In this third chapter, we delve deeper into climate footprints for early-stage tech companies and venture funds. Although only a few of our portfolio companies have producing operations, around 30% of our portfolio already estimate their climate footprint and many are taking steps to reduce and offset their emissions. For the companies that don't, it seems that hesitations around footprint calculations and doubts about whether offsetting really works are two of the main factors that hold them back. In this chapter, we aim to provide some clarity on climate footprints and describe how we ourselves reason around climate compensation.
We begin with a brief background and provide some examples of what a climate footprint process can look like. We also examine the voluntary carbon market and clarify what "good" should look like. Finally, this chapter explains why we at Northzone have chosen to abandon the word "neutrality" when we compensate for our climate footprint. We simply know too little about both our portfolio's footprint and need to use a lot of estimates in our calculations. In addition, we don't believe that neutrality is sufficient; we must go far beyond that. As early-stage investors, we can and should use our core competence to support catalytic and groundbreaking projects that have the potential to contribute to real solutions.
As with everything in this Notion, this is not meant to be a playbook but rather inspiration and a way for us to present how we do things so that others can build off our work. To provide more action-oriented advice, we have this time partnered with Leaders for Climate Action (LFCA) in putting together a checklist of what all early-stage software companies can do to minimise their climate impact from the very start.
We hope you enjoy the read and never hesitate to reach out if you have questions or suggestions!
Northzone Climate Footprint (2022)
Climate footprint case studies
Checklist for early-stage (digital) companies
The great potential (and problems) of the voluntary carbon market