7 Things I Learned During NYC Climate Week
VVP CONSULT
We help companies in the United States and Europe to access non-dilutive funding.
By Verus Plotho, Founder & CEO of VVP Consult
As Climate Week in New York City unfolded, the bustling metropolis played host to a myriad of events, meetings, and gatherings centred around the global climate crisis. Thanks to modern tools and the efficiency of the New York subway system, I had the privilege of attending 10 events in just two days, offering a mere glimpse into the over 500 official activities taking place throughout the week. Navigating this whirlwind required meticulous planning, with Google serving as an indispensable ally, down to calculating the minutes needed to switch between subway lines. The Wall Street Journal even chronicled how top executives managed their schedules during the city's busiest climate-focused week.
The hectic schedule proved worthwhile, as the events brought together climate tech experts, investors, professionals, lawyers, and financial experts, all joined in the mission to combat climate change. And amid the discussions and networking, there was always great food to be found, ranging from popcorn to gourmet wraps.
Here are the seven most significant takeaways from my Climate Week experience:
1. How AI Can See Through Clouds and Detect Floods
Innovations in artificial intelligence are revolutionizing climate monitoring. One standout example is Floodbase, which combines advanced AI and satellite imagery to effectively monitor floods, even when cloud cover obstructs traditional optical sensors. By selecting satellites equipped with sensors capable of penetrating clouds and integrating data from various sources, including river gauges and hydrological models, Floodbase employs machine learning algorithms to differentiate between flooded and non-flooded areas.?
2. Top Challenges for Hardware Companies are Financial
Cleantech companies, despite their noble missions, often face significant financial hurdles. Hardware startups, in particular, encounter challenges such as low-profit margins, slow growth, and regulatory obstacles. These financial objections frequently account for up to 50% of the challenges faced by these companies. Identifying true customer demand, leveraging partnerships, managing capital effectively, and exploring off-balance sheet financing options emerge as key strategies for their success.
3. The Enigmatic Inflation Reduction Act (IRA)
The Inflation Reduction Act (IRA) remains shrouded in some uncertainty, with many of its provisions still being discussed and formulated. It was mentioned at almost every event I attended. However, despite the ambiguity, IRA has already spurred remarkable achievements: $278 billion in new private clean energy investments, projects accounting for 170,000 new jobs, and the availability of $70 billion in grants, rebates, and loan funding. IRA is only the beginning of what is already a green tech boom in the United States.
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4. Bridging the Gap in Sustainability Education
Surprisingly, many sustainability officers lack formal education in sustainability. Often, these professionals ascend to their roles based on merit from previous positions. There is a pressing need to fill this skills gap, and initiatives like OnePointFive Academy's sustainability training aim to provide specialized education to sustainability officers, enabling them to contribute effectively to green business growth and ESG compliance.
5. Navigating Climate Tech Grants in the US
The US government has passed three significant climate policy packages since 2021, each with its specific funding mechanisms and goals. While government grants offer substantial funding opportunities for climate tech startups, they also come with reporting requirements and restrictions. Success in obtaining these grants hinges on factors such as eligibility, building relationships with agencies, and developing strong proposals. Fortunately, platforms like Streamline Climate have emerged to support the grant application process using AI-driven assistance, helping climate tech startups secure funding more efficiently.
6. Big Finance's Commitment to Climate
The finance sector is increasingly recognizing the urgency of climate action. Prominent players like PSP Investment, CalPERS, KKR, and BlackRock are committing substantial resources to green investments. These financial giants are directing billions of dollars towards sustainable assets, green bonds, and climate-focused initiatives. The industry now calls for agreed-upon frameworks defining what qualifies as "green enough", underscoring the growing importance of green investments in contemporary finance.
7. The Significance of Green Bonds
In the financial markets, green bonds have emerged as a critical source of funding for sustainable initiatives, including renewable energy projects. These bonds play a pivotal role in advancing global sustainability goals and reducing carbon emissions. As of now, the cumulative issuance of green bonds stands at an impressive $2.334 trillion, with 2023 alone witnessing $390.1 billion in issuance.?
Green bonds can be a suitable option for organizations if they intend to secure substantial financing, typically exceeding $25 million, for capital-intensive initiatives that can deliver tangible sustainability benefits, such as reducing greenhouse gas emissions or attaining green building certification.