Fig. 5
Cost of Automation
Comparison of labor prices versus robot prices through time (indexed to 1990).
Source: McKinsey
Every year, the world emits 55 billion tons of greenhouse gases (GHG) into the atmosphere, and even more harmful gases are released every day as a result of simple tasks like commuting to work and running the dishwasher. To prevent a climate disaster, humans must reduce emissions to zero by 2050. While physical industries, including agriculture, industrial manufacturing, and transportation, make up 75% of global economic activity, they also account for 75% of global GHG emissions. It is clear: the aging infrastructure upon which these industries operate no longer supports sustainable economic growth and the green future the world needs.
Eclipse invests in the Industrial Evolution: the thesis that the world’s physical industries must be modernized and digitized, enabling the efficiency, productivity, and sustainability needed to support a growing global population and drive sustained economic growth. Put simply, it’s about what is good for business and for people — combining both economic and environmental value propositions is the key to unlocking the Industrial Evolution.
Modeling the financial potential of a business is a well-established science — analysts can model reasonable assumptions, key metrics, and optimal outcomes. The same cannot be said for measuring the environmental benefits of a new technology, where scientific methodologies for impact forecasting have only recently emerged and vary in their implementation. As regulatory and political pressures mount and climate change intensifies, businesses need a standardized, reliable method for quantifying the environmental value of their technologies.
As the leader of the Industrial Evolution, Eclipse has adopted a rigorous and quantitative methodology for impact forecasting and developed a novel reporting framework to benefit investors and founders. Last year, Eclipse identified CRANE, a tool developed by Prime Coalition, a leading climate investment nonprofit, in collaboration with Rho Impact and others, and supported by grants from the MacArthur Foundation, NYSERDA, Massachusetts Clean Energy Center, and more. CRANE enables users to assess a technology's potential for reducing or avoiding emissions in the future. In partnership with Rho Impact, an impact analytics firm, Eclipse developed the Eclipse Carbon Optimization (ECO) Framework to calculate a new venture’s climate impact potential. Using the ECO Framework, Eclipse assessed the GHG reduction potential of 13 portfolio companies. The analysis indicates that by 2050, this subset of portfolio companies has the potential to reduce annual emissions by 172 MMtCO2e, equivalent to about 4% of total U.S. CO2 emissions today or the annual emissions of 22 million homes.
This information is powerful, and Eclipse wants to ensure every founder and investor can access this analysis. To demonstrate the ease of use, depth of analysis, and power of the ECO Framework — which has been applied to every portfolio company in this report — Eclipse and Rho Impact have made these models publicly available for anyone to use and provide feedback. The more companies, customers, and asset managers that adopt the ECO Framework and collaborate to strengthen the methodology, the more investment and innovation there will be in technologies that result in a net-zero economy.
Summary of ECO results by Eclipse portfolio company, reflecting expected (planned) impact by 2050.
Note: In several cases, per-unit emissions intensity reductions shown above may include only a partial set of well-documented avoidance mechanisms, and may therefore be interpreted as a lower bound estimate. Target market geographies vary.
Without dramatic changes to physical infrastructure driven by emerging technologies, the world won’t reach net-zero goals. We must accelerate the Industrial Evolution.
In recent years, we have seen five of Eclipse’s core investment areas — robotics, artificial intelligence, IoT, renewable energy and storage, and advanced semiconductors — mature and reach inflection points. They are now primed for rapid adoption due to their dramatic value propositions. At Eclipse, we call the broad proliferation of these technologies the Industrial Evolution, transporting our physical industries into the digital world.
To understand the significance of the innovations coming directly from the Industrial Evolution, it’s important to revisit the Industrial Revolution of the late 18th century. During that time, the global economy experienced exponential economic growth. However, this growth was heavily reliant on the consumption of fossil fuels, which led to a similar exponential increase in carbon emissions.
The dramatic improvements in quality of life made possible by infrastructure investments in the 1800s and early 1900s have always been correlated with — and contributed to — the negative impacts of climate change. Infrastructure is now declining, investment has not kept pace, and digital technologies have been overlooked, culminating in highly inefficient, expensive operations that account for the majority (75%) of greenhouse gas emissions. In 2021, industrial processes in the U.S. — which include manufacturing — contributed 23% of all CO2e, while transportation accounted for 28% and electricity production 25%.
Sankey diagram showing ECO portfolio company cohort location in breakout of emissions by industry sector.
Without dramatic changes to physical infrastructure driven by emerging technologies, the world will never reach net-zero. We must accelerate the Industrial Evolution.
The transformative technologies represented in the Eclipse portfolio lead with their economic value proposition — these companies promise to generate more revenue for customers, save on costs, and deliver increased operational reliability. But they also offer significant environmental benefits, and it is critical that investors and companies have a way to quantify this additional value proposition.
In 2022, with the first annual ECO report, Eclipse set out to do something new: quantify the total greenhouse gas emissions that its portfolio companies expect to reduce or prevent in the future. This year’s report further evolves and expands the analysis (please see the appendix for a full breakdown of the year-over-year evolution of ECO), assessing the impact of 13 Eclipse portfolio companies. As part of Eclipse’s mission to drive increased adoption and collaboration around ECO, this year’s report also analyzes a company that falls outside of the Eclipse portfolio: Gecko Robotics, a company that is building a platform to protect the world’s critical infrastructure, including power plants and energy transportation networks.
