Singapore-based Climate Impact X (CIX), a global marketplace, auctions house and exchange for trusted carbon credits, has completed the first independent assessment of its alignment with the International Organisation of Securities Commissions Principles for Oil Price Reporting Agencies (IOSCO Principles), concerning its global nature-based carbon credit benchmark, CIX Nature X (CNX).
The external limited assurance review was conducted by professional services firm Ernst & Young, which assessed CIX’s benchmark methodology and governance processes for adherence to the IOSCO Principles.
IOSCO is the global standard setter for securities regulation and serves to protect market participants by ensuring fair, efficient, and high-integrity market practices.
CIX’s decision to align its benchmarks to the IOSCO Principles from the very first day of publication stems from broad demand in the voluntary carbon market for professionally assessed, robust, and data-driven benchmarks, which are priced transparently and consistently in concentrated liquidity sessions within a safe and accessible centralised trading venue.
The IOSCO Principles provide internationally recognised best practice guidance on governance and control systems for the publication of commodity price benchmarks.
It covers various aspects including price assessment methodology, the management of contract and index methodology changes, the data reporting process, supervision of assessors, audit trails, as well as the management and prevention of conflicts of interest.
Julien Hall, Pricing Director at CIX, said, “The adoption of trusted price benchmarks can lead to significant positive change for market participants and markets, including a reduction in information asymmetry, fairer and more efficiently priced commercial agreements, and a general increase in transparency.”
“They can also catalyse the emergence of innovative new risk management tools such as swaps and futures, contributing to de-risking investments into the sector and encouraging a greater influx of capital. As demonstrated by this successful first audit, CIX is committed to ensuring that its price benchmarks are produced in accordance with the very best global standards,” he added.