INTRO:
Joe Coletti 00:04
Welcome to Powering Sustainable Ideas, a new podcast series from RBC Capital Markets, where we interview the leaders and companies powering the sustainable future. In this episode, you'll hear a conversation that took place at RBC’s global energy transition conference in London this past June.
Joe Coletti 00:20
Climate Technology innovations could hold the key to decarbonization success, but after a few heady years, valuations in the space have tumbled, and companies face a new urgency to demonstrate that they can offer commercially viable solutions.
Joe Coletti 00:33
Three of these companies outline their response to this new landscape in a session moderated by Ken Martin, Managing Director in Investment Banking at RBC Capital Markets, they include Rob Hollingsworth, Financial Director at EV Energy. Tom Idzel, Head of Americas at GRESB and Alistair Furey, Chief Executive Officer and Co-Founder of Silvera.
Now, let’s dive into the conversation.
Ken Martin 00:55
What we want to do is go through a couple of things about what makes these companies special, and really tap into some of their expertise around where the puck is going, so to speak, in the space. We'll start with Alistair. Tell us a little bit about the company.
Allister Furey 01:05
Silvera is a data business. We provide tools, ratings and data, primarily for carbon markets, but also now extending into other environmental commodities and towards the energy sector, CCS, hydrogen, ammonia, this kind of thing. We invest very heavily in proprietary data. That could be on pricing, is particularly important where there's lots of fragmented data sets on pricing in the market, and then supply-demand imbalances and how that projects forward, policy data, and we also have the largest data set on forest carbon by about two orders of magnitude. So that allows us to answer questions in the commodity space as well as carbon space. And we, for example, use that data to recently sign an agreement with the government of aqua state in Brazil to underpin what will be a couple of billion dollar program on forest protection there.
Ken Martin 01:52
Tom, maybe same question, and also just kind of what inspired you to join the company?
Tom Idzal 04:29
Of course. We've been doing real asset analysis across commercial real estate and infrastructure portfolios for over 15 years. For 15 straight years, we've had growth in the number of organizations coming to GRESB and having their assets and their portfolios analyzed on real measured energy, water waste, GHG consumption data, and so therefore, 15 years later, we are now sitting on the world's largest verified, transparent and comparable data set of real asset portfolio performance in the area of sustainable metrics. What that means is, this year, we'll have roughly 2400 individual investment instruments come to be assessed. There will be over 220,000 individual assets in those portfolios. They will be across 80 markets, and they will represent roughly $10 trillion in gross asset value.
Ken Martin 02:42
Thank you, Tom. And bring us home, Robert, same question.
Rob Hollingsworth 02:45
At EV Energy, we're building a virtual power plant which is powered by batteries on wheels, the electric vehicles which are already sitting on people's driveways, on depot forecourts across the globe. We are a software-only platform that agnostically integrates with both the car telematics inside the vehicle and also the charger that you plug in. By regulating the flow of energy into each of these electric vehicles, we can create value in the energy system for our utility clients. We work with some of the biggest utilities across North America, UK and Europe, and then the value that we can create and capture through the flexibility of these electric vehicles, these distributed batteries, we can provide financial incentives back to the end users, so they are further incentivized to keep on smart charging for the benefit of the grid.
Ken Martin 03:36
What are some of those challenges you guys have faced around scaling? What are some of the barriers to growth that you guys have faced?
Rob Hollingsworth 03:42
We work with utility companies. Their planning horizons are 15 plus years. It's a long time. That does not always match up with the pace and ambition of a climate tech company. It does also not necessarily match up with the requirements that the energy transition needs. So working with utilities in a fast paced climate tech company can be a challenge, but what does that mean? What do we need to do? We need to listen to our utility clients. To understand their challenges, understand their processes, and we need to meet them where they are. So sometimes for utilities, that means maybe we should provide them some data to show the constraints the problems that electric vehicles are currently having on their energy grids. It could mean that some utilities want to actually, actively or passively control the charging of electric vehicles which are within their service territories. Or for some of the more progressive utilities, they actually want to be involved with more emerging products like bi-directional charging and see how that can be an asset to the grid.
Ken Martin 04:39
Yeah, thank you. And so for Tom and Alistair, slightly different customer bases you guys are serving into. So maybe Tom same question, what are some of the challenges and maybe barriers to growth you guys have faced?
Tom Idzal 04:48
Sure, I think of the scaling in three Cs, you've got capacity to get data, because in some industries and organizations, just getting the consumption data that they need is not always easy, or even by law rightfully theirs. You've got the fact that as a global standard, we have different countries that have vastly different regulatory regimes and even systems and measurements. And then lastly, you just have complexity. In our business, what is good, what is efficient, to look like? What does that look like in different sectors and different property types? And so all three of those really are very complex topics that we have to work through, and it takes a while. For example, we just announced with iMasons, a data center sustainability standard that's been in the work for over a year, getting the industry together, getting the hyperscalers, the developers together and saying, what do we want when we think about sustainable data centers? And when you achieve that, how will that help you unlock capital markets and fundraising? As you can imagine, all the stakeholders will sometimes have different biases, different preferences, but ultimately, the way the investment community is, they want comparable, standardized data, and so it's our job to make that work. And that can be pretty complex.