Eclipse sees a future where technology will bring efficiency and economic prosperity to physical industries, while also improving quality of life and reducing carbon emissions. With the ECO Framework, Eclipse and the rest of the investment community can quantify the future carbon reduction potential of their investments, building confidence that portfolio companies are contributing to economic growth while simultaneously alleviating climate change.
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Cumulative emissions reduction potential by ECO portfolio company through 2050.
Note: Graph and combined effect assumes non-overlapping market penetration and independent GHG avoidance effects.
Eclipse worked with Rho Impact to establish the ECO Framework, which leverages CRANE, an open software tool, to assess the environmental impact of early-stage ventures1. The model estimates carbon reduction much like an investor would evaluate an investment’s future revenue and profit potential, making it widely applicable and powerful.
The ECO Framework comprises three components:
The estimated total GHG emissions in the market(s) addressed by an Eclipse portfolio technology.
The estimated GHG intensity reduction (%) per unit of good or service of an Eclipse portfolio technology.
The estimated market penetration rate of an Eclipse portfolio technology by 2050.
How it works:
Consider one of Eclipse’s portfolio companies that operates in the energy and electrification market. The model starts by estimating a total market size of 9,203 billion kilometers traveled by automobile passengers in the year 2050 (for the U.S. and EU) and converting that figure into the expected associated emissions equivalent of ~822 MMtCO2e. ECO considers both today’s market and future market growth, so it dynamically considers all existing technologies in the context of the future emissions market.
ECO first quantifies the potential for this company to reduce GHG emissions on a per-unit basis compared to the technology and processes currently in the market that the company is disrupting — in this case, the internal combustion engine (ICE) and the electric vehicle (EV). The analysis finds that the company can reduce the carbon intensity by ~41% versus ICE and ~17% versus incumbent EVs due to the larger energy density of the company’s lithium-ion battery technology. By 2050, this works out to be about a 23% GHG savings per unit on average.
The model then estimates market penetration in increments (2025, 2030, 2040, and 2050). This example assumes that by 2050 the company will displace 10% of ICE vehicles (the target market) and given the expected growth of EVs, this amounts to ~2% of the overall market in 2050. Note, that these target market penetration values are conservatively projected with S-curve growth, and are reevaluated each year.
Combining these three key metrics — total market size, GHG intensity reduction, and market penetration — ECO shows that this company will prevent an estimated 3.3 MMtCO2e in GHG emissions annually by 2050 relative to the incumbent transportation scenarios. This is the equivalent of 918 wind turbines running for one year.
1 ERP analysis was first proposed to investors by Prime Coalition and NYSERDA in their 2017 paper Climate Impact Assessment for Early-Stage Ventures. The methodology was recently updated in Project Frame’s Pre-Investment Considerations: Diving Deeper into Assessing Future Greenhouse Gas Impact. To learn more about Project Frame, please visit www.projectframe.how
An example of how ECO works based on one of Eclipse’s portfolio companies operating in the energy and electrification market.
1. Automation + Robotics:
The factory of the future is sustainable.
As supply chains become more complex and labor prices continue to rise, robotics and automation are quickly driving economic and environmental value in logistics:
Economic: Automation accelerates production, reduces line stoppages, and increases precision, improving fulfillment rates and customer satisfaction, which ultimately drive revenue growth.
Environmental: More precise and accurate processes produce less waste, which reduces the carbon footprint of facilities.
Comparison of labor prices versus robot prices through time (indexed to 1990).
Source: McKinsey
Fulfil is a prime example of the positive impact of automation and robotics. Rising food demand, coupled with decreasing farmland, and the pandemic-accelerated shift to e-commerce have forced society to rethink grocery shopping. o unlocks grocery e-commerce with automated robotic fulfillment centers. Using sensors and computer vision algorithms, Fulfil can dispense items directly into bags, and then robots distribute orders to their loading site.
In the same vein, Company A is leveraging robots to reimagine the warehouse. It is estimated that 80% of warehouses have zero automation. And, the process of picking and packing inventory remains highly manual. Through a lattice facility paired with a three-dimensional robotic articulation, Company A’s technology can maneuver payloads with increased throughput and a dramatically smaller footprint. The reconfiguration of the facility into a lattice network increases the density of pallets in a warehouse, resulting in a reduced carbon footprint per pallet.
CDP estimates that 90% of an organization’s emissions are within Scope 3 — emissions occurring indirectly in the value chain of a company. The magnitude of logistics emissions is massive and the complexity of supply chains poses a challenge for organizations attempting to cut CO2 emissions. Fulfil and Company A demonstrate that it is possible to clean the manufacturing industry through advanced robotics and automation, while reducing costs and driving growth.
2. Reshoring
Decades of globalization have created efficient — but brittle — supply chains, while also devastating the Western industrial manufacturing base as companies outsourced to low labor-cost countries.
However, several recent drivers highlight the need for nearshoring:
• COVID-19 crippled supply chains, resulting in an imbalance of supply and demand that kickstarted the highest inflation rates since the 1970s.
• Rising geopolitical tensions between the U.S. and China, combined with the Russia-Ukraine war, have heightened the risk of an upstream slowdown (or interruption) of supplies.
• Technology and automation are closing the labor cost arbitrage that has existed for the past several decades.
Companies are shortening their supply chains as they prioritize resiliency over short-term cost-cutting. As the cost of robotics, computer vision, and advanced compute have declined dramatically, the value proposition of nearshoring in countries that have higher labor costs — like the U.S. — has increased.
