When we reach Net-Zero, which for now is tentatively targeted by 2050 (according to the COP26 pledges by over 100 countries), global warming should stop. This should result in less intense and frequent disaster events and more predictable weather patterns, thus protecting billions of dollars of potential damage and loss. For these decarbonizations to be effective, they have to be permanent and be linked to long-term sustainability and green-growth policies and investments that prevent new unavoidable carbon emissions.

As of today, we are still far from the decarbonization target that would keep the temperature increase below 1.5 degrees Celsius by the end of the century. However, we currently still have a CO2 budget, ie, the amount of carbon that we can emit while still having a chance to slow global warming within 1.5 degrees centigrade. As of today, we have about 400 billion tons of CO2 budget and if business as usual remains, we will spend this budget within 9 years. Just as a reference, the United States emits 7.2 billion tons of GHG per year. So, let’s look at the business opportunity at hand and get to work to ensure that decarbonization accelerates across sectors. 

According to the management consultant McKinsey, the growing demand for net-zero services and technologies is accelerating and could generate more than $12 trillion of annual sales by 2030 with key leading sectors including transport ($2.3 trillion to $2.7 trillion per year), power ($1.0 trillion to $1.5 trillion), and hydrogen ($650 billion to $850 billion). Such a transformation of the global economy will create significant growth potential for climate technologies and solutions as already evidenced by the massive growth of green startups and green unicorns (companies valued at over 1 billion dollars).

In 2021 alone green tech companies attracted investment of over $1 trillion dollar, while the market capitalization of oil and gas companies declined by roughly $690 billion. In 2002, the Davos First Mover Coalition (FMC) expanded its green transformation partnership to over 55 leading corporations that have started buying billions of dollars of decarbonizing technologies to scale up green tech “early adoption.” 

Another interesting trend of sustainability start-ups is that these companies are embracing the “Silicon Valley approach,” taking huge risks and raising massive capital to challenge the market status quo. Among these, Green unicorns are creating value for shareholders more rapidly than previously expected, reaching the billion-dollar valuation significantly faster than early-stage companies in conventional sectors. On average, green tech startups have taken four years to join the unicorn club, as opposed to seven years for startups in other sectors.  

We expect the Net-Zero movement to catalyze trillions of dollars invested in renewable energy, clean fuels, and carbon capture and storage in the short term. The shift to low carbon technology will accelerate further as decarbonization becomes the fastest growing business and investment opportunity to enable the Net-Zero targets. Finally, as climate risk is being prioritized by all market participants and politicians, this is a great time to refocus your business or start investing to decarbonize the global economy.