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Driving Change Through Economics

Sri's Blog

The best way to address climate change is to start with economics. Private sector companies have tremendous influence in shaping and driving change, and while individual action can create big change, it’s even more effective in conjunction with innovations in the industrial and business worlds—which means we need businesses and industries to get on board with making small changes.

As counterintuitive as it might seem, when it comes to businesses, we can’t focus on solving the climate problem directly. While perhaps some businesses are thinking about the climate crisis, I can assure you that the majority are not. They are thinking about a reliable product or a business that will make them money.

In order for change to happen, it has to be fundamentally supported by economics. If it is not supported by economics, no amount of marketing, no amount of good will, is going to make it happen—because at heart, businesses are not charities. Their mandate is to create products, have a strong revenue stream, make a profit, and provide a return for the shareholders. Corporate responsibility, ethics and social impact are a part of it too, but at the foundational level, it has to make economic sense.

In my early days as an entrepreneur, I intuitively knew that any solutions to the climate crisis we wanted to offer had to be economically compelling to our customers. On its own, being greener is not a selling point or a competitive advantage—especially when we were starting out. At that time, most people believed that in order to “go green,” you had to spend more money, even if you are saving on energy costs. For instance, if you bought a Hybrid car like the Prius, you would have to drive it for roughly 15 years before you made your money back on the gas savings.

With our product, that wasn’t the case. Here was a product that saved energy, cost less to own and cost less to operate. It actually created positive cash flow, right from day one! You can engineer and innovate your way into something that is economically compelling while delivering solidly on energy efficiency. Our product cuts down emissions, but it does not cost more; it doesn’t have the “green premium,” as they call it.

The only way to start making a change is to solve the economic and business problems first. If you reframe the challenge and make it clear that it doesn’t have to cost more—that in fact, it can save money—businesses will get on board. And the truth is the economic and business problems and the climate challenge are just different sides of the same equation. Less emissions equals saving energy, equals lower operating costs, equals saving money. The result of energy efficiency is saving money and not as many pollutants in the air. When the Hilton Hotel in San Francisco Burlingame installed our system, they cut their gas bill by over 70 percent—and also eliminated several million tons of CO2 that would have otherwise been emitted into the atmosphere.

If we tackle the problem of climate change from this angle—with innovations that can satisfy commercial needs, with compelling economic value propositions, that also help the environment—we will be resolving both problems with one solution. If we can create solutions that meet people where they are—both businesses and individuals—then all those individual changes, on the personal and commercial level, will add up to something substantial and impactful. If we do this individually and collectively, we can actually achieve an enormous reduction in energy usage, saving individuals and businesses money while also saving the planet and ensuring our future survival.