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- Trump bans flights from China to U.S. amid tensions over coronavirus, Hong Kong USA TODAY
- The way to defeat China is to be true to ourselves The Washington Post
- Across all fronts, China is playing for keeps The Boston Globe
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It takes a village to succeed in climate tech
Ben Soltoff
Wed, 06/03/2020 – 02:00
Solving climate change depends, to some extent, on technological innovation.
The world’s leading climate authority, the Intergovernmental Panel on Climate Change (IPCC), published a landmark 2018 report highlighting the urgency of limiting warming to 1.5 degrees Celsius. The report outlines four potential pathways for reaching that goal. The pathways are vastly different, but one thing they have in common is a central role for new technologies, all of which fall under the growing category known as climate tech.
Relying on emissions-reducing technology isn’t the same as blind techno-optimism. New technology needs to complement existing solutions, deployed immediately. But the IPCC pathways make clear that the route to mitigation goes through innovation.
So, what does it take to turn a societal need into a functional reality? Scientific breakthroughs are only part of the challenge. After that, there’s a long road before solutions can be implemented at scale. They require funding through multiple stages of development, facing many financial and operational risks along the way.
There’s a parallel here with the response to COVID-19. Even if a working vaccine is developed, it must go through trials to determine efficacy and the logistical challenge of distribution to billions of people. But a key difference is that effective climate solutions are more varied than a single vaccine and usually more complex.
At a webinar last week hosted by Yale, Stanford and other groups, Jigar Shah, co-founder of clean energy financier Generate Capital, noted that climate technologies, unlike medical breakthroughs, must compete with systems already in place.
“In the biotech industry, which I think folks herald as a well-functioning market, once companies reach a certain validation of their technology and approach, there’s a payoff there,” he said. “And in [climate tech], there really isn’t one [in the same way], largely because there are a lot of incumbent technologies that provide electricity, energy, water, food, land and materials.”
The period when a new technology is costly to develop but too early-stage to produce commercial revenue is often called the “Valley of Death” because even promising technologies often fail during this period. Success requires the collaboration of a wide set of partners and investors.
As an Environmental Innovation Fellow at Yale, I’ve helped compile insights for investors on overcoming the unique barriers faced by nascent climate technology. Fortunately, many investors are already tackling this challenge.
The new wave of climate tech investors
In the early 2000s, there was a well-publicized boom then bust in clean energy investing. According to Nancy Pfund, founder and managing director of impact venture capital firm DBL Partners, much of this interest was from “tourists” looking for an alternative to the dot-com failures earlier in the decade. On a GreenBiz webcast last week, she observed that the current interest in climate tech is markedly different. “Today there’s such a high level of focus, commitment and knowledge on the part of both the entrepreneurs and investors,” she said.
Pfund said the interest in climate tech is partially due to the compelling economics of renewable energy compared to alternatives. “There’s been a stunning cost reduction over the past decade,” she said. “This brings in mainstream investors who are just making dollars and cents. They’re not even necessarily waving the climate banner. They want to rebalance their portfolio for the future.”
During the same webcast, Andrew Beebe, managing director of Obvious Ventures, noted that an additional factor in the rise of climate tech has been the overwhelming public demand for climate action. “There’s been a societal shift as well,” he said. “In entrepreneurs today and investors, I see an urgency like we’ve never seen before. People are not that interested in doing yet another social media company, unless it has a real impact.”
In entrepreneurs today and investors, I see an urgency like we’ve never seen before.
It’s important to note here that climate tech takes many forms. There are software solutions that can help reduce emissions and that don’t face the Valley of Death I mentioned earlier. But some of the most critical solutions are physical technologies that require a lot of time and capital to succeed.
“You can’t spell hardware without the word ‘hard,’ and everyone knows that,” said Priscilla Tyler, senior associate at True Ventures, at the Yale-Stanford webinar. “Hardware is hard, which isn’t to say it’s impossible. And if anything, in my opinion, it begets more impact and more opportunity.”
There are promising signals that climate tech is here to stay. Tyler is part of a group of venture capital investors called Series Green, which meets regularly to discuss climate tech opportunities. Additionally, multiple weekly newsletters share the latest deals in climate tech, and in a recent open letter, a long list of investors confirmed that, despite the COVID-19 economic downturn, they remain committed to climate solutions.
Going beyond traditional venture capital
A notable climate tech deal that happened last week was the $250 million investment in Apeel Sciences. The California-based company has developed an edible coating for fruits and vegetables that can help to preserve some of the 40 percent of food that normally gets thrown away. Investors in this round included Singapore’s sovereign wealth fund and celebrities such as Oprah Winfrey and Katy Perry.
