Innovation can bring about the Green Revolution in Business

When Bertrand Piccard proposed circumnavigating the globe in a solar-powered plane, the world’s leading aviation experts told him it was a pipe dream.

That’s when the former Swiss Air Force fighter pilot turned to a shipyard where engineers said they could build a fuel-free airplane as light as Piccard required.

In 2016, Piccard and his aviator partner André Borschberg made history when their slender aircraft, the Solar Impulse, touched down in Abu Dhabi after completing the first round-the-world solar-powered flight.

By inspiring shipyard builders to design the plane, Piccard understood that to innovate he had to step away from old ways of thinking and forge alliances with experts who saw the world from a different point of view.

Now Piccard is using this vision to shape The Solar Impulse Foundation, an initiative to identify 1,000 business ideas that can protect the environment in profitable ways. So far, Piccard’s foundation has certified more than 200 solutions that create jobs and generate profit while reducing CO2 emissions and preserving natural resources

At IFC, where I lead the institution’s climate business, we believe that to make a difference for the climate, investors and businesses will lead the way.

Our clients understand that the future of their business depends on tackling climate change and investing in new technologies and business models to deal with its impacts. They see the opportunity of investing in a low-carbon economy and the pitfalls of a business-as-usual high-carbon path. It’s a business plan that’s not only positive for the environment, but also good for people and profitability.

But to align profit with the planet’s best interests, and to lessen our dependence on fossil fuels, business leaders will have to transform their mindset and adapt to a new landscape. Familiar ways of operating will not pay dividends in the long term.

Just like Bertrand Piccard, board members and CEOs have to turn their business models upside-down. They will need to embrace innovation, forge partnerships in the unlikeliest of places, and treat disruption as an advantage, not a handicap.

We must all prioritize efficiency. Inefficient systems and infrastructure – incomplete electrical grids, ageing combustion engines, or badly insulated buildings – are depleting our resources. We must invest in systems and technologies that are energy efficient, resource efficient and waste efficient.

It was not the people selling the best candles that invented the lightbulb, as Bertrand Piccard likes to say.

That means developing clean-energy solutions with lesser dependence on fossil fuels, and creating new industries to remove carbon from the air. It means investing in technologies to scale up electric vehicles, chemicals and plastics made from recycled products or plants, and to store and transport goods in a low-carbon way. It means building green homes, cities and infrastructure and investing in smart grids, sustainable agriculture and energy-efficiency hardware.

Business leaders who overcome hurdles to offer these low-carbon technologies, goods and services – and the banks that fund them – will be the front-runners of our future.

For years at IFC, we have been systematically scanning the market for digital business models to make sectors more efficient. Our venture capital team identified platforms for matching long-distance trucks with freight in emerging markets, reducing the portion of empty truck runs and reducing fuel waste.

In India, the vast trucking system is hobbled by inefficiency, with millions of trucks travelling partially empty or idling without stock. This not only leads to high greenhouse gas emissions but blocks India’s goods and services supply chains.

In 2015, IFC made an investment in the B2B start-up BlackBuck to untap the potential of India’s freight transport market. Using an app that is easy for truck drivers to use, the platform allows truck owners to find shipping jobs and bid for them. BlackBuck now has 300,000 trucks on its platform and about 10,000 clients, including Coca-Cola. Besides improving India’s competitiveness, this investment is also addressing concerns about climate change.

We recognized the potential of small satellites early on, investing in Planet, the first commercial operator for low-orbit, small earth observation satellites. Planet has launched the largest fleet of satellites in human history to deliver a daily image of every spot on the earth’s surface and to drive new applications for satellite imaging. Their satellites are catalyzing more climate-smart investment by enabling precision agriculture and tracking deforestation in near real-time.

These businesses are showing how to use efficiency and innovation to find profits and reduce emissions. But more is needed.

Governments play a key role here. Current regulations fail to move markets or encourage companies to transition to a low-carbon economy. We need regulation that compels companies to be more efficient, to respect natural resources, to use less water and energy. Smart regulation will allow innovations to enter the market. It was not the people selling the best candles that invented the lightbulb, as Bertrand Piccard likes to say.

We also need to price carbon, rather than allowing it to enter the atmosphere for free, and in doing so, shift the burden of responsibility to those who generate emissions. At IFC, we are applying a carbon price to all project finance investments in the cement, chemicals and thermal power sectors. In doing so, we encourage innovations for cleaner growth. And we are not alone – more than 1,300 global companies are taking the cost of carbon into account to help them innovate for cleaner growth.

With this sort of new thinking among businesses, and with smarter regulation, we can grasp the climate challenge and find inspiration in the race to find a solution.

When Piccard tried to build the Solar Impulse, it wasn’t just shipyard builders who shifted their paradigm. He persuaded a telecommunications company to build a navigation system 10 times lighter than that used in regular aircraft and a chemical company to create cockpit insulation unlike anything used before.

That’s when Piccard understood that “the impossible” is only defined by the limits of our thinking.

Piccard’s stunning accomplishment is a vivid reminder that innovative investors and entrepreneurs can build thriving businesses by adapting to climate change. They help pave the way to a cleaner planet.

Innovation does not occur when you have new ideas, says Piccard. It comes when you throw away old beliefs.

Written by:

Alzbeta Klein, Director and Global Head, Climate Business, International Finance Corporation (IFC)

This article is originally posted in World Economic Forum.