AMDP Investment Proposal Final

To: Clark Hansen, CEO, AMDP

From: Ethan O’Keeffe, Research and Development Analyst, AMDP

Date: March 11, 2022

Subject: Investment Opportunity: Aether Diamonds

Following extensive market research on potential investment opportunities, I am pleased to recommend Aether Diamonds as an investment opportunity for AMDP. Aether is an award-winning climate tech startup that uses an alchemization process to pull pollution from the air and transform it into diamonds. Founded in 2018, Aether is a young company experiencing promising and rapid growth patterns. Their company philosophy aligns perfectly with AMDP standards: to actively build a future where we generate our own renewable energy sources (Aether).  Investing in a high commodity company like Aether not only offers us great returns but allows us to become part of a forward-thinking movement that is ambitiously proving itself as a vehicle for social change.

AMDP Investment Standards

As a research and development analyst at AMDP, I look for investment opportunities based on our own standards for business practice:

Triple Bottom Line

The Triple Bottom Line is an economic framework which states that companies should commit to three different measures of performance – financial, social, and environmental – or “profit, people, and planet” (Kenton). 

• Profit: The traditional measure of corporate financial revenues and losses

• People: The measure of how socially responsible an organization is -- a company’s impact on its employees, customers, and the community

• Planet: The measure of how environmentally responsible an organization is -- a company’s impact on air, climate, water, land, and biodiversity 

Corporate Social Responsibility 

Corporate Social Responsibility is a business model that helps a company be conscious of the environmental, social, and economic impacts that they have. For a corporation to be socially responsible, their daily operations enhance society and the environment. They have positive contributions to the wellbeing of the planet and the people that they interact with (Fernando). 

Social Enterprise

A social enterprise is a business which operates with specific social objectives rather than financial objectives. That is, a traditional profit measure is not their primary goal. Unlike a charity though, they seek to generate revenues to fund social causes. A social enterprise looks to reinvest their profits into their social mission rather than fund payouts. Financial profit is simply a supporting objective for their social endeavors (Barone). 

Carbon Footprint

A carbon footprint is the total amount of greenhouse gasses (such as carbon monoxide, methane, etc.) that are generated by our actions. This amount is the sum of emissions from both the direct and indirect actions of an individual, organization, or product. Carbon footprints are measured and expressed as the equivalent amount of CO2 (in tonnes). It is necessary to consider and manage carbon emissions because of the direct impact on climate change. Sustainable behaviors can help reduce our collective carbon footprint and work to combat the ecological and environmental degradation of our planet.

Aether 

Background: Pollution to Solution

In 2018, the CEO of Aether, Ryan Shearman, recognized that diamonds are made of the same carbon that is filling our atmosphere. With that idea in mind, Shearman began the conversation on how to turn an environmentally destructive product into a less destructive one – sustainable diamond production. This led to the inception and creation of Aether, the New York based lab-grown diamond company (Marsh).  

Process: Alchemy of Air

The word “aether” is defined as the personification of the sky breathed by the Olympians; a medium used to explain natural phenomena. Aether is the alchemy of the air. To create their diamonds, Aether has a unique alchemization process which involves capturing carbon dioxide from the atmosphere. They have a partnership with a Swiss company which allows for the use of direct air capture technology. They isolate the pollutants from the captured air and then synthesize it into a hydrocarbon feedstock in a chemical vapor deposition reactor. These reactors are powered by 100% clean energy and host the growth of diamond crystals, one atom at a time (Aether). 

Innovation: From Nothing Into Something

In 2019, an estimated 142 million carats of diamonds were mined. A single carat of diamond requires about 100 square feet of soil removal and 6000 consequential pounds of waste material. Diamond mining is a huge factor in soil erosion, deforestation, and ecological destruction. The Aether process means no soil removal, saves 127 gallons of freshwater and removes 20 tons of carbon from the atmosphere for each carat developed (Marsh). Aether turns nothing into one of the most valuable luxury commodities. 

Aether is the first company in the world to offer diamonds created from carbon that doesn’t come from the ground. Aether diamonds are the world’s first positive-impact diamonds.

Values and Practices

In their vision, Aether states that they are “actively building a future where we generate our own renewable energy sources, returning excess clean power to the grid… to shift the industry from old to new”. To accomplish this they engage in several principles that contribute toward a triple bottom line, which aligns with AMDP’s values.

Their goals include:

• No water wasted

• No dirty energy

• No Earth uprooted

• Cleaner air

• No conflicts funded

• All human loving

They state that buying an Aether diamond means you can be sure you don’t support any unethical labor practices, unhealthy working conditions, or displacement of indigenous communities. They are socially responsible for the people they employ, their customers, and their community. They are environmentally responsible; they clean the atmosphere, keep work above ground, and maintain ecosystems (aether).

