Federal green bank, CBA back climate friendly commodities trader

The Federal government’s Clean Energy Finance Corporation (CEFC) and the Commonwealth Bank have emerged as significant investors in Macquarie-backed global exchange Xpansiv, which focuses on ESG-inclusive commodities.

As investors turn up the heat on companies to go carbon-neutral, Xpansiv is pitching its platform as a handy tool for businesses to get a clearer picture on carbon offset financing and trading, as well as, the carbon footprint of traded commodities.

Xpansiv’s trading volumes have exploded as corporations seek to fulfil carbon-neutral commitments. Credit: AP

With a potential float on the ASX in the offing, Xpansiv has doubled its planned capital raising from private investors, from $US50 million to $US100 million, due to demand.

“It is our pleasure to welcome high-quality investors, including Clean Energy Finance Corporation, Commonwealth Bank of Australia, Hartree Partners, Wilson Asset Management, and many others who have participated along with Xpansiv’s current investors,” Xpansiv executive chairman Will Stewart said.

Xpansiv is also backed by rich lister Will Vicars, BP’s venture capital arm, S&P Global, American billionaire and private equity pioneer Thomas H. Lee and Jack Klinck, a former executive at State Street and BNY Mellon.

The company did not reveal how much the CEFC and CBA invested, or the size of their stakes but said both participated as “cornerstone investors”.

The private capital raising could be the last before Xpansiv prepares for a public listing late this year or early next year. The fresh funding will be used by Xpansiv to invest in developing its platform and strategic acquisitions.

Xpansiv acts as a hub for the trading of ESG-based commodities like carbon offsets, Renewable Energy Certificates (RECs) and differentiated fuels.

Its platform recently passed a major milestone with 70 million tonnes of carbon traded on its platform in 2021 year-to-date. It posted a monthly record 15 million tonnes traded in August, an increase of more than 800 per cent year-on-year

According to Xpansiv, the rapid volume growth is being driven by companies seeking to fulfil carbon-neutral commitments.

CEFC CEO Ian Learmonth said its investment reflects its focus on investing alongside private businesses to help reduce emissions.

“The CEFC is supporting this innovation as part of our goal to help unlock new sustainability-focused investment products in Australia to help ensure we have access to the best global technology available to keep reducing emissions,” he said.

CBA’s head of Institutional Banking and Markets, Andrew Hinchliff, said Xpansiv has created a leading marketplace for ESG commodities.

“Voluntary carbon markets will play a critical role in the economies of tomorrow, and we are speaking to stakeholders right across the value chain, so we can help our clients along this path,” he said.

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