So they're building their own power plants.s

According to recent research, at least a quarter—and potentially up to 40% or more—of data centers’ electricity needs will be powered by on-site power generation. Looked at another way, a full 30% of data center developers plan to power their projects solely with on-site generation by 2030. These “behind the meter” sources are effectively private power plants, built to help meet the electricity demands of the data center and the artificial intelligence applications that they power.

And the trends point to why—US data centers in 2024 consumed 183 terawatt-hours of power—more than 4% of the total demand on the US grid. And that was in 2024—globally, data center demand is expected to double by the end of the decade, to 945 terawatt-hours of power consumed world-wide. For context, that’s 19 New York Cities (New York consumes about 50 TWh/year), or the entire country of Japan.

Across the US, researchers at the International Energy Agency project 240 TWh of additional electricity will be needed from now until 2030 to power new data centers—on top of what’s already consumed.

Clearly the bulk of this power is expected to come from the existing electrical grid—putting a tremendous strain on legacy generators and regulators. But, based on current plans and projections, a large portion will be generated on-site. What are the ways data center developers could generate electricity on-site for their operations? And what are some of the most innovative approaches in each category?

How Do You Feed the Beast?

“The number one constraint for AI data centers is power,” said Bill Kleyman at this year’s Data Center World event. How will the industry feed its insatiable need for more electricity? The horrific short answer: “More fossil fuel”. The only-slightly better long answer? “More fossil fuel, but with a slight nod to the potential to do better later.”

Natural Gas

The biggest source of on-site power for the proposed data centers is natural gas. Take, for example, Meta’s new Louisiana data center, Hyperion, which generates up to 7.5 gigawatts of power for its operations—all from 10 gas-fired power plants. (Combined, the 10 plants will produce more electricity than used by all of South Dakota).

This trend isn’t isolated. According to Gartner, “In the near term, natural gas will lead as the main power source for data centers.”

Pros:

Gas is a known generation sources, and burning it efficiently to generate electricity is a very mature technology. This makes them a “safe” option—there’s very little technical risk.

They also can be a cheap form of power.

At least they’re not coal?

Cons:

While they can be cheap to operate, gas turbines obviously require gas as an imput—meaning the operator is beholden to the market price, which can fluctuate wildly (remember the European experience after Russian invaded Ukraine). The Iran war is currently throwing the natural gas markets into chaos. Prices in Europe spiked by as much as 50%.

Building new plants from scratch is tough right now. Gas plant parts—turbines particularly—are back-ordered for years, making it impossible to bring new projects online if you haven’t already secured the hardware.

Oh, and burning gas releases huge amounts of carbon pollution. Since that’s the whole reason for the climate crisis in the first place, building new facilities isn’t in anyone’s best interest.

Sector Innovation:

Despite being a mature technology, there’s some promising climate-related innovation in the space.

Carbon capture, obviously, is an entire category—the idea of capturing the carbon generated from burning the fuel and then storing it somehow. Most carbon capture & storage (CCS) technologies are expensive and still in prototype or pilot phases, however, and may not ready for the scale required by the data center boom. na

Another innovation in the sector is building gas turbines that can easily switch to using fuels other than natural gas. These dual use turbines, from Mitsubishi, GE and others, can be converted to burn fuels like hydrogen, generating no carbon emissions. The only catch is the infrastructure—from production to storage and transport to delivery on-site—doesn’t exist like it does for natural gas, making this logistically difficult and expensive today. Still, this could be a viable clean energy source for the data center industry. Multiple startups, like Fourier, are working on making this fuel source more realistic.

There’s also a growing hydrogen startup scene in Europe.

Renewables

If fossils fuels like natural gas destroy the environment and exposes the data center operator to wild price fluctuations markets, what about renewable energy: solar, wind, hydro and geothermal? Opportunities exist, but this route isn’t without challenges.

Pros:

No carbon pollution. Known technologies that are continuously getting cheaper. Minor operational costs after initial capex investment; not tied to a volatile commodity market.

Cons:

Solar and wind are intermittent. Geothermal, wind and hydropower are site specific, even solar performs better in some locations.

Can take up a lot of surface land. Solar, for instance, takes between 5 and 7 acres to generate 1MW of power. To power a 1-gigawatt datacenter, you’d need roughly 5,000-10,000 acres of land (or about the amount of land in a mid-sized airport, like Denver International). (Note I’m ignoring seasonal fluctuations — you’d need to overbuild to cover base load in the winter, etc).

Sector Innovation:

Batteries. Because renewables can be intermittent, power storage becomes a necessity—enter battery technology. Although first-generation battery storage systems often used chemical processes (think: lithium ion batteries, like in your phone), more cutting-edge systems are using heat and other storage mediums. One of the most exciting companies in this space is Exowatt, which offers a single solar+battery module that can be shipped to a data center and dropped into place, making solar easy to install and available 24/7.

Geothermal. New drilling technologies (ironically, developed for the oil & gas industry) are powering new ways to harness the Earth’s core temperature to provide renewable energy. Fervo Energy is an early leader in this space, having customized a horizontal drilling technique from the oil & gas sector to tap underground heat sources that traditional vertical drilling couldn’t reach. This Enhanced Geothermal Systems (EGS) approach has completed successful pilot deployments, and the team argues their technology can scale to meet the data center industry’s 2030 power needs. (One study argued that EGS could provide nearly two-thirds of new data center demand either at or below the cost of other sources).

Critically, geothermal runs 24/7, making it a great pairing with other renewables

Solar. The innovation in solar is co-locating solar production with data centers and treating the data center as the core tenant—an innovation in business model. Intersect Power is one innovator building solar-plus-storage campuses designed specifically for the needs of hyperscale data centers.

Nuclear Fission

After fossil fuels and renewable energy, the next electrical generation option may be nuclear fission. This may sound crazy, given the 15 years it took to bring Plant Vogtle online in Georgia, but fission has promise for the data center industry. There’s a lot that’s attractive about it—but there’s some catches. Thankfully there’s a couple of very exciting companies pushing the envelope for what’s doable in this space.

Pros:

Is site agnostic and a continual source of power. It’s largely known technology. Once fueled, a nuclear reactor can operate for years before it needs to be refueled.

Low space requirements. Unlike solar, some of the proposed nuclear projects take only 30-40 acres of land.

Cons:

Traditional plants can take 15+ years to come online. Regulatory requirements can significantly slow projects.

Most uranium used in nuclear plants in the US is imported (inc. 12% from Russia), exposing operators to potential fuel insecurity and price fluctuations.

Chernobyl, Fukushima, Three Mile Island….

Sector Innovation:

Lots of excitement exists about the Small Modular Reactor (SMR) space. The core concept is to go small—instead of building a multi-gigawatt grid-scale plant like Vogtle, build a 50-100mW plant that is simpler, standardized and faster to bring online (and then string multiple together to meet the data center’s power needs). Think cars off the assembly line vs a custom-made space shuttle.

Of the companies in this space—Radiant, Oklo, Kairos and others—Aalo stands out for designing a truly modular reactor (they have a factory in Texas) and designing a data-center-specific 50MW reactor that scales well. Most importantly, they’re one of only three companies (Radiant and Valar Atomics are the others) that will have built an operational reactor by mid-2026.

Restarting retired assets. In the push for any feasible generation asset, some electrical companies have restarted previously retired nuclear plants—Unit 1 at Three Mile Island, for instance, is being restarted by Constellation Energy explicitly to power a Microsoft AI data center. It could come (return?) online as early as 2027. Palisades in Michigan and Duane Arnold in Iowa are also planned for restart. In total, these three plants alone bring 2.3GW of power back online.

Microreactors. These reactors are tiny, relatively speaking—20MW of power is typical. Designed to be factory produced and small enough to fit on a truck, they were originally designed to replace diesel generators, but could play a role in the data center space. The catch is that 20MW is a rounding error for a hyper scale data center—but they could find fits in edge computing or remote situations. NANO Nuclear Energy is an early leader in this space.

Coal-to-nuclear conversion. This is longer term, but there’s effort to convert retired coal facilities to nuclear energy. The sites are often ideal—grid interconnections are already in place, cooling infrastructure exists and community acceptance for an energy employer typically exists. The timeframes are longer though for this effort—the Department of Energy led a site evaluation effort in 2024, and the ADVANCE Act of 2024 included streamlined regulatory pathways for future conversion projects.

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Exotic Power Technology

If you’re not one of the generation technologies above, you fall into the “and other” category. There’s some interesting ideas in this space, but it’s unclear if any of them will come to fruition.

Pros:

May position your data center strategically for the long term. Science fiction is always a fun read.

Cons:

Unproven technology or science. Likely far more expensive than other options, at least initially. Doesn’t meet today’s immediate need.

Sector Innovation:

Fuel Cells. So what if you take hydrogen or natural gas, but instead of burning it (like in a gas turbine, above) you ran it through an electrochemical reaction to generate electricity? (Think of it like using the gas as a battery—as long as you keep feeding it new hydrogen, it keeps generating power). By far the current leader in the space is Bloom Energy, which claims its fuel-cell plants cost about as much as a gas turbine to build but use 15-20% less fuel, making the operating costs lower. Brookfield recently allocated $5B to deploy Bloom fuel cells at its AI data centers globally, and American Electric Power paid Bloom $2.65B for a 900 MW fuel cell plant at its Wyoming data center. Maybe fuel cells are the dark horse contender to power the data center industry?

Other fuel cell players in the data center space worth keeping an eye on: FuelCell Energy, who announced a 450MW fuel cell deployment in January, and ECL, which used solely hydrogen as its fuel source to power a data center in Mountain View, California.

Fusion. No talk of the future of power generation is complete without the technology that’s always “just 5 to 10 years out”. That said, legitimate milestones have been hit recently for the first time that say that maybe this time is different.

Realta Fusion is focusing specifically on bringing fusion to data centers and industrial customers with a compact, scaleable modular fusion system. Their technology, based on a cylindrical containment vessel and magnetic mirror configuration, builds on research dating back to the 1960s but that only recently has become feasible to engineer. Each of their planned reactors would generate 50MW of power and could be combined (like the SMR deployments in fusion) to meet larger power needs. Realta is targeting prototype deployment in 2028.

Commonwealth Fusion is another leader in the fusion-for-data-centers space, having signed a 200MW power purchase agreement (PPA) recently with Google. Helion, backed by OpenAI’s Sam Altman, signed a similar PPA with Microsoft and hopes to deliver power by 2028.

Keep in mind that fusion is always 10 years out—although it’s potentially limitless energy, no one is planning commercial reactor deployment until the mid-2030s.

Space-based data centers. What if you took the constraints of Earth out of the equation entirely and just moved the data center into space?

This sounds crazy, until you realize that one of the reasons Elon Musk rolled xAI into SpaceX was to streamline deploying data centers in space. (NVIDIA is also explicitly pursuing space-based data centers, with its CEO Jensen Huang stating “space computing, the final frontier, has arrived.”) Space-based computing benefits from far more efficient solar and no land requirements, although cooling servers at scale is challenging because lack of air means nothing to conduct away heat.

Starcloud is the furthest along in this space (puns are always intended) and most credible. Their team launched their first proof-of-concept satellite in November 2025, and ran a version of the Google Gemini LLM on NVIDIA’s H100 GPU chipset. They’re on track for a launch with 100x the computing capacity later this year (it’ll also be profitable).

Axiom Space is another data-center-in-orbit company with a successful prototype in orbit. If orbit isn’t exciting enough for your tastes, Lonestar Data Holdings is planning data centers on the moon (and has successfully done a lunar prototype).

Of note—the real “play” in space-based data-centers is to power other satellites doing work in space. Instead of a satellite collecting data then beaming the giant data packet back to Earth for processing—or even more costly, crunching the data in space—your satellite collects the data, processes it on Starcloud’s server, then the result (a much smaller piece of data) gets sent back to Earth. Streamlining how the space industry deals with data analysis is a giant need, and these companies are a piece of that.

So… what’s a lonely data center to do?

The answer isn’t a single technology—it’s knowing how to place bets and how to time them. So if you’re a data center developer (or someone who cares about the climate) what’s the answer? How do you power your data center?

Here’s the recommendation that I’d make to a new developer—and then what I’d actually do if I were in charge:

1. Focus on a portfolio of solutions. Most data centers are likely to go for the cheapest solution that can provide 24/7 non-intermittent power, which is natural gas. But, if you do this, you’re lashing yourself to future price instability and energy shocks and the risk of pricey future regulation.

   Instead: Diversify. Trade off a few cents per megawatt to have a mix of generation sources per development. This keeps your fuel price exposure down, gets you cheap renewable power (with backup for power peaks) and lets your team gain critical experience in deploying multi-generation facilities.

2. Be a fast follower on SMRs. Unless you can get a significant price concession or other incentive, being the first-mover on SMR deployment may not net you anything—and future deployments are likely to be smoother and cheaper for all parties. But, if you wait too late, your competition will capture the knowledge of how to deploy SMR technology most effectively and surpass you (and wait times may delay entire projects, like is happening today with gas turbines).

   Be early to the party but not the first one to show up. Timing is tricky but critical.

3. Track exotics and be ready to move. If nuclear fusion finally arrives, it radically changes the power generation landscape, and you want to be ready to incorporate it when (if) it does. Ditto if current fuel-cell trials are positive, or another innovation appears.

   Have a team solely dedicated to meeting with these companies, understanding the technology and vendors, knowing the landscape and players and spotting new opportunities as they develop. Then, as an organization, be ready to move on a technology as soon as something is proven viable. You’re building a competitive intelligence group that gives your organization a strategic advantage in the marketplace—you’ll know what’s real and what’s not, which external teams are worth your time and how to structure the most advantageous deals. Your competition may be disrupted by a new power-generation technology. You won't be.

Now, what would I do if I were the CEO of a data center developer?

If I were developing data centers, I’d structure a contract with an SMR developer now, realizing commercial delivery is still a few years out, to be the first adopter of their SMR technology. Then I’d pair that with a solar + battery solution, and then rely on the grid for peak load management. Nuclear gets me a baseline (when it’s ready to go), solar + batteries gives me a reliable workhorse, and I’m protected from peaks by the grid.

Then I’d market the heck out of my carbon-free data center to the major tech companies and find someone willing to pay slightly more per megawatt hour for a climate-positive solution—and critically, one that could be replicated at scale, globally.

The pieces to solve the power-supply problem are all there. Even the exotic technologies are maturing faster than most people realize. How would you tackle the power generation challenge?

As we discussed in Part I, the growth in artificial intelligence creates a daunting power challenge—almost 10 gigawatts of additional electricity are required in Georgia alone. This power comes at a climate cost: Not all coming power needs can be met with zero-carbon power production.

Where are the opportunities for innovation to help meet the challenge?

Two Sides of the Coin

When it comes to energy efficiency in data centers, there’s two main opportunities for efficiency: Making the data center itself more efficient (physical infrastructure optimization) and making the algorithms computed in the data center more efficient (computational efficiency).

Who’s innovating on each front? And what opportunities for innovation still exist?

Physical Infrastructure Optimization:

Data centers are actually pretty simple in their operations: They route power to thousands of housed servers (sourcing the electricity from the grid or on-site generation, depending on the site) and they keep the servers cooled so they can operate. There’s also a physical space utilization/optimization challenge when the space is built (“how do you arrange the servers to power & cool them optimally?”).

Given the scale of the data center challenge, its not surprising there are a lot of startups in the energy space—even companies developing new fission and fusion power supply!

