Frequently Asked Questions
Everything you need to know about Carbbin's climate impact assessment platform
Platform Capabilities & Speed
Carbbin transforms assessment timelines from days to minutes, increasing reporting capacity by 32x without additional hiring.
Traditional sustainability impact assessments require 3-5 days per company and cost $5,000-$15,000 when conducted by outsourced specialized consultants. For climate VCs managing 20-30 portfolio companies, this creates unsustainable bottlenecks in decision-making.
While industry platforms like Novata, Apex/Holtara, and Dasseti serve PE and VC ESG reporting needs, their subscription costs range from $5,000 to $150,000 annually, and they still require significant human resources to collect data from portfolio companies before input into the system.
The platform reduces costs by up to 10x through AI-powered automation that requires only minimal human input and basic startup information, addressing the reality that limited resources and lack of expertise represent major obstacles to ESG adaptation by VC funds.
Carbbin enables VCs to begin producing standardized, science-based reports immediately upon onboarding.
Annual LP questionnaires on ESG for VCs became the norm around 2020 and remain a key piece of regular engagement, with European state LPs frequently embedding requirements in Limited Partnership Agreements that create immediate reporting deadlines.
Our AI-powered platform requires only minimal human input and basic startup information to generate comprehensive impact assessments, automatically assessing compliance with SFDR and EU Taxonomy requirements while providing both quantitative Carbon Performance Potential assessments and qualitative ESG SWOT analysis.
This eliminates lengthy setup processes, organizational change management, or staff training that traditional ESG management systems require for effective deployment.
Methodology & Industry Standards
Project Frame has emerged as the definitive industry standard for climate impact assessment.
Membership has grown from 370 organizations in December 2022 to over 1,300 observing members representing 700+ organizations by March 2025, including 400+ investment firms representing $471.8B in venture capital and private equity AUM.
The 2024 annual survey found that 90.9% of respondents use Project Frame as a resource and 87.9% align with its values and principles. Leading climate VCs like World Fund have explicitly stated that "any climate VC that cares about financial returns should assess a startup's CPP (climate performance potential) before investing".
Carbbin's methodology is built on Project Frame guidance, ensuring alignment with the framework that sophisticated climate LPs increasingly expect as the baseline standard for credible impact assessment.
Carbbin's Carbon Performance Potential formula follows the established framework comparing solutions to incumbents across their life cycles.
Building credible narratives around climate impact is important to VC firms, with acknowledgment that the way climate impact is measured may affect the kinds of solutions that receive financial support.
World Fund emphasizes the need to "allow better comparability and to benchmark for climate-effective decision making" by following certain best practices when using tools and methodologies. They collaborate to maintain the GHG Impact Resource Dashboard hosted by Project Frame as the definitive resource for climate assessment tools.
With Project Frame membership representing $471.8B in venture capital and private equity AUM across 340 investment organizations by December 2023, assessments following this methodology provide scientific credibility that sophisticated climate LPs recognize as the industry benchmark for avoided emissions quantification.
Climate impact requires specialized lifecycle analysis and avoided emissions forecasting that generic ESG platforms lack.
Different investments play different roles in decarbonization, with different investment characteristics that influence the timing, magnitude, and measurability of impact. Climate impact must be classified into Direct Climate Impact (solutions that directly avoid, reduce, or remove emissions), Indirect Climate Impact (enabling technologies), and Transformational Climate Impact (next-wave technologies).
World Fund explicitly states that climate performance assessments require bottom-up lifecycle analysis where "once a per-unit LCA is established, which is called the unit impact, it can be multiplied by projected unit sales over a defined period to estimate the expected climate performance".
Carbbin can forecast avoided emissions from direct products, components, or enabling technologies that increase market adoption or efficiency across different market segments, using the specialized CPP methodology that leading climate VCs recognize as essential for evaluating actual decarbonization potential.
Regulatory Compliance
Carbbin automatically assesses compliance and updates to reflect latest regulatory requirements.
European state LPs frequently embed SFDR and CSRD requirements in Limited Partnership Agreements, yet several Article 9 funds have downgraded to Article 8 due to compliance difficulties as regulations evolved. The Regulatory Technical Standards came into force on January 1st, 2023, and the Taxonomy Regulation was partially completed in July 2022, but guidelines remain incomplete for social and governance factors.
Carbbin automatically assesses compliance with SFDR (15 mandatory + 2 additional Principal Adverse Indicators) and EU Taxonomy (Do No Significant Harm across 6 dimensions), and the platform automatically updates to reflect latest regulatory requirements.
