The Security Dividend of Clean Innovation

A Q&A with Carolina de Azevedo, Head of Impact & ESG at Emerald

Following the European Venture Fair and the Emerald Investor Forum, Carolina reflects on a takeaway reinforced across several sessions: the technologies that make industry cleaner can also help make economies more secure, competitive and resilient.

What was your key takeaway from the European Venture Fair and the Emerald Investor Forum?

Carolina de Azevedo: What stood out for me was the link between sustainability and today’s priorities, including energy security, resilience and competitiveness. Sustainability may have lost ground as a policy and investment priority, but many of the solutions that support the current priorities are sustainable ones.

Electrification can reduce fossil-fuel dependence and improve efficiency. Circularity can lower resource demand, support local supply and reduce exposure to concentrated supply chains. In many industrial systems, sustainability and security reinforce each other.

You mentioned fossil-fuel dependence. How can this energy crisis accelerate innovation?

Carolina de Azevedo: Laura Cozzi, Director of Sustainability, Technology and Outlooks at the International Energy Agency (IEA), opened her remarks at the European Venture Fair by describing the current energy crisis as, by many measures, the largest in history. She also highlighted how crises can drive change.

The oil shocks of the 1970s spurred investment in nuclear power, more efficient combustion-engine cars, energy research and more diverse fuel supplies. Cozzi expects today’s crisis to encourage innovation and diversification, with energy security playing a much larger role in investment decisions.

How is the meaning of energy security changing?

Carolina de Azevedo: It now reaches beyond access to oil and gas and exposure to shipping chokepoints. Cozzi highlighted the need for resilient technology and critical-mineral supply chains, bringing energy and economic security into the same discussion.

Rafael Cayuela, author and Dow Corporate Chief Economist, described a shift in the traditional energy trilemma of security, equity and environmental sustainability. In his framing, the trilemma is rebalancing from the recent emphasis on sustainability towards security and affordability, expanding to include resilience and competitiveness, and requiring a more integrated view of the energy system. He sees electrification and circularity as two practical tools to navigate this shift.

Where does this shift create opportunities for industrial innovation investors?

Carolina de Azevedo: It points to opportunities in grid optimization, storage, power electronics, industrial electrification and demand flexibility, alongside recycling and resource-efficient manufacturing.

Cayuela argued that companies should treat electricity as a strategic asset. The opportunity extends across the infrastructure, software and industrial equipment that enable electrification. For investors, the common thread is technology that helps industry use energy and resources more efficiently while reducing dependence on vulnerable supplies.

Why are materials and clean energy supply chains a security concern?

Carolina de Azevedo: The extremely high concentration of clean energy supply chains creates dependencies. Cozzi sounded the alarm on this: China accounts for around 85% of solar PV and 80% of lithium-ion battery supply-chain production capacity. At individual stages, including critical-mineral processing and battery materials, concentration is even higher.

The economic exposure extends well beyond energy. The IEA estimates that full implementation of China’s expanded rare-earth export controls could put USD 6.5 trillion of annual downstream production outside China at risk across automotive, high-tech, defense and energy industries.

How can innovation reduce dependence on scarce materials?

Carolina de Azevedo: New battery chemistries can reduce reliance on constrained minerals. Recycling can create secondary supplies, while new materials can replace scarce inputs. These approaches can help diversify supply and reduce resource dependence.

The scale of innovation is already visible: energy storage accounted for 40% of energy patenting in 2023, an unprecedented share for a single technology area.

What is material informatics, and how does it fit into this picture?

Carolina de Azevedo: Material informatics combines AI, simulation and experimental data to discover and improve materials faster. At Emerald’s Investor Forum, Aline Rotzetter explained how it can shorten development cycles and reduce research and development costs.

The investment models range from data and lab-automation platforms to companies that develop and own proprietary material intellectual property. It was another example of how innovation can help address the materials challenges discussed across the sessions.

What role can venture capital play in strengthening industrial resilience?

Carolina de Azevedo: Venture capital can help these technologies move from scientific breakthrough to commercial scale, particularly where new materials, hardware and industrial systems require patient capital. The strongest opportunities are in technologies that reduce resource dependence, improve efficiency, enable substitution, support local supply or increase system flexibility.

For investors in industrial innovation, this is the opportunity: backing the technologies that make industry cleaner can also help make economies more secure, competitive and resilient.