A venture capital firm that lays claim to being the largest of its kind with a focus on proptech is celebrating Climate Week NYC this week by announcing that it has raised about a quarter of its $500 million goal for a new climate-focused fund that it says is also the largest of its kind.
Los Angeles-based Fifth Wall set that goal for its Climate Tech Fund and announced this week that $140 million so far is from five firms: Canada-based Ivanhoé Cambridge and the following real estate investment trusts (REITs): Equity Residential, Hudson Pacific Properties, Invitation Homes, and Kimco Realty.
Bringing industry heavyweights together to address a funding gap
Citing research that says the real estate industry -- in the form of building construction and operations -- is responsible for nearly 40% of all greenhouse gases, the Fifth Wall announcement says the Climate Tech Fund “represents the first time that real estate industry heavyweights have come together, collectively and cooperatively, to close the significant climate tech funding gap in real estate and dramatically reduce the industry's carbon footprint.”
The investment fund already has one start-up out in the wild: Sealed, a company that offers to pay for insulation and HVAC upgrades in exchange for the homeowners paying Sealed back through their energy savings. That venture also has attracted the financial attention of Hollywood’s “Iron Man,” Robert Downey Jr.
The double bottom line: helping to save the world profitably
Sustainability and profitability are coming together here. The investors expect to gain early access to emerging ideas and technologies that will benefit their bottom line and the world around them.
“Equity Residential was an initial partner of Fifth Wall in its property technology funds, which are generating both strong financial returns as well as innovations in how we operate our portfolio, and we are excited to continue this relationship with our investment in their Climate Tech Fund," Mark Parrell, that company’s president and CEO, said in the Fifth Wall announcement this week.
And check out this piece by our Liz Brumer from a few weeks ago when Invitation Homes, one of the nation’s largest owners of single-family rentals (SFRs), discussed its participation: “Invitation Homes Goes Green: Investing in Fifth Wall's Green Technology Fund."
The Millionacres bottom line
The commitment to environmental, social, and governance (ESG) initiatives just keeps growing among major players in commercial real estate. Just one other recent example is a $1 million donation by Owen Thomas, CEO of Boston Properties, to help launch the Urban Land Institute’s Net Zero Imperative.
The idea there is to bring experts together to develop how-to guides that building owners can use to help deploy their own decarbonization strategies. That’s where smaller investors and landlords can get involved at their own scale. It all adds up.