Climate VC isn’t working.

Venture capital is supposed to fund the innovations that will transform our planet’s trajectory. Early-stage investors are ever more influential in the climate race, helping decide which solutions win and lose. But when we look at climate VC as a system designed to help solve our world’s biggest issues, major obstacles stand out: 

Vital solutions are systematically overlooked. Those deciding where capital flows are rarely those closest to the problems. The result? Capital stays concentrated among homogenous, privileged founders, funding a narrow range of solutions. VC is notoriously homogenous in its funding - going almost entirely to white, male founders. 

Capital flow doesn’t match what the world needs. That narrow range of solutions caters to wealthy, Western preferences - rather than climate realities for most of the world. Consider that 60% of climate tech investment in 2021 went to mobility, though it accounts for only 16% of global GHG emissions. Or that 7% of global climate funding supports adaptation, despite nearly 50% of the world’s population living in areas that urgently need adaptation solutions.

Social equity’s importance to scaling climate tech is undervalued. Investments in early-stage climate solutions have surged, but most omit climate justice and equity as investment factors. This happens in spite of growing awareness that social inequality is a risk to our sustainable future, and a major opportunity for transforming our world’s economy.

Frontline communities and environmental justice movements know these obstacles first-hand. Unfortunately, investors rarely value that expertise, and communities are rarely positioned to inform and influence where venture capital flows.

To move more money, more effectively, investors have to do things differently.

Investors focus heavily on ‘what’ to invest in -- but ‘how’ we move capital is just as critical to uncovering and scaling the climate solutions we need. 

By shifting power in the investment process, we believe investors can better unlock critical innovations and a realistic pathway towards a Just Transition.

That’s exactly what our research and work aims to illustrate.

We think climate activists and communities can choose better investments than your average VC. 

Deep knowledge of climate policy. An understanding of social movements and the tides of momentum. Lived experience with climate realities on the ground, and of the culture and behavior that will determine whether a new technology can scale -- or not. These are just a few of the advantages we see at play. 

Leaders across participatory investing, philanthropy, and social justice movements have proven the value of placing those closest to the issues at the helm of investment solutions. We think climate VC can learn a lot from these movements, to the benefit of all.