I founded Nest. Here’s how startups can help solve climate change

The best way to drive lasting change is to create opportunities where the right thing to do is also the easy thing to do. The upcoming COP26 climate conference has the unique opportunity to incentivize new talent to innovate and deploy the widest variety of solutions possible to make this happen.

When it comes down to a split-second decision or a force of habit, the average consumer will always choose the more convenient path, even if that path is the “wrong thing to do.” Technology, coupled with deep empathy for the user experience, has the opportunity to meet consumers where they are – to offer solutions that not only meet the bare minimum of conveniently solving a problem, but also do so in a way that is better for more people.

All too often, I see companies – tech and otherwise – lose sight of this principle.

Let’s take a long-institutionalized example: recycling. Everyone knows that recycling is key to reducing waste and, in turn, mitigating climate change. We simply cannot keep making waste at the same rate that we are currently. Recycling is an attempt to alleviate the waste burden on the planet. The concept of recycling is simple: reuse old things in new ways. However, when the average consumer is faced with a split second decision between the blue bin or black bin, it’s much easier to toss an item into the black bin rather than take the necessary step(s) to investigate the exact recyclability of that item.

On the other hand, at Nest, we knew that average households wasted a huge chunk of energy when the thermostats were left set at the same temperature all day. We also knew that the last thing busy people (and everyone is a busy person) needs is to remember to set or reset their thermostat based on weather patterns, time of day or energy consumption spikes.

It’s one thing to tell someone to turn their thermostat off, because it’s good for the planet. It’s another thing to simply turn off their thermostat for them, automagically. When we added automation, energy usage data, app controls and a design that makes temperature regulation feel cutting edge, we had a product that we knew would drive lasting change. On average, the Nest Learning Thermostat saved 10-12% energy on heating and 15% energy on cooling per household (more stats here).

At Nest, we made energy saving in the home the cool thing to do, sure. But that’s not all. We educated our customers to see their personal cost benefit as well as the planet’s. Nest made it easier and more convenient for the average consumer to do the right thing.

But let’s zoom out from Nest.

This is a pivotal moment for technology to solve big problems. The biggest and most time-crucial of these problems being climate change. We have the opportunity to use the advancements we’ve achieved over the last few decades to make it easier for everyone — yes, everyone — to get involved with saving the planet. We need to create, fund, and champion technology that actually does good in tandem with doing well.

As an investor, I see tech companies either embracing or ignoring this principle every day. A few years ago, I met Arch Rao, founder of Span, and was immediately struck with how his idea makes a cumbersome task easier and, in so doing, causes positive change. Today, it’s really hard to electrify your home. Sure, you could install a solar panel or a battery in your basement, but it’s challenging for home owners to know if these instruments are actually helping them to save energy. Span is an electric panel that lets the homeowner control every circuit in the home right remotely through a phone app. Span introduced user-centered design to an unsexy category: home electricity.

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This begs the question: if we can apply human-centered design, technology, great UX and end-to-end product thinking to more areas (no matter how “boring”), what kind of solutions can we build? What kind of big problems could we solve?

We’ve made great progress in moving towards solar and renewables, but it’s not enough. We must plan and dedicate resources towards solutions across all industries. This call to action may start at tech, but it needs support from investors, non-profit advocacy groups, and policymakers. And we need the leaders gathered in Glasgow later this month to set out a roadmap of incentives. There are no silver bullets to climate change and there is no one person, idea or company that will solve it. It takes all of us, it takes all our ideas.

Simply put: people are motivated to do the right thing, but only so far as it is more convenient. As we build, let us embrace human nature as our challenge. Technology that stands the test of convenience will ultimately stand the test of time to drive lasting change. How can we make doing the right thing easier than doing the wrong thing? Figure that out, teach others how to do the same, and we will put ourselves a position to save the world.

ESG and shareholder activism: A tsunami is coming to Silicon Valley

With the increase in attention on environmental, social and governance (ESG) issues over the past few years, it’s easy for companies to assume that we’ve reached the crest of the ESG wave. However, we are only at the early stages — an ESG tsunami is headed toward Silicon Valley.

The increased attention on ESG issues has been across a much broader spectrum than just companies in the technology sector. This has largely been driven by broader societal trends, such as the focus on climate change. However, the ESG wave at companies, particularly public companies, is being accelerated by demands by various investor classes (including pension funds as well as a younger generation of individual investors) to focus more attention on such issues.

