Emerging Leaders: This climate tech deserves more investment

by John Stapel

$19 billion. That’s the amount of cash climate tech startups raised in the first half of 2022, according to early-stage venture capital (VC) firm Powerhouse Ventures and Climate Tech VC, a leading newsletter on the climate economy.

This is the environment that the VERGE 22 Emerging Leaders cohort, which includes members of the next generation of Black, Indigenous and people of color (BIPOC) leaders in the climate tech community, are entering for the first time.

Professional services and accounting firm PwC sponsored the VERGE 22 cycle for Emerging Leaders.

"Driven by our purpose, at PwC we have a deep obligation and commitment to help address the root causes of climate change," said Shannon Schuyler, chief purpose and inclusion officer, PwC US. "As part of that responsibility, we are proud to support the VERGE Emerging Leaders program. Developing the next generation of diverse leaders will be crucial in supporting a more equitable and sustainable planet for us all."

While those participating in the Emerging Leaders program might be new to the space, they offer valuable perspectives. With that in mind, we asked them to answer this question: What climate tech do you feel deserves more investment?

Here are the answers from a portion of the latest Emerging Leaders cohort.

Alexandro Olvera headshot

Alexandro Olvera

Senior, UC Berkeley

The climate tech that deserves more investment is not a single piece of technology but any climate advancement in adaptation and resilience. Although VERGE 22 highlighted many cutting-edge climate mitigation technologies and practices on the main stage, efforts toward climate adaptation could have been further explored. We must also focus on relieving climate impacts due to the longstanding proliferation of fossil fuel use and greenhouse gas (GHG) emissions. Despite the potential for extreme climate mitigation measures, it is clear that average temperatures will continue to rise for up to 30 years even if carbon emissions fall to zero, as noted by the latest [Intergovernmental Panel on Climate Change] report. Consequently, sea-level rise will take thousands of years to return to "normal" levels.

We expect increased heat waves and natural disasters to impede business functions and productivity. Therefore, climate adaptation investments must be upheld alongside mitigation measures to ensure the longevity of sound business/public/nonprofit organizations. Organizations that have begun early investment in climate adaptation and resilience will be ahead of the curve and are a step closer to a more complete climate strategy.

Allison Handunge headshot

Allison Handunge

Client Success Coordinator, Pachama

Dawn Wright and ‘Aulani Wilhelm highlighted startling truths about our lack of ocean knowledge during their brilliant keynote session. Currently, less than 10 percent of the global ocean is mapped using modern sonar technology, yet water covers approximately 71 percent of Earth’s surface. The ocean currents regulate Earth’s climate, and water is the source of all life on Earth. It is a piece of the climate crisis puzzle that we are all working to solve. Apart from the importance of knowing the inner workings of our planet, the ocean is a source of income and sustenance, and is deeply ingrained into many cultures around the world.

As humans have progressed along the industrial pathway, many of us have lost touch with our ancestral roots. Previously, human survival relied on our understanding of our environment and our ability to balance our resources, to many this is still their reality. The communities that haven’t lost touch with their roots will be the ones to suffer the most as the climate crisis progresses. The families that gather water straight from the river and the local businesses whose product comes directly from the ocean will be affected on a larger scale by droughts, hurricanes and flooding. To equitably restore Earth as we know it and solve the climate crisis, we have to devote more time, money and exploration to the ocean and other nature-based solutions.

Jamileth Picavia-Salazar headshot

Jamileth Picavia-Salazar

Junior, George Mason University

Attending VERGE 22 allowed me to gain insights into a wide variety of issues and solutions when it comes to addressing sustainability and the climate crisis impacting our world today. Through my learning experience, I came to recognize how large of an issue food and water insecurity is as a result of the climate crisis. The reality is that the impacts of climate are already affecting many individuals across the globe. While this may not be as persistent within the United States, many countries lack proper access to water and quality foods. Therefore, I believe investments in climate tech solutions that address food and water systems deserve more recognition and planning. From what I learned, food and agriculture systems account for about 30 percent of the world’s total GHG emissions. The time to act and create impactful change is now. By investing in improvements to food and agriculture systems, we could reduce global emissions while at the same time helping those who need it most in small communities.

Julian Smith headshot

Julian Smith  

MBA Candidate, Goizueta Business School; Investor, Dynamo Ventures

I think the sector within climate tech that deserves more investment is the built environment — our manmade structures of which we conduct most of our activity, including our homes, offices, infrastructure, etc. What we build is directly correlated to what we as a society place value in, and as we combat climate change and transition to a more sustainable world, ensuring our buildings are net zero is absolutely paramount and will require an estimated $18 trillion over the next 10 years.

