Humanity has never faced a common threat as consequential as climate change. Despite the overwhelming evidence that human activity is the major driver of rising temperatures, it’s difficult to get governments and the private sector to share the burden of addressing this crisis and move fast enough in this all-important decade, to limit global warming to 1.5°C above pre-industrial times.
The effects of climate change are becoming more visible – from floods in Australia to wildfires in California with State Farm recently dropping new homeowner insurance in that state. Climate change is an intensively physical phenomenon, but software will also play a key role, in improving efficiency, providing insights, and solving climate problems.
How software supports climate transition
According to the latest synthesis report from the Intergovernmental Panel on Climate Change (IPCC), limiting warming to between 1.5 and 2.0°C will require three to six times greater investment and investments in climate mitigation with a need to increase across all sectors and regions, including especially renewable energy, which has seen a renaissance of rising adoption rates and dramatic cost reduction in recent years. Between 2010 and 2021, the proportion of global energy provided by solar power surged almost 25-fold. According to the International Energy Association (IEA), solar PV’s installed power capacity will surpass coal by 2027.
IEA has confirmed that solar is now the cheapest form of electricity in history. Scaling solar dramatically is therefore critical as an existing, scalable technology with economics that already work. This involves a value chain consisting of manufacturers, installers, homeowners, and other partners like financiers. Here, vertical software shines in helping residential solar installers almost double the number of jobs they can quote.
For example, OpenSolar provides freemium 3D design software, customizable sales proposals, and integrated partners such as financing and hardware ordering to solar installers in over 130 countries. The company estimates that around 25% of solar contractors in the U.S. use OpenSolar for daily operations, and the company has a significant market share in the U.K. and Australia (where it was founded). Enabling non-technical users to create accurate designs in seconds and incorporating AI to speed it up and make it more accurate, are key to scaling renewable adoption.
The deeper you look, the more you realize that software will support many other aspects of the transition – from designing utility-scale solar PV installations to even improving the actual construction of solar farms themselves, with companies like Terabase Energy. Creating a functioning price and market for carbon will rely heavily on data and software, including deeply understanding projects and connecting them to ecosystem players. Planning, managing, and maintaining electric vehicle deployments will also rely on data around utilization and people movements. Even aggregating distributed energy resources like batteries via virtual power plants provides important dynamic resilience to the grid.
Software innovation reduces waste and increases efficiency
Even an innovation as simple as the electronic signatures we now use has had a significant impact. It might surprise readers to hear that since 2003, DocuSign has helped replace 38B sheets of paper, saving an estimated 4M trees, 4B gallons of water, 3B pounds of CO2 and 64M KG of solid waste. Despite rapid digitization across many sectors, millions of tons of paper continue to be thrown away every year (much of which ends up in landfills).
According to the IEA, in 2021 the pulp and paper sector accounted for around “2 percent of all emissions from industry … a historic high.” Combining intelligent software which classifies, extracts, and validates data and hardcore robotics has separately allowed Ripcord to digitize physical paper boxes for customers like MUFG, Fujifilm, Coca-Cola, Chevron, and BP from all types of insurance documents and makes these documents instantly accessible.
Data is a key ingredient to respond to climate change
Sadly, climate change is leading to more severe storms and other natural disasters. Every asset owner and emergency department has felt the increasing need for operational resiliency. Many emerging companies are responding. Rethought Insurance, for instance, is using climate change data to price flood insurance policies on every property in the U.S. The company developed a proprietary underwriting methodology and risk assessment technology to generate predictive data on the financial consequences of extreme weather.
This approach is seeing dramatically lower loss ratios than incumbent approaches. There are also companies that have sprung up that provide satellite data to track methane in agricultural production, carbon accounting software to track corporate emissions and a range of other solutions for evaluating climate change risks and interventions.
Responding to climate change will involve humanity making considerable changes to almost every industry. This includes transitioning some sectors (like energy) and creating entirely new ones (like carbon tracking and removal). Daring entrepreneurs are building the physical and digital infrastructure underpinning these gargantuan changes to allow humanity to respond. The byproducts of moving to a zero-carbon world will be wonderful, such as abundant near zero-cost energy.
Albert Bielinko is Climate Tech Partner at Telstra Ventures. Albert has helped founders build businesses that matter at Telstra Ventures for the last six years.
In a past life, he co-founded an on-demand food delivery service in Sydney. For his sins, Albert was an investment banker at Goldman Sachs for almost 5 years where he successfully avoided sleeping (and covered Technology, Media and Telecommunications, executing numerous transactions – from multibillion-dollar mergers to sales to IPOs). Albert started off as a corporate lawyer, giving him rudimentary legal ninja skills.
He has a keen sense for unconventional ideas that end up working. At university, he co-founded the Young Entrepreneurs Society, where he dressed up as a large bear and hi-fived students at Orientation Week to get new members. It worked! Albert spent years investing for a start-up funds management firm that grew to $3B AUM, so he knows what a small, passionate team can accomplish with ingenuity and lots of pizza.
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