As a result, institutions that are trying to attract capital from these investors, such as mutual funds, venture capital funds and hedge funds, must increase their focus on the ESG dimension to stay competitive.

While the increase in focus on ESG has been gradual over the past few years, the level of investor influence on ESG issues took a step function forward with successful campaigns by shareholder activists at energy companies during the spring of 2021, most prominently a prominent proxy contest led by Engine No. 1.

For the first time, investor pressure related to an ESG issue (in this case, climate change), directly led to substantial turnover in the board of a public company. Activist shareholders are tapping into new and powerful ESG themes as leverage in their activist campaigns to change control and strategy at public companies.

Is the technology sector next?

Historically, the pattern of investor pressure on governance issues (the “G” in ESG) in public companies is to successively tackle issue after issue, winning on one issue and then moving on to the next. One good example of this is the migration of public companies to have annual elections for all directors for a one-year term rather than staggered elections of a portion of the directors for a three-year term — a so-called “classified board.”

An institutional investor that overlooks an ESG-themed activism campaign may risk criticism for disregarding client priorities and even lose out on future investment from ESG-focused investors.

In 2007, 55% of the U.S. incorporated public companies in the S&P 1500 had a classified board. By 2021, after years of governance campaigns by shareholders, this was reduced to 26% of S&P 1500 companies, with the classified board almost extinct at the largest public companies that comprise a larger percentage of investors’ portfolio. Thus, from an investor perspective, the push to achieve annually elected boards is almost entirely resolved and the glare of the investor spotlight moves to focus on other issues.

We expect the same scenario to play out here. At a recent conference, Aeisha Mastagni, a portfolio manager at CalSTRS and one of the architects of Engine No. 1’s proxy contest this spring, stated that she hopes the contest would serve as a wake-up call for all companies across all industries, not just for energy companies. So if targeting climate change in the energy sector was an obvious first choice, the question now becomes “Who’s next?”

The climate policies tucked into Congress’ budget package are signals to investors

The climate measures in the budget reconciliation package now before the U.S. Congress could unlock an investment boom in clean energy, zero-carbon transportation and efficient manufacturing that would allow us, as a nation, to reverse the course of rising greenhouse gas emissions that threaten our future.

Simultaneously, ​​these investments will help the U.S. maintain its role as an economic leader in a global economy that prioritizes zero-carbon solutions. Oh, and investment creates jobs, lots of them.

After deadly floods in Louisiana, grid failures in Texas and devastating wildfires in California, who wouldn’t want strong steps to meet the climate crisis with impactful, 21st-century solutions?

For investors, the proposed federal investments for zero-carbon infrastructure, renewable energy, electric vehicles and climate innovations will provide the policy signals we and other investment firms need to confidently fund breakthrough technologies.

Once investors know that the government is serious about taking action to bring the economy into the 21st century and competing with nations already aggressively deploying these technologies, climate and tech investors will increase commitments in these areas.

For example, take transportation electrification. Transportation now emits a greater volume of greenhouse gases than any other U.S. sector, with carbon exhaust from cars, trucks, airlines and shipping adding up to 29% of total U.S. emissions. Despite the temporary reductions in travel-related emissions during the pandemic, transportation emissions were still climbing at last measure and are likely to keep growing. This should alarm us all.

But with the reconciliation bill’s tax incentives for purchasing electric vehicles making these cars much more affordable for Americans — up to a $12,500 credit if you buy an EV made in the U.S. — plus the bill’s incentives for manufacturing and deploying EV charging infrastructure, we’d see rapid adoption of clean electric transportation and a steep drop in transportation emissions.

Couple the transportation incentives with the reconciliation package’s Clean Electricity Performance Program (CEPP), which encourages utilities to hasten their steady transition to clean energy — from a national average of 40% today to 80% by 2030 through incentive payments and penalties — we’d see a precipitous drop in overall emissions.

Transportation and electric power together currently account for more than half of U.S. greenhouse gas emissions. These provisions will spur a broad energy generation transition that can also power the EV cars, trucks and fleets of the future.

As investors, we view the budget reconciliation as a long-term catalyst for sustainable growth, and growth translates to jobs. The Economic Policy Institute estimates that the budget reconciliation provisions, on their own, could create up to 3.2 million new jobs per year. Through our existing investments, we have seen firsthand how infusions of capital, from both public and private sources, can stimulate job creation, from hourly wage positions all the way up to highly skilled engineering roles. The budget reconciliation will create economic opportunities for all.

