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Houston Ranks Among Top Cities for Sustainability Startup Funding

Published Jan 17, 2023 by Brina Morales

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Houston is once again proving it’s a city where green businesses can thrive. A recent report found Houston ranks fourth in the nation for average funding raised by startups focused on sustainability. 

PromoLeaf’s analysis of Crunchbase data found Houston startups leading the way in sectors such as renewable energy, decarbonization and environmental engineering raked in $150.7 million in funding. Salt Lake City ranked first with $204.6 million, followed by Santa Monica, Calif. with $154.3 million and Freemont, Calif. with $153.5 million. 

Companies like Ionada and Renewell Energy are choosing Houston to scale their businesses because of the region’s expertise and global network as the Energy Capital of the World. 

Momentum continues to build in Houston as the region positions itself as a global leader in the energy transition. According to the Partnership’s Houston Tech Report, startups in the energy industry received more than $320 million in venture capital funding between 2017 and  2021.

In October, the Houston Energy Transition Initiative (HETI), a strategic initiative led by the Partnership and dedicated to strengthening Houston’s leadership as the Energy Capital of the World, released a report examining the region's opportunity to fund the energy transition and the success companies across all energy value chains can find in Houston.

Another report recently highlighted how local companies continue increasing their investments in clean energy. Axios Houston reports Houston companies invested more than $1.25 billion in clean technology, climatetech and impact investment in 2022, making the city one of the top five cities in the U.S. for investment in companies focused on environmental, social and governance (ESG) initiatives.

"I think what we're gonna see is a new breed of public companies created within Houston that will go public in 2023 and 2024 that's going to further make Houston more diverse and increase the level of energy transition that we're already seeing in the Houston market," Will Braeutigam, U.S. capital markets transactions leader at Deloitte, told Axios Houston

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How NRG is Preparing for the Transition to a Low-Carbon Economy

NRG is North America’s leading integrated power, gas, and home services company, serving roughly six million customers across the US and Canada. In 2021, NRG consolidated its corporate headquarters to Houston. Currently, NRG’s largest employee base, more than 3,000 is located in the greater Houston region. As an energy company, NRG understands the industry's role in decarbonizing homes, communities, and the economy. This has been a key driver to NRG’s sustainability commitments and passion for innovating the products and services that power lives. As such, sustainability is woven into the fabric of NRG’s organization.  We sat down with Jeanne-Mey Sun, Vice President of Sustainability at NRG, to learn more about what NRG’s doing to support corporate sustainability and its annual sustainability report. NRG is a member of the Houston Energy Transition Initiative (HETI) and is an active member of the Industry Decarbonization and CCUS steering committees.  How does NRG think about decarbonization and corporate sustainability?  As a company, we are committed to achieving net zero by 2050, with an interim target of 50% emissions reductions by 2025 from a 2014 baseline. These goals have been certified by the Science-based Targets initiative as 1.5° Celsius aligned. To meet our net-zero goal, NRG has identified multiple levers to transition the company onto a 1.5° pathway: decarbonization of existing business lines, diversification into low-emissions businesses, divestment of select high-emissions assets, and deployment of new technologies and innovations.  In addition to our own sustainability progress, we are committed to leading the low-carbon transition by providing clean energy solutions to our customers through a breadth of sustainable products and services. Share some examples of ways that NRG is involved in decarbonization efforts across the Houston region.  The City of Houston has been an energy partner with NRG for over 15 years, and in 2020, NRG helped the city commit to powering all municipal operations with 100% renewable energy.  NRG is also a founding member of EVolve, an organization dedicated to supporting and enabling the adoption of electric vehicles in the greater Houston area.  We also actively support the climate-tech start-up ecosystem, including being a founding sponsor of Greentown Labs’ expansion to Houston and a founding supporter of the Rice Alliance Clean Energy Accelerator.  Describe how NRG is working with its customers to achieve its sustainability goals. Our customers continue to be the central focus of our company, and it is our responsibility to provide our customers with multiple sustainable and efficient energy options to help them achieve their sustainability. We offer several products and services, such as renewable electricity plans, carbon offsets, renewable energy credits, and more. We are committed to working closely with our customers to provide tailored solutions to help them meet their goals. Our customers have the power to control what type of energy they use and when they consume it. It is this personalization and innovation that is helping customers achieve their targets.   Outline how NRG developed its annual sustainability report and its five pillars (i.e.: business, customers, workplace, operations, suppliers).  Our annual sustainability report reflects our longstanding commitment to continued leadership on climate, engagement with a diverse set of stakeholders to advance common sustainability objectives, and our growing portfolio of sustainable energy products. We have always tried to approach sustainability in an all-encompassing way, which spans our entire value chain and accounts for the interests of our stakeholder ecosystem. To demonstrate the comprehensiveness of our approach, we developed the five pillars.  What are some of the more important priorities from NRG’s five pillars over the next year (i.e.: renewable electricity, optimizing portfolio of power plants, natural gas/hydrogen, alignment of efficiency & sustainability through innovation)? Our framework will continue to support the development of products and services that help achieve customers’ energy goals and reduce their environmental impact. We also recognize the ever-growing importance of the people that power NRG, so our focus next year and beyond will be on building upon our many programs and initiatives that support, attract, and retain our talented workforce. 
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Houston Outperforms Texas Peers in New Global Ranking

A new report is reinforcing why Houston is a great global city after it ranked No. 42 globally, beating Dallas and Austin, and ranked No. 1 in Texas.  Resonance Consulting recently released its 2023 World’s Best Cities Report, ranking the top 100 cities with metro populations of more than one million based on a city’s performance across 24 areas, including education, quality of life, infrastructure and investment.   According to the report, Houston is described as “…America’s stealthy powerhouse on the rise,” citing its educated, diverse and hard-working population.  “In the past year, immigration both domestic and international has swelled the metro population almost seven million—an increase of almost 300,000. And the people arriving are more educated and more international than before the pandemic. Houston today is one of America’s most ethnically diverse big cities, with more than 145 languages spoken at home, according to the latest census—about even with New York.”  That diverse population allows Houston to serve up an ethnically dynamic food scene, another attribute the report recognized. In 2022, the greater Houston area received 10 semifinalist nominations for the James Beard Awards, commonly known as the “Oscars of the food world.”    Railway Heights, POST Houston, Chivos, Casa Nomad and Urbe were highlighted in the report, noting that “few cities anywhere do Mexican better than Houston.”  According to Houston Facts 2022, the Houston Metropolitan Statistical Area was home to more than 11,000 food service and drinking establishments at the end of 2021 with more than 80 categories of cuisine.   The report also states that Houston has a top 10 global GDP per Capita finish and “has been among the top five Googled cities over the past year.” In 2020, the U.S. Bureau of Economic Analysis estimated the Houston MSA’s GDP at $488.2 billion. Twenty-four companies are headquartered in Houston, making it home to the largest concentration of Fortune 500s in Texas.   Austin landed at No. 43 globally and Dallas ranked No. 47. Kyiv, Ukraine received the 2023 Honorary World’s Best City title with London ranking No. 1 globally.   Learn more about why talent and companies are choosing Houston.
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