By Julie Castro Abrams
Climate focused companies will create more value and make a bigger positive impact on our planet and our economy than any other business sector in the next 30 years. We’re already seeing the beginning of a massive transformation in how we build and grow everything we use in the quest to get to net zero– from cars, to agriculture, to buildings, and clothing – and this fundamental shift presents incredible positive-impact and wealth-building opportunities.
According to Larry Fink, CEO of Blackrock, cleantech, aka greentech, aka climate tech companies will be “the next 1,000 unicorns - companies that have a market valuation over a billion dollars,” not search engines, media companies and the like. “Green hydrogen, green agriculture, green steel, and green cement,” and other green technologies that fundamentally change the way we produce anything, will be among the most valuable companies in the world.
Bill Gates has said that future returns in climate investing will be comparable to what the biggest tech companies have produced. And while he cautions about the risk involved in investing in companies at such an early stage, he’s confident that there will be “eight Teslas, ten Teslas, and only one of them is known today.”
Women are more likely to invest where they can “do well by doing good,” according to research How Women Lead commissioned, and stand poised to participate in a big way in investing in companies they think will change the world. From where I sit, climate tech companies represent the single biggest opportunity to create wealth for women, and to create and scale companies that are built for the future - with talented, gender-neutral, diverse organizations designed to help us reach net zero in a fair and equitable way that creates more opportunity for everyone. Unicorns, in so many ways.
We can already see this happening in the electric vehicle industry.
Electric vehicles represent one of the largest innovation and wealth creation industries for the next 30 years. Currently, the industry is valued at $287.4 billion. That’s an increase of around $40 billion from 2020’s valuation of $246.7 billion. This figure is set to significantly grow in the coming years, reaching over $1.3 trillion in 2028 at a compounded annual growth rate of 24.3 percent.
This emerging category has several experienced women founders and CEOs leading the fundamental shift in the automobile industry, including Mary Barra, CEO of GM who recently pledged that GM will outstrip Tesla in EV car sales in two and a half years. Cathie Wood’s and her Ark Investment Management firm that is well-known for their way-out-there predictions that Tesla would outperform is also making bold plays.
On the startup front, How Women Invest recently invested in Sylvatex (SVX), led by founder and CEO Virginia Irwin Klausmeier, who is future-proofing battery material production and is currently focused on driving down the costs and environmental impacts of EV batteries, with premium EV-grade cathode active material (CAM). The CAM market alone will grow to $189 billion by 2032 and is the most expensive component and the bottleneck in the production of lithium-ion batteries. Significant improvements to the manufacturing of CAM are critical to meeting the long-term demand for batteries and to reach electronic vehicle automakers’ cost and carbon reduction targets.
Factorial Energy, led by founder and CEO Siyu Huang. Factorial Energy, with a transformational solid-state battery technology, is empowering a sustainable future with safe, high performance batteries for electric vehicles, homes, and critical applications.
Nth Cycle is also focused on batteries. Led by co-founder and CEO Megan O'Connor, Nth Cycle, a metal processing technology company, uses its proprietary electro-extraction technology to support battery recyclers and miners. Rather than using large, greenhouse gas-emitting furnaces or harsh chemicals, their technology uses only electricity to transform the outputs of electronics recycling, and waste from existing mines, into high-quality critical minerals ready for re-use.
Big picture is that all of these innovations work together. Nth Cycles output could be used in Sylvatex’s advanced manufacturing CAM process that could all be used in all EV batteries including in Factorial Energy’s technology. These batteries can then power the vehicles built by GM and other Automotive OEMs.
The women behind these companies are already changing the dynamic in the industry, providing innovative technology that will advance the EV market, and at the same time create massive wealth opportunities. They are solving critical problems, addressing the crucial issue of climate change and leveling the playing field for women and people of color in the industry.
One challenge to scale is adequate investment in the early stages. Traditional venture capital companies are woefully behind the eight ball in investing in women-founded companies, who have been boxed out of the vast majority of venture capital. This, despite study after study demonstrating that businesses founded by women yield higher revenues at a rate of more than two times as much per dollar invested than those founded by men. Now is the time for venture to break down the gender barrier it has erected and get on board in funding tomorrow’s unicorns. Amazon and the U.S. Agency for International Development have recognized this and recently launched their Climate Gender Equity Fund to address these inequities.
We also need more women to step into venture funding as part of their investment strategy. Women funding women will be the dynamic that creates a more equitable and profitable economy. As a report from Angel Capital Association finds, a large percentage of women investors consider the gender of founders and leaders and invest to “proactively close the gap in funding going to female founders.”
For women looking to invest to make great returns and create great positive change for the planet, for business impact, and for equitable business, look no further than clean tech. And out of these investments- clean tech that will wholly change the way businesses of all types work while improving our planet- unicorns of many shapes, colors, and sizes will emerge. Because women believed in them.
*This is a longer and expanded version of an article originally published on Forbes.com