4 reasons to believe in cleantech financially! With examples from 5 rocketing material tech startups
This article speaks about novel innovations in material science & circular economy, but, sorry, I just have to start a little bit off-topic to emphasize one thing.
It’s just that investing in cleantech and sustainable companies is financially just so reasonable!
We hear it, we talk about it, but now the Academia makes it even more explicit! 70% out of 2000+ research articles find the positive relationship between companies ESG scores
and financial returns. Better ESG score brings about 10 percent lower cost of capital. I even made this ⬅️ wonderful graph cutting out the correct amount 😂.
So why is that? Why investments in sustainable companies excel?:
First and foremost, sustainable enterprises are just doing the right damn thing! And therefore there are little to no risks involved - the investment is secured from the instances of such as the suffocating carbon tax or plastics ban. The chances of a state interference and punitive regulatory outcome are just much lower. And I mean much lower than for plastic produce, polluting energy, or just low-quality products!
Positive attention! According to McKinsey’s knowledge base, the sustainability-focus brings about loyal customers and new clientele, therefore increasing the top-line growth of green companies.
Cleantech innovation is centred around efficient processes and resource-use. This is always at the heart of cleantech innovation and is also growing the operating margin with a lower unit-cost structure.
In addition, cleantech attracts motivated, more productive workforce who demand value-driven work. This is not at all irrelevant, but worth roughly even 2 percent of the stock price each year.
Primed with these pretty numbers, one may start wondering what are the opportunities that get you all of these wonderful gains...
One rocketing technological trend is in material science that oftentimes, actually pretty much always make use of reusing the materials at hand and in doing so falls under the category of circular tech as well. Material science based startups are growing since people have understood they're just making so much of an impact.
For instance, do you know what’s the impact of buying just this one T-shirt? It’s 2700 litres of water, so if you wanna make it up for the environment, please don’t drink water for another 2,5 years.
Not gonna go into the footprint of the jeans (7500 litres, btw), the glossy golden jumpsuit coat of your friend's Mops
or leather car seats.
However, the textile industry that is currently the second greatest polluter will go through a rapid, say, revolution led by much more optimised routes of production and consumption. And as mentioned, this is an industry with a clear-cut path to circular economy as well. To sum the process up bluntly by the words of Jan Huitema, lead MEP of the circular economy action plan:
„Circularity principles need to be implemented throughout all stages of a value chain to make the circular economy a success. From design to production, all the way to the consumer.“
These new principles and regulations empower innovation of materials and @Beamline we are happy to have worked with several globally recognized science-based novel material startups. Therefore there’s a lot we can bring to the table for startups in this field. This is also one of the focuses of Batch 2 of our accelerator, with applications phase opening very soon in September 2021!
There are loads of new/recycled materials based companies that allow us for (hopefully) a better future. Companies that really want to change the industry have to dream big! This is what our portfolio companies Gelatex Technologies, Woola, Reverse Resources, RAIKU and MYCEEN are doing, all approaching the same problem from different, value adding angles. Of course there are MORE, much MORE. But knowing these 5 teams we are 100% certain that they’ll really deliver their world-changing promises. So what are these?
We all have encountered the packaging-nightmare when the ordered online-product is wrapped so heavily in bubble wrap and tape that it takes ages to unpack the thing. Why? WHYYYY? 🤯 Thats why the proposition of Woola – packaging made of leftover sheep wool – is such a no-brainer! 🐑 🐑 🐑
They don’t only optimize the production, but make beautiful wraps out of nothing basically. Too beautiful, even – admittedly, the consumers don’t have hearts to throw these away, looking for another ways to use the wraps.
A little bit of competition does no harm in materials innovation, since there need to be enough solutions for consumers to start noticing and choosing sustainable packaging over plastics. So there is RAIKU, that also provides leftover wood based alternative to plastic bubble wraps. Speaking of beauty, RAIKU is just fabulous (look at the picture above)! 😎 They also claim to be the cheapest plastics alternative in the field. 🌱
Revolutionizing nanofiber production! Their production method makes nanofiber production 75% cheaper than that regularly is. When this doesn’t ring a bell yet then let me take that home for you: many things are fully or partially made of nanofibers. E.g. clothes, filters or medical masks, cultured meat, medicine capsules etc. If you make the production of nanofibers much more sustainable and a lot cheaper, then we can soon enjoy ONLY sustainable, long-lasting clothing that doesn’t pollute and eat the world-saving artificial meat. Strong team with pivot experiences (=adaptable) - Gelatex is a must to keep in mind! 😉
Reverse Resources is one of these complex projects that is led by the founder’s vision of bringing the holistic, structural change to life. This globally recognized company has created the tracking and trading platform for textile waste. Doing that they’re also putting a price tag on textile waste that’s so needed, since leftover pieces are not produced for free but have taken their toll on environment similarly to ready-made clothes. RR has done large cooperation projects with companies such as H&M, Marks & Spencer, Global Fashion Agenda etc. These kinds of initiatives help them create the real change to circular economy faster in one of the most polluting industries.
🍄+🛋️ and there's nothing else to add! MYCEEN, also, makes quality products from nothing. No, to say "out of nothing" clearly undervalues their science-based, clever innovation. "We grow carbon-negative furniture combining mycelium and organic materials, " they say. "Mycelium" is the magic word here, since this living network combines in itself the power to act as a glue to loose materials, while also being non-flammable, which is so important for some types of furniture. I'd definitely buy their mattresses - hopefully they start producing them any time soon! And this is not it, my friend! MYCEEN, as all fungi, has compostable materials, super low footprint of production + it's a good insulator, antistatic and, when needed, has also good acoustic properties 🎸🎸!
All in all, it's time to stop filling your portfolio with fleet management startups and start investing your time and resources to companies that bring clear value to the world your children will live in.
Sharing is caring! Do you know some other new materials startup that you think will be the next big thing? Share your answers in comments below or write them to me firstname.lastname@example.org, maybe it'll inspire cool new ideas or cooperations!