Lisbon, 4 November 2022: World Fund, Europe’s leading dedicated climate tech VC, is announcing that it is joining forces with Prime Coalition on Project Frame (Frame), a coalition of venture capital and private equity investors, to advance the work on open-source frameworks and tools that will better analyse the climate performance potential of startups. This partnership will also see the two organisations co-lead the Frame Data and Tools Working Group to better understand the available tools for forward-looking emissions impact.
Climate tech is the fastest growing vertical in Europe according to Dealroom, with over $2.6 billion raised by dedicated climate tech funds across the continent last year, but currently, there is no set standard or framework for how to measure the emissions reduction potential of startups or monitor their claims. This is particularly concerning given the pressing nature of climate change - we need to find solutions that will reduce global warming in the future. Analysis by IEA found that by 2050, almost half of global CO2 emissions reductions will come from technologies that are currently only at the demonstration or prototype phase. Venture capitalists who are typically the funders of innovation need a common language to talk about and manage climate performance, which could become a leading indicator for economic performance.
World Fund and Prime Coalition are joining together through Frame to build solutions for investors backing climate tech startups. World Fund was founded in 2021 on the premise that startups that have the potential to save at least 100Mt CO2e per year will be the most valuable companies of the next decade, something it terms climate performance potential (CPP). Whilst Prime Coalition is a nonprofit public charity and catalytic capital investor that works with philanthropists and other mission-driven organizations and individuals to support sustainable, effective, and scalable solutions to climate change. Its programs, such as Frame, are designed to catalyse, deepen, or accelerate solutions that will become the winners of the upcoming climate transformation and will massively reduce greenhouse gas emissions.
Since Frame’s launch in 2021 as a purpose-built coalition of investors, its aim has been to improve IMM standards for climate-driven investments and to galvanize a network of leadership around transparency and collaboration. The coalition now consists of over 200 dedicated members from 5 continents, representing 80 venture capital or private equity investors and over $40 billion in investment capital dedicated to climate. A cohort of these investors have come together to develop a methodology deep-dive paper, which is scheduled to be released early next year.
This is particularly needed in Europe - the continent’s climate tech sector has doubled in value to $100 billion since 2020, a rapid rise for what is still considered a nascent sector with developing technologies. According to PwC’s State of Climate Tech report, the areas that represent 80% of future emissions reduction potential by 2050 received just 25% of climate tech investment between 2013 and 2021. Yet, there are concerns that startups will position their business as ‘sustainable’ or ‘climate tech’ to access a slice of the billions available in investment across the continent, at the expense of businesses that are truly developing the core technologies that will enable decarbonisation.
Universally accepted tools, methodologies and best practices would enable investors and LPs to dig deeper into the claims made by startups to ensure they were only backing the companies creating the most promising solutions to fight the climate crisis. World Fund has long advocated for the CPP model, but by working together with other funds and organisations, they can collectively move towards a standard and easy-to-use framework that can accelerate the shift the world needs to fight the climate crisis. As well, the framework isn’t valuable only to other VC funds, such tools are also necessary for startups so they can build their case for climate-specific investors and find the right supporters for their business.
By coming together through Frame, World Fund and Prime Coalition will be collaborating to define investor needs, guide tool development, and push best practices into the market to enable more investors to use common criteria and analysis to fund startups that will have the biggest impact in the future, with the aim to reveal the results in March next year.
Danijel Višević, co-founder of World Fund, said: “We believe that the only way to fight the climate crisis is to invest in the ground-breaking technologies that will make a real difference to the planet and we enjoy working with our peers and partners across the industry to drive this movement. Climate tech is a fast-moving field and we’re at the point now where there needs to develop a universal standard that investors and startups can refer to in order to prevent spurious claims and greenwashing. We’ve advanced these principles using our CPP thesis but you cannot develop a standard as a single fund - it needs an association and a joint process. We have been in dialogue with Prime Coalition since our inception and are excited to formalise our partnership now. With Project Frame, they have started the platform we need to converge towards a standard tool of impact management instruments and together we can accelerate the fast-paced shift we need to transform the fight against the climate crisis together and in the most impactful way possible.”
Keri Browder, Director of Project Frame at Prime Coalition, said: “We are proud to be the convener for Project Frame, which was originally launched in partnership with our 12 steering committee members as a platform to help climate investors better assess the impact that innovations they support today will have on greenhouse gas emissions in the future. We’re delighted to work closely with World Fund, a true thought leader in the climate tech investment community, on improving the methodologies, best practices, and tools to assess future emissions potential. We need strategic climate investing and transparent reporting if we are to make a difference to the climate crisis and this is a big step forward in that direction.”
World Fund is the leading European-focused climate venture capital fund established by Daria Saharova, Danijel Višević, Craig Douglas, and Tim Schumacher. From energy, food, agriculture, and land use, to building materials, manufacturing and transport, World Fund is investing in European climate tech with a climate performance potential (CPP) of at least 100Mt CO2e emission savings per year. Because we need to decarbonise our economy, startups with such CPP will be among the most valuable companies of the next decade.
Prime Coalition (“Prime”) is a nonprofit organization that works with philanthropists and other mission-driven organizations and individuals to support sustainable, effective, and scalable solutions to climate change. Every Prime program is designed to catalyze, deepen, or accelerate solutions that we believe will massively reduce greenhouse gas emissions.
Project Frame is a nonprofit program at Prime purpose-built to organize investors around forward-looking emissions impact methodology and reporting best practices. Its aim is to improve IMM standards for climate-driven investments and to galvanize a network of leadership around transparency and collaboration. As of July 2022, Frame consists of over 200 dedicated members from 5 continents, representing 80 venture capital or private equity investors and over $40 billion in investment capital dedicated to climate.
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