Voluntary carbon markets are no panacea. Plus: Wall Street moves to T+1 settlement cycle for stocks.

Voluntary carbon markets aren’t going to solve the climate crisis by themselves, US Treasury Secretary Janet Yellen argued yesterday. Voluntary carbon markets “have the potential to support significant decarbonization,” but that’s only if we make sure that the carbon credits on offer in the market “meet high-quality atmospheric integrity standards.”

ICYMI: The Biden administration along with the departments of treasury, energy, and agriculture released their Voluntary Carbon Markets Joint Policy Statement and Principles (pdf) yesterday.

Not all carbon credits do what they say on the tin: Yellen called for greater “supply integrity,” pushing for carbon credits offered up on the market to “represent real emissions reduction and removals” and for there to be regulations in place to “avoid negative environmental and social impact.” In this relatively unregulated market, “we’ve seen too many examples where credits fail to meet this criteria,” Yellen added.

Yellen also called out corporate buyers: “Corporate buyers should prioritize reducing their own emissions, particularly through transition planning, adopting net-zero targets, and transparently reporting on progress,” Yellen argued in her pitch for “demand integrity,” rejecting the notion that companies can just rely on offsetting their emissions through carbon credits to fill their responsibilities to the climate.

The market also needs to be more transparent: In her third pillar for sorting out the voluntary carbon market in the US, Yellen called for market integrity, adding that the voluntary carbon market is “a fragmented market, with high search costs and low transparency.”

ALSO- Traders in the United States, Canada, and Mexico are under a bit of extra time pressure this morning after they moved back to T+1 stock trading, having enjoyed for the past century a more leisurely settlement schedule. Look for a bit of short-term stress this week as folks adapt to the shift, which is meant to reduce risk in the financial system, Bloomberg writes.

Sound smart: T+1 trading means settlement comes one business day after the trade — the buyer gets the stocks the next day, and the seller the money at the same time. The previous standard in the US for most equity transactions was T+2; Wall Street was last on a T+1 settlement schedule back in the 1920s.

In our part of the world: Most Egyptian stocks are on a T+2 schedule, but some brokerages can trade select equities T+0, with settlement happening the same day trades are executed. Saudi’s Tadawul is T+2, as is the Dubai Financial Market.

MARKETS THIS MORNING-

Asian shares are in the red this morning even after the IMF upgraded its China growthforecast to 5%, with the Shanghai Composite being the only major benchmark in the green this morning. US and European equities futures are down slightly after yesterday’s fresh Nasdaq record.

THE CLOSING BELL: TADAWUL-

The TASI fell 1.5% yesterday on turnover of SAR 5.3 bn. The index is down 2.6% YTD.

In the green: Sisco Holding (+6.2%), Medgulf (+4.0%) and Ayyan (+3.6%).

In the red: Acwa Power (-4.7%), Avalon Pharma (-4.6%) and Alarabia (-4.5%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.8% yesterday on turnover of SAR 25.3 mn. The index is up 7.0% YTD.

In the green: Almodawat (+10.1%), Aictec (+7.5%) and Pro Medex (+5.6%).

In the red: Future Care (-8.6%), Osool and Bakheet (-7.9%) and Food Gate (-6.5%)

CORPORATE ACTIONS-

The board of the Saudi Industrial Development Company (Sidc) has recommended a capital reduction followed by a capital increase through shares offering to offset accumulated losses, it said in a disclosure to Tadawul. The first stage will see a 66.3% capital reduction to SAR 135 mn shares. It will then seek to raise its capital by SAR 165 mn following the capital reduction to enable the implementation of its operational plans, support working capital, and strengthen its financial position. Sidc appointed Alinma Investment as financial advisor for both tracks.

The board of Bupa Arabia has recommended dividends of SAR 600 mn at SAR 4 per share for FY 2023, it said in a disclosure to Tadawul.