Newsletter: Tom Steyer launches new investment fund with a focus on climate justice

The world needs to spend trillions of dollars to decarbonize over the coming decades. And that money needs to be spent in ways that help the people who’ve suffered the worst environmental harms from industrial capitalism — and who stand to suffer the most from climate change.

For investors Tom Steyer and Katie Hall, founders of the new investment platform Galvanize Climate Solutions, one solution to this dual challenge lies in ​“movement capitalism.” That’s how Steyer described the philosophy behind their fledgling multibillion-dollar fund in a Thursday statement:

Movement capitalism is an economic philosophy that employs the foundations of capitalism — innovation, entrepreneurship, competition — and merges those with the power of global activism, in support of a higher public purpose.

Those are lofty words. We’ll have to see how Galvanize measures up once it actually starts investing its billions.

Galvanize’s two founders do have backgrounds that straddle the worlds of capitalism and activism.

• Steyer, founder of Farallon Capital Management, has parlayed his $1.6 billion fortune into a range of political and philanthropic causes. NextGen America, the nonprofit he founded in 2013, supports young activists fighting for social justice and against climate change. These causes also served as a centerpiece of Steyer’s 2020 campaign to become the Democratic presidential nominee.
• Hall, the founder and co-chair of Hall Capital Partners, manages about $40 billion in investment assets for foundations, endowments and families, and sits on the boards of charities including the Andrew W. Mellon Foundation and the Smithsonian Investment Committee.

Galvanize is targeting investments ​“in the billions [of dollars]” into seed, venture and expansion capital for companies working on decarbonization strategies, a spokesperson for Steyer told Canary Media. The fund is also committing 25 percent of its profits to ​“climate and climate justice organizations.” 

Hall pledged in Thursday’s statement to create a ​“very different investment platform” that will ​“accelerate the clean energy transition ecosystem through business and civic leadership.”

Galvanize’s backers include Emerson Collective, founded by Laurene Powell Jobs, and Marc Benioff’s Time Ventures. Senior investment partners include Veery Maxwell, a founding partner at Ajax Investment Strategies; Saloni Multani, who has held senior investment positions at Hellman & Friedman and SPO Partners; and Cliff Ryan, previously a managing director with Riverstone Holdings.

Investing for community and climate

Steyer’s activity in the climate-VC-meets-climate-justice space this week wasn’t limited to his new Galvanize fund. On Wednesday, he joined a host of backers to launch Earthshot Ventures, a $60 million fund spun out of the Hawaii-based Elemental Excelerator that centers energy equity and inclusion in its funding strategy.

In an interview with Canary Media, Earthshot Ventures founding team members Dawn Lippert and Mike Jackson highlighted the role that community involvement can play in helping climatetech companies grow. Earthshot’s approach builds on Elemental Excelerator’s ​“energy and access” framework that it applies to startups it funds and works with, aimed at helping the startups assess how their hiring and contracting practices aid underserved communities and how their technologies and business models affect them.

Beyond being the right thing to do, ​“there’s so much value in working with local communities that can de-risk supply chains…[and] coordinate partnerships on the ground,” Lippert said. Examples from Elemental Excelerator–backed companies include:

• ChargerHelp, which collaborates with local workforce development programs to train technicians to fix out-of-service EV chargers. 
• OhmConnect, a startup that targets traditionally underserved communities for low-cost or free smart thermostats that enable them to reduce home energy usage during grid peaks and get paid in return.

Earthshot’s other backers include Emerson Collective, John Doerr of Kleiner Perkins, Microsoft, Stafford Capital Partners and Facebook Chief Product Officer Chris Cox, as well as two state-centric entities, the Employees’ Retirement System of Hawaii and McKinley Alaska, a fund investing in Alaska communities. Both Hawaii and Alaska are interesting targets for distributed energy technologies, Jackson said, which ​“tend to lend themselves much more to building scalable, venture-financeable types of funding” than large-scale energy technologies.

(Lead photo: Gage Skidmore via CC BY-SA 2.0)