The Venture Climate Alliance (VCA), an organisation created by leading global venture capital firms, has been launched to facilitate and realise net zero-aligned pathways for early-stage investments, with a goal to build a robust movement within the venture industry to combat climate change.
Consisting of 23 venture capital (VC) firms across the US and Europe, VCA members have committed to supporting a global transition to net zero or negative carbon emissions by 2050 or sooner and will take specific, near-term steps to achieve this goal, both within their respective firms and in their roles as investors and advisors to their portfolio companies.
The group will operate under the Glasgow Financial Alliance for Net Zero (GFANZ), which currently houses groupings of bigger companies that aim to cut emissions to no more than can be absorbed into natural sinks like forests or by using technology.
“We want to establish a framework that allows all early-stage investors, climate-focused or not, to come into the fold,” said Stephan Feilhauer, a managing director at VCA founder member S2G Ventures. “Right now every investor is asking early-stage companies similar but slightly different questions and that’s a poor outcome for everyone,”
Part of the plan is to develop guidelines for monitoring and reporting carbon emissions, data that global regulators want companies to start disclosing soon.
Alexandra Harbour, a principal at founder firm Prelude Ventures, said the goal was to “bridge the gap” with public markets, where many companies have made net zero commitments.
VCA, whose members’ portfolios range from less than $50 million to more than $50 billion, will also be a formal partner of the UN’s Race to Zero campaign. VCA members aim to reach net zero emissions from their own operations, including electricity used in their offices and business travel, by 2030 or sooner.
GFANZ is co-led by former Bank of England governor Mark Carney. Some groups in that alliance have seen high-profile departures in recent months from members that cited the need to be independent and avoid falling foul of any antitrust rules.
The VCA has been approved by the Race to Zero under the leadership of the UN Climate Change High-Level Champions and constitutes a new sector-specific alliance under the Glasgow Financial Alliance for Net Zero (GFANZ). The VCA will work alongside other sector-specific alliances within GFANZ to develop methodologies and tools appropriate for early-stage investments, and to share expertise on climate solutions across the broader financial sector.
Membership in the VCA is open to any venture capital firm, or a division of a larger firm that is engaged primarily in venture investing, that agrees to fulfil VCA’s commitments and to actively contribute to the organisation as appropriate. More information about how to become a member can be found here.
