Africa’s first locally-developed online marketplace for trading environmental assets, the Green Asset Exchange, has launched. The asset exchange connects buyers and sellers through an online platform which allows a transparent, trusted, and efficient way to get the best economic value from the green economy.
The exchange of green assets is already prevalent in global markets, although this exchange is the first of its kind to be developed in Africa.
The launch in South Africa this month comes after three years of collaboration between the founders of the Green Asset Exchange and various market participants, brokers, developers, environmental lawyers, and the top carbon registries in the world.
Green Asset Exchange Founder and Manager Director, Nicholas Rowley, had worked in the financial markets for close on a decade as a portfolio manager, but had always been troubled by the lack of financial incentives to drive sustainability in large companies.
“Several years ago, we identified that the development of green assets is the greatest mechanism to put an economic value on the environment,” he explains. “At the same time, South Africa brought out its carbon-tax legislation with one of the most forward-thinking policies on carbon pricing and inclusion of carbon credits in the world. So, the time and place is here and now.”
The asset exchange works as a tool to help accelerate the green economy as it continues its rapid growth and maturation. “Green assets” – such as carbon credits and renewable energy certificates – already exist and they have economic value because of their positive impact on the environment. The producers of these assets want to get the highest price for them, and buyers want to buy them at the best price they can get – this is where the Green Asset Exchange comes in.
“We could see that there is a need for capital to flow towards protecting the environment, but there is little clarity in how and where these assets are traded. We saw the need for efficient market mechanisms to promote such an important growth sector of the economy,” continues Rowley.
“Over time we also identified some key differences and misunderstandings between how things are done in Africa compared to other exchanges in the world, such as in the USA. An example is how these assets are traded digitally internationally, versus how they are used in the practical sense. We spent years developing relationships and tools to bridge that gap, and the Green Asset Exchange is a result of that,” he says.
This comes at a time when society is increasingly becoming conscious of the impact their choices have on the environment, with companies increasingly taking responsibility for the externalities caused by their business practices, often with a big decarbonisation drive.
“The Global South has big potential to benefit from these market dynamics because of the huge opportunity to produce green assets in these countries, which can then be sold to businesses in developed nations that need it. South Africa and Africa has a solid base for growth in the green economy with established developers and consultants already in the industry and with growing interest from banks and investment companies,” explains Rowley.
This is backed up by impressive figures: $7.5 billion was invested in carbon projects last year and 1 500 new projects have been developed or registered with the five main global registries since 2020;
“The Green Asset Exchange can then essentially act as a “green stimulus” in enabling the protection of the environment, assisting in bringing much needed capital to the African continent,” he states.
The Green Asset Exchange is launching with a diverse asset portfolio and is calling for more producers and buyers of green assets to register, along with brokers, consultants, and project developers.
“We are passionate about driving positive change and building the green economy, to accelerate the transition to a sustainable, low-carbon economy,” Rowley ends.
