On April 6, 1922 (just over 100 years ago), Albert Einstein clashed with the most famous philosopher of the day, Henri Bergson, about the nature of Time - in one of the most famous debates of the last century. Einstein defended the picture he formulated in general relativity of time as inseparable from space and lacking the absolute reality that humans tend to perceive in it. Bergson claimed that science alone cannot describe time, which he said was closely intertwined with the “vital impulse” of life and its creative expression. The famous debate initiated a rift between physics and philosophy, “splitting the century into two cultures and pushing scientists against humanists, expert knowledge against wisdom.” (Jimena Canales)

Luca

On April 6, 1922 (just over 100 years ago), Albert Einstein clashed with the most famous philosopher of the day, Henri Bergson, about the nature of Time - in one of the most famous debates of the last century.
Einstein defended the picture he formulated in general relativity of time as inseparable from space and lacking the absolute reality that humans tend to perceive in it.
Bergson claimed that science alone cannot describe time, which he said was closely intertwined with the &ldquo;vital impulse&rdquo; of life and its creative expression.
The famous debate initiated a rift between physics and philosophy, &ldquo;splitting the century into two cultures and pushing scientists against humanists, expert knowledge against wisdom.&rdquo; (Jimena Canales)
Indeed, that is when&nbsp;people started to love physics and technology beyond what they bring as solutions into our world &mdash; but also to describe the world we can't see. Physics offered radical new perspectives on what lies&nbsp;beneath and behind&nbsp;our everyday experience. In this way, physics seemed like more than just knowledge; it seems like truth with a capital T.
But does that mean&nbsp;there is a philosophy &mdash; a "metaphysics" &mdash; that goes beyond what the math and the data support? And, if such background metaphysics exist, could it be wrong even if the theory itself is right in terms of experiments and data?
In the ensuing century, science and technology prevailed, leaving philosophy (and to some extent religion at least in the Western world) in a holding pattern, looking for its own meaning and diminishing role in society. And as a result, most of the developments in the twentieth century and to this day were related to technological improvements and step change, from cars to radio, from international flights to space travel, from TV to the Internet, until blockchain and AI, etc
The French philosopher Bergson was far more famous than Einstein in the first two decades of the 20th century. The reason most folks these days know Einstein's name but not Bergson's is an important story in itself and much has to do with that debate. It's the story of how science seemed to become the last word on everything, even on a topic as subtle, slippery and difficult to pin down as time.
In the debate, Bergson made it clear he had no problem with the mathematical logic of Einstein's theory or the data that supported it. But for Bergson, relativity was not a theory that addressed time on its most fundamental, philosophical level. Instead, he claimed, it was theory &ldquo;about clocks and their behaviour&rdquo;. Bergson called Einstein out for missing the distinction.
So, on that day in Paris, Bergson was not criticizing Einstein's theory. He was attacking a philosophy that had grown up around the theory &mdash; and that was being passed off as part of the science. It was the theory's hidden metaphysics that Bergson challenged. Bergson told Einstein that the only proper way to unpack the full meaning of time, in all its lived richness, was through explicit philosophical investigations.
Einstein, however, was not moved. In response to Bergson's challenges, the physicist lobbed his now famous grenade: "The time of the philosophers does not exist," he told the audience.
In relativity, space and time are no longer separate entities. Instead, they're replaced with a four-dimensional whole called space-time. But something very weird happens when you make that move. The remarkable thing about space-time is that it contains all the events that ever happened. It also includes all the events that ever will happen.
Being human, being at the centre of our own worlds, is an immense and beautiful mystery. The explanations of science are one route to plumb that mystery &mdash; but not the only route. The debris of that disagreement became the foundation of our present ideas about the fabric of existence.
But why this reflection is important after over 100 years?
Because that same rift needs to be closed now, as it is as important to do what is &ldquo;good&rdquo; for humanity (the land of philosophy) and what is &ldquo;beautiful&rdquo; (the land of aesthetics), while we ensure we do what is &ldquo;right&rdquo; (the land of science), particularly when faced with the upcoming risks for humanity caused by climate change and biodiversity loss.
Both Einstein and Bergson, beyond the debate and its immediate consequences, already understood that this was needed at the end of their lives, each reflecting on each other rival&rsquo;s legacy &mdash; Bergson during the Nazi occupation of Paris and Einstein in the context of the first hydrogen bomb explosion. Science can well progress without philosophy, and sometimes can even have better explanations of the world around us, but philosophy and ethics are just as important, and need to always be used in conjunction.
We can design the best autonomous vehicle, but who will decide which obstacle to avoid between a child and an aged person, if both cannot be avoided? We can develop nuclear fission, but who is to decide when it is right to use them, if ever? We can use carbon-based solution, but what increase in temperature can we afford to accept? We can eat fish, but what fishing practices are acceptable, and which consumption is sustainable? We can develop DNA sequencing and manipulate our genome, but when is that acceptable to cure diseases and when is it dangerous as it changes the natural evolution of our species? And we could go on and on with questions that no science can answer, but only ethics can discern.
If we are to take the role of Homo Deus (as defined by Yuval Noah Harari) by pushing the boundaries of universal science and global technology that multiply our know-how capabilities, we better also know when and how is good to use them to avoid a significant fight back from our planet and our environment. And that only our beliefs or religion, our ethics and philosophy, and ultimately international agreement and laws will be able to contain and drive, rather than our understanding itself.
Now that we know the combined power of technology and capitalism, we need to pair them with philosophy and ethics to ensure that we apply them for the good of our society and for our planet, not just to maximize profitability of a company or achieve the best result only for a (small) portion of people.
Let us not forget that the value of science and technology is nothing if not paired with decisions made on what is good and bad for people and planet. It seems that the latest generations are better able than us to make these distinctions, and re-prioritize choices we gave for granted, preferring purpose to wealth and lifestyle to riches.
&ldquo;With great power comes great responsibility&rdquo;: Sustainability is the latest application of this old saying to our current reality. All those who work in this field should remember that debate between Einstein and Bergson, and recall that both sides have a reason to exist, better if they coexist and reinforce each other.
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Science and philosophy of sustainability

