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Why Venture Capital And Government Partnerships Are A Make-or-Break For Cleantech

Emily Dao

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sustainability

America has always been reliant on fossil fuels, with over 80% of its energy obtained from oil, coal, and gas. In 2016, CO₂ emissions produced by burning fossil fuels comprised nearly 80% of greenhouse gas emissions –and that’s not to mention their responsibility for 94% of total carbon dioxide emissions. Luckily though, with increases in emissions came cleantech companies, who hope to lead the shift towards cleaner, renewable energy.

However, for these newborn companies, finding funding can be a struggle. For the greater majority of startups in the environmental sector, partnerships are crucial to building and sustaining their companies.

The Venture Ecosystem for Cleantech

To better understand the venture ecosystem, The Rising spoke with Jigar Shah, founder of Generate Capital, a venture firm that manages over $200 million to back cleantech startups. Shah said he started Generate Capital motivated by his own experience growing his solar startup, SunEdison.

The Future of Clean Energy | The Rising

“We didn’t have a go-to investor when we started SunEdison,” Shah told The Rising in an email interview. “Generate Capital is that go-to investor and we want to make sure every entrepreneur that works hard has fair access to project finance for their ideas.”

Today, according to Generate Capital’s website, it currently invests in renewable energy, resources, food, and water, among other sectors. Evidently, it hopes to lead the change in renewable resources.

The Decrease in Venture Funding

Unfortunately, research shows investment in cleantech by venture capitalists has taken a downturn in recent years. A 2016 Brookings report found total VC investment in cleantech companies dropped by 8% since 2011. (That’s after a rise from 2008-2011.)

VCs have long been instrumental in moving the “resource revolution” forward. So with this decline in VC investment, how else can cleantech startups survive in the business world?

The Importance of Partnerships In Cleantech

A study conducted by the University of Maryland, University of Cambridge, and Technical University of Munich found government collaboration led to tremendous growth for cleantech startups. The report showed patenting activity rose by more than 73% when cleantech startups chose to work with the government.

The data doesn’t stop there. A Research Policy study showed that when cleantech startups licensed government-developed technology, financing deals would go up. Not just by a bit either – by some 155%. In perspective, that’s more than twice the amount of financing deals for comparable companies. Evidently, partnerships are essential to the success of cleantech companies.

Laura Diaz Anadon, Climate Change Policy Professor at the University of Cambridge, echoes a similar sentiment to these studies. She told Forbes, “Cleantech that comes from public-private partnerships will be essential for meeting global climate and sustainability goals.”

Conclusions

With the effects of climate change becoming increasingly prevalent, it’s important cleantech startups continue to rewrite the nation’s energy narrative. However, cleantech startups can’t reach their full potential without partnership. Cleantech might be an area where returns aren’t as immediate for investors, but some funds are already on board.

Not too long ago, Al Gore’s Generation Fund raised a $1 billion third fund to fund sustainability startups. Shah’s Generate Capital is another leader in the sustainability venture space. As the space becomes increasingly popular, it wouldn’t be surprising to see more firms enter the space. The general consensus seems to be that money isn’t everything in cleantech, but it sure helps.

But altogether, it’s going to take much more than a couple of funds to truly create a sustainable future. To invoke real change, partnerships must be more open, and it’s clear to see public and private sectors need to work together. Now, it’s just a matter of seeing how things play out and what that will look like in the coming years.

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4 practical ways brands can make their sustainability initiatives more authentic

Steven Li

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Brand Sustainability

As sustainability continues to become an important consideration for brands, particularly in areas like high fashion and hardware, sustainability reports have become increasingly popular. They show a brand’s dedication to transparency — that the brand understands it owes its customers and the general public honesty when it comes to its environmental footprint.

But sometimes good intentions don’t carry over to good PR, and that’s because either a company isn’t specific enough or is blatantly misleading. The scenario where brands try to sound more green than they actually are is often dubbed “greenwashing,” which often leads to boycotts these days. So how can brands better handle their sustainability PR? Here are four practical ways brands can approach making their sustainability initiatives more authentic.