Ken Martin 05:53
Yeah, makes sense. And Alistair, what about you guys at Silvera?
Allister Furey 05:56
The kind of grind of the policy machines like globally, has progressed. So there was definitely this mismatch between the rhetoric and, you know, CEOs making Net Zero commitments, the market not moving, like the stock price wouldn't move, even though, if you if you were to kind of figure out how much that would cost them, it should materially change the value of those businesses, because they would have just imposed huge cost to themselves. But basically, the market didn't believe they would ever pay those costs, right? No one actually priced any of that in. Nobody really believed it would happen. The market voted that it didn't believe. And now that's changing. So now you have 30% of emissions with some kind of price. The prices are ratcheting up. It's coming into the horizon of debt, where it's kind of becoming material as this ramping up, Cbam is really changing things globally. Nobody wants to be paying money to the EU, and they could keep it within their own economy. So it's become what was a headwind for us, I think realistically, is now kind of becoming a tailwind.
Ken Martin 06:46
Any thoughts on just how you've changed your business strategy, your plans, maybe hiring product development, in light of some of, the polite way to say it, the macroeconomic volatility that we've experienced, a change in outlook. We'd love to hear kind of how you guys have been reacting, if at all. and also just how have stakeholders and companies perhaps change their tone one way or the other.
Tom Idzal 07:06
Yeah, for a long time, I think there was a quite a myopic focus on just decarbonization. We're just de-carbing, de-carb, de-carb, whatever you can de-carb, de-carb it. But what this past period of time has really taught everybody is we're doing that for a purpose, because that drives increased value. We're talking about real assets here. These are huge building sets. These are huge infrastructure projects. The more we can take these inefficiencies out of their operation, the more resilient they will be, the more valuable they will be. And obviously, from an investor's perspective, the exit value and the ROI go up. So it's caused us, I think, to be better in our business, quite frankly, and be more focused on the real value of what this enormous data collection effort, which costs money, costs time, costs resources, what it's really about, and it's about driving value
Rob Hollingsworth 07:50
Our business, we have about 70% of our revenues coming from the US, so we're quite exposed to the political changes there. However, there are two pillars of our business which are still steady. I think electric vehicles are a superior product. You know, I think they are here to stay. I think if you buy an electric vehicle, you drive one, you do really enjoy it. So I think that, although the climate friendly technology or policies within the US is waning, I do think it's difficult to overturn that consumer trend towards electric vehicles, and then also electrification. That is increasing. There's continued constraints in our electricity grids, through AI, through data centers, through electric vehicles, extreme weather conditions, and so therefore we need to be solving for that. And therefore I think electric vehicles are a huge source of flexibility for the energy grid. I want to build on what Tom was saying. I actually think it's really important for climate tech companies not just to be focusing on the decarbonisation. We've got to be demonstrating that there's real economic value in terms of what we're doing. And that is good thing.
Allister Furey 08:49
Yeah, I couldn't agree more. I think there was definitely in our sector a rather naive view that people would do this just for the sake of it. They'd go through a net zero transition. They would be buying carbon instruments. They'd be buying carbon removal with no clear ROI. We in our series B, we were joined by Fidelity, one of our investors spent some time with them thinking about how they saw their portfolio, the net zero transition. And they just really wanted to know, look, we can stress carbon pricing, like, all day long. We just want to know when those will be manifested for real. And when a price comes in in China, it really matters. if it's $4 or $40. What will the price be? Is it politically determined? Is it a function of supply and demand? Because then you can start to map those regulatory pathways into costs and say, Well, look at the situation in South Korea for Hyundai and what it might look like for Volkswagen and for Ford. Now, what will the outlooks for those businesses look like as those costs start to come in, given their footprint and their exposure to different tax regimes. That's interesting, because then that lends itself to them taking a view on the valuation of the equities in their portfolios, and also how they should allocate assets.
Ken Martin 09:52
Iis amazing, the speed with which we've shifted from kind of climate and decarbonization, as some of you have pointed out, to just pure ROI right? All of your companies have had a lot of success raising capital, and so maybe if you can comment Alistair, starting with you, valuations in the climate tech space, especially in the last couple of months, as things have changed, any shift in tone in terms of investors that you're talking to around future capital raises.
Allister Furey 10:14
Very, very simple. They were irrational multiples being paid. Gravity has reasserted itself. And they want growth and a reasonable burn for every dollar that you're adding.
Tom Idzal10:25
In our particular business, it's really about the scale, how quickly we can go into other areas. I mentioned the new assessment on data centers, but there's a whole queue of other heavy industry type of assessments and data collection efforts that we can go through. And how quickly can you do that, and how could we get to market? So probably less on the vision and more on the practical plans that you have going forward.
