Historically, the Black community in the U.S. has been disproportionately affected by the effects of climate change. Relegated for decades to a vulnerable economic and social class, the community is nearly always at risk of facing the brunt of natural disasters, no matter where they occur.
This issue has inspired many Black founders and investors to enter the climate space, given that the conversation of today’s current crisis is led by white people and is hence missing some key perspectives.
“It’s crucial we see more Black investors and creators tackling climate change because the battle against this existential crisis demands everyone’s intellectual prowess, personal character and uniquely lived experience,” Stonly Blue, managing partner at early-stage venture firm Third Sphere, told TechCrunch+. “When Black individuals are given the space and autonomy to expand their ambitions beyond societal ‘survival,’ the potential for innovation is immense.”
The Black climate tech community is growing, according to investors and founders TechCrunch+ spoke to. But while funding to underrepresented founders in the space is dismal, it represents the sheer potential that remains.
Last year, U.S.-based Black climate tech founders received only 1% of all capital invested in climate tech startups, according to Crunchbase. That’s $214 million out of $21.5 billion. In the first quarter of this year, it was even lower: such founders raised $24 million of the $3.4 billion allocated or only 0.7%.
Data visualization by Miranda Halpern; created with Flourish
While striking, these investment levels are quite close to what Black founders have raised overall. Last year, Black founders raised 1% of all venture funding, and last quarter, they received 0.69%. That stubbornly low figure is almost certainly not representative of Black participation in climate tech, even though the actual number of Black people involved in the space is unknown. The lack of funding and dearth of DEI data suggests that the venture community writ large is overlooking a vast amount of untapped potential.
“The planet will burn if we don’t maximize the talent and genius embedded in the entire human race,” Donnel Baird, founder and CEO of BlocPower, said.
The early innings for Black climate tech
According to Blue, a growing number of Black venture capitalists are starting to take an interest in climate tech. Many hail from the energy, mobility or infrastructure sectors, as they intersect with the need for climate action.
On the other hand, those building the tech often have to work with material science, hard technology or industrial processes, and due to the time and complexity involved, they often choose against venture funding. However, that doesn’t mean there isn’t economic opportunity in backing those who do.
Anthony Oni, a managing partner at Energy Impact Partners, noted that this sector would eventually become the largest economic and wealth-building opportunity in this lifetime, and the startup ecosystem can’t afford to ignore ideas, no matter their origin.
“I firmly believe the world will not have a comprehensive solution for climate change unless more diverse investors and entrepreneurs are part of the equation. We must include the unique cultural and social lens of diverse lived experiences in solving climate issues,” he said.
Efforts to drive activity in the climate tech space have been somewhat fruitful, even though there are few programs out there preparing Black people to enter the climate tech space. Some of these, such as Browning the Green Space and GreenTech Noir — a community of nearly 500 Black founders and investors working within climate tech — are slowly but surely encouraging and inspiring more Black people to enter this space and devise solutions for their communities.
Other well-known Black-owned climate funds include Black Tech Capital, Green Power Ventures, Mission One Capital and South Loop Ventures. The idea is that backing such diverse investors will help fund underrepresented founders. Some venture-backed Black climate companies include Olokun Minerals, LimeLoop and Mars Materials.
Taj Ahmad-Eldridge, a founding adviser of GreenTech Noir and co-founder of Include Ventures, pointed us to another new organization, Culture and Climate. The annual event, launched by Kameale Terry, aims to help educate and involve more Black investors.
Eldridge is also keen on this mission, as it is a matter close to his heart. In January, he underwent a kidney transplant after being on dialysis for seven years due to a kidney disease caused by environmental factors. In the meantime, he’s been helping back climate funds operated by underrepresented investors.
He also is looking to help support Black fund managers, what he calls “climate curious” funds, as well as funds that have hired Black people.
“For Black people, climate change is a public health issue, an economic mobility issue and a social justice issue,” Eldridge told TechCrunch+. “Economically, it is an opportunity for us to build green wealth; for social justice, it impacts communities of color far greater, so we should be the owners of the solutions.”
But more resources are still sorely needed
Getting more Black people in the climate tech space is not just a matter of backing Black tech products: The path starts far earlier.
Mandy Nyarko, a climate angel investor, said access to climate education and venture capital must be democratized. Nyarko believes the onus lies on the education system to encourage people to enter this space and change the face of climate tech. “Investors are more likely to trust capital with founders they can relate to,” she said, adding that the racial dynamics of the space only heighten the need for more diverse investors and founders, as well as resources and support so marginalized communities can innovate, even if they do so in their localities.
“Encouraging more Black founders and investors to engage in the climate innovation space requires a concerted effort to address the systemic barriers that have persisted for decades,” Energy Impact Partners’ Oni said. According to Chante Harris, a climate strategist, this includes asking questions like how to get more Black people into STEM fields, how to grant more opportunities to black fund managers, and how to ensure VCs understand solutions involving deep tech.
Oni says he’s encouraged by the increasing number of climate and clean energy talent from historically Black colleges and universities as well as the rise in conversation and awareness about why all of this matters.
Still, there is work to be done. Dan Goldman, managing partner at Clean Energy Ventures and co-founder of Browning the Green Space, says the tendency to overlook Black founders is a “very tough cycle to break.”
“What we need now is to break down and self-reflect on our unconscious biases and bring traditionally underrepresented groups such as women, Black and brown investors and partners into the climate tech space to help the largely white male incumbents and develop a systematic plan to overcome it,” he said.
There is a bright spot, though: Shally Shanker, managing partner at AiiM Partners, believes that climate tech investors are uniquely positioned to build strong, diverse portfolios, partly because the field of climate is relatively still very new.
“Ten years ago, there weren’t a lot of firms focused on climate tech,” Shanker told TechCrunch+. “In the past three years, we have seen an influx of capital coming into the climate space. The same investors have an opportunity to impact funding for women and people of color, and to change the dialogue.”
Sharing a mission-based approach helps, too, according to Abe Yokell, managing partner at Congruent Ventures. “Many climate-specific venture funds are investing in both profit and purpose,” Yokell said. “We have found that most of these firms have been more proactive than the venture norm by focusing on underrepresented founders, given their founding purpose goes beyond pure profit.”
Whether that mission stands up as funding needs increase remains to be seen. “There is a specific capital gap for DEI founders as we move along into the growth phases,” said Baird, the BlocPower CEO who recently raised a $25 million Series B.
Yokell said his firm has focused on building a diverse, early-stage portfolio, which is good for the meantime. In the long term, though, running a climate business is expensive, and since Black founders typically only receive early-stage funding, firms that can write bigger checks for Black innovation will be needed to address this capital gap.
For many Black founders and investors, though, climate change is a more urgent problem that affects them personally. Eldrige summed up the crisis, saying, “White people in climate talk about saving the world. Black folks like me talk about saving ourselves.”
Nyarko echoes that sentiment, pointing to how she’s still haunted by the story of nine-year-old Ella Adoo-Kissi-Debrah. A Black British-Ghanaian girl, Debrah was the first person in the world to have air pollution stated as the cause of death.
Nyarko says Debrah’s story drives her passion for creating impact and change in the space, and hopes it inspires others as well. “I could have been her. We come from the same background,” Nyarko said. “Not all of us have the option to run off to Mars. Our lives, and the lives of the next generation, depend on our investment in climate tech.”
Comment