Bessemer will reduce carbon footprint

Bessemer Venture Partners will go ‘carbon neutral’ by the end of the year, a step few private equity or venture capital firms appear poised to take.

Bessemer Venture Partners plans to offset all of the firm’s direct greenhouse gas emissions, beginning this year, in addition to reducing its total carbon emissions 25 percent by 2013. In addition the firm will also pay to offset the emissions of all of its portfolio companies with fewer than 15 employees, and will offer assistance to its larger portfolio companies in developing their own carbon emissions reduction programmes.

“As we’ve expanded our cleantech practice, we’ve become increasingly aware of the carbon emissions problem,” said Justin Label, the Bessemer partner who launched the firm’s cleantech business in 2005. “While recognising that we are a very small business, we decided to do something about it, mainly as a way to learn about the issues.”

Awareness of the “carbon footprint” has begun to make its way into the collective ethos of the corporate world. The Economist Intelligence Unit surveyed 213 companies around the globe last month, and found that 45 percent have a programme in place to reduce their carbon footprints. Of those, 9 percent aim to be carbon neutral by 2012.

Companies can reduce their footprints either by directly reducing their carbon emissions, or by purchasing carbon credits. Most carbon credits are issued under the Kyoto Protocol’s Clean Development Mechanism. The programme allows countries to generate tradable carbon credits by investing in carbon reduction programmes in developing countries.

This summer Google said it would go carbon neutral by the end of the year, and in April, Rupert Murdoch said his News Corporation would be carbon neutral by 2010. Volkswagen of America said in August it would offset one year of carbon emissions for all vehicles sold between 1 September 2007 and 2 January 2008.

Few established venture firms or private equity firms, even those that invest in green technologies, have announced similar programmes in the past; Label said he personally knows of no other venture firms with similar plans.

“I have a high level of confidence that we are unique in our practice,” Label said.

But several environmentally conscious newcomers have committed to carbon neutrality. Environmentally focussed firm Kyoto Planet Capital Partners, which launched last week, does plan to offset its direct carbon footprint, and is currently in the process of writing a manual to help its portfolio companies do the same. Kyoto Planet Capital Partners is working with its portfolio company, cleanairpass, on a similar project. Cleanairpass calculates carbon footprints for its clients, and also administers the purchase of carbon credits.

Environmental Capital Partners, which also launched last week, is also in the process of developing an environmental programme that will include offsetting its carbon footprint. But ECP partner Chris Staudt cautioned that purchasing offsets to achieve carbon neutrality should by no means be regarded as sufficient.

“Not all carbon offsets are created equal, and avoidance/minimization of C02 produced is the ideal plan as offsets can often be used as an excuse to continuing polluting,” Staudt said in an email. “We are evaluating the best practices in carbon reduction (and other areas) in order to do it the right way from the start rather than merely do it.”