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#19 - Start-up ideas after COP15 on biodiversity

#19 - Start-up ideas after COP15 on biodiversity

πŸ’‘ One idea: Start-up ideas after COP15 on biodiversity

πŸ“ˆ One data figure: Near $5 billion in nuclear fusion private research

✨ One success: TreeCard, the green fintech that plants trees

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πŸ’‘ Start-up ideas after COP15 on biodiversity

The 15th Conference of Parties on biodiversity conservation challenges was initially supposed to be held in October 2020 in Kunming, China, but was postponed several times because of covid. At last, it was organised in Montreal, hosted by Canada but still presided over by China. As far as what a COP can achieve, it was a success! The summit paved the way for a new Nature Tech economy around biodiversity conservation. Here are the key takeaways from the weekend:

  • The text recognises the need for urgent action and aims to "halt and reverse" biodiversity loss by 2030.
  • A Global Biodiversity Framework was designed and became the roadmap for action, including financial commitments, conservation quantified objectives such as the 30-by-30 target, and pollution and pesticide reduction goals.
  • A strong push for governments to constrain businesses to disclose their risks, dependencies and impacts on biodiversity; in particular, the TNFD framework should gain significant traction in the coming years.
  • Biodiversity credits are recognised as an essential mechanism to channel private capital into conservation projects.
Our world leaders praising themselves at COP 15.

Before the summit, uncertainty about the expected role played by private entities in biodiversity conservation pushed more than 330 businesses and financial institutions to call for mandatory requirements around disclosure and impact assessments. They will undoubtedly welcome the outcome of the summit.

Biodiversity disclosure needs to catch up to climate reporting. In 2022, 18,600 companies disclosed climate change data through CDP (a 42% increase from 2021), but only 1,000 companies disclosed data on forests (a 20.5% increase from 2021).

Where there are gaps and pain points, there are opportunities to launch start-ups. Here is a list of Nature Tech sub-sectors where needs have to be addressed by new services and technologies:

  1. All techniques supporting the implementation of conservation projects on the ground: bioengineering, biotech, tree planting devices, precision sustainable agriculture and agroforestry.
  2. Financial engineering and innovative vehicles to structure public and private investments in biodiversity, green fintech, biodiversity credits marketplaces, and anything promoting nature as an asset class.
  3. Technology to measure how ecosystems are maintained, restored and impacted by human activities: unprecedented amounts of data can be collected by remote sensors (drones, satellite imagery) and various in-situ visual, acoustic, genomic and IoT sensors.
  4. Computing power, AI and machine learning can help us classify, predict and make decisions about managing natural systems management.
  5. SaaS to automatise and ease MRV procedures and new disclosure requirements; blockchain, tokens, distributed ledger technology and other technologies to improve supply chain traceability and increase transparency in nature-related transactions and respect land tenure and human rights.
  6. Mobile apps and platforms to connect stakeholders and address the need for shared and transparent information, capacity building, increased awareness and engagement.
"And there is very little startup activity related to problems like biodiversity", Shaun Abrahamson managing partner at Third Sphere in his excellent article Choosing a Climate Problem to Solve.

And because VCs still have a lot of dry powder, there has never been a better time to launch a Nature Tech start-up. So, pick one idea and go! (Should I do it too?)

πŸ“ˆ Near $5 billion in nuclear fusion private research

Nuclear fusion was all over the news recently. American researchers have achieved a process called ignition: to put it simply, they were able to get more energy out from fusion reactions than is put in by a laser. This announcement is a huge milestone but remains only a first step, and fusion is still far from granting us abundant, cheap, clean and safe energy.

Ignition is quite artistic.

Even though we have been hearing of it for years, very little research has actually been done on fusion reactors. Several technical paths are envisioned, and each of them will require hundreds of millions of dollars of investment in research with no guarantee of success. Not very appealing to traditional investors!

Nevertheless, various funds with a very long-term outlook have started investing in start-ups that are often working faster than governments and betting on fusion as a future commercially viable energy source. On top of the $3 billion invested by public entities, private funding in the sector is now estimated to be above $2 billion. It may look like a lot of money. However, it is negligible if we think of the upside potential.

✨ TreeCard, the green fintech that plants trees

Saving the planet as you shop is the dream the promising green fintech TreeCard is offering its customers. The company was founded in London in August 2020 by Jamie Cox, Gary Wu and James Dugan. As a proxy to β€œsave the planet”, you do nothing else but plant trees, which is not much but better than nothing and still quite trendy. Even the card itself is made out of wood, providing a great yet probably not intended example of a circular economy.

When using the card, you plant one tree for roughly every 50 pounds you spend. To do so, TreeCard uses the major part of the interchange fees charged to retailers and invests the capital saved into reforestation projects. Tree planting activities are undertaken by the search engine Ecosia, which is also an investor in the start-up. The service is free, but the client has to give up loyalty points or cash back. What is left for the company seems minimal; the business model might need to be perfected to ensure long-term financial viability.

The London-based company raised a $5m seed round in 2021, led by EQT Ventures. TreeCard is already present in the US and will soon launch in the UK and key European markets.

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