We work with bold initiatives that are in need of a strategic plan to position them for success, creating positive triple-bottom-line impact. We leverage our proprietary approach to assemble executable plans, complete with identified goals, objectives, key performance indicators, resource maps, and timelines. We work collaboratively with our clients to design a plan that is right-sized for their ambitions. We include the feasibility assessment (opportunity, target, scale, competitive landscape), value proposition, market validation, client/stakeholder acquisitions, and a financial model to support the launch or pivot of a climate-related initiative.
Carbon Acquisition Portfolio
We design and assemble portfolios of diversified environmental assets that represent an array of carbon-emission reducing projects, technologies, and protocols and comply with leading carbon registries. These acquisition programs establish long-term environmental asset portfolios for our clients to meet their emission reduction targets and ultimately achieve carbon neutrality. They also offer capital appreciation by engaging in the voluntary and compliance markets. We are well positioned to undertake the design and implementation of carbon acquisition programs given our strong relationships with project owners, developers, registries, verifiers, and brokers domestically and internationally. We pay special attention to furnishing the framework for evaluating acquisition co-benefits, such as land stewardship, resiliency, social justice, and health and wellbeing that align with the UN Sustainable Development Goals.
Impact Fund Design
There are a host of elements that we give attention to when advising on the establishment of impact funds designed to invest in climate solutions. These include the appropriate structuring of a special purpose vehicle (SPV), allocating personnel to fund management, establishing investment criteria, due diligence checklists, portfolio monitoring tools, term sheets, fund governance, investment agreements, and building a project investment pipeline. Securing the impact capital to launch a fund must be preceded with a sequence of actions to appropriately equip the fund to meet its objectives. Key to targeting investment is the development of a fund financial model that appropriately reflects the blended capital stack proposed for the fund. Each source of capital has its requirements in terms of subordination, cash sweep, risk mitigation, and hurdle rate. We build financial models based on the thesis for the composition of the fund. The outcome sought is to determine that the fund can accommodate the risk adjusted returns to impact investors while taking advantage of concessionary capital and other forms of available capital while remaining viable. With a sustainable financial fund model in place, we work with our clients to commence outreach to the network of impact investors, foundations, and agencies to capitalize the fund while cultivating a pipeline of potential projects for investment.
Climate Finance Structuring
Worldwide programs to safeguard ecosystem services have surged, topping $36 billion as of 2018. Over 550 Payments for Ecosystem Services (PES) programs operate globally and offer a perspective on the factors we take into account when assembling climate finance mechanisms to stimulate and support a functioning environmental market initiative. Our design of financing solutions takes into account demand, supply, standards and metrics, transaction costs, and sources of finance with appropriate levels of risk mitigation. All five elements need to be robustly addressed to mobilize an effective climate financing solution. We call upon impact finance, program related investments, donor advised funds, opportunity zone funds, environmental impact bonds, and agency financing to design appropriate solutions for our clients.
Carbon Pricing Policy
We diligently track carbon policies and emission trading initiatives around the globe. Whether it’s translating changes to the Market Stability Reserve in the European Union’s Emissions Trading System (EU ETS) or the impact on demand for California Carbon Allowances (CCAs) in the cap-and-trade program administered by the California Air Resources Board (CARB). Given that the rules for California Carbon Offset (CCO) surrender are changing in 2021 (reducing to 4%) under AB398, we decipher and share the challenges and opportunities with our clients. We monitor the main emission trading schemes (European Emissions Trading System, Korean Emissions Trading System, New Zealand Emissions Trading Scheme, Regional Greenhouse Gas Initiative, and Western Climate Initiative) and are deeply engaged in the trends, pricing, volatility, and role that the voluntary carbon markets play.
Organizations are filled with skilled teams, driven leadership, and ambitious aspirations. Companies either confront stark culs-de-sac threatening their existence or are dazzled by opportunities for growth. In both cases, without a clear bearing on the pathway to success, organizations flounder, wasting precious time, resources, and morale. We take our clients through our Gimbal Method™ to create a blueprint for winning. We begin with context setting and then map the current reality affecting the organization across all business activities. This sets the stage for crafting the unique Hedgehog model that reflects the intersection of passion, activity, and revenue creation. With this compass in place, we can then develop the supporting organizational goals, strategic directions, and desired outcomes. The facilitation is completed with determining a set of key performance indicators, the resource map, 1-year and 3-year objectives, and the mechanism for feedback monitoring. Result? A crystal-clear vision on how to achieve greatness that ensures a fully engaged team and board and delivers impact.