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Net Zero in Focus: Climate Week with Speed & Scale
In this episode of What’s at Stake, host Ylan Mui is joined by Ryan Panchadsaram and Anjali Grover from Speed & Scale to reflect on Climate Week 2024. Ryan and Anjali discuss the pressing need for stronger corporate net-zero commitments and the crucial role of venture capital in accelerating breakthrough technologies. The two also offer insights into the connection between national security and climate change, highlighting the need for increased investments to drive meaningful progress and bold action.
Welcome to this week's episode of what's at Stake. I'm your host, ilan Mouy, a Managing Director at Penta. New York Climate Week has just wrapped up. It's one of the largest annual climate gatherings that brings together business leaders, policymakers, advocates and the public to discuss solutions that can help us drive down emissions and accelerate the transition to clean energy and a more sustainable economy. Joining me today are two very important voices in that discussion. Ryan Pechinsaram and Anjali Grover lead Speed Scale, a climate action platform that was founded by venture capitalist John Doerr to create a roadmap to help the world reach net zero by 2050. Ryan and Anjali, thank you so much for joining me Our pleasure.
Speaker 2:It's wonderful to be here.
Speaker 1:Fantastic. Well, one of the really fun parts of Climate Week is that it's really a chance to connect with other people who are equally passionate and equally committed to this issue, to learn more about what others are doing, to maybe get inspired, as well as to share your own experiences what's been working, what hasn't been working and what you're thinking about for the future. So I'd like to start with a big picture question, if you will, and ask what's one new thing that you learned at Climate Week?
Speaker 3:I'm going to cheat and I'm going to share a couple of things that I learned from Climate Week this year, and I think, with so many summaries that relate to climate, there's always a bit of a potpourri. There's some great news and there's some sobering news. So on the uplifting side, I think a lot of us know that solar is having a standout year. We're on track for the 23rd consecutive year of renewable energy deployment and in the past year, we've seen an 80% increase year over year in deployment, which is enough for me to want to jump on the couch, Tom Cruise style, and wave my hands about.
Speaker 3:You know, I think that particularly interesting piece of this story is how geographically distributed it is and, as just one example of that, I saw Jennifer Morgan, Germany's climate envoy, speak on Monday and she really highlighted the huge advances that Germany has made since Russia invaded Ukraine in transitioning to clean energy. In 2023, Germany doubled its solar capacity additions From 2022, the German grid is now 60% clean and it's on track to phase out fuel by 2030. It really highlights the ability of countries to act and you know, we've never seen. You know, I think solar is the cheapest form of energy in 95% of countries, 95% of the world today, and the energy security imperative just gives us more of a reason to act.
Speaker 1:I think that's so fascinating when countries have to do it they can, and then they realize that actually maybe it's something they should have done a long time ago. Ryan, what about you?
Speaker 2:Yeah, we're talking countries when we spend time with companies. I mean, I was at this CSO roundtable and one of the CSOs from a large food company shared that it will cost them 1% of their revenue to cut emissions in half by 2030. And that's the nugget I keep sharing with everyone that I meet, because that CSO was very clear. They made the call to action in the room to spend it within your supply chain to help your suppliers decarbonize. But just that 1% to get to 2030, I thought was a remarkable number and it's really stuck with me.
Speaker 1:I don't know if they gave you the data on this, but how much they save from doing that transition as well, right? So 1% of their revenue investment that you know what is the return on that?
Speaker 2:Yolanda, I have on my to-do list to follow up with that CSO. I really want to know the details of that 1% but more importantly I want to know how much it's going to cost them to get to net zero by 2050. Because I think when a world-leading food company like that can put these numbers in perspective that can inspire others to act, it can give their CFOs real numbers to follow.
Speaker 3:I think on that front.