A company such as Apeel doesn’t start out raising hundreds of millions of dollars from large institutional investors and celebrities. At the early stages, many new technologies depend on government grants and philanthropy. Apeel got started with a $100,000 grant from the Gates Foundation in 2012.
Apeel coats fruits and vegetables with an edible layer that can is designed to extend shelf life by two to three times.
Prime Coalition is an organization that helps foundations deploy philanthropic capital to climate solutions through flexible funding structures that allow for long periods of technology development and multi-faceted risk. It calls these funding sources “catalytic capital,” because they can help unlock other forms of finance further down the line.
In addition to helping others deploy catalytic capital, Prime also makes its own catalytic deals directly through an investment arm called Prime Impact Fund.
“We’re looking to support companies that have specific things to be de-risked before they will be attractive to follow on funders, and then we can be the source of that de-risking capital,” said Johanna Wolfson, principal at Prime Impact Fund, at last week’s Yale-Stanford webinar.
By collaborating with one another, investors such as Prime can help technologies move through the stages of innovation, until they’re ready for more traditional investment structures. Catalytic capital invested today could help create the next Apeel Sciences several years from now.
At each stage, investors serve not only as sources of money but also strategic partners for the startups themselves. This is particularly true for corporate investors, who may have substantial industry knowledge to share and more flexible expectations than traditional investors.
There’s a lot more sophistication on part of corporate investors now than there was 10 years ago.
“There’s a lot more sophistication on part of corporate investors now than there was 10 years ago,” said Pfund. “Then, you saw the agenda of the corporation being pushed around the board table more than you do today, and that’s never a good idea.”
If their interests are aligned, corporations and startups can create mutually beneficial relationships, where each offers the other something that it couldn’t have obtained on its own.
“These corporate investors see so many different technologies, and they believe their own products are better than the startup products, so how do you actually get their support?” said Andrew Chung, founder and managing partner of 1955 Capital, on last week’s GreenBiz webcast. “Well, you need to have a widget or product they haven’t seen before or can’t build themselves.”
Non-financial support also can be catalytic
Investors such as DBL Partners often connect the startups in their portfolio to corporates and other partners. These connections can be hugely valuable for startups, especially in emerging industries where networks are largely informal.
While investors’ main role is to provide capital, they also provide many forms of non-financial support, which can be essential to advancing innovation. In addition to connections, they also can help startups to navigate dynamic policy environments at the state and federal level.
“Policy plays a pivotal role,” said Pfund. “We don’t invest in policy, we invest in people, but we know that our companies are going to have to address the changing policy landscape.”
We don’t invest in policy, we invest in people, but we know that our companies are going to have to address the changing policy landscape.
DBL Partners helps to shape the policy landscape by convening roundtable meetings, advocating for legislation and reaching out to regulators in order to help create a more favorable environment for innovation. This sort of engagement is relatively low-cost in the short term, but it can have massive benefits in the long term, especially as new technologies begin to scale up.
Shah pointed out that the challenges facing climate tech don’t end once solutions reach commercialization. Nascent technologies still need to be deployed at a large scale to have impact.
“A lot of us focus on going from zero to millions,” he said, “but then, in fact, millions to billions is still nascent.”
Reaching the necessary scale requires a careful alignment of technological development, market creation, political support and investment across a wide spectrum of capital.
“All of these things work together in tandem to really unlock nascent technologies,” Shah said.
This story was updated June 4 to correct Apeel’s funding information.
Climate Tech
A tightrope walk ahead for corporate sustainability managers
Rajat Panwar
Wed, 06/03/2020 – 00:00
Amidst numerous uncertainties surrounding post-COVID corporate climate, one thing is certain: Sustainability managers will face multifaceted challenges.
Many could face budget cuts, even as their stakeholders expect them to ramp up sustainability efforts and seize this unique “opportunity” to initiate fundamental corporate transformations. Many may find their companies’ post COVID-19 business strategies are no longer aligned with ongoing or planned sustainability programs. The job of a sustainability manager never has been easy, it will become even more challenging during economically turbulent times.
After the 2008 economic recession, I led a study to show that companies generally scaled down sustainability programs during periods of lowered financial performance, but they did so rather selectively. This study also shows that the extent of scaling down is contingent upon the level of economic turbulence. The latter issue is especially critical in the current context because the COVID-19 has inflicted turbulence on economic systems at a deeper level and more pervasive scale than previous downturns have, at least in the recent history.
I believe that this is a time for sustainability managers to act with foresight. They should not only concern themselves with broad sustainability goals, but they also should be active partners in helping their companies recover from economic hardships.
