August Cleantech Roundup

Clean Energy Trust’s cleantech roundup recaps interesting news highlights, from policy changes to technology updates and investment news.

Investors on the Vanguard of Climate Risk Disclosure

Vanguard is urging companies to disclose climate related risks to their business. While this might sound like something that gets buried in the business section of your local newspaper, I can’t overemphasize how important the broader trend on this subject is.

While corporate sustainability efforts have value and some companies are legitimately forward-looking in their approaches, many companies have not yet had to really grapple with the impacts of climate change on their businesses — fossil fuel companies in particular.

Companies will only adjust their priorities in this space when they are forced to do so by investors (even though there is a strong case to be made that long term thinking and acting strategically is something these businesses should do anyway). Disclosing climate risks is an important step for companies to take — it helps investors and potential investors make more informed decisions about a company’s long term prospects.

But even more important, once companies know they have to disclose these risks, they are forced to think about and plan for them accordingly — indeed, this will lead to these companies making different decisions since they will need to explicitly consider the long-term climate implications of their decisions. As management expert Peter Drucker may or may not have said, “what gets measured gets managed.” Further, it can be a major push without requiring to deal with politics to advance policy or regulation — it is a nudge from the marketplace.

So what does Vanguard have to do with this? As the largest mutual fund in the U.S., companies listen when the firm speaks since they are a major shareholder. Further, Vanguard had avoided the climate issue in the past, so this chain signals a new direction for the influential fund manager.

Even as regulation and policy remain an important driver for action, the emerging trend of major investors pressuring companies to disclose climate risk will indirectly lead to enormous changes in the way large corporation do business going forward.

New Technologies Are Super-Critical

Even as nuclear and pre-gasification coal carbon capture plants under construction have struggled to be completed recently, an innovative carbon capture pilot plant is nearly complete and shows promise. Net Power is developing a $140 million, 50-megawatt natural gas plant that will spin its turbine using supercritical carbon dioxide (happy wiki diving!); the same greenhouse gas it will be capturing as part of the plant’s operation. If this technology works at scale, it could find its way into the mix of technologies the nation relies on as it works to decrease its carbon emissions from the power sector.

Financing the Clean Energy Transition

Financing solutions beyond traditional capital are important to commercializing new clean energy technologies — it’s one reason Clean Energy Trust recently received an award from the U.S. Department of Energy for a new investment model to help unlock private capital sourcing for early stage companies. But there are many actors in this space working on philanthropic giving, investment syndicates, working capital financing, and other approaches. For example, Spring Lane Capital is a new private equity firm started by former employees of Black Coral Capital, a Boston-based energy technology investor — the fund will be focused in the cleantech space, but intends to explore financing mechanisms beyond just traditional venture capital investments.

For Further Reading:

These publications and newsletters are great sources for cleantech and investing news.

Energy:

• GreenTech Media — Good source for news and analysis on all kinds of clean energy.
• Axios’ Generate — Daily energy news roundup, with coverage that includes (but is not limited to) going on federally
• Midwest Energy News — Provides both a midwest and national daily newsletter

Investing:

• Social Capital’s Snippets — A weekly newsletter from Social Capital
• A VC — Blog by Fred Wilson of Union Square Ventures — lots of interesting commentary on venture investing in general, and blockchain in particular
• Fortune’s Term Sheet — Weekday morning newsletter by Polina Marinova