Could Climate-Consciousness be the Key to Consumer? 60+ Brands Pioneering Sustainable Models
A regulatory wave in the US, along with generational shifts in consumer preferences, are favoring climate-conscious tech innovation and business models. Meera Clark, early-stage investor at Redpoint, has developed a new category to capture key areas of business potential and important players: the Conscious Consumer. The category straddles three large consumer-facing industries: commerce, home improvement and automation, along with transportation. You can read more of her views at her Substack, The Conscious Consumer.
MARKET MAP: THE RISE OF THE CONSCIOUS CONSUMER
The image shows brands seeking an edge in existing markets with a climate-conscious approach enabled by innovation in technology, business model, or distribution — or combinations of the same.
Clockwise, the brands listed work in:
Transportation transformation (upper-right)
Conscious commerce (bottom)
Residential retrofitting (upper-left)
WHAT YOU NEED TO KNOW: THE CONSCIOUS CONSUMER
Editor’s note: The beloware excerpts and digested insights from Meera Clark’s original post, “The Environmental Era.”
Why is this such an important category moving forward?
Consumer spending will increasingly reflect greater demand for climate-conscious products and services: A 2022 Sensormatic survey found that nearly 80% of US adults are proactive in considering the sustainability of products, retailers, and brands on at leastsome of their purchases.
Sustainability concerns are most pronounced among younger generations. A Deloitte survey of more than 20,000 respondents this year found that nine in 10 Millennial and Gen Z consumers report actively trying to protect the environment.
Government regulation is increasingly incentivizing climate-conscious processes and products in consumer-facing industries: California leads the way with laws that have mandated organic waste composting, construction efficiency, and zero-emission vehicles by 2035. Federal law is following suit with tax benefits for solar and battery installation, and the allocation of $5B to a national network of charging stations.
What applications or business models might evolve in this category?
Conscious Commercerequires efficiency-optimizing logistics and laying the groundwork for circular economies (i.e., commerce in which goods, components, and packaging can be endlessly recycled to minimize waste and energy impact). Circular and sharing economies will play a growing role in extending the durability of goods. The most successful business models will find novel ways to alleviate environmental impact across every stage of the value chain, including in materials, manufacturing, logistics, and resale.
Residential Retrofittingoffers an opportunity in improving the carbon footprint of home construction, energy use, and appliances. Leading applications include innovation in solar, battery installation, energy-efficient appliances (including heat pumps, electric stoves, and electric dryers), water efficiency, and material conservation in new construction. Sustainable innovation could take shape through full-stack providers or embedded offerings that transform existing operators.
Transportationtransformationcaptures the shift towards electric vehicles and other less carbon-intensive modalities for getting from place-to-place. New financial instruments will be needed to bridge the affordability gap of EVs, as lower-cost models are still lacking. The growing proliferation of EVs requires new underwriting methodologies compared to the combustible engine. EV-oriented infrastructure will allow for new transportation marketplaces and support stations to emerge and evolve in the coming decades.
What are some of the potential roadblocks?
The main blocker is how costly these products are. While consumers show commitment to environmental engagement, they also show little willingness to compromise on quality, cost, or convenience. Category-defining companies pursuing this opportunity will need to meet consumers and “prosumers” where they are, offer clear cultural and economic incentives, and drive delight every step of the way.
Category-defining companies will need to meet consumers and “prosumers” where they are, offer clear cultural and economic incentives, and drive delight every step of the way.
California’s CALGreen (fka Green Building Standards Code), which introduced legislation for new construction, including planning and design, energy efficiency, water efficiency and conservation, material conservation, and resource efficiency.
Almost 40% of transportation-related emissions come from passenger cars alone. Federal and state governments are feeling both policy pressure and budgetary support for this transportation transformation.
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