Bill Gates-Led Fund Invests in Startups Fighting Climate Change

Giving Compass' Take:

• Bill Gates is funding startups that are experimenting with alternative forms of energy in an effort to battle climate change. 

• Other significant business entities such as BlackRock Global Funds and Pictet Clean Energy are also investing in clean energy startups. Private financing is participating in climate action, and other companies should follow suit. 

• Read about why most Americans don't worry about climate change. 

A Bill Gates-led investment fund is making a major commitment to clean energy by investing in a number of emerging companies, Quartz reports.

Breakthrough Energy Ventures (BEV) plans to invest $1 billion into radical energy startups, experimenting in anything from hydropower to nuclear fusion that could dramatically reduce global emissions.

BEV's first two investments are in Form Energy and Quidnet Energy, Quartzreports. Form Energy is creating new types of batteries that last weeks or months at a fraction of the cost compared to lithium ion batteries. Meanwhile, Quidnet Energy is developing technology to mimic the benefits of hydropower, which is a renewable alternative to carbon.

BEV's portfolio focuses on startups that will lower emissions in five sectors — electricity, transportation, agriculture, manufacturing, and buildings. The nine companies announced so far each fit into one or more of these categories.

Despite the fact that funding energy startups tends to be a riskier, long-term betting game than investing in software companies, this is not the first time that Bill Gates has made a major investment in "tough tech." Funding energy startups demands more than monetary commitment from investors — it requires supporting scientists who are first-time entrepreneurs, Quartzreports.

As energy startups gain traction in tackling climate change, they must also factor in the need for racial and gender diversity in the budding industry's entrepreneurial workforce. After all, climate change is a global issue and its solutions demand collaboration across cultures and national borders.

BEV is not the only investment fund to make a major investment in renewable energy. BlackRock Global Funds, Pictet Clean Energy, RobecoSAM Smart Energy Fund, and several others are also betting on the future of clean energy — and they are seeing good returns.