“Impact” can be a tricky word in the context of investing.
Depending on who you talk to, impact can mean everything from philanthropy to concessionary returns to negative screening. The SEC’s recent risk alert is an example of this confusion on a broad scale, with the SEC asking investors to say what you mean and mean what you say. To be part of the solution, the Buoyant Team is sharing our perspective on impact through the lens of our investment thesis.
Buoyant’s Climate Impact Investment Thesis
Climate change is here. There is an urgent need for both mitigation and adaptation. Buoyant invests in companies that rapidly deploy and scale climate solutions. We invest for financial results to achieve resilience and climate justice today and reverse trends that will affect tomorrow.
This thesis represents some core beliefs of Buoyant, specifically:
There is no time to waste. Acting now is the only path forward, and we are encouraged by the recent executive order (more on that below) and other actions around the world (Hawaii, Big Oil, Indonesia).
We already have many of the tools required. Thanks to decades of research and testing, we can solve climate change today with existing technologies.
Scale is critical and can often be enabled through software. Digital technologies have transformed countless industries, providing a new level of scale and efficiency to meet customer demands. We must now use these same digital technologies to help scale climate solutions to meet the challenge posed by climate change.
Adaptation drives climate justice. Pollution and the impacts of climate change are felt most acutely by vulnerable populations. Adaptation solutions are required to increase the resilience of those populations and promote economic and social equity. More reading on this: Women, Miami, Racial Justice
Supportive policy can speed development and action. The last few years have proven that action on climate change will occur. And the last few months have given us a glimpse of how much faster we can move to address climate change by speeding the development of innovations and providing transparency on risks and emissions.
Climate change is a massive financial opportunity. Over the next decade, we must transition our economy. This transition provides a unique opportunity to invest in and grow highly profitable businesses that will solve for climate change risks in the most viable way, making money.
Buoyant’s Impact Actions
To implement our stated impact thesis, Buoyant is taking the following actions:
We apply a climate impact filter to all pipeline investments.
We assess the potential magnitude of impact and associated risks.
We set clear expectations with impact and DEI side letters.
We report metrics with intent and authenticity.
We prepare early-stage companies to scale their impact and financial success.
These actions are built into our processes, due diligence, and reporting to help identify the best opportunities and mitigate risk.
We view this work as the foundation of our climate impact investment thesis. As a young fund, we look forward to building on these efforts and continuing to engage with experts, LPs, and fellow investors.
We wish we would have…
An excellent tweet thread by Justin Guay on the latest executive order on climate change.
What we are…
A Dutch court ruled that Royal Dutch Shell is partially responsible for climate change and ordered the company to reduce its carbon emissions by 45% by 2030, compared with 2019 levels.
Chevron shareholders voted 61% in favor of a proposal to cut “Scope 3” emissions, those emissions generated by using the company's products.
In what represented a major shift in projections, IEA’s latest report called for Ending new oil, gas and coal funding to reach net zero
Ford’s F150 truck makes up 900 thousand of the 11 million trucks sold each year in the US. The unveiling of the F-150 Lightning (all-electric truck starting under $40,000) could be a tipping point in the EV market as it brings EVs to a different customer segment, can act as home backup, and could spur the growth of V2G and other new business models we’ve been hoping for.
The Pope and the Vatican are becoming a louder and more important voice in addressing climate change Pope Launches Green Initiative Decrying Predatory Attitude Towards Planet
Stripe's second demo day on Carbon Removal, provided a look at some interesting new ideas for carbon removal.
A message to climate tech and clean tech entrepreneurs that we enjoyed. In short:
Now is the time (You Are Still Not Late)
There is a need (and room) for all types of solutions
A great graphic from the Financial Times on the perception of action vs. actual impact on individual carbon footprint.
Last Call for the Bayou: Five Stories from Louisiana’s Disappearing Coastline, five different stories about how Louisiana’s diminishing wetlands is threatening livelihoods today.
Emission Impossible, from OG podcast Planet Money, walks through the world of carbon markets and how effective (or not) they are at helping combat climate change.
Calling Clean Energy Startups Interested in Working with Amazon Web Services
We are excited to announce that we are partnering with Amazon Web Services (AWS) and Freshwater Advisors on the first ever AWS Clean Energy Startup Accelerator! The program will pair the best clean energy startups with global energy corporations and industry leaders to help startups accelerate their impact and deploy solutions to pressing energy challenges. Applications are due June 8th- apply at https://freshwateradvisors.com/accelerator-aws.
Buoyant Venture Updates
Buoyant was honored to be mentioned in Jason Green’s post, A Step Back and a Step Forward
The fully vaccinated Buoyant team took our first work trip in over 12 months! We are excited to see more of each other in 3D during the rest of 2021.
A big thank you to Morgan Flynn, who drove our climate impact investment thesis over the last few months.
For fun (since you’ve made it this far…)
Take the Clever Carbon Quiz and find out what your footprint is!
And one more tweet that made us laugh…
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The Lighthouse is a resource for climate tech updates and a channel for regularly sharing our perspective on Buoyant’s investment thesis and industry sectors. We know we are not alone in producing great content and will amplify the voices of others by highlighting those resources we find thought-provoking.