Companies embarking on the journey of decarbonization face two major problems. One is to measure and quantify the supply chain emissions and two are to follow the reporting guidelines. Arjun Vijayaraghavan is set to launch his own startup, Carbonwise, in 2023. A decade of experience as a sustainability consultant has helped Arjun VijayRaghavan envision a technology platform that can quickly collect, analyze, and understand data so that companies can achieve their sustainability goals and reduce their carbon footprint.
The Mumbai-based start-up aims to provide comprehensive solutions to entrepreneurs seeking decarbonisation. "We understand the urgent need for enterprises to measure and reduce their carbon footprint and adopt sustainability practices amid increasing pressure from stakeholders such as consumers, investors and regulators," says Arjun Vijayaraghavan, Founder and CEO, Carbonwise.
The decarbonisation efforts of Indian companies are part of a larger ambition.At COP26 in 2021, it was announced that India aims to become a net-zero carbon emission country.For this, 1,000 top companies will be required to report on their ESG (environmental, social, and governance) performance, including strategies used to reduce carbon footprint, through the Business Responsibility and Sustainability Report.India plans to generate 500 GW of non-fossil energy by 2030 and 50% of its energy consumption from renewable sources.
"India aims to achieve net zero emissions by 2070 and enterprises are playing a crucial role in this transformation. We aim to help enterprises by providing tools that enable this, "he said.
Prior to his entrepreneurial venture, Arjun Vijayaraghavan worked at Susnomics, a UAE consultancy known for low-carbon building design. He later moved to McKinsey & Co. in London. She worked at IN, where she worked in the areas of climate initiatives, net-zero pathways, and supply chain emissions.
What's the platform doing?
Carbonwise is a web-based platform that combines data from various sources to provide insights on carbon emissions and environmental data to enterprises. The startup provides services such as automating carbon accounting, helping set realistic targets, reducing carbon emissions, and streamlining reporting requirements to ensure compliance with global ESG standards.
"Our platform uses AI-assisted models to analyze and identify carbon hotspots in an enterprise by aggregating and incorporating enterprise data from internal systems and applying specific models to calculate carbon footprints and other ESG metrics," he adds.
The company uses advanced data engineering and AI / NLP expertise to integrate data from various sources and automate calculations for Scope 3 emissions that cannot be directly controlled by the company, such as carbon emissions generated during the commute of employees to and from the office.
"Also, the generative AI branch is developing pre-recommended pathways and alternate inputs / levers to reduce the footprint," says Arjun Vijayaraghavan.
Currently, the startup works with more than 10 clients divided into two groups: medium to large enterprises that have difficulty in calculating carbon emissions, especially Scope 3 / supply chain emissions, and major companies that seek product or project lifecycle analysis to meet customer needs. The company plans to add three to four times the number of existing clients in the next eight months.
"Businesses often struggle to equalise growth, cost and environmental impact, due to a lack of comprehensive understanding of the impact of their activities on sustainability metrics such as carbon footprint, ozone depletion and biodiversity," he added.
For example, the pharmaceutical industry faces many challenges, such as the lack of standard sustainability metrics, the difficulty of tracking emissions across complex supply chains, and the limitation of renewable energy sources.---_-
Sector-specific approach
Carbonwise offers lifecycle analysis modules for construction projects as well as portfolio emission management for property managers and developers. The start-up assists mid-sized suppliers in decarbonisation, aligning with the net zero emission targets of global pharma / chemical leading companies. The company plans to enter the financial services sector by the end of this year.
For example, a construction company with 10 projects in multiple countries can use Carbonwise to get real-time information on carbon emissions and its environmental impact. It analyzes project materials and activities, helps in tracking emissions, identifying inefficiencies and developing strategies to reduce their environmental impact.
"We are integrating industry-specific expertise to help organisations use data and statistics to make appropriate decisions," said Arjun Vijayaraghavan.
The startup competes with companies such as San Francisco-based Watershed, New York-based Greenlee, and Arizona-based Persephony.
"What sets us apart in the market is the importance given to Scope 3 and supply chain emissions, with early clients attesting that they have not seen similar ones elsewhere." Vijayaraghavan explains.
The accuracy of the data is in line with globally accepted carbon accounting standards such as the GHG Protocol and ISO 14064."Our software's calculation methods and algorithms are designed to be flexible enough for third-party audits," he adds.
The Future and the Business Model
According to Research and Market, the carbon accounting software market is predicted to grow by $16.55 billion at a CAGR of 29.27% during 2023-2028.
The startup generates revenue through platform subscription fees, one-time system integration fees for setup and implementation, and consulting services that offer bespoke solutions to specific client needs.
"Our pricing structure varies depending on factors such as the size and complexity of the customer's needs, the specific modules they choose, and the quality of consulting they want embedded in the offering. So it's difficult to determine a number that suits everyone, "the founder adds.
It plans to invest in carbonwise sales and growth to develop its customer base through inbound and outbound efforts.
The company is looking to enhance its product offerings, especially in ESG reporting, build a generative AI-based intelligence layer, and strengthen its market presence.
