April 22 is Earth Day, a day to build environmental awareness and to remind us to work year-round to solve climate change, to end plastic pollution, to protect endangered species, and to get educated about sustaining the environment.
Rarely a day goes by that I don’t hear some distressing news about climate change. Canada is warming at twice the rate of the rest of the world according to a new study led by Environment and Climate Change Canada, the federal government department responsible for a wide range of environmental issues.
“Human-induced [global] warming has already reached about 1°C above pre-industrial levels,” according to the Special Report on Global Warming of 1.5°C (“SR15”) published by the Intergovernmental Panel on Climate Change (“IPCC”) in October 2018. “Climate change represents an urgent and potentially irreversible threat to human societies and the planet.” The IPCC recommends that we limit global temperature rise to 1.5°C to avoid catastrophic, irreversible effects.
Extreme weather events such as ice storms, heat waves, and flooding, extinction of animals and plants, and loss of wildlife and plant diversity, melting glaciers and rising sea levels are attributable to rising average temperatures associated with global warming and climate change. These changes introduce new risks and uncertainties into our daily lives and impact business and personal decisions.
However, the human propensity to innovate is immense. The drive to disrupt the way we typically do things and to improve the way we live can help humankind reverse global warming and address the risks and challenges we face due to climate change. Although investing in climate solutions may seem like a daunting endeavour, but there are many levers that can positively affect climate change. Even by investing in solutions that are smaller pieces of the bigger puzzle, we can make a difference and take a step in a more sustainable, thrivable direction.
A book called Drawdown piqued my interest last year. Drawdown is a collection of 100 solutions for reversing global warming, compiled and edited by renowned American environmentalist and entrepreneur Paul Hawken. If we can disrupt other industries such as taxis, hotels, and retail, why can’t we disrupt global warming? There are so many opportunities to contribute to climate solutions and Drawdown provides a blueprint. Drawing from some of those solutions, here are some of the ways investors can invest in innovations that contribute to climate solutions:
- The most significant contributor to greenhouse gases are refrigerants, namely chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs), that are used in air conditioning to cool buildings and in refrigerators in industry, supermarkets, and homes. 90% of refrigerant emissions happen at end of life. There is an opportunity to invest in solutions and innovations that help us recover and reuse refrigerants more effectively or that help cool buildings without the use of refrigerants.
- Sourcing our energy from onshore wind farms instead of conventional fossil fuel-dependent sources would reduce carbon dioxide equivalent emissions by 84.6 gigatons. We not only need more investment in renewable energy infrastructure, but we can also invest in solutions that provide more accurate and timely information to consumers and businesses about their energy sources, their energy consumption, and the energy efficiency of their activities and operations. There is a “continued decline in the cost of generating electricity from alternative energy technologies, especially utility-scale solar and wind. In some scenarios, alternative energy costs have decreased to the point that they are now at or below the marginal cost of conventional generation,” according to the Levelized Cost of Energy Analysis published in November 2018 published by Lazard, one of the world’s leading financial advisory and asset management firms. This makes investing in alternative energy generation and related technologies increasingly attractive opportunities.
- The food we waste contributes to 8% of greenhouse gas emissions caused by humans – the third largest contributor to global warming. Unconsumed food that ends up in landfill produces a lot of methane – a greenhouse gas. Technologies such as FoodMesh, an early-stage venture that Pique Ventures invested in, help divert edible surplus food from landfill and gets it into the hands of people who are suffering from hunger and food insecurity.
- Switching to a plant-rich diet also contributes significantly to reversing global warming, but this solution requires a lot of care and information. Technology that helps people better understand their nutritional needs and sources could impact business models such as food and grocery delivery, restaurant bookings, and health and wellness apps. Or innovation could help food producers and processors make better choices in how they farm, process, and distribute food. For example, plant-based “meat” producers such as Beyond Meat and Impossible Foods are growing in popularity.
- Tropical forests have suffered and been depleted in recent decades due to clearing, fragmentation, degradation, and loss of plant and animal life. Carbon dioxide is released into the atmosphere when we lose forests. Restoring forests helps us capture and hold carbon (known as carbon sequestration). We have innovative companies such as Canadian-based Carbon Engineering, which recently raised US$68 million in equity financing to grow and scale its artificial carbon sequestration technology. Investing in innovative solutions for forest restoration that are economically attractive, viable, and sustainable would also help capture carbon and restore tropical forest habitats.
- According to Drawdown, educating girls is “one of the most powerful levers available for avoiding emissions by curbing population growth. Women with more years of education have fewer and healthier children, and actively manage their reproductive health. Educated girls realize higher wages and greater upward mobility, contributing to economic growth.” Innovative solutions can range from education technology that reaches and helps more girls in developed and emerging economies, as well as investments in infrastructure, products, and services that help keep girls in education such as schools, menstrual products, and health and safety.
At Pique Ventures, we’ve been investing in a diverse community of leaders building companies that care, connect, and protect. We believe everyone should be investing in innovations that protect and take care of our planet and the environment, as well as investing in technologies that connect us to our natural environment and to the resources we need to survive, thrive, and be happy. Tackling climate change and limiting global temperature rise to 1.5°C is possible.
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About Pique Ventures
Pique Ventures is an impact investment and management company. Pique Ventures enables a diverse community of investors to pursue integrated investing. Integrated Investing is a proprietary investment decision-making methodology to help create a better world and was developed specifically to evaluate impact and early-stage ventures.
