Climate tech is a long-term, high-risk proposition

What does that mean for the people selling it?

Hello friends,

Trailblazing companies with high profit margins and progressive employee bases are betting big on climate tech. Setting themselves apart as first movers and innovators, these companies are sending demand signals to the market and demonstrating to early movers what climate action looks like in B2B.

But these first movers are few and far between. Take carbon markets as an example: Microsoft accounts for about ⅔ of cumulative durable CDR purchases.

Decarbonization isn’t cheap. Climate tech is a long-term, high-risk proposition.

So how can we entice new users to enter climate tech markets?

Recognizing the challenges

Net zero pledges are creating demand for high-durability carbon removals and credits, carbon accounting software, and disruptive innovation in heavy industry. But as any scrappy startup knows, supply far outweighs demand.

This is because for (most) companies, investing in (most) climate tech today equates to taking a risk with little to no tangible business case, with the hope of future returns. Hence its long-term, high-risk proposition.

There are three main barriers to climate tech adoption:

1. High initial costs

2. Lack of understanding

And dare we say…

3. A smidge of shortsightedness

The task for climate marketers will be to address these barriers and their associated objections and to do so in a way that resonates with the early majority of the mainstream market.

Overcoming the challenges

High initial costs

Climate tech marketers’ best weapon here is to speak to the long-term value of climate tech adoption. Returning to the example of carbon markets, CDR purchasers are willing to pay higher prices for lower volumes today in exchange for the promise of access to higher volumes at lower prices later.

Sometimes it takes time to offset initial costs. In other cases, buyers may see returns immediately.

Consider this example from Aurora Solar. The company specializes in remote shade analysis for solar designs. The upfront cost of investing in its platform is easily and quickly compensated for by helping solar energy companies create highly accurate solar designs and determine their financial returns, all without having to visit the site.

And then there’s Climeworks. It’s difficult to tie the sale of carbon credits today to a business use case in any traditional sense. This is why here, aspirational messaging works.

Effective messaging will depend on which category (returns now or returns later) your solution falls under. For those that won’t enjoy an immediate and tangible business case opportunity, aspirational messaging will play a key part in your strategy.

Lack of understanding

It’s critical for suppliers of climate tech to help their market understand their options and pathways for getting to net zero. This means providing ample use cases, case studies, and informative campaigns. We’re talking hyper-specific and comprehensive forecasts relevant to decision makers in your target audience.

Climate tech leaders must also be incredibly transparent about the risks associated with their solutions. This is a critical step to building trust — a precondition to building positive business relationships.

Ripple tackles this challenge flawlessly. An innovative energy company that aims to democratize energy ownership, they break down the process to “part-own a wind farm” to the letter. But what really stands out about their approach is the unmissable banner at the top of their site urging would-be buyers to read up on risk factors (which they outline in a comprehensive and well-designed PDF document) before completing a share purchase.

Buyers know there is risk in investing in climate technologies.

Acknowledging this head-on goes a long way in moving prospects along the buying journey, for the confused and skeptical will not move forward.

Shortsightedness

Every company will need to decarbonize; depending on the hard work of first movers won’t cut it. Companies that don’t understand this will not have a future in a decarbonized economy.

One effective way to overcome shortsightedness on behalf of the early majority is to help decision-makers at these companies imagine the future we climate tech marketers already know is possible.

LanzaTech does this beautifully. Its homepage uses figurative language and visualization techniques to help readers understand the role its highly complex tech plays in the climate transition — and why it’s a smart bet for B2B buyers to adopt.

Yep — it all comes back to storytelling.

What will it take to market climate tech into the mainstream?

Low climate tech adoption rates are not a surprise — this is an emerging market after all. But urgency is on our side.

It’s worth cautioning against relying too heavily on compliance messaging, as it isn’t a point of differentiation. And we urge you not to over-rely on aspirational messaging, either. It works for the likes of Climeworks because they’ve reached commercial scaling and have already won the business of big-name first movers.

For the rest of us, focusing on pragmatic value is the sweet spot:

Tangible value, ROI, and risk mitigation.

There are a lot of climate tech startups out there. But without crossing the chasm between corporate innovators and the early majority of the mainstream market, reaching net zero will remain out of our reach.

Are we up to the challenge, marketers?

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