Investing in Holistic Urban Sustainability

By Peter Hirsch, Head of Sustainability

The average person on earth lives in a city. Currently 4.2 billion people live in urban areas, representing roughly 55 per cent of the global population. By 2050, this number will increase by almost 2.5 billion people and represent 68 per cent of the world. Africa and Asia will lead the coming decades’ urbanisation with Africa moving from 42 to 59 per cent urbanised by 2050, and Asia from 50 to 66 per cent.

What these figures show is that our average experience and impact on the earth is and will increasingly be urban. So it comes at no surprise that cities account for approximately 70 per cent of global GHG emissions, three-quarters of global final energy consumption and 80 per cent of GDP. As urban populations and areas grow, these impacts will lead to increasing risks for urban residents stemming from climate change.

By 2050, at least a billion people will be exposed to regular extreme heat conditions, even under a 2ºC scenario. Similarly, a billion people will be at increased risk of coastal-related climate hazards under all warming scenarios. Beyond direct human impacts, the ecosystems on which we rely will degrade with 18% of species at high risk of extinction under a 2ºC warming scenario.

These stark statistics demonstrate that the urban ‘challenge’ is multi-dimensional, and our responses need to reflect this reality.

At 2150, our mission is to address our most pressing urban sustainability challenges through investment, innovation and facilitation. Cities represent a concentration of energy, material, industrial and economic systems that create opportunities for targeted response to climate change and environmental improvement. By understanding the challenges cities face like those raised above, we can target our capital allocation and work to deliver meaningful, multi-dimensional impact.

We define Impact through four Principles:

Climate Action — Mitigation & Adaptation

Companies which are materially reducing, removing or mitigating urban GHG emissions while preventing carbon lock-in, and increase the resilience of systems to adapt to climate change.

Resource Efficiency & Environmental Protection

Companies that reduce resource waste and support a circular economy, promote sustainable water use and protection, reduce pollution, and protect and enhance biodiversity.

Social Resilience & Balance

Companies that enable healthy, safe and liveable cities with a healthy social-economic balance, including the creation of and increased access to economic opportunities.

Profit & Purpose

Companies that deliver both exponential impact and productivity outcomes as co-benefits beyond the immediate impacts of their operations.

In our inaugural 2150 Impact Report, we demonstrated that our approach to investment is already yielding positive outcomes. By the end of Q1 2022, our portfolio already mitigated 20.8 tonnes of CO2e for every tonne emitted, for a total of 277,000 tonnes per annum. These are solutions delivering meaningful impact today, with the potential to scale significantly in the coming years.

Urban sustainability is about more than emissions reductions, though. True urban sustainability needs to be built on a holistic approach to investment that is as concerned with climate mitigation as adaptation, biodiversity and social betterment. Our most recent investments support our mission to deliver impacts that speak to this integrated approach.

UrbanFootprint

Despite growing populations exposed to climate risks such as heat, water scarcity, extreme weather and sea level rise, investment in climate change adaptation is lacking. UNEP estimates, in developing countries alone, we need $70 billion of annual investment today and up to $500 billion in 2050 to adapt to climate change. With constrained municipal budgets to address climate risks, cities need tools to ensure they can maximise impact for every dollar invested.

Our recent investment in UrbanFootprint — based in Berkeley, CA — backs a solution that builds actionable insights through data analysis to target climate responses and spending. Urban Footprint equips utilities, governments and service providers with layered analyses to pinpoint where capital can most effectively increase the resilience of urban systems. Factors such as socio-economic data and population are factored with heat stress, infrastructure vulnerability and other factors. The result is more resilient urban systems that maximise the reach of budgets.

For more information on Urban Footprint, see our Medium post.

NatureMetrics

Ecosystem health and services are vital to the sustainability of all human systems, urban and rural. Climate change and our patterns of development are unfortunately creating unprecedented strain on ecosystems and species. Preserving and ideally enhancing species biodiversity is critical for maintaining our ability to live, use and benefit from the environment.

Our current methods for tracking biodiversity are surprisingly analogue and time-intensive, hindering our ability to manage ecosystems at pace with the impacts from development and climate change. Our recent investment in NatureMetrics — based in Guildford, UK — revolutionises the way we can measure, track and report biodiversity to improve management and ultimately ecosystem health.

NatureMetrics uses environmental DNA (eDNA) sampling from water and soil to assess the presence or absence and relative abundance of species. This allows for faster and more comprehensive biodiversity testing and monitoring, which can inform our ecosystem management and development responses. Through its advancement of biodiversity, NatureMetrics is broadening the impact of the 2150 portfolio.

For more information on NatureMetrics, see our Medium post.

As 2150 grows and matures, we seek a portfolio that can build the sustainable cities of the future. These are cities that are net-zero, resilient to the impacts of climate change, support biodiversity and create enriching experiences for all residents. Less than one year after our fund’s final close, I’m excited that we have a portfolio that already speaks to this mission. To achieve the goals of the Paris Agreement we need to focus on more than carbon alone. I’m looking forward to supporting more solutions for cities that do just that.

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2150 is a venture capital firm investing in technology companies that seek to sustainably reimagine and reshape the urban environment. 2150’s investment thesis focuses on major unsolved problems across what it calls the ‘Urban Stack’, which comprises every element of the built environment, from the way our cities are designed, constructed and powered, to the way people live, work and are cared for. Find out more at www.2150.vc

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1 UN DESA (2018) https://population.un.org/wup/Publications/Files/WUP2018-Report.pdf

2 Met Office (2021)

3 IPCC (2022) https://www.ipcc.ch/report/ar6/wg2/downloads/report/IPCC_AR6_WGII_SummaryForPolicymakers.pdf

4 UNEP (2021) https://www.unep.org/news-and-stories/press-release/step-climate-change-adaptation-or-face-serious-human-and-economic

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2150

2150 is a venture capital firm investing in technology companies that seek to sustainably reimagine and reshape the urban environment.