Piva’s 2022 Predictions: Our View of the World

In 2021 the ongoing pandemic made us realize that our industry, energy supply chains, and preparation for climate disasters was less than ideal. The great news: people are starting to take meaningful actions to address climate change, and both the private and public sectors are more committed than ever to building new systems and processes that will dramatically improve what we had before. This is spurring unprecedented opportunity and a massive influx of capital towards efforts to build a more secure, resilient, and sustainable future.

With this new reality in mind and our position as long-term investors, the Piva team collectively has been focusing on what’s to come in 2022 and over the coming years. We are sharing our predictions this year, focused on the trends of climate resiliency and determination to make positive changes in how we live — from the way we purchase goods to the energy we consume, the food we eat, and our means of dealing with the impacts of climate crisis.

Here are our top ten predictions for 2022.

The Aperture on Sustainability Will Widen Beyond Greenhouse Gasses

Human activity is pushing up against several of the earth’s limits; however, everyone has been mainly focused on greenhouse gas emissions and climate change. In 2022, the focus will broaden from emissions and climate change to a broader view that includes issues such as biodiversity loss, water scarcity, ocean acidification/health, and plastics. While the focus on climate change and carbon emissions will continue to be important for VC investment, there is a big opportunity to consider sustainability more holistically.

Subscription Micro mobility will Ride into Broader Adoption

While some micro-mobility startups have struggled during the pandemic, the subscription model will drive broader adoption in 2022. Instead of relying on a docked bike or scooter, individuals will be able to keep one at home, not worry about maintenance, and upgrade as needed. These services will be used by both commuters and delivery professionals. The subscription model is a fixed, predictable business model that will lead to long-term success for startups in this space.

Climate Adaptation Will Be Included Alongside Climate Change Mitigation

It’s become increasingly clear that climate change is here, with more severe effects increasingly felt around the world. To date, investors have primarily focused on investing in innovations that mitigate climate change. In 2022, VCs will widen their investment focus to include solutions that enable climate adaptation, alongside mitigation. The VC industry will have an important role to play in funding critical solutions to help the world adapt to a changing, more volatile climate. Innovations like drought-resistant plant seeds, fireproof homes, and energy-efficient HVAC will see increased demand as the need to battle climate change today becomes more acute.

Climate Justice Will Progress to the Center of the Climate Conversation

When natural disasters like droughts, hurricanes, and floods hit, they disproportionately affect already vulnerable communities. Climate Justice is a lens that acknowledges that climate change impacts will not be equally felt, and solutions to climate change must address that. From a policy perspective, that can mean advocating for more adaptation resources being allotted to lower-resourced communities. In the private sector, we’ll see more investment going to innovations for and from these harder-hit areas.This means more money for solutions that enable green jobs, clean local air and water, and economic upside for these communities. We’ve already seen strong initial interest from funds like Bezos’ Earth Fund, Tom Steyer’s Galvanize fund, and Earthshot Ventures.

Supply Chains will Become Sustainable

Before last year, many people were not aware of the complex supply chains behind the goods that we use every day. Today, however, supply constraints are in the news daily, and people are directly impacted, whether by a critical medical supply that is delayed, or a birthday present that does not arrive. The issues are daunting, but they present a great opportunity in 2022 to elevate the importance of supply chains in creating a more sustainable future. The magnitude of the problem will drive new investments in solutions, from analytics and help with traceability, to physical solutions to transport goods more efficiently. We’ll see many startups bring about long-awaited innovation to the sector.

Climate Intelligence will Become Necessary

Unexpected amounts of rain, heat, hurricanes, and ice caused by climate change continue to inflict material damage. There will be an urgent need to gain a better understanding of rapidly changing weather patterns and have access to better tools to predict dramatic weather changes and mitigate major damage. This will propel “Climate intelligence” into its own category of technology in 2022, with significant VC funding.

A Record Number of Companies Will Be Founded in Climate Tech and Energy Transition

The energy transition movement accelerated in 2020, with record climate tech investments in 2021. This will only continue in 2022, when we’ll see a record volume of companies being founded to address climate change. Several factors are driving this trend, including a workforce transitioning out of technology jobs and into climate tech jobs in order to have an impact on the world’s future, as well as a younger generation determined to focus their talents on mitigating climate change.

Cybersecurity will Emerge as a Key Enabler for the ‘Electrify Everything’ Movement

As we transition to a carbon-free energy system, we will need to bring on more distributed and dynamic power generation that requires increasing coordination between supply and demand. Going forward, we’ll see the proliferation of smart meters and devices that send signals between consumers and power providers, as well as EV charging infrastructure that orchestrates the bi-directional flow of electricity. While increasing digitalization and connectivity unlocks renewable energy resources and leads us to new levels of efficiency and optimization, it also leaves us increasingly vulnerable to cyberthreats. We’ve seen a boost in visibility and monitoring tools to bring heightened awareness to these environments, but in the next year the cyber-solutions that harden and tamperproof our interconnected devices and critical energy infrastructure will become essential to ensuring the success of the clean energy future.

Raw Material Supply Constraints Will Kickstart a Circular Economy

The clean energy transition is putting a strain on the supply of raw materials such as lithium, nickel, cobalt, copper, and even rare earth elements. As the supply-demand gap widens, more companies and countries are scrambling to invest in and secure access to these critical resources. But bringing new raw material sources online takes time* and can lead to price volatility, not to mention the negative externalities of environmental damage and loss of biodiversity. A key pathway to relieving pressure on raw material extraction is through more robust material recovery processes (i.e. recycling). We expect recent advances in new recycling technologies, especially for high-value materials, will give a much-needed kickstart to a more circular economy.

*IEA estimates an average of 16.5 years to move mining projects from discovery to production

The Synthetic Biology Revolution Will Need More Steel to Scale

We’re witnessing the emergence of an entire new economy based on biomass rather than petroleum. Promising many benefits over conventional, carbon-intensive methods, bioproduction leverages biological systems to make all kinds of products, from proteins to fuels, chemicals to textiles, plastics to palm oil. The abundant start-up ecosystem is proving itself at the benchtop scale, and many will soon need access to more tanks and larger vessels to achieve commercial scale. Contract bioproduction facilities are a popular route for many start-ups to test and scale without major capital outlays, but we expect excess capacity at these contract facilities to get scooped up quickly and become a scarce resource. Start-ups will need to plan ahead to secure capacity, but ultimately the growth of the bio-economy will need support from larger institutions and corporations to help finance testbeds and commercial-scale infrastructure.

Final Thoughts

In conclusion, Plato famously said: “necessity is the mother of invention.” Set in today’s context, perhaps a more appropriate phrase would be: “adversity is the mother of invention.” No one will ever downplay the past two years’ devastating effects, but we can’t deny it: the crises we have been facing have driven it home that we are all in this together — and, thankfully, we are pulling in the same direction now more than ever toward a more sustainable, just future.