How To Make Money From Sustainability

There are a lot of political posturing and acronyms around sustainability. This makes it confusing and unattractive. The simplest way to understand and profit from sustainability is to think of it as a way to conserve resources, save money and become aware of where to invest your savings and time to ensure you can profit from it.

At the core of capitalism is money making, and as companies try maximizing their revenues and profits, they are quickly jumping into the decarbonization, sustainability and Net-zero business future as this is emerging as one of the biggest business opportunities of our generation.  In the next 10 years, sustainability considerations will have a much greater impact on how companies do business than even the Internet has had. 

The green transition will affect companies’ competitiveness, relevance, and market positioning. Reducing the carbon intensity of our economies and building resiliency saves money and prevents damage and losses caused by disaster events. Those that invest in sustainability and clean tech now are going to be able to join the “first mover coalition” that is building the new industrial, digitally based economy of the future. Those that stay behind and lobby for the status quo are missing the point and missing the boat.

A few trend that you can learn and benefit form:

– In 2021 alone green tech companies attracted investment of over $1 trillion 

– There are currently 43 private, $1b+ climate tech companies in the unicorn club. Of the 1,000 Unicorns today, the 43 in climate tech make up 4.3% of the overall group. Green unicorns are creating value for shareholders over 4 years (instead of 7 years in other sectors), reaching the billion-dollar valuation significantly faster.

– Decarbonizing our economies will be costly, but as in all investment, and disruptive changes capital and risk taking must be at the core of this transformation. Under the 1,5 C Net-Zero plans almost $30 trillion dollars will have to be invested by 2050. This corresponds to roughly 4 percent of annual GDP (in 2021 money). The cost of unmanaged and unpredictable climate change (based on business as usual) would be that the money invested to decarbonize our economies as climate events are projected to affect about 20 percent of global GDP by 2040.

– The growing demand for net-zero services and technologies is accelerating and could generate more than $12 trillion of annual sales by 2030 with key leading sectors including transport ($2.3 trillion to $2.7 trillion per year), power ($1.0 trillion to $1.5 trillion), and hydrogen ($650 billion to $850 billion). 

-In early August 2022, the United States approved the largest ever green growth focused investment program toward fulfilling his goal to modernize the American economy and reduce its dependence on fossil fuels. The $ 500 billon program is a powerful move towards creating the new American industrial revolution. 

Opportunity ahead:

More than 80% of climate new business fall into the three major categories of energy (35%), agribusiness (33%), and mobility (16%). In addition to these sectors, we believe that climate risk data and ESG focused companies are going to experience massive growth as investors and financial institutions try to gain access to climate risk data. Going forward most companies will also be required to disclose their sustainability and social footprint (which will become compulsory in 2022-2023 in the EU and in the US). 

Final points: This is a good time for business and individuals to assess their internal sustainability score, and impacts, as this forces you to better allocate resources and efforts. In a post covid marketplace, and in a post-recession society, consumers will expect more from corporation in terms of social contract and sustainability promotion. Time for corporation to jump on the zero-waste economy and for individuals to jump on this rapidly expanding business opportunity. 

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