Sustainable Finance Initiatives

A $125B fund to protect tropical forests is gaining traction, reports Justin Catanoso from #COP16. At COP16 in Colombia, an idea as audacious as it is pragmatic took center stage: the Tropical Forest Finance Facility (TFFF), a potentially transformative step in conservation finance. Conceived as a new model for protecting tropical forests, TFFF aims to establish a reliable, results-based income stream for nations stewarding these biodiverse reserves—essentially treating tropical forests as stakeholders in our planet’s future. Despite a patchwork of conservation funds, financing has simply not kept pace with the rapid rate of forest loss. Enter the TFFF, structured to attract up to $125 billion from a mix of sovereign investors, philanthropies, and private sources. Its ambition is to reward countries for slowing deforestation and safeguarding tropical forests, offering an annual return of $4 billion, contingent upon rigorous satellite monitoring and adherence to conservation targets. While other funds have relied on goodwill and grants, TFFF introduces a model akin to a bond fund, rewarding investors while incentivizing nations to keep forests intact. The initiative’s architects envision a diversified portfolio, combining climate-friendly investments—such as green bonds in developing economies—with fixed-income securities in more established markets, aiming for stable returns to underwrite ambitious payouts. Penalties for deforestation are stringent: each hectare lost forfeits the equivalent of rewards for 100 hectares. Such measures aim to maintain a steady yield over an anticipated 20-year lifecycle, supporting more than 70 tropical nations in preserving, rather than depleting, their natural capital. Beyond its environmental goals, TFFF’s structure addresses the governance and transparency challenges often faced by global finance initiatives. A globally recognized body would oversee fund administration, minimizing political influence and ensuring that proceeds are distributed equitably and transparently. Payments will be tracked and verified, supported by an annual “Global Score Card” to enhance public accountability. If successful, TFFF could represent a shift from traditional conservation financing, creating an asset-backed approach where nature's essential services are finally valued. Tropical forests—indispensable for climate stability, biodiversity, and local livelihoods—have long been absent from balance sheets. As TFFF’s supporters might say, it’s high time forests were valued for their productivity as ecosystems, not just as raw materials. 📰 Catanoso's story: https://lnkd.in/gfmdvyPm Photos: various rainforests I've photographed.

Alastair Marsh's recent thought-provoking piece in @Bloomberg highlights critical challenges with the current climate tech investing landscape Climate tech projects are capital-intensive with long timelines. Unlike software, much of climate tech requires massive upfront capital for R&D, pilot plants, and manufacturing before significant revenue. This demands longer development and deployment cycles (often 7+ years to scale) that exceed typical 5-7 year VC exit horizons. The classic VC model - built for rapid, asset-light scale-ups - often misaligns with the realities of many climate tech solutions, especially "hard tech." While there’s an abundance of early-stage VC capital for entrepreneurs, later-stage growth that bridges these projects from venture to infrastructure stage is basically absent—that’s called the missing middle. We need to adapt and supplement that approach by layering in other types of capital and bridge the "missing middle." A broader array of financing instruments is essential for climate tech to scale, including patient equity and growth capital, project finance, blended finance, and specialized debt models. Marsh’s piece lays out how family offices are uniquely positioned to be catalyzing players in this space. Their flexibility allows them to deploy capital across diverse segments, filling the gap and driving significant financial returns alongside impact. https://lnkd.in/gUf85Bwy

Can Family Offices Outperform Traditional Private Equity and Venture Capital? When it comes to long-term impact and sustainable growth, Family Offices might just have the upper hand. Why? They possess a unique advantage that traditional private equity (PE) and venture capital (VC) firms often lack: patient capital. Unlike PE and VC firms, which are bound by short investment cycles, Family Offices operate without a “shot clock.” This freedom to hold investments indefinitely allows them to focus on true, lasting growth rather than short-term returns. Consider some of the most prominent Family Offices, like the Pritzkers, Crowns, and Dells. With the right infrastructure, they can bypass traditional channels and compete directly in private markets. They’re set up to outperform PE and VC firms because they aren’t pressured to sell within three to five years. Instead, they can take their time, letting investments grow naturally and compound without frequent disruptions. In the typical PE or VC world, investments go through a cycle: a firm buys a privately held company, holds it for a few years, then sells it—often to another PE firm, which repeats the process. Over time, these repeated buy-sell cycles generate significant friction—taxes, operational shifts, and the focus on short-term strategies. Family Offices, on the other hand, can acquire a company and simply hold it. This approach reduces transaction costs and avoids unnecessary disruptions, allowing for exponential growth over decades. Currently, only a handful of Family Offices have the infrastructure to operate this way. But I believe that’s changing. As more Family Offices recognize the power of patient capital, they’ll increasingly distinguish themselves from traditional PE and VC models. They’re not just adopting a different investment style; they’re reshaping the landscape, showing us what true long-term investment looks like. Family Offices are proving that, with the right resources and strategy, they can redefine sustainable investing—and the impact is only just beginning. #familyoffices #familyoffice

