The transition to a green economy will be the most significant economic shift of our generation and perhaps lifetime.
This year at Davos, Bill Winters, group chief executive of Standard Chartered Bank, said the transition to an environmentally stable global economy represents a US$50 trillion investment opportunity. The green economy as the engine for economic growth is reflected in the recently announced Singapore Green Plan as well as recovery plans in the United States and Europe.
Getting involved in climate tech now is a once in a generation opportunity for women entrepreneurs to be the builders and leaders of the new green economy. Three decades ago, the shift to the internet age saw the creation of companies such as Google, Facebook and Amazon. Similarly new technology and startups will play a major role in the transition to a green economy. Venture capital (VC) investment in climate tech has grown by nearly $60 billion in the last seven years and climate tech companies being founded today will be the architects of our low carbon future and grow to be the largest companies in the world in the next 20-30 years.
For the most part, women missed out on leading the last great economic transition. Digital corporate giants are now deeply embedded in our lives and most have all-male founders, who have amassed incredible fortunes and influence. Study after study has shown that women leaders result in better company performance and yet women remain persistently underrepresented. The 100 largest companies listed in Singapore have only 16 per cent female board representation and the US estimates that at the current trajectory, it will take 59 years for women to achieve income equality.
We need to move much faster to close the gender gap and one of the best ways to do this is for women to start and lead the next wave of Fortune 500 companies.
The business case for more women entrepreneurs is clear. Women founders generate more revenue per dollar invested and exit 1 year earlier than their male counterparts. Yet, last year only 2 per cent of VC funding went to women-led startups. The stereotypical bravado, over confidence and unnecessary risk taking and competitiveness that characterises the startup world can make entrepreneurship unattractive to women. On top of that, most VC firms do not have a single female partner. There is a real risk that women will be left behind in this essential driver of innovation, value creation and economic growth.
When it comes to climate tech, one of the biggest misconceptions that can discourage women entrepreneurs is that you need to be a researcher or scientist to make a difference. Climate tech is often thought of as a deep technology or research and development play, for example more efficient solar panels, better battery tech. While this type of climate innovation is essential, most of these technologies are 5-10 years away from being commercially viable at scale at best.
Based on the work we have done at Engie Factory, we know there are a multitude of high growth, VC investable ventures that can be built today, using available technology. For example, all the technology needed to reduce the energy consumption of buildings by 10-30 per cent exists already and is quite affordable – what is needed is the right business models that create incentives for building owners and occupiers to adopt energy efficiency technology. It is this type of venture building that is needed now to enable corporates, governments and individuals to meet their immediate sustainability and decarbonisation targets that will put us on the trajectory to half global emissions by 2030 and meet net-zero emissions by 2050.
Women are already leading the way when it comes to sustainability and impact-driven business model innovation. Last year, Raena Lim, co-founder of StyleTheory was a panellist at our event on women on the frontline of energy and sustainability innovation. Raena shared that sustainability had always been at the heart of StyleTheory business model and is a great example of how innovation can change consumer behaviour. And we’re already seeing early entrants in the climate tech starting to make an impact. Lynn Jurich founded SunRun and created a business model for home solar installation which IPO-ed in 2015 and now has a market cap of over $11 billion.
Women who want to have a real impact climate change and build companies with the potential to be the Amazons and Googles of the green economy – the time is now. Let us make the best of this $50 trillion opportunity to shatter the glass ceiling.
Marie Cheong is vice president, Venture build, Engie Factory Asia-Pacific. Find out how Engie Factory supports women entrepreneurs in climate tech here.