During the second day of Echelon 2022 at Resorts World Sentosa in Singapore on October 28, Steve Melhuish, Founding Partner at Wavemaker Impact, highlighted the breaking of climate change-related records in 2018. The devastation caused by events like forest fires and drought that year served as a wake-up call. Even in 2023, the World Meteorological Organisation predicts that global temperatures will hit record highs in the next five years.

“There is no single dominant issue in the climate change conversation,” he stated. “Similarly, there is no single predominant opportunity for entrepreneurs either.”

This signifies the boundless possibilities in the climate tech sector. However, Grace Sai, Co-Founder of Unravel Carbon, cautioned about the challenges climate tech startups might encounter when seeking investors.

She recounted her company’s experiences pitching for funding rounds from major global VC firms like Sequoia.

“We were often the first climate tech platform investment for these funds,” she shared. “We had to educate our investors because the climate crisis was new to many of them. It was essential to help them understand this new field beyond their existing knowledge in software and other areas.”

Also Read: Amasia introduces impact assessment framework for climate tech companies

Sai and Melhuish were part of a panel titled “The state of climate tech in 2022: How we can create new urgency for green recovery”, moderated by Robyn Tan, Managing Director of KrAsia. The panel aimed to explore how startups and investors can maximize their impact amidst growing awareness of climate tech.

On the accessibility factor of climate tech solutions

Before delving into how SEA climate tech startups can enhance their societal impact, understanding what makes a “good” climate tech startup is crucial.

According to Angela Noronha, Director of Growth at Asia Secondmuse, there is little difference from traditional businesses.

“A good company is a good company. The fundamentals are the same. It’s about the purpose you serve. Does it help reduce or remove emissions?” she emphasized.

It’s important to note that certain climate tech functions can be integrated into existing businesses without the need for standalone companies. Many data platforms and tools enable business owners to fulfill these functions internally.

For climate tech startups, success in growth starts with understanding the accessibility hurdles customers face when accessing climate-friendly products and services.

Also Read: How Third Derivative assesses the impact of a potential climate tech investment

Cost remains a major hurdle for customers, as highlighted by Melhuish, who pointed out how green-labeled products often get categorized as luxury items. “We reject that notion. Adoption is unlikely if customers are expected to pay extra for environmentally friendly options,” he emphasized.

Sai echoed this sentiment, stating that fewer than 10,000 companies globally measure their carbon footprints, deeming the number unacceptable. However, measuring emissions can be a costly process for businesses, showcasing another accessibility barrier. “You can’t manage what you don’t measure,” she stressed.

Sai also stressed the importance of simplicity for customers, citing the example of plastic bags versus tote bags. While tote bags are considered environmentally friendly, using them 1,500 times is required to offset the impact of a single plastic bag, a fact that can overwhelm consumers. She emphasized the need for experts and businesses to simplify decisions and guide corporations towards emission reduction strategies.

—

This article was originally published on November 9, 2022.

The post Beyond buzzwords: How climate tech startups can create an impact in green recovery appeared first on e27.