Net zero seems to be on everyone’s mind nowadays (and if it isn’t it should be). With the 26th UN Climate Change Conference of the Parties (COP26) on the horizon, aiming for countries to commit to achieving net zero by 2050, interest in startups that significantly contribute to reaching this target is growing. And if you’re still left unconvinced, the latest report of the Intergovernmental Panel on Climate Change (IPCC) is a stark reminder that we need to act fast if we want to mitigate increased harm to people and planet due to climate change.
Critically we find ourselves in a position where we need to invest in companies aiming to secure a net zero future. Net zero, for those unfamiliar, refers to the balance between the amount of greenhouse gas (GHG) produced and the amount removed from the atmosphere. Efforts include switching from fossil fuels to renewable energy and curtailing the loss of biodiversity and deforestation. However, market forces alone will not achieve our net zero targets. Instead, directed transformations are needed to develop and invest in the technologies and innovations to support wider industry to meet these goals. So how can technology help to achieve a net zero future?
Examples of tech for good to achieve net zero
What we’ve witnessed at BGV in almost a decade investing in tech for good is that there is a significant increase in entrepreneurs who are acutely aware of the climate emergency. These founders want to build tech businesses providing the means to move towards a net-zero economy. Since 2012, we’ve invested in a range of companies providing access to affordable and clean energy, improving and creating sustainable supply chains, encouraging responsible consumption in a circular economy, and much more.
Take LettUs Grow, who are creating the farms of the future using aeroponic technology that uses up to 95% less water than traditional farming and increases growth rate by 70% compared to hydroponics. With rapid population growth and increasing extreme weather events that severely impact our food security, businesses like LettUs Grow can provide affordable, healthy food for everyone while helping farmers take the pressure off soils. Other examples from BGV’s portfolio include Envaluate, who are building an API that integrates with financial services to help consumers track the carbon emissions of their transactions. This in turn helps users change their purchasing behaviour to more sustainable choices.
Meanwhile, inhabit helps employers commit to their net zero pledges through their platform and enable employees to track, reduce and offset their carbon footprint. Inhabit recently did a carbon assessment for the BGV team, which provided us with lots of rich insight into what we can do as a business to achieve net zero in the years to come.
Companies like XeroE, the first UK platform to aggregate zero-emission delivery vehicles in one place, connect people and businesses for emission-free deliveries. In 2020 alone, they made over 130,000 emission-free deliveries, achieving greenhouse emissions savings equivalent to 80 acres of forest.
Creating sustainable supply chains is equally important to achieve net zero
A transition to a net-zero future requires radical tech transformation in existing and emerging sectors. Amid the global health and economic crisis, we also need to ensure that we create the conditions for sustainable recovery and long-term structural reduction in carbon emissions globally. Unfortunately, many supply chains remain unsustainable and can lead to massive environmental degradation and other adverse effects, largely fuelled by the trade in timber, palm oil, coffee, soy and other commodities. And it’s not just food - there is a rapidly growing demand for batteries and semiconductors putting immense pressure on the cobalt and copper supply chains. Thankfully, some tech for good companies are paving the way for responsible consumption.
For example, Fairphone, as a founding member of the Fair Cobalt Alliance, invites the wider industry to join the alliance to drive the supply of fair cobalt, make mines safer, minimise the environmental impact, and create more equitable working conditions for workers.
The investment and tech landscape is growing
ClimateTech investment is undeniably on the rise. According to PwC, 2013 saw about $418M in funding for climate tech companies vs. $16.1B in 2019, which is an increase in venture funding of more than 3,750%.And we'll only see more of this - 542 investors with nearly $52 trillion assets under management signed on to Climate Action 100+ pledging to drive action on climate change. A collective of pension funds with over £250 billion assets under management have also pledged to align their investment portfolios with a path to net zero. And the emergence of early-stage investors such as the government-backed Clean Growth Fund in the UK, who led BGV portfolio company Piclo’s Series A, are crucial to help more early-stage founders scale.
As governments, asset managers and business leaders across the globe align on the urgency to achieve net zero, investors have a great opportunity for systemic change through investing and nurturing tech for good businesses and really move the needle to achieve a net zero future. Many of the technologies and innovations that will drive progress to achieve our net zero targets might already exist or are yet to be created. Our job at BGV is to provide early-stage founders with a thriving enabling environment to create, launch and scale their tech for good ventures for a net-zero future.
If you’re a founder with a business idea to help achieve net zero, talk to us here.If you’re an investor interested in companies creating a sustainable future, contact us here.
Additional resources to explore
Photo by Thomas Richter on Unsplash