As countries worldwide face increasing pressure to reduce carbon emissions under the Paris Agreement and other mandatory requirements, the demand for carbon and biodiversity offsets is growing. However, the voluntary nature of these products often leads to a lack of transparency in existing carbon projects, along with poor liquidity and pricing discrepancies, making the market challenging for many investors to navigate.

To address these challenges, Strata has developed two innovative instruments that represent carbon sequestration from natural assets and biodiversity. These instruments will be tradable on regulated digital securities exchanges, providing certain investors with market access for the first time. This approach enhances transparency around both the underlying projects and pricing, while also improving liquidity through the exchange. Additionally, the structure allows for ongoing monitoring of the underlying projects, ensuring that investors’ offsets align with their obligations.

Furthermore, Strata is working with exchanges to develop derivatives based on these underlying assets, potentially introducing a new range of instruments in the natural asset category. This will enable investors to better manage their carbon and natural asset positions and associated risks.