Technology to address a staggering 85% of the emissions abatement needed to achieve net zero already exists. However, only 10% is commercially competitive, whereas 45% is commercially available but requires scale-up and technological improvement to reach cost parity with traditional alternatives. That is why, as the clock ticks and the planet heats, hyper-scaling becomes vital.

But shareholder value and economic empowerment are crucial too if that step change is to take place – fast. And these are key challenges of our time. How do we make that link between shareholder value and innovation? Where are the investor returns in climate action, and when will they materialise as an enabler of change? How will they influence the global economic empowerment line of $12 per day?

We are only 10% of the way through the energy transition – at best. An orderly transition must innovate to solve some difficult physical challenges across the energy system while also adapting systems and use cases. A low carbon economy is an innovation economy, and we must find a path from aspiration to action to deliver this innovation economy, quickly.

Key takeaways

1. Our planet has a scaling problem, not an invention problem. The evidence of humanity’s ability to invent solutions to the climate crisis is clear but scaling is not easy and hyper-scaling is even harder. We are at the early stages of scaling, and it will take investment, with clearer evidence of investor returns – and deploying talent well – to achieve the leaps in technology adoption needed to secure 1.5°C.

2. There are huge opportunities to be had from the innovation economy. An estimated $12tr investment is needed to get us going on a 1.5°C future. This is exciting. It means we will see new entrants some of which can scale quickly –these are the unicorns of the future. We will see game-changing ambition and whole new business ecosystems with new investors at their heart.

3. There are structural challenges that need to be resolved – such as long-term energy storage issues associated with new ways of generating energy. This takes convincing governments and policymakers that solving these challenges will result in the right outcomes. It is not a straight road to net zero but one way of reducing the twists is to ensure that government incentives – in relation to the roll out and adoption of climate technologies – work in the right direction.

4. Projects that deliver innovation must be fundable. They must be within the tolerance of traditional investors or appeal to specific – new – types of funders who understand the risk and reward profiles of new technology investments. We are on a learning curve.

5. It takes leadership to achieve net zero. Leaders must understand that the cost of net zero is the cost of investing in a company’s future. Companies must get comfortable with being agents of change and looking beyond the quarterly and annual reporting cycle. And it is possible that ambitious leaders will not be in post to see the results of their endeavours given the extended time horizon for returns. But this does not mean they should not act now.