July 21, 2024

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Climate technology forgot the consumer is still king

2 min read

Tehmina Haider and Michael O’Leary lead L Catterton Impact, the impact investing arm of the consumer private equity firm L Catterton. Michael is also the author of Accountable: The Rise of Citizen Capitalism (HarperCollins 2020).

This spring, ExxonMobil chief Darren Woods came under fire after telling Fortune Magazine that consumers—not ExxonMobil—were the ones holding back the transition to clean energy. “We have opportunities to make fuels with lower carbon in it,” he said, “but people aren’t willing to spend the money to do that.”

The SEC’s new rules on climate disclosures similarly put emissions on consumers’ shoulders: though public companies must now report their emissions, they don’t have to include the emissions that come from consumers using their products. Instead, those emissions implicitly remain part of the consumer’s carbon footprint.

Many in the climate community bristle at blaming consumers. After all, even the concept of a consumer’s “carbon footprint” was only popularized by a BP-funded ad campaign in the early 2000s.

But Darren Woods is right in principle: It doesn’t matter what sustainable products companies create if consumers don’t buy them. We shouldn’t blame consumers for companies’ actions, but we should focus on what they actually want to buy.

Within the climate movement, we’ve too often taken an “if we build it, they will come” approach to climate investing, assuming that if we can just develop the technology, then climate-conscious consumers will be eager to adopt it. Consider transportation and food, which together make up roughly half of a consumer’s total emissions in many countries. Within each, we’ve developed technologies that offer substantial reductions, but we’re now seeing just how fickle consumer adoption can be.

According to the Department of Energy’s latest analysis, the cradle-to-grave emissions for today’s electric vehicles are 48% lower than…

Tehmina Haider, Michael O’Leary

2024-06-13 07:17:21

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