Our investment in Opna: unlocking the capital to solve climate change
More than 5200 businesses worldwide, together representing 40% of the world’s private capital, have committed to reaching net zero by 2050. But the vast majority remain a long way from meeting these crucial commitments, with only 7% of companies on track to honour their net-zero pledges.
To reach their targets quickly and cost-effectively, corporates have turned to offsetting and insetting their emissions. Typically, this has involved purchasing carbon credits in the voluntary carbon market (VCM). But this approach is becoming less and less viable. Though the VCM is expected to become a trillion dollar industry, right now it’s plagued by quality concerns and a supply shortfall which will only intensify as demand surges in the coming years.
In response to these market issues, an increasing number of businesses are taking matters into their own hands. They’re creating their own supply of high-quality credits by investing directly into the carbon projects behind them.
But companies following this approach face pain points too. Mobilising capital can be an uphill battle in the face of a lack of in-house expertise, high transaction costs, analogue infrastructure, and time-consuming processes. As a result, there is a sizeable gap between the growing demand for high-quality, transparent and trustworthy carbon projects and the amount of direct investment actually taking place.
We need a solution that removes these obstacles, to ensure that corporates with credible net-zero commitments can reach them and to unlock capital for the next generation of carbon projects with speed, scale and equity.
Enter Opna, our newest $6.5 million Seed partnership which we’re delighted to announce today. Its founder Shilpika Gautam - a Guinness world record-breaking climate advocate and one-time commodities trader - has built a data-driven carbon removal financing platform that enables companies to discover, finance and manage trustworthy and high-quality carbon projects in a transparent, cost-effective, and timely manner.
Opna offers a platform for corporates to connect with trusted and vetted carbon project developers, and facilitates the financing of carbon projects through standardised processes and agreements. This reduces transaction costs and helps level the playing field between stakeholders.
The platform also offers a digitised portfolio and asset management tool, which allows organisations easily to monitor their financed projects over time through regular KPI tracking and risk reporting. This is key due to the long-term, multi-year nature of projects and the need for ongoing evolution of core project attributes such as risk profile and financing needs.
Opna’s whole value proposition is underpinned by its proprietary risk engine which combines public and proprietary data into a quality assessment, allowing businesses to direct capital to high-integrity projects. Today, this quality assessment framework incorporates over 280 different data points, across project developer track record, the project’s financial and technical viability, and its carbon sequestration potential.
With our Seed partnership, we will work with Opna to increase awareness of its financing platform, deepen its proprietary risk engine, grow its team, build out new services, and support the expansion of carbon projects. There’s no single answer to the climate crisis, but with the help of Opna we can unlock the essential capital that will be a crucial part of the solution.
