Twenty-three venture capital firms have joined up to guide young companies and their investors towards a low-carbon future, in the latest effort to steer money towards reducing greenhouse gas emissions from the global economy.
The Venture Climate Alliance (VCA) of firms active in the United States and Europe aims to help companies its members have invested in to set climate-related goals in their growth strategies from the outset, the VCA said in a statement.
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.
Part of the plan is to develop guidelines for monitoring and reporting carbon emissions, data which global regulators want companies to start disclosing soon.
"Right now every investor is asking early stage companies similar but slightly different questions and that's a poor outcome for everyone," Feilhauer said.
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 U.N.'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.
