For the past 18 months (when not changing my son’s nappies in the fresh air of mid-Wales), I’ve been non-executive Chair of solar trains pioneer Riding Sunbeams. Last week we hit a huge milestone in announcing our first commercial investment, from Thrive Renewables and Friends Provident Foundation.
Having spent the previous decade in very much an executive role, chairing a board has been a fascinating challenge. It has also frankly been refreshing not doing much of the day-to-day work (huge respect to the core team who’ve got it this far).
When I joined the board in spring 2019, Riding Sunbeams was a newly-created company limited by guarantee. This is a typical non-profit structure and is consistent with the aim of local communities owning the solar farms that we intend to build and connect to the railways. The challenge was that without being able to issue shares, there was no practical way for the company to raise investment.
Whilst individual solar farms are often set up as cooperatives (such as Southill Solar in Oxfordshire), Riding Sunbeams is pioneering a new model (which comes with a level of risk) and therefore requires startup finance for the core organisation before it can facilitate the creation of individual projects.
The company had successfully applied for a number of grants (mostly Department for Transport/Innovate UK), but the projects were focused on demonstrating technical innovation (i.e. how to literally connect the solar farms to the railways), and did not provide the core organisation funding needed to roll-out the technology and create a pipeline of installation sites.
We therefore decided to create a new limited by shares company (“Riding Sunbeams Apollo”). This decision wasn’t taken lightly given the (well-deserved) reputation of shareholders prioritising profit to the detriment of wider society. There was concern that the community vision underpinning Riding Sunbeams would be lost to the commercial interests of incoming investors, despite the two founding charities (Possible and Community Energy South) retaining a majority stake.
Thankfully we had tools at our disposal to lock in the community benefit. Purposely is a simple tool that helps social enterprises modify their Articles of Association (a public document that can be accessed via Companies House) to enshrine a clear purpose.
In our case, the “Objects” of Riding Sunbeams Apollo are to:
(a) carry out such business and related activities as will:Extract from clause 3 of Riding Sunbeams Apollo Ltd Articles of Association
(i) decarbonise the transport system by developing renewable energy assets and using the electricity generated by such assets to power trains and other forms of transport; and (ii) enable community ownership of renewable energy assets, where possible, to operate for community benefit as part of a just transition to a decarbonised economy; and
(b) promote the success of the Company:
(i) for the benefit of its members as a whole; and (ii) through its business and operations, in order to have a material positive impact on society and the environment, taken as a whole.
Despite the legalese, the clear intent (particularly around a “just transition to a decarbonised economy”) is fairly unique for a company receiving commercial investment and seeking to quickly scale a technology innovation.
Of course it wouldn’t have been possible to commit to such a clear statement without the cooperation of the incoming investors.
Having funded Loco2 via angel investment, I’d not had previous experience of institutional investment (unless you count when we sold the company, which was certainly a formative legal process). So it was fascinating to participate (albeit at arm’s length) in the process led by Thrive (the renewables arm of Triodos Bank) and their lawyers.
It’s clear that there’s a huge amount of goodwill from both Thrive and Friends Provident Foundation (who interestingly are themselves a charity) to scale the venture quickly and effectively in line with the values that we all share. This investor/company relationship sits in stark contrast to the many horror stories of venture capital that have put me off the institutional route in the past.
Riding Sunbeams now has the opportunity to prove that it’s possible to achieve scale without compromising on values. I’m proud to have played a small part in getting it to this point.
*if any journalists reading this want to steal my excellent headline, beam my guest