Title: The Green Opportunity: UK Startups and Venture Capitalists Embrace Climate Actions
Introduction:
The UK’s startup ecosystem has experienced rapid growth, with venture capital-backed companies raising a staggering $40 billion. However, a recent study conducted by Supercritical, a climate measurement and compensation startup, has shed light on the neglect of carbon emissions by these startups. Only 24% of the top 500 VC-backed startups in the UK have taken steps to measure or offset their carbon emissions. This article aims to explore the key findings of the study and discuss the role of fintech companies and venture capitalists in climate actions. Additionally, we will delve into the implications of this research and provide insights into the larger context of sustainability in the startup landscape.
Key Findings of the Study:
1. Lack of climate action: The study reveals that 76% of the UK’s top 500 VC-backed startups have not made any efforts to measure or offset their carbon emissions.
2. Fintech companies leading the way: Among the companies analyzed, fintech companies like Monzo, Oaknorth Bank, and Tide have shown the highest commitment to climate action, having raised significant funding while prioritizing sustainability.
3. Worst performers: On the other end of the spectrum, companies like Doccla, Multiverse, Cera, and Motorway fail to prioritize climate actions, despite their substantial contributions in terms of funding.
4. Varying performance of venture capitalists: The study also assessed venture capitalists based on their climate scores. Investors like Latitude, Molten Ventures, and Tencent emerged as high performers in integrating climate considerations into their investments, while Samos Accel and Passion Capital ranked among the lowest.
The Importance of Climate Action in Startups:
1. Responsibility and trendsetting: As Dr. Steve Smith of the University of Oxford highlights, ending climate change should be a collective endeavor, and companies across the globe are increasingly committing to reaching net-zero emissions. Startups have a unique opportunity to lead the way in demonstrating climate leadership and inspiring larger organizations.
2. Cost of climate consciousness: Contrary to misconceptions about the high cost of climate action, the study estimates that high-quality carbon measurement and offsets amount to just £4.98 per employee per week, emphasizing that sustainability is an affordable priority.
Exploring the Climate Effectiveness Ranking:
Supercritical’s Climate 100 Report provides a comprehensive ranking of the most climate-effective UK technology companies. These rankings are based on various climate-related factors, including carbon footprint assessment, reduction initiatives, offset purchases, goal-setting, progress communication, and climate roles within the business. The following is a selection of the top-ranked companies in the report:
1. Monzo Bank: Monzo has emerged as a front-runner in climate actions, raising $1.2 billion in funding and exhibiting comprehensive sustainability measures.
2. Oaknorth Bank: With $861 million in funding, Oaknorth Bank demonstrates a strong commitment to climate considerations in its operations.
3. Tide: Tide, having raised $294 million, is another fintech championing climate action.
4. Faculty: Faculty, an artificial intelligence developer that raised $52 million, showcases the potential for sustainable tech innovation.
5. Yulife: Yulife, a notable insurtech company that raised $207 million, places a strong emphasis on climate responsibility.
The Role of EdTech and FoodTech Companies:
The study reveals that edtech companies have the highest average climate scores, surpassing other sectors such as climate tech, food, transportation, and real estate. This points to the importance of education and knowledge dissemination in driving climate action. Foodtech companies also showcase exemplary performance, recognizing the vital role the Industry plays in sustainable agriculture, supply chain management, and reducing food waste.
The Green Opportunity:
1. Younger companies stepping up: The fact that 52 of the top 100 ranked companies were founded since 2016 indicates a proactive approach among younger startups compared to more traditional ones.
2. Potential competitive advantage: Embracing climate actions can provide startups with a unique selling proposition, attracting socially conscious investors, customers, and talent. It can also serve as a differentiator in a competitive landscape and foster innovation.
3. Collaboration and collective impact: Startups can collaborate with venture capitalists, accelerators, and government bodies to create a supportive ecosystem that encourages and rewards climate-conscious practices.
4. Influencing the wider business landscape: Startups can set an example for larger corporations and inspire them to adopt sustainability-driven strategies.
Conclusion:
The study conducted by Supercritical highlights a significant gap in climate actions among VC-backed startups in the UK. While fintech companies lead the way, overall, there is much room for improvement. Startups have a unique opportunity to adopt sustainable practices and influence the larger business landscape. By embracing climate actions, these companies can attract socially conscious investors, customers, and talent while contributing to a greener and more sustainable future.
Summary:
A recent study by Supercritical reveals that around 76% of the UK’s top 500 venture capital-backed startups have not taken any steps to measure or offset their carbon emissions. Fintech companies, such as Monzo, Oaknorth Bank, and Tide, have emerged as leaders in climate actions, while other sectors, like edtech and foodtech, also showcase commendable performance. The study sheds light on the potential competitive advantage and collective impact startups can achieve by prioritizing sustainability. By collaborating with venture capitalists, shaping industry norms, and setting an example for larger corporations, startups can play a crucial role in driving climate consciousness and fostering innovation.
