To effectively address ‘the biggest threat modern humans have ever faced’, a radical transformation of our financial system is imperative to prevent the worst effects of climate change. Despite investments in the low-carbon energy transition reaching $1.77 trillion as of 2023, according to BloombergNEF’s Energy Transition Investment Trends 2024 report, it falls short of the $4.8 trillion annually needed to meet Paris Agreement targets. Enter Sponsor, a pioneering initiative co-founded by Michael Grimm and Michi Yamamoto, confronting the climate crisis while enabling an inclusive economic system.
Grimm, with a robust background in the banking industry and a personal commitment to decarbonisation following the loss of his father to lung cancer linked to a coal-fired plant, brings extensive experience from CarbonNegative OÜ, Sumitomo Mitsui Banking Corporation, the World Bank, and the Asian Development Bank. Yamamoto complements the leadership team with nearly two decades at Google, contributing technical expertise and innovation honed through projects like Google Cloud and YouTube.
Sponsor and the Green Bank
Traditional methods for financing climate projects are fraught with inefficiencies and are not inclusive. They are catered to large institutional investors and can take years to finance. Grimm told Climate Court: “Our current institutions are not answerable to the people and are moving too slowly”. It’s a system stacked against the average person and against the future of our planet.
Here’s how Sponsor proposes to disrupt the status quo:
Unlocking Funding: Sponsor proposes a different approach. By providing the tools needed to streamline the current bespoke and inefficient process, and a robust platform to make it easy to match stakeholders and capital providers to climate mitigation projects, Sponsor will enable humanity to redirect the small fraction (less than 0.1%) of the existing global financial transactions towards climate mitigation projects, needed to bridge the funding gap and put us on the path to a sustainable future.
Gateway to Climate Action: Sponsor will be a user-friendly platform where you can browse investment opportunities. The platform will leverage artificial intelligence and streamlined processes to make it easier to bring good projects to market, and to make investing easy and efficient. You’ll be able to research projects, understand their impact, and invest directly with just a few clicks. Sponsor will also offer resources and education for platform users so investors can easily do their own due diligence.
Finance Climate-Friendly Projects: Sponsor will prioritise investments for projects that are among the most effective in fighting the climate crisis, based on the latest scientific opinions of the Intergovernmental Panel On Climate Change. This includes climate mitigation projects and/or technologies such as renewable energy; energy storage; agriculture, forestry, and other land use; and nature-based solutions.
Mobilising Resources for Maximum Impact: The green bank will mobilise funds from both individuals and organisations on the Sponsor platform. This will create a giant pool of resources that can be directed towards sustainable projects.
Use of the Cooperative: Currently, profiting from climate solutions is a privilege reserved for a select few. Sponsor aims to dismantle this barrier. The digital platform will be owned by a cooperative green bank. Grimm says: “Coops are built to solve problems for their members, and the climate crisis is a problem for all of us. So, this seems like the appropriate answer”. The use of the cooperative model ensures that the organization acts in the best interests of its members, and its members aren’t voting for profit-making, they’re voting for their future.
Ownership for Everyone: Every individual who wishes to, can own a common voting share in the cooperative and become a member. You can claim your share simply by registering on the platform, for free. Voting shares are non-tradeable. Any profits earned through Sponsor will subsequently be distributed back to the cooperative bank’s members. Preferred shares will be available for those who contribute something of value to the platform, with fixed dividend returns to be decided on.
Democratisation of Climate Mitigation Investment: Currently, with the exception of Raise Green, which is only available in the United States, only institutional investors are able to invest in the low-risk 8-24% returns associated with climate mitigation projects. This is an excellent asset class largely inaccessible to the general public. Michael Grimm told Climate Court: “With the platform, individuals will be able to invest directly into climate mitigation projects and profit from helping humanity build the infrastructure needed for the future.”
Good Governance: The platform is committed to transparency and trustworthiness, with an open-source technology infrastructure that allows the code to be audited to ensure security and accountability. Additionally, Sponsor will be a registered platform with a robust compliance program, and will also seek to obtain appropriate banking licenses in the countries it operates, which will eventually be globally.
Sponsor’s Next Steps
To fund the initial phase of development, Sponsor is launching a crowdfunding campaign with a goal of $500,000. This initial capital will be used to establish the cooperative, build a demo platform, and attract further investment. The first market in which the platform will become active is likely in Asia. Sponsor is seeking an overall financing of $5,000,000, which is needed for business development and to access subsequent markets. For the financing of projects, once the platform is deployed, a major climate fund has already indicated its interest in providing approximately $30 million in funding the green bank could then deploy.
Grimm concludes by saying that because of how the Sponsor and green bank model is being set up, “it’s worth it even if you don’t believe in the climate crisis. There’s still a $4.8 trillion opportunity with good returns, and worst case we create many jobs and a financial institution owned by all of us, for our benefit”. It is a paradigm shift towards a more inclusive, sustainable future – one where regular people wield the power to effect change.
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