GAS portfolio impact assessment – February 2022

This is the fifth six-monthly impact assessment report produced by Green Angel Syndicate, a series of reports that we started two years ago in February 2020.

Green Angel Syndicate (GAS) is the UK’s largest network of specialist investors fighting climate change. As a purpose driven organisation, measuring our impact is essential to us. Given our exclusive focus on early stage companies that tackle climate change, we measure our impact by calculating the quantities of carbon dioxide and other greenhouse gas emissions (CO2e) that have been prevented, thanks to the activity of our portfolio companies.

Today, we report that the CO2e emissions mitigation enabled by GAS portfolio companies has again grown rapidly in the past six months, reaching 57,000 tonnes, cumulatively, by the end of December 2021. This exponential growth is driven by the continued expansion of our portfolio and by the commercial development of the companies themselves.

Calculating such an impact remains a complex task, but as we and our portfolio businesses grow, we are progressively able to refine our methods for calculating CO2e emissions mitigation.

And by deploying ever larger amounts of capital into more companies, we are proud to play a growing role in countering the increasing effects of climate change.

57,000 tonnes of CO2e emissions avoided

Green Angel Syndicate invests exclusively in businesses with a direct impact on climate change. Each one of our portfolio companies is developing a product or service that helps cut greenhouse gas emissions, or restore and regenerate degraded ecosystems on which we depend for CO2 removal.

In total, by adding together all the different types of contributions from our portfolio companies, we can report that the amount of greenhouse gas emissions avoided thanks to their activities has now reached 57,000 tonnes.

NB – This figure includes new portfolio companies’ contributions starting at the time of GAS’ investment
Source: Green Angel Syndicate

This figure has continued to increase rapidly, up another 57% in the past six months, reflecting the expansion in the commercial activity of many of our portfolio companies and also in the number of companies in our portfolio – now 30.

Of course, 57,000 tonnes of CO2e, which is equivalent to taking 27,000 cars off the road for a year, remains a small number: globally, humans emit a whopping 50 billion tonnes of greenhouse gas into the atmosphere per year, and the UK-wide emissions are in the range of 400 million tonnes.

Many of GAS’ portfolio companies are still in the development phase – producing no, or only a small, impact on CO2 emissions – but the investment that we bring is there to help them accelerate their development and achieve their potential.

Energy-related companies remain the largest contributors

During the second half of 2021, the largest contribution to the GAS portfolio’s carbon emissions mitigation figure continued to come from the energy sector (63% of the total), followed by transportation (24%), buildings (7%), recycling (5%) and agriculture (1%).

Source: Green Angel Syndicate

All sectors are growing, but at different paces, reflecting different types of businesses. For example, digital models are naturally scaling more rapidly than manufacturing-based ones.

In our September 2021 Impact Assessment Report, we explained how we analyse carbon emissions avoided by different portfolio companies – each one contributing in its own particular way. In this new edition, we have made a number of changes, reflecting refined methods as well as new contributions:

  • Qflow is a software-as-a-service company that enables the construction industry to measure and track materials delivered on site, and therefore to cut down on the otherwise huge quantities of materials wasted – with massive economic and environmental benefits. Following GAS’ investment in Q3 2021, we have integrated a first estimate of the company’s carbon impact.
  • Better Origin has announced a commercial agreement with Morrisons by which it is installing 10 of its X1 units to produce carbon neutral eggs, and the company is therefore moving from development to commercial phase. Better Origin’s technology uses food waste on farms to grow insect larvae, which are then fed to poultry. The dual benefits of cutting food waste and replacing carbon intensive soy with insects in poultry feed enable CO2 savings of 565 tonnes per year per unit, as calculated by Better Origin.
  • Stormharvester uses artificial intelligence to master water flows in large utility networks, cutting sewage overflow into the environment, and also in individual buildings, enabling a reduction in water consumption. The environmental benefits are obvious, but estimating their specific carbon impact is difficult. For now, we have only accounted for the carbon benefits of cutting water consumption in buildings, coming up with a CO2 impact which is small, but not negligible.
  • Thrift+ is a successful second-hand fashion company. It contributes to cutting carbon emissions by avoiding the making of new clothes – reducing the output and therefore the environmental impact of the fashion industry. We are now using a more conservative estimate for the carbon intensity of new clothing – hence an impact number which is reduced compared to our previous calculations, but still large and fast growing.
  • Swytch makes and sells conversion kits, enabling any bicycle to be transformed into an e-bike. We have updated our carbon impact estimates to take into account not only the switch of users away from car journeys to e-bike journeys, but also the beneficial impact of making conversion kits that transform existing bicycles into e-bikes, rather than manufacturing full new e-bikes.

Finally, it is worth noting that out of the 28 Green Angel Syndicate portfolio companies, there are still:

  • Four companies for which we have not (yet) been able to develop a satisfactory methodology to estimate their carbon impact. This is notably the case of those operating in biodiversity monitoring (NatureMetrics) and environmental preservation and restoration (NatureSpace Partnership and Scottish Bee Company).
  • Five businesses in their development phase, not yet contributing in terms of carbon mitigation.
  • There are three companies, in which GAS invested in early 2022 and which are therefore not included in our H2 2021 calculations.

Beyond carbon emissions

Not all the positive impacts of our portfolio businesses can be, or should be, directly captured in a single greenhouse gas mitigation number. For example, this is the case of Stormharvester or NatureMetrics, as mentioned above.

To illustrate the other forms of impacts that our portfolio companies make, we have continued to benchmark them against the UN’s Sustainable Development Goals.

As a group, our portfolio companies address 10 of the 17 SDGs, with a particular focus on resource efficiency, sustainable consumption, renewable energy, water and sustainable cities. These five SDGs are being addressed by seven or more portfolio companies.

Source: Green Angel Syndicate

Mitigating climate change is at the core of what Green Angel Syndicate is about. Estimating the actual impact that our portfolio companies have is difficult, but it is necessary – for us to report on what we are achieving, but also to inform our decisions, for example to help us choose our next investments.

*Risk disclaimer: Investment in early-stage companies involves risks such as illiquidity, lack of dividends, loss of investment and dilution. Even when diversified within a fund, investing in early stage companies carries a higher risk than investing in more established companies. Investment in EIS and SEIS funds should be considered as part of a diversified portfolio. For professional investors only.

Antoine Pradayrol is a Director of Green Angel Syndicate. He is a Cleantech expert and Angel Investor. Formerly head of telecoms equity research, Exane BNP Paribas, Antoine provides analysis on smart cities, mobility, green & clean tech and ed tech. Follow Antoine on LinkedIn and Twitter.

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