FIS Horizons 2023 Brochure - Riding the wave - Flipbook - Page 9
One year on: using
tokenization to advance
climate initiatives
Bryony Widdup
Partner, London
Tokenization is a process whereby assets can be converted into digital
tokenized form.
The resulting tokens can constitute rights in
respect of physical assets, they can also
constitute non-physical assets like shares and
other securities and/or can be assets in and of
themselves (like digital artworks in the form of
non-fungible tokens). There are a number of
potential benefits of tokenization and some of
the most commonly cited are liquidity and
fractionalization – blockchain-based tokens
enable trading of interests in otherwise illiquid
assets and also provide for ownership of
fractional interests in assets which are
otherwise difficult to divide.
Tokenization is flexible, adaptable, strongly
aligned with ‘monitoring, reporting and
verification’ (MRV) requirements in the broad
ESG-investing space (including climate). It is
also built on systems that can be substantially
automated and are highly efficient from an
operational perspective.
Its usefulness in all these respects as a solution
for achieving climate-related goals is
increasingly recognised. In this article we look
at how tokenization could help advance
climate goals, including through integration of
carbon offsets with tokenized debt securities,
the offering of tokenized green real estate
investment platforms and the emerging asset
class of natural capital investments, and ask,
what do we see in the future for this space?
Read the full article for more details on
Engage here.
Article correct as of 18 January 2023.
