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These were the trends of 2013. It will be exciting to see what is foreseen to happen in 2014. Stay tuned...
Having been busy with all kinds of activities over the past months we almost forgot to inform you that The Entrepreneurs' Ship® is now an officially registered trademark in the US, the EU and Switzerland.
Interviewee: Dr. Christoph Sutter (Switzerland)
Category: Climate Change, Carbon Credits
Climate change is a great treat to humanity, causing water levels to rise and natural disasters globally. Climate change is a moderate rise in the overall temperature of the earth’s atmosphere predominantly due to the green house effect provoked by increased levels of carbon dioxide, chlorofluorocarbons and other pollutants.
Dr. Christoph Sutter, born in 1973 in Switzerland is co-founder of South Pole Carbon. He holds a PhD on Environmental Sciences from the Swiss Federal Institute of Technology in Zurich (ETH). For his thesis “Sustainability Assessment of CDM Projects under the Kyoto Protocol” he was awarded the ETH Medal. After his studies and based on his research, Christoph took an active part in setting up the Myclimate Foundation, along with Renat Heuberger. In the mean time, he was hired to work for the UNFCC Methodology Panel in 2005 until 2008. In 2006, while he was working for the UNFCC Methodology Panel, he co-founded South Pole Carbon. Christoph worked as the Co-CEO, together with Renat Heuberger, at South Pole Carbon, until 2012. He currently serves as South Pole Carbon’s chairman of the board.
South Pole Carbon’s strategic focus is on projects that reduce greenhouse gas emissions incl. renewable energy, forestry, energy efficiency, waste management and methane avoidance. These projects have generated more than 200 jobs worldwide. The internationally operating company has offices in 12 different countries and projects in 25 countries. The central mission for South Pole Carbon is to reduce the amount of damaging emissions wasted around the world. For the high standards of work produced by South Pole Carbon, they have been presented with several prestigious awards: In 2009, Christoph was announced as a “WEF Young Global Leader”. In 2011 and 2012 South Pole Carbon received the honor of “Best Project Developer Award” by Environmental Finance. Also in 2011, they won the “Social Entrepreneur of the Year” award by the Schwab Foundation (part of the WEF). In 2012 a Swiss Bank presented South Pole Carbon with the “SME Sustainability Prize”. Moreover, they were awarded “Best Project Developer CDM” by the readers of Carbon Trading Magazine.
Both of you have worked in related areas prior to starting South Pole Carbon. What was your motivation to become social entrepreneurs?
We never intended to become social entrepreneurs. We simply followed our passion of fighting climate change and fostering sustainable development by using business mechanisms. We wanted to develop sustainable greenhouse gas reduction projects and focused on building a sound business around this objective. Then we immediately re-invested our first revenues to expand South Pole's activities. We never labeled ourselves "social entrepreneurs" until the Schwab Foundation awarded us as "Social Entrepreneurs of the Year".
How did you come up with the initial idea for South Pole Carbon? Was it related to your previous activities (work or research) or was it a spontaneous idea?
Yes, it was pretty much related to our previous activities. After having worked for several years on renewable energy and climate change projects of all sizes I felt the need to create a niche for highly sustainable climate change projects in the field of renewable energy which can be run on business principles. I wanted to amalgamate experiences from my previous work in very different worlds – experience from grassroots NGOs as well as from management consulting at McKinsey.
Renat has been co-founding and successfully leading the foundation Myclimate, which was pioneering the market for voluntary climate action. He realized that for an international expansion and rapid scaling-up of the project development work a business setup is more suitable. We then jointly set-up together South Pole Carbon in form of a private company as a spin-off of ETH Zurich.
Tell us more about South Pole Carbon. What do you do specifically and what distinguishes you from your competitors?
We provide solutions for private persons and organizations that want to do something actively against climate change. Not because somebody forces them, but because they want to do so. We systematically developed products in these voluntary markets from the beginning. Another factor which distinguish us from competition is that we focus on projects that reduce greenhouse gas emissions and at the same time show a high contribution towards sustainable development.
What were the greatest challenges you faced when starting South Pole Carbon?
We faced the typical challenges most start-ups do in theirs early stage: you quickly have to build up virtually everything from scratch (products, structures, rules, brand, marketing, etc.). Within a short timeframe and with a very limited budget. But it is a very energetic and creative and hence rewarding experience.
How would you rate Switzerland as a place to (a) start and (b) operate a social enterprise?
From a legal and logistical point of view Switzerland is very attractive to operate a social business. We found it also easy to attract top talents from around the world to move to Switzerland for their new job. On the other hand, Switzerland is rather expensive and most of our operations are outside of Switzerland.
The majority of your projects (with the exception of Turkey) are located outside of Europe. Why did you choose Switzerland as the location for your business? What role does “Swissness” play when pitching to your clients?
We are operating as highly decentralized international company. We have offices in 12 countries, which operate with a lot independence and responsibility. There is no paramount need to run our headquarters in Switzerland. But – as mentioned – a good infrastructure, simple legal procedures and an excellent pool of talents are key. And Zurich is very well connected to the rest of the world. The "Swissness" helps here and there, but we should not overestimate it within our business. Probably more important is our strong expertise combined with our presence in the local markets where we are active.
What do you tell people that question the true effectiveness of carbon credits?
First, carbon credits are one of many tools in the spectrum of solutions against climate change. We see that no organization is buying carbon credits without taking measures to reduce their own greenhouse gas emissions. Reducing emissions by own actions and through financing actions of others goes hand in hand. Furthermore, every carbon credit is verified by an independent third party against international standards.
How much political lobbying is part of your everyday work? Is it difficult to get a foot in the door in this highly specialized field? What role did your advisors / board members play in this process?
In the last years we did our main political lobbying on the U.N. and EU level. It was done by our senior management who has a deep technical understanding and a wide network in this highly specialized field.
How did you make your project financially sustainable?
Most important is to create an entrepreneurial company culture among the whole team. Furthermore, we combined short-term cashflows (e.g. from consulting services) with mid- and long-term investments in a balanced manner. With lean operations and a culture of disciplined spending we ensured a low cash burn rate reaching break-even within the first year.
You have won several awards for your outstanding work. Are you satisfied with what you have achieved to date? Where do you want to see this company in 5-10 years from now?
Awards are a nice external recognition and can infuse additional energy in the organization – they shouldn't be the key indicator for satisfaction. Yes, we are very happy with what we reached; especially with the fact that we managed to put together and develop such an amazing team. This team proofed that it is possible to undertake projects to tackle climate change and foster sustainability on a purely commercial basis.
In your opinion, what characterizes a successful entrepreneur?
First, the successful entrepreneur is passionate about his/her business. Second, he/she is able to recruit a top team and sparks the joint vision. Third, he/she loves to take risks – in a controlled manner.
Both of you have gained significant professional experience in the area of your business. What is your advice for young people that want to start a business but lack this in-depth expertise?
If you are passionate about the topic you can become an expert faster than you initially thought. First you have to jump with courage into the new theme, then through hard work and endurance you will learn on the job and will get an expert. However, it helps a lot when you bring people with different abilities and complementing knowledge into your team.
Is there anything else you would like to add?
To everybody who is considering starting a own (social) business: jump and try it out. Don't be afraid of a potential "failure". It is guaranteed that you will learn a lot regardless how "successful" your business finally will be.
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