CLIMATE WEALTH BY JIGAR SHAH - A BOOK REVIEW:

“Climate change is one of the greatest wealth-creating opportunities of our generation.” Sir Richard Branson, Founder, Carbon War Room

IN SUMMARY:

"Climate wealth" is an emerging concept in environmental sustainability that explores the potential for economic and social wellbeing through climate-focused solutions. Essentially, it’s the idea that we can generate economic prosperity by transitioning to sustainable, low-carbon industries like solar energy and regenerative agriculture. Climate wealth includes new investment opportunities, job creation in green industries, and enhanced resilience through sustainable industries and socio-economic systems.

If you’ve been following climate change news, you might notice that negative climate stories far outweigh any positive news on climate wealth or related solutions. Given this context, it's refreshing to read a positive outlook like that in Climate Wealth, a book by Jigar Shah . The full title, Creating Climate Wealth: Unlocking the Impact Economy, was published in 2013.

As you may recall, 2013 was a significant year in climate circles: America’s first Black president, Barack Obama, was sown into his second term in January 2013. He had prioritized climate action as a signature goal of his presidency and particularly his final term of office. Over the next 24 months, a cascade of significant climate events followed. In May 2015, Pope Francis released the encyclical Laudato Si’, which framed environmental protection as a moral obligation, stating that climate change, largely driven by human activity, is a threat to humanity. Laudato Si’ calls for a shift away from fossil fuels and towards sustainable energy, advocating for changes in lifestyle, production, and consumption. Seven months after Laudato Si’, in December 2015, 196 world leaders signed the Paris Climate Agreement, a legally binding treaty aimed at keeping global warming well below 2°C above pre-industrial levels, with efforts to limit it to 1.5°C.

Amid these major climate milestones, Jigar Shah’s Climate Wealth stands out. The book’s main thrust is on solar energy as a service business model, covering a wide array of topics in just 208 pages. It spans issues from grid-tied renewable energy and energy access to building and industrial efficiency, shipping, personal vehicles, and agriculture. Part autobiography and part “how-to” manual, Shah explains his journey in founding SunEdison, detailing how he turned his childhood fascination with solar energy into a multi-billion-dollar enterprise. He also transparently discusses his setbacks in scaling SunEdison from an initial $230,000 in startup capital to billions in revenue within ten years. Shah makes a compelling case that climate change, while disruptive to society and ecosystems, also offers a pathway to a new $10 trillion economy across industries such as solar energy, renewables, and agriculture.

MY KEY TAKEAWAYS

It’s important to note that everyone may take away different insights from Shah’s book, so don’t worry if your takeaways differ from mine below:

Shah argues that in tackling climate change, business model innovation could be more impactful than technological breakthroughs. In Chapter 3, he describes how he started SunEdison in 2003 with $223,000, including a $93,000 line of credit on his home. Like many startups, he admits that he didn’t have a clear direction initially but eventually found a repeatable, scalable business model by offering solar as an energy service. This “solar-as-a-service, no-money-down” model (see page 60) was a major innovation that addressed the high upfront cost of solar energy services, which remains a challenge in the Global South due to issues with supply, contract enforcement, and access to capital.

In North America, SunEdison’s rapid growth validated this business model, experiencing 1000% year-on-year growth for several years. By year four (2007), the company’s revenue had grown from a few thousand dollars to $200 million, and by year nine, it was $2 billion. Today, 90% of solar sales volume in the U.S. includes elements of SunEdison’s model and contract terms.

What would it take to replicate SunEdison’s success? Shah outlines a framework on page 31: a pipeline of bankable projects and contracts, supportive regulations for no-money-down models, standardized practices, a reliable workforce, enforceable contracts, effective operations and maintenance, and entrepreneurial, climate-smart policies from the government.

Shah highlights examples like BrightFarms, which uses rooftop hydroponic greenhouses to grow food close to consumers, showing how others have successfully built billion-dollar sustainability businesses by leveraging existing climate technologies through innovative business models.

Advantages of Doing It the Hard Way: This was perhaps my biggest takeaway. Shah makes a strong case for focusing on attracting commercial capital rather than grants and impact investments. His reasoning is that grants and impact investments don’t scale, while there’s an enormous amount of commercial capital looking for profitable, bankable projects. Although more than a decade has passed since the book's publication, it would be interesting to hear Shah’s thoughts on how this advice might apply to entrepreneurs from disadvantaged backgrounds who may not have ready access to startup capital. Could grants and impact investments be the best option for some to bring their ideas to market? Regardless, Shah’s principle holds true: all entrepreneurs should start by creatively using available resources and avoid the trap of endlessly chasing grants or impact investments, which often don’t scale. They should remember that philanthropy accounts for less than 2% of annual climate investments, with the bulk coming from the private and public sectors.

CONCLUSION:

Climate Wealth offers a refreshing perspective, advocating for business model innovation over technological breakthroughs. It presents a glass-half-full view of climate change, recognizing that within its many challenges lies a $10 trillion opportunity to create sustainable wealth using existing technologies. When I began reading, I was conflicted—how could we talk about wealth while people suffer from climate-induced disasters? But as I read on, it became clear that capital and market forces, when directed toward just and sustainable pathways like solar energy, can help avert future catastrophic impacts. We must use every tool at our disposal, from charity to private investment, to prevent climate change impacts and aid those affected. Yet, we should also explore future wealth-building opportunities that our climate-changed world presents. Shah emphasizes balancing the urgency of the present with a forward-looking approach to uncover opportunities, holding the negative and positive impacts of climate change in creative tension—a perspective he brings into full view.

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