Authors: Shannon Hobbs and Antoine Pradayrol
As the reference early-stage investor for UK climate innovation, Green Angel Syndicate is dedicated to fighting climate change. We achieve this by investing exclusively in start-ups that reduce greenhouse gas emissions or remove carbon from the atmosphere. We demonstrate the effect of our investment strategy by calculating and publishing the carbon impact of our investments every six months.
Green Angel Syndicate’s Carbon Impact
We base our carbon impact on the emissions saved from the activities of our portfolio companies, and we are pleased to report that as of 31st December 2022 Green Angel Syndicate portfolio companies have collectively saved 135,000 tCO₂e from being emitted into the atmosphere. To put this figure into perspective, it is equivalent to the carbon sequestered over the lifetime of 135,000 trees.
Our carbon impact has continued to increase since we first began measuring the cumulative emissions saved by our portfolio companies in 2018. Between December 2021 and December 2022 our carbon impact rose by 125%, representing the largest increase in actual emissions saved to date. This is the result of the fantastic work of our 35 portfolio companies, who are supported by our group of specialist angel investors. We appoint board members to companies in which we invest.These people, members of our angel investment syndicate, use their expertise to support the companies through their commercialisation and scaling phase.
Our carbon impact is growing, and we expect it to continue to grow for years to come, because:
- We have deployed tens of millions of pounds into our portfolio companies to accelerate their growth and therefore impact. Some companies which were in R&D mode move to commercial sales, and start having an actual impact. Some other companies are expanding from initial sales to much larger contracts, with a fast-growing impact.
- The number of companies in our portfolio keeps increasing. We now have 35 companies, with a warm welcome to our three most recent additions: enee.io, 3ti Energy Hubs, and Kelpi.
With an urgency to mitigate climate change, coupled with a soaring appetite to invest in cleantech according to Beauhurst’s analysis, we will continue to deploy more funds into more new and dynamic companies. We also anticipate that with the help of our expert board members, over time our early-stage investments will develop into mature companies with larger impacts. These drivers will continue to increase Green Angel Syndicate’s carbon impact, as they have done since our first investment.
Carbon Impact by Sectors
Breaking down our carbon impact into sectors for H2 2022 shows that the largest contributors are our investments in energy, buildings and transport.
As it has done in the past, the energy sector generates the largest carbon emission savings. These savings are thanks to nine of our portfolio companies, whose activities span across wind, solar, storage and smart grids.
The IPCC’s 2022 report (Table 15.3 page 15) emphasises that to remain below 1.5℃ with no overshoot, European countries must invest $345 billion USD every year in energy systems between 2023-2032. The IPCC has suggested that investing in energy systems should cover non-biomass renewables, solar, wind, storage and transmission/distribution. These categories are where Green Angel Syndicate has focused its investments in Piclo, Powervault, Rovco and Naked Energy for example, and consequently has seen the most impact.
Historically, transport has accounted for around a quarter of our carbon impact, and it remains a strong contributor this half year, with companies encouraging the substitution of car or van journeys with zero-emissions modes of transport. PwC’s 2022 report has stressed the importance of investing in technologies that can make an immediate carbon reduction in sectors with the largest emissions, rather than only investing in potentially high impact technologies that will not be ready for deployment in the short term. In the UK, transport makes up 24% and residential buildings 16% of total domestic emissions. To facilitate the immediate transition to net zero, these are areas where Green Angel Syndicate has funnelled funds into e-bike conversion, electric car charging, and smart ventilation bricks. We are helping to change what can be changed without delay, and the critical impact these technologies have is evidenced in the carbon savings they have made to date.
It is worth noting that our portfolio companies go far beyond reducing carbon emissions: they contribute to 10 of the 17 SDGs. Further detail on what and how they are achieving these SDGs can be found in our September 2022 GAS Portfolio Impact Assessment.
Behind the Scenes
Calculating Green Angel Syndicate’s carbon impact remains a complex task, which is why we endeavour to be transparent with our methodology. We base our calculations on the emissions saved from the activities of our 35 portfolio companies, because our investment often represents a majority of the early stage capital used to develop the company to a commercial stage.
Each carbon calculation is different and depends upon the companies’ activities and the space they are operating in. In each case a company’s carbon impact is calculated by comparing the emissions from their product/service against baseline emissions of the same incumbent product/service. We do not consider offsetting as a viable method for effecting impact, and therefore it is never included in our calculations. To give a flavour of the logic behind our carbon impact we have published the methods we use to calculate the avoided emissions for a few of our portfolio companies.
A common question we are asked is: what happens when one of your portfolio companies exits (i.e. the company is sold, and is therefore no longer in our portfolio)? In early 2022 Zeigo was acquired by Schneider Electric, which will be key in amplifying its contribution to the fight against climate change. Zeigo is no longer considered a portfolio company, and likewise it is unjustifiable to attribute Zeigo’s new activity to Green Angel Syndicate. As such, Zeigo’s contribution to our carbon impact is capped at the time of exit and other portfolio companies will be treated the same.