Setting aside power production innovation, there are dozens of companies working on new approaches to optimizing the physical infrastructure at a data center. A few standout examples include:

• Hyperview: A new, cloud-native DCIM entrant that focuses on simplicity, transparent pricing and ease. They recently launched an advanced carbon footprint reporting module that provides granular rack-level insights for optimization.

• Device42: Designed to eliminate multiple pricy software packages in the data center, Device42 combines DCIM + IT Asset Management, IP Management, physical space planning and device configuration & monitoring for a single low price. Even auto discovers devices on the data center network, eliminating the need to install software on every machine and cutting down deployment costs.

• Hyperlume (recently acquired by Credo): Designs & builds optical interconnects for AI data centers — reducing the power needed for individual processors to transfer data to one another and increasing the transmission speed.

• Runwise: A new building automation provider, Runwise uses a patented mesh network system to deploy full HVAC and monitoring systems controls within a day.

• Utilidata: Enables real-time load management at the meter level in commercial facilities. The team just launched a solution for data centers that brings dynamic power management a the server, rack or group level within a data center.

• Gradyent: Developed a platform for creating digital twins for heating/cooling/CO2 optimization at grid level. Allows for full optimization of data center design during the design phase, ensuring that multi-source energy provision is as efficient as possible and unique elements, like waste heat, are modeled and used correctly.

The startups above are competing with the established DCIM players by incorporating native AI functionality into their solutions (ironic…) and getting in front of sustainability and ESG reporting requirements—which are particularly critical in the European Union and likely to come into play at the state level in the United States. They’re also targeting special use-cases or components (like optical interconnects) that can be optimized. (As mentioned, I’m also omitting the startups tackling energy storage at the data center site—companies like Exowatt or Natron Energy—and building power generation facilities that could be deployed at a data center.)

And of course, there’s a number of startups developing data centers—not just components for others’ developments. Two of the most interesting are:

• evroc: European data center developer focused on using renewable power and running hyper-efficient, sustainable facilities. The idea of building a European data cloud with “European values”—things like sustainability baked in from the outset—is exciting.

• Crusoe: Data center developer focused on largest, hyperscale deployments. Centers designed from scratch to optimize for power consumption.

But Wait, What About the Processor Hardware?

Before we talk about the software operating in the data center and the algorithms being run, there’s a final piece of the infrastructure puzzle—the energy use of the machines themselves.

What if the servers themselves—specifically the chipsets running the AI algorithms—used electricity more efficiently?

The chip manufacturers are asking the same question.

NVIDIA’s latest Blackwell Ultra architecture, announced at GTC 2025, claims 50x higher output than its predecessor—but more importantly, it achieves this through radical efficiency improvements. Co-packaged silicon photonics reduce power consumption from 39 watts to 9 watts per optical port. In a large AI datacenter, that single innovation saves 24 megawatts—enough to power 20,000 homes.

AMD is chasing similar gains with its MI350 series, promising 35x better inference performance while moving to 3nm manufacturing processes. Both companies are racing toward 4-bit floating point precision (FP4), which halves memory requirements and power draw while maintaining accuracy.

There’s also dozens of startups chasing the opportunity to develop the fastest, lowest-power-usage chipset for AI. With current cutting-edge chipsets already cutting power usage by 30x or more, how much power will we need for each AI computation in 5 or 10 years?

But… there’s a catch:

These efficiency gains are enabling bigger models and more computations, not reducing absolute power consumption. It’s Jevons Paradox for AI—efficiency improvements increase total demand rather than reducing it. If power consumption efficiency improvements continue, there may be a point where they outstrip the marginal benefit of further computational gains, driving down overall power usage.

Computational Efficiency:

But that’s just operating the center and hardware—what if the computational work of the AI itself (the 60% of power usage, above) was also more efficient?

(Remember DeepSeek? Their initial breakthrough was, in part, training and running an AI model on far less computational horsepower than OpenAI, Anthropic and the other US leaders in the space.)

The work of optimizing the AI calculations themselves has fallen mostly to the hyperscalers (Google, Microsoft) who are building the models themselves. This makes sense: Google’s search algorithm, for example, is constantly being improved on by Google’s engineering team to make it faster, better and less costly for Google to run.

Unfortunately, in the current industry race to develop the best AI model, efficiency is taking a back seat to sheer computing power.

Two examples exist of startups who tackled this efficiency challenge from the outside—one of which was purchased by NVIDIA in 2024 for $700M+

• Run:ai: (now part of NVIDIA): Run:ai tackled the allocation of computing power to individual processors. By enabling smart scheduling that put priority on more important calculations, Run:ai drove processor utilization from 20-30% to over 80%—a huge improvement on efficiency.

• Modular: Modular has developed an optimization platform that speeds up AI models without changes to the underlying code. They also enable models to run on any vendor software and claim to be able to reduce inefficiency in computations by more than 60%. (A great post on AI interference and the companies addressing the challenge is here.)

Cross-Layer Intelligence:

Or maybe, instead of looking at the efficiency challenge as two sides of the same coin, what if you focused on the whole coin? Solutions that bridge both the built infrastructure management world and the algorithmic level may be the ultimate in efficiency.

For instance, what if an algorithm layer operating the data center could match non-urgent computing jobs with dips in overall computational demand and match that with overall demand on the grid? There are certainly operations that could be delayed a few hours to help smooth demand, but even a delay by a few seconds could help manage overall demand on the grid.

As of now, no companies are bringing that level of optimization to the data center space, but given the urgent need for optimization solutions, it’s a huge opportunity. Whoever cracks this challenge will transform energy efficiency for data centers—and thus the entire energy industry.

There’s one final possibility for efficiency improvements—what if we didn’t compute at the data center at all?

Right now most AI work is done through the giant models of Anthropic, OpenAI, Meta and others. But often, the actual AI requests are simple—not requiring the power of a full LLM. For example, take an inventory management AI tool for a warehouse—if its optimizing storage of individual products, it doesn’t need to be able to write a Shakespearean sonnet. Maybe we should use a hammer to drive a nail instead of a pile driver?

These queries could be handled by smaller, single-purpose models, which may not even need cloud computing power. There’s a growing space of edge AI computing providers and applications that handle the AI calculations on-site. Our inventory management algorithm could be run on the tablet in the warehouse—without ever being sent to a data center for computation.

Estimates vary, but early projections are that anywhere from a third to more than half of AI queries could be handled at the edge. Maybe in the cycle from centralized to decentralized calculations and back, AI is the catalyst that swings computing back to local computations?

Takeaways

We need more power generation—whatever the eventual demand for AI is, it’s clearly a tool that will be used in multiple contexts, and society will need to provide electricity for its operation.

But right now we’re building dozens of new power plants when, if we were smarter at using resources efficiently, fewer could suffice. From a climate perspective, the impact of not building those data centers and their associated power generation far outweighs the climate benefit of making them slightly greener.

Capitalism, in this instance, could help environmental sustainability: Because electricity is priced, business needs and climate needs align. It’s both cheaper and more climate friendly to build smarter and use electricity efficiently.

The AI revolution needs data centers. But it may not need as many as we think—particularly if we get smart and efficient about the ones we build.

Georgia alone needs 9.9 gigawatts of new electrical generation capacity in the next five years—a 50% increase in power production—just to meet projected data center demand.

But here’s the unpleasant truth: 40% of that electricity won’t even power calculations. It goes to cooling, networking and infrastructure overhead.

That’s 4 gigawatts of power—the entire output of America’s largest nuclear plant—lost to ancillary activites and inefficiency.

The climate math is simple: The most sustainable gigawatt is the one we never need to generate. While the industry rushes to build hundreds of new data centers and dozens of natural gas plants to power them, a handful of companies are asking a different question: What if we just built smarter data centers instead?

ChatGPT queries… so many queries….

First, let’s talk about the scale of the challenge.

I’ve been in multiple presentations from Georgia Power and others in the past few weeks where policy makers discussed the forecasted data center growth in Georgia, where I live, and the power requirements to run the new facilities.

What’s the projected top-line number of new data centers in Georgia alone?

At least 100 new data centers are planned for Georgia—a 10x increase since just 2019. (Georgia is the most active data center market, according to recent research.)

Each data center brings a host of challenges: new electricity demand, new water demand (for cooling), dissipated heat, additional noise and challenges to land use.

But let’s look at electricity.

Calling up the Russian Third Infantry

Georgia Power, which has been generating electricity since 1902, currently has approximately 20 gigawatts of electrical generation capacity. This spans the gamut, from a few legacy coal plants to the largest nuclear plant in the United States to a huge solar and natural gas footprint (wind isn’t that big here, and despite the number of dams in the state, hydro power isn’t a significant contributor).

In the almost 125-year history of the company, Georgia Power brought online 20GW: Enough to power metro Atlanta (population: 8M+), thousands of industrial clients and the country’s 8th largest economy.

The amount of new power demand forecasted?

9.9 GW—and that’s just in Georgia! A 50% increase in power in 5 years.

That absurd growth in generation capacity comes mostly from new carbon-emitting natural gas plants (almost 60% of projected new capacity). Solar-plus-battery plants make up the remaining new capacity.

(Note I’m suspicious of bubble forecasts too—I started my career in technology in the late 90s—but there’s demand coming, and it’s likely to be massive compared to historical increases).

This rush to power the forecasted demand feels, well, rushed.

“We’re tackling the need like the Russian Army,” an industry observer told me recently. “Instead of being smart about how we meet the new demand, we’re just throwing endless bodies at it.”

Electricity is a resource—and given the cost of building new generation capacity, it’s a vital resource. How can we be smarter about how we use it?

Where’s the Power Going?

Let’s assume that the projected data center demand comes through. What’s included in those 10GW of additional power demand?

Consider:

60% of electricity is used for computation;

7-30% of electricity is used for cooling;

10-15% of electricity is used for networking and storage.

(See here and here for more details.)

So for each site a whopping 40% of power isn’t used to power calculations at all! That means that 4GW of power—roughly what’s produced by plant Vogtle, the largest nuclear plant in the United States—is going to non-computational data center use.

It’s not sexy, but this wasted power means wasted construction, wasted money and wasted carbon—we’re driving climate change just through inefficiency. Yes, we need to cool the facility and power will be lost in transmission, but there’s huge opportunities to reduce that 40%.

The most climate-friendly gigawatt of electricity we can make is the gigawatt we don’t need to generate. Instead of throwing bodies at the data center power demand challenge—in the form of endless new gas plants—we need to be more efficient about the power we’re using.

An Operating System for the System

In the data center space, there’s four main players with software to run and manage the data center campus—think of these like operating systems for the data center. Next week, we’ll look at a handful of new startups with innovative solutions to specific problems that are helping drive more efficient operations.

• Schneider Electric (EcoStruxure IT): EcoStrucure is a cloud-based data center management (DCIM) platform to manage the data center. What makes it unique is that Schneider sells it as a cloud service, vs a traditional on-premise solution, which means it can both easily incorporate other cloud and edge-based devices and Schneider can aggregate data from across their customers to power services like predictive analytics and predictive maintenance.

• Vertiv: Vertiv’s DCIM software is unique because of its integration with the company’s hardware—cooling systems, UPS and server racks. This enables them to provide integrated end-to-end infrastructure solutions instead of just software (particularly for high-density AI workloads).

• Sunbird DCIM: Sunbird focuses on monitoring and operations—the two biggest challenges of operating a data center. Its software is focused on scenario planning and management to oversee things like capacity, power, space, cooling and operations and is often more lightweight than other solutions.

• Nlyte (now part of Carrier): Since their acquisition, Nlyte has focused on tightly integrating their software with Carrier’s existing building management software and physical HVAC systems. This gives the solution tighter control between cooling/power systems and computational IT workloads.

These four platforms—Schneider, Vertiv, Sunbird, and Nlyte—represent the current state of datacenter intelligence. Together, they manage billions of dollars in datacenter infrastructure and keep the lights on—literally—for the AI revolution. They’re the operating systems keeping today’s facilities running.

But here’s what they’re not doing: They’re not eliminating that 40% overhead. They’re optimizing within the existing paradigm, not reimagining it.

The opportunity isn’t incremental improvement on legacy systems. It’s rethinking data center efficiency from the ground up—new approaches to cooling, smarter hardware interconnects, AI-native infrastructure design and software that treats power as the precious resource it is.

Next week, we’ll look at the startups tackling these challenges: companies building cloud-native DCIM platforms, deploying wireless building automation in a single day and using digital twins to optimize datacenter design before a single server gets racked.

The efficiency revolution in datacenters isn’t coming. It’s already here (thankfully!). You just have to know where to look.

Additional Reading:

Science for Georgia: Data Center Project

Pew Research Center

“Powering the Future Without Breaking the Grid”, Georgia Tech

“We Did The Math On AI’s Energy Footprint”, MIT Technology Review

Now what?

Alternatively, say you’re a business owner or executive leader who believes that businesses can be a force for good in our society. You want to be an example to others and take a stand against climate change (or, as I’ve written about, you want to build a stronger business). You want to do something.

Where do you start?

Whether you’re an individual or a multi-national corporation, there’s one single action you can take right now that will have an outsized impact on the climate.

And thankfully, it has nothing to do with metal straws.

Let’s Scan the Field

First, a chart:

If you total the emissions funded by the largest 12 banks in the US (JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, etc) and the 10 largest asset managers (BlackRock, Vanguard, Fidelity, etc), they’d be the third largest carbon emitter in the world, behind China and the United States. That’s a whopping 4.7 billion tonnes of carbon dioxide equivalent.

Why?

Because 20-30% of the loan portfolios of these institutions is directly funding carbon-emitting projects. Globally, since the Paris Climate Agreement was adopted in 2015, $5.5 trillion has been invested in fossil fuel financing, with almost $670 billion in 2022 alone.

And the actions of the majors are just getting worse—as of January of this year, all the major US banks have left the UN-sponsored Net-Zero Banking Alliance, run from their climate commitments, and generally backtracked on any progress on funding carbon emissions.

But wait, banks don’t drill wells or dig mines. What’s their role?

Super quick banking lesson: When you put $100 into your savings account, that money doesn’t just sit at your bank, locked away in a vault somewhere. The bank takes that money, couples it with money that it can borrow from the Federal Reserve, then loans it out to businesses and other borrowers. That’s how banks traditionally make money.

Where does that money go? That’s the catch.

If you’re at a major US bank, $20 to $30 of every $100 you saved went to fund new oil wells and other carbon-intensive projects—the absolute worst thing it could do from a climate perspective.

If you have a checking account or savings account at these banks, congratulations. You’re directly fueling climate change.

How Big a Deal Is This?

In short: It’s massive.

Oil exploration, for example, is extremely expensive. The oil majors learned a long time ago that they could work with banks to finance their exploration and extraction activities. It provided a predictable investment return for the banks and gave the oil companies the capital they needed to explore and drill.

For the consumer who’s unwittingly funding oil extraction, it could be your biggest personal source of carbon emissions.

The average consumer has roughly $8,000 in checking and savings accounts. Consider the climate impact of this money if you’re at a large US bank compared to other climate activities:

And that’s with $8,000 saved. The more you’ve saved, the bigger a (negative) impact your money is having.

Another way to think about this is the impact of switching from a major US financial institution to a smaller, community-based bank with climate-friendly lending policies. The magnitude of the impact you can have is staggering:

For a business, the impact is even more staggering.

US non-financial businesses hold in total about $7T of cash and investments. All told, the emissions enabled by this money represents more than 20% of all US carbon emissions—more than the entire agricultural sector.

Or, the entire emissions of the aviation and trucking sectors combined—and doubled:

Follow the Money

So how can you have a dramatic climate impact with (literally) no lifestyle change?

Change your bank!

