While the LC3 Centres have the same mandate, they are operating in different local or regional contexts which will result in unique challenges and opportunities. This is the value of this diverse partnership and the collaborative nature of LC3 — while they operate autonomously, the Centres come together to share with and learn from each other, building on their experiences and knowledge.
The LC3 Centres will invest their endowments to achieve both impact and a risk-adjusted rate of return, allowing the Centres to invest in local opportunities to achieve barrier-busting results that complement GMF and other federally-funded programs. The intent is to accelerate adoption of low carbon solutions at scale in big cities.
This was a foundational year for the LC3 network. Funding agreements were signed with all but one of the seven Centres, and they have put in place the systems, governance, processes and tools they need to operate effectively. With oversight from GMF Council and ultimately, FCM’s Board of Directors, a readiness assessment was completed to ensure each Centre has the necessary capacity to do the work. To date, the Centres have accomplished the following:
- The Climate Innovation Fund, hosted by the Alberta Ecotrust Foundation (AEF), was launched supporting two LC3 Centres in the Cities of Calgary and Edmonton.
- The Halifax Climate Investment, Innovation and Impact Fund (HCi3) was incorporated as a subsidiary of EfficiencyOne.
- The Greater Montreal Climate Fund (GMCF) was incorporated as a bespoke organization to deliver the LC3 mandate in the Montreal Metropolitan Community.
- The Ottawa Climate Action Fund (OCAF), incubated by the Ottawa Community Foundation, was launched in Ottawa.
- The Atmospheric Fund (TAF) led the way in supporting agreement negotiations and began investing for impact in the Greater Toronto and Hamilton Area.
- Simon Fraser University (SFU) was chosen to support the creation and launch of the Zero Emissions Innovation Centre (ZEIC), the LC3 Centre supporting Metro Vancouver. This new organization is in the process of being incorporated and will be launching in fall 2021.
In 2020-2021, GMF transferred $155M of the $177M available to the Centres as an endowment, with only the Metro Vancouver LC3 Centre remaining. In the fall of 2020, TAF began reviewing applications and allocating money to projects, and the other Centres are not far behind. We estimate that most if not all Centres will launch their programs by 2021-2022.
The LC3 network is backed by GMF, which, as the LC3 National Office, coordinates shared services and delivers capacity development and knowledge exchange support, in addition to reporting to the Government of Canada on the Centres’ activities and outcomes. This frees up the Centres to focus on enabling initiatives that not only have a significant carbon reduction potential but that advance economic prosperity, equity, resilience and community well-being.
The LC3 network has developed a Theory of Change framework to inform program objectives and outline the approach to generate the expected benefits, with work beginning in 2020-2021, and being completed in 2021-2022. The implementation of the framework will vary slightly from centre to centre but will be guided by two high-level lenses: potential to reduce carbon informed by principles of scale and the scale-up pathways that can support full-scale adoption; and the extent to which the initiative is designed to deliver multiple benefits, informed by the principles of equity to ensure an equitable design and distribution of the costs and benefits of such initiatives. Through this framework, initiatives will be evaluated based on their potential impact once fully scaled, not as a one-off or pilot initiative. Because of this, some initiatives may not generate an immediate reduction in GHGs but set the stage to enable change at a systems level. The LC3 network has also developed its approach and methodology for GHG emission quantification, based primarily on the TAF methodology.
The LC3 Centres will use a range of approaches to enable results through impact investments, grants, strategic programs, networking and collaboration, partnerships and advocacy. The framework also lays out broader sector indicators that will be monitored over time, through regular trend scans, to better understand the impact of LC3’s work. These signals of success are being developed in line with international practices in socially just, carbon-reduction activities. A performance measurement framework and developmental evaluation and monitoring process to track and evaluate our impacts over time will be developed in 2021-22.
The LC3 network has launched at a pivotal time in the global movement to tackle socially-equitable climate action and there is no shortage of work. Each Centre has been focused on local, multi-sectoral stakeholder engagement, intentionally seeking out equity-focused organizations, to identify the possible intersection of our work and where LC3 can be most impactful with their resources. A key tenet of the LC3 model is to leverage their efforts and resources to catalyze an opportunity by breaking down barriers and supporting key drivers, being careful not to replicate the work of others. Finding that niche has been one of the greatest challenges this year, while also shining a light on some likely opportunities.
LC3 and COVID
Without question, the Network’s successes this year resulted from a significant investment in time and energy by a large group of intelligent, hard-working, and dedicated people committed to making LC3 a reality. In many ways, the pandemic highlighted the inherent strengths of the LC3 network backed by their Boards of Directors and committees, GMF Council’s LC3 Committee and the two working groups packed with subject-matter experts supporting the development of the LC3 network Theory of Change and the GHG Quantification Methodology. We are grateful for their expertise, insights and countless hours spent in videoconferences.