These advanced technologies not only revitalize and drive Western manufacturing-based economic growth, but they also create entirely new opportunities for never-before-seen product capabilities manufactured in a highly efficient manner.
Bright Machines’ full stack approach to modern automation is a driving force in the reshoring movement. With shorter supply chains, customers can transition from “build-to-stock” to “build-to-order,” avoiding inventory forecasting errors and improving the reliability of deliveries. By leveraging software, machine learning, and robotics, Bright Machines’ dynamic assembly lines adapt to customers’ needs, while reducing waste.
Pairing reduced waste with shorter supply networks reduces costs and GHG emissions. For context, the total CO2 emissions from international shipping in 2021 were 700 MMtCO2e. To put that into perspective, if global shipping were treated as a country, it would have been the 6th largest emitter. Now, governments, customers, and investors are demanding a cleaner industry. Nearshore manufacturing supported by advanced technology reduces emissions from global shipping and dramatically reduces industrial waste by ensuring that finished products are of higher quality and work as expected. At Eclipse, we anticipate continued reshoring efforts as companies reap the benefits of lower supply chain costs, grapple with ongoing geopolitical issues, and enjoy growing sales from customers in search of opportunities to decrease Scope 3 emissions.
Without dramatic changes to physical infrastructure driven by emerging technologies, the world will never reach net-zero. We must accelerate the Industrial Evolution.
The mission of the ECO report is to provide a data-driven, unbiased analysis of the environmental impact of early-stage companies. In order to deliver a comprehensive and impartial assessment of the industry, the 2023 report includes a case study of Gecko Robotics, a company outside of the Eclipse investment portfolio. By including Gecko in the 2023 ECO report, Eclipse aims to shed light on the broader landscape of companies driving decarbonization. Further, this analysis underscores Eclipse’s commitment to avoid greenwashing and to showcase a diverse range of solutions that contribute to a sustainable future.
Company Description
Gecko Robotics’ combination of hardware and software solutions ensures the reliability and sustainability of infrastructure health. By pairing data collected from ultrasonic inspection robots with predictive maintenance software, Gecko is able to extend the life of an asset and avoid unexpected downtime in multiple sectors.
Problem
When coal or natural gas power plants experience a forced outage, they often switch to peaker plants for backup generators (BUGs) to meet market demand. Peaker plants generally have much higher GHG intensities than base load plants, sacrificing efficiency for immediacy.
Total Market Emissions
The total global emissions produced when coal and natural gas power plants switch to peaker plants due to failures is expected to reach 343 MMtCO2e annually by 2050. That is equivalent to ~17 million garbage trucks of waste recycled instead of landfilled.
Summary
Gecko Robotics integrates data from Gecko’s various robotic, fixed-sensor, and partner systems into a software platform that enables unparalleled analysis and decision making about asset health. By bringing together data layers that were not previously possible, Gecko is driving important decisions for customers that increase uptime, decrease costs, and mitigate safety issues. By detecting impending component failures, operators are able to perform predictive maintenance versus dealing with an unexpected catastrophic failure. Planned maintenance is not only tactical and swift, but avoids the use of a peaker plant to meet power generation demand.
Assumptions
Based on early adoption, we assumed that Gecko Robotics’ technology is 100% successful at preventing unplanned component failures due to corrosion. Furthermore, our model assumes Gecko Robotics can grow to address approximately 10% of all forced outages globally.
Peaker plants vary widely in terms of their GHG intensities (i.e., 700-2,700 kgCO2e/MWh). The analysis underlying Gecko’s model estimates that the average GHG intensity for peakers in North America is about 1,250 kgCO2e/MWh today and declines to about 1,000 kgCO2e/MWh by 2050.
Emissions Reduction Potential (ERP) Statement
36.3% reduction potential per TWh, or 13 MMtCO2e annually, equivalent to GHG emissions from 3.5 coal-fired power plants in one year.
Since the ERP for Gecko’s model is highly dependent on the GHG intensity of the set of displaced incumbents, and since that number can vary widely based on geography and other factors, future analyses will seek to reduce the inherent uncertainty in the forecast through more precise estimates.
Applications of Gecko’s technology in areas other than the power industry have not been evaluated here.
Company Impact
Global prosperity depends on physical infrastructure. But without innovative technology, assets are pushed to their breaking points, undermining safety, efficiency, and accuracy. Gecko Robotics addresses this by providing a full-stack solution needed to maintain and protect the world’s critical infrastructure in the energy, manufacturing, and defense sectors.
Emissions reduction potential by ECO portfolio companies through 2050.
Transportation & Mobility
31.1 MMtCO2e
Arc is taking a similar approach to electrify the marine market as Tesla took to the automotive market, beginning with high-end performance boats and then shifting to mass-scale, entry-level production.
Recreational boating is a large market, with >300,000 boats sold annually in the U.S. Due to high drag (from water), boats are incredibly energy intensive, often getting <1 mpg. Besides Arc, there are no other viable solutions to electrify the market.
The U.S. recreational boating market is expected to emit ~350 MMtCO2e annually in 2050, equivalent to 7% of the total U.S. emissions today.
Arc has developed the most advanced electric boat on the market, including a 220 kWh battery pack for optimal performance. The company’s first model, the Arc One, hit the market in H1 2023 and is now sold out. Because there are no other viable electric solutions today, Arc is providing a fossil fuel alternative and will reduce the carbon intensity of the recreational boating industry by 90.9%, resulting in 31.1 MMtCO2e in emissions reduction by 2050, assuming 10% market penetration.
