The Impact
Why investors are Short on ESG Funds

To: The Impact Readers

Howdy 🎃

Have you ever checked out a Tesla solar roof install?

Not the marketing stuff or the videos from fanboys. I am talking an actual installation of a Tesla solar roof…

If not you’ll find this video interesting. What we found most interesting is how little it really differs from the OG tiles from Dow Chemical.

In Your Inbox: Clean hydrogen; Avocado seed as a drink; Taking a short position on the ESG market.

🚀 STARTUPS & TECH

The Future of Clean Hydrogen

Making clean hydrogen is a huge focus for the energy market. (Image: Ways2H)

Ways2H just secured a $2.5M investment from Pacific6 Enterprises. The company uses a thermochemical process to convert waste into renewable hydrogen with a net zero-carbon footprint and without incineration.

Why does this matter?


What’s next?

  • Ways2H is currently developing commercial facilities in Tokyo and California that convert waste biomass into clean hydrogen fuel. This round of funding will be used to develop more renewable hydrogen production projects in the US, Europe and Asia.
  • Ways2H expects to begin supplying hydrogen to customers by early 2021.
  • As microgrids grow, it is possible and likely that they will integrate renewable hydrogen. This means that there will be less energy demand from the grid, and therefore would reduce carbon footprint.
  • Broadly speaking, clean hydrogen can replace fossil fuels.


Thoughts

Industrial processes are innovating, disrupting the current market for the better. We need new technology that is not only more efficient, but also implements sustainability practices. Companies tackling these problems are prime candidates for companies with net zero commitments.

Sign up for The Impact and learn the perspectives behind the latest sustainability trends

🚀 STARTUPS & TECH

Brewing Up New Ideas in Food Upcycling – Reveal

Would you drink an avocado seed if it tasted good? (Image: Reveal)

One area of sustainability practices in the food system comes from handling waste streams. One of the more popular trends is upcycling food waste.

Reveal is taking avocado seeds that would normally go into landfill, extracting nutrients from the seeds, and creating a sustainable probiotic beverage. Sheetal Bahirat took some time to talk about her innovative approach to upcycling avocados. The best part is that once the extraction process is done, these avocado seeds can get composted!

What’s your story?

The idea behind Reveal came to fruition back in graduate school. After making a huge batch of guacamole and having more waste than pulp spoke to me.
At the time, I was pursuing a Master of Science in Culinary Art and Science. I turned my thesis into how to utilize avocado waste. Specifically, I looked at what nutrients and antioxidants are in avocado seeds and how to extract them, as well as investigating the safety piece.

I did a lot of research on to figure out what we were extracting. So figuring out what potential toxins could be in the avocado seed, looking for them, making sure that the extract did not contain any toxins, then updating the process to make sure that we didn’t produce anything undesirable. We also talked to different professionals, from food safety experts and toxicologists to lawyers.

Why does this matter and what is the impact?

Avocado seeds currently go into landfill because they don’t compost well. In the US, we throw away 15 million pounds of avocado seeds every single week into the landfill. We’re able to remove the avocado seeds from that waste stream, create this beverage, and then compost the seeds at the end.

How do you differ from other competitors in the space?

Generally speaking, we are competing with other beverages – it’s a highly competitive space. However, in terms of the avocado seed, we are the first ones to have something like this come to the market. So there’s no direct competition.
Our current market fit is people that want to drink kombucha for the health benefits but can’t get over the flavor of it. Reveal lets people drink the antioxidants and get probiotics, but without the pungent flavor profile that kombucha has – it’s much easier, lighter, and fruitier. Reveal also has almost no calories, it’s 15 calories a bottle, whereas a kombucha will be like a minimum of 40.

What are the current trends in the sector?

There’s so much potential for upcycling foods, it’s important that the food system becomes more sustainable. That’s something that our country and the industry hasn’t really thought about until recently. This is going to be one of the ways to reduce the amount of hungry people that we have. Consumers are demanding it, and we need it for the environment.

What does the future look like?

I think people are becoming more conscious of their impact on the environment. As a result, during quarantine when people aren’t going anywhere, we are faced with the amount of waste that we create. It’s kind of scary – you don’t leave the house for a week, but you have a garbage piled up.

It really shows you something like normally when you’re out and about, you throw things away in different places, and it’s distributed. But during quarantine, everyone is stuck in one place and throwing away garbage in one place.

I think people want to contribute to the environmental goals that the whole world is striving towards.

📃 POLICY & FINANCE

Make Way For The Short Sellers

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For years people were short on Apple, Amazon, Tesla (still are) and many other companies that still stand tall and strong today.

Independent blogs like Hindenburg Research are among the group of people who are beginning to call out the all of the hype behind ESG investing going on right now.

Investors have poured a little over $22 Billion into ESG exchange-traded funds this year according to Bloomberg. Showing that they hype is definitely there.

With some much money pouring in and now regulation as to how an “ESG” focused fund or company is defined short sellers have reason to believe this is a growing bubble with a bunch of questionable decisions being made.

What Should We Expect

We believe regulation is coming and will be coming fast. Especially after the big meltdown of Nikola just a few months ago, resulting in the founder stepping down from the company.

ESG is hot especially for corporations looking to demonstrate their “environment first” posture to the world. If it has a green or renewable label on it – investors are interested.

Of course when things are gaining hype the way the ESG funds are, naturally people will begin to cut corners and find ways to “justify” that certain companies should be considered in their portfolio…

Expect a potential bloodbath in the space one the SEC begins to investigate.

📻 PODCAST UPDATES

How You Can Bank Sustainably Today. With Ravi Mikkelsen

Ravi Mikkelsen joins us to share how switching to the right bank can actually accelerate our move to sustainable energy & resources across the board.

Check out and subscribe to our Youtube Channel for future episodes!

Writers: Swarnav S Pujari, Ian Sumner, Daniel Kriozere

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