Rob Majteles is a Board Member-in-Residence at Mach49. With decades of operating, investment, and board experience, Rob focuses on impact as the driving factor in entrepreneurial success and passionate advocacy for climate and sustainability-centered growth initiatives that both serve the planet and create enormous financial wins.
Despite an abundance of corporate net zero and nature positive pledges, corporations are struggling to define, align, and execute the plans needed to achieve their climate and sustainability goals.
The biggest challenge for companies trying to turn these goals into reality comes from the explicit and implicit acceptance of a false binary, often dangerously phrased as a rhetorical question: “Are you making money or are you saving the planet?” The only real answer to this question is ‘yes’. And, only climate and sustainability growth initiatives can make it happen.
In a recent Fortune survey, 58% of Fortune 500 CEOs said they have a plan to achieve net zero greenhouse gas emissions by 2050. And yet, any scorecard measuring the achievement of these goals calls into question the credibility of these plans. For example, Norges Bank, one of the world’s largest sovereign wealth funds, recently assessed the net zero pledges of their 9,000 portfolio companies and concluded that only 17% of them were credible.
Norges is not alone. Two European environmental think tanks, NewClimate Institute and Carbon Market Watch, recently examined 24 multinationals that endorsed the Paris Agreement target of capping global warming at 1.5 degrees Celsius and cutting greenhouse gas emissions by 45% by 2030. Few have met their pledges — in fact 22 of the companies studied will likely only cut 15% of collective emissions. CDP reports that only 81 of 19,000 companies surveyed have credible climate and sustainability plans in place.
How can we bridge the gap? Climate and sustainability growth initiatives must meaningfully drive these pledged outcomes or they will not happen.
In her Forbes’ article, “How The World's Largest Companies Can Become A Driving Force For Clean Tech,” Mach49 Founder and CEO Linda Yates notes how well-positioned the world’s largest companies are to help lead the global sustainability movement.
The Mach49 Approach to Climate and Sustainability
Most companies have two strategies for dealing with climate and sustainability opportunities and challenges: either do nothing and pretend, and/or make big capital expenditure (capex) commitments. Simply looking at pledges versus credible plans and outcomes reveals that “do nothing and pretend” is the dominant choice, for now. However, investors, employees, customers, regulators, and the planet all demand and deserve better.
Capex related to climate and sustainability is vital, of course, and Mach49’s analysis of global climate and sustainability capital flows shows that up to 70% of climate and sustainability outcomes will come from capex commitments. But capex has its own time horizons and hurdle rates for payback. It is worth noting that with the introduction of the U.S. Inflation Reduction Act and new industrial policies across the globe, among other things, the potential for climate and sustainability capex returns is being redefined. But capex alone is not sufficient to create the real change demanded of climate and sustainability pledges — although it’s essential, capex will take time and might not reward the best companies with the highest financial returns on their invested capital alone. Furthermore, capex needs to be spurred by the catalyst of growth initiatives to become truly rewarding.
Making Climate Progress with Growth Initiatives
The missing ingredient for companies struggling to meet their pledges and plans must come from climate and sustainability growth initiatives. Mach49 helps make all of this possible by mapping growth initiatives that will meaningfully drive climate and sustainability outcomes for the Global 1000’s strategic priorities. We help define and execute a portfolio of growth that matters: initiatives focused on delivering at least one-third of their net zero and nature positive strategic plans, catalyzing the rest to occur as well.
For companies that are making credible and impactful climate and sustainability pledges now, the challenges are different: they’ll typically have many goals across a broad array of initiatives, but will struggle to compare and prioritize funds spent on one climate and sustainability project versus another. Mach49 offers a singular and measurable focus on success that helps companies define, align, and execute an impact roadmap for growth. Only then can they achieve one-third or more of their key climate and sustainability outcomes.
Driving Climate and Sustainability Growth Initiatives with Hitachi and Schneider Electric
Japanese electronics giant Hitachi committed 84 billion yen to a ten-year carbon neutrality roadmap. In addition to reconfiguring operations to reduce emissions, Hitachi is also focused on scaling climate and sustainability ventures and has built an incubator/accelerator that champions the environment and sustainability, including electric vehicle fleet management and remanufacturing ventures.
Schneider Electric, one of the world’s most sustainable corporations, not only offers technology and energy solutions to help companies shrink their carbon footprints, they’ve also established SE Ventures and have had success investing in and incubating sustainability-focused startups. These include eIQ Mobility, which offers electric vehicle fleets as a service, Dash Energy, an online tool to optimize energy spend, use, and the percentage of energy coming from renewable sources, and Grain Ecosystem, a platform that streamlines the carbon offset certification process.
The real work lies ahead to not only pursue great climate and sustainability projects, but to also systematically drive a broad portfolio of such projects aimed at delivering at least one-third of the net zero and nature positive strategic plans most vital to Mach49 clients.
How to Drive Sustainable Initiatives at Your Company
When we partner with clients, we use a teachable, repeatable, scalable methodology proven to produce pipelines and portfolios of profitable new ventures in the climate and sustainability space and beyond. Our experienced team of venture building and venture investing experts guide companies who want to turn climate and sustainability goals into real action and growth that matters — for their company, their communities, and the world.
Read more about how Mach49 is helping meet the ESG imperative with venture building and investing and how corporations can drive clean tech.