How green stocks are surging in the face of political hostility 🌱📈 Even as the Trump administration dismantles climate initiatives and mocks what it calls the “green scam,” the clean-tech sector has quietly become one of the most profitable trades in the global market. The S&P’s clean energy index is up roughly 50% this year, more than double the broader MSCI World Index. What’s driving this resilience? It turns out, the green economy no longer depends on government goodwill…it depends on demand. “Investors have been too distracted by Trump’s anti-green rhetoric,” says Aniket Shah, PhD of Jefferies. “The $2 trillion in low-carbon spending last year is an insane number that shows the green economy is enjoying a wonderful moment.” That moment is powered by forces far larger than politics: ▶️ The insatiable energy appetite of AI data centers ▶️ China’s relentless expansion of low-carbon industries ▶️ The economics of speed — renewables are “quick to bring online,” as Brookfield’s Natalie Adomait notes This is the new paradox of progress: AI’s energy needs may actually accelerate the transition to clean energy. Not because of ideology, but because of efficiency and economics. As Amundi’s Timothy Ho puts it, “If you’re offering green electrons to a company, they can be agnostic as long as you can promise delivery when they need it.” Yet this “green euphoria” isn’t without irony. BloombergNEF warns that fossil fuels will still play a big role in meeting soaring electricity demand, potentially inflating emissions even as the world invests trillions in clean tech. The planet remains off track for both the 1.5°C and 2°C targets. In other words, green markets are flourishing — even if the planet isn’t yet. As BlackRock’s Charles LILFORD observes, “We don’t correlate any potential ‘AI bust’ as an existential risk to sustainable energy equities.” The clean economy, it seems, has outgrown its dependence on politics and entered a new phase of market maturity. Based on reporting by Natasha White, Alastair Marsh and Coco Liu (Bloomberg) (+++Opinions are my own. Not investment advice. Do your own research.+++) 👋 Follow me for my daily investing nuggets, musings on markets, and hilarious investing memes. 💸

2150 closes a second $197 million fund to invest in sustainable startups #2150, the climate-focused #venture arm of Urban Partners, has raised €197 million for its second fund to back startups innovating across the ‘urban stack’—from sustainable construction materials to the electrification of transport. Co-founded by Christian Hernandez Gallardo, the firm operates out of London, Oslo, Berlin, and Copenhagen, and is positioning itself as a key player in financing the transformation of cities through scalable climate technologies. The fund is supported by institutional and mission-aligned investors including the Augustinus Foundation, Novo Holdings, EIFO, Church Pension Group, Viessmann Generations Group, Security Trading Oy, and Virala Group. 2150 plans to invest in 20 Series A and B companies, split between Europe and the U.S., writing initial cheques between €3 million and €15 million, with a strong focus on both financial returns and measurable environmental impact. Three investments have already been made: METYCLE, a German metal recycling marketplace; Mission Zero Technologies, a UK-based carbon removal startup; and AtmosZero, a U.S. company developing industrial heat pumps. 2150's approach blends software and deep tech, with the goal of enabling cities to thrive sustainably, while tracking performance through both revenue metrics and environmental KPIs like air quality, water efficiency, and carbon mitigation. The article on Sifted in the first comment.

