ESG - Excel, Surveys, and . . . Gutfeel?
- Aug 14
- 6 min read
By Oliver Campbell │ ICM HPQC Fund │ August 2026
“Written by humans, please don’t blame the robots for our typos”
The investment world's embrace of ESG (environmental, social, governance) analysis is directionally correct: long-term sustainability challenges are real sources of both opportunity and risk. HPQC's entire thesis (reducing the financial and therefore ecological costs of compute through technological efficiency gains) sits squarely inside that logic. The challenge comes when that analysis is compressed into an ESG score. Qualitative questions become quantitative answers, and in that compression, information is inevitably lost. Here's where that loss is exposed generally and especially in early-stage venture capital.
G(overnance) is the load-bearing letter. Disaggregating “ESG” can feel counterintuitive: A management team with sound long-term judgment will pursue sustainable revenue growth and reasonable cost minimisation as a matter of course while balancing the interests of all stakeholders in order to grow a business sustainably, that's just good management, rather than a separate "G" bolted onto the business model. What's harder to imagine is a company with excellent “E” and “S” credentials and terrible governance persisting for long.
The failure mode runs the other way: governance metrics get gamed by proxy. Enron's board was rated among the five best in America in 20001; Theranos assembled what Fortune called the most illustrious board in U.S. corporate history2. Satyam Computer Services won the prestigious Golden Peacock Award in 20083. All boards were credentialed, diverse, and impressive on paper and all oversaw historic frauds. Marquee names and box-filled diversity checklists are proxies for governance quality, not governance quality itself.
This is why we assess management and corporate culture holistically rather than scoring board composition in isolation. The real question is whether we are aligned with how the company thinks and acts, not just with how its board looks or its bios read.
Scope 1/2/3 doesn't map cleanly onto the stack. 4 is critical. . .
A fabless design house like SpiNNcloud has negligible Scope 1 or 2 exposure beyond its own operations, including office electricity in Dresden, but much of their real footprint sits in Scope 3, split between upstream (energy consumed at a foundry) and downstream (the energy the deployed chips consume over their operating life).
That's not "out of scope," but it is a boundary and attribution question: the emissions that matter are generated by other companies' operations and by end-customer usage patterns neither the investor nor the portfolio company can fully observe or report on. Furthermore, it feels unrealistic and also somewhat unfair to expect relatively young companies to put pressure on their foundry partners while fighting for capacity in smaller volumes, at least until they reach greater scale.
Scope-based accounting was built more for vertically integrated industrials, and less for a semiconductor supply chain with a dozen ownership handoffs between design and deployment. The real measurement of SpiNNcloud’s impact on the world is felt via its so-called “Scope 4 emissions”, i.e. emissions avoided through use of their products. The current generation of SpiNNcloud systems already reduces the cost of certain computations by a factor of 17. The next architecture, SpiNNNext, is expected to significantly increase this efficiency even further and enable savings of up to 80 times4. It is impossible for an ESG spot measurement to capture this impact on a net basis, but for HPQC that distinction is fundamental.
Jevons Paradox: One of the key arguments for HPQC’s investment into Diraq, the spins in silicon quantum modality company, is that it uses existing semiconductor manufacturing capacity (based on CMOS or Complementary Metal-Oxide-Semiconductor). Leveraging established manufacturing capacity has the potential to lower manufacturing costs and mitigate the need for new capital investments (capex) versus other modalities.
However, over time it is the case that lower CMOS and capex costs expand the addressable market for compute: cheaper compute tends to induce greater total consumption, not less, which is the standard 19th-century coal argument reapplied to silicon.
This is a real tension with the HPQC thesis, not just an ESG-framework artifact: efficiency gains reducing cost per unit of compute don't guarantee a reduction in aggregate energy draw if demand is elastic enough. The honest counter argument isn't that Jevons Paradox doesn't apply, it's that the relevant comparison is relative decoupling (emissions per unit of useful compute) rather than absolute consumption. Without the efficiency gains, the same demand growth would be met by less efficient compute, making the counterfactual worse, not better.
