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We worked together with Cambrium, a Berlin-based startup that leverages technology to create the molecules and proteins of the future, to help them gather and collect insights on their sustainability performance.
In this interview, we asked Charlie Cotton, the Co-founder and CSO of Cambrium, about his perspective on the new wave of sustainability regulations and data needs that startups in the tech and chemical space face today.
If you are more of a watcher rather than a reader, you can also watch the full interview with Charlie here!
Briink:
Charlie, can you tell us a bit more about yourself and Cambrium?
Charlie:
Hi! I'm Charlie Cotton, and I'm the Chief Scientific Officer of Cambrium.
And our mission at Cambrium is to accelerate the shift towards a bio-based economy, by triggering the next wave of material innovation.
I often describe proteins as the kind of “specialty chemicals” of the 21st century, because they have this amazing range of material properties, but are also fundamentally biodegradable.
Briink:
Why is sustainability important to Cambrium?
Charlie:
On a personal journey level, sustainability has kind of been the reason for me to work with Cambrium, and to start to commercialize technologies that I've been passionate about for my whole life. Internally, at Cambrium, we often talk about "making materials that matter". And these materials that matter to us have to matter in two ways:
The first one is that their sustainability profile has to be better than the existing solutions. The second is that they can be produced at scale, so that they end up in millions of products worldwide.
Briink:
You have been engaging with some investors, lately. Do you feel that investors are starting to care more and more about sustainability?
Charlie:
Yeah, absolutely.
There is a specific class of investors defining themselves as “impact investors” today, and they have very stringent requirements on how their portfolio companies go about sustainability.
That's one class of investment that has very clear sustainability requirements. But in general, we see the investment space moving towards more sustainable technologies, and so everyone is increasingly more interested in this data.
Briink:
What types of questions do investors usually ask you about Cambrium's sustainability performance?
Charlie:
Investors typically think very analytically, so they like quantification.
Usually, that would be things like asking about greenhouse gas emissions, water usage, and so on. But legal and governance issues, as well as compliance with certain ESG frameworks or standards, are becoming important as well.
For example, investors would ask things like: Are you set up in order to be compliant under such and such a regulation, and what's your plan for in five years when this happens?
Those questions are becoming crucial, and it's good to be ready, especially today, as investors face increasingly stringent requirements: regulations such as the SFDR EU taxonomy and sort of all the European Action Plan regulation package is pushing them to actually gather granular data on the sustainability of their portfolio companies.
Briink:
Startups have very high constraints in terms of time and resources that they can allocate to different projects. Which roadblocks did you personally face as you were trying to gather this data at Cambrium?
Charlie:
When we started to get into the data side of things, the first concern was understanding which data to collect, particularly as a B2B chemicals company producing a physical product. There are so many different kinds of data I could collect about our manufacturing process, or about our supply chain, for example.
So in our case, honing down the kinds of data you need to collect and track at this point in your company's lifecycle was probably the first constraint or roadblock. The second was prioritizing them and aligning them with our goals as a company, because you can't do everything from day one.
The minute you have a product idea, you should probably be thinking about how is this gonna work from a sustainability perspective and what data might I collect.
Briink:
Which data is the hardest to collect, in your space?
Charlie:
To speak about manufacturing a little bit, we have to work with third parties, and supply and logistics partners, and we have to be very careful about the kind of data we ask for and be very clear about what we need and why.
Unfortunately there's no general standard or "state of the art" data package for any of these things. So it's still kind of bespoke.
Briink:
I know you worked with Briink to hone and refine your sustainability profile and vision, not only to bring this information to investors, but also for your own “sustainability intelligence” purposes. How did that go?
Charlie:
The question we were working with Briink on were: How can I present our company under the current EU regulations, e.g. under the current Taxonomy for Article 9 Funds? And what does that framework look like? What kind of data do we need to collect in order to work with these kinds of investment funds in future funding rounds?
We had a very clear idea of what we were working on, and we were able to bring that framework together in a “question and answer” format.
Briink:
Is there anything that surprised you in particular, as you were presented the results of this analysis?
Charlie:
Yeah. The first surprising response was actually my empathy for the regulators.
I was surprised by how many aspects they have to consider for every business.
They are trying to regulate a whole space, including both existing and new technologies, and there's just so many different risks and aspects which must be properly identified.
And then beyond that, it kind of opened my mind to new kinds of data that Cambrium might want to collect as well. Before working on this actively, I hadn't been thinking particularly about corruption policies, or perhaps even about our exposure to pollution from things like water, because I see our production methods as fundamentally environmentally-friendly.
But in the future, these are pieces of data that I might need to collect in 510 years time as things scale. So I became interested to see the breadth of data that could be relevant for this analysis.
Briink:
So this data will also be very useful for your future planning and thinking ahead about how to build a sustainable company.
Charlie:
Right.
Briink:
Have you approached any investors after working with Briink? And how did they respond to this?
Charlie:
After working with Briink, I was given a really nice list of items to prioritize for my future engagements. I haven't shown investors the work we've done together yet, because I'm consolidating a package.
But one interesting way to think about this sustainability discussion is that you need to prepare an understanding for the different stages of your company. So, right now I'm getting to polish those steps, get the final pieces of data for this year.
Briink:
Is there any advice that you would give to any other startup that is starting to think about, okay, how do I craft my sustainability vision? And how do I approach these requests from investors today?
Charlie:
Usually, with things like sustainability, I like to think about it deeply myself first, to see if I can get involved and understand the regulation.
But my experience so far has been that this is both too complex and too important to do it on your own.
So now I believe that enlisting the help of experts makes a lot of sense. And it’s crucial to do this so early on, because the sooner you engage with this issue, the more it sticks in your subconscious, the clearer it becomes how different aspects of it will fit into different future scenarios for the company.
To summarize my advice: Start early, and get help.
Briink:
And is there any advice or feedback that you would give to impact investors that are starting to ask these questions?
Charlie:
My take on this is that investors are generally being very forward thinking about applying these frameworks for their portfolio companies, and are doing some very good work in that space.
I would say that the amount of data collection on the portfolio company side is very, very high, and there's obviously a burden associated with that.
So these kinds of new tools like Briink that are coming about are a really easy way to help them connect their companies to other companies that can derisk basically what is a complicated and time intensive process.
Briink:
Looking slightly ahead now, how will you integrate the insights that you gathered together with the brink team in your future sustainability, or ESG strategy?
Charlie:
The first step is a consolidation of a single state of the sustainability profile today. And then I think there's a continuation of that work. Again, we have this prioritized list of where one can go year on year and in the long term, I hope to get a certification for the organization as a whole as a result of the work we're doing together.
Briink:
Thank you so much, Charlie! It was really nice having you here. Is there anything that you would like to add to what we just shared, maybe for startups or investors that are getting started with this?
Charlie:
Well, first of all, thank you very much for the hard work from the Briink team. I really enjoyed working with everyone, and I think towards startups, it's never too early to start on this topic. I think that this was a big learning for me as well.
The minute you have a product idea, you should probably be thinking about how this is going to work from a sustainability perspective, and what data might I need to collect?
And then to investors, you know how busy your portfolio companies’ teams already are, and that this is a new requirement if they want to play in this space. So, keep thinking of ways to help them speed up this process and collect the right data.
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