We assume that Arc only disrupts the recreational boating market. We have not factored in ferries, ships, and inland transport, but will reassess each year as the company has this in its roadmap.
90.9% reduction potential per unit resulting in 31.1 MMtCO2e annually by 2050, equivalent to about 80 billion miles traveled by an ICE vehicle.
Arc introduced the first-ever high-performance solution for electrifying the recreational boating market. Its debut model, the Arc One, has already been delivered to customers, marking a significant step towards electrifying an entire industry plagued by emissions.
Industrial
2.2 MMtCO2e
Augury provides manufacturers and other industrial sectors with insights into the health of machines and operations to transform how people work and what they can create. A pioneer in Machine Health and Process Health solutions, it uses purpose-built AI, trained by industry experts and the world’s largest data library, to help customers eliminate production downtime, improve process efficiency, maximize yield, and reduce waste and emissions.
When a machine fails or a process is inefficient, production stops, waste goes up, worker safety is compromised, and energy is squandered. Augury helps manufacturers and industrial companies reduce production downtime, improve process efficiency, maximize yield, and achieve sustainability goals to realize the full potential of their production.
Electric motors in North American manufacturing alone are expected to emit 35 MMtCO2e annually in 2050, equivalent to ~0.7% of total U.S. emissions today.
Augury deploys its platform across manufacturing rotary equipment. Augury’s holistic software and IoT solution monitors equipment for inefficient operations and potential unexpected downtime, reducing downtime, improving operational efficiency, and elongating asset life. As a result, Augury reduces emissions from rotary equipment by ~13% per unit output. Rotary equipment tends to make up 54% of carbon emissions in manufacturing, and is expected to reach ~35 MMtCO2e annually by 2050 in North America alone. Augury is expected to reach 50% penetration by 2050.
We assume Augury is only targeting manufacturing rotary equipment. However, the company is already deploying into the energy and utility sectors, expanding its scope of impact. Further, we do not assume any emissions reductions from the elimination of product waste during manufacturing downtime.
13% reduction potential per unit or 2.2 MMtCO2e annually by 2050, equivalent to the emissions from 5.5 natural gas-fired power plants in one year.
Augury is digitizing the manufacturing footprint, enabling managers to see how their equipment is performing in real time. Plants will run more efficiently, requiring less energy and decreasing the carbon footprint. Augury improves supply chain and manufacturing resiliency, bringing the industrial world into the digital age.
Logistics & Supply Chain
6.2 MMtCO2e
AxleHire is a digitally-enabled last-mile delivery company. Its proprietary software-first platform provides industry-leading speed and quality at a material cost advantage versus industry incumbents.
With the rise of e-commerce and contactless delivery, AxleHire recognized the need for an end-to-end solution that upholds strong brand reputation. Current logistics companies fail to provide a customer-focused experience at a competitive cost. Amazon sets the bar for delivery experience, but large brands committed to customer intimacy do not want to use Amazon and disintermediate their customer relationship. AxleHire is building the industry antidote to Amazon to capture the 80% of package volume not served by Amazon.
The last- and middle-mile shipping market is expected to emit 74 MMtCO2e by 2050, or 1.5% of total U.S. emissions today.
AxleHire has disrupted the delivery and parcel industry by providing a technology platform focused on the most efficient and sustainable deliveries without sacrificing exemplary customer experience. As a result, AxleHire reduces 84% of last- and middle-mile fuel. We expect by 2050 for AxleHire to have a 10% market penetration, displacing 6.2 MMtCO2e annually.
We assumed that 15% of AxleHire’s delivery fleet would be EVs or hybrid EVs, consistent with its current fleet mix. We expect this to increase over time.
84% per unit savings or 6.2 MMtCO2e annually by 2050, equivalent to two coal-fired power plants in one year.
Consumers love having their goods delivered as quickly as possible. For the foreseeable future, parcel delivery will be conducted through ground transportation. AxleHire offers an effective consumer-centered solution that is affordable. The company provides real-time package tracking, proof-of-delivery, 99%+ on-time delivery, resulting in higher end-consumer satisfaction, higher re-purchase rates, and lower returns/complaints.
Manufacturing
1.4 MMtCO2e
Bright Machines transforms how and where companies manufacture products. Through the use of intelligent, software-defined and AI-enabled microfactories, Bright Machines’ automation empowers the electronics assembly industry to increase yields, minimize waste, and decrease global transportation needs.
Today, many electronics are manufactured in low-cost countries and assembled manually. This creates a high degree of inefficiency in supply chains — from sizable scrap rates due to human error, to finished goods getting stranded offshore.
The electronics assembly market is expected to reach ~412 MMtCO2e annually by 2050, equivalent to ~9% of total U.S. emissions today.
Bright Machines is a technology company pioneering an innovative approach to intelligent, full stack manufacturing. Not only does Bright Machines make it feasible to move factory operations closer to home, but it also boosts economic and environmental advantages over the long run. The company’s solutions can reduce the GHG intensity of electronics manufacturing by at least 7%, resulting in an annual reduction potential of 1.4 MMtCO2e by 2050, assuming 5% market penetration.
These results are based on Bright Machines’ current focus on electronics assembly automation and do not consider future expansion into other categories. Additional emissions reductions benefits related to re/nearshoring of manufacturing (e.g., eliminating international freight), production rate increases, and disassembly and recycling of hardware were not included in the calculations.
