A major new funding initiative promises a breakthrough for climate-tech startups. A group of top venture capital and private equity firms, called “All Aboard Coalition”, managing $60 billion in assets, has started a $300 million fund. This fund will help climate-tech companies grow from pilot stages to commercial operations. This is the time when many firms encounter the “missing middle.””
Led by TED Conferences curator Chris Anderson, the group aims to bridge the critical funding gap in clean tech—often called the “valley of death.” Anderson stated:
“One of the biggest threats to the world’s future is that the companies capable of building a healthy low-emissions global economy are simply not getting the funding they urgently need. The only way to fix that is through collective action. By acting as a community, we can help propel these exciting vanguard companies to true global scale.”
Closing the “Valley of Death” for Climate Innovations
The “missing middle” refers to a familiar but frustrating gap in climate-tech funding. Early-stage seed rounds usually get enough funding to test ideas in labs. But moving to full deployment needs big infrastructure investments. Traditional venture investors often avoid this type of capital.
This new fund aims to close the gap. It targets rounds of $100–200 million. This money will help companies build manufacturing facilities, test prototypes, or develop commercial systems.
Leading firms backing the fund include recognizable names such as:
- Breakthrough Energy Ventures,
- Khosla Ventures,
- DCVC,
- Clean Energy Ventures,
- Energy Impact Partners.
Their participation signals confidence in the climate solutions market and hopes to bring in generalist capital by reducing risk. The All Aboard Coalition brings both capital and credibility into a sector needing institutional support.
Ramp-Up Amidst Funding Declines
Global venture capital investment in climate tech has fallen for three straight years, according to PitchBook. Funding declined from $25.9 billion in 2022 to $19.7 billion in 2023, and slipped again to $17 billion in 2024—a total drop of about 34% in just two years.
Over the past two years, venture funding in climate technologies has dipped sharply. In early 2025, funding for technologies such as direct air capture fell by over 60% compared to the previous year.
Broadly speaking, global investment in climate tech fell 19% in H1 2025 compared to the same period in 2024, signaling ongoing funding challenges. Non-dilutive funding, like debt and grants, hit record levels. This shows confidence in scalable, infrastructure-focused solutions, even with fewer deals.
The U.S. market led the global share with 51% of funding (around $21.4 billion), and it may end the year 12% higher overall. In contrast, Europe’s equity investments declined, though a rebound is expected later in the year.
A report by Sightline Climate shows that global climate tech funding fell to $5.9 billion in Q2 2025, the lowest quarterly level since 2020. Although the sector is still expanding, growth has slowed to 7%, a pace the report describes as typical for a maturing market.
For the climate tech community, however, this shift from rapid acceleration to steadier progress may require a period of adjustment. Moreover, without scalable capital, many startups hit a pause. This delays or stops their work on important technologies.
This new fund directly addresses the problem. By offering a vehicle for later-stage funding, it intends to keep innovations moving forward. One industry analyst said, “You can have great lab-scale solutions. But without funding to build factories or test them in the field, those solutions go nowhere.”
This new fund comes at a key time. It brings fresh energy to a sector facing slow commercialization. This is true even with strong policy support, especially in Europe and North America.
Why Climate-Tech Needs Big, Patient Capital
Climate technologies, such as green hydrogen and advanced battery storage, require different funding. This is unlike the software and service startups that VCs typically back. Building a green hydrogen plant or modular carbon capture equipment can require hundreds of millions in initial investment. This happens before any revenue comes in.
Institutional impact investors or infrastructure funds can provide capital. But this happens only after a concept is proven viable, operations are scaled, and revenue starts flowing.
Many climate companies fail to reach that stage due to capital constraints. This new fund provides flexible capital, using equity and convertible terms. It helps overcome the commercialization hurdle.
Coalition Power: Who’s Onboard and Why It Matters
The coalition gathers firms that manage $60 billion in assets. This gives them strong financial power and expertise in green technology. They have strong capital behind them. Their goal is to invest in later-stage rounds. They want to create a strong market signal. This signal will attract more generalist investors.
