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This case involves quantifying emissions, their impact, and applying the social cost of carbon to complete a comparative financial valuation for a fictional startup, VerticalFarm Co. (VFC). VerticalFarm Co. sites, develops, and owns/operates vertical farms in retrofitted buildings such as warehouses or high rises. These vertical farms grow fresh produce (e.g., lettuce, spinach, microgreens and herbs), using lighting, water nutrient delivery systems, and temperature control. VFC's leadership is passionate about providing fresh, nutritious food in traditionally food-insecure urban areas and creating employment opportunities in the local community. They aim to expand their operations to a building in Chicago for which they seek venture capital (VC) investment. The fictional protagonist is a senior investment analyst at a large VC firm. She is asked by her boss to evaluate how the social cost of carbon would affect the firm's current valuation of VCF-and her analysis and recommendation is due in just a few days, per the request of the firm's board of directors. Students are asked to act as the protagonist and incorporate the social cost of carbon into the proforma projections and then compare them to the original due diligence analysis. Finally, they will make a recommendation either "for" or "against" investing in VFC. The case provides an overview of climate change; why emissions are a challenge (from both global stability and monetary impact quantification perspectives); an overview of controlled environment agriculture; and the framework for an analysis and the quantification of the social cost of carbon. Data on alternative estimates of the carbon price for the United States are provided.

In the business environment surrounding the 2008 financial crisis, a new field within investing emerged to address the shortcomings of a "profit-only" mission of business. The nascent impact investing industry sought to create positive impact beyond financial returns. Putting this idyllic-sounding idea into practice demanded that institutions interested in this line of work consider what social impact means, how to assess it, how returns in impact investments would differ from traditional investments, and where to invest capital. Four students at the University of Michigan's Ross School of Business realized the flawed structure of the financial system and wanted to see how they and their university could play a role in the impact investing industry. Collaborating with faculty and industry professionals, the students conceived the idea of a student-run venture capital fund that would invest in companies for both financial and social returns. Social Venture Fund was the first of any such organization on any campus. Before the students could even make an investment, however, they had to decide on the nature of their organization. The students wrestled with four questions at the same time as the overall impact investing industry was struggling with the identical questions: How would they define impact? What would their investment thesis be? How would they measure impact? In which sectors and geographies would they invest?