Speaker 3:You know, ryan, one of the huge learnings and insights for me came on what we call, under the speed and scale plan, other industries so not steel, not cement but also hard to abate, and this session was put on by our friends at Bloomberg Philanthropies and it was really around petrochemicals and focused on the planned expansion of petrochemicals specifically in the US and talking about the health and the environmental and the climate impact that we are seeing and that we can expect to see with this build out, and some of the data points here I thought were particularly sobering.
Speaker 3:So, just to bring us all on the same page, the petrochemicals are the input right to plastics and rubber and synthetic fibers, adhesive dyes, detergents, pesticides they're pretty much in just about everything that we touched in our daily lives. Their planned petrochemical buildout in the United States is equivalent to 39 coal plants or all US commercial aircraft in 2022. We're talking about 154 million metric tons of CO2e and these plants that already exist are already having hugely devastating effects on the health of people who live near them. And so you know there's work to do. There's work to do on fronts that we were aware of but maybe not paying close attention to a few years ago. So you know, the news that we get on Climate Week is great because you sort of get to celebrate the wins but you really get to lock into the issues that need more consideration, more investment, more time.
Speaker 1:You know, it's really in some ways, a little bit of a relief to know that, even when people with your level of expertise and knowledge go to Climate Week, that you're still learning things, that there's always more to understand and more that we know that we can do. But at the same time, you all also were very well represented. Speed and Scale team members were speaking on several different panels and participating in events throughout Climate Week. What are some of the major insights that you brought to the table and that you shared with others?
Speaker 2:Ilan, I got a chance to speak at an event for Breakthrough Energy and the Center for Climate and Energy Solutions. I was tagging up with Nat Keone, who runs the nonprofit advocacy group, and we wanted to do a fireside chat, but the prep call went for about an hour, so the only way to get that information across was to jam it into a call it a nutrition information dense presentation and was all on first of a kind financing, and so the title of the presentation was Breaking First-of-a-Kind Barriers. You know, what was special about the conversation was there's this deep understanding that venture capital dollars are slowing. Right, the deployment rate is slowing, but it's so much more than what was being deployed in 2020. And so we have to remember the pace of venture capital that's happening today is so much more than five years ago, but it is going to be a little less than last year, and so we have to keep that in mind, especially companies that are going out and fundraising. You know they've got to make sure they hit the technical milestone, they've got to make sure that they have early revenue signals.
Speaker 2:But sort of the good news is that there's actually a lot more capital for infrastructure and the new ideas, especially for the ones that are working right. These are the large funds by BlackRock and Brookfield. It's also a lot of the catalytic capital from the EPA and the Department of Energy and groups like Breakthrough Energy Catalyst. So there is money that's going into the early stages as well as the stuff that's more proven. It is this, call it, the messy middle. That's really hard, and so, at that event, I tried to give advice to the different groups of folks the founders, the buyers, the investors and the policymakers on what each group can do.
Speaker 1:Anjali, the panel that you spoke on with the Environmental Defense Fund was more focused, perhaps, on what some of the big corporate players can do. There's a lot that entrepreneurs and startups and sort of early stage investment. They certainly have a role to play, but if you don't get the big guys to move too, then we won't make much progress.
Speaker 3:Absolutely, and I think, in telling this story, it took me back a few years, to 2020, when we were working on speed and scale. Our team was in the midst of writing the book and we had set out to understand what the state of corporate climate commitments look like, and we thought it would be a fairly straightforward exercise. Companies were largely committing to net zero. There was a lot of carbon neutrality claims out there and at the 30,000 foot level, we seem to be coalescing around the same idea decarbonization. Amazon, if you'll remember, had just bought the naming rights to a little space in Seattle and they dubbed it the Climate Pledge Arena. And so I thought I think a lot of us thought we were living in the golden age of climate commitments, or so we thought. And so in the golden age of climate commitments, or so we thought. And so you know, in our first analysis of climate commitments, we were confronted with just a buffet of terminology all used to describe companies' goals, and I actually took the time this week and went back and tried to jot down all the terms that we came across that were being used to describe companies' goals. Here's just some of the terms If carbon-free, carbon-negative, carbon-neutral, carbon-positive, climate-neutral, net neutrality, net positive, net zero, net zero, carbon peak emissions, real zero. Someone's got to fill me in on what fake zero is. Reduction and zero emissions? Obviously, that's a lot to contend with, and so our team dug several layers deeper, and we've been that that terminology was not being applied consistently within a single organization or even across organizations. Um and so, in that first year's analysis in 22, what we found is about 6% of the fortune global 500 had true net zero commitments in place.
