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ESG has moved from sidelines to strategy — here's what that means for Houston companies

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Amy Chronis of Deloitte shares why now's the time to invest in ESG — and the impact this movement is having on Houston. Photo via Getty Images

The Houston business community has embraced environmental, social, and governance investments, with a majority of deals in the past two years valued at $50 million or more, per PitchBook Data, Inc. In 2022, Houston companies invested just more than $1.25 billion in clean technology, climate technology, and impact investing. Nationwide, ESG investments totaled north of $15 billion across 330 deals, according to Deloitte’s latest Road to Next report, released late in 2022.

What might this mean for Houston companies? In our view, it demonstrates that ESG appears to be moving from sideline to strategy and in the process, providing potential wins across multiple fronts for companies. As companies prepare for upcoming SEC regulations around reporting greenhouse gas emissions, much of the work they’re doing is not simply “because we have to.”

Increasingly, businesses are realizing that prioritizing ESG can be good for the bottom line, for the planet and for employees. As they prioritize ESG, they’re involving teams, accepting accountability and often reaping the benefits of ESG reporting, according to Deloitte’s 2022 Sustainability Action Report. The report surveyed 300 legal, accounting, finance, and sustainability leaders from companies with annual revenue of $500 million or more. Here are some ways that ESG activity is becoming part and parcel of corporate life.

Teamwork. Fifty-seven percent of executives surveyed note that their companies have assembled cross-functional ESG teams, and another 42 percent say they plan to. That’s a considerable increase from 2021, when a similar study showed that only 21 percent of respondents had such teams in place.

Accountability. A large majority (89 percent) of executives polled have enhanced internal goal setting and accountability mechanisms to promote readiness. These executives realize that their companies can have both an impact and dependence on the environment and society, and that ESG reporting measures may not just be reporting requirements, or a box to check, but a meaningful way to align strategy with commitments to sustainability and the social good.

Proactive moves. Nearly all (96 percent) of executives surveyed plan to seek external assurance for the next reporting cycle. Among executives in the oil and gas sector, 67 percent say they will continue to obtain assurance and 31 percent will seek it for the first time. Executives are also proactively investing in technology and tools to help them meet reporting needs, with around half saying they are very likely to invest in these tools in the next 12 months. These planned investments indicate that leaders appear confident in the business benefits of ESG.

Reaping the benefits. ESG commitments, it turns out, can be good for business. They are yielding benefits, including attracting and retaining talent, increasing efficiencies and ROI, boosting trust among stakeholders, and enhancing brand reputation. Another, perhaps surprising benefit of enhanced reporting is that it can enable some companies to premium-price their products, a benefit acknowledged by nearly half (49 percent) of respondents.

Facing challenges. Businesses have challenges, especially when something new comes along. While many executives (61 percent and 76 percent, respectively) are prepared to disclose Scope 1 and Scope 2 greenhouse gas emissions, Scope 3 remains a challenge because it involves data from external vendors. As such, only 37 percent of executives surveyed are prepared to disclose Scope 3 details, the top challenges cited being lack of confidence in the data supplied by external vendors as well as lack of data availability.

In just over a year, we’ve seen ESG reporting morph into a powerful tool, one that can inform business strategy. We expect that in the coming years, leaders may see even more benefits from ESG reporting and integrate it even more fully into the way businesses are managed.

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Amy Chronis is the Houston managing partner and vice chair of energy and chemicals at Deloitte. Geoff Tuff is the sustainability leader for ER&I practice at Deloitte. This article originally ran on InnovationMap.

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Houston-based ‘grid in a box’ provider Branch Energy raises $33M

fresh funding

Houston-based startup Branch Energy, which offers a self-contained “grid in a box,” has collected $33 million in a Series B round.

Piva Capital and Clean Energy Ventures led the round, according to a news release. Active Impact Investments, Whitecap Venture Partners, Prelude Ventures, Zero Infinity Partners and Inovia Capital also contributed to the round.