Industry Position

Aether is perceived within its field as an innovative industry-leading company that maintains high quality. They are the first company to fill the position that they are in. On the Aether website, they state that the quality of their diamonds is among the top 2% of all diamonds on the planet. The claim that the way they source their carbon means that their diamonds are “the rarest you can buy”. They don’t position themselves as the industry standard but as a new standard that the industry should strive to get to.

Outside Recognitions

Aether was featured by Forbes in 2020, where writer Lela London described them as “instant pioneers in an innovation-scant industry”. Instead of arguing over what methods of diamond production have a lower carbon footprint, CEO Ryan Shearman says that Aether is determined to “actually be beneficial”. Every diamond they produce removes carbon from the environment. Forbes describes how Aether is not only leading climate change efforts in the diamond industry but in all industries. “If every industry today, across the globe, went 100% carbon neutral, we would not stem the change that’s already happening,” Shearman says. Aether is not complacent with carbon neutral and seeks to operate on a carbon negative. 

Diamond Buzz says that “Aether is redefining what it means to be a diamond company in a historically destructive and cruel industry… they are proving that the most luxurious products, such as diamonds, can be innovatively produced without risking people and the environment.” Aether’s real goal isn’t to make a more sustainable diamond but to actively make the world a better place. They act as a “representation of the human element’s integration with the natural world.” Instead of diminishing the diamond’s value, their practices add to it.

Profitability/Financial Track

The process of air capture is an extremely expensive one but because Aether sells luxury jewelry, they are able to “easily absorb” the cost (Stone). Their ability to go carbon negative is something that other industries cannot do because they don’t sell products that are profitable enough. Aether says that it can transform one ton of captured CO2 into “millions of dollars’ worth of diamonds.” Aether currently sells their diamonds for close to the price of mined diamonds. Although Shearman won’t offer specific sales figures, Aether produced “hundreds of carats” last year and with financial backing wants to produce thousands of carats in 2022.

Future Plans

Aether offers a positive-impact diamond, focusing on a triple bottom line and being socially and environmentally conscious while generating large revenues. Currently, Aether is a carbon-neutral corporation after offsets for energy, logistics and delivery. By 2023, they aim to become an “independently carbon-negative” company that generates its own renewable energy, sends excess energy to the grid, and continues to pull massive amounts of pollution out of the air.

Final Recommendation

After lengthy review, I believe that AMDP should take advantage of this great opportunity to invest in Aether. Aether is experiencing great growth patterns and is positioned to change the way that its entire industry operates. Referring back to the Triple Bottom Line, Aether aligns with our financial, environmental, and social standards. They generate great returns due to the nature of the commodity they sell and they follow practices that will redefine the way production industries will operate in the future. Aether is a high profit business that follows the same set of values that we do. They are an invaluable addition into the ADMP portfolio because they have the potential to revolutionize an industry. An investment in Aether is not only an investment in a diamond company, but an investment into a cleaner, better future and as Aether says in its manifesto, “the future is a luxury”. 

Works Cited

“Aether: Our Story.” Aether, Aether, https://aetherdiamonds.com/pages/story.

Barone, Adam. “Social Enterprise.” Investopedia, Dotdash Meredith, 27 Feb. 2022, https://www.investopedia.com/terms/s/social-enterprise.asp#:~:text=A%20social%20enterprise%20or%20social,used%20to%20fund%20social%20programs.

“Climate Change.” Carbon Footprint, Carbon Footprint Ltd, 18 Jan. 2022, https://www.carbonfootprint.com/warming.html.

Fernando, Jason. “Corporate Social Responsibility (CSR).” Investopedia, Dotdash Merideth, 7 Mar. 2022, https://www.investopedia.com/terms/c/corp-social-responsibility.asp.

Kenton, Will. “Triple Bottom Line (TBL).” Investopedia, Dotdash Meredith, 9 Jan. 2022, https://www.investopedia.com/terms/t/triple-bottom-line.asp.

London, Lela. “Meet Aether, Creators Of The World’s First Carbon-Negative Diamonds.” Forbes, OpenWeb, 2020, https://www.forbes.com/sites/dimopoulos-injury-law/2022/03/01/what-is-the-value-of-my-personal-injury-case/?sh=4d98c0744561.

Marsh, Natasha. “Meet Aether: The World's First Carbon-Negative Diamonds.” Byrdie , Dotdash Meredith, 23 Apr. 2021, https://www.byrdie.com/aether-carbon-negative-diamonds-5120889.

Sola-Santiago, Frances. “Are Lab-Grown Diamonds The Gemstone Of The Future?” Refinery29, VICE Media Group, 28 Feb. 2022, https://www.refinery29.com/en-us/2022/02/10704387/lab-grown-diamonds-ethical-future

Stone, Maddie. “THIS DIAMOND COMPANY WANTS TO HELP CARBON CAPTURE TAKE                     OFF.” The Verge, VOXMedia, 2 Mar. 2022, https://www.theverge.com/2022/3/2/22951332/aether-diamonds-carbon-capture-air-climate-change.