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By: Claudine Emeott, Partner, Salesforce Ventures Impact Fund, and Naomi Morenzoni, Senior Vice President of Philanthropy at Salesforce

The planet just endured its hottest year on record. And with global temperatures projected to rise even further, communities worldwide risk conditions that exceed survivability limits. While the need for action is clear, we need an estimated $4 trillion in annual funding to reduce the most severe impacts of climate change and limit global warming to 1.5°C. 

Companies can play a critical role in addressing the climate finance gap by strategically deploying multiple streams of capital. While $4 trillion in annual funding may seem daunting, it stands within reach if companies are willing to rethink how they leverage their capital stack for climate. 

A blueprint for coordinated climate finance

Many companies today are utilizing multiple forms of capital – like philanthropy, venture, and carbon credits – in isolation of one another to drive incremental progress on their climate goals. However, by failing to tap every financial tool at their disposal, companies are inhibiting their impact. 

We, too, have been guilty of this. But over time we have learned that when we optimize our full capital stack for climate, we can drive progress towards our goals at a pace the planet will notice. 

That’s why we partnered with the Climate Policy Initiative to develop a working blueprint that captures best practices from peer companies and customers like Autodesk, Cisco, Seventh Generation, and more. 

In doing so, we’ve learned two important lessons. 

Lesson 1: Each financial tool has its own superpower.

One size does not fit all. There are pros and cons to each form of capital, which must be considered when building a coordinated climate finance strategy. 

For example, philanthropy by its very nature is catalytic, and best suited for early-stage initiatives with no, or uncertain, financial returns. By funding feasibility studies and demonstration projects, philanthropists can empower early-stage innovators to take risks and bring new solutions to the market. But check sizes can sometimes be limited, and the lack of financial returns can make it difficult to scale solutions. 

Meanwhile, venture capital is best suited for opportunities that are high-risk and high-reward. With bigger check sizes, venture capital has the power to scale innovations with a clear path to financial returns – but if deployed alone, very early-stage ideas that are equally as viable will be left in the dust.

The most impactful strategy is to deploy both in tandem. That’s why in 2021, Salesforce launched its $100 million Climate Justice Fund, which serves as a key pillar of Salesforce’s comprehensive climate finance strategy. This strategy includes commitments such as investing $100 million in Carbon Dioxide Removal, purchasing 280,000 MWh in renewable energy certificates from small, distributed energy projects, a $1 billion sustainability bond, and a Ventures Fund that invests in climate startups.

Another example of a coordinated climate finance model is Cisco Foundation’s $100 million Climate Impact and Regeneration portfolio which is gaining impact. Recognizing that organizations at various stages can benefit from different financing structures, Cisco has deployed half of its portfolio through grants and the remaining through venture investments, and in doing so, was able to support Vesta, a nonprofit coastal carbon capture enterprise. 

Lesson 2: A coordinated climate finance strategy can maximize impact. 

Unlocking the full potential of a company to drive maximum impact means strategically blending different forms of capital together. 

In 2021, Salesforce set a goal to purchase one million tons of high-quality blue carbon credits by 2025 – that is, credits derived from coastal and marine ecosystems. These credits offer the capacity to remove atmospheric carbon at a rate 10 times greater than tropical forests. 

But there was one small problem – the world didn’t have enough. That’s why we partnered with a global coalition of ocean leaders to establish High Quality Blue Carbon Principles and Guidance – a set of development standards for high-quality blue carbon credits. We also leveraged our finance stack by blending multiple forms of capital to build and refine the blue carbon credit market from the ground up. 

Using philanthropic grants, we helped fund the Mangrove Breakthrough, a solution to scale global mangrove investment. In parallel, through the Salesforce Ventures Impact Fund, we are investing in for-profit climate solutions like Pano AI, which is leveraging AI to detect wildfires before they spread and become a significant threat, and Arcadia, a platform that is unlocking access to utility data for faster decarbonization. 

Another example of a company with a coordinated climate finance approach is Autodesk. Through its Carbon Fund, Autodesk is cutting operational emissions with high-quality carbon credits, virtual power purchase agreements, and advance market commitments like Frontier. Meanwhile, using capital from its sustainability bond, Autodesk has acquired the startup Innovyze to help its customers deliver sustainable water solutions, and through the Autodesk Foundation, they are supporting ventures like Heirloom.

Unlocking the full capital spectrum for climate action 

Meeting global climate targets is going to take smarter and more flexible kinds of capital to make an impact at the speed and scale our planet requires. The surge of corporate climate commitments is a step in the right direction, but we need every company to use its full capital power to drive real impact.

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