This document discusses new opportunities and trends in climate investing. It notes that while underlying trends still support lower carbon energy sources, economic realities cannot be ignored. Investment opportunities exist across alternative energy, efficiency improvements, and emissions reduction sectors. Clean tech investing requires more funding upfront compared to IT, due to long development cycles. Partnering startups with expertise and large corporations with resources could help breakthrough opportunities succeed while also improving the climate.

1. New Opportunities and New Generation
Climate Investing // University of Notre Dame
Ben Saydah
Carbon Strategies, Inc.
30 – September - 2015

2. Carbon Strategies, Inc. 2
Trends & Reality
Development & Investment Opportunities
Investment Profile
Case for something different

3. Carbon Strategies, Inc. 3
Underlying trends are still there…
• Energy Demand is increasing
• Sustainability is still desired even as energy
supply increases
• National security remains a concern
• Concerns over nuclear power exist
• Historically renewables are one of the few
issues that have support from both
Republicans and Democrats in the US
• Governments, NGO’s and general public
around the world still support lower carbon
energy
• Energy use, climate change and poverty are
linked in the eyes of many

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...but lower carbon options are not isolated from
economic reality
Governments around the world are struggling with deficits
• Significant government assistance to alternative energy has had mixed results
• US deficit and political stalemate putting future financial support in limbo
• Eurozone historical support for renewables at risk
Government regulations are prone to change
• Changes to regulation will force some players out of business and create opportunity for others
Poor countries are unable to pay for high cost
• Lower carbon options must not be more expensive than current technology
• Majority of energy consumption growth is in poor countries
Proposed solutions are dependent on significant R&D
• Moving from lab scale proof of concept to energy scale is a major challenge
Timing is everything
• For both investors and developers
• Opportunities to buy in on the down cycle
Successful future energy solutions must be able to ride through
economic gyrations and volatility in the energy markets by
standing on their own

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Trends & Reality
Development & Investment Opportunities
Investment Profile
Case for something different

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Investment opportunities exist in three areas and
a multitude of business segments
Alternative Energy and Raw Materials
• Power generation
• Transportation fuels
• Bio / Renewable raw materials
Efficiency Improvements
• Industrial
• Consumer
• Transportation
Emissions Reduction & Waste Management
• Air
• Water
• Soil
• Process Control
• Recycling
• Reduction in raw material input

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Example of opportunities across the biofuels value
chain for both existing & startup companies
• Design
• New specialty
equipment
• Project
management
• Blending
• Supply and
Distribution
• Offtake
agreements
• Automotive
changes
• Consumer
education
• Optimize
growing
conditions
• Develop
improved
harvest
techniques
• Develop new
seeds and
crops
Crop
Development
Cultivate,
Harvest &
Supply
Engineering &
Construction
Conversion Distribution
Consumer
Experience
• Thermo-
chemical or
biological
processing
Seed / Plant
Ag Co’s
Biotech
Engineering
Ag Co’s
Oil Co’s
Transport/Jobbers
Automotive/OEMs
Data Management
Optimization
Note: Adapted from Mckinsey and Co. 2006 presentation on Trends and Opportunities in Biofuels

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Trends & Reality
Development & Investment Opportunities
Investment Profile
Case for something different

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Clean tech and IT investing have a similar technical development
curve but materially different investment requirements
Confidencein
FutureSuccess
Investment
Required
Angel Series B Series C Ongoing
IT Investment
Clean tech Investment
CashflowPositive

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Trends & Reality
Development & Investment Opportunities
Investment Profile
Case for something different

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Opportunity exists to couple expertise of large companies with
breakthrough opportunities being developed in startups
New Startup Venture
• Deep core subject matter expertise but
company typically lacks breadth
• Innovative, unencumbered by the past
• Hard to access to financial and
technical resources
• Singular focus: employees only way to
advance is if corporation succeeds
• Once the technology is developed
quickest path to revenue may not
improve climate
“Black Swans thesis of energy
transformation” Vinod Khosla,
8/28/2011
Large Corporations
• Financial, technical and managerial
depth and expertise
• Track record of success
• Employees – risk averse, used to
moving onto new projects
• Access to relatively unlimited resources
but accountable to multiple operating
businesses and shareholders