Kim Kolt, General Partner, Bay Bridge Ventures
Kim Kolt is co-founder and General
Partner at Bay
Bridge Ventures, the first purpose-built, institutional ESG and
Sustainability focused venture capital firm. Bay Bridge is committed to
inclusivity – starting from leadership
and continuing through the underlying investments – in addition to responsible
stewardship – active, high-engagement investing through multiple stages of
development.
What have you’ve learned about
sustainability and how does that impact your work at Bay Bridge?
My focus on sustainability arose out of my
interest in marine biology and oceanography, which stemmed from growing up in
Hawaii. For as long as I can remember, I’ve felt a sense of reverence for all
life and the systems in nature that support it. Like many native cultures,
Hawaiians have a close connection with and appreciation for the environment.
It’s difficult to scale nonprofits to
effectuate change, but solutions that attract talent and create value can tackle
issues more quickly than their nonprofit counterparts. If you can generate
value from scaling sustainability solutions, and do so with recurring success, the
economic proceeds can be put back into the same pool of capital to support a
regenerative business model. We believe, and have now proved, that
returns and ESG become more correlated over time.
Can you talk about the overlap between
inclusivity and sustainability when you’re deciding which investments to make?
Underserved communities are most often exposed
to the toxicities and downstream effects of traditional energy and wasteful
systems. Creating sustainable systems with renewable resources will directly
lift these communities – cleaner water, less pollution, less waste, more available
food, more resilience to climate change related issues, particularly around
temperature, etc.
Bringing more inclusivity into
sustainability gives us a better chance of comprehensively solving the most
pressing problems because we have a diversity of perspectives and information,
both of which give rise to more creative, effective solutions. We
understand the benefits of building inclusive companies, so we drive a
proactive approach from our portfolio companies incorporating diversity from
leadership down and have reflected the same at Bay Bridge Ventures.
What can you tell us about the ESG+
Methodology in Bay Bridge’s investment process? What qualities in companies /
leaders make for a good investment?
The ESG+ Methodology is designed to meet
the needs of the individual portfolio companies and then evolve alongside the
company as they grow. Whereas most ESG frameworks are used as a simple
screening tool, we think of ESG as a model for active management. Our process
is uniquely architected to help companies stay true to their values and to
fulfill their vision for the company. This inspired stewardship is what many
CEOs are looking for but is sorely lacking today in the market.
What advice do you have for companies
looking to incorporate sustainability into their metrics and reporting? Any
things you’d tell them to avoid?
Companies need to make sure the scope for
incorporating sustainable metrics is viable. For early-stage companies, for
example, planning the KPIs and metrics desired to track may be the only
feasible option given limited resources. Companies need to keep reading,
learning, and asking about new tools, policies, and systems for incorporating
sustainability since it changes so rapidly. There is no one-size-fits-all way
to be sustainable, there will always be a need for customization specific to a
business, industry, geography, size, etc.
What are the key factors for investors
and companies focused on ESG/Sustainability to consider?
The current climate tech wave is different
than previous efforts. During Cleantech 1.0, enterprise software investors
recognized a rising consumer awareness around climate change and burgeoning
interest in sustainable products. They saw large undisrupted markets and sought
to apply the same playbook to this new space. The problem was that they didn’t
understand the underlying physics of the technology, didn’t prepare for the
capital intensity of some of these product development cycles, and didn’t
recognize that the overall supply chain and servicing/maintenance systems
weren’t robust enough at the time.
In contrast, we are now seeing foundational
technologies from other industries that have matured to a point where new
applications are getting unlocked regularly in climate tech. For example, AI
control algorithms, energy storage, robotics & automation, 5G
communication, advanced computation, and next generation sensor technology are
all coming down in cost while enhancing performance, thus creating massive
opportunities to disrupt old industries or create entirely new industries.
Many VCs recognize this renewed
opportunity, but few are well prepared to take advantage of it. Our team is
unique in that we have broad technical expertise, deep investment experience,
and a track record of exits. Bay Bridge Ventures is purpose-built to solve some
of the world’s most challenging problems while driving top-tier returns for
LPs.
For more information
about Bay Bridge Ventures, visit baybridgeventures.com.