Building a Sustainable Future at the Intersection of Corporate and Climate Innovation

The BCG Green Ventures team spotlights the importance of “investing in our planet” and the need for corporate innovation to accelerate climate action

Like national governments, corporates are facing increasing pressure from activists, investors, and customers to do more to slow climate change. While many corporations recognize the need for sustainability to be more than a CSR initiative, there is still a significant gap between those that prioritize climate action as a driver of strategic business decisions and those who have yet to see this agenda as mission critical. That’s why BCG and BCG Digital Ventures (BCGDV) launched BCG Green Ventures in 2021, a new offering with a dedicated team of experts focused on partnering with corporates to invest in, co-build, and scale sustainable businesses–creating value for both shareholders and society.

In recognition of Earth Day, and this year’s timely theme of “Invest in Our Planet,” which calls on organizations and individuals to take accountability for their role in saving the planet, we’ve compiled a hit list of expert perspectives from members of our global BCG Green Ventures team to showcase how corporate innovation is key to driving climate action.

Progress at scale will require corporates to drive climate innovation from the inside out

• “The technology necessary to get the world to net zero by 2050 has been developed over the course of years — in some cases decades — and corporates aren’t going to be able to catch up overnight. Instead, corporate focus must be on the unique superpowers they’ve cultivated over the years. Their customers, capital, processes and operations will be key to accelerate the unicorns of tomorrow to the level of scale needed to truly move the needle on climate change in the short amount of time we have available. In 2022, expect to see the smartest corporates productize their assets at scale, launching platform plays as critical to the ecosystem’s ultimate success as the startups who will leverage them to change the world.” — Raechel Hopson, Director and Venture GM at BCGDV (Manhattan Beach)
• “A decarbonized economy requires a sustainability-led company transformation. As a part of this transformation, organizations need to consider implications on their talent and staffing models. This includes creating a set of entirely new professions as well as rethinking many of the existing ones. In our green business building practice, we frequently see that the main challenge in rolling out impactful sustainability ventures at scale is the availability and time to ramp up new workforces — ranging from carbon analysts via renewables operation and maintenance engineers to installation workforces for EV charging or heat pump infrastructure. The good news is that many of the basic skills needed for the green economy exist already–often precisely in the hopefully soon-to-be obsolete fossil-fuel intensive sectors. After all, taking carbon molecules out of the atmosphere and into the ground (as it is the case in CCUS) turns out to be not entirely dissimilar from taking carbon molecules out of the ground! What is needed is a bit of imagination and creativity in discovering the right talent pools and then a scalable, effective way to approach, recruit, and retain the new talent needed..” — Vuk Trifkovic, Partner and Director of Product at BCGDV (Berlin)
• “Partnerships between ventures and corporates will be an important stepping stone towards maximizing the impact of climate tech: whereas a lot of the innovation for climate is coming from the venture side, corporates have the scale and resources to help them get to impact faster”. — Azra Cevapovic, Consultant, BCG

Consumers, investors, and activists want results, and the time for action is now

• “Through the urging of customers, employers, and shareholders, many companies have staked a claim on their climate goals in the next 5, 10, 15 years. The clock is now ticking, and in 2022, companies will have to show, in very real terms, how they are progressing towards their targets. Sustainability is no longer a ‘check the box’ type of activity, but a strategic objective that requires real innovation and risk taking to meaningfully curb the impact of climate change.” — Heidi Kim, Partner and Director of Product at BCGDV (Manhattan Beach)
• “The science has been clear for decades yet the globe has already warmed by around +1.1 °C (and Australia by around +1.6 °C). While we see companies working out what their long-term climate plans are, we need even more urgency and concrete action. We need to push the needle because we have no time left to wait.” — Daniel Jarosch, Managing Director and Partner at BCGDV (Sydney)

Corporates have the power–and the responsibility–to lead climate innovation and progress

• “The saying goes that ‘necessity drives innovation.’ In the transition to a net zero world, corporations in every industry will be forced to transform and the winners will be the ones that find innovative ways to leverage their access and scale to commit to bold and long-term purpose, action, and impact. While climate change is unequivocally the greatest threat to humanity, it is also the greatest opportunity we have to collaborate across the ecosystem and redesign sectors of our economy to be compatible with a 1.5 degree world. We will also see the aperture of the conversation widen to encompass not only ghg reduction but also nature, biodiversity and adaptation. Corporations must work together with start-ups, including across sectors, to accelerate innovation towards a resilient, robust and resourceful future.” — Kanika Chandaria, Lead Venture Architect at BCGDV (London)
• “As global momentum builds to achieve a net zero future and venture capital hits record heights, we will look to corporates in particular to become key drivers of climate innovation. Corporates have a big opportunity — and responsibility — to help avoid the worst impacts of climate change by driving decarbonization of their products and operations, reducing emissions along their value chains, and investing in and inventing solutions to close the climate innovation gap. It is not only essential for the future of our planet but should also become a core element of future innovation and business strategy for organizations around the globe.” — Stefan Groß-Selbeck, BCGDV Global Managing Partner (Berlin)

The climate revolution will be bigger and even more important than the digital revolution

• “Expecting big things for climate progress in 2022, expect we will see 100+ climate venture unicorns with market traction driven through corporate partnerships. Corporates have the opportunity to save the planet while creating tremendous value at the same time. Partnerships between Corporates and Ventures will accelerate the world to net zero while creating valuable new economies that will ultimately become larger than the digital revolution.” — Raju Sarma, Managing Director and Partner, Head of Green Ventures at BCGDV (Manhattan Beach)
• “Climate innovation will happen faster than we think. The progress in solar, wind and battery technologies was not linear but rather following a S-curve. I believe we are at the start of many more S-curves across climate-tech. It will be an extremely exciting time for Green Ventures as we support innovators to accelerate and scale the most promising climate solutions.” — Marco Duso, Partner, BCG

Diversification of focus beyond decarbonization will help drive real progress

• “2022 we will begin to see more companies making commitments beyond carbon. The need to address and value other ecosystem services such as biodiversity and water cycles will become more mainstream, and the markets to enable transactions for these assets will evolve.” — Ashley Silver, Venture Architect Director at BCGDV (Sydney)
• “It is a time to be hopeful about climate tech but also a time where we must pick up the pace and further accelerate solutions at scale. Furthermore, we must move beyond step 1, which saw a heavy focus on measurement and tracking (which is a challenge) to step 2, which is actual emission reduction (which is equally if not more difficult). More accurate measurement is a stop on the journey, not the final destination.” — Danielle Ullner, Managing Director and Partner at BCGDV (London)

Yes, climate innovation is costly–but what’s the cost of not taking action?

• “The climate challenge requires not only ambitious goals but also audacious investments — from the reimagining of current technologies to the invention of brand-new solutions to make meaningful, sustained impact.” — Harnish Jani, Partner and Director of Strategic Design at BCGDV (Manhattan Beach)
• “Hitting Net-Zero targets presents technology and business challenges. On the technology side, we must develop and scale energy and materials alternatives. But finding these alternatives is not enough. Each has to make business sense. Only profitable paths will lead us to Net Zero. The good news, with available technologies, we can create solutions that work, and support business growth.” — Hod Fleishman, Partner and VP of Deep Tech Innovation at BCGDV (London)

Pledging to prioritize sustainability is no longer enough; the time has come for corporates to take real action to invest in climate innovation. By harnessing their existing assets, exploring business model innovations, and diversifying the focus of their climate innovation efforts, corporates have the power to drive change–and the timing could not be more critical for the success of their business, or the future of our planet.

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