Just two years ago, we shared an article with you on the new carbon exchange to explain in a simple way how this new economic instrument works. Did you missed it? In fact, what is marvelous about this type of capitalism which has been adapted to the green economy, is that it rewards the efforts of companies that reduce greenhouse gases (GHGs) and charges for those that exceed Reduction targets. A scholarship that deals with pollution is already a very big step. And here is another big step that is emerging: green financing!
Guaranteeing a Reduction of pollution
Believing in the old adage and anti-waste argument “Money does not grow on trees” the leaders of Fondaction announced last November 16 the setting up of a Carbon Fund of a value of $ 20 million. This innovation in financing enables Quebec to become the first place in the world where carbon credits (GHG reduction) can be used to finance businesses. Hats off to the CSN Workers Fund team who put their financial creativity at the service of ecological and economic ideals by stimulating a business appetite for GHG reduction. Simply brilliant! How does it all work?
The underside of this financial and ecological innovation
Imagine that you buy a house, you will then contract a mortgage if you give your house as collateral. In the event of non-payment, the creditor would then take possession of your home to repay the mortgage. Some companies do the same with their movable assets and give their equipment as collateral against a movable hypothec. They also finance themselves with factoring, i-e by pledging their accounts receivable in exchange for an advance on the sums to be paid by customers. This is exactly how the Carbon Fund will apply to companies accepted for green financing. They will grant advances on offset credits generated by their GHG reductions and take them as security until they are sold on the Carbon Exchange. Obviously, the value of the sale of credits will fluctuate according to supply and demand, such as shares on the stock exchange, and the profits (or losses) will be paid to the Fund which owns the credits, much like stocks.
Common sense ideas
While the newly elected US president made an election promise to withdraw from climate change agreements, it is easy to understand how Fondaction’s initiative is welcomed across the board. A world that sees in us an example to follow. Quebec is also improving its chances of achieving its aggressive target GHG targets for 2020 and 2030. It is initiatives like this that are driving the green economy in the right direction, hoping that our southern neighbors will join us in our efforts.
For the Cartonnerie Montréal ™ team, the fight against climate change is a motivator and a source of daily satisfaction, thanks to our customers who share our values of sustainable development by making the right choices for the planet.
Let us continue the “green” initiatives and share with us the good strokes you witness!
The Cartonnerie Montréal ™ team
