Inside Microsoft’s $1B Climate Fund Strategy to Hit Net Zero by 2030
Brandon Middaugh is the senior director of Microsoft’s $1 billion Climate Innovation Fund, created in 2020 to accelerate technologies that help Microsoft and the wider economy meet aggressive 2030 sustainability goals: carbon‑negative, water‑positive, zero‑waste and ecosystem‑protective.
Five years in, Brandon shares how the fund’s “invest‑to‑procure” model aligns capital with Microsoft’s own demand for clean power, fuels, carbon removal, low‑carbon materials and water solutions; what’s working (a 5‑fold jump in durable CDR contracted since launch) and where supply still lags; and why scaling markets—not just piloting tech—is central to Microsoft’s moon‑shot roadmap toward net‑zero and beyond.
Episode recorded on April 10, 2025 (Published on May 12, 2025)
In this episode, we cover:
[01:43] Microsoft's ambitious 2030 sustainability targets
[02:59] Brandon’s path toward climate finance
[10:59] The fund’s “north star”
[12:18] How carbon removal demand still dwarfs current supply
[17:14] Airline partnerships supporting Microsoft's net-zero goals
[19:46] Investment and procurement teams’ flywheel collaboration
[23:22] Water-related investments and initiatives
[29:36] Program mandates: innovate, accelerate, and scale
[31:57] Brandon's advice on transparent engagement with Microsoft
[36:43] Predicting highly distributed future energy systems
[40:16] How transformation only seems inevitable in hindsight
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Cody (00:00):
Today on Inevitable, our guest is Brandon Middaugh, Senior Director of the Climate Innovation Fund at Microsoft. The Climate Innovation Fund is a $1 billion fund announced in 2020 that is now invested in more than 60 climate tech startups across equity and project finance. Microsoft, the third largest publicly traded company in the world, created an ambitious net-zero target in 2020, now five years ago, to be carbon negative by 2030, and by 2050 to remove all historic scope one and scope two emissions that the company is responsible for since its founding in 1975. The Climate Innovation Fund was established along with this mandate, and I was eager to catch up with Brandon to hear what she's learned in five years of deploying the fund.
Cody (00:49):
Our venture fund at MCJ has many common co-investments with Microsoft, at least seven by my count. I had a sense of what she's been interested in going into the conversation, but had been a while since she and I caught up. Of course, the space around us continues to change rapidly. From MCJ, I'm Cody Simms, and this is Inevitable. Climate change is inevitable. It's already here, but so are the solutions shaping our future. Join us every week to learn from experts and entrepreneurs about the transition of energy and industry. Brandon, welcome to the show.
Brandon Middaugh (01:33):
Thanks for having me, Cody.
Cody (01:34):
Looking forward to hearing all about the work you're doing. You've been in this role now with Microsoft Climate Innovation Fund for a while. You're like five years into this thing.
Brandon Middaugh (01:43):
We launched the fund in 2020 and it's hard to believe it's been half a decade, but it's perfect time to take stock of where we've been and what comes next.
Cody (01:53):
It's especially fascinating because I believe the fund was launched in 2020 as part of this sweeping set of 2030 goals that Microsoft set for net-zero and it's 2025. We're halfway there.
Brandon Middaugh (02:06):
That's exactly right. We launched the fund as part of the overall sustainability strategy for the business. Our 2030 targets are to be carbon negative, water positive, zero waste, and protecting ecosystems by 2030. We are hard at work executing on that roadmap, and my team sees our role as central to enabling that progress.
Cody (02:32):
Well, I'm looking forward to learning all about that. I'm looking forward to learning about how your role fits into that broader set of goals, and how Microsoft views external investing, which is what I believe you're mostly doing, to help it achieve those goals and any other ancillary benefits that come from that. But let's start with you. How did you get into this role in the first place? I think you were at Microsoft prior to taking the role with the Climate Innovation Fund. Maybe share a little bit more about your background there.
