Avoiding the Bla Bla Bla This Earth Day

It is easy in this time of crisis to feel despondent. Russia’s invasion of Ukraine has laid bare Europe’s continuing dependency on natural gas from its unreliable, and anti-democratic, Eastern neighbor. Oil and gas prices are through the roof. And that’s just the tip of the iceberg.

Worse still, U.S. efforts to tackle climate change are being held hostage by electoral math and political interests. And, all the while, temperatures continue to rise, and extreme weather events, drought, and forest fires are the global norm.??

It’s not just one crisis we face, it is many. Climate change, social inequality, threats to our democracy, hunger, poverty, and forced migration. We have the technology and the innovation to help solve so many of these problems while also making the world safer and more equitable for all. We must no longer talk about the actions but take them.?

So today, on Earth Day, I am challenging myself, as much as anybody else, to do more. To identify, champion, and support, real life climate change solutions, which are no longer a nice-to-have, but requirements for a sustainable future.?

The clock is nearly chiming midnight, and we must wake up before it really, truly, is too late. As investors, consumers, citizens and participants in civil society, we must be willing to act, and willing to act now.?

To address and reverse the effects of global warming and ensure the earth’s temperature does not rise more than two degrees Celsius, businesses and countries have pledged to achieve net-zero greenhouse gas (GHG) emissions by 2050. Research reports and?articles?show such goals are already lofty, and consulting firms estimate that achieving those goals by 2050 would cost at least $275 trillion.?

It gets worse, the Intergovernmental Panel on Climate Change recently?reported?that we must prevent a 1.5-degree Celsius rise in global temperatures. And yet, according to Breakthrough Energy, the Washington state-based climate change focused investment network spearheaded by Bill Gates, we currently add 51 billion tons of GHG to the atmosphere annually.?

I worry that we no longer hear the warnings. Like the proverbial frog in a pot of boiling water, inundated as we are with bad climate related news, we’ve become immune to our own predicament. And we’ll be boiled alive through our own inertia.?

And yet, I try to remain optimistic. Every day, I witness innovation, investment, and productivity across the energy transition ecosystem. As the CEO of Growth for Good Acquisition Corporation, a publicly-traded SPAC, I have the great privilege of talking regularly with the entrepreneurs who are building the businesses that are driving the clean energy transition.

In the last five years, venture capital has woken up to the threat of climate change. Just looking at investment in clean tech alone, a sector that was much maligned for almost two decades after some well-known blow ups in the early 2000s, it’s clear that activity has ramped up significantly.??According to data from data provider Pitchbook and the National Venture Capital Association (NVCA), the energy sector experienced a record $8.8 billion of venture investment in 2021 and is off to a strong start in 2022 with $1.6 billion in new capital committed in the first quarter. That’s $600 million more venture dollars invested in one quarter than all of 2016.

But venture capital and private equity money are not going to be enough to drive the clean energy transition at scale, and scale is what we urgently need if we are going to transition our economy to net-zero in 30 years or less.???Many of these businesses are going to require cheaper sources of funding to achieve critical mass, which means tapping both the debt and broader equity markets, including public markets.?

Breakthrough?identified?the five areas of the economy that need to be targeted in order for us to achieve net zero in GHG emissions by 2050.??They include electricity (responsible for 27 percent of emissions), transportation (16 percent), manufacturing (31 percent), building (7 percent), and agriculture (19 percent). I am seeing innovation and new developments across all these areas, from renewable power and battery storage to vertical farming and the development of alternative proteins. The sheer volume of innovation alone is inspiring.?

For institutional investors this is great news. It means there are increasingly more ways for allocators to profitably put capital to work financing the clean energy transition across asset classes and sectors from energy to manufacturing to agriculture and beyond.?

But, we do not have two, three, or even five years to wait. Institutional investors, including investment consultants and other gate keepers and advisors must start now. Take just five minutes today to think creatively about how your portfolio can be a part of the clean energy transformation.?