When our founders Katie and Tom formed Galvanize, it was with an explicit purpose: to bring the power of investment to the climate crisis. As Tom often likes to say, “capitalism scales.” This simple phrase encapsulates a powerful idea—that market forces will drive the clean energy transition. The best solutions will win out, not just because they’re cleaner, but because they’re cheaper, faster, and better. This principle guides Galvanize’s strategic approach to climate investing—we seek out solutions where climate impact creates competitive advantage.
Realizing this vision requires going beyond traditional investment approaches. It means doing the work to identify opportunities where Transition can drive scaled impact and generate alpha. It also means being intentional about our actions as capital allocators and portfolio service providers to maximize our own additionality and investor contribution.
At Galvanize, impact assessment and acceleration enhance our investment process. These practices serve as tools that shape our strategies and sharpen our edge in the rapidly evolving climate solutions market.
Investing with Intentionality
We believe climate investing begins with intentionality. From the earliest stages of strategy development, our Impact team works alongside investment teams to articulate clear impact objectives and develop comprehensive theories of change. These frameworks make explicit the key resources and actions we’ll aim to deploy to create meaningful impact.
For instance, together with Galvanize Global Equities (GGE), we developed the theory of change below, helping to define both our vision for success and the pathways to achieve it. While we do not expect to realize all targets for every company, this cause-and-effect model helps to guide GGE’s distinctive, engagement-driven approach and enforces a level of discipline and systematic thinking in how we plan, implement, and evaluate our efforts toward our mission.
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Case Study: Galvanize Real Estate’s Proprietary Sustainability Framework
Our collaboration with Galvanize Real Estate (GRE) further illustrates the role impact plays in our strategy development. GRE was formed with a mission to catalyze a paradigm shift within the buildings industry—to build a novel platform focused on profitably decarbonizing real estate assets. To help execute on this vision, the Impact team engaged from day one, helping to build a proprietary sustainability framework that integrates climate considerations across the investment process.
Re-imagining acquisitions through the lens of impact: We started by helping GRE evaluate potential markets and property types through the lens of climate impact potential. We helped to answer key questions like: Which markets offer the strongest local rebates and incentives? What physical building characteristics and load profiles make a property type or asset most favorable for profitable decarbonation? Where are energy prices most conducive to electrification and energy efficiency retrofits? Which regions of the grid are likely to ‘green’ the fastest over the coming decade? The output of this market research was a set of high-conviction markets and property types that offered both strong real estate fundamentals and significant potential for profitable decarbonization.
Tools for impact-driven decision-making: To home in on these opportunities more precisely, the Impact team worked with GRE to build and integrate a suite of proprietary and third-party analytical tools. To name just a few:
Galvanize Opportunity Locator for Decarbonization (GOLD) is a solution Galvanize developed in partnership with architecture firm EHDD. It leverages the C.Scale data model to scrape 8.8 million building simulations and forecasts for the local utility grid to isolate markets with high decarbonization potential and evaluate how certain strategies could drive down emissions over time.
GreenScreen is a proprietary model developed by the Galvanize Impact team. GRE leverages GreenScreen early in the acquisitions process, before the team has access to detailed asset and utility bill data, to estimate the baseline emissions of a property and the abatement potential of various retrofits from on-site solar PV to air-source heat pumps to energy-efficient windows and lighting.
Decarb “Hot Takes” are deeper-dive analyses conducted in partnership with an external energy engineering firm. These analyses provide the team with a better understanding of the capital requirements and return on investment from particular retrofits as well as their potential emissions avoidance, taking into account the interactive nature of several decarbonization measures occurring at the same time.
These tools, among others, integrate fully into GRE’s pre-investment process, with climate impact potential and feasibility systematically evaluated as part of our Investment Committee reviews. They allow us to develop bespoke decarbonization plans for each asset upon acquisition, designed to deliver both climate impact and profitability.
Accountability and incentives: Finally, we understood that implementing our sustainability framework relied on a robust framework for impact measurement, management, and accountability. Over several months of iteration, the Impact team partnered with GRE to develop a methodology for measuring and motivating progress against five sustainability goals, including portfolio-wide operational emissions and water use reduction. GRE then took an unprecedented step in real estate: tying a share of its long term incentives directly to the accomplishment of these climate impact goals—creating powerful alignment for deeper, faster decarbonization.
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Strategic frameworks and tools like those described above serve as our north star, ensuring every investment decision aligns with our dual mission: accelerating transformative climate solutions while creating lasting value for our investors. By embedding impact considerations into our strategies from the outset, we’re better positioned to identify opportunities where commercial success and climate impact go hand in hand.
In our next post, we’ll take a closer look at the investment process itself, exploring how impact enhances our pre-investment sourcing and due diligence processes across strategies.