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Case Study
Carbon Growth Partners
Carbon Credit Management
The newly launched carbon offset fund needed a solution that understands carbon projects and caters for the nuances of this asset class.
Solution
Mutual Learning
Messer took time to research and communicate with Carbon Growth Partners to better understand the financial mechanics and terminology specific to carbon credits including vintages, attributes, and forms of settlement, as well as their subtleties, such as frequent delayed settlement.
Configuration not Customisation
Keeping with our philosophy of “configuration not customisation”, Messer was able to satisfy most of Carbon Growth Partners’ requirements through configuration. Minimal customisation was necessary to complete the solution, keeping both time and cost to a minimum.
Challenges
Lack of Market Data Providers
The carbon market is relatively new; many of the assets are non-listed and there is a lack of market data providers to integrate with.
Messer configured workflows to import all globally listed offset projects, credit issuances and credit retirements with periodic updates to maintain the data.
Messer configured automated proxy pricing workflows to overcome limitations of availability of recent prices for carbon credits.
Third party integration support
Messer configured ad-hoc file imports for registries and counterparties that did not support data transmission via SFTP.
Redesign
Security Creation Mechanism
Messer optimised the creation of the Carbon Credits as a by-product of booking the initial trade. Carbon Credit definitions are easily maintained, updated and expired from the positions view.
Additional Trade Information
For carbon credit trades, there are many additional items in the term sheet that need to be captured, including the eligible projects, delivery windows, prepayment, etc. Messer was able to capture all of this information with simple configuration thanks to its extensible data model.
Impact
Carbon Growth Partners has a complete carbon credit trading solution with the following capabilities:
- Support for carbon emission trade types like carbon credit, carbon credit forward contract, carbon credit spot contracts (including GEO, NGEO, CGEO and CGEO TR), carbon credit token
- View and manage carbon project attributes
- Separately manage cash accounts and asset accounts
- Reconcile between registry, fund admin and client data
With these new features in our Prodigy Portfolio Management module, Messer are able to support Carbon Growth Partners and other carbon offset funds in their daily investment activities.
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