This is the 50th annual meeting
of the World Economic Forum in Davos, Switzerland,
and sustainability is leading the agenda.
Environmental issues represent the top five
long-term risks in this year's WEF risks survey
for the first time in its 15 years.
Larry Fink, CEO of BlackRock, recently announced
that his company will drop investments
that face high sustainability-related risks.
And other investment firms are
adding a temperature score to their portfolios,
an estimate of an asset's environmental impact.
Doing less harm is an important first step,
but it will take proactive, solution-driven investments
to really make an impact.
I'm here with Ibrahim AlHusseini,
the founder and CEO of FullCycle, an investment firm
focused on climate-restoring technologies.
So tell me about your fund, FullCycle.
I started FullCycle with my partners
to address an area in climate change
that few are paying attention to,
which are short-lived climate pollutants.
So much concentration goes on CO2,
which is a potent greenhouse gas,
but there are many other greenhouse gases
that are much more potent, like methane, hydrofluorocarbons.
These gases are hundreds, if not thousands,
of times more heat-trapping than CO2,
and eventually they break down into CO2 anyway.
So by getting rid of them, we're addressing,
let's call it the lowest-hanging fruit
in the climate crisis.
So, how do you tackle
these short-term climate pollutants?
Waste is a massive contributor
to methane emissions in the world.
So what do we want to do with methane?
So, garbage is a resource.
We should not be burying it in the ground anyway.
We live on a resource-constrained planet,
so extracting fossil fuels, producing all this packaging,
cutting down trees, making paper,
all the food scraps that took so much to transport,
to eat, to cook, to prepare, to do all of this with -
when we're done with it, this is a resource.
We should not be digging another hole in the ground
and burying it in it. We should be using it for something.
So now, we have technologies that allow us
to take all of this waste and turn it into value.
And this is an investment
that you have in your portfolio?
This is a company called Synova
that is using a technology developed in the Netherlands,
by the Energy Centre of the Netherlands,
that's now called TNO.
It allows us to take commercial waste,
municipal waste, industrial waste,
anything that is not inert, and turn it into
what we call a product gas
that can be used to produce energy,
that can be used to produce plastics,
that can produce biofuels, and we can do it at economics
that work as much for Jakarta and Mumbai
as it does for Berlin and San Francisco.
So it's not just a vanity project
that we can feel good about, it's actually a solution
to transform our relationship to waste.
And our goal at FullCycle is to close all landfills
in all nations in our lifetime.
But this is actually happening right now.
So, this is happening in four different countries,
but again, on commercial uses, for industrial uses,
less for residential.
You know, eventually we will move into residential,
but we wanted to address commercial and industrial first.
And as we know, in order to get people
to care about stuff like this
and to promote technologies like this,
it's very helpful if it can be profitable.
Can you make money investing
in a company like this, and how?
Reversing the climate crisis is going to take
aggregating a lot of capital,
and we're not going to aggregate a lot of capital
just because of ideological alignment.
People, you always win if you bet
on people's self-interest, and that means profit.
So we specifically focus on the nexus
between a gigaton of carbon equivalent or carbon abatement
and a minimum of 14, so double-digit, IRRs
on infrastructure project level,
and the ability to have long-term exclusivity
on pre-existing terms with these companies
so we can expedite the rollout
of their technology worldwide.
Because we're not a venture firm.
We actually don't believe the venture model
works to combat climate change,
because venture means investing in early-stage companies,
and we don't have that kind of time frame.
So we specifically focus on market-ready technologies
and created a model that specifically accelerates
the deployment of their tech so we can quickly transition
from this current high-carbon economy that we live in
that is causing all the chaos that it's causing,
to a low-carbon economy that's more harmonious
and sustainable with the biosphere
that we live and rely on.
And there was a lot of subsidizing of like,
when solar was coming around,
and that was drawing a lot of investment dollars in.
Is there anything like that
that is helping promote investment dollars,
or that's giving these more of a lopsided return?
So, not for us. We've now identified, for example,
Canada's giving incentives for R&G production,
so we're taking advantage of those now in British Columbia.
But in general, we don't pick technologies
that rely on subsidies
to actually become financial feasible.
Everything we do has to both work financially
without subsidies, and without debt.
And Davos, this year, seems to have much more
of a grasp and understanding of the climate change concerns.
Do you feel like it's enough?
Are there things you'd like to see next year?
There's so much money sloshing around in the world,
and so many of its representatives
are concentrated at this event,
and we do spend an inordinate amount of time
talking about what we're going to do,
and it's just time to start doing it.
Even if you consider the investing
in something like FullCycle too good to be true,
you still have to take the risk.
Even if we don't succeed at reversing climate change,
it's better that we went down trying
than not to have tried at all.