In the last few years alone we’ve seen tens of thousands of press releases issued by businesses, industry groups, countries, states, and cities touting net-zero commitments – promises that now cover more than 70% of global emissions and a giant chunk of the global economy.
And for every single one of those press releases, there’s a CEO, CFO, sustainability lead, or head of supply chain suffering through the nightmare where they show up for the final exam only to realize they never attended class. “We are definitely going to zero out our Scope 3 emissions, it’s just that we have no fucking idea how,” is a refrain we’ve heard too often behind closed doors from the leaders of the world’s biggest corporations.
Watershed is the platform that helps them rest easy, and today we’re thrilled to share that they’re in our portfolio. Plug in your existing finance and operational data and Watershed spits out reports showing how much carbon your company emitted, from your direct operations to deep in your supply chain. Over the last few years, they’ve grown into the global leaders in carbon accounting, serving the largest banks and financial institutions alongside retailers, food distributors, and manufacturers. Household names like Carlyle, BBVA, General Mills, Stripe, and Shopify.
This solves an urgent problem for C-suites around the world who need answers not only for their climate-minded customers, but also for the growing cast of regulators like the Securities and Exchange Commission and European Banking Authority who are starting to mandate climate disclosures.
But, taking a measure of the problem is only step one. The reason we’re so excited to partner with Watershed is what they’re doing to help customers bring their emissions to zero. They’re building out a marketplace of renewable energy and other lower carbon products to help companies directly reduce emissions today. And, for the emissions you can’t wipe out overnight, they offer seamless access to the highest quality supply of carbon removal, including a partnership with Frontier that lowers the bar for buy-in, so companies of all sizes can participate in this growing market.
Since launching the world’s biggest fund dedicated to carbon removal last year, we’ve backed more than a dozen teams working to trap, dissolve, and mineralize CO2 out of the atmosphere by storing it in plants, soils, oceans, and underground wells. As we said then, “there has never been a better time to start a carbon removal company.” Since raising our fund, Frontier launched and the IRA multiplied incentives for carbon removal and utilization. Billions of dollars of demand are chasing our early stage portfolio.
Yet, for all the traction investing, what we haven’t done before at Lowercarbon is buy 1,000 tons of carbon removal. Turns out, even for people like us whose day jobs are to back the most unreasonably ambitious climate founders we can find, this was still a tricky problem.
The world’s largest corporations are responsible for the vast majority of CO2 removal purchases. They have the latitude to negotiate contracts directly with suppliers, or better yet to join Frontier, a $1-billion buyer’s club of the world’s most visionary companies focused on acquiring high quality carbon removal. For relatively smaller purchasers like us, who bought removals to sweep up our own personal emissions, the process isn’t so clear. Our offtake from any individual supplier isn’t big enough for companies to bother negotiating with us, and to build a custom portfolio would take months of back and forth and require endless complexity to track deliveries. This dynamic leaves individuals and one-off buyers mostly locked out of the carbon removal market, or more worried about the risk of buying something bad than feeling confident they’re doing something good. On the flip side, it deprives suppliers of a new set of customers just as the urgency of removing carbon from the atmosphere goes up.
As investors in leading carbon removal companies, here is where we bring unique strategic value. We help connect Watershed to emerging suppliers of carbon removal, and our insights on the evolving market help them iterate on the product. Meanwhile, Watershed grows demand for all the carbon the companies in our portfolio remove.
And when we needed to buy 1,000 tons of carbon dioxide removals, they made it easy so we can stay focused on our work. Watershed was founded by my former Stripe colleagues Christian, Taylor, and Avi, so it’s absolutely no surprise they’ve managed to build a platform that makes complex transactions dead simple.
Through the Watershed Marketplace, we’ve purchased 1,000 tons of carbon removal. We purchased from a variety of companies in our portfolio to support a range of high-quality removals. (We also biased toward nearer term removals and only bought from companies who already had existing contracts in place with other buyers.) Here are the suppliers helping us hit our removals goal:
Arca’s suite of technologies speeds up the reactivity of mine tailings to use mine waste for permanent carbon removal.
Charm converts waste biomass into bio-oil through fast pyrolysis,then inject the bio-oil deep underground.
Heirloom automates carbon mineralization, speeding up the time required for rock formation from years to days.
Living Carbon uses biotechnology to improve how trees break down a toxic byproduct of photosynthesis, conserving more energy to grow bigger and faster.
Loam coats seeds in an endophytic fungus that produce stable forms of carbon in soils such as aggregate and minerals that endure for hundreds if not thousands of years.
Noya’s direct air capture system uses materials made from activated carbon that is soaked in a blend of CO2-capturing chemicals.
Pachama offers the best reforestation available, combining remote sensing technologies and deep learning to provide automated and trustworthy monitoring.
Running Tide deploys wood-and-limestone buoys in the open ocean to restore alkalinity to surface waters before sinking terrestrial biomass, storing the carbon for centuries. They will magnify that carbon removal capacity by growing kelp, too.
Undo spreads crushed basalt on farmlands where the minerals combine with rain to replenish soils with micronutrients and cheaply trap carbon as bicarbonate for millennia.
At Stripe, I worked on putting together their initial portfolios of CDR. Speaking from experience, I can tell you that we could easily have spent months putting together one bilateral agreement after another. Watershed made the headache go away.
If they could do that for us, they can do it for you, too. If you’re wondering how to strip fossil fuels out of your supply chain, zero out your emissions, and begin reversing the impact of global warming by sucking CO2 out of the atmosphere, wait no longer. Get in touch with Watershed today.
p.s. There are more inspiring companies in our portfolio working on removing CO2 from the atmosphere and stopping greenhouse gas emissions at the source. In this batch, we only purchased from companies for whom we weren’t the first customer and who were delivering removals in the next few years, but we look forward to buying removals from a growing assortment of kickass teams in the years to come.