Speaker 3:So the inevitable question becomes well, what's a true net zero commitment? The UN and SBTI have all argued that the math is pretty simple. It's in line with the science. You have to reduce your emissions as much as possible, and your residual emissions can only be offset with permanent removals. That's what zero looks like. That's a really high bar, right, that's a really high bar. We understand that, and it doesn't mean that the companies who aren't meeting that standard today are failing. But it does give us an understanding of where businesses need to move for the world to draw down from the 59 gigatons of CO2e that are in the atmosphere of CO2e that are in the atmosphere. An updated analysis of that same question yielded about 9% of the Fortune Global 500 last year that had TrueNet's Euro commitments in place. So you can see that we're not making the progress that we would need to be making in order to draw down emissions.
Speaker 3:I think the big picture is this is that you know there's a lot of talk about the action that we need to see in the plans, the progress and for sure that needs to happen. Commitments tend to get overlooked as a marker of corporate action, but I would argue that they are the most important harbinger of progress. You don't see the amazing action without amazing commitments in place. So you know what the state of the state is is that there's much more to do. We need many more companies, both those that are in the Fortune Global 500 and those outside of it, to make net zero commitments so that we have a North Star and a pathway for the audacious climate action that we're going to need. So there's some degree of.
Speaker 1:You know, maybe the commitments are the leading indicator, but certainly we need to see that follow through with the action and the data that shows that they're going to meet the commitments they've put out and then even make those commitments stronger and more robust and harmonized, so that we understand exactly where we're all going.
Speaker 3:I think that some folks have argued that climate commitments are a bit like New Year's resolutions, that they're easy to make and hard to keep. But I would argue that the numbers don't really tell that story. We're still looking at less than 10% of the highest revenue companies in the world that have that North Star commitment. So we need to see more commitment and that commitment needs to be followed up with real action.
Speaker 1:So, Ryan, when you're talking to early stage companies and to startups, you know what is. What do you suggest their New Year's resolution be? What? What promises should they be making to themselves and and to their investors?
Speaker 2:You know, for the early stage companies, it's really about them building and scaling their technologies Right For on Angus side that, like those large companies right, the ones that are trying to decarbonize, they're the buyers Right, they're the buyers right, they're the pull, whereas the startups are the creating the new thing and you know, some of the advice we give to them in this moment is in whatever you're doing, how do you do a lot of volume and reps and learning A lot of these companies? Try to build just one of a kind things right, the whole first of a kind acronym, and the advice I'd like to give them is really, you know, try to run as far away as you can from being a first-of-a-kind. Find ways to build what you're doing smaller, more modular, or make sure that when you're thinking about building it, how does it actually look? A lot like different industries.
Speaker 2:You know, also, when you think about decarbonization, the thing that companies are selling are not first of a kind. You're selling energy, you're selling steel, you're selling a way to move, you're selling food. So the way you interact with companies is probably the exact way that they're buying those things today, and so when you talk about buying some of the advice for the big buyers and companies is you know, these clean green things are expensive when they're being first innovated. So be that demand, pay that premium. Be really clear with companies what KPIs need to be met for you to be a buyer and maybe take a shot at investing. For the upside, you can help these companies with that extra capital.
