The climatization of venture capital: Transformations of financial expertise, valuation, and performances

• Applicant: Cornelius Heimstädt, Ph.D.
• Subject Area: Empirical Social Research
• Term: since 2025
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 566086766

This research project examines how venture capital (VC) firms are transforming in response to the environmental challenge of climate change, and how these transformations are changing their influence in shaping global climate policy. Since their emergence after the Second World War, VC firms have driven growth in sectors associated with significant greenhouse gas emissions, including information technology, biotechnology, and e-commerce. Today, however, they are also playing a key role in the rise of “green finance,” the financing of innovations that address environmental challenges such as climate change, reflecting broader shifts in the financial sector where financial goals increasingly intersect with environmental concerns. The project argues that this adaptation is neither self-evident nor automatic, but a work-intensive process that remains underexplored in sociological research—a process I propose to call “the climatization of venture capital” or, more generally, “the climatization of finance.” Situated at the intersection of the sociology of finance, economic sociology, and science and technology studies (STS), the project examines climatization as a critical precondition for the much more widely studied financialization of climate change policy and mitigation. To explore this interplay between the climatization of financial actors and the financialization of climate policy, the project addresses the following questions: How do VCs integrate climate concerns into their knowledge and valuation practices, and how does this shape their role in the financialization of global climate policy? The project is divided into three empirical Work Packages (WPs). Each WP focuses on a different sub-question rooted in current theoretical debates. These debates include the changing expertise of financial actors, the emergence of new practices and devices for valuing natural entities and processes, and the role of public performances in shaping global environmental governance. Methodologically, the project is designed as a multi-sited ethnography of climate VC markets in Germany, with a particular focus on “Article 9” VC funds—those considered to be at the forefront of sustainable investing. Key data collection methods include qualitative interviews with stakeholders in the German climate VC sector (VCs, entrepreneurs, policymakers), document analysis (in particular of methods used by climate VC firms to calculate the “climate impact” of start-ups), and ethnographic observations of climate VC staff (in particular at high-level policy conferences such as the UNFCCC Climate COP). Data analysis will follow the paradigm of grounded theory analysis, developing theory-driven codes aligned with the research objectives, while remaining flexible enough to capture actors’ vernacular sense-making.

• DFG Programme: Research Grants