Embracing Incremental and Radical Innovation for a Fair and Sustainable World

“Keep looking for doors that create more impact and that will lead you to a very fulfilling journey.”

Janice Tran, Co-Founder & CEO of Kanin Energy 

The Columbia Climate School students know how to bring people together to enable what we need to do. We need to tackle climate change now.  For new ventures, urgent environmental sustainability needs are more than a societal debt.  They represent a massive business opportunity for incremental and radical solutions.  

I was pleased to moderate a panel at Columbia’s 11th Annual Climate Symposium consisting of Janice Tran(Co-Founder & CEO of Kanin Energy), Dr. Sarah Qureshi (Founder & CEO of Aero Engine Craft), Sylvain Massot (Founder & CFO of Impaakt), and Arne Halleraker (Partner of FJ Labs).  Our topic was how new ventures envision and shape a fair and sustainable world.  The panelists addressed climate impact solutions on the ground, in the air, in measuring impact, and related the investor’s perspective of those solutions. 

The climate crisis has made daily headlines with extreme heat, drought, fires, and floods affecting communities across the globe.  An area of deep interest and opportunity is carbon reduction and removal.  Key to this is accurate measurement and reporting of carbon emissions and of decarbonization solutions.  There are issues of scalability and cost.  Some solutions rely on customers spending to remove something, versus to gain something.  This is a good transition to our first panelist’s solution.

Panelist One: Solutions for Waste Heat.  Janice Tran is Co-Founder and CEO of Kanin Energy.  Kanin Energy is a Calgary based development company that transforms industrial waste heat into emission-free power with no capital needed from host facilities.  Kanin enables clients to monetize their waste heat without the investment and the hassle of undertaking the projects themselves.

I asked Janice, a Columbia alumna with a master’s of science with sustainability management, how she and her team came up with this solution.  It was a full circle moment for Janice who attended this conference when she was a Columbia student.

Why did Kanin choose to focus on waste heat to power?  

“It was the intersection of a lot of different problems in implementing sustainable solutions.  When you look at the grid, it is really great that there is a lot of solar and wind now coming on to the grid.  But this is an intermittent resource.  To get to that next level of marginal impact, we need to start looking at baseload solutions that can really take off peaking plants or even replace coal and gas.  We saw that this resource of waste heat, which is normally just emitted into the atmosphere as a biproduct of industrial processes, can be turned into clean, emission free, baseload power.  We can either put that into the grid or sell that behind the meter.

We looked at many of the most polluting companies out there that are looking to decarbonize.  They need these steps to get there.  Everyone is looking at carbon capture.  Everyone is looking at hydrogen.  There are a lot of different technologies that can just decrease their emissions today with available technology that can get them marginally closer to taking those big steps.  We want to help them see those projects and implement them.  That is why we sell waste heat to power, which has been widely deployed in Europe and other parts of the world, to find business model solutions to accelerate the adoption in North America.”

What have been the biggest pain points you have observed in the waste heat to energy business?

“We work with cement, steel, and oil and gas companies.  There is a resistance to do anything.  Now, there is no price on carbon in the US.  Some [companies] are really seeing the business opportunity to get ahead of the curve and are looking at ways to increase their bottom line and see this as a core strength.

The reality is that doing nothing is still viable or partially viable.  That is our biggest roadblock right now.”

Despite the challenges, the opportunity to cut carbon emissions is huge across multiple verticals including cement, natural gas, iron/steel, and biomass.

Panelist Two- Solutions for Waste in the Air:  Next on the panel was Dr. Sarah Qureshi, Founder & CEO of Aero Engine Craft and Ambassador to the Solar Impulse Foundation.  Dr. Qureshi is not only a pioneer in aviation technology, she is also an acrobatic aviator.  Her contribution to climate solutions is radical.  

Please tell us about your big step climate impact solution and the related obstacles and opportunities.

“Mine is a disruptive technology developing a contrail free jet engine.

We all share the same sky and whatever happens there affects everybody.  When you talk about pollution or global warming on the ground, it is regionalized and the various governments intervene.  In the sky, there is only one contributor.  There is only one industry operating there which is the aviation industry. 

There are two distinct types of contributors, the carbon emissions and the non-carbon emissions.  In contrast, on the ground we have only carbon emissions.  What I am working on is basically non-carbon emissions.  The most abundant carbon emission is contrails.  Contrail is the shortened form of condensation trail, the white “smoke” you see behind an aircraft.  This is basically frozen water vapor that is a byproduct of any hydrocarbon fuel combustion (carbon dioxide and water vapor).  On the ground, the water is recycled under atmospheric conditions.  But in the air, it behaves like greenhouse gas.  So, we have two greenhouse gases contributing to global warming in the sky compared to one contributing on the earth.