Speaker 1:How have you guys seen the conversation evolve since that moment or you guys have talked a lot about since, dating back to 2020, you know, obviously the world is in a very different place than it was when the Paris Accord was initially signed, all the way back in what is it now? 2015. And certainly since even 2020, and since even the Speed and Scale book came out, we've seen many, many shifts in geopolitical dynamics. There are wars going on, as you alluded to at the beginning of our conversation, anjali. There might be some silver linings and learnings in that, when countries are forced to look at some alternative energy sources, but I'm just curious whether you think that makes a climate conversation and climate consensus harder to achieve when we live in a more volatile world.
Speaker 3:I was in conversation last night at dinner with an entrepreneur who is at the circularity space and she was remarking about how just four or five years ago, when we were seeing a lot of heads of ESG be appointed, her selling proposition looked very, very different. Right, she could sell into big retailers, wholesalers, get her service to be adopted and her technology to be adopted, solely for the purpose of climate, and doing the quote unquote right thing. She's living in a very different world today. Lots of the same folks that she was selling to four years ago, those roles don't exist today. Lots of those heads of ESGs, especially in retail, don't exist anymore, and so she's having to talk about the value proposition of her company in a very different way.
Speaker 3:And I think that speaks to the question that you're asking, which is for the last few years, I think a lot of folks in the climate space have talked about the co-benefits to climate action the jobs, the quality of air or environment.
Speaker 3:I think that we are getting that wrong and that climate need as an outcome needs to take a backseat to the opportunities it affords us in terms of health and economic prosperity and national security. So we talk a lot about the planet, but the truth is that the planet is going to be just fine. This is about people, it's about their energy bills, it's about jobs, it's about breathing clean air and about your kids getting to do that and their kids getting to do that. You know, in Germany, going back to Jennifer Morgan's talk, some 400,000 new jobs are estimated due to this transition to clean energy. You know, clean energies are the industries of the future and a lack of leadership on climate pretends a lack of economic leadership. Lack of leadership on climate pretends a lack of economic leadership. So, to answer your question, I think that this is about reframing the conversation and helping people understand how decarbonization is the pathway to economic prosperity, to energy security and to fundamentally better lives.
Speaker 2:Ron, you know every chapter of the book is needing an update because of what's happened in the past couple of years. Right, you think about chapter one the competition in EVs from China. You know China is the number one producer of these. They really are putting on the pressure because they own every part of the supply chain. This is really shocking the legacy automaker in the US and Europe.
Speaker 2:You jump to the global crisis happening in Ukraine and Russia for Chapter 2, decarbonize the grid.
Speaker 2:Those oil and gas shocks, specifically natural gas shocks, really forced countries to think about how do they get away from fossil fuels, how do they use things like heat pumps and energy efficiency, and so that crisis changed the relationship, with a steady oil and gas price and reminding folks that fossil fuels are really volatile.
Speaker 2:You jump to chapter three fixing food. You know we talk a lot about beyond meat and alternative proteins, and we come to find out that the majority of beef is eaten by just a few people. We found out that 12% of Americans eat over half the beef in the country, and so when you think about the alternative protein movement, it wasn't tackling that part of the problem. Those solutions weren't good enough and I mean I could jump to every chapter, but you think about protecting nature. The good stuff that's happening in Brazil and Indonesia is keeps us on our toes, and why we love doing it is that this is an active problem that's actively changing, with more solutions, and I think we're optimistic that there is a path right. It's the whole tagline of the progress report. We've made unprecedented progress, but we need far more urgency and ambition.
Speaker 1:One of the things that you said, anjali, stood out to me in terms of the challenge of making an environmental case as a sort of co-benefit to other issues. How far do you think we've come in turning climate into a kitchen table issue and really sort of seeding the idea that getting to net zero is actually good for the economy, it's actually good for jobs, it's actually good for security, that it's not a goal on its own, that it's actually part of all these other issues that everyday Americans and everyday families around the world care about?
