Yesterday, The HBAR Foundation, a philanthropic subsidiary of Hedera Hashgraph, announced the creation of a $100 million Sustainable Impact Fund (SIF). The money will be used to support solutions that use the Hedera DLT network and promote changes in line with UN Sustainable Development Goals (SDGs).
These projects will likely target the measurement of carbon emissions, tokenizing carbon offsets and removals, and financial projects such as carbon exchanges and green bonds.
The SIF notes that due to the climate crisis, interactions between stakeholders are changing, and organizations are increasingly held to account for their environmental impact. Businesses are not yet equipped to integrate carbon and environmental markets effectively and efficiently into their practices in a transparent and auditable way. The HBAR Foundation believes that its underlying principle of tokenization will be the change necessary to drive high-quality and standardized transactions in the future.
Last year, the Interwork Alliance, a blockchain token standards body, launched the IWA Voluntary Ecological Markets (VEM) Standards. The HBAR foundation has created an open-source DLT solution that implements these standards, the Guardian. One of the key applications is making emissions and carbon offsets or removals auditable. Another is to support tokenization of these offsets and removals.
“The open-source guardian is the first of many steps in our investments in ESG markets and building the sustainability economy on Hedera. This will be a primary building block for application developers to scale quickly as the world adopts Hedera as the natural choice for scalable and transparent sustainability applications,” said Wes Geisenberger, VP for Sustainability and ESG at the HBAR Foundation.
SIF is looking to invest in several types of ESG projects, and other organizations are also exploring blockchain for these use cases. One of these is the measurement of carbon emissions. Recently, blockchain non-profit MOBI launched a new standard for carbon emissions tracking, the Trusted Trip, which uses decentralized identifiers and self-sovereign identity to track the individual’s journey and its emissions.
Additionally, projects tied to carbon offsetting and removals are also of interest to the SIF. These initiatives require robust validation and are prone to double-counting, which tokenization could help solve. An example is the Universal Carbon token.
SIF is also interested ub new kinds of voluntary carbon exchanges and green bonds, recently demonstrated by the development of the Climate Impact X (CIX) to trade carbon credits and Carbonplace.