Today, estimates place the GHG emissions of the built environment at about 20 to 40 percent globally, and the real estate sector itself consumes 40 percent of the earth's raw materials and energy. However, due to the technically complex dynamics of the sector, the built world has attracted less than 10 percent of all climate tech venture dollars in the past decade, receiving only $1.5 billion of the $70 billion invested in the past two years. When you consider that roughly $100 trillion of real estate assets are at risk of damage from climate change between now and 2040, it becomes clear that more investment is an imperative. Eliminating embodied and operational carbon from real estate, the world's largest asset class, is arguably the biggest lever we can pull to prevent climate catastrophe.

Kennedy Gourdine headshot

Kennedy Gourdine

Sophomore, Arizona State University

Listening to panels, today’s sustainability professionals on the expo floor, and game-changing pitches at VERGE 22 has taught me a lot about the successes and challenges of integrating sustainability and climate technology into different areas like food, transportation, energy, carbon, buildings, and startups. One common theme was solving the life-cycle issue we see with most products. Asking questions like "How can we make products that last longer?" or "How can we reuse products so they have a higher cradle-to-cradle potential?" is very important when making a path towards a more sustainable future.

Because of this, I believe the second life of electric vehicle (EV) batteries deserves more investment as we transition into an age of electric vehicles. EV batteries usually only spend 80 percent of their capacity on usage in electric cars. These batteries don’t have to go to waste; they can be used as energy storage and then eventually recycled. The topic of EV batteries is becoming increasingly important as the global demand for batteries is expected to increase seventeenfold by 2030, according to the World Economic Forum.

The transition to EVs is a major step forward, but we have to be careful about the way we do it or it will end up increasing our electronic waste problems.

Diane Sanchez headshot

Diane Sanchez

Master's of Environmental Management Candidate, Duke University

One field in climate tech I believe requires more investment is decarbonizing buildings. The United Nations Environment Programme and the Global Alliance for Buildings and Construction reported that 34 percent of energy use in 2021 was from the building sector. Climate tech surrounding energy efficiencies such as energy storage and HVAC systems are technologies we know work to improve the efficiency of buildings. I see the opportunity for investment in microgrids for energy security and HVAC for energy efficiencies to help lower GHG emissions.

For example, hospitals use 10 percent of all U.S. commercial building energy use, and investing in microgrids and HVAC will supply energy security and lower a hospital's emissions. Similarly, there needs to be more investment in technology for constructing buildings. There needs to be investment in driving innovation to lower the environmental impact of materials used for construction and processes to reduce construction waste. It is easier to build energy-efficient buildings than to go back and retrofit them, and I think we need to revise how we design our buildings and invest in decarbonizing buildings.

Storm Lewis headshot

Storm Lewis

Master of Environmental Science (MESc) candidate, Yale School of the Environment

Accessible climate technology in the agricultural sector deserves significantly more investment. My experience at the VERGE 22 conference was a valuable opportunity for me to think critically about the communities often excluded these forms of innovation. This conference also reaffirmed my belief that marginalized farmers will be the catalyst for environmental resilience amid the climate crisis. Therefore, it is critical that global mitigation efforts implement strategies that sustain farming activity, reduce emissions and uplift underrepresented farmers. However, the discrimination that women farmers and BIPOC farmers face make it extremely difficult to adopt costly agricultural technologies. Climate tech funders should thus invest in companies that eliminate the financial, educational and technical expertise barriers to food waste and sustainable energy services. I am grateful to have learned from Olympia Yarger, CEO of Goterra, and John Hanselman, founder and chief strategy officer of Vanguard Renewables, who reinforced this sentiment during the "Repurpose and Recycle: Building the Right Infrastructure for Food Waste" session.

Furthermore, it is not enough to only increase the availability of climate tech; it is imperative that funders also invest in companies with diversity, equity and inclusion (DEI) at the core of their business structures and hiring processes. The "Diversity is More than a Checkbox" session led by Dr. Philip McAdoo, vice president of DEI for Earthjustice, resonated with me as I questioned how investors and climate tech companies can support farmers most impacted by climate change. Increased investment in justice-centered businesses is much needed to repair socioeconomic harm and empower marginalized farmers. I encourage investors to apply an intersectional, equity-based lens to their decision-making processes moving forward.