Emissions are the easy half of the picture.
Compute's power and emissions profile is well-trodden ground precisely because it's measurable. The social consequences are harder to assess: what artificial intelligence (AI) or quantum computing may mean for labour markets, information security, encryption and privacy or geopolitical balance over a 10-20 year horizon is genuinely unknown, rather than simply under-measured.
Furthermore, the supply chain for technology itself is notoriously difficult to analyse, spanning upstream mineral extraction in central Africa, non-compliant smelters, and politically embargoed chipsets. Any technology that minimises volume exposure here goes at least some way to alleviating those concerns. An ESG framework that scores what can be measured and stays silent on what cannot will systematically overweight energy and emissions metrics relative to the harder and possibly more consequential questions, including those above.
Dual-use isn't avoidable, it's structural. You cannot invest across quantum sensing, cryo-electronics, RF, or advanced photonics without touching defence-relevant applications. The same physics that improves civilian compute also improves detection, guidance, and cryptography. Quantum sensing technologies that can identify materiel on a battlefield can also make MRIs (magnetic resonance imaging) cheaper, faster and potentially more accurate too.
Snapshots versus derivatives. Most ESG scoring is a point-in-time measurement, whereas HPQC is underwriting something different: a rate of change, the efficiency trajectory of a technology, not its current-state footprint.
A portfolio company may look less attractive than an incumbent on a static metric today and still be the better investment because the second derivative is what we're actually buying.
Diligence without a track record. Pre-tapeout semiconductor and pre-manufacture quantum companies may have little to no operational data to score against for traditional ESG metrics. There may be no meaningful yield rates, no fab energy figures, no deployed-unit telemetry.
This isn't really an ESG-scoring gap; it's a technical diligence challenge. This is exactly why HPQC’s Technical Advisory Committee's judgment matters more than a third-party rating agency's model for early-stage names.
It's not a box tick. This isn't a box-tick relocated. Taken together, these are reasons governance and impact assessment sit inside the investment philosophy rather than as a compliance overlay bolted onto it. HPQC underwrites sustainability metrics as part of the investment case itself, because the inputs that compute consumes — power, capital, fab access among others — are themselves the constraint that the thesis has to price. Getting this right, with data where we have it and defensible assumptions where we don't, is part of what gives us the confidence to invest, not a separate hurdle to be cleared afterwards. We also use checklists, but checklist scores routinely miss what actually matters to that underwriting. The irony is that when investors are pushed to externalise ESG assessments to avoid the appearance of greenwashing, the externalisation can become the very box-tick exercise it was meant to avoid.
Oliver Campbell
Investment Principal of the ICM HPQC Fund
MAS Licensed Representative, ICM Global Funds Pte Ltd
August 2026
Sources:
[1] Gillan, Stuart; John D. Martin (November 2002). "Financial Engineering, Corporate Governance, and the Collapse of Enron"
Important Note:
The information in this article should not be considered an offer or solicitation to deal in the ICM HPQC Fund (Registration number T22VC0112B SF003) (the “Sub-fund”). The information is provided on a general basis for informational purposes only and is not to be relied upon as investment, legal, tax, or other advice. It does not take into account the investment objectives, financial situation, or particular needs of any specific investor. Investors should seek relevant professional advice before making any investment decision. The information presented has been obtained from sources believed to be reliable, but no representation or warranty is given or may be implied that it is accurate or complete. The Investment Manager reserves the right to amend the information contained herein at any time, without notice. Investments in the Sub-fund are subject to investment risks, including the possible loss of the principal amount invested. All forms of investments carry risks, including the risk of losing all of the invested amount. Investors should read the prospectus before deciding whether to acquire the units in ICM HPQC Fund. The value of investments and the income derived therefrom may fall or rise. Past performance is not indicative of future performance. This document is intended solely for institutional investors and accredited investors as defined under the Securities and Futures Act 2001 of Singapore. The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without ICM Global Fund’s express written consent. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.
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