GAS portfolio impact assessment – October 2022

By Antoine Pradayrol and Shannon Hobbs

Underlining its commitment to the fight against climate change, Green Angel Syndicate (GAS) is pleased to publish its sixth carbon impact assessment report – a series that we started in February 2020. GAS is the UK’s largest network of specialist investors fighting climate change and, as a purpose driven organisation, measuring our impact is essential to us.

Given GAS’s exclusive focus on early stage companies that tackle climate change, we primarily 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 an estimated 91,000 tonnes, cumulatively, by the end of June 2022. Climate action is urgent, and, importantly, we are not reporting on mere projections of the companies’ future impact, but rather on what Green Angel Syndicate’s portfolio has, collectively, already achieved to date. The rapid growth in this carbon impact is driven by the continued expansion of our portfolio as well as by the commercial development of the companies themselves.

Calculating such an impact remains a complex task, and this is why we are transparent with our methodology and include a profile on each portfolio company, in which we explain how their operations contribute to the fight against climate change, but also to other relevant UN Sustainable Development Goals.

91,000 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 91,000 tonnes.

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

This figure has continued to increase rapidly, up 61% 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 32.

Saving 91,000 tonnes of CO2e is equivalent to taking approximately 45,000 cars off the road for a year. It is a small number compared to humanity’s annual global emissions of 50+ billion tonnes of greenhouse gases – but this reflects the fact that many of GAS’ portfolio companies are still in the development phase, producing no, or only a small, impact on CO2 emissions. However, the investment that we bring is there to help them accelerate their development and achieve their potential.

It is important to note that this total aggregated carbon impact number is a simple mathematical sum of the impact that we calculate for each company – regardless of the ownership of Green Angel Syndicate’s members and funds in each company. If the companies were large publicly listed businesses, this would not be a fair reflection of Green Angel Syndicate’s impact. However, in the case of early stage companies such as those that we support, Green Angel Syndicate often represents a majority of the early stage capital being put to work to develop the company to commercial stage, and as such, we believe that this total aggregated metric does make sense – as long as we are transparent about it.

Energy-related companies remain the largest contributors

The largest contribution to the GAS portfolio’s carbon emissions mitigation figure remains that of the energy sector (two thirds of the total), followed by transportation, buildings, recycling and agriculture.

Source: Green Angel Syndicate

Out of the 32 Green Angel Syndicate portfolio companies, there are eight businesses which are still in their development phase, not yet contributing in terms of carbon mitigation because they are not yet selling their products or services.

In addition, there are five companies for which we have not yet developed a satisfactory methodology to estimate their carbon impact e.g. those operating in environmental monitoring (NatureMetrics, QLM) and environmental preservation and restoration (NatureSpace Partnership and Scottish Bee Company).

Dealing with an exit

In January, GAS portfolio company Zeigo was acquired by Schneider Electric. This was great news not only for investors in Zeigo, but also for Zeigo itself and its ability to fulfil its mission, namely to accelerate the wide scale adoption of renewable energy by corporations, thanks to its platform that intelligently matches demand from such corporations with developers building large wind or solar farms.

However, in the context of calculating the carbon impact of GAS’s portfolio companies, we were left with a question: should we take Zeigo out of the equation, as it is not part of GAS’s portfolio anymore, or should we keep it in our total? We have concluded that we should keep Zeigo’s contribution in GAS’s numbers, to reflect our contribution, as early stage investors, to enabling the company to reach its current stage – where it can really start to make a much larger impact.

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. 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 – and the company profiles below give more details about how each company contributes to different SDGs.

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

Source: Green Angel Syndicate

*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 is an experienced early stage climate tech investor. Since 2019, he has been leading the development of the GAS Climate Change Fund (EIS) and he chairs its Investment Advisory Committee.

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