Capital Discipline Strategies for Low-Carbon Projects

Last week I wrote about running a proper fundraising process. This week is about the decisions most founders get wrong: whether to raise at all, how much, from whom, and what kind of capital. First, raising external capital should be a last resort. Can you grow slower, stretch runway to profitability? Are there grants available? Can you take debt instead of equity to minimise dilution and maintain autonomy? These are the questions worth sitting with before you open a round. Second, do your due diligence on investors. Many founders I talk to are surprised by this. Once investors are on your cap table, it can be a venture-lifelong marriage. Bad investors can make your life hell, hinder decision making, create extra work, or even kill the company. Speak to their portfolio company founders about how they were treated in the good and bad times, and what value they really added versus the promise. Third, raise less than you think you need. A large round and high valuation feels like validation, but it often comes with heavy dilution, super-high expectations, and pressure that compounds founder stress. Far better to raise a smaller amount fast and oversubscribe than face a never-ending process. My preference is milestone-based raising. Raise what you need to hit clearly defined milestones over 18 to 24 months. Under promise, over deliver. Build trust and the next raise happens at a higher valuation with less dilution. Fourth, be deliberate about who you raise from. Most founders chase the biggest name or engage whoever knocks on the door first. Mistake. Prioritise investors who can genuinely help, have strong networks in your sector, can access the best talent, and can introduce partners and customers at C level. At PropertyGuru, that discipline allowed us to select the right partner at each stage, rather than whoever could write the biggest cheque. For climate founders specifically: what kind of capital do you actually need? Climate businesses are mostly physical, with upfront hardware requirements. Equity is expensive for that. Ideally you want a capital stack. Grant capital to fund R&D and de-risk first deployments. Equity to build the IP, team, brand, and operating platform. Debt to finance working capital and the assets. The challenge is that grant and debt capital remain scarce, immature, and heavy on admin in emerging markets. It is one area we collectively need to fix if we want to accelerate green adoption. Founders obsess over valuation. The ones who build the best companies obsess over funding strategy and process. This is part of a weekly series on scaling lessons from building PropertyGuru to NYSE and backing 40+ climate ventures. Follow along if useful.

The CFO’s Role in Decarbonising the Cement Industry Cement is the foundation of infrastructure — but it’s also one of the most carbon-intensive industries on the planet. As sustainability becomes a core business imperative, the CFO is uniquely positioned to lead the charge toward decarbonisation. Traditionally seen as gatekeepers of cost and compliance, today’s CFOs must evolve into strategic enablers of green transformation. Here’s how: Capital Allocation with Purpose Prioritising investments in low-carbon technologies, green fuels, and waste heat recovery systems is no longer optional. It’s a necessity — and CFOs must ensure these projects meet both sustainability and return thresholds. Embedding Carbon into Financial Decisions True ESG leadership means internalising the cost of carbon. Carbon pricing models, shadow carbon costs, and scenario-based planning must become standard practice in budgeting and forecasting. Innovating Financing Structures From green bonds to sustainability-linked loans, CFOs must leverage innovative instruments that tie financial performance to climate outcomes — sending a clear message to markets and stakeholders. Building Transparent Reporting Frameworks Clear, credible, and auditable sustainability disclosures are key. Integrating non-financial KPIs like emissions intensity per tonne of cement into regular reporting helps drive accountability. Partnering for Impact Decarbonisation is a collective challenge. CFOs must engage with R&D, operations, policymakers, and peers to accelerate innovation across the value chain. The transition to a low-carbon future isn’t just an environmental obligation — it’s a strategic growth opportunity. Cement CFOs who act boldly today can reshape the industry for generations to come. #CFOLeadership #Decarbonisation #CementIndustry #Sustainability #GreenFinance #ClimateAction #ESG #NetZero #InfrastructureForTheFuture

