21: Fighting climate change by investing

Anna-Marie:
Hello, and welcome to our 21st episode of 30 for Net Zero 30. I'm Anna-Marie Slot, global sustainability and ESG partner here at Ashurst, and in 30 for Net Zero 30, we're speaking with 30 change makers around the globe about things to do now and actions that are being taken to deliver on 2030 goals around net zero. Today, I am so pleased to be joined by Cam Ross, CEO at Green Angel Syndicate, the UK's largest network of specialist investors fighting climate change. Also, coming up in this week is FinTech Week currently taking place, and Cam as well as being the CEO of Green Angel Syndicate and working with your own investors, they are graciously our official partner at Ashurst FinTech Legal Labs accelerator programme. Just to get us started, Cam, can you tell us a little bit about your background and what you do?

Cam Ross:
Certainly. Thank you, Anna-Maria, and it's really great to be here. So, I have a background in engineering. You might be able to tell from my accent that I'm Australian by birth. I've lived in the UK more than half of my life now so that's kind of a little bit of the twang that has been lost. But essentially when I moved to the UK, I worked in a number of engineering, manufacturing roles, and that sort of hands-on practical experience led me into starting a company with a colleague of mine, and we ran that business for many years. We actually got into the payment space. So, that's why I'm really interested in the FinTech side of what you're doing and what we're doing is I operated in that sphere for many years and raised a couple of rounds of business angel funding as we grew that business.

We were extremely lucky to be able to sell it to an AIM listed company in 2013, and after I spent maybe four or five years, very happy years, working with that acquirer, I felt as if I wanted to do something that would be able to take my background and my skills and apply it to really the biggest problem that mankind has brought upon itself, and that is the challenges that we have with climate change. Along with that, my teenage children were reaching the age where they were starting to ask questions about how our family, how our household were dealing with and hopefully helping with the problem of climate change, and I just felt that time was right for me to take some of that background skill set and apply it in a new way.

That's what led me to Green Angel Syndicate. It was a real early stage company at that point started by a really dynamic founder called Nick Lyth, and I got in touch with Nick, and we really hit it off, and I started essentially volunteering for Green Angel Syndicate, and that was really early days, that was in 2017. After a long time of action on both of our behalf's, we've really grown the business. We've got a team of around 20 people now, and yeah, we fight climate change by investing, a subject I'm sure we'll get into in a few minutes.

Anna-Marie:
Very interesting, and like many of the people we talk to, both a professional and a personal connectivity to the question at hand. So, you've now been working with Green Angel Syndicate for a while. Have you seen a shift, I mean, in terms of companies you're seeing, or in terms of the number of companies you're seeing over the last kind of 18, 24 months around how people are engaging on the question of sustainability?

Cam Ross:
That's really good question. So, what we've seen, and I might tackle the companies that we look at, but I also would like to tackle the funding side of things. We have really ramped up our membership, particularly over the past three years. So, the model for Green Angel Syndicate is we have around 350 specialist members, and those members are high-net-worth individuals, and they all want to fight climate change by investing in and helping our portfolio companies to grow using their background, their specialist experience, and their knowledge of the market. Most of these people are professionals who work in and have experience in the space in which we invest, so they can bring a lot of skill to this area.

And then on the portfolio company side or the demand side for funding, we really felt as though COVID a couple of years ago was a real threat to our business model and also to our existing portfolio companies at the time because we worried that there was going to be a real slowdown. I am staggered actually with the pace of change and the increase in demand from portfolio companies and companies out there looking to raise funds. I mean, you will know, Anna-Marie, from your FinTech Legal Labs programme that Ashurst runs, the incredible nature of startup companies, entrepreneurs out there who really want to get out of bed every day and make a real difference to the world. It is so exciting to be working in this space and looking at companies who want to fight climate change, and we have seen no slowdown what so ever in the past couple of years.

To sort of put some numbers on it, Green Angel Syndicate receives around 800 applications for funding every year, and that's sort of three every working day, maybe three and a half every working day. So, it's very gratifying to see a really large swathe of the population out there who are wanting to take those risks of starting a business and doing something they passionately believe in.

Anna-Marie:
Yeah. No, that's really interesting, and your points on COVID, we see that in some of our conversations with others. I think at the beginning, everyone did think that, oh my gosh, this is going to really slow down the conversation about sustainability, but people have really leaned into it as an example of why the conversations need to happen now, actions need to start now, right, and the money has been following that. So, it's very interesting that you're seeing that kind of in the very, very early stages as people risk, right, to create a whole new company. There's quite a lot of risk there.

Cam Ross:
Yeah, that's true, not only in terms of the appetite for further funding, but also the appetite from corporations out there to adopt technologies and also processes that improve not just climate change per se, but also employee satisfaction, employee health as a really key part of driving our community's sustainable approach to the future. So, for example, we have one portfolio company called BetterPoints, and what they do is they have a programme for helping corporations to help their employees to lead more sustainable lives in terms of active travel. So, walking, cycling rather than driving a car, and they saw a huge uptick in the COVID period, obviously with people being home bound mainly that the companies wanted to really take care of their employees and make sure that they were being looked after well and that they were leading as sustainable a life as they could. Mental health, physical health, environmental health, all these things are so clearly wrapped up together.

Anna-Marie:
Yeah, definitely. So, from that base, we've seen this big shift, where do you think we go? What needs to happen really kind of in the near term to really deliver on essentially the transformation, right, of the business ecosystem at large?