Topofinance, Bank Green, and others have resources if you want to bank somewhere responsible. Where you keep your money matters. (And note that not only is your money at an FDIC-insured community lender like Climate First Bank or Amalgamated Bank are just as safe as it is at Chase—they’re both insured by the the federal government—you’ll likely earn a much higher rate too).

If you’re a business, change your bank!

Again, you’re just as insured and your money won’t be funding fossil fuel extraction and other activities causing climate change. (You’ll also likely get better service, rates, save on fees, etc).

Particularly if you’re undertaking other climate-friendly actions as a business to drive things like higher employee satisfaction and retention, addressing the impact of your treasury accounts is an easy step to take.

So if you’re a business leader, what specific steps can you take?

• First, understand the problem.

  If you’re in a larger organization, speak with your treasury department to understand where your firm’s cash and short-term investments are held. If you find that your capital is being held at institutions that fund climate change (use the tools at Bank Green to check), start a conversation internally about whether this is important to your leadership to address. Make sure there is alignment internally to take action.

• Second, open up a conversation with your bank.

  Your bank is like any other vendor or supplier—and depending on your size and the depth of your relationship, they might be able to work out a solution for you. (Or, if nothing else and you do end up moving to a new bank, they’ll know why—and can think about adjusting policies in the future).

• Finally, if you still need to move, create a transition plan.

  Just like changing over any supplier, trying to switch overnight can be a disaster—but setting up a new set of accounts at a climate-friendly institution, then migrating from your existing financial partner to the new one over 6-9 months is completely doable. Target a methodical migration between old and new partner.

  And long-term, if you’re an account of any significant size—certainly $1M or more—think about keeping money across multiple institutions going forward. That way, just like maintaining multiple suppliers in your manufacturing supply chain, you can limit your exposure to any one partner and more easily shift business between partners as the needs of your business change.

Here’s a detailed roadmap that highlights the main steps you’ll want to think through to make your transition as smooth as possible.

Your money has power—and can either be a catalyst for climate innovation or can support unsustainable carbon-intensive systems. Thankfully there are new, emergent players providing an alternative to traditional banking and technology providers offering the tools traditional banks need to make their businesses more environmentally sustainable.

But there’s been less focus on AI’s impact on climate tech — despite some really exciting developments.

What impact is AI having in the climate space?

Let’s Focus On Products

First, let’s be clear—there’s two answers to the question “What’s the impact of AI on climate?”:

1. There’s AI’s impact on the climate overall

2. There’s AI’s impact on climate-tech and sustainability products, processes and businesses

What’s the impact on climate overall?

Probably bad: More AI means much more intensive cloud computing means more computer servers means more data centers means more electricity used to power said data centers means (potentially) more fossil fuels burned to create that electricity and more carbon into the atmosphere.

Although I think the apocalyptic forecasts for data center power demand are overblown (most data center forecasts I’ve seen ignore any efficiency gains from better chips and AI rigs, for instance), there’s clearly a direct climate impact from AI itself.

But what about question #2?

What’s AI’s impact on climate-tech and sustainability products and businesses?

The Two-Path AI Revolution

When you think about AI’s impact on climate, there’s actually two distinct strategies companies are following—and both can be revolutionary.

Let’s look at both strategies.

The first is to use AI tools and processes to hasten existing products and roadmaps and to augment features. Think of this as the “AI-Accelerated” Strategy: By adopting AI tools in product management, software development, marketing and other functions, companies are accelerating their response times and cutting cycle times. Maybe they’ve even included AI features into their products—maybe the suggestion algorithm uses advanced machine learning.

They’re using AI to build better products, faster.

For example, teams I’ve run recently have gone from spending a month or more to spin up a testable prototype to spending 10 minutes per prototype using AI.

The result? In the time it took two years ago to test a single concept, we’ve tested dozens of concepts.

If you’re trying to test product/market fit, that’s revolutionary.

But, there’s a nuance: These solutions are still inherently non-AI. It’s traditional software or hardware, just built faster and better with AI-enhanced tools. The product could still be built and do what its core functionality is, even without AI. It’d just be slower and more expensive.

The second strategy is to build AI directly into the product itself—call this the “AI Native” Strategy.

This is fundamentally a different type of product—not merely an enhancement of an existing product. The AI components, as part of the product’s core architecture, are unlocking functionality that couldn’t exist otherwise.

By analogy, jump back to the 2000s.

Although I was very early in my career, I remember the debate about how to build for mobile devices:

If you saw mobile as a new distribution channel, you took your desktop experience and changed the layout to work on a mobile device (remember the old “m.companyname.com” and “companyname.mobi” websites?).

If you saw mobile as a unique platform and technology, you designed an app that was a unique experience that could only exist on the phone.

Desktop-first was Facebook. Mobile-native was Instagram.

At CNN, we had both a suite of mobile apps and a mobile-responsive website. App users were more profitable, but mobile web got far more traffic (and thus ad impressions). They were different products with different user bases and different economics.

Both strategies can be valid, depending on the situation—but they’re two very different approaches.

The same is true with AI.

Every climate tech company should be in one of these camps—either be AI Accelerated or AI Native.

Which is a better fit for your company? Let’s take a look.

In this post, we’re going to examine companies following an AI-Accelerated Strategy; in a future post we’ll look at “AI Native” strategies.

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AI-Accelerated

What do SpaceX, BMW and Pepsi all have in common?

They each use AI tools to make their teams more productive and more efficient.

In climate tech, there are four main areas where I’m seeing companies implement AI to accelerate their business. Here’s the latest (and general guidance for whether your company should investigate this area or not):

1) Simulation and Modeling AI

This is the use of AI to simulate a complex process, system or interaction of materials without the need for physical testing. You create a model of the real-world that you want to test, and then run simulated tests of it under different environments or circumstances. Classic examples are check in lines at the airport or retail employee staffing. More sophisticated examples include virtual testing of new materials for things like new superconductors or advanced aerospace alloys .

First, a confession:

I LOVE simulation software and will run a discrete-event simulation to optimize a process whenever I get a chance. In a few hours, you can simulate the most complex process incorporating complicated probabilities and distributions thousands of times until you’ve completely optimized it—potentially saving years’ worth of trial and error (and angry consumers).

In climate tech, AI modeling shows up in many places. For example, teams have been working for years on new cement formulations that don’t release CO2 when they cure. AI has accelerated this work: Meta partnered with the University of Illinois to help develop alternative cement mixtures using their AI engine. They trained the model on more than 1,000 concrete formulas to generate an open-source formula that reduces concrete’s carbon footprint by 40% while maintaining an identical strength profile to “traditional” concrete.

Scientists at USC Viterbi School of Engineering took this approach a step further. They used AI to create a model that simulates the behavior of billions of atoms at once to generate new, stronger concrete that captures carbon instead of releasing it.

In other parts of climate tech, sustainability focused mining companies, such as Still Bright are using modeling to fundamentally change how ore is extracted. Others, like VerAI and KoBold Metals are using AI to revolutionize geologic modeling to identify new mineral deposits.

Even in uber-sophisticated industries as nuclear fusion, companies like Realta Fusion are using AI to model out the behavior of sub-atomic particles to design their next-generation fusion reactors.

Is it for you? If your company is building physical products with either expensive materials or slow manufacturing cycles or you have staffing challenges, you should already be using or building AI simulations.

Think your product is too complex to model?

Consider another energy startup, Aalo Energy, a company that went from founding to a working prototype of a nuclear reactor in 2 years. Aalo plans to launch a commercial reactor in the summer of 2026, all with $135M in funding (for comparison, Plant Vogtle—the last new nuclear plant to open in the US—cost $35B+ and took more than 16 years!)

Product Strategy: Plan on it taking 6 months to build and refine your simulation capabilities, depending on how detailed you want your digital twin to be. The reward is significant though—a well functioning platform should cut your development by 5x or more.

2) Computer Vision for Monitoring and Inspection

This is the use of AI to inspect something (think: quality control) or monitor something. The goal is to identify problems or issues, optimize performance and gather data.

For example, I ran a team that built an AI-based visual inspection system that looked at x-ray images of welds to identify microscopic flaws that could in the future cause the entire joint to fail. Another company I worked for built an AI vision inspection platform to identify air leaks in large commercial office towers. com

In climate tech, I love PanoAI — they use AI-powered vision systems to monitor continuously for wildfires from their network of field cameras, satellite imagery and other data. Their system can detect a fire outbreak minutes after it starts, giving fire departments, utilities and local residents critical time to react.

Other great examples are Aerones, which uses computer vision to inspect wind turbines, reducing turbine downtime by 4-6x or more. Voliro uses computer-operated drones and a computer vision system to inspect remote infrastructure (like offshore wind turbines), cutting inspection time by 90% or more. All these companies—and the companies I worked at—could do inspections manually or with other technology, but the AI system is exponentially faster and more thorough.

Is it for you? If your company is operating distributed physical assets that need monitoring, if you need to inspect something in the built world or if you need strict quality control, you should be evaluating a computer-vision initiative.

Product Strategy: These projects can take longer to reach scale, so start with a single high-value internal use case. Build the system and prove the ROI, then expand across your company, evolving the system as you continue to learn how to incorporate it. Expect returns in the 50-200% range in comparison to traditional inspection processes, with many machine vision systems paying for themselves within 24 months. Well-functioning platforms should achieve 98%+ accuracy while cutting development and inspection time by 5x or more.

3) AI for Predictive Operations

This is an area where AI applications start to get really cool—and visions of Skynet start to takeover.

Companies in this category are using AI not as an analysis tool or a way to experiment on discrete questions, but as a way of optimizing their on-going operations. They’re integrating the AI into their processes and systems to predict things like demand, failures or performance—and, in some cases, even then letting the AI make the decisions on how to react in real time. Think of a manufacturer using AI for predictive maintenance, a retailer to predicting and planning for staff turnover, or an investment firm automating arbitrage trades.

In climate tech, smart grid providers like Utilidata use AI to manage electrical grids at the microsecond level—tweaking production and deployment based on data from the grid to monitor and react to changing grid conditions as they happen, while Rhizome uses an AI system to predict power grid failure from extreme weather events. Smart grid providers like WeaveGrid (EV charging optimization) and Stem (with their Athena® AI platform) are using AI to manage other aspects of grid operations, while Lunar Energy's Gridshare software creates personalized energy predictions for tens of thousands of homes.

Companies like Runwise and Gradyent, in the building sector, use AI to optimize building and HVAC performance in real time, lowering operating costs for the building owner and slashing the building’s carbon footprint.

Is it for you? If your company is operating complex systems (think the electric grid or the heating and cooling for an 80-story office tower) with multiple variables to optimize and can access a stream of real-time (or near-real-time) data that can be used in the optimization, you might have a perfect use case for predictive operations AI.

Product Strategy: This is a tricky product because it is so complex, and it’s likely that the variables you think are exhaustive are missing some of the full picture (which changes the model’s predictiveness).

Start with a small test subject (think single building, in the building automation example) or prototype you can work on, and then focus on prediction first: Run the model alongside the existing operations and refine it until it mirrors the existing building accurately. (If you’re modeling the cost to run your HVAC system, is the model successfully capturing what your building is seeing?)

Once you’re comfortable with the prediction, you can start to add AI-controlled automation to the system.

The results can be massive—JPMorgan Chase saved more than $150M annually from their AI-powered fraud detection system. McKinsey estimates that AI-driven predictive maintenance alone could generate $500B to $700B in global business impact, underscoring the potential in this space.

Typically, expect returns in the 30-50% efficiency improvement range in year one, with a 20-30% reductions in maintenance costs and 25-50% decreases in downtime.

4) Process Automation AI

This final category may be the most broad and is the one most talked about in the media—the use of AI to streamline or eliminate manual tasks in functions like product development, compliance, marketing or operations.

From call center automation to automated reporting to systems integration, this is the next step in the Robotic Process Automation (RPA) push that has been going on for years—AI is making the products in the space truly powerful. Before Generative AI, RPA companies like UiPath and Blue Prism worked with businesses to generate scripts to automate processes—taking the fields from an invoice and putting them into the accounting system, for instance, or working new hires through things like benefits enrollment.

The key difference is, whereas old RPA systems were rules-based and brittle—if the field on the invoice changed, the system broke—GenAI agents can use natural language processing to “understand” a document and respond accordingly. This adds a level of flexibility and intelligence to their execution of the process.

This is also opening a new suite of RPA capabilities—reports, emails or proposals can be generated automatically without the need for structured data inputs, for instance, or customer service bots can understand complex questions—and respond with personalized responses—instead of forcing a customer to hold to a call-tree script. Think of it as “AI-Powered RPA 2.0”.

In climate tech, initiatives that fall into this category are taking the repetitive work out of a business’s operations, increasing the organization’s ability to adapt quickly or accelerating compliance reporting functions. Three exciting examples of companies taking an early leadership role in this space include Makersite, which is using AI to automate environmental life cycle assessments (LCAs)—a critical step to understanding a company’s climate footprint, Terabase, which is using AI to automate the design, construction and management of new solar plants, and SINAI, which is using AI to automate carbon analysis for reporting and operational management across their clients’ business and supply chain.

The key for companies using AI to enhance process automation is that they’re not just processing data faster—they’re actually helping coordinate decisions across the organization faster. They’re decision support systems: Whether it’s SINAI connecting carbon data to a firm’s financial models to identify the highest ROI decarbonization options, Terabase adapting to real-time site conditions to coordinate construction workflows or Makersite predicting the impact of design changes across cost, carbon-output and compliance, they’re helping surface and implement smarter decisions, with speed and scale.

Is it for you? When I worked in robotics, we talked about jobs that were “dangerous, dirty or dull” as being low-hanging fruit for robotic automation (my favorite example: automated drones and crawlers to map old abandoned shaft mines—the ultimate dirty and dangerous job!)

When it comes to AI-enabled process automation, opportunities exist in multiple areas (hopefully you’re avoiding open mine shafts along the way). Low-hanging fruit are repetitive processes that are objective in nature and require fairly standardized inputs— anything that would have been marginally possible in RPA 1.0 is now probably fair game.

More cutting edge opportunities include processes with:

• High-stakes, multi-variate optimizations: If you have a process that must balance multiple competing objectives (ex: cost, carbon, time) where small variations could have a dramatic impact on the output, AI-enabled automation can help with the strategic tradeoff

• Data-rich, insight-poor: Do reams of structured data (think invoices, BOMs, supplier databases, financial models) exist across multiple silos? AI-enabled automation can bring these pieces together quickly to surface new insights

• Domain expertise: If your process requires specific domain expertise (solar installation expertise, for example), you can embed that expertise into the AI system, making it available to people throughout the organization to use

• Regulatory pressure: If you have processes in which regulatory agencies are requiring deeper reporting more often with faster required response times, AI-enabled automation lets you comply with less manual input

Product Strategy: More than the other enabled categories, this category depends on correct scoping and definition for success: What exactly is the goal of the automated product? What do you want it to output? What must it consider?

More than just ‘garbage in, garbage out’, this is also ‘if you ask for garbage, it gives you garbage’! Make sure you’re crystal clear on what you want the system to provide, what you want it to consider and how you want it to function.

For these reasons, think about biting off something manageable first, learn from the experience, build excitement within the broader organization and then build out from there. A perfect starting point is a process that is highly manual and expensive to execute with external delivery pressures.

Expect returns in the 1-3x of investment range for simple RPA implementations (for example, replacing manual spreadsheets and external consultants to track/report Scope 1 & 2 emissions), with a payback period of 8-18 months.

Larger, enterprise-wide platforms (for example, standardizing emissions monitoring & reporting across dozens of countries and business lines, replacing hundreds of hours of manual data collection) could yield 4x-8x returns with a payback period of 18-36 months.

