Ag Carbon Index commences roadshow; “bottom-up” system offers hedging, trading opportunities, and valuation support

In Virginia, GIC Group has commenced a roadshow in support of its Ag Carbon Index, in which exchanges and strategic investors will have a preview of the first “bottom-up” valuation and trading system in the value of carbon assets and liabilities. By using the Ag Carbon Index, companies can evaluate  the carbon liabilities and/or offset assets on the balance sheets of potential targets in mergers and acquisitions.

Similarly, companies can use the valuation approach to determine whether it is more economically efficient to reduce the carbon footprint of a company through an internal carbon reduction strategy, or through the purchase of carbon offsets or emission allowances from third parties. Or, a multinational company that has invested in a carbon reduction project could purchase carbon futures on the proposed Ag Carbon Index, and thereby provide a hedge on the expected value of carbon credits when the project is completed and carbon reduction credits are realized.

“What is our balance sheet exposure?” said GIC CEO Rick Gilmore, a widely-respected ag industry adviser and speaker, “that is the question that companies are asking.  A bottom-up analysis of carbon gives you accuracy, which is the key.”

A white paper on the Ag Carbon Index can be downloaded here.

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