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The Sifted guide to Cop26

From cleantech case studies to VC lists to sustainability advice, we've put together a comprehensive guide to climate change for startups across Europe

By Alex Oscroft

Mauro Ujetto / Shutterstock.com

For the next two weeks 20,000 politicians, scientists and business leaders will descend on Glasgow in the hope of hammering out a deal to cut emissions quickly enough to stop catastrophic climate change. 

Cop26 is being billed as a pivotal moment, with the record heatwaves, floods and storms in the six years since the Paris Agreement showing why drastic measures are needed. 

While world leaders will be the faces of any agreements that are struck, startups will be on the cutting edge of developing new technologies that can turn those pledges into reality. Whether it’s growing vegetables in urban shipping containers, floor tiles that convert footsteps into energy, tree-planting search engines or second-hand clothing marketplaces, new opportunities for innovative businesses are plentiful and much needed in the fight against climate change. 

Cleantech is a booming market, with record amounts of investment this year, and startups in unrelated sectors can also take action to improve their sustainability.

At Sifted we’re proud to make the environment a central part of our editorial mission. To mark Cop26, we’ll be bringing you new reporting from our expert team of journalists and digging into the archives to highlight articles on sustainability, ESG, climate tech and everything in between. 

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Innovative technologies 

Fifty years ago, we barely had recycling bins; 20 years ago, electric vehicles seemed a thing of the distant future; even 10 years ago, it was hard to imagine that Europe would be shutting down coal plants thanks to a boom in wind and solar power. 

New technology will be at the forefront of cutting emissions and there are hundreds of startups across Europe rising to the challenge and innovating at an unprecedented rate. 

  • Spanish startup Bioo has invented batteries that can run on the energy produced by decomposing soil. Pablo Vidarte, founder and chief executive, told Sifted earlier this year that his batteries were a cheaper alternative to solar panels and were already seeing an impressive takeup in agriculture.
  • Carbon capture has caught the imagination of founders: Soletair, based in Finland, removes carbon dioxide from office ventilation systems, which it claims can boost worker productivity as well as help the environment. Elon Musk has even offered a $100m prize for the best technology in the field.
  • Dayrize is a Dutch ecommerce company whose app tells customers how sustainable the products they buy are. Its UK marketplace is already home to 5,000 products and it expects that to double by the end of the year.
  • Scottish vertical farming startup IGS sells its systems to urban farms across Europe and hopes to be one of the first companies in the sector to make a profit. It announced a £42.2m Series B round this week. Its farm systems can control the sun, rain and wind to mimic open field agriculture.
  • If you think cleantech is a market you’d be interested in but are struggling to come up with a winning pitch, why not take some ideas from VCs themselves? Sifted asked top investors what sustainability startups they wanted to see, so take a look if you’re a Sifted Member (and if not — why not join?).

Cleantech success stories

Once you have your product mastered and investors are handing over their money, it’s time to start scaling it to make it accessible and affordable. 

Climate change will mean many habits have to change and will make new products a part of everyone’s lives — creating lots of opportunity for companies who have the capacity to meet them.

  • Northvolt is valued at more than $11bn after a monster $2.75bn raise this year, and is looking to keep growing. It has joined forces with Volvo to build a factory in the north of Sweden that can make enough batteries for 1m cars a year. 
  • Arrival is a London-based company developing electric cars, vans and buses made from its own composite material. It floated with a valuation of $13bn this year, and aims to have a “micro-factory” — a small plant close to the site of purchase that can tailor production for local needs — in 31 cities by 2024.
  • Recycling clothes is the name of the game for Depop, which was bought by Etsy for $1.6bn in June. By creating a marketplace for people to sell second-hand clothes, Depop caters to young people who want to cut their emissions from buying new clothes, and has committed to making its operations carbon neutral by the end of the year.
  • Other startups are looking to reduce the emissions from fashion at the source, by creating new sustainable materials. Sifted runs through some of them here.
  • Sifted also polled investors on which startups they think have the potential to become “gigacorns” — companies with the potential to remove a gigatonne of carbon dioxide from the atmosphere every year. You might be seeing some of these names a lot in the near future.

VC funding is booming

Cop26 is a big moment in the calendar, but climate change has been rising up the agenda for years. Cleantech and climate-related businesses have enjoyed a surge of investment in that time, and VCs know there’s money to be made in the sector. 

They’re opening their wallets at a record rate and sustainability is one of the hottest sectors in the market right now.

  • Sifted has put together a list of more than 30 climate-focused VC firms across Europe. Keep this one bookmarked.
  • Just last week World Fund announced Europe’s largest ever climate-focused fund, with more than half of a €350m target fulfilled already.
  • More than $1bn had been invested into cleantech in London alone so far in 2021, more than in all of 2020 already.
  • Angel investors are a fantastic source of pre-seed and seed-stage capital, and many are focusing solely on sustainability. Check out our ever-growing list of climate angels in Europe, which is over 50 strong already. 
  • For a sense of which VC firms and investors are scoping out the sector, have a scroll through our list of the hottest sustainability investments from the last quarter, including big rounds for Octopus Energy, refurbed and Verkor.

Importance of ESG

Every startup and VC will have had meetings over the past year about Environment, Social and Governance (ESG). These three letters have become big news in the business world as companies look to prove that they’re taking their responsibilities beyond the balance sheet as seriously as the bottom line. 

  • It’s a different proposition for a multinational corporation than a startup, and VCs have had to grapple with the problem of instilling important values into new businesses while also giving them the flexibility to innovate at a rapid pace. In March we reported on a workshop being held by leading VC firms to put together an ESG framework for VCs.
  • On the other hand, some say they don’t go far enough. Seventure Partners, a VC firm based in Paris, made the UN Sustainability Development Goals a benchmark for its portfolio companies, saying they were “likely to be far more widely understood than a specific ESG framework” of an investor.

Things every startup can be doing

To misquote the Three Musketeers, climate change is about all for one and one for all — everyone needs to do their part to save the planet. Fortunately, Sifted has plenty of resources to suggest meaningful changes you can make at your startup, VC firm or in your daily life. 

  • Drawing up an accurate carbon footprint can be a difficult and long process, but it’s vital to understand where your company’s emissions come from. There’s no perfect solution, but startups can look to do it themselves through the helpful toolkit put together by Much Better Adventures, a sustainability minded travel company, who list the metrics you ought to be measuring to keep track of your footprint. 
  • If a company has a bit more money to spend, they can look at one of the growing number of carbon accounting products on the market, including the hot-off-the-press Series A round by Plan A.
  • Head of sustainability is an increasingly common job title at both major corporates and startups. We asked some of Europe’s leading lights how they went about their jobs, which stakeholders they spoke to and what to keep in mind while crafting a sustainability strategy. “Communication and influencing is such an important part of what I do,” explains Delivery Hero’s Jeffrey Oatham. “Even though people are interested [in sustainability], you’re still asking them for time, you’re still asking them to do something.”
  • Saving the planet isn’t going to be a walk in the park, however. Elina Kajosaari put together a useful list for us of the five things to watch out for when making sure your climate efforts are doing what they’re supposed to.

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