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Delivering Net Zero: Lord Turner’s Energy Transition Commission echoes why the Clean Growth Fund is needed

Jonathan Tudor, Investment Partner, Clean Growth Fund


Portrait of Jonathan Tudor

Last week the Energy Transition Commission, the body that Lord (Adair) Turner chairs, published its report ‘Making Mission Possible: Delivering a Net-Zero Economy’. I agree with all its recommendations, and the reasons behind them.

The ETC’s mission is to help us achieve the Paris climate objectives of limiting global warming to well below 2°C, preferably to 1.5°C. The report points out something that I could see during my career in energy with both Centrica and BP, viz. much of the technology needed to tackle emissions or reduce our addiction to fossil fuels already exists.

The ETC also claims that a prosperous net-zero economy can be achieved by mid-century. Again, this is something I also believe. However, this will not only require the adoption of new technologies, but a shift to new products and services coupled to new business models. I certainly believe that these shifts in business model predominately occur in start-up companies who have the agility often lacking in larger organisations.

But here is the dilemma; without the scale to drive costs down, some new solutions are hard to sell (in my view, even harder to sell at a price that makes commercial sense). Again, I agree with Lord Turner’s point that to achieve this change, we will need innovative finance from both public and private sectors.

Venture Capital companies have a long history of helping to take risk out of scaling young companies, but in recent years early stage venture funds have shied away from the clean technology. Whilst  the assertion by Andreessen Horowitz (A16Z – the VC firm) that software is eating the world is on the whole true, software cannot eat all the CO2 and methane, so investment will have to back hardware again, including solutions for CCS, biomass and hydrogen. In Europe, I’m afraid that there is a paucity of early stage investors who understand clean tech and have the operational experience to support companies in navigating this scaling challenge.

At the Clean Growth Fund, we are in tune with the ETC and Lord Turner. We have blended public finance with private capital by having BEIS and CCLA as cornerstone investors in our fund, but we are actively looking to back early stage businesses in the sectors the reports highlights. We also have the operational sector experience to support them. However, I know that our collective experience isn’t everything. It will need patience, partnerships, syndicates with corporates, infrastructure investors and project finance.

Galvanised by Greta Thunberg, we have all seen the swathes of school children on a Friday demonstrating about the lack of action on climate change. These children are the consumers of tomorrow – it looks like they want technology to succeed in preserving a diverse environment where they can all have a meaningful quality of life, so let’s give it a go.

Post Script: in the period preceding the creation of the Clean Growth Fund, Lord Turner expressed his support: “the Fund will play a crucial role in driving an essential energy revolution.  Achieving that revolution requires input from many different players – governments, energy companies, new technology challengers, NGOs and investors. Often these different players start with different points of view; but they need to be united in their commitment to limit global warming to well below 2°C.”

Jonathan Tudor appointed Investment Partner at the Clean Growth Fund


Jonathan Tudor has joined the Clean Growth Fund as Investment Partner.  The Clean Growth venture capital fund was established earlier this year to invest in UK early stage, clean technology companies. 

Jonathan joins the Clean Growth Fund from Centrica Innovations, where he has been Technology & Strategy Director for the past three years.  In his career to date, he has specialised in corporate venture capital investment and new business creation, working primarily in the UK, Israel and the USA.  He has held senior executive roles at BP Ventures, QinetiQ and CG Innovation Partners, and has held board roles at a number of privately held technology companies.

The Clean Growth Fund was launched in May 2020, with cornerstone investment from the UK Government’s Department of Business, Energy & Industrial Strategy (BEIS) and CCLA, one of the UK’s largest charity fund managers with £10 billion of assets under management.  The Fund is targeting the UK’s most promising early-stage “clean growth” companies that are pioneering carbon emission reductions in the areas of power and energy, buildings, transport and waste.

The Fund’s remit is to drive superior financial returns for investors and accelerate the development and commercialisation of clean growth technologies in the UK – leading to the creation of new and skilled jobs across the country, and contributing to the UK’s efforts to deliver net zero by 2050.

Jonathan Tudor said:

“It’s an exciting time to join the Clean Growth Fund.  The Fund has sparked a huge response from clean-tech businesses from across the UK, as well as interest from institutional investors.  The UK has a plethora of innovative clean-tech businesses; we have the difficult but enviable task of investing in the most promising companies that offer our current and future investors a good return, and deliver long-lasting benefits to UKplc.”

Beverley Gower-Jones, the Managing Partner of the Clean Growth Fund said:

“Jonathan’s VC experience on both sides of the Atlantic will be invaluable, as we invest in companies and secure new investment in the Fund.  The work of the Clean Growth Fund is even more important as the UK emerges from Covid.  A vibrant and dynamic clean-tech sector will deliver a stronger and more sustainable, low carbon economy.”

Friday Focus logo

The road to net zero – the importance of investing in sustainability


Date: 11th September 2020, 11am
Location: Zoom webinar

2020 has highlighted to many people the importance of sustainability and the need to look after our planet. Launched in May 2020, the Clean Growth Fund invests in companies with products and services focused on driving clean growth in the low carbon economy.

