Galvanize Climate Solutions' real estate team members are putting their money where their stated climate goals are, tying part of their compensation to meeting net-zero objectives.
Joseph Sumberg, a New York-based managing partner and head of Galvanize's nascent real estate arm, said in an interview that Galvanize executives plan to begin investing this summer in existing properties and bring those to net-zero carbon emissions in three years. He declined to divulge the 2-year-old firm's assets under management or where the firm would be getting the funding to make investments.
"We're going to take existing stock and convert it to net zero," he said. "That's a big, big chunk of carbon emissions."
Galvanize was formed by Katie Hall, founder and co-chairwoman of $40 billion Hall Capital Partners, based in San Francisco, and Tom Steyer, founder of $36 billion Farallon Capital Management. Galvanize also has venture capital and global equity businesses.
The built environment generates 40% of global CO2 emissions, Mr. Sumberg noted.
Should the real estate team fail to bring a property to net zero in three years, Galvanize executives would lose a portion of their long-term incentives and other compensation, said Mr. Sumberg, who joined Galvanize from Goldman Sachs Asset Management in October.
And there is a "tremendous" investment opportunity for buying existing real estate and decarbonizing, he said. There are more incentives to build new sustainable buildings than convert old ones, creating an investment opportunity, he said.
"I learned that people don't do things out of the goodness of their hearts," he said.
Galvanize will focus on investing in apartments, student housing and self-storage in states such as California, Illinois and Texas with conducive weather, government incentives and utilities interested in decarbonizing the grid.