AXA IM acquires carbon offset platform to ride ‘pivotal moment’ in market

AXA IM Alts, one of the world's largest managers of private markets impact capital, has bought ClimateSeed from BNP Paribas.

The impact investing team at AXA IM Alts, the alternatives unit of AXA which manages €162 billion in assets, has acquired ClimateSeed, a carbon offsetting platform.

ClimateSeed connects “businesses seeking to offset their carbon emissions with project developers offering carbon reduction projects with high environmental and social benefits.” It has a portfolio of 36 projects in 24 countries with an aggregated capacity of over 4 million verified carbon credits, the firm said in a statement Wednesday.

“We see this as a pivotal moment for the market, which is why we are entering it now”

Jonathan Dean, AXA IM

AXA has bought the business from French bank BNP Paribas, which launched ClimateSeed in late 2018.

As a subsidiary of BNP Paribas, ClimateSeed operates as a social business, reinvesting 100 percent of its profits back into environmental initiatives and projects. This status will change over time, Jonathan Dean, head of impact investing at AXA Investment Managers, told New Private Markets.

ClimateSeed forms as part of the voluntary carbon credit market, where businesses can purchase carbon credits to either transfer, sell or retire them as a means to offset their carbon footprints. The voluntary market, which is different from the regulated “compliance markets” such as the European Union’s Emissions Trading System or North America’s Regional Greenhouse Gas Initiative, is growing. A January 2021 report from the Taskforce on Scaling Voluntary Carbon Markets said that between 2017 and 2020, the number of credits issued had more than tripled from 60 million to 181 million metric tons of carbon dioxide equivalent, and the number retired had more than doubled from 44 million to 95 million.

“There has been a huge push in the last 12 months from stakeholders buyers, sellers, project developers and others to organise and scale this market,” said Dean. “We see this as a pivotal moment for the market, which is why we are entering it now.”

AXA did not disclose the price paid for ClimateSeed, or the fund from which the investment was made, but a source with knowledge of the deal said the investment was made from the AXA Impact Fund.

AXA was among the early institutional managers into the impact investing arena, launching its first private markets impact fund in 2013. It deploys capital across private equity, private debt, venture capital and project finance and has separate strategies targeting environmental goals (climate and biodiversity) and social goals (financial inclusion and access to healthcare). It ranked 14th in our list of the largest managers of impact capital in private markets, having raised $641 million in the last five years.