The National University of Singapore ( NUS ), in collaboration with Northern Trust and UOB, has launched a first-in-market initiative aimed at tokenizing green bond credentials.

NUS is the first university in Singapore to implement blockchain technology for environmental, social, and governance ( ESG ) reporting. The initiative, a key milestone in green finance innovation, seeks to enhance transparency, data integrity, and investor confidence in sustainable investment practices.

Based on best practices in the market, green bond issuers provide regular updates to investors regarding the use of funds. Investors may require such data for their own sustainability reporting obligations and to assess their progress towards their ESG goals.

Under the initiative, Northern Trust will use its cutting-edge digital assets platform, Northern Trust Matrix Zenith, to mint and hold a green bond reporting token.

The token will hold the environmental impact reporting data from NUS’ third green bond, issued in 2023. UOB, as the lead arranger of the bond issuance, will solicit and provide crucial feedback on how the tokenized data can enhance investors’ sustainability reporting practices.

The tokenization process will focus on ensuring data integrity, providing investors with confidence that the environmental impact reporting data is secure, immutable, and reliable for their own sustainability reporting obligations.

Investors of the bond will receive the same complete set of information which will remain unchanged even as the bond changes hands. This initiative marks a significant step towards aligning green finance practices with global transparency and regulatory standards.

The tokenization of NUS’ green bond credentials is part of Project Guardian, a global collaboration between policymakers and key industry players, led by the Monetary Authority of Singapore to enhance liquidity and efficiency in financial markets through asset tokenization.

It falls under the fixed income workstream of Project Guardian, which focuses on demonstrating the benefits of tokenizing bonds and other fixed income securities.