In that context, we developed a technology (which was part of my research question during my PhD) to mitigate contrails, the non-carbon emissions, within a turbo machine or with an add-on product to a standard engine that processes waste emissions and converts the water vapor content into liquid water.  In this way, we eliminate the source of contrails in the sky.

Contrails are contributing five times more to global warming in the sky as compared to carbon dioxide.  We are global first movers in the technology when it comes to commercializing the product and working on it as a company.  It is disruptive in terms of the technology itself when you talk about aircraft and aircraft engines, and in terms of the operations because we are creating liquid water in the process of eliminating contrails which can be released as rainfall close to the ground when the airplane is landing.  

This is the definition of radical technology.

The challenges are numerous getting into the market with something so disruptive.  Not doing anything, like Janice mentioned, always remains an option.  Aviation is the only industry that has been exempt from [this type of environmental] regulation, even the shipping industry is now under emissions regulations.

We need to work on regulation for emissions in the sky.  So far, all the work has been focused on carbon dioxide and there is very limited focus on non-carbon emissions or on contrails.  The reason is that the emission of carbon dioxide is spread over a spectrum of industries on the ground.  So, the knowledge around it and the awareness is very widespread.  There are a number of mitigating technologies and some can be transported to the air.  But when you talk about contrails, which is a phenomenon very specific to the aviation industry and to the sky, it is mostly invisible to us when we are on the ground.  It is ignored and knowledge intensive.  It is only the aviation industry which is aware of the problem. Because the industry is also very monopolized and controlled, they can choose whether they want to bring it to the table or not.

So, we are working #1 on developing the technology itself and, secondly, on providing it as a backup for regulation on waste emissions.  To pass the regulation, you always need a technology back up because not flying is not an option.  There needs to be an alternative.”

Opportunities for students, researchers, and faculty related to the Solar Impulse Foundation.

The Solar Impulse Foundation is a global aggregator of business initiatives in the climate impact/environmental sustainability space.  It is a budding marketplace of those who have solutions and those who are seeking them from a useability and investibility standpoint.  Dr. Qureshi serves as an ambassador to this foundation.

“What I do for the Solar Impulse Foundation is mostly incremental technology focused on energy, a few [proposed solutions are] in the aerospace domain on sustainable fuel.  We need more solutions in the air as well.

The Solar Impulse Foundation initially started with a target of identifying and labeling one-thousand green solutions for the world.  Anyone can submit a solution and that is evaluated on the basis of its technological viability, scalability, economic viability, and environmental capacity.  Then they label and qualify the solution (like a peer review) in the subject domain focused on the green/sustainability objective.  They are placed into a publicly accessible database classified by subject area and can serve as very good case studies for the solution itself and its implementation [to replace mainstream non-sustainable solutions].” 

Panelist Three- Solutions to Measure Impact:  Silvain Massot is the Founder and CFO of Impaakt.  Impaakt provides tools and services for investors and asset managers to evaluate ESG impact differently with a solution that is inclusive and mitigates against greenwashing.

How is the Impaakt solution different from existing ESG rating solutions for investors?

“Impaakt is a web platform accessible to the public that you can go to for searching information or to become a contributor.  Impaakt, unlike the traditional approaches, relies on collective intelligence to assess the positive or negative impact of companies.  The companies described are the large listed companies.  They are considered the biggest economic players.  They have a big part to play in the transition towards a better economy and we need to make these companies accountable.  

The issue we have today with the so-called ESG [ratings] is that we are looking at the practices of the companies.  This is an issue because the companies may have good policies in place, a good reputation, and good intentions.  But is this really going to move the needle to change the world?  

I come from the world of finance.  I have been an asset manager for many years.  When I look at existing tools, I struggle a bit when the tools tell me that it is better to invest in a large tobacco company rather than investing in Pfizer.  It is nothing wrong with the assessment tool.  It is just based on the practices of the company. 

What we need to do if we really want to transform the world is to look at the impact the company has on the planet and society.

This is not what the existing players are measuring.  Looking at the practices of the companies, everyone is reporting on the practices so it is relatively standardized.  When you look at the impact, plastic pollution, child labor, so on and so forth, there are many metrics but we like to say today that it is actually a jungle.  It is a jungle because the data is not at all standardized.  It is not at all structured.  We had to come up with something different.

