🚀 One Founder's Mission to Decarbonise Big Tech
As companies scramble to stake out a path to net zero, voluntary carbon credits – tradable certificates that show companies have funded the reduction of atmospheric CO2 – have grown in popularity. The theory is that a company can buy credits to fund projects that help curb emissions, thus compensating for their own pollutive output.
Ideally, a business would reduce its own emissions at the same time. When I wrote about carbon offsets back in July, EV member Hugh Reid commented that offsetting is like “pushing the brake while not actually lifting off the accelerator.”
Plus, carbon credits are far from perfect: it’s really hard to verify which credits (also known as offsets) actually do any good. Lots of credits fund schemes that might have gone ahead anyway, like renewable energy generation, or pre-planned tree planting. In those cases, carbon credits can do more harm than good: they give companies carte blanche to keep polluting, and falsely “compensate” for that pollution with meaningless pieces of paper. I tackle carbon markets in the latest Charts of the Week, too.
Several young companies are looking to fix this problem, and among the most exciting is London-based Supercritical. They help companies measure and reduce their carbon emissions. Its USP: it only deals in offsets that actually remove carbon from the atmosphere, rather than offsets that just pay other people to stop emitting CO2.
Right now, carbon removal is not a big industry. But if we’re to hit net-zero emissions by 2050, it will have to be.
I spoke to Michelle You, Supercritical’s co-founder and CEO, to understand how we might start to fix carbon markets, and to talk through some of the incredible emergent technology that will make carbon removal a major part of the climate fight.
Before starting Supercritical, Michelle co-founded music recommendation engine Songkick. She’s part of a generation of consumer product-focused founders pulled into climate tech by the urgency of the mission – and speaks brilliantly on what people in traditional tech businesses can bring to the climate fight.
Supercritical focuses on tech companies, for a few reasons. I’ll emphasise two.
First: tech companies tend to be early adopters of new technology, and early adoption is exactly what the nascent carbon removal industry needs.
“Because carbon removal as a sector is so early, there's so much risk, it's so expensive. Tech CEOs understand Wright’s Law, scaling cost curves, making a bet on early technologies. So they are really great early adopters for these removal technologies.”
As readers of Exponential View (and those of you who’ve read my book) will know, Wright’s Law states that the costs of a new technology comes down as producers better understand how to make that technology. Early buyers of a technology pay a premium to get their hands on it – but they also drive down the cost of the technology for future buyers. Take the Tesla Model 3:
This cost reduction curve is a crucial dynamic of the Exponential Age – and it’s absolutely critical for climate technologies. The market needs early adopters of carbon removal technology to pay a premium now in order to make that tech more widespread.
That’s one reason Supercritical focuses on tech.
The second might be more surprising. As a whole, Michelle says, the technology sector emits more CO2 than the aviation industry. Airlines might be more obviously pollutive, but tech – encompassing hardware production, user energy usage, and so on – emits more. As a founder, Michelle feels a responsibility to help the sector emit less.
Michelle made her name as Songkick’s Co-Founder and Chief Product Officer, building a consumer internet product that millions of people used. She understands how to build things that people want to use, that involve minimal user friction, and that can scale massively. Those skills will be key in decarbonising our planet. When Supercritical first engages with a company, it measures that company’s emissions:
“We focused our product team on making that process of measuring a customer's emissions as fast as possible, to require as little data and as little manual entry as possible. Because when I looked at what consultants were doing, they're going in with 1000-page questionnaires, spreadsheets, taking ages, asking every little last question. We're trying to speed up that process… It takes less than a day for the company to go and get the data they need as opposed to when we first started: it was about four weeks.”
Michelle understands that complicated, janky processes – the sort that too many companies use when it comes to climate – won’t get us to where we need to be. At Supercritical, she’s trying to change that.
Listen to our discussion in full here.
Listen to this, too
Last year, I spoke to Michele della Vigna, who runs the Carbonomics research programme at Goldman Sachs. He talked me through the hard numbers behind the climate fight, the role new technologies might play in it, and how big oil companies could help turn the tide in the race to decarbonise. Michele's research is all about making the intangible tangible, and it's an invaluable resource well worth your time.
Listen also to my conversation with IKEA’s CEO Jesper Brodin about his strategy to turn the furniture giant around onto a net-zero path.
I discussed what it takes to create trustworthy market for carbon offsets with the Co-Founder and CEO of Pachama, Diego Saez Gil.