Optimizing return and impact in climate initiatives

I was invited to speak to the Chief Sustainability Officer group at the World Economic Forum during climate Week. I urged us all to take control of the narrative. Here is a summary... Let’s shift the narrative. As sustainability leaders… Let’s not talk about decarbonization as emissions. Let’s talk about it as innovation that drives: ·    energy cost savings, ·    avoidance of energy pricing volatility ·    avoidance of carbon fees ·    reduced maintenance ·    increased productivity ·    sales lift Let’s not talk about tons of waste diverted from landfill and reused, let’s talk about it as innovation that reduces: ·    virgin input costs ·    waste disposal costs ·    exposure to geopolitical risk in supply chains ·    exposure to tariffs (e.g. Renault is putting 45% of used car components into new cars) Our research into the Return on Sustainability Investment (ROSI) shows that sustainability is just good management.   The methodology (developed with companies) has found nine value drivers associated with sustainability, including operational efficiency, risk reduction, employee retention and productivity, sales and marketing, and and innovation and growth. For example, innovation is about identifying a problem or an opportunity. It can be focused on process, product or service. It can be incremental or transformative. From a sustainability perspective, innovations fall into two broad buckets:  ·    innovating sustainability improvements in an industry or a category ·    innovating with a process, product or service that is needed by society. The first approach requires understanding the material ESG issues for the sector and designing solutions that tackle that issue, while also improving the underlying value proposition - -which sustainability can do. The second approach is tougher, but has more potential to go big: Innovating to solve broad societal problems such as water scarcity, plastic packaging pollution and health impacts, tackling the carbon transition, social inequity and so on. Here we might look at innovation such as 3D printing (e.g. on demand) using recycled inputs – tires, dresses, construction materials etc. We might look at bio-based plastic made from air and methane-based greenhouse gas dissolved in saltwater, recyclable through biological digestion. We might look at how to give immigrants and others with no credit history access to credit through tracking ontime rental payments. So as you work with your companies, help them understand that managing the material ESG issues for their sector and company is not a reporting and compliance exercise. It is a good management exercise that can drive everything from operational efficiency to sales and customer loyalty to innovation that will help the bottomline. Put in place methods such as ROSI with your finance team or ESG controller to track the financial benefits so you can get sustainability to the speed and scale you and the planet want and need. 

Investment Opportunities in Climate Adaptation and Resilience 🌎 Climate change is intensifying physical risks across regions and sectors, placing climate adaptation and resilience (A&R) at the center of global strategic priorities. While mitigation addresses emissions, A&R solutions tackle the immediate and long-term risks to infrastructure, economies, and communities. Investment in Climate A&R remains at an early stage despite its scale and urgency. The BCG and Temasek report projects global A&R financing needs of $0.5 trillion to $1.3 trillion per year by 2030. This presents a significant opportunity for private capital to drive both financial returns and systemic resilience. The Climate Adaptation & Resilience Investment Opportunities Map provides a framework to assess where capital can be most effectively deployed. It structures opportunities into seven impact themes and offers a granular view of subsectors and solutions across industries. Investors will find diverse entry points—from early-stage ventures focusing on pure-play A&R innovations to established industrial players integrating resilience solutions into broader portfolios. This dual landscape enables a mix of venture, growth, and buyout strategies tailored to different risk appetites. Adaptation markets are inherently localized. Flood defense strategies, water efficiency technologies, and agricultural resilience solutions vary by geography, creating fragmented but scalable market opportunities that respond to specific climate risks and regulatory frameworks. The report highlights the importance of co-benefits. Nature-based solutions, for example, deliver protective functions while enhancing biodiversity and ecological health. At the same time, material-intensive interventions require careful scrutiny to balance resilience gains with environmental impacts. To capitalize on these trends, investors will need to navigate sectors where regulation, insurance incentives, and risk disclosure frameworks are evolving rapidly. Competitive advantages will accrue to those with deep technical expertise and the ability to scale proven solutions across markets. The Climate Adaptation & Resilience Investment Map identifies seven key impact themes: - Food Resilience - Infrastructure Resilience - Health Resilience - Business and Community Resilience - Water Resilience - Energy Resilience - Biodiversity Resilience Climate adaptation is shaping a new investment frontier, where value creation is tied directly to long-term societal and economic stability. #sustainability #sustainable #business #esg #climatechange

Funding climate adaptation delivers huge benefits to people's health and prosperity, but these benefits often remain hidden and unaccounted for. That's the conclusion of new research by WRI, which finds that investing $1 in climate adaptation can yield more than $10.50 in benefits over a 10 year period. Benefits not only include the avoided losses from climate impacts, but also a wide range of economic, social and environmental benefits that are generated even when disasters don't occur. WRI analyzed investments in 320 adaptation and resilience projects spanning agriculture, water, health and infrastructure, and found these projects generate much higher rates of return than commonly assumed. Adaptation investments in the health sector offer some of the highest returns. This is because investing in more resilient health systems can save lives, improve wider public health, and bolster economic productivity, especially among vulnerable populations. When governments and decision-makers do not fully take into account these benefits, climate adaptation is often seen as a financial burden. In fact, the opposite is true: it is often much more profitable to adapt than not to do so. Climate adaptation isn’t just about managing risk—it’s about building resilient societies, encouraging development, keeping people healthy and prosperous, and creating new opportunities. This is an important insight in the ongoing discussions around increasing climate adaptation finance for developing countries, which will kick off again next week at the UN climate negotiations in Bonn. Read the WRI report here: https://lnkd.in/gisDhfvW Or read a helpful summary here: https://lnkd.in/gtPXpSD4

