Giving Compass' Take:
- Organizations are adding diverse perspectives to their climate action and approach by backing more underrepresented founders and increasing the number of female and BIPOC investors.
- How can donors support communities of color most impacted by climate change?
- Read more about climate justice.
What is Giving Compass?
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There is an inextricable link between frontline communities and the effects of climate change. Yet there is a mismatch between those most in need and the people building solutions. Only 2.6 percent of venture capital (VC) funding went to Black and Latinx founders in 2022, and companies with only female founders received just 2.1 percent. While these numbers are relevant to all of VC, we can ascertain the same would apply for climate tech funding.
But diverse perspectives make good business sense. In a 2020 study by Kauffman Fellows and MaC Venture Capital, teams with ethnically diverse founders returned 30 percent more capital to their investors than companies with all-white leaders. Additionally, Pitchbook found that teams with at least one female founder demonstrate faster overall growth.
The data confirms what we know to be intrinsically true — reaching gender-parity and equitable racial representation creates financial, social and environmental benefits.
So instead of focusing on the multiple reasons for the current lack of diversity across the climate tech innovation ecosystem, let’s highlight some organizations currently implementing actionable solutions.
- Backing more underrepresented founders
- Increasing the number of female and BIPOC investors
- Providing better access to education and resources
- Maintaining momentum
Read the full article about diversity on climate solutions by Sherrie Totoki at GreenBiz.