Driving sustainable growth: A review of low-carbon investment opportunities in the UK

Ian Thomas, Managing Director, Turquoise

The UK is one of the global hotspots for low-carbon investment, offering investors a broad range of opportunities. Ian Thomas, managing director, Turquoise, explains the diverse low-carbon prospects available in the marketplace for investors.

As we enter 2024, despite challenging economic conditions, UK Venture Capital (VC) investment is steadily rising. In 2023, UK start-ups secured $21.3 billion in funding, marking the third-highest total on record, surpassed only by the exceptional years of 2021 and 2022. This upward trend resumed in the second half of 2023, with a notable 46% increase compared to the January to June period. This turnaround can be attributed in part to the growth in investing in climate technology.

Climate tech took centre stage, constituting 29% of all UK VC investment in 2023, showcasing a remarkable 40% year-on-year growth. Reaching a record-breaking $6.2 billion, growth was propelled by the electric mobility and electric vehicle (EV) battery sectors, each securing funding of $2.2 billion and $1.2 billion respectively.[1]

Greening the cabin: Paving the way for sustainable aircraft seating

Investors in the UK have various opportunities to contribute to the global push towards environmentally friendly aviation. Green aviation technology investment is one, but there are other key areas where investors can play a key role in boosting sustainability in this sector. We recently announced an investment in Unum Aircraft Seating via the Low Carbon Innovation Fund 2 (LCIF2), managed by Turquoise.

Unum measures carbon consumption for each designed part in its aircraft seating and has implemented a part marking system outlining end-of-life recycling details, underscoring its commitment to sustainable practices throughout the entire product life cycle. The company’s designs are not only sophisticated and high quality but also effectively reduce weight, leading to decreased aircraft fuel consumption.

Our investment will help to support Unum’s product development, including expansion plans for its seats range, while enabling initial certification attainment for all its products. The company is set to implement its initial factory blueprint, secure regulatory approvals, and invest in the necessary capital equipment to meet the demands of its initial production phase. Unum’s products are poised to play a meaningful role in lowering overall aircraft emissions.

SMEs: Minding the gap in carbon reduction strategies

Small to medium-sized businesses (SMEs) represent an incredible 99.9% of all UK businesses with the Carbon Trust estimating that SMEs account for 44% of non-household emissions in the UK. Despite this, research reveals that more than three-quarters of small businesses lack a strategic plan to reduce their carbon footprint in the next three years (Lloyd’s Bank, 2023), while 2.5 million business owners are unfamiliar with the concept of net zero.

Working to empower businesses to calculate, mitigate and offset their greenhouse gas emissions is climate action platform, Net Zero Now. Its simple, credible and affordable carbon management accounting software delivers accurate and consistent carbon reporting.

Unlike other platforms, Net Zero Now applies a unique sector-specific, industry-backed approach which harnesses the power of big brands and trade associations to lead change in their sector, giving businesses of all sizes access to tried and tested climate action tools. This process establishes a clear competitive advantage, underscored by the inclusion of Net Zero Now’s registered Certification Marks.

Via LCIF2, Turquoise has invested in Net Zero Now as part of a capital-raising round exceeding £750,000. The company’s user-friendly and science-backed solution underscores a commitment to fostering sustainable practices, providing SMEs with a straightforward pathway to net zero, further bolstered by the brand’s robust corporate partnerships and industry endorsements.

Sustainable solutions to grocery packaging waste

In the UK, almost 40% of plastic packaging waste originates from grocery shopping, amounting to a staggering 886,000 tonnes per year. Only 12% of this waste is recycled, highlighting the urgent need for sustainable alternatives (Greenpeace).

Recently securing investment from LCIF2 and Turquoise is B-Corp startup, weekly.shop, a revolutionary grocery retailer based in London. Founded in 2022 by Paul Cooke and Mark Holland, previously founders of successful pet food startup, tails.com (acquired by Nestle in 2018), the company provides all of its products in reusable containers. Weekly.shop is also backed by angel investors with experience in successful startups such as graze.com, LoveFilm, and Zoopla. The investment will be used to drive the development phase, as the first customers trial the service.

Green initiatives for a sustainable future

As we witness these transformative developments across various sectors, the intersection of financial growth and environmental responsibility becomes increasingly evident. The evolving investment landscape in the UK signifies a paradigm shift towards sustainable practices, where capital deployment aligns with the need to address pressing environmental challenges. As investors continue to play a pivotal role in shaping the future, these initiatives underscore our collective commitment towards a greener future.

For more information, please visit https://turquoise.eu/.

[1] HSBC Innovation Banking and Dealroom, January 2024


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