Fabien welcome to the Mother Earth Heroes show. I'm here with my co-host Maxim Union and you are really someone we had to talk to because as an investor and partner from earlier world and the co-founder of climate leaders for climate action. You have a broad perspective of what's Happening currently not just in the activists space, but especially as well on the in the space of companies. Big businesses and what was going on there? So our study question would be where do you currently see the biggest Trends developing in the industry regarding the positive impact for a climate now, thanks for having me and indeed speaking in my role as a partner with early bird we have about nine months ago and initiated a dedicated Practice Group within our investment team that is focusing. what we Define as climate tech and and climatic essentially for us as an Institutional Financial investor is all about finding the intersection of companies whose products have a positive environmental and or social impact, but at the same time or not Charities, but for profit businesses because we as an Institutional Financial we see have first and Most a duty to deliver Financial returns to our intestines. So essentially we are trying we are trying what we call the power of end. We are trying to bring the Two Worlds of making impactful Investments together with making financially successful Investments and specifically we have a bit more than a handful of areas which we identified where we think they are most Suitable for early-stage Venture Capital investors to back companies in those spaces and that includes for example, eternity of nutrition non-animal and nutrition mostly it includes smart cities smart infrastructure oftentimes intersecting with iot sensor in controlling window. And as well as well. Yeah, it includes mobility and Logistics. So the way we transport With people both on a micro interest City level but also all the way down to global trade Logistics and Mobility as one of the top four heavy emitting most heavily emitting Industries globally and it includes on the edge. It's not an easy space to invest in alternative fuels and it also includes the area of Behavioral Science and education because as we basically realize the necessary shift in the in the people's mindsets is one of the most powerful sources we can activate one of the biggest levers we have and that's true both for for us as being in a consumer role privately but being in a manager or entrepreneur role in the way we set policies for our businesses, but also being in an investor role and deciding which each products and businesses. We want to put our money behind and which ones not So you see a higher responsibility for everyone who is an investor who is an entrepreneur to actually do something good with their Venture. Yes. Absolutely the way we look at it and and I recently gave a keynote actually two weeks ago at our annual investors Conference of early bird here in Berlin the way we look at it and basically phrase this topic. First this keynote is entrepreneurial responsibility for society and environment and and I brought up the question. Is there actually an entrepreneur responsibility and blending entrepreneur and VC roles here into each other. Let's put it like this. Yeah, but if the question is there actually such responsibility because on paper and every see investors like us is liable to their investors to deliver returns, there is no and and and to Do that by investing in early-stage technology companies. There is no whatsoever restriction or not much with regards to making a positive impact with those Investments. Yeah and likewise You could argue that most entrepreneurs out there ask for building successful businesses by their investments in pay their employees and that's why I think it it's for us. It's a good starting point to bring this question up and tear really Ask is there an intersection or should there be an inherent purpose in both investing and in running companies as entrepreneurs a purpose Beyond just making money Beyond just being successful in business and our take our answer to the question is that we both we seasoned entrepreneurs are in the very privileged position in in the position of being the say point. Point zero zero one percent of the global population have the analytical insight to understand about the mechanics of climate change and emissions and policy and Regulation and behavioral aspects. We can understand the problem and we can understand we can grasp. What is what what need to be done and what could be our contribution and and on top of the analytical Insight we control s We could roll a policies in companies. How do we travel? What do we eat? How do we use energy and so on and so forth. Where do we invest? For example? Yeah, we control assets. We have the analytical inside. We have a voice. Yeah, people are listening to us. We have teams. We have political stakeholders who asked us for our opinion and and all of these aspects combined to us. Do not only basically off Offer the opportunity to make a positive contribution, but from our perspective they basically put an obligation on us to make a contribution because who whom should we basically asked if not ourselves we are in the position that we must utilize the levers and must basically Leverage The assets that we have in a positive way. That is our self on. Standing both as VC investors also as serial entrepreneurs and one podcast will guest Martin still today and he's talking about new kpix. We need to develop into the field of investing and into the field of and yeah driving successfully companies. So do you see this new kpi's of how our environmentally green you are or how social responsible you are soon implemented into the current system. Mmm, or do we need a fundamental change of how we are currently operating in the financial sector? Yeah, that's an