Background
Chenavari launched its Solstice Fund to support the decarbonization of industrial suppliers, who often face resource constraints that limit their ability to invest in low- carbon solutions.
Solstice has been created to address this funding gap through tailored debt financing solutions, targeting a KPI of 250 tons of CO₂e saved per million euro invested.
Chenavari integrates a rigorous methodology to assess potential carbon savings and collaborates with an independent partner to help validate them before the deal is financed.
Challenge
Decarbonization-led investing presents a dual challenge: aligning financial returns with measurable and tangible carbon savings. The intention is to prioritise emissions savings, whether through direct reductions, avoided emissions compared to a reference scenario, or carbon capture, which is still an early and quite costly technology.
Setting these high standards for their deal sourcing requires more time and resources in the pre-investment phase, due to the robust GHG data collection that a traditional debt fund would not have to worry about.
For Chenavari, this means evaluating whether a company’s business model or project could realistically match the expected CO₂e savings. Their approach combines two complementary strategies:
a best-in-class strategy to finance companies that enable carbon savings by choosing the less carbon intensive production means, and
a grey-to-green strategy to support the efforts of high-emission companies committed to drastically reducing their emissions.
The difficulty lies in determining whether the claimed carbon savings are real, especially in the case of avoided emissions, where the impact relies heavily on the choice of a clear, logical, and credible reference scenario.
Establishing an appropriate reference scenario is not straightforward, as it raises critical questions - such as whether to benchmark against national, European, or global averages.
Carbometrix’s Role
Chenavari brings in Carbometrix early in the due diligence process to provide third-party expertise and help :
Assess the potential carbon savings of each investment in the pre-investment stage
Check alignment with the 250 tons of CO₂e saved per million euro invested KPI, not as a rigid threshold, but as a directional benchmark to inform decisions holistically
Critical review of avoided emissions methodologies and reference scenarios
Detailed feedback on ambiguity/inaccuracy in carbon narratives or assumptions
Evaluating the real carbon impact of investments, considering factors like transportation
These assessments help determine whether the company qualifies as a “grey-to-green” candidate – a high-emission business on a credible path to decarbonization – or if its emissions avoidance claims are legitimate.
This process allows Chenavari to add a robust carbon integrity layer into their investment decisions, core to their DNA and mission as a fund focused on decarbonization.
Example transaction accepted by Solstice: Low-Carbon Aluminium Smelter
The fund’s first investment was in a leading aluminium smelter in Europe, a traditionally carbon-intensive sector. Given the potential for substantial decarbonization and the company’s top-quartile emissions performance, the project passed a rigorous assessment. Carbometrix confirmed that the carbon savings were both credible and material, aligned with the fund's decarbonization objectives.
Example transaction declined by Solstice: Industrial Waste-to-Energy Project
Another opportunity, focused on energy recovery from waste treatment, was ultimately not pursued. While promising on paper, the project’s avoided emissions claim was built on an unrealistic reference scenario (e.g., 100% coal-based grid). A closer look revealed that much of the carbon savings came from compliance with existing regulations rather than true carbon avoidance. Transport-related emissions further diluted the climate benefit. After collaborative review, the investment was declined.
Outcomes of the Collaboration
Through this partnership, Carbometrix has helped Chenavari:
Establish robust standards for evaluating avoided emissions in a debt financing context
Enhance internal credibility of carbon impact assessments through consistent third-party validation
Deliver clear, documented carbon analyses for each potential deal
Why This Matters
The Fund’s success depends on a level of carbon diligence uncommon in traditional private debt. This includes navigating incomplete data, diverse regulatory environments, and complex emissions modelling.
In Carbometrix, Chenavari has found a trusted partner, not to replace internal decision-making, but to strengthen it with technical rigor and climate expertise. Together, Chenavari and Carbometrix demonstrate how expert collaboration can enable investments that are transparent, financially sound and environmentally meaningful.