Key strategic opportunities this coalition unlocks:
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Market validation: Their backing signals to other investors that climate tech is viable.
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Network leverage: Members can share technical and operational support with portfolio companies.
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Standard-setting: The fund could define benchmarks for due diligence and standards in climate-tech investing.
According to one venture partner, “This is not about gimmicks. It’s about building infrastructure to scale solutions that are already proven technically.”
A Window into the Future
As the fund deploys capital, it will ramp up in three stages:
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Investment into expansion-stage companies with proven prototypes.
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Deployment into building manufacturing capacity or first-of-a-kind facilities.
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Financial returns and impact tracking, demonstrating investment viability.
If it succeeds, the fund could spark a climate-tech ecosystem. This would make delivering solutions faster, less risky, and more appealing to mainstream investors.
Road to Scale: What Drives Impact Forward
This fund arrives amidst promising developments in climate policy and corporate net-zero commitments. The U.S. Inflation Reduction Act and the EU’s Green Deal are reducing risks for clean tech investments.
This is especially true when they team up with private capital. Corporations looking for verified offset credits or ways to decarbonize their operations now have more tools. To maximize impact, the coalition aims to:
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Invest in technologies fulfilling Tier 4 removals or real-world emissions reductions.
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Support companies with strong go-to-market plans and partnerships with utilities or industrial firms.
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Provide supplementary technical advisory support, alongside capital.
A Balanced Path Forward
While optimism is high, risks remain. The fund’s success hinges on:
- Demonstrating real-world returns on large climate investments.
- Ensuring measurement and verification of climate impact.
- Balancing financial ROI with societal and environmental goals.
The launch of this $300 million fund by a coalition managing $60 billion in assets represents a turning point for climate-tech. Targeting the “missing middle” fills a long-standing funding gap. This move could speed up the journey from innovation to real impact.
If capital flows as planned, this fund could spark a wave of climate solutions. These solutions might generate billions in revenue and cut emissions by gigatons by 2030. This initiative provides a financial boost and shows how private capital can support real climate progress.
The post $60B Venture Capital Alliance Backs $300M Fund for Climate-Tech Startups appeared first on Carbon Credits.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
The accounting differences that decide whether your nature investment shows up in inventory, in BVCM, or nowhere at all.
The question reaches a procurement team about three weeks before the next sustainability committee meeting. Someone has read about insetting. Someone else has just signed off on an offset purchase. The CSO wants to know if the two are interchangeable. The answer is no, and the GHG Protocol Land Sector and Removals Standard is the reason why.
This article walks through what each term means at audit-grade specificity, what the standards actually say about how each gets counted, and how to decide which tool fits which target. The insetting vs offsetting question is one of the most-searched in corporate climate strategy, and one of the most poorly answered. By the end of this piece, you should be able to brief a committee on the difference without notes.
The two definitions, in plain English
Offsetting means buying carbon credits generated outside your value chain and retiring them against your residual emissions. The reduction happens somewhere else, financed by you, and the credit is the receipt.
Insetting means investing in emission reductions or removals inside your own value chain, typically with suppliers, where the reduction is directly linked to the products and services you buy. The reduction happens inside the boundary of your Scope 3 inventory, and the accounting treatment is fundamentally different.
The shorthand from the University of Oxford’s Nature-based Insetting Initiative is useful: insetting is what you do with the supply chain you have; offsetting is what you do with the supply chain you do not have.
What the GHG Protocol Land Sector Standard actually says
The GHG Protocol Land Sector and Removals Standard, finalised in 2024 after a multi-year pilot, sets the rules for how land-based emission reductions and removals enter corporate inventories. The Standard distinguishes between inventory accounting (Scope 1, 2, and 3) and project or intervention accounting (a separate methodology for crediting).