interesting question and indeed basically having you know a qualitative discussion about generally what should happen etcetera is one thing and it is definitely a starting point to nurture certain, you know, inside and conviction, but then it's really all about delivering data and and boiling boiling things down. Two facts to kpis and what we see interestingly is that in the public markets so investors investing in publicly listed companies. There is some of the larger and largest asset managers already some degree of sensitivity for that for example to the detriment of companies that are exploiting for sale Fields. They start being blacklisted by some of the The most about some of the largest Global Investors, we have not so much seen this same pattern or notion being applied in the private Market So speaking especially of private Equity institutional Venture Capital, but also Angel Investing and private investment and we at early bird based on what the convictions that that I just outlined a minute ago. We for us recently came to the conclusion that we want to be at The Cutting Edge of basically making sure that there's a transmission system a conveyor belt between the notion of the idea of we should make a contribution. And what does it actually mean in reality in like Quantified because many companies don't know what to do right exactly do something, but maybe they even do something that is worse than when they started a potentially even that exactly and and for that reason we have recently started to develop a known climate policy at early bird for implementation in our portfolio companies and that policy we have not yet publicly launched its so this is kind of a preview but it all starts basically with raising awareness and with quantifying the current emissions of the whole Actually hopefully company and then they're up on building building and exploring measures how these primary emissions can be thoughtfully and within the economic boundaries that the business has can be reduced in the first place and thereafter the residual how can it be offset? And which Partners should use etcetera. This is a very big picture speaking what we are what we are currently working on and we'll publish soon and that is Basically how we can increase the lever we have investors as investors way beyond our own operations being 40 people across Europe. That's nice. But in our portfolio, there's north of 10,000 people who we can indirectly influence by basically using our voice on the board of those companies and basically being a sparring partner for the CEOs and Founders and top management. In both raising awareness, but also helping the concrete climate Action level as we call it what to do about it and that is tightly interlinked also with the efforts at leaders for climate action, and we have already started converting first yours from our portfolio as well as leaders for climate actions as well and earliest retirement actually is helping on a very detailed level with third-party Auditors on at arm's length to quantify and reduce and off. Offset is there a systemic approach behind all of these actions or is it more of the trial of having an impact? Like is there a bigger picture behind that you have analyzed for a long time some other situation with in this climate change and what is happening? And then you came out with this conclusion conclusion, or is it more somehow to try to start some we're testing out and getting getting into the field of really changing things out there in the industry. So as an investor, you know, typically the best way to approach a market or opportunity is top-down big picture thinking and and and we believe in the science based approach of tackling climate change largely in line with what we see Friday's for futures Etc. So when we believe in that science-based approach and say 99.9% And percent of the global scientific Community are convinced of the correlation of carbon and methane and other climate active gases resulting from Mostly combusting fossil fuels and temperature increase and we take that for granted it immediately basically took us to the next question. Okay, how can we reduce ongoing emissions and how can we offset residuals and how can we carbon capture? I forgot about that in my in my listing earlier and how can we also decarbonise or basically gain back emissions that have already entered the atmosphere. This is for us basically The Logical steps and questions that follow from from from from realizing this strong correlation on a parts per million level. And as it as we see it as scientifically proven and that respect it's basically a top-down effort and also an orchestrated effort to to leverage all these roles consumer entrepreneur investor, but also on the political or regulatory level basically use our voices in order to influence political decision-makers for example to put a much higher talking 800 hundred twenty Euros per ton price tag on carbon emissions in Germany and Europe, which is again. One of the initiatives that we've been pushing with leaders for climate action as well and which were not our basically our own ideas as as a hobby climate activists, but which have been scientifically backed by Professor Innova professor quashnick and others who are part of the scientific Board of leaders for climate action. So we leave that to the pros, but we then Use our Assets in order to get these messages out and try to initiate movements on all of those stakeholder levels. Would you say that leaders for climate action is a logical consequence of Friday's for future. We want to pressure politics, but actually nobody's pressuring startups. Nobody's pressuring companies. Did you see that? There's something that you have to conquer so when you look into a how leaders for climate action, in fact, basically originated it was not so much driven by the idea of say as you said, let's