Matt Arnold is Global Head of Sustainable Finance at JPMorgan Chase & Co. His team’s remit is sustainable finance – helping firms capitalize on sustainability as a business and leadership opportunity, as well as navigate related policies and risks.

In 2017, JPMorgan Chase committed to sourcing renewable energy for 100 percent of its global power needs by 2020 – a significant goal given the firm has offices and operations in more than 60 countries across over 5,500 properties. In addition, the bank has committed $200 billion in clean financing by 2025, which will help other companies and governments accelerate their transition to a low-carbon economy.

Ahead of his speaker appearance at GLOBE Capital 2019, Matt shares his insights on the business opportunities in the clean economy.

The clean economy is good for business because it drives innovation, motivates employees, is increasingly profitable, and has the benefit of addressing climate change, one of our era’s major challenges.

The personal motivation angle is important to us at JPMorgan Chase. We are very proud of the work we do. We have three or four task forces across different business areas made up of a wide range of people who don’t normally work together, but who are highly motivated because the clean economy is our core business.

Many of our clients are pursuing renewable energy as a business opportunity. Others are exploring it from other perspectives: research, mergers and acquisitions, equity capital markets, and debt capital markets.

The early movers in solar and wind had to work hard to break down barriers, but are now seeing strong business results. I learned last week that there are 1,200 energy companies in Silicon Valley. There’s a great deal of innovation focussed on energy storage and energy transmission. You get a sense that people are working together on a huge societal problem, and it’s really motivating.

Three barriers to realizing the business opportunities in the clean economy

1. Economics
Fossil fuel prices are still very competitive, certainly for transportation fuel and particularly for aviation. I was in a meeting with a group of large integrated oil companies the other day, and some of them were investing in renewable energy but others weren’t. The discussion from those who weren’t was interesting: they said that the economics of fossil fuels are better, and that they didn’t really know enough about renewable energy to invest in it. Continuous education of the long-term economic opportunity that environmentally sustainable solutions present can therefore help boost investment in the sector.

2. Policy
We need clear policy signals in the U.S. on key issues like carbon pricing, methane emissions from energy production, renewables, and energy production tax credits. Having said that, many national and sub-national jurisdictions are making good progress. For example, Alberta has made strides towards cleaning up their oil industry, probably due to the province-wide policy framework.

3. Incumbency
A lot of new technologies haven’t been deployed at scale, and large incumbents in the power sector, including oil and gas, are not embracing these new technologies. It’s not that they’re against them, it’s that their business models don’t necessarily accommodate them.

Three ways to integrate sustainability in your organization

1. Develop a business case for sustainability
Without a firm business case, it will be difficult to overcome resistance to integrating sustainable business practices. Decision makers need to understand why it is good for business, for people, and for the bottom line.

2. Set strong environmental objectives and targets
Having a goal or a series of goals is really motivating, no matter whether it’s a revenue goal, capital goal, or installation goal. Measuring progress against your goals is also helpful. If you know you’re coming up short on your sustainability goals, you’re going to work harder.

3. Create a purposeful corporate culture
Ensure there is an employee engagement angle when embedding sustainable business practices – communicate, engage, and enlist the support of people throughout the organization. Employees often enjoy and are motivated by the notion that they are contributing to something bigger than themselves and the organization they work for.

The Capital conversation

Canada is an important market for us right now and I’m looking forward to meeting leaders from across the industry at GLOBE Capital 2019. We look forward to learning from them and sharing our own experience in advancing sustainability for our clients and in our own operations.

Partner article written by Joseph Lalonde, Data Manager for MaRS Data Catalyst

Many individuals and industries in Canada are looking to reduce their carbon footprints and are pushing for greener products, resulting in a proliferation of clean technology companies and solutions. Private and public funders have taken notice and made significant investments in clean technology programs. Natural Resources Canada (NRCan) alone has committed CDN$1.4B in program funding for 2019-2020.

This amount of money creates an amazing opportunity for private investors. For example, the Commercial Retrofit Program allows for one-time incentives based on the amount of natural gas saved. Companies can take advantage of these incentives to improve their existing infrastructure and investment dollars, in turn, could then be re-directed toward growing the business.

Government and private dollars can drive opportunity, but coordination is key

In 2017 alone, Canadian investors channelled US$9.4B into clean technology companies[1]. Although this number has been trending down over the past few years, clean technology solution providers are still poised to benefit from an influx of capital. With this amount of money being invested, it is extremely beneficial to have an overarching and coordinated investment strategy.

