This report is based on CCSI’s comprehensive benchmarking of VCs’ publicly available approaches, combined with a literature review and practical insights collected through an interactive workshop and extensive bilateral conversations with VCs. It is tailored for venture capital investors seeking to optimize their climate impact through meticulous impact screening, measurement, and reporting. It is focused on key issues that the field is intensively debating and where consensus is yet to be achieved.
In Section 1, the report highlights the significance of methodologies for calculating avoided emissions, while focusing on two aspects that remain debated in the field: attribution and baselining. Section 2 focuses on sector-based prioritization and the importance of setting threshold criteria to ensure the investment is aligned with the Paris Agreement objectives. Section 3 explores the necessity of rigorous screening processes to identify and address indirect impacts of investments. Finally, in Section 4 the report delves into innovative approaches for measuring impact in climate adaptation financing, emphasizing the need for a formulation of a comprehensive Climate Adaptation Investment Thesis.
The report underscores that in the realm of venture capital investing, climate due diligence is as pivotal as finance due diligence. While the provision of capital is essential for driving impactful climate solutions, it is the meticulous evaluation of climate mitigation and adaptation needs, scalability of breakthrough technologies, and their potential impacts that ensures the effectiveness and sustainability of such investments