In 2024, Branch raised $10.8 million in an oversubscribed Series A round.

Branch’s business model

Branch, which launched in 2021, says its proprietary Arc “grid in a box” contains everything needed to store and supply electricity. A container about the size of a parking space holds an industrial-grade battery, grid connection equipment, cooling capabilities, autonomous controls and cloud-based management software.

The startup installs Arc systems at warehouses, hotels, factories, stores and other commercial properties. Each system arrives on a flatbed truck and can be online within two days, Branch says.

Under Branch’s business model, a property owner avoids upfront payment for an Arc system.

Aside from equipping a host business with an Arc system, Branch serves as the business’ power provider. The startup says it guarantees savings on the host’s energy bills and delivers backup power during outages.

Branch generates revenue by sending the battery’s stored power to the grid or to customers like hyperscale data centers. It also benefits by shifting energy from low-cost periods at night to high-cost periods during daily power peaks.

The startup handles permitting, installation, insurance and operations for each Arc system. The host provides a parking-lot-sized plot of land for the system.

Alex Ince-Cushman, co-founder and CEO of Branch, says the startup’s “grid in a box” can quickly meet the substantial power requirements of hyperscale data centers.

“We can do it on the timeline of a delivery, not a construction project. Our customers don’t lift a finger, don’t pay a dime and get guaranteed savings,” Ince-Cushman said in the release.

Entering the Illinois market

Branch already operates in Texas and is entering the Illinois market.

PJM, which operates Illinois’ power grid, recently paved the way for major energy users like data centers to connect to the grid sooner when they rely on their own electricity generation. PJM’s territory covers roughly 1.2 million commercial buildings and represents 20 percent of U.S. power demand, according to Branch.

“Grids around the country need the distributed capacity that [the Arc] system can supply, especially in states with fast-growing power demand like Texas and Illinois,” Lee Larson, principal at Piva Capital added in the release.

To keep up with that demand, Branch plans to build tens of thousands of Arc systems in the U.S.

A multibillion-dollar company in the making?

Daniel Goldman, co-founder and managing partner of Clean Energy Ventures, said Branch holds the potential to become a multibillion-dollar competitor in the emerging market for distributed power.

“With utility-scale generation and storage challenged by interconnect and siting constraints, behind-the-meter commercial, and industrial storage sites have become the ultimate market opportunity with ease of interconnect, ability to combine distributed AI data centers, and identifiable savings in rapidly growing markets,” Goldman said.

Rice Alliance, Greentown name winners of Houston Energy and Climate Week pitch competitions

winner winners

Approximately 100 startups from around the world pitched their breakthrough technologies and businesses during Houston Energy and Climate Week, with a select few taking home top prizes and bragging rights.

Each year, investors at the Rice Alliance Energy Technology Venture Forum name the 10 most-promising startups. Greentown's Climatetech Summit also culminates in a pitch event, where member companies can earn cash prizes.

Here's who won at two of the week's anchor events and competitions.

Rice Alliance Energy Tech Venture Forum

The 23nd annual event was held Thursday, Sept. 17, at Rice University’s Jones Graduate School of Business. The most-promising companies were selected by industry experts and participating investors attending the event.

The 10 most-promising companies included:

  • Australia-based Aquafortus, which has developed a non-thermal liquid to liquid desalination technology for resource recovery from wastewater brine
  • Houston-based Focis AI, which converts industrial laser scans into a queryable digital twin of refineries and plants
  • Houston-based ironlattice, a semiconductor manufacturing company
  • Houston-based Licube, which has developed technology to produce ultra-high-purity lithium compounds for the fusion energy, pharmaceuticals, semiconductors and high-performance solid-state battery sectors
  • Houston-based Mars Materials, a clean chemical manufacturing business that is working to convert captured carbon into resources, such as carbon fiber and wastewater treatment chemicals
  • Dallas-based MCatalysis, which has developed a suite of proprietary microwave-driven catalysts to produce high-quality, ready-to-use fuels compatible with existing infrastructure
  • Oslo, Norway-based OTee, an automation machinery manufacturer
  • Houston-based Pike Robotics, which deploys its Wall-Eye robot to inspect hazardous tanks without taking assets offline
  • New Mexico-based Spiritus, a direct-air-capture (DAC) technology company
  • San Francisco-based UptimeAI Inc., which develops AI reasoning agents for industrial operations teams

Stellai won the People's Choice Award. The Norwegian company develops AI products for the waste management industry.

