ZERO #15 (climate startups + finance)
Top 10 cleantech trends this year. 45 FoodTech and AgTech startups to watch. $50 trillion of green transition opportunity. New ESG meta- analysis on financial performance. Lawyer with a cat head.
Top 10 Cleantech Trends in 2021.
Here’s my version of what market research firm IHS is watching for this year:
Renewable energy project deployment to grow [20-30%], led by solar
Solar costs to fall 5% this year, and 54% since 2015, while efficiencies increase, but perovskites technologies remain five years from commercial scale
Offshore wind installations to grow 2x, led by China and followed by the UK, France, Denmark, Netherlands, Germany, the US, Japan, and Taiwan, with oil and gas majors’ increasing their investment because they have the relevant skills to pay the bills
Floating wind projects to stay in the “some day” category, while floating solar is here and scaling, especially in Asia (70% market share)
Repowering older solar, wind, and battery projects with newer technology to boost output and financial returns will decrease the life cycle of equipment and create a need for more recycling (but can it defy trends and actually be cost effective?)
Lithium ion battery price declines driven by EV expansion (80-90% of the market) could lead to availability challenges for grid storage, which might create new opportunities for alternatives to NMC (lithium nickel manganese cobalt), such as LFP (lithium iron phosphate) or flow batteries
Battery supply chain concerns buffered by 2020 capacity announcements — 42% for Europe, 26% for North America — versus the current situation with 80% of global battery cell manufacturing is in China
More cleantech and EV companies to go public via a SPAC, but fingers crossed that the 2020 experience delivers the goods — 16 SPACs with $2B average valuation, $470M in net proceeds, and 50% with no commercial product yet (gasp)
Green hydrogen to remain the high school prom queen — $44B of funding through 2030 in Germany, France, Italy, Spain, and Portugal; 40% cost decline since 2015; 40% additional cost decline by 2030 (but it’s still 2-3x the cost of gray hydrogen today)
Hydrogen company stocks rose 500% last year, but are they on a sugar high?
$50 trillion opportunity in the green transition?
OK, so this might be the largest estimate I’ve ever seen.
It comes from Bill Winters, Group CEO of the UK-based Standard Chartered Bank at the 2021 World Economic Forum. So, like, very serious.
Piling on to that, comes this quote from Philip Hildebrand, vice chairman of BlackRock:
“The transition to a carbon-neutral economy will require between $3 trillion and $7 trillion per year ‘for many, many years to come.’”
While I’ve always been hypnotized by these big numbers, I wonder if they really matter.
Once we’re talking about trillions of dollars potentially lost or gained, it seems that we’ve sufficiently crossed over from the tiny island of “climate change is an environmental problem” to the Pangea of “climate change is an economic, public health, quality of life, and environmental problem and opportunity.”
Read more here about the World Economic Forum’s validation of this, plus the recognition the even the US is moving from shareholder capitalism to stakeholder capitalism.
Shout out to Aaron Ratner — President of Cross River Infrastructure Partners (billion-dollar, low carbon project development) — for sending me this headline.
Early stage regenerative agriculture and food ventures to watch.
Rabobank’s F&A Innovation team selected 45 ag/food startups out of 340 applicants for their FoodBytes! Pitch 2020. Categories included Consumer Food & Beverage, Food Tech, and AgTech.
See the full list summarized here by Waste 360.
Notably, “31% of the selected startups are BIPOC-founded or led, and woman-founded or led companies make up 20% of the Pitch class.”
In contrast, only 8%, 1%, and 0.4% of VC-funded startups were led by women, Black, and Latina founders, respectively, in recent years (link to Transparent Collective).
We’ve got work to do.
Boost that impact career of yours.
Summer internship for BIPOC students in cleantech
Our partner organization, Clean Energy Leadership Institute (CELI), is partnering with the fantastic folks at Elemental Excelerator to launch the EDICT summer program — Empowering Diversity in Clean Tech. Applications are due March 1. Apply here.
What Every MBA Needs to Know
From my friends and colleagues Dan Vermeer and Katie Kross at the EDGE Center at Duke University’s Fuqua School of Business, this series of primers, videos, and case studies empowers emerging leaders with actionable insights on important sustainable business trends for the 2020’s. Current primers cover ESG Investing, Climate Change, Water & Business, and the Blue Economy.
The latest ESG study in financial performance.
I think I’m preaching to the choir here — can I get an Amen? — but just in case you or your peeps need some help…
Here’s a recent meta-analysis from NY Stern Center for Sustainable Business that looked at hundreds of studies on the link between ESG excellence and financial performance.
For 71-86% of the studies between 2016-2020, the link for corporations was positive or neutral, and 57% of the time it was a positive correlation.
Not perfect, but a far cry from this outdated excuse — "You can’t do good by doing well at the same time. You have to pick one: Financial returns (red meat and serrated knives) or environmental/social goals (white daisies and childlike skipping).”
Here are their key takeaways, but read the full report here.
Improved financial performance due to ESG becomes more pronounced over longer periods of time
ESG integration performs better than negative screening (which is so last decade)
ESG investing seems to provide downward protection, especially during crisis (ahem)
Sustainability initiatives appear to drive better financial performance
Managing for a low carbon future improves financial performance
ESG disclosure in isolation does not drive financial performance
Two oddities to keep things light.
Bizarre way to save money.
“The first Hershey’s chocolate bars with almonds were produced in 1908 because they were cheap to make. The nuts took the place of some of the more expensive milk chocolate, which meant Hershey’s could keep the price of the candy at a nickel.”
- Mental Floss
Beware of the cat people on Zoom.
If you live under a rock, you might have missed this viral video of a Texas attorney in a virtual court hearing who accidentally appeared as a cute kitty cat due to an accidental Zoom filter. As you watch the video here and chuckle, just remember we’ve all been there.
(And yes, I know the low to which I’ve sunk by giving in to a reference of cats on YouTube. #CovidLife)
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Most importantly, keep on fightin’ the good fight.
“If we really want something, we’ll find a way. If we don’t, then we’ll find an excuse.”
- Jim Rohn
P.S. — At Entrepreneurs for Impact, we run an invite-only Executive Roundtable for climate CEOs. If you’re looking to get outside of your echo chamber, make time to work on (not in) your business, and learn from 15 high performing peers on a for-profit, for-impact, climate mission, then check us out here.
P.S.S. — Here’s where the name “ZERO” comes from.
Dr. Chris Wedding
Founder and Chief Catalyst, Entrepreneurs for Impact
Executive Roundtables for Climate CEOs and Investors