Corporate Community Will Spur Demand for New, Low-Carbon Technologies

by | Dec 16, 2016

bill-gatesWhen Bill Gates met with President-elect Trump, we heard nothing of climate change — even though the founder of Microsoft just held a news conference on $1 billion fund he had helped spearhead to promote new technologies. Turns out, though, the two men have been discussing global warming long before that. What does it mean for innovation in the energy sector?

“The key point I was pushing there was the opportunity for innovation in not only energy but also medicine and education and encouraging the idea that that’s a great deal and a great thing for American leadership,” Gates said, in a Bloomberg story.

Gates, who held a news conference this week on to unveil the so-called Breakthrough Energy Venture and who subsequently met with the president-elect the next day, aims to spur innovation in such technologies as energy storage and carbon capture and sequestration through a $1 billion fund. He said during the conference call that if these technologies can be proven, they will attract investment and become part of the mainstream for commercial and industrial customers.

At issue here is giving corporations the incentive that that they need to implement clean energy technologies — things that no doubt require capital outlays but which may ultimately add to their bottom lines and preserve the ecology for generations to come. But why do so if their federal government imposes no such demands?

That’s where guys like Bill Gates and Elon Musk come into play. In the case of Musk, his driving ambition goes beyond improving the performance of the transmission grid. To paraphrase him, it’s about generating power that produces no heat-trapping emissions. Advances in energy storage technology are critical to the mission. Bill Gates and Breakthrough Energy Ventures are marching to the same drummer.

But institutional investors that manage billions in retirement funds for millions of working people are trying to use their financial leverage to force companies to make these investments, or at least disclose their potential risks. Those money managers say that it is their obligation to ensure that the companies with which they are investing are considering the effect that climate change could have on their businesses. If they are not properly doing so, they could be acting penny-wise and pound-foolish.

To that end, the Task Force on Climate-related Financial Disclosures just released its suggestions to help companies identify and disclose information needed by investors, lenders and insurance underwriters to assess climate-related risks and opportunities.

This “ought to spur not only increased attention — by companies, investors, insurers and regulators — on managing climate and carbon asset risk exposure, but also increased interest in clean and low carbon investing opportunities,” says Sue Reid, vice president of climate and energy at Ceres, in an interview. “In that regard, the task force’s recommendations may indirectly elevate interest in opportunities such as those presented by the new Gates-led Breakthrough Energy Ventures Fund.

“The new fund isn’t likely to change investors’ risk appetites,” she adds, “though over time it may boost clean energy market growth and related investment opportunities that meet the risk tolerances of various classes of investors.”

At the same time, she says it is the corporate community that is spurring on the trend toward a low-carbon economy and the resulting investments in clean technologies — a catalyst that will create even more opportunities and progress. And this process will occur over decades, meaning it will outlast whatever administration is in office.

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