Linklaters works with ISDA on a new whitepaper on Voluntary Carbon Credits

Linklaters has worked with The International Swaps and Derivatives Association, Inc. (ISDA) on the whitepaper it released on Voluntary Carbon Credits (VCC) on 1 December 2022.

The paper considers the legal treatment of VCCs and certain other aspects of VCC transactions (such as when they might be regulated as derivatives). The paper also sets out recommended steps that can be taken to further develop legal certainty in VCCs at both a global and jurisdictional level.

It is hoped that the publication of the whitepaper will significantly enhance secondary markets in voluntary carbon credits to help transition to a low carbon economy by channelling funding into projects that reduce carbon emissions or remove carbon from the atmosphere.

The whitepaper can be accessed here.

Deepak Sitlani, Derivatives partner at Linklaters, commented:

“The whitepaper is a further step towards enhancing the use of VCCs in the derivatives context and we look forward to continuing to see how this market develops as we move to a low carbon economy.”

The whitepaper on Voluntary Carbon Credits included input from an ISDA working group that includes dealers, asset managers, institutional investors, funds and end users.