Venture Climate Alliance to Develop Tools for Venture Capital Industry and Portfolio Companies to Track Alignment with and Contributions to the Climate Transition
SAN FRANCISCO, April 25, 2023 — The Venture Climate Alliance (VCA), an organization created by leading global venture capital firms to define, facilitate, and realize net zero-aligned pathways for early-stage investments, launched today with a goal to build a robust movement within the venture industry to combat climate change.
Consisting of 23 venture capital (VC) firms across the U.S. and Europe, VCA members have committed to supporting a rapid, global transition to net zero or negative carbon emissions by 2050 or sooner, and will take specific, near-term steps to achieve this goal, both within their respective firms and in their roles as investors and advisors to their portfolio companies.
Over the past few years, momentum across venture-backed climate tech innovation has been accelerated by entrepreneurial ambition, world-class innovation and more recently, increasing tailwinds driven by the U.S. Inflation Reduction Act, the EU Green Deal Industrial Plan, and other supportive policies. As one of the first institutional touchpoints between capital markets and early-stage innovation, venture capital investors have helped thousands of new companies from initial development to commercialization and scale. The VCA provides a forum through which member firms will develop best practices for collecting, interpreting and reporting carbon emissions, and climate impact data, as well as tools and guidance to help to overcome barriers associated with aligning early-stage investments with net zero goals.
The VCA’s founding members are Prelude Ventures, Capricorn Investment Group, DCVC, Energy Impact Partners, Galvanize Climate Solutions, S2G Ventures, Union Square Ventures, Tiger Global, World Fund and 2150; along with Obvious Ventures, Congruent Ventures, Valo Ventures, Clean Energy Ventures, Fifth Wall, Overture Ventures, Blackhorn Ventures, Spring Lane Capital, Azolla Ventures, Systemiq Capital, The Westly Group, Innovation Endeavors, and ReGen Ventures. It is supported by Great Circle Capital Advisors, a climate finance advisory firm.
“Our goal is to bridge the gap between what’s happening in public markets, where hundreds of companies have made bold forward-looking net zero commitments – and early stage innovation, which has the potential to decarbonize legacy industries through a combination of better products, more efficient processes, and lower costs,” said Alexandra Harbour, founder & chair of the VCA and a principal at Prelude Ventures.
In joining the VCA, member firms have committed to support the goal of achieving a global transition to net zero emissions. To start, venture firms pledge to inventory their direct Scope 1 – 3 carbon footprint and to reach net zero or negative emissions for their own firm’s operations by 2030 or sooner. Members will encourage and assist their portfolio companies in setting their own targets to achieve net zero alignment by 2050 or sooner, and will report transparently on their progress over time using best practice methodologies and disclosure guidance to be developed over the coming year. These commitments will establish stage-dependent climate-aligned goals as a part of startups’ growth strategies, rather than as a late stage add-ons to business-as-usual operations.
“We invest in climate tech companies that are transforming multi-billion dollar industries. As public markets, asset managers, and policymakers implement 2050 decarbonization goals, disclosure of climate-related risks, carbon emissions, and impact will matter for everyone– including those at the earliest stages of business building. As investors, it’s our role to prepare our teams for the realities of the markets that they’re operating in,” said Gabriel Kra, managing director at Prelude Ventures and founding member of the VCA.
“It’s critical that the venture capital industry support technologies that accelerate the climate transition,” said Samson Mesele, partner at Union Square Ventures and founding member of the VCA.
The VCA has been approved by the Race to Zero under the leadership of the UN Climate Change High-Level Champions, and constitutes a new sector-specific alliance under the Glasgow Financial Alliance for Net Zero (GFANZ). The VCA will work alongside other sector-specific alliances within GFANZ to develop methodologies and tools appropriate for early-stage investments, and to share expertise on climate solutions across the broader financial sector.
Membership in the VCA is open to any venture capital firm, or a division of a larger firm that is engaged primarily in venture investing, that agrees to fulfill VCA’s commitments and to actively contribute to the organization as appropriate. For more information, or to become a member, please visit ventureclimatealliance.org.
“Net zero for thee but not for me is no longer a workable solution,” said Daniel Firger, co-founder and lead advisor of the VCA and managing director of Great Circle Capital Advisors. “If we’re serious about moving the entire world economy into alignment with a pathway to net zero emissions, we must consider the critical role that private markets play in that journey.”
About the Venture Climate Alliance
The Venture Climate Alliance (VCA) is an organization created by leading global venture capital firms to define, facilitate, and realize net zero-aligned pathways for early-stage investments. The organization currently consists of more than 23 members across the U.S. and Europe that have committed to achieving net zero or negative carbon emissions by 2050 or earlier.
Additional information available at ventureclimatealliance.org.
