Greetings, Agents of Impact!
👋 Call No. 47: What’s The Word? Ownership? Deployment? Risk? Nominate a “Word of the Year” and share how it will guide your work next year. Shoot us a note (just hit “reply”) and we’ll call you up on our last Agents of Impact Call of 2022. We’ll preview some of our plans for 2023 and will look forward to hearing yours. Join us, Wednesday, Dec. 21 at 10am PT / 1pm ET / 6pm London. RSVP today.
Featured: Looking Ahead to 2023
Deadline 2030: Midway to climate marker, time to take deployment exponential. Halfway there. When the ball drops in Times Square this year, it will ring in the critical midpoint in the world’s self-set 2030 milestone for the global mobilization to prevent catastrophic global warming. We have some catching up to do. To zero-out carbon by mid-century, we need to halve greenhouse gas emissions by 2030 (from 2010 levels). That’s just to keep planetary warming to 1.5 degrees Celsius from pre-industrial levels – higher than we have now, with even more catastrophic droughts, storms and famine than we’ve seen so far. The Earth has already warmed by at least 1.1 degrees, or 2.7 degrees Fahrenheit. Different this year: the palpable sense that a dramatic mobilization to meet climate and development goals remains possible, even at this late date. The narrative has shifted. The goals are within our reach. The three most important words in the energy transition: deployment, deployment, deployment. Signals we’ll be watching in 2023:
- Unstoppable S-curves. Not even the global energy crisis sparked by the Russian invasion of Ukraine could stop the inexorable clean energy transition. The S-curve of technology adoption, and the positive returns to scale in the form of continuously falling costs, are driving adoption of renewables. Solar and lithium-ion battery costs have fallen by more than 90% in the past 15 years. Such virtuous cycles make the transition not slow, hard and forced, says Kingsmill Bond of RMI, but “fast, beneficial and inevitable.”
- Every building, every neighborhood. The Inflation Reduction Act’s hundreds of billions of dollars in incentives is driving a green, inclusive economic revival across the U.S. EV manufacturing plants and battery gigafactories are rising in Ohio, Tennessee, Michigan, Georgia and other states. Brooklyn-based BlocPower sees trillion-dollar opportunities decarbonizing buildings, transportation and charging infrastructure for the mass market. What’s needed: project developers to fuel the revival. “The money is there,” says Jigar Shah, who heads the U.S. Department of Energy’s loan program. “Where the world has not caught up is in creating the projects.”
- Climate tech resilience. From carbon capture and more efficient batteries to climate-smart agriculture and emissions accounting, investors piled into climate tech in 2022. More than one-quarter of all venture funding went to such investments in 2022, according to PwC. Climate tech VC counted at least $94 billion in fresh private climate-targeted assets under management amassed this year. Mega funds, such as TPG Rise’s $7.3 billion climate fund and Brookfield’s $15 billion fund, are hunting big game. A crop of smaller climate-focused funds are seeding promising new technologies – and fund managers.
- Catalytic climate capital. Just Energy Transition Partnerships. Debt-for-nature swaps. Carbon markets. With a looming recession and domestic concerns putting many wealthy governments in a Scrooge-like mood, impact investors are getting creative to meet the trillions of dollars of investment in climate mitigation and resilience needed annually to meet the goals of the Paris Agreement. Consumer subsidies that kick in on January 1 will prompt a wave of heat pumps, induction stoves, EVs and other green products.
- Nature-positive investment. Biodiversity, long overshadowed by the climate crisis to which it is inextricably linked, is finally getting its due. A U.N. goal seeks to halt and reverse nature loss, from a baseline of 2020, by the end of the decade. On the agenda: preserving 30% of the planet’s habitat by 2030, centering Indigenous communities and mandating corporate biodiversity-risk disclosures.
- Keep reading (and get all the links), “Deadline 2030: Midway to climate marker, time to take deployment exponential,” by Amy Cortese on ImpactAlpha.
Dealflow: Follow the Money
Investment news crossing our desks:
- Climate-data startup Arcadia raises $125 million, backed by Magnetar Capital, Keyframe Capital and Macquarie Asset Management’s Green Investment Group.
- Shopify’s Sustainability Fund backed six carbon removal startups, including Arbor, Captura, Carbon To Stone, Cella, CREW Carbon and Inplanet.
- Elizabeth Park Capital Management and Calvert Impact were selected to co-manage the Mission Driven Bank Fund, backed by Microsoft and Truist, to invest in minority depository institutions and community development financial institutions.
- More than 100 investors, including Semil Shah of Haystack, Saar Gur of CRV, and Phil Black of True Ventures, backed Jetstream, a $10 million fund led by investor Tommy Leep that invests in pre-seed, mostly software climate-tech startups.
- The Clarmondial-advised Food Securities Fund renewed two working capital loans to agriculture companies in East and West Africa, following the successful repayment of their first loans.
Agents of Impact: Follow the Talent
Microsoft names Melanie Nakagawa, former special assistant to U.S. President Joe Biden and climate and energy expert on the National Security Council, as its chief sustainability officer… Common Future’s Rodney Foxworth, Vanessa Roanhorse of Roanhorse Consulting, Mekaelia Davis of Ballmer Group, Mahlet Getachew of PolicyLink, and TIIP’s William Burckart and Monique Aiken, an ImpactAlpha contributing editor, are among 21 industry leaders joining The Investment Integration Project’s racial equity working group… UT Austin is hiring a director of global leadership and social impact… Instiglio is looking for a project director in Bogotá.
Thank you for your impact.
– Dec. 19, 2022