There’s clearly a market for climate action: The Global Commission on the Economy and Climate found that bold climate action globally could deliver $26 trillion in economic benefits through 2030. We need this funding to go as far and as fast as possible to avoid a global rise in temperatures of 1.5 degrees C, which experts collectively agree is the tipping point into catastrophic, irreversible climate change. Government policy can both signal and pave the way for broader private-sector investments, as it did decades before with pollution legislation.

And what will happen to these investment dollars if Congress does not pass the infrastructure and budget reconciliation packages? The cost of inaction is far higher than the costs outlined in the budget reconciliation legislation. The climate measures in the bill add up to $700 billion over a decade, or $70 billion a year.

Climate change-induced extreme weather disasters in the U.S. alone cost roughly $100 billion each year. If measures are not passed, individual citizens will keep paying higher tax and energy bills. Meanwhile, investors will instead put money into companies and sectors in other geographies that are focused on next-generation renewable energy, EV charging and other technologies supported by policy and will look for clean infrastructure plays on other continents where their investment dollars go farther and create faster returns.

In a no-action scenario, the United States will face long-term negative consequences as its economic leadership fades and its OEMs and supply chains gradually lose their position as global leaders. The U.S., as a nation, will in turn lose the financial capacity to mitigate or respond to the devastating local impacts of climate change.

We have an urgent need to address the climate crisis now, with the public and private sectors each maximizing their tools to ensure long-term economic and environmental sustainability. The federal policy tools and opportunities are clear, and the private sector is ready to respond with investment capital.

We urge Congress to pass a budget reconciliation bill and allow its strong climate measures to reap benefits for all.

MIT spinoff Via Separations scores $38M Series B to decarbonize manufacturing

Via Separations is a startup from a couple of MIT material science engineers who figured out a way to reduce the amount of energy required in a manufacturing process, resulting in lower carbon creation, lower energy usage and lower costs. Today, the company announced a $38 million Series B.

The round was led by NGP ETP, a firm that focuses on investments that lower carbon emissions. In addition, 2040 Foundation participated, along with existing investors The Engine, Safar Partners, Prime Impact Fund, Embark Ventures and Massachusetts Clean Energy Center.

CEO and co-founder Shreya Dave says the company hopes that by reducing carbon in the manufacturing process, they can help consumers make more green buying choices because the things they buy will have resulted in less carbon creation during manufacturing.

“Basically our vision is if we can decarbonize that supply chain infrastructure, then we don’t have to rely on consumers having to make a decision between the thing that they want and how to do good for the planet,” she told me.

The Via solution sits in a shipping container in the middle of the manufacturing process and acts as a filtration system for whatever is being produced. Dave uses a pasta pot analogy to describe how the filtering process works. “Instead of going into a pot where the water gets boiled off using heat, it goes through a strainer, where we [apply] pressure in order to force it through a filter like a pasta strainer,” she explained.

She said that has a couple of advantages. First of all, it reduces the amount of energy required because it’s using electricity instead of heat, which is using 90% less energy than a heat-based process. What’s more, because the process is using electricity, if you can get that from renewable energy, then you’re both electrifying and improving the energy efficiency of the process.

As an early startup building a complex solution, Via has decided to concentrate on the $5 billion pulp paper industry for now, but the technology could be more broadly applicable in other industries like petrochemicals, food and beverages, and pharmaceuticals.

The company has been working on three pilot projects, but the goal is to eventually offer this solution as a service, which reduces overall capital costs for customers and puts the maintenance burden on the company instead of the customer. They are also building a software monitoring solution to keep an eye on their products as they get deployed to help customers maximize impact and catch any maintenance issues early.

Via spun out from MIT in 2017 and today has 23 employees with a goal of reaching 30 by the end of the year. As a diverse founding team, Dave says she and co-founder and CTO Brent Keller want to build a diverse group of employees.

“My philosophy is that there is a diverse candidate for every job opportunity that we’re hiring for, but there’s also a reality of resource constraints. And so we try to allocate our resources to get the widest perspective,” she said. That may mean hiring based on potential, rather than experience. She says they have also implemented rigorous anti-bias training in the hiring process.

The startup idea has its roots in research that Dave and Keller were doing as graduate students at MIT with their professor Jeffrey Grossman, who is chief scientist at the company.

“My co-founder and I were working on water filtration membranes and looking at how to take salt out of the water to make that process cheaper, better, faster. What we learned is that what we had invented didn’t have a lot of application in water, but had a lot of potential for chemical manufacturing for this raw material, for stuff that wasn’t water,” she said.