The energy technology ventures selected to participate in the forum were named earlier this year. See the full list here, and read about last year's winners here.

Greentown Lab's Climatetech Summit

The annual summit was held Wednesday, Sept. 16, featured a number of Houston startups in its pitch competition and lighting pitch round. Judges included Dave Dreessen,, Jon Greene, Naval Preet Singh, Philip Llewellyn, Erin Madro, Justin Yeung, Jay Kim, Rawand Rasheed and Moji Karimi.

Pitch winners included:

  • First place: Elementium Materials' CEO Matthew Dawson, winning a $10,000 cash prize sponsored by TotalEnergies plus another $10,000 in legal services sponsored by Foley Hoag. The company develops advanced battery electrolytes. It is a Greentown Boston member; though Dawson is based in Houston.
  • Second place: Houston-based Solidec CEO and co-founder Ryan DuChanois, winning $5,000 in legal services sponsored by Foley Hoag. The company electrolyzes air, water and electricity into onsite hydrogen peroxide.

Lightening pitch winners included:

  • First place: Montana-based MagDrive Technologies, winning a $1,000 cash prize sponsored by Energy Transition Ventures. The company develops magnetically actuated, zero-emission valve systems that eliminate fugitive emissions and improve reliability.
  • Second place: Houston-based HEXASpec, winning a $500 cash prize sponsored by Foley Hoag. The company has created a new material to improve heat management for the semiconductor industry.

Read Greentown's recap of the summit here.

Houston Energy and Climate Week announced that the 2027 event will move to the spring, held April 4-10.

Kanin Energy raises up to $100M for waste-heat-to-power projects

fresh funding

Kanin Energy, a member of the Greentown Labs climatech and energy incubator in Houston, recently raised as much as $100 million in capital to grow its energy-as-a-service platform.

S2G Investments led a round of up to $50 million, and the Canada Growth Fund chipped in an additional $50 million. The money will primarily support Kanin’s development and operation of waste-heat-to-power projects.

Kanin—founded in 2020 in Calgary, Alberta, Canada—builds and runs onsite power assets for large-scale energy users. The startup says its energy-as-a-service offering lowers power costs, boosts power reliability and decreases emissions.

The company operates a waste-heat-to-power project at Ohio’s University of Dayton. The project supplies zero-emission electricity.

Kanin has a pipeline of projects totaling about 50 megawatts of capacity. This includes a waste-heat-to-power plant at the Phillips 66 Mewbourn gas-processing plant near Greeley, Colorado.

“Kanin was built on the belief that industrial facilities already hold the solution to their own energy challenges, they just need the right partner to execute,” Janice Tran, CEO of Kanin, who is based in Houston, said in a release. “At a time when power costs continue to rise, [our] solutions are an important tool for our industrial customers to manage their costs, operations, and emissions.”

Marisa Sweeney, principal at S2G, says waste heat is a largely underused resource for lowering power costs, alleviating grid congestion and improving power reliability.

The waste-heat-to-power process captures thermal energy from industrial activities and converts it to electricity. This happens without using extra fuel or generating more emissions.

Kanin says up to 58 percent of energy consumed by industrial processes is lost as waste heat. This heat winds up in the atmosphere at thousands of facilities in North America, including oil-and-gas operations, cement plants, and steel mills, the startup says.

Kanin was founded in 2020 in Calgary, Alberta, Canada. It opened offices at Greentown Labs Houston in July 2022.

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