recarb takes the nature restoration due diligence process online
In the ever shifting landscape of nature-based solutions and climate finance, one German startup is tackling risk assessment and due diligence. recarb, co-founded by Daniel Vetterkind, is tackling a critical challenge in the nature restoration market: the lack of comprehensive, efficient, and standardized due diligence processes for investors and project developers alike.
Who is recarb?
recarb is a German-based nature tech company that specializes in digitalizing the process of due diligence and risk assessment for nature restoration projects. The company focuses on evaluating the success factors for ecosystem restoration projects, collaborating with experts and local stakeholders, and conducting in-depth scientific evaluations to ensure robust controls and management practices.
The recarb platform aims to provide comprehensive verification and empower investors with the right data to make well-founded investment decisions in the field of nature restoration.
Navigating challenges in a growing nature restoration market
The nature restoration market, particularly in areas like reforestation and afforestation, has seen a surge of interest from investors and corporations looking to offset their carbon footprints or contribute to biodiversity conservation. However, this rush has led to some significant challenges, which risks hindering the scaling of much-needed ecosystem restoration efforts.
The impact of the current dynamics in the nature restoration market is multifaceted:
Increased investment with risks: While there's heightened interest from investors and corporations, many lack a deep understanding of the inherent risks in nature restoration projects. This could lead to financial losses and undermine long-term sustainability.
Inefficiency in due diligence: The lengthy traditional due diligence processes (4-6 months) can slow down project implementation, delaying urgent ecosystem restoration efforts that are critical for addressing climate change and biodiversity loss.
Reliance on incomplete data: Companies depending solely on third-party data or certifications may miss vital project-specific factors, leading to misguided investments and ineffective restoration outcomes.
Trust deficit: Past scandals related to carbon offsetting have eroded confidence in the market, making investors wary. This skepticism could deter potential funding and hinder collaborations that are essential for scaling restoration efforts.
Improving the due diligence process with recarb’s online risk assessment platform
recarb has developed a risk assessment and management platform that promises to revolutionize the due diligence process for nature restoration projects.
Their approach includes a structured digital process that can reduce assessment time from 4-6 months to less than 4 weeks.
The platform provides comprehensive verification covering over 200 criteria across multiple categories. The assessments are biome-specific, currently focusing on the Amazon, Cerrado, and Atlantic Forest in Brazil.
recarb has also developed a proprietary carbon sequestration model covering 700 tree species over a 40-year period. Importantly, their process integrates local and indigenous knowledge and practices.
To make assessments easily interpretable by investors, recarb also uses a rating system similar to financial industry standards, ranging from AAA to D.
recarb’s online risk assessment & due diligence process: How it works
recarb's process covers four main areas of consideration:
The Project Developer Assessment evaluates financial conduct, transparency, and alignment with ethical and social responsibility standards.
The Carbon Sequestration Assessment examines the reliability of carbon sequestration claims, including factors like leakage, permanence, and additionality.
The Livelihoods section looks at how the project engages with and benefits local and indigenous communities.
Finally, the Ecological Recovery Evaluation considers how the project addresses ecosystem improvement, genetic diversity, and habitat provision. The result is a comprehensive digital report with a clear rating and specific recommendations for improvement.
recarb recently completed a case study with Alfenas Agricola, a Brazilian project developer. The assessment resulted in a BB rating, with the digital report clearly showing strengths and areas for improvement across all categories.
What’s next for recarb?
Looking ahead, recarb is seeking funding, clients for pilot projects, and partnerships to expand their reach. They're also working on adapting their assessment for different biomes in Europe in anticipation of new nature restoration laws.
As the nature finance gap continues to grow – estimated at around $700 billion annually – solutions like recarb's will be crucial in building trust, reducing risk, and accelerating investment in nature restoration projects.
By providing a more efficient, comprehensive, and standardized approach to due diligence and risk assessment for nature restoration projects, recarb is helping shape a more robust and effective nature restoration market. Their platform has the potential to unlock much-needed capital for ecosystem restoration, ensuring that investments are not only financially sound but also ecologically impactful and socially responsible.
Dive deeper with our NTC Now recarb webinar session
Interested to learn more?
The above video was recorded during a Nature Tech Collective NTC Now session: A weekly event for members to drop in to present time, exchange updates, and connect. Each week we invite a special guest, provide a quick pulse on the collective including special announcements, followed by community led updates and activities.
Our live interactive webinar sessions are available to both new and long-time Nature Tech Collective members. If you’re not yet a member, you are welcome to submit an application to explore membership or simply express interest in one of our events and we’ll be happy to consider you for approval.
