INVESTMENT STRATEGY

Humanity’s growing demand for and wasteful extraction and consumption of natural resources including fossil fuels, water and land including minerals, metals and biomass is adversely impacting the Earth’s environment, changing its climate and destroying its biodiversity. Not only are the Earth’s resources finite but humanity’s vast and often careless appetite for them now risks its survival as a species as well as that of countless other species.

We at Sustainability Investors believe that none of this is inevitable. Through innovation in technology, business models and public policy, disaster can and should be averted.  We focus on the interrelated markets for the Circular Economy, Clean Energy and Sustainable Transport. Through our impact delivery methodology based on the UN’s Sustainable Development Goals and the IFC’s Operating Principles of Impact Management, we seek to facilitate and accelerate the necessary transition from an unsustainable and wasteful linear economy to a much more resilient, sustainable, resource efficient and ultimately circular economy.

CLEAN ENERGY

 

Energy is indispensable to the world’s economies and societies, from powering appliances and equipment, to transporting goods and people, from creating the built environment to manufacturing products for business and consumers. Human civilisation depends on energy, but mankind remains addicted to the combustion of hydrocarbon fossil fuels to produce the energy it needs. This is not sustainable because the resulting emissions contribute heavily to the air pollution which causes an estimated 7 million deaths per year worldwide through heart and respiratory diseases. The producing and consuming energy causes over 70% of all man-made greenhouse gas emissions and threatens irreversible climate change that could in turn jeopardise humanity’s continued existence.

Although the transition from fossil fuelled to clean and sustainable energy has begun, the global scientific consensus before and especially since the Paris Agreement of 2016 tells us that we need to go a lot further within the next decade if we are to achieve the required net zero carbon emissions by the middle of this century. Completing this energy transition involves working along the value chain of energy generation, efficiency, storage and distribution, and applying the latest information technology to ensure smarter, more efficient and resilient heating/cooling and power systems.

We are committed to assisting this transition from carbon-intensive fuels to low carbon energy generation. In so doing, we aim to help ensure that the generation, storage, distribution and consumption of energy is done in a way that meets the needs of the present without compromising the ability of future generations to meet their own needs through the continued emission of harmful, greenhouse gases into the atmosphere.  Renewable sources of energy including geothermal, solar and wind technology are already generating clean power for the grid. We welcome the emergence of renewable energy generation being increasingly delivered in a modular and scalable way, not just to the grid but also to off grid sites and for shorter duration projects in place of diesel generators. Where these renewables are not feasible, we also support the introduction of technology using hydrogen, biofuels and low-methane natural gas in place of diesel or petrol.

The growing reliance of national grids on renewable energy generation makes balancing the grid’s supply and demand harder, so smart grid software solutions are increasingly being adopted to help balance the grid in real time.

In short, the energy sector is diverse and complex. Decarbonising it continues to require more than one transition. We need to continue to decommission thermal power generation plants dependent on fossil fuel combustion in favour of zero carbon power sources such as geothermal, solar and wind. We also need to continue to develop other alternative forms of low-carbon energy such as hydrogen and bioenergy, particularly for sectors that cannot be electrified such as aviation and terrestrial heavy goods logistics. Last but not least, we need to make ever greater efficiency savings in our use of energy, for example in commercial and residential buildings. Creating demand at scale for these new technologies will drive down marginal costs and result in scale economies as we have already seen in the solar and wind segments of the market. This in turn will reduce emerging technologies’ initial reliance on government subsidies to bring them to cost parity with fossil fuelled power.

Making these transitions simultaneously during the 2020s should help humanity avoid catastrophic climate change by the middle of this century but will also make the air we breathe much cleaner and will help reduce the high risk to human and animal health posed by our continued addiction to burning fossil fuels.

CIRCULAR ECONOMY

CIRCULAR ECONOMY

 

Central to our investment strategy is our support for entrepreneurial efforts to make the economy ever more circular and ultimately achieving the goal of no longer being dependent on the continuous extraction of raw materials from the earth or the polluting incineration or dumping of end-of-life waste into landfill or the sea. Instead, we aim for the economy to become restorative and ultimately circular through the reducing consumption and ever more efficient use and use of secondary raw materials, the designed-in re-use of product components, the recycling of all waste, and the use of clean, renewable energy for all power. It is a step beyond the hybrid economy that we increasingly have today in the West, one in which most waste continues to be disposed of rather than recycled or re-used, thereby wasting huge amounts of embedded energy, materials and labour. Throughre-designing products, manufacturing processes, supply chains and business models, corporations can extend their product life cycles and enhance their efficiency by using fewer natural resources to make longer lasting products, and creating less pollution and waste doing so.