Brandon Middaugh (02:59):
Sounds great. Well, if I can take us all the way back to my childhood, I was a kid who was out in the woods catching toads and snapping turtles and red eft salamanders, and then trying to keep them alive before releasing them back.
Cody (03:16):
Where was this?
Brandon Middaugh (03:17):
Pennsylvania. I grew up in Baltimore, Maryland, lived in Baltimore City and spent as much time as I could with my family out and about in the mid-Atlantic woods and lakes regions. When I was a kid, I developed this love for the natural world that my parents really encouraged, and in school I always had an affinity for math and science. Went deep on the conservation science, biology, chemistry side of this space, and assumed when I was younger that that path is what I would take, that I would be in the natural sciences and be in research specifically. I continued down that path until I was in college, at which point I started to look hard at the science that was coming out around climate change.
Brandon Middaugh (04:10):
I remember this moment of realization that whatever we do on conservation science was at risk of being swamped, figuratively and literally, by the emerging climate crisis. I spent one summer during college working for the Smithsonian's Environmental Research Center, measuring blades of grass in a marsh and realized both that with all the mosquito bites, that might not be the career path for me. At the same time, the Stern Report came out that fall and it really sparked my attention to the role that market-based solutions and economics play in solving this issue. I pivoted my focus from the science and research path really to solutions at scale and developing those market strategies.
Brandon Middaugh (05:02):
I went into consulting in Washington, D.C. when I finished my degree and was working with clients from the multinational corporate world, BMW, Coca-Cola, First Solar, on their sustainability strategies and go-to-market strategies.
Cody (05:20):
You had some big name folks associated with that consulting firm, I think. Yeah?
Brandon Middaugh (05:24):
Yeah, exactly. I was at the Albright Group, which subsequently became Albright Stonebridge. I was working for Madeleine Albright, Carol Browner, and their partners really driving the climate-focused sustainability, as well as investing through Albright Capital Management.
Cody (05:40):
Madeleine Albright, the former Secretary of State for folks who maybe are younger than us.
Brandon Middaugh (05:46):
That's right. One of the things about working within that policy arena and at that intersection of business and policy was, we had the opportunity to advise organizations like Norway's sovereign wealth fund, which is actually one of the largest sovereign wealth funds in the world, on how to integrate climate risk into their strategy.
Cody (06:08):
Not only the largest sovereign wealth fund in the world, but a lot of it being oil money as far as I understand.
Brandon Middaugh (06:13):
That's right. We advised the Government Pension Fund Global, it's called, the Norges Bank Investment Management Team on their what was then called ethical investing strategy, in how to integrate climate risk. With that broad set of background in how to apply climate strategies to business, when I went back to graduate school, I really honed in on that intersection of economics and sustainability, and I've been working on that ever since. I went into renewable energy project finance, then joined Microsoft in the cloud operations and innovation team to focus on distributed energy and energy innovation. The key thing that we saw in our work piloting new technologies for integration into our supply chain was that we would find these incredibly promising solutions, but they didn't have the scale to really solve our challenges.
Cody (07:09):
This was what, 2016, 2017 era?
Brandon Middaugh (07:13):
That's right, 2016 to 2019, really. In 2019, our leadership took a broad look at where we were on our sustainability journey as a company and what the science was telling us was coming and realized that this is just a critical component of our global corporate strategy, and set the goals with the fund being part of that as a tool or a toolkit for addressing the markets that we need.
Cody (07:41):
You took the role with the fund in 2020. As we said, you're five years in. Since that time we've had this incredible boom of AI and data centers and all that, and Microsoft's right in the middle of that. How has that impacted or influenced the work that you do?
Brandon Middaugh (07:56):
Our business has evolved since we launched the fund, as well as the broader sustainability program initiatives in 2020. In many ways that has made the hill we need to climb steeper. At the same time, we have a road map to get there and are steadfast in our work on progressing towards those goals.
