Catalytic Capital Portfolio

The Sierra Club Foundation’s Catalytic Capital Portfolio is an investment pool to deploy catalytic capital via equity investments, debt financing, loan guarantees/credit enhancement vehicles, and recoverable grants. The SCF Catalytic Capital Portfolio (the “Portfolio” - initially a $9 million investment portfolio carve-out to be deployed over approximately three years) strives to accelerate the shift of trillions of dollars from fossil fuel investments to climate solutions that also advance racial, economic, and environmental justice.

An equitable green transition requires the democratization of power and resources. The Foundation is dedicated to the inclusion of under-resourced communities that are most affected by climate change and whose leadership is vital to achieving the social and economic progress needed to address climate change at scale. The Foundation’s primary investment objective for the Catalytic Capital Portfolio is to provide catalytic capital for projects and funds that advance climate solutions, social equity, and justice. Such catalytic investments may be deployed in collaboration with, or as complements to, relevant Sierra Club programs to maximize the programmatic impact of the investment. They may also be deployed in conjunction with funds from other mission-aligned investors. The Foundation’s catalytic capital impact investments are intended to catalyze additional investment by helping to de-risk, blend capital with a range of other types of capital, and maximize community control over projects.

The management of the Catalytic Capital Portfolio will conform to fiduciary obligations by providing mission aligned benefits while striving for return of capital over the long term so that the funds can be redeployed into future catalytic investment opportunities. The primary purpose of such investments is to accomplish one or more of the Foundation’s objectives around social equity and justice, consistent with its charitable purpose rather than the production of income or appreciation of property. Such investments may carry greater risk due to the often early stage(s) of a project or fund and return objectives for each investment will be consistent with the programmatic impact intent of this program (and thus may be below what have historically been considered “market rate”).

The Portfolio seeks to invest in projects and funds that would accomplish at least one of the following goals:

  • Deploy and scale clean energy, energy storage, and energy efficiency solutions for under resourced populations;

  • Enhance equitable and just access to affordable clean energy or other climate solutions;

  • Create good jobs, especially in under resourced communities, to support the transition to a low carbon economy; 

  • Support natural systems solutions that effectively take carbon out of the atmosphere.

Underlying these goals will be a commitment to support companies and funds led by underrepresented founders/managers who have plans for inclusive and sustainable economic growth and a demonstrated commitment to equity, inclusion, and justice, including adherence to the principles of “Free and Prior Informed Consent” with Indigenous communities.