Rob Hollingsworth 10:46
Yeah. I think investors these days do want more traction. They want more proof points. They want more guarantees that things are going to work, which I think is fine, right? We need to mature a little bit, and we need to be making sure that we ultimately can provide a return to the investors. I think that's healthy for companies that are maybe Series B stage plus, because probably that pathway to profitability is a little bit closer for them. What I do hope, though, is some of the earlier stage companies are out there can still secure capital, because by their very nature, they are further away from that profitability. They do need to experiment. And actually, the energy transition does still need that level of investment, that innovation.
Ken Martin 11:25
Well, each of you have mentioned the magic letters AI. What are your thoughts around how AI impacts our world, our decarbonization goals, etc.?
Tom Idzal 11:33
In our business, because we focus in on real, reported data, verified data, there's an awful lot of verification that has to go on when our clients provide their data to us. And generally, historically, that's actually been a lot of manual, personal, kind of validation. So AI opens up an incredible opportunity for us to severely downscale our individual human verification and do that more automatically with proper controls, also because we are sitting on a data set that just isn't rivaled in the world around private, real asset type performance. You know, we all just sit back and think about the prompts we could put into our database about, you know, what is really good performance in refrigerator warehousing in Mexico, and how has that changed over the last five years? You know, we should be able to spit that stuff out almost on the same kind of scale. So AI is already starting to transform our business. And I think the upside feels unlimited.
Allister Furey 12:24
So we've been collecting data. We developed an entirely new way to scan forests with lasers, and we've been doing that for several years. We basically recalibrated the carbon stock in the Mumba forest in Mozambique, showing that the estimate of biomass there was 80% too low. So eight zero. So then the value of the natural capital, we were able to establish that for Mozambique was equivalent to its entire GDP. We needed AI to be able to take that data we captured in the field and map it out on what we have now globally. But it's the data that's the thing that powers those models. And without that, you’re kind of nowhere
Rob Hollingsworth 13:00
We realized that just some small steps in using AI can actually be very large steps in the more traditional methods. Just a case study of how we're using it at our company, we are learning the charging behaviors of all the electric vehicles which are on our network, what time people get home, what time they charge, how long they leave it there for, the state of charge of the battery, the carbon intensity of the grid at that particular time. And we can use this to provide, quite simply, a forward-looking forecast to our users of our app to say, yeah, in over we will be charging your car at these points over the next 72 hours. That actually builds trust for the users. And then on the utility side, if we can take all of this data, learn very rapidly and then pass it back to the utilities to then give them a forecast of when we are going to be charging cars over the next 72 hours, they can then use it for their capacity planning, which is very valuable.
Ken Martin 13:54
Great. So we're approaching the end of the session, what I'd like to do is finish on an optimistic note. Leave us with something optimistic about if your company gets it right, you know, 5, 10 years from now, what kind of impact is your company having on the world?
Allister Furey 14:08
It comes back to the regulatory umbrella kind of coming over carbon pricing. For airlines, the corsia initiative, which is a emissions reductions and carbon pricing initiative, it’s going to fall under IAS 37 and you'll have hundreds of millions of dollars of liabilities now appearing on airlines’ balance sheets. It actually forces, basically, stakeholders to take note of that in their pricing. And it provides, like, the clear signal then where you decarbonize, you go down the SAF route, you go for carbon removal. And that's kind of game changing for us.
Tom Idzal 14:38
I'm incredibly optimistic. Energy intensity per share, when this information becomes as regular and as expected as financial information is, we've done it. We have moved what was considered non-financial information into the same level and rigor of accounting and assurance as financial information, and then people will really be valuing companies and projects and investments on a total cost-to-society basis. Because up to now, most of the financial rules don't cover that. They're really just talking about the operations and finances of the company, not the total cost to the world or to the society. So that's what I think is nirvana for me, was we get to that point.
Ken Martin 15:16
Yeah, and Rob, bring us home. Same question.
Rob Hollingsworth 15:19
There are about 2 million new car sales every year in the UK alone, and about 20% of them are electric right now, 400,000 per year. So very soon, there are going to be a lot of electric vehicles. It's not just a niche. It's going to go into mass, that's going to accelerate. Every 1 million vehicles in a virtual power plant is the equivalent of around one gigawatt. Now, so when we're speaking to utilities and they are saying, we need to put an extra four gigawatts of capacity onto our grid, we can now have meaningful conversations with them to say, actually, let's not spin up more CCGTs. Why don't we actually solve for one gigawatt of that through flexibility, a smarter energy grid? So I'm really encouraged about the pace of acceleration of electric vehicles and the flexibility they can provide. And then if we can do that, we are going to have a greener, cheaper and simpler energy grid.
Ken Martin 16:05
Super.
OUTRO:
Joe Coletti16:06
Thanks again for listening to Powering Sustainable Ideas, brought to you by RBC Capital Markets, please remember to subscribe to get more great content and be alerted about future episodes. This episode was recorded on June 26, 2025. If you'd like to learn more or continue the conversation, please visit rbccm.com/energytransition.
Disclaimer
This content is based on information available at the time it was recorded and is for informational purposes only. It is not an offer to buy or sell or a solicitation, and no recommendations are implied. It is outside the scope of this communication to consider whether it is suitable for you and your financial objectives.