Sustainability managers should also be active partners in helping their companies recover from economic hardships.
This ambidextrous approach will help them garner more trust for sustainability units within their companies, which in turn will enhance internal support for corporate sustainability programs in the long term. Here are five ways (call them 5Cs) that together can help sustainability managers act ambidextrously:
1. Focus on communities
These are times of community-level distress, manifesting in multiple ways. Community well-being is the most salient of all concerns that companies must attend to as part of their sustainability programs.
Many companies are doing it through corporate philanthropy; but engaging in community-oriented projects more directly would provide companies with visibility, goodwill, improved employees pride and enhanced societal trust.
Community involvement will be the yardstick with which stakeholders will measure companies’ sustainability and social responsibility performance in the post COVID-19 recovery period and well beyond it.
2. Develop coalitions with other businesses
This may be a promising approach for companies to engage in community-oriented projects. A critical part of community involvement should be the support for small and micro businesses in the area.
Initiatives taken by grocery chains, such as Publix, can play a critical role in providing much-needed support to save farmer markets and small farmers throughout the world. Local sourcing and purchasing can help revitalize small businesses and are well aligned with broad sustainability goals. Indeed, local sourcing also can uniquely demonstrate companies’ commitments to foster circular economies.
3. Display creativity
This is truer than ever. As goes the adage, “If you want creativity, take a zero off your budget. If you want sustainability, take off two zeroes.”
The COVID-19 outbreak has removed those two zeroes for many companies. Sustainability managers could draw on such concepts as frugal innovation to spur outside-the-box thinking and to develop and execute sustainability programs that actually help in cutting cost, reducing waste and projecting companies as originators of cool, simple solutions to complex problems.
To clarify, it is not time to stall climate initiatives; but it is time to more vigorously engage with stakeholders who have urgent claims.
Workplace risk mitigation will be a priority for companies as economic reopening starts. Innovation in this area is already happening — combining smart scanning technologies, drone-enabled deliveries and artificial intelligence — but such high tech-high cost innovations will not be accessible to all companies.
Frugal yet effective sanitization, I believe, is the most important area in which sustainability experts can provide critical input. Keeping sanitization costs low while ensuring the safety of customers and employees alike is indeed a litmus test for creativity and innovation: Backed with expertise in design thinking, safety norms and customer expectations, sustainability managers are among the best positioned to advise companies on how to effectively handle sanitization in the most frugal way.
4. Show genuine concern
A core tenet of sustainability is a concern for all. These are periods of immense hardships. Indeed, bigger threats of climate change loom at us, and sustainability managers ought to not take eyes off that big issue. Yet the open wounds need urgent treatment.
It is exactly the time for sustainability managers to display concern for all and live up to their own ideals. Sustainability entails integrated thinking: The United Nations Sustainable Development Goals are interlinked, after all.
It is an immense opportunity for sustainability managers to institutionalize integrative thinking in their companies and cultivate fraternity across functional units. By showing empathy for communities, employees and customers, sustainability managers will further ingrain stakeholder orientation within their companies.
To clarify, it is not time to stall climate initiatives; but it is time to more vigorously engage with stakeholders who have urgent claims and earn their trust and support for future sustainability initiatives that they may not otherwise support.
5. Get everyone on board with the changes
Finally, sustainability managers will need to make their co-workers on sustainability teams comfortable with the adjustments in their corporate sustainability programs.
Co-workers’ discomfort may emanate from their fearing job loss as they might perceive adjustments as curtailments. This discomfort also may emanate from a perceived value-misalignment as some co-workers simply may not value new approaches to sustainability.
Keeping up the spirits of team members and instilling in them the confidence that theirs is a critical role in helping the company recover from financial hardships is a new and important task for sustainability managers. Sharing with sustainability co-workers a short-, medium- and long-term vision of strategy will help sustainability managers keep co-workers motivated and creative.
Clearly, times are difficult. But these are exactly the times when the relevance of sustainability thinking will be put to test. After all, sustainability is about resilience and adaptation: Sustainability managers will have to show both in the coming months.
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It’s time to prioritize the survival of indigenous people, the world’s forest stewards
Carol Goodstein
Tue, 06/02/2020 – 00:00
Hunting and gathering for food is taking on a whole new meaning of late. The ever-lengthening line at my local Whole Foods starts to wrap around the outside of the store before 7 a.m., as socially distanced shoppers — securely donned in gloves, masks and even plastic face shields — wait nervously to scavenge for their week’s worth of essentials along with their COVID-19 indulgences: the extra bars of Hu chocolates and Enjoy Life cookies, in my family’s case.