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Around 76% of the UK’s top 500 venture capital-backed startups have done nothing to measure or offset their carbon emissions, according to new research shared exclusively with TechCrunch. In total, these companies have raised $40 billion in venture capital funding. Furthermore, of the venture capitalists analyzed, the highest one only obtained 37 out of a possible 100 in the ranking, and the lowest, 3.
Fintech companies turned out to do the most on climate: Monzo (raised $1.2 billion), Oaknorth Bank (raised $861 million), and Tide (raised $294 million). They were followed by Faculty (an artificial intelligence developer that raised $52 million) and insurtech company Yulife (raised $207 million). The worst performers in the top 100 on the 500 index were Doccla (grossed $23), Multiverse (grossed $414 million), Cera (grossed $303 million), and Motorway (grossed $272 million).
Investors such as Latitude, Molten Ventures and Tencent achieved high average climate scores, while Samos Accel and Passion Capital ranked among the lowest.
The VC classification It ranked companies based on the climate actions in their portfolio. Each VC’s average climate score was calculated by summing the climate scores of all their top 500 investments, divided by the number of top 500 companies they invested in.
Some ‘household names’ in UK venture capital ranked outside the top ten, including Notion Capital (11), GV, Index Ventures (13), Balderton Capital (18) and Seedcamp (27).
UK venture capitalists and the climate
The report, published by the climate measurement and compensation startup. Supercritical, looked at a possible range of actions spanning emissions measurement, carbon reduction, purchasing offsets and contracting to play a climate role. Supercritical directs its services primarily to technology companies.
The research analyzed 500 venture capital-backed companies based in the United Kingdom, with more than $20 million in funding and a workforce of more than 30 people.
In the index, edtech companies had the highest scores on average, followed by climate tech, food, transportation and real estate.
The index also estimated the cost of being climate conscious, using data from Supercritical customers. The report found that the average cost of high-quality carbon measurement and offsets was £61,635 per year, equating to just £4.98 per employee per week.
Dr. Steve Smith of the University of Oxford (co-director of the Net Zero Tracker and co-author of the Oxford Principles for Net Zero Aligned Carbon Offsetting) said in a statement: “Ending climate change should be a matter of all. Companies around the world are realizing this, and a third of the world’s largest PLCs have now committed to reaching net zero emissions. “It is increasingly difficult to excuse those who do not have a climate goal and it is easier for companies to measure their own carbon footprint.”
Fifty-two of the index’s top 100 companies were founded since 2016, suggesting that younger companies are quicker to measure their footprint than traditional ones.
Michelle You, co-founder of Supercritical, told me: “Our research shows that measuring emissions and offsetting them with high-quality removals would cost an average of £5 per employee per week… We believe that our community has a responsibility to act and show the world what climate leadership looks like. We solve problems, we innovate, we move fast, we are data-driven and we are first-principles thinkers – today there is no greater challenge than the climate crisis.”
The following are UK technology companies ranked between 1 and 100 in terms of climate effectiveness according to Supercritical. Climate 100 Report. The ranking is a combination of whether the company had measured its carbon footprint; planned and/or initiated reductions; purchased removal offsets; bought conventional offsets; set a climate goal; is communicating progress; or has a climate role in the business
Monzo Bank
OakBanco Norte
Tide
Faculty
Yulife
Immersive laboratories
what3words
infogrid
origami energy
Ometry
perlego
All the plants
Bumper
Vu satellite
Gravitiq
Student
impala
urban jungle
habit
pangaia
Go without card
Onfido
TVS Supply Chain Solutions
Zego
soldier
Money box
money farm
Sylvera
BCB Group
Wildanet
Winnow
Connection
Cultural trip
Notpla
Rovco
day
strange box
Altruistic
revolution
gousto
Ogury
Anyvan
Fanatic
HODGEPODGE
Yapily
Element
timit
Bit of life
The modern milkman
Dronomics
The bicycle club
XMOS
Skyrora
Accurx
RedSift
Ledgy
Strong third
land bay
Juice
Everledger
Nothing
Ieso Digital Health
nut box
wirex
profit box
Wagestream (formerly Earnd)
Zeelo
Hello myself
PhoreMost
Educate Zen
beam
ConnexOne
Oxbotics
Wow
Payhawk
Huma
A little biography
Birdie
SenSat
Raylo
Induction sanitary group PLC
causeLens
Hoxton Farms
VFC Foods
Foresee
Etopia Project
Bondaval
Garrison technology
fountain
divided
Prolific
Superscript
Doccla
Multiverse
wax
Highway
New research: Vast majority of VC-backed UK startups do *nothing* on climate emissions
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