Bill Gates is right. Investments in disruptive technology which contributes to reduced CO2-emissions are crucial in order to reach the Paris-agreement.
This article is republished after it was first published in the Norwegian newspaper E24 earlier this autumn. You can find the article in Norwegian here.
Earlier this autumn, Bill Gates said in Financial Times that exclusion of fossil fuel companies has zero effect on actual CO2-emission reduction. What matters is to channel capital to the new disruptive technologies which contribute to reducing these emissions.
He has a valid point. Excluding companies on the stock exchange from investments will not in itself lead us to a sustainable future in line with the Paris-agreement.
In order for this to happen, it is crucial that investors allocate capital to and scale the new green innovation, the business models and the new technology which enables the necessary speed and pace in this green transition. Solutions, which not only transform our energy systems, but also revolutionize what we eat and how we produce food, make the houses we work and live in more energy efficient and are greening the industry. We need transformation across most sectors and systems, and technology will be a common denominator for many of the enabling solutions.
Examples are sensors which monitor agriculture for optimized fertilizing or make buildings more energy efficient. It is food technology which redefines what we think of as meat, such as Beyond Meat. Or disruptive materials eliminating the need for cattle based leather. Not only are these solutions necessary, they are also interesting investment opportunities.
And these solutions will largely be found outside the stock exchange, like an increasing amount of value creation globally (no wonder why the NBIM governing the Norwegian pension fund aims at investing in the private marked for exposure to technology companies).
It is therefore important that investors increasingly invest in unlisted markets. That some of the capital which is currently floating around on the stock exchange is allocated to early phase and growth companies, to scale the green solutions we need today to enable a sustainable future tomorrow.
But the current pace is too slow. As Christiana Figueres says, there is not enough capital coming into the green solutions to enable the necessary pace and scale we need in the green transition.
Investors who are committed to green investment strategies, which will bring the world closer to a sustainable future in line with the Paris-agreement, should therefore set clear and bold targets of taking part in investments in unlisted markets. Not only is this important, it should be a part of every forwardlooking investor`s investment strategy.