GCV Symposium 2021: Panel – A future vision for climate-focused investors

Henkel Tech Ventures’ Paolo Bavaj moderated a discussion between Btomorrow Ventures’ Lisa Smith, ArcelorMittal’s Irina Gorbounova and Hitachi Ventures’ Tobias Jahn about making climate-conscious investments.

Steel itself is an infinitely recyclable material, said Gorbounova, but the production process is heavily carbon-intensive. While challenging, it also presents a great opportunity to make an impact by identifying those technologies that would let the industry reinvent itself in a carbon-neutral way.

Currently, the steel industry is looking to switch from coal to natural gas and then eventually to clean hydrogen. The solution, she said, would not necessarily be to find alternative materials to steel – a highly versatile material that is used in everything from industrial construction to consumer products – but rather invest in low-carbon production technologies.

The heart of the matter growing sustainable solutions at scale and getting all stakeholders on board – from individuals to corporates and to governments. Smith said: “The ability to scale solutions is one of the cruxes of the climate agenda – how we can work together to rapidly scale technologies that are already out there.”

Getting the corporate on board, the panel highlighted, would require an investment hook – be it strategic or financial – which can then result in multiple sustainable outcomes.

Regarding how to measure success, Jahn outlined a multi-layered approach. Firstly, as selection criteria, you have to assess that the company would not be harmful once the technology and business scale. Subsequently, financial metrics are a necessary indicator of whether the investment was made correctly, and one should take into account the internal success vis-à-vis how the investment interacts with and benefits the wider company ecosystem.

Ultimately, it cannot be just sustainability-focused companies that use climate metrics – all organisations should incorporate sustainability metrics across their business. Smith said: “If you do not do that, all we are doing is investing in bloody nightmares when they scale up.”