This eliminates the need for VCs to continuously monitor regulatory changes or maintain in-house regulatory expertise, solving a challenge that has caused even sophisticated funds to struggle with compliance.
Carbbin's methodology based on Project Frame guidance satisfies the growing majority of sophisticated climate LPs without requiring customization.
The standardization problem represents one of the main challenges for the climate tech ecosystem, with startups reporting to multiple investors using their own templates and questionnaires. VCs themselves report to LPs using different frameworks, and most LPs outside Europe use highly divergent questionnaires.
While the Invest Europe template aims to increase harmonization in Europe from 2025 onwards, international harmonization remains a significant challenge.
Carbbin leverages the Project Frame framework that has achieved unprecedented industry adoption, growing to over 1,300 observing members representing 700+ organizations by March 2025. With 90.9% of Project Frame survey respondents using it as a resource, assessments following this methodology satisfy LP requirements without requiring customization for each unique questionnaire format.
Early-Stage Assessment
Carbbin is specifically designed for early-stage startups and can assess solutions from any sector even with low information available.
Environmental reporting cannot be the same for early-stage startups as for growth stage companies, and measuring sustainability risks is especially complex given the low maturity of portfolio companies.
World Fund emphasizes that "a startup is typically asset-light, and its primary lever is its product" and that understanding product mechanics through lifecycle assessment is essential. Traditional ESG platforms designed for private equity are optimized for established companies with existing operational data and can struggle with early-stage assessment.
The platform uses the Carbon Performance Potential (CPP) formula following Project Frame's framework: GHG Impact = Net Unit Impact × Volumes, comparing solutions to incumbents across their life cycles, enabling directionally sound assessments even when startups lack comprehensive operational footprints that traditional tools require.
Carbbin can generate directionally sound assessments based on product descriptions and market information without requiring comprehensive operational data.
This represents a common challenge as climate impact VC firms see a startup founder's commitment to climate impact as an important measurement criterion, yet early-stage founders often lack resources for comprehensive data collection.
Traditional ESG platforms fundamentally operate as data collection and management systems, meaning they cannot generate assessments without portfolio company cooperation and data provision.
Carbbin uses AI-powered automation that requires only minimal human input and basic startup information. The platform can generate directionally sound Carbon Performance Potential assessments based on product descriptions, target markets, and incumbent comparisons without requiring comprehensive operational data from uncooperative or under-resourced portfolio companies.
Carbbin maintains consistent methodology across different industries while accounting for sector-specific characteristics.
The KPIs and metrics to collect vary greatly across industries and types of companies, making it critical to develop dedicated tools for growing companies. This creates challenges for multi-sector climate funds investing across renewable energy, industrial decarbonization, sustainable materials, and food systems.
ESG platforms are typically designed as generalist data collection systems that require manual configuration of sector-specific metrics and materiality assessments. World Fund notes that understanding product mechanics through lifecycle assessment varies significantly across sectors, requiring deep technical knowledge of different industries' reference scenarios and incumbent solutions.
Carbbin uses a life cycle-based approach with the Carbon Performance Potential framework that maintains consistent methodology across different industries. This eliminates the need for multiple specialized assessment tools, sector consultants, or manual configuration of industry-specific metrics that traditional platforms require.
Value & Investment Decisions
Carbbin provides actionable metrics focused on decarbonization potential rather than just compliance data collection.
This represents the industry's most critical challenge: only 30% of LPs currently use collected ESG data to influence investment strategies or re-upping decisions, despite 63% requiring fund-level ESG reporting. Under SFDR and CSRD regulations, reporting remains mostly not materially filtered, becoming a one-size-fits-all exercise where materiality loses out and meaningfulness suffers.
While traditional platforms offer data collection and visualization features, they focus primarily on compliance reporting rather than forward-looking impact forecasting that drives investment decisions.
Carbbin provides quantitative Carbon Performance Potential assessments alongside qualitative ESG SWOT analysis, enabling VCs to "invest in ideas with strong sustainability returns". The platform forecasts avoided emissions from direct products, components, or enabling technologies, directly addressing what World Fund calls the "climate-effective execution" that benefits both the planet and financial returns.
Carbbin transforms costs from $100,000-$450,000 annually to $10,000-$45,000 while completing assessments in hours rather than months.
For a climate VC fund with 20-30 portfolio companies, traditional approaches using outsourced consultants at $5,000-$15,000 per assessment translate to $100,000-$450,000 in annual costs. Assessment processes taking 3-5 days per company mean 60-150 days of total assessment time if done sequentially.