Addendum to Editors -
Founding Member Quotes
“2150 is thrilled to be a part of the VCA to set a course for rapid action towards net-zero within venture capital. Early stage companies and their investors play an essential role in global decarbonization, and will benefit from a common framework to guide action and maximize impact.” (Peter Hirsch, Head of Sustainability, 2150)
Capricorn Investment Group
“We’ve been investing in climate tech companies over the last two decades – some of them have gone on to become market leaders reshaping trillion dollar industries, some are poised to do the same in the near future, and we hope many more will emerge in the future. We’ve learned a lot over the years and are excited to help launch this new alliance, and look forward to collaborating through the VCA to move the broader market, not just our own portfolio, into alignment with decarbonization goals.” (Dipender Saluja, Managing Partner, Technology Impact Funds, Capricorn Investment Group)
“DCVC is proud to be a founding member of the Venture Climate Alliance — because helping brilliant new companies successfully address climate change represents a shared opportunity of historic proportions, with great outcomes for all stakeholders.” (Zachary Bogue, Co-Founder and Co-Managing Partner, DCVC)
Energy Impact Partners (EIP)
“As a platform custom-built to accelerate the net zero economy, EIP is pleased to help launch the VCA. We firmly believe financing and scaling innovative climate solutions is one key to a safe climate future, and this alliance will help the entire venture community improve its progress towards achieving net zero.” (Hans Kobler, Chief Executive Officer, Energy Impact Partners)
Galvanize Climate Solutions
“As an investment firm solely focused on the climate transition, we are proud to be a founding member of the Venture Climate Alliance. Setting standards for progress and accountability is critical to accelerating the climate transition, and we look forward to collaborating with the other members of the VCA to establish best- in-class tools and practices to meet our collective decarbonization goals.” (Nicole Systrom, Chief Impact Officer, Galvanize)
“S2G’s strategy reflects a growing appetite for combining financial returns with positive long-term social and environmental effects across sustainable food, agriculture, oceans and energy. Being part of the VCA enables us to collaborate with and learn from other investors, and harness our collective resources toward a shared vision of a healthy and sustainable planet.” (Stephan Feilhauer, Managing Director, Clean Energy, S2G Ventures)
“The risks and opportunities posed by climate change are real for all investors, not just climate-focused investors. Over the last few years, Tiger Global has been taking steps to measure and manage our firm-level footprint, achieving net zero status as of 2021. As we look ahead, we believe that supporting our portfolio companies to better understand and manage these issues will be increasingly important. We’re thrilled to join the Venture Climate Alliance and work in collaboration with our peers to advance this work across the industry.” (Ali Hartman, Head of Responsible Investment, Tiger Global)
“At the World Fund, we strongly believe that the Venture Capital Alliance (VCA) will play a pivotal role in driving climate innovation forward. By harnessing the collective expertise of top venture capitalists from both sides of the Atlantic, the VCA has the potential to significantly influence the funding decisions that shape the future of climate startups and technologies. As a group, we are committed to backing entrepreneurs who understand decarbonisation as a value driver, and those who build tech for a regenerative world. By doing so, we aim to have a meaningful impact in mitigating the climate crisis, driving positive change through strategic investment and support for innovative ventures that align with our vision.” (Danijel Višević, Founding Partner, World Fund)
Glasgow Financial Alliance for Net Zero (GFANZ)
“Investing into climate solutions is a critical, foundational pillar of a comprehensive, economy-wide transition to net zero, and one of the four financing strategies in the GFANZ net zero transition plan framework. In keeping with our industry-led approach to date, we welcome the launch of the Venture Climate Alliance as a new sector-specific alliance under GFANZ, and applaud efforts by venture investors to establish workable and high-integrity standards for tracking the contributions of early-stage innovations in the transition to net zero.” (Mark Carney, Co-Chair, GFANZ)
UN Climate Change High-Level Champions
“As the High-Level Champions we are delighted to approve Venture Climate Alliance as a formal partner of Race to Zero. Venture capital funding is crucial to advancing the climate agenda. It plays a key role in the development of climate mitigation technology which is urgently needed to keep us within a 1.5 ° limit. Race to Zero’s 25 Partners and around 11,000 members are working hard to implement the campaign’s robust, science-aligned criteria. Two- thirds of the largest companies in the campaign have shifted from pledges to science based transition plans, driving down emissions in their operations by 6.5% on average. 70% have set an absolute reduction target by 2030. We look forward to supporting and collaborating with the Venture Climate Alliance as together we build on this significant momentum in this year of the Global Stocktake.” (UN Climate Change High-Level Champions for COP27 and COP28, Dr. Mahmoud Mohieldin and H.E. Razan Al Mubarak)