Climate50 2.5 — New Acknowledgements
Back in 2021 we started Climate50 as an annual ranking with the aim of providing recognition to the most impactful climate VC investors allocating capital to entrepreneurs moving us closer to net-zero. Since then, Climate50 has become a trusted and indispensable resource for GPs, LPs, and, most importantly, entrepreneurs, facilitating continuous climate capital mobilization.
However, given that collective actions got us into the climate mess, it’s going to take a collective effort to mobilize resources and get humanity to decarbonize the economy, as the cost of inaction on climate change poses a greater threat to the global economy than the financial crisis of 2008, with estimated losses reaching up to $24 trillion by the end of the century.
“The greatest threat to our planet is the belief that someone else will save it.” — Robert Swan
Fortunately, individuals have become more and more mindful in understanding that there is no planet B. Increased awareness is noticeable in The Climate Tech landscape where last year saw record capital deployment in the sector, surpassing expectations of the broader venture landscape. Governments worldwide have also joined the effort to expedite decarbonization, and we believe it’s time to elevate Climate50 to the next level. For this reason, we are excited to introduce the following changes.
To give a holistic view of global climate VC funds, we’ve kept 7 our direct measures to evaluate investment activity but changed the indirect metrics by eliminating the Brand Awareness score as well as the Founders score. This decision was made to ensure a more objective and comprehensive assessment of climate venture capital funds based on their investment activity and impact on mitigating climate change. Therefore, please welcome:
Investor Climate Alignment Checkmark
The introduction of the Investor Climate Alignment Checkmark will provide greater transparency by showcasing investors that actively allocate capital toward the net-zero agenda. This checkmark will be awarded to investors meeting at least six out of ten criteria
- Primary investment objective is the climate impact
- Implemented impact due diligence methodology / sustainable investment policy
- Tracking positive impacts of the investments
- Majority of the portfolio companies are committed to the net zero
- Tracking GHG footprint of the portfolio companies
- Tracking GHG footprint of own operations
- Internalizing the costs of GHG footprint
- Assessing portfolio’s exposure to climate risks
- Alignment to SFDR in case of European-headquartered fund
- In-house expertise for sustainability and impact analysis
While there is no single answer in terms of Impact/ESG evaluation or framework yet in the climate tech industry, we aim to upfront draw attention to those actively and intentionally addressing humanity’s most critical transition. As the frameworks and methodologies are evolving quickly, the ten criteria will not impact the 2022 investor score and starting in 2023, it could constitute up to 20% of the final investor score.
Top Emerging Manager category
On top of the Checkmark, in order to recognize the numerous new climate tech funds established in recent years, we are also introducing the Top Emerging Manager category. This category encompasses investors with an AUM of less than €100 million or in their 1st or 2nd fund (excluding corporates). This spotlight will acknowledge managers who do more with less.
To wrap things up, Climate50’s mission remains the same: to acknowledge the investors with the belief in forward-thinking entrepreneurs that bring us one step closer to achieving Net-Zero. Venture Capital’s role as initial institutional capital has never been more important in helping to commercialize and accelerate revolutionary technologies.
The climate community is not limited to impact-driven investors and financial powerhouses — everyone has the potential to contribute towards making a difference. Be sure to cast your vote for your favorite climate tech investors starting 17th of April!
