Sounds like there’s hope for the planet yet.
Almost half of employees and consumers believe it’s important for companies to disclose their environmental impact and climate-related risks, PwC’s 2024 Trust Survey shows (PwC is a sponsor of this newsletter). When it comes to building trust in an age when people have so many ways to share information, Aidan Madigan-Curtis reckons such honesty is at a premium.
“Being frank and being truly transparent about your business—what it is doing, what it is not doing, what it stands for, and everything in between—is more important than ever,” says the partner at venture capital firm Eclipse Ventures. “Especially in a world increasingly full of misinformation and noise.”
Eclipse walks the talk.
The firm, which manages about $4 billion, sits at the intersection of digital transformation and heavy industry—think transportation, manufacturing, and logistics and supply chain. With such industries accounting for roughly 75% of global greenhouse gas emissions, it invests in companies using technology to reduce that pollution.
Over the past several years, more institutional investors have been asking Eclipse about its portfolio’s carbon dioxide footprint. Madigan-Curtis and her colleagues figured the positive climate impact could be significant over time.
“But when we went about trying to find a [system] to measure that—just how much carbon would be avoided or mitigated by leveraging modern technology in these industries—we couldn’t find one,” she tells me from Nevada.
So Eclipse built its own. With analytics firm Rho Impact, it developed the Eclipse Carbon Optimization (ECO) framework, which calculates a new venture’s climate impact potential. Eclipse then applied ECO to 13 portfolio companies representing a cross-section of heavy industry.
The bottom line, published in a 2023 report: By 2050, those companies could shrink annual carbon dioxide emissions by 172 million metric tons, or about 4% of total U.S. C02 output today. That’s equal to the yearly emissions of 22 million homes.
“We found it really impactful to have that kind of standard,” Madigan-Curtis says of ECO. Besides helping Eclipse’s companies convey their carbon impact to potential customers, it’s been well received by other VC folks interested in using such a framework.
Madigan-Curtis also sees a way forward for any business that wants to build trust in its climate reporting. In her view, many companies could do better.
“If you look at, for example, Amazon or Google’s reporting around their carbon footprints, there’s a lot to be potentially disappointed by,” says Madigan-Curtis, who previously worked at Apple and connected operations provider Samsara.
Many carbon reduction goals and statements take offsets into account, she notes. “It’s fairly well-known that carbon offsets are not the most reliable.”
True enough. One study found that more than 90% of rain-forest carbon offsets approved by the world’s top certifier are probably “phantom credits” that could worsen global warming.
Eclipse prefers the rigor of carbon “insets,” Madigan-Curtis explains. For businesses, that includes doing things that are carbon-reductive, such as upgrading HVAC systems and investing in new tech that cuts energy consumption.
“These are the types of actions we like to measure,” Madigan-Curtis says. “This is why we’re promoting this framework, versus the more high-level ‘Set a goal, and then use carbon offsets to get there if you’re coming up short.’”
To be fair, Google has changed course. As it shifts away from buying carbon offsets in bulk, the tech giant is aiming for net-zero emissions by 2030.
Madigan-Curtis sees big upside in trading offsets for insets.
“Consumers, investors, and employees are smart, and a lot of people care about climate and the way that companies behave around climate,” she says. With that in mind, Madigan-Curtis thinks there’s plenty of room for businesses to lead by doing “real work” to decarbonize and measuring and reporting the impact.
Those that do “will be the ones that, over time, get more investment, have happier customers, and have greater employee stickiness,” she predicts. “Because people are smart, and they really do look under the hood.”
Ideally, that vehicle is electric.
Nick Rockel
nick.rockel@consultant.fortune.com
IN OTHER NEWS
Third time unlucky?
Jamie Dimon has news for anyone who trusts that we’re just going through a rough patch. World War III might have already started, the JPMorgan Chase CEO said at the Institute of International Finance. Conflicts in Ukraine and the Middle East could turn into something much bigger, Dimon warned, putting fears of a U.S. recession in perspective. On top of that, Russia, Iran, and North Korea—not to mention China—have joined forces to upset the post–World War II order. Dimon thinks peace could still break out, but he isn’t banking on it.
Con job
Looking for work? Be careful who you trust. Job scams are on the uptick, advises Eva Velasquez, president and CEO of the Identity Theft Resource Center. One common ruse: Posing as a recruiter online, the scammer dupes their victim into sending money or sharing personal info. Often, a fake job posting should ring alarm bells because it offers high pay for relatively low-skill remote work. To stay safe, Velasquez suggests researching the recruiter or company in question and not clicking on links sent your way. Sounds like a job in itself.
Military intelligence
Washington isn’t trusting investors to do the right thing on China and AI. To stop the Chinese military from winning the tech arms race, the Treasury Department will soon block and monitor American financial and other support for AI, computer chips, and quantum computing in China. It’s part of a broader push by the Biden administration to thwart Beijing’s high-tech plans—something Democrats and Republicans can actually agree on. What a machine.
Political gains
No matter who wins next week’s presidential election, Americans can trust they’ll get richer. So says a Bloomberg survey of 350 economists, portfolio managers, and investors, which reveals a bullish outlook on the stock market. Almost half of respondents forecast that with Kamala Harris in charge, markets would continue or top this year’s 2% monthly gains. If Donald Trump wins, nearly 40% see growth accelerating. And while respondents think housing would fare better as an asset under Harris, they see a Trump presidency being kinder to gold and Bitcoin. Voters, take your pick.
TRUST EXERCISE
“The vast majority of America’s CEOs understand their obligation not to mislead investors and take it seriously. But how many can honestly claim a similar understanding of their obligations around consumer reviews? The Federal Trade Commission is now forcing the issue—and all executives need to pay attention.
For too long, consumer trust has been undermined by the prevalence of fake consumer reviews. This summer the FTC announced a new rule banning their use and empowering officials to seek consumer restitution and, for knowing violators, civil penalties of up to $50,000. Those rules have now gone into effect.”
Online, fake consumer reviews have long been a feature, not a bug. No wonder the FTC finally cracked down on those who create and spread them. That’s good news for Adrian Blair, CEO of Danish review hosting site Trustpilot, which was involved in the FTC rulemaking process and stamped out more than 3.3 million fakes last year alone. For Blair, the new rule is not just a deterrent but also a chance for leaders to bake trust into doing business.
After all, reviews are hugely influential. Roughly nine out of 10 consumers check them before buying something, and almost half trust what they read as much as a personal recommendation, Trustpilot research shows. In addition to fooling shoppers, fake reviews have made life tough for businesses that don’t play such games.
For companies and consumers, dispensing with all that fakery ushers in a new era of trust, Blair maintains. If reviews are credible, executives can use them to mine real insights—which could help businesses build stronger ties with their customers. And of course, consumers can trust that they’re getting an honest take on a product or service. Rave reviews all around.
