Evaluating only TerraPass’s profile at its peak — without knowing the outcome — the model ranked Unit economics as the #1 likely cause. Documented cause: Contagion.
Key Events Timeline
FOUNDING
TerraPass founded at Wharton as one of the first consumer-facing carbon offset retail brands in the US.
ACQUISITION ATTEMPT
South Pole acquired TerraPass to expand its US retail carbon offset distribution channel.
FRAUD EXPOSURE
Guardian exposé revealed South Pole's Kariba fraud; FTC inquiry into TerraPass greenwashing claims initiated.
SHUTDOWN
South Pole ordered TerraPass brand shutdown amid consumer refund demands and regulatory scrutiny; website taken offline.
Full Analysis
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Documented cause
TerraPass, one of the oldest US voluntary carbon offset retailers, was acquired by South Pole in 2017 and leveraged to sell consumer and SME carbon offsets. Following the Guardian's January 2023 exposé of South Pole's Kariba fraud and the broader REDD+ scandal, TerraPass faced a wave of consumer refund demands and regulatory inquiries from the FTC regarding greenwashing claims. Parent company South Pole ordered the brand shut down in mid-2023 as reputational damage made operations untenable.
Lesson
“Being acquired by a larger operator in your industry transfers their existential risks directly to your brand.”