There's a lot of debate about how to combat climate change. Climate Week in New York City was probably the most lively gathering of conversation last week. Some firms, individuals, and organizations are trying to focus more on more action, too. A small-known New York investment firm, which invests in real assets and venture-backed startups, is planning to put some of its fund managers' money behind organizations addressing climate solutions.
Aligned Climate Capital, a four-year-old firm, said yesterday that it will donate 3% of the company's carry interest, the profits that fund managers make from the returns of a fund from their new venture fund to three climate-focused nonprofits. The firm is currently in the process of raising its second venture fund, and plans to raise $150 million. Aligned's managing director and COO Brendan Bell tells me that so far, about half of that has been raised with a final close planned for March. Bell said that they are planning to donate a percentage of carry in future funds.
Bell says it's a multi-pronged move. Aligned as a company, it is focused on generating profits for its limited partners, including institutions and family offices, and investing in businesses that are already commercial-not burgeoning technology that are still being developed, or climate-focused consumer products. Other things that could help alleviate climate change that are often forgotten by venture capital investors are just a few examples.
That is where those who like Alex Honnold, a well-known solo climber and philanthropist, want to come in. Is it something like a billion people on earth, who the market doesn't serve at all, he tells me. His charity funds solar projects funded by community organizations in rural and marginalized communities-places he's visited on climate expeditions or through travel. Honnold said Aligned's donation - however much it ends up being, once the fund is launched and, hopefully, earns returns - will go to a roughly $60 million backlog of projects they want to fund.
I may be cynical, but I certainly hope there's a wider trend that the BlackRocks of the world catch onto. Now that we're running out of time, we'll have to find a new way to spend it.
Twitter: @AnneSraders (@AnneSraders)
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