Lloyds Banking Group has established a new desk to support corporate and institutional clients in purchasing and financing carbon offsets, marking a notable entry into a market where several peers, including HSBC, have recently scaled back operations.
The London-based bank has appointed Emily Martin as Head of Voluntary Carbon and Nature Markets and Gabriella Carden to lead its strategy across the carbon and nature space within its markets division. Both executives have spent over a decade at Lloyds in various roles across fixed income, commodities, and sustainability.
The move underlines continued interest in the voluntary carbon market from major financial institutions, despite recent turbulence stemming from greenwashing controversies and declining activity. HSBC, for instance, scrapped plans to establish its own carbon trading desk last year, while Shell has reportedly sought to offload part of its nature-based carbon project portfolio.
Carbon credits, which represent one metric tonne of carbon dioxide either avoided, reduced, or removed from the atmosphere, are used by banks to trade, finance emission-reducing projects, and offset their own emissions. As corporates pursue long-term net-zero targets, demand for high-quality credits is expected to grow substantially. According to BloombergNEF, demand from hard-to-abate sectors alone could reach 7 billion metric tonnes by 2050, compared to just 171 million today.
In the UK, the government has highlighted voluntary carbon and nature markets as key components of its Clean Growth Strategy, with ambitions for London to emerge as a global hub for such trading. The Department for Energy Security and Net Zero is also preparing to integrate carbon removal credits into the country’s regulated emissions trading system by the early 2030s.
Nature markets, still in their infancy, are designed to facilitate the trade of credits representing ecological benefits such as biodiversity gains. The UK has pledged to increase annual private investment into nature to over £1 billion by 2030 in England. Notably, King Charles III has leased part of his Sandringham Estate for a biodiversity restoration project that will issue tradable credits.
Lloyds’ carbon and nature markets desk sits within its sustainability and client advisory team, which was established in 2021 and now comprises around 35 specialists. The team supports some of the bank’s largest clients in aligning their operations with sustainability targets.