Beverley Gower-Jones, Managing Partner at CGF, joins us for our Friday Focus webinar on 11th September to give us an insight into the fund and what they look for when investing in innovative companies accelerating the transition to net zero. She will also discuss some of the exciting trends in the sector as well as the challenges.

Register here: https://us02web.zoom.us/webinar/register/9415990630789/WN_eaF9OWlWRo-CtnCwl5iwFA

Beverley giving a presentation

Interview with Beverley Gower-Jones

Beverley Gower-Jones, Managing Partner of the Clean Growth Fund, gives some additional insight into the aims and objectives of the Fund and its next steps.


Why is the Clean Growth Fund needed?

It’s been clear for many years that there has been a need to improve venture capital funding of clean tech firms in this country.  One body in particular, the Green Finance Taskforce, had identified this funding gap and made a recommendation to Government on how to stimulate investment in the sector.  The Government responded favourably and saw the public/private sector Fund as one means to help deliver its Clean Growth Strategy and achieve Net Zero.

The Government sees the Clean Growth Fund as a catalyst to increasing private investment in the clean tech space.  With the Fund backed by the Government and CCLA to the tune of £40m, we aim to increase the size of the Fund to more than £100m by the end of 2021, and make our first investments before the end of this year.

What’s your role as Managing Partner?

The Government (BEIS) selected Clean Growth Investment Management LLP (CGIM) to manage the Fund, with me as its Managing Partner.  I lead a team consisting of NorthStar Ventures, which has extensive VC knowledge, and the incubation consultancy, Carbon Limiting Technologies which has deep technical knowledge of the clean tech sector.  I co-founded CLT and before that I co-founded Shell Technology Ventures.

In short, the team have a deep understanding of disruptive clean technologies, as well as knowledge of emerging trends and of those companies that will have a large impact on the growing low carbon economy.

Ultimately, I’m responsible for the Fund’s investment strategy and delivering the best returns for our investors.   

How will you build the Fund to £100m by next year?

It helps massively that BEIS and CCLA, one of the UK’s largest fund managers, have made their commitments and we need to leverage this.  We are already talking to potential investors, principally institutions, corporates, family offices and High-Net-Worth-Individuals.  I’m confident that, against the backdrop of #buildbackbetter / green recovery, we will reach our target.

We are operating as a commercial VC fund, so we have the optionality of co-investing in individual opportunities alongside retail and high-net-worth angel investors. In such scenarios, the HNWs will be able to access available (S)EIS tax reliefs.

Is a £100m Fund sufficient to make a real difference?

We feel that the clean growth VC market, as it is now, would struggle to deploy more than £100m at this time. 

Will Covid-19 impact on the success of the Fund?

The impact of COVID-19 on the long-term prospects of the Clean Growth sector is being reported on favourably. 

COVID-19 has resulted in reduced liquidity in the venture capital market. The Fund will provide much-needed investment into early stage companies looking to commercialise their product or solution. In the longer term, the clean growth sector will help to re-invigorate the economy: Clean Growth Fund backed early stage companies will be “pulled through” as a result.

How is the Clean Growth Fund different from any other VC or environment/clean tech investment fund?

The Clean Growth Fund is commercially driven, aiming to make a commercial return the same as any other VC fund. The Fund will actively provide portfolio companies with hands on incubation support, drawing on the services of Carbon Limiting Technologies.

What are the investment horizons and expected returns for the Fund?

The Clean Growth Fund has a 10-year horizon and expects to make the majority of its investments in the first 5 years. The Fund expects to make commercial returns.

When will the Fund make its first investments?

We are looking to invest in at least two companies between now and the end of the year.  We already have an active pipeline of investment opportunities and we have received over 250 applications since the Fund was launched in May. 

It’s hugely exciting. We are going to be busy.

Mountains image as a metaphor for growth

Clean Growth Fund update

Beverley Gower-Jones, Managing Partner


BEIS, CCLA and the team at the Clean Growth Fund have been delighted with the response to the Fund’s establishment, and importantly the level of interest shown by clean tech companies up and down the UK. 

We have received more than 250 inquiries from companies seeking funding from the Clean Growth Fund.  The investment team at the Clean Growth Fund is currently assessing each application and the team are aiming to get back to everyone within the next month. 

The incredible response underlines the fantastic work that’s being carried out by the SME sector to help the UK reach NetZero, and importantly the growth potential of the UK clean tech sector – especially as our economy takes steps to rebuild. post-Covid19.

To recap, the Clean Growth Fund will invest in innovations that reduce greenhouse gas emissions or improve resource efficiency across power, transport, industry, buildings, waste and water. The Fund is aiming for a balanced portfolio across these sectors.

Two final points: I would particularly like to thank the regional business/inward investment groups that have spread the news of the Fund to their members.

And secondly, if you want to stay in touch with the Fund, please follow us on twitter (@CleanGrowthFund) and via our LinkedIn page for news and comment.

Best wishes
BGJ

clean-growth-fund

Investment boost for the UK’s very best early stage clean growth companies

BEIS and CCLA launch £40m Clean Growth Fund


The UK’s most promising early stage clean growth ventures have the opportunity to secure investment from a new £40M investment fund, established by the Department of Business, Energy & Industrial Strategy (BEIS), in partnership with CCLA, one of the UK’s largest fund managers.  

