With a wealth of experience spanning decades in the climate finance realm, Gordian Knot Strategies offers a trove of expertise, dedicated to facilitating the achievement of our clients’ goals.
Our work spans Natural Climate Solutions, Technology and Hybrid Solutions.
We serve an array of diverse clientele located in Africa, Europe, North America, and South America that include multi-national corporations, endowments, agencies, project developers, consortiums, and impact investors.
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 consider 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, green bonds, and agency financing to design appropriate solutions for our clients.
Carbon Pricing Mechanism Design and Policy
Numerous avenues exist for instituting carbon valuation within the purview of corporations, institutions, and countries. Presently, there are 73 carbon pricing initiatives around the globe including 39 that cover national jurisdictions and 33 subnational jurisdictions. In total, these systems cover 11.66 GtCO2e, representing 23% of global greenhouse gas emissions.
Carbon levies, internal carbon pricing, and emission trading frameworks play a pivotal role and are essential for curbing an entity’s greenhouse gas emissions. Our expertise and resources support the crafting of these frameworks for both regulated and voluntary markets. Through adept implementation of appropriate carbon pricing mechanisms, our clients can seamlessly reduce their carbon footprint while safeguarding its financial performance.
We diligently track carbon policies 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), or mapping supply and demand curves in the voluntary market. We monitor all global emission trading schemes and are deeply engaged in the trends, pricing, volatility, and role that the carbon markets play.
Net ZERO TARGETS
There are currently 7,458 companies that have committed to a net zero target and with each passing quarter, an increasing number dedicate themselves. While this ambition is both bold and imperative, each organization’s pathways to success are multifaceted and distinctive. By establishing scientifically grounded objectives and assembling a strategic blueprint, we guide our clients in translating their aspirations into tangible actions, effectively curbing carbon emissions and upholding their net zero pledges.
Impact Funding & Investment
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, implementing rigorous screening and due diligence frameworks, portfolio monitoring tools, drafting of term sheets, guidance on fund governance, assembly of 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 project development partners, impact investors, foundations, and agencies to deploy the fund while cultivating a pipeline of potential projects for investment.
CLIMATE SOLUTIONS STRATEGY
Organizations are filled with skilled teams, driven leadership, and ambitious aspirations. Companies either confront stark cul-de-sacs 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 strategic roadmap development process 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 organization’s Logic Model to inform the 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.
The result? A crystal-clear strategic vision and executable plan on how to achieve greatness that ensures a fully engaged team and board and delivers impact.
We work with bold initiatives that need a strategic plan to position them for success, creating positive triple-bottom-line impact. We leverage our proprietary approach that draws on the hedgehog, logic model, business model canvas, and strategy map to assemble comprehensive implementation 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 Offset Development and Acquisition Portfolios
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 well-being that align with the UN Sustainable Development Goals.
CLIMATE ADVISORY SERVICES
We offer expertise in navigating the complex landscape of climate-related challenges. We provide a range of essential services from spearheading policy development to pioneering carbon credit methodology development. We are a strategic advisor to the Integrity Council for the Voluntary Carbon Market (ICVCM), which gives us a seat at the table of improving the integrity of the carbon credit supply side of the market. Our strategic facilitation services bring forth innovative solutions by fostering collaboration and strategic thinking among stakeholders. With our multifaceted approach, we empower our clients to proactively address climate concerns while maximizing their positive impact.