In this era of accelerate growth driven by technology, we profoundly believe in innovation as a key driver to address the world’s environmental crisis. Yet, according to the Global Sustainable Investment Review, only a very small percentage of the overall $35T per year investment in ESG is allocated to accelerating high-impact disruptive businesses, the so-called “Impact Unicorns”.  Instead, most of the investments go into expanding the application of existing incremental technologies, extending public infrastructure and subsidizing large public corporations. 

“Not a day passes without us seeing the many ways in which technology can advance peace, human rights and sustainable development for all.” António Guterres, Secretary-General United Nations.
In this era of accelerated growth driven by technology, we profoundly believe in innovation as a key driver to address the world’s environmental crisis. Yet, according to the Global Sustainable Investment Review, only a very small percentage of the overall $35T per year investment in ESG is allocated to accelerating high-impact disruptive businesses, the so-called “Impact Unicorns”. Instead, most of the investments go into expanding the application of existing incremental technologies, extending public infrastructure and subsidizing large public corporations.
We have observed this trend in almost in all sectors in the last few decades: the slow adoption of solar and wind technologies in favour of large subsidies to make oil and gas more efficient and more competitive; the low penetration of electric cars in favour of increased efficiency of diesel and gasoline engines; the continued improvement and growth of plastics packaging instead of more sustainable reuse models or widely recycled materials like paper; the continued financial allocation to climate change adaptation instead of significant repositioning to mitigation and reversal.
Possibly these are all things that can gradually improve the environmental situation, and one may also assume done with the best intentions (i.e. not related to incumbents’ interest in maximizing profitability by maintaining the status quo or political support to who has the largest influence or wallet). I have also worked in and advised many large corporations in my career, convinced like many others that I could modify the system from the inside and rely on commercial-ready innovation to start improving the existing situation.
However, I believe we are now in a situation where the incremental solutions are not enough anymore, and we need to accelerate market adoption of breakthrough innovation. For those who know innovation well, it is typical to have in any given company or sector about 70% of the investments in incremental innovation, around 20% in step-change innovation and 10% in true breakthrough innovation. Unfortunately, today less than 3% goes into disruptive businesses that can transform entire industries and make them carbon-free, restore bio-diversity and become more sustainable. As a consequence, we continue to move out the tipping point of adoption, and we cannot reach the steeper part of the S curve for many innovations, which would be truly impactful from an ESG and UN SDG perspective. The United Nations and IPCC estimate that this delay now means that 50% investment would be required for sustainable breakthrough and step-change technologies to scale up and have a significant impact on the two most urgent and critical environmental issues of our times: climate change and biodiversity loss (based on WEF rankings).
Indeed, even on the investment market side, we notice a strong imbalance between fast increasing demand for impact VC funds investing, and the limited availability of large funds in this space. According to the Financial Times there are only few funds larger than $100M entirely focused on Sustainability in Europe, which creates a significant vacuum for start-ups to be able to be scaled, despite Europe’s global leadership in innovation and technology generation.
Starting from this analysis, we have engaged with LPs from high-net-worth individuals to family offices, from corporations to endowments, from private banks to funds of funds. What came out of our interviews and discussion is a clear set of needs, which should be embraced by VC Funds.
