How business is riding the Fourth Wave

Environmental innovation is thriving. Here's how leading businesses are benefiting from their sustainability tech investments.

Investments from venture capital and private equity firms into sustainable technologies surged to over $9 billion last year. And their appetite to invest in new technologies is transforming everything from energy generation to energy efficiency and automation, while the electrification of mobility remains unabated.

The $9.2 billion that investment firms committed to new technologies in 2018 was a 127% jump from 2017 and returns the category to highs it had not seen since the height of the clean-tech bubble in 2010, according to the clean energy and sustainability tracking and analytics firm, Bloomberg New Energy Finance.

Companies using tech for efficiency

Thanks to continuing advances in sensor technology, data processing, materials science, genetics and the falling costs of existing renewable power technologies, sustainable technologies are indeed poised for a renaissance. And at price points that should make large corporations take notice.

Indeed, the adoption of renewable technologies improves operational efficiencies within companies and may even (in some cases) improve productivity among employees.

The benefits reflect the broad swath of industries where clean and sustainable technologies can be applied.

For example, the largest investment in 2018 was a $1.1 billion commitment into View — a company that uses sensors and coatings to create what it calls smart windows. The company's product can improve energy efficiency and, it argues, productivity.

View claims it can increase a building's energy efficiency by 20% while giving employees the benefit of working in natural light, which has been shown to have health benefits.

Tech giants take on energy consumption

While View is focused on conservation and health, other sensor technologies are tackling rising sources of energy consumption — and emissions — through adding efficiencies to data center operations.

Companies like Amazon, Alphabet and Microsoft have established global networks that supply hosted internet services to many of the world's businesses. These data centers — quickly rising as a source of concern among environmentalists — are turning to technology solutions to slow the pace of their energy consumption.

Data centers currently use nearly 200 terawatt hours each year, which equates to about 1% of global energy demand and 0.3% of overall carbon emissions, according to a 2018 article in Nature. However, the information and communications technology industry as a whole, including mobile phone networks, personal digital devices and televisions, accounts for 2% of global emissions.

Notably, as of April 2018, Apple was powered entirely by renewable energy and has convinced over twenty of its suppliers to engage in carbon offsets to make more of its own supply chain carbon neutral as well. The other tech companies are also forging ahead. Google is the world's largest buyer of renewable energy to offset emissions, while Apple has also slashed its emissions by 58% since 2011.

Even companies like Facebook and Amazon are getting into the act, with Facebook aiming to power its operations entirely with renewable energy by 2020 and Amazon saying half of its shipments will be carbon neutral by 2030. Amazon already claims to have eliminated 244,000 tons of packaging materials and avoided shipments of 500 million boxes.

These companies have the potential to be exemplars of how to apply technology to business operations to drive down costs, improve efficiencies and reduce emissions. Conversion to renewable energy — or the use of offsets — is one arrow in the quiver of these companies. But so is a deep knowledge of their operations through visibility they acquired through the deployment of automation and sensing technologies to optimize efficiency.

Startup investment boosts innovation

Emerging technologies — from companies like Spark Meter, which is driving down the cost of meters for microgrid energy; AMP Robotics, which is automating factories to improve efficiency; and even new blockchain-based software platforms for new application development, like the Energy Web Foundation — are becoming the basis for viable businesses on the back of investments from venture capital firms and large technology companies.

And while the founders and executives of these companies reap the benefits from technology deployments in their organizations, they're investing some of their wealth in startups that could improve their operations even more down the road.

For instance, Jeff Bezos, Bill Gates and Mark Zuckerberg are all backers of Breakthrough Energy Ventures — a venture fund committed to backing moonshots at the far edges of technological possibility.

These startups touch everything from nuclear fusion technologies (Commonwealth Fusion Systems) to new, low-carbon manufacturing technologies for making steel (Boston Metal) and cement (Carbon Cure).

Utilities provide key support for growth

Underpinning all of these advances, and providing support for technology development when profit-seeking investors abandoned the market, have been the big utility and energy companies themselves.

There can be no deep decarbonization without them, and these companies have actually been making progress in meeting the demands of regulators and investors to make the shift to clean energy possible.

Whether through investments in infrastructure to support electric vehicles or software and services to ease the transmission of renewable power across the grid, utilities have provided key support to the startups developing these technologies of tomorrow.

As the Fourth Wave surges, it's this combination of utilities and industry, responding to the demands of consumers, investors and regulators, that will catalyze adoption of the technologies that will show an upside for both business and the environment.

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