Venture Capital Investors Launch Net Zero Alliance to Align Startup Portfolios with Climate Goals
A coalition of 23 venture capital firms across the U.S. and Europe announced the formation of the Venture Climate Alliance (VCA), aimed at supporting global climate goals by encouraging and helping to facilitate net zero pathways for startups, and financing climate solutions.
The new alliance will form part of the Glasgow Financial Alliance for Net Zero (GFANZ), a UN-backed climate-focused multi-trillion dollar coalition of financial institutions. Launched in April 2021, GFANZ brings together several leading net zero groups representing sectors across the financial industry including asset owners and managers, banks, insurers, investment consultants, service providers and investors. In addition to the VCA, GFANZ includes the Net Zero Asset Managers initiative (NZAM), the Net Zero Asset Owner Alliance (NZAOA), the Net Zero Banking Alliance (NZBA), the Net Zero Financial Service Providers Alliance (NZFSPA), the Net Zero Insurance Alliance (NZIA), the Net Zero Investment Consultants Initiative (NZICI), and the Paris Aligned Asset Owners (PAAO).
The VCA is also a partner of Race to Zero, a global campaign designed to rally leadership and support from businesses, cities, regions, and investors committed to cutting global emissions in half by 2030 and achieving net zero by 2050, established under the stewardship of the UNFCCC.
Following the launch of the VCA, GFANZ co-chair and former Bank of England and Bank of Canada Governor Mark Carney said in a social media post:
“Thrilled to announce that an entirely new net-zero alliance – the Venture Climate Alliance – will join #GFANZ. VCA brings together leading VCs committed to financing climate solutions and building net-zero business from day one.”
In joining the VCA, members agree to a series of commitments, including encouraging portfolio companies to set targets to achieve net zero alignment by 2050 or sooner and to provide them with assistance along their net zero pathways, as well as to achieve net zero emissions in their own operations – not including financed emissions – by 2030.
According to the VCA, the new alliance will also develop tools and best practices for the VC industry to collect and report on carbon emissions and climate impact data, and tools to help overcome the challenges of aligning early stage investments with net zero goals. The VCA stated that its 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.”
Gabriel Kra, managing director at Prelude Ventures and founding member of the VCA, said:
“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.”
Members of the VCA include Prelude Ventures, Capricorn Investment Group, DCVC, Energy Impact Partners, Galvanize Climate Solutions, S2G Ventures, Union Square Ventures, Tiger Global, World Fund and 2150, 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.