If Smart Money Is Now on “Cleantech,” Where Should Philanthropy Go?

According to Daniel C. Esty, coauthor, Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value and Build Competitive Advantage , in Fast Company, June 2007:

For businesses, the lesson [in the April Supreme Court ruling that climate science was clear enough to mandate greenhouse-gas emission controls under the Clean Air Act] is indisputable: In a low-carbon future of EPA-mandated incentives and penalties, energy efficiency, alternative energy sources, and carbon capture become worth investing in.

While Big Auto whines about (and sues over) the prospect of carbon-dioxide limits on cars in Vermont and California, the smart money is riding on the “cleantech” tide. Venture capital will pour more than $30 billion into such startups this year, three times the total in 2005.

We’ve argued previously, with the help of The Economist, that where business moves in, philanthropy should move on. The CleanTech Index United States, with a market capitalization of $128m, is an example of the growing maturity of business investment in environmental sustainability.

What we’d love to see these venture capitalists do, perhaps with the help of the Cleantech Network (an industry research body) is let us know what areas of green investing are critically important but still too risky for venture investment. Areas where philanthropy can play the angel investor and catalytic role it plays best. Any takers from the cleantech investing world?

Carla E. Dearing