Climate action fades as companies pivot to risk and resilience
The majority of start-ups avoided using words related to climate in pitching to investors at the progressive annual South by Southwest tech, film, music and arts event, as even green-related company founders have adjusted to the political backdrop.
The pitch competition at the SXSW event held in Austin, Texas, has collectively raised more than $22bn since 2009, and this year featured 45 companies in nine categories presented to industry experts, venture capital and angel investors.
The pitches were reframed as performance, resilience and risk management, rather than addressing climate action, with 70 per cent of sustainability-related start-ups avoiding activist or 'values forward' framing, said Chris Valentine, the SXSW pitch event producer.
Just 18 per cent of companies referenced sustainability and greenhouse gas emissions, although many more implied it through language about infrastructure, resilience, efficiency or waste reduction.
"The landscape that we're living in now has changed so certain kinds of words or terminologies need to look a bit differently to exist," Valentine said. "Sustainability and climate doesn't have the same type of strength that it had previously."
John Khazraee, founder of water monitoring start-up MayimFlow, aimed at data centres and using AI, participated in the SXSW pitch event and said the language shift towards risk management reflected 'reality'.
"When I talk to a CFO [chief financial officer] or a data centre operator, they're not asking me about my environmental mission. They're asking what it costs when a pipe bursts and a server goes down," he said. "The risk management language matches how decisions actually get made."
The shift comes despite the wider SXSW event remaining a draw for those linked to climate change activism, with celebrity attendees this year including California governor Gavin Newsom and actress Jane Fonda.
But climate action in the US has suffered since President Donald Trump described global warming as a 'hoax', withdrew from the Paris Agreement and attacked renewable energy. Republican politicians have also targeted companies that prioritise the environment, with a group of 'red state' attorneys-general taking legal action against investors such as BlackRock, State Street and Vanguard over claims they colluded to reduce financing for coal mining.
Large US companies last year largely maintained their climate plans, but reduced their messaging about it. S&P Global reported that companies said they would take a more 'risk-averse' approach to sustainability efforts this year.
Some 42 per cent of companies had disclosed a climate adaptation plan on how they would handle risks to physical assets, infrastructure and business.
Bryan Stubbs, chief executive of Cleveland Water Alliance and a judge at the SXSW event, said the pitches this year were more professional and the technologies more mature. He noticed the change in language for founders of companies that were related to the climate and welcomed the shift.
"If you walk in saying I'm going to save the world, you've just lost 90 per cent of your potential investors," Stubbs said. "The investor wants to know if they're going to get a [return on their investment]."