Tl;dr?

Here’s a quick framework to identify where your team should start:

Physical products with long testing cycles? → Start with Simulation AI Distributed assets needing monitoring? → Start with Computer Vision
Complex systems needing optimization? → Start with Predictive Operations Manual processes eating your team's time? → Start with Process Automation

General rule: Pick ONE family, start small, implement it well, prove ROI, then expand.

Companies that try to implement multiple AI families simultaneously usually fail at all of them.

Budget expectation: Budget 6-12 months to see meaningful results from any single AI family. (If you’re budgeting more time than that, you’re either starting to big—tighten scope!—or have organizational readiness challenges)

Universal Implementation Challenges

No matter which AI-enabled product category your initiative fits in, there are a couple of universal challenges you’re likely to face:

Legacy Systems: Expect legacy systems, software and processes everywhere as soon as you start. The spreadsheet that finance uses to report out monthly operational statistics? It’s on Jim’s laptop and no where else. Supplier invoices? They’re on an ancient FORTRAN system that can only be accessed manually (and only by two people who know the commands).

Nothing is ever easy—plan for the unexpected, budget some time for discovery (so you can understand what you’re going to be building with) and be ready to get creative.

Cultural Readiness: Tons has been written about organization readiness for new technology products—evaluating areas like leadership commitment, data quality, technological infrastructure and stakeholder knowledge (Microsoft even offers a “Readiness Wizard”).

I’ll highlight one element that gets overlooked: Culture.

Is your team’s culture one of continually experimenting to improve your operations and your business? Are you open to new processes, new products and new approaches? Do you want to do things better?

If there’s resistance or reluctance to a new product, you’re signing up for an uphill battle!

Failure Risk: There’s a chance for failure for any initiative in any of the categories above. Best to prepare for it at the outset, just in case.

Step one is understanding what that risk looks like—if yours is a new AI-powered modeling system, what’s the downside risk of incorrect modeling?

Once you understand that risk, you can mitigate it (which typically involves running the new product side-by-side with your current solution until you’re comfortable that the new system is at least as good, ideally better, than what it replaces).

The risk of failure exists with any new opportunity—the rewards of success are great enough though that downside risk shouldn’t stop you from trying. Just mitigate the downside.

Final Thoughts

One final note—what’s the point of any of these AI-enabled product areas?

Just like the goal of your sustainablity efforts, you’re building a competitive moat around your business—giving your team an advantage in the marketplace that other organizations can’t copy. This sets your company up for faster growth, broader margins and greater marketshare—a stronger business!

Next time, we’ll dig into the other main AI strategy: AI Native. Subscribe now so you don’t miss out!

Is your company doing something cutting-edge in climate tech with AI? Please drop it in the comments to shoot me a note—I’d love to hear about it!

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Imagine if 70%—more than two-thirds—of your products failed to find users. You’d fire the entire team!

Why even bother with sustainability? Remember: sustainability initiatives, done right, can be a massive boon to your organization: McKinsey identified five areas where bringing environmental sustainability into the business can add value, and a Deloitte survey found that 40% of CFOs see cost-saving opportunities in implementing sustainable practices.tea

You can strengthen your company and create a sustainable advantage in your marketplace by getting sustainability right.

And yet, teams keep repeating the same mistakes. The results are wasted financial resources, missed market opportunities and lost impact.

We have to get sustainability projects right—there’s too much at stake.

So why are so many teams failing?

Sustainability is a Product

Too many sustainability initiatives fail because they don’t understand a fundamental truth:

Your sustainability initiative is a product.

It’s not a corporate reporting function. It’s not a benchmarking function. You’re creating a product.

When Unilever applied product thinking to their Sustainable Living Plan, they achieved 70% faster adoption of sustainable packaging across business units. Interface Inc.'s Mission Zero used customer-obsessed product management to reduce carbon emissions by 96% while growing revenue and doubling net income.

Think about what a product is: It’s something (either tangible, like a brick, or intangible, like knowledge) sold to a market of customers to satisfy some need or desire.

You’re sitting in a sustainability team at your company. Think about what you’re really doing:

1. You’re selling an idea (“let’s reduce carbon generated by our supply chain”)

2. To a customer (maybe internal, like manufacturing, procurement or product design)

3. In a marketplace of competing ideas (“there’s a lot of ways we could make this widget”)

You own a product. Success means widespread adoption and measurable environmental impact. Failure means joining that bottom 70%.

Products Need Product Owners

The most successful product companies—whether it’s Apple, Toyota or John Deere—have teams of people obsessing over how to make their products more successful. They may have different titles, but there’s someone on each team whose job it is to obsess about their product and their market. They live and die by their customers’ desires and their ability to meet them.

Their core skill? They can apply frameworks like Jobs-To-Be-Done to understand what customers are actually looking for their products to accomplish, then translate those insights bak into solutions that create a competitive advantage.

That’s a product mindset and approach. And your sustainability team needs it.

But We’re the Sustainability Team. We Don’t Have Customers!

Welcome to that bottom 70%.

In my experience, every successful sustainability initiative treats internal stakeholders as customers with real needs, concerns and alternative options.

Apply the Product-Market Fit framework instead:

Step 1: Map Your True Customer Base

Even something as simple as identifying your customers can be a challenge. For a manufacturing process change, for instance, you may need:

• Primary customers: Operations (they must implement the change)

• Secondary customers: Finance (funding), Procurement (changes to sourcing), QA (validate), Design (must incorporate)

• Influencers: Marketing (can champion and amplify), legal (can block or accelerate)

Identifying who you need to think about is step one—it’s critical to get this one right to address potential down-stream resistance.

Step 2: Discover True Needs & Wants

This is a lot more difficult and requires a sophisticated stakeholder approach—not just a set of surface-level assumptions.

Does operations “want” to be more sustainable? Maybe. Maybe not.

They do have cost improvement targets, regulatory compliance concerns and operational efficiency mandates. Sometimes they're "hiring" sustainability to solve supply chain risk. Sometimes to meet customer requirements. Often to simplify compliance reporting.

The most effective approach combines direct stakeholder interviews with behavioral observation. You need to figure out what they need your solution to provide. I've seen teams spend months developing "perfect" sustainable solutions that operations rejected because they didn't address the real job-to-be-done.

Step 3: Design Solutions For Needs

Finally, build your product: Craft your sustainability initiative to meet the needs of the stakeholders you’ve analyzed.

Maybe your core impact initiative is unchanged, but your value proposition to other teams has evolved: For operations, you’re simplifying their supply chain and reducing regulatory risk, for finance, you’re lowering total cost of ownership through waste reduction, etc.

More likely , your sustainability initiative itself—your product—will evolve into something else: Something the teams who have to implement it will actually want rather than passively tolerate.

That’s a HUGE win.

Eyes On the Prize

Remember, you probably went into sustainability because you care about the environment and want to help combat the climate crisis.

To achieve that goal, you need to have an impact.

The only way to have an impact—to make change happen—is to get adoption for your initiatives. You do that by selling your ideas.

So think like a product owner and design a solution that sells.

How Do You Start Thinking Like a Product Manager Tomorrow

Executive Action Plan:

1. Stakeholder Value Mapping.

   Take your current top sustainability priority and map all the required stakeholders. For each, identify what you believe are their core KPIs, pain points and decision-making criteria. What tradeoffs do they make when sustainability requirements don’t align with their functional goals?

2. Stakeholder Research.

   Step 1 surfaced your hypotheses about what you think your stakeholders need and want. Now it’s time to test those hypotheses.

   Go talk to 3-5 senior members of each stakeholder in question. Key questions to ask:

   • "What specific outcomes does your team need to achieve this quarter that sustainability could impact?"

   • "When you evaluate new initiatives, what criteria determine go/no-go decisions?"

   • "What would have to be true about a sustainability initiative for you to actively champion it?"

3. Assess your product-market fit.

   Take a hard look at the last two “products” you launched—maybe it was an internal report, or a new initiative you championed. Using the Product-Market Fit framework, did you find market fit?

   Did your initiatives solve real stakeholder problems, or just check a compliance box? What can you do differently this time to achieve closer alignment with what your customers / stakeholders want?

Approaching sustainability from a product mindset transforms teams from internal service providers to strategic business partners. It's the difference between pushing compliance and unlocking competitive advantage.

The organizations winning on sustainability—from Patagonia to Microsoft to Unilever—treat environmental initiatives as core products deserving the same strategic rigor as any other revenue-generating offering.

Isn’t it time your organization started unlocking this value too?

In upcoming posts, we'll explore advanced product management techniques for sustainability teams that serve both business and environmental goals.

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However, while a lot of companies talk about circular design, I came across two recent examples of two very different manufacturers doing it right.

One is a 150-year-old family business; the other is one of the largest organizations on Earth.

Both are doing it for a core business reason: Circularity can be very profitable. Not only that, it can create a significant competitive advantage.

Here’s how.

Let’s Start Big

Toyota Motor Corporation — yes *that* Toyota—is a behemoth. With dozens factories across five continents, hundreds of models across four primary brands and 10.8 million cars manufactured annually (that’s 20 vehicles a minute!), Toyota is one of the largest manufacturing companies in history.

It’s also one of the most innovative. The company that created the manufacturing concept of kanban is now going all-in on circularity—for automobiles.

Toyota just launched a first-of-it’s-kind “Circular Factory” in Europe. The goal is to systematically bring the concepts of recycling, repurposing and remanufacturing to cars at the end of their lives.

The vision is simple and exciting: Take old cars off the road and break them back down to parts. Parts that can be refurbished and reused get reintroduced to retailers and parts distributors as certified reused parts. Other commodity parts, such as wheels, get remanufactured, repurposed into new uses or recycled, depending on their condition.

Raw materials in the car, such as copper or aluminum, get recycled—reducing Toyota’s reliance on virgin materials.

The initiative’s goal is to reduce the environmental impact of car manufacturing and lower Toyota’s overall carbon footprint—a fantastic goal (Toyota has a goal of being carbon neutral in its European owned facilities by 2030).

Introducing circularity now also gets the company ahead of potential recycle/reuse regulations in the European Union.

Don’t miss the business impact though: Toyota is also doing this because it’s cheaper to refurbish and reuse parts.

Value Beneath Your Feet

Circularity isn’t just for mega-corporations though. An emerging leader in circularity is Ecore International, a 150-year-old family business headquartered in Lancaster PA that makes rubberized flooring—also known as gym floors.

Think gym floors and rubberized flooring is a surprising place to find sustainability innovation? Me too, until I spoke to Shweta Srikanth, the company’s Chief Circularity Officer.

She explained that the circularity advantage that Ecore has is that rubber, as a material, is a versatile material that can be recycled multiple times—and the company has realized they can turn this into a competitive advantage over their competitors.

In their evolving model, Ecore plans to take back their product once it’s reached the end of its useful life. This product is then sorted, recycled, and fashioned into new flooring—which often can be sold to the same end market they reclaimed the old flooring from.

Through their end-of-life management, Ecore plans to develop long-term relationships with its customers, giving them the best on-going flooring experience possible. It also strenghtens the company’s own margins.

Because not only is reusing and recycling their old products a values decision for the company—its sustainability work goes back decades—it’s also more profitable than creating flooring from new rubber.

In addition to lower costs, there are two strategic bonuses:

First, recycling their own product locks in a source of materials that doesn’t fluctuate like the cost of virgin rubber does. Cost stability enables better long-term planning and forecasting, and it frees up capital that might have been set aside to cover unanticipated price spikes.

Second, by dealing with the end-of-life of the floor for their customers, they’re already in discussions with their customers before any other supplier. Customers aren’t locked into Ecore products, per se, but the company does have the inside track on the next sale.

Critically, Srikanth’s charge is to demonstrate that this business can be more profitable for eCore than traditional production models.

Just like Toyota (or Patagonia’s Worn Wear Program), this initiative is an extension of the company’s leadership’s values—Ecore already reclaims 430 million pounds of rubber annually, and the company’s sustainability roots go back to the days when it was manufacturing cork products.

But its circularity work wouldn’t be something the company could pursue long-term if it didn’t make business sense. Businesses have to be profitable and strong to stay in business—circularity is a competitive advantage for Ecore.

(How to) Run In Circles

If you manufacture a product, should you explore circular manufacturing? Yes. But your team needs to approach the opportunity strategically:

a/ Focus On (Long-term) Profitability.

For circular manufacturing to take hold in your company, it needs to be more profitable than your current manufacturing process. This doesn’t need to happen on day one—there’s a learning curve for any change, and changing to a new manufacturing process is a major one—but you need to have a path to profitability.

Why?

Because, like with any sustainable innovation in your business, if the business rationale for the change isn't sound, it won’t last.

b/ Circularity Requires Ingenuity.

You’re attempting something new in your organization—that, by definition, requires some level of ingenuity.

What makes circularity so exciting, however, is that it opens the opportunity to innovate on all aspects of your product experience. You can rethink product design, manufacturing processes, supply chains—and even the business model itself. (Rental models, anyone?)

All of these rethought elements can work together to create a stronger business for your organization—and one that your competitors will have difficulty replicating. This competitive advantage will strengthen your business for years to come.

c/ Product Leads the Way

At its core, a circular system revolves around the product—you’re rethinking the product experience from cradle to grave to cradle again. Because the product is central to the process, this is one area of sustainability where experienced product managers can really shine.

A great product manager knows how to balance stakeholder needs, rethinking products and processes, work across functional lines, manage a P&L and bring a new product to market. If you’re exploring circularity and considering bringing circular concepts into your business, having product management experience on your team will be critical to success.

Do you have experience running a circular business, is your team exploring the space, or do you know of other inspirational stories I’d love to know about? Drop me a note—I’d love to hear from you!

One thing jumped out at me:

There are two divergent perspectives on how to go about incorporating environmental sustainability in your business—but only one is going to succeed in 2025 (and potentially for well beyond).

If you’re in sustainability, which path you choose may determine your success or failure.

Let’s look at how to succeed using sustainability in 2025.

Option 1: Values Focus

In one panel, comprised manufacturers whose companies made products for commercial office space, each panelist shared the innovative work that their company was doing on their product lines.

A lot of it was genuinely exciting—products built for adaptive reuse or recycling (waste is a giant issue in the office decor industry), products that better used water, or that relied less on dangerous chemicals (indoor air quality is a significant concern).

The problem: No one cared.

The panelists wouldn’t directly state this, but the impression was that all of their best efforts were dying in the face of indifference. The rest of the business wouldn’t adopt the change. Third-party designers wouldn’t specify a new product. Clients wouldn’t ask for them.

They had great ideas, but no traction for adoption.

“The problem,” one panelist explained,

I’ve spent most of my career launching new products and new businesses. I’ve learned the hard way that when you start saying “if only our customers were smarter and understood how good our product is”, it means only one thing:

You’ve failed.

Option 2: Give ‘em What They Want

Contrast this with the experience of a startup I spoke to.

4Earth does industrial, commercial and municipal waste-water treatment. They have a modular solution that, using technology developed at Georgia Tech, enables a company to process their waste water with the goal of reusing the water on-site. Worst-case, this reduces the amount of (treated) water they send into the sewer system. Best-case, they can recapture the water and create a closed-loop system at the factory.

It’s a huge environmental impact—and absolutely critical in water-sensitive markets, like California and the American Southwest.

But, if you talk to their team, their solution is all about the cost savings that their pilot customers are seeing—drastic reduction in sewage bills and reduced water costs (their platform also uses AI to optimize water usage).

