With the launch of the climate tech accelerator program, Hewlett Packard Enterprise aims to support the development of new climate technology. In this episode, Fred Tan explores why the climate crisis demands radical innovation, and how to take an ecosystem-level approach to sustainability. He covers:
Why there’s currently such low investment in climate tech
What it takes to integrate business and impact
How to define success over the short and long term
Fred Tan is the head of social impact at Hewlett Packard Enterprise and the deputy director of the Hewlett Packard Enterprise Foundation. In this role, he is responsible for developing HPE’s social sustainability strategy and transforming the company’s approach to better leverage its technology, talent, resources, and brand for good. Fred also leads a team driving the successful implementation of HPE’s social sustainability, philanthropic, and corporate social responsibility programs.
Before joining HPE, Fred was most recently at Village Capital, the largest organization in the world supporting impact-driven, seed-stage startups, where he helped drive the organization’s global impact partnerships and strategic growth.Connect with Fred Tan
Learn about Hewlett Packard Enterprise’s sustainability promise.
Dig into HPE’s climate tech impact accelerators.
See the far-reaching impacts of the climate crisis.
Get the report about only 2% of global philanthropy going to climate change.
See the story behind the mere 2% of global venture capital that goes to women founders.
Dive deeper into innovation ecosystems.
This spot, the confluence of the Blackfoot and the Clark Fork Rivers, used to be the site of an environmental disaster. For a century, waste from mines upriver settled here at the Milltown Dam, lining the river bottom with a thick layer of toxic sludge. Arsenic seeped into the groundwater.
Experts warned it was only a matter of time before the toxic sludge would break loose and flow past the dam, wreaking havoc on the wildlife and the communities downstream. The problem wasn't going away on its own. And the solution would have to strike a balance. The community needed swift action, but they also needed that action to be measured and strategic. The whole ecosystem hung in the balance.
In the end, the consensus was the dam would have to come down. There was no dynamite, no great moment of destruction. Instead, the demolition was gradual, and so was the recovery.
Today, 15 years after the dam removal, the rivers flow freely. Fish populations are flourishing, groundwater is safe to drink again.
It's an example of what's possible when you channel fear and concern into tangible action.
In some ways, the dam removal is a microcosm of the current climate crisis itself.
It's a reminder that a lot of the work is going to be about dismantling past symbols of progress. And that work requires its own unique kind of innovation.
Welcome to <i>Impact</i> <i>Studio</i> I'm Sam Caplan, Vice President of Social Impact at Submittable. From my vantage, I've seen how difficult it can be in corporate philanthropy to build climate solutions that effectively address the scope of the problem.
For anyone interested in this work, Fred Tan, Head of Global Social Impact at Hewlett Packard Enterprise, is setting a great example. As part of his CSR efforts, he's helping to launch a climate tech accelerator program with a sharp focus on innovation and a unique appetite for risk.
I'd love to focus in on the climate tech accelerator
Climate tech accelerator.
program that you have in place there. So, what can you tell me about that?
- Yeah, for sure. It all really stems from Hewlett Packard Enterprises purpose, and that's to advance the way that people live and work. And we do that in our business by working with some of the top and most innovative companies, governments, private sectors, to really advance the way that people live and work.
And so core to that belief is that innovation and technology has the power to solve some of the world's greatest challenges. And when I think of maybe one of the existential challenges of our day to day, it is the climate crisis. And so we want to leverage innovation and technology to solve that.
But not just to focus on innovation and innovators. We want to support the whole innovation ecosystem as a whole. And so beginning in FY23, we are launching a series of programs together with different organizations to aid in their effort to support different elements of the innovation ecosystem, to support climate tech entrepreneurs, and to really get climate solutions de-risked and out to market and out in scale.
Particularly innovations that not just focus on sustainability, but solutions that focus on helping communities adapt to climate change, if you will. And that's really the impetus behind why we launched this new climate tech accelerator in FY23.
- Tell me just a little bit about how you developed the strategy behind this program.
Strategy behind this program.
- So, in philanthropy, only 2% of global philanthropy goes to climate change. And that's really, really little. But beyond that, the ecosystem in general, it overlooks large communities of innovators, if you will.