[The solution] had to go beyond the edges, to go beyond the measurements of the practices of the companies.  [It needed] to be able to address this big jungle which is why we decided to train a large community.  We spoke to hundreds of thousands of people.  We have today a community of about fifty-thousand members, contributors who are going to help us assess the impact on the many dimensions there are for each of the companies.  [This means] writing, analysis, then doing ratings.

This is very different.  To the best of our knowledge, we are the only one to have this idea to go after something quite complex, relative intelligence, and which works only with good safeguards in place.” 

What are the additional challenges to solving this problem of impact assessment?

“[Our] customers are you and me as consumers, you and me as potential employees, and the primary target investors.  In a portfolio, whether it is a mutual fund or pension fund, people don’t know where to start when assessing the impact because it is totally unregulated, data is unstructured and not standardized.  What we are doing at Impaakt is curating this data and organizing it so that people can identify all of the important impact things which are relevant for the different industries.  Secondly, we address with collective intelligence who is going to decide whether the negative impact- like Nestle’s plastic pollution- is more or less important related to the mission of Nestle which is feeding the planet.”   

Judging the materiality of the impact.

“The materiality of the different impacts is something that people are struggling with…  What usually happens is that you have one expert, whether in NY or in Geneva, who is going to arbitrarily decide that this impact is more important…  With collective intelligence, at least we can offer the view of the civil society.  It is an evolving view which can change over time as we have seen with Covid, as we have seen with the situation in the Ukraine, where at a given point in time all the impacts are not assessing in the same way.  Assessing the materiality of the different impacts is quite critical which is not properly done yet.”

Panelist Four- An Investor’s Perspective:  Arne Halleraker, Partner at FJ Labs.  FJ Labs in a NYC based venture capital firm founded by serial entrepreneurs (turned angel investors) with a marketplace focus.  They make over one hundred investments annually with a 1-2 week decision turnaround.

What is your approach for identifying climate impact/environmental sustainability opportunities?  Please comment on your view of incremental versus big step impact business opportunities.

“We are a VC firm which means we are looking for businesses which we think have a compelling business opportunity that can create value for society and, as a result, financial return for our investors.  What Dr. Qureshi mentioned earlier with respect to healthy business models that make these efforts sustainable and viable over the long term is something that we care a lot about.  The company was started by two serial entrepreneurs that started building companies in the 90s.  Since the beginning, the focus has been on marketplace business models which typically have been focused on reusables… If you look at the used category, it is typically 3-10 times bigger than what you see in primary sales.  It is one of the first models that was moved online.  You start with the horizontal classifieds like Craigslist, and then you have the marketplaces for houses, cars, jobs, etc.  These have been fragmented more and more over the years. 

Since the very beginning, our focus has been on the circular economy.  We have 100+ portfolio companies that fit into that circular theme.  Regarding incremental versus big steps, all of these are very incremental.  They make it easier for people to choose to reuse instead of buying new.  The more people that choose to make that decision, because it is economical for them and they feel better about it, the better the impact is on the [circular] economy for those decisions.  It may not be as sexy as Tesla, or something else that completely changes the way we operate, but it is something that we can do quickly that will have a big impact.

Because we care about the healthy viable business models, it has always been important to us to look at when the incentives actually make it possible to introduce real change.  A lot of the things that we are now seeing reaching a tipping point, if you look at solar for instance, for a long time solar was much more expensive than going with other energy solutions.  Because of the continuous improvement in tech, the energy density of solar panels has continued to go up.  Now Solar in many places, probably most places, is actually more efficient and cheaper than grid power (in addition to all the other incentives that come with it).  To Janice’s point, it fluctuates a lot so it doesn’t solve all of your energy needs.  You need to deal with storage solutions, etc.

The financial incentives matter a lot for us when we look at businesses.  What is very exciting now is that the world has woken up to how big the problems are that we are going to be facing if we don’t deal with these things forcefully now.  Financial incentives introduced across the board make it more and more compelling to invest more capital to try to figure out the big step change solutions in addition to the incremental solutions that we have been investing in for decades.”

What is the most important thing we can do to drive success in sustainability?

“The biggest thing we can do is measurements.  We are obsessed with companies and company building.  One of the biggest mantras in building a company is what you measure gets managed.  If you are not measuring something, if you are not following the right KPIs, if you are following vanity metrics and try to present numbers to investors that make you feel and look good but do not actually drive your business in the right direction, you are going to end up wasting a lot of resources and you are not going to hit your goal.