Cody (08:20):
The Chief Sustainability Officer at Microsoft, Melanie Nakagawa, had a really interesting blog post maybe a couple months ago, where she basically said, "Hey, we're halfway through this goal that we set for ourselves, and we always knew this was going to be a moonshot, but the moon has gotten farther away. We're still working really hard. But energy demand is growing now, which it wasn't necessarily when we set out to do this, and it's causing us to rethink how we prioritize." I assume that has cascaded its way to the work you do on a daily basis.
Brandon Middaugh (08:50):
When we put out our most recent sustainability report last spring, we saw a number of areas where we were on track at the mid-decade mark, particularly scope one and two, actually, our energy usage. Then, other areas where we really need to lean in to build out these markets, accelerate the progress. That's in particular the suppliers and supply chain, our are scope three footprint, as well as solutions related to water. Those are the major areas that my team is focused on investing in and building solutions. That's the main thing that we're doing every day, is finding the technologies, the new business models that can address the roadmap for us, as well as the rest of the industry and really building those out.
Cody (09:43):
The focus is on hitting this net-zero target by 2030. How much does that translate then for your team into focus on carbon removal, and how much of it is looking for new technologies that can be applied to your suppliers and to your broader footprint that help them actually have lower emissions in the daily work that they do?
Brandon Middaugh (10:04):
Over time, we've had the opportunity to see how our capital and our partnership can be most additional in these markets. What we've found is that we are most valuable to our portfolio when we are bringing insight into the end markets that they are selling into. Our strategy has really honed in on an invest to procure motion, where we are or will be a customer of the companies in our portfolio. A few areas that we've prioritized have been carbon-free electricity, materials, fuels, carbon removal, e-waste circularity, and water. Those are the major interventions that are most important for us in making progress. We tie the strategy to that very much both sides of the ledger.
Cody (10:59):
Got it. It very much is a strategic investment for Microsoft, where you see over time, as this company grows, you can become a buyer of their product in some way, whether that product is carbon removal or whether that product is a material that you can use in your operations somehow that are driving down the missionality of said operations.
Brandon Middaugh (11:19):
Our north star is to grow the markets that we need to succeed and progress towards our sustainability targets.
Cody (11:27):
Which of those markets have been growing faster than you would've appreciated, and which of those markets have been hard? Where has it been hard to find the innovation that you need?
Brandon Middaugh (11:35):
It's very much a both and, demand significantly outstrips supply in most of those markets that I just mentioned. As an illustration, when we launched in 2020, both the overall carbon negative goal and the Climate Innovation Fund program, we estimated that there was about 1 million metric tons of eligible durable carbon dioxide removal available in the market at that time. Fast-forward now five years, last year we announced that we contracted an excess of 5 million metric tons, the majority of which was in year three and a half million, if that was in year. What you see and-
Cody (12:18):
In year meaning plan to be delivered that year?
Brandon Middaugh (12:20):
Correct.
Cody (12:20):
Wow.
Brandon Middaugh (12:21):
What you see is these markets were very nascent to non-existent when we set out on this journey, and we're starting to see the traction, the supply coming to market. It's still not enough to meet that accelerating demand globally, not just our demand, but others as well, but we've come a long way.
Cody (12:42):
How much do you end up needing to focus on the nuts and bolts of Microsoft's core operations, decarbonization, helping large scale compute have lower emissions and whatnot? That feels like that would be something that ultimately, back to your point of investor procurer, if you can find solutions in those areas, they would be high priority, I would think.
Brandon Middaugh (13:04):
Our approach has been to integrate ourselves with the business groups across all parts of our business to understand both the materiality of what they're seeing in terms of technological needs, and then the dependencies that they have in their roadmaps to get there. Then, we partner with those business groups to further understand, is a demand signal enough to build that market or is capital something that's needed to build that market? We've done that across, for instance, sustainable aviation fuel, embodied carbon in building materials, carbon removal as you mentioned, and so on.
Brandon Middaugh (13:45):
That's very much part of the strategy, is to deeply understand and then build an investment thesis and what we call an innovation map on the basis of those insights from across the business.