1. Make specific and verifiable claims

Claims that are specific and verifiable are really easy to make if a brand actually cares about sustainability. Claims like “we’re dedicated to including recyclable materials in our products starting 2019” leave consumers with more questions than answers. They include:

  • Which product lines will feature recyclable materials?
  • What percentage of your products will be made from recyclable materials?
  • Which recycled materials are being used?

Claims like these are verifiable but are too vague. To consumers, journalists, and pundits, they look lazy and disingenuous. That is, if a brand actually cares to elaborate, it would include specific metrics that could be easily tracked.

2. Reduce the timescale of your initiatives

The other mistake that brands often make is dragging their initiatives on for long timescales. For instance, let’s say a brand were to claim: “We will achieve carbon neutrality by 2050.” The brand may have amazing intentions, but if so, it should release smaller, easily-trackable milestones. Setting a goal for 30 years out leaves consumers in the dark.

Brands should, of course, prioritize being better citizens of the environment in their sustainability initiatives, but undeniably, they also use them to draw environmentally-conscious consumers in. If that’s the case, your consumers should have a way of holding you accountable for your promises … in their lifetimes. And that brings us to the next point.

3. Work with independent auditors to verify claims

With all the greenwashing going around, you shouldn’t expect your customers to trust everything you say. If you’re truly doing something sustainable, you should have no problem working with independent auditors to verify your claims. This way, when you share your data with the world, a third-party that has no incentive to promote misinformation has vetted it.

But that’s also why you have to work with independent auditors. Leaving no doubt in your consumers’ minds about your dedication to sustainability is how you build trust. Without trust, your sustainability initiatives are in vain, regardless of whether your intentions are true or misleading.

4. Publish annualized sustainability reports, including both successes and failures

And with the results comes a possibility of publishing them. Brands, too often, only publish data that helps their brand. Of course, that’s the common-sense way of doing things, but part of being honest is telling the whole story, not just the part that helps you.

If you’re missing your sustainability targets, it’s more genuine to let your customers know that you’re working hard to get back on track than hiding those statistics under the rug. This way, when you’re making substantial progress, your customers are going to be rooting for you. Your reports are going to be more about transparency than they are about making a sales pitch. And that’s what annualized reports are about anyway — transparency. That’s why you have to include your failures in them in order to truly achieve what you claim to be going for.

Note: Brands that have questions about how they can improve the messaging around their sustainability initiatives can reach out at biz@mediusventures.com.

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Is Google greenwashing with its vows to make sustainability a centerpiece of its hardware business?

Steven Li

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Google Sustainability

In a recent blog post, Anna Meegan, Google’s Head of Sustainability, discussed some challenges related to the company’s hardware initiatives. She’s right: these days, people can’t live without their phones and other electronic devices. This phenomenon comes from the intense competition from giants, including Apple and Samsung (and more recently, Google), to make customer experiences better.

But the production of consumer electronics comes with environmental ramifications, including e-waste and carbon emissions. Google is unquestionably a part of those ramifications.

Just last week, Google continued its promise to make sustainability a centerpiece of its hardware business. But what exactly does the promise entail?

Committing to Recycling When It Comes to Hardware. Sort Of…

In an effort to create products for consumers that have the highest utility while being conscious of the environment, Google has announced: “100% of Made by Google products launching in 2022 and every year after will include recycled materials.”

Though this seems like a commitment to recycling, the way the claim is phrased is somewhat ambiguous. It begs the question, “Sure, your products may include recycled materials, but just how much of every product is going to come from recycled materials?”

Until Google can show the extent of its recycling efforts, the promise to do so is somewhat unfounded.

Carbon Neutrality for Device Orders

Previously, Quartz uncovered just how much carbon Google is emitting, particularly through its ubiquitous search engine. So, it makes sense that Google is doubling down on emissions reduction efforts.

More specifically, Google has made a somewhat big promise to have “100% of device orders shipping to and from Google customers will be carbon neutral by 2020.” There’s less than a year and a half for Google to reach that target. Hence, it will be pivotal for consumers to hold Google accountable for its claims.

More on emissions, every step of the supply chain typically contributes to emissions. Google’s blog briefly talks about the “highest ethical standards” that its supply chain embodies, but at the time of this article’s first publication (August 10th, 2019), it makes no mention to emissions, which is something that companies like Starbucks have heavily looked at.