The extractive, linear economy which still exists today is slowly but steadily being transformed into a much more circular one through the shift to renewable energy, the elimination of waste and pollution, the restoration of eco-system services and the increased resilience of capital and labour markets. This serves to de-link finite natural resources from business growth, thereby removing resource constraints and enhancing resource productivity and creating sustainable competitive advantage.

This transition away from an inefficient linear economy to a circular economy will reduce environmental stresses and damage, while simultaneously controlling input costs and reducing humanity’s dependence on finite natural resources. It is already creating economic opportunities and we see signs that the innovative companies that seize this growth opportunity can generate enhanced returns for investors as well as having a profoundly positive impact on the environment and on human society.

SUSTAINABLE LIVING

SUSTAINABLE TRANSPORT

 

The way we live (i.e. how we work, produce, consume, travel) has a profound impact on our planet, the Earth. The greenhouse gas footprint of industrial production and of buildings, whether residential or commercial makes up two thirds of total greenhouse gas emissions. Moreover, households and industry are major water users (and wasters). Lastly, producing investment and consumer goods entails, on the one hand, severe natural resource depletion, and on the other, major waste streams of non-biodegradable material (pollution of soil, air and water bodies bear witness to this). It is estimated that all humans in the Western world now ingurgitate microplastic. Transport and commerce of goods are fundamental to modern and thriving economies, yet they too must follow the path of decarbonisation.

Hence there is huge leverage in promoting technologies and business models which will allow us to benefit from better comfort, accessibility and efficiency, while at the same time reducing as far as possible our environmental footprint. We can expect as a result, greater social justice and cohesion as well as a move away from the materiality of ownership. Indeed having access is often more satisfying for the consumer, lessening the burden of ownership, while at the same time being more commercially viable for the producer. Lastly, the built environment must seek to be regenerative in its utilisation of materials, energy and water, but also in its intent to allow for changing demographics, work habits and urban reconfiguration.

Our societies depend on vast and varied transport systems for the movement of people and goods. The way we organise mobility and freight is responsible for a quarter of all energy-related global CO2 emissions. The transport sector also causes other harmful emissions such as hydrocarbons, nitrogen-oxides, sulphur oxides and particulate matter, impacting the quality of life in urban areas, damaging human health and causing premature mortality. Workspace digitalisation, videoconferencing and regionalisation of supply chains will not keep the transport sector from growing. Transport is forecast to grow by at least 50% by 2030 driven by a growing world population and an increasing number of consumers who can afford goods and mobility.

A fundamental transformation of transport is required to protect our climate, to manage increasing urbanisation and to create healthy, liveable environments. There is a growing consensus that this transformation needs to happen quickly. It is the transformation of a €13 trillion industry and it will create many large-scale opportunities. We are committed to driving this transformation by supporting innovative companies from all transport sectors, whether terrestrial, marine or aerospace, which focus on creating cleaner transport, whether for people mobility or freight logistics, that is increasingly electrified or powered by non-greenhouse gas emitting fuel cells, autonomously driven, shared and connected.

INVESTMENT CRITERIA

INVESTMENT CRITERIA

 

What are we looking for in our potential new investments?

  • Small or medium sized companies based in Europe, but perhaps already serving customers beyond Europe, that are seeking equity capital of between €3m and €15m
  • Companies whose products or services have a clear competitive advantage and with the potential for strong environmental and social impact, growth and value creation
  • Experienced management committed to achieving environmental and social impact as well as rapid growth through taking their company’s intellectual property to market as a solution with an attractive customer value proposition
  • Proven and proprietary technology, or a technology-based service, that is already securing initial market traction and is ready to be scaled up
  • Targeting a sector of the economy with attractive long-term fundamentals

Well researched go-to-market strategy and business model

If you and your business plan meet these criteria, please do get in touch by completing the CONTACT US section on this web site.

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