Taking Commodities Carbon Neutral
Trovio Group is a trusted partner tackling decarbonisation in the digital asset ecosystem. We examine the need to retire carbon credits and a low-carbon agenda with Head of Special Projects, Angus Scott
Writer: Phoebe Harper
The evolution of the new digital economy is ceaseless. In this advancing industry, the digital asset ecosystem must confront ESG standards, monitoring critical data concerning the sourcing of physical commodities and the manner in which they are deployed to market.
At the heart of this dynamic shift, Trovio Group is an Australia based company taking strides in advancing the new digital economy, effectively setting the benchmark in commodities and emerging technologies.
As a trusted partner, Trovio Group strategically guides fund managers through investments, and with its trailblazing ‘TrovioGREEN’ initiative, promotes a net-zero target that gives investors confidence in mitigating carbon emissions. We find out more with Trovio Group’s Head of Special Projects, Angus Scott.
APAC Outlook (AO): How is Trovio Group leading the new digital economy?
Angus Scott, Head of Special Projects (AS): Trovio Group is focused on bridging the gap between traditional markets and the digital asset ecosystem. Having recently completed a merger between TCM and Trovio, the Trovio Group offers a wide spectrum of digital asset services across its technology licensing, asset management and advisory arms. Combining Trovio’s deep blockchain and cryptography experience and intellectual properties, with TCM’s institutional-grade, digital asset investment infrastructure, the Trovio Group represents a new standard in a commercial partner for a rapidly growing industry.
The Trovio Group is a fully integrated, technocentric financial services and investment management partner for institutional clients, with a focus on the Asia-Pacific region. Our clients gain market-entry strategies for investing in the digital asset ecosystem and a partner in launching institutional-grade investment products for this new asset class.
Crucially, we enable clients to interact with the digital asset ecosystem without creating reputational risk and without introducing unnecessary costs and friction.
AO: What is your current take on the work being done on commodity digitisation?
AS: The commodities market is becoming increasingly digitised, but there’s still a significant lag in the adoption of new technology, particularly where entrenched legacy systems require an update.
Access to an abundance of data, as well as an increased number of tools and analytics, has opened the eyes of commodity industry participants to a world of new possibilities.
This is playing out in contract creation, logistics, market risk management, and complex networks, where there are solid, long-term upsides for the industry. Digitalisation creates new opportunities and increases transparency, enabling businesses to respond to significant changes in real-time and mitigating operational risk.
Being able to transparently retain data against assets adds new, verifiable commodity attributes, including but not limited to provenance data such as responsible sourcing, carbon footprint and trade history. This will change the way assets are valued, traded and held in investment portfolios, as the market introduces new standards of quality and differentiation.
AO: Are there any industries particularly strugglingto offset carbon levels?
AS: Commodities play a vital role in global economies. It is important that we find a way to reduce their significant emissions profiles. Initiatives to improve mining, refining processes etc, are a start, but by no means consistent across jurisdictions. Many of these initiatives have limited or no transparency. Provenance tracking allows improvements to consistency, verifiability of carbon footprints, and a clear, transparent method of offsetting by retiring and linking carbon credits.
Trovio Group’s TrovioGREEN solution ensures the verifiability of carbon retirement against assets and the backing of carbon neutrality, linking carbon neutrality to the assets, in perpetuity — making sure offsetting accounts for more than a symbolic token offering.
AO: Why is it essential that carbon credits are retired?
AS: Carbon credits represent a tonne of carbon that has been removed from the atmosphere, one way or another. The tradable carbon asset is the right to take credit for the removal of that tonneof carbon. The danger here is that without transparency, a claim by an organisation that they have bought carbon credits to offset footprint, cannot be distinguished between an organisation buying and retiring carbon credits (as they should) or buying and holding credits, with an ability to resell them in the future at market prices, for another player to “use” them.
The retirement of carbon credits represents the definitive end of the line for the removal of that tonne of carbon from the atmosphere. This is a necessary factor in the carbon market maturing and becoming a functional, effective way to incentivise carbon offsetting. The value of a retired carbon credit shifts from a monetary, tradeable asset, to the value attributed to operating as a carbon-neutral organisation or trading a carbon-neutral asset.
AO: Finally, does Trovio Group have any other plans for net-zero carbon emissions products in the pipeline?
AS: Yes, Trovio’s approach to carbon neutrality is asset, process and activity agnostic. Our solution provides the framework for the capture and retention of asset data in a way that enables the effective operation of global carbon markets. In this sense, we are not limited in how we bring carbon neutrality to an endless range of markets and industries. Trovio is working with a number of partners to develop and implement this infrastructure, and will continue to expand the functionality and accessibility of decarbonisation services.