To scale carbon removal, we need a financial architecture built for it. That’s the focus of the new piece Eneida Licaj and I wrote for the World Economic Forum. We break down why capital struggles to move and what’s needed to finance carbon removal at scale, including: 🔹Long-term offtakes that reduce risk and unlock predictable cash flow. 🔹A capital stack where risk, return, and tenor match the type of capital deployed. 🔹Targeted incentives - from policy tools like CfDs and tax credits to catalytic capital that can absorb early risk and crowd in institutional finance. 🔹Data infrastructure to support credit risk assessment and tie capital flow to progress. → We focus on the 'missing middle' in the capital stack - projects that are beyond early equity, but not yet bankable. Too risky for lenders, too capital-intensive for venture investors, and currently without the financial bridge needed to scale. → We also outline what corporates, governments, institutional investors, family offices, and development banks can do now  to help build a system that can price and allocate risk, deliver liquidity, and finance carbon removal infrastructure at the speed this decade demands. Special thanks to our expert reviewers for their input: Kash Burchett, HSBC Cindy J., ING Lucas Joppa, Haveli Investments Henry Waite, Kumo Max Zeller, Carbon Removal Partners and to Adam Sipthorpe & Hannes Junginger at Carbonfuture. 🔗 Link in comments. 📍If you're at WEF in January & working on financing climate infrastructure, let’s connect. #CarbonRemoval #ClimateFinance #CDR #NetZero #WEF2026

✋ Carbon Contracts for Difference (CCfDs) are policy instruments modeled on traditional Contracts for Difference, but linked to the carbon price instead of the electricity price. ✋They guarantee a fixed "strike price" for abated CO₂ emissions. If the carbon price is lower, the government pays the difference; if higher, the developer pays back. ✋The mechanism mitigates revenue risk for low-carbon projects that don't emit CO₂ but compete in carbon-affected markets. A new paper "Carbon contracts for difference design: Managing carbon price risk in a low-carbon industry" was published in the academic journal Joule 👉 The paper explores Carbon Contracts for Difference (CCfDs) as a tool to manage carbon price risk in hard-to-abate industrial sectors (like steel, cement, and chemicals) that are crucial for decarbonization as these projects often depend on unproven, capital-intensive technologies (e.g. green hydrogen, CCS) and face significant financial risk. 👉 Design Challenges: 1️⃣ Benchmark selection: Key to determining payouts; if poorly chosen, carbon price risk remains. 2️⃣ Fluctuating price-setters: Actual market conditions may diverge from the benchmark over time. 3️⃣ Reverse payments risk: If carbon-neutral tech sets the market price, CCfD beneficiaries may owe money. 👉 Policy Considerations: 1️⃣ Avoid covering OPEX unless justified—could reduce market efficiency. 2️⃣Use reduction factors and termination clauses to manage long-term risk. 3️⃣Complement CCfDs with tools like PPAs; tailor design per sector. 4️⃣ More quantitative research needed on risk magnitude and effective hedging. 👉 Full paper attached. 👏 Well done Authors: Alexander Hoogsteyn Kenneth Bruninx Erik Delarue 

Carbon Reduction with your BAS? Low-cost building automation strategies can play a significant role in achieving carbon reduction goals by optimizing energy use, improving operational efficiency, and reducing waste. Here are some strategies that can be implemented to help reduce carbon emissions without significant capital investments: Energy Monitoring and Benchmarking: Implement a basic energy monitoring system to track and benchmark energy use across the building. Many energy management systems can be integrated with BAS for minimal cost. Identifies areas of excessive energy consumption, allowing for targeted improvements, reducing waste and carbon emissions. Optimized HVAC Schedules: Use BAS to automate HVAC schedules based on occupancy, seasonality, and operational needs. Turn off or reduce HVAC operations during unoccupied hours or in unused spaces. Reduces energy consumption and emissions from heating, ventilation, and cooling systems. Setpoint Optimization: Adjust temperature setpoints slightly (e.g., increasing cooling setpoints or reducing heating setpoints) within comfortable ranges. Small setpoint changes can lead to significant energy savings over time, reducing carbon emissions from HVAC systems. Demand-Controlled Ventilation (DCV): Integrate sensors that measure CO2 levels in spaces to control ventilation rates dynamically, providing fresh air only when needed based on occupancy. Reduces the energy required for ventilation, cutting down on unnecessary heating or cooling of outdoor air. Lighting Control Systems: Install automated lighting controls (e.g., motion sensors, daylight harvesting) and integrate them with the building automation system to optimize lighting use. Reduced lighting energy consumption translates directly to lower electricity use and carbon emissions. Variable Frequency Drives (VFDs) for Motors: Add VFDs to fans, pumps, and other motor-driven systems, allowing their speed to adjust based on demand rather than running at full capacity. VFDs reduce energy consumption by matching motor speed to actual demand, reducing energy waste and carbon output. Continuous Commissioning: Use BAS data to continuously monitor building systems and performance. Identify inefficiencies and make ongoing adjustments to optimize energy use. Ensures systems are running efficiently, preventing energy waste and emissions over time. Free Cooling (Economizers), Ensure that economizers are properly maintained and optimized to use outside air for cooling when outdoor conditions are favorable. Reduces the need for mechanical cooling, saving energy and cutting emissions. Remote Monitoring and Management: Use remote monitoring and automation tools to adjust system settings and identify energy-saving opportunities without requiring onsite personnel. Allows for better oversight and proactive adjustments, avoiding wasted energy and unnecessary emissions. These strategies, when combined with an ongoing commitment to energy