~7% per unit emissions savings or 1.4 MMtCO2e annually by 2050, equivalent to the avoidable emissions of running about 400 large wind turbines for a year.
Factories have not evolved at the same pace as the products they make. By delivering a flexible and scalable full-stack automation solution, Bright Machines is helping to modernize one of the world’s biggest industries — enabling companies to localize supply chains, increase productivity, and reduce costs.
Construction & Real Estate
11.3 MMtCO2e
Canoa is digitizing the internal footprint of commercial real estate, enabling reusable and modular office designs and eliminating the waste of office renovations by recycling and offering reusable furniture and designs.
Commercial office space is renovated every five years. Over the lifetime of a building, renovations, including new furnishings, often emit 2x or more than building construction itself. This is both economically and environmentally inefficient and costly.
The commercial buildings market in the U.S. is expected to emit ~462 MMtCO2e annually in 2050, equivalent to ~10% of the total U.S. emissions today.
Canoa allows companies to digitally render their office footprint and design new spaces with highly modular, recyclable designs/furniture, eliminating the need for full renovations. Instead, offices can be redesigned without construction, new flooring, or new furniture. This increases flexibility and saves customers money, while also reducing per unit emissions by ~27% relative to full renovations. We assume 9% market penetration in the U.S. for Canoa by 2050, which results in a 11.3 MMtCO2e reduction annually.
We assume that Canoa only operates in the U.S. market.
~27% reduction potential per unit or 11.3 MMtCO2e annually by 2050, equivalent to carbon sequestered by 75,000 acres of U.S. forests preserved from conversion to cropland in one year.
Construction is a large emissions contributor (>10%), and the industry has evolved very slowly. Canoa is creating a platform that enables one of the most historically inflexible physical industries — commercial real estate — to become modular and adaptable without the heavy economic and environmental costs of renovation.
Logistics & Supply Chain
10.1 MMtCO2e
Cheetah is a tech-enabled B2B food distribution marketplace for local and sustainable wholesale foodservice supplies.
Food supply chains are inefficient and outdated. Legacy distributors limit selection for customers, produce substantial waste, and rely on inefficient logistics networks, increasing costs and emissions.
Food supply chains for meals eaten away from home are expected to emit ~558 MMtCO2e annually in the U.S. by 2050, equivalent to ~12% of total U.S. emissions today.
Cheetah designed its tech-enabled distribution network with modern customer demands in mind, creating a distributor for locally grown food and a tech stack that dramatically reduces the efficiency of delivery and inventory. More efficient routing enables lower emissions per delivery, while better inventory and local supply chains reduce waste. By 2050, Cheetah is expected to reduce per unit emissions compared to legacy distributors by 45.5% and is estimated to avoid 10.1 MMtCO2e annually.
We assume Cheetah is successful with its "Inventory as a Service" initiatives by reducing inventory for both customers and Cheetah operations. We also consider local agriculture and new food sources. We do not include the potential to nudge customers to plant-based alternative meats, although this is part of Cheetah’s roadmap. We will reevaluate as these services evolve.
45.5% per unit savings or 10.1 MMtCO2e annually by 2050, the equivalent of ~23 million barrels of oil consumed.
Food supply chains are critical to improving the well-being of the population. Legacy networks rely on fragile global networks, but Cheetah’s approach focuses on localization and reduction of “food miles,” while also lowering costs and ultimately, creating a more resilient supply chain.
Manufacturing
19 MMtCO2e
Company A designs reconfigurable, high-throughput warehouse automation with a dense/optimized footprint.
Consumer purchasing behaviors continue to drive complexity within distribution operations. Further, global supply chains are being re-designed due to onshoring, and labor unavailability plagues fulfillment operations. There has never been a greater need for automation to improve supply chain efficiency, yet it is estimated that 80% of warehouses have zero automation.
In the U.S., warehouses are expected to emit 691 MMtCO2e annually by 2050, equivalent to ~14% of the total U.S. emissions today.
Note: because Company A's system is highly applicable to grocery, food, and beverage, we expect the company to move into this space quickly given the value proposition. However, for the purpose of the initial analysis, we only targeted warehouse pallets and did not consider the reduction in food waste/scrap. As Company A grows, ECO will analyze additional reduction benefits in future reports.
Company A’s mechanical/electrical lattice structure supports robotic articulation. This hardware edge paired with no-code software enables efficient warehouse operations. Highly-automated warehouses increase pallet density, in turn reducing warehouse emissions. This approach allows Company A to reduce emissions by 45.9% compared to legacy warehouses.
We assumed that Company A had greater indirect emissions compared to incumbent technology due to additional concrete and steel in its lattice framework, but over time, this would be surpassed by the direct emission reduction from greater throughput. To be conservative, we assumed no increase in warehouse efficiency due to automation.
46% per unit reduction potential or 19 MMtCO2e annually by 2050, or 44 million barrels of oil consumed.
The COVID-19 pandemic highlighted the limitations of our global supply chain and has resulted in an onshoring movement. However, lack of automation and labor pose barriers for affordable onshore manufacturing. Company A’s technology enables domestic manufacturing, while increasing warehouse density to reduce overall emissions.
Logistics & Supply Chain
9.6 MMtCO2e
Fulfil’s automated fulfillment center was designed to provide convenient and affordable food to everyone. Fulfil robots pick and pack goods across all product categories and temperature zones, unlocking extreme speed, throughput, accuracy, and inventory control.