let's let's put in place a parallel organization of Fighters for futures. That's addressing CEOs. The the actual origin of organization goes back to about April 2019 when a couple of A good handful of CEOs from the Berlin ecosystem including myself were basically on a surf trip. So all people who have been engaged in Ocean protection for a long time because they felt the results of you know, that diving into a plastic bag Etc and witnessing witnessing that birds Etc. They experienced that firsthand and that makes it easy for example to engage for animals or for Maritime or other ecosystems because your first hand you can first and Gaucho what's going wrong? And how has it been before? What is it now? And and and you want to make a contribution the tough thing about climate change is that you can't smell it and you can't really see it and and and the results are basically coming, you know in waves and and some of the events are oscillating and it's really hard to grasp it. I think that's also the reason why Mankind and why political lead us Across the world have been so good in a sense at ignoring it for 20 to 30 years after the United Nations already put it like really onto the agenda and in the 80s. Yes and business interests and lobbying from from Big Oil specifically hardcore lobbying has done basically for them a great job in preserving their interest and in and letting them continue to run their hugely profitable businesses. At the expense of Mother Earth em at the expense of the 60-70 percent least wealthy people out there who are the first ones to suffer from the emissions that stem mostly from the Western developed industrial countries. So the wealthy amid the pool suffer. As you have built or have been in a process as well of building a lot of companies be your one smaller ones. I wonder how when you would have to cross the Crone and you could decide how we take a look at climate change. Like what would be the five young? I live on five steps to to get rid of it. So have to be 5 yeah, let me let me let me think of three for now. So one one tremendously big aspect is a mindset change triggering behavioral change. Yeah, and although you know, there are people out there who argue what difference does it make whether I omit 10 tons or 20 tons of And five tons a year Etc. Although some people argue that I am convinced that when you look into how Revolutions in the past happened be it French Revolution or be it the it's a 1989. You have the German unification many of the big revolutions were actually not initiated by that one political leader. They were may be tolerated or facilitated by political leaders, but in fact there were initiated by By the people and that's why I strongly believe in in educating the global population about their behavior about their behavior in how they run their households how they travel. What do they eat? Whom do they give their political vote for it comes down to the consumer, but also then everybody who's the consumer is at the same time also an employee some our managers summer investors Etc. The consumer part I think is a good way to start because it's easy to Grasp easy to explain everybody can watch the immediate impact of his behavioral change and it has immediate impact. If you go if you try to go watch the the impact of making changes in your Global Supply Chain as a large e-commerce was much harder much harder. Yeah, so start small and get get the basic mechanics get an understanding the work for upwards from there. So first aspect really at UK for mindset, Triggering behavioral change by because people learn what's good and what's not good for themselves, but also for them being part of a global human Community second step is technology. Not only because I am an Avenger Capital investor in mostly digital and some iot technology. But but because I am fundamentally Convinced but leveraging the power of technology has to play Can Can Play should play has to play is it's basically it's a tool we need to utilize has to play a significant role in mitigating the the problems of climate change and that's for both sides of the equation both for the for the question. How can we render services or produce Goods also in terms of circular economy as I said alternative. Is and so on. How can we render certain services produced Goods in a less environmentally harmful way but also on the other hand, how can we decarbonise or all the Spectrum from just planting a tree to building industrial decarbonization plans space Tech and so on many aspects with both sides of the equation technology can play a vital role and and Mankind has been extremely good in developing technology for the past couple of hundred years. And so for me, it's a natural. It's basically a natural idea of applying this of harnessing the power of human Bill technology. Now for this cause it has been harnessed for many other courses very successfully already in the past. And so first aspect behavioral change and education triggered medication second aspect Technology Building Technology that can help us mitigate emissions and Decarbonize atmosphere and third aspect is really this regulatory has political environment. So I believe we need to set smart structures that incentivize environmentally friendly behavior and put a price tag on environmentally hostile Behavior. So essentially we need to put regulation in place that incentivizes at number one and number two is happening, but also enforces it to some extent as we do not tolerate. Rate speaking. For example of peak oil. We do not tolerate business models anymore who are who are basically generating private returns at the expense of the public may be going in the last question and respect as well off. As our time frame. We have been to the indoor Changi member Congress am currently today and a lot of people especially in enterpreneur space. I talkin that politics should