Positive long-term news (and some great data points) from the LSEG (London Stock Exchange Group) - The global green economy, a market providing climate and environmental solutions, has expanded considerably over the last decade, representing a significant investment opportunity. In 2023 it made a strong recovery from a sharp decline in 2022, with its market capitalisation reaching US$7.2 trillion in Q1 2024. Headwinds remain, such as overcapacity issues and trade barriers related to #renewableenergy equipment and #EV manufacturing. And, following downsizing at some large US green companies earlier this year, the share of the green economy in the market dropped slightly from 8.9% at the end of 2023 to 8.6% in Q1 2024. But, despite market volatility and increasingly complex geopolitical risks, the green economy is expanding, and its long-term growth (10-year #CAGR of 13.8%) outpaces the broader listed equities market. Full Report: https://lnkd.in/ebhw5qhz #climateaction #sustainability #climatetech #growth #greeneconomy

Impact startups in MENA are growing fast but funding strategies must evolve just as quickly. One of the questions I’m asked most often by founders is: “Where do we start when it comes to raising funds for climate or sustainability-focused ventures in this region?” Here’s how I usually break it down in 4 key pathways I’ve worked with or closely observed, each requiring a clear narrative, regional awareness, and the right positioning: 1. Government-backed innovation platforms These are not just about incubation, they are increasingly designed to de-risk startups and connect them to capital. 🔹 Example: Hub71 (Abu Dhabi) offers access to corporates, sovereign investors, and a growing base of VC partners through its Incentive Program. It's a launchpad for startups aligned with national priorities. 2. Climate-aligned positioning Framing your solution around climate resilience or adaptation is no longer optional—it’s a strategic funding move. 🔹 Example: ALTÉRRA, the $30B climate investment fund launched by the UAE at COP28, is designed to mobilize capital into areas like clean energy, food security, and nature-based solutions. Startups that clearly align with these priorities stand a stronger chance of attracting institutional and private funding. 3. Corporate sustainability partnerships Corporates in MENA are increasingly partnering with startups to accelerate their ESG goals—often offering pilot funding, technical support, or access to infrastructure. 🔹 Example: PepsiCo Middle East has launched several open innovation challenges in the region, focusing on sustainable packaging, water reuse, and food system transformation. These partnerships are a valuable entry point for startups ready to co-create scalable solutions. 4. Strategic VC alignment Venture capital in MENA is increasingly aligning with long-term sustainability themes—especially in climate tech and resource efficiency. 🔹 Example: VentureSouq, a MENA-based VC, launched its Climate Tech Fund I to invest in technologies tackling the climate crisis—from energy and mobility to the circular economy. They’re actively backing companies that blend strong commercial potential with measurable impact. The takeaway? It’s not just about raising funds, it’s about raising strategically. That’s how you align with where capital is moving in the region. If you found this useful, share it with a founder or ecosystem builder working on climate and impact in MENA. Let’s make these conversations more visible ;-) #ClimateFinance #MENA #ImpactStartups #StrategicFunding #GreenTransition #BusinessWithPurpose

There's an overwhelming political rhetoric ATM towards addressing biodiversity funding gaps thru upscaling natural capital markets & private investment. But for many of us working in nature finance, we've seen big disparities between the rhetoric & reality. Various forms of nat cap markets have existed for decades, yet most have achieved limited scale & certainly very limited scale relative to other ways in which nature is financed. Many have also been asking the question, is this really the best we can do, our best hope for preventing biodiversity loss, hoping to create institutions that enable the commodification & trade of nature in the hope that these units will become valuable enough to attract mainstream private investment? Very happy to share our new preprint led by Theo Stanley with Adrienne Buller Katie Kedward Yadvinder Malhi Constance McDermott Nathalie Seddon Forrest Fleischman & convened by Justin Adams OBE Mark Hirons & myself, inviting us to ‘Reimagine nature finance’: https://lnkd.in/dnhtZ8ug. We review 6 major challenges that consistently come up in the nat cap markets lit: 1) Despite the story that they're more ‘scalable’ than public investment, v few natural capital markets have scaled, cos they often compete with other political objectives (demand for most natural capital offsets comes from making infrastructure developers pay) which most often win out 2) They are typically defensive expenditures – they make up for harm elsewhere, not delivering additional improvements in nature 3) They typically deliver the ecologies that yield highest profitability, & we show a few eg.s where this has been misaligned with the highest conservation value 4) Most of the world’s most valuable biodiversity areas don’t possess appealing financial investment characteristics 5) Equity concerns with land consolidation & mismatches with local people’s preferences (which is a wider problem with conservation not unique to nat cap markets) 6) Persistent challenges developing measures of nature that have widespread legitimacy & acceptance Then we make an invitation to rethink what nature finance might look like, an emphasis on revolutionizing the effectiveness of public spending away from untargeted subsidies & towards targeted biodiversity investments, & a focus on mechanisms for improving conservation outcomes which are consistently demonstrated to be effective but do not rely on natural capital markets - like stricter regulations, enhancing land tenure of conservation stewards. “We do not flatly reject NCMs and some of us work on improving their social and ecological effectiveness. But there is now an overwhelming body of evidence which, taken collectively, suggests that they will continue their decades-long trajectory of being a small and specialised component of a wider nature finance portfolio” The Leverhulme Centre for Nature Recovery Circular Bioeconomy Alliance Oxford EARTH - University of Oxford

