GAS portfolio impact assessment - October 2020

By Antoine Pradayrol

Six months ago, we published GAS’s first portfolio impact assessment, calculating for the first time the amount of greenhouse gas emissions that are being avoided thanks to our portfolio companies.

​As promised at the time, we are now publishing a six-month update - a great occasion for, in fact, three types of updates: (i) taking stock of the growth of each business and therefore of its impact; (ii) revising and improving our impact calculation methods where we could; and (iii) adding GAS’s new portfolio companies into the mix.

​We estimate that this has now passed 10,000 tonnes, cumulatively, since early 2018. This figure is up 88% in the past six months, driven both by the growth of the companies themselves and by the addition of new investments to our portfolio. This article details our findings by sector, and how we have updated our calculation methods for several companies.

We are acutely conscious that this is a very complex topic - and it is a fact that our calculations are simplistic and probably inaccurate in many ways. However, we have based them on the best research and sources we have found, including of course the companies’ reports themselves where available - and we endeavour to refine our methods, gathering data from the companies, and reporting on it regularly.

More than ever, Green Angel Syndicate is convinced that early stage investment into the right companies can help tackle global warming and catastrophic climate change - and we are determined to prove it.

​10,000 tonnes of CO2e avoided

Green Angel Syndicate exclusively invests in companies tackling global warming and climate change - so every single one of them must be developing a product or service that will help reduce greenhouse gas emissions or restore and regenerate degraded ecosystems on which we depend for CO2 removal.

Depending on the sectors they operate in, they can be directly displacing CO2-emitting activities (for example, replacing diesel delivery vans with greener electric trikes), or making products in more resource-efficient ways (for example, recycling plastic or building materials to make valuable new objects, whilst using less energy and other resources and therefore emitting less greenhouse gases); or indeed helping to reduce damage done by existing systems (for example, helping the ocean to recover its carbon sink properties).

Adding all these different types of contributions from our portfolio companies, we are proud to report that the greenhouse gas emissions that have been avoided thanks to their activities have now passed 10,000 tonnes.

​NB - This total figure includes new portfolio companies’ contributions from the quarter in which GAS’s investment has been completed
Source: Green Angel Syndicate

​This contribution is increasing rapidly: it was up 88% in the past six months, reflecting the expansion both in the activity of our fast-growing portfolio companies, and in the number of companies in our portfolio (23 as of the end of June 2020, up from 17 at the end of 2019).

Of course, these 10,000 tonnes remain tiny, compared to global greenhouse gas emissions, or even to UK-wide emissions (c. 350Mt in 2019). But this simply reflects the fact that our portfolio companies are very early stage businesses: their commercial activity is only nascent, and so is their impact. As their revenues grow, so will their impact - and the good news is that we can already see this growth happening quickly.

Energy and transportation: the largest contributors so far

​For confidentiality reasons, we cannot publish detailed company-by-company figures - but we can report on a sector by sector basis, aggregating the contributions from companies in each broad sector of the economy.

During H1 2020, we found that GAS portfolio companies’ impact mainly came from the transportation sector (44%), followed by energy (40%), and then buildings (10%) and recycling (6%).

This mix has evolved a lot compared to H2 2019, with an increase in the contribution from the energy sector - following the inclusion of two fast growing businesses, Piclo and Zeigo.

​Source: Green Angel Syndicate

​Compared to our first impact assessment report published at the beginning of this year, we have improved several aspects of our calculations, for which more detail is provided below, but there are a number of caveats worth mentioning:

• Of the 23 portfolio companies, four (NatureSpace Partnership, NatureMetrics, Bunloit and Scottish Bee Company) help monitor, protect, restore or renew degraded ecosystems. They definitely contribute to fighting global warming, as we depend on these ecosystems for CO2 removal. However, we have not yet developed a method to directly link their activity to quantities of CO2 emitted or removed.
  
  
• Of the 19 remaining ones, there are two for which we have not (yet) come up with a sensible, direct way of calculating their impact on CO2e emissions. These are BuyMeOnce and Good Club (although the investment in Good Club happened in Q2 2020 so its contribution to the total would in any case be small).
  
  
• Four of our companies are not yet at commercial stage – meaning that they are developing their products and services, but not selling them at sufficient scale to have a positive impact in reducing greenhouse gas emissions, yet.

So, the 10,000 tonnes overall figure is the sum of the CO2e emission reduction that we have calculated for the 13 most advanced companies for which we have been able to set a clear, straightforward method linking their sales to a certain reduction in carbon emissions. These are Powervault, Naked Energy, Rovco, Piclo, Zeigo, Shields Energy, AirEx, Swytch, BetterPoints, Zedify, Smile Plastics, Thrift+ and StormHarvester.

