Climate change and the environmental issues that stem from it have become an all too familiar staple in our daily news. Whether it’s the melting polar ice caps, wildfires in Australia, or the dangerous amounts of plastic polluting our oceans, it’s clear that we all need to pitch in for a more sustainable future. Even oil and gas companies like BP are on board to make some much needed changes (more on that later).
It’s therefore not surprising that an increasing number of consumers are switching over to environmentally friendly brands that are more in line with their personal values:
- The sustainability market in the U.S. alone is projected to reach $150 b by 2021.
- 32% of consumers are willing to pay more for brands that are committed to sustainability.
- 45% of consumers seek out environmentally responsible brands.
Interestingly, the desire to buy consciously seems to transcend age, with boomers, Gen Xers, millennials and Gen Zers all placing sustainability high on their list of priorities.
Companies like Amazon, Microsoft, Lyft and Coca Cola are all making commitments to reduce their carbon footprint and be more environmentally responsible – but how do you “go green” when your business is oil and gas?
BP is doing just that, using corporate venturing to expand beyond its core business and find greener ways of providing energy. This week’s corporate startup, VYVE, is just one of their green ventures, helping people reduce, offset and become more aware of their carbon footprint.
How it all started.
With climate change increasingly on everyone’s mind, fossil fuel companies are getting a fair share of push back. It’s understandable when you consider that BP alone was responsible for 34 billion metric tons of CO2 emissions since 1965. Although there have been some significant company-wide efforts to reduce emissions, there’s still a long way to go. As described by recently appointed CEO Bernard Looney:
“Oil is increasingly becoming socially challenged; there’s no question about that. There’s a view that this is a bad industry, and I understand that.”
As part of its efforts to “reimagine energy”, BP has made several significant commitments to become more sustainable in the next few years, including:
- Becoming a net-zero company by 2050.
- Producing 40% less oil and gas than it did in 2019, by 2030.
- Increase its spending on low-carbon energy to $ 5 b.
New ventures are also a big part of the transformation efforts with BP Ventures focusing on high growth technology business to reduce carbon and explore adjacent areas for growth. In 2019, they founded Launchpad, a subsidiary to create five unicorn companies by 2025.
One of the best ways to describe Launchpad is as a “business builder” with the goal of scaling companies to deliver clean, affordable and reliable energy.
In contrast to BP Ventures, which tends to take minority stakes in its companies, Launchpad takes a much more hands-on approach – housing its startups within BP offices and taking majority ownership. So far, their portfolio includes five companies:
- Fotech Solutions – which provides fibre optic sensing solutions used in security, smart cities, intelligent transport and energy sectors.
- Lytt – which offers integrated end-to-end software for pattern recognition and analytics.
- Stryde – a subsurface imaging company for challenging terrains.
- Onyx InSight – a technology and analytics company focused on the renewable energy sector.
Last but not least, there’s VYVE, an app designed to help users understand how the choices they make impact their carbon footprint.
Founded in 2020, VYVE (pronounced like five) is one of Launchpad’s more recent ventures.
The app enables you to calculate how much carbon is produced as a direct result of your travel, in real-time as you go. This goes a long way in terms of making people more aware of their impact on the environment. As your carbon output increases, you start getting options to “buy offsets” by sponsoring different green initiatives around the world.
Although it’s only been a few months since VYVE’s launch, the app has already been downloaded by thousands of people in the U.S. and the U.K. As described by founder Mike Capper:
“There is a lot of noise around climate change, and it is a very complex world. We wanted to simplify it for the man on the street. A lot of people care about the environment and offsetting their emissions, but we don’t make it easy for them.”
For now, the plan is to keep things simple by focusing only on the carbon emissions from transportation. Gamification and community elements have been added to keep users engaged and coming back.
How it works.
VYVE calculates travel-related carbon emissions based on distance and the type of transport used.
Creating an account is free and can be done in just a few minutes. Once you’re in, you can either input your location or allow the app to track your travel based on your location. The last step is to choose your transport mode (e.g. car, flight, bus, train etc.), and watch the numbers go up as you move.
You can offset your carbon production by supporting different decarbonisation projects around the world like:
- Fighting deforestation in Zambia.
- Addressing overgrazing by livestock in Scotland.
- Adding wind turbines along the coast of the Yellow Sea in China.
- More efficient use of biomass in ceramics factories in Brazil.
- Biodigesters for low-income households in China, Indonesia and India.
- High-efficiency ONIL cookstoves for around 32,000 rural homes in Mexico.
Your personalised dashboard keeps track not only of the carbon emitted but also of your trips, carbon saved (e.g. by taking a bike) and the amount of carbon you’ve offset.
Global players like BP can leverage corporate assets like growth capital, internal capabilities, global partnerships and domain expertise to strengthen their ventures and give them an edge over the competition.
Founder Mike Capper was able to use the expertise and partnerships from his almost seven years at BP’s Carbon Neutral programme to develop VYVE. According to an article by Sifted, he pitched the idea to the Launchpad team in 2019 and was working on the new venture a month later.
All these factors combined, add up to a pretty significant competitive advantage for VYVE. After all, it’s unlikely that competitors like Klima, Oroeco, Choose or Wren have all the backing in terms of funding and resources that BP can provide.
VYVE, for its part, is also bringing some pretty significant benefits to the table. With the market for global carbon offsets expected to reach $ 463,7 m by 2026, VYVE might become an important revenue source in the future.
It’s also helping BP connect to a whole new generation of young consumers, enabling them to learn more about their travel preferences and energy consumption patterns.
It’s too soon to tell how VYVE will fare in terms of loyal users and long-term profitability, but Capper has some big plans for the next few years:
“I want to be the leading organisation that people turn to, to track their carbon footprint and reduce it.”
As for BP, CEO Bernard Looney continues to be committed to achieving net-zero carbon emission by 2050. With oil prices weakening, diversifying the portfolio with innovative, sustainable companies makes total sense – and they have some great projects in the funnel.
We’ll keep you informed on their progress and exciting new ventures in future corporate startup stories.