Indonesia Stock Exchange (IDX), the country’s national securities exchange and among the “fastest growing” in the continent, is exploring the possibility of working with MetaVerse Green Exchange (MVGX), a digital green exchange licensed and regulated by the Monetary Authority of Singapore (MAS), “to develop Indonesia’s carbon exchange system.”
This development comes “amid the Indonesian government’s plan to launch the country’s own emissions trading scheme by 2025 to incentivize domestic businesses in high-emitting industries to reduce their emissions.”
To date, Indonesia is “among 61 countries with established carbon pricing regulations and has committed to reducing its greenhouse gas emissions by 43 percent by 2030 with international support, whether through financing or new technologies.”
Indonesia itself has “made good on its sustainability promises, having cut 10.37 million tons of carbon dioxide from its energy plants in 2021 alone — 210.8% of its initial target.”
Jeffrey Hendrik, IDX Director of Business Development, said:
“The Indonesian government has recognized the vital role that the financial services industry can play in strengthening the country’s sustainability commitments. IDX is currently preparing for the possibility of becoming a carbon exchange in Indonesia and started discussions with several parties to deepen our knowledge. We believe that this strategic partnership with MVGX can support us in building a robust carbon exchange infrastructure and ecosystem that will underpin the country’s plan to develop a sustainable finance ecosystem.”
Bo Bai, Executive Chairman and Co-Founder of MVGX, said:
“At MVGX, our goal is to build an ecosystem of secure, compliant carbon trading systems across the world in order to empower and enable businesses and governments to reach their sustainability goals. Today, carbon markets still continue to face challenges around lack of transparency, standardization, and liquidity — we are thrilled to be supporting IDX as they work towards meeting this critical milestone as part of Indonesia’s climate policy and as they raise the bar for green finance in the region.”
MVGX leverages blockchain technology which “offers a transparent, tamper-proof record of the performance of all green projects tied to the credits listed on its exchange infrastructure.”
This will “give buyers and issuers the utmost assurance of the integrity of the carbon credits listed on IDX’s registry.”
When used for carbon neutrality verification by businesses, these credits will be “certified in accordance with internationally-recognized gold standards for carbon footprint validation in line with ISO 14064-1:2018 Carbon Footprint Verification and PAS 2060 Carbon Neutrality Verification.”
Michael Sheren, President of MVGX, former Senior Advisor for the Bank of England, former Co-Chair of the G20 Sustainable Finance Study Group, said:
“Asia is set to be among the hardest hit by the impact of climate change, and it’s estimated that US$2 trillion in sustainable financing will be needed over the next decade in Southeast Asia alone to pave the way for the sustainable transition towards achieving net-zero. Home to a third of the world’s rainforests, Indonesia has made meaningful strides in its deforestation mitigation efforts, and in working with IDX, we’re excited for this opportunity to support the country on its next climate-related milestone as it looks to develop and launch its own carbon trading registry.”
IDX is “a Self-Regulatory Organization that aims to be a competitive stock exchange equipped with world-class credibility that holds membership titles with the World Federation of Exchanges and Sustainable Stock Exchanges.”
As one of the fastest-growing stock exchanges in the continent, IDX reportedly “has more than 800 listed companies on its exchange and a total of over 4.2 million investors on the exchange.”