OTTAWA — When Sustainable Development Technology Canada (SDTC) held its first Cleantech Leadership Summit in April 2016, ESG investing and the notion of climate-tech unicorns had yet to enter the popular imagination. “The theme of that summit was, ‘Can you name a Canadian cleantech success story?’” said CEO Leah Lawrence. “The answer was, ‘No.’” So the agency set out to find some.

At the latest edition of the summit in Ottawa Wednesday, Innovation Minister François-Philippe Champagne will unveil SDTC’s inaugural cohort of “Sustainability Changemakers.” The list spotlights the most promising of the agency’s portfolio companies. It includes 10 firms from across the country with expertise ranging from sequestering carbon dioxide in building materials to digitizing fruit farms. It also represents a new approach to how SDTC—which the federal government created more than two decades ago to fund clean technology companies—is measuring its impact.

While Canadian cleantech startups often feature in global rankings of companies to watch, those lists are often based on how much money they’ve raised, or subjective measures of their potential impact. SDTC is recognizing these 10 companies for their financial metrics. 

“Government programs are set up to measure projects that are related to R&D,” Lawrence said. “Often, we don’t ask companies how much revenue they have [or] what their growth looks like.” 

But as SDTC has put more money into scale-ups—since the Liberals came to power in 2015, federal innovation funding has prioritized promising growth-stage companies—the agency has found it increasingly important to measure its portfolio companies’ financial and environmental impacts.

It took years to collect and analyze the data. SDTC identified which of its portfolio companies had more than $10 million in annual revenue and compound sales growth of at least 20 per cent over three years, then screened for growth in their employee count, the environmental benefits of their products and their international presence. The companies it will recognize Wednesday are “making change on the ground in terms of real emission reductions and economic growth,” Lawrence said.

Halifax-headquartered CarbonCure might be the best-known name on the list. Concrete plants in Canada and abroad are using its technology to inject carbon dioxide into their product, strengthening it and reducing its environmental impact. That concrete is being poured on projects like the new headquarters for Amazon and Microsoft-owned LinkedIn. Both tech giants are also investors in CarbonCure, along with Breakthrough Energy Ventures, founded by Bill Gates and backed by Jeff Bezos. The firm, which declined to disclose how much capital it has taken on, will launch its next fundraising round later this year.

There’s “a regular drumbeat of, ‘We want lower-carbon building materials,’” said Robert Niven, CEO of CarbonCure. The company uses a software-as-a-service business model, and has sold about 580 systems so far. CarbonCure still manufactures and assembles its hardware in Nova Scotia, but hires some sales, marketing and service staff locally in new markets it enters.

But while executives at scale-ups on SDTC’s list say Canada has been a supportive place to build their businesses, it hasn’t necessarily been a good market to sell their products.

“There’s a lot of talent,” said Joshua Zoshi, co-founder and COO of Richmond, B.C.-based Saltworks. The firm’s staff of just under 100 develops technology to clean up industrial wastewater. He cited the province’s “lineage of cleantech,” including companies like fuel-cell manufacturer Ballard Power Systems. It’s a “competitive advantage right now, finding really well-trained people with conviction about what you’re doing,” said Niven, noting that the Canadian labour force “can be really good value.” CarbonCure has about 160 staff, up from 15 in early 2015, with about 125 currently in its home country. Both executives also said government funding and support programs like SDTC and the National Research Council’s Industrial Research Assistance Program have helped their firms. 

However, the bulk of their buyers are across the border. “Canadian customers [are] generally more risk-averse” and less willing to try new technology, said Zoshi. By contrast, several U.S. jurisdictions have stricter environmental regulations on wastewater that have driven adoption of Saltworks’s products. In the longer term, the firm is considering expanding into European and Asian markets. 

Niven said a forthcoming federal low-carbon concrete strategy could encourage the use of technologies like CarbonCure’s in Canada and inspire policy change in other countries. “Canada and even the U.S. are just tiny little markets” for concrete, he noted. CarbonCure is looking to expand into African and Southeast Asian countries where demand will be higher. “It’s where the population growth is greatest, and where [they] have not yet built out their infrastructure.” The firm’s technology is used by concrete producers in Bolivia, Chile and Singapore. It also shares with clients revenue it earns from selling carbon credits to firms like Shopify. Tobi Lütke, the Ottawa-headquartered commerce company’s CEO, is an investor in CarbonCure via his family foundation.

SDTC looked for firms that are growing sales overseas, but maintaining a substantially domestic workforce, said Rachael Moir, the agency’s manager of portfolio insights. Canadian companies “can’t usually survive on the domestic market alone,” said Lawrence. “We need them to scale and export.” 

But she’s concerned that Canadian cleantech firms must still look abroad for investment rounds of $20 million or more. Companies “start to get pulled towards the United States” and other countries where their financiers are located. For example, in June 2021, Burnaby, B.C.-based General Fusion—another SDTC portfolio firm—announced it would build its pilot plant in the U.K.; in November, it opened a U.S. office. 

(Niven disputes the idea of a funding shortfall, noting that CarbonCure has raised capital from investors around the world via Zoom during the pandemic. Canadian cleantech companies raised $706 million in VC funding last year, up from $133 million in 2015, according to data from the Canadian Venture Capital & Private Equity Association.)

Canada’s climate plan leans heavily on cleantech adoption and innovation to help get the country to its net-zero goals and provide employment through a green transition. It won’t be a quick fix. SDTC’s analysis shows firms take 13 years to hit the $10-million revenue mark, said Moir. Lawrence noted that data-enabled and energy-efficiency cleantech firms are likely to produce the most significant environmental benefits through 2030, with more capital-intensive technologies like biofuels or geothermal power taking longer. CarbonCure’s goal is to reduce or remove 500 million metric tons of carbon dioxide from the atmosphere by 2030; a live ticker on its site showed it was up to just over 164,000 by mid-May.

There’s no financial award attached to being named a “changemaker.” Lawrence hopes the list will attract private-sector investor interest to Canadian cleantech, and show that companies are scaling and driving real climate progress. “We will only be successful if we come [to] a day when SDTC isn’t needed,” she said. “This has to become normal innovation, not special cleantech innovation.”

Correction: This story has been updated to reflect the number of systems that CarbonCure has sold, not installed.