The Concrete industry (Driven by cement production) accounts for ~7-8% of global CO₂ emissions. The pathway to Net Zero in this sector is capital intensive, complex and infrastructure dependent. It requires long-term investment, policy alignment and institutional support. But progress does not begin only with multi-billion-dollar projects. There are commercially rational levers available today that deliver measurable emissions reduction while strengthening margins: • Savings in Cement & Binders (SCMs) – lower clinker content, lower emissions, cost positive over time. But requiring strategic networks and commercial partnerships. • Efficiency in Concrete Production – mix optimisation and reduced overdesign with immediate material savings - should be standard practice. • Efficiency in Design & Construction – smarter structural design that reduces embodied carbon at source. Massive potential to save here but requiring modernisation of construction standards. These are meaningful contributors to 2050 abatement. They are low capex, operationally achievable and financially healthy practices to achieve a considerable proportion of the target abatement. Decarbonisation in this sector will be delivered through structured roadmaps ,staged investment, portfolio thinking and disciplined capital allocation. The leaders will move on both fronts: strategic long-term infrastructure and decisive short-term gains. #NetZero #Cement #Concrete #IndustrialDecarbonisation #Infrastructure #Sustainability

Most energy transition projects that fail to progress beyond capital allocation have one thing in common. They do not have clear stage gates, and both risk and commercial viability remain unclear to owners and lenders. In the Middle East and Europe, pressure is mounting to deliver renewables at scale with measurable short-term value. As part of my end‑of‑year energy transition playbook, I am sharing an example of a four‑step process that links technical, commercial and procurement decisions directly to investment milestones. Effective capital allocation depends on three actions: 🔹 Run system studies early, validating demand, power and costs before any FEED spend. 🔹Stress‑test dispatchability and tariffs, matching supply scenarios to contract structures and finance models to secure bankable offtake. 🔹Apply risk filters from day one, mapping mitigation measures and confirming business model fit before procurement commitments. This sequence connects capital with accountability. Time, cost and risk each have a checkpoint, reducing the chance of overruns and stalled decisions. Key takeaways: ▪️ Link early planning to bankability. ▪️Use clear gates for faster approvals and lower risk. ▪️Align commercial terms with operational readiness. How are you ensuring capital stays aligned with delivery risk in your energy transition strategy? #CapitalStrategy #EnergyTransition #ProjectFinance #RenewableEnergy #MiddleEast

