There’s no arguing that the fourth annual Earthshot Prize awards, the pet project of British royal Prince William held in Cape Town this week, was fabulously glamourous.
The prince himself was in the city, where he charmed climate advocates, media and the usual clutch of stargazers hoping to absorb some royal radiation. Nor, with his hipster stubble, did William look or sound out of place as he bantered with Kenyan environmentalist Wanjira Mathai and Tokunboh Ishmael, co-founder of private equity firm Alitheia Capital, about financing new climate projects, just hours after popping in to meet President Cyril Ramaphosa, presumably for tea.
The prizegiving was a slick show too, hosted by Grammy award-winner Billy Porter and Bonang Matheba, and punctuated by the £1m award given to each of the five winning finalists.
“Sanibonani and dumelang,” began the prince, as he described how appropriate it was that an African country was hosting the awards, since the idea for the Earthshot Prize first hit him on a trip to Namibia and Tanzania.
“I saw first-hand the extent to which people were dedicating their time, talent and vision to fixing environmental challenges, but they weren’t getting the support they needed to speed their solutions to scale,” he said. The £1m, he said, is there to reward those inventors who have a workable business plan hinged on solving an environmental problem.
It’s a noble ambition, and some of the winners this week have solid business plans, which investors would jump at. None more so than Advanced Thermovoltaic Systems (ATS), a US-based company that has developed technology which converts wasted heat – the sort given off during the making of cement or steel – into usable clean electricity.
ATS founder Kelly Adams explained that the company began life as a solar company, but took an unexpected turn one evening when the founders turned off the lights and left for the day. When they arrived back the next morning, “to our surprise, we discovered we’d produced electricity without the presence of light”, Adams said.
As ATS researcher Jake Perez put it: “Something that can turn heat, which is everywhere and in very instance, into useable clean electricity is just mind-blowing.”
The industrial applications are obvious. Adams said that 60% of all energy used at a cement factory is wasted through heat. But by putting the technology into 100 industrial facilities, which it plans to do by 2030, it will save 3.5Mt of CO2. (For context, a round-trip flight from London to Denver, Colorado, where ATS is based, emits about 3t of CO2.)
Now, ATS is the sort of business which you’d imagine would have worked in any time and place – allowing companies to slash their electricity costs while boosting their environmental credentials – so it’s no surprise that some investors have already subscribed to its $26m capital raise offer.
Matchmaking funders
If companies like ATS are no-brainer investments, does all the flash and glamour of the Earthshot Prize really make a difference to the viability of the sort of businesses needed to meaningfully alter the globe’s climate trajectory?
It’s hard not to be sceptical; it has become something of a cottage industry of irony (trademarked at Davos’s World Economic Forum) for journalists to sneer at how many tons of CO2 are pumped out, bringing celebrities to any one place to wring their hands about how much we pollute. It’s good for the red carpets, sure, but it’s not as if they’re imparting much wisdom. “Right now, carbon in our atmosphere is making our world warmer,” said model Heidi Klum, gravely, as she presented the first award.
But actually, this sort of award does make a difference, says Nazmeera Moola, head of sustainability at asset manager Ninety One.
“First, by the time a company qualifies to enter, it has to show scalability, so this is about providing financing as a catalyst for their growth that they might not get elsewhere. And, second, it shines a spotlight on the need to focus on funding small and medium enterprises in this space,” she tells Currency.
This is critical as South Africa, in particular, has had a dismal record of funding new, innovative businesses of this sort. In part, this is because there are vanishingly few true venture capital or angel funders in the country who are willing to take a bet on these sorts of companies – which is why so many opt to launch in places like Silicon Valley in the US.
“We have an excellent financial services industry in this country, but it’s far more structured, and not used to dealing with these sorts of companies. The more creative investors, which are comfortable looking at these new business models, tend to be overseas right now, so there’s a gap,” says Moola.
It is revealing that of the 60 Earthshot finalists in the past four years, South Africa has had no winners and only one finalist. (Africa has had 10 finalists, with half coming from Kenya, which must be doing something right.)
Still, it helps that for businesses premised on solving an environmental or energy problem, the time is ripe. Government subsidies, as well as tax breaks on household solar, have lit a spark under hundreds of renewable energy companies, for instance.
In Ninety One’s case, it launched a new Accelerator fund in Cape Town this week alongside the Earthshot Prize to help South African firms with global ambitions and a viable business plan. It has set aside R45m over the next six years for this, which will be used for technical assistance, strategic guidance and funding these businesses.
Casting wide
It’s not as if there will be a shortage of applicants. While Prince William ultimately chose five companies to get his £1m apiece, there were 3,000 nominations for those awards which didn’t win.
The first company in Ninety One’s accelerator fund is called Abalobi, one of last year’s Earthshot finalists, which helps small-scale fishermen in South Africa sell their catch to restaurants and specialised stores, while providing those fishing communities with a savings product.
“Small-scale fishers in our programme commit to responsible fishing practices. With a fair price and healthy market access, there is no incentive to overfish. Surplus seafood is routed to our food security initiative,” says Abalobi.
So far, Abalobi has channelled $1.6m into the fishing communities in South Africa, and its website – fishwithastory.org – allows consumers to scan a QR code to read the full story behind its seafood: what it is, where and how it was caught, and who actually caught it.
It’s the sort of idea whose time, you feel, has come.
Prince William at the 2024 Earthshot Prize event. Photo by Gallo Images, Die Burger, Jaco Marais
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