Saturday, May 25, 2024

Al Gore’s Generation Launches $1.7 Billion Sustainability Growth Fund


Former Vice President Al Gore’s Generation Investment Management has created a new $1.7 billion fund in a move aimed at reducing emissions, increasing financial inclusion, and making healthcare more accessible.

Al Gore has not been quiet about the climate crisis. His 2006 film An Inconvenient Truth is often credited for sparking global climate action. Now, Gore’s $36 billion Generation Investment Management, which he co-founded in 2004 with David Blood of Goldman Sachs, is turning up the heat on climate-friendly investments.

The new $1.7 billion Sustainable Solutions Fund IV is Generation’s fourth and largest Growth Equity fund, and it will invest in companies “shifting industries toward sustainability and responsible innovation at scale,” the company said in a statement. The fund will allow Generation to invest $50-$150 million as active minority investors in high-growth companies with revenues between $30 million and $300 million.

deloitte $1 billion investment
Courtesy Harry Cunningham | Unsplash

“We’ve been researching the changes needed for a sustainable future, and investing in pioneering companies driving that transition for over 15 years,” Lila Preston, Head of Growth Equity at Generation Investment Management, said in a statement. “Our systems-level view helps us identify industries, companies and entrepreneurs that can scale sustainable solutions globally. We believe this helps us to see value where others don’t, and add value where others can’t.”

The announcement comes in the midst of an energy crisis and rising inflation, underscoring the need for sustainable solutions.

Sustainable Solutions Fund IV

The new fund will focus on three key areas: planetary health, such as net-zero-carbon solutions transforming mobility, agriculture, energy, and enterprise by reducing waste and emissions, and enhancing biodiversity; personal health, with a focus on better health outcomes and reducing costs while making healthcare more accessible; and financial inclusion, by supporting access to finance, reducing inequality, and supporting an equitable future of work.

“Sustainability has been and will always be at the core of our mission, but we know we cannot achieve this mission on our own,” David Blood, Senior Partner of Generation Investment Management, said.

sustainable investing
Courtesy Geran de Klerk | Unsplash

“We believe partnership is the way to succeed. When companies and entrepreneurs work with Generation, they don’t just get a single point of contact,” Blood added. “They gain access to our team, extended network and a continuum of capital across private and public equity to help them scale and transform, and to bring system-positive change for generations to come.”

Generation says it offers its portfolio companies diversity of thinking and perspective through its range of experts and advisors and more than 150 deep research roadmaps outlining macro and long-term industry trends.

Generation says it has tracked secular shifts including the electrification of the transportation industry, adoption of alternative proteins, the rise of remote collaboration tools, circular economy marketplaces, personalized medicine, and most recently, digital remittances.

Sustainable investing

Last October, Generation announced it was entering into a partnership with Goldman Sachs Asset Management, Microsoft’s Climate Innovation Fund, and Harvard Management Co. to create a venture fund aimed at investing in companies actively working to limit global warming in line with Paris Agreement targets of 1.5°C over pre-industrial levels.

sustainable blue chips
Courtesy LoLo | Unsplash

Since its launch, the firm has made more than 60 investments in companies including Solar City, which was acquired by Tesla in 2016. It also invested in Asana, Nest Labs, and Octopus Energy, where it took a 13 percent stake last September for $600 million.

The news comes after leading financial firm Deloitte announced a $1 billion investment fund in April to support its sustainability initiatives. “We have the resources, skills, and influence to help build stronger and more sustainable communities. And it’s our collective environmental and societal footprint that has the potential to make or break this decade of action,” Deloitte Global CEO Punit Renjen said in a statement.

Across industries, sustainable enterprises have seen a groundswell of funding. According to Crunchbase, after investing just more than $2.2 billion in VC-backed sustainability startups in 2020, “investors poured $6.3 billion into the industry last year.” And this year has already seen about $2.4 billion in investments.


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