KarbonWise streamlines carbon footprint measurement and reporting for enterprises

Companies that embark on a decarbonisation journey encounter two key pain points—how to measure supply chain emissions and adhere to reporting guidelines.

A decade-long career as a sustainability consultant helped Arjun Vijayaragavan envision a technology platform that could accelerate the process of aggregating, analysing and understanding data so that companies could achieve their sustainability goals and reduce their carbon footprint.

This led to him founding sustainability startup KarbonWise in 2023.

The Mumbai-based startup aims to provide comprehensive solutions across the entire decarbonisation journey.

“We address the urgent need for enterprises to measure and reduce their carbon footprint and adopt sustainability practices amid growing pressure from stakeholders such as consumers, investors, and regulators,” said Vijayaragavan, Founder and CEO, KarbonWise.

Indian companies’ decarbonisation efforts are part of a larger ambition. At COP26 in 2021, India set a net zero carbon emissions target, requiring the top 1,000 listed companies to report on their ESG (Environmental, social, and governance) performance, including carbon footprint and emissions reduction strategies, through the Business Responsibility and Sustainability Report (BRSR).

India also plans to generate 500 GW of non-fossil electricity and meet 50% of energy needs from renewables by 2030.

“India aims to achieve net zero emissions by 2070, with enterprises playing a crucial role in this transition. We aim to assist enterprises by providing tools,” he said.

Before his entrepreneurial venture, Vijayaragavan worked at Susnomics, a UAE consultancy specialising in low-carbon building design. He later worked at McKinsey & Co. in London, where he focused on climate initiatives, net-zero pathways, and supply chain emissions.

What does the platform do?

KarbonWise is a web-based platform that integrates data from various sources to provide insights into carbon emissions and environmental data for enterprises.

The startup provides services such as automating carbon accounting, assisting in setting realistic targets, reducing emissions, and streamlining reporting requirements to ensure compliance with global ESG standards.

“Our platform uses AI-driven models to analyse and identify carbon hotspots within an organisation by aggregating and ingesting enterprise data from internal systems, and applying specific models to calculate carbon footprint 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, particularly for scope 3 emissions, which are emissions not directly controlled by the reporting companies such as employee commute.

“In addition, a layer of generative AI is being developed that will proactively recommend pathways and alternative inputs/levers to reduce the footprint,” Vijayaragavan asserted.

Currently, the startup is working with more than 10 clients divided into two groups: mid to large enterprises struggling with calculating carbon emissions, particularly Scope 3/supply chain emissions, and niche companies seeking product or project lifecycle analysis to meet customer requirements. It declined to name its clients

The company plans to onboard 3-4X clients of its current size, in about next eight months.

“Businesses often struggle to balance growth, cost, and environmental impact, lacking a comprehensive understanding of their actions' impact on sustainability metrics like carbon footprint, ozone depletion, and biodiversity,” he added.

For example, the pharmaceutical industry faces several challenges, including a lack of standardised sustainability metrics, difficulty tracking emissions across complex supply chains, and limited access to renewable energy sources.

Sector-specific approach

KarbonWise offers lifecycle analysis modules for construction projects and portfolio emissions management for property managers and developers.

The startup assists mid-size suppliers in decarbonisation, aligning with global pharma/chemical leaders' net zero emissions goals. It also plans to explore financial services sector later this year.

As an example, a construction company with 10 projects across multiple countries can use KarbonWise to get a real-time view of carbon emissions and environmental impact. It analyses project materials and activities, providing insights to track emissions, identify inefficiencies, and develop strategies to reduce their environmental footprint.

“We integrate industry-specific expertise to assist organisations in utilising data and insights for optimal decision-making,” stated Vijayaragavan.

The startup competes with players such as San Francisco-based Watershed, New York-based Greenly, and Arizona-based Persefoni.

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“What sets us apart in the market is our focus on Scope 3 and supply chain emissions, which early clients and prospects haven't found in similar solutions elsewhere,” Vijayaragavan explains.

The data's accuracy is in line with globally recognised carbon accounting standards such as the GHG Protocol and ISO 14064. “Our software's calculation methodologies and algorithms are designed to be flexible enough for third-party audits,” he adds.

Business model and future ahead

The carbon accounting software market is predicted to grow by $16.55 billion between 2023-2028, at a CAGR of 29.27%, according to Research and Market.

The bootstrapped startup generates revenue through platform subscription fees, a one-time system integration fee 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 client's needs, the specific modules they opt for, and the level of consulting they would like embedded in the offer. So it’s difficult for us to provide a one-size-fits-all numbers,” the founder adds.

KarbonWise plans to invest in sales and growth, expanding the client base through both inbound and outbound efforts.

It is also looking to enhance its product offerings, particularly in ESG reporting, and build Generative AI-based intelligence layer and to strengthen market presence.