As urbanization increases, inefficient and archaic food supply chains are over-emitting and under-delivering. Grocery stores are too big, inventory spoilage (shrinkage) is a notorious challenge, supply chains are too complex, and innovation has been lacking.
As the global population continues to grow, a cumulative 543 MMt of groceries are expected to be purchased by 2050 in the U.S. alone, resulting in 555 MMtCO2e emitted due to food production, grocery store stationary emissions, and customer transport. That is equivalent to 11% of the total U.S. emissions today.
Fulfil is disrupting traditional grocery supply chains through automated fulfillment centers (FCs). FCs offer emissions reduction opportunities thanks to smaller operational requirements for lighting, HVAC, and refrigeration. Furthermore, Fulfil anticipates leveraging e-commerce marketing strategies to reduce food spoilage in traditional grocery retailers and bring groceries to the consumer with efficient last-mile delivery.
We model Fulfil’s emissions impact as a combination of food waste reduction, last-mile transportation savings, store stationary energy savings, and reduced refrigerant leakage. Fulfil’s current business plan includes using ICE vehicles for last-mile delivery. Further last-mile emissions savings could be realized if they switch to EVs.
11.6% per unit savings or 9.6 MMtCO2e annually, equivalent to 1.1 billion gallons of gas burned.
It is estimated that 2% of global food production may be wasted by retailers, which is equivalent to about $22B lost in the U.S. alone due to grocery retail waste. With 100% order accuracy, dynamic robotic handling of groceries, and temperature-controlled centers, Fulfil lowers costs and reduces emissions.
Advanced compute
37 MMtCO2e
Through greater customization and control, Oxide wants to make cloud computing available to all, opening up the benefits of cloud to the vast and underserved on-premise IT market.
90% of IT infrastructure runs in customer-owned or leased facilities and consists of disjointed technologies operating at low-efficiency, in stark contrast to the high-efficiency solutions run in public cloud hyperscalers today. Energy losses due to fan geometry, placement, and operational timing are of particular concern, as are bus bar voltage and current and heat sink design. Inefficient data computation and storage requires electrical energy connected through the grid that is powered mostly by fossil fuels. As a result, data centers are a major contributor to GHG emissions and will continue to be if the industry grows without markedly better designs.
The future scale of data center IT-only energy consumption is estimated to reach 3,164 TWh, emitting 868 MMtCO2e annually. That is equivalent to 17% of total U.S. emissions today.
Oxide has taken a holistic approach, co-designing hardware and software into a state-of-the-art rack-scale solution that solves many of the key challenges in data center infrastructure today. The design of Oxide’s technology improves compute efficiency, while reducing energy consumption and decreasing operational costs and emissions. Specifically, Oxide cuts fan energy use by at least 70% (i.e. about 20% overall) and is expected to eliminate a further 15% overall through changes to the power delivery substrate and other fans, including those at power supplies, custom rotation control, and software controls. In sum, the company’s solution can reduce the per unit IT-only GHG intensity of data centers by 35%, resulting in an annual reduction potential of 37 MMtCO2e by 2050.
The model assumes that the emissions intensity of the power grids feeding servers will decline at the same rate as the global average.
35% per unit emissions savings or 37 MMtCO2e annually by 2050, or the equivalent of the carbon sequestered by 44 million acres of forests in one year.
By increasing computing power and decreasing energy input requirements relative to conventional servers, Oxide can reduce 37 MMtCO2e annually by 2050 compared to incumbent processors, with 403 cumulative MMtCO2e avoided by 2050.
Manufacturing
29 MMtCO2e
Reframe Systems is developing a network of hyperlocal robotic factories to build modular net-zero carbon housing affordably at a massive scale.
While manufacturing productivity continues to increase, productivity in construction peaked in 1970. Unsurprisingly, the high costs associated with construction translate to unaffordable climate-friendly buildings. Many high quality, low embodied carbon materials are not yet cost competitive (versus traditional materials), which adds 7%-15% incremental cost to the construction costs for passive house, net-zero-carbon buildings.
The adoption of modular construction, wherein a building is assembled offsite, has doubled from 2015 to 2021. A modular design reduces the costs associated with new buildings, while avoiding emissions by using lower energy material, reduced transportation, and waste minimization. In 2050, 564 MMtCO2e will be emitted due to residential building construction and operation. This is equivalent to GHG emissions avoided by 157,000 wind turbines running for a year.
Reframe Systems is expected to disrupt traditional multi-family residential construction with a network of hyperlocal robotic factories that use digital-first matrix manufacturing, scalability of their building system platform to respond to changing market demands, and by incorporating sustainable materials in its building system. Reframe Systems' energy efficiency improvements, modular approach, integrated virtual design and manufacturing, sustainable materials, and reduced waste are expected to decrease emissions by 51.3% relative to conventional buildings.
Eclipse assumed incumbent housing is aligned with the status quo (the IEA’s Beyond 2C Scenario), in comparison to Reframe Systems, which adheres to a 2-degree outcome by assuming that direct onsite emissions and emissions due to electricity reflect 2-degree scenario efficiencies.
51.3% per unit savings or 29 MMtCO2e annually, or 3.6 million homes’ energy use for one year.
