Integrating with Regenerative Finance for Operational Sustainability (formerly ESG)
The ServiceNow Regenerative Finance for Operational Sustainability application enables a company or an organization to generate climate assets by integrating with the Hedera Guardian open-source tokenization platform. Climate assets typically refer to assets or investments that are linked to activities, technologies, or projects aimed at mitigating or adapting to climate change.
Climate assets are designed to have a positive impact on the environment and contribute to the reduction of greenhouse gas emissions or the resilience of communities and ecosystems in the face of climate-related challenges.
Regenerative finance (ReFi) represents a transformative approach to finance, aiming to replace traditional finance's practices. This approach fosters a financial ecosystem that can effectively address all stakeholders' present and future needs.
This integration is designed to work with the Envision Blockchain Managed Guardian Service, utilizing the Hedera Hashgraph Distributed Ledger Technology (DLT) to track climate assets and individual token provenance.
Regenerative Finance for Operational Sustainability v1.0 is primarily centered around a particular certificate category known as renewable energy credits (RECs). RECs are instrumental in quantifying and monitoring the quantity of renewable energy. Each REC symbolizes one megawatt-hour (MWh) of electricity from renewable resources like solar energy, wind, or hydro power. After an REC is created, it can be securely stored in a blockchain account, transferred, sold to another account, or retired to claim a reduction in scope-2 emissions. The applicable energy attribute certificate (EAC) standards for conventional renewable energy encompass International REC (I-REC) and Guarantee of Origin (GoO).
The Hedera Guardian provides auditable, traceable, and reproducible records that document the emission process and the life-cycle of carbon credits thereby reducing fraud in the ESG market.
Tokenized climate assets hold several advantages over traditional climate assets, including:
- Facilitating the creation of a certified supply of climate assets based on measurement, reporting, and verification (MRV) data.
- Providing verification of provenance and auditing data through dedicated interfaces and public blockchain explorers. Data provenance is the process of tracing and verifying the origin, history, and quality of data.
- Significantly mitigating the risk of double-counting through a verifiable on-ledger retirement process. Double-counting is when a climate asset is claimed by more than one entity even though no additional carbon benefit is produced.
- Significantly reducing the risk of greenwashing for all participating parties.
Entities for a policy
- Standard registry: An organization that develops science-based standards for MRV ecological benefit claims and issues value in credits that meet the established standard.
- Registrant: An entity that carries out actions in an Ecological Project or Program (EP) to generate asset value such as RECs or carbon offsets, for use in the voluntary market, thereby becoming the initial owner of the ecological benefit value produced.
Other actors who potentially benefit indirectly from the application, or may need to integrate with it, are the climate assets marketplace, financial intermediaries, and investors.