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Entrepreneurs: Meet Circulor, London’s start-up tackling ‘greenwashing’ as a ‘sustainability tech arms race’ gets underway

·4-min read
Co-founders Veera Johnson and Douglas Johnson-Poensgen at their Hammersmith HQ  (Circulor)
Co-founders Veera Johnson and Douglas Johnson-Poensgen at their Hammersmith HQ (Circulor)

COP26 is a time for big pledges, with everyone from governments to banks promising to do their bit for the planet. How will we know these promises are being kept and it’s not all just “greenwashing”?

Enter Hammersmith-headquartered start-up Circulor.

Founded in 2018, the firm uses blockchain technology to help companies trace products through complex supply chains.

Circulor’s software lets clients do things like track CO2 emissions through manufacturing and shipping, monitor if recycling is being carried out responsibly, or make sure the cobalt inside a battery is not the product of child labour. Circulor already does the latter for the batteries in Volvo’s electric vehicles.

The start-up was set up by former consultants and colleagues Douglas Johnson-Poensgen, 52, and Veera Johnson, 56 (the pair aren’t related).

“Five years ago when I was talking to VCs about what we were doing, they were sitting there going ‘is that a thing?’,” CEO Johnson-Poensgen says. “Nobody would now suggest this is not a ‘thing’.”

Companies were not desperate to prove their ESG credentials even two years ago, but they are now -thanks to growing pressure from investors and customers as well as governments.

“Where we are now, the whole climate tech and sustainability tech space is hot,” Johnson-Poensgen says.

“Big polluting industries are trying to demonstrate that they’re making meaningful efforts around ESG performance. Greenwashing is endemic generally, and increasingly institutional lenders are simply withholding capital from the most polluting people.

“Firms need people like us to help them prove they are making changes.”

Johnson-Poensgen started in the military after a degree in engineering. He entered the corporate world via roles at BT and Barclays but “had an entrepreneurial itch” he “needed to scratch”.

Johnson worked in the public sector in economic development before moving into consulting. She had already retired when her old colleague pitched her the idea for Circulor. Johnson put in her money and time because she “wanted to do something that made a difference” to the world she would leave her children and grandchildren.

The start-up was featured at COP26 as one of Europe’s leading climate tech companies. “It feels like we’re on a rocket ship and hanging on for dear life as the company grows exponentially. We are in a business that is suddenly very topical,” Johnson says.

Revenues are “growing rapidly” and the team has grown sixfold in the past year. (More than half of staff are women — still unusual in the start-up world.)

“If we closed our laptops tomorrow our forward order book would be in the range of £60-£70 million in terms of revenue,” says Johnson-Poensgen. “And we’re not going to close them.”

The co-founders self-funded Circulor until last year and have since raised £20 million from backers including The Westly Group and the venture arms of some of Circulor’s clients: Boeing, Volvo Cars, Jaguar Land Rover, TotalEnergies, and BHP. Johnson-Poensgen said: “There’s definitely a sustainability tech arms race going on, so we’re going to raise again early next year.”

The CEO first came across blockchain in 2010 while running BT’s defence and security business, and realised he wanted to find a real-world use for it.

“Supply chain fraud is as old as mankind,” he explains. “Even today making false promises in supply chains is endemic. So the idea you are able to record reliable information at a source, alongside attaching data around carbon footprint or working conditions or water use, and that it cannot be changed as that material undergoes its journey is the real value [of blockchain].”

Circulor is about to launch a programme to assess the social, economic and environmental impact of suppliers’ processing facilities on their local areas. The “real challenge”, Johnson-Poensgen says, is being able to call out when a supplier has entered something incorrect,.

His advice to budding climate tech entrepreneurs? Trust your customer.

“You question yourself, but once you get your first customer going ‘that’s the problem I’m trying to solve’ you have to think ‘if there is one there must be others’. Then you’re on a bit of a roll.”

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