An Interview with a Climate Tech Founder: EcoHedge
According to a PWC report, more than one quarter (26%) of all venture capital funding last year went into climate technology. In fact, US$50 billion was invested in 2022 and its popularity is being reflected across the investment industry. Businesses tailored to investing in climate are more popular than ever, such as the likes of Green Angel Syndicate, Sustainable Ventures and impact-led Venture Capital Trusts (VCT’s) like at Octopus Investments.
As well as these sector-specific syndicates and funds, various venture builders are exploring commercial opportunities in the race to net zero. Such venture builders include Carbon 13 and Futerra Makes, whilst some larger firms like EY are setting up whole departments dedicated to climate. These organisations have huge ambitions. For example, Carbon 13 will be selecting and supporting 1000 entrepreneurs over 5 years who will build scalable ventures with the potential to collectively reduce CO2e emissions by over 400 million tonnes.
There are also sustainability specific recruitment firms, communications agencies and strategy houses all supporting their clients on the road to net zero. Needless to say, Climate Tech and the green economy is a huge commercial opportunity, as well as an altruistic career choice.
At the end of last year, I spoke to Founder and CEO Rob Smallcombe of EcoHedge. Rob started EcoHedge at the end of 2020 (see the Story of EcoHedge here), a carbon accounting software firm helping businesses take a monumental step towards their climate goals through empowering them with better data.Enjoy the interview with Rob below, where we discuss all things EcoHedge and climate.
What are the biggest challenges we face in solving climate change?
“The biggest challenge used to be awareness, where it was hard to get people to acknowledge and understand climate change. Now, the obstacle is more that even with the best intentions, many people and businesses don’t know how to take action. The abundance of climate news and complicated jargon overwhelms most people.”
2. How does EcoHedge help solve these issues / Why did you start EcoHedge?
“We started EcoHedge with the goal to empower businesses that want to make a difference through our no-frills and easy-to-use carbon accounting software. Our software will act as the first, monumental step to helping businesses become businesses fit for the climate age and reaching climate goals, net-zero or otherwise.”
3. Why do you think now is the right time for EcoHedge?
“Climate consciousness has never been higher with the general public. Consumers, investors and employees alike are demanding companies to be more environmentally-friendly and be more transparent with their carbon footprint. On the other hand, in an effort to tackle climate change and reach national climate goals, many countries, like the UK, have put forward legislation, requiring businesses to disclose their emissions and set climate targets. We at EcoHedge think it is the perfect time for our product as it’s what the market desires, and frankly, requires.”
4. How do you think the current macro climate is affecting EcoHedge?
“The current macro environment has created both challenges and opportunities for EcoHedge. On one hand, the increased focus on sustainability and reducing carbon emissions has led to more interest in and demand for climate-related technologies. This has created opportunities for us to grow and attract investment. However, on the other hand, the economic downturn has made it more difficult for small and medium-sized businesses (SMEs) to invest in new technologies. SMEs are now, rightly, more focused on reducing costs than ever before, which makes it a challenging environment. Ultimately it just means we must find ways to adapt, innovate and provide more value to our customers.”
5. Where do you see EcoHedge within the next 3 years?
“The connection between the energy crisis, climate crisis, and current political situation highlights the challenges businesses are facing. While sustainability is a small part of the larger picture, it can have a significant impact on areas such as retaining and recruiting employees. At EcoHedge, we promote making progress rather than aiming for perfection and assist businesses in making small changes. This includes setting goals, achieving them, and then raising the standards to build momentum over time. Our focus is on providing data-driven insights to support businesses in making difficult decisions and having more meaningful discussions with suppliers, such as deciding to divest from or continue carbon-intensive activities.”
6. Who is your target audience and why?
“Currently, our target audience are Small Medium Enterprises (SMEs), particularly those within the manufacturing & FMCG space. As SMEs don’t have the resources and capital to hire expensive consultants, we saw our product as the perfect solution for them. The manufacturing space is one that we were dedicated to as it is one of the most polluting industries in the UK, accounting for 16% of its GHG emissions.”
7. Where have you seen the most traction for your product, where do your customers see the most value?
“We’ve seen the most traction for EcoHedge Express with those time-pressured business owners who have a requirement to report on their climate credentials but don’t quite know where to start. They don’t have the time to invest in manual in-house solutions and don’t want to invest the capital to outsource this to environmental consultants. Our fast, accurate, but most importantly affordable solution allows them to be agile when it comes to responding to tenders, preparing for investment or obtaining certifications.”
8. EcoHedge recently raised finance. How, if at all, did being a climate/ social good business help investor interest?
“Being a climate-tech company was certainly important for investor interest and something on which we were questioned. The sentiment towards purpose-driven and social good businesses has shifted to the extent that it is now a deal breaker for many investors. For us, it meant we had many meaningful conversations and met some incredibly valuable investors who were either already invested-in or looking to invest in the impact space.”
9. What is your most memorable moment running EcoHedge?
“In the early days, due to a communication error between our product and development team. Metric Tons was confused with Million Tons. This led to us producing a report for an SME stating they produced 38 million tons of CO2E per year. Thankfully it was spotted, but that was a pretty memorable day!”
10. What is your response to climate change deniers?
“Whilst it is always important to engage alternative viewpoints and debate the truth. I don’t think it’s productive trying to convince people who to this day deny that climate change is happening. The evidence is too vast. I rather focus my energy on engaging with individuals who are passionate about problem solving, and making the world a better place.”
11. How do you live the mission in your personal life, outside of EcoHedge?
“Having founded a business I understand the pressure on Small Business owners and how many plates they are spinning. In my personal life I try to ensure I’m listening and learning as much as I can about those challenges across different sectors. As a company we can only empower Small Businesses if we understand their challenges. It is not about us telling them what they ought to do, rather helping them achieve what they want to do and navigate the chaos!
12. If there is one thing you’d like our readers to take away from this interview, what would it be?
“Climate can often feel like a pretty daunting space. It is heavily polarising with praise quickly turning to criticism as sentiment flickers. People typically think to take climate action you have to be ‘all in’ or ‘nothing’. I disagree with that. No one can claim to have all the answers, but over the course of time, striving for progress rather than perfection will serve you best.”
To keep updated with EcoHedge’s progress, follow EcoHedge using the handle @ecohedge across all social channels except on Twitter, where you can find them at @ecohedgehq.
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