London-based climate tech startup BeZero Carbon secured $50 million (about €48M) in a Series B round to scale its carbon rating platform and expand into the US and Asia.
BeZero Carbon is a ratings agency founded in 2020 for the voluntary carbon market (VCM). Its ratings are determined by scientists, earth observation specialists, and financial analysts.
BeZero’s users include major energy institutions, commodities, and the financial sector. The firm’s platform also supports credit buyers, investors, project developers, brokers, carbon marketplaces, and top exchanges.
For Scale Up & Expansion
BeZero’s latest $50 million funding round is the largest Series B raise in UK climate tech this year. The company raised a total capital of over $70 million.
The firm’s CEO Tommy Ricketts said:
“… Starting with carbon, effective ecosystem markets have huge potential to accelerate the Net Zero transition and generate economic prosperity. Developing the information infrastructure that allows these markets to take off is fundamental to their growth. The raise will ensure we can continue to invest in our ratings, risk and analytics tools to make this vision a reality.”
US-based investment firm Quantum Energy Partners led the round, with more investments from old and new partners:
- Molten Ventures
- Norrsken VC
- Illuminate Financial
- Qima
- Contrarian Ventures
- EDF Pulse Ventures
- Hitachi Ventures
- Intercontinental Exchange (ICE).
The startup said it would use the funds to drive innovation in the VCM. And that’s through developing ratings, risk and analytics tools, and opening offices in New York and Singapore.
The funding will also be for investing in creating risk-based products for other markets. BeZero will further use it to develop its proprietary toolkit, deepen its earth observation capabilities, and expand the team.
The BeZero Carbon Rating Methodology
The BeZero Carbon Rating (BCR) gives users a risk based assessment for understanding and evaluating carbon credit of any type, in any sector and country.
The BCR of carbon credits represents the firm’s opinion on the likelihood that a given credit achieves a tonne of CO2e avoided or removed. It uses a 7 point scale across 3 categories: A, AA, AAA.
BCR Qualifying Criteria:
Projects must meet these 3 key criteria to be eligible for a BeZero Carbon Rating.
- Applied an additionality test or provide enough information on how it is additional
- Audited by a recognized independent auditor to ensure the credibility of data and information
- Information on project design and ongoing monitoring must be available in the public domain at all times
BCR Analytical Framework:
The BCR follows a robust analytical framework with detailed assessment of the following 6 critical risk factors. They significantly affect the quality of carbon credits issued by the project.
The BCR Process:
BeZero rates a project’s carbon credits in a 4-stage process.
#1. Macro factor assessment: making top-down assessment of the credits based on country-specific risks, sector, and accreditation methodology.
#2. Project specific assessment: assessing project-specific risks based on all publicly available information on project’s credits.
#3. Risk factor weighting: summing up all the specific weighting for each risk factor, according to these percentage.
#4. BCR committee review: The Rating Committee reviews all ratings and must approve them before assigning final BCR to the carbon credits.
Ensuring Transparent Growth of VCM
All BeZero Carbon Ratings are valid at all times and are tracked on an ongoing basis. The monitoring process involves reviewing all new information about the project, sector, and methodology.
That’s to ensure that the VCM grows in a transparent way, delivering a real impact on the planet.
Jeffrey Harris from Quantum Energy Partners noted that:
“Set to reach $50bn by 2030, the Voluntary Carbon Market will play a central role in the transition to Net Zero. BeZero Carbon has built the biggest ratings agency in the market, with an incredible team of experts that are leaders in their fields. We are excited to be supporting them with their next stage of growth to help build a new climate economy.”
All headline ratings are available on the firm’s website, making it the only carbon ratings agency to do so.
With more information readily available to assess a carbon credit’s quality, the more confidence investors and buyers can have that it’s achieving its claim towards a net zero emissions.
Paying clients can access full project assessments, research insights and risk tools via its platform. And by integrating its API, carbon credit marketplaces and exchanges can also host the BeZero Carbon ratings.