In the following post, we will take a closer look at the current trends that are disrupting the industry.

But this is only the beginning. The rapid shift to electrification and sustainability more generally has created white space across the industrial landscape and new opportunities to create and capture value. Investors are also trying to fill the gaps: in the first half of 2022 alone, they have put almost $90 billion into companies that are developing climate technologies.

Titanium Economy companies that have focused on the energy transition and the circular economy have employed a four-part playbook to build businesses that create value for their employees, communities, customers, and shareholders:

• Lead with digital. Leverage technology to prepare your company today to compete tomorrow. For example, materials manufacturer Trex’s intake of plastic bags grew so large that the company’s IT team had to refresh its computing capabilities. This led to a migration to the cloud, which gave Trex the ability to collect more data and disseminate insights more easily throughout the company, reduce the frequency of hardware upgrades, and more readily scale its computing capacity, allowing for increased production and future growth.
• Innovate your products. Develop new products, services, or business models to better meet new customer demands for sustainable products. Solar technology manufacturer Enphase is one example of this: based on customer feedback, the company developed a microinverter to help fix the long-standing “Christmas tree problem” in solar: if one panel in the grid fails, the whole grid fails. The company also developed and installed sensors in its customers’ home networks that fed energy back into the grid, earning both Enphase and their customers income from their local utilities.
• Pursue programmatic M&A. Use M&A to build “segments of one” in specific sustainable products or technologies. Clean Harbors, an environmental and industrial services provider, employed this approach when it acquired Safety-Kleen, the inventor of an innovative solution to re-refine and reuse waste oils. Today, the Safety-Kleen subsidiary is the largest re-refiner of waste oil in North America.
• Tell your story. Be vocal about the importance of—and your role in—advancing sustainability. This could create not only a flywheel for sustainability but also tangible business value, such as attracting top talent, securing advantaged supplier relationships, and improving investor multiples. Trex has forged public partnerships and engaged media on its industry-leading NexTrex program² for grassroots material sourcing as well as written ESG reports to disclose progress made toward sustainability targets. These efforts have supported a sustainability strategy that has achieved an enterprise value more than 25 times its EBITDA—a ratio nearly three times that of its industrial peers.

The drive toward sustainable growth has far-reaching effects, from improving the health of our communities to serving as the foundation for future American economic prosperity. Many Titanium Economy companies have been first to enter these new and growing markets. But it may take a more concerted, collaborative effort from businesses, communities, and governments to develop the American industrial base in ways that accelerate the energy transition and build a more circular economy.