Green, digital, innovative: business for future

Many companies have long since realised that climate protection can stimulate the economy, promote innovation and help new technologies to attain market maturity. Here in Germany, so-called “green start-ups” are proving to be the driving force behind the green, sustainable transformation of entire industries and business models. According to Green Startup Monitor 2021, these young, innovative start-ups already account for around one third of the German start-up economy and are ensuring that the scene as a whole becomes greener and more impact-oriented. Their products, services and technologies are pursuing ecological, sustainable goals, creating jobs in the green economy and delivering solutions that tackle the major challenges of the future, such as reducing greenhouse gas emissions. They originate primarily from the fields of information and communication technology (ICT) and green IT, nutrition and consumer goods, mobility and energy efficiency. Below we present some examples of particularly innovative green economy start-ups with high technological potential for shaping the economy of the future.

Energy-efficient computer centres are just the beginning

The energy sector is rightly considered a key area when it comes to meeting our climate targets – and not only with regard to traditionally energy-hungry sectors such as the steel industry. With advancing digitalisation and the growing use of artificial intelligence (AI), the need for smart, secure, powerful data processing is also on the rise. The market for computer centres and cloud solutions is booming. However, the soaring demand for energy to operate IT structures is swallowing up resources and driving up greenhouse gas emissions. By 2030, electricity consumption in the ICT sector is likely to account for more than 20% of global demand. The Dresden-based Cloud&Heat Technologies GmbH is on a mission to harmonise sustainability and the digital future by means of green IT and is combining the design, construction and operation of computer centres as well as individually tailored IT infrastructures with the sustainable, energy-efficient use of waste heat to provide energy for heating and hot water. The “hot water direct cooling” system used to cool servers was developed by Cloud&Heat Technologies GmbH and makes it possible not only to supply buildings (“green building”), but district and local heating networks, too. Even without the use of heat pumps, the temperature can be maintained at 60 °C. The technology cuts cooling and heating costs and reduces the carbon footprint of computer centres quite considerably. Green IT is therefore transforming computing power into a source of energy. The computer centre containers supplied by Cloud&Heat are achieving top marks in terms of energy efficiency and already beginning to conquer international markets. Moreover, with its “Green Cloud”, the company also provides an ideal solution for machine learning and artificial intelligence applications that prioritise ecologically and economically efficient technologies. 

The approach taken by the young Swiss company Climeworks is no less innovative and even potentially revolutionary. Founded more than ten years ago by Christoph Gebald and Jan Wurzbacher as a spin-off from the renowned ETH Zurich, the company is a worldwide leader in the development of direct air capture technology, which enables carbon dioxide to be filtered directly from the ambient air and then permanently stored underground. Alternatively, the carbon dioxide extracted from the air can be used for industrial purposes, such as to produce synthetic fuels or to carbonate drinks. The company is pursuing the ambitious aim of making a significant contribution to compliance with the Paris Agreement through the sale of its plants. This is also a meaningful undertaking from a scientific point of view, as experts estimate that between 5 and 30 billion tonnes of carbon dioxide will have to be removed from the atmosphere by 2050 in order to avert the most dire consequences of climate change and meet the 2-degree target. In September 2021, Climeworks set a key milestone, by impressively demonstrating the scalability of its solution with the opening of the largest facility of its kind to date near the Icelandic capital of Reykjavik. Climeworks also places great emphasis on the reliability of its data, as the process it uses makes it possible to precisely measure the amount of carbon dioxide extracted from the atmosphere. 

A green Gründerzeit?

In Germany, 43% of start-ups already classify themselves as part of the green economy and see themselves as drivers of solutions to the major ecological challenges of our times. Almost half of the start-ups in Germany state that their products and services make a specific contribution to improving energy efficiency as well as environmental, climate and resource protection. Does that mean we are witnessing the beginning of a new “green Gründerzeit”? According to the study Green Startup Monitor 2021, that depends on the economic framework conditions. Time and again, financing, or a lack thereof, has proven to be a hindrance to growth. Access to venture capital in particular is proving difficult for green start-ups.

Fridtjof Detzner, who had seen environmental pollution and climate damage with his own eyes on a trip to Asia, is looking to close this gap. With the investment fund Planet A, he and his partners are helping European green tech start-ups to finance sustainable and scalable business models that drive climate protection, avoid waste, conserve raw materials and protect biodiversity. Planet A is in the process of raising a triple-digit million amount and intends to invest exclusively in early-stage green tech start-ups in the coming years. Compared to major investors and institutional investors who are already diverting billions into sustainable projects, Planet A is a relatively small fish. However, the problem with impact-driven investments is that “green” and “sustainable” are often defined in a very arbitrary and mostly low-level way, which is also known as greenwashing. After all, financially potent customers can be easily lured in with supposedly “green” investments.

But how do you measure the actual ecological impact of business models, products and services? Planet A is the first venture capitalist to conduct scientific impact assessment, using credible criteria through the broad analysis of data. A team of experts uses specialised databases to ascertain the ecological footprint of products and services over their entire life cycle, including raw materials, production, transport, recycling and disposal. A start-up only receives funding after it has successfully completed this life cycle analysis and has a favourable business forecast. The results of the analysis are made transparent and public, which is also intended to encourage investors to use measurable and verifiable criteria.

“In order to successfully tackle climate change, innovation, regulation and consumer behaviour need to interact with one another,” says Planet A co-founder Tobias Seikel. “Green economy and green IT represent the greatest economic and ecological opportunity of this century.” Planet A sees itself as a venture capitalist in a significant, formative role: “The investment decisions we make today will impact the economy of tomorrow,” says Tobias Seikel. “Planet A focuses on the scientific quantification, calculation and forecasting of impacts.”