Climate change is arguably the greatest disruption of our time.
I’ll go out on a limb and say that no one reading this article will remain unaffected by effects of climate change in the next five years — whether you are sitting in downtown Manhattan, New York, USA, riding a ferry in Sydney, Australia, working on a vineyard in France or commuting to work in Chennai, India.
Living in an Indian city means I see the disruption of climate change daily and feel its effects. In May, we are ravaged by the heat and are looking up desperately at the cloudless skies for rain. Come August, we are praying — equally desperately — for the rains to go away as our cities are flooded. You see intense rainfall, one of climate change’s signature moves, when combined with poorly-managed solid waste, causing flooding in many Indian cities.
But disruptions always create opportunities.
The opportunity in the disruption
One such opportunity is managing solid waste. Today, in most places in the world, garbage is dumped, not managed. But management (i.e., extracting value from the rubbish) is a different story altogether and one of the strongest possible adaptive actions to a warmer climate. And it’s unsurprising that Bengaluru, the startup capital of India, should be the first to spot the opportunity. A shining example of this is Saahas Zero Waste, a nongovernmental organization that transformed into a for-profit startup five years ago.
Let me share a story.
Thangamma, a middle-aged woman, wears thick blue gloves, a mask and an apron. She works with precision, unerringly taking one component after the other and placing it in the appropriate bin. Her attitude, attire and approach would not be out of place in a high-tech factory working with printed circuit boards, but the truth is that Thangamma is working with soiled napkins, bits of waste paper and used plastic bottles. She takes a basket filled to the brim, and with a group of other middle-aged women, she puts the crumpled paper napkin into one bag, a used paper cup into a second, a Lays potato chip bag into a third. They keep working quietly, talking to each other while their hands move with surgical precision. Each piece they sort is one less piece into the landfill — quite a bit more than that since segregation of dry waste allows the wet waste generated to be made into biogas or compost. They work in dignity and safety — a far cry from their less-fortunate cousins working out in the open, in the landfill. She tells me that her daughter has finished her engineering degree. “Is she working?” ask. “No, I got her married,” Thangamma replies. “But she is continuing to study.”
A ragpicker-turned-employee, sending her daughter to college, assured of a steady income, facing no unnecessary danger in her work, provided with retirement and health benefits, while ensuring less of our waste goes into a landfill. What a story! I was hooked, and this is why I invested in Saahas.
The work that Saahas and many of its competitors do in helping Bengaluru manage (not collect and dump) its solid waste, helps Bengaluru become more resilient to a warmer climate. Every ton of waste that is managed is not blocking a drain, canal or river or not generating methane in a landfill.
The pivotal role of climate change entrepreneurship
Sahaas’s margins, and hence its survival, depends on innovation — in how it collects, segregates and manages its waste. As the company tries to extract additional value from the waste (i.e., the management of the different streams of waste or waste “destinations” in trade talks), “destinations” for the waste begin to develop.
Wet waste can be transformed into biogas. Carbon Masters, another company I have invested in, could not have existed unless there was access to large quantities of segregated wet waste such as Saahas provides. Carbon Masters takes this waste and makes biogas in cylinder form — used to fuel carbon neutral cooking or vehicular fuel. Carbon Masters even runs its fleet of trucks on these cylinders — green transportation indeed!
Dry waste also finds various homes. Paper goes to paper factories, but plastics — those need a little more work. Low-grade plastics are tricky (and expensive) to handle, whereas higher grades are easily melted and made into granules that complete the circle in the plastic lifecycle.
Saahas and Carbon Masters cannot survive or satisfy their investors if they do not grow. And such growth will not rely on grants or government allocations to provide a subsidized service. The insistent need to grow, to make a profit translates into the “hunger” to develop destinations, to ensure efficient (and easy) collection, segregation and management of waste.
Very conservative, expert estimates are that four to five new jobs can be created per ton of managed waste. These estimates are far less than what Saahas and Carbon Masters are creating on the ground today but far higher than estimates in developed countries given the much higher levels of mechanization. Not all these jobs are “new.” Some would simply be displacing municipal corporation workers. But waste management creates entirely new sectors and new jobs.
Managing urban India’s 150,000 tons of municipal waste could generate 600,000 to 750,000 jobs while creating a cleaner environment and ensuring dignity and safety for millions. These are dignified jobs with benefits — a far cry from the waste pickers rummaging in the open.
I’ve just highlighted some of the possibilities that lie within waste — when investors, entrepreneurs and managers can unlock value. Opportunities also lie in agriculture, water management and urban transportation — opportunities to create value, build resilience and create jobs. Climate change investing lies in the unique intersection of impact, return and building resilience. These opportunities need investment — patient capital that can guide and handhold — to grow and create the impact our world needs.
A recent issue of “Forbes India” featured Som Narayan, Co-Founder of Carbon Masters, on its cover. This appears to be a sign that the time for climate change investing is here.
YPO member Mridula Ramesh is an investor in early stage climate-related startups and the Founder of the Sundaram Climate Institute. She also is the author of an upcoming book on climate change and India.