And that's a huge problem. And I think a huge problem because when we overlook huge communities of innovators, what essentially happens, is that there are lots of solutions that never get a fighting chance to see the light of day.
And so when you think about it, when only 2% of global venture capital goes to women founders, that means that women founders who are developing some of the most cutting edge and innovative solutions, their products, their services, don't really even get a chance to succeed. And that's really what we're trying to solve for, that's some of the lens in which we see the world.
Another lens in which we see the world, is that globally, while innovation ecosystems are super important, only 2% of global incubators and accelerators actually focus on climate change. And so us as HPE, when we take a look at how do we advance the way that people live and work, how do we accelerate innovation and support innovation ecosystems, we see a huge gap there.
Not just in climate change more broadly, but specifically the climate innovation ecosystem really does need some help for us to be able to generate more solutions and better solutions to really combat the climate crisis.
- So talk us through the goals of the climate tech accelerator. Like, how will you define
How will you define success?
success with this program?
- Immediately, our metrics of success really is how many organizations are we partnering with, are we enabling equal opportunities to succeed in the innovation ecosystem, and I think that's a really big one.
Beyond that, we are really trying to keep ourselves honest, if you will, and asking the innovators and the ecosystem itself, what does success look like for you. And then how can we as a company, HPE, better design technology, better deploy technology for good? And so if you will, we're trying not to put the cart before the horse.
We really want to just support the ecosystem and the innovators, really understand what they need, and from there, decide what do we as a company, really need to do to change the innovation ecosystem instead of starting with our internal goal. And in so doing, becoming a bit more transactional in terms of how we work with the ecosystem.
- You gave us a few data points earlier regarding the low investment in innovation in this space. And I'd love to know, why do you feel like there's been
Why is there investment in climate tech?
such low investment in innovation in the climate tech space?
- I think my personal belief on that is sometimes in CSR we like to be sure of what we're getting out of our philanthropy. We want to know what impact, and we want to very quickly be able to quantify that impact.
But I think with innovation, it's hard to do that. In business strategy, for example, if your strategy leads to a absolute outcome that you're sure of, that's probably not a very good strategy. And I think the same applies for innovation in the CSR space.
If you're 100% sure of what you're going to get, because of what you put in, then that's probably not incredibly innovative, and probably not going to be the most impactful. And so when I think of these areas that HP is working at, health care, climate, we wish we could solve the climate crisis in a year. We wish we could cure Alzheimer's in six months.
But the reality is, we can't.
And it's really hard to peg impact metrics to that. And so because of that, our innovation and our approach is really, are we helping more innovators? Are we getting more solutions to scale and to market? Can we test stuff quickly, and can we figure out what succeeds and what doesn't?
And I feel like the need to innovate and iterate and to apply the same rigor that we do in business into innovating in CSR, for me, remains exactly the same. And whether we take a look at it in health care or education, for example, STEM education, I feel like the need to innovate and take risks apply as equally. And again, I think the industry is getting there. And I think there's a lot that we can do to get there quicker.
For me in my role, I get to report to our Chief Sustainability Officer Monica Batchelder. And because of that, we talk really often around environmental sustainability and what that means for social impact. I talk with our global workplace teams when we look at purchasing new real estate, when we look at where to expand our footprint, what is that connection both with the environment and the social side of the house.
And I feel that because of how organizations and companies have evolved over the past few years, many of those connections are starting to happen. And so we're starting to think about investing more in climate and in innovation in a way that is more symbiotic and moves the needle in different ways that might not have happened before.
And so I feel like that is one hill, if you will, that we're trying to overcome, which is something that when we do, will result in a lot more investment in the innovation space, specifically in climate. But I think on a broader level, perhaps what is contributing to a low investment in climate innovation might be incentives.
And potentially the fact that investors have lots of different options to choose from to generate returns than to invest in climate tech innovation. In all honesty, investing in fossil fuels probably brings them a better return in the short term, or at least in the future.
And so green projects, climate tech innovation, especially in emerging markets developing economies, they really, it really does not justify the risks of investment in the current environment. And I think because of that, there is such a crucial role for philanthropy to play.
