One to watch #2: Carbon management startup Persefoni.
"Like GDPR in 2017. People know they need to comply, but not how..."
In the not-so-distant past, Persefoni CEO and co-founder Kentaro Kawamori was Chief Digital Officer at US shale gas company Chesapeake Energy, as around him the world changed at dramatic pace -- with investors ramping up the pressure on businesses to disclose carbon emissions, and institutional concerns about climate risk rising.
Sitting in the boardroom, he found himself feeling both isolated and quizzical. As he told The Stack: "I'm a technology guy. My background was outside the O&G industry. It felt to me like everybody was very insulated from the whole climate discussion. And all this time I was thinking 'if somebody asked us to start to disclose our carbon footprint like they're doing to BP and Shell, how in the hell would we get started?'"
It was, he realised, "practically, less a sustainability answer than it is a data exercise; it's thousands of different spreadsheets; it's thousands of different data sources in all sorts of different places..."
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Kawamori did not stick about too long. Wheels had started turning, and that short-lived experience was the genesis of an idea that sooned turned into a carbon management startup Persefoni; a business dedicated to tackling this problem (he describes it as "like an ERP for carbon transactions").
Persefoni has brought in some serious talent, hiring Tim Mohin -- the former chief executive of ESG data specialist Global Reporting Initiative -- as its Chief Sustainability Officer and is gearing up for a substantial funding round, having got off the ground with $3.5 million seed funding.
We're making Persefoni our second "one to watch": companies we are selecting once every month that The Stack is are confident are going to be well-known names in the near future.
What is Persefoni?
Tools to help assess carbon emissions, climate risk, and supply chain carbon life cycle analysis are emerging from various quarters as regulators and investors ramp up pressure on businesses to improve carbon data reporting. Yet the companies trying to report their environmental impact accurately and consistently face a challenging environment: from fragmented datasets to an inconsistent reporting standards environment.
The world's changing fast however. The UK and New Zealand are set to make Taskforce on Climate-Related Financial Disclosures (TCFD) -- the reporting framework designed to test whether companies are on track to meet the Paris climate accord’s goals -- mandatory by 2025 and 2023 respectively, and the heavyweights of the reporting standards world are working ever more closely together to unify around a reporting standard.
What's happening in climate disclosure and climate data is like GDPR in 2017...
Carbon management startup Persefoni's data model aims to help make this easier for companies, by letting users report in different formats like GHG Protocol, SASB, TCFD, SECR, GRI, and CDP, with customers able to account for the full spectrum of Scope 1, Scope 2, and Scope 3 emissions with 100% compliance to the GHG Protocol, with more to come. It works, crudely, by letting users plug it in to their Oracle or SAP systems, pulling data out via API, running analysis on it and providing suggestions to reduce emissions.
As Kawamori puts it: "This moment that's happening in climate disclosure and climate data is sort of like GDPR in 2017. It's about to go into effect and everybody knows, 'OK, we're going to start reporting on our data privacy and what does that mean? How do we do it? What tools that we need to go by?'"
His aim is to start by providing specialist guidance across certain industry verticals, particularly extractive industries, but ultimately to provide sustainability disclosures and reporting not just to and from portfolio companies but back to LP’s, co-investors, and regulatory agencies via one platform. Its bold claim: To have "completely reimagined the entire process from accounting through reporting to make the most burdensome tasks like data cleansing and assurance easier than ever before".
See also - One to watch #1: Cloud data warehouse startup Firebolt
Realistically right now most companies are still uploading data for assessment manually, and Kawamori notes that "if you want to do manual data uploads, we can support that. Many sustainability teams are probably doing it all in flat files and CSP files. We can support that process, but we take care of the calculation and the reporting side of it.
"When you're ready to automate the data ingestion processes, we can add native integrations to other SaaS products so you can simply link those in an integration portal. So you'll be able to take a vendor payments file, an expense file and an accounts receivable file, drop it in the platform and it'll auto-categorise carbon calculations based on the source of that data."
He adds: "We're very focused on the enterprise. We're one of the first movers in an emerging category and I think really the first mover in the institutional investor space. We're going to work with the top of the stack."
Few businesses or large investors will be ready yet, but down the line Persefoni sees them tracking portfolio carbon performance in real-time, on-demand, using its platform to plan for various future scenarios and understand which path enables the greatest progress.
For now, carbon management startup Persefoni has a team of 24 working across five different countries. And talking of footprints, expect theirs to be a lot bigger, very soon. Much like CIOs have become an increasingly important boardroom figure as technology/IT play a growing role in the success of most enterprises, as tools like Persefoni gain adoption and regulators tighten the screws around the world, it's plausible that the Chief Sustainability Officer will follow suit. Watch this space.
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