Speaker 3:I think the answer to that question really varies depending on where in the world you live today. So when we look at some of the impetus for why countries decide to act on climate or decarbonize their industries, oftentimes there is some kind of external input that's driving that decision. China is by far the world's leader on EVs today. They're poised to control one third of the global auto market by 2030. That is a real come from behind story, and a lot of that early start that China made on EVs had to do with their dependence on foreign oil and the and the risks that they saw associated with that Traveling to another hemisphere in the world. In Denmark, denmark was a leader in natural gas for a long time and they really started to invest in offshore and onshore wind because of what we saw happen to natural gas and the shale boom. Countries and companies are not going to act just because it's good for the planet. We need to find the existential and we need to find the economic reason for companies and countries to act.
Speaker 1:So, if I can ask you all to future cast a little bit, what could an economy of the future look like if we focus on the clean energy transition In a world where we do see politicians and business leaders and other advocates stepping up to the plate? What could that world look like?
Speaker 3:Ron and I were in conversation with a team from Australia earlier this week and they told us about the amazing transition that Australia has made. About 40% of their grid is clean nationally, but 80% in the southern part of the country, and one of the things that has really stuck with me that they shared is that you've got climate deniers with rooftop solar. People are choosing solar again, not because of climate, but because it's the most economic energy source for them. We're seeing a similar story in Pakistan, where so much rooftop solar was installed over a six month period that it added 30% capacity to the total grid. So when we're answering the question of what the economy of the future looks like, I think it's one where you've got cheap, abundant future looks like, I think it's one where you've got cheap, abundant renewable energy. You've got great clean energy and great storage to be able to support the total energy equation, and we're living in a world that is fundamentally more resilient and more capable of powering us into the future.
Speaker 2:You know there was this wonderful panel with Bob Mumgard, the Commonwealth Fusion CEO, and he really pushed this new way to think about things in my mind you know he talks about the need for energy has always been a resource extraction game, right, continually looking around the world for sources of oil and gas and coal. This new shift is one about technology and manufacturing, right, how many fusion plants can you build? How many solar plants can you build? How much battery can you build? And all these new energy sources from technology manufacturing you get to keep, and so what you're seeing today is countries that import energy are starting to see it as an economic and national security imperative to start trying to bring these resources, this manufacturing, all to home. And that's actually inspiring, right, because then it creates this race to the top.
Speaker 2:You have the Inflation Reduction Act in the US that led to the Green New Deal in Europe, to the work that's happening in Australia that Anjali just talked about, and you are coming into a year this year 2024, where two billion people are walking into elections and the candidates that they pick are going to set not only the economic priorities for their countries but also their climate posture, and that's going to be really critical for next year when every country is going to be in Brazil for COP to set what their targets are. So we've got a lot going right now globally and very much individually right. Like your vote matters this year? It absolutely does.
Speaker 1:So hopefully, in this climate forward economy of the future, there's also room for a little bit of fun too. I know that climate week often is filled with like very dense, a lot of data, you know, very heavy panels, but there's also a lot of social events and sometimes some celebrities might show up to them. What's something fun that you guys did during Climate Week?
Speaker 3:I gotta say my one of my favorite events of the week is the Emerson Collective's Climate Science Fair. It's free, it's open to the public, it runs along the High Line in New York, which is beautiful. We had some really stunning weather this week and I think it's you know, I think climate. I was at a birthday party for one of my daughter's friends on Sunday and chatting with climate, with some parents who don't work in climate, and I'm always reminded when I do that of just how deep we're in it and just how daunting people who don't work in this space find it, and I love that Emerson puts on an event.
Speaker 3:That is one beautiful and a lovely way to sort of engage with the idea of a climate week. You've got 100,000 people descending upon your city and this is about a topic that affects all of us and I love the spirit of that idea. It's a great way to get people to find what interests them. We've got 10 objectives on the speed and scale plan, everything from food to cement, if that's your thing, to policy and politics, and there's a lot of ways to get engaged and get involved and they showcase so many great solutions over the course of that science fair and I think it's a great, it's a really. It's a really lovely way to pay homage and say thank you to the city that hosts Climate Week and also to make people feel like they can be part of the solution.