ESG platform subscription costs range from $5,000 to $150,000 annually based on AUM and portfolio company count, but these platforms primarily facilitate data collection and require significant staff time to gather information from portfolio companies, input data, and generate reports.
Carbbin transforms the timeline to minutes per assessment representing a 32x increase in capacity, and reduces costs by up to 10x, providing enterprise-grade climate performance analysis at a fraction of traditional cost.
Deal Screening & Due Diligence
Carbbin delivers quantitative Carbon Performance Potential assessments in minutes rather than days, allowing investment teams to evaluate climate impact alongside traditional financial metrics without creating bottlenecks.
Impact due diligence is no longer a formality, and for climate ventures seeking serious investment, transparent and verifiable impact assessment has become essential. Working with a consultant to complete a full Life Cycle Analysis takes resources and time that most ventures don't have.
Impact investors often need to move fast when a promising new venture appears, but without clear insight into a company's climate impact potential, they risk backing a liability. VCs face unique challenges gathering comprehensive and accurate data from their diverse portfolio companies, with traditional methods being time-consuming and prone to errors.
Carbbin requires only minimal human input and basic startup information, enabling rapid assessment that fits within typical deal screening timelines.
World Fund's five-year analysis found that over 60% of climate unicorns passed climate performance criteria, while over 80% of climate unicorns that filed for bankruptcy did not pass these criteria.
Their research from 2020-2024 of almost 150 climate tech unicorn companies validates the hypothesis that climate performance goes hand in hand with financial performance. World Fund explicitly states that "any climate VC that cares about financial returns should assess a startup's CPP (climate performance potential) before investing".
Carbbin's methodology following Project Frame guidance uses the same CPP framework that World Fund validated as correlating with financial performance, providing VCs with an assessment tool that serves both impact reporting requirements and risk mitigation objectives.
This potentially helps identify ventures more likely to achieve both climate impact and financial returns.
Carbbin's methodology leverages the Project Frame framework that has achieved over 1,300 observing members representing 700+ organizations by March 2025, creating a common measurement standard across the climate VC ecosystem.
Parallel benchmarking can provide additional transparency. While broad market-cap weighted indexes are often used to gauge equity-market performance, an important consideration for active climate funds is to demonstrate their ability to meet climate objectives.
The challenge is that different funds use different assessment methodologies, making meaningful comparison difficult. Using a climate index as a parallel benchmark could help managers provide targeted transparency and improve investor decision-making.
This enables meaningful benchmarking since assessments following the same methodology can be compared across funds, providing VCs with data to demonstrate whether their portfolio's climate performance is above or below peer averages.
Carbbin implements robust data security infrastructure with explicit security guarantees and clear data handling protocols to protect sensitive portfolio company information.
Investors are increasingly demanding transparency and accountability from companies on ESG data. However, ESG data handling raises significant privacy and security concerns as organizations must safeguard stakeholder data against breaches while adhering to legal standards.
VCs handling sensitive portfolio company information—including proprietary technology details, market projections, and competitive positioning—require robust data security. Portfolio companies may resist providing detailed information for climate assessments if they fear data leakage to competitors or public disclosure of confidential business information.
Advanced technologies like homomorphic encryption and differential privacy are key to maintaining data usability while ensuring security and privacy, with implementation of Privacy Enhancement Technologies protecting data integrity during analysis and reporting.
Portfolio Management & Value Creation
Carbbin's rapid assessment capability enables VCs to conduct independent due diligence on co-investment opportunities without relying solely on lead investor representations.
Impact investors face challenges in assessing the social and environmental impact of startups during co-investment processes. Early-stage impact assessment helps investors avoid climate liabilities and deliver targeted support to scale high-impact innovation.
When evaluating co-investment opportunities presented by lead investors or other syndicate members, having independent climate impact assessment capability enables VCs to validate claims and make informed decisions.
This supports more confident co-investment decisions and enables productive discussions with syndicate partners based on shared assessment methodology, particularly when Project Frame adoption means multiple co-investors may recognize the same framework.
Carbbin assessments can be shared with portfolio companies, transforming climate impact assessment from a reporting burden into a value creation tool that supports revenue growth.
The Climate Impact Forecast tool enables ventures to model their innovation against a "business-as-usual" baseline and pinpoint where and how avoided emissions occur. Portfolio company Brill Power noted that "having third-party validation of our product's life cycle impacts is particularly helpful with our investors and customers".
