June 2023

Cleantech Executive Leadership Challenges and Solutions

The medium-to-long term outlook for the cleantech sector is extremely positive, but getting the right leaders in place, who share an aligned vision, understand the market, are able to navigate ambiguity and anticipate challenges are essential ingredients to success.

This was the key takeaway discussed at NGS Global’s recent webinar titled Cleantech Executive Leadership Challenges and Solutions. NGS Global is committed to bringing contemporary insights and informed perspectives to a range of human capital trends and topics. The webinar explored the current health of the cleantech, climate tech, and renewables market, future opportunities and challenges, business scaling strategies, and the leadership and talent traits most suited for success in the sector.

Facilitated by Karla Dorsch, Managing Partner at NGS Global for the Middle East, the session featured four esteemed speakers:

Rengarajan Sadagopan, the former CEO of Brookfield Renewables, India. Rengarajan has more than 20 years of experience in the energy and industrial electrification sectors, including leading various teams at renewable energy and sustainability companies ABB, SunEdison and SoftBank Energy

Jeff Loebbaka, former Chief Commercial Officer at AMP Robotics and Senior VP at Enphase Energy. Jeff is a seasoned Silicon Valley professional, having served leadership roles at a number of high tech sustainability and clean energy firms. He was a major contributor to the early growth phase of Enphase Energy, which now has a $40 billion market capitalization

Dr. Celeste Cecilia Moles Lo Turco, Director of ESG and Sustainability at PwC Middle East, G&Ps where she oversees sustainability and ESG related projects and initiatives. Prior to Celeste’s work for PwC, she was Director at NEOM, a Saudi-led sustainability $500 billion giga-project, where she also served as the Director at the NEOM Investment Fund

James Munce, the CEO and Chief Investment Officer of HYCAP – a UK based energy transition asset manager founded in 2021. James has over 20 years of experience in the alternative asset management industry across multiple strategies, jurisdictions and asset classes.


Situational Context

Currently, more than one quarter of all global venture capital is going to climate tech start-ups, totaling US$77 billion for the last 12 months (which is more than double what it was just five years ago, at US$36 billion).

The panel highlighted a number of positives for the sector right now, particularly: 

- Buoyant macro drivers (entrepreneurial momentum, community demand for action)  

- Government policy support (e.g. the CHIPS bill and IIJA in the US)  

- Strong R&D ecosystem, new and improved technologies.

“To give you some idea of the numbers, just in the US alone, the expected climate tech market for the next decade has a potential opportunity of $500 billion,” explained Ms. Lo Turco, Director of ESG and Sustainability at PwC Middle East, G&Ps. “Some US states have committed to renewables-only energy systems by 2035, plus there is a new national initiative to modernize building codes, improve climate resilience, and reduce energy costs.”

However, the panel also pointed out some headwinds currently plaguing the sector:

- Activities and speed are still lagging in order to meet Paris Agreement targets

- Investor hesitancy in the last 12 months - valuation challenges, down rounds

- An obsession with electrification, which the grid is not yet ready for. 

“We are coming off the back of two-to-four years of what are seemingly inflated valuations in early-stage cleantech investing,” said Mr. Munce, the CEO and Chief Investment Officer of HYCAP. “This means that many investors are clinging to those attractive valuations, and a lot of businesses and very good entrepreneurs are not scaling up quick enough, because they are not getting invested into as quickly as needed.”

Biggest Upside Opportunities

The panel discussed a multitude of transformative opportunities that make the industry particularly exciting.  

“Green hydrogen and storage technology are just two of many examples of nascent stage technologies in this space right now,” explained Mr. Sadagopan, the former CEO of Brookfield Renewables, India. “I expect the tech and innovation for those two technologies to change drastically in coming years and decades.”

Other opportunities that the panel mentioned included:

- carbon capture, utilization and storage technology - a very underdeveloped field that could play an essential role in our energy transition 

- India and China’s maturation as cleantech manufacturing and export superpowers. China can already produce solar panels 65% cheaper than Europe.

Scale-Up Advice for Cleantech Leaders

“One of the biggest challenges to the scale-up of a cleantech business is figuring out what your best proposition is – what segments, customers, product-sets, markets, and geographies you should focus on,” explained Mr. Loebbaka, former Chief Commercial Officer at AMP Robotics and Senior VP at Enphase Energy.

“Once this is determined, the challenge is making the whole organization aligned with that strategy, to avoid stove pipe operations.

“Having said that, firms also need to diversify. Cleantech businesses that have a multi-faceted approach to revenue streams, and balance their business both for the short and long-term, are in a much better position strategically. Ensure you build out not just for now, but for 3-5 years out – make the right investment in systems, people, infrastructure, and processes.”

Mr. Munce highlighted the importance of the supply chain when scaling – figuring out what is the customer, and how you are going to get it to that customer.

What Type of Leadership is Required to Take Us There?

The panelists felt that getting the right cleantech people and leaders - that share the vision and have the right personalities - takes considerable time, but is worth the investment, since it is so fundamental to success. 

Leaders that can galvanize their team and bring both internal and external stakeholders along on the journey is essential, otherwise you get short-term wins but not long-term achievement. The best executive talent understand your markets, know your investors, and anticipate challenges. 

For Mr. Loebbaka, the leadership traits that are most important for cleantech success include agility, an ability to adapt and iterate, drive through change, deal with ambiguity, complexity, and uncertainty, and to take calculated risks. “These are useful in all venture tech, but particularly in cleantech, because of the nature of the industry, the multitude of stakeholders and players, the amount of change at pace, and the fact that you are not controlling each and every aspect.”

Another component of great cleantech leadership is passion for the business that you are leading, and a belief in the mission at hand. The best leaders in the sector determine what the vision of their business is, use this as the bedrock for the setting of plans and priorities, and then consistently communicate and reinforce that vision, so all staff have a bigger sense of purpose and value, and the better world they are working towards. 

Currently, the panelists felt there is not the quality or volume of leadership to take the sector forward at the scale required.

Mr. Sadagopan explained that “there has been a slow-down in the war for talent in other sectors, but not for cleantech. Right now, it is tough to get leaders, just because of the sheer volume of development – new segments, new functions. The talent pool is lagging beyond where a lot of firms are.”

For Mr. Munce, the ultimate leadership challenge for the sector is that “there are some wonderful cleantech entrepreneurs out there, but they want to build Ferraris. How do we find founders that are willing to compromise and give the market the Ford Fiestas they might demand? 

“They might be a scientist, a CTO, or an engineer, but they may not be the best leader as the business develops, and goes through a Series B or C, and it institutionalizes itself more. In terms of leadership traits, commercial acumen and forward-thinking become increasingly important as the business develops. If you find a founder or an entrepreneur with those skill-sets, then that is fabulous.”

Public Policy Approach

The webinar also covered what governmental policies could be most beneficial in support of the sector. Most of the panelists said that public sector grants and unlocking government funding was a crucial component to ongoing growth. 

“Once a regulatory framework has been established – which it largely has been – the next role governments can play is to provide easy access to funding, particularly that which supports the development of innovation and start-ups,” explained Ms. Lo Turco. 

“We are still at the embryonic level in terms of developing this integrated and vibrant ecosystem. There is plenty of opportunity for growth, investment and expansion.”

Webinar Recording

You can view the full recording of the webinar with extended commentary from all of the panelists here: https://streamyard.com/929iabuwn6h2hb2q


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