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IDEA was started in 1989 by Shandi J Modi with the objective of conducting rigorous and original research to help public and private sector participants deal with the problems of managing risk and conducting appropriate policy in the foreign exchange and bond markets.

IDEA soon established itself as an important part of the fabric of the capital markets, influencing the daily risk-taking activities of the leading players in these markets, as well as advising central banks on the conduct of monetary policy, particularly in the management of market expectations. 

IDEA and its advisors were involved in some of the most significant events in the financial world in the 1990s, establishing a role as a bridge between the policy community and the financial markets.

  1. Sir Alan Walters, who joined us as a principal advisor in 1991 was a consistent proponent of the GBP abandonment of the ERM (exchange rate mechanism), and played a key role in advising governments in emerging markets on appropriate currency regimes. He also provided critical insights on subjects such as German reunification.  
    With IDEA, which by then had a voice to the “mind of the market”, Sir Alan’s views effectively gave confidence to financial markets to correct the error of the ERM and other semi-fixed currency regimes, including the UK in September of 1992 and Sweden in November of 1992.

  2. Professor Doctor Helmut Schlesinger, former president of the Bundesbank, joined the IDEA Advisory Board in 1995. As is well known, Dr Schlesinger played a pivotal role in the creation of the European Central Bank and oversaw the monetary unification of Germany.  Professor Schlesinger spoke at several IDEA events and directed IDEA clients on why the ECB and the single currency had to be formed.    He also used the IDEA Advisory platform to communicate with the financial markets the structure of and inherent checks and balances leading to the creation of the single currency.

  3. In 1996 IDEA held a seminar in Hong Kong on the subject of ‘Future Shock: How Asian Central Banks should handle a financial crisis”.  Among the speakers were Professor Helmut Schlesinger, Joseph Yam, Governor of the HKMA and Dr Zeti, the current governor of Bank Negara Malaysia. They highlighted the existing core issues at the time and key risks to the Asian economy to an audience of leading financial market participants.  
    Within ten months, the exact risks that the IDEA conference had highlighted materialised and became what is now known as the Asian Financial Crisis of 1997. The essence of the valuable content from this IDEA event was was distributed to IDEA clients worldwide, including policymakers, and helped them deal more effectively with the costs and opportunities that arose from the crisis.   

  4. Nick Stern, William Buiter, Ng Kok Song and Professor Schlesinger along with leading financial market participants, gathered at the Merchants Taylor’s hall in London in 1999.  During the conference, the speakers clarified the thinking on some of the critical economic and market issues of the day:  
    a) William Buiter highlighted the ‘Bubble in the US equity market based on the lack of earnings of many leading Internet companies’.
    b) Nick Stern, who at that time was Chief Economist of the EBRD, correctly forecast the economic success of Eastern Europe seen over the last five years.
    c)The positive ‘underlying’ outlook for the Asian economies after the 1997/98 Asian crisis was bought back into perspective by Mr Ng Kok Song, MD of Public Markets, GIC.


In 2006, IDEA decided to play a similar role to help the private and public sector deal with the problems and opportunities arising from action on climate change, arguably the most significant challenge of today.  Shandi Modi wanted to make a contribution by providing transparency and market standards for institutional/private capital to play a leading role, as IDEA Group has done in many other public and private areas before. The work of IDEACarbon is centred on helping provide the critical and necessary tools to help the creation of a large and successful alternative asset class.

Ian Johnson (then Vice-President at the World Bank) a leading expert in the policy world, having established, inter alia, the Carbon Finance Unit of the World Bank, had a similar goal of harnessing the private sector effectively to play a role. Ian joined IDEACarbon as Chairman in April 2006, from the World Bank, to spearhead the effort in creating tools and transparency in an opaque marketplace, and give confidence to the vast pool of institutional capital to enter the space. 

Our work since March 2006, has culminated in the creation of a rigorous ratings service, which analyses any asset with carbon collateral; publishes in the standard nomenclature of rating agencies and classifies each asset/instrument or paper with a carbon asset that helps investors size up the inherent relative risk of these assets. 

We hope and expect our ratings will play an integral part in the evolution of ‘carbon markets’.

At this stage, with significant binding commitments behind us, the carbon market is ready to take off.  We all hope and believe the prospects of a “new global deal” on carbon emissions are promising; this would of course reinforce the tremendous growth push from the voluntary carbon market triggered by the California decision in 2006.  

Nevertheless, it still needs sponsorship by leading players with a long-term commitment, and IDEACarbon is focused on helping to bridge the intellectual gap, reduce regulatory uncertainty, improve market standards and enhance risk analysis and transparency. These market needs are increasingly recognised by both the private sector and public sector policymakers. 

At the recent Globe G8 + 5 meeting in Berlin, the final communiqué, for example, recognised the need for ratings of carbon assets.     

And industry figures as well as policymakers increasingly understand the need for ratings.

IDEACarbon is also working with policymakers to change the investment landscape to allow sizeable/scaleable investment. The IDEACarbon team has a close understanding of the evolving policy framework and its ramifications.

  •  Ian Johnson is involved in pro bono work with various organisations

  • Policymakers and politicians worldwide seek Nicholas Stern out for his insights, after his groundbreaking report on the Economics of Climate Change.   Nick is here tonight as a guest. 

  • Sam Fankhauser has participated in the 1995/2001 and 2007 Intergovernmental panel on Climate Change and has recently joined IDEACarbon from his position as Deputy Chief Economist of the EBRD.

IDEACarbon believes the case for serious involvement by private capital is compelling: it’s an opportunity to achieve healthy investment grade returns in a market un-correlated to stocks and bonds. We encourage leaders in the financial community to help us all set the standards and build a real market thereby making a tangible difference in reducing the risk of climate change, which affects all of us, and our future.

What can IDEACarbon offer?

  1. The IDEACarbon team bridges the gap between policy driven initiatives and market analysis and understanding.  

  2. IDEACarbon’s innovative Ratings approach can set market standards.

  3. The IDEACarbon portfolio advice and funds advisory service.

  4. The IDEACarbon strategic consultancy advice product for a forward looking understanding of the evolving policy agenda, aimed at CEOs of leading corporations and CIOs of leading financial institutions.


More IDEAglobal Information

Sir Nicholas Stern and Mr Ng Kok Song guests at IDEAGlobal Group

Sam Fankhauser joins the IDEAcarbon team

IDEAglobal Public Relations
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