By Antoine Pradayrol
Tackling global warming and climate change, by supporting businesses that develop solutions to cut greenhouse gas emissions, and more generally that help the environment. That is Green Angel Syndicate’s core mission – and we are determined to make the largest possible positive impact.
But what is this impact? How can we measure it? In our view, it must be measured as the impact that our portfolio companies are making, as a group. Indeed, this aggregate impact is what Green Angel Syndicate Members’ investments are making possible, by helping these companies grow.
Putting a figure on this is not an easy task: how should we best calculate the impact of each of these 17 (as of the end of 2019) diverse businesses, operating in sectors ranging from renewable energy to recycling? And in practice, how can we build a reporting tool that is robust enough to make sure that the numbers it produces are meaningful and consistent, but simple enough for a small team like ours to be able to deliver a result – and, more importantly, to not overburden the busy teams running our portfolio businesses with some cryptically-phrased reporting requirements?
In any case, we had to start somewhere, and the next paragraphs show the results of our first attempt at estimating our impact. This is not where we stop, but rather where we start. Over the coming months and years, we will continue to refine our method, gather data from the companies, calculate their contribution to reducing greenhouse gas emissions, and report on it.
We strongly believe that angel investment into the right companies can help tackle global warming and catastrophic climate change – and we will prove it.
5,200 tonnes of CO2e avoided
The companies we have invested in are diverse in their sectors, but they have one thing in common – or at least most of them do: their business, as it grows, will help cutting greenhouse gas emissions.
As such, we are reporting our impact in the form of one main figure, namely the aggregate tonnes of greenhouse gas emissions that have been avoided thanks to the activity of all portfolio companies taken together – and, at the end of 2019, we estimate that this was approximately 5,200 tonnes of CO2e.
Obviously, compared to global greenhouse gas emissions, or even total emissions in the UK (c.450 Mt), this is a very small number. This was to be expected, since our portfolio companies are very early stage businesses, so their commercial activity is only nascent, and so is their impact. However, as their revenues will grow, so will their impact – and we will continue tracking that growth over the coming years.
The many other sorts of impacts
Even though the reduction in greenhouse gas emissions is – and should be – the main way of measuring our impact, it is important to highlight that our portfolio companies bring much broader and more diverse benefits to the environment.
To report on this, we have mapped the activity of our 17 portfolio companies against the UN Sustainable Development Goals, and this is summarised in the following table.
Mapping of GAS portfolio companies’ impact vs. UN Sustainable Development Goals
Source: Green Angel Syndicate
Source: United Nations (un.org/sustainable development)
So far, transportation, buildings and recycling are the largest contributors to CO2e reductions
Let us now return to the portfolio companies’ impact in terms of cutting greenhouse gas emissions and explain the key steps that we have followed to establish a figure that we can publish with some comfort. Firstly, four important caveats:
With all this in mind, at this stage, we find that the impact from GAS portfolio companies is mainly coming from the transportation sector (63%); then buildings (19%); then recycling (15%); and finally, energy (3%).
This reflects the different levels of maturity of the different companies in our portfolio, but also the different levels of ‘reverse carbon intensity’ of each company’s business model – in other words, what quantity of greenhouse gas emissions is avoided by each unit of sale by each company.
Source: Green Angel Syndicate
The deep dive
We cannot go into each calculation for each single company, because these calculations use commercially sensitive sales figures for each of them and these are generally not publicly available.
However, we can explain what each calculation looks like, what sources we have used, and why, for some of the companies, we weren’t able to come up with a reliable figure.
Source: Coolsmartphone.com, Swytch
For a group of angel investors like Green Angel Syndicate, there is no such thing as a perfect calculation of the impact of our portfolio companies – especially because these are very early stage businesses with a necessarily limited track-record and constrained resources; and also because there is a lot we have to learn ourselves.
But this is not where we stop, this is where we start. Over the coming months and years, we will endeavour to continue refining our method and publishing our data, to prove our point that angel investment can, and will, make a significant difference in tackling global warming and climate change.