Capital to effect change: Inside Carbon Equity’s quest to move the needle on climate change

“Human-induced climate change is the largest, most pervasive threat to the natural environment and societies the world has ever experienced,” a UN report observed last month.

The report particularly said that the poorest countries are paying the heaviest price. It also focussed on the topics of “mitigation action, loss and damage, access and inclusion, and the protection of climate rights defenders.”

The biggest challenge associated with climate change is that transitioning towards a low carbon economy is a capital intensive task. “Capital can be an immensely powerful tool to effect change,” says Jacqueline van den Ende, co-founder of Carbon Equity. “Capital is basically the control room of the world. So I am curious how I can leverage capital as a weapon to drive change,” she quips.

She co-founded Carbon Equity in 2021 as a Dutch climate investing platform for alternative investments with Lara Koole, Jeff Gomez, and Liza Rubinstein.

Moving the needle on climate change

The idea of Carbon Equity comes from the quest of Van den Ende and her co-founders to move the needle on climate change. They repeatedly questioned how capital can be a prudent tool to bring about change. “We saw that trillions of dollars were being funnelled into so-called sustainable funds or stocks, but there was little to no change in real world outcomes,” she says. “This led us to ask “so how do we move the needle?”

According to the co-founders, most of the sustainable funds are ESG funds that invest with companies like Apple, JP Morgan, and Meta that have good environment, social, and governance practices. While these are sound investments, they believe it does little to actually solve sustainability challenges like climate change.

They observed that to really move the needle with your money, one needs to invest in private markets. “97 per cent of all companies are private, i.e., the vast majority of climate solutions are privately funded. Furthermore, when investing in private markets, especially in venture capital and growth equity, every euro invested directly powers innovation, product development and growth of these climate solutions,” Van den Ende explains.

However, private markets are still inaccessible to most investors and private investors mostly have access to risky time intensive options like crowd-equity or angel investments. Professional investors invest in venture capital or private equity funds, where they benefit from professional management and diversification. Van den Ende says a person, however, needs at least €5M to participate in such funds. Carbon Equity lowers that threshold to €100,000 and through the Climate Investment Club enables access below €100,000.

Powering world’s most impactful climate solutions

The mission of Carbon Equity, according to Van den Ende, is to unlock “billions in global private wealth to power the world’s most impactful climate solutions.”

Carbon Equity enables unique access to top climate venture capital and private equity funds at a low minimum. First, Carbon Equity’s investment team conducts climate impact and financial diligence on over 800 global climate venture capital, growth equity, and buy-out funds. Second, their fintech platform enables scalable access for all.

“Through our app and online and offline platform investors can track all of the companies they are invested in, meet fellow climate investors and learn more about climate investing,” she adds.

Since starting their first fund last year, Carbon Equity has seen €80M invested on the platform and has raised €3M in venture funding to scale its platform.

Powering the world’s most impactful climate solutions is a team that is very much driven by its mission. Jacqueline van den Ende says the core founding team came together very naturally. She and her friend Lara Koole envisioned starting a company together when they first met 15 years ago.

She met Liza, a former consultant at McKinsey, during a customer interview, while Jeff joined them at a time when he was looking to start his own company. “We are a super multi-faceted and experienced team which has allowed us to move relatively fast,” says Van den Ende.

Go-to climate investment platform

Every founding team has a vision for its startup and the co-founders of Carbon Equity have one centred on impact. “Our ambition is to invest at least 1 billion dollars in climate solutions through our platform over the next 5 years together with thousands of investors,” says Van den Ende.

In order to make this a reality, she envisions building a platform able to service a global investor base and become the global go-to climate private equity investing platform. The Dutch scaleup is also planning to raise a substantial Series A round in 2023 to support its technology platform, marketing, and sales initiatives.

She also sees climate investing as a one way street. With most markets for climate solutions projected to become multi-million dollar markets and fossil fuels no longer being used in the foreseeable future, she says climate investing is a superior investment choice.

Rise helps with coaching and scaling

Carbon Equity joined 9 other Dutch scaleups to form batch #9 of Techleap.nl’s Rise programme this year. Jacqueline van den Ende says this programme comes at a perfect time as they start to focus on scaling.

“It’s a truly unique programme where, through themed sessions, we get to benefit from world-class coaching, mentorship from top entrepreneurs, peer learning and the strong network that Rise has built internationally,” she says.

In its first 18 months, Carbon Equity has made big headways, including proving its ability to deliver a great product, acquire enthusiastic customers, build a strong brand, and hire super talented people. With its current trajectory, the Rise programme will act as a guiding light in unlocking next growth potential.

Van den Ende says the programme just got started but has already proven beneficial to them. She says the sessions held by Techleap.nl have triggered new things including the need to think about your hiring plan for the next 12 months as opposed to ad-hoc hiring.

She adds, “It is super useful to share our experiences with other founders and to learn from them too.”

Actual dent in climate change

With a long-term vision of $1B invested in climate solutions, Jacqueline van den Ende says Carbon Equity will be a success if “it can put an actual dent in climate change.” She sees this possible either by mobilising additional capital to find breakthrough climate solutions or by mobilising people.

“Carbon Equity gives people skin in the game and allows people to benefit from transitioning towards a net zero economy,” she says.

For Van den Ende, it is more than just climate investment but also about creating a “Yes, we can” mindset.

As more entrepreneurs are embarking on their startup journey with sustainability at the centre, Van den Ende suggests looking at unique skill sets or experience and problems they are passionate to solve. “Once you answer these questions, you will be pointed in the right direction,” she says.