In the bustling corridors of innovation at SXSW Sydney, one of the event’s first panel discussions delved into the pressing need for innovation and acceleration as the distance to net-zero by 2050 closes. “Climate tech is not a silver bullet solution – it's a silver buckshot one. We need hundreds of different solutions across the gamut,” says panellist Paul Hunyor, managing director and co-founder of Wollemi Capital, a global climate specialist investment firm that focuses on businesses and projects that reduce greenhouse gas emissions.
The cash is flowing into climate tech
“It’s not news that climate change is one of the greatest challenges of our time, requiring fast, coordinated action,” says Alex Matthews, panel moderator and CommBank General Manager of Climate Strategy, noting the statistic from the Government’s Intergenerational Report that up to $423 billion of GDP is at risk if the world fails to address climate change. But there are also significant opportunities. “Successfully transitioning will call for trillions of dollars in capital – our estimate is $2.5-3 trillion over the next 30 years,” he says. And with a strong and growing start-up ecosystem, there is a huge opportunity for climate tech here in Australia. Australian climate tech funders aim to raise $1.5B in the next 12 months.
Australia is in a position to move the needle
“We have so many amazing natural resources at our fingertips that we can use to lead the world in climate-tech innovation,” says Kirstin Hunter, managing director at Techstars, a business that supports entrepreneurs and works to make innovation accessible. Hunyor agrees, predicting that Australia will punch above its weight in several sectors: “Firstly, the movement from chemistry-based to biology-based agriculture,” he says, noting that his firm is a big believer in the vision of turning Australia into a renewable superpower. “There’s a lot to be done but it comes down to leveraging the critical minerals corridor that we have and doing more with our metals before shifting them offshore.” Another way we are moving the needle, household by household, is with solar electrification, says Katherine McConnell, CEO of Brighte. “We've seen solar capacity increase seven times since 2015 and now we’re seeing homes with solar expanding their systems and those who don’t have it hearing that it's working and putting in a big system up front.”
Climate skills are in demand
Industry’s focus on reaching net zero often centres on scaling new technologies but we need to keep in mind that we also need entirely new business models. Climate tech can only have an impact when we’re also investing in the deployment of those new technologies, says Hunyor. One example is the industrial space: “Waste-heat-to-energy technology has been around for years and could be vital in helping decarbonise steel and concrete plants. But the reality is, installing the technology is complex.” The innovation will likely sit with project developers who manage to move that to an infrastructure-as-a-service model “and that’s where we’re seeing a critical skills shortage.”
Climate-tech founders need more room to play
“For the founders developing physical technologies, there’s not the same proving ground as there is in the software venture investment ecosystem,” says Hunter. Often, their only option is to do a PhD to contribute to the betterment of their discipline. “It's important to consider: where is the opportunity to experiment and develop new creative ideas for deep-tech, hard-tech and infrastructure founders?” asks Hunter. “Because if the only individuals who can test, study and research a technology are those who can afford to be without pay for a number of years, then we’re limiting the amazing brains in Australia that could be helping solve the climate crisis.” As a founder 8 years into her own journey, McConnell adds: “If you're solving a problem that's big enough and that's real enough, then what you realise as you progress is it's not just about solving that problem, it's around building a company and trying to scale your idea. That’s where having a diversity of advisors can really help.”
Partnerships can help close the gap faster
“Nobody can change the world in a vacuum,” says Hunyor. “We need partnerships and collaborations.” Take Brighte’s latest venture. Right now, the private sector hasn’t been able to solve the problem of helping apartment renters unlock the spoils. No organisation has tackled it from a programmatic point of view and McConnell shared how her company is taking a new approach. “So Brighte is launching a partnership with the Australian government called the multi-unit development scheme, or MUDS, for strata buildings. The program is going to make it really easy for every participant in this strata block to participate in the savings that solar generates.” Proof that a complex problem can be made easier to navigate and scale with the right partner.
If you’ve got an idea – give it a crack
“Climate tech isn’t a vitamin and nor is it a painkiller. Climate tech is life support and corporate demand is queuing up for better solutions. Yes, it's hard to be a founder but never before have people been so motivated to help you succeed if you're willing to have a crack,” says Hunyor. For Hunter, the message is simple: “My advice to climate-tech founders is to build your company like the world depends on you – because it does.” And from one founder to another, McConnell’s words of wisdom: “Be tenacious and have that unshakable belief you can make a change.”
To learn more from leading industry experts, head to CommBank Foresight™ – insights for future-facing businesses.