Cody (13:57):
Then, maybe describe a bit about where and how you invest from a stage perspective, from a geographical perspective, from a product market fit readiness perspective. Are you incubating ideas that still have a lot of tech risk? Are you looking for things that mostly have solved the problem and are now looking for commercialization pathways?
Brandon Middaugh (14:15):
When we first launched, our CFO, Amy Hood, articulated four key investment principles. One was climate impact, the second was underfunded markets with consideration for climate equity and with alignment to Microsoft's core business. That really describes a portfolio and an investment strategy that we've built, which is focused on solutions that have commercial traction, demonstrated commercial traction, which typically takes us post series A at least, but also has the room to scale with the right partners and needs anchor customers to get there. That's really been the differentiated role that we play. Over time, we've had the opportunity to reflect on what is it that sets a corporate investment initiative apart from the other climate tech investors in this space, and how do we lean into rather than away from that differentiated value proposition?
Cody (15:15):
Okay, so I'm hearing a bit more of looking at commercial scale. I'm guessing that's a series A, series B stage, where you're looking to come in, and you said how Microsoft differentiates from other corporate investors. What have you learned there? What is the special sauce that you all feel you bring to the table?
Brandon Middaugh (15:34):
It's really about CBC differentiating from the rest of the climate tech investment landscape. I think leaning into the joint roles as a buyer and investor, a solutions provider in some instances, depending on which base they're in, an advocate, and even a go-to-market partner in some instances. We really look to take cues from our portfolio companies on which of those is most useful to them. A few examples of where we've seen it work really well, early on we invested using project finance in the Orca Project that Climeworks built in Iceland. We also purchased carbon removal. More recently, we announced that we have both invested in Terradot and are buying 12,000 metric tons from Terradot and we see that flywheel of demand plus capital really kick in.
Cody (16:30):
That's enhanced rock weathering, Terradot?
Brandon Middaugh (16:32):
That's right. Enhanced rock weathering. Yup. Another example in the fuel space would be our investment in Twelve. We also partnered with Alaska Airlines to purchase fuel attributes from Twelve, and it's that flywheel of demand plus investment that we see helping to either kickstart or accelerate a company's path to market.
Cody (16:55):
Let me double click on that one. We're both co-investors in Twelve, which is awesome. In that case, Microsoft isn't necessarily a buyer of the sustainable aviation fuel, but you have a corporate partnership with Alaska Airlines and you helped together make a commitment that you'll somehow leverage Alaska Airlines flights that are flying with staff. How does that work?
Brandon Middaugh (17:14):
It's a great example, not just of the investment strategy, but the overall market development approach because what we're doing with Twelve is partnering with Alaska such that they take physical delivery of the fuel, use it in their routes that are serving Microsoft business travel.
Cody (17:34):
Which Seattle, Alaska Airlines flies to Seattle a lot, I'm sure.
Brandon Middaugh (17:38):
Exactly. Then, we purchase and retire the environmental attribute certificate associated with that, such that it counts towards our scope three business travel emissions reduction.
Cody (17:51):
Got it. You make Alaska a preferential airline partner in exchange for them knowing that they're using more sustainable fuel. Then, you can buy that credits and use it for your 2030 net-zero goal.
Brandon Middaugh (18:03):
It's a template approach that we have used with a number of airline partners, actually, across and with other technology providers. What's unique about how it has applied to Twelve is that we also put capital to work with the company.
Cody (18:17):
Super cool. That's a great use case.
Yin (18:20):
Hey, everyone, I'm Yin, a partner at MCJ here to take a quick minute to tell you about the MCJ Collective membership. Globally, startups are rewriting industries to be cleaner, more profitable, and more secure. At MCJ we recognize that a rapidly changing business landscape requires a workforce that can adapt. MCJ Collective is a vetted member network for tech and industry leaders who are building, working for, or advising on solutions that can address the transition of energy and industry. MCJ Collective connects members with one another with MCJ's portfolio and our broader network. We do this through a powerful member hub, timely introductions, curated events, and a unique talent matchmaking system and opportunities to learn from peers and podcast guests.
