By Lynda Kiernan-Stone, Global AgInvesting Media
Sustainable private equity firm Lightsmith Group announced the final close of Lightsmith Climate Resilience Partners SCSp RAIF– the first private equity fund of its kind focused on climate resilience and adaptation – with $186 million in capital.
Chaired by Richard Kauffman, the former chairman of Energy and Finance for New York State, Lightsmith Climate Resilience is targeting six initial technological areas: smart water management and water efficiency, resilient food systems, agricultural analytics, geospatial intelligence, supply chain analytics, and catastrophe risk modeling and risk transfer.
At the Glasgow Climate Summit held in Scotland in November 2021, a strong theme among the voices were from less developed countries (where the brunt of the effects of climate change are felt) stating that the world’s most developed countries (which are responsible for the bulk of the damage) are not committing enough money to address the underlying issues.
During that meeting of nations, a pact was drafted including a call for the world’s developed countries to double their “collective provision of climate finance for adaptation” – a move that would bring funding to $40 billion by 2025, according to analysis completed by Carbon Brief.
While sounding impressive, $40 billion is not nearly enough. The Adaptation Gap Report 2020 issued in January 2021 by the UN Environment Programme concludes that costs associated with climate adaptation in developing countries could exceed $140 billion by 2030.
But there is good news, too. Venture capital and private equity investment in climate technologies is soaring, according to data from PwC, exceeding $60 billion in the first half of 2021 alone.
Within the mix is Lightsmith Climate Resilience, which noted that investment in technologies that can address the physical impacts of climate change represents a current estimated total addressable market of over $170 billion.
Lightsmith’s co-founders, Jay Koh and Sanjay Wahle, each have more than 20 years of experience in direct investing with The Carlyle Group and VantagePoint Capital Partners as well as US Development Finance Corp (DFC), International Finance Corporation (IFC), US Department of Energy, and New York Green Bank. The balance of Lightsmith’s team brings with them experience from Goldman Sachs, True North Partners, Baring Private Equity Asia, IFC, and US DFC.
“Climate resilience technologies are an overlooked, multi-billion dollar investment opportunity that will just keep growing,” said Koh. “Increasing drought, agricultural stress, and supply chain disruption linked to climate change will drive demand for data and analytics to understand those risks and for the solutions to manage them.”
This team has brought together a global cadre of backers that include PNC Insurance Group, The Rockefeller Foundation, Kinneret Group, and Caprock Impact Partners, as well as the Green Climate Fund (“GCF”), European Investment Bank, Asian Infrastructure Investment Bank, KfW on behalf of the German Ministry for Economic Cooperation and Development (BMZ), Nordic Development Fund, the Government of Luxembourg, and others.
“Lightsmith Climate Resilience is the first private equity fund to focus on investing in solutions to the effects of climate change,” said Kauffman. “Lightsmith has brought together a team with a unique combination of experience in direct investment and climate change and has secured the commitment of leading global investors to invest in climate resilience.”
Using an investment strategy the firm refers to as CRAFT – the Climate Resilience and Adaptation Finance and Technology-transfer facility – that was developed with support from the Global Innovation Lab for Climate Finance, Nordic Development Fund, the Global Environment Facility, Conservation International, and the International Climate Finance Accelerator, Lightsmith Climate Resilience has already made investments in SOURCE global, a water harvesting technology company with an off-grid solution for producing affordable drinking water from sunlight and air; and in India’s WayCool Foods, an agriculture and food supply aggregator platform and supply chain service company using automation and digital technology to reduce food waste while increasing farm production.
“As investors, we know very little about the future with any certainty,” said Wagle. “One thing we do know is that companies that have smart solutions to respond to climate change will be increasingly in demand. Investing in climate resilience solutions can deliver both financial returns and real benefits to companies, communities, and individuals. Climate resilience technology is an opportunity for investors and for us all.”
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~Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@