Building Climate Smart Businesses

Hi everyone, my name is Lucas Robinson.

I'm a principal at Renew Capital covering our portfolio and advisory services. I also have a background in

services. I also have a background in renewable energy and uh sustainability issues. I've run several businesses that

issues. I've run several businesses that are that touch on those themes. Uh so my job today is to support you in becoming

more climate smart and to try to provide for you a bit of a road map, a draft of

a road map perhaps uh to help you to to create or update um your environmental management plan. We're going to cover a

management plan. We're going to cover a few themes today. uh the primary sources of waste as a tech startup optimizing digital infrastructure maintaining

hardware and the KPIs around some of that but we're going to start with the business case and I'm just going to spend two minutes explaining why I think

it's so important to think through these issues for there's several reasons and you'll you'll get a document that goes

through each of them in detail but let me give you My pitch on this, my pitch is basically this. In the 15

years or so that I've been working on these themes, I have yet to run into a business where they haven't had several

strong incentives to at least think through what the environmental and in particular

the climate implications are of their business and how they can both mitigate

potential climate impacts and um do more when it comes to uh reducing their impact on the climate. And here's

what I mean by that. The first one is around compliance.

Basically any company on the continent now that is preparing even if it's 10 years

in the future for an IPO or a large takeover by a significant investment

firm uh even a I even a relatively small investment from a relatively small venture capital firm.

All of those processes are going to involve a lot of questions when it comes to both climate adaptation

and um climate change adaptation rather and uh climate change mitigation. And

what do I mean by that? Then your your potential investors and or your andor your IPO regulator are basically going to say what are you doing to ensure that

my money is safe if the climate continues to as it's predicted to change and secondly what are you doing to

mitigate your own company's impact on that climate because I as an investor am under pressure from my own investors to answer that question.

Furthermore, you're going to have buyers of your service or your technology or your product who have exactly that same set

of questions being asked of them. And

for all of those reasons, I think that it makes a great deal of sense to think through I'm not I'm not saying uh a

startup that's only been going for 6 months needs to act immediately and spend millions of dollars on a climate mitigation a climate change mitigation

strategy. That's not the case. Um

strategy. That's not the case. Um

however having a plan around which you can seriously discuss your efforts in this space will only serve to ensure

that you are viewed as being a serious and trusted partner in this space.

The other um area that I would say is important here is that it is almost certainly the case that you

will save money by thinking through these issues in particular when it comes to energy consumption across the continent. I have yet to

travel to any country where it doesn't make financial sense at least over the medium term to move to more sustainable

sources of energy. Now I'm living in Nairobi and I am sure that many Nairobi based c companies will be saying to themselves right now Lucas our grid is

in almost entirely green. uh you know we have some surge uh energy provision from less green sources but by and large it's

one of the greenest grids on the planet that is true however uh it is also true that here in Kenya if

a company were to move towards a solarbased system that just provided um renewable energy to that company, the

investment would pay for itself within generally speaking four to 5 years and that includes the cost of financing down in so I used to live in Zimbabwe

down in Zimbabwe and certainly Zambia these days that repayment period is is generally less than 3 years because the grid is so unreliable backup solutions

involve the uh diesel generators and uh it's it's it's basically ally a tremendously smart financial investment.

So I don't have time to go through every country on the continent. However, I can promise you that there is almost certainly a strong financial incentive

over the medium term to make the change.

Now, does it in some cases mean that you're going to have some upfront costs and that that might mean it's impossible for you to make that change at this time? Yes, I understand that. I have

time? Yes, I understand that. I have

been in that position many times myself.

I know that the costs of of renewable energy systems in some markets can be quite high and that financing is often not available. My point is only this

not available. My point is only this having a plan that you can point to that says when the following conditions apply

we are ready to make this kinds of switch is a good idea. And it's the kind of thing that investors

um and uh and buyers like to see.

Okay, that's all I'll say on that. As I

say, there's more reasons why I think the business case is clear. There's

competitive advantage. I think it does a lot for your reputation and trust, but I'll leave that uh off to the side for now because I think the most important

two reasons are that your compliance and your attractiveness um to both buyers and investors is high and also that there's money to be saved

are the two or three main reasons why um people generally make the switch. Now on

the primary sources of in of waste as a tech startup, the reason I spent so long talking about energy is because most

tech startups um yeah, in fact almost all that I can think of anyway, their main source of waste is energy inefficiency or or

choosing to buy energy from the grid or or using a diesel generator when they could be um buying it from somewhere else or

um they have uh they have not optimized their data storage. Now um most folks don't think about this but data storage

is quickly becoming one of the most wasteful waste producing wasteful um sectors on the on the continent and

around the world. All those emails that you attach 20 megabyte pitch decks to are uh taking up space on a server. And

if that server is not using renewable energy to run itself as many servers and data farms are or are not, um then the

environmental impact of that is tremendous. And so reducing your data

tremendous. And so reducing your data storage is the first act of being

um of optimizing your energy in this in this way. Improving your website um and

this way. Improving your website um and your application efficiency. the number

of um engineers who I meet with who are focused on this issue of simplifying the app, not only because it delivers such a

better user experience, but also because it reduces cost first of all because for all of that data going back and forth is

going to cost somebody something. um but

also um uh reduces the storage costs and and storage um requirements at the uh uh at the

place where your data is being stored and therefore um you the more you need the worse it is for the environment.