If you didn’t know better, you wouldn’t realize that they’re also reducing a factory’s carbon footprint, improving climate resiliency and increasing sustainability.

They’re running multiple pilots and have a backlog of clients waiting to get onto their system.

Rethink, Reframe, Refocus

Clearly one of these strategies works in 2025.

If your sustainability project—whether it’s an internal improvement, a new product or a new company—is going to succeed, it must be grounded in business fundamentals for your user. Gone are the days when sustainability projects could be successful based on environmental impact alone.

How do you do this?

Rethink, Reframe, Refocus:

Rethink: Ask yourself: What am I doing, fundamentally, and why? And are there other routes to accomplish the same goal? (This is the easy step).

Say you’re a building owner and you’re trying to reduce your building’s carbon footprint. You decided to focus on energy efficiency—turning the lights off at night and the weekends, for example—as the best way to reduce your building’s carbon usage. You switched to light bulbs that use less power. Maybe you’ll even have a smart system that automatically turns lights on and off based on sensors and an AI system, and tie into your grid’s billing system to shift some demand to cheaper, off-peak hours. You’re implementing a sophisticated energy management system.

But what are you doing at a fundamental level?

You’re using less electricity.

(Told you this was the easy step!)

Reframe: Ask yourself, how what you’re doing impacts the business. How are you improving profitability?

Back to the building example: You’re reducing electrical usage in your building. What’s the business impact of that? Well, less electricity means lower power bills. You’re reducing your building’s operational costs.

Most successful sustainability projects reduce costs, increase efficiency, increase productivity—or all three.

Refocus: How can you tell this new, reframed story?

Your energy efficiency project—which you were excited about because of its carbon impact—is now a story of slashing operating costs via clever efficiency improvements. You found a way to save a measurable amount of money versus the status quo—well done!

What’s critical in today’s environment is that you tell that story—how you reduced costs, in this example—and keep your focus there. You and I know that you improved efficiency for more noble reasons—for you and me, that’s the point!—but what makes the project happen is its cost impact.

(Critically, this business focus is also the reason the project will continue to happen, whether others share your concerns about the climate or not. Even climate deniers would rather spend less money.)

Let’s Sell Office Products

How could my panel—the ones who just needed smarter, more enlightened clients who shared their values—have had the sustainability impact they envisioned?

Let’s use Rethink/Reframe/Refocus:

Rethink: What were they trying to do? They wanted to reduce the carbon impact of their products and, specifically, reduce the volume that went to a landfill at the end of its life.

For simplicity, let’s take a single item: A desk.

One way to do reduce the number of desks in the landfill is to divert them to reuse programs. Maybe a local non-profit needs your old desks, and you could take your desks at the end of their lives and send them to a second user.

Alternatively, maybe you could design the same desk, but use ingredients that could be more easily recycled.

But what are you trying to do, fundamentally? Reduce the volume of product in the landfill.

What if you redesigned your products to use less material?

If your goal is reducing landfill volume, designing products that use 15% less material means 15% less eventual landfill waste.

Reframe: How would reducing the amount of material being used impact the business?

That’s simple—it reduces costs.

Depending on how aggressive you are at reducing your material usage, it could reduce a lot of cost.

Refocus: Who benefits from reduced costs?

We do, certainly! Less money spent on materials!

But, because we’re not jerks, we’re going to share some of that with our clients too—lowering the of our desk price for them.

Now everyone wins! Our business improved its margins, and our clients paid less for desks. As long as we maintain high performance standards for our designs, we can likely reduce materials without compromising the quality of our products.

(By the way, this is the same strategy Ikea pursued as part of its sustainability goals.)

By Rethink/Reframe/Refocusing our sustainability efforts, we were able to help our clients achieve something they need no new education to appreciate—saving money. And we did so sustainably.

Ensuring there is a business impact to your sustainability project—and then keeping focus on that—is how to succeed with a sustainability project in 2025.

a/ Renewable Energy Surges

Looking for a reason to finally feel good about 2024? How about this:

Renewable energy production—both in relative and absolute terms—set new records in 2024! Renewable energy now accounts for 40.9% of global electricity production. Renewable energy grew a whopping 49% from its previous peak in 2022.

That’s right—despite the surging demand for power from AI data centers running, Bitcoin miners and other power-intensive activities, renewable energy was able to capture a larger percentage of the power market.

Best of all, what’s the fastest growing segment? Solar. From the study’s authors:

The report also shows that renewable power production is set to outstrip demand—leading to a permanent decline in fossil fuel usage. Maybe 2024 wasn’t entirely a dumpster fire after all?

Read more about the 2024 data here.

Here’s the original Ember study.

a’/ A Bonus Solar Innovation

Traditional solar panels have a fatal flaw — they’re opaque, making them really bad windows.

Well, no longer!

Scientists at Tohoku University, led by Toshiaki Kato, developed a super-thin solar panel that’s only a few atoms thick, making it almost transparent, then paired it with the transparent conductive material used in phone screens.

The resulting solar panel is a 1,000x improvement on prior attempts—and about as efficient as a traditional, opaque solar panel.

The applications are vast—literally any place glass is used. Think: windows in buildings, cladding for skyscrapers, car windows… even your future FitBit or iPhone screen.

Read more about it here.

b/ More Efficient AI Datacenters?

Staying on the topic of electrical supply and demand—it’s well-documented that AI applications, and generative AI models in particular, are huge consumers of electricity. But maybe that’s just because the hardware the models currently run on isn't optimized for AI?

Researchers recently at Tsinghua University in China recently developed a chipset that runs on light (vs electricity) to run AI applications at a fraction of the energy cost of NVIDIA’s H100 chipset. Read more about the research.

And speaking of more efficient datacenters, there are new server innovations that make even Bitcoin mining—a notorious consumer of electricity—more energy efficient.

What’s driving innovation in both use cases? Electricity is a significant operating cost for both AI datacenters and Bitcoin miners, giving both a strong incentive to reduce power consumption.

c/ More Fusion Milestones

The joke in fusion research is that fusion has always been “just 10 years out”—and has been now for 50+ years. The current target for most of the companies in the fusion industry? Early to mid-2030s. Timelines never change.

China is investing heavily in fusion research to meet the needs of their growing economy, and I profiled research in China that had set records for length of a controlled fusion reaction.

Well, the China National Nuclear Corporation just announced that they hit a new record for highest controlled temperature in a reactor—a whopping 210 million degrees Fahrenheit. (In case you’re curious, that’s a little less than 10x hotter than the surface of the sun).

Read about it here.

Curious about all the work happening today on fusion technology?

Here’s a good overview on the leading companies in the new fusion industry.

Whenever I see interesting climate and sustainability innovations and trends, I’ll include them in future editions of Innovation Bites.

Subscribe to the Climate Innovator now to ensure you never miss out!

In recent months, “ESG” has been lumped in with “DEI” on the long list of ways for your company to get pilloried in the right-wing media. Sustainability, environmental responsibility, circularity, green” anything… all of these are getting pulled into the morass of the culture wars.

In such an environment, what’s a sustainability practitioner to do?I

Is it time for a rebrand?

A Rose By Any Other Name

What’s frustrating is that the broad backlash against anything seen as “woke” (however that’s defined) ignores reality:

(and yes, this holds for broader ESG and DEI initiatives too).

To put it plainly: You can make more money—and make your business stronger—by incorporating sustainable technologies and practices.

So how did a business improvement get caught up in the culture wars? After all, no one on either side of the political spectrum is worked up out CRM software. Why did sustainability get drug into this mess?

Because, for a lot of business leaders, the push to be more sustainable was an expression of personal values. These leaders led the way—at Ben & Jerry’s, Patagonia and elsewhere—because sustainability and environmental stewardship meant a lot to them. It was an expression of values for them, and their organization.

But the problem with values is that issues framed as “morality” become two-sided: If I believe A, someone else believes B.

If I think it’s a moral imperative that people only write with red ink, it opens space for someone else to believe writing with red ink is bad. Which side you fall on becomes a matter of personal values, not some objective measure (readability, for instance). If I tie my own sense of self to my belief in the virtues of red ink, it’s easy for non-red-ink writers to become “bad”.

Because we’ve let a perception of values infiltrate our discussion of something that is simply good for the business, sustainability and ESG are now part of a values argument where they don’t belong, whereas CRM software is not.

Let’s Reframe

So what should we do?

Any business executing a sustainability project should follow two rules:

a/ If it’s internal, keep it internal.

Not all sustainability projects need to be crowed about. Did your company switch to an all-electric truck fleet to reduce maintenance, fuel and operating costs? Great! You’re improving your margin!

But maybe—particularly in the current cultural and political moment—you should resist the urge to brag in public about how virtuous you are.

b/ Focus on customer value.

Ikea’s products are some of the most sustainable in the furniture industry. And while the company talks about its environmental stewardship, it focuses far more on telling the story of how it’s offering low-cost, high-design products.

It’s customers want to buy a table. Sustainability is important to many of them, but everyone buying a table cares about cost and style. That’s where they focus.

(As an aside, much of Ikea’s sustainability work is focused on manufacturing efficiency—sustainability helps them win on cost, making low-price products possible)

Focus on what your customers care about

b’/ …. this holds for internal messaging too…

Not only should you focus on customer value when talking to external parties, you should focus on customer value when talking to internal stakeholders too.

I focus all of my clients on the business value they get from their sustainability work—your team should understand that the switch to the packaging you’re making is reducing your costs by x%. That is why you’re doing the work and why it’s important now—the fact that the change is also better environmentally is a bonus.

(Thankfully, almost all sustainability work hits on core business fundamentals—efficiency, productivity, product differentiation, etc).

So is it time to rebrand sustainability?

Maybe not rebrand—maybe just refocus.

Focus on telling only the stories that need to be told, and focus on the value of the work you’re doing.

That’s work that no one can argue with.

a/ Using Nature to Cool a City

What’s it like to live in a master-planned community that’s focused on environmental sustainability?

Try 5 degrees cooler than surrounding cities, with breezes that make it possible to walk or bike and reduce the need for air conditioning. The city, northeast of Mumbai India, was designed to be a pilot test-case for other cities, which could copy its successes.

From the developer:

Read more about it here.

b/ Making Concrete Improvements

Concrete is a problem—traditional concrete, as it cures, releases carbon dioxide. And society uses so much concrete that, if it were a nation, it’d be the fourth largest emitter of carbon dioxide on the planet (approximately 8% of global CO2 emissions come from concrete).

But there’s a better way!

Enter concrete that doesn’t release CO2, but rather absorbs CO2 during the curing process.

Many companies are commercializing approaches to using the new approach to making concrete—everything from additives that go into existing concrete mixes to new types of cement to pre-cast blocks.

Mehdi Khanzadeh, an assistant professor of civil and environmental engineering at Temple University, has a new approach to creating carbon-absorbing concrete that also makes the resulting concrete stronger. Initial tests show a strength improvement of 80-100%.

Read more about it here.

c/ Seafloor Technology On Your Rooftop

Speaking of capturing carbon, how about creating exceptionally strong, fire-resistant building materials the same way coral reefs form?

Researchers at the University of Southern California used 3D printers to create coral-inspired scaffolds, which they then coated with a conductive material and connected to an electronic circuit. When submerged in a calcium chloride solution and exposed to carbon dioxide, the scaffolding “grew” a carbon-dense coating and filled in the scaffold’s gaps.

What’s really exciting is that the result was exceptionally strong and fire resistant—withstanding direct flame with no damage for more than 30 minutes.

With climate change causing more massive forest fires globally, the demand for fire-resistant building materials is on the rise. Technology like this could be a way of creating better building materials while also addressing the surplus CO2 in the atmosphere—the root cause of the climate crisis.

Read more here.

Whenever I see interesting climate and sustainability innovations and trends, I’ll include them in future editions of Innovation Bites. Subscribe to the Climate Innovator now to ensure you never miss out!

There’s not one type of sustainability project. There’s at least four.

And one is clearly superior to the others when measured by business value and long-term environmental impact.

Let’s take a look at the main types of projects, examples of each, and pros/cons of each approach:

1/ Marketing

This is your typical “2030 Climate Pledge” that was very popular back in 2022, and now that 2030 is getting closer, no one is talking about. Marketing saw an opportunity for your firm to take a stand for the environment and appeal to younger buyers, they signed onto some effort, this resulted in a pledge to “do better” and now there’s nothing but question marks.

What are you going to do to meet that pledge? Are there options you can still implement — or is it already too late?

And most pressing of all:

If you just ignore that pledge entirely, will anyone notice?

It’s hard to avoid being cynical about marketing-led sustainability work. BUT it’s also undeniable that for many organizations (Patagonia, Ikea, Ben & Jerry’s, Microsoft), their sustainability work is an element of their brand and has a significant marketing lift. Often these organizations can earn a premium on their products because of their sustainability leadership.

What’s the catch?

Marketing-led sustainability efforts collapse if it’s just a marketing effort. Without buy-in from the broader organization, operations and other divisions will resist the change and efforts will stall. And your customers are smart—marketing pablum without demonstrable change gets spotted immediately and will backfire.

So can marketing lead a sustainability effort?

Sure—if marketing is the dominant force in your organization, if the CEO supports the work and if marketing has enough visibility into operations to understand what’s achievable and what isn’t.

Otherwise, marketing-led efforts are almost doomed to fail.

(And remember: No one likes greenwashing.)

2/ Compliance

Compliance efforts used to dominate environmental work in the corporate world. Even early software packages that tracked environmental impact were focused on pollution monitoring as a reporting tool.

Compliance-led sustainability efforts are still very common—look at the power-generation sector’s efforts to transition to renewable energy, and at times it’s been an effort to stay ahead of state and local regulations.

So what’s wrong with thinking about sustainability as a compliance exercise?

There’s at least three reasons why this isn’t the best way to think about sustainability:

1/ You’re always on defense. Compliance efforts, by definition, are reactionary — either a new regulation is enacted that you must deal with, or the threat of a coming one spurs action. But you’re not leading, you’re just trying to pass a slowly rising bar. This is more costly in the long-term, as you’re constantly tweaking operations to meet regulatory requirements, and more critically, you’re never leading.

Playing defense is OK. Playing offense is better.

And if you’re not in the lead, guess what? Someone else in your industry probably is. Why not be that leader?

2/ No marketing lift. When you’re just trying to pass the bare minimum, everyone in the industry knows it. Your partners know it, and most importantly, your customers know it. They all know you’d just as soon continue to pollute, were it not for those pesky regulations.

The result? You get no marketing value from the good work you are doing. Motivations matter in marketing. If you’re going to need to transition to renewable energy in a specific market anyway because of eventual regulations, for example, why not do it now—not in defense to pending requirements, but proactively, as a way to position your business for future growth and profitability?

You both take the lead and, critically, get recognized for your leadership. That can have significant marketing benefit.

3/ You’ll miss giant opportunities. The company that’s only looking at regulatory compliance is going to miss the financial return—which may be a lot higher—from non-regulatory-compliance opportunities.

Look at it this way:

If, due to regulations, you need to deal with sustainability anyway, wouldn’t it be smarter to maximize the financial value from this additional work? Why hinder those efforts by focusing your sustainability efforts narrowly on compliance, when the real opportunities to drive business value may be elsewhere?

Compliance isn’t a bad way to approach sustainability work, but it will hinder your team’s ability to maximize the value from the work you’re doing.

3/ “Values” Project

A quick story.

I’m familiar with a corporation that launched a company-wide digital transformation effort after the CEO read a book on the subject. I’m oversimplifying slightly, but not by much—a multi-year, multi-million-dollar transformation effort was launched because the CEO read a book.

