It’s rare to see an investment space where the ticking clock is as evident and pressing as it is with climate change, said this week’s Net Hero Podcast.
Victor Basta, Chief Executive Officer of financiers DAI Magister told Sumit Bose: ‘Normally, major developments in technology in a particular space are driven because there is opportunity for money to be made.
‘But for climate tech, there is a pool because the clock is ticking, which normally doesn’t exist. So for example, a few decades ago the public wasn’t demanding mobile phones an iPhones when the iPhone came out.
‘Everybody was reasonably happy and then you create the interest for the product. So it was vendor driven and there was no ticking clock.
‘It is quite the opposite for climate technology because there is already a demand for it from government and the public. So it is a different dynamic. And you rarely have a market like this that is guaranteed to be there and one that will grow over the next ten or fifteen years.’
Victor told us that investors are increasingly prioritising sustainability.
He said: ‘Investors for large energy companies, particularly in Europe, are asking them to take prioritise renewables. So companies have to have a renewable strategy.
‘So as a chief executive or a board of a company, if your investors are wedded to a net zero approach, that affects your share price and it hits you right in the pocketbook.
‘And all of a sudden, it galvanises the whole strategy. So sustainability is a groundswell which should not be underestimated.
‘But equally, the kind of agitation that has been so incredibly successful at the board level and towards CEOs has really triggered a move in the direction of sustainability. And you can clearly see companies, like the ones in Europe, where it is driving change.’
Victor told us that the energy transition won’t be equitable.
He said: ‘It’s the word equitable and you have so many discontinuities. For example, African economies are being pushed to move to renewable on the one hand.
‘But on the other hand, a lot of those economies are struggling to keep the lights on. So you’re almost imposing a tax on the populations because they’re having to move to more expensive renewable solutions, at least in the near future where the prices will no doubt be high.
‘And aid money for renewables gets used up on bigger and more immediate problems like health facilities. So already in the world there is inequity.
‘The right answer is that there should be different degrees of pressure depending on existing carbon footprints. But in reality, this is not the case.
‘The idea that is often pushed is that we want to go to renewable everywhere as fast as we can. But there are regions that shouldn’t be a priority because they aren’t doing as much damage and they have other more pressing matters to deal with.’
Watch the full episode below and don’t forget to register to Big Zero Show Online: 100 Days of Labour.
