How can investors help us get to net-zero? By supporting start-ups with a purpose

The world is rapidly running out of time to meet its net-zero and sustainability targets. So the World Economic Forum’s open innovation platform UpLink is targeting venture capital (VC) investors in its latest challenge in a bid to speed up this transition.

Launched in 2020, UpLink was created to source innovative solutions to global issues as outlined by the UN Sustainable Development Goals (SDGs) through a competition framework. Working with a diverse set of partners, UpLink develops and launches innovation challenges to source high-quality submissions from entrepreneurial start-ups.

However, our latest challenge is not so much focused on the solutions themselves but instead on how to scale them up. Our Innovative Funds for our Future initiative targets venture capitalists who are keen to invest through the lens of the SDGs, offering them access to a curated pool of global and high-impact entrepreneurs.

‘Business as usual’ won’t help us achieve net-zero

This is important because the investment community taking a ‘business as usual’ approach isn't going to help us achieve the UN SDGs on the time horizon that we hoped for. The funding and innovation needed for a transition to a net-zero and sustainable world will only happen if we can accelerate these entrepreneurial ecosystems and support the most innovative SDG-focused funds.

While the global SDG investing market has more than tripled between 2017 and 2019 to $715 billion, it is still a drop in the ocean compared to the $100+ trillion of total assets under management. Meanwhile, only 50% of the technology needed to achieve net-zero and other SDGs exists – making it much more difficult to meet any the UN’s SDG targets for 2030.

Think of the aviation industry trying to achieve SDG 7: Affordable and Clean Energy, for example. Sustainable aviation fuels can be 80% less carbon intensive over their lifecycle, but more work needs to be done if they’re going to make up a significant share of supply.

If you think about the ecosystem around that, consider what type of technology you need that is going to support that transition. There may be start-ups working towards making that achievement possible, but will they be in position to scale beyond the exploratory phase and into the growth phase?

Meanwhile, there could be fund managers doing great work in the area of sustainable aviation fuels that are trying to do new things, perhaps already had success in adjacent industries or had smaller funds that are looking to grow to the next level. How could we encourage and support them, and lay the ground for them to be successful in that space?

UpLink seeks VC funds to invest in start-ups with SDG focus

This is why, in our latest challenge, UpLink is seeking venture capital funds that invest in portfolio companies with a focus on one or more of the following SDG areas: Conservation & Restoration of Nature, Oceans, Plastic Waste, Climate Action, Circular Economy, Water, Health and/or Education.

We aim to select a diverse set of VC funds from Africa, Europe, Latin America, North America, Southeast Asia and South Asia. Criteria we are looking for include funds that have an innovative approach to financing and scaling SDG-focused entrepreneurs, an overall size of $5 million to $250 million, and a track record of delivering market rate returns to investors.

We will assess submissions according to factors including a fund’s past investment and track record of delivering market rate returns, its team experience and diversity, and innovative investment strategies when helping solve key obstacles for people and the planet.

The deadline for submissions is 12 June 2022 and up to 30 successful ‘Top Innovation Funds’ will be chosen by a selection committee, which will include entrepreneurs, investment experts, philanthropists, fund-of-fund managers and capital providers.

Top Innovation Funds get privileged access

Selected funds will benefit from gaining privileged access to a curated pool of global entrepreneurs; recognition and credibility as a ‘Top Innovation Fund’ by the World Economic Forum and UpLink, and visibility across the Forum and UpLink digital channels, with a combined total of 30 million-plus followers.

They will also get a chance to connect with capital providers, fund-of-fund managers and investment experts; access to select in-person and virtual Forum and UpLink events and opportunities for co-investment with fellow Top Investment Funds.

Chance to develop innovative financing models

The Innovative Funds for our Future programme is unique in that its long-term goal is to catalyse the rising of a new class of venture fund managers who are able to develop innovative financing models adapted to the kind of challenges global SDG entrepreneurs face, in terms of the impact areas or geographies they’re working in.

It will highlight success stories from both the entrepreneur side and the investment side to show how we can disrupt current strategies and processes to help create a net-zero and sustainable world, where both people and the planet can flourish.

So through UpLink’s latest challenge we aim to find not only innovative funds for our future, but also create innovative funds of the future as we work together to achieve net-zero.