Undoubtedly, face-to-face interaction is vital to building relationships. But even remotely, LC3 managed to negotiate a multilateral term sheet, sign six funding agreements, transfer $155M, launch their Centres and introduce the LC3 Centre leaders. This is a testament to the collaborative nature of the Network, and the drive to address climate change in Canada’s cities.
Lessons Learned (and shared)
TAF is examining their past experiences to glean what can be learned and adapted to continuously improve and outperform. These learnings are being shared and integrated into the LC3 network’s Theory of Change and performance measurement framework and building on TAF’s incredible 30-year track record of delivering real results.
TAF states in their report: “In 2020-21, TAF undertook a review of three of its major initiatives (TowerWise, Impact Investing and TransformTO) to better understand the pathways for scaling climate solutions. Here are five key insights that surfaced from these reviews and will continue to shape our approach to scaling going forward:
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Find the tipping points. Invest upfront in understanding the shifting landscape that is impacting the climate action we seek and identify the most influential interventions that we can advance given our tools and capacity.
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Be a ‘swiss army knife’. Use cross-team, cross-functional collaboration and expertise to create superior outcomes.
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Position for policy. Leverage changing social norms, technology diffusion, public health, community well-being, economics and other forces that drive political attention to create pathways for regulatory climate frameworks with long term durability.
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Go for some moonshots. Assess which risks we can and should take to achieve our most ambitious objectives.
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Chart and re-chart the course. Talk about program and campaign milestones, undertake continuous assessment and apply learnings via regular course corrections.
In addition to these insights from TAF’s scale-focused analysis, TAF also generated rich learnings through its work operationalizing the Canada endowment fund and supporting knowledge-transfer activities within the LC3 network. Here are a few key lessons emerging from these efforts:
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Turn requirements into regeneration. Extract as much managerial value as possible from new reporting requirements. For example, in some cases the data required by FCM has been applied to better manage TAF’s organizational risk, improve our wider governance structures and track new indicators to support program success.
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Set up new systems for double duty. TAF’s new federal reporting requirements necessitated new processes and templates to track project data that had not previously been collected. Wherever possible, we established new systems in a way that integrated with existing ones. This minimized the amount of additional tracking and reporting – and in some cases streamlined our existing approaches.
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Go slow to go fast. When forging the new LC3 partnership, Centres must invest the time to understand each other’s challenges, opportunities, risks and priorities; to demonstrate trust and trustworthiness; and to experiment with different ways of working together. As we nurture a shared spirit of empathy and reciprocity, we can build on this foundation to achieve great things together.
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Think nationally, act locally. While each LC3 Centre is guided by the same mandate, the way it manifests at the local level can vary dramatically. We continue to learn more about the political, cultural and economic conditions in which each Centre is operating – and how to leverage those conditions to achieve the most impactful network-level lessons and outcomes.
Charting the course
Work with the LC3 network to establish the Theory of Change and GHG quantification methodology were used by the Alberta Ecotrust Foundation’s (AEF) Climate Innovation Fund (CIF) as they developed their project selection criteria, evaluation rubric, and carbon and co-benefits calculator. Early application of these tools have highlighted the reality that accelerating urban emissions reductions in Calgary and Edmonton will require significant innovation, rapid replication and socio-economic transformation. To be successful, CIF will need to be both catalytic and targeted if it is to drive large scale emissions reductions with its constrained funding over the next decade and beyond. Partnerships and co-funders (co-investors) will be critical to future success. The kickstarter project being incubated and summarized below encompasses many elements of the Theory of Change and highlights the power of partnerships and targeted funding.
Novel to the Norm: Advancing Building Level Carbon Capture and Utilization (CCU)
Towards the end of the period, the AEF Climate Innovation Fund team began incubating a project with CleanO2™. The technology to be deployed through this project is called CARBiN-X™ and it is installed as an accessory to natural gas fired boilers. The CARBiN-X™ removes carbon dioxide (CO2) from the exhaust and converts it into pearl ash, a stable compound that accumulates in the unit. CleanO2™ collects and uses this pearl ash to make soap. The CARBiN-X™ unit also captures and re-uses heat to reduce the amount of natural gas needed to heat water for the building. The intention is to install two to four units in buildings owned and operated by charitable organizations or nonprofits in 2021/2022. The purpose of the project is to gather data on the technology, assist in the scale-up of this innovative, Calgary-based organization, and support the research being undertaken to develop carbon neutral CARBiN-X™ units. In addition, the co-benefits and equity indicators will be explored as the project is 100% focused on charities and nonprofits. The project will also test CIF’s due diligence processes and involve an innovative tripartite agreement that includes piloting a financial payback model.
