COP21 for Startups & Seed-Stage Investors

The 21st Conference of the Parties (COP 21) is generating a flurry of climate news. The focus used to be on national governments, but this time, it’s different. Many commitments are coming from city governments, businesses, and even investors. We want to highlight commitments that may help startups that focus on cities.

City Commitments

C40, Compact of Mayors
C40 and the Compact of Mayors have committed to initiatives to curb emissions and respond to climate change. Taken together, the actions from participating cities show a path to achieve 25% of the current “gap” to limit climate change to 2C. It makes clear the central role that city governments can play alongside other stakeholders.

You can search C40’s 82 affiliated cities and filter through initiatives, regions, and categories. Initiatives are focused on better management of critical infrastructure such as water, energy, waste, and transportation. The Compact of Mayors provides a directory of its 392 member cities and allows you to search for cities based on key risks such as drought, extreme weather, and flooding. You can also identify cities based on size and priority actions like energy, transportation, waste, and water. Many cities are in the early stages of fulfilling their commitments and may be receptive to partnering with startups that can help them achieve their goals.

10% Resilience Pledge
While most of COP21 is focused on minimizing emissions to limit climate change, a number of efforts are focused on adaptation. Cities in the Rockefeller Foundation’s 100 Resilient Cities (100RC) network have committed to dedicating 10 percent of their annual budgets to projects and planning that will make their cities more resilient. Collectively, this represents more than $5 billion in spending toward preparing for consequences of climate change like flooding, drought, and displacement. Most of this will be spent via the procurement process and some will be spent under the check-writing capacity. 100RC is already taking its first steps to working with promising startups.

Business Commitments

American Campus Act on Climate Pledge
218 campuses across 40 states recently committed to encouraging a strong COP21 climate deal, with more than half vowing to become carbon neutral. College campuses are like small cities (though the demographics skew younger) and offer great opportunities for startups to pilot projects, win funding, and find early partners and customers. Check out the pledge and full list of campuses.

Global Alliance for Buildings and Construction
Sixty groups and 16 countries launched this alliance last week. The goal is to lower the footprint of the built environment, which contributes to 30 percent of the world’s global warming emissions. The initiatives in this alliance will be receptive to startups selling solutions that offer energy efficiency, like in heating, cooling, and retrofit financing. The full list of the partners offers a breakdown of the related initiatives that startups can plug into.

American Business Act on Climate Pledge
154 corporations have committed to the American Business Act on Climate Pledge. Each company has a unique approach and goal, but most have vowed to reduce greenhouse gas emissions by as much as 30 percent over the next decade. The list of companies goes into detail on what specific strategy each is taking and provides a strategic map for startups aiming to sell solutions to these corporations.

Financial Disclosure
Many businesses are committing to disclose the financial impact of climate change via the Task Force on Climate Related Financial Disclosures, organized bythe Group of Mayors. The goal is to bring transparency to the opaque risks that climate change presents to markets around the world. For startups, the data gathered will help enhance the value proposition of products and services that predict, mitigate, or prevent climate risk and catastrophe.

A Consumer Carbon Diet Problem?

For individuals, climate goals can feel a lot like dieting. Some people will do well, but most will struggle when forced to give up things they’ve come to like, such as SUVs, large homes, or air travel. Even as the Pope makes climate a moral issue, the same challenges apply. How quickly might people repent and change their ways?

More and more products sneak in climate benefits. That is, they might be more focused on fun, savings, convenience, or safety. Startups offering solutions that have clear value, in addition to the potential to lower our carbon footprint and mitigate the direct impact of climate change, create attractive opportunities for themselves. Many solutions don’t need to be presented as climate-conscious but can still gain traction from traditional market dynamics while delivering public good.

As recently covered in TakePart, people don’t always use climate-conscious products for “green” reasons. “If people are making smart choices for different reasons, that’s OK,” says Katharine Hayhoe, a climate scientist at Texas Tech University. “What matters is not why we do it; what matters is what we’re doing.”

Investor Commitments

The Breakthrough Energy Coalition
Within the first few days of the COP21, a new early-stage coalition was announced to focus on making seed- and early-stage investments in energy. Led by Bill Gates, the Breakthrough Energy Coalition includes a number of well-known angels, VC funds, and early-stage investors such as Marc Benioff, Jeff Bezos, and Richard Branson. While there were some thoughtful objections to focusing on the commercialization of new innovations versus deployment of existing tech, our sense is that seed and series A companies are often focused on deployment models. We suspect that this type of activity might cause more mission-driven organizations, like foundations, to look more closely at how to invest in mitigating climate change via seed-stage investments in startups.

Cleanweb Investment Trends
The recently released Super Collider report “The State of Cleanweb” is worth highlighting here, as it does a good job articulating some of the investment opportunities. Many of the trends noted, such as mobile and social, will be familiar to early-stage investors but with a lens toward how they are being used to solve energy and logistics challenges. Investors such as Andreessen Horowitz and USV are highlighted, as well as recent examples of successful startups solving climate challenges, whether directly or indirectly, such as Nest and Uber. Most importantly, the report shows that this investment trend has accelerated in recent years.

Urban.Us Fund
From energy efficiency, comfort, disaster response, irrigation, retrofits, and e-waste to cool new modes of transportation, Urban.Us has backed 19 of the world’s leading startups solving urban challenges. We are committing to funding and enabling 20 more early stage companies creating solutions to the challenges of cities and climate change. We’re seeking solutions that can scale to 100 cities within five years.

Reach out if you are building a company solving a problem at the intersection of climate change and cities.

Thanks to Shaun Abrahamson, Anastasiya Sharkova, Liza Licht, and Lynne (Wordy.com) for contributing to this.

Originally published at www.linkedin.com.