Investment spotlight: Allinfra
According to a report recently co-published by Ernst & Young and Oxford Analytica, the environment, social and governance (ESG) movement is at a breaking point. Spurred by rising demand from a public well versed in the woes of climate change, investor interest is at an all-time high - even as the ESG industry has come under intense criticism. A lack of standardization in ESG reporting, a lack of transparency, and a lack of consistent definitions are some of the most commonly cited investor frustrations.
Blockchain technology is uniquely suited to provide a solution to some of the problems that the ESG sector is facing. Its transparent nature makes it verifiable and auditable, providing an essential gatekeeping mechanism against greenwashing, false or exaggerated claims by organizations that their products or policies are more environmentally friendly than they actually are.
MESH portfolio company Allinfra is building technology to help achieve ESG goals through transparent and measurable data initiatives built on a combination of public and private blockchains (Ethereum mainnet and Hyperledger Besu). Allinfra’s two platforms, Allinfra Climate and Allinfra Digital, are respectively a data management platform and asset tokenization platform that together are reforming climate markets. While clients themselves do not need to have any blockchain software, they do need a wallet if they plan on tokenizing and trading digital environmental financial products like renewable energy certificates.
Allinfra Climate
Allinfra Climate is a sustainability data management software that helps institutions achieve their sustainability goals. It collects verifiable, auditable climate-relevant information directly at source (e.g. from smart devices) — across an organization's portfolio of assets. This end-to-end solution builds a repository of auditable, immutable data that can be used for a host of purposes: calculating carbon footprints, reporting environmental performance to stakeholders, undertaking green financing, or even creating environmental financial products in digital form, like renewable energy certificates or emission reductions.
Allinfra’s platform helps solve some of the biggest challenges of ESG reporting by collecting and storing data in a way that ensures it cannot be tampered with. Not only that, it is cost effective. The standard process for similar environmental data collection and verification is manual, which tends to be expensive and long, often requiring months for one cycle of data collection and reporting, resulting in a report that is relevant only to that snapshot in time and usually designed for a single purpose. Allinfra Climate puts that process on digital rails. Data accrues up to the last few minutes and is accessible at any time and for a variety of purposes. COVID has further underlined the merit of digitizing these processes, a period during which site visits have been difficult to impossible. Allinfra Climate’s clients have ranged from Link REIT (the largest REIT in Asia), to UPC Renewables, one of the largest independent renewable energy companies in the Asia-Pacific region. More information on other Allinfra Climate projects can be found here.
In 2021, Allinfra was part of Project Genesis, a groundbreaking project led by the Bank for International Settlements (BIS) Innovation Hub and Hong Kong Monetary Authority. Allinfra Climate was used as the climate data feed within the project—a great endorsement of their thesis which showed just how flexible and easily integrated the product suite can be. Following on from this success, BIS announced a follow-up project in July 2022 called Genesis 2.0—a project exploring the use of blockchain and other technologies to enhance the transparency, objectivity and environmental integrity of the green bond market. Allinfra is working with Goldman Sachs and Digital Asset to develop a prototype for the project.
Allinfra Digital
Allinfra Digital is an end-to-end asset tokenization platform that allows organizations to efficiently create and issue green bonds and other green financial products in digital form. Using Allinfra Climate’s green data feed technology, organizations are able to permanently tie underlying source performance data to financial products—improving transparency, auditability, and immutability of assets. (For more information on how green bonds work, see here, and for more on how green technology will transform the bonds market, see here).
In recent years there has been a substantial acceleration in the issuance of green bonds in financial markets. However, this rapid growth has also brought into question the quality of certain bonds, with some issuers being accused of greenwashing. With Allinfra Digital, organizations have the ability to create and issue tokenized green bonds that are tied to an underlying data set that is easily provenanced. This means that these financial products can not only be created, transferred and audited with fewer costs and intermediaries, they are also verifiable and tamper-proof. This allows for transparency regarding asset performance and provides valuable evidence that climate action has occurred.
Allinfra’s work continues to be recognized by the wider market. In May 2022, Allinfra received honorable mentions in the AI and Data, Climate, and Energy Categories of Fast Company’s 2022 World Changing Ideas Awards. That same month they were also awarded as "Technology Pioneer” by the World Economic Forum as an early stage company that is involved in the use of new technologies and innovation and is poised to have a significant impact on business and society.
At MESH we believe that the transparency and immutability offered by blockchain technology is going to revolutionize the green finance and ESG industries. Thanks to portfolio investments like Allinfra, this trajectory is already unfolding. We encourage you to get in touch with them here with any questions you may have.
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