The Venture Climate Alliance has created a framework for venture capital fund managers to align their portfolios with net zero. While existing decarbonisation frameworks for private equity and debt, such as the Science-Based Targets Initiative, the Private Markets Decarbonisation Roadmap and the Net Zero Investment Framework for PE (from the Institutional Investors’ Group on Climate Change) can be applied to venture capital, they are not tailored to early-stage portfolio companies, the VCA contends in the framework document.

The framework involves additional requirements for portfolio companies in higher revenue, fundraising or employee bands. Smaller companies that have raised less than $25 million must set a climate strategy at the board  level; companies with more than $250 million raised must measure their carbon footprint to up to Scope 3, and companies with more than $500 million must set near-term emissions intensity reduction targets.

Find the framework here.