With the increasing awareness of climate change, carbon removal technologies like climeworks have gained more attention recently. Investing in carbon removal could be a wise choice for companies and individuals who want to offset carbon emissions. This article will summarize 4 main methods to invest in climeworks based on the context articles, aiming to provide a practical guide for potential investors. The key to invest in climeworks is to understand the technology and find the right approach based on your situation.
Invest in climeworks directly through private funding rounds
As an emerging company in carbon removal, climeworks has raised multiple rounds of private funding to support its technology development and plant construction. Qualified individual or institutional investors could participate in climeworks’s funding rounds to obtain private equity in the company. This allows investors to support climeworks’s mission directly and benefit from the company’s future growth. For example, climeworks raised a 100 million CHF series C round in 2021 from investors like Wellington Management and BMW Group. However, the investment amount required is normally high for private rounds. Investors need to conduct due diligence on the technology viability and market potentials.
Invest in publicly traded companies allied with climeworks
Instead of investing in climeworks directly, another approach is to invest in public companies that have partnerships with climeworks. For example, Shopify purchased carbon removal from climeworks to offset its emissions. By investing in Shopify, investors could benefit indirectly from the growth of carbon removal. This approach has lower barriers to entry since investors could buy public stocks conveniently. However, the connection to climeworks could be more indirect. Investors need to identify companies with substantial partnerships with climeworks to better benefit from the carbon removal industry.
Invest in ETFs or index funds focused on carbon removal
Some ETFs and index funds have emerged with a focus on carbon removal companies like climeworks. For example, the MOON ETF and NASDAQ CARBON TRANSITION INDEX aim to track the performance of carbon removal companies. By investing in those ETFs, individual investors could get exposure to the carbon removal industry easily without picking specific stocks. This approach requires less due diligence but provide less control over specific companies. Investors should evaluate the fund portfolio to ensure adequate exposure to climeworks and other leading players in the industry.
Use carbon removal certificates to indirectly fund climeworks
Climeworks and other DAC companies sell certificates representing carbon removal. By purchasing these certificates, individuals and companies could fund carbon removal projects indirectly. The certificate provides proof that a certain amount of CO2 has been removed. This market-driven approach provides flexibility as investors could support carbon removal by purchasing certificates. However, there is no equity gain through this approach. The impact is also less visible compared to other alternatives. But it’s easy to get started with small investment amounts.
In summary, investors could consider four main approaches to invest in climeworks – direct private funding, public stocks of allied companies, industry ETFs, and carbon removal certificates. The suitable option depends on factors like investment amount, risk tolerance, expected return and impact goals. But carbon removal presents a promising opportunity to combat climate change while generating environmental impact and potential financial returns.