The Carbon Rating Agency (CRA) was conceived by Shandi Modi in 2007. It was clear that public money would be devoted to the challenge of climate change, but without private sector involvement, this alone would not be sufficient.
Environmental assets require tools for accounting and risk measure at a standard consistent with other asset classes. Without these tools, institutional investors would not be able to deploy capital. With their benefit, however, investors would be attracted to low carbon investment opportunities.
The Carbon Rating Agency enlisted Lord Stern as an advisor, recruited Ian Johnson (then VP of sustainable development at the World Bank) as co-founder; Christiana Figueres as Vice Chair (now head of UNFCCC); Nitin Desai from India, Paul Ezekiel (former head of Carbon trading at Credit Suisse), and Mr. Neil Eckert (Former CEO of Climate Exchange Plc). This group has guided the development of a set of products and services which are necessary for climate finance to scale up and become mainstream.
Multilateral organisations, consortiums such as the R20 Regions of Climate Action founded by former Governor Arnold Schwarzenegger, the World Economic Bank, banks and others pushing the climate finance envelope are focused on harnessing private sector capital, identifying and allocating risks and return, in a world scarce on public funds. Out products for environmental markets are designed to play an important role in scaling climate finance initiatives and attracting institutional capital.