We once thought of foraging as an activity engaged in only by our very remote ancestors and distant “primitive” people. But the spread of COVID-19 has heightened the subsistence survival instinct in all of us. In a way, we are not so dissimilar from “primitive” people in places such as the Amazon Basin as we might have thought.
And now, we’re all vulnerable to the same pandemic virus. Only with virtually no resistance, no access to medical treatment and a government that condones the deforestation and development of their lands, it’s far worse for indigenous people.
Companies and consumers everywhere have a role to play. In fact, COVID-19 has created an opportunity for companies to be more cognizant and compassionate in their approach — more aware of the direct and indirect responsibility for the impact they have on people in places where they operate.
So as the spread of COVID sickens and kills front-line workers in meat-packing plants across the country and suppliers are forced to curtail operations — leaving the meat section of local supermarkets looking, well, a little lean — what about the places where this meat comes from, namely Brazil, which according to the USDA is the world’s largest beef exporter?
Tribal people living in the Amazon Basin have been made even more vulnerable to the virus by the recent uptick in deforestation.
While many companies are doing right by their workers in U.S. plants, why not — in the spirit of cognizant corporate citizenship, stakeholder accountability and stewardship, let alone brand reputation — help to protect people in Brazil that are not only particularly vulnerable to the virus but whose very survival is directly linked to the protection of forests?
While the current pandemic may be overwhelming America’s medical system, killing our healthcare workers, tanking our economy and generally frying our collective nerves, the indigenous people of Brazil — the country from which a lot of our meat as well as the soy used to feed farm animals is produced — have virtually no access to healthcare, let alone hand sanitizer.
President Jair Bolsonaro, along with slashing funding mandated to protect indigenous rights and proposing to open up oil and gas exploration and hydropower development on indigenous territories, effectively eliminated the availability of rural healthcare by driving out the thousands of Cuban healthcare providers who used to service indigenous communities prior to his presidency.
As the nationwide death toll in Brazil soars above 11,000 and reliable data on indigenous infections and deaths is hard to come by, a recent survey by the Brazilian Indigenous Peoples’ Association found the virus has reached 38 groups in the country with 446 cases of the new coronavirus and 92 deaths reported as of mid-May, mainly in the Brazilian Amazon.
Tribal people living in the Amazon Basin have been made even more vulnerable to the virus by the recent uptick in deforestation, up by nearly 64 percent in April, compared to the same month last year, according to data from Brazil’s National Institute for Space Research. Last month alone, more than 156 square miles of rainforest were destroyed — an area about the size of Philadelphia.
While indigenous people are locking down like the rest us, when they do, their lands are left even more vulnerable to brazen land grabbing, which also has been alarmingly on the rise.
Well before the pandemic, Bolsonaro made no secret of his intention to open the Amazon to increased economic activity, and he’s been determined since the start of his time in office not to let indigenous tribes stand in his way.
As he said, “They don’t work. They don’t bring in money for Brazil, only burdens.”
Meanwhile, Bolsonaro has downplayed the effects of the virus even more than other presidents, describing it as a “little flu” and a trifling “cold” and accused the media of manufacturing “hysteria.”
Emboldened by Bolsonaro’s stance, indigenous leaders have been targeted in increasing numbers over the past year — even before the outbreak of the virus. Last year, there were at least 10 documented indigenous murders, as Bolsonaro effectively has declared open season on indigenous peoples who stand in the way of economic expansion, writ deforestation.
While the Bolsonaro administration has made its dismissive if not genocidal attitude toward indigenous people patently clear, agribusinesses operating in Brazil could, just for example, step in.
The opportunity to display corporate social responsibility has taken on new urgency as indigenous leaders call out these businesses as culprits in the ravaging of their lands and families.
“What we are asking from the multinationals is that they not buy commodities that cause deforestation and conflict and that are produced on indigenous lands. We are also demanding that bilateral trade agreements … demand respect for indigenous rights and ensure there are no products linked to deforestation coming into their countries,” declared Dinamam Tuxá, coordinator and legal adviser to the Association of Indigenous Peoples of Brazil.
While a number of soy and beef producing companies have set time-bound targets for eliminating deforestation from their supply chains, deforestation continues to escalate.
Shoppers at Sam’s Club, Safeway and Target may notice a paucity of meat at their local megastores, but all of us have a collective responsibility to protect the indigenous people who help to protect lands and species on which we all depend.
In addition to banning, or at least dramatically reducing deforestation, why don’t companies, while they’re at it, support communities who know a thing or two not only about hunting and gathering but about protecting the lungs of our world?
Equity & Inclusion
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