Climate change financing is raising stakes this week. Carbon Collective – the online investment advisor that aims to spread our investing in sustainable assets, announced an oversubscribed $2.2 million seed round.
Investors featured are Powerhouse Ventures – the investor backing startups building software to decarbonize energy, HyperGuap, and Elevation Ventures.
Carbon Collective is on a mission to address the problem with current ESG investing that offers greenwashing and is more expensive than the generic one. According to CEO Zach Stein, current options are based on a complex series of proprietary data, which are not accessible to the retail investor, and have no clearly defined link to how your investments can drive impact.
As Mr. Stein claims, that is opposite to what the world needs which is simple, affordable investing driven by a clear theory of change that will actually serve as a catalyst for climate change solutions companies.
“The world only changes when enough individuals decide to change it… Given that, our goal with this raise is to continue broadening our foundation of mission-driven investors through our low-fee, zero minimum robo advisor and green 401(k) program for mission-driven startups and nonprofits,” said Mr Stein.
The company launched its climate-friendly 401K plan for employers in April this year. It aims to offer individual investors and employers a plan that is mission-driven and aligned with the net zero emissions transition.
What sets the 401K plan from the rest is the screening process which is based on the last year’s revenue of companies and how much of it came directly from fossil fuels, or fossil fuel-dependent activity.
Even if a company is a major player in both the clean technologies space and fossil-fuels sector, if more revenue comes from fossil-fuels-related activities than from decarbonization activities, it will not get past the screening.
Retail investors are now demanding more transparent and mission-driven investment opportunities so the market is in a need to address issues related to business as usual ESG investing. Carbon Collective is well-positioned to drive future growth of the sector and raise awareness that would actually advance climate solutions.