Super fun to be back on campus at Columbia Business School to guest lecture in Gernot Wagner ’s Climate + Business class. Great to see the demand of so many b-school students interested in climate, finance and investing. We dove into the current investing environment for climate + energy tech - one that demands sharper discipline, increased emphasis on commercialization and a clearer path to scale. A few highlights from our discussion:  1️⃣ Fundraising is tough—but strategic capital is flowing 💰 Venture slowdown has hit climate tech, but funding is still available for high growth companies with market traction + clear commercialization plans. 2️⃣ Capital efficiency is king ⚖️ Investors are focused on leaner burn rates, realistic revenue milestones, and stronger unit economics before committing capital. Securing non-dilutive funding (gov’t grants, project finance, infrastructure funds) for capital intensive business is a critical step. Founders need to be prepared to unlock capital to scale and limit too much equity dilution. 3️⃣ Unit economics need to work—no more ‘subsidy dependence’ 📊 Climate tech must compete without relying solely on subsidies. Investors are pushing for cost curves to come down quickly via economies of scale, process innovation, and vertical integration. Business models that depend purely on policy incentives without a competitive long-term cost structure are struggling to raise. 4️⃣ Scale is no longer an afterthought—it’s the main event 🌍 Investors care less about cool tech pilots and more about proven pathways to gigaton-scale impact + commercial scale. The winners in climate tech will be those who master supply chains, deployment models, and customer adoption. 5️⃣ Entry Valuations, Moats + Exits: While the perception is that capital-light business models are easier to scale, you have to be judicious on entry valuations given the amount of capital chasing AI + software in climate tech. Still a lot to be done in hardware / deeptech and those sectors don’t necessarily mean lower margins + can often have stronger differentiation / deeper moats than software. But, with limited exits in the space, investors are focused on fundamentals. 🚀 The bottom line: The next phase of growth for climate + energy tech investing is about disciplined bets on scalable solutions with strong unit economics and clear commercialization roadmaps. #Climate #EnergyTech #VentureCapital #ColumbiaBusinessSchool #Sustainability #ClimateInvesting #Innovation 

Last month, I sat down with a senior director at one of the UK’s largest institutional banks. What he told me flipped the script on everything developers think they know about money. Most are selling the same tired story: • Strong yield • Low risk • Predictable upside Then wonder why the money’s not moving. But behind closed doors - One of the UK’s most experienced banking execs told me something every developer needs to hear. He leaned in and said: “We’ve got billions sitting on the sidelines - not because we lack capital, but because we lack conviction in the deals we’re seeing.” I asked him to clarify. “We’re bored. Another 7 percent IRR? Another copy-paste resi box? There’s no soul. No story. No relevance. We’re not backing spreadsheets anymore. We’re backing vision.” That’s when it hit me: There is no capital shortage today. There’s a shortage of meaningful projects worth backing. THE SMART MONEY ISN’T CHASING YIELD. IT’S HUNTING PURPOSE. And it’s not only one institution. • Family offices are shifting to mission-led portfolios • PE funds are filtering for human impact • Institutions are rebalancing portfolios for ESG mandates Return on Investment (ROI) still matters. Of course it does. But the new benchmark? Return on Purpose (ROP). ⸻ WHAT THIS MEANS FOR YOU If you want access to top-tier capital, your project must pass the Purpose Filter: ⸻ 1. Human-Centred Design Does your asset elevate quality of life, or just house people? • Natural light, airflow, wellness-driven layouts • Health-conscious architecture • Thoughtful spatial flow Why it matters: Purpose-led assets attract stronger tenants, build loyalty, and stay full longer. Anything less is just space for rent. ⸻ 2. Regenerative Economics Is your project designed to give more than it takes? • Net-zero or energy-positive design • Low-carbon materials • Durability over disposability Why it matters: If your asset isn’t future-ready in the next 5 years - You’ll get priced out of every serious capital conversation. ⸻ 3. Longevity and Legacy Will this still be desirable in 20 years? • Timeless design, multi-generational use • Enduring materials • Cultural relevance Why it matters: Smart capital funds forever assets, not trends. If your project fades with fashion, it fails the test. ⸻ 4. Local and Economic Relevance Is your project solving a real problem in a real place? • Place-based regeneration • Contribution, not gentrification • Community identity embedded in the design Why it matters: Investors are done with tick-box ESG. If the community wouldn’t fight to keep your project, neither will the capital. ⸻ THE BOTTOM LINE If your pitch still starts with a returns table… If your asset lacks story, soul, or substance… You’re already getting filtered out. Because while most are still chasing capital… Capital is chasing purpose. And in this new real estate cycle? Projects without it won’t only underperform. They’ll never get built.