Investing in global climate solutions starts in Snowmass Village
For the first decade of the 21st century, much of the investment in climate and sustainability solutions had an altruistic streak.
“You saw people wanting to do good with their money,” said Chris Tullar, who along with fellow Snowmass Village local Joseph Goodman and three other managing partners co-founded the climate solutions-oriented venture capital firm VoLo Earth Ventures.
That patient, investing-in-climate-just-because-it’s-the-the-right-thing-to-do funding hasn’t gone away, Tullar said in a joint interview with Goodman this week.
But lately, investors have been able to see more clearly the dollars and sense behind putting money into products that cut down on carbon emissions; in the past two or three years, the technology has advanced enough and can be scaled enough that ”these low-carbon solutions are now more profitable solutions,” Tullar said.
“Now it’s a more investable universe,” he said.
And a pretty big universe at that, Goodman pointed out: for just about every sector of human need — from transportation to indoor temperature control — there’s a “whole population” of companies working to serve that need in a low-carbon way.
Still, though, there’s a gap in funding between established companies with already-scalable products and startups that might face “technology hurdles” to join the ranks, Tullar said.
That’s where VoLo Earth comes in, with investments in early-stage companies that larger firms might not be comfortable spending the time and resources on to clear those hurdles, according to Tullar. (Goodman said the firm is an offspring of sorts from Voloridge Investment Management, whose cofounder David Vogel is a founding adviser and seed investor at VoLo Earth.)
It’s a Snowmass-based operation, but one that’s acting on a global scale with money flowing in from coast to coast — and from across the Atlantic — and money flowing out just as far and wide. Typical investments from the firm fall into the $500,000 to $4 million range.
“We’re investing in companies that have the ability to really move the needle in lowering carbon emissions,” Tullar said.
Take Heimdal, for instance: the United Kingdom-based company in VoLo Earth’s portfolio is working to decarbonize concrete manufacturing, an industry that by some estimates contributes as much as 8% of all carbon emissions in the world — no small potatoes in the context of climate change. And the effort won’t just keep the price of cement the same in the long term — “in fact, it might end up costing less,” Goodman said.
“We feel like it’s meaningful that we get to be here in the Snowmass Aspen area and still have an influence on the global capital markets,” said Goodman, who along with Tullar and five other town representatives sits on the Snowmass Village Environmental Advisory Board.
“Capital” is a key word here — and its extension, capitalism, which Tullar sees as a key component to making a substantial impact as the threats of climate change get more dire and its effects get harder and harder to ignore.
“We all know what speaks, and money talks. … If we can harness the power of capitalism to accelerate the energy solution, that’s how we’re going to make this happen,” Tullar said.
Goodman, for his part, is hesitant to claim that any one sector is the primary driver behind change. Ask someone in finance, and they may say capitalism is key; ask a scientist, and they could say it’s science; ask someone in the social networking sphere, and they might attribute the shift to their own industry.
“My hope is that all the forces that different people know how to exercise well all play huge roles in decarbonizing in a way that’s profitable and good for people and the planet, and we can leave it to historians to kind of digest how that happens,” Goodman said.
And individual actions can and do make a difference, Goodman and Tullar agree. That might mean making the switch to more energy efficient lighting and heating, or asking about where your 401k contributions are investing.
“I think it all starts with the people, and people start demanding different products. … I think governments and entities can help, but it’s impactful if everyday decisions you make in life are intentional,” Tullar said.
Still, convincing risk-averse major corporations to put millions or billions into decarbonization is another endeavor entirely.
“It’s a long transition, but we’re dealing with some pretty entrenched behaviors,” especially so in carbon-intensive industries that aren’t exactly known for putting the pedal to the metal when it comes to big changes, Goodman said.
“Inertia” — that idea that an object (or in this case, entire industries) tends to stay in place unless acted upon by an external force — is a big barrier that could stand in the way of substantial corporate movement on the sustainability front, he said.
Capitalism could very well be the force that sets things in motion, according to Tullar. He’s excited about those scalable technologies that are now more profitable, and he’s hopeful for the prospect that as sustainable solutions continue to add to the bottom line, “the climate has a shot.”
Goodman and Tullar recognize that change doesn’t happen overnight, even when the race against a changing climate is charging along as fast as it is. Some of the companies VoLo Earth invests in are working on products that, if not already commercial, might be six to 18 months out from deployment; other nontraditional climate solutions might be a few years out.
Still, all the climate technologies rolling out in this decade “are really just slowing down the speed at which things are getting worse,” Goodman said. “We’re not quite making things better. … We’re preserving some chance to get better in the future.”