Climate Got Paid Last

Over the years, the scale of climate investment dollars has oscillated dramatically. I think we are going to be at an elevated plateau of interest for a few years now.

Why are there big swings in “climate-tech” investments?

Historically, climate investments were paid with the final 5% of profits… so in any down market, the long-term resilience investments were the first to be cut when profits took even the smallest dip. Last year’s COVID-induced demand shock cratered profits at many traditional industries: energy, utilities, manufacturing… and many companies in those verticals shuttered climate investments. Ironically the firms that need the most resilience help are now the least ready to address the needs.

A few verticals are taking the opposite approach and moving climate-tech investments up the profit stack... meaning these improvements are finally being prioritized ahead of other operating investments. The reason? These “prioritizing verticals” now realize that major consequences of climate change could wipe out the entire business altogether. The verticals leaning in the most are the banks and insurance companies. The government and Department of Defense is also reprioritizing resilience efforts with this administration. Finally, the most forward leaning utilities are also still investing in climate adaptation and resilience.

In general, the higher up the priority stack these climate-tech and resilience efforts, the more steady the investment and the better long-term outcomes for us all. Within the Energize portfolio, Jupiter Intelligence is seeing major tailwinds as these verticals re-prioritize and elevate resilience efforts.