Collecting new, more granular data meant Sweetgreen, when choosing a feta provider, could pick between two that seem the same but have drastically different footprints, or encourage some partners to make investments in their farms to reduce their impact. “The biggest differentiator here is we were using actual emission numbers from actual suppliers, not just estimates or averages,” said Sweetgreen co-founder Nicolas Jammet. Sweetgreen has pledged to cut emissions per dollar of revenue in half from today’s levels by 2027. And Jammet sees benefits extending beyond his own business. “Ultimately what’s exciting is that when we work with suppliers to upgrade the way they make food, it doesn’t affect just the food they sell to Sweetgreen—it affects all the food they sell,” he said.
Watershed’s three co-founders weren’t originally hired at Stripe to work on climate; they worked on engineering and built various products for Stripe customers. But in 2019, Stripe’s co-founders, John and Patrick Collison, became interested in how Stripe, which was valued around that time at $35 billion, could help fight climate change, particularly by being an early customer for fledgling climate-related technologies. They turned to Anderson and asked him to figure out what Stripe could do.
Anderson consulted with academics and climate experts and came back with a proposal, which Stripe announced in August 2019: The San Francisco-based company would commit to spending at least $1 million a year on carbon sequestration, something few other companies had done.
That pledge prompted some of Stripe’s peers—other tech companies who wanted to use their money to help fight climate change—to reach out to Anderson and ask how he had approached the proposal. In those conversations, Anderson realized these companies shared a broader problem: Before they could shrink their carbon footprint, they needed better tools to measure it. He started talking to two of his former co-workers, Francis and to their third co-founder Avi Itskovich, both of whom had left Stripe earlier that year. In September, Anderson quit Stripe and the three of them started Watershed.
As is common in Silicon Valley’s clubby world, Stripe became one of Watershed’s first customers, and the Collison brothers became early investors. So did John Doerr and Michael Moritz, who share a friendly rivalry as chairman and partner of their respective venture capital firms, Kleiner Perkins and Sequoia Capital. Watershed declined to say how much the company had raised. Both Moritz and Doerr joined Watershed’s board. Doerr and his firm have had a decades-long history of funding climate-related companies, with mixed financial results. Moritz, on the other hand, said his firm avoided green tech investments in the “huge frenzy” in the early 2000s because he thought they weren’t a good fit for venture financing. “I don’t mean to pound our chest about it,” he said. “It was the right thing to do to allow others to lose money in that particular phase of climate investing.”
Moritz is writing a check now because Watershed is selling enterprise subscription software, not expensive equipment that needs to be approved by a utility or by regulators. “We’ve always been very careful not to confuse noble crusades with solid investments,” he said.
This article was provided by Bloomberg News.