The built environment generates 40% of greenhouse gas emissions annually. Reframe Systems enables more affordable construction, while reducing carbon emissions by selecting low embodied carbon insulation, less cement, and more efficient operational systems for space heating and cooling. Reframe Systems enables the building construction industry to be both affordable and environmentally friendly by reducing construction costs and scaling decarbonization.
Transportation & Mobility
2.2 MMtCO2e
Reliable Robotics was founded in 2017 to develop safety-enhancing technologies that will prevent many common causes of fatal aviation accidents and save lives. The FAA has accepted the certification basis and plan for the Reliable Robotics continuous engagement autopilot and high-precision navigation system, which automates all phases of aircraft operation including taxi, takeoff, and landing. This system will greatly enhance pilot productivity, improve the economic viability of regional ‘feeder’ cargo operations, and enable the flexibility to deploy aircraft on point-to-point routes across 5,000+ existing U.S. public-use airports to meet customer demand.
Aircraft operators currently fly a limited set of fixed routes on inflexible schedules, limiting their ability to adapt to changing demand patterns. As a result, aircraft are underutilized — both in terms of flight hours and unused capacity — and pilot productivity remains low, particularly for small ‘feeder’ cargo aircraft.
Global rural air freight is expected to result in ~114 MMtCO2e annually by 2050, equivalent to ~2% of the total U.S. emissions today.
There are over 5,000 public-use airports in the U.S, but only ~10% are typically utilized for commercial transport. Compared to jet aircraft, small cargo turboprop aircraft are more environmentally efficient for air freight on shorter routes, if they can travel point-to-point with higher utilization. However, the pilot represents approximately 30% of the operating cost for cargo planes, making air freight economically inefficient in existing operations. Reliable's remotely operated aircraft system will greatly improve pilot productivity, decreasing operating costs, and increasing freight capacity by 20%, while reducing per-package emissions intensity by about 19%. As a result, airlines can economically operate new point-to-point cargo routes with small aircraft and improve the cost and environmental efficiency of their entire operation.
We assume that Reliable improves the efficiency of rural logistics, specifically the middle-mile segment that is currently transported over the road.
19% per unit reduction potential or 2.2 MMtCO2e annually by 2050, equivalent to recycling instead of landfilling 95 million trash bags of waste.
Over 20% of the U.S. population lives in rural areas. Our logistics networks need more efficient and faster modalities to connect with one-fifth of America. Enabling economical, point-to-point air cargo operations will increase the utility of the existing air cargo network.
Transportation & Mobility
5.3 MMtCO2e
RideCo is redefining public transportation by partnering with municipal transport infrastructure and enabling dynamically routed, on-demand transit solutions. RideCo provides the convenience of ride hailing with the efficiency of public transportation, expanding access to public transport in underserved neighborhoods and paratransit users across North America.
Public transportation is one of the most elegant ways to quickly reduce transportation emissions from passenger vehicles. However, inconvenience prohibits ridership. Further, static routes result in low utilization in low or medium population density areas. In addition, paratransit systems currently operate on legacy software systems that require daily manual scheduling of vehicle manifests. Public transport networks lack the tools and software to drive higher utilization and improve the rider experience.
Light and heavy-duty road vehicles in the U.S. and EU are expected to emit ~1,260 MMtCO2e annually by 2050, equivalent to 26% of the total U.S. emissions today.
RideCo is enabling municipal transport networks to offer Uber-like customer experiences at a “bus fare” price point. A rider can request that a smaller public vehicle pick them up near their home and bring them along with other riders to a public transportation hub, providing access to public transportation to large metro areas that are currently underserved. Paratransit systems can now offer app-based booking for riders and automated scheduling and dispatching for fleet operators. RideCo can reduce carbon emissions by an estimate of 53% per passenger mile by shifting commuters from passenger cars to public transit. Assuming only ~1% market penetration in the U.S. and EU, RideCo can reduce ~5.3 MMtCO2e annually by 2050.
A prior version of the model assumed the percentage of commuting vehicle miles to be about 75% of all miles traveled. The 2009 U.S. DOT FTA 2009 and National Household Travel Survey shows that figure to be closer to 28%. Further, the assumption of the share of urban versus rural populations now reflects projections provided by ‘Our World In Data,’ in which the share of urban miles increases slightly over time, rather than our prior assumption of no growth.
53.1% per unit savings or 5.3 MMtCO2e annually by 2050, the equivalent of 29,000 railcars worth of coal burned.
Dynamically routed, on-demand transit enabled by RideCo will improve mobility by reducing waiting, walking, and total journey time. Improving access to quality transit will connect individuals to more employment centers, schools/colleges, and recreation and retail centers. This, in turn, will foster further economic and human development. Further, it will improve productivity of transit systems, resulting in 20% reduction in operating costs.
Transportation & Mobility
8 MMtCO2e
Wayve has developed a differentiated, end-to-end deep learning platform to enable the global scale of autonomous driving. The Wayve platform is purpose-built for electric vehicles.
Internal combustion engines combined with human drivers are incredibly inefficient: transportation contributes 29% of the U.S. GHG emissions; commercial drivers account for ~50% of costs; and the average person wastes 250 hours in transit each year.
Light-duty vehicles in the U.S. and EU are projected to emit 1,053 MMtCO2e annually in 2050, equivalent to 22% of total U.S. emissions today.
Wayve is solving multiple problems with its capital-efficient and highly scalable autonomous driving platform. On top of productivity and cost savings, autonomous vehicles can realize direct emissions savings. Autonomous vehicles can employ eco-driving, platooning, intersection connectivity and faster highway speeds to realize an average 7.6% efficiency savings. We assume 10% penetration of Wayve’s technology by 2050.
