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Climate Change Capital

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This is a "video-first" raw case study with most of the information coming from videos on the web site.

In the summer of 2008, James Cameron was buoyed by the success of Climate Change Capital (CCC), the firm he had cofounded to marshal private capital to help fight climate change. Besides advisory services, the firm had entered the funds business with a bang, building a portfolio of investments in carbon abatement, drawing assets from a number of deep-pocketed investors, and gaining headlines in the business press across the world.

Cameron had become interested in climate change through his legal work. He played a significant role in the UNFCCC (United Nations Framework Convention on Climate Change) and Kyoto Protocol. Once the Kyoto Protocols had been agreed to, he worked as counsel to Baker & McKenzie, where he worked on the foundational agreements that led to carbon trading in Europe.

For all his efforts in the legal sphere, Cameron was dismayed at how tentatively the private sector was moving to invest in carbon abatement. He came to believe that there needed to be a new type of investment firm to guide finance professionals in the new world of carbon allocations; a firm that would array the power of markets to take on the global challenge of controlling GHGs.

Therefore, Cameron and some colleagues created CCC in 2004. The firm brought together a unique and diverse group of financiers, technologists and policy mavens to advise firms on how to benefit from this new type of investment. When it entered the funds business in 2006, CCC recruited fund managers from the booming financial sector in London. However, these finance professionals came with a very different set of expectations than the employees who the firm had initially signed up. Compensation was an obvious issue and the fund managers were focused almost entirely on the assets within their own funds. While this was to be expected, Cameron felt that the new hires were belittling the firm’s platform – the distinctive mix of policy, technology, and legal expertise the firm had built.

Cameron felt very much out of his depth when it came to managing the growing divide within his firm. Were these just the growing pains for a burgeoning enterprise or evidence of more serious problems? Should he do anything to relieve the tensions and if so what?

Published Date: 2019-02-03

Keywords: Carbon market, Kyoto Accord, hedge funds, institutional investors, London, IPCC

Suggested Citation: Greg MacDonald and Jaan Elias, "Climate Change Capital," Yale SOM Case 18-015, February 3, 2019