Frameworks
Portfolio Alignment Framework
The first climate alignment framework built by and for VCs. Four maturity stages, two boundary options, invested capital weighting.
25 min
Overview
The Portfolio Alignment Framework is the VCA's core methodology for measuring and communicating the climate alignments of portfolios . It was developed over nine months by the VCA Methodology Working Group — including Coatue, DCVC, Energy Impact Partners, Galvanize, Prelude Ventures, and 2150 — with input from 50+ industry stakeholders and a 60-day public consultation launched on Finance Day at COP28. It incorporates concepts from Science Based Targets, the Net Zero Investment Framework, and the Private Markets Decarbonisation Roadmap, but is the first alignment methodology designed explicitly for the venture capital asset class. Version 1.3, July 2025.
How it works
Portfolio companies are classified into four maturity stages based on objective indicators: annual revenue, total capital raised, and full-time headcount. A company progresses to the next stage when it meets two or more of the thresholds. At each stage, it's expected to adopt progressively more rigorous climate practices.
The framework offers two boundary options. The board seat boundary includes portfolio companies where the firm holds a board seat or observer rights — designed for firms with active governance roles. The new investment boundary includes companies invested after a selected start date — designed for firms that don't typically take board seats. In either case, firms may exclude companies no longer in operational reporting, such as write-offs or material write-downs.
Alignment calculation
Portfolio alignment = invested capital of companies meeting their stage-based practices ÷ invested capital of all in-boundary companies. The VCA chose invested capital as the weighting metric over financed emissions (which many early-stage companies can't yet measure) and carrying value (which can be subjective).
Design principles
The framework reflects a practical understanding of how venture works. Quality over quantity: engage teams with only the most critical climate actions without overburdening them. Build for scale: it's easier to integrate climate early than retrofit later. Maintain focus: climate practices should support commercial value creation, not distract from it. And optimize for cross-compatibility: the VCA framework is designed as an on-ramp to established later-stage frameworks, so portfolio companies graduating beyond Stage 4 transition seamlessly into PE and corporate standards.
