Mark Carney’s climate alliance expands as 23 venture capital funds join net zero group
Mark Carney’s global alliance of financial firms fighting climate change expanded into the venture capital sector today with the launch of the Venture Climate Alliance (VCA).
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. Founding members include Capricorn Investment Group, DCVC, and Systemiq Capital.
The VCA constitutes a new sector-specific alliance under the Glasgow Financial Alliance for Net Zero (GFANZ).
GFANZ was launched in 2021, bringing together 160 of the world’s largest banks, asset managers and insurers. It aims to improve the coordination of net zero initiatives across the financial services industry.
The new group intends to help build “net zero businesses from day zero” by developing tools to track portfolio companies’ alignment with net zero commitments and their contribution to the climate transition. It will also collect and interpret data from early stage companies
Venture capital firms provide funding to small businesses that do not have access to stock markets and do not have enough cash flow to take on debts.
Climate tech firms in particular are likely to receive huge amounts of capital over the next few years as governments around the world create incentives firms to direct investment to the sector.
According to PwC figures, climate tech funding accounted for more than a quarter of every venture dollar invested in 2022.
Co-chair of the GFANZ Mark Carney said: “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.
“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,” Carney continued.
The VCA will work with other sector-specific alliances within GFANZ to develop methodologies and tools appropriate for early-stage investments.
“Net zero for thee but not for me is no longer a workable solution,” said Daniel Firger, managing director at 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.”
Gabriel Kra, managing director at Prelude Ventures said focusing on companies at “the earliest stage of business building” is as necessary as focusing on the largest asset managers and public firms.
“As investors, it’s our role to prepare our teams for the realities of the markets that they’re operating in,” Kra continued.