On Wednesday, the $36 billion investment firm chaired by environmentalist and former US Vice-President Al Gore, Generation, launched a $1.7 billion investment to support the Sustainable Solutions Fund IV — a fund dedicated to taking minority stakes in private companies focused on sustainable solutions.
The firm has been investing in the Sustainable Solutions Fund since 2008 and is now launching its fourth and biggest investment to date, which is expected to take European companies by storm.
What has Generation previously done?
Generation, which is co-founded by Gore, currently has $36 billion invested in private and public company funds that have strong environmental, social and governance (ESG) records.
So far Generation has had a strong emphasis on business in Europe, backing up some of the biggest startups to date including French companies Back Market — an electronics company and France’s highest-valued startup — and Vestiaire Collective — a second-hand clothing company.
Other previous startup investments made by Generation include work management platform ASANA and digital freight network Convoy.
What will the latest fund support?
According to Generation’s equity growth team, the fourth fund is expected to support businesses all over the continent.
“We made a couple of investments in Europe over the course of fund one and fund two,” said Joy Tuffield who is a part of the equity growth team at Generation. “Then we saw an accelerated focus on Europe in fund three and are really to see what Europe can offer over the course of fund four.”
The new fund will allow Generation to act as a minority investor in companies — meaning Generation will have a percentage of ownership in the company but one that doesn’t allow it to control the company. As the minority investor, Generation will write checks in rounds of $50 million to $150 million.
Fund four has three specific focuses: planetary health, human health and financial inclusion.
Planetary health will be one of the biggest focuses of the company — supply chain efficiency being part of that vision.
Another part of planetary health will be making the data economy more environmentally friendly by reducing the carbon footprint of data centers and computer networks.
As part of the human health aspect, a big emphasis will be put on mental health and digital health services. Final inclusion will entail ways to further educate employees with necessary skills and compensation tools.
In order to measure the effectiveness of Generation’s role in private companies — as well as to address concerns over private companies being exempt from disclosing their greenhouse gas emissions — every company Generation invests in will have to undergo an assessment of its emissions and disclose its direct and indirect carbon emissions. Previously, Generation saw a 30% reduction in emissions year-on-year in 2021 from their portfolio of startups.
Generations plans to invest in all companies across Europe
Tuffield mentions Generation intends to invest in any company that fits their mission of sustainability — yet Generations has its eyes set on a few already.
Generation has its sights set on the sustainable leaders of the world, Nordic countries, as well as France, Germany and the UK.
Currently, the firm has offices in San Francisco and London, yet despite being an American Venture Capital, as of now, it has no plans to put staff in other countries.
With the newest Sustainable Solutions Fund IV, Generation is expected to expand their investments all across Europe — something extremely timely as Europe plans to execute their latest sustainability goals. With Generation’s previous success, the firm will hopefully continue to propagate and fuel the drive of more sustainable businesses.
Editor’s Note: The opinions expressed here by Impakter.com columnists are their own, not those of Impakter.com — In the Featured Photo: Al Gore gives a presentation on day 5 of the COP23 conference on Nov. 10, 2017. Source: John Englart, Flickr.