Speaker 2:Yeah, the special thing about that event it's on the high line, anyone can attend it. You're like everybody. If you're just a tourist, you're seeing the science fair and you're like, oh my God, what's happening? The kind of fun thing was like to kick off the week. Nasdaq, you know, opened and had the opening bell rung by the climate community, and so it was like a really special thing. You're like you're seeing industry flashing on the boards of how companies are doing and up, front and center is NASDAQ saying you know, we want these companies of the future to be a part of the industries of the future, and so I had a really good time there with colleagues from the climate community.
Speaker 1:That sounds so fun, definitely. Definitely a celebration too. They have the confetti and everything going. So, okay, I will admit that I started this conversation, you know, a little bit, maybe depressed, if that's the right word. I think a lot of people are depressed about the challenges before us in terms of avoiding the worst case scenario when it comes to the environment, the planet and the potential impacts of climate change, but you guys have brought a lot of optimism to the conversation, so maybe the parting and final thought can be what's that secret sauce? What keeps you still hopeful and optimistic that we can actually reach net zero by 2050?
Speaker 3:So I lied earlier.
Speaker 3:Today I have a different Tom Cruise moment, or maybe I just am eager to jump on couches, but the thing that I turn to consistently when I'm left wondering what impact our work is having not just our work, but the collective world's work is having on this climate crisis, is to go back and look at the data having on this climate crisis, is to go back and look at the data and what it shows us is that if we rewind time, we go back to 2014, right before the Paris Agreement was signed, and we look at temperature projections for the year 2100, what you would find is that the temperature was looking like it was the average temperature projected to be about 3.9 degrees Celsius.
Speaker 3:Today, that temperature projection is 2.7 degrees. So we have brought the temperature projection down almost in half in the course of 10 years. That is not no one here wants to live in a 2.7 degree world, but it shows us that we can make immense progress and that we have made immense progress For those who think that we are not making a difference, that we are not bringing down, we're not bettering the world with the work that's being put into this, the energy that's been put into this by policymakers, by innovators, by activists. That's fundamentally untrue. We're seeing the effects of our work today and we just need more speed and scale to get all the way back down to the temperature of the world that we want to live in.
Speaker 2:I think what keeps me motivated is just seeing the fact that, you know, one dollar of solar today, elon buys more solar than it did yesterday and a lot more than five years ago. And then we're talking about a lot more than, of course, 20 years ago. And so when you think about the feeling of doom, which means like we can't act on actually tackling and solving this problem, you know that's changing. Right, there are technologies and there are solutions. Right, we have all the technologies we need to get and cut our emissions in half. Right, if we scale them up, the kind of charge for innovators and entrepreneurs are also to then invent the next set of technologies that we need. And you know we have line of sight of what those things are.
Speaker 2:Right, clean steel, ways to fly planes using sustainable fuel, ways to do farming and soils better. Right, like there's actually a path. And so you know, optimism is the key word here, because optimism is something you can act on. Right, I would say hope is the wrong word, because hope means you're praying and hoping it gets fixed, and that's not what's gonna happen. I mean, I think this is a entire industry transformation and it's gonna take all of us to choose the clean green thing. It's gonna take a lot of the innovators and entrepreneurs to scale up the clean green thing, but there is a path and I think that should be why we're optimistic.
Speaker 1:Ryan and Anjali. It's been great to speak with both of you today. Thank you so much for joining the podcast To our listeners. You can learn more about Speed Scale by visiting the website speedandscalecom, as well as signing up for the newsletter. They're also on Twitter, at Speed Scale, and on LinkedIn, and, of course, please remember to subscribe to this podcast. Wherever you listen to your podcasts, you can follow Penta on Twitter, at PentaGRP, and on LinkedIn, at PentaGroup. I'm your host, ilan, and, as always, thanks for listening to what's At Stake.