Top Trends in Corporate Sustainability, Partnerships, & Investment in 2015

Big data, the “circular economy”, new metrics, and innovative financing is changing how corporations are investing in sustainability, says leaders from American Water, Novelis, Veolia, and GSV Sustainability Partners.

CleanTechIQ recently spoke with these corporate sustainability leaders to get their top trends for 2015:

Big Data Driving Better Decision-Making for Utilities

What cleantech trends should we look out for in 2015? For Paul Gagliardo, manager of innovation development at American Water, the future lies in big data. By tapping into troves of available information, organizations like his, the country’s largest investor-owned water and wastewater utility company, can reduce risks and slash costs. New software and analytics tools don’t just help optimize resource management—they help organizations respond more quickly to emergencies as well.

Case in point: last January’s chemical spill into the Elk River in West Virginia. Real-time data boosted response times and helped restore the area’s drinking water quality.

As it related to energy efficiency, big data is also a recurring theme in E.ON’s investment strategy. Based in Duesseldorf, Germany with major operations in Europe and the US, E.ON is one of the world’s largest investor-owned utilities. The company has already invested in Autogrid, a provider of software to track customer’s energy data for utilities, and FirstFuel Software, a provider of commercial and industrial energy analytics. AutoGrid raised $12.75 million in a Series C round in 2014, and First Fuel Software raised $8.5 million in a Series B round in 2013.

Another notable energy analytics big data company, Space-Time Insight, a developer of geospatial and visual data analytics software for the energy sector, raised $20 million in a September 2013 Series B funding.

(See CleanTechIQ’s analysis of startups that are gaining corporate market traction and top sustainability investment trends.)

Making the Business Case for Sustainability

At Veolia, executives have prioritized methodologies and tools for making the business case of sustainability, enabling corporations to increasingly looking at sustainability in a more pragmatic businesslike way, says Ed Pinero, Senior Vice President for Sustainability and Public Affairs at Veolia North America.

Notably, the global water services firm has developed a new tool that monetizes risks and cost exposure related to water, which gives companies actual information for making a business case for sustainable water investment.

Now, corporate sustainability metrics are merging with traditional financial metrics, and companies’ environmental risk is increasing impacting their cost of capital, says Pinero.

Major Focus on the Circular Economy (i.e. Recycling)

The biggest change in corporate sustainability over the past year has been the move toward the “circular economy”, says John Gardner, Chief Sustainability Officer, Novelis, a world leading rolled aluminum producer.  In fact, he said the company has rolled out low-carbon circular economy strategy with the goal of moving the entire global business to 80% recycled content.

 Veolia has made a similarly big commitment this year, pledging more re-use, more recycling, and less waste disposal, says Pinero.

The circular economy was also a centerpiece of Waste Management’s most recent sustainability report, which is creating “zero waste” programs for its customers.

And a consortium of large corporations recently launched the Closed Loop Fund, which will invest $100 million in recycling infrastructure and services over the next five years.  The founding corporate members of the fund include: Coca-Cola, Colgate-Palmolive, Johnson & Johnson Family of Consumer Companies, Keurig Green Mountain, Inc., PepsiCo, Procter & Gamble, Unilever, Walmart, and Goldman Sachs.

Strong Awareness Driving Corporate Cooperation, Partnerships

Veolia’s Pinero says that he’s observed greater stakeholder cooperation to do sustainability projects on the ground that leverage different types of expertise on how to get things done.

There’s been an increase in cooperation among traditional food and beverage competitors to work around the issue of sustainability, Pinero says. Two notable examples are PepsiCo and Coca-Cola, and Anheuser-Busch InBev and Miller Coors, which are cooperating on sustainability projects.

Also noteworthy are the partnerships Pinero says he’s seeing between entirely different types of organizations, such as the Nature Conservancy and Dow Chemical, whose scientists are analyzing the impact of nature on business operations, and Shell Oil and City of Houston, which set up the Shell Center for Sustainability in Houston, TX.

This cooperating is driven by a realization that sustainability issues are bigger than any one organization, Pinero says, and environmental impacts are common to all of them.

To further this point, Novelis’s Gardner observes that growing societal awareness around sustainability is driving more and more leading businesses to try and make a “positive change” in regards to carbon action and resource efficiency.

Financial Innovations to Drive “Main Street” Sustainability

Although investment in sustainability is heating up at large Fortune 500 corporations, “Main Street” corporate customers don’t have the money to acquire these new innovations that save resources, says Tom Cain, who recently launched GSV Sustainability Partners (GSVSP), part of public venture firm GSV Capital, to bring a “sustainability as a service” model to small and mid-size corporations. Cain is also a managing partner at venture capital firm EFW Partners, and former managing partner at SAIL Venture Partners.

How it works: GSVSP acquires and puts the sustainability project or innovation on their balance sheet (i.e. innovative wastewater systems, LED lights, natural gas “CNG” fleets, etc.) then provides the asset as a service to corporate customers, taking a percentage of the cost savings driven by the innovation, and helping these small companies become more sustainable. Deal sizes can range from $100,000 per location to $50 million on a single “product placement.”

Banks and other debt market players aren’t doing these types of deals in sustainability because these projects are too small to be securitized, and therefore, the banks cannot underwrite their credit default risks.

He expects that there will more innovation in this type of “product finance” in sustainability and resource efficiency markets, as more players enter the market. In fact Generate Capital, a specialty finance company for sustainable infrastructure, just launched in December to provide capital to small (<$20 million) energy generation, water, waste-to-value, agriculture and food projects using a similar “infrastructure as a service” model.

In fact, Cain says, 90% of resources are consumed in places owned by small corporations, such as facilities, golf courses, office buildings, hotels, and vehicle fleets, so this is a huge potential market that will require “big capital” as these small and mid-size corporations increasingly adopt innovations in sustainability.

His major focus this year in providing GSVP’s “sustainability as a service” model will be in transportation, particularly “advanced” CNG truck fleets, innovative wastewater projects, and LED lighting retrofits, particularly for corporate customers in states that promote adoption of these innovations with incentives, such as in California and Utah.

American Water’s Gagliardo, Veolia’s Pinero, Novelis’s Gardner, and  GSV Sustainability Partner’s Cain will be discussing corporate sustainability innovation and investment trends at the Sustain Summit in Newport Beach, CA on Feb 12th .

To learn more about the Sustain Summit and hear from other leading companies, such as BASF, ThermoFisher Scientific, Total New Energies, Sempra Energy, Waste Management, Monsanto, DBL Investors, and Chrysalix Energy VC, click here.  Use promo code CTIQ50 to receive a 50% discount.



Post Comment

Your email address will not be published. Required fields are marked *

Featured News Topics