Carbonstop Raises 50 million RMB Series A funding from Hillhouse Capital and Matrix Partners China— Milestone in China’s Carbon Neutrality Goal
On 10th May, 2021, Carbonstop, China’s first carbon emissions management software and consulting solutions provider, announced it had raised 50 million RMB Series A funding from Hillhouse Capital and Matrix Partners China, marking the latest move by the two leading institutions to increase their stake in “carbon neutralization” infrastructure.
Founded in March, 2011, Carbonstop’s offering include customized carbon management software and SaaS services, carbon accounting and consulting, and a consumer-facing carbon account platform. It has serviced more than 1,000 clients over the past decade, including Alibaba, Baidu, JD.com, Vanke, Microsoft, CNOOC, among others. This round of financing will be used to enhance its SaaS offerings and the standardization and intelligentization of its carbon management products.
A Trillion Dollar Market Ready to Take Off
In September, 2020, at the 75th session of the UN General Assembly, China pledged to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. Over this year’s National People’s Congress and the Chinese People's Political Consultative Conference sessions, “carbon peak” and “carbon neutrality” were for the first time included in the Chinese government work report as one of the priorities for 2021. As early as 2013, China already launched some local carbon trading pilot projects as a main means towards carbon neutrality. It is expected that a national carbon trading market will be in place in June, 2021, with 2200+ power companies being the first batch to trade in the market and over ten thousand firms will be involved in carbon trading later on.
Globally, over 200 international companies and institutions have already put forward their carbon neutrality goals and hundreds of thousands of suppliers and sustainable innovative firms are conducting or forced to conduct carbon management and carbon information disclosure. According to the Institute of Climate Change and Sustainable Development of Tsinghua University, China will have to invest 3.7 trillion RMB annually in the next three decades to make itself carbon neutral and in the next 5 years, hundreds of thousands of companies will undertake carbon management and cut carbon emissions.
On the other hand, China’s sustainable consumer market is booming. According to the Survey on Green Consumption of the Chinese Consumers Report (2019) issued by the Association for Research and Promotion of Eco-civilization, 83.34% of the respondents support green consumption and 46.75% said they ‘support it very much’.
Luke Li, Partner at Hillhouse Capital said: “The global economy is set to shift from a high carbon emission model to a low or even zero emission model. Leading companies have already set up targets for carbon disclosure, management and neutrality. The carbon management industry is in urgent need of solutions that are more digital and intelligent. Meanwhile, as sustainable consumption gathers momentum, disclosure of product carbon footprint has become even more important.”
The “Carbon Manager” behind Giants - A Decade of Commitment
After graduating from Oxford University, Luhui Yan joined a leading UK carbon consulting firm before returning to China to start his own business. “A decade ago, there was barely any company in China working on carbon management, let alone carbon neutrality. But I believed that the world would in one day wake up to the challenge of climate change and soon companies would start to pay attention to carbon emissions,” said Yan, Founder and CEO of Carbonstop, “It was like sailing uncharted waters 10 years ago, but now I can see all of my forecasts are becoming a reality.”
“Without quantifying, (carbon) management is impossible. Only by measuring carbon emissions in numbers can companies and organizations know where they need improve. With decade-long experience in carbon management, plus China’s largest carbon emissions factor database, what Carbonstop provides is the most fundamental and important carbon data accounting services.”
Currently, Carbonstop offers carbon emissions management software, carbon management consulting and a carbon account platform, among others.
The carbon management software helps organizations measure, analyze, manage and report their carbon emissions. Clients can choose customized software or the SaaS platform. Currently the clients include government entities, emissions control organizations, carbon exchanges and carbon assets management firms, etc. (Click here for more information about the software). To reduce carbon emissions, organizations first need to measure the emissions, a process that will provides data support for their carbon strategies and execution. Carbonstop’s consultancy services include carbon accounting, products’ carbon footprint, emissions reduction accounting, carbon disclosure and carbon management training, etc. It has also created the CREO (i.e. calculating, reducing, engaging and offsetting) strategy towards carbon neutrality (Click here for more information), helping companies like Baidu and Hillhouse Capital with their carbon-neutral endeavor.
