About two dozen venture capital firms say they are coming together to “build a strong movement” in the venture capital business to combat the climate crisis. The group calls itself Risk Climate Allianceor VAC.
The coalition features well-known technology investors, including Kleiner Perkins, Tiger Global and Union Square Ventures as members, saying in a joint statement Tuesday that their goal is to “define, facilitate and realize net-zero-aligned paths” for early-stage startups.
Several things are happening here.
Materially, VCA says that its members will begin by evaluating their “scope 1-3 carbon footprint,” and pledging to achieve “net zero or negative emissions for your own business operations” by the end of the decade.
VCA also says its members are committed to helping their portfolio companies achieve net-zero targets by 2050 at the latest. Along the way, the members are supposed to “transparently report on its progress over time.”
Fundamentally, “net zero emissions” is not the same as zero emissions, and companies have scrutiny won for using such language to obscure its continued carbon pollution. Net zero targets that rely on carbon offsets justifies skepticismgiven the compensation industry poor record till the date.
VCA’s songwriting is also noteworthy. Several well-known generalists are linking up with some relatively specialized companies, such as S2Ga prolific patron of food technology, and fifth wallwhich focuses on the real estate sector and manages a strong, building-focused climate fund. In theory, VCA members can share a large Rolodex of experts and pass what they learn across industry lines.
Directionally, VCA is a sign from notable investors that they are still investing in climate solutions, be it “climate tech” or broader decarbonization efforts. This is important because, after two years of explosion, funding for climate technology declined in the first quarter of 2023, raising questions about whether the sector is it still as modern or “recession proof” as it seemed
In an email to TechCrunch, climate finance consultant Dan Firger said that the VCA methodology working group will begin developing a list of best practices and disclosure guidelines in May. “We look forward to sharing more information with members and the public along the way,” he added.
VCA membership is non-binding and members can leave “at any time,” Firger said. Membership is also not limited to 23 venture companies who are currently on board. The group said in a statement that it is open to any venture firm that “agrees to abide by VCA’s commitments and actively contribute to the organization.” Other members at the launch include Obvious, DCVC, Prelude and Clean Energy Ventures.
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