September 26, 2024
September 26, 2024
In response to a warming planet, climate tech innovation is heating up. As it does, Jonathan Weitz, who leads sustainability innovation initiatives in North America for consulting giant Accenture, has his finger on the pulse of how climate tech startups are launching, scaling and bringing solutions to market.
Jonathan is dedicated to understanding how companies grow sustainable revenue, decarbonize and reach net zero. Recently, he issued the latest edition of his Climate Tech Solutions Map, a quarterly analysis of the innovation across new and emerging climate industries. (The latest version has more than 500 categories.)
When we caught up with Jonathan recently, he shared insights on the climate tech sector’s opportunities and challenges, as well as innovative partnerships between large global companies and climate tech startups that are helping to scale solutions. What follows is an edited version of our conversation.
First, congratulations on releasing the latest edition of your Climate Tech Solutions Map! Walk us through the thought process behind it. Why did you decide to bring this resource to life? And, what have you learned by developing it?
There were two big reasons to pursue this. First, some of our large corporate clients were asking: ‘What’s the art of the possible and the strategy of the practical in climate tech? How and when should we invest in these new solutions?’ There’s an understanding among leading companies that what is good for the planet is also good for business, but we often hear questions about the details of planning and executing the net zero transformation.
The other driver was being able to share with clients a comprehensive resource that speaks to the breadth and depth of climate tech solutions, and that communicates what is possible when companies partner with climate tech startups. It’s amazing to see how many climate solutions already exist that can scale. We have many of the solutions that we need to get to net zero.
First-of-a-kind, or FOAK, financing is hot in climate tech right now. What’s your take? What are the big opportunities?
For innovative financers, there is a significant opportunity to think creatively about financial structures and standards to unlock investment.
For instance, part of the reason for solar’s growth among corporates is the structure of power purchase agreements (PPAs), through which solar panel users pay only for the power they use, not solar panel installation and maintenance. Thinking like that helps unlock a ton of investment for founders and upside for financiers, and we need similar types of models for the latest technologies.
When it comes to building climate tech, what are some of the most common challenges (as opposed to building enterprise software-as-a-service)? What’s your advice for scaling and go-to-market?
In software, once you have product-market fit, scaling is often a matter of sales and marketing. In hard tech, getting out of the lab and finding market demand is the start of the journey, not the end.
Also, much of climate tech is in highly regulated markets. There’s a real need to do policy engagement at all levels of government, and work with leaders in the community. Another challenge is that climate tech is very often in established commodity markets—like cement, steel or chemicals—where incumbents have the advantage in existing supply chains.
Each of these challenges comes with big opportunities for innovative founders. Entry barriers, regulated markets and incumbents can actually become moats for founders who think strategically, scale successfully and partner with corporates that have established supply chains.
<split-lines>"Entry barriers, regulated markets and incumbents can actually become moats for founders who think strategically, scale successfully and partner with corporates that have established supply chains."<split-lines>
What’s your advice for a climate tech company that wants to get acquired?
The best way to get acquired is to not make your strategy about getting acquired. Build the business for growth, deliver on the impact for people and the planet, develop strong corporate partnerships and hire a great CFO. That means following the path to profitability and building up scalable unit economics that make you successful and resilient when times get tough—and a potential smart acquisition.
<split-lines>"Build the business for growth, deliver on the impact for people and the planet, develop strong corporate partnerships and hire a great CFO."<split-lines>
What is the media getting wrong about climate tech coverage?
There are three big myths that need more airtime. First, that saving the planet requires a sacrifice in living standards. Successful climate solutions are winning on cost, convenience, comfort and quality—they simply make life better.
Second, that we don’t have the right solutions yet. We have most of the solutions we need to get to net zero—and the pace of innovation across industries is a good indicator that the rest are coming soon.
Finally, there’s the myth that climate solutions will be too expensive, when they will actually save a lot of money. Electrifying buildings and reducing air pollution save billions of dollars now, not to mention future savings.
We need to compare the cost of deploying these solutions to the massive cost of waiting—which would be exponentially more, both today and for our kids’ generation.
<split-lines>"We need to compare the cost of deploying these solutions to the massive cost of waiting—which would be exponentially more, both today and for our kids’ generation."<split-lines>
What marketing strategies will resonate in the age of simultaneous ‘greenwashing’ and ‘greenhushing’?
I think one way to win on marketing while avoiding greenhushing is to speak up about meaningful, effective climate results – getting away from the 'either/or' and showing the 'both/and.' The brands that put marketing dollars behind that message will differentiate on trust. Also, it’s never too early for PR–climate tech founders benefit when they tell their stories more publicly.
