Investment Proposal: Living Carbon

This week, I am presenting to you a company that not only fits all of our values and investment criteria, but focuses their business model on helping other organizations do so as well. I highly recommend investing in Living Carbon: a biotechnology company driven to reduce carbon emissions and reforest degraded land. In this memo, I will present:

• Our standards for investing

• Background, values, and business model for Living Carbon

• Appraisals for Living Carbon

• My recommendation for Investment in Living Carbon

Our Standards for Investing 

Carbon footprint: The carbon emitted by individuals through their daily activities, such as driving a car. It can also refer to the carbon emitted by a corporation. Global carbon footprint refers to the total amount of carbon emitted worldwide. Reducing the carbon footprint is crucial in counteracting and slowing global climate change.

Corporate social responsibility: where a business accounts for ethical and sustainable impact. This can involve efforts in workplace equity and inclusion, including fair wages and equal employment opportunities. Corporate social responsibility also refers to companies dedicating efforts to improving their environmental impact and reducing their carbon footprint. 

Social Enterprise: A business that is designed to achieve a specific social objective. They strive to maximize profit while also creating positive impact.

Triple Bottom Line: An idea that firms should focus on their environmental impact alongside profitability, on an equal level. The standard “bottom line” suggests profitability, but the triple bottom line highlights the idea that there are other important objectives outside of profitability alone.

Background and Values

25% of the Earth suffers from land degradation. Land degradation consists of a negative trend in land condition due to human activities, causing long term reduction of biological productivity and ecological integrity. Increased climate concern over the last few decades has raised concern about the high levels of deforestation and degradation. Scientists have argued that reforestation of 2.5 billion acres could sequester 200 gigatons of carbon. This sequestration could greatly offset the global carbon footprint. 

Restoration efforts for degraded land have existed for a while, but there have always been struggles to re-integrate a natural ecosystem onto grounds that are severely depleted of nutrients. Recent biological advancements in genetic engineering have allowed genetic engineering of plants to be able to endure rougher environmental conditions, and that’s where Living Carbon comes in. 

Living Carbon was founded in 2019 with a mission to use technological advancements to rebalance ecosystems. AMDP investments has a commitment to investing sustainably, focusing on companies that embrace the triple bottom line. I believe that Living Carbon fulfills all such metrics. While Living Carbon is centered around a sustainable initiative itself, it also works to help other companies become more sustainable. 

Living Carbon develops seedlings that have been genetically engineered to have advanced photosynthetic capabilities, which allows them to capture increased amounts of carbon. These seedlings are also engineered to withstand harsh environmental conditions. With these modifications, the plants are capable of both surviving on degraded land, and sequestering an increased amount of carbon. 

As the climate crisis worsens, companies like Living Carbon are going to become increasingly valuable and important. Living Carbon exists at the forefront of biotechnology, utilizing the most modern gene-engineering technology. The trees that Living Carbon has spawned were found to grow 53% faster in just four months as compared to a standard tree. They have also been found to capture up to 27% more carbon. Living Carbon CEO Maddie Hall stated, “We’ve gotten people from over 100 countries reaching out to us wanting to buy trees.” 

Business Model and Finances 

The Living Carbon business model involves selling carbon credits, which are permits that represent a reduction of removal of one ton of carbon dioxide. Companies and land owners are increasingly inclined to have corporate social responsibility. Because of this, companies search for ways to reduce their global carbon footprint, and carbon credits are a way to signify this reduction. 

Living Carbon is currently valued at 150 million dollars. The firm went through round A funding in January 2023, raising $21 million. Investors included Temasek Holdings Pte Ltd. and Toyota Ventures. Since inception, they have $51 million. The majority of Living Carbon’s investors are venture firms with sustainable values, similar to AMDP. 

Appraisals

The genetic engineering space is complicated. Major technological advancements have been made; however, they face ethical and moral challenges. Scientists often question the evolutionary and invasive effects that genetically modified plants have in a natural environment. Dr. Steven Strauss, a forest biotechnology researcher was initially skeptical when he heard of Living Carbon. Through his years of research on trees, he had found that they were difficult to engineer, requiring lots of care. He was skeptical that the Living Carbon trees would be viable outside of a laboratory setting. However, Strauss later saw the progress that Living Carbon had made in their field trials, and fully supports the production of Living Carbon trees.

Sean McMahon, a forest ecologist with the Smithsonian Tropical Research Institute, also shared his opinion on the potential for these trees to cause ecological damage. He said that he doesn’t think it is possible for a tree to become a weed. He also shared that the genetic ability to create a faster growing tree could be a $5 billion dollar industry, as the timber industry has been striving towards this for a decade. Although Living Carbon is focused on sustainability, it is exciting to know the possibilities that exist within this technology. 

Recommendation

Living Carbon is fast growing, ahead of their times, and bracing a massive market. I recommend that we invest in their next round of fundraising, as the opportunity is growing and the valuation for the company gets higher each year. When considering our values, they align perfectly with the initiative and impact that Living Carbon is making, and I believe that this will be a highly successful partnership and investment.