The Trellis Impact climate tech startup of the year is Dexmat, which produces a conductive nanomaterial that can be spun into fibers, films and wires for aerospace applications, EVs and energy storage. The product, Galvorn — which is derived from carbon nanotubes that have the potential to store carbon —is ultra-strong, lightweight and exceptionally flexible. It could potentially replace steel, aluminum and copper.

The Houston company won a live audience vote at Trellis Impact on Oct. 29 in San Jose, California, after five companies made two-and-a-half-minute pitches to investors and corporate leaders.

The early-stage companies among the Trellis 25 Climate Tech Startups to Watch tackle emissions from every angle: energy, carbon, industry, nature and transport. Moreover, they represent a new generation of entrepreneurs that focuses not simply on cutting emissions, but on rebuilding the systems that power the global economy. It is a generation, though, that is currently facing a drop in climate tech funding and challenging policy shifts.

Dexmat is backed by Shell Ventures, the U.S. Department of Energy and other investors in advanced materials for decarbonization. Galvorn emerged from research in the lab of Co-founder and Chief Science Advisor Matteo Pasquali, a professor at Rice University, that was conducted in collaboration with Nobel laureate Richard Smalley. Dexmat Co-founder and CTO Dmitri Tsentalovich, who holds a chemical engineering PhD from Rice, has worked for 15 years on carbon nanotube technology.

“Dexmat was able to show the audience how the problem they are solving affects everyone in the room, and the potential for climate impact at scale,” said Alex Behar, a partner at Buoyant Ventures in Chicago. “Copper is fundamental to upgrading the grid to support the energy transition and increased demand for energy from data centers, but it is resource-intensive to produce. Dexmat avoids these challenges by using alternative materials that can deliver similar or better performance.”

The finalists

Before choosing Dexmat, the finalist in the Industry category, the Trellis Impact audience also heard pitches from four other category finalists:

Energy: Ammobia is reinventing ammonia production, delivering a low-pressure, lower-carbon process that uses renewable hydrogen and air to decarbonize feedstocks for fertilizer and fuel. Founders: Karen Baert and Tristan Gilbert; San Francisco

Carbon: Planet Savers is developing modular, low-cost direct air capture systems to remove gigatons of carbon dioxide from the atmosphere. Founders: Kei Ikegami and Kenta Iyoki; Tokyo

Nature: Airbuild uses microalgae and pyrolysis to transform polluted water and air streams into clean water, biochar and long-term carbon storage. Founders: Richard Mariita, David Gory Jr. and John William Bucur; San Diego

Transport: Photon Marine designs high-power electric outboard motors and fleet management software to electrify commercial vessels and phase out fossil fuels in marine transport. Founder: Marcelino Alvarez; Portland

Choosing the contenders

Trellis winnowed and published pitch videos of 25 finalists from a pool of 109 applicants from 13 nations. The applicants were judged on: solution, business model, customer need and traction, as well as team and pitch presentation.

Collectively, the applicants have attracted more than $750 million in funding. Each was required to have at least one full-time worker and seed or Series A funding.

“It was impressive how much commercial progress each finalist had achieved in a short time, with minimal resources,” Behar said. “They are all engaging partners, which is a smart way to grow faster with less capital.”

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The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

You’ve probably heard of the rebound effect — the phenomenon where savings from increased efficiency (such as lower energy bills) are then spent on other goods that ultimately reduce the expected environmental benefit of the original efficiency efforts.

In your own life, though, you’ve probably seen that it doesn’t have to work this way. Maybe you’ve set aside the money saved from lowering your energy bills by upgrading to smart thermostats or other sustainable home projects, such as installing more efficient appliances. These savings can function as capital for other improvements, and, in turn, snowball into more savings. 

Sustainable packaging is approaching a similar opportunity for savings. Right now, seven states are about to mandate packaging fees through extended producer responsibility (EPR) programs. Under EPR programs, materials — and their fees — aren’t created equal. These programs use a technique called eco-modulation to essentially grade materials on a curve: the lower the environmental impact, the lower the fee for producers. In practice, this means flexible plastic, for example, often has higher fees than more easily recycled materials.  

As these programs launch in these states and potentially advance to others, companies can unlock a new opportunity to save on fees, and then reinvest the savings back into more sustainable packaging options. Call it “improvement capital” for lower-carbon materials, more collection programs and smarter sortation technology.  

