The World Economic Forum says that so-called 'Scope 3 emissions,' - or CO2 in supply chains - can make up as much as 90% of a company’s carbon footprint and worldwide more than half of all emissions can be traced back to only a handful of supply chains. Tracking and reducing these emissions are easier said than done; and if you can't track it, you can't improve it. Berlin-Based startup, The Climate Choice closed a $2 million round to help companies cut a chunk of their carbon out of that part of their emissions, too.
"In 2014 I experienced the problem firsthand when I attempted to reduce the climate impact of my first company, Resmio, by sourcing products from climate-friendly suppliers. The task proved impossible for someone who was not a climate expert," explains The Climate Choice CEO and Co-Founder, Yasha Tarani. "Following the sale of Resmio, I took a sabbatical and witnessed the catastrophic effects of climate change first hand. In Delhi I arrived to 122-degree temperatures with people sleeping on the streets, in Thailand my hut was lost to floods, and in New Zealand I saw the glow of bushfires on the horizon. I decided then to dedicate my life’s work to reversing the degradation of our planet."
Tarani combined forces with co-founder Lara Obst, who had built what she refers to as the EU’s leading climate innovation program. Together, they decided to focus on decarbonizing corporate supply chains, along with a third partner - data scientist Dr. Rey Farhan, who had most recently been working on data-heavy products for the financial industry.
The $2 million equity financing round was led by Gutter Capital.
"We believe the world is at a turning point. Starting in 2024, approximately 49,000 companies will be required to disclose Scope 3 emissions data in compliance with the EU Corporate Sustainability Reporting Directive. We believe that The Climate Choice is positioned to be the partner of choice to help these companies rise to the moment," explains Tarani. "We have already seen the success of our platform with our customers in simplifying data collection and collaboration with suppliers, and we are excited to empower companies around the world to make climate-relevant procurement decisions."
The company has built a platform that helps companies understand the emissions of their suppliers, acquire audit-ready data, and take actions to decarbonize the supply chain. The product is currently in use by several early customers, including O2 Telefonica and HiPP. The company says it is actively monitoring thousands of suppliers.
"Our mission is to empower every company to be a climate champion. We believe that now more than ever that mission is in reach. Today about half of European companies have a climate transition plan in place, but less than 5% of those companies show the readiness required to achieve those plans. We believe that TCC will fundamentally change this," says Tarani. "Ten years from now our platform will automate supplier engagement for the world's largest companies, and all companies will have access to real-time supplier data to empower informed decision making."
The company is adamant that it isn't a carbon accounting platform, but something different altogether.
"Traditional carbon accounting practices rely on averages and assumptions to calculate supplier emissions. This approach is helpful to infer a rough carbon footprint and understand hotspots, but because every supplier within a category looks the same, it is useless for actually making choices to decarbonize," Tarani explains. "TCC starts where the carbon accounting typically ends. Our platform automates supplier outreach and generates real primary data profiles on supplier emissions and practices. Supplier profiles are shared openly within our network, so that work is not duplicated across firms. Armed with comprehensive supplier data, companies can compare suppliers, and make informed procurement decisions to decarbonize their supply chain."