Lawyers Driving Climate Change Solutions

The article highlights the crucial role of lawyers in driving climate change solutions through innovative impact investing initiatives. It focuses on the Cut Carbon Note, a financial instrument developed by Calvert Impact, a non-profit impact investment firm, and Morgan Lewis, a law firm.

• The Cut Carbon Note enables individuals to invest directly in projects that promote energy efficiency and sustainability in commercial buildings.
• This approach helps bridge the gap in traditional funding for green buildings, making them more accessible to developers and investors.

Calvert Impact's Mission: Financing Climate Justice

Calvert Impact is committed to financing social and climate justice projects through its Community Investment Note program. The organization works with Pace Equity, a company that assists building owners and developers in constructing green properties.

• The Cut Carbon Note is a key instrument within this program, designed to attract a broader investor base beyond large insurance companies.
• It provides direct access to financing for new buildings and major retrofits, promoting sustainable development practices.

Morgan Lewis: Legal Expertise in Climate Change Impact Investing

Morgan Lewis, recognized for its expertise in legal and financial structuring, played a critical role in developing the Cut Carbon Note. The firm, alongside Calvert Impact's in-house legal team, created an asset-backed securitized instrument to make climate change impact investing accessible to individuals.

• Their efforts have been acknowledged with the Grunin Prize for Law and Social Entrepreneurship, highlighting their contribution to sustainable development.
• Morgan Lewis partnered with specialized legal firms to navigate state-specific securities regulations, ensuring a smooth launch of the Cut Carbon Note.

Cut Carbon Note: A Powerful Tool for Climate Action

The Cut Carbon Note leverages C-PACE (Commercial Property Assessed Clean Energy), a program available in 38 states and Washington, D.C., to incentivize green upgrades in commercial properties.

• The note, though a new asset class, is attracting significant interest from investors, including Millennials, nonprofits, and institutional green buyers.
• Calvert Impact launched the Cut Carbon Note in October 2023 with an initial issuance of $30 million, followed by a second issuance of $19 million.
• The goal is to reach $400 million in issuances over the next two years, demonstrating the growing potential of this climate-focused investment strategy.

Impact Investing: Removing Barriers to Green Buildings

The Cut Carbon Note tackles the financial barriers that often prevent property developers from implementing green building practices. By offering attractive financing options, it encourages sustainable construction and renovations.

• The financing is available for properties that meet a new low-carbon building standard for efficiency improvements, developed by Pace and the New Buildings Institute.
• Investors receive regular impact reporting, showcasing the positive environmental impact of their investment.

Real-World Impact: The Coliseum Project

One notable project funded by the Cut Carbon Note is the Coliseum in Minneapolis. The building, damaged after the murder of George Floyd, is being revitalized as a hub for Black entrepreneurship.

• The green upgrades, facilitated by the Cut Carbon Note, are reducing energy consumption and carbon emissions while creating a sustainable economic hub.
• This example highlights how impact investing can drive positive social and environmental change while supporting local communities.

The Future of Climate Change Impact Investing

Calvert Impact envisions a future where the Cut Carbon Note becomes a widely adopted tool for climate action, attracting even greater investment and accelerating the transition to a green economy.

• The organization sees this as a multi-billion-dollar opportunity, with significant potential for growth in the years to come.
• The success of the Cut Carbon Note signifies a growing trend towards impact investing, where investors seek to align their capital with their values and contribute to a more sustainable world.