12 climate tech companies to watch (Bloomberg)

Plus, 95% of investors are evaluating ESG risks this year, $5T/year needed to achieve UN SDGs, your new climate justice advisory board, and our "atomic" habits (tiny and powerful).

ESG investing drivers — 5 stats to know.

The stats below can help remind your audience that ESG investing is here to stay.

Which is quite the opposite of what I heard in a closed door session at the end of the world’s largest private equity and venture capital event in Berlin a few years back.

“Ugh, ESG is such a distracting, ‘check the box’ exercise. I can’t wait for this fad to pass.”

• 95% — Limited partners are either already evaluating ESG risk factors or will be increasing their focus on ESG risk factors in the coming year. (Pitchbook 2020 Sustainable Investment Survey)

• 80% — CEOs who believe government, business and the public will reward companies for taking meaningful action on global challenges over the next 5–10 years. (2019 EY CEO Imperative Study)

• 40% — Faster growth in cash returns for companies scoring among the highest in terms of their approach to ESG factors (RBC Global Asset Management)

• 3x — Likelihood that employees stay working happily at purpose-driven companies versus those working at normal companies. (New York Times)

• $4T — Average annual investment needed meet the UN Sustainable Development Goals (SDGs) by 2030, and we’re definitely not on course…yet. (United Nations)

Hold on to the reins. This horse might finally be ready to gallop. *

Thanks to EY for much of this summary.

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* You can take the Kentuckian out of Kentucky, but you can’t take the Kentucky out of the Kentuckian.

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Mixed bag — Sustainable investing in private equity.

The good news?

• 47% of investors plan to increase allocations to ESG-focused private equity funds in the next 2-3 years

Less good news?

• Only 24% take ESG very seriously, including a mature ESG policy and process.

• 32% of private equity managers only consider ESG on an ad hoc basis, but believe that investment return is still most important (as if a trade off is usually implied), or they don’t view ESG risks as important at all.

Similarly, when it comes to climate specifically.

Good news?

• 83% of private equity firms viewed climate as a risk to their portfolio companies in 2019.

Less good news?

• Only 31% were doing anything about it.

Here are lots of great visuals from EY and PwC.

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12 climate tech companies to watch (Bloomberg)

Each year, through its Pioneers program, Bloomberg NEF picks the “most impactful and original technology innovations for advancing the low-carbon economy.”

As of last week, here’s the cohort of innovators, each tied to a particular “challenge.”

Challenge 1: Managing and optimizing long-haul freight

• Convoy (U.S.) — Digital freight network to optimize truck shipments (CEO Dan Lewis)

• Nautilus Labs (U.S.) — AI-based efficiency in ocean commerce with predictive decision support (CEO Matt Heider)

• Ontruck (Spain) — Digital transportation company combining automation and machine learning to reduce waste in logistics (CEO Iñigo Juantegui)

Challenge 2: Advancing materials and techniques for sustainable products

• Cemvita Factory (U.S.) — Microbial engineering to convert carbon dioxide or methane into carbon-negative industrial chemicals (CEO Moji Karimi)

• Pyrowave (Canada) — Microwave technology to supply the chemical industry with recycled raw materials (CEO Jocelyn Doucet)

• Via Separations (U.S.) — Electrification of energy-intensive separation steps in chemical production (CEO Shreya Dave)

Challenge 3: Monitoring and understanding our changing planet

• Pachama (U.S.) —Machine learning with satellite imaging to measure carbon captured in forests (CEO Diego Saez Gil)

• Planet (U.S.) — Global, daily satellite imaging to better manage risk across various sectors (CEO Will Marshall)

• QLM Technology (U.K.) — Camera systems to visualize and quantify greenhouse gas emissions (CEO Murray Reed)

Wildcards:

• 75F (U.S.) — IoT-based building management system for greater efficiency, health, and comfort (CEO Deepinder Singh)

• ECOncrete (Israel) — Technology for marine infrastructure that boosts concrete strength and creates an active carbon sink (CEO Shimrit Perkol-Finkel)

• Pivot Bio (U.S.) — Nitrogen-producing microbial products that can replace the synthetic fertilizers (CEO Karsten Temme)

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Who’s on your Climate Justice Advisory Panel?

Oh wait, who has one? Almost nobody.

So either create one, or make this part of the Board’s duty.

If no one is watching or asking questions, then nothing changes.

Check out the White House’s new Environmental Justice Advisory Council or read more in Greenbiz.

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Atomic habits — Tiny and powerful.

This Amazon bestseller from James Clear is an important read because...

• “Habits are the compound interest of self-improvement. The same way that money multiplies through compound interest, the effects of your habits multiply as you repeat them. They seem to make little dif­ference on any given day and yet the impact they deliver over the months and years can be enormous. It is only when looking back two, five, or perhaps ten years later that the value of good habits and the cost of bad ones becomes strikingly apparent.”

I was also delighted to see that our 15-year-old — who’s digesting this book via his “Daddy Reading” assignment — found this insight to be particularly poignant. I paraphrase…

• The energy used to heat an ice cube from 25 to 31 degrees Fahrenheit is not wasted, although it may feel like it. Instead, it’s a required investment and commitment, which ultimately leads to something amazing with the final push of just one more degree to 32 degrees as the ice melts.

So if you’re feeling frustrated about something (aren’t we all?), as if you’re wasting time, capital, or social credibility, just remember that a phase change happens almost instantly. But only after you’ve put in sufficient energy.

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I craft these newsletters on email-free Fridays to help you scale ventures and investments that address climate change, boost personal productivity, and become better leaders.

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• How can this be more useful (or entertaining) to read?

Feel free to respond directly to this email with 2-3 bullets before your next coffee break. (Caveman brevity is totally acceptable.)

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Make it a great week,

Chris

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Dr. Chris Wedding
Founder and Chief Catalyst, Entrepreneurs for Impact
Peer-to-Peer Advisory Groups + Executive Coaching + Investor Intel for Climate CEOs

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