Does traditional venture capital work for African SMEs? Most investors expect startups to scale fast and exit within a decade. But in Africa, exits are rare, and short-term funding models don’t align with long-term economic growth. This is the gap that 'Luni' Libes is tackling with Africa Eats. Instead of chasing quick returns, he’s building a sustainable investment model designed for patient capital and real impact. His approach? Holding equity indefinitely. Instead of forcing companies to sell, Africa Eats provides long-term funding, hands-on support, and access to public markets so African agribusinesses can scale at their own pace. In my latest newsletter, inspired by my recent Unlocking Africa Podcast interview with Luni Libes, I break down the key pieces of insight from his unique approach. Key takeaways from our conversation: ➡️ Forget the 10-year exit. African SMEs need capital that grows with them, not capital that pressures them to sell. ➡️ Public stock markets can fund SMEs. SEMX, a new segment on the Stock Exchange of Mauritius, is unlocking liquidity for high-growth businesses. ➡️ Supply chain inefficiencies are the real problem. By cutting out middlemen, Africa Eats has reduced post-harvest losses from 30-40% to just 3-5%. This isn’t just about investing; it’s about reshaping food systems so that they are more sustainable, scalable, and profitable. Want the full insights from our conversation? 📩 Read the full blog & subscribe by clicking the link in the comments below! #ImpactInvesting #SMEGrowth #Agribusiness #Entrepreneurship #Podcast #PodcastHost #Newsletter

🇫🇷 France isn’t just playing catch-up in climate tech — we’re setting the pace. After backing 72 climate startups and building the Techstars Sustainability Paris ecosystem from scratch, I’ve seen firsthand what real, long-term impact actually requires. Spoiler alert: it’s not just capital. In my recent conversation with Sarah Chen-Spellings on the Billion Dollar Moves Podcast, we talked about what it takes to build the next generation of climate solutions — and why 🇫🇷 France’s bold €54B commitment is such a game changer. Here are 3 big takeaways: 1️⃣ VC models must evolve. 10-year fund cycles and SaaS-style traction don’t fit the pace of climate hardware or deep tech. We’re talking microreactors, CO₂-into-fabrics, circular battery systems. These aren’t apps — they’re atomic. We need patient capital, not just fast exits. 2️⃣ Government + private sector = momentum. France2030 is more than a funding plan — it’s a roadmap. Sovereign backing (Bpifrance), deep corporate support (TotalEnergies, VINCI, Renault Group), and founders from around the world are finding a uniquely founder-ready ecosystem here. 3️⃣ Support doesn't stop after writing a check At Techstars, my belief is simple: be the constant in a founder’s journey. The real work starts after the accelerator ends and we invested. Building in climate takes a village — and a long view. 💥 Some standout French climate startups I’m watching: ✅ Back Market — circular electronics at scale ✅ Innovafeed — insect protein transforming agri-food systems ✅ Fairbrics — turning CO₂ into sustainable textiles ✅ Verkor — €2B gigafactory powering low-carbon EVs ✅ newcleo — reimagining nuclear with next-gen innovation Let’s fund the future, not just the fastest exits. 💬 Know a woman-led climate tech startup we should be watching? Drop it in the comments. 🔗 Full episode link in comments! #France2030 #ClimateTech #DeepTech #Techstars #BillionDollarMoves #ImpactInvesting #VC #Sustainability #WomenInClimate #ParisTech #BeyondTheBillion