Carbon Reduction: Changing Business Practices - [Business Breakdowns, EP. 90]

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Dec 28, 2022

Christian Anderson, co-founder of Watershed, shares his expertise on decarbonization methods to help businesses track and reduce carbon emissions. He dives into the financial implications of carbon reduction, explaining how debt financing supports clean tech initiatives. The conversation also highlights the role of large companies like Walmart in climate reporting and the shift towards centralized climate strategies led by CFOs. Finally, Anderson discusses the challenges faced by sectors like aviation in transitioning to sustainable practices, pushing for urgent climate action.

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INSIGHT

Over-Regulation Hinders Climate Progress

Over-regulation of infrastructure, not funding, is now the bottleneck in the US.
Streamlining the process for building energy infrastructure would accelerate the transition.

ADVICE

Early Vendor Choices and Carbon Footprint

When starting a business, consider the carbon footprint of early vendor choices like cloud providers.
Watershed chose GCP due to its zero-carbon operations.

INSIGHT

CFOs Leading Climate Initiatives

Initially, climate initiatives were scattered, but now CFOs often lead them centrally.
This hub-and-spoke model allows other teams to incorporate climate data into their workflows.

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This week is the second half of our mini-series on the two major levers to reduce the impact of climate change. Last week, we covered Carbon Removal with Nan Ransohoff. Today we're focused on Carbon Reduction. To break down the business of decarbonization, I'm joined by Christian Anderson. Christian is the co-founder of Watershed, which helps companies like Monzo, Spotify, and Walmart measure, report, and act on their emissions. We discuss the impact on financial statements, why debt financing is key, and why people say no to climate programs. Please enjoy this breakdown.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Show Notes

[00:02:14] - [First question] - Climate change as a result of the inertia of capital

[00:03:44] - Financing a capital stock transformation for decarbonization

[00:05:22] - Decreasing dependence on legacy tech to mitigate humankind’s energy debt

[00:08:32] - System of incentives to use and invest in clean technology

[00:10:59] - Banks and debt financiers getting into the climate effort

[00:12:46] - How Watershed’s individual corporate customers approach decarbonization

[00:15:30] - Complexity and recent progress to decarbonize industry

[00:18:25] - How more effective energy will accelerate the decarbonization of supply chains

[00:20:58] - Surprising cost curves for various clean energy processes

[00:24:16] - Energy solutions for the most energy-intensive applications

[00:26:44] - The impact on corporations’ balance sheets and stakeholders

[00:29:49] - Why sophisticated companies are needed to drive the decarbonization transition

[00:31:46] - How companies measure and then modify their carbon footprints

[00:35:00] - Companies getting serious about climate issues in the past year

[00:37:29] - Capital flowing to tech niches and the problem of infrastructure regulation

[00:40:35] - Digital tools for decarbonization projects

[00:42:43] - How new businesses approach the climate issue from inception

[00:44:39] - Structure of Watershed’s buyers

[00:46:53] - Why people and businesses say no to Watershed

[00:48:55] - Perspectives across Watershed’s global markets

[00:51:36] - The most worrisome aspects of the climate crisis

[00:53:26] - Simplicity in the complex domain of climate change

[00:54:39] - The overall sentiment toward the climate movement

[00:57:37] - Forces that antagonize the climate movement

[00:59:25] - An exemplary case study of Apple’s climate work