For insetting, the practical implication is that supplier-level interventions, when properly measured and attributed, can reduce your Scope 3 category 1 (purchased goods and services) emissions in your inventory. The reduction is not a credit retired against the inventory; it is a lower inventory number, period.
For offsetting, the credit is retired separately. It can be reported as a contribution toward a net-zero claim under the SBTi Beyond Value Chain Mitigation framework or as part of a VCMI Carbon Integrity claim, but it does not lower the inventory number.
A practical consequence: if your Science Based Target requires a 50% absolute reduction in Scope 3 emissions by 2030, insetting moves you toward the target. Offsetting does not. This single point of difference reshapes the procurement decision.
When insetting counts toward Scope 3 (and when it does not)
Insetting counts toward Scope 3 only when several conditions are met:
- The intervention must occur with an entity in your value chain.
- The emissions reduction or removal must be measured against a defensible baseline.
- The reduction must be attributed to your share of that supplier’s output, not double-counted with other buyers.
- It must follow the inventory accounting rules in the GHG Protocol Land Sector Standard, not the project accounting rules used to generate credits.
The most common failure mode is double counting. If your supplier sells the same reduction as a credit on the voluntary market and also reports it to you as a Scope 3 reduction, the math breaks. The Standard requires you to address this risk, typically by purchasing and retiring the supplier-issued credit as part of your inventory or by contractual provisions that prevent the supplier from selling the reduction twice.
When insetting does not count toward Scope 3: when the intervention sits with a supplier you do not buy from, when the baseline is not defensible, when the attribution is unclear, or when the documentation does not survive audit. Those cases default to Beyond Value Chain Mitigation, which is still useful but operates on a different ledger.
The procurement and supplier engagement question
Insetting is harder than offsetting. That is the unfashionable truth most buyers eventually confront. Offsetting is a transaction; insetting is a relationship.
To run an insetting program, you need supplier mapping precise enough to know which farms or facilities sit at which Scope 3 boundary. You need an engagement model that gets suppliers to participate, which usually requires multi-year commitments and shared economics. You need an MRV architecture that measures the right things and produces audit-ready documentation. And you need a contractual structure that prevents double counting and protects both sides.
The trade-off you receive in return is significant. Reductions count against your inventory rather than your residual. Supplier relationships deepen, which protects sourcing continuity. Yield and quality improvements often follow regenerative interventions, which reduces your input cost over time. And the regulatory file, under CSRD, CSDDD, EUDR, and the SBTi FLAG Guidance, is materially stronger.
Choosing the right tool for the right target
A practical decision rule. If your target is a science-based Scope 3 reduction and you operate in a FLAG sector or source FLAG commodities, insetting is the structurally correct tool. If your target is a net-zero claim that includes neutralising hard-to-abate residual emissions outside your value chain, BVCM via high-integrity offsets is the structurally correct tool. Most companies with material Scope 3 exposure need both, in different proportions, sequenced over time.
The sequencing matters. Insetting takes longer to stand up but produces a permanent reduction in the inventory. Offsetting can be transacted faster but does not change the inventory and now sits under tighter claim restrictions. Treat them as complementary tools with different jobs, not as substitutes. The Accountability Framework Initiative and the IUCN Global Standard for Nature-based Solutions both provide useful guardrails for the insetting side, with biodiversity, human rights, and benefit-sharing requirements that go beyond carbon math.
If you are mapping a Scope 3 reduction roadmap and need to scope which interventions count toward your inventory versus which sit in Beyond Value Chain Mitigation, the carbon and sustainability experts at Carbon Credit Capital can help you structure a nature-based supply chain investment program that fits your FLAG exposure, your target architecture, and your audit horizon. Schedule a consultation.
Net zero is often described as a balancing act: cut what you can, account for the rest, and reach zero on the ledger. That framing is useful, but it leaves something out. It treats every tonne of carbon as interchangeable and every route to zero as equally sound, while the science tells a more specific story.
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