Despite economic uncertainty, tech industry woes and a tightening VC market,
money and talent are flowing into climate technology development at an
unprecedented pace. This is accelerating progress and offering hope for meeting
global decarbonization targets to mitigate temperature rise. We’re also seeing
renewable energy solidifying its status as the “world’s cheapest source of
energy.”
Why is all of this happening now, after many years of underinvestment in and
debate about climate mitigation? Four key trends are converging this year to
create a permanent shift toward sustainability across industries — with
implications for tech innovation, the planet and companies that have yet to
start their sustainability transformation.
4 trends driving the sustainability pivot
Workers seeking work with purpose
The first trend is a desire to make a positive impact and find meaningful work.
The pandemic gave many of us more time to consider what we're doing with our
lives and with our technology. During the Great Reshuffling, as many as 90
percent of people in the labor
market
“changed roles in some way” in response to the pandemic. Gallup data
confirms that workplace engagement plummeted and stress surged during 2021 —
with most workers saying “they don't find their work meaningful, don't think
their lives are going well or don't feel hopeful about their future.”
Now, as the pandemic shifts from an acute crisis to a chronic issue, people are
seeking work they feel has demonstrable value in the world.
Broader acceptance and understanding of climate change
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Another trend is widespread awareness of climate impacts. With more time during the pandemic to
ponder our life paths, a lot of us also had the opportunity to pay closer
attention to the effects of the ongoing climate crisis — many of which we’re
experiencing firsthand. For example, the wildfire proliferation in the western
US decimated many lives and properties; it also made the COVID situation
worse
for people living in areas polluted with smoke. Elsewhere, hurricanes are
becoming more powerful and causing more
damage
through storm surges and flooding when they reach land.
What used to feel like an academic debate in the public sphere about climate
change is now a conversation about what we’re going through today — and what we
can urgently do to stop or slow the processes that are driving climate change.
Consumers are reacting with more conscious purchasing
behaviors, a
willingness to pay a
premium
for more sustainable products, and votes for political candidates who promise to
pursue climate solutions. Companies are responding, with increasingly bold
climate commitments (including those from
Microsoft
and
Google)
and more Chief Sustainability Officers being hired in
2021
than the prior five years combined.
The Inflation Reduction Act
The desire for meaningful work and the growing concern over climate change are
intersecting with a third trend: A massive investment by the US in climate
technologies through the Inflation Reduction
Act.
The tens of billions in federal loans offered through various IRA programs are
projected to result in hundreds of billions of dollars’ worth of investment by
the private
sector.
In particular, the IRA has accelerated the rate of investment in and development
of
carbon-capture
and
-removal
technologies. For example, tech giants Google, Facebook, Stripe and
Shopify recently partnered to form Frontier
— a $925M fund for carbon
removal.
Tech layoffs
The fourth trend fueling this year’s sustainability pivot is the reversal of the
big tech hiring boom. Instead of drawing in most of the talent, now the
traditional tech sector is undergoing rounds of layoffs and hiring freezes. Over
130,000 workers in
US-based tech companies have been laid off in mass job cuts so far in 2023 —
giving emerging climate tech innovators access to the kinds of engineering and
project management talent that were “once thought
un-poachable”
from tech giants such as Twitter and Meta.
An urgent need for more climate tech deployment
This pivot is resulting in new and expanded use cases for a variety of
climate-mitigation technologies. For example, carbon capture, utilization and
storage (CCUS) tech prevents carbon from escaping industrial processes into the
atmosphere, transforms it, and sequesters or eliminates it. CCUS has
applications across energy-intensive domains including utilities, manufacturing,
food production and food-waste
management.
Additionally, an increasing number of companies are pursuing direct air capture
(DAC) and the associated carbon-credit
market
through a wide range of processes — from scaling natural carbon sinks such as
kelp
to chemical processes to scrubbing carbon straight from the air. Other
technologies can help companies improve their operational efficiency and reduce
their energy usage to reduce their carbon footprint; still others are behind
new forms of renewable energy
production
and storage, as well as the growing electrification of vehicles ranging from
bikes to 18-wheelers.
Climate tech innovations are happening at legacy companies such as fossil fuel
producers, as well as at small startups. That’s crucial, because the
International Energy Agency estimates that in order to reach net-zero carbon
emissions globally by 2050, we need to be capturing 1,286 metric
tonnes of carbon dioxide per year
by 2030. Currently, we’re capturing about 45 metric tonnes per
year.
Beyond carbon-capture initiatives for industry, the sustainability pivot also
hinges on another goal: reducing the carbon footprint of basically every product
and process. There are opportunities for companies to reduce the impact of
existing products by creating circular
pathways
such as
resale,
refurbishment
and
recycling.
Products in development must also be made as sustainable as possible,
considering everything from their raw materials and manufacturing to transport,
use and end of life. These improvements not only address consumer preferences
for sustainable products, they create other kinds of business value. For
example, Forrester
lists
enhanced innovation, employee retention, regulatory compliance and revenue
growth among the benefits of optimizing for sustainability.
Pivoting toward a sustainable future
As exciting as these developments in the climate tech space are, the pivotal
changes we’re seeing this year are just the beginning of a longer-term
sustainability transformation. By 2045, annual investment into CCUS technology
is projected to exceed $150
billion
— and that’s just one domain within the array of climate technologies now on the
market and in development. For employees, investors, business and governments,
this shift to a focus on sustainability offers meaning, purpose, the potential
for value creation and a healthier planet; this year’s trends are bringing
together the awareness, talent and capital to make it happen. As a result,
there’s never been a better time for organizations to lean into their
sustainability goals and accelerate their progress toward them.
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As president of Synapse Product Development, part of Capgemini Invent, Jeff Hebert is responsible for balancing and continuously improving the experience for Synapsters, technical output and client satisfaction, and the health of the business. Jeff believes the magic of Synapse is its amazing community of inclusive, collaborative, smart, caring people who solve the most intractable technology challenges as a team. He is passionate about the positive impact Synapse can make for People and our Planet as a leader in product innovation.
Published May 12, 2023 2pm EDT / 11am PDT / 7pm BST / 8pm CEST