Reducing biodiversity loss

Hi folks,

As I wrote last week, a core topic area I’ll cover this year is “climate challenges, beyond carbon dioxide.” This can also be articulated as “climate change, beyond global warming.” This idea – that climate change isn’t just global warming – doesn’t get enough attention.

Biodiversity loss offers an appreciable example. As we’ll explore in this note, global warming is a significant driver of biodiversity loss. But it’s far from the only one. It’d be nice if addressing warming alone would solve biodiversity loss. That’s not the case. 

But this newsletter isn’t all bad news. There are many companies, investors, and good people working to turn the tide of biodiversity loss. Don’t take my word for it. For this newsletter, I chatted with Tom Quigley, one of the founders of Superorganism, the first venture firm focused exclusively on biodiversity.

This newsletter is an edited transcript of our chat with added analysis from me.

In today’s newsletter:

• Biodiversity loss is about much more than global warming

• Why start a venture firm focused on biodiversity?

• Businesses being built to address biodiversity loss (& more)

DEEP DIVE

Nick: Tom, thanks for the time. Let's get folks up to speed on what biodiversity is.

Tom: Yeah, “What is biodiversity?” Biodiversity is effectively all nature. That ranges from individual diversity of genetics within species and populations out to ecosystems and thinking about what the habitat range, what the evenness and nativeness of those different types of ecosystems are, and a lot of other things that are captured within that. But it is essentially a catch-all for all nature. 

The challenge is that biodiversity on this planet that we know and love is critically under threat. There are five main categories of where those threats come from according to IPBES, the Intergovernmental Science Policy Platform on Biodiversity and Ecosystem Services. They're the ones generally in charge of curating the best science about biodiversity, similar to how the IPCC curates science on climate change.

The five main categories of biodiversity loss drivers are: 

1. Invasive species

2. Pollution

3. Land use change

4. Over-exploitation

5. Climate change 

Of those five categories, if you're looking at weighting those drivers, there's a lot of effects that climate change has. But if you're weighing it against some of the other drivers, then things like land use change are significantly more detrimental to individual habitats and species.

Stepping back, what's the total scale of the problem? Well, in the last 50 years, since 1970, the world has witnessed a decline in wildlife populations of 69%, which is a really significant amount. The question is then, well, how much does that affect us? And the answer to that is becoming increasingly clear, which is a lot, whether from a human livelihoods perspective or an economic perspective.

Up to 55% of global GDP is moderately or heavily reliant on nature. That's a massive amount of all of our global economy that really is tied into the services that nature provides. It's a big problem.

Why build a venture firm

Nick: I'd love to understand what the evaluation process was when you decided that one of the things that needs to exist in biodiversity work is a venture firm focused exclusively on it.

Tom: That's a great question because the category was basically zero going into this. When my partner Kevin Webb and I were starting to look into the space, the question was, really, is this needed? Are there companies out there that will have both venture-scale returns and impacts on biodiversity loss at a global scale?

We continued to meet founders who were calling themselves "climate tech" or "regenerative ag" or something else, categorizing themselves into different impact areas. But when we actually spoke with them, they breathed a palpable sigh of relief. They'd often say (something to the effect of):

So we're getting a lot of draw from these companies and founders that were asking for a partner to be able to support them, not just by understanding the challenges they face and the impacts they envision, but by setting up a full stack of support, from direct advising to community, resources and of course, money.

Certainly, venture capital is not the only solution needed in the 'nature' world, nor is it the right solution for every type of nature problem. But it is a highly underserved area where there's a lot of opportunity for really incredible founders to build things and completely reshape industries that have driven nature loss historically to create a set of new technology tools that will have huge market caps in their own right, but also to put new tools into the hands of scientists and conservationists, and to 'stick the landing' between both the climate crisis and the biodiversity crisis. We have to solve both.

Gimme a company example!

Nick: Great set-up. Let's talk about some companies. What types of companies fit the profile of venture-scale returns and the potential to make a meaningful dent in biodiversity loss?

Tom: The question for us here really starts with "What are the industries that have contributed most to biodiversity loss? And within those industries, where are there opportunities to use new technologies or approaches to create competitive products or transition from harmful practices?" 

There's a lot of opportunity. A company that we invested in early on called Inversa is focused on creating luxury leather out of invasive species. They're disrupting something negative, namely typical inputs for luxury leather. Exotic leathers are generally sourced from crocodiles, kangaroos, stingrays, and many other species that are drawn out of their typical habitats. Inversa's approach is to 'invert' the supply chain by replacing the typical feedstocks with material from lionfish in the Caribbean, Burmese python from the Florida Everglades, or Asian carp leather from the Mississippi River Basin. Those are non-native animals that harm the ecosystems into which they have been introduced. Removing those invasives is a high-leverage way to help those ecosystems rebound.