Potential savings for lower-impact materials 

We find the first steps of improvement capital in Oregon and Colorado, the first to publish the fees that packaging producers will be charged for a wide range of packaging materials such as glass, aluminum, rigid plastic, flexible plastic and compostable packaging.  

To look at broad trends, it helps to combine the wide range of materials covered under these laws into a few select categories and to average the fees per category. For example, the fees for rigid plastic vary from 17 cents/lb for PET plastic (used in packaging such as water bottles) in Oregon to 171 cents/lb for “rigid other” in Colorado. 

Looking at the average fees in Oregon and Colorado, we see that moving from rigid plastic to paper is a roughly 81 percent fee savings. Moving from rigid plastic to metal or glass gives companies savings in the 60 percent range, and moving from flexible plastic into a paper package with a bioplastic coating yields approximately 78 percent in savings. The takeaway? Companies could see substantial savings from switching to different materials — and these switches are reinforced by consumer perceptions about which materials are more sustainable. 

What might these savings look like for a typical company? To answer that question, imagine this:

• A consumer packaged goods brand is planning a switch from 34,000 tons of flexible plastic packaging to a paper option
• The brand does about 19 percent of their U.S. sales in EPR states with fees
• This new packaging option will require a 16 percent increase in material usage 

In this scenario, the savings are significant: $11 million in fees saved across the seven EPR states. Of course, these savings will depend on a multitude of factors, and the cost of switching to a new material needs to be factored in. But even when an alternative such as paper is more expensive, innovation can lead to savings. More back-of-the-envelope calculations show that in this case, a 34 percent increase in material costs would still lead to over $600,000 in net savings. These are just sample calculations, but the take-home message is clear. Strategically switching to lower-fee materials can add up to meaningful savings. 

Redeploying savings 

Right now, EPR fees are likely going to come out of one part of an organization’s budget and investments in sustainability, new technology, and R&D are coming from another. But what if there could be some feedback mechanisms between the two? 

It will take collaboration and shared goals between finance, product and sustainability teams, but once the connection between fees and innovation has been established, you’ll have even more powerful incentives to build sustainability into your budget. 

This is when the exciting sustainability work begins. The savings from avoided fees could be used as a way to cover additional R&D and fund more testing into how well packages are being reprocessed at material recovery facilities, paper mills and composting facilities. The savings could also be redirected back into consumer education campaigns, especially around topics such as store drop-off where we know consumers are confused and need more information.

Fees can be a driver of innovation

Right now, the packaging industry has the opportunity to see fees as possible new investment capital. Companies can save money by switching to incentivized, lower-fee materials and packaging formats. Then, they can reinvest these savings back into the sustainable materials that once seemed out of reach. 

Your company can get started by: 

• Cross reference the materials in your packaging portfolio with the base fees and dues posted for Colorado and Oregon, two states that have posted early fee projections   
• Calculate the largest liabilities in your current portfolio, then run back-of-the-envelope calculations on the potential benefits of switching into lower-fee material categories 
• Find out how you can make sustainable switches or work with packaging consultancies to support sustainable transformations

Just like the savings from lower energy bills can be directed towards other sustainable home projects, the savings in EPR fees can be funneled towards strategic innovations in materials and recycling infrastructure. 

With EPR laws in seven states, the packaging industry has the opportunity to reverse the rebound effect by turning fees into momentum needed to power sustainable packaging’s innovation flywheel.

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Creating a pair of jeans requires as much water as an average U.S. household consumes in several days, according to Levi Strauss. Multiply that by $6.4 billion in annual sales, and the brand guzzles 66 billion gallons of freshwater a year.

Continuing its work to reduce the environmental impact of the denim industry, Levi’s latest strategy expands water stewardship from its plants to the communities in which they operate. A 35-page report, released Oct. 22, spells out this attempt to make a “positive impact” on water resources across 30 supplier nations.

One key target is a 15 percent decrease in freshwater use across the Levi’s supply chain compared with 2022 levels. This comes on the heels of the company admitting to missing its goal to halve consumption in parts of the world with water vulnerabilities by 2025 over 2018 levels.

“Our aim is to build on our long-held commitment to water stewardship to make a positive impact on water quality, quantity and access while protecting and restoring nature,” Jennifer DuBuisson, senior director of global sustainability at Levi Strauss, told Trellis via email.

