Carbon Collective

Let's start with the "Why" (and get to the investment case in a few slides).

You're saving for retirement so one day you can stop working and it will look and feel like this:

But if you're like most Americans, your retirement savings are probably funding a retirement that looks and feels more like this:

Here's the good news: we can stop and reverse climate change.

But the only pathway there includes investing in solutions. From renewables to building efficiency to reducing agricultural emissions, climate change is a problem we have to build and invest our way our of.

Here's the bad news: investments in climate solutions are pretty far behind where they need to be.

But that's where our retirement accounts comes in.

Of course our retirements should align with a climate-stable world.

Today, an estimated one quarter of fossil fuel company stock is held in 401(k)s alone.

We need to transition a lot of private capital into climate solutions. But that won't happen without public markets leading the way.

But Wall Street's answer, ESG, isn't aligned with the science behind solving climate change.

It often still invests in plenty of fossil fuels and does not specifically invest into climate solutions.

In 2020, we launched Carbon Collective to enable investors like us to save for retirement in sensible, easy to understand, low-fee portfolios that focused fully around sustainability, which at this point to us means they focus on climate change.

As individuals we couldn't find a place we knew of and trusted for sustainable investing.

The big Wall Street firms had some ESG products, but were very prone to greenwashing.

And the "old school" ESG firms were more trusted ethically, but expensive, focused on ESG (so just "less bad" than the general market) and we found were simply not generationally known.

So we launched Carbon Collective to fill that gap.

In our industry (financial services) scale is everything. When you have it, you can do a lot. When you don't everything is really expensive and slow.

The first way we looked to scale our AUM was by serving individual retirement savers.

It went well, we now serve >800 households with an average account size of $54k. Running that part of Carbon Collective is profitable. But not the biggest opportunity!

So in 2022, we launched our first ETF to start securitizing our strategies.

And in 2023, we found our pathway to scale: helping companies get a fundamentally better 401(k) experience, that also happens to be greener.

With almost $0 marketing spend, we've grown our 401(k) program to over 106 companies and nonprofits.

We call it the "Better Together 401(k) Program"

Our job is to be the investment advisor (called a 3(38) fiduciary) for 401(k) plans. That means we build and maintain the funds and portfolios that employees have access to.

That's how we make 401(k) plans greener, by getting sustainable options in there for the first time (alongside traditional ones).

But our value-add goes a few steps further, we are beating the traditional 401(k) investment industry on HR support and employee education.

It's working.

Since we launched our 401(k) program, our AUM has grown at an extremely fast rate.

And while nothing is guaranteed, in 2024 we expect to keep growing just as quickly.

The best part about our 401(k) program is that every 2 weeks, companies run payroll. Which means our AUM goes up.

And frequently, company 401(k)s are individuals first experience investing. So we build trust early.

It's this kind of predictable growth that is unlocking our clear pathway to scale.

Right now we're averaging $1.3m in new AUM every month just from payroll running.

That number goes up with each new client we onboard.

That's why our 401(k) program is the perfect foundation to scale the rest of Carbon Collective around:

We can let our climate-focused funds grow organically.

And we can build trust early with the next generation of investors.

Because the greatest transfer of assets in history is beginning:

And millennials don't see the future like their parents do.

What the world will look like in 30 years is a different question for them.

So it's no surprise that:

This is our longterm goal at Carbon Collective.

To become the "Go To" company that the next generation of investors know and trust for sustainable investing.

We've seen a financial services define a new kind of investing.

Vanguard did it for passive investing. And they've been able to scale with incredibly low costs because of that.

But when it comes to sustainable investing, the firm you know and trust is probably ____________

Our goal is for Carbon Collective to be that company.

Previously only accredited investors have been able to invest in Carbon Collective and now we're thrilled to be launching our first Community Round to enable anyone to invest right alongside our awesome VC's and angels (on the same terms!)

Because, when it comes to scale needed to solve climate change, we're going to need a sustainable investing company to be the next Vanguard.