Yin (19:09):
We started in 2019 and have grown to thousands of members globally. If you want to learn more, head over to mcj.vc and click the membership tab at the top. Thanks and enjoy the rest of the show.
Cody (19:21):
You mentioned with Terradot, for example, you are doing not just, and the Twelve use case, not just a capital investment, but also an offtake purchase. Do those two things happen at the same time or does one tend to happen before the other? I know you're also not the only group at Microsoft doing offtakes. There are other groups that might be involved with an offtake of a company, whether it's a carbon removal offtake or some kind of fuel or sustainable product offtake.
Brandon Middaugh (19:46):
Our approach has been to develop our strategy jointly with the teams that are procuring the offtake. In the case of fuels or in the case of carbon removal, we sit down early with those teams to understand their pipeline, our pipeline, and often collaborate on the technical and financial due diligence to understand, how is the company positioned, what role will they play in our portfolio both from an investment and a procurement perspective. Then, to design the two in coordination. They're often two independent contractual relationships, but they articulate our view of the future of the market effectively.
Cody (20:29):
In that regard, where does Microsoft find leverage or what is the benefit to Microsoft for doing the equity investment alongside that? What does having an external fund like Climate Innovation Fund bring to Microsoft that you wouldn't have if you were just purchasing offtakes example? Every company is going to want to sell an offtake to Microsoft regardless of whether Microsoft is investing into their cap table. How does the full bear hug benefit you as an organization?
Brandon Middaugh (20:57):
Our goal, our objective is to build these markets on which we are reliant. Another great example of this is the work we're doing now in building materials. We've realized that building materials are a significant part of our path to carbon negative, and they're one in which solutions are still emerging and are not yet at the scale for mainstream adoption. A few investments we've made in the space, in Boston Metal, in Stegra, in some concrete companies as well, those are really around how do we grow the supply so that when it comes to market, we will be able to purchase at the scale we need. The goal is really around creating that market supply and enabling the type of commercial opportunities.
Brandon Middaugh (21:50):
There's a critical time lag here, especially for any of these solutions that require infrastructure development, and that's why we've not only done the parent equity investments, but in certain cases have used project finance capital as well.
Cody (22:05):
Got it. What I'm not hearing you say is, these companies need our capital as catalytic capital in nature, that the companies wouldn't exist without us. You're investing in companies that are a going concern that have optionality on the capital markets and it's just a way for you to lean in, help build and grow the market. Honestly, it's I think also just a stamp of approval that Microsoft is really behind this business, which hopefully makes other corporations feel that much more comfortable leaning in and working with said startup. Am I interpolating that correctly?
Brandon Middaugh (22:41):
We like to invest alongside others. One of the elements of that, I should say, with MCJ being one of our most frequent flyer co-investors, I was looking at it by count recently. We like to partner with others. We want to ensure that while this is relevant for us, it's also relevant for the rest of the global economy. To your point, that makes economic sense, it means it's a stronger investment, and it sets a more durable course for those markets over the long term. We absolutely choose to invest alongside others where we can partner as part of a syndicate, typically.
Cody (23:23):
Shifting gears a little bit, we've talked about the work that you're doing in supporting these investments. We talked a bit about the energy space, we talked a bit about the carbon removal space, and you've brought up water a couple of times. I see water as one of the big critical infrastructure areas that sometimes is secondary in the climate tech discussions. But at the end of the day, a lot of the impacts of climate change are going to be either too much or too little water, depending on where you are in the world. How do you view that and what kinds of investments from a water perspective are you making and are you interested in making?
Brandon Middaugh (23:57):
It's so true that these other pillars, for us, water sits alongside carbon, which is meant to capture carbon equivalent emissions as well, so greenhouse gas emissions and waste. It's so critical, because to your point, so many of the impacts of climate change will be mediated through water. The investments we've made to date include partnership with WaterEquity, which is very focused on water infrastructure, water access, including some of the social, not just infrastructure, but also social and community dynamics of those projects. We're interested in really leaning in on water efficiency, some of the other technologically enabled solutions as well. I think we see this as critical. It's a challenging space.
