TPG-Backed Carbon Markets Platform Rubicon Raising $1 Billion
Carbon markets-focused products and solutions platform Rubicon Carbon announced its official launch today, aiming to “deliver greater scale, confidence, and innovation across all facets of the carbon market.”
The new platform is being launched with backing from global alternative asset firm TPG, with a $300 million capital commitment from its climate-focused investment strategy TPG Climate Rise, and its impact investing strategy, The Rise Fund.
The company stated that it is targeting total capital commitments of $1 billion, with participation in its initial equity financing expected from investors including Bank of America, JetBlue Ventures, and NGP ETP.
Rubicon is led by CEO Tom Montag and Chariwoman Anne Finucane, formerly Chief Operating Officer and Vice Chair of Bank of America, respectively.
“To deliver on net zero and keep as close as possible to a 1.5-degree pathway, companies must first reduce emissions within their value chain to the greatest extent possible. To balance any remaining emissions that cannot otherwise be eliminated right now, we must scale high-quality carbon credits in parallel.”
According to Rubicon, the launch comes as demand for carbon credits is rapidly increasing, while weaknesses and imbalances in the market are becoming apparent.
Jim Coulter, Founding Partner of TPG and Managing Partner of TPG Rise Climate, said:
“The growing carbon market will need new tools and financing solutions in order to reduce friction, democratize access, and improve quality. Rubicon Carbon was not designed as a replacement for aggressive carbon emissions reduction but rather as an end-to-end solution for corporations that have chosen to include high-quality carbon credits as part of their overall decarbonization strategy.”
Demand for carbon offset projects that counteract the release of greenhouse gases, and related credits is expected to increase significantly over the next several years, with companies and businesses increasingly launch net zero ambitions, and turning to offsets as a bridge to their own absolute emissions reduction efforts, or to balance difficult to avoid emissions.
The market for carbon credits, however, is challenged by problems including a lack of liquidity, and insufficient or inconsistent data to assess the effectiveness of the projects.
Aiming to address these issues at scale, Rubicon’s platform provides technology-based services including proprietary curation and portfolio construction, enhanced monitoring and analytics. The company’s first product, the Rubicon Carbon Tonne (RCT), provides enterprise customers access to proprietary sets of both nature-based and non-nature-based carbon credits, backed by an owned inventory – 20 million tonnes of CO2e at launch – of high-quality, verified, broadly diversified carbon credits.
“The latest discussions from COP27 underscore the critical role that developed markets play in channeling capital towards a vast supply of high-quality carbon reduction or removal projects, particularly in developing countries. Rubicon is designed to be the market-based solution that allows both the supply and demand side of the global carbon market to scale responsibly.”