Climate Circles

By ROLAND HARWOOD and Julie Blane

What ARE THE shared challenges facing the UK climate-tech ecosystem right now?

This question underpinned an event we hosted last week at Zinc that brought together a diverse group of climate connectors to explore how we might work better together to scale innovation and collaborate across sectors.

The event was timely given that the ecosystem is growing so quickly right now which is really exciting. But it can be hard to navigate and quite fragmented which is one reason for a high degree of duplication of effort. In addition we know that many people and organizations are already operating at their maximum capacity. So how might we build our collective capacity? 

At the heart of the event were eight climate circle discussion groups around a range of different topics related to ecosystem gaps in three areas namely investment, knowledge and narrative. Six of these groups were planned and we were also pleased that two more were spontaneously created at the event. See below a short summary of what was discussed in each group. 

Sustainable Storytelling (led by Juliette Devillard from London Climate Connection)

We concluded that a definite shift in narrative is required away from fear and problems, and towards hope and solutions was needed. This shift is required from (at least) two angles: A top down approach (business leaders, politics etc), or a bottom's up approach (popular movements, grassroots action, community leaders etc). As ever the challenge of how to equip people and organizations with these new narratives was a recurring theme of the group.

Climate-Tech Talent (led by Leone Baron from MCJ Collective)

Why should top talent work on climate? Is there too much reliance on an individual's sense of purpose? In terms of challenges we identified the following: perceptions (low paying, risky, not sexy, ‘no big shiny companies’), reputation (attempts that failed, bad impression lingers, money was lost), awareness (new jobs to society, time is needed, misrepresentations of climate science being needed), capital and risk (economic downturn - safer to stay in more well established industries, salary comparison), and education: (people don't know what's involved, understanding of science needed). In terms of how we overcome some of these challenges we identified: repetitive messaging / persistence, open sourcing risk and helping people make an educated choice, accelerating awareness of what’s happening in nature, awareness across disciplines and showing that anyone is welcome and all jobs can be climate jobs, and lastly encouraging corporates to focus on supporting talent in startups, education in startups. 

Non-Dilutive Capital (led by Connor Brooks from Silicon Valley Bank)

The main investment gap is currently for hardware based businesses particularly past the R&D stage. Once companies are in the stage where they need working capital to meet demand, grants tail off but banks and traditional lenders aren’t yet comfortable with lending. Founders don’t want to raise a round to meet demand and dilute themselves, knowing they have demand. Also don’t want to rely purely on revenues as they’ll grow too slowly and miss the revenue targets of their VCs. Some of the difficulty for lenders is around tech ‘newness’ – if secured against assets, lenders are unsure of how the tech amortizes/depreciates. We explored whether venture funding is the right mechanism, and how corporations are no longer investing in R&D in the same way. The idea was raised that instead of investment flowing into startup companies themselves, could there be joint ventures established that capital investment flows into, which could derisk things. 

Open Climate Data (led by Chris Pointon from Icebreaker One)

We uncovered a long list of data needs and pain points from a wide range of perspectives. Whilst we'd like to see as much data as possible as open data, we're more concerned that data needs are met. Good data improves and accelerates nearly all our efforts, and there's not enough of it. But often just "data" isn't sufficient - we need context, definitions, models and analyses for it to be useful. Yet it’s better to have incomplete/lower-quality data sooner than perfect data never. One ideas was to develop a climate data playbook similar to the ODI's Data Landscape Playbook.

Climate-Tech Venture Building (led by Jeff Hardy from Zinc)

Venture scaling is difficult. There is a clash of narratives and deal flow in that climate change is clearly urgent but investments and technology take too long. Many investors do not have a fit for purpose investment model for climate tech. In addition, culturally in the UK we are cynical about failure and founder skills in selling climate tech, sometimes in partnership with corporations and perhaps we can learn from the US and elsewhere. Lastly, we would welcome government models to assist with first-of-a-kind investments such as through loans and guarantees.

Scaling Net-Zero Finance (led by Stafford Lloyd from Innovate UK)

There’s a problem with the current VC model and how it applies to climate tech.  The main issue seems to be temporal in that it takes longer, for a number of reasons (e.g. hardware based).  A few solutions to this were put forward – mainly along the lines of stretching the existing model, for example by feeding in opportunities earlier to the funding cycle or exiting in a different way.  Although our intuition was that we just need a different model. Investors need to see the funding chain and this isn’t always visible (i.e. an early stage investor likes to see active larger scale investors) so perhaps a sector investment map is needed. Investors generally don’t always understand areas of deeptech that need investment to reduce emissions. Lastly we need more non-dilutive capital (see above) and some felt that the government should reconstitute the Green Investment Bank, or something similar!

Diversity, Equity and Inclusion (led by Pippa Gawley from Zero Carbon Capital)

We all felt that climate tech as it is today is highly non-diverse and homogenous, in particular there are too few female founders and most founders we see are white. We felt that the diversity on the VC side has improved in recent years, but there is still a lack of women in decision making roles. We believe that this lack of diversity is a result of inefficient decision-making =  unconscious bias (thinking all CEOs have to act like men to be judged as confident etc) + network bias (you hire / invest in people that are like you) + working with a pool of candidates that is not diverse to start with thanks to systemic issues in society and education pushing women away from STEM subjects, and then pushing them away from being founder if they have dependents. It takes intent at every stage to try and overcome all these barriers. Investors / managers / connectors need to genuinely believe that companies are going to perform better with diverse teams on board, as much as they believe that going to a top university or having great work experience will contribute, and then be willing to do the work to try and cast a wider net. 

Collective Climate Insights (led by Colin Pinks working with Jaguar Land Rover)

This group explored how and why do we encourage people to get better connected across the sector? The main benefits identified were: new perspectives through cross contexts, getting inspired about greater possibilities, seeing how others might help, learning new techniques from other domains, and building empathy and trust (especially face to face). In terms of how to realize these benefits the group proposed having a clear and facilitated structure (so that it creates productive collaborative conversations), building a context to generate conversations, creating a safe space and develop people’s collaborative muscles (listening, turn taking, hearing from all etc) and building a framework for followthrough with a bias for action.

GET INVOLVED

Many thanks to everybody who joined us for the event and in particular to the hosts of each circle. If you were unable to attend you can check out the slides below which includes links to our recent ecosystem research and mapping, and the playlist that was playing quietly in the background here. 

We now want to take forward some of these discussions to deliver on the challenge and opportunity of ensuring a habitable planet for all. One suggestion has been to run some Circle Sprints over a 6 week period to forge new collaborative actions and partnerships.

We really like this suggestion and in order to do so we are now actively looking for people and organizations who are interested in joining and supporting this work. 

Please get in touch or schedule a call to find out more or to explore how we might collaborate. Or you can join our community and support our work directly here. Thank you.

“We hope we can use the event as a launchpad for an ongoing effort to define, discover and demand the sector needs to accelerate the transition to net zero.”