<ol><li>Better Sourcing: Focus on ready to scale businesses (i.e. early growth already generating revenue) and innovation that can truly transform entire industries, using proven pre-screening criteria for spotting market needs both in BtoB and BtoC and on understanding the customer / demand side rather than the technology / supply side, in order to maximize commercialization, boost adoption and minimize market risks. Leverage key partnerships, including preferential access to curated deal flow, e.g. from EIT-KIC, technology centres and universities, in order to select the companies with the best teams, superior and proven solutions, and customer acceptance.</li></ol>
<ol><li>Better Financing: Consider the use of evergreen funds, which can be scaled over time, but can start investing immediately, so as to maximize alignment, transparency and liquidity, and reduce costs for limited partners, while promoting sustainable technologies and innovative business models for the long run. The ability to continuously raise and invest, to keep a high the ratio investment/funding maximizes a focused approach for limited partners and compounds financial results, thanks to the opportunity to reinvest distributions.</li></ol>
<ol><li>Better operations: An experienced operating team with a proven strategic implementation process to scale market-ready solutions for the climate and biodiversity crisis, focusing on strategy, growth, talent, financial and operational support. Accelerating value creation where it matters most, from inception to scaleup to exit requires laser-focused Strategy and an experienced and complementary team, with a strong track record across Growth, Innovation, Talent, Capital, and of course, Sustainability. In our survey, founders and scaleups have been consistently choosing active and experiences team to lead Series A+ rounds and given them better valuations than competition, because they believe in their ability to accelerate results and to support them in key areas like strategic development, customer introductions, new market entry, value proposition definition, value pricing and willingness to pay, additional smart money, exit preparation, etc. Money is a commodity, know-how is worth a premium.</li></ol>
<ol><li>Better Exit: Preferential connections with top PE funds with a focus on ESG and Sustainable Development; C-level network with large corporates and their Corporate Venturing and M&amp;A teams; co-investments with other VC funds to maximize combined set of connections and share risks or provide complementary know-how; and experience in going public through SPAC/IPO both in Europe and in the United States, in order to help founders finding the best opportunities to see their business grow beyond their wildest hopes.</li></ol>
<ol><li>Better Results: Track and monitor ESG results as much as financial ones, to achieve the largest climate and biodiversity impact per euro in the shortest amount of time possible – contributing to net zero and zero waste and 30%+ IRR. This allows funds to achieve top quartile MOIC and IRR, and to show their true commitment to Sustainability, using any of the most respected models and frameworks like those of PRI, EIF, GIIN, and in line with Art. 9 of the SFDR in the EU. </li></ol>
Overall, these are decisive strategic choices, which will shape both the architecture of a fund and the formation of its leadership team. Clearly, they are very often at the opposite end of what other funds are doing in the same space, so it takes significant courage and resilience to take this path.
“Two roads diverged in a wood, and I— I took the one less traveled by, and that has made all the difference.” (Robert Frost)
We believe however that this setup provides a significant advantage and these strategic choices act in a synergistic way to increase acceleration and adoption rate of unique sustainable technologies in all the sectors that have a significant impact on climate change and biodiversity loss.
“The greatest threat to our planet is the belief that someone else will save it.” (Robert Swan)
This call to lead is also very dear to me: I believe that only leadership and all its characteristics will allow to take the accelerating growth of the best solutions to climate change and biodiversity loss. Please reach out, and join the expanding movement of those who care enough to invest their own time, resources, capabilities into the most important quest of our times.
Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Why do we need to urgently accelerate selected Breakthrough Innovation in Sustainable Technologies and what does it take to make it happen?

