More than a decade since the last wave of cleantech investment petered out, a climate tech boom is in full swing and many innovations are ready to scale, an investor says.
Dawn Lippert is the CEO and founder of Elemental Excelerator, a nonprofit impact investment firm based in Hawaii and the Bay Area. It's focused on boosting climate-related startups not only with funding but also by connecting founders with other partnerships and funding opportunities.
Lippert and I spoke about the state of climate investing and innovation during Elemental Interactive, an annual event held at the Presidio Theatre in San Francisco on April 10.
Alternative aviation fuel and ground-fleet electrification are among the innovations that have been in development for years and are ready for prime time, Lippert said.
"A lot of it is working, it just has to be scaled up," she added. "And that's really kind of where we are as a sector. That's what feels so exciting about having the Greenhouse Gas Reduction Fund having these new financing incentives, having the IRA coming in strong with tax credits and other kinds of facilities to support the scale-up of the sector."
Elemental's portfolio includes Bay Area startups such as Twelve, Glacier, Span, Planet FWD, Ebb Carbon, Full Harvest, OhmConnect, Proterra and Leapfrog Power.
Hosted by comedian Kal Penn, the event was a call to action for investors and founders to act on climate solutions, especially in collaboration with vulnerable communities who will be impacted by the affects of climate change most acutely.
Speakers included investor Tom Steyer, Emerson Collective founder Laurene Powell Jobs, and several founders from around the country including Kurt House, CEO of Berkeley-based metal mining startup Kobold, and Rebecca Hu, CEO of San Francisco-based robotic recycling startup Glacier.
"To a very large extent, what this program is about is trying to marry economic justice, with environmental sustainability," Steyer said during an on-stage conversation with Powell Jobs. "For the people who think that we are in fact going to solve the climate problem without dealing with justice, without dealing with it on a human basis — I think that that is an impossibility."
Investors also look for a return on their investments, which raises the question of how to realize these seemingly dueling goals.
"My argument has always been that the thing that scales is profits. And so when we're talking about returns, you know the truism: you manage what you can measure. And we can measure profits, which is why people always default to profits," Steyer said. "The thing that we don't measure well is impact on human beings and communities."
In 2022, the President Joe Biden signed the Inflation Reduction Act which earmarked around $369 billion for climate mitigation effort through subsidies, investments and tax incentives.
One of the programs created through that legislation is a $27 billion allocation called the Greenhouse Gas Reduction Fund.
The Biden administration announced on April 4 that $20 billion from the greenhouse fund will go towards clean energy and transportation projects in disadvantaged communities around the country, Reuters reported. At least $4 billion will be set aside for projects in rural communities and $1.5 billion for tribal nations.
Venture capital investment in climate tech companies fell by nearly 15% last year to just over $41 billion, according to a recent PitchBook report. Total deal value peaked at $51 billion in 2021.
