Extantia Capital Hires Sustainability Professor – Francesco Pomponi

Portrait of Francesco Pomponi

Professor Pomponi was well within his means to maintain his professional inertia and become a prominent academic in life cycle analysis and the built environment, but he has recently joined Extantia Capital as Head of Carbon Maths to go directly to the carbon war. He will leverage his extensive expertise in calculating and measuring CO2 abatement potential to help Extantia ensure that they are pursuing technologies that have the direct potential to lead to gigaton scale carbon reduction.

Before Pomponi embarks on this new era of his career, he took some time with The Impact to describe his motivations, outlook, and how his background can contribute to the future he has dedicated his career to creating.

Coming from an academic background, what motivated you to get involved in the VC world?

Living a life where you’re learning constantly is a privilege and an honor. However, I felt I wasn’t delivering sufficient impact, particularly given the scale of the urgency of the climate crisis. I realized I write papers that are mostly read by my colleagues, other academics, who live in this bubble with me. As a result, I started engaging more with professionals in the UK and advising professionals even if it’s sometimes frustrating because of the knowledge gap between where the industry is and where academia is. Academia is at the forefront of knowledge in the sustainability space and has been developing it for the last 10 years. I joined VC with a lot of humility, thinking that it can teach me a lot of things that I don’t know about, and maybe I can offer in return academic expertise.

Why were you drawn to work with Extantia?

Extantia liked the work I did, and I liked the approach that they had. Having seen other funds, Extantia is really trying to transform the industry. One word that recurs in their marketing materials is being “tech agnostic”. They are not coming to this with a preconceived choice of what companies they should be funding. One of the things that they ask me constantly is “give us data, tell us what matters, give us a breakdown by sectors by countries” – they’re trying to fund what matters the most and that’s why they want a rigorous methodology. Of course they’re also interested in financial return, by all means, but they really care about getting the numbers right and making sure that they find something that can have an impact. I like the scientific mindset that they have. There seems to be a lot of wish-funding out there, but Extantia wants to find something that matters, that can move the needle. So it’s exciting for me to think that I can play a part in this. Maybe some of the companies that they fund will end up being one of the many paradigm shifts that we need. I’ll be very happy to have played a small role in that.

Along this line of “wish-funding,” I’ve noticed that gut instinct is often very wrong when it comes to the carbon impact. A company’s technology might seem to reduce carbon emissions when, in reality, it does not. That’s where Life Cycle Analysis (LCA) comes in. You have published an impressive number of LCA studies that are very intensive and complicated to produce. So how can climate-focused VCs mitigate this risk that they don't have an inherent gut instinct for carbon reduction potential when introduced to a technology?

I think part of the role that people like me, in academia, have in society is educating new generations about LCA and the limitations of LCA. At the moment there is a lot of attention on carbon savings, which is great to consider when scaling, especially if you need to build 500 different plants all over the world in today’s carbon-intensive global economy – that’s a lot of steel, a lot of cement, a lot of transportation, all powered by fossil fuel. 

You need to understand that you don’t start from zero. You actually start from cumulative embodied emissions that you’ve accumulated from scaling up and only then do you start saving. So first, you have to make a net contribution to the atmospheric greenhouse gases (which is something that we don’t want), and then you start saving by displacing other fossil fuels. It’s important to scale quickly,, but then your savings need to be accurate and fast. The double risk that I see is if an investment fails, then you’ve lost money, but the carbon emissions remain. The money that is lost can be recovered, but the environmental damage remains.

I heard you are developing a carbon ranking methodology to help accurately assess the true environmental impact of startups. Can you elaborate?

Yes. The idea is to have a step-based methodology that allows us to filter out companies as early as possible to understand whether they meet the criteria for investment. They may be perfectly fine companies, but we have a unique focus in the fund on Giga reduction potential – companies that can significantly reduce carbon emissions. As a result, we start the conversation with a company by trying to use available LCA data. That’s when we start to struggle to find what’s out there because LCAs are expensive and time consuming to produce, but we need to find data that sufficiently represents the companies to a point that we can trust numbers. And then if the company gets funded, there is dialogue between the fund and the company to develop those tailored impact metrics. Extantia also looks at other social impacts and measures financial performance.

So, you yourself have a wealth of stories on how to decarbonize industries from your research. Do you have any advice for startups in terms of developing their technologies and using this wealth of information that is out there?

It’s important not to reinvent the wheel. From the field of design, there’s a lot of knowledge that we already have in terms of design for disassembly, design for deconstruction, design for remanufacturing, and design for circularity. So these are things that you actually do at the very early stages of any idea or conceptual exercise. Rather than getting a very complex technology up and running and then looking at how to reduce the amount of resources you can actually start doing all those things in parallel when developing the technology, which saves time and ensures that you get to the market. 

Sometimes I feel that the startup environment is so reliant on lateral and innovative thinking that people forget that you only need to innovate on a single idea that no one has, and not on everything.

This has been such a wonderful conversation I really enjoyed it. Is there anything, I should have asked you that I didn't?

The climate crisis we’re in needs action. And that’s why I thought I still want to discover new things but there’s lots of things that we discovered already that need to be translated into action. 

I love writing papers about LCA and, you know, playing with matrices and discovering new things so that we are 5% more accurate and have some better convergence of the simulation. Beautiful. Mind blowing. I love spending my nights on that! 

But can we really save the world through a 5% better accuracy of a complex simulation? So why don’t we make available to the world the knowledge developed in academia on hybrid LCA, which is a wonderful step forward compared to traditional LCA, that nobody’s using. So it felt to me, it’s much more important that I might not be credited in history for having advanced LCA massively, but at least to have contributed to translating the knowledge that we have into something practical that is used to support this much needed sustainability transition.

About Extantia Capital

Extantia Capital is the first European venture capital investor that supports startups in the development of deep decarbonisation technologies and their measurable contribution to climate protection. In addition to capital, the firm provides know-how from its founding partners. They are part of a network of high-profile and experienced investors, entrepreneurs, university partners and climate experts. The current portfolio includes GA Drilling, Bloom, betteries and Ineratec.

About The Author

Oakley Jennings-Fast The Impact

Oakley Jennings-Fast

Independent Contributor

Oakley is a chemical engineer and started her career in chemical manufacturing at BASF. She is currently Director of Circular Economy at Smart Waste USA  where she enables companies to divert their landfill waste. She also founded a company called Level Up Planet where she consults businesses and educates individuals on circular economy and sustainability.

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