To put it another way, different investors and government can create synergies if the types of investments they make are complementary. For example, government could play a role in getting early-stage high-risk companies off the ground, but step back and allow later-stage venture capital to come in and scale up the companies that need it.

Conversely, the opposite can happen if government and private investment are out of step with one another. For example, both government and private investors could both be putting all their money into early-stage investment, with no incentives for growing companies who are poised to become true scale-ups. Another example is government investing in a type of technology that industry has deemed irrelevant.

Good strategy requires good information, but this is a challenge in the cleantech space

A coordinated strategy should be guided by information such as industry trends, firm growth rates, benchmarking against international markets and the latest in new technological developments and trends. The Canadian Venture Capital Association (CVCA), CB insights and Pitchbook and others provide some background information. However, other clean technology reports that use traditional economic analysis, such as North American Industry Classification (NAIC) codes, have been problematic for two main reasons:

1. Classification of clean technology is complex. As a company introduces a new technology into their business, it can blur traditional industry lines. This natural business progress can outpace analysis, which requires that industry sectors fall into nice, neat buckets. Take an automobile company, for example, that develops both electric and gas-powered vehicles. Would you consider it to be a clean technology company, or not? These are the challenges to determining a clear and concise count of clean technology companies in the automobile industry – or any industry for that matter. Although NAIC has created foundational standards to segment industries, they have not been very nimble in catching up to technological advancements.
2. Too little, too late. Early-stage, ‘pure-play’ clean technology companies may be too nascent to drop digital breadcrumbs for researchers who are putting together data repositories, such as Angel List, Crunchbase or Pitchbook. For this reason, much information about these startup clean technology companies remains undocumented.

Projects and initiatives exist to understand trends, but they need time to take effect

As a result of these challenges, we have a situation where billions of dollars are being spent in an industry that has an arguably slippery classification and information capture challenges. Now imagine a different world where the government acts on robust information, which in turn incentivizes private funding to invest in a way that leverages government dollars. We are getting closer to that reality with Statistics Canada’s Environmental and Clean Technology Products Economic Account, which has begun to estimate jobs and impact of clean technology in Canada.

Another bright spot is the role my group at MaRS Data Catalyst (or ‘Data Catalyst’ for short) plays in this scenario. Data Catalyst is a group hosted within MaRS Discovery District, a public-private innovation centre located in the heart of Toronto. MaRS focuses on bringing government, business, academia, and communities together to catalyze, accelerate and amplify innovation. Clean technology is one of our four main pillars, and we serve hundreds of technology-based clean technology start-ups and later-stage ventures. We are currently conducting a three-year data collection project, recently completing our first year with a partial number of provinces. Public results can be found here.

Our data collection strategy is driven by strong partnerships

How do we approach data collection at Data Catalyst? We know that the different regions know their participants and stakeholders best, so we engage with these locations and establish data partnerships with the likes of provincial industry associations such as the Alberta Clean Technology Industry Alliance (ACTIa) and Innovacorp, and with federal-level organizations, such as Statistics Canada and Natural Resources Canada. We also work with organizations like Emissions Reductions Alberta, who have requested analysis to be done for their own purposes.

In addition, we’ve been fortunate to have The Delphi Group and the GLOBE Series on our side to work with stakeholders and ensure that our project to understand clean technology activity is a success. Basically, this means sharing the work, but also reaping the benefits. Data collection can be a long game, requiring multiple years to establish baselines and analyze trends. Three years is the minimum period required to be able to ascertain if there is some kind of trend.

Looking forward, what will we be doing and what you can do

Our current goal is to bring on other regional partners who have already provided letters of support in Quebec and British Columbia. In addition, we are in the process of finding partners and formalizing relationships in the rest of the prairies.

How can cleantech companies and associations do their part?

1. Participate in surveys. Seriously, do it! It provides richer data and accurate findings, helping industries focus on what’s important.
2. Complete your profiles in public sources. (ex: Crunchbase)
3. Encourage companies you work with to do the same as above. This feeds into a long-term benefit of researchers who might use the data to create trends.

Remember, the better our underlying data on the country’s cleantech sector, the more likely we as a society will reap the rewards in the long term.

We asked our 2019 speakers to weigh in on the conversations they’re looking forward to having at GLOBE Capital in February.   

