Fast Track To Success
Paul Murphy’s Climeaction helps firms to develop sustainability action plans using its Fast process and has been profitable from its start in 2021. He tells Karina Corbett how he bought out the business and secured financing for its global ambitions
Having a sustainability strategy, along with a plan to implement it, is imperative for any business now, regardless of size, according to Paul Murphy, chief executive of Climeaction, a climate action solutions provider that recently raised substantial funding.
The business was established in April 2021 by Murphy and Joe Aherne’s Leading Edge Group, with Murphy owning a 15% stake and Leading Edge the balance. Leading Edge Climate Solutions Ltd did well from the off, and booked a net profit of €300,000 in 2022. For reasons that Murphy says he is precluded from discussing, in 2023 the partners decided to go their separate ways.
Murphy and some colleagues bought out Leading Edge last November. Company filings disclose that Murphy secured a €250,000 loan from Bank of Ireland to help finance the purchase, and borrowed €180,000 from the company to assist financing the purchase of the Leading Edge shares.
In tandem, the purchase vehicle Orbworx Ltd issued preferred redeemable shares valued at €2.3m to the Davy EIIS Fund, which invests in Irish SMEs with growth ambitions.
“During the buyout process, our financial advisors reviewed our business plan in detail and said that it was really strong,” explains Murphy. “They pointed out that the buyout piece was the most difficult to finance, but once that was done it would be possible to source finance for growth.
“They introduced us to various interested parties and when we met with the Davy group we immediately saw that they understood the business and our vision. Because we had undertaken a large amount of due diligence for the bank in relation to the
buyout, all our financial information was in place, and we were able to complete the funding round quickly.”
Paul Murphy (37) is from Kilkenny and first moved to Cork in 2009 to study sustainable energy engineering in CIT (now MTU). He recalls that there was always a curiosity in the family home about how things work, and how they could be restored or fixed. He went on to do a postgraduate in biopharmaceutical process engineering in UCC, but employment opportunities in the sector were scant at the time and he returned to Kilkenny to open a pizza restaurant.
“At the peak of the summer I had eight people working for me parttime,” says Murphy. “We used to open
at 8am because we did breakfasts as well, and we closed around 11pm, and that was seven days a week. It was a really enjoyable experience, and the toughest job I’ve ever had in my life!”
After a year with the dough and pepperonis, Murphy got a job with EM3, an industrial energy efficiency venture in Charleville. He was there for six years until EM3 was bought by Calor owner SHV Energy in 2020. “At EM3 I learned from some of the best in the business, but I could see different ways to approach things, and I wanted to push forward on those ideas.”
Murphy and Climeaction’s approach for clients to address climate action centres on a process he calls Fast. He explains: “F is for footprint, which involves looking at where the business is currently at with that and their ESG initiatives. A is for audit, which is where we identify opportunities for improvement. Once you have them, you’re on to S, which is for strategies. We might have identified 20 or 30 opportunities for improvement, but we need to look at what are the best ones to undertake first so we formulate a step-by-step strategy.
“Then T is for the training required in the business to deliver on the strategy. This Fast part of our service usually takes six to eight weeks from start to finish, and by then the company knows how much it’s going to cost, who they need to work with, and what the return on investment will be.”
So why would a business of any size want to employ Climeaction? “For larger companies it’s down to a mixture of compliance, costs, regulation, customers and investors,” explains Murphy. “Sustainability is a must-have now, and large companies are feeling the pressure from every angle. They understand it’s a necessity, and all large companies are taking action.
“The key driver for SMEs is costs and their customers. They want to reduce their operating costs, which we help them to do, but they also want to be able to provide their customers with the necessary documentation to show them that they are taking action in the area of sustainability.
“SMEs are only really starting now
to feel pressure from their customers, and I’m not sure they realise the risk of not taking action, because very quickly they’re going to feel the pressure from the larger companies they supply. SMEs are going to become most important to supply chain decarbonisation, because they form the supply chain of the larger companies. Anyone who isn’t taking action now is going to be under pressure over the next number of years, particularly from 2025 when the Corporate Sustainability Reporting Directive legislation comes into effect.”
Murphy adds that on any given day Climeaction could have a team out in a small shop helping them to reduce their energy costs, and another team consulting in a large factory. “Our biggest client is probably Abbott, but we are also working with hundreds of hotels, shops and small businesses, helping them to set their climate action strategies.
“Because what we do is very standardised, it can scale internationally. We’re expanding into the US this year by taking what we do here and doing the exact same thing over there. We can do that in any country with the right people working with us. Investors can see the growth potential from the clients we already have, never mind the ones we will pick up as we expand.”
To extend reach, Climeaction is developing a digital tools offering for small firms to enable them to access insights and make progress on climate action without an in-person consultant. A similar tool is being developed for the dairy farming sector.
With expansion funding in place, Climeaction is moving its office from Monaghan Road to Cork city centre, and plans to increase headcount from 20 to 45 people this year. Murphy is relocating to Boston to prove that the Fast process really is transferable, and it’s a move he’s looking forward to, especially as he’s fulfilling his ambition to be running his own business again.
“I have always wanted to work for myself. I’m the kind of person who doesn’t particularly like taking orders, which can be an asset and a challenge. I like doing my own thing and having the freedom to do things my way. With Climeaction I get to do that and pursue my passion.”
‘Investors can see the growth potential from the clients we already have’