Hey fintech friends,

Lots of mixed press around carbon credits lately! Since we last spoke about carbon markets in Q1 2023,

• The largest carbon traders have written off millions of carbon offsets on the revelation that underlying projects won't deliver on emissions promises.
• Regulatory scrutiny, controversial new standards, and high-profile scandals have prompted big companies like Nestle, Gucci, and Shell to pull back from voluntary carbon markets en masse.

Investors still play a small role in this market– only accounting for ~1% of open interest in carbon credit positions– but this could soon change: Climate fintechs raised an aggregate $2.3 billion in VC funding in 2023 (down only 19% YoY, as compared to 38% across all other sectors) to expand tools for carbon accounting, crediting, trading, and reporting. Banks like JP Morgan & Goldman Sachs are also standing up carbon credit trading desks in anticipation of an upcoming spike in speculative demand.

Given all of this activity, it's worth diving into the biggest developments and players impacting the carbon credit market– an industry that Bloomberg estimates could grow from $2 billion to reach a staggering $1.1 trillion in value by 2050.