As a risk and sustainability officer, I look forward to connecting with leading influencers to address policy trade-offs and innovation-led milestones that are most likely to drive environmental, social and financial ROI.

Alessia Falsarone
Managing Director, Portfolio Strategy and Risk
PineBridge Investments

I’m looking forward to coming back to GLOBE and talking with sustainability pioneers – the project developers, entrepreneurs, technology companies, and investors – who are driving the Infrastructure Transition to a more decentralized, democratized, digitized, and decarbonized world.

Scott Jacobs
CEO and Co-Founder
Generate Capital

I’m keen to explore how regulations will help introduce sustainable initiatives in corporations. Will this be a more or less influential factor than the increases we’re seeing in broad customer outrage at waste and non-sustainable inputs in consumer facing products?

Ashley Larson Yesayan
Vice President
Revolution

As an environmental theme manager, I’m interested to explore the middle ground between broad economy ESG investment strategies and technology-based venture investing. How do we improve capital market engagement in the promise of mid-sized growth companies – companies with proven products that help address our greatest challenges?

John Cook
President and CEO
Greenchip Financial Corp.

I’m looking forward to hearing insights on where financial and business leaders think Canada can differentiate itself on sustainable finance, and what they are doing on R&D, product development, policy engagement and transparency to make this a reality. What are the new collaborations and practical implementation actions required to accelerate this economic transition.

Andrea Moffat
Vice President
Ivey Foundation

From the IDB we would like to push the discussion on how investors are perceiving opportunities and risks for investment in sustainable infrastructure. The IDB Group has developed a Framework for guiding planning, construction and operation of Sustainable Infrastructure, so we hope that at GLOBE Capital we can discuss its utility for investors looking to evaluate sustainable infrastructure assets. 

Amal-Lee Amin
Division Chief, Climate Change and Sustainability Division
Inter-American Development Bank

I’m curious to learn more from an investor perspective. What new risks are investors willing to take? What new markets are they looking at? What new technologies might they be willing to back? And what new types of financing structures are they willing to participate in? New risk and innovation around investment – that’s what I’m keen to explore.

Ethan Zindler
Head of Americas
Bloomberg New Energy Finance

I’m looking forward to sharing the latest insights from our investments in the circular economy. I’m also excited to tap into GLOBE Capital’s community for new opportunities, ideas, and partners.

Ellen Martin
Vice President, Impact and Strategic Initiatives
Closed Loop Partners

GLOBE Capital is the natural extension from GLOBE Forum 2018, from which I like to see the latest developments in financing vehicles for the new sustainable economy, and meet stakeholders and capital providers. Additionally, I am curious to understand investment focus and targets of industry players and strategic companies in this space and their role in it.

Boris von Bormann
Founder and Managing Partner
renu ventures

Learn more about GLOBE Capital 2019: globeseries.com/capital 

Cleantech is one of the biggest opportunities in the clean economy. We talked to Jeanette Jackson, Managing Director of Foresight Cleantech Accelerator Centre, to get her insights on the evolving cleantech landscape – the companies to watch and areas of untapped investment potential – as well as how Canadian start-ups can grow and compete in the global marketplace. Foresight is Western Canada’s first clean technology accelerator to foster the growth of businesses who are growing and commercializing technology solutions.

How do you expect the Canadian cleantech scene to change over the next five years, and what role do you see Foresight playing?

I see the cleantech sector evolving over the next five years to be much broader, with a lower level of capital required to advance technologies. In the past 10 to 15 years, cleantech start-ups required millions of dollars in capital to develop large renewable energy projects and biofuel systems, for example. What we’re now seeing are cleantech entrepreneurs being much more focused on a specific area in the value chain of the industry that they want to serve.

Canadian entrepreneurs are also much more globally focused. While we have a robust start-up sector here in BC and across Canada, they’re now being very strategic in the markets they can serve.

We’re positioning Foresight to be facilitators and champions of Canadian start-ups. We are also working alongside experts to help new organizations penetrate international markets, such as Australia, Europe, South America, and throughout the US.

Who are the ones to watch on the Canadian cleantech scene?

Minesense is a BC-based company that has developed innovative technology for the mining sector. Carbon Cure in Alberta are doing some very interesting work in the cement industry, amongst other sectors.

What area in cleantech has a lot of untapped potential?