Brandon Middaugh (24:49):
Our anchor investment in water, our first investment in water was in the Global Water Impact Fund that Emerald Technology Ventures manages. They've been a great thought partner for us in terms of identifying what's out there, understanding, is it conservation angle, is it a replenishment angle, is it quality? What are the different dimensions of that? I would say we've made a few investments in the space, but we're really looking to do more.
Cody (25:17):
Yeah, it feels like a next frontier. Carbon has had its big growth moment in the sun and there's a ton of attention and a ton of incredible innovation happening there. Still lots of amazing early stage startups, but certainly startups that are starting to hit scale in the carbon space. Energy clearly has grown like crazy in terms of clean energy access and different technologies for that, materials and fuels you mentioned. But water feels like this next wave of innovation that I'm excited to see what comes out of it personally.
Brandon Middaugh (25:47):
Me too, and we're really leaning in with the team within Microsoft that works on water strategy to understand what's out there as emerging technology options, and then also to understand what type of development support some of these projects and markets need to take off.
Cody (26:05):
Is there anything in your fund... water's the closest I can think of that's going to be an answer to the question I'm about to ask. I'll give you the answer before the question. Is there anything in your fund that deals with, talk about you invest to procure, you try to focus on things that are in demand in your business units. I would think climate resilience and helping Microsoft's operations be resilient in the face of wildfires, drought, flooding, hurricanes, tornadoes would be very relevant though it's not necessarily directly tied to your 2030 emissions goals. I'm curious how you as a climate fund have navigated that.
Brandon Middaugh (26:44):
Yes, I think every climate fund manager has to grapple with this question. Adaptation and resilience is core to the global climate response and climate transition. We've made a few investments in this space. For example, Mitiga Solutions is a climate risk analysis platform that really takes modeling of multi-hazard disasters and other types of enterprise risks, and applies that to develop these AI driven insights that can be useful to the insurance industry, to national governments, to international aid agencies, and so on. It's a great example of where we've been active in investing on that risk and resilience team.
Brandon Middaugh (27:33):
We have struggled at the strategic level with the broader question of, how much of our strategy should be risk and resilience focus versus mitigation solutions. We've determined that we're going to primarily invest in mitigation solutions because we see that being our role in the markets. But we know that risk and resilience are critical and they're also something where these digital tools, Mitiga being a great example, can give the insights that are useful for planning. You mentioned wildfire prevention. One of our portfolio companies, Vibrant Planet, is active in insights useful for wildfire prevention and land management.
Cody (28:14):
Allison's been on the pot.
Brandon Middaugh (28:14):
That's right. Yeah. I was so delighted to see a number of our portfolio companies have come on, LineVision, Rondo, maybe some others as well, so delighted to see that.
Cody (28:25):
LineVision is a fairly recent one, and yeah, Rondo we did maybe a year or year and a half ago. LineVision I would argue is in the resilience adaptation category, it's helping-
Brandon Middaugh (28:36):
It's both.
Cody (28:36):
... it's helping the power grid manage capacity, increase capacity potentially as well.
Brandon Middaugh (28:43):
I think that enabling tools like LineVision, which is a dynamic line rating solution that uses sensors and analytics to allow more capacity to flow through existing rights of way and existing lines, those are fantastic illustrations of our thesis. That digital enabling tools are really going to drive a lot of the first change in this space and hopefully to do so in a cost-effective way that's scalable. I think that's a great example.
Cody (29:16):
Outside of getting an investment from Microsoft Climate Innovation Fund, what should startups know about working with Microsoft, about trying to work with Microsoft, and then about eventually being a partner with Microsoft?
