Article contributed to illuminem as part of my Reclaiming Entrepreneurship series.
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Over decades venture capitalism has forcibly separated entrepreneurship from ethics, impact, and activism. Exploitation is made up for with CSR programs, the metric of success is The Exit, and the only route there is venture capital (VC). This monocultural complex has now been attempting, in the words a prolific investor in the space, to “Unf*ck the Planet” through climate capitalism. A few trillion dollars later, how are we doing?
The simplest climate metrics would indicate that we’re not doing well at all. Emissions, resource use, air and water pollution, biodiversity and habitat loss, waste production, and land degradation: all are on the rise with no inflection point on the horizon. Fires, floods, and extreme weather have become commonplace; inequality and the inability to adapt keeps growing. Investors will tell you that we simply haven’t invested enough. That it’s just a matter of directing more capital towards the innovations that will result in a turning point.
After decades working for high-growth startups and a few years deep in the climate capitalism ecosystem I began to question this logic. Over the past two years I have been carrying out a research exercise tracking the activities of the 160 most active climate venture funds and what they invest in. My findings so far lead me to conclude that the climate VC community is investing in the wrong things, using a mixture of shallow impact metrics and outdated thinking.
It is a mode of thinking that is neither driven by climate science nor by modern economic theory. It is instead driven by the same profit-focused mindset that prioritises financial gains over everything else. As such it should be treated with a high degree of caution and a very critical eye.
Modern economic thinking, such as that put forward by Donnella Meadows, Kate Raworth, and EF Schumacher indicate that what actually needs to be unf*cked are the economic and social systems we have come to accept as a given. This is not even generally contested by venture capitalists; most investors claim to agree. Homepages are emblazoned with sentiments that support system change, talking about creating “regenerative economies” (#), implementing “circular business models”, supporting “Earth’s vital systems” (#), and “redefining industries” (#) because our “economy is breaking the planet” (#).
As it turns out however, climate capitalism is broadly doing none of that.
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