should do more. Of regulations like it's really crazy that that interpreters are asking politics in a way to punish them a little bit more or to give them opportunities as well to go in a Direction. So the question is are they stuck as well? Who should I reach out to you because I imagined that the politics is in the same way helpless as the enterpreneurs want to do an impact you are talking at the moment, but who do they reach out to who can who can help them with making it right governments to to Really support? People into the nerves going in the right direction. So the thing is that that from the scientific from the scientific side, it's pretty much Clear what has to happen. And basically I explain explain both sides of the equation. So it's really it's not so complicated to think about which regulatory changes in terms of making putting a price tag on emissions, but also putting tags. He's or even subsidies to the development of Technologies. We He's efficiency or lessen environmental impact and that's actually not so hard to imagine and the ideas the concepts are there and and science is giving a technically from my perspective enough input to policymakers. The problem is really the execution on the political side. So they know in theory what has to be done, but they just don't do it and and from my perspective a couple of reasons or illogical and Game Theory kind of phenomena are basically the reason why policymakers are so weak and executing on what's obviously needs to be done and one is basically the Free Rider aspect. Yeah. So the idea that if some national or even European regulation is putting our economy in a at least temporarily basically Advantageous position versus China or u.s. We lose jobs. Are we have yellow vests coming up Etc fear of losing the position the fear of losing position and they say and it doesn't make sense for us because it has would say because even if we reduce our gross emissions 20% if Asia and India and u.s. Don't change then we're still going to be a three degrees just not at three point five degrees. So so it's pointless. Let's not do it unless everybody else do it. Free rider problem. Yeah, and that can basically only be solved by a coordinated effort and by the leaders of the top five countries globally including say taking EU as one country if those five leaders aligned, then you will have a positive trickle-down effect and then smaller countries will not have the option to withstand that pressure coming from the big ones and the big ones being in a position to say unless you also Basically change regulation in a more environmentally friendly way. We don't do business with you anymore. So the power is really with G limping with Trump with Morrie with Merkel or the political ecosystem you commission from the line like that. That's where the power seats and they need to align to solve the free rider problem second aspect from my impression is the kind of the general generational conflict to some extent. So those who are making the decisions today typically between 50 and 75 years old. They just many have children, but it's just harder for them to imagine that the way they live their life for decades and the ideals of wealth and traveling and and and it's ultimately desirable to basically fly first class around the world and being Fans also I can memory etcetera all of what they thought would be desirable and successful entrepreneur driving that forced to wear all of those ideals everything. They've ever been fighting for it putting the energy is now put that question. Well, it's basically turned upside down and worship. It's it's a really psychologically identically a really tough challenge to in the last quarter of your life span to let go and stand at MIT. It sorry we have been wrong. We didn't we didn't know any better. That's okay. Nobody blames you. Yeah, but so I'm not you know, I'm not arguing for blaming that Jen the generation of my parents. I'm just saying nevertheless, please in the sake of your children and grandchildren and great-grandchildren and in the sake of the 99.999 percent less privileged people on planet, please let go now it's okay and that's Jointly embark on a journey where we just execute what obviously needs to be done now. Fight great. Thank you so much problem. Like early bird is really one one of those. I mean, you are one of the biggest PCS and Germany, right and in Germany Berlin, maybe one thing which I would really like to know because everybody is like a green tag cleantech are and really attractive ways of investing. I mean for decades people were scared about these areas and Because they didn't make any Returns on the other side. Al Gore was making a big return by by actually having right that he was he's with someone like like a symbol to the crisis. Where are we right now? You have a good overview of the whole Market. What is what is happening in the market of clean tech Green Tech and what is for you the most promising thing? Yeah. So basically along the lines of of the the area's I explained earlier on a lot is starting to happen now in the market and I'll go with generation. I am is one of the firm's that that are basically at the Forefront in late-stage PE and also as a public market investors and there are a couple of seed funds now emerging across Europe who are dedicatedly tackling these areas and who and who have also to some extent with an academic and deep. Background the right DNA to do so and as I explained at early bird, we really want to be at the designing at the designing edge of that revolution of finding those intersections between financial attractively investments and and impact and technically speaking basically of patterns for making successful Venture Capital Investments. You need to go after really really big opportunities, so it's not without a reason that for example some of our unicorn portfolio