(by Dave Bullock, Director of RWDI Ventures)
When I tell people the RWDI Ventures team is a group of ecopreneurs, the second part usually clicks first: we’re entrepreneurs. We have a strong track record of building disruptive, product-driven tech companies.
As for the “eco” part, most people figure it has something to do with the environment – but it sometimes takes a little more conversation to show just how serious we are about transforming the relationship between business and the planet.
At Ventures, the “eco” side of our identity runs deeper than a corporate social responsibility initiative. It’s fundamental to our strategy: we build companies that gain unique market advantages through deeper levels of environmental insight. Treating the planet as a partner goes to the heart of our mission as an impact incubator.
A new economy is already coming to life
For centuries, major economies have grown and thrived, underpinned by two critical assumptions: that there would always be plenty of clean land, water and air; and that weather and climate patterns were stable and predictable. Neither of those assumptions holds true anymore.
Global economic growth has lifted hundreds of millions of people out of poverty, radically improved global health outcomes, and yielded other extraordinary benefits. But it’s clear that the economic and environmental assumptions that got us to this point can’t carry us much farther.
In the World Economic Forum’s most recent annual assessment of the top risks to the global economy, the top three risks were all environmental: extreme weather events, failure of climate change mitigation and adaptation, and natural disasters. The biggest threat to business and the global economy is not tax policy, recessions, trade disputes, terrorism or cyber security. It’s the interplay between nature and human activity, which has become increasingly dangerous, unpredictable and adversarial.
Take a look around and it doesn’t take long to see the signs of this:
- Financial markets are struggling to quantify, transfer and manage climate change risks in the mortgage and insurance sectors. These eco-risks threaten the stability of the entire financial system.
- Manufacturing sectors are scrambling to adapt to how weather is impacting global trade. The four largest sources of supply chain disruption in 2017 all related to extreme weather and natural hazards.
- These threats are local as well as global. Climate change has put 70% of Europe’s largest cities at risk from rising sea levels. All the infrastructure critical to local economies and businesses (roads, rails, ports, internet, drinking water, sanitation) risk disruption or failure.
As businesses navigate the impacts of climate change, they face extraordinary complexity. They have to absorb the direct effects, such as property loss, reduced crop yields and increased insurance costs. And they need to keep pace with shifting regulations, laws and policies as governments and institutions also race to adapt to climate change. Through decades of work in industry – from manufacturing to mining, automotive to telecommunications – I’ve seen up close how this new and rapidly changing risk landscape is testing leaders across sectors and industries.
Earth-aware companies will be the new winners
Despite the obvious and existential nature of these risks, many business leaders haven’t fundamentally changed how they think about creating a defensible business advantage. We have.
Whenever an industry faces a risk that has a large, direct impact on financial performance, the companies that best understand that risk tend to emerge as the winners. In the next economy, earth-aware companies will win.
RWDI Ventures believes that treating the planet as a partner and active stakeholder in a business is not only the right and moral thing to do, it can create long term competitive advantages. We regularly meet with companies who are figuring this out, such as:
- An insurer that truly understands the flood and windstorm risks to a property – and how they’ll evolve overtime – can use that data advantage over competitors to better price risk and select which properties to insure.
- A manufacturer capable of accurately assessing the impact of extreme weather events on critical infrastructure can use that insight to maintain a more stable and lower-cost supply chain.
- A retailer who better understands the relationship between customer demand and weather patterns can craft a more efficient inventory strategy.
- A sports team that gains deep insight into how their venue interacts with natural wind currents, and uses that insight to optimize strategy and lineups, gains an edge over opposing clubs.
- Architects who know how to harness the surrounding environment as an asset and resource – in both climate control and energy production – can design buildings more operationally efficient than those of competitors.
Many companies are already gaining deep competitive advantages by understanding how nature impacts their business. In fact, RWDI has already been active in this work since our inception in 1972 – helping firms and governments around the world advance their business objectives by leveraging advanced, data-driven environmental insights.
As climate impacts intensify, the competitive advantages to be gained from weather and environmental insights will only grow. Indeed, we believe these will match or exceed the value of any other “information advantages” firms utilize today.
The RWDI Ventures vision
I’ve spent most of my career as an entrepreneur: building startups and helping scale-ups grow. I came to RWDI to lead Ventures because I saw an opportunity to scale the impact of a company with unparalleled expertise in how the natural and human-made worlds interact.
The tech world and the startup world are both prone to hype – but you can’t fake the kind of deep scientific expertise that’s powered RWDI’s rise as a global technical leader. In Ventures, I saw a chance to create companies that would solve truly urgent and important problems – and to do that work with 600+ talented experts at our backs, helping. It was the kind of opportunity every entrepreneur dreams of.
We’re going to be building companies across every part of the economy, including areas that expand beyond the sectors RWDI has traditionally operated in. Some are already coming into view, and I can’t wait to say more about them (soon!). The thread that runs through all these ventures is the keen awareness that there’s a new set of rules for how to create a company that’s built to succeed in the coming economy.
Companies that thrive in the decades ahead will treat the planet as an active stakeholder -- not only at the philosophical level of respect for the environment, but at the level of business fundamentals. Winning firms will have a deep understanding of the operational and financial impact of the natural environment.
We’re not naïve. Clearly business and the planet can, at times, have opposing interests. But we believe that the most successful future businesses will be the ones that flip the script on this assumed conflict, understand their relationship with the planet, and use that understanding to mitigate risks and create market opportunities.
So when I say we’re ecopreneurs, that’s what I mean. If this vision resonates with you, we’d love to hear from you.