“Putting People First”

In Meegan’s blog post, she references Google’s commitment to “make technology that puts people first.” To make this happen, the company has two main initiatives.

  1. The company will publish environmental reports for all of its flagship products released in and after 2020.
  2. Google will install “one million energy and money saving thermostats in homes that need them most” by 2023.

What will be included in the “environmental reports” is uncertain. But certainly, consumers will soon learn something new about the environmental ramifications associated with Google’s hardware.

The Decision is Yours

Google’s initiatives sound ambitious and they could be potentially very good for the environment. They could also lead the way for other hardware businesses, specifically consumer electronics companies, to follow suit. On the other hand, Google could be greenwashing to look like a more sustainable company. What do you think?

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Coca-Cola, PepsiCo finally cut ties with prominent plastic lobbying group

Emily Dao

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Last year, Greenpeace revealed major corporations like Coca-Cola and PepsiCo were among the worst producers of plastic trash in the world. After growing pressure from the public and environmental groups, the soft drink giants have finally broken ties with the Plastic Industry Association.

Victory for Sustainability

Both companies’ exit from the organization acts as a landmark decision in their commitments to more eco-friendly practices. The organization, which represents plastic manufacturers, has encouraged states to prohibit plastic bans throughout the nation. 

Greenpeace’s Ocean Campaign Director, John Hocevar, said the announcement serves as a “victory for every person that spoke up” against the corporations’ major contributions to plastic pollution. 

“Companies understand that they cannot publicly say they want to end plastic pollution, while financially supporting an association that lobbies for our continued reliance on throwaway plastics,” Hocevar said in a statement.  

Coca-Cola, PepsiCo Leaving Plastic in the Past?

In withdrawing from the lobbying group, both companies cited disagreements without disclosing the exact policies prompting their departure. Coca-Cola told CNBC the association’s values “were not fully consistent with our commitments and goals.”

PepsiCo had similar rhetoric. The company stated its membership didn’t include participation “in the policy advocacy work of the association or its subsidiaries.”

Further, it claims it joined the plastic lobby to become better educated about material innovation. In lieu of plastic, Coca-Cola and PepsiCo have been searching for alternatives that are easier to recycle, such as aluminum. Recently, PepsiCo revealed it would start replacing its Aquafina plastic bottles with aluminum cans at restaurants and fast-food chains across the nation. 

By 2025, PepsiCo aims to make all packaging for its products fully recyclable, biodegradable, or compostable. The company also has vowed to reinvent their packaging for their plastic water bottles by using 25% recycled material. Coca-Cola has also made major pledges for their environmental goals. Last year, the corporation established a World Without Waste campaign.

Specifically, the campaign would involve collecting and recycling the equivalent to every bottle or can sold worldwide by 2030. Additionally, Coca-Cola also plans to make its products’ packaging out of 50% recycled material over the next eleven years.

The companies have also announced commitments to significantly change recycling in the United States and decrease plastic waste. For instance, Coca-Cola has pledged to make its packaging fully recyclable, reusable, or compostable by 2025. Pepsi vowed to make all of its products recyclable, biodegradable, or compostable by that same year.

“Tackling plastic waste is one of my top priorities and I take this challenge personally,” PepsiCo CEO Ramon Laguarta said. “We are doing our part to address the issue head-on by reducing, recycling and reinventing our packaging.”

More Brands Ditch Plastic

The Plastic Industry Association said the reason several brands were ending membership with the group was due to Greenpeace. Other notable brands that left the lobbying group last year include Clorox and medical tech business Becton Dickinson. Patty Long, the interim president and CEO of the organization, described the environmental group’s efforts “unfortunate.” 

“Consumer brands are integral to making sustainability commitments into realities, by working with their suppliers to make lasting change,” Long wrote in an email to CNBC. “For example, our members work together to align their efforts to put recycling and sustainability at the forefront of their businesses.” 

Conclusions

As more companies (and local governments) start to stray away from plastic, it goes to show the public’s call for environmental action and accountability is not going unheard — not even by major corporations. 

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