It wasn’t the wrong decision—the company was late to the game and the effort had an impact—but it was undoubtedly the CEO’s pet project.

Guess what happened when the CEO retired?

Sound like your sustainability efforts?

Values-based business decisions are understandable and have a role in business—after all, we’re humans, and we have personal values that we bring to the workplace. Environmental stewardship is a core value for many people, and many successful sustainability programs (Interface, Patagonia) trace their roots to their founder’s values.

So what’s the catch with approaching sustainability this way?

Often it makes the work—pardon the pun—not sustainable.

What gets cut the instant there’s a downturn? The second that quarterly numbers are missed? Or the moment a new leadership team is put in place?

The pet projects.

This is because they’re often not well-grounded in the company’s economics and market dynamics.

If the CEO says “go do X”, you do X—you don’t spend time thinking about why you should do X, or what the goals of X are.

You just do it.

This makes the project—”do X”—poorly grounded. No one identified the clear goals of the project or the financial motivations, making the project not as well thought-out as it could be. Take away the CEO mandate—”go do X!”—and there’s no clear business reason for doing it.

Which means, eventually, the project fails.

4/ Center of Excellence

So if the first three types of sustainability efforts are bad, how should a company approach its sustainability opportunities?

You should approach your sustainability work as a center of excellence within your organization. Their mantra should be Identify, Share and Support: Identify opportunities for sustainable innovation, share that knowledge broadly across the organization, then support teams and business units as they implement change.

Approach sustainability work not as a marketing effort, or a values expression, or a compliance effort—think of it like a digital transformation or an AI transformation effort.

Create a small team (a mix of insiders and new people is ideal) and charge them with identifying their business goals and objectives for their sustainability efforts.

Then, with these goals and objectives firmly in place, charge them with identifying opportunities to bring sustainability best-practices into your organization, and give them the tools and resources they need to bring their knowledge and insight throughout the rest of the organization.

Importantly, this team is a cross-functional, cross-department team—they provide thought leadership and knowledge to the rest of the organization, but also help identify areas for improvement and can help lead the improvement efforts.

(This is a good resource on how to implement a center for excellence well).

Approaching sustainability as a center for excellence ensures you remain focused on the business objectives of your work, focus on the difficult product and operational challenges this focus may unveil, and entrenches the effort into your organization.

With this foundation in place, you’ll be surprised at what opportunities your team uncovers, what new advantages your company creates in the marketplace, and where your sustainability journey may lead.

Are there other categories of sustainability projects you’ve encountered? Drop me a note or leave it in the comments — I’d love to hear!

First, two quick hits:

a/ Good news in small places.

Meet Chonkus, a newly discovered blue-green algae that sucks up carbon dioxide.

What makes it unique?

It’s large and heavy, grows faster than normal, and absorbs more CO2 than typical algae strands. If left in the oceans, it’s heavier-than-normal structure lets it fall to the seafloor, where its stored carbon will lie locked away for centuries. (It can also be used as the food spirulina.)

b/ Some “Current” Good News.

According to recent research, the famous (as currents go) Atlantic Meridional Overturning Circulation (AMOC) is safe—for now. Even under severe climatic changes, the current is likely to survive until at least the later half of the century. Which is good if you live in the northern hemisphere—or particularly in Europe.

Of course, there’s still this:

c/ Let’s Talk Industrial Policy!

When was the last time you were excited about tariffs and reporting directives? Well, check out Europe’s recently announced Clean Industrial Deal.

Key highlights:

• Lower energy costs by speeding up the deployment of clean energy, increasing grid interconnections and improving energy efficiency—all with the goal of reducing dependence on fossil fuels.

• A new €100bn ($105bn) Industrial Decarbonization Bank to support decarbonization projects & clean manufacturing

• Increasing the demand for sustainable products through such initiatives as the new Decarbonization Acceletator Act

• A push to incorporate circularity in to decarbonization efforts, with the goal of having 24% of materials be circular by 2030.

Why?

European manufacturing has fallen behind the US and China for years, and now suffers from energy costs often 3x higher than the US.

But Europe sees a strategy to compete: Bet on clean energy & industrial decarbonization and create a lead in the new marketplace that others will have trouble catching.

(Hmmm… Using sustainability to create a competitive advantage… where have I heard that before?)

Of note: The EU is stepping into the climate leadership vacuum opened up by the Trump administration’s decision to pull the US out of the Paris Agreement, halting IRA funding and drafting tariffs.

As with all EU legislation, the catch is implementation: The new policy must be passed by the European Parliament and ratified by a majority of member countries before taking effect, so changes to the details are likely. And there are a lot of details—it’s laudable to create an incentive framework for a sector like steel, but how those incentives are applied will make or break the policy’s effectiveness.

d/ Congratulations!

For making it through a discussion of European industrial policy, here’s a final bite—and this one’s good news: While the overall UK economy stagnates, the net-zero portion of the economy is growing like mad.

Here’s the study.

As the Chancellor of the Exchequer, Rachel Reeves, said recently:

Whenever I see interesting climate and sustainability innovations and trends, I’ll include them in future editions of Innovation Bites. Subscribe now to ensure you never miss out!

• Let’s figure out where we are.

• Let’s figure out where we want to go.

• Let’s figure out the optimal (read: most profitable) way to get there.

Is a stronger market position, better margins and a healthier business a destination your company might want to go to?

Then buckle up!

Where Are We?

Step one in any strategic process is figuring out where you are.

I got back into running recently, and step one was realizing I was no longer in shape to run half marathons (heck, 5ks were a stretch!). Acknowledging that, I built a training program that got me from where I actually was and built back up to the goal I wanted to achieve.

Like in life, in business. The first step in designing a climate innovation strategy—before you get to explore all the cool new technologies out there or how to incorporate them into your business—is figuring out where you are.

What is your business good at? What are you known for? Do you already have a competitive advantage in the market? What customer trends are going on that you should consider? Are there regulatory (particularly local or state) that you should consider?

Notice these are all just core business considerations — incorporating climate innovation into your business is about your business, not about the technology.

With a solid, objective understanding of where your business sits in the marketplace, we’d then determine what your environmental footprint looks like.

Critically, hyper precision isn’t needed here!

It’s enough to know what is generating carbon in your business that might be worth addressing and where you can make the biggest environmental impact—you can add precision later. (See my post on carbon accounting for more on this)

Where Are We Going?

With an understanding of where the business is today—both the business’s performance and the sustainability footprint—we can then ask the fun question:

What goal do we want to aim for?

Critically, this should be a business goal, not just a sustainability goal.

For example, maybe you’re a professional services firm. You have a highly educated workforce who are concerned about the climate crisis and their role in it. Employee turnover is a significant cost for you. Maybe one of your goals should be to increase employee retention by providing tools and opportunities for your employees to take action on sustainability issues.

Done successfully, you’ve accomplished two things—you’ve made your workforce more sustainable (a Scope 3 impact) while, critically, reducing your employee turnover and associated costs.

You’re having both an impact on your business while also having a climate impact—and that’s the point. Both must be done for any change to have long-term viability.

Maybe your goals are to reduce your packaging costs while reducing the carbon impact of your outbound transit. Maybe it’s to unlock a new customer segment by new net-negative carbon product. Maybe it’s to capture the brand space of environmental leadership in your industry.

Whatever it is, if you don’t have an explicit goal—a destination all your work is driving to—you’ll never get there.

How Do We Get There?

Now’s the fun part!

You know where you’re starting from. You have a destination in mind.

How do you get from A to B?

The recommendations here are 100% unique to your business, but tend to fall into a couple of categories:

First, is your chosen path bespoke—meaning only your business could implement it? Or is it universal—meaning it's something many others have already implemented?

I spoke recently with a vehicle manufacturer who was implementing recycled aluminum in their products to drive down their product portfolio’s carbon footprint. They needed a specific metallurgy footprint. Tensile strengths. Engineering things.

That’s very bespoke.

On the other end of the spectrum, I spoke recently with a consumer product company that’s concerned about the impact of their packaging. That’s pretty universal—if you make a physical product, at some point it probably goes in a package. A lot of off-the-shelf sustainable packaging solutions exist that can help.

Either bespoke or universal are OK paths!

Bespoke implementations can provide a stronger competitive advantage (only your company could implement it), but can be higher risk and more expensive. Universal solutions tend to be more “low hanging fruit”—low risk to implement, but unlikely alone to provide a competitive advantage because everyone can do it. And if everyone can do it, it’s hard to make that an advantage.

(For more on Universal Options, see “The Universal Playbook” here and here)

Second, do you need to build or buy?

If your path is highly bespoke (like my vehicle manufacturer trying to determine which recycled aluminum to use) you may need to build your solution. You’ll need to do the science or engineering (often in partnership with your suppliers) to bring something completely new to market.

The reward: Having “something new” is almost always a competitive advantage.

Need an example of someone doing this well? Take a look at Interface and the new carbon-capturing products they’re designing.

A slightly easier variant of completely building it yourself?

Build a platform solution based off a host of individual point solutions. Like Lego bricks, if assembled correctly, a handful of smaller innovations can create something unique for your firm—with low technology risk. (As an example, VendorX is trying to bring platform solutions to the climate tech startup space).

Lowest risk of all: Maybe you just purchase the innovation of someone else. If it’s a solution that’s particularly impactful for your business, it can also be an opportunity to invest in the startup supplier and participate in their upside.

Again, it just depends on what your goals are.

Artifacts & Other Shelf Art

If you’re thinking that this process looks a lot like a strategic planning & review process, you’re right—that’s exactly what it is. It’s just a strategic plan through the lens of climate & environmental sustainability.

Your team will generate key documents to track the process and make it a “living” one that you can keep current:

1. Sustainability Assessment. This captures the “Where Are We?” step above, and includes your carbon accounting data (if available). It also captures corporate goals & strategy, current initiatives that may be under way, and a competitive review of where your company sits in relation to your peers.

2. Sustainability Innovation Strategic Plan. This is both the “Where Are We Going?” stage above and a recommendation on “How Do We Get There?”. It captures key items like opportunities that may exist in the market place, new technologies that may impact your company and its products, a scorecard to evaluate current and future initiatives and opportunities, and other relevant material.

3. One-page Business Plans. For the top opportunities in the strategic plan, how are we going to implement and what’s the business case for it? What’s a rough pro forma set of financial projections look like? What’s the implementation plan & timing? Although it might be longer than a single page, the point is that it’s actionable, not encyclopedic.

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What’s the Why?

“Wait,” you might be saying, “I know I want to do something sustainable—we’re going to update our packaging to reduce carbon and cut our packaging costs. Why do I need to go through this process at all?

I’m not a processes for processes-sake guy, but this is one instance where going through a formal review and planning process is critical.

Why?

It gets alignment on what you’re doing, and critically, on why you’re doing it. It also gets buy-in from across the organization.

Maybe fixing packaging really is the best opportunity for your organization—or maybe there’s a different initiative that can have a bigger impact while saving you more money. Isn’t it worth a few weeks’ attention to do the work correctly to know you’re spending your time and money on the right thing?

The Bottom Line

Climate innovation isn't about chasing the latest green technology or having marketing make empty sustainability promises. It's about methodically incorporating sustainability into strategic decision-making to make your business stronger. The most successful companies are already using this approach to:

• Create and capture new market segments

• Reduce operational costs

• Strengthen their competitive position

• Future-proof against coming regulations and market shifts

But they're doing it strategically, not tactically. They start with clear-eyed business analysis, define specific goals and then implement with precision. They know where they are, where they want to go, and have a clear plan to get there.

The companies that will thrive in the next decade are the ones preparing now.

Are you?

The Sun FTW!

Big week for solar-related news. Three innovation-related things caught my attention:

a/ Solar Power Surpassed Coal Power in Europe for the first time last year.

This is big news, coming from one of the biggest markets in the world. All you need to know is this graph:

It’s partly Europe’s regulatory push to decarbonize their energy sector, but fundamental market forces are what’s really driving this shift (psst… solar’s cheaper). It’s everywhere across Europe too—even places where coal is abundant, like Poland, saw a rise in solar generation.

Here’s the full report.

b/ Oh yeah, China too.

But wait! You say. China is the biggest carbon polluter out there, and they still love coal! What about them??

Well, remember how in 2023 China added more solar panels than the US did in its entire history?

Turns out that’s nothing compared to 2024. Last year, China added 277 gigawatts of solar generation, surpassing 2023’s record. This means China has hit its initial 2030 renewables target already — six years early.

(The US response to the challenge? Don’t ask.)

c/ Sunshine in my pocket.

OK, not in my pocket, but how about in my lab?

While China was setting records on PV installations, their scientists were busy setting new records for a controlled fusion reaction. Scientists at the Institute of Plasma Physics sustained a steady-state high-confinement plasma operation for 1,066 seconds.

For 70 years now scientists worldwide have been trying to create a controlled fusion reaction (think: what powers the sun and stars) that could be used to generate electricity, which would provide an almost limitless source of power. Doing so “just” requires controlling temperatures at 100 million degrees Celsius or more, and, you know, precisely controlling the power of the sun.

Despite this, we’re getting closer!

Whenever I see interesting climate and sustainability innovations and trends, I’ll include them in future editions of Innovation Bites. Subscribe now to ensure you never miss out!

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Wilder, before we get started, let me just give you a second to introduce yourself to our audience, and then we'll dive into the product that you guys are working on.

Wilder: Sure. Wilder Kingsley, born in Boston but moved to New York when I was about six months old. I'm a proud Brooklynite and grew up here in New York where my great-grandparents originally settled. I really focused on languages [initially] and connecting with all sorts of different people. I started studying Chinese, Spanish, and eventually Portuguese and traveled to a number of different countries where they speak those languages, and I lived in a few of them. I've always focused on connecting with people and, that, corporate career-wise, led me into sales.

I started in sales in B2B SaaS about seven years ago. I was initially focused on international markets, specifically Latin America for the last few years, but I’d been worrying about the climate crisis for years and years and years.

I got to a point a few years ago where I felt uncomfortable not working directly in trying to address the crisis,. I then had the rare opportunity to bump into a gentleman at a climate tech networking event called Green Drinks here in Brooklyn. It was almost exactly two years ago, and I was fresh into climate. He had just launched a platform called EarthScope, which is a SaaS platform. He needed some sales advice, which lead me to become an advisor and eventually a cofounder.

I'd sold SaaS for years before. And he said, EarthScope is just working on Scope 3. And I said, “What is Scope 3?” and that led me down a rabbit hole that I've been down for the better part of two years now, helping him bring to market the product that he put together and simultaneously learning a lot more about the very messy subject.

The largest elephant in the room within corporate sustainability is tracking your upstream and downstream supply-chain-related emissions. It's one that I think EarthScope is addressing quite uniquely, but what I've learned along the way in climate and particularly within Scope 3 is we have a unique approach that can help folks in a certain way.

We absolutely must partner with other folks who address Scope 3 in a different way. This is much more about coalition building and picking the right solution for the right scenario. I have tried my best to veer away from the natural competition that occurs, particularly within the kind of techier part of climate tech.

Ed: Wilder, as we look at the product and think about kind of the service that you guys offer, it sounds like you're focused on a problem area that not a lot of other organizations are focused on right now in Scope 3 emissions. Is that right? Tell me more about the product that you guys have built and how it can be impactful for a corporate sustainability office.

Wilder: I would actually argue and push back a little bit on one thing you said: I think folks are really worried about their Scope 3. They are worried about their supply chain emissions. Their focus is on Scope 1 and 2 because it's within their control. It's within their boundaries of control. And it's an important exercise in beginning to make pretty significant operational changes for emissions reduction.

