The recent landmark IPCC report highlights the urgent need for collaborative climate action in order to reach net-zero emissions by 2050. With billions of dollars already flowing into climatetech, investors have a big role to play in driving the energy transition and negating the effects of climate change. So what does this mean for climatetech startups and the investors who have the resources to help scale their technologies, and where may the biggest opportunities lie?
To explore the many facets of the IPCC report’s impact on investing, our Investor Speaker Series convened three leading investors: Dan Goldman, co-founder and managing director of Clean Energy Ventures; Taj Eldridge, general partner of Include Venture Partners; and Christina O’Conor, vice president of Congruent Ventures. Greentown Labs COO and General Counsel Ryan Dings moderated the panel.
Check out top takeaways from their conversation below, and watch a recording here!
The IPCC report hasn’t necessarily changed investors’ core approaches, but it’s shifted forward their timelines of investing in certain technologies.
Carbontech, already a hot topic in recent years, has come to the forefront after the IPCC report emphasized the criticality of large-scale carbon removal. This urgency means some investors are looking to invest in carbontech ahead of schedule.
“We’re thinking a bit more about the carbon removal space—the time to invest is now, rather than in a couple of years,” O’Conor said. “The IPCC report calls for a lot of carbon to be removed from the air.”
Greentown is uniquely thrilled by this positive market signal as we’re actively working with 10 of the industry’s most promising carbontech startups in our Carbon to Value (C2V) Initiative, in partnership with Urban Future Lab and Fraunhofer USA. The C2V Initiative Year 1 Cohort Showcase is on Oct. 21—join us!
We need all hands on deck to tackle climate change, and that means we need to focus on the tangible ways that climate change—and the technologies that are fighting it—are impacting people today.
The IPCC report shows that we need many more people working on climate—across the entire climate ecosystem, including investing—than there are today.
A long-held criticism of the climate field is that the urgency of tackling climate change is framed in scientific and future-facing ways, rather than focusing on the ways that climate change is already, concretely affecting people now. This approach can fail to move people to action—especially people of color and other groups who often face injustices and society-induced threats as part of their everyday lives.
“When I first got into environmentalism, there were not a lot of people who looked like me in the space,” Eldridge, who is Black, said. “Every time I heard about this issue, years ago, it was, ‘Let’s talk about something that’s going to happen 20 years from now, for our grandchildren.’ But we have problems we’re dealing with right now, today. There are a lot of things we’re overlooking that are impacts of climate that we don’t really talk about. When I talk about climate, I talk about it as a public health issue, an economic issue, and a social justice issue.”
He gave the example of SparkCharge, a Greentown member that received a $1M deal on Shark Tank last year. SparkCharge’s appearance on Shark Tank helped get more types of people excited about their technology, Eldridge said: “We wanted to get the public behind SparkCharge and change the idea of what climatetech is. We’re going to need all hands on deck. Part of what’s changed for me is not only focusing on founders, but other investors. We’re going to need other, different types of capital to come to the space.”
Measuring technologies’ GHG-emissions-reduction potential is more critical than ever.
It’s crucial that investors—and others—be able to measure the emissions-reduction impact of climatetech solutions. Goldman shared that Clean Energy Ventures recently released a tool that the ecosystem can use to assess startups’ GHG-emissions-reduction potential.
“We found that when we were diligencing investments, we needed a standard tool to assess how much emissions reduction a company could offer,” Goldman said. “We created the Simple Emissions Reduction Calculator. Any company that comes to us looking for funding has to go through this process. That’s proved extremely instructive for us as we’ve looked at companies.”
“What we really need to do is get everyone using that or another similar tool, because we need to make sure we’re all making investments that can be financially successful, but also have as much impact as possible,” he continued.
Goldman also cited the importance of technologies that can quantify larger companies’ emissions to hold them accountable, and pointed to ClearTrace, a Greentown Houston member that Clean Energy Ventures has invested in, as a prime example.
We asked Eldridge, O’Conor, and Goldman what innovation areas they’re most excited about. Here’s what they said.
- Eldridge: transportation, e-waste, solutions that weave climatetech into other sectors (e.g. fintech)
- O’Conor: greening cryptocurrencies, deep tech, AI
- Goldman: EVs, alternatives to electrochemical energy storage
Want more investor insights? Visit our website for recaps on previous Investor Speaker Series panels.