This article does not aim to explain the calculation for each single company, because each calculation uses commercially-sensitive business performance indicators. We explained some of our key approaches in our March 2020 blog, and it is worth mentioning below how we have updated a few of these, and also the methods we have used for new companies.

New methods

​Two fast-growing companies in our portfolio - Rovco, Piclo - have now been included, whilst they were previously not accounted for, as both of them have been able to provide us with robust CO2e impact calculations:

• Rovco is a technology and services company using AI to cut the cost of subsea survey, notably for offshore wind farms - thereby helping to make wind power more competitive. Rovco generates direct (scope 1) carbon reductions compared to traditional subsea surveying methods, because its survey missions take less time and require smaller vessels than traditional approaches. Rovco has now developed its own calculation for this impact, and provided us with estimates for the CO2e savings enabled by each of its missions in the past two years. We have reviewed these figures and integrated them in our portfolio calculation.
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• Piclo is a unique ‘flexibility’ marketplace that helps power utilities integrate intermittent renewable energy sources into the grid, but also accommodate the electrification of large sectors such as transport (EVs) and heat (heat pumps). Piclo has developed a detailed calculation linking transactions on its marketplace to the shift from high-carbon to low-carbon energy sources and energy usages. Piclo attributes a certain amount of CO2e savings to each pound-value of transaction on the platform, in the short term (now), medium term and long term (net zero scenario). We have used Piclo’s short term figures for our calculations, since our impact assessment is not a forward-looking one (rather, we focus on what has been achieved so far).

In addition, we have improved our calculations for Swytch, a company selling innovative e-bike conversion kits. We have used recently published academic research to refine our estimate of the carbon savings enabled by the adoption of electric bikes in the population.

We have retroactively recalculated GAS’s historical portfolio impact figures using these new methods - so the bar chart above shows consistent data across the whole time series.

​New companies

• Thrift+ is an on-demand donation service for second-hand clothes, making it convenient, transparent and rewarding to support a charity via these donations. Thrift+ joined the GAS portfolio at the beginning of the year. By encouraging the reuse of clothes, Thrift+ reduces the need to buy and therefore to make new clothes. We have used research by WRAP assessing the carbon footprint of new clothing in the UK, and applied this to the weight of clothing collected and sold by Thrift+.
  
  
• Zeigo is developing a platform that supports the uptake of renewable energy globally, by better connecting supply (renewable project developers) with demand (corporations buying energy). Like for other energy-related companies, we estimate Zeigo’s impact as its role in reducing the carbon intensity of electricity - with each MWh of power deployed via Zeigo being zero-carbon and displacing fossil fuel-generated electricity. We have included Zeigo in our impact calculation following GAS’s significant contribution to its latest investment round earlier this year.

​Beyond CO2e

​Not all positive environmental impact can be directly captured in one CO2e mitigation number - and in any case, it would be unjust and unfair to not report on all the other forms of impact that our portfolio companies make - ranging from the protection of terrestrial or marine ecosystems to the development of more liveable cities.

We have therefore continued to benchmark our portfolio against the UN’s Sustainable Development Goals.

As shown below, we have found that our portfolio companies are directly relevant for 10 of the 17 SDGs - including four SDGs (resource efficiency, renewable energy, sustainable consumption and water) which are addressed by six or more portfolio companies.

Matching GAS portfolio companies with UN Sustainable Development Goals

Source: Green Angel Syndicate

​Estimating the environmental impact of an angel investment portfolio is not a simple task: there are complex calculations to be made for a large variety of companies with diverse business models, in many different sectors - and for which there is usually no well established methodology. In addition, these portfolio companies are early stage businesses, with an inevitably limited track-record and constrained resources; and we, the GAS team, have a lot to learn ourselves.

However, it is really good to see how rapidly we are collectively progressing: in just six months, several of our portfolio companies have matured to a stage where they have been able to dedicate resources to develop their own detailed methodologies to assess their CO2e impact; and we have ourselves been able to devote more time to refining our portfolio-level calculations.

We will continue reporting on our impact every six months, looking forward to further improving our methodology but also to showcasing the scale of the cuts in greenhouse gas emissions enabled by GAS’s diverse portfolio companies.

Antoine Pradayrol is a Director of Green Angel Syndicate, the only angel investment syndicate in the UK specialising in the fight against Climate Change and Global Warming. For regular updates follow Green Angel Syndicate on LinkedIn and Twitter.