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Echo River Capital Update – MAY 2024


Posted by Peter Yolles, 3 minute read How Echo River is Decarbonizing the Water Cycle – Part II

At the 2024 Yale Innovation Summit, I had the honor of joining over 2,200 of the brightest innovators, researchers, and fellow investors leading the charge in climate tech and environmental innovation. From nonprofit investor Dawn Lippert of Elemental Excelerator and climate champion Tom Steyer to impact-investing OG Nancy Pfund of DBL Ventures, it was invigorating to discuss the ways in which capital—and its many different forms—can be better allocated and distributed to solve for the challenges we face.

 

At Echo River Capital, we’re particularly excited about the intersection of water and climate. During a panel alongside David Gilford, Head of Policy and Strategic Partnerships at Sidewalk Infrastructure Partners (SIP) and Samantha Grassle, Director at Elemental Excelerator, I shared ERC’s investment thesis and how the promising technologies we’re investing in will help address emissions from water:


The More Personal Impact of Climate Change

My family spent summers on a small lake in Northern Michigan. We would go fishing with Grandpa and swimming with Grandma out to the raft. Sometimes, I was scared that I wouldn’t make it the 50 yards back to shore, or that I would have to skim above the weeds reaching the surface. I can still feel the rush of excitement I felt as a 5-year-old from swimming in the freshwater lake and how sweet the water tasted.

 

Traditional people believe that water is sacred—that it should be treated as family. That’s why I founded ERC: to live in closer freshwater harmony with nature, made easier with technology. However, this is getting harder as most of climate change’s effects are felt through water.

 

How Climate Change is Impacting Water Today          

Today, we experience more frequent, severe droughts. More intense storms release devastating deluges on ill-prepared cities causing floods. Sea-level rise pushes storm surges inland and saltwater into coastal groundwater supplies. Even the insurance industry has taken notice with estimates that ~70% of insurable losses will be caused by water-related damage (Global Water Intelligence, “Investing in a Water Secure Future,” 2024).

 

Water is not only a vector of climate change damage. Water is also a source of 10% of global greenhouse gas emissions. About half of this, or 5% globally, is created by moving, heating and treating water in residential, commercial and industrial production. The other half, or 5%, is from the natural environment, where the human use of water in irrigated agriculture, hydropower, and wetlands produce a range of greenhouse gases including carbon dioxide, methane and nitrous oxide.

 

Since water is both a cause of climate change and an effect of climate change, this presents a huge impact investment opportunity for those who are willing to align their climate values with their investment goals. ERC is uncovering these huge, hidden emissions in water and placing bets on companies that can mitigate more than 2 gigatons of CO2e annually, and, in doing so, protect 60% of global gross domestic product (GDP) according to the World Wildlife Fund as illustrated below.


The combined global greenhouse gas emissions from both natural processes and human-caused emissions of freshwater systems are about 15 gigatons per year. Reservoirs, rivers and wetlands are the main sources of these emissions from both carbon dioxide and methane.

 

Companies Leading the Charge

ERC recently invested in Open Hydro, a software platform helping its utility and industrial customers monitor, report, and re-operate emissions from reservoirs and rivers. Open Hydro’s goal is to mitigate more than one gigaton of emissions per year.

 

CREW Carbon is a new investment that uses enhanced rock weathering in wastewater treatment systems to sequester carbon dioxide and nitrous oxide emissions. Likewise, CREW had ambitions to reduce emissions from wastewater treatment by about one gigaton per year, with about 330 MT CO2e from North America.

 

ERC is pursuing high impact, highly lucrative investments in these innovative companies to address the huge, hidden emissions occurring throughout the global water cycle. By promoting the success of these companies, we hope to enable children everywhere to enjoy their rivers, lakes and ponds and make their own lifelong memories with friends and family.

 

 

ERC in the News


If you’re interested in learning more about ERC, please watch and listen to my latest podcast episode hosted by Jay Kapoor at Climb Ventures here.



 

Portfolio News


Aclarity CEO Julie Bliss Mullen is featured on the podcast “(don’t) Waste Water.” She also welcomed her third child reporting “a lot less sleep, but a lot more love.”

 

Open Hydro assessed 56 million cubic meters (m3) of water for carbon dioxide (CO2) and methane (CH4) in the UK. "Conducting both a lifecycle assessment and comparing it to year-on-year reporting requirements, we have helped our clients demonstrate their reduction in emissions. We saved our first customer $2 million in climate-related risks.”

 

Waterplan explains here how setting corporate targets helps large companies to achieve their water stewardship goals. This comes on the heels of corporate water stewardship gaining lots of traction, helped along by the CEO Water Mandate.

 

CREW Carbon was selected as one of six cleantech startups for the DOE’s Office of Technology Transitions EPIC Pitch Competition, and is a Phase I winner of the Carbon Dioxide Removal Purchase Pilot Prize. CREW can compete for the opportunity to deliver carbon dioxide removal credits directly to DOE.

 

Uravu has surpassed the creation of over 700,000 liters of drinking water from their atmospheric water generation platform. Uravu is featured here and could be a critical drinking water resource as the country experiences record heat and competition for drinking water, as the New York Times reported.


 

Industry News


World Economic Forum’s UpLink Program is featuring water with a new report on water impact investing, including yours truly. UpLink and HCL Group’s Aquapreneur Innovation Initiative has just launched its first-ever Community Paper, "Investing in Water: A Practical Guide." This paper offers insights from impact investors and experts on water’s market potential and the opportunities for investing in water-focused innovators.


 

Indigenous Forum


This month, I traveled to Toronto, Canada for a family Bat Mitzvah. My father was born there, and he grew up spending summers ages 5-21 sailing and canoeing on the lake at Camp Arowhon in Algonquin Park. Likewise, I attended Camp New Moon for my 14th summer, and experienced my first great wilderness trip on a canoe portage through the Park's freshwater lakes. In honor of my family's recreational trips, here is Camp Arowhon's land acknowledgment: “For thousands of years the Anishinabewaki Algonquin people have lived in harmony with the lands in and around Algonquin Park, and we are grateful for the opportunity to utilize this site on which we are settlers.” 

 

In Toronto, my wife Jill and I stayed along Lake Ontario, where I grew up sailing with my uncle Cecil, now 99 years old. We watched the rowing sculls glide along the shore and a few brave swimmers move along. “The city’s name itself is derived from the Mohawk word “tkaronto,” meaning “where there are trees standing in the water. The traditional territories of the Mississaugas of the Credit, Anishnabeg, Haudenosaunee, Chippewa, and Huron-Wendat nations encompass the area that is now Toronto.

 

I admire Canada's efforts to come to terms with its dark history with indigenous peoples and the system of state residential schools where horrors occurred to Native children. Toronto is covered by Treaty 13, also known as the "Toronto Purchase" of 1805, with the Mississaugas of the Credit. A land claim with Canada was settled in 2010 for CA$145 million. The Algonquins are still negotiating their claims with Canada, with an Agreement-in-Principle signed on October 18, 2016 with the Province of Ontario. The United States can and should do more for its own Indigenous peoples and nature, including engaging in more co-management of public lands, and granting more "rights of nature" declarations to permanently protect rivers.


 

Coming Soon: Where I’ll be presenting


American Water Works Association – ACE24 – Innovation Hub: June 13th in Anaheim In person



 

Peter Yolles

General Partner

+1.415.203.0432

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