Notable U.S.-Based Players Driving Climate Tech Underwriting
Several organizations and initiatives are actively working to define, de-risk, and mainstream climate tech investing. These players can be valuable references or partners for institutional investors looking to allocate to this space:
Prime Coalition: Prime is a nonprofit catalytic capital investor focused on early-stage climate tech. Since 2014, Prime has been mobilizing philanthropic and impact-first capital to support climate solutions that can slash greenhouse gas emissions but struggle to attract conventional financing. Prime’s model is to absorb outsize risks (long technology timelines, binary technical risks) that profit-driven investors can’t, with the aim of “graduating” these companies to mainstream investment. They have developed rigorous climate impact criteria – each investment must target at least gigaton-scale CO₂ reduction if successful – and they publish an annual Climate Impact Audit verifying outcomes. Prime also convenes discussions to bridge gaps between venture funding and project finance for climate tech. For example, their Trellis program is exploring how to finance first-of-a-kind climate infrastructure by blending philanthropic funds with commercial co-investment. Institutional investors can look to Prime for frameworks on impact assessment and can co-invest alongside Prime to leverage their technical diligence. Essentially, Prime is defining the due diligence playbook for high-impact, high-risk climate ventures – useful information for any underwriter stepping into this arena.
Breakthrough Energy Ventures (BEV): Backed by Bill Gates and other prominent investors, BEV is a $2+ billion fund specifically investing in climate tech companies that can reduce at least ½ gigaton of GHGs per year at scale. BEV’s investment criteria and long-horizon approach have set a benchmark for climate tech venture investing. They operate on a 20-year fund life (much longer than traditional VC) to accommodate the time needed to commercialize tough technologies. They also emphasize scientific rigor and collaboration – BEV will only invest if it sees a clear scientific pathway to the claimed climate impact and if it believes its network can help the company succeed. Importantly, BEV looks for companies that can attract other investors – leveraging additional capital into the climate space. Their portfolio includes innovations in areas like green hydrogen, energy storage, sustainable steel, etc., many of which have since drawn follow-on funding from mainstream VCs and corporates. For institutional allocators, BEV serves as proof that competitive returns and climate impact can go hand-in-hand; they have publicly stated they target market-level VC returns while insisting on climate impact as a prerequisite. BEV also shares knowledge through reports (like their annual State of the Climate Transition report) which detail progress in various climate tech sectors. They are a prime example of a “crossover” investor blending policy insight, patient capital, and traditional venture discipline – offering a model that others are now emulating (e.g. other large venture funds launching climate-focused vehicles).
U.S. Department of Energy Loan Programs Office (DOE LPO): The DOE’s LPO is a government underwriting entity that provides loans and loan guarantees for innovative energy projects and advanced technology vehicle manufacturing. It has been instrumental in financing seminal climate tech projects (Tesla’s early factory loan, utility-scale solar farms, the first nuclear reactors in decades, etc.). With fresh authority and funding from the 2022 Inflation Reduction Act, the LPO is scaling up to support many more climate-related projects. The LPO effectively sets underwriting benchmarks for first-of-kind projects – its thorough due diligence process (technical, financial, environmental) often becomes the standard that private co-lenders follow. For example, LPO requires detailed techno-economic analyses and third-party engineering reviews (as mentioned, ~1000+ hours of demonstration run-time for new tech). It also structures deals with covenants and monitoring that manage the risks of new technologies. Institutional investors can piggyback on LPO deals (many projects are financed with an LPO loan plus private lender participation). Notably, the LPO has a portfolio approach to risk – it can take more risk on one deal knowing the broader portfolio is balanced – similar to how an institutional investor might think of a 2% high-risk allocation in context of the total fund. The LPO also publishes guidance (“10 Questions to Ask Before Applying”, etc.) that essentially highlight what information any underwriter should seek from a climate project. With the LPO’s track record (over $35 billion in loans issued and a very low default rate aside from a few cases like Solyndra), it stands as a de-risking partner. Some institutional investors are already partnering with LPO via its co-lending programs or considering credit-wrapped bonds that are backed by LPO guarantees. In short, DOE LPO is a cornerstone player making climate tech projects bankable in the U.S., and a rich source of underwriting know-how for others.
Climate Finance Leadership Initiative (CFLI): CFLI is a coalition of major financial institutions (led by Mike Bloomberg as UN Special Envoy) aimed at mobilizing private capital for climate solutions, especially in emerging markets. Members include large asset managers, banks, and insurers. CFLI produces reports and frameworks on how to overcome barriers to investment. For example, their reports on “Unlocking Private Climate Finance in Emerging Markets” outline policy and market changes needed to attract institutional investors. While a lot of CFLI’s focus is global (working with countries like India or Indonesia to develop pipelines of bankable projects), it also informs U.S. investors about best practices in climate finance. CFLI has working groups on things like climate-related financial products (e.g. designing yieldcos or green bonds) and risk-sharing facilities. For institutional investors considering climate tech, CFLI’s findings provide guidance on structuring deals with development banks, using public incentives, and aggregating projects to scale. Essentially, CFLI is defining the market architecture needed for climate tech to move from niche to mainstream. Engaging with CFLI or its publications can connect investors to a network of peers tackling similar allocation questions. It also frequently highlights successful case studies of large-scale climate investments, which can help convince investment committees.
Other Notable Players: In the insurance space, companies like AXA XL and the Geneva Association of insurersare pioneering insurance solutions for climate tech (as noted, AXA XL helped develop an Insurability Framework for climate tech deployments). Marsh McLennan and Zurich Insurance have units focusing on underwriting renewable energy and new climate tech risks– they are good contacts for any investor looking to insure aspects of a deal. Among asset managers, BlackRockand Goldman Sachs have launched dedicated climate infrastructure or climate private equity funds (e.g. BlackRock’s Climate Finance Partnership), which are setting market standards for returns and structures. On the philanthropic side, groups like the Grantham Foundation and Rockefeller Brothers Fund have been active in climate tech investing and often publish insights on integrating mission and returns. Impact investors such as Generate Capital (which finances sustainable infrastructure with creative debt/equity hybrids) and Spring Lane Capital (which funds small-scale sustainable projects via project finance) are demonstrating new financing models for climate solutions. These players are effectively “learning by doing” and creating templates that others can replicate. Finally, industry consortia like the Mission Possible Partnership (focused on decarbonizing heavy industries) and the First Movers Coalition (corporate buyers club for clean technologies) are influencing the demand side – which indirectly de-risks climate tech for investors by assuring future markets.
All these actors contribute pieces of the puzzle: from early-stage philanthropy and venture (Prime, BEV) to government risk absorption (LPO) to big capital deployment and standard-setting (CFLI, BlackRock). An institutional investor can leverage their work – by co-investing in funds, adopting their criteria (e.g. BEV’s gigaton threshold as a way to screen for truly transformative tech), or simply following the trails they’ve blazed in underwriting novel deals.
