Bill Gates gets involved in climate change

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Drawing on his well-known name in the community of entrepreneurs, Bill Gates has persuaded billionaire friends to invest in a fund set up to combat global warming. They include Jeff Bezos, Richard Branson, Jack Ma and Xavier Niel. For the fund, called Breakthrough Energy Ventures, one billion US dollars has already been raised!

Its objective is clear:

  • to invest in technologies that will reduce greenhouse gas emissions by at least 500 billion tonnes;
  • these technologies must have already proven their scientific potential and capacity to lead to practical applications.

The fund’s founding charter acknowledges that it will not be easy to meet the immense challenge of giving everyone access to cheap and reliable energy without greenhouse gas emissions. It stresses the absolute need to invest massively in innovative technologies that will contribute to the emergence of a world without greenhouse gas emissions. It also takes note that the normal cycle of implementation of innovations – i.e., fundamental research, new regulations, subsidies and investments – is too long and too costly, given the urgency of the situation.

Among other things, it concludes that, as things currently stand, there is not enough public money to finance the development of these new technologies. The Breakthrough Energy Coalition of fund contributors therefore intends to help speed up the cycle of innovations through targeted investments, adequate partnerships and efficient networking. It intends to help evaluate these innovative technologies, assess their commercial potential, develop viable products and to bring them to market.

Members of the Breakthrough Energy Coalition are driven by:

1) the obvious reason to f ultimately generate attractive yields, and

2) the praiseworthy motive of bringing their experience as entrepreneurs to bear in resolving the critical problem that global warming has become.

This initiative shows, in the case that there was still any need to do so, that greater awareness of the issue goes far beyond the limited circle of environmental activists and NGOs, that a growing number of investors are pulling out of fossil fuels – the Rockefeller Foundation to name one – and that the greatest entrepreneurs have now served notice of how urgent it is to act and the extent of the resources needed.

Managers of BNP Paribas Asset Management’ environmental funds are keeping a close eye on this trend and are taking an active interest in, and analysing methodically, the private equity decisions in this field.

Alexandre Jeanblanc

Investment Specialist, SRI

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