The Clean Growth Fund will invest in the UK’s most promising early-stage “clean growth” companies pioneering carbon emission reductions in the areas of power and energy, buildings, transport and waste.  It will seek to accelerate the development and commercialisation of clean growth technologies, to create new and skilled jobs across the country, and contribute to the UK’s efforts to deliver net zero by 2050.

There is a strong market need for new funding to support clean growth companies at the ‘early’ stage of their development.  BEIS and CCLA want to support and enable an increase in early stage investment in clean growth technologies and solutions.  Partnering public funds with private capital is key for delivering Net Zero and this Fund will show the opportunities available in the clean growth space.

The Clean Growth Fund will be managed by Clean Growth Investment Management LLP (CGIM).  The Managing Partner of CGIM is Beverley Gower-Jones, working in partnership with Northstar Ventures to bring together in-depth knowledge of the UK low carbon technology sector and investment expertise.

BEIS and the CCLA are the cornerstone investors for the Clean Growth Fund, investing £20M each.  The Fund has ambitions for a £100M fund and CGIM is now seeking wider private sector investment from others – pension funds, Limited Partner (LP) investors and family offices.

Business Secretary, Alok Sharma, said:

The need for innovative and ambitious ideas across green industries has never been greater. I am pleased that with the help of this fund, promising clean growth start-ups will be able to step up to accelerate the UK’s recovery, while supporting our path to Net Zero by 2050.

This pioneering new fund will enable innovative low-carbon solutions to be scaled up at speed, helping to drive a green and resilient economic recovery.

James Bevan, CCLA’s Chief Investment Officer said:

We decided that it was time for CCLA to invest in the very best early stage technologies to support the UK Net Zero objective.  In partnership with BEIS, we have developed a solution, the Clean Growth Fund.  Through the Clean Growth Fund, we now look forward to working with other investors to support these exciting young UK companies aiming to reduce carbon emissions.

Beverley Gower-Jones, Managing Partner of CGIM said:

The Clean Growth Fund is a significant boost to the country’s low carbon sector and is a clear signal from the UK Government that new and innovative technologies will be crucial to deliver Net Zero and the clean growth agenda. We want to hear from the very best clean technology businesses from across the UK.

Beverley Gower-Jones co-founded Carbon Limiting Technologies, a low-carbon business incubation consultancy, and was a founder and Vice President at Shell Technology Ventures where she was instrumental in defining Shell’s technology venturing strategic approach.  She chairs the commercial panel of the BEIS Energy Entrepreneurs Fund, which has invested more than £72m of grant funding into early stage, cleantech ventures.

The multi-national law firm, Pinsent Masons, advised Clean Growth Investment Management LLP.  Ian Warner led the team at Pinsent Masons. 


For further information, please visit: www.cleangrowthfund.com   / twitter: @CleanGrowthFund

Beverley Gower-Jones is available for interview.

Clean Growth Fund/CGIM:
Beverley Gower-Jones, Managing Partner: beverley.gower-jones@cleangrowthfund.com
Paul Taylor, Taylor Keogh Communications: +44 (0)20 8392 8250 / +44 (0)7966 782611 / paul@taylorkeogh.com

BEIS:
Vanessa Moore, Media Officer, Department for Business, Energy and Industrial Strategy 020 7215 5689 / Vanessa.Moore@beis.gov.uk

CCLA:
Miranda Barham, Fable Bureau: +44 (0)7899 030 304 / miranda@mirandabarham.com

Northstar Ventures:
Sharon McKee, Marketing & PR Manager: +44(0) 7753 414 236 / sharon@northstarventures.co.uk

Notes to Editors:

CGIM’s Advisory Panel includes Michael Liebreich, Professor Chris Rapley, Vicki Bakhshi, George Whitehead and Robert Bahns.

BEIS brings together responsibilities for business, industrial strategy, science, innovation, energy, and climate change. The Clean Growth Fund is funded by the BEIS Energy Innovation Programme and further details can be found at: https://www.gov.uk/government/publications/clean-growth-equity-fund.

CCLA manages investments for charities, religious organisations and the public sector. Founded in 1958, it aims to deliver strong long-term returns and has unmatched experience in providing ethical and responsible investment to charities. CCLA is independently owned by its clients with £10 billion of assets under management.

CCLA Investment Management Limited (Registered in England & Wales under number 2183088) and CCLA Fund Managers Limited (Registered in England & Wales under number 8735639) are authorised and regulated by the Financial Conduct Authority (FCA).  Their registered address is Senator House, 85 Queen Victoria Street, London, EC4V 4ET. www.ccla.co.uk

Northstar Ventures is a venture capital and social investment firm based in the North East of England.  Northstar Ventures Limited (Registered in England & Wales under number 5104998) is authorised and regulated by the Financial Conduct Authority (FCA).  Its registered address is 5th Floor, Maybrook House, 27-35 Grainger Street, Newcastle upon Tyne, NE1 5JE. www.northstarventures.co.uk