Bill Gates on sustainable investing: ‘There’s probably some Teslas out there’

Bill Gates
Bill Gates has a net worth of nearly $124 billion, according to Forbes.

One way he’s putting some of that money to work is an investment effort to spur the private sector towards green innovation as a means to combat climate change.

“You know, there’s probably some Teslas out there,” he told Yahoo Finance’s editor-in-chief, Andy Serwer, during a wide-ranging interview this week. But he added that “identifying who they are in advance” is the tricky part.

Gates referred to the Elon Musk-led electric car company (TLSA) multiple times during the conversation as a model for green innovation. In his new book “How to Avoid a Climate Disaster,” the former Microsoft (MSFT) CEO outlines plans to re-orient the U.S. economy in the coming decades to combat global warming.

In his book, Gates argues the world needs to get to zero greenhouse gas emissions by 2050. To achieve that goal, Gates says companies need to make better use of the technologies that already exist and also invent new ones.

That’s where his fund, Breakthrough Energy Ventures, comes in. The billions of dollars in the fund, contributed by Gates and others, flows to environmentally minded entrepreneurs in fields like agriculture, construction, electricity, manufacturing, and transportation.

Gates began the effort in 2015 as he began turning more and more of his attention towards climate change.

‘Travel alone didn’t didn’t give us a dramatic cut’

In the book, Gate proposes overhauls to an array of fields, from manufacturing to agriculture to electricity.

Gates is a big fan of what Tesla and others have done in transportation and says other areas of the economy should follow that lead. He points to the ongoing pandemic as evidence that sectors beyond travel need to address global warming. Travel has fallen dramatically in the last year as people stay at home, but “we’re still making cement and steel,” Gates said. “Travel alone didn’t give us a dramatic cut” in greenhouse gas emissions, he added.

While the world might not have seen a huge emissions reduction, recent research shows that global greenhouse gas emissions dropped about 7% in 2020 amid the pandemic restrictions. The analysis, published in December 2020, came from researchers at the University of East Anglia, University of Exeter, and the Global Carbon Project.

Those researchers found the biggest drop was in surface transport, with emissions falling to a rate about half of normal peak of the COVID lockdowns.

By December 2020, the road transport and aviation industries were still below 2019 levels but getting closer to normal — and researchers warned the numbers are set to rebound further this year.

To help draw down the numbers permanently, Gates wants to encourage widespread adoption of greener technologies to more cheaply produce things like concrete and steel. He argues that any long-term “green premium” — where it costs more to make things in an eco-friendly way — is unsustainable, especially in countries like India and China.

“The U.S. has the majority of the world’s innovation power,” he notes. And if he succeeds here, he added, “then we get world class companies like Tesla that are helping to solve the problem globally.”

Innovative companies can also make a profit while saving the planet, Gates said, pointing specifically to synthetic meat company Beyond Meat (BYND), and QuantumScape (QS), a company in the Breakthrough Ventures portfolio that sells lithium metal batteries for electric cars. Beyond Meat saw a spike in sales during the pandemic as Americans stockpiled groceries and feared meat shortages (though it posted a quarterly loss in November).

Meanwhile, QuantumScape’s stock jumped just this week after it announced the clearing of a key hurdle in its effort to build solid-state lithium-metal batteries for electric vehicles.

“It’s nice to see the willingness to reward those companies and appreciate they’ll have a strong future,” Gates says.

Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC. Max Zahn contributed additional reporting.

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