About episode
You probably know that buildings and the built environment account for 40% of our emissions and about 40% of our energy use. Many bright minds are working on this problem, but it remains a tricky one. In the residential market, homeowners are often reluctant to undertake renovations, and when they do, they usually lack the information and contractors they need to consider energy-efficient and climate-positive options.
Now, imagine a world where all homes were rated based on their energy efficiency and environmental impact, and that rating influenced their financial value. Furthermore, imagine if the rating included a recommended retrofitting strategy. That would be a game-changer, right? This is the world that a start-up called Pearl Certification is attempting to create. I have to say, I really love this systems change approach that could shift incentives and behavior in real estate.
In this episode, I’m joined by Pearl CEO and Founder Cynthia Adams, as well as one of her investors, Lou Schick from Clean Energy Ventures. We discuss Cynthia and Lou’s extensive experience in the built environment and real estate markets, Pearl’s growth and potential, how this space will evolve in the future, what we need to do to get there, and much more. Enjoy!
In today’s episode, we cover:
- [3:29] Pearl, Cynthia’s role & why she got involved in climate work
- [6:37] Clean Energy Ventures, Lou’s role & why he got involved in climate work
- [7:43] CEV’s investment thesis, their approach to potential climate investments & what led to their investment in Pearl
- [9:26] The business opportunity with Pearl
- [11:00] Pearl’s impact through certifying buildings
- [12:38] Pearl’s demand, target market, reach & the evidence for demand
- [16:12] Consumer interest in retrofitting homes & investing in clean energy products
- [19:17] Partnerships to Pearl’s growth
- [22:10] How Pearl’s helping homeowners in the next phase
- [23:59] What Lou is excited about in these spaces
- [25:32] The gaps in electrification
- [31:15] The future outlook in 5-10 years
- [36:02] The most concerning problems within the built environment
- [41:01] The government’s role in building markets
- [43:10] How the Inflation Reduction Act benefits homeowners
- [47:09] Call to action for listeners who want to support the built environment transition
Pearl, Cynthia’s role & why she got involved in climate work
Cynthia, CEO and co-founder of Pearl Certification, has been working in the residential built environment for nearly three decades, where she has undertaken various roles such as remodeling homes, building green homes, working as a LEED AP, running energy efficiency and renewable energy programs. During the Obama stimulus era, she observed that buildings with LEED and ENERGY STAR labels were rented, sold, and appraised for more due to their high-performing features. However, the same was not observed on the residential side. Cynthia and her co-founder partner, Robin LeBaron, identified an opportunity to create a third-party certification that targets existing homes, making data on performance features available for prospective buyers, real estate agents, lenders, appraisers, inspectors, and allowing homeowners to accrue equity value for having a high-performing home. Its goal is to create a market-based mechanism that drives the energy transition by providing compelling incentives for homeowners to make energy-efficient upgrades.
Her passion for this work is deeply rooted in her heart. Cynthia’s interest in climate work stems from spending time outdoors and witnessing the devastating impacts of climate change, such as the death of trees due to bark beetles, wildfires, melting of snowpack, and low streamflow impacting salmon navigation.
Clean Energy Ventures, Lou’s role & why he got involved in climate work
Lou is the Director of Investments at Clean Energy Ventures, a venture fund that focuses on climate and is not hesitant to invest in hard tech and software. The main objective of the fund is to support companies that have the potential to make a significant impact by averting 2.5 Giga tons of CO2 equivalent GHGs between now and 2050. The team was established from an angel group comprising individuals who have founded successful companies. Lou joined the team a few years ago, and the fund has made 22 investments to date – which includes Pearl. At CEV, Lou is responsible for bridging the gap between technology and the market. He strives to provide guidance and support to companies to ensure they are as effective as possible as quickly as possible.
CEV’s investment thesis, their approach to potential climate investments & what led to their investment in Pearl
Lou explains that CEV’s investment philosophy involves seeking out talented teams that are working on projects that can have a significant impact. Lou has been interested in climate work since the 1980s and is particularly passionate about the potential impact of the built environment. He has focused on energy efficiency for a long time but found it to be opaque and inaccessible to most people. However, Cynthia and her team of smart building scientists at Pearl were able to make energy efficiency accessible by connecting homeowners with good contractors and making sure that the improvements made to their homes were effective and efficient. Lou believes that Pearl’s approach to energy efficiency is not only good for the environment but also makes homes more comfortable, attractive, and valuable.
Pearl’s impact through certifying buildings
According to Cynthia, there are many excellent technologies in the market that could improve the quality of life for homeowners while also reducing their carbon footprint. However, homeowners are often confused about which technologies to use due to conflicting information from vendors and contractors. To accelerate the adoption of these technologies in homes and help homeowners understand their benefits, certification is needed. This certification will create a connection between contractors, builders, appraisers, real estate agents, homeowners, and others, ultimately accelerating the energy transition. By educating homeowners on the benefits of these technologies beyond just their performance characteristics, such as improved indoor air quality, comfort, affordability, and overall home value, this certification will create a flywheel effect in the market, increasing the visibility of certified homes and their value.
Resources Mentioned
- Pearl Certification
- Clean Energy Ventures
- National Association of Realtors
- The Appraisal Institute
- Ferguson Ventures
- Green Door
Connect with Cynthia Adams & Lou Schick
Connect with Jason Rissman
Keep up with Invested In Climate
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