The Impact Innovator | Issue 303
In this week's The Impact Innovator edition:
What is it:?BlackRock shifts focus to "transition investing."?This involves actively supporting high-emission companies transitioning to greener practices.
Why it's important:?It represents a departure from passive ESG screening to proactive engagement.?Acknowledges the significance of actively driving positive environmental change. It also reflects a broader trend towards impact-focused investing.
Key takeaways:?Signals maturation in sustainable investment strategies.?May inspire further innovation in the ESG landscape. It can also encourage greater collaboration between investors and corporations towards sustainability goals.
What is it: The article discusses the resilience of U.S. clean technology investment amid negative headlines, highlighting a record $67 billion investment in Q4 of the previous year, a 40% increase from 2022, and the significant growth in electric vehicle (EV) sales and supply chain investment.?Investing in clean technology is crucial for accelerating the transition to a sustainable and energy-independent future, and for meeting global climate goals.
Why it's important: It underscores the critical role of clean technology in the energy transition, the necessity to meet U.S. and global climate goals, and the importance of distributing clean technology investments globally, especially in emerging economies.
Key takeaways:?Despite pessimistic views, data shows strong cleantech investment.?Significant growth in EV sales and interest in emerging climate technologies.?Challenges in wind investment and consumer energy solutions.?The need for investments to align with climate goals, particularly in diverse economies.
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What is it:?Fervo Energy, a US geothermal start-up, has raised USD 244 million to advance a 400-MW geothermal project in Beaver County, Utah, utilizing innovative drilling techniques from the oil and gas industry. Why it's important:?The funding will enable the production of continuous clean energy, addressing the growing demand for sustainable and reliable power sources. Key takeaways:?The project, set to supply electricity by 2026, has shown promising early results exceeding US Department of Energy expectations. The funding round saw contributions from various investors, including Devon Energy, highlighting a significant move towards next-generation geothermal solutions.
What is it:?Sunfire, a German electrolyser manufacturer, announced raising €215 million in Series E equity financing, with an additional term loan of up to €100 million from the European Investment Bank (EIB).?The company also has access to about €200 million in previously approved, undrawn grant funding, bringing its total funding to over €500 million.?Sunfire's technologies, including pressurised alkaline and high-temperature solid oxide electrolysis, are crucial for the transition to renewable energy and the production of green hydrogen. The company aims to install several gigawatts of electrolysis equipment by 2030.
Why it's important:?This funding positions Sunfire as one of the best-capitalized electrolyser manufacturers in the industry, which is vital for scaling up the hydrogen economy. The investment supports Sunfire's goal to secure a leading position in the rapidly growing global electrolyser market, addressing the demand for green hydrogen production technologies. It also reflects a strong vote of confidence in Sunfire's technology and its potential to help decarbonise energy-intensive industries, contributing to the green transition and enhancing European competitiveness in clean technologies.
Other key points:?New investors, including LGT Private Banking, GIC, Ahren Innovation Capital, and Carbon Equity, have joined, alongside increased investments from existing shareholders such as Lightrock, Planet First Partners, Carbon Direct Capital, the Amazon Climate Pledge Fund, and Blue Earth Capital. The funding round and subsequent investments are subject to regulatory approvals and expected to close in Q2 2024. Sunfire's CEO Nils Aldag and others underscore the strategic importance of this funding in supporting the EU's goals for industrial decarbonisation and resilience, as well as the significance of Sunfire's role in the global hydrogen economy and European clean-tech industry.
What is it: UCLA has partnered with Singapore’s national water agency and others to build the world’s largest ocean-based carbon dioxide removal plant, called Equatic-1, with the capacity to remove 3,650 metric tons of CO2 annually and produce 105 metric tons of carbon-negative hydrogen. Following successful pilot programs in Los Angeles and Singapore, the next phase is a US$20-million full-scale demonstration plant. The process involves electrolysis of seawater to break water into hydrogen and oxygen while securely storing CO2 as solid materials for over 10,000 years.
Why it's important: The initiative aims to significantly reduce atmospheric CO2, leveraging the ocean's natural CO2 absorption capacity. With average global CO2 emissions at 4.3 metric tons per capita in 2020, such technologies are crucial for tackling climate change. The Equatic process can enhance the ocean’s CO2 storage ability, making it a critical solution for achieving net-zero emissions targets and addressing the urgent challenge posed by climate change.
Key takeaways: Equatic-1 will be constructed in two phases, expected to remove up to 10 metric tons of CO2 per day when fully operational. This technology also produces carbon-negative hydrogen, which can help decarbonize transportation and industrial sectors. The collaboration includes significant partners like Singapore’s PUB and the National Research Foundation, emphasizing the role of international cooperation and technological innovation in combating climate change.
What is it: The article discusses the surge in ESG (Environmental, Social, Governance) investing and explores its financial returns compared to traditional investments. Why it's important: It addresses skepticism around ESG investments, particularly concerns about lower returns, and situates the discussion within broader political and economic debates. Key takeaways:?Political debates and strategic shifts among major asset managers in the U.S. regarding ESG investing. Research findings suggest that ESG investments can yield competitive, if not higher, returns, especially due to positive externalities in the green sector. The potential for ESG investments to achieve sustainability goals without sacrificing financial performance.