Climate change, innovation, and entrepreneurship
November 4 2021
Climate change, innovation, and entrepreneurship
Climate change is the single biggest threat to human existence as we know it. Our planet faces enormous challenges that only humans are responsible for. And indeed, there is hardly a day where news about climate change, increasing greenhouse gas emissions, and the warming atmosphere does not reach us. Climate change seems to be dominating our everyday life – and not in a positive way. For example, studies have found that levels of teenage anxiety due to climate change are currently at unparalleled heights. The inconvenient truth, to borrow from Al Gore, remains that if we do not drastically cut our carbon emissions by 2050 at the latest, by then Planet Earth will not be recognisable anymore, and societies will need to deal with major shifts in climate, food production, migration, and biodiversity loss.
As almost every part of society has reoriented itself to accommodate the challenges posed by climate change, how has the sphere of entrepreneurship and innovation contributed to this phenomenon?
Green start-ups are becoming more and more popular, with the number of eco-entrepreneurs, and the spaces dedicated to them, growing steadily. We live in an age where social media and associated marketing channels have reached undisputable importance in promoting a “green” and sustainable lifestyle, with influencers, bloggers, and content creators advertising for climate-conscious companies – or, inversely, shaming those who are not embracing the climate cause. This can be seen to have a two-fold effect: there is greater incentive for companies to look at ways to become more sustainable, and new start-ups and budding entrepreneurs are motivated to position themselves on the market in terms of their ecological impact.
International spotlight has also been turning towards climate-friendly entrepreneurship and innovation. The United Nations Framework Convention on Climate Change (UNFCCC), the UN’s overarching climate authority, recognises that innovation is crucial to develop better, more efficient, and climate-friendly ways of life. Earlier this year, the UN Climate Change Innovation Hub was launched with the purpose to “promote disruptive, SDG-integrated innovations compatible with the goal of limiting global average temperature rise to 1.5 degrees Celsius through a cluster of climate actors using a collaborative platform for all to exchange experience, learn from one another, and track, report and recognise action.” Similarly, accelerators and incubators for climate technologies already exist in some places, such as the EU-funded ClimAccelerator. However, it is also largely acknowledged that solutions to climate change issues might come from local communities in rural areas where people might not be familiar with concepts relating to entrepreneurship and innovations. There is therefore a need for better frameworks and more support for such communities.
What does this mean for global industry?
Companies world-wide have become conscious of their environmental impact and are adapting their policies to reflect new attitudes towards climate change. There are ISO certifications to be acquired as proof of good environmental management, and climate-related financial risks can be incorporated in company reporting mechanisms. Whilst many companies now undertake net-zero commitments, it can be tricky to discern instances of “greenwashing” from genuine climate commitments. Some companies commit to “zero waste” policies in their operations, others release their carbon footprints alongside action lists to mitigate any carbon dioxide emissions. More wide-ranging commitments strive to make production processes circular and more sustainable. Ford Motor Company, for example, is committed to using recycled fabrics in its vehicles as well as to converting paint fumes to fuel for the company’s US-based plants.
It is highly likely that the future will only bring more pressure on companies and governments to produce evidence of environmental commitment. Especially industries perceived as highly polluting, such as the energy and the automotive sectors, will need to continuously provide proof of their contribution to the fight against climate change and environmental degradation. As the recent court cases against the Dutch Government as well as Royal Dutch Shell demonstrate, the threat of legal action to insufficient climate commitments is real and will only accentuate in the future.
What is the role of investors in all of this?
Likewise, investor attitudes have seen some developments in line with the new sensibility towards the climate issue. Whilst green technology investment funds have been active in the United Kingdom for about 25 years, thus coinciding with the establishment of the UN’s climate regime in 1994, their activity has been expanding. The interests of such funds have pivoted to include broader topics than the initial focus of replacing fossil fuels, such as the environmental impact of everyday life. Examples include impact on carbon footprints of grocery shopping baskets and of wider consumer habits, energy efficiency for homes, and ways to reduce impact on biodiversity; the list continues to expand.
The need for proof of environmental impact, be it clear positive or reduced negative, has begun to affect investors as much as wider society. This comes with the realisation that climate change is an issue that requires more than one intervention, more than one technological eureka moment. Rather, what investors have the power to foster through their role is a shift in consumer habits towards a more sustainable and participatory society.
And what about innovation management?
At Oxentia, the nature of our work means we come into contact with some of some of the world’s newest and most promising environmental technologies. We are in the unique position to give these technologies access to global markets and their inventors a voice to be heard. Through many of our projects, we have also had the pleasure of working with entrepreneurs with game-changing products and services that will contribute to a green market revolution that we are expecting in the near future.
To us as a company and as innovation management consultants, the climate crisis means that we must increase emphasis on the impact factor in our training and mentoring activities. Impact, including climate-related goals, is not just a tick box and something that entrepreneurs give proof of as they grow: it can be planned in advance, whatever the nature of the technology that one wishes to develop.
We are eager to see new opportunities for green solutions increase following the current COP26 summit. As well as attracting new market entrants, these will stimulate established industry players to develop and reposition intellectual property to meet new climate goals. We look forward to continuing to support clients and partners in this shift through technology valuation and repositioning, market research, and licensing services. Investing in the continuous development of skills to position green technologies in the market will be a priority for innovation management consultants around the world in the upcoming years.
As we continue to develop and deliver our commitment to the climate cause, we have created the Oxentia Foundation, a not-for-profit organisation to address global inequalities through innovation and entrepreneurship. Through the Foundation, which will soon launch globally, we expect to support inventors without immediate access to capital and partnerships in the creation of a sustainable future for our planet. Reducing the impact of climate change is not just for the better resourced advanced economies of the world or the well-capitalised leading corporates. Innovators and entrepreneurs all over the world, from the world’s richest to poorest economies, need to be empowered to bring about the changes we need to see. That’s a key role we play here within Oxentia.
 The United Nation’s Framework Convention on Climate Change came into force in 1994. It remains the foundation of the international climate change regime until this day.