Climate Fund Spotlight: The 22 Fund
Tracy Gray, Managing Partner of The 22 Fund, and her partners Monica Dodi and Rajan Kasetty, are breaking molds in the investment industry. Their rich and varied backgrounds resulted in a unique thesis that’s anything but your typical cookie-cutter strategy.
While most impact investing focuses on one issue at a time, they look at numerous challenges holistically. The array of issues their fund addresses includes: economic, racial and gender systemic inequalities, the climate crisis, shortages of domestic supplies of critical products, and the changing landscape of job opportunities.
This holistic view allows them to invest with intersectionality while identifying opportunities with high returns and high impact that simultaneously:
Mitigate the climate crisis with new technologies, materials, and processes
Fund women and people of color typically overlooked by traditional sources of capital
Create well-paying, high-tech jobs, especially in low-income areas
Support supply chains that protect critical US infrastructure, products, and intellectual property
Increase and strengthen global trade opportunities
How do they do this? By investing in tech-based US manufacturing companies to grow their businesses through exports thereby creating the clean, quality jobs of the future in low and moderate-income (LMI) communities.
A Sector Approach
By taking a sector approach to climate change, The 22 Fund is killing several birds with one stone since manufacturing is the perfect vehicle to address not only the climate crisis, but also race, gender, and economic inequity. Manufacturing is known to be a dirty industry, and much of the pollution it causes ends up in LMI communities of color.
Numerous studies, like this one from the EPA, show that people of color face disproportionate harm from climate change. “In our work,” Tracy explains, “we can’t not think about climate justice, because those are the people who are impacted the most by it.”
A Unique Strategy
The 22 Fund’s strategy of investing in manufacturing companies to increase their international sales is singular, and it substantially de-risks their investments and provides high ROI. No other fund is currently addressing this sector or this opportunity.
Export markets are essential for US manufacturers to not only expand jobs and grow revenues but also to mitigate current and future geopolitical and economic risks. Exporting companies are more resilient to economic downturns and create jobs faster, but only about 1% of US companies actually trade internationally. With the growing importance of emerging markets, domestic focus is no longer an option for the continued survival and growth of US manufacturing.
Moreover, a technological edge is critical to keep US manufacturers ahead in global markets. Advanced manufacturing practices such as: automation, artificial intelligence, data analytics, IoT, and additive manufacturing tech (like 3D printing) are creating new, high-paying jobs that can help bring back the manufacturing advantage to the US economy. Plus, all of these new technologies can be clean, sustainable, and carbon-neutral.
By investing in US manufacturing companies and allowing them to upgrade their technologies and improve exports, The 22 Fund can provide investors with outsized returns while providing critical capital to companies that are women-and/or BIPOC-owned. This in turn drives the creation of clean, quality jobs where they are needed most – in LMI areas and communities of color.
VCI’s Climate Justice Initiative
The 22 Fund’s mission to invest in women and BIPOC-owned US manufacturing companies perfectly aligns with VC Include’s mission and values. That’s why we are thrilled to support the fund with our Climate Justice Initiative for Diverse Emerging Fund Managers.
For Tracy, it is equally meaningful. “Being a black woman in the climate space has been a lonely road. I’ve been a lone voice for a very long time, and The Climate Justice Initiative validates the many years of hard work and makes it feel less lonely out there,” she explains. “A lot of white, male investors have ecosystems where they can source connections, support, and capital. VCI is creating a similar network and ecosystem for BIPOC and women investors.”
She further gives a nod to the Climate Justice Initiative’s backers, “Having a well-known brand like Hewlett putting their money where their mouth is really sends a signal to the market and the system that this is important.”
We couldn’t agree more. That’s why we’re elated to help elevate, accelerate, and be a loud-speaker for innovative, essential, and ground-breaking funds like The 22 Fund.