But I do believe that most folks who have a sizable organization, say $50 million and above in revenue, are aware loosely of what Scope 3 is and they're worried. They're worried because it is outside their boundaries of control. And it's a large source of emissions.

With that in mind, I think what we're able to help provide is assuaging some of those worries. The biggest barrier to measuring and tracking what your Scope 3 is engaging your suppliers effectively. We strongly believe in veering away, not abandoning, but veering away from the spend-based approach [to carbon accounting] towards using your procurement spend with each supplier as a calculation of what their potential emissions might be.

What EarthScope does is it's a software that sends out iterative assessments to each of your suppliers to actually capture your primary emissions data. So “what are the suppliers’ actual emissions”, and then do that at scale. A lot of this kind of supplier engagement requires having conversations. And if you can do that—initially manually and then automated en mass and scaled—it makes that kind of daunting task of engaging suppliers around sustainability a lot more manageable and palatable.

I think we have a situation which frankly is completely understandable within corporate sustainability, where folks are so scared to do something about their Scope 3 that they don't do anything about their Scope 3. It's the same thing that you and I go through as individual consumers: “I’m worried about the climate, you know, but I don't know what to do. It all seems bad. So I'm just not going to do anything.”

That's partially, honestly, why I moved into climate and climate tech—I was worried about how much of an impact I can really make as an individual on a daily basis.

Ed: That makes total sense and completely resonates.

One of the concerns I hear from sustainability folks in the corporate sector when it comes to Scope 3 is, “Oh my gosh, Scope 3 can almost literally be anything, depending on how you draw the boundaries.” There are no clear rules yet around how those boundaries should be drawn, and, to your point, it leads to people just shutting down.

Can you walk me through how EarthScope as a product and platform helps organizations get Scope 3 management together and under control?

Wilder: We don't define anything for anyone, but what our product is doing is focusing just on your upstream suppliers.

In order to produce or provide the service that you provide or produce the product that you produce, you require good services from a lot of different people. If you're able to engage those folks using a combination of technology and person-to-person, one-on-one conversations around sustainability, you can offer them things like more favorable contract terms—a carrot approach—or more of a stick approach of “If you want to bid for our business, you have to disclose your Scope 1 and 2 to us.”

We found that, like similar issues in our society, meeting people where they are on their Scope 1 and 2 for your Scope 3 is crucial. So using curiosity, moving the needle gradually, and then listen, when the needle's not being moved enough and regulations are starting to hit at end of this year, now that we're in 2025, you can say, “Listen, we need your Scope 1 and 2 emissions or you can't RFP for our business next year.” That makes sense.

Ed: OK. As a downstream organization, I finally have visibility into what my suppliers are doing and what their numbers look like through your platform, if I understand correctly. I can then start having conversations with folks about what we're doing jointly and what I'm looking for in my suppliers and my vendors.

Wilder: That's correct.

Ed: That makes a lot of sense. You guys are talking to, I would imagine, a host of different organizations across different industries and sectors. Have there been specific areas or sectors that had been most receptive to your platform? Where do you think you can add the most value?

Wilder: I am glad you asked because it's something that we've really been a lot more focused on in the last quarter or two. How do I approach this from a go-to-market motion? How do I start making dents within my territory and where are we finding the most repeatable, successful processes?

What we found overall is Transportation Logistics is our bread and butter. It is our stickiest industry. We have the strongest mobilizers or champions who really evangelize our technology and shop it internally within the organization to help them in their daily jobs.

Just to give you a profile of who those folks are, it's generally supply chain leaders or sustainable procurement leaders where they have either a direct tie to their success being linked to sustainability or it's a looming issue from a regulatory standpoint. So we found Transportation Logistics to be our stickiest customers and also the vertical in which we're still having the most conversations. We haven't shied away from talking to other folks in Retail, Mining, Oil & Gas to a lesser extent. But as of now, transportation seems to be lagging in its sustainability progress—not commitments, but progress. There's a lot of greenfield opportunity there for folks to be leaders.

Ed: That makes a ton of sense. If I think about a transportation organization, I'm already kind of the linchpin between clients on both sides. So my mindset is probably already to be networked into both my customers and the folks upstream from me, and you're just enabling me to have a different conversation with those folks.

Wilder: Right. But I think where I'm personally not super interested in, in jumping forwards, but where there could be further opportunity is helping Transportation Logistics companies with their downstream emissions because then it gets really granular and really complicated. For now I want to stick to what we can do best.

Ed: Wilder, if I'm a chief sustainability officer or maybe a procurement officer or something like that, and I'm looking at your solution, how should I be thinking about evaluating your product and your offering right now?

Wilder: I think I’d ask how effectively can you engage your suppliers on sustainability, and what kind of KPIs are you looking for? How many suppliers have signed up to the platform and how many suppliers are reporting to the platform? Within your first year of using EarthScope or another reporting solution, what percentage of my suppliers am I still using a spend-based approach to calculate their emissions for? I think deploying our technology successfully is crunching those numbers.

Ed: That makes a lot of sense. Just so I understand, can you differentiate for me the difference between a spend-based approach to carbon calculations and the way that your platform goes about doing it?

It sounds like you guys are a heck of a lot more accurate.

Wilder: A primary emissions or direct emissions approach is far more accurate. That's the approach that we take. We didn't come up with it, but it's the one that we use, and we built a technology around it to capture that type of data.

What spend-based is, is looking at your list of different suppliers and then applying emissions factors from each industry. So if you have a supplier in Transportation Logistics, spending a certain amount with you, you can apply that procurement spend against those industry emissions factors to estimate what their emissions will be.

We found that approach to be inaccurate, and that's part of why EarthScope focuses on gathering primary emissions data. A spend-based approach paints only a small picture because, you know, different suppliers within the same industry can have very, very different emissions. And it furthermore doesn't lead to this conversation, to a two-way street between you and your supply base on “what are we doing on sustainability?” “Well, we're doing this, we're doing that. How can we work with you guys to incentivize you to do better on sustainability?” It's not just pulling their numbers that show their spend and then calculating [a carbon impact] on your own. And by the way, that’s generally done in a spreadsheet, supplier by supplier, and it takes a really long time.

That's why we lead with a primary-emissions approach first.

Ed: That's fascinating. It does cover up probably a lot of the nuances that make one supplier better than the other from a carbon standpoint. It does make a lot more sense.

Wilder: I mean, listen, we're helping one of our clients right now calculate their entire Scope 3 inventory for an SBTI submission. They've been working with us for a year and a half, and we probably have 30% of their suppliers onboarded, which for us is pretty high. But we're absolutely using a spend-based approach to calculate the rest of their inventory. That deadline is hard and fast and it's approaching, and a spend-based approach is not wildly inaccurate. It just doesn't paint the full picture.

One of the many daunting factors of Scope 3 is this is probably a five- or 10-year project of onboarding all of your suppliers and getting them to report. So the more accurate of a sign you can tell of what your Scope 3 inventory is, the better you're going to be able to make decisions for your operations and for your company.

Ed: One of the things that we focus on within our community is different innovations and different ways that people are bringing technology into their organization to try to address climate issues—be it decarbonization or carbon capture or whatever their challenge is.

You're working with a ton of different organizations and businesses across different industries. What innovations have you seen recently that get you really excited, as someone who's passionate about climate change and the climate crisis?

Wilder: I recently spoke to a company called Sunshine Platform, which helps corporates abate their CO2 emissions by making it easy for them to invest in renewable energy assets and thus drive impact, reduce emissions and generate financial returns. They're based in the EU and they work with large corporates—I believe H&M is their largest partner—to buy renewable energy to, in theory, offset some of their operations. It's pretty different from the offsets and a lot of the hubbub around that topic than you and I probably are more used to. I remember it being a really innovative and nuanced one-off approach to further decarbonize your daily operations.

Then I took a sustainability accelerator over the summer called OnePointFive Academy and had Oppenheimer's grandson speak to us about nuclear energy.

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Ed: Oh, that’s cool.

Wilder: He dispelled every myth or assumption I'd made about nuclear energy. I have hope in our democracy and our society to make swift strides towards nuclear, but should we do that? I think nuclear will not ever be the silver bullet that humanity keeps hoping for with every problem that they try to solve, but I do see it as enormously helpful and maybe the thing that keeps us from going extinct.

Ed: It's interesting because it feels like across climate, no matter what the sector, everyone always is hung up on finding that one silver bullet where—if we just do that!—we're fine.

But it's never that. It's always an entire portfolio of solutions that are needed, and we should do it all because it's not going to be one solution that solves everything. We need a portfolio of solutions.

Wilder: It shouldn't be which one do we do, it's which one do we do first.

Ed: Fully agree. OK, final question: What have you read recently or listened to that you'd recommend to folks who are reading our discussion?

Wilder: They're not climate related. But there is a book that I read a few years ago about The Troubles in the north of Ireland, and the sectarian conflict that really accelerated in the late sixties.

It's called Say Nothing by a brilliant author named Patrick Radden Keefe, who studies current and historically impacted conflicts throughout the world and how they're still very much in flux today. I mean, there's a ceasefire in Northern Ireland, but sectarian tensions are extremely tense.

There is now a TV show on Hulu called Say Nothing based off the book by Patrick Radden Keefe that I highly, highly recommend. It's probably, I think in terms of numbers, I would assume it's the number one show on Hulu right now.

And in addition to the book that I read and the TV show that I'm now watching, there's a podcast called The Troubles Podcast that I've been listening to religiously for the past two years. It's incredibly informative. It takes a neutral approach and stance towards exploring the different, stakeholders within a conflict: Republicans, Catholics, Unionists, Protestants, British soldiers and everyone in between, and kind of learning more about their own perspective, as well as documenting some more grisly bombings and attacks and conflicts that occurred throughout the period known as The Troubles.

Ed: Thank you for the recommendations! That’s a period I know almost nothing about. So I'll definitely look into that. Thank you for the recommendation and your time here, I appreciate it!

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Adam, do you want to take a second to introduce your company?

Adam: Sure. My company is Fiora Mara. Our goals are to utilize a nature-based solution to absorb massive amounts of carbon on the open ocean. My background is, just at my core, I'm an innovator. I've been hired at technology companies who work on the hard projects, the projects that you wouldn't really expect somebody to take on. I've worked as a product manager in that regard, and I have an engineering degree in computer science, so what I bring to teams is some great algorithmic knowledge. I love to tackle any hard problem in technology, whether that's an algorithm or a complex sales initiative.

Ed: Adam, obviously you guys are early stage and still refining things. But could you tell me more about the solution that you're envisioning and how you're approaching the nature-based carbon removal market?

Adam: Sure. Our goal is to utilize seaweed as a method of carbon capture.

Seaweed is known to absorb carbon at 20 times the rate of land-based equivalents. What we like about it is that overall the solution we've come up with we believe is simple, scalable and sustainable. We're currently identifying areas of the ocean that would be most fitting for our project. We know that there's some risks in certain areas, so we're trying to decide where to launch our prototype. But the plan is we're going to have various barges go along those different routes and release small self-growing and self-sinking seaweed farms along the route. These farms will be small in size to avoid issues in the marine environment. But at the same time, it's going to absorb massive amounts of carbon on each journey across the ocean.

And that's our goal—to grow and sink seaweed on the open ocean. In sinking it, you're going to sink it to a depth far enough down where it will remain captured for the long term and hopefully be reintegrated back into the soil.

Ed: You're a seaweed farmer, effectively, is what this turns into. Should we envision this as like an ocean pen with buoys around it that sets up an area that gets seeded?

Adam: I'd say that I'm a carbon farmer, and seaweed is just an intermediary. Our goal is to create a 100% bio-friendly seaweed farm that we can launch.

Seaweed farms, in and of themselves, we don't expect to be incredible in size—we want to keep it, again, suitable to the environment. The way that we have our vision right now is that we are looking to use bamboo poles and a biodegradable rope to keep things together, as well as seeded lines going across it and into the water, and then just release that from the vessel.

The farm, before it’s released, is already seeded, and our goal is to use gametophytes as seeds and rely less on spores. Gametophytes are actually a more mature version of seaweed seeds, essentially, a little bit more mature, and then measure growth on the water.

In the various areas of the world that we're trying to target, we'll find the optimal places for us to grow that seaweed and have it all at the same time. The goal is to do it a lot. Release a lot of these little farms, and by releasing a lot of little things, we're going to make a real big impact.

Small plant, big impact.

Ed: Adam, one the challenges that I know Running Tide and some early precursors in this space have run into is the issue of monitoring and verification of the carbon they're capturing and sinking. How are you guys thinking about the monitoring and verification challenge?

Adam: Running Tide was an excellent company, but they were a bit early.

In terms of what we're looking to do, we are looking to partner with these carbon sequestering verification organizations. There's a number of them out there—Gold Standard, Verra—and we want to work closely with them.

In addition, the marine biologists, marine scientists and marine engineers that we're going to have on our team are going to be creating a way for us to monitor the growth and the sinking of the seaweed on the water to the best of our abilities. We're trying to do everything right, and do it the way that it's supposed to be done.

Ed: So, why the oceans? With all the different opportunities to capture carbon you could go after, why the ocean?

Adam: That's going to be a little bit of a story followed by my reasoning.

Back near the tail end of the Coronavirus, I was getting frustrated with the fact that climate change was still a disaster and I was still waiting for it to come and kill us all. I decided, look, let me just pretend I had all the resources in the world to fight climate change and I could build anything I wanted to. What would I do?

What I started to focus in on is that I love the idea of creating a nature-based solution. What if I could just take 100,000 square miles of land and build a forest on it? What kind of forest combination would I do? What combination of shrubs and trees would I put on that land to absorb the most carbon?

At the time, I was reaching out to experts in the field. I reached out to people on LinkedIn, experts, and they were happy to have a conversation with me. I read their studies. I read various studies online.

Then finally, somebody turned to me and said, “I think you should look into seaweed. If you're looking to absorb the most carbon, seaweed does it.”

I'm like… okay. And I looked at seaweed, and I started doing that research. As I mentioned before, seaweed absorbs carbon at 20 times the rate of a forest of the same size.

But the real benefit that I see is that it doesn't require land. What's the problem with land that we have? Tell me. What's the problem?

Ed: There's only so much of it and we have to live on it.

Adam: The problem is that we're humans!

As humans, we want to have as much land as possible. And just because I do something good on land doesn't mean that somebody in the next generation or in the next couple of years isn’t going to come by and bulldoze it. Anything I do on land is unmaintainable throughout my lifetime and minimally when I die. I want to do something that can’t be reversed.

The great thing about the ocean is that the world is 71% ocean. The scary thing is that the ocean is 71% of our world. As humans, that's not a place for us to live. It's a place for us to explore, for us to travel through.

That's where the idea comes into play. The ocean is phenomenal.

It is also particularly sensitive to the changing carbon levels in our world. If you really want to go back in time for history, we used to be a carbon planet billions of years ago. The way that we got out of that [stage] is that algae—seaweed is a form of algae—began to form. It absorbed so much CO2 and released so much oxygen that other oxygen-based lifeforms were able to come into play and live.

The way that I see our solution is that we're going back to basics in terms of how the Earth formed and how it became an oxygen and water planet and utilizing the method that the earth used to restore order that there is today. That's why I'm looking at the ocean as a big solution.

In addition, if you were to grow seaweed and sink it down below 2,000 meters, 96% of that carbon is sequestered for the long term. Once you sink it down below 2,000 meters, I'm going to tell you one thing that's less likely to happen: Humans are less likely to go down there and destroy what it is that we've done, at least over the next 100 or so odd years, to the point where it would be reintegrated into the ocean bed. That's why the ocean is attractive to me as a natural solution.