Levi’s latest strategy also aims to:

• Recycle or reuse 40 percent of water across manufacturing and mills, open-sourcing methods. This will account for two-thirds of the planned water reduction, with the final third resulting from efficiency measures.
• Ensure that dyeing and other operations that create wastewater discharges comply with the Zero Discharge of Hazardous Chemicals Foundation.
• Better understand “hot spots” for water use and pollution in raw materials and textile spinning plants.

The company took a hard look earlier this year at the opposite ends of its supply chain — cotton field and factory floor — which are responsible for the biggest impacts. Using the Science-Based Targets for Nature framework, Levi’s found that 70 percent of its effects on freshwater systems come from growing cotton in stressed regions. Tier 1 manufacturing, including pollution from laundering, contributes between 16 to 38 percent of its impacts to freshwater.

The company also appointed Chris Callieri, its first supply chain officer to report to the CEO, in August, and launched a program to help suppliers in India adopt renewables a month later.

Its previous year’s progress included wet finishing suppliers in high-risk regions shrinking freshwater usage by 27 percent, a savings of about 1.8 billion gallons over six years. The amount of reused and recycled water among suppliers rose by 85 percent in that same period.

Water resilience

Moving forward, the company’s 2030 strategy includes the following water resilience efforts, which lack public numeric targets:

• Creating projects to restore watersheds in high-stress areas, including in Pakistan and Bangladesh.
• Bringing water, sanitation and hygiene projects to more people in developing regions.

Where it stands

The denim pioneer has long been a leader of water responsibility efforts in an industry in which only one-third of brands are currently working on water stewardship targets, and just 17 percent track progress, according to The Global Fashion Agenda Monitor’s report for 2024.

Levi’s effort to create “waterless” jeans, which began in 2007, led to a Water>Less strategy that is now the open-source norm for the industry. Its techniques reduce water usage by 96 percent, according to the company.

Similarly, Levi’s is recognized as the first apparel brand to set global wastewater discharge standards, which it did in the 1990s. And 20 years ago, it joined the launch of the Better Cotton Initiative to reduce water usage in the growth of the crop.

Today, some 2.2 billion people globally continue to lack access to clean water, according to WaterAid America, which engages with Levi’s on water sanitation projects in India. In a press statement, WaterAid America’s CEO Kelly Parsons praised the partnership as addressing “one of the most challenging, but solvable, problems of this generation.”

“Their 2030 water strategy embodies the ambition needed for a water-resilient future,” said Jason Morrison, head of the CEO Water Mandate and president of the Pacific Institute.

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PepsiCo Chief Sustainability Officer Jim Andrew was running the $92 billion food and beverage company’s SodaStream business when CEO Ramon Laguarta tapped him to lead sustainability strategy in August 2020.

Laguarta’s marching orders for the experienced business development strategist: Define the processes for embedding environmental metrics more deeply into the operations of PepsiCo’s operating units. Andrew’s connections in the field and familiarity with managing profit and loss statements are key strengths. 

“Things don’t happen at headquarters in sustainability, they happen in our businesses,” said Andrew during the latest episode of Climate Pioneers, our series featuring innovators and leaders shaping the corporate climate movement. “Every day, I’m talking to my peers on the executive committee, in particular the CEOs of the businesses.”

Sustainability as team sport

Andrew, who reports to CEO Laguarta, speaks with many of his C-suite colleagues several times weekly and checks in with others at least once every two to three weeks. 

“At PepsiCo, we need everybody — and certainly have everybody — as part of the team,” he said. “But it’s also a full body contact team sport, so you’ve got to be out there. You’ve got to be talking to people. You’ve got to be having these conversations.”  

Andrew believes his experience in managing huge corporate budgets — at PepsiCo and in his previous role as head of strategy and innovation at health tech company Phillips — taught him how to argue more effectively for investments in energy or operational efficiency technologies in a way he’s most likely to win support. 

He advocated strongly for a process that embedded climate risk factors and other environmental considerations into PepsiCo’s financial governance, including how the company evaluates mergers and acquisitions.

Sustainability leaders can’t ask or expect a division head to shut down a factory for a major retrofit at a time when it would impact revenue, Andrew noted. Because of his business background, Andrew knows when it might make sense to add those projects, such as when operations are paused for other business reasons.

“I think having run businesses actually allows me to be a better partner to our businesses when it comes to really making sustainability happen,” he said.