companies like and 26 in retail banking or uipath in Enterprise productivity robotic process automatization are tackling markets, which are hundreds of billions of dollars large and they are completely redefining the game and the same basically holds true when we think about climate XO the largest opportunities you can currently Uh, probably around energy in a broader sense. So if you for example get geothermal energy, right and at scale or if you get a nuclear fusion, right at scale then these are absolutely Paradigm shifts for Humanity, but it's tough and it's tougher than setting up an e-commerce store. It's really really details. It has long worms ISO shopping for its work. Complex. Yeah, and so in a nutshell, we believe that that there is a huge opportunity a huge business opportunity associated with products and businesses that make a positive contribution towards mitigating climate change and its adverse effects because what we now see basically in small Germany say, okay, we put a 20 Euro price tag to start with on each turn of images. This is a global Trend and And in Sweden and others are already way ahead and what we need to get to solve the free rider problem. We need to get the big countries in the big economic ecosystems on board, but it's a trend. I think it's not going to reverse even if Trump is going to be re-elected. It's not going to reverse because the impact each summer each year. The impacts are getting worse and it's getting more and more obvious like ocean protection was already to ask 20 years ago. Yeah, and so it's all more and more countries will put price tags on emissions and and that's basically Lee opening a huge opportunity for for businesses who are more efficient who are rendering Services producing products in a more circular way. So it basically all goes hand in hand. And in that sense. I think it's fair to say maybe also as a closing statement that that climate change is both in my opinion the largest challenge to humanity in the 21st century and potentially Beyond but at the same I'm probably the single biggest business opportunity for entrepreneurs to intersect commercial and impactful success. What a what a loud. What kind of Last Words Famous Last Words Fabien all listeners are very excited about like what we talked about. What can they do for you? Is there something where you want our listeners to go to is there some Kind of challenge that you currently face that our community can help you with. So if for all of those entrepreneurs out there again, we are excited to invest in Impact for businesses submit your investment proposals from seed stage series a series B. We don't do angel have a bit seat seat and early, please submit your investment proposals is far beyond literally, but not calm very simple and I'll go to our website and The documents and you can be sure you will read from us. We see 8,000 years a year. We can only do 15 to 20 new ones. So it's a it's a tiny conversion rate. Yeah, but if yeah, it's fine, but but we but we give feedback to any proposals submitted to us and we take serious and appreciate every entrepreneur who reaches out to us. First thing second thing is spread the word. Yeah, so everybody has people in his family. Only friends colleagues to influence and it's really about the power of generating a Grassroots movement and educating and and you know, keep going keep going and at some point, you know, also the last flat earther will start to realize yeah. Yeah spread the word and really make a climate change about leaders for climate action show may also check that out like our friends a couple of friends and business are entrepreneurs. Sure. So please do so. So you just for climate Action Now a group of 210 CEOs and Venture Capital investors from Curly from Germany. Probably soon from Europe who are committing not only to measuring and reducing and offsetting their companies for print but also their private footprint and who are jointly uniting their voice for triggering stronger political action in terms of especially putting higher price that actually Makes a steering impact in the markets and consumer behavior on carbon emissions. Yes. Please reach out via the website videos for climate action.com and drawing. Thank you so much Bobby. Thank you.
Fabian is not only a serial entrepreneur who is sitting on various boards, Partner at Earlybird who is invested in known startups like Movinga, Onefootball, N26 and many more, he is also the Co-founder of Leaders for Climate Action. Leaders for Climate Action is an organization now a group of 210 members of CEOs and venture capital investors, that makes clear statements. Their website shows clearly that we have barely 8 years left. They have specific demands and present solutions with concepts like the Green Pledge where leading digital entrepreneurs in Germany and Europe commit to measuring, reducing and off-setting their company's CO2 footprint, and who are uniting their voice for stronger political action, like putting a higher price on CO2 emissions that actually would make a steering impact. In this podcast episode he gives us an insight how he plans to use the power of institutional investors like Earlybird to combine their duty of delivering financial returns to their investors with driving a positive impact for our planet. What you gonna learn in this episode: - What Fabian thinks is the intersection between companies that have a positive social and environmental impact which aren't charities but for-profit businesses (Climate Tech) - How Leaders for Climate Action are helping companies on a concrete climate action level - How they plan to quantify, reduce and off-set CO2 emissions for companies  Check out the following resources: - https://www.leadersforclimateaction.com/ - https://earlybird.com/ (Reach out to them if you are working on an impact-driven business, they appreciate your email) 