Your Time to Act: How Green Venturing Could Solve the Climate Emergency

Maybe your company has committed to becoming net-zero by 2030, has science-based targets for reducing carbon emissions, and has endorsed the Paris Agreement. That’s a good start, as it signals a proactive and responsible approach towards environmental sustainability, which also positions your company strategically in today's competitive and environmentally conscious business landscape.

Yet, we have to be realistic. Do you think your company will achieve the net-zero target before 2030? It’s very likely that that's not going to happen.

Norway's biggest sovereign fund, Norges Bank, has 9000 portfolio companies. Only 17% of these companies have credible Net Zero plans. Deloitte found that the majority (42%) of their clients surveyed do not have any attached actions to achieve their ambitious Net Zero targets. Both revelations highlight that achieving net-zero within a few years is far-fetched.

As a result of not meeting net-zero targets, there will be serious repercussions on your business. What are those?

Effects of Climate Change on Businesses

Climate change will impact your revenues, if it hasn’t already. Insurance companies have already experienced significant financial losses due to catastrophic events like wildfires. 20% of the world's GDP is in jeopardy, with banks being the most impacted. Experts predict that the effects of climate change could result in a staggering $1 trillion in damages. Therefore, if only from that perspective, businesses should be extremely worried about the implications of climate change and take it seriously.

Only 50 years ago, the average lifespan of F500 companies was 75 years. However, this lifespan has already decreased to 15 years pre-pandemic, and this decrease is accelerating thanks to climate change. Both these indicate that immediate actions should be taken on climate change, or else you may face obsolescence.

On top of all that, government policies are not helping. The policies are only adding to the misery. The current policies of the government are not sufficient to address the pressing issue at hand. Still, excessive amounts of carbon are being released into the atmosphere, leading to a rise in global warming.

What's the solution for corporations to address climate change?

The Solution: Venture Building and Venture Investing

Climate techs hold the potential to make a significant impact on the environment and lessen the adverse effects of global warming. Currently, there is a significant amount of money being invested in the market, $1.5 trillion- but to truly make a difference a whopping $9 trillion will need to be poured into climate technologies over the next few years.

It is important to acknowledge the scale of the financial commitment required. The $9 trillion needed to support climate technologies is a significant amount that calls for substantial efforts in mobilizing resources. Governments and corporations like yours must work together to create an environment conducive to funding these technologies.

The urgency to address climate change cannot be overstated. It has reached a critical point where action must be taken now to prevent further damage. From a business perspective, this presents a lot of opportunities, as the market for climate tech is growing rapidly.

Also, after the tech layoffs, there’s a lot of talent on the market that now is open to considering working for corporates.

Because of the recession, the market conditions will lead to lower valuations, making it a good time for corporate venture capitalists (CVCs) to get involved. Unlike traditional venture capitalists (VCs), CVCs have a long-term investment perspective. Waiting for the market to improve is not a valid excuse. Investing in climate and sustainability initiatives can yield a return of four dollars for every dollar invested

When it comes to climate change, time is of the essence. We only have seven years to reverse the damage that has been done over the past three decades of living in abundance and excess. From a corporate innovation perspective, venture building and venture investing offer the necessary speed and scale.

Chris’s colleague Linda Yates wrote the book “The Unicorn Within”, that outlines in detail the best-in-class venture building and investing methodology, so there is a clear answer to the question how to make it work.

In the light of venture building and investing, it’s important to create an environment where your executives get educated and empowered to embrace this approach.

In addition to this, don’t forget the importance of bottom-up disruption. Many people inside your organization, often with specialized knowledge and relevant experience, will want to be involved.