Cut Carbon Note Surpasses $50M in Assets, Attracting Over 100 Investors in Climate-Focused Investment

Calvert Impact, Inc. has announced the successful closing of the second issuance of its Cut Carbon Note, a pioneering investment product designed to finance sustainability upgrades in commercial and multifamily buildings. The program has now surpassed $50 million in capital raised from over 100 diverse investors, marking a significant milestone in the realm of climate-focused investments.

The Cut Carbon Note, which received investment grade ratings from Morningstar DBRS, represents a crucial step forward in making climate investments more accessible to both individual and institutional investors. The program's success underscores the growing demand for financial products that address environmental concerns while offering attractive investment opportunities.

Justin Conway, Chief Impact Officer of the Cut Carbon Note, expressed enthusiasm about the program's expansion, noting that the participation of over 50 new investors has more than doubled the expected carbon, water, and energy cost savings. The program is projected to grow to an impressive $400 million, signaling its potential for substantial environmental impact.

The second series of the Cut Carbon Note attracted a diverse range of investors, including prominent organizations such as the David and Lucile Packard Foundation, Federated Insurance, and the National Philanthropic Trust. This broad investor base demonstrates the wide appeal of climate-focused financial products across various sectors.

A key feature of the Cut Carbon Note portfolio is its use of the Commercial Property Assessed Clean Energy (C-PACE) tool, which is available in most U.S. states. Notably, two-thirds of the projects in the portfolio now meet the CIRRUS™ Low Carbon certification, a green building program that incentivizes lower carbon commercial building designs. This certification, offered by PACE Equity and verified by the New Buildings Institute, is expected to yield significant environmental benefits, including savings of over 172,000 metric tonnes of carbon and 130 million gallons of water, along with over $54 million in energy cost savings.

The program's impact extends beyond environmental benefits, as it also educates developers and building owners about their long-term climate impact. Beau Engman, founder and president of PACE Equity, emphasized the company's commitment to making green building improvements cost-effective and accessible, resulting in high customer satisfaction among program participants.

The Cut Carbon Note's innovative approach to combining financial returns with environmental impact has not gone unnoticed. The program recently won the 2024 Grunin Prize for Law and Social Entrepreneurship, recognizing its innovation, impact, and scalability potential.

As Calvert Impact prepares to announce a third issuance of the Cut Carbon Note in the coming weeks, the program's success highlights the growing intersection of finance and sustainability. It demonstrates that investors are increasingly seeking opportunities that align with their environmental values while still providing solid financial returns.

The Cut Carbon Note's achievement represents a significant step forward in the fight against climate change, showcasing how innovative financial products can mobilize substantial capital for sustainability initiatives. As the program continues to grow, it has the potential to drive meaningful reductions in carbon emissions and promote more sustainable building practices across the United States.

This development in climate finance illustrates the evolving landscape of investment opportunities, where environmental impact is becoming a crucial factor in investment decisions. The Cut Carbon Note's success may inspire similar initiatives, potentially accelerating the transition to a more sustainable built environment and contributing to broader climate change mitigation efforts.