The climate crisis is creating a huge demand for data capture as industries grapple with how to decarbonise. Simply put, you can’t cut your carbon emissions if you don’t know what they are in the first place.
The need to gather data is a huge opportunity for startups – and a wave of early companies have already set out to try to plug the sustainability data gap through things like APIs for estimating emissions for carbon offsetting. (which in turn has spawned other startups trying to deal with the data gap around offsetting projects…)
One thing is clear: the requirements for sustainability reporting are only getting wider and deeper from here.
Munich-based Tanso is an early-stage startup (founded this year) building software to support sustainability reporting for a particular sector (industrial manufacturers) – with the goal of creating a data management system that captures data. and can automate stability reporting. specific requirements of the region.
The startup says it decided to focus on industrial manufacturing because it is an emissions-heavy sector and underserved with assistive digital technology versus many other industries.
The founders met during their studies at universities in Munich and Zurich – where they were researching organizational climate impact assessments. Their collective expertise crystallized in the realization of a business opportunity to build a data management system for a notoriously polluting sector that is facing a mandate to change.
In the coming years, European regulations will expand sustainability reporting requirements – with the EU’s ‘Green Deal’ plan setting a broader goal of becoming Europe’s first “climate-neutral” continent by 2050.
Specific (current) reporting requirements within the bloc include the EU Corporate Sustainability Reporting Directive (CSRD), which will apply to over 50,000 companies – requiring them to report on sustainability metrics starting in 2023.
The UK (now outside the EU) has already introduced some reporting requirements for domestic companies under the Streamlined Energy and Carbon Reporting (SECR) regulation, which has been in place since 2019 and applies to more than 12,000 businesses in the UK separately. Applies on a different extension basis. company size.
So there is a clear direction of travel in this area in which businesses need to collect and report sustainability data.
Tenso has kicked off a $1.9 million pre-seed increase aimed at bringing its data management support software to market in time for an expected surge in demand as sustainability rules like CSRD begin to bite.
This growth has been led by German early stage b2b fund UVC Partners, with participation from Pickus Capital, Possible Ventures and several business angels.
Tenso is still in the R&D/product development phase, with co-founder Gyrie Ryerson telling that it is currently working with several manufacturers to automate data gathering to “detect the sweet spot” So that it can come to market with a scalable product offering. . She says the team picked up a relatively large pre-seed to see it through until something fit to launch (it’s going to be something “solid, verifiable and scalable” per Ryerson by the end of 2022). is expecting).
The goal of the product is a single platform that collects and maintains all of a customer’s sustainability data and can automate the generation of reports to meet regulatory requirements, including auditing.
From 2025, Ryerson points out that CSRD reporting needs to be “auditable,” which means you need to have “some sort of transparency and traceability”; And also that the “accuracy” of sustainability reporting would be a C-suite responsibility. Therefore the boardroom should concentrate the mind.
“Going beyond that it is all about how you can use this data and how the data gives you insight to make predictions and models about how we should develop our products? Understanding what to do going forward I come?” she adds.
“What we are currently prototyping is to streamline the information gathering workflow,” Ryerson also tells us while discussing the product development process. “Also having a really good, fundamental user flow for users to use our product and then do a deep dive on integrations over time.”
She says the challenge is finding the trade-off between usability and “digging into the data.” “It is very important for us to have a scalable product, especially making it fully scalable from 2023 when CSRD is launched because then there will be market disappointment. Companies will need to do something,” she adds.
“We need these solutions … that are a step in the right direction for all companies and not just some carbon neutral companies … products.”
But she also cautions on the proliferation of overly “shallow” offerings in the space – driven and course-corrected by marketing-led ‘greenwashing’ (and bogus carbon offsetting) rather than a genuine desire to identify the problem that is really needed. It is up to humanity to prevent climate disaster.
Ryerson says he got really interested in this space through his university work researching the overestimation of carbon offsets through deep learning.
“Accountability and the need to ensure that the product being developed actually does its job correctly. Because it’s so easy to just have a black box and trust it. We cannot tolerate a system that overestimates or underestimates. It needs to be accurate and it needs to be validated,” she says.
“Further accuracy will mean greater and then you need to reach ‘real data,’ not just ‘guests,'” she predicts. “And that’s where we see that of course we need to be very front-end/UX-friendly, and make it easy for people to enter the right data and have a very user-friendly, usable product.” And people are guided by the right data gathering process… but over time really focusing on how do you integrate and acquire data at the data-base level?”