AMDP Final

AMDP Investment Proposal

TO: Clark Hansen, CEO of AMDP

FROM: Jack Williams, Research and Development Analyst

DATE: March 5, 2023 

SUBJECT: Investment Opportunity in Charm Industrial

______________________________________________________________________________

As a part of my role within Research & Development at AMDP, it is my duty to find companies that present investment opportunities. Charm is a carbon removal company that converts plant-based biomass into bio-oil and sequesters it underground, preventing CO2 from returning to the atmosphere. However, AMDP should gather more information to verify Charm’s technological effectiveness, sustainability claims, and financial viability before making an investment.

This memo contains:

  • Summary of AMDP standards

  • Overview of Charm and their sustainable practices

  • Two expert opinions

  • Final recommendation

AMDP Standards

AMDP aims to invest in companies that are pressing our societies' most prevalent issues. This can include promoting environmentally friendly practices, socially responsible businesses, while creating financial opportunities. The four missions are:

Triple Bottom Line

The triple bottom line is a business concept that ensures companies must take into consideration more than just income statements. The framework for this concept can be summarized by the “Three P’s”:

  • People - creating a positive impact on communities (Miller, 2020) 

  • Planet - environmental effects

  • Profit - financial performance for shareholders

Corporate Social Responsibility

Corporate social responsibility (CSR) is a concept built on the principle that a company has a responsibility to the society around it (Stobierski, 2021). Firms that follow these principles act in a way where they are socially responsible to create a positive impact on the world. Companies implement by adopting ethical business practices, supporting social and environmental initiatives, promoting fair labor standards, and engaging with their communities.

Social Enterprise

Social enterprises are businesses, however, they operate a little differently. These businesses seek to further a social or environmental purpose. Like any business, they seek to make profit, however, they want to reinvest some of their profits into this environmental issue (Social Enterprise UK). 

Carbon Footprint

The total amount of greenhouse gases (including carbon dioxide and methane) that are produced by our actions (The Nature Conservatory). Companies track emissions across product life cycles and operations (ClimateTrade). As climate change becomes a more pressing issue, it is imperative that we all work together to reduce carbon emissions. By doing so, we are protecting our environment, reducing CO2 emissions, and minimizing the consumption of natural resources (Badamasi, 2023). 

Overview of Charm Industrial

Background

Charm Industrial was founded in 2018 in San Francisco by developing a scalable method for permanent carbon sequestration. Unlike direct air capture (DAC) technologies, Charm focuses on bio-oil sequestration, converting agricultural waste into a stable carbon-rich liquid and injecting it underground. This method ensures long-term carbon storage while utilizing waste materials that would otherwise release CO2. Charm has been able to gain recognition in the sustainability field by working with clients such as Stripe, Shopify, JP Morgan and Microsoft (LinkedIn). 

Financials

  • Revenue Growth: Charm has secured multimillion-dollar contracts for carbon removal. However, profitability remains uncertain due to ongoing infrastructure investment.

  • Return on Sales (ROS): Negative, as Charm is in its growth phase and reinvesting heavily in operations.

  • Quick Ratio: Estimated at 1.5, indicating sufficient liquid assets to cover short-term liabilities.

  • Funding: Over $100 million in venture capital, demonstrating strong investor confidence.

Company Claims

  • The process is "the most permanent and scalable carbon removal solution available today." 

  • To only use agricultural waste, and abandoned oil rigs to avoid deforestation or additional land use. 

  • Every ton of bio-oil injected into the ground results in approximately one ton of CO2 removed. 

  • Charm claims to have removed over 7,000 tons of CO2

    • Projects a capacity to remove 1 million tons annually by 2030. These claims align with AMDP’s carbon footprint reduction goals but require third-party verification.

Expert Opinions

Opinion 1: University of California, Berkeley professor, Daniel Sanchez, who also runs the Carbon Removal Lab is a principal scientist at the firm Carbon Direct, says, ”What Charm is doing is fairly unconventional in terms of thinking about the role of biomass in carbon removal and storage” (Canary Media). He continues to add how Charm has been able to get out the initial gates very fast compared to other companies, which is why he believes they are leading the race. However, for all the momentum they have, it is still unknown whether bio-oil sequestration can play a meaningful role in addressing climate change. 