How to change ‘No’ to ‘Yes’

Reflecting on PepsiCo’s progress over the past five years, Andrew acknowledged that he underestimated the complexity involved in trying to change established systems — both inside the company and among its business partners. That experience shaped how he responds to resistance to the sustainability team’s agenda or proposals.

Turning “no” into “yes” requires digging below the surface to uncover the root cause of an objection and understanding whether there’s an opportunity to solve for that need as well as the original request, Andrew said. 

“If you can pull apart what seems to be a disagreement, you’ll find there’s two questions or two different objectives,” he said. “It’s honestly a lot easier to solve for two different objectives than to solve for just two fundamentally different points of view on one objective.”   

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Fossil-fuel companies and other heavy emitters are among the backers of a new carbon accounting initiative that looks to be on a collision course with current standards.

Carbon Measures —which launched last week with ExxonMobil, BASF, Nucor, Mitsubishi Heavy Industries and Blackrock’s Global Infrastructure Partners as members — will advocate for global emissions strategies focused on lowering emissions at a product level. The approach runs counter to current de facto standards from the Greenhouse Gas Protocol and Science Based Targets initiative (SBTi), which require companies to measure and reduce emissions across value chains.

The approach is based on the success of financial accounting, said Carbon Measures CEO Amy Brachio. 

“Financial accounting is what helped us to get past the Great Depression, when we had real issues with understanding the finances of organizations and we needed to get to a place where there were commonly and generally accepted rules,” she told Trellis. “And so we need to get to that same place where you’re associating the carbon with a product and you’re able to follow it through the system.”

Ledger-based 

The project takes inspiration from E-liabilities, a carbon accounting system developed by Karthik Ramanna, a University of Oxford professor who was announced this week as an advisor to Carbon Measures, and Harvard’s Robert Kaplan. 

E-liabilities eschews Scope 3 measurements and requires companies to measure direct emissions and allocate a portion of those emissions to customers. It’s won support from academics and been piloted in multiple industries. It’s also been criticized by the creators of the current carbon reporting system as impractical and likely to disincentivize collaboration between value-chain partners. 

For the Carbon Measures backers, such “ledger” systems — named for the record of carbon emissions each company would maintain — are attractive because they may boost competition for low-carbon products. Companies already calculate the emissions associated with a ton of steel, semiconductor chip and countless other products. But these numbers often rely on estimates of supply-chain emissions that are based on industry averages, which lessens the motivation for companies to source lower-carbon alternatives. 

“Four years ago, Bob Kaplan and I articulated a method for how companies can win by competitively differentiating their products based on their emissions efficiencies,” said Ramanna. “As more businesses show interest in this model, now is the time to drive into practice the systems change that will align market capitalism with decarbonization innovations.”

Once a ledger-based carbon accounting system is established, said Brachio, governments could use it as the basis for climate policies focused on reducing the emissions associated with specific products, known as carbon intensities. 

“This move from voluntary to mandatory is what drives demand in the system and levels the playing field so that companies have to compete,” she argued. “As long as we’re operating on a voluntary basis, you don’t create the market conditions that force everyone to move.”

Such an approach would likely be more preferable to heavy emitters than existing company-level targets. Companies in steel and other hard-to-abate industries have long said they cannot make decarbonization investments without stronger demand signals and clearer government support for low-carbon products.

‘Delay tactics’

Carbon Measures’ initial list of members includes companies not associated with climate action, most notably ExxonMobil: The world’s largest investor-owned emitter is responsible for 1.3 percent of global emissions, has a history of funding disinformation about the climate crisis and is known for lobbying against emissions-reduction legislation. Critics add that ledger systems benefit heavy emitters by transferring emissions to customers.

“It’s easy to see why an oil major, a chemical giant, and fossil-heavy financiers want a framework that puts their Scope 3 emissions — the largest scope for these companies — on someone else’s carbon balance sheets,” wrote Lisa Sachs, director of the Columbia Center on Sustainable Investment, on LinkedIn. “I’m not a fan of GHG footprinting, but I’m *really* not a fan of misrepresentation and delay tactics.”

Brachio welcomes the skepticism. She noted that the initial list of 19 members — which includes her former employer EY, as well as Bayer and the utility NextEra Energy — is likely to grow quickly in coming months to encompass companies in other sectors. “I would ask everyone to just keep an eye on us and judge us by our actions,” she said.

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