A role that Hewlett Packard Enterprise and the HP Foundation is thinking what is our role, and both when it comes to mitigation and adaptation innovations, these innovations and investments often come with high upfront costs that again, traditional deployers of capital will probably be a little more averse towards the risks.
There's lots of technical challenges, longer time horizons, unproven business models, the data accuracy is also a lot less established there.
Small pool of investors. The list goes on, really. And so again, I think it's an incentive problem.
And that is where companies like HPE and definitely a lot of our peers in the ecosystem, as well, there's a huge role for philanthropy to play in taking that patient approach to returns, de-risking some of these climate tech innovations, and setting the stage, if you will, for more traditional deployers of capital to come in after.
Hi, I'm Keriann, Chief Marketing Officer at Submittable. Fred's observation that philanthropy is in a unique position to take risks is really inspiring. I think it challenges misconceptions about where innovation does and doesn't happen, and it reminds me just how much potential has yet to be unlocked.
We're so excited to bring you to this episode as part of <i>Impact</i> <i>Studio.</i> Our goal is to keep creating spaces like this for more conversation. If you're interested in taking a more holistic approach to your CSR efforts, we'd love to talk to you more about how our software could support your work. Please reach out to our email@example.com. Now, back to the episode.
- You've used this phrase, ecosystem level approach, like, what does it mean to take an ecosystem
What does is mean to take an ecosystem-level approach?
level approach to sustainability?
- Two ways maybe, one internal, and one external. And on the internal side, I feel it has a lot to do with actually developing a right strategy that not only resonates internally with the culture and with the value of the company.
But where I think many corporate responsibility and sustainability strategies fall short of actually gaining an ecosystem level support internally, is that it doesn't sufficiently connect with the broader strategy of the company.
And by that I mean, the strategy by which we conduct corporate responsibility, in my opinion, has to go beyond talent management, which is a crucial part of the strategy. It has to integrate into product strategy. It has to integrate into marketing strategy. It has to integrate into R&D strategy.
And so internally, that is the ecosystem that we look at, and that I look at. How do we create this strategy that is the right connective tissue for different parts of the business, and then for team members across the company from a culture and value perspective. So, internally.
Externally, I take a look at how do we join forces with partners, with customers, with communities within our sphere of influence. And then outside of our sphere of influence, how can we look to create these partnerships and collaborations that generate shared action, shared value.
And so on this later point, I think when I take a look at HPE, between 1867 and 2022, in Puerto Rico, where HPE has a huge team member population and lots of business engagement, we do a lot of manufacturing in Puerto Rico that manufactures parts for supercomputers.
So in Puerto Rico between this time period, 13 hurricanes made a direct impact on Puerto Rico, including nine major hurricanes above a category 3. And so as a company, when we take a look at CSR, there are a couple of things that we can do. We can, of course, deploy philanthropy in a disaster response fashion.
But we took a look at what more can we do, and how can we integrate business and impact together. And when we did that, that's why HPE built a cogeneration plant on site in Puerto Rico. And this cogeneration plant that we built provides continuous power, fueled by locally sourced 100% renewable natural gas, which allows our operations to remain in action during extreme weather conditions.
But it also creates a power source, if you will, that because it is independent from the Puerto Rico energy grid, is able to continue operating, even in event of a disaster. And what that enables, is that team members, families, communities, now have a place to shelter from the element with energy, even in the course of a disaster.
And so that's an ecosystem level approach really that we take a look at. Yes, we want to fund different things philanthropically, but how can we create, and how can we design our business so that in the way that we run our business, it creates impact for the community, it creates impact for our customers, it reduces risks to different parts of the business?
SAM CAPLAN: Over the last 25 years, hundreds of dams have been removed from rivers all over the US. Communities are finally reckoning with their industrial pasts, and finding new ways forward. A dam removal is a big complicated project with a lot of uncertainty.
But each dam that comes down is a microcosm of what's possible when we don't turn away from the complexity of an environmental crisis, when we come together to face it head on.
So as we shape our corporate strategy, let's think about the long term. Let's invest in the structures that support innovation. And as we build, let's do so with the whole ecosystem in mind. Thanks for tuning in.
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