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ON GREEN BUSINESS BUILDING
Doubling down on net zero
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We’re at a critical and complex moment for building green businesses.
On one hand, we’re seeing an increasing urgency to scale climate technologies. As companies and governments continue to make net-zero commitments, demand for green products should continue to grow. According to our analysis, net-zero offerings could generate more than $12 trillion of annual sales by 2030 across 11 key value pools. There’s also the issue of energy security. In Europe, for example, there’s a real question around the sufficiency of both heating and electricity for the coming winter season due to gas supplies from Russia being at risk. The importance of alternative sources of energy—from renewables, for example—has never been more apparent.
At the same time, uncertainty in the financial markets and supply chain challenges may be creating a sense that launching or scaling a green business is more complicated. Funding may not be as easy to come by as it was six months or a year ago. Input materials for certain technologies, such as batteries or solar panels, might be costlier or in shorter supply. The growth potential and need for green businesses haven’t gone anywhere. But it’s even more important for green business builders to do the homework on cost positions and creating supply chains, for example, in order to scale.
One interesting way we’ve seen green business builders approach financing is to sign up customer demand before fully scaling—as a way to build production capacity against that demand. We’re seeing this in green steel, electric-vehicle batteries, and sustainable airline fuels. That way, others who are investing in these ventures may feel more confident in the business potential. Over time, these products could also fetch a green premium. Right now we’re seeing a premium of 20 to 30 percent on some sustainable goods compared with products that have a higher carbon or environmental footprint.
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“We’re seeing a premium of 20 to 30 percent on some sustainable goods compared with products that have a higher carbon or environmental footprint.”
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Tiffany Burns on making equity real |
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Consumer-facing companies say they want to imbue services and offerings with equity, but what does that mean? Here’s what they need to think about.
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