Clim8, a London-based sustainable investing platform, is on a mission to challenge ESG funds so that investors can bypass “greenwashing” and find a portfolio of companies that are having a positive impact on climate change.
The platform, which launched its app “Clim8 Invest” in March, today announced it has closed its third funding round. The latest fundraising campaign on Crowdcube raised £2.85m, bringing the total amount raised by Clim8 thus far to £10m.
Clim8 took a leaf out of Revolut’s book with the latest Crowdcube fundraiser and gave customers the opportunity to join as users and also shareholders in the company.
1800 investors joined the latest campaign, which raised over £1.26 million in the first 24 hours, with significant demand from existing investors and app users.
Last month, Clim8 secured capital of up to £2m from Channel 4 Ventures (the venture arm of the TV channel) to fuel its growth, and previously raised capital from 7percent Ventures and two earlier crowdfunding campaigns.
On downloading Clim8’s app, users can choose to invest in one of three core portfolios of sustainable businesses according to their risk profile: balanced, cautious or adventurous.
These cater for first-time investors right up to more experienced or higher net worth individuals, and equity increases with the higher risk while fixed income is higher with the lower risk portfolio.
Each portfolio is diversified with around 400 global stocks, listed in the UK, America and Asia.
But founder Duncan Grierson is keen to stress the app does not fall into the “grey area” of ESG, as companies in the three Clim8 portfolios are picked according to the platform’s own strict metrics, which dig deeper than the ESG “greenwashing” and focus on companies that are actually having a positive impact on climate change.
“We’re positioning ourselves as pure play, if you like,” Grierson tells City A.M. “If you’re an investor and you want to have a positive impact on climate change with your investment, then you shouldn’t put into an ESG fund that is just merely screening out fossil fuels.”
“Some companies in those portfolios might tick some boxes but they’re not going the extra mile. We’re looking for companies that are actually making a positive impact on nature rather than just marketing,” he adds.
Companies that have made the cut for Clim8’s three portfolios therefore include a “a lot of clean energy”, clean tech, sustainable food, and electric mobility.
These include Danish renewable energy firm Orsted, wind turbine manufacturer Vestas and vehicle software company Aptiv.
Of the three risk profiles, the most popular among the app’s 16,000 users are the adventurous and balanced portfolios – which have both seen positive investment return performance in the last 12 months.
Clim8’s measurement of simulated and real performance information has recorded 12 month returns from July 2020 to June 2021 of 26.75 per cent for the “adventurous” portfolio, 15.04 per cent for the “balanced” portfolio and 7.03 per cent for the “cautious” portfolio.
And Grierson has ambitious plans for growth. The latest funds will be used predominantly to hire further, grow its user base and roll out more app features, with a new Junior ISA and self-invested personal pension plan in the UK in the pipeline.
But as it grows, Grierson is determined to differentiate Clim8 from existing ESG fund portfolios. “One thing’s for sure. It’s a very, very different thing from ESG investing.”