A prior version of this model assumed that Wayve’s emissions reduction potential was a combination of autonomy-enabled savings and savings due to accelerated adoption of EVs as a consequence of Wayve’s platform. During model refinement this year, the impact hypothesis was adjusted to only account for direct emissions savings that are caused by vehicle autonomy.
7.6% per unit GHG savings, or 8 MMtCO2e annually by 2050, the equivalent to emissions avoided by running 2,225 wind turbines for one year.
Autonomous vehicles are one of the major technological challenges of this century. If successful, AVs will unlock a wave of productivity comparable to the internet. They will also dramatically reduce traffic and decrease individual vehicle ownership.
1. Automation + Robotics:
The factory of the future is sustainable.
Eclipse and its innovative portfolio companies are driving the Industrial Evolution forward by focusing on digitizing physical infrastructure. As part of that mission, Eclipse is committed to measuring and optimizing both the financial returns and environmental benefits of the technologies within its portfolio. Through the ECO Framework, any company or investor can assess a technology’s economic and environmental value potential, both now and into the future. This year’s estimates are based on company- and technology-specific ECO analyses built in partnership with Rho Impact, and they confirm that dramatic increases in efficiency and resiliency are often accompanied by substantial sustainability benefits. The companies highlighted in this report are uniquely positioned to help decouple economic growth from GHG emissions, and ultimately, improve the health of the planet and the lives of people around the world.
If you would like to learn more, or dive deeper into the methodology, please reach out to the ECO team: ECO@eclipse.vc. For all press inquiries, please reach out to Eclipse’s VP of Marketing, Laura Spaventa Lewis: laura@eclipse.vc.
Framework Development and Analytics: Rho Impact and Jay Knafel
Research and Project Management: Rho Impact and Kevin Grathwohl
Writing: Kevin Grathwohl and Jay Knafel
Editing: Rho Impact, Allyson Johnson, Laura Spaventa Lewis, Alexandra Nelson, Angela Hayward, and Ritika Trikha
Design: Rebecca Suby-Long Design
Rho Impact Key Personnel: Aurora Ginzburg, James Midkiff, Seth Sheldon, and Zachary Thomas
1. Year-Over-Year Evolution
From the inception of ECO, Eclipse and its partner Rho Impact set out to provide rigorous analysis and public reporting to build trust and accountability. This report is data-driven, consisting of thorough research for each carbon emissions market and the technology’s ability to reduce emissions, supported by substantial scientific and academic research (cited and released for widespread use). Returning portfolio companies are analyzed annually, with new portfolio companies added to each successive report.
Eclipse and Rho Impact regularly review and evaluate the model assumptions that underlie the ECO Framework, and when appropriate, make adjustments to ensure the outputs reflect the latest market and environmental data. After completing this assessment for this year’s report, the team updated the assumptions for multiple companies. Two models stood out as needing significant revisions:
1. A reduction in penetration assumptions for Wayve and a modification to the key impact mechanism: ECO previously assumed 20% market penetration for all motor vehicles by 2040, which has since been revised to 5%, representing approximately 90 million vehicles. While the company continues to make tremendous progress, the average age of a vehicle is ~10 years old, making it unlikely that Wayve could be installed in 20% of all motor vehicles in the U.S. and E.U. by 2040 given the nature of the refresh cycle and sheer number of total vehicles. In the earlier model, it was assumed that all future Wayve-enabled vehicles would be EVs, thereby displacing a much greater share of ICE vehicles. The model now only considers average improvement to light duty vehicles (both ICE and EVs) for small AV systems.
2. A reduction in emissions reduction potential for Canoa: ECO previously assumed that Canoa would extend the useful life of commercial real estate furniture and equipment by 10x, or 50 years. While Canoa’s marketplace and platform extended the useful life substantially, this assumption was reduced to 10 years.
When looking at the report year-over-year, these two adjustments together account for the majority of the change in the expected portfolio-wide annual reduction potential in 2040. For the companies included below, this figure changed from 177 MMtCO2e to 48 MMtCO2e, a 73% decrease. While significant, we believe this to be indicative of the effort to which our teams and the portfolio companies have gone to make these estimates as realistic as possible.
Without dramatic changes to physical infrastructure driven by emerging technologies, the world will never reach net-zero. We must accelerate the Industrial Evolution.
2. ECO Standard and CRANE
A foundational element of the ECO Framework is the concept of emissions reduction potential (ERP) analysis established by Prime Coalition and supported by CRANE, a free, web-based tool. ECO seeks to augment and enhance CRANE for easy interpretation by venture capital investment managers.
ECO not only generates transparent, forward-looking emissions analysis for a wide array of interested parties, but also helps formulate internally consistent impact goals at the portfolio and company levels. This year, Eclipse strengthened the ECO Framework in multiple ways:
• More systematic analysis at each step of the process, in addition to discussions and feedback from portfolio company subject matter experts and executive leadership.
• Greater data quality and depth supporting the research, including new and updated data from primary and secondary sources.
In short, the 2023 ECO Report builds on a strong foundation and provides even more granular insights. We believe it is a useful and straightforward method of emissions forecasting that will continue to help Eclipse and other asset managers evaluate their portfolios and opportunities in a rapidly decarbonizing economy. Readers may find a template to use for their own analysis here.