Ed: You're really approaching this entirely from what's the efficacy of the solution compared to all the other solutions that are potentially out there.

Adam: I'm looking at not only the efficacy but also the long-lasting possibility of what we're trying to do.

We sink seaweed once, nobody's going to go down there and go, “Okay, we've got to pick this up and bring it back up to the surface and release the carbon back.” I think that's a low risk. If you were to build a forest, you get a new government in office and they tell the paper company to go use that forest for their paper and to eliminate it [as a carbon sink].

I see anything done land-based as risky. I know that there's some machines that are coming out that are trying to do carbon capture, but that’s at its infancy. It's going to take a generation for [industrial carbon removal] to become more efficient.

We need to get started. It's the way that I see it.

Ed: I think that makes a tremendous amount of sense.

If you're a Chief Sustainability Officer at a Coke or a GE or some large or mid-sized corporation, and you're looking at innovation as a potential solution to decarbonizing your products and your business operations, how does the carbon removal services that your firm offers fit into that set of options? How should sustainability leaders think about carbon removal?

Adam: The way that I see it Ed is there's a lot that you can do to reduce the amount of carbon that you emit—from within your factories, within your transport on land—but you're not going to get to zero. That's the hurdle that we have as a culture, as a world, as a climate-fighting set of people. You can get it down, but you can't get it to zero. That's where the carbon capture market comes into play.

You need to capture carbon to offset the fact that you're releasing some additional carbon into the atmosphere that you can't account for. The decarbonization impact is phenomenal. I love to see organizations chasing after it. But nobody's going to get to zero because you always have to ship your product to somebody at home. Even if you have it down to zero, if you're shipping Coke to a store, for example, you're going to have that transportation from where you made the Coke, you made it in Mexico, and you're transporting it up to California. In that whole transition, you're going to be wasting carbon into the atmosphere. That's what we have today.

There's electric vehicles. Even electric vehicles, you need to fill back up with electricity. You still will have to offset something today and in the near future, as I see. That's where we come to play.

Ed: This isn't a quick fix solution where I don't have to change any of my operations.

Adam: You can do it that way. You want to hack it? Let’s talk!

But in terms of being a responsible company, you probably want to make headway on both [reducing emissions and purchasing carbon removal] because at the end of the day, if you decarbonize your [operations], you're going to spend less on carbon removal, which will impact your bottom line in the long term.

Ed: It's part of that menu, that combined solution, really.

Adam: Yeah, I don't think there's one answer to climate change. The answer to climate change is in having many different solutions.

My solution is not going to reduce the cost that we have on carbon for electricity. It's not going to reduce the cost that we have on carbon for gas at this point. What it will do is it will offset [what we can’t easily eliminate].

If we go after electric vehicles, we significantly reduce the amount of carbon we release into the atmosphere. If we go after heating systems, we get rid of coal altogether. These are all big things that can make a giant impact. Alone, carbon capture will have a limit in which it can function. Once it gets into the trillion mark, you probably can't do that every year. You're going to need to make adjustments to make sure that the marine environment, any environment where you're capturing carbon, is still kept well.

Ed: Final two questions for you. One is, if folks are interested in getting in touch with you to learn more, how can people get in touch with you?

Adan: You can go to our website, Fioramara.com, go to the contact form there, and that goes right to me. Or, you can find me on LinkedIn. If you reach out to me on LinkedIn, I’d love to talk.

Ed: Fantastic. Final question then for you: What is a book or podcast you’d recommend to folks?

Adam: There are a couple of books that I like. One’s called Eat Like A Fish, written by Bren Smith. He started Green Wave, a nonprofit that's promoting seaweed farming as not only a climate solution, but also as a way to make a living. I will mention that in my conversation with them has shown that the demand for seaweed from seaweed farming is lower than expected currently, but we'll see where that goes.

In terms of other reading, I look to Al Gore and the Climate Reality Leadership Corps. If you have further interest, I would probably see what the Climate Reality Leadership Corps is pointing you to and read up on it.

Ed: Fantastic. Adam, thank you so much for your time, I really appreciate it!

Adam: You bet!

Now we’re going to look further afield, to some areas your team may not have considered before. But, just like the more conventional areas, these are opportunities to strengthen your business by making your business more environmentally sustainable.

Employee Engagement

Typical Impact: High

Investment Required: Low

I love programs that drive employee impact on the climate crisis—and even better, so do your employees! There are literally hundreds of opportunities that fall into this category, ranging from the very simple (things like tools you can include on your employee portal to direct employees to environmental volunteer opportunities) to more substantial (things like environmental-focused 401ks and other savings products). This category is an area where innovative teams can really design an internal offering that makes a huge impact—and is a differentiator that sets your company apart.

Why does that matter?

Because employee retention is a significant driver of both increased productivity and lower costs. Don’t believe me? Consider the company that spends 6 months filling a role, another 3 months training that new hire up, another 3 months before they’re really productive on the team, only to lose them after the first year and have to repeat the cycle.

And current trends aren’t encouraging: According to Gartner, annual turnover is projected to be 50-75% higher than before the pandemic, and it’s now taking 18% longer to find and hire someone. Your company should embrace any opportunity to keep your top employees.

Financial

Typical Impact: High

Investment Required: Medium

Opportunities that fall into the "Financial” category often fall off leaders’ radars—but there’s a significant number of options here, and they can have a huge impact. Leaders think of regulatory compliance issues when they think about finance opportunities in environmental sustainability, but there’s so much more.

Sustainability opportunities in the finance category include things like green investment overlays for the company treasury, impact-linked executive bonuses, green procurement policies and carbon removal purchase programs.

While some opportunities in this category (like carbon-removal credit purchase programs) are strictly a cost, combined into a broader product strategy they can create a unique product offering that no one else in your industry can match.

Don’t believe me? Take a look at Microsoft’s comprehensive carbon-removal credit retirement strategy.

Digital

Typical Impact: Low / Medium

Investment Required: Low

One opportunity falls into this category that every business should incorporate, as a foundational effort on their sustainability work: Implementing a carbon accounting (or “Sustainability Management”) system. It might just be a spreadsheet to start with, but as I wrote about earlier, you need to start tracking so you can see the impacts of your work.

Outside of implementing a tracking and reporting platform, there are a lot of simple steps your business can take to reduce your climate impact from your digital activities. For instance, are you storing 3-hour long, 1080p videos from video calls from 2022 that no one will ever look at, ever again? Do you have 150,000 unread emails that date back to 2006? Anything stored in the cloud means a server, somewhere, is consuming electricity to keep your file alive. Maybe its time you culled them? (Saving both the planet and your storage budget in process).

The overall climate impact of these improvements (beyond implementing a Sustainability Management System) is likely to be low, but the effort needed to achieve them is minimal. Why not take a look?

There are likely opportunities to improve the environmental sustainability of your business everywhere you look. Approaching these opportunities intelligently, in a holistic, strategic manner, can have a significant impact on the competitiveness of your business.

Environmental sustainability isn’t just a feel-good issue for your business, it’s a way for you to expand market share, beat your competition and make your business more competitive and profitable.

What are you waiting for? Isn’t it time you got started?

This is a “deep science” or “deep engineered” innovation. Chasing those opportunities can benefit from a product & innovation generalist (like me!), but you also need deep, specific knowledge to bring it to market.

But, did you realize that 80% or more of the sustainability innovations that will drive real cost improvements and differentiation in your business are fairly universal? How you implement them though is critical, and how you combine them into a holistic solution is where you’ll develop a sustainable competitive advantage.

But first, what are the areas of climate impact and sustainability that impact almost any business (even yours)?

This is Part I: The “traditional” areas for environmental impact. The non-traditional areas that everyone can benefit from are coming next week!

Energy & Infrastructure

Typical Impact: Medium / High

Investment Required: Low

From the smallest neighborhood coffee shop to General Motors, your business has a physical presence (even if you’re 100% remote, your employees are still working somewhere). That physical presence uses resources (water, electricity, heating & cooling…), all of which generate carbon and contribute to climate change. reducing

If your business exists, it generates a climate impact that falls into this category.

BUT this is also the most exciting category because ANY climate-friendly improvement in this category will likely directly reduce your costs!

Cut down on electrical usage? Your power bill goes down.

Improve the energy efficiency of your office space? Your heating bill goes down.

Reduce your water consumption? Your water bill goes down.

This is a great starting point if you want to immediately make your business more profitable.

Does that grab your attention?

Waste & Materials

Typical Impact: Medium

Investment Required: Low / Medium

Want to know exactly how un-sexy climate work can get? Let’s talk about waste streams!

Broadly speaking, every business (even yours!) uses physical materials and tools. From laptops and monitors to printer paper and markers to coffee in the break room, your employees need and use things that, in turn, require carbon and have a climate impact.

The good news?

Tackle opportunities to reduce waste in this category and you’re likely to drive down your overhead costs. Bonus? You’ll also probably tighten up your firm’s corporate and digital security.

“Universal” Product & Operations Improvements

Typical Impact: High

Investment Required: High

This is one of my favorite categories because it starts to get at the heart of improving your product offering, but it doesn’t require a tremendous amount of specialized knowledge to implement.

Things like outbound product packaging, fleet management improvements and vendor management fall into this category. They’re improvements that make a huge impact on your business, but can also require coordination across a lot of suppliers and internal stakeholders to achieve. But they’re also often low-risk—others have figured out how to improve the environmental sustainability of their packaging. You should too.

Tackling a challenge in this category also starts your team thinking about how to improve the climate impact of your products themselves—developing that specialized knowledge that your team will need to tackle the specifics of your product. But by starting with a “Universal” opportunity in the product & operations category, you can start to see a return immediately while you learn the details and get better at sustainability.

See opportunities to make your business stronger in the list above? You should—opportunities to improve your company’s sustainability while making your business stronger are everywhere.

Your competition is likely tackling some of these. Shouldn’t you?

(A note to my fellow accounting dorks out there—I’m munging Scope 1 vs Scope 2 impacts here, but doing so intentionally. If addressing only Scope 1 emissions matters to you, focus just on those.

But if you’re worried about climate-friendly perceptions of your brand, remember that your customers likely don’t understand the difference in the technical scopes. They’ll just hold you accountable for, say, flying your entire team to Bali for 2 weeks, even though that’s technically a Scope 2 and not Scope 1 emission. Better to address as much as you can and leave the carbon accounting to the folks who have to do the reporting!)

If you want to trim your company’s overhead budget by 15%, what do you cut first? If you trim corporate travel by 5%, does that get you there? Or should you renegotiate your contract with your packaging supplier? What about headcount?

If you’re like most business people, your eyes glazed over at the mention of accounting categories and percentages.

But you’re not most business people—you’re a business leader, concerned about making your business stronger and thinking about environmental sustainability. So your thoughts immediately went to “wait, how much money is 15% of the overhead budget”, “how much do we spend on travel?” and “but packaging isn’t typically overhead.”

Followed by “why are we talking about financial accounting in a post about sustainability?

Because in environmental sustainability, the old accounting adage holds true: You can’t manage what you can’t measure.

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Step One: Find Your Starting Point

You couldn’t launch a successful cost-reduction project in your company without knowing what your current costs are. You wouldn’t know where you’re overspending, and more fundamentally, without knowing your starting point you wouldn’t know if you were successful in your cost-cutting efforts or not.

The same holds true for environmental sustainability.

Although my focus is on helping your business identify ways to create a long-term competitive advantage through becoming more environmentally sustainable, you need to have a baseline understanding of where your business is to identify high-impact areas to focus on and to measure the outcome of your work.

Without this foundation, you don’t know where you currently stand, you don’t know for certain where to focus and you don’t know the magnitude of the impacts that your improvements make.

It’s like changing suppliers without knowing what anyone is costing you. It’s unlikely to have the impact you want.

Enter: Carbon Accounting

Hence the need for a basic carbon accounting system.

What is this?

It’s a system, designed to meet the needs of your company, that can show you how much carbon (the primary sustainability measurement to track for companies worried about the climate crisis—or European Union regulation) your business is generating through each step of your value chain.

At its most robust, a carbon accounting system can automatically pull data from all your other systems to show you how much carbon is generated by each of your suppliers, how much your business generates through its operations, how much your employees generate and how much your users or customers generate in an elaborate, graphical dashboard. It’s like NASA’s mission control, for carbon.

At its most simple, it’s a spreadsheet that takes basic operational data from your business and calculates how much carbon your company generates.

Just like financial accounting software, solutions range from a DIY spreadsheet to a simple online system that could cost $20/month to a full enterprise platform that costs thousands of dollars (or more).

What does your business need? You want the simplest solution that gives you reliable data you can start making decisions from.

(Spoiler: If you’re just starting out, you probably want a consultant with a few spreadsheets. Not only does this get you started quickly, but you’ll learn where your data gaps are and what other issues exist in your current systems, which will help you implement a longer-term solution more effectively.)

Let’s Start Counting!

Many businesses nowadays have some sort of carbon accounting software in place. If yours does, congratulations! You can go focus on how to improve your numbers.

If you don’t, you’re falling behind and your business needs one. A few recommendations to keep in mind:

Accuracy Over Precision

Many businesses—and sustainability teams in particular—get bogged down in determining the exact number for a given source of emissions. This is understandable: Most sustainability professionals either are ex-scientists or have some scientific background, and in science, whether the answer is 2.230209 or 2.23020883 makes a difference.

In business, it rarely does.

2.230209 and 2.23020883 in a business context are typically “about 2” and “less than 10”, meaning the business implication doesn’t change with the added precision. Often what the business needs is the order of magnitude of a carbon source (“is it 2, 20, or 20,000?”), how it compares to other carbon sources (is it the highest? lowest? or 3rd biggest source of carbon?), how it generally compares to the industry, and how easily it can be improved.

Anything over that is unnecessary precision. You want to start making an impact and showing value for your sustainability efforts ASAP. Go quick, get close and move on. Quick and close is better than slow and exact.

(Nuance: The danger in focusing on unnecessary levels of precision is that this work isn’t about the accounting—it’s about identifying where and how to impact the company’s sustainability. Spending all your time on fine-tuning the 4th decimal point takes attention away from the point of the work—eliminating the carbon source entirely).

Don’t Die In Reporting

Related to precision, many sustainability teams spend so much time gathering data, inputting it into the system and then reporting those figures out that they never focus on their true mission: Driving sustainability improvements for the organization. They spend their entire time generating and updating reports.

Create a system that is simple, lightweight and actionable for the rest of the business, then focus on ways to make your business stronger through sustainability.

Don’t Overbuy

There are a lot of very big, very complicated, very shiny carbon reporting platforms out there. You may not need that yet. Particularly if you’re just starting out, you may just need a spreadsheet and access to your business’s operational numbers to get started.

You can always upgrade systems later, once you start seeing the impact of the improvements you’re making.

Reporting Is the Start, Not the Goal

Carbon accounting providers, like any systems seller, like to position their platform as the solution—if you just implement carbon accounting platform X, everything takes care of itself.

In reality, reporting is just the starting point. Knowing that your product’s packaging results in X metric tonnes of carbon annually doesn’t matter. What you do with that knowledge (switch to a more sustainable provider? change to a reusable package? eliminate layers of packaging entirely?) is what matters. The numbers and reports are just a starting point for your team to make an impact.

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Go Start!

Remember, fundamentally your carbon accounting process (whether it’s an elaborate software system, an outside consultant or Bob over in the corner) exists to provide you two key pieces of knowledge:

1. A starting number that you can measure options and progress against

2. A prioritization of where the biggest emissions sources in your organization and its processes are

However you can get to that cheaply and quickly is the best solution for you.