Businesses ramping up to meet their 2030 net-zero goals require the immediate deployment of strategies in order to reduce carbon emissions and transition to a clean energy economy.
Jigar Shah of the U.S. Department of Energy has been a vocal advocate for deploying existing technologies and investing in new ideas to address climate change. His mantra reflects the need for bold action and collaboration among government, industry, and communities to achieve a sustainable future.
The benefits of taking action now are clear. We can create new jobs, improve the health of our communities, and protect our planet for future generations. We must work together to achieve a sustainable future, and this Decade of Action is the perfect opportunity to do so.
Close to $100 billion of new private climate assets under management in under two years signals a social shift. Such funding levels, and the recent scrutiny attached to them, means that managing runway and scaling to commercialization are not the only operational risks companies face today. In short, attracting and retaining high-value talent is a critical component of long-term success. Companies prioritizing investing in leadership development and talent acquisition will be well-positioned to thrive in an increasingly competitive global economy.
Look ahead to the next wave of cleantech
In the VC world, investors must stay on top of the businesses they finance. This resurgence of funding in the sector, known as Cleantech 2.0, is elevating the attention put on teams managing ESG commitments in Fortune 500 companies and promising startups. Looking beyond current employees at these companies, a deeper understanding of an organization’s talent risk and roadmap for future hiring is now a critical factor in the conversation.
We now have effective technology, innovative capital stacks, strong political will, widespread policy and social support, and increasingly diverse teams. Yet, one risk ignored by Cleantech 1.0 that continues to be overlooked by leaders today is the danger of neglecting talent risk.
We often hear that the skilled labour shortage is one of the biggest challenges facing the U.S. economy. Highly-trained tradespeople are critical to creating the “boots on the ground” workforce for electric vehicle and battery manufacturing as well as solar panel and efficiency installations that help cut emissions.
With experienced leaders who can deploy the massive flow of funding and create plans to achieve green initiatives, we can address talent risk from the top down and get it right the first time under pressured deadlines.
Steering clear of common hiring errors
In past years and during bull markets, VCs often left very early-stage companies primarily to their own devices, particularly at Series A. As early rounds become much larger and follow-on rounds accelerate, investors in Cleantech 2.0 are weighing more heavily on acquiring high-value talent. By contrast, in Cleantech 1.0, the pressure to mitigate risks related to managing financial runway and commercial adoption was significantly less, as was scrutiny around execution as VCs and startups learned by doing.
Hiring mistakes are costly from both time and money perspectives. They can shorten a startup’s runway and slow down commercialization. Often the pressure to “scale” can outweigh the process of building a strategic hiring plan for tactical, strategic and opportunistic hires. In any industry, a hiring mistake can have a domino effect: when your company focuses on solutions that address the climate crisis or the ecosystem surrounding those solutions, hiring the wrong person, the right person at the wrong time, or losing a candidate with an out of touch offer can set the company—and the entire sector—back and have real implications on the capital market’s appetite for this sector.
Through the Great Resignation in 2020, hiring issues became increasingly evident, leading to the need for remote hiring and a general reassessment of priorities for large talent pools. This once-in-a-generation opportunity to transform our world requires a bold approach and not “more of the same” type of reactive recruiting. We need to use our collective knowledge and experience to decrease the uncertainty surrounding talent decisions—minimizing execution risk, driving success, and keeping investors coming back for more, even when the broader capital markets may be uncertain.
Talent advisory services can help ease talent acquisition questions and mitigate execution risk. Traditionally, these services were reserved for private equity or public market environments; some providers are becoming more attractive for early-stage companies with an increased focus on emerging verticals and market segments.
The companies that succeed in Cleantech 2.0 will address their talent risk from the top down, with experienced teams who can deploy the massive flow of funding and get it right the first time under accelerated deadlines. If successful, this will support our collective efforts to reach the 2030 net zero goals. If companies cannot achieve these goals, our collective ability to mitigate the worst effects of climate change is at risk.
Recruiting is broken. It’s time to repair the system and change our perspective to look at talent as the currency to answer this problem. With the right strategic advisors and a toolkit to strategize and develop a practical hiring playbook, companies can avoid the same costly hiring mistakes because people, not technology, will be the catalyst in the race against climate change.
Paige Carratturo is the co-founder and CEO of Sea Change, a talent venture firm that provides advisory, business intelligence and retained search services to climate tech investors, their portfolio companies, and global corporations focused on transforming executive teams to achieve a more sustainable industry.
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