The US$4.5 trillion opportunity and how to unlock it

By Tobias Jahn, Partner, Hitachi Ventures

Delivering net zero is arguably the single most important collective task society has ever faced. The challenge to scale new decarbonisation tech as well as the transition to a circular economy is huge but then so is the opportunity – consulting giant Accenture has valued the circular economy at US$ 4.5 trillion market potential by 2030.

Identifying this prize is one thing but unlocking it is quite another which is where Hitachi Ventures comes to the fore. In simple terms, our role is to discover, nurture and support innovative start-ups who are ready to address the world’s technical, social and environmental challenges and we’re always searching for like-minded partners who can really help turbo-charge this progress.

Technology can deliver so much – everything from renewable energy, energy storage, electric vehicles, recycling, carbon capture and storage and biomanufacturing – all of which can help reduce emissions and remove carbon from the atmosphere. When you support this with digital technologies – IoT, AI, big data analytics – you are able to optimise energy consumption, improve energy efficiency and drive low carbon product design, all key steps on the road to net zero.

Today and every day, we’re looking to invest in the businesses best placed to help us build this road but with so much great potential around us, one of our biggest challenges at Hitachi Ventures is selecting the partners who can deliver the maximum impact. There are two dimensions to this decision making – we assess each case from a venture capital financial perspective: Is it a large, growing market with a strong management team and a unique or compelling product? And then from an investment opportunity perspective: Is this a partnership which can deliver mutual benefit? If the answer to both questions is ‘yes’ then we are likely to progress.

Our portfolio comprises many examples of the type of technology that can help address challenges for a decarbonised and circular economy. Each of our investments in Makersite, BeZero and Captura is playing a critical role along the CO2 reduction journey of corporates.

To reduce internal emission, Makersite is empowering companies to reduce emission hotspots in supply chains and products (Scope 3) with its AI powered digital twin technology. The remaining emissions will be offset via carbon certificates, for which BeZero, the leading carbon ratings agency, is providing corporate buyers the confidence in efficacy of CO2 savings. Captura is one of the future suppliers of those high-quality carbon credits as it leverages a novel carbon removal technology called Direct Ocean Capture. With our investment in Ascend Elements and Provectus Algae, we supported companies that are tackling the circular transition with leading battery recycling tech and algae-based biomanufacturing, respectively. All these companies will play a mission-critical role and make a huge difference today and in the future.

As a social innovation business, sustainable transformation is the cornerstone of everything we do – this is what drives the partnerships accelerating our journey towards net zero. And whilst the environmental transition at the end of this road is a massive opportunity for all of us, the flipside is that for those who don’t embrace this transition, the road will quickly become a dead end – according to Swiss Re, if we fail to take action on climate change, the world economy stands to lose up to 18% of GDP by 2050.

Ultimately, the prize at stake goes way beyond economic value – we are talking about the future of the planet here. Through our investments Hitachi can play a key role in delivering solutions for a carbon-neutral society and right at the heart of this is our commitment to encourage businesses across all sectors to look further ahead and anticipate trends and future customer needs – now is the moment to take that leap because in 2023, the biggest risk is not taking a risk at all.