World Bank, the Government of Singapore and IETA’s Establishment of the Climate Action Data Trust

The CAD Trust is a joint initiative of the World Bank, the government of Singapore and IETA to establish a decentralised metadata system that is able to link, aggregate and harmonise all major carbon market registry data. It was officially launched at the Asia Climate Summit in December 2022. The aforementioned organisations are the founding sponsors of the CAD Trust and will collaborate with other governments and private sector entities in furtherance of the initiative.

The CAD Trust will provide an open-source metadata system to share information about carbon credits and projects across digital platforms, which will ease future integration of multiple registry systems. Using distributed ledger technology, the platform aims to create a decentralised record that will avoid double counting, increase trust in carbon data and enhance climate ambition. It hopes to provide and facilitate crucial infrastructure for the development of the next generation of carbon markets.

HFW’s team was led by partner Peter Zaman and included associates Rochelle Musgrove, Jefferson Tan, Russell Quek, Christopher Ong and Farah Majid.

Peter Zaman, HFW

Can you tell us about the roles HFW has played during this operation and the skills that yourself and your team have brought to the process?

There is no existing organisation in the world today whose objective for being set up is similar to that of the CAD Trust. As such, the main role HFW played at the early stage of this mandate was to guide the sponsors on the most suitable governance and corporate organisational framework for the CAD Trust. This involved recognising the quasi-public/private nature of the sponsors, as well as the various participant types who will be involved in the future activities of the CAD Trust and creating a balanced arrangement that accommodates the dynamics of the multitudes of interests arising from that. HFW coordinated the incorporation process for the CAD Trust in Singapore together with SLB.

Why is the creation of the CAD Trust significant for governments and multinational corporations?

The establishment of the CAD Trust is expected to be a critical enabling tool towards the achievement of net-zero climate goals as it will assist countries in implementing Article 6 of the Paris Agreement. This requires countries to track and report on the use of international credits through a registry system, and the CAD Trust system will assist in promoting high-integrity systems and digital linkages. The future of carbon markets involves establishing trust between the Paris Agreement markets and voluntary carbon programs. By helping reduce the risk of double counting, the CAD Trust will be an important tool towards building that trust.

Do you expect HFW to advise on similar international projects as we move into 2023?

HFW and SLB will continue to support the efforts of the CAD Trust as it starts to implement its objectives in 2023. The carbon market, in its second iteration, remains nascent with many new products, infrastructure tools and markets frameworks yet to be developed. The work on these things will continue in 2023 and HFW will no doubt continue to support its clients with such initiatives.