And of that small portion, only about one percent came from the private sector. But with nearly all of that spent on mitigation (renewable energy, energy efficiency, among others), only five percent was invested in adaptation. In 2018, for example, climate finance amounted to more than USD600 billion globally. Investment figures confirm that Lightsmith has few predecessors in trying to take advantage of the sea change it said is underway. The analytics it provides should help not only utilities such as PG&E reduce their risks but farmers and insurers, too. The fund’s next investment, Koh says, should be in a yet-to-be-disclosed Indian provider of digital mapping software. The other major California utility, Southern California Edison, is now budgeting USD1.2 billion annually on wildfire risk mitigation a huge sum that Lightsmith has its eye on.
LIGHTSMITH BOSSAJIN SERIES
In 2019, after Pacific Gas & Electric’s (PG&E) equipment sparked a series of wildfires, victims sued the company to bankruptcy.
Koh points to utilities in California, the United States. “It’s one of the biggest macro trends in the global economy today.” “Companies may not label it as such, but climate change adaptation is what they’re paying for,” Koh said. Why is Lightsmith going against this consensus? According to Koh, market demand for such innovation is not only clear and present but also substantial and fast-growing. Traditionally, developing technologies for adaptation to possibly irreversible changes in the climate has been seen as the preserve of governments and philanthropic foundations. Lightsmith was launched in December 2019 by Jay Koh and Sanjay Wagle, two Harvard graduates with decades of experience in private equity and sustainable development. The consultancy Climate Policy International has identified it as the first fund to do so. Lightsmith Climate Resilience Partners, as its name implies, sees opportunity in scaling up new technologies for businesses and communities to better withstand adverse weather and bounce back from climate-related disasters. With extreme weather spotlighting the arrival of climate change, a unique new growth capital partnership is overtaking its peers to expedite adaptation to solve the problem.
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