“Disruptive and positive change is reshaping global sectors and markets, but to stay competitive and drive long-term profitability, we must invest strategically in climate smart innovations today”, says D’Anne Hurd, independent board member, mutual fund trustee, SEC Audit Committee Financial Expert and climate and biodiversity advocate.
D’Anne also sits on the Climate Advisory Council of our US Chapter (NACD)
“In this uncertain and ever-changing world, we face multiple economic and climate-related challenges that need clever, effective and long-term solutions. For business, these largely lie in achieving greater efficiency across products and services, which in turn, requires thorough analysis followed by thoughtful, strategic investment.”
Innovation is the catalyst to positive change and investing in it is critical
As Climate Week NYC begins this week, it serves as a glaring reminder for businesses, no matter where they are in the world, to identify opportunities, pinpoint any obstacles to be overcome, and discover where is best to invest to have optimal impact.
First, it is vital to understand who and what is driving the transition to a sustainable economy. Behind the transition there are many drivers, but three of the key ones include:
- Changing technology
- Consumer preferences
- Societal changes
Together, these drivers are galvanizing the critical structural changes within the global economy that are disrupting entire industries and radically changing business models.
Use technological advancements for business advantage
To accelerate the pace of positive change, secure sustainable growth and shore up business sector resilience, greater efficiency is needed across every sector. Tech-based approaches and solutions are, and will continue to be, at the heart of this fast-paced transformation: they have proved to be one of the most effective ways to address the climate challenges facing us and to meet our evolving demand, particularly when it comes to energy.
We need only look at how increased mobile internet connectivity, the adoption of EV vehicles and precision agriculture have respectively transformed the technology, transportation and farming sectors over the last decade. Recent advancements in internet connectivity in rural areas have been transformative, enabling communities to access essential services and opportunities. Technological advances in EV vehicles have driven the price down, making them an accessible choice for consumers. And technologies such as GPS enable today’s farmers to precisely target where additional water, fertilizer and seed is needed in their fields – rather than just blanket application.
Evolving consumer preferences
When it comes to clean power in particular, market demand has been rising, and customers’ expectations have significantly evolved: they want the best product at the best price. An interesting example of where we have seen this is the electrification of the economy and decarbonisation of grids in the US; an endeavour that presents a range of investment opportunities. To meet national climate targets in the US, investment would need to double to more than 600bn USD by 20301. This would in turn give way to lower energy prices, improved energy security and reduced greenhouse gas (GHG) emissions. This signals a win for business, consumers and the planet.
A change in societal norms
The transition to a more sustainable society involves societal changes such as a move away from owning more tangible goods. This is especially evident in the retail clothing sector where a circular economy rewards consumers who recycle their clothes. Another example is the rise of the sharing economy where everything from clothes (Rent the Runway) to cars (Uber) to homes (VRBO) are being shared and reused. Businesses have the opportunity to both instigate and respond to such societal changes, harnessing their potential to better facilitate the transition to a more sustainable society.
Finding solutions in transformative tech
Returning to the topic of technological advancement, investment in innovation is not only critical to realising a sustainable economy, but also the smart business choice. Responding to increasing regulation, consumer demand and economic logic, global markets increasingly favour zero-carbon and resource- and energy-efficient models that are based on clean technologies, renewable energy, and sustainable infrastructure.
Investors backing these propositions are positioning themselves at the forefront of long-term value creation. For investors, accelerating the transition isn’t solely about impact—it’s also about securing future profitability in a rapidly evolving economic landscape.
AI inference has been key to this, especially in the case of industrial software companies that use such tech to manage product lifecycles, implement computer-aided design and oversee high-level logistics.
This use of tech is streamlining operations by analysing big data and automating workflows. What’s more, with time, these AI-based technologies have become more affordable, enabling wider adoption that helps drive innovation further still. But data centers fuelled by AI use one of our scarcest resources: water. Opportunities exist here for investors to seek out companies producing products and systems that address this possible future shortage.
The transition to renewable energy is also pushing climate tech companies to develop long-duration energy storage solutions that go beyond traditional battery technology. Energy storage start-ups are now at the forefront of enabling a renewable energy grid that can handle fluctuations in solar and wind energy.
Focused investment
Adopting a longer-term view is essential for longer-term financial stability. By targeting greater efficiency in products and services, and creating opportunities for innovative companies, investments can yield cleaner and better risk-adjusted returns.
The transition to a more sustainable global economy is already underway, but investors and businesses must continue to focus on future-forward, tech-driven transformations that will keep accelerating wide-ranging, positive change to protect their company’s future success.
Learn more about how innovation and smart investment must be at the heart of global climate action at this year’s Climate Week NYC in New York, 21-28 September 2025. D’Anne is a panellist at a special closed-door session titled “Boardroom Ready: Climate and Nature as a Performance Strategy,” hosted by Deloitte during Climate Week specifically for boards.
Disclaimer: D’Anne Hurd is an Independent Trustee of Impax Funds, a family of mutual funds focused on the risks and opportunities arising from the transition to a more sustainable global economy. The views in this article are hers only and do not necessarily represent the views of the funds or its Advisor.
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