Um streamlining online meetings uh video conferencing is a major source of digital emissions. So, um, you know, if

digital emissions. So, um, you know, if it's not necessary to have a camera on, maybe turn it off. Uh, or, uh, consider

whether or not, um, like you're using a cloud provider that uses renewable energy as part of its solutions. Um,

yeah. So, there's a few examples there and there are more available, but those would be just a few that I would highlight. When you start thinking about

highlight. When you start thinking about these things, it's like, you know, how am I going to reduce my energy footprint? Um, it's not just what

footprint? Um, it's not just what happens inside your air conditioned office to the extent it's air conditioned. Um, but it's also where

conditioned. Um, but it's also where that data is stored and how much that data is being processed and churned that

affects your energy consumption and your footprint.

being mindful of of employee practices.

So, email habits, trying to encourage people not to attach 20 megawatt pitch decks, but instead to reduce the size of those documents. I know these things

those documents. I know these things sound small and petty and like encouraging your employees not to print things off for no reason, even though often you will require paper copies of

things. I appreciate that all these

things. I appreciate that all these things are tiny. Oh, I'm about to sneeze. Sorry.

sneeze. Sorry.

There we go. Um, but the idea of creating a culture of data minimalization or data minimalism, yes, that's the

better word. Um, to train employees to

better word. Um, to train employees to to think about their digital actions is, I think, increasingly going to become the norm both from a cost point of view,

but also from an environmental point of view.

Um finally um you know uh managing your hardware efficiency I think can have a big impact. So extending device

big impact. So extending device lifespan. The majority of a devices

lifespan. The majority of a devices carbon footprint comes from its manufacturing. So the longer you can

manufacturing. So the longer you can hold on to it the better. basically

companies that can, you know, extend the life of these little tablets or all the phones in our pockets um and other electronic devices that we use rather

than just willy-nilly replace them every year. Um that that dramatically impacts

year. Um that that dramatically impacts um the carbon footprint of your company.

When you do need to throw things out, doing so through proper e-waste disposal facilities and or maybe there's a phone recycling program like one of our portfolio companies, Badilli, um

encourages. These these things can be

encourages. These these things can be refurbished and when they are refurbished, you as a tech firm can buy refurbished devices rather than focusing

on, you know, the latest and greatest.

Not only are they a little bit cheaper, uh, but they also are dramatically less impactful when it comes to carbon emissions.

Let me say one uh well, one word on leadership and then another word on on KPIs. On leadership, all of this starts

KPIs. On leadership, all of this starts at the top. if your leadership team, whether it's you or someone you've assigned to be your chief sustainability

officer, if they want a really grand title, um, or your COO, if nobody's responsible for thinking about these things, then it's very likely that it's

not going to happen. So, step one, I would argue, is assigning someone to think through basically how are we going to do this? What is our plan? It's only

probably when you start it only needs to be a couple pages and as you grow you might look to expand that to three, four

or five pages. Um but from my point of view uh the simpler the better and as as long as one individual sees it as their

job to be constantly thinking about these things then I think you'll be on the right track.

Last word on measurement or KPIs.

It is generally the case we would argue new capital that you can't manage what you don't measure. And the same is true

when it comes to emissions. The same is true when it comes to um

uh yeah your readiness when it comes to uh climate mitigation. So there are several choices that you can make but I would I would encourage you to give some

thought to what it is that you want to measure in this respect. The easiest and perhaps most obvious is to measure your carbon emissions. your scope one and

carbon emissions. your scope one and your scope 2 greenhouse gas emissions.

There are several calculators available online. Many of them are not well suited

online. Many of them are not well suited for Africa. Um for a few hundred bucks a

for Africa. Um for a few hundred bucks a year, sometimes a little bit more, you can subscribe to a service that takes all the hard work out of this process

and means you only have to spend a few hours uh pulling this all together every year. And you can measure how your

year. And you can measure how your company is um yeah is reducing its carbon footprint. Whether you're

carbon footprint. Whether you're reducing your carbon footprint, obviously if you're growing very very rapidly, your carbon footprint, your total carbon footprint is likely to be

increasing unless you're aiming to be carbon negative or net neutral. Um but

uh that's a that's a quite special case.

But you can also measure your impact when it like on a per employee basis or on a per dollar of revenue basis. There

are lots of different ways that you can measure this um that show that that give a good illustration of the impact that

you're having as a firm um as you're as you're growing. There are some sector

you're growing. There are some sector specific metrics. Um the GIN impact

specific metrics. Um the GIN impact reporting and investment standards uh the Iris Plus.

This allows you to identify standard metrics that may apply to your particular business model. And I would encourage you to just have a quick look

through there and um see whether or not there's anything that might be useful for your company. Chances are there's another company in the world that has thought about measuring exactly the same

thing.

You may want to do something like, you know, subscribe to a global standard or global certification. You might be

global certification. You might be thinking, "Oh my god, that sounds expensive." And yes, some of them are

expensive." And yes, some of them are expensive. And so, you know, again, I'm

expensive. And so, you know, again, I'm not trying to encourage anyone to take on a hugely burdensome process in this in this effort. My goal is to get you

thinking about these things. if you're

not already, and if you are to ensure that um that that basically you have the tools you need in order to get started.

Uh so with this you'll receive uh the deck of course uh a bit more detail on um on what I've talked about today and

then a few guides, tools and that kind of thing that are available online um which we uh recommend you having a look at. And that's it.

at. And that's it.