Investors are supporting and benefiting from the oil money push into climate change technology

Katie Mehnert, Founder and CEO of ALLY Energy

A number of reports this year indicate that climate-focused investors continue to make their voices heard within energy companies, including those that fall under the traditional “Big Oil” umbrella. These shareholders, sometimes called “activist investors,” are demanding that companies cut emissions and accelerate the transition to net zero. They also often urge these companies to take another important step: continue investing in climate technology.

These investments have helped fuel significant growth in the sector. The Future Market Insights report predicts that the global climate technology market will exceed $20 billion this year and grow at a “staggering CAGR of 24.5%” to reach more than $180 billion over the next decade.

While overall VC funding for climate technology fell from 2021 to 2022, funding from so-called “big oil” actually increased, according to Pitchbook. “More than one-fifth of all venture investments in climate technology startups in 2022 were in deals with participation from oil and gas companies – $6.79 billion out of a total of $36.47 billion.”

Some of these climate technology solutions are so successful that they are brought to the public market through IPOs, creating new opportunities for shareholders. Just a few days ago, pointed out that climate change technology stocks could offer “a shortcut to profiting from one of the most popular sectors in the market today.”

Ironically, some climate change activists are trying to make it harder for oil companies to invest in climate change technologies. Although it is certainly not a sentiment shared by all environmental groups, some individuals are urging climate change technology companies and incubators to stop accepting funding from oil companies. This idea is pointless and will not yield any positive results. Removing critical seed funding from climate technology startups will not reduce profits for oil companies, it will only slow down the climate solutions and climate technology ecosystem.

Investors need to point to recent events when speaking out about the importance of directing “oil money” to climate change technologies. Earlier this year, LanzaTech Global began trading on the Nasdaq. The company was also named to Time Magazine’s 100 Most Influential Companies in 2023. The carbon recycling company got this far in part through partnerships with oil companies, and just recently its spinoff, LanzaJet, announced funding from Shell.

A few days ago, Occidental Petroleum announced plans to acquire Carbon Engineering for approximately $1.1 billion. CBC noted that the company is “pioneering the use of direct air capture technology to remove carbon dioxide directly from the atmosphere” and has already “been working with Oxy subsidiary 1 Point Five for a number of years.” . From now on, it will become a “wholly owned subsidiary of Oxy Low Carbon Ventures.”

Meanwhile, NanoTech, which focuses on eco-friendly fire protection and cool roof coatings, announced an oversubscribed funding round. The company is supported by Halliburton Research Institute.

As a leader of a company focused on energy and climate change technology work, I believe that the sector is not what some people imagine, with renewable energy on one side and fossil fuels on the other. I understand that this is not an everyday reality.

In fact, in addition to funding projects and launching their own initiatives, traditional energy companies also provide something else that clean energy companies need: the skills of their employees. More and more people are finding that the knowledge and expertise they have learned working in oil and gas can help them work in renewable energy fields, from solar to wind, geothermal and hydropower.

It is important for investors to continue to make their voices heard not only in the market but also in the broader environmental community. The world needs to find ways to work together to achieve the energy transition, and in the process ensure humanity has enough power to fuel everything from businesses to schools to hospitals and more. need to do it.

The more we find ways to put aside our differences and work together, the farther we will be in the race to net zero. After all, as members of the TCS New York City Marathon Energy Leadership Team know all too well, the finish line of the energy transition is far away, and we will need to work together with each other along the way.

katie mehnert Founder and CEO of Ally energymembers of Green Town Research Institute.she ambassador U.S. Department of Energy Energy Equity Initiative Award and National Petroleum Council Representative.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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