Climate tech startups increasingly face customer due diligence requirements where enterprise buyers want quantified environmental benefits before procurement decisions. Portfolio companies need credible climate impact quantification not just for investor reporting but for their own revenue generation.
This provides the third-party validated impact claims that enterprise customers increasingly require before making purchasing decisions, as corporate buyers incorporate sustainability criteria into vendor selection.
Carbbin enables repeated assessments over time with version control and historical tracking, allowing VCs to demonstrate improvement trajectories that show active value creation.
Done right, impact assessment can unlock key insights that accelerate venture growth, providing better conversations with investors, sharper internal focus on climate value, and a faster path through impact due diligence.
Portfolio monitoring goes beyond initial assessment to track performance evolution, identify improvement opportunities, and demonstrate value creation to LPs. VCs need mechanisms to establish baseline climate performance at investment, set improvement targets aligned with company growth, and track progress over holding periods.
This demonstrates not just static portfolio impact but improvement trajectories, supporting the narrative that the GP actively improved climate performance rather than simply selecting high-performing companies.
Carbbin provides investor-grade reports and historical performance tracking that create exit preparation assets supporting higher valuations.
Mature digital platforms can support GPs with their own reporting and disclosure requirements and assist in exit preparations. Exit value increasingly reflects sustainability performance as corporate acquirers and public market investors incorporate ESG criteria into valuations.
Portfolio companies need documentation of climate performance to maximize exit valuations and satisfy acquirer due diligence. VCs can enhance exit outcomes by ensuring portfolio companies have comprehensive, third-party validated climate impact documentation ready for buyer review.
This demonstrates quantified climate impact that acquirers value, particularly as strategic buyers in industries facing decarbonization pressure seek to acquire climate solutions and need validated impact data to justify acquisition premiums to their own boards and shareholders.
Operational Excellence
Carbbin's automation reduces technical expertise requirements while providing embedded guidance that builds institutional capability over time.
Platforms complement rather than replace fund manager engagement and training, with success requiring support and guidance for raising standards. VCs need investment teams to understand climate impact assessment sufficiently to ask informed questions of portfolio companies and evaluate results critically.
Most investment professionals lack technical training in lifecycle assessment, emissions accounting, or environmental science. Traditional approaches require either hiring specialized sustainability staff or extensive training programs.
The platform's embedded guidance and contextual explanations enable knowledge transfer, allowing generalist investors to develop climate literacy through practical application rather than formal training, which is more effective for busy investment professionals who learn by doing.
Carbbin allows configuration of assessment parameters to reflect specific investment strategies while maintaining methodological rigor.
Establishing a robust data management system has become crucial to meeting regulatory compliance obligations, benchmarking portfolio progress, and driving sustainable growth. Different climate funds have varied climate objectives, and appropriate benchmark selection depends on aligning with funds' climate objectives.
A renewable energy fund, industrial decarbonization fund, and food systems fund each have different impact priorities and measurement requirements. Generic assessment tools may not capture thesis-specific nuances.
VCs with differentiated investment strategies need customization capability to generate assessments that reflect their particular investment strategy, supporting differentiated positioning in fundraising where funds articulate specific impact theses rather than generic climate claims.
Carbbin provides templated reports, customizable dashboards, and exportable visualizations suitable for LP quarterly letters, annual reports, and fundraising materials.
VCs face challenges creating detailed reports for LPs who are increasingly focusing on sustainable and ethical investments, with traditional methods being time-consuming and prone to errors leading to inefficient processes.
Investment teams spend significant time reformatting data from assessment tools into LP presentation formats. Each LP may require different report formats, visualizations, or emphasis on particular metrics. Manual report generation consumes resources and introduces errors.
This eliminates manual reformatting and accelerates LP communication cycles, particularly if reports can be customized to match different LP preferences while maintaining underlying data consistency.
Carbbin maintains detailed methodology documentation, calculation transparency, and audit trails showing how assessments were conducted.
2024 introduces stringent data privacy regulations impacting ESG data handling, and organizations must align their ESG frameworks with new laws, focusing on adjusting data collection and reporting practices to ensure compliance.
VCs face potential audits of SFDR classifications, regulatory inquiries about impact claims, or LP requests for methodology validation. They need documentation showing rigorous, defensible processes. Traditional consultant-based assessments provide written reports but may lack methodology transparency or audit trails.
This provides defensible evidence for regulatory reviews, supporting VCs in responding to inquiries about Article 8 or Article 9 classifications and demonstrating that impact claims are based on rigorous, documented assessment processes rather than subjective judgments or marketing claims.
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