Sustainable investment house OnePlanetCapital has targeted two new investments in GoThrift and Adaptavate, in its mission to support the next generation of startups making positive contributions to climate change.
After receiving clear interest from IFAs, the investments mark the latest companies the flagship OnePlanetCapital Climate Change EIS fund has deployed financing into. The fund only targets investments that will make a real impact on climate change as they scale.
GoThrift is a rapidly growing company that sells used and second hand clothing as the industry moves away from fast fashion and its environmental impact. With the resale industry growing 11 times faster than traditional retail there is a real opportunity to create a shift in the market towards more sustainable retail practices. A new item of clothing takes 77 gallons of water to produce with 4kg of CO2 emitted. Today we produce 100 billion items of clothing per year, a 100% increase over 15 years. If you buy 2nd hand you reduce this impact by 82%.
Adaptavate produces a range of carbon negative products for the construction industry. In particular its Breathaboard product is a wallboard made of a bio-composite instead of gypsum, which makes them carbon negative. The construction products market is set to be worth $109 Billion by 2028, but traditional resources are finite and the industry is rapidly seeking alternatives.
In the U.K., plasterboard is responsible for 3.5% of the country’s annual emissions, according to a University of Bath study. That’s about half as much as the country’s aviation sector contributes each year. Globally, the building sector accounted for as much as 38% of energy-related emissions in 2019, according to the United Nations Environment Programme.
Adaptavate will use funds from this raise to build a pilot production facility in Bristol in 2022.
The investments in both GoThrift and Adaptavate will make significant long term contributions in the reduction of carbon emissions as they scale. Investments in reducing carbon footprint and supporting a green economy are on the rise, with major economies including the US and China investing heavily in decarbonisation and a greener economy.
ESG versus impact
Investments in companies like GoThrift and Adaptavate clearly show the kinds of companies that investors in the space should be focusing on. Ie businesses that are genuinely focused on solving climate change. Unparalleled change is required to our global economy. We are in the midst of a green industrial revolution and the good news is the world is finally waking up to the substantial changes needed to tackle the climate issues we face.
This is reflected by the huge growth in ESG funds, however there is a growing realisation amongst both retail investors and institutional investors that this in-pouring into ESG funds is not without problems.
The problem with ESG is that it is a very loose definition of terms and targets which are largely self-policed and not well regulated. The ESG ratings agencies are massively divergent in their approaches. In February Morningstar removed 1200 ESG funds from its sustainable investments list representing some $1.4 trillion in assets. If investors want genuinely sustainable investments with impact at their core they need to look outside the ESG traditional markets and at the venture capital space where much of the action is happening.
Matthew Jellicoe, Co-Founder of OnePlanetCapital, commented:
‘’If investors want genuinely sustainable investments with impact at their core they need to look outside the ESG traditional markets and at the venture capital space where much of the action is happening.”
“We’re proud to invest in GoThrift and Adaptavate. We’re seeing increasing interest from IFAs in backing companies that are genuinely benefiting the environment and both companies are having a truly positive impact on the world we live in.”