After spending nearly half a year each year collecting and calculating data on carbon emissions in spreadsheets, the Salesforce.com climate team got fed up. So in 2017 they created an app to analyze the numbers – and now they’re selling it for $ 4,000 (about 3 lakh) a month.
As global corporations form commitments to curb climate change, one of the first problems they face is quantifying their emissions. The second is to understand whether their solutions work.
This need is leading to a boom in carbon accounting software by large companies like Salesforce and startups, along with a certain skepticism about parts of the process.
Microsoft is previewing a tool for calculating emissions called Microsoft Cloud for Sustainability, which should be available by mid-2022.
On Thursday, Persefoni, an Arizona-based carbon accounting startup, said it had raised over $ 100 million, the largest ever venture capital round in the space.
According to a Reuters review of PitchBook and Climate Tech VC data, total fundraising this year is nearly $ 300 million (approximately Rs.2,250 billion), six times the 2020 total and 21 times the fund raised in 2019 .
Carbon accounting is complex, especially if emissions are included outside of the company’s direct control, such as B. Suppliers and the use of products, what many companies try. For example, how does a car manufacturer account for steel purchases and the kilometers traveled by its customers? Some in the accounting industry call these indirect emissions, often the bulk of a company’s emissions, the “Pandora’s Box” of carbon accounting.
“You have a massive problem in our world of corporations that develop their own methods and then black boxes them. These cannot be checked. In the worst case scenario, they help companies with greenwash, ”said Kentaro Kawamori, CEO of Persefoni, which uses a system called the Greenhouse Gas Protocol to calculate numbers that are added to total emissions.
Some argue that bookkeeping is not always worth the effort and it skews focus.
The Science Based Targets initiative, a nonprofit that helps companies set emissions targets, does not force small businesses to produce emissions outside of the company’s direct control, even if they have a “net zero” program with a strong focus on indirect. creates emissions.
Snocap, a new venture capital firm in the air conditioning technology space, believes startups shouldn’t be asked to measure their environmental impact, especially if their technology is aimed at fundamentally transforming an industry, such as making meat from the Laboratory.
Taylor Francis, co-founder of Watershed, a carbon accounting software startup founded when fintech Stripe was tracking its own emissions data, hopes customers will use the tool to make decisions about suppliers and emissions.
“If this whole area is just about disclosing and publishing a sustainability report once a year, I don’t think that will do what we need to actually tackle climate change,” he said.
© Thomson Reuters 2021