A message from Rho Impact CEO Gilman Callsen
Central to Rho Impact’s mission is promoting the widespread adoption of open and transparent forecasting approaches. We believe this is key to enabling industries worldwide to allocate the trillions of dollars required to combat climate change in a way that is auditable, robust, and universally comparable. For those of you who are looking closely, ask for the details behind any numbers you see reported in annual reports, promotional materials, or otherwise (including this one!). It is crucial that we don’t settle for hand-waving or black-box approaches.
We applaud Eclipse’s dedication to transforming physical industries (notoriously difficult for startups and slow to change) and we are thrilled to have collaborated this year on both their second annual ECO report and the public release of the ECO Framework. This report is a testament to Eclipse’s strategic, thesis-driven approach and the framework is a useful tool to help nearly any investor credibly communicate the potential impact of their portfolio companies.
I invite you to read the report, dig into the numbers, and engage. There is a broad and rapidly expanding community of investors and operators who are pushing for transparent, reproducible, auditable forecasts that help us all make the most informed decisions possible.
How Tech Benefits the Environment: The Second Annual Eclipse Carbon Optimization (ECO) Report
The infrastructure supporting today’s physical industries is outdated and inefficient — and as such — accounts for 75% of global greenhouse gas (GHG) emissions.
At Eclipse, we believe that by digitally transforming the ways we manufacture goods, construct buildings, design transportation and other infrastructure, will meaningfully and positively impact the planet. Digital solutions improve flexibility and precision in large-scale, critical systems, which inherently lead to less waste. We've already seen this with VulcanForms, whose novel approach to metal additive manufacturing reflexively leads to lower waste versus reductive manufacturing processes. A standard way to measure the impact of various technologies on GHG emissions helps us amplify the positive effects of these solutions.
Today, we’re announcing the second annual Eclipse Carbon Optimization (ECO) report, which provides a novel framework for assessing the potential environmental value of technologies. We found that the 13 Eclipse portfolio companies included in this year’s report have the potential to **reduce annual emissions by 172 MMtCO2e by 2050, or 4% of current total U.S. carbon emissions.** To put that into perspective, just these 13 companies are estimated to reduce emissions generated by 22 million homes.
The ECO Framework
To develop the methodology, we collaborated with Rho Impact, an impact analytics firm, and utilized the CRANE tool created by Prime Coalition, a prominent climate investment nonprofit, in order to assess the environmental impact of early-stage ventures. This model estimates carbon reduction much like an investor would evaluate an investment’s future revenue and profit potential.
The ECO Framework has three components:
- The total estimated GHG emissions produced in the market(s) that the technology addresses.
- The estimated GHG intensity reduction (%) per unit of the technology.
- The estimated market penetration rate of the technology.
The ECO Framework is a big step forward in measuring how technology can reduce carbon emissions. But evaluation is an ongoing and evolving process, given the rapidly changing technology ecosystems. This year, we’ve not only iterated on the methodology, but we’ve also open sourced the framework. A key goal of the ECO initiative is to encourage the broader tech community to evaluate the sustainability of technology companies and share feedback.
In order to more thoroughly evaluate the potential positive environmental impact of various technologies, this year’s report also includes a new case study of Gecko Robotics, which falls outside of Eclipse’s portfolio of companies. The inclusion of Gecko in the 2023 ECO report, aims to shed light on the broader landscape of companies driving decarbonization, in addition to showcasing a diverse range of solutions that contribute to a more sustainable future.
Market trends driving a sustainable future
In recent years, five of Eclipse's investment areas — robotics, artificial intelligence, IoT, renewable energy and storage, and advanced semiconductors — have matured and reached important inflection points. The innovative technologies represented in the Eclipse portfolio offer significant economic advantages — these companies generate more revenue for customers, save costs, and improve operational reliability. With ECO, we can now demonstrate that these companies also offer substantial environmental benefits with long-term effects. Here are a few examples:
- Arc Boats, which is disrupting recreational boating with the most advanced electric boat on the market, will reduce the carbon intensity of recreational boating by 90.9% per unit. Assuming 10% market penetration, Arc Boats will reduce emissions by 31.1 MMtCO2e annually by 2050.
- Reliable Robotics, by developing safety-enhancing technologies that will prevent fatal aviation accidents, shows a 19% per unit reduction potential, or 2.2 MMtCO2e annually by 2050. This is equivalent to recycling 95 million trash bags of waste.
- RideCo is expanding access to public transport in underserved neighborhoods by enabling municipal transport networks to offer Uber-like customer experiences at a “bus fare” price point. By shifting commuters from passenger cars to public transit, RideCo can reduce carbon emissions by an estimated 53.1% per passenger mile, or 5.3 MMtCO2e annually by 2050. This is the equivalent of 29,000 railcars worth of coal burned.
Accelerating the Industrial Evolution for economic and environmental prosperity
Eclipse invests in the Industrial Evolution: the thesis that the world’s physical industries must be modernized and digitized, enabling the efficiency, productivity, and sustainability needed to support a growing global population and drive sustained economic growth. Digital transformation will allow the world to achieve its net-zero goals. We see a pathway to a bright future where technology unlocks greater efficiency and prosperity for businesses, as well as safety and longevity to people and the planet.
To learn more, read the 2023 ECO Annual Report
Follow Eclipse Ventures on LinkedIn for the latest on the Industrial Evolution.