How Can We Efficiently Mobilize Impact Capital for Climate Action and Justice?

Veris recently partnered with the Shift event series to bring together a variety of impact leaders for a Shift Conversations event focused on climate action and climate justice. 

As moderator of the session I asked each of our panelists – Alex Amouyel, the Executive Director of MIT Solve; Christian Okoye, a Partner in Sidewalk Infrastructure Partners; Geoff Eisenberg, a Partner at Ecosystem Integrity Fund; and Melissa Weigel, Senior Director of Investment at NatureVest – to tell us about the climate solutions they are most excited about currently and examples of how they are bringing a climate justice lens into their own decision-making processes. A video and transcript of the session are available here, but I thought I would share a few of the key insights that I took away from our conversation.  

1. Nature-based solutions can be both more affordable and more effective than human-made solutions. 

Nature-based climate solutions include efforts to conserve and restore existing ecosystems. This approach removes carbon dioxide from the atmosphere while also increasing resilience to climate change in many cases. By restoring coastal wetlands that act as a carbon sink, we can help with climate mitigation while also helping front-line communities adapt to new challenges caused by our changing climate. Melissa Weigel shared about the innovative sustainable debt swap program that NatureVest developed to support nature-based solutions in communities that are disproportionately impacted by climate change. 

Melissa Weigel: “The Nature Conservancy has designed this debt swap mechanism so we’re able to renegotiate a portion of (small island developing states’) debt in exchange for the country achieving certain conservation outcomes primarily related to coastal resiliency – protecting their coral reefs and mangroves. Not just because it’s good for the environment, but because that actually protects their country from future storm events. Coral reefs can attenuate 97% of the wave energy that might come during a storm, and that’s protecting that coastline from future damage. So it’s actually making the community more resilient, and we’re able to reduce their debt burden.” 

This nature-based approach is reducing carbon while protecting the lives, property, and livelihoods of the people who live in front-line communities and doing so in a way that is significantly lower cost than developing and installing a human-designed solution like a seawall. 

2. Rethinking our existing energy grid will be a critical part of the solution to climate change. 

Developing and scaling renewable energy solutions is critical, but that is only one piece of the solution to climate change. There is tremendous opportunity to address climate change by rethinking our existing energy grid. Christian Okoye, of Sidewalk Infrastructure Partners, talked about the exciting possibilities of Distributed Energy Resources (DERs). 

Christian Okoye: “With more people deciding to put solar on their roofs or get an EV charger, we think there’s going to be increased numbers of prosumers to the grid. The grid will increasingly become bi-directional, where we can all participate in the grid. You won’t necessarily have to figure out how you trade and get value out of the grid. A lot of that will be automated through Tesla and other aggregators who will get all of the load at the consumer or prosumer level and be able to speak with the grid and participate in those marketplaces and give you value for your participation and for your load flexibility. This will effectively become a virtual power plant.”

In the future we won’t just be buying power from our utility, we’ll also be selling it back. That will be a big part of the solution moving us away from large scale utility plants that emit greenhouse gases. In addition to that, DER solutions aimed at expanding access to renewable energy to low and moderate income communities that have historically suffered the most from the negative environmental impacts of large scale utility plants. Expanding access to more affordable renewable energy solutions within these communities will reduce carbon while helping low and middle income communities become more resilient financially.

3. We must develop and scale climate solutions that serve people with low incomes, the rising middle class, and emerging markets globally.

If we are to solve climate change we must develop and scale solutions for all markets. Using micromobility solutions as an example, Geoff Eisenberg, of Ecosystem Integrity Partners, made a point that really drove home why we must focus on developing solutions that serve emerging markets, domestically and in developing countries, that have high populations of low-income and poverty level citizens as well as a rising middle-class.

Geoff Eisenberg: “Enabling new markets outside the U.S. to leapfrog the mistakes that we made around hydrocarbon energy generation and hydrocarbon-based transportation is not a nice-to-have, – it’s a must-have. If the two billion people who are rising up into the middle-class go through the same processes that we went through, it’s over. We’ll be at 6℃ by the end of the century. So we’ve invested in solar battery mini-grid developers in Africa and electric motor scooter operators in Africa where we think there’s an opportunity to leapfrog past some of the mistakes that we’ve made.”  

Spreading the use of affordable electric bikes and scooters and other micromobility solutions can also help reduce pollution that causes asthma and other health challenges that primarily impact low and middle income communities.  

4. Proximate entrepreneurs develop innovative solutions that address the unique needs of their communities. 

The most creative and effective solutions often come from entrepreneurs who represent or have deep ties to the communities that are being affected by the challenge. To solve challenges in low and moderate income communities and communities of color, we need to invest in entrepreneurs from these communities. Alex Amouyel noted that MIT Solve seeks to invest in proximate solutions. She gave an example of an innovative proximate solution called ISeeChange which is based out of New Orleans and developed by an entrepreneur with deep ties to the Gulf.

Alex Amouyel: “It is a citizen journalism platform that is mobilizing communities to share microdata about climate impacts in their streets and their cities and their communities. Through that, they are rebuilding data, bottom-up, that can be used by cities and climate scientists to really understand how the climate is changing in a city like New Orleans.”

Later Alex noted that it is equally important that entrepreneurs working on these kinds of solutions are able to tap into supplies of capital aligned investors who prioritize impact. She said, “the patience of the capital and the impact alignment of the capital are really important for impact-aligned entrepreneurs to succeed. That makes the difference between where they can spend their time.”

That kind of impact capital is needed at every stage, from getting something up off the ground and throughout each later stage as the solution achieves scale. 

5. Funders must consider the social impact – in addition to the environmental impact – of a climate solution.  

There are powerful ways to change your screening process to seek out solutions that solve for both social and environmental challenges. Geoff Eisenberg offered this example of how their screens evolved over time to incorporate a climate justice lens:

Geoff Eisenberg: “We’re looking at an electric truck company that electrified a diesel truck. It’s great that you cut carbon emissions, but most ports and distribution centers are also in low to moderate-income communities and those people suffer massively higher rates of asthma and other health problems due to PM (particulate matter) 2.5 pollution. Let’s focus on getting the diesel out of those communities and have this wonderful impact of having these great trucks that solve a bunch of problems all at once.”

It is essential that the folks solving for climate include a justice component. We don’t want the solutions to climate change to make existing social inequalities significantly worse.  

Conclusion

In our conversation we covered a variety of approaches, but we only scratched the surface of many promising solutions for climate change. Though we did not have enough time to cover all the possibilities, we hope that this session inspires effective climate action – whether that action is around how you allocate your capital or philanthropic dollars, how you turn your entrepreneurial ideas into action, or simply how you use your voice and votes.

To learn about other opportunities to drive impact on climate change, watch the video or read the full transcript of our Shift Conversation, How Can We Effectively Mobilize Impact Capital for Climate Action and Climate Justice?