The recent political developments in Europe have shown how much our society depends on fossil fuels. Even countries who can cater to their own needs have felt the consequences from the war in Ukraine. How can we address this going forward?

The recent political developments in Europe have shown how much our society depends on fossil fuels. Even countries who can cater to their own needs have felt the consequences from the war in Ukraine. How can we address this going forward?
In the short term, geopolitical conflicts with Russia will stress global oil &amp; gas supply and increase energy price. The issue with fossil fuels is that some countries own oil and gas and others don’t: but no one owns sun, wind, water, geothermal energy or green hydrogen, which we can replace oil &amp; gas with. They are infinite amounts of energy - and they are free; when coupled with efficient batteries, they can be used any time, night and day, wind or no wind.
Moreover, they are not centralized but distributed, so we will not need central energy generation plants and high power transmission lines. But we can generate and use alternative energy at a local level, without risk of grid failures and at lower cost. In terms of security, this also significantly increases safety and minimizes risk associated with existing plants: not only they do not risk exploding or create catastrophes like oil, gas and nuclear, but they will also be distributed and connected in redundant grids. This will make our world sustainable and safer across energy generation, and also in mobility and buildings.
The cost of energy will be less volatile, as it will not depend on the decisions of few oil &amp; gas producing countries, and the energy supply will be infinite, depending on technologies rather than fuels. At the current price of oil, alternative energy is already cheaper than fossil fuels. Also, from a financial perspective, this will also reduce volatility of cash flows for these projects - much smaller in size and with lower cost of capital - resulting in much lower interest rates and longer term contracts.
Europe is most motivated to move to alternative energy: limited fossil fuel supply; instability due to Russian war; technology to quickly move to new solutions. It has indeed already committed to end its dependence from Russia by 2030 (and Germany will do it by 2025 to show the way). In the short term, this may be costly, as we will need alternative supply like LNG from the US or oil &amp; gas from Norway. But it will push EU countries to accelerate the energy transition, thus achieving an advantage vs other countries, while cutting their dependency from oil &amp; gas.
As a result, in VC we observe: 
<ul><li>an immediate acceleration of investments in start-ups facilitating energy transition </li></ul>
<ul><li>the elimination of solutions providing increased efficiency to existing fossil fuels</li></ul>
<ul><li>the rejection of capital coming from Russia.</li></ul>
Fossil fuels have been often the cause of conflicts, from Russia to Middle East or Venezuela. Alternative energy may well be the way to not only limit climate change, but also to eliminate one of the key causes of global conflicts and instability. “
Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Luca Zerbini

Luca Zerbini

Science and philosophy of sustainability

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