As I reflect on the intersection of climate innovation and finance, my thoughts have turned to the topic after a thought-provoking conversation between my colleague James Temple and Mike Schroepfer, former Chief Technology Officer at Meta and now a prominent investor in climate technology. Schroepfer’s philanthropic endeavors and his venture capital firm, Gigascale Capital, which focuses on climate technology. (I’d extremely advocate studying .)
Schroepfer highlighted the importance of considering firms’ investment potential beyond their mere environmental assurances, emphasizing the value of companies that can deliver affordable, high-quality products with inherent benefits for climate action.
What concerns us most is how these emerging technologies will impact our financial outlook. To effectively compete, they must first conduct a thorough market analysis to identify key trends and opportunities.
As one navigates the portfolios of climate-focused venture capital agencies or browses a climate-tech convention, it’s impossible not to be impressed by the innovative and groundbreaking technologies on display.
As they strive for survival, they require more than just a thoughtful recommendation; according to my colleague David Rotman’s insightful analysis of the six key takeaways from the rapid growth in local weather technology this century. Countless companies soared to fame with innovative ideas emerging around 2006 before ultimately faltering and collapsing by 2013.
According to David’s assessment, the evolution of local weather technologies can be characterized by classes that experience periods of ascendance and decline, ultimately contributing to the advancement of weather expertise in this era; “The exceptional value of numerous innovative local weather technologies has become apparent, and we urgently require their integration.” However, the absence of those factors does not necessarily preclude success. Entrepreneurs backing startups with venture capital may prioritize economic sustainability over altruistic motivations.
Companies seeking to help address local climate change by introducing innovative products are pitted against well-established industries. Newcomers need to factor in the “inexperienced premium,” a concept coined by Bill Gates, referring to the added cost and effort that comes with being uninitiated.
To bridge the gap and gain traction for innovative technologies among the public, we must take steps to address the disconnect.