Opinion 2: ​Hans-Peter Schmidt, head of the Ithaka Institute, has expressed concerns about Charm Industrial's method of injecting bio-oil underground. He cautions that the process carries environmental risks, stating, "It really depends on how and where you store it. There is a risk of leakage. There is a risk of environmental harm. It's nasty stuff” (The CoolDown). 

Recommendation

Based on the AMDP standards and the analysis of Charm Industrial, I believe that we should proceed with caution before investing. 

While Charm Industrial presents a promising and innovative approach to carbon removal, there are key uncertainties that must be addressed before committing capital:

  • Alignment with AMDP Standards: Charm aligns well with our Triple Bottom Line by addressing climate change (Planet), creating green jobs (People), and attracting strong investment interest (Profit). However, its long-term financial viability and scalability remain uncertain.

  • Technological Effectiveness & Risks: While Charm has garnered early traction and high-profile clients, concerns about the permanence and environmental safety of bio-oil sequestration must be independently verified. The risk of leakage and long-term ecological impact must be fully assessed.

  • Financial Uncertainty: Although Charm has secured major contracts and venture funding, its profitability remains unclear due to heavy reinvestment in infrastructure. A lack of stable revenue streams could pose a risk to investors.

Before investing, I would recommend that a third party verify carbon sequestration effectiveness and environment safety. Additionally, an assessment of financials to ensure long-term outlook potential and risk exposure. 

Ultimately, Charm is a very innovative company in an emerging industry, but further research must be done before investing. I recommend AMDP monitor Charm’s progress while gathering additional data on its technological effectiveness, regulatory compliance, and financial sustainability.

Works Cited

Badamasi, Hamza. “What Is the Carbon Footprint and Why Does It Matter?” Earth.Org, 28 Mar. 2024, earth.org/what-does-carbon-footprint-mean/#:~:text=As%20we%20go%20about%20our,stable%20climate%20for%20future%20generations. 

“Charm Industrial.” LinkedIn, www.linkedin.com/company/charm-industrial/. Accessed 12 Mar. 2025. 

Gallucci, Maria. “Inside Charm Industrial’s Multimillion-Dollar Bid to Remove CO2 With...” Canary Media, 19 June 2023, www.canarymedia.com/articles/carbon-capture/inside-charm-industrials-multimillion-dollar-bid-to-remove-co2-with-plants. 

“How to Calculate the Carbon Footprint of Your Company?” ClimateTrade, 21 Oct. 2021, climatetrade.com/how-to-calculate-the-carbon-footprint-of-your-company/. 

Miller, Kelsey. “The Triple Bottom Line: What It Is & Why It’s Important.” Business Insights Blog, 8 Dec. 2020, online.hbs.edu/blog/post/what-is-the-triple-bottom-line. 

Perera, Shehan. “What Is a Social Enterprise, How Do They Work & What Do They Do?” Social Enterprise UK, 30 May 2022, www.socialenterprise.org.uk/all-about-social-enterprise/. 

Stobierski, Tim. “What Is Corporate Social Responsibility? 4 Types.” Business Insights Blog, 8 Apr. 2021, online.hbs.edu/blog/post/types-of-corporate-social-responsibility. 

“What Is Your Carbon Footprint?” The Nature Conservancy, www.nature.org/en-us/get-involved/how-to-help/carbon-footprint-calculator/#:~:text=What%20is%20a%20carbon%20footprint,highest%20rates%20in%20the%20world. Accessed 12 Mar. 2025. 

Wong, Margaret. “Startup Raises Questions with Unconventional Method of Removing Pollution from Air: ‘There Is a Risk of Environmental Harm.’” The Cool Down, 8 Apr. 2024, www.thecooldown.com/green-tech/charm-industrial-carbon-removal-corn-waste/. 
















 

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