CarbonPool, the world's first carbon credit insurance company, raises $12M

CarbonPool is set to be the world’s first insurance company with a carbon credit balance sheet. Today it announced the closure of a $12 million funding round.

Many companies depend on carbon credits to reach their net zero goals. But after considerable turbulence in carbon credit markets, credit integrity, proper risk underwriting and certainty of outcomes are critical to reassure investors, regulators, and other stakeholders that these promises represent real environmental gains.

CarbonPool helps society reach net zero by providing in-kind insurance for failure to achieve net zero commitments due to shortfalls, reversals, business interruptions and natural catastrophes that either reduce the amount of carbon dioxide removals contracted for or unintentionally add carbon dioxide back into the atmosphere.

The team of insurance leaders, climate scientists, weather modellers, geographers, and engineers assess each risk to build bespoke risk models. The premiums collected from each client are invested, alongside CarbonPool's own capital, into high-quality carbon removal projects, to enable claims payments in-kind.

According to Coenraad Vrolijk, former regional CEO of Allianz Africa and CarbonPool’s co-founder and chief executive:

“CarbonPool’s in-kind payments make it unique among insurers in not only offering protection to holders of carbon credits in cases of natural disaster or technology breakdown but also in providing a guarantee that carbon credits live up to their promises, giving purchasers certainty and ensuring that they can meet their net zero goals.”

The funding round was co-led by Heartcore Capital and Vorwerk Ventures, and included HCS Capital, Revent Ventures and former members of Allianz, Axel Theis and Christof Mascher.

Christian Jepsen, a founding partner at Heartcore, shared: 

“Insurance represents 5-10 percent of the revenue of most mature markets, yet it has only just begun to touch carbon trading. This is a space that desperately needs the credibility that established financial controls like insurance can offer.” 

CarbonPool’s insurance licence application is underway in Switzerland, and the company is already offering assessments and pre-underwriting agreements to clients, including corporations, institutional investors, and carbon removal developers. 

It is also in conversation with government bodies, including the United Nations and the State of California, sharing perspectives on how insurance can solve some of the industry’s key challenges, such as securing the permanence of carbon removals from the atmosphere.

Lead image: CarbonPool. Photo: uncredited.