‘Robust demand signals’ drive climate-tech opportunities

Climate tech is the most promising emerging sector for investors to place capital in and for government to support with policies promoting economic growth, speakers explained during a webcast from news service Axios last week.

Two finance leaders and a US senator spoke during the event about public and private sector efforts that are underway to further the momentum behind reducing carbon emissions. Below are the notable quotes and ideas mentioned during their conversations:

Celine Herweijer, global chief sustainability officer, HSBC

“The thing around climate change now is we have a very, very robust demand signal,” said Herweijer. “If you think about it, we’ve now got hundreds, close to thousands of companies – large, massive global companies – that have committed to the net-zero transition.”

She explained that industry-wide initiatives to curb carbon emissions are a major creator of climate-tech investment opportunities. Starting with HSBC’s net-zero commitment last year, the investment bank is deploying capital to companies that are in line with its goal of “fundamentally changing” its carbon footprint.

HSBC is also looking upstream at investment opportunities in companies that will help make climate mitigation and emissions reduction possible. It recently launched a venture growth strategy, including a $100 million venture debt fund targeting early stage, high-growth climate-tech start-ups. Herweijer said HSBC will also soon launch a more traditional climate-tech venture fund targeting software-based climate-tech solutions.

Tom Steyer, co-founder, Galvanize Climate Solutions

“Ten years ago, we were in a completely different political and societal attitude towards our climate crisis,” said Steyer. “We’ve had a decade of proof that what people were talking about 10 years ago as a crisis is here.”

The billionaire investor, who campaigned to become the Democratic Party’s US presidential candidate on a platform of addressing climate change, said investors and broader society are giving climate change much higher priority now than a decade ago due to the “urgency of the problem”.

“There’s a huge need for capital here,” explained Steyer, who recently launched a new firm called Galvanize to focus on this space. “As money comes in here, we’re also going to see an explosion of entrepreneurial talent, of innovation and of focus. And I think that combination is going to get great momentum.”

Ron Wyden, US senator

“In 100 years, the [Senate] Finance Committee hasn’t done anything close to being as transformative,” said Wyden, a Democratic Senator for the state of Oregon. He spoke about a climate change bill promoted by US President Joe Biden and supported by Democrats that will enhance investment opportunities in clean energy, in part by reducing support for the conventional energy sector.

“The tax code, with [its] 44 separate energy provisions, is tethered to yesteryear,” he said. “A lot of these breaks are decades old …. Instead of the 44, we would have one for clean energy, one for clean transportation fuel and one for energy efficiency. And then we would establish a tech-neutral, free-market, no-mandate system that would essentially say the more that a company, for example, reduces carbon emissions, the bigger their savings.”