When they launched the company, they ended up shifting their focus to industrial manufacturing, which is much more impactful from a greenhouse gas perspective, a point that is particularly important to the founders.

Uber tests shared rides in Africa as UberPool stays shut in US, Canada

Uber is testing Pool Chance, a feature that lets riders heading in the same direction share the cost of the journey, in Kenya, with plans to roll out the low-cost service to Ghana and Nigeria. TechCrunch discovered the option when booking a car in Nairobi, Kenya. An Uber spokesperson later confirmed it was part of a pilot (beta version) of the service that it plans to roll out more widely, pending the outcome of the smaller test.

The new service, being introduced for the first time in Africa, is similar to UberPool launched in the San Francisco Bay Area in 2014 and later introduced in multiple cities across the world. The low-cost popular service remains suspended in many regions including the US and Canada due to Covid-19 restrictions, but it seems the technology firm is slowly bringing it back in some markets and introducing it where it was unavailable before. Uber said the two products share a similar concept but are not identical, without offering further details.

However, this thread in an Uber drivers’ forum describes the difference like this. Pool Chance is just that: you have a chance of getting a discounted ride if the driver picks up other riders; otherwise you pay the regular fees you’d pay for an individual ride. UberPool negotiates a specific carpool rate for the rider regardless of who else gets into the vehicle.

The Pool Chance trip option is available on the budget service, Chap Chap in Nairobi; in the populous Nigerian city of Lagos and Ghana’s capital Accrait will be accessible on the UberX category.

“We are currently trialling a new Uber ride, Pool Chance, which will cut costs for riders in Nairobi (Kenya) when they share their ride with others heading in the same direction,” Uber’s head of communications for East & West Africa, Lorraine Ondoru, told TechCrunch.

“We use this approach when introducing something new and we want to ensure the marketplace remains healthy and balanced. We will share more details once this has been officially launched,” she added.

In April, Uber launched Pool Chance in Auckland, New Zealand after introducing it in Kyiv, Ukraine in October last year. They also switched back on the low-cost rideshare service in Australia’s Sydney and Perth cities earlier in the year, and thereafter launched Pool Chance in Adelaide.

Uber says on the app that Pool Chance will bring the cost of rides down by up to 30%, further making its trips more affordable to riders.

Affordable shared rides can mean more riders using the app, which can lead to more trips, less downtime, and more overall earnings for you,” Uber said about the new service, in a message to its drivers, in the three African countries.

Uber is available in eight markets across Africa including Egypt, South Africa, Uganda, Tanzania, and Morocco.

Across the continent, it has over the last few months expanded and introduced new products in its new strategy to retain its customers and attract new ones amidst growing competition from rivals like Bolt, the Estonian-based ride hailing firm.

Earlier this month, Uber expanded to two additional cities in Nigeria – Ibadan and Port Harcourt – bringing into the regions a service that is already available in three other cities.

In South Africa, it also expanded its reach by nine cities this year and introduced its premium service dubbed Uber Comfort to be offered alongside UberX, UberBlack and the budget service, UberGo. It also added a feature that allows booking of a trip a month in advance in August, a service that was already available in other markets across the world. 

Uber’s plan to introduce the fare-splitting service in markets across Africa comes after it said in a recent report that “ride-sharing will likely play an increasingly important role within the public transportation mix in the next 3-5 years.”

The company added that while bus and rail transportation will remain core to public transportation due to their ability to transport large numbers of people, they will be complemented by microtransit, ride-sharing and micro-mobility means. 

“The addition of new modes with a variable cost structure like ride-sharing and the proliferation of on-demand services will unlock new optimums of efficiency and lower cost structures for public transportation agencies,” said Uber.

This, it said, will go towards ensuring and improving “the equity, accessibility, resilience, and flexibility of their networks.”

Through Uber Transit, a division serving public transportation, and Routematch, a company they bought last year that provides software to transit agencies, it said in the report that it’s providing new tools to help agencies to operate more efficiently and offer support to its riders too.

Since the establishment of Uber Transit in 2015, the tech firm has rolled out services in regions across the world that go towards making public transport seamless.

In early 2019, it launched an Uber in-app service that enables riders in Denver to plan their journeys and purchase tickets, and offered software to power public transportation after partnering with Marin Transit, in California.

In September last year it launched in some markets “Uber and Transit”, an in-app feature that makes it possible for riders to use the ride-hailing service to combine trips with other public transportation means like trains and buses.