Brandon Middaugh (29:29):
When we launched our program in 2020, we had what we considered a dual mandate: innovate and accelerate. The way we interpreted that dual mandate was to participate in the product development of these solutions, and then Accelerate was to go build the markets and accelerate a path to mainstream adoption at commercial scale. In the last year, we've added a third mandate. Now, our focus is innovate, accelerate, and scale. In terms of things to know about working with Microsoft, particularly if it's about Microsoft as a customer, as an end user or buyer of a product, I think that third piece scale is one of the most important things I would call out. From my experience in multiple roles within Microsoft, when we want to do something, we want to go big.
Brandon Middaugh (30:20):
As you're looking at energy systems, supply chains, carbon removal strategies, we want to be able to see that vision of scaled adoption. It doesn't need to be today, we can roll the tape forward a number of years, but we really do want to participate in building the scaled market of the future and having an urgency around developing that market scale.
Cody (30:45):
Give me a few stories, you can make them totally anonymous, of things you've seen startups do in trying to work commercially with Microsoft, that would be good lessons learned for anyone listening to not try to do.
Brandon Middaugh (30:59):
Another important thing to know about Microsoft is that we strongly value what we call a one Microsoft culture. This really gets to the people element, the organizational elements, organizational culture of the teams that are working inside our business day in day out to bring these sustainability solutions into our operations. I think another important thing to know is, when you're working with a counterparty, a partner within Microsoft, to really take a collaborative stance. We value transparency across teams, we value the opportunity to work together and we tend to prioritize the partners who are going to view that as additional, to work with multiple teams in parallel in a transparent way rather than dividing or fragmenting conversations across different teams.
Cody (31:57):
Got it. If you're engaged in a business development conversation with one part of Microsoft and then you engage with another one, you should probably let them know that you're already in the middle of a conversation. Because if they found out separately and you were trying to somehow negotiate different terms with each of them or in a different way, ultimately, folks are going to find out.
Brandon Middaugh (32:15):
I think that despite having a large complex supply chain, I have personally loved the fact that the teams within this company are all rowing in the same direction. By and large, what you're seeing is a desire for that transparency and collaboration across teams from all of our partners as well. I think that that's been one of the things I've loved. Coming into this large company with its global infrastructure and global market reach to see, "Okay, it really comes down to the relationships that we build, the shared vision, and then selecting partners who are ready to build that scale with us in a collaborative way."
Cody (32:57):
Super helpful and thanks for humoring me on that topic. I find that folks like you in your role, who you're not in a direct business development role with any of these business units, but you help all these startups do business development with all these business units. I imagine, Brandon, you are probably one of the best people on the planet on how a startup should do business development with a large organization.
Brandon Middaugh (33:18):
It's important to remember that large organizations are people too. A lot of the complexity that we navigate, we can still be agile. We have been very pleased to prove out to our investees that we have that agility as a company to be responsive to their needs and their timelines as well. Yes, I think that working across a large complex organization just as you would with any other organization is great. I come from smaller organizations, so I didn't know what to expect joining a large global group like Microsoft. But the great thing for me has been the scale of impact and the people.
Cody (33:59):
We started the conversation by talking about you're halfway into this 2030 goal, you're five years into the climate innovation fund, and some of the lessons learned along the way. What are you looking forward to for the next five years? If we were having this conversation five years from now in 2030, is there anything you think we would be talking about that you weren't talking about in 2020?
Brandon Middaugh (34:19):
Well, first of all, let's have that conversation in 2030, and I do expect that there will be emerging solutions where we either hadn't engaged in or had engaged in but not yet seen the type of commercial readiness that we will see in five years. I have no doubt. That's what's so exciting about being active in this space. It changes. I fully expect and look forward to seeing the technologies that are around today, on circularity, power, carbon markets. But I also look forward to seeing the scale up of talent in this space. We're starting to see that over the last couple of years. There's been a huge influx of talent. It wasn't that long ago that climate tech as an industry was in the wilderness, so to speak, right?
Brandon Middaugh (35:13):
But now, there's enormous enthusiasm from a new generation of graduates to go into this space to develop the skills that will be building out the energy systems and supply chains of the future. I absolutely expect that what that means will be completely different in 2030 from what it is today. What skilling and talent and growth mean in this space will change over that time.
