The Centre for Digital Transformation assembled a carefully-curated group of participants to create a framework for incentivising institutional capital around the more rapid commercialisation of climate innovation.
Deep tech like climate innovation has longer cycle times and greater financing requirements than is typically found in software or other areas of venture capital-supported startups. Policy interventions that can help bridge this gap include public–private partnerships, which can help drive systems-level change and mobilise capital at scale.
Our mission was to identify key issues, share best practices from other domiciles and domains, and outline of desired approach. This workshop was presented in collaboration with Project Drawdown and Open ESG.
Provocation
1) What are the most exciting opportunities for public-private collaboration around climate innovation?
2) What is one specific intervention you want to see government implement to support private capital investment in climate innovation?
Conclusions
Exciting opportunities
- More and better accounting standards for private and public companies regarding ESG
- Coalition of companies facilitated by government
- Creating a government-mandated carbon price flow to help reduce volatility
- Education: both in terms of bottom-up from elementary schools as well as top-down from business
- Open data to facilitate public–private collaborations in areas such as energy efficiency
- Supply chain to simplify production of tools necessary to introduce local net zero economies
- First Movers Coalition of the World Economic Forum: create a buyers club between governments and industries that need transformation, such as green cement, green steel, and generate a demand
- Create better carbon markets via a public–private collaboration
- Reimagine cities for people, not cars
- Take risk from lenders, providing grants, making financing more secure
- Global fund that incentivises or penalises certain behaviours which are positive or negative for the climate
- Educate people worldwide so they understand why it's necessary to care about the climate and change their behaviour
- Power of positive storytelling to drive change around champions of the climate space
- Lead investing by governments or co-investing by governments alongside private capital
Recommendations for specific government interventions
- Put the price on the carbon that goes onto company balance sheets
- Open data coming from government, as well as mandating that companies do so as well
- Expand the model of the European Union carbon border tax to put money in the hands of people via basic income and use some of the money for an innovation fund
- Expand venture level tax incentives for VCs up to the Fortune 500
- Government spotlight on top 15 areas for climate crisis innovation, offer accelerated depreciation over two years, to offer two to one matching funds for venture funds to help subsidise and create moonshots similar to how UK handles startups
- An alliance that formulates a policy framework work for projects relevant for the climate, where they can enjoy fast tracking in several countries, addressing issues such as delays on wind farm approval
- Lead investment by G7 countries, catalysing private co-investment in developing nations. To address transparency and governance, facilitated by a private stable coin, with a track-and-trace mechanism to ensure funds are delivered where needed. If money is misappropriated, automatically generate a TikTok video to name and shame offenders. Conversely, for positive outcomes, generate a Climate Champion TikTok video with an incentive to virality by encouraging positive action to be taken either by a stranger or someone you know (similar to the Ice Bucket Challenge).
Contacts
Centre for Digital Transformation, Imperial College Business School
- David Shrier
- Chris Tucci
- Laura Singleton for media enquiries