There’s obviously been significant investment in our resource sectors over the last several years, which has resulted in an interesting space. Two other sectors that are particularly interesting right now are robotics and manufacturing. Especially when artificial intelligence (AI) is included, connecting the advanced robotics and manufacturing sectors allows us to do things much more efficiently in the waste and production processes.

On the consumer level, advanced materials in smart buildings and transportation will result in exciting developments. Another interesting space for advanced materials is the fashion sector. Almost 10% of GHG emissions can be attributed the fashion industry from a fabric manufacturing perspective. This means there is significant opportunity to optimize textile waste management, and reuse these waste products in new products.

What strengths do Canadian cleantech companies bring to the global cleantech table?

Traditionally, cleantech start-ups have been immersed in the sectors that they serve. Canadian experience in mining, oil and gas, and forestry has resulted in some big evolutions in manufacturing and production in these industries. At Foresight, we encourage companies to really think through the opportunities that they have – there is always the danger of being drawn in to “shiny object syndrome”. We are seeing companies become much more realistic about where their market is, and who is going to be the best fit for them to build a business around.

What advice would you give to Canadian cleantech organizations looking to grow in the next few years?

The challenge is being able to move fast and furiously, but also making sure that you check all the boxes you need to be successful. You need a great team, you need to validate your technology, and you need to make sure that you have the right funding mechanisms in place to grow. You have to make sure that the team, the technology and the funding aligns with the vision that you’re working towards. The more quickly you can get those things aligned the better.

With that said, start-ups must be able to make smart decisions quickly because people are going to catch up. You need to be nimble and be able to take calculated risks. Of course, you can mitigate that with really good advisors and mentors, which is a lot of what Foresight focuses on.

Clean technologies came to life in the Innovation Expo at GLOBE Forum 2018 – a global showcase of sustainable products, services, and ideas fresh off the lab bench. Buyers from more than 50 countries roamed the aisles, looking for the next big thing.

The latest clean technologies focused on the following Innovation Technology Clusters:

• Smart Grid/Micro-Grid
• Sustainable Mobility
• Smart/High Performing Buildings
• Water Innovation
• Carbon Capture, Utilization and Storage (CCUS)

One of the highlights at this year’s GLOBE Forum 2018, the Honourable François-Philippe Champagne’s opening speech at the Innovation Expo. Canada’s Minister of International Trade opens the exhibition with inspiring remarks that encourage leaders in the clean technology space and set the stage for the most exciting edition of the Innovation Expo.

Highlights from our armchair dialogue with two leading finance-world luminaries, Robert E. Rubin, Former United States Secretary of the Treasury, and Robert Litterman, Founding Partner of Kepos Capital.

The session, which was chaired by Kate Gordon, Senior Advisor at The Paulson Institute, discussed the roles of corporate policy and practice in measuring and managing climate risk.

If you aren’t already embedding strong social and/or environmental objectives in your business—or if you’re already there, but want to your company to more tightly integrate purpose with profit—then you’ll want to check out this highlights video.

In a spirited discussion, experts shared their insights into how to create a purposeful corporate culture that embeds sustainability and social good while engaging customers, employees, and investors.

Moderator: John Izzo, Author

Speakers:

• Lynelle Cameron, VP, Sustainability, Autodesk and CEO, Autodesk Foundation
• Patsy Doerr, Global Head, Corporate Responsibility & Inclusion, Thomson Reuters
• Liz Maw, CEO, Net Impact

GLOBE Forum 2018 brought together business and government leaders from over 50 countries to network and advance global business and sustainability agendas. A mix of armchair dialogues, roundtables, salon-style gatherings, lively debates, SPARK talks and opportunities for active participation made the conference a very exciting place to be.

Join us as we relive some of the best moments of this year’s GLOBE Forum with this wrap-up video.

In what turned out to be one of the most popular sessions at GLOBE Forum 2018, political leaders from BC, Washington, Oregon and California came together to discuss The Pacific Coast Collaborative – an initiative focused on building a sustainable future that works for the people of the West Coast. The panel discussed approaches to tech, clean energy, job creation and trade among four jurisdictions that are on the cutting edge of sustainability.

Speakers:

• The Honourable George Heyman, Minister of Environment and Climate Change Strategy, Government of BC
• Shauna Sylvester, Director of Simon Fraser University’s Centre for Dialogue
• Jay Inslee, Governor of Washington
• The Honourable John Horgan, Premier of British Columbia
• Matt Rodriquez, California Secretary for Environmental Protection
• Janine Benner, Director, Oregon Department of Energy