By Mathew Carr
April 19, 2021 — LONDON: South Pole, which provides services to help cut greenhouse gas, has sold a stake valuing it at at least 200 million euros.
The company didn’t specify all details of the transaction, but the price was from 20 million to 30 million euros for a 10% cash injection, said Renat Heuberger, CEO of South Pole. The buyer was Lightrock, an impact investor.
Zurich-based South Pole now expects to double the size of its staff to about 1,000 people, as it seeks to capitalize on a global push to decarbonize economies to protect the climate. Countries are doing so under the 2015 Paris climate deal, which gives nations choice about how they tackle global warming.
Big companies are using both compliance and voluntary carbon markets, while countries have introduced various policies, also including setting minimum levels of green energy and efficiency standards.
Heuberger said he spoke with scores of investors before settling on Lightrock for the first equity sale in years. South Pole managed to convince potential investors that “this business model exists, has legs and has growth potential,” he said in an interview.
“Our business model does not hinge on voluntary markets, it does not hinge on the compliance market, it does not hinge on a fund. We are 100% convinced that funding needs to go into the transition and you have to account for that. It’s not just going to be donations.”
(More to come)
With a double digit million Euro investment, pioneer impact investor Lightrock taking a minority position in leading climate solutions company South Pole to spur climate action globally
London/Zurich, 19 April 2021
Lightrock, a leading global impact investor backed by LGT and the Princely House of Liechtenstein, today announced its minority investment of 10% in South Pole, one of the world’s largest companies fully focused on fighting climate change. For investors around the world this sends a clear signal: climate action is now squarely at the centre of attention and a rewarding investment. Following an unprecedented spike in demand for climate solutions in the last year, the mid-sized, double digit million Euro investment announced today will help South Pole meet exploding demand and achieve its mission of accelerating the global transition to a climate-smart society.
South Pole, a social enterprise recognised by the World Economic Forum’s Schwab Foundation, has developed nearly 1,000 projects in over 50 countries to massively reduce greenhouse gas emissions. Projects range from sustainable agriculture, forest conservation, waste management, energy efficiency, to decentralized renewable energy. Across the world, South Pole enables thousands of leading companies, including Nestlé, L’Oréal, and Tetra Pak, to achieve net-zero emissions.
For over fourteen years, Lightrock has pioneered investing into scalable and tech-driven businesses around three themes: people, planet, and productivity/tech for good. Today, it is a direct investor in over 60 companies around the world, with over US$ 1 billion in invested capital. LGT has over US$ 270 billion assets under management.
The world is in the grips of a climate crisis. Lightrock’s investment in South Pole is motivated by the growing urgency to meet this challenge, coupled with the realization that dramatically more financing is needed. Both companies, as leaders in their fields, recognize that scaled up action today is urgent to avoid irrecoverable damage to people and the planet, and wish to take advantage of the enormous market opportunity that investment into a low-carbon economy offers.
“Climate change has finally become a public, political, regulatory, and corporate hot topic. Reflecting this, we have witnessed a strong growth in carbon markets, driven by growing corporate and consumer demand for climate neutral solutions,” says Pal Erik Sjatil, CEO and Global Managing Partner Lightrock. “South Pole has developed the largest portfolio of carbon projects in the world. In terms of people, they have an exceptional talent base with over 470 sector specialists around the world, ranging from environmental scientists, engineers, social scientists, renewable energy experts, and more. We have been very impressed by the extensive solutions platform built by the team and look forward to partnering with South Pole in accelerating global climate action.”
H.S.H. Prince Max von und zu Liechtenstein, Chairman LGT and Lightrock, says: “In addition to South Pole’s size and global presence, we chose to partner with South Pole based on two key differentiators. First, we consider the quality of its carbon projects as second to none. Second, the strategy that South Pole has developed to help clients on their climate journey towards zero carbon has proven extremely effective. On top of this, the company’s intention to materially improve lives, not just decarbonize operations, aligns well with our own ambitions and convictions.”
“Climate change and global inequality are among the most pressing challenges of our generation”, says Renat Heuberger, CEO of South Pole. “As entrepreneurs and scientists, our passion is to tackle these challenges with market-based approaches. We have come a long way since incorporating South Pole as a start-up in 2006. With Lightrock as an investor and partner, we can scale up our impact dramatically. And nothing less is required if we are to achieve a sustainable, more equitable and climate neutral economy.”
The investment in South Pole is one of Lightrock’s first and largest to demonstrate a dedicated portfolio around Lightrock’s key investment theme “Planet”, focusing on companies that contribute to the UN’s SDG 13 “Climate Action.” These are companies that enable a greener, more efficient energy value chain or that accelerate the transition into the circular economy.
“We envision a regenerative system of resource usage supporting economic development whilst reversing environmental degradation”, says Cornelius Walter, Senior Advisor to Lightrock on climate positive solutions. “The current convergence of technological readiness, regulatory action, consumer awareness, and talent attracted to purpose represents an unprecedented and unique opportunity. For us as investors to scale climate-positive solutions in partnership with ambitious entrepreneurs like South Pole, this is a strong step in the right direction not only for us, but for people and the planet as well.”