Nick: Love it. To play it back to you, it sounds like an example of taking something you don't want in an ecosystem and using it as an input for a product for which there's already demand. Which eliminates a problem in that the traditional input for it is something we do want to preserve in an ecosystem.

Tom: That's exactly right. We think in these terms a lot. "Where are there large markets that already exist to scale up through."

On the potential for a biodiversity credit market

Nick: What about a market for biodiversity credits? Will that 'happen?' We've seen some headlines in recent months of some of the first biodiversity project linked credits being sold. Will that become a ‘real’ vehicle to move big money? Perhaps a more successful one than the voluntary carbon market, which faces lots of headwinds? Or do you think that a lot of the more successful biodiversity-focused businesses will have a model that's more akin to Inversa's?

Tom: I think that there will be both. It's going to be a lot easier to get started now on a biodiversity product or company that grows within existing markets and tries to serve those. Because the money is there, companies can start there and make a lot of progress. 

On the biodiversity credit side, there are individual companies that are developing projects and selling credits to corporations or governments in some cases. Some governments are setting up jurisdictional schemes to be able to create a type of compliance market internally within that country or ecosystem type. Actors like Verra and others who are active in carbon markets are going to come up with a methodology around biodiversity credits soon. 

We'll have to see how some of this shakes out on the buyers' side. This first 'tranche' of biodiversity credit buys will be really telling for what the global 'temperature' surrounding a market for biodiversity credits looks like. You're ultimately asking people to make purchases that are effectively additional commitments beyond what they're already committing for, say, scope three emissions. Not everyone's going to spring for that.

The net-net (tl;dr) 

Nick here again. It's time to get creative about how we, which is to say humanity collectively, address biodiversity loss. Slowing global warming isn't enough (as if that weren’t enough of a challenge). There are other significant drivers of biodiversity loss, like invasive species, that have little to nothing to do with greenhouse gas emissions.

Some of this work can take the form of venture-backed businesses. I'm bullish on Superorganism's ability to find and support them. If you have a business idea that this newsletter sparked, you should consider building it! If you already are, reach out! 

Some of the needed work will also decidedly have nothing to do with venture capital. Tom would readily admit and advocate for that. As Emma Marris noted in her wonderful book Wild Souls (one of my favorite books I read in 2023):

Perhaps one of the highest-leverage things we could do to reverse biodiversity loss hinges on land restitution. Or, at minimum, a deeper appreciation for how indigenous peoples have stewarded landscapes and ecosystems for millennia.

The climate change conversation doesn't stop with global warming. And the climate tech conversation doesn’t stop with venture capital.

Want to dive into the rest of this conversation? → Listen to the full podcast here

JOBS

Been a min since I surfaced awesome roles at great climate tech companies. I'll pick that practice up again in 2024. Here are four great openings for your perusal.

P.S., want to feature your role here? Respond to this email and make the ask.

P.S.S., are you looking for your role at a great climate tech company? We want to help you with that too. Respond to this email and we’ll chat. 

Software Engineer, Electric Era

We wrote about Electric Era's approach to EV charging last year here. Electric Era's software team redefines "full-stack." They write everything from low-level firmware to cloud-hosted backend software to factory test infrastructure to artificial intelligence and simulation tooling. 

In this role, the ideal candidate will have the opportunity to accelerate Electric Era's mission, take ownership in solving open-ended problems in deploying EV charging infrastructure, and execute from ideation to in-field operation in months, not years. The candidate's contributions will be critical to the long-term success of the company and making EV fast charging ubiquitous and affordable. Learn more and apply here.

Electrical Engineer, Electric Era

Electric Era is also hiring an Electrical Engineer to help quickly ship new charging units across the U.S. The ideal candidate is a generalist who can take on a significant role in owning everything electrical for the company's battery pack, working on their system architecture, and helping to shape the company culture along with next-generation designs. More here.

Director of Grant Administration, Cquesta

We wrote about Cquesta, a company scaling innovations in agriculture, last Sunday (here). Cquesta is hiring a Director of Grant Administration to secure funding through grants and/or loans from state and federal agencies, philanthropic organizations, and public awards. 

The ideal candidate is a dynamic individual with experience in grant sourcing and writing, particularly in the agriculture and climate fields. In this position, you would work closely with the executive team to plan and execute funding initiatives to deliver on the company's mission to accelerate nature-based carbon sequestration in the agriculture sector. More here.

Head of Sales, Yard Stick PBC

For context on the company, we published a fun podcast with the CEO of Yard Stick PBC last year here. In 2024, Yard Stick is hiring a Head of Sales to act as a sales leader to sell big projects and build a high-performing sales team. The ideal candidate can both knock on doors to drive sales and maintain an incredible degree of curiosity and empathy in the way they collaborate with all stakeholders. This role reports to the CEO. More here.

Have a great rest of your week,

– Nick