I tell every climate tech founder I meet: if you want to raise millions, your solution needs to be better, faster, or cheaper than whatever came before it. Full stop. Now, more than ever, climate tech companies cannot rely on regulatory support or favorable policy environments as their competitive advantage. Your innovation needs to compete purely on its intrinsic merits — delivering superior economics, unmatched efficiency, and undeniable value for your customer. The hard truth is climate impact alone will never compensate for subpar performance. To fully grasp this reality, we must reconsider what we mean by “climate” innovation. The term itself is often misleading, implying a singular sector. In truth, climate innovation represents a full-scale industrial revolution, one that touches every industry — agriculture, transportation, construction, manufacturing, consumer goods, energy production, and beyond. The most successful climate founders adopt a mandate to reduce emissions AND rebuild entire value chains to be radically more efficient at scale. That’s the unlock. I've found Collaborative Fund's "Villain Test" to be a helpful framework to illustrate this sentiment. The test poses a critical question: Would a hypothetical ‘villain’ investor, driven purely by financial returns and self-interest, invest in your company? A dual focus, 1) irresistible, scalable economics paired with 2) purpose-driven impact, is the driving force behind climate tech superstars like Antora Energy, Twelve, and Nitricity, to name a few. This is the blueprint. If you want to lead in climate, build products that dominate on performance and deliver planetary benefits as an essential byproduct. Of course, the path from idea to reality is much easier said than done. This isn't meant to discourage but rather offer a principled approach for thinking about how to identify problems and build climate companies that endure. Start with the problem. Design for performance. Make impact inevitable. P.S. Also sharing this as an excuse to post a favorite photo from my time in Stanford Climate Ventures, where our dream team worked on extreme heat solutions that outperformed the status quo in cost and effectiveness across a variety of applications <3 #Better #Faster #Cheaper #Climate #ClimateTech #ClimateInnovation #IndustrialRevolution #VillainTest #Startups #Founders

Your investments could be shaping more than just your portfolio. What if every dollar you deploy could create a ripple effect of positive change? The cost of overlooking impact is higher than you think. According to the Global Impact Investing Network (GIIN), over 3,907 organizations currently manage $1.571 trillion USD in impact investing assets under management (AUM) worldwide, representing a 21% compound annual growth rate (CAGR) since 2019. Yet, this still accounts for only about 1% of total global assets under management, indicating a vast potential for growth. By not integrating impact considerations, investors may miss out on opportunities for meaningful change and long-term value creation. 7 Strategies to Align Investments with Purpose: 1. Define Your Impact Objectives ↳ Identify core values: Determine the social or environmental issues that resonate most with your mission. ↳ Set clear goals: Establish specific, measurable outcomes you aim to achieve through your investments. 2. Conduct Thorough Due Diligence ↳ Assess impact potential: Evaluate how prospective investments contribute to your defined objectives. ↳ Analyze track records: Review the historical performance of organizations in delivering both financial returns and positive impact. 3. Diversify Across Asset Classes ↳ Explore various vehicles: Consider equities, bonds, and alternative investments that align with your impact goals. ↳ Balance risk and return: Diversification can help mitigate risks while enhancing potential for impact. 4. Engage with Investee Companies ↳ Active ownership: Use your shareholder influence to advocate for sustainable practices. ↳ Collaborate on initiatives: Work with companies to develop strategies that enhance their social and environmental contributions. 5. Measure and Report Impact ↳ Utilize standard metrics: Adopt frameworks like IRIS+ to track and compare impact performance. ↳ Transparent reporting: Regularly disclose impact outcomes to stakeholders to build trust and accountability. 6. Stay Informed and Adaptable ↳ Monitor industry trends: Keep abreast of developments in impact investing to identify new opportunities. ↳ Be flexible: Adjust your strategies as needed to respond to changing social and environmental landscapes. 7. Collaborate with Like-Minded Investors ↳ Join networks: Participate in groups like the GIIN to share knowledge and resources. ↳ Co-invest: Partner with others to amplify impact and share due diligence efforts. Every investment is an opportunity to shape a better future. What’s one step you can take today to align your portfolio with your purpose? ♻️ Share this story with your network - let's spread inspiration far and wide! 👉 Follow Ben Botes for more insights on Leadership, Entrepreneurship and Impact Investment.

🌏 New Study Finds Climate Adaptation Delivers a 1,000% ROI And yet we’re underinvesting by $359 billion a year. It’s easy to think of adaptation as a safety net. But this new World Resources Institute report flips that idea on its head. Analysing 320 projects across 12 countries, the findings are clear: 🟢 Every $1 invested in adaptation delivers over $10 in returns. That’s $1.4 trillion in benefits over 10 years. Returns weren’t just from avoided damage, 65% of benefits came even without disasters. ✅ More jobs. ✅ Higher crop yields. ✅ Healthier communities. ✅ Stronger infrastructure. Some highlights: ⤷ Health projects: 78%+ return ⤷ Forestry & farming: 29%, plus biodiversity gains ⤷ Disaster risk tools (like early warning systems): 36% ⤷ Resilient infrastructure: ~30% & wide-reaching social impact ⤷ Water and wetlands: From Durban to Fortaleza, nature-based solutions are buffering floods, creating jobs & improving water quality Nearly half the projects studied also reduced emissions, aligning adaptation with mitigation. But the best bit: 🔍 Only 8% of evaluations captured the full picture. Which means these returns are likely underestimated. With the world facing $1B+ climate disasters almost every week and the adaptation funding gap now at $359B/year, the question isn’t whether we can afford to scale resilience. It’s whether we can afford not to. #ClimateResilience #AdaptationFinance #GreenEconomy #NatureBasedSolutions #NaturePositive