The Venture Climate Alliance is made up of two-dozen venture capital firms that are teaming up to combat climate change. Their goal is to create a robust movement in the VC business, and they believe that it’s important for companies to take steps to reduce their impact on the environment.
The coalition is making a concerted effort to help startups achieve net zero-based operations, or businesses that generate no more waste than they recover. To spur innovation and address a burgeoning global pollution crisis, the group hopes to redefine early-stage startup pathways by incentivizing companies to adopt sustainability tactics and remove all incentives for wasted output.
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Because VCA is such an influential organization, its members will have a tremendous impact on the way businesses operate. In order to make an even bigger impact, VCA is urging its members to assess their “scope 1-3 carbon footprint,” pledge to hit “net zero or negative emissions” by the end of the decade, and work together towards a more sustainable future.
Many large organizations are striving to become net-zero by 2050. With this goal in mind, the Verified Carbon Accreditation (VCA) has announced that its members are committed to helping their portfolio companies set net-zero targets for the same timeline. Along the way, members are supposed to “report transparently on their progress over time” so as to remain accountable and ensure that they move forward in the right direction.
It’s been widely reported that businesses are advertising their “net-zero” emissions, but this term is misleading. Net-zero targets that hinge on carbon offsets warrant skepticism, given the offset industry’s poor track record to date.
TCP is rightly renowned for its data centers, but the firm has quietly been building out a more diverse operations footprint in recent years. In November 2017, TCP announced it had acquired Aptara, an Israeli artificial intelligence startup. Several months later, TCP announced it had also acquired C3 Metrics and Lucky Labs (two data science startups) and Electrify Ventures (a venture capital firm focused on electric vehicles). Earlier this year, TCP made another acquisition when it bought Peakstream , a company that provides software to manage load on data center grids. After expanding its operations in artificial intelligence and data science, TCP is now focusing on areas such as grid management and energy storage. The acquisitions are indicative of the focus shift by many technology firms towards building resilient business strategies that can be flexible enough to take advantage of new technologies and markets
Investors continue to support climate solutions, even as the economy slows down. This signals continued interest in the sector and could help reassure investors that climate tech is recession proof.
Tech companies are facing increasing pressure to take action on climate change, with many pledging to reduce emissions or invest in renewable energy. However, the methods used to calculate the value of these commitments have been largely uncontested.
In May, a group of climate finance experts will launch a working group tasked with developing best practices for measuring and disclosing climate finance commitments. The group is expected to release guidelines for calculating value and disclosure later this year. While this may help improve transparency around environmental investments, it remains unclear how much impact these measures will have on businesses’ bottom lines
VC firms are set to band together to create their own industry organization, the Venture Capital Association (VCA). This move comes in response to criticism that venture capitalists are not coordinating enough with one another and not doing enough to support new startups. The VCA will initially consist of 23 firms, but it is open to any firm that agrees to fulfill its commitments and actively contribute. Some members at launch include Obvious Ventures, DCVC Ventures, Prelude Ventures and Clean Energy Ventures.