The carbon account credits individuals’ low-carbon behaviors (for instance: one day without driving) into their carbon account as a reference for incentives in the future. For example, Carbonstop is a partner of and major low-carbon scenario developer for Ant Forest, helping it incentivize 550 million users to participate in low-carbon activities and plant more than 220 million trees.
Since its inception, Carbonstop has helped a number of leading Chinese companies with their green and sustainable development, servicing over 1000 clients, including 50 Fortune 500 companies and leading institutions, such as Alibaba, Baidu, JD.com, Vanke, Starbucks, Microsoft, Hillhouse Capital, Asia Green Fund, UNEP, the National Development and Reform Commission of China, The Ministry of Ecology and Environment of China, Energy Foundation China, World Wildlife Fund and Natural Resources Defense Council.
A One-stop Carbon Management Platform - Ccloud
In addition to customized services, Carbonstop has also developed a number of standardized products such as the Carbon Intelligence and Ccloud.
The Carbon Intelligence is a not-for-profit mini program supported by an emissions information database whereby individuals and companies can conveniently search for carbon information. An important component of Carbon Intelligence, the Carbon Emissions Factor Database is a cornerstone not only of the product but also the entire carbon management industry.
All products and behaviors generate carbon emissions, known as the Carbon Emission Factor. A simple equation to calculate carbon emissions is Carbon Emissions =Activity data*the Carbon Emission Factor. Over the past 9 years, Carbonstop has been accumulating carbon emission factors data from more than 200 countries. With over 100,000 data entries, its database is now the largest in China and becoming the infrastructure for carbon emissions management.
(Carbon Emission Factor Database)
(Scan the QR code to try Carbon Intelligence)
Embracing the trend of carbon neutrality to help Chinese companies better manage their carbon emissions, Carbonstop distilled best practices from its experience of serving thousands of clients and developed China’s first SaaS platform for carbon management - Ccloud. Ccloud is a corporate-facing carbon footprint assessment software that was developed following life cycle assessment principles and is compliant with ISO 14067 and PAS 2050 standards. It covers all industries and includes its 100,000 plus emission factors for clients to use.
In addition to products’ carbon footprint accounting, Ccloud also plans to add more features such as corporate carbon emissions accounting, scenario-based carbon reduction accounting, conference carbon emission accounting, carbon disclosure and carbon neutrality to make itself a one-stop-shop platform for emissions management and carbon neutrality for Chinese companies.
Lingye Zuo, Partner at Matrix Partners China commented: “Carbonstop has been committed to carbon emissions accounting and management for a decade. It has accumulated rich experience and developed a complete emission factors database. It has also achieved standardization of carbon management software. Its founder, Luhui Yan, is one of the earliest in China to engage in carbon emissions management. He has been a steadfast practitioner with a good reputation in the industry. We look forward to Carbonstop coming up with more carbon management software services to contribute to China’s carbon neutrality goal.”
The Decade Ahead: Enabling China’s carbon neutrality transition
As of 2020, Carbonstop had helped its clients reduce more than 100 million tons of emissions, impacting over 800 million people indirectly via its products and services. Due to its outstanding contribution to the 12th and 13th UN Sustainable Development Goals, i.e. “sustainable consumption and production” and “climate action”, Carbonstop are recognized by the UNEP, Dubai World Expo, the SEE Foundation of China and the Energy Foundation China (Click here for more about Carbonstop’s awards). In the next 5 years, it will continue to contribute to China’s endeavor to cut emissions by over 1 billion tons. “The alignment between its tremendous positive impact on the environment and its business model makes Carbonstop a milestone investment opportunity that will make a real difference in the world.” said Yijing Wang, the exclusive finance advisor of this deal.
“On the other hand, individual consumers are also pushing for companies’ low-carbon transformation,” said Yan, “10 years ago, people seldom paid attention to companies’ carbon reduction, but this is now mandatory. I believe that in 10 years, low carbon consumption is also the trend forward. We will be the bridge between products’ low-carbon transformation and the sustainable consumption market, and strive to provide carbon footprint information for every product.”
“Apart from the funding itself, support from the two leading investment institutions Hillhouse Capital and Matrix Partners will make us more firm in our mission and remind us to remain committed to doing the right things even when the industry is in strong tail wind, to create long-term value for our clients and the society,” added Yan, “we will keep improving our core products to make ourselves the best partner for Chinese companies in their journey towards carbon neutrality.”