The Transition Economy: A unique opportunity for the next generation
"Achieving net-zero emissions will require a whole economy transition - every company, every bank, every insurer and investor will have to adjust their business models". Much recent focus has been on government targets, but these words from former Bank of England governor turned eco-evangelist Mark Carney, remind us that everyone is responsible for delivering a carbon-free future.
In simple terms, the ‘transition economy’—a concept popularised by Mr. Carney—refers to the shift from an economy fuelled by fossil fuels to one fuelled by renewables.
At Springwise and Re_Set, our horizon scanning and client work support Mr. Carney’s belief that this is ‘the greatest commercial opportunity of our time’. American credit rating giant Moody’s agrees, seeing a $45trn opportunity for those willing to seize the moment.
Companies pledge their bets
At COP26, we saw varying levels of corporate commitment to the net-zero transition. Many companies have announced ambitious, yet loosely worded goals, while the leaders have committed to science-based targets.
This broad acknowledgement of the issue is refreshing. The next generation of businesses will be more purposeful, and they will be the ones to benefit from the transition economy. The opportunity is to bake sustainability into a hard and fast business strategy to drive both growth and resilience.
Innovation is key
Added to this, as the pace of change increases, how can pledges be converted into action? We believe that innovation holds the key. At edie's innovation partner Springwise, we see inspiring, ingenious and innovative solutions to this problem every day, and my recent judging experience for the innovation categories at the 2022 edie Sustainable Leadership Forum filled me with confidence. The quality of the submissions was exceptional, leaving me convinced that business is not only part of the solution – it is also beginning to use climate innovation as a differentiator.
Follow the money
Finally, it is clear that the amount of investment in climate tech is exploding, with $17bn invested in 2020, and that figure increasing since. When investment visionaries like Larry Fink start talking about it, huge swathes of capital start to shift. Private equity firms, not immediately known for supporting business as a force for good, are spawning funds dedicated to ESG and the green economy – to create value not just impact.
From my point of view, as Chair of two B Corps, Springwise and Re_Set, I could not be more excited about this stage in my career. At Re_Set, we work with enlightened CEOs and leadership teams to create strategies to capitalise on the transition economy. Sustainability, innovation and digital capability are at the heart of this business transformation. As members of 1% for the Planet and Business for Nature, and a partner to Rewilding Britain, we bring next-generation thinking to some of the biggest global companies who are grappling with the opportunities presented by the transition economy.
2022 will most certainly see an acceleration in the shift to transition – most welcome to all of us in the edie community.
James Bidwell is co-founder of Re_Set, a leading next-generation strategy consultancy for innovation and sustainability. He is also Chair of Springwise, the world’s largest source of global innovations. Sign up to the Springwise Sustainable Source newsletter to receive a bi-weekly curation of green innovations, or contact the Re_Set consultancy team to learn how innovation could help accelerate your business.James Bidwell, Springwise