Cody (35:36):
That is such a good point. I think one thing I've observed is, obviously, political winds have changed here in the US over the last year. You're seeing a lot of language instead of climate tech or climate change. You're seeing a lot of language around energy transition, energy abundance, whatever. But when it comes to what 22, 23, 24-year-old college graduates are putting their hands up wanting to work on, it's climate change problems. That part has not changed, which is really interesting. The motivation of why folks are getting into this work, I think, is consistent regardless of what it's called in the commercial market.
Brandon Middaugh (36:13):
Exactly. I was at an event earlier this week with a number of graduate students working across areas as diverse as paleontological ecology to ocean chemistry. What all of these folks had in common was this broad passion for solving this huge challenge, but they all had different skills and abilities that they were bringing to the market. I think when you roll the tape forward, that's going to be very different. A couple other things, at the risk of being willing to get out a crystal ball, I fully expect that we will see dramatic change in assumptions for what our technological tools in the energy systems look like.
Brandon Middaugh (36:57):
By way of anecdote, when we were initially standing up our distributed energy strategy, I had the opportunity to travel and see one of the grid operator operation centers and noticed that the dispatch board for generation had about a dozen spots on it. The operators were then dispatching those generators against the changing load on a minute by minute basis. In five years, you will need more than 12 spots, you will need 1200 spots to capture the sources of generation, for instance. Just that move to distribution, diffusion of the tools we're using, I think that'll be big as well.
Cody (37:41):
Potentially, who knows in five years, but eventually, potentially probably fewer human operators doing that dispatch shifting too, I would guess.
Brandon Middaugh (37:49):
Tell me what you see in your crystal ball.
Cody (37:52):
I have no idea in that regard, but one has to imagine that eventually those types of roles will become automated. I feel like we're a ways away from that still, just because of cybersecurity risk and other things, in terms of managing the grid. But it feels like there will be technologies that enable that coming up in our eventual investment meeting.
Brandon Middaugh (38:10):
I will venture to posit that security and resilience will still be the most important things in that sector and it'll be interesting to see.
Cody (38:19):
Brandon, anything else we should hit on?
Brandon Middaugh (38:21):
I feel really good about the topics we covered. Like I said, we're co-investing in a lot of things, so I think we'll have an opportunity, I hope, to continue comparing notes.
Cody (38:31):
Looking forward to finding more to work on and super appreciate you taking the time. You guys are one of the biggest companies in the world. You are the 800-pound gorilla in carbon removal. You are one of the largest companies in the world from a data center development perspective. You have businesses that expand into categories that people forget Microsoft is even in, from video games, to you name it. It's an incredible company that you're a part of and thanks for your leadership in making an impact in this space.
Brandon Middaugh (39:03):
Yeah, thanks, Cody. I think what's most important is that we're pulling all the levers to build these markets and really leaning into our role in shaping the ecosystem, so thanks for having me.
Cody (39:13):
Thanks, Brandon.
Brandon Middaugh (40:16):
Earlier this year, when we were holding one of our team strategy sessions, our president, Brad Smith, who's the head of our organization, shared with us his view that transformation only seems inevitable in hindsight. I thought of you, with the rebrand of the podcast, and I would leave your readers with that thought.
Cody (40:37):
Amazing. Well, hopefully we're helping to highlight things that feel inevitable in the future, but if at the very least when people go back and listen to a story from a startup or whatever when they were still a baby and they ultimately become a multi huge billion dollar company with lots of impact and all this sort of stuff, it will seem as though they were inevitable from the start.
Brandon Middaugh (41:00):
I love it. Fantastic.
Cody (41:02):
Inevitable is an MCJ podcast. At MCJ, we back founders, driving the transition of energy and industry and solving the inevitable impacts of climate change. If you'd like to learn more about MCJ, visit us at mcj.vc, and subscribe to our weekly newsletter at newsletter.mcj.vc. Thanks and see you next episode.
