the energy transition, climate change and social demographic trends are set to create a world where everything is more decentralized. One example of what may be coming is in Japan, which this week announced that it’s planning to revamp its green power law to promote distributed solar power.
We’re already getting a major preview of the future thanks to the coronavirus.
I asked two of the world’s wealthiest impact investors to weigh in, and they said the climate crisis will require a radical reorientation when it comes to building companies, and investing in them.
“There’s a lot of development required to prep the market for an impact company,” said Karam Hinduja, a longtime private equity investor at Timeless Capital. “If you’re a company providing solar energy panels to a third-tier market in the middle of India, there’s a lot of work to make sure that the city and region can support that, and there’s infrastructure set up.”
The companies of the future that make this leap won’t necessarily fit with the traditional venture capital timeline, he said. One venture capitalist wholeheartedly agreed: He said time is running out.
“The decisions we make today determine where we end up as a society 30 years from now,” said Ibrahim AlHusseini, CEO of FullCycle Energy, a company that seeks out market-ready, climate-focused businesses that can be rolled out almost like franchises. “In venture, it takes a 12-year cycle to go from an idea to commercialization, and that’s assuming it succeeds,” AlHusseini said. “We don’t have that kind of time: we need market ready technology that is quantifiable and climate critical, and can be deployed to evade 1 gigaton of carbon a year.”