December 6th, 2021
Amro Partners’ co-founder and Head of Venture Investments Ami Kotecha chaired a lively panel discussion at CREtech London in October, discussing how venture capital can play a key role in climate-related innovation.
Joined by Gregory Dewerpe (founder of A/O PropTech), Nikolas Samios (co-founder of PropTech1 Ventures), Nicole LeBlanc (partner at venture capital firm 2150) and Roelof Opperman (partner at venture capital firm Fifth Wall), Ami laid out the scale of the decarbonisation challenge facing a complex and granular built environment sector under pressure to respond in a timely manner.
While solutions exist to measure and monitor in-use emissions, embodied carbon emissions represent a greater challenge, with a fifth of emissions coming from residential buildings that are inadequately insulated and fuelled by fossil fuels. It’s a legacy problem and the focus needs to be on decarbonising existing real estate portfolios as quickly as possible. Failure to do so will lead to an increase in stranded assets – buildings that cannot be let as they fail to meet country requirements – which will force landlords to act. It will take years to decarbonise existing physical real estate and the winners will be the early adapters.
The discussion also touched on the pros and cons of carbon offsetting and whether offering a route to NZC compliance through offset markets was a positive thing, bringing greater buy-in from companies who are unsure about how to achieve the targets, or whether offsetting instead offers an easy way out for landlords who could do more to tackle emissions directly. Concerns were also raised about the governance of certain countries where offsetting projects are located and whether all the capital ends up where it’s meant to be.
There’s a significant opportunity for Europe to position itself as the greentech capital of the world, due to ESG taxonomy, SFDR and other regulatory frameworks that form a basis for the private sector to commit to emissions reductions that incentivise capital and talent flows.
Venture capital plays a crucial role in taking early risks on start-ups that are innovating and bringing forward tech solutions for decarbonisation. There are new materials and new processes being developed that can reduce emissions. However, scaling those technologies will require investment and adoption by the built environment ecosystem – from Governments to landlords to regulators, all playing their part.
Many of these solutions will fail, but it’s the ones that scale that will enable us to meet our National Determined Contribution targets. Venture capitalists may need to accept longer gestations in their cleantech and climate tech investments – but fortune favours the bold and we only have eight years to make the difference.
To hear the full discussion please click here.
November 30th, 2021