$800M for carbon tech | 2021 Sustainable Investment Survey | Climate as alpha generator

Plus, 23 more U.S. species are now extinct, stoicism is not what you think, and Tesla self-driving on a climate bubble?

Howdy folks —

I hope you find some good nuggets in this issue of the ZERO: Climate Finance newsletter from Entrepreneurs for Impact. If you have thoughts on climate finance trends I should cover, please drop me an email.

High fives and such,

Chris


$800M this year for carbon tech.

That’s up 3x from 2020. And 2021 ain’t over yet.

Kudos to Reuters for a fun intro. This is what makes climate entrepreneurship so damn fun.

  • “What do diamonds, sunglasses, high-end lululemon sportswear, and concrete have to do with climate change?”

And a hearty shout out in the article to carbon tech leaders such as Global Thermostat, Solugen, LanzaTech, Twelve, and Aether Diamonds.


2021 Sustainable Investment Survey: Pitchbook

If you’re looking to geek out on the opinions of 900 limited partners (LPs), general partners (GPs), registered investment advisors (RIAs), industry associations, advisors,
family offices, and startups, then here’s your reading assignment.

And Pitchbook is a BEAST in the investor data world, so respect.

In it, you’ll see things such as this:

The LEAST IMPORTANT practices when developing a sustainable investment program include (1) engaging outside experts, (2) appointing dedicated in-house
sustainability professionals, and (3) outlining a sustainable investment philosophy
in a Limited Partnership Agreement.

  • Wait, so how do you know what to prioritize, and how do your investors hold you accountable for your sustainable investment goals?

When evaluating fund managers, do investors assess their ESG risk factor framework during due diligence?

  • 29% said. “Yes”

  • 52% said, “We’re working on it”

  • And 19% said, “Sustain-a-who? Ha! You think we’re a bunch of communists?”

Despite the slight exaggeration, if investors don’t ask fund managers for their framework (or more), how important is this topic really?

Also interesting — climate change is not mentioned anywhere in the 31-page report. Hmm…

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Climate change as an alpha generator for 40 years.

Here’s the full quote (CNBC):

  • “If you take advantage of it, and get ahead of it, it’s going to be an alpha generator for the next 30 or 40 years.” — CalSTRS CIO Christopher Ailman

Why does this matter?

  • CalSTRS — California State Teachers' Retirement System — is the nation’s second-largest public pension fund with about $318B of assets under management.

  • Christopher Ailman is their Chief Investment Officer, not their tempeh-eating, yoga-doing sustainability manager. (Though I love me some tempeh and yoga. I bet he does, too.)

  • Alpha generation reframes the story of “Will I have to sacrifice financial returns in order to also do the right thing for our climate?” into “Avoiding climate risk and creating low-carbon solutions can help you outperform the market.”


Tesla self-driving on a climate bubble?

Jim Coulter, the Managing Partner of the $5 billion-plus TPG Rise Climate fund, said recently that the “current climate investing moment reminds him of the tech bubble of the 1990s.” (CNBC)

And Tesla is the poster child. See its Himalayan stock run-up below.

I recall talking to a household name in climate tech VC years ago — even before today’s rabid excitement — and he basically said, “God help us if Tesla fails.”

Indeed, we need them to succeed.

But they’re up against tough competition. As an example, Ford recently announced an $11B investment in EVs and battery plants.

And while we’re praying, let’s also hope that we’re still on the sane side of a climate bubble, and that the historic reshaping of all sectors of the economy for a low-carbon future means that we’re just in the first inning for climate startups.

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23 more U.S. species are now extinct.

I was responding to some focus group work for the wonderful My Climate Journey community recently, and I was asked why tackling climate change is important to me.

One of my first responses was that it is a moral imperative. It’s our duty. It’s about spiritual stewardship. It’s way more than just a business opportunity.

And so it goes with headlines like this:

When NPR spoke to a Hawaii-based conservationist about this news, she broke down in tears due to the loss.

It’s a shocking response on national radio. But maybe more of us should be reacting with equal intensity.

Rather than end on a sad note here, I thought I’d try some levity, which usually includes some truth, too. Thanks to The Onion, here is what some hypothetical folks said in response to this extinction headline.

  • “I prefer to think they [the animals] have just gotten really good at hiding from us.”

  • “It’s always good to see animals make it off the endangered list.”

  • “While we’re mostly to blame, the animals bear some responsibility for never fighting back.”


Stoicism: Not what you think it is.

If you’re into tech or Tim Ferriss or personal development, then you’ve heard of Stoicism — a school of philosophy from ancient Greece and Rome in the 3rd century BC.

To give you a flavor, here are sample quotes from three of its most popular practitioners.

Wealth consists not in having great possessions, but in having few wants.

―Epictetus

Life is very short and anxious for those who forget the past, neglect the present, and fear the future.

—Seneca

Let us prepare our minds as if we’d come to the very end of life. Let us postpone nothing. Let us balance life’s books each day… The one who puts the finishing touches on their life each day is never short of time.

—Marcus Aurelius

To learn more, check these out:

This is all fine and dandy, but I bring this topic up for another reason.

While listening to this podcast episode during my weekend forest stroll — Stoicism 101 with Nancy Sherman via the “Ten Percent Happier” with Dan Harris — I was given an “aha!”

  • Stoicism is not about self-optimization. It’s about us-optimization.

It’s easy to focus so much on ourselves during personal reflection and improvement that we can forget the bigger goal — to live a better life for others, to help others, to fix broken shit in the world.

As the doom-and-gloom airplane analogy goes:

  • Put our mask on first, but the goal is to save your kids.


That’s all, folks.

Make it a great week, because it’s usually a choice.

— Chris


P.S. How about some 1,500-year-old wisdom?

“We have two lives. The second begins when we realize we only have one.” — Confucius

Boom. Drop the mic, my 6th-century black-bearded friend.


Dr. Chris Wedding
Founder and Chief Catalyst, Entrepreneurs for Impact
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