Cam Ross:
Well, that's such a big question, and I think that it requires an absolutely enormous effort from every single part of the ecosystem, and by that I mean governments, local councils, corporations, individuals, and these entrepreneurs who want to start and build these companies because the technology advances that are coming through are the ones that will provide us with the really large scale impact that we need to be making on climate change. So, systemic things and overhauls in what might be considered to be even mature technology today, the mature technologies are really expanding at an incredible rate and improving. So, one example, how do we make sure that we can sustainably and cheaply generate offshore electricity through wind farms. Every aspect of that entire network and entire hardware system that is needed for deploying an offshore wind farm and building it into a global scale which is what we need for our decarbonizing our electricity grid is important.

Green Angel Syndicate invested a few years ago in an amazing company down in Bristol called Rovco that has a brilliant technology for radically reducing the operating costs of offshore wind. The way they do that is essentially subsea surveying. In other words, taking a digital 3D record of all of the assets that are below the waterline for offshore wind farms to make sure that the maintenance programmes are being followed, corrosion is under control, that the electricity cables that connect these wind turbines to shore are in position, and that we really understand the dynamic marine environment in which these things operate. So, that's just one example of where improvements in technology can really make a difference to something that people might even consider to be au fait or old hat, I should say, today. All these things can be improved, and that's what we're aiming to do bit by bit.

Anna-Marie:
Yeah. So, tweaking every single aspect of everything that you're doing. I guess you mentioned at the beginning your own kind of personal interest in this. I ask everybody, what are you doing in terms of how you're approaching your own commitments?

Cam Ross:
I expect when you ask people that question, they'll say things like, "Well, I'm doing my recycling and I'm thinking about buying electric car," and the same is true for me and my family personally, Anna-Marie. We do those sorts of things. We have an electric car.

Can I say one thing that we're struggling with at the moment? You can hear the Australian twang in my voice. My children are Australian citizens. I have three teenage children, and they have not been to Australia for eight years, and I'm taking them to Australia in a few weeks time, and I got to say, the carbon impact for doing that is absolutely huge. Now, we can and we will offset to the best degree we can those flights because there's nothing really else we can do to limit that impact, but things like that, the really, really large carbon elements that impact a household, we personally, and this applies to, I mean, all of your audience, not just Cam here, we need to do as much as we possibly can to reduce those big impacts.

So, get on a green energy tariff, insulate your house, stop driving a petrol car, and as much as possible, don't go flying. It's a really, really tough challenge.

Anna-Marie:
It is a hard one. That is a hard one, especially post-COVID when people haven't seen each other for so long and families have been apart for so long. That is definitely, I think, a challenge for everyone and a focus area. I guess, take taking it back to the day job, what's the kind of one thing that you think would really kind of juice up this transformation? I mean, the fascinating thing I think for you and for Green Angel Syndicate is really the focus on the opportunities that are coming out of ESG and sustainability. So often the conversation's all about the costs of trying to make a change, but you're looking at companies every day that are innovating solutions and entire new business opportunities around this. I mean, how do we here in FinTech Week, how do we support that infrastructure? What do we do to kind of drive that at even faster scale?

Cam Ross:
Well, I got to say from our perspective, there's a real gap in the market and it relates to funding. So, if you just look at the businesses, the types of businesses that we fund today, they are pretty high risk startup businesses, and angel funding typically comes in as maybe the first or the second round of funding that a company will have. So, they might have gone round their friends and family and raised a few tens of thousands of pounds to really get the idea off the lab bench and into some sort of prototype, but then it really needs angel investment in the region of sort of a hundred thousand to one and a half million, something like that, to really give the first ability for these companies to commercialise themselves.

Now, just jumping ahead a few stages of funding, if you've got a very well established technology, a marketplace, customers that are buying your product, and you can show really, really strong demand, and you want to raise 30 million, 50 million, there's plenty of opportunities for you to do that in the marketplace, and plenty of funds out there that will happily invest that sort of money. For me, the gap comes between those two. So, when we're looking at investments in the range of sort of two to 10 million, something like that, that's really tough actually at the moment for companies in this space, and there are much fewer green funding potential out there than there are in the pure sort of FinTech space. One of the things that we've recognised in order to... Particularly with our portfolio companies, as they're expanding and growing and they need those millions of pounds of funding to help them grow, we've realised that there's just a lack of ability for them to do that out there.

So, we're in the middle of launching a venture fund ourselves to try and fill that gap, and I really, really wish that there was more money in this space. So, anyone who has the potential to offer funding and investment for companies in this space, in that sort of size, one to 10 million pounds, please do it. It's really important, and we recognise that when we get the carbon impact that is needed from the growth of these businesses to help us solve the climate crisis, financial returns will come. We're not actually doing this for financial returns. We're doing it for impact, but the follow-on effects are natural. The world will need these technologies in order to meet its carbon commitments, and for the companies that do this well, they will be financially successful.

Anna-Marie:
Great, great words, and a great shout out. If anybody out there has got between one and 10 million pounds sitting around looking for something to do with it, clearly call Cam or anyone else at the Green Angel Syndicate. Thank you so much, Cam, for joining us today. It's been fascinating to listen to what you're doing, how you came to be here, and also some of those companies that you are all supporting as they really take advantage of the opportunities that transformation brings and the opportunities that FinTech brings. So, thanks for your time and appreciate you coming on the series.

Cam Ross:
Anna-Marie, it's been a real pleasure. Thank you so much for the invitation.