The most important thing you can do is to make sure that at every level (in every industry and type of company) impact is measured on all supply chains from start to finish, from cradle to grave.  

Once we actually understand those impacts, we can understand where we have the most leverage to make big impacts quickly.  Data and measurement is definitely the biggest thing to get right quickly.”

Student Question: What advice do you have for students looking to start a social venture?

Janice Tran, Co-Founder & CEO of Kanin Energy, responded:  

“The first step is just to do it.  It is a very different decision if you are on a completely different path than your friends.  It is going to be perceived as riskier.  I don’t know if it is actually riskier but it is going to be perceived as riskier.

Once you are in the moment dealing with big issues, small issues, and all of those micro decisions and are resourceful, you can do it.  Just have faith that you will figure it out.  Just take the step.  If it doesn’t work out, assuming you are a Columbia student here, you will be fine.  You can always go back to school.”

Arne Halleraker, Partner at FJ Labs, added:  

“I would underline that.  The downside risk of starting a venture is actually much smaller than people perceive it to be.  The experience you get from setting up an organization, figuring out all the legal things, all the financial things, hiring people, selling, and raising capital… all the skills that you learn in the process will serve you incredibly well in whatever you choose to do next.  There are so many employers out there who value the drive and this experience that you have gotten from going though that.  Even if your venture doesn’t work, even if it goes nowhere, I think your resume is going to look very attractive to a lot of employers out there.  You will feel at home there with an innovator’s perspective.  So, I don’t really think there is a lot of downside for people in your shoes to start companies.”

Student Question for Janice Tran:  What was your journey from Columbia student to Co-Founder & CEO of Kanin Energy.

It wasn’t a straight path… what drove me was getting the real skills that you need to contribute to the sector.  When you are doing a task, don’t just do the task, really understand the fundamentals and skills behind it.  Bring that to your next job… Keep looking for doors that create more impact and that will lead you to a very fulfilling journey.”

Student Question for Dr. Qureshi, Founder & CEO of Aero Engine Craft, on being a woman and Pakistan based founder in the aviation industry and innovation ecosystem.

“For me the challenges of the technology itself has always been very overwhelming when you look at all of the challenges. When you talk about sustainability, global warming, or pollution on the ground, we have a lot of offsets.  A very simple example is we can grow trees.  You cannot do that in the sky.  So whatever needs to be done, that tech has to be on the plane and on the engine.  Then you have very stringent regulations for certification, for airworthiness, and for safety.

All of these make it a very complex problem for getting the technology right.  And as I mentioned, the industry is very monopolized.  There are a few major players and the knowledge is very specific to the industry… The result is less clarity by funding bodies, by regulators, and by the governments.  These are the challenges.

As a company in the aerospace domain in Pakistan, yes, there are challenges.  Most of the industry lies either in the defense domain which is classified or the airline operations.  So, when you talk about R&D and introducing a very radical product into the global aviation industry… there is a lack of ecosystem.  There is not much civil aerospace and we don’t have an ecosystem around it.  You really have to explain the problem in depth, actually pitch it.”

Student Question for Sylvain, Founder & CFO of Impaakt:  What were your strategies for funding your two startups in two different sectors and what advice would you give young entrepreneurs?

In addition to Impaakt (a for profit social enterprise), Sylvain started Fondation ReBin (a nonprofit foundation) that focuses on turning organic waste from the local population in Africa into useful products.

“There is a lot in common in the way we decided to approach fundraising for these two different ventures. My recommendation would be to start with a credible business plan.  A credible business plan is something that is sufficiently ambitious to make people dream but not too crazy to make you appear as a complete daydreamer… We have been blessed and lucky to find the right investors.  You need to find the right investors that are not just going to bring money for one round… The perfect investor is the one who can be patient and accompany along the journey.

You have to be transparent.  You have to be very honest with your investors [about] what you are doing well, what you are doing not so well.  When you hit roadblocks, communicate a lot with these investors.”

These are great words of advice.

We are deeply appreciative of all of our panelists for sharing their insights and experiences with our Columbia extended community!  Thank you to all the students of the Sustainability Management Student Association (SUMASA) who put on the 11th Climate Symposium.  A special thanks to the Symposium Co-Chairs Sophie van Berchem and Alexandra Bagnasco and the rest of the SUMASA board members Alan Chen, Yoni Ronn, Natalie Freeman, Celine Leroudier, Ester Fernandes, and Ivy Mbayah.  Thank you as well to my panel facilitator Shubhi Kesarwani.  Bravo!