Carbon neutrality, a reality or a scam?

According to the Agence de la Transition Ecologique (ADEME), “carbon neutrality” aims to counterbalance, on a global scale, all greenhouse gas (GHG) emissions resulting from human activity by sequestering equivalent quantities of CO2, i.e. keeping them out of the atmosphere over the long term. In other words, it is a matter of sequestering as much carbon as we emit to stabilise its level of concentration in the atmosphere and thus limit the increase in the planet’s global temperature. 

The objective of carbon neutrality therefore only makes sense on a global scale. 

In line with the global objective of carbon neutrality, many actors are mobilising and wish to do their part: companies, territories, citizens, etc. There is an increasing amount of communication around this global objective, without a shared framework and without always understanding the ins and outs. Various interpretations of the term “carbon neutrality” are observed, often giving the illusion that an actor, a product or an activity would no longer have any impact on the climate. 

Individually or on their own scale, economic actors, local authorities and citizens who are committed to carbon neutrality are not, nor can they become, or claim to be, “carbon neutral“, which is meaningless on their own scale.

As explained by M. Jancovici, when a company declares itself “carbon neutral“, it does not mean that it has instantly put itself “outside the climate problem”. A company belongs to a value chain, in which all the links (suppliers, customers, partners, etc.) depend for instance on fossil fuel machines, or even deforestation, and therefore on CO2 emissions, whether these emissions are their property or not. The risk comes from the dependence, not from the ownership!

However, companies can enhance their contribution to this global objective through their respective actions. 

At Tapio we have mistaken some terms, concepts and wordings regarding “carbon neutrality” but thanks to institutions such as ADEME, Carbone 4, etc., which shed light on climate blurs, we were able to reconsider and adapt our strategy.

Indeed, as the ADEME explained, the sequestration potential of our forests, soils, etc., is not sufficient to balance the current and trend level of our emissions. It is therefore essential to adopt, as soon as possible, ambitious reduction strategies that will allow us to decarbonise our system while increasing the available carbon sinks.

We thus push our partners to implement actions in priority on their perimeter of responsibility, i.e. on which their activity induces a GHG impact and not to base their strategy solely on the financing of emission reduction or sequestration projects at third parties. 

Sources
https://www.ademe.fr/sites/default/files/assets/documents/avis-ademe-neutralite-carbone-2021.pdf
https://jancovici.com/publications-et-co/articles-de-presse/soyons-neutres/

What is Climate Tech ? Where does Tapio fit in?

Save the Earth by Friends of the Earth

Looking back at when we launched Tapio in September 2019, our view and comprehension of the carbon industry was still limited and a lot has happened since. Back then we felt it was our generation’s responsibility to act even if perhaps it didn’t work out, at least we could say we tried. 

Nearly 18 months later, after several pivots and having analysed the carbon emission value chain from every possible angle and trying to find the right solution or business model, Tapio has finally settled on two important components.

The first, which is its value proposition, is to make it easy and cost-effective for companies to manage their carbon emissions. Over these last 18 months, a huge pain point we noticed was that most companies want or even have to act on their carbon emissions and that it is now among their top priorities (public, market and regulatory pressure tends to that). Yet many are left powerless of where to start, greater still is the total misunderstanding of how to manage their emissions in time. Bringing those companies a solution that provides them the tools to understand and act upon their emissions at a relatively low cost is critical. 

The second, Tapio’s core business, is what we do and how we do it. Tapio is a Carbon Management Software. Our platform offers companies a complete overview of their carbon status. One of the key strengths of our platform is our proprietary B2B marketplace that matches our customers with carbon reduction solution providers.

From a macro point of view, Tapio is part of an industry called “climate tech” – in a nutshell that means startups and companies that want to fight climate change with technology. That technology can be software, hardware, financial products or even consumer goods (think Impossible Foods).   

And like most industries, it attracts investors although 12 months ago very few venture capitalists (investors backing early stage companies typically in the tech space) were interested in what we were doing or in climate related topics. Then around September 2020 the number of mappings, investment thesis and dedicated impact funds around “climate tech” literally exploded. I highly recommend checking out Creandum’s Ines Streimelweger’s article in which, part of her conclusion, is that there is a high need and demand for B2B (this is where the biggest impact is possible) software to understand and act on carbon emissions and also ESG reporting tools for investors. Luckily for us, these are features available through Tapio’s platform. Here is also a great mapping of climate tech startups from Stride’s Pietro Invernizzi’s. Below is a picture of that mapping and the specific sector in which Tapio operates. 

Mapping Climate Tech Software Startups by Pinverrr

Clearly Covid has raised awareness towards sustainable issues, specifically climate change. But public, regulatory and market pressure towards companies to act on their carbon emissions has also increased dramatically these past 12 months, forcing investors to pay attention.

This has led us to realise that we are not alone in our fight against climate change. Other great startups have been active in offering services and products both for B2Cs and B2Bs. 

Typically, for an industry to take off you need a huge opportunity with people going after it, capital flowing into that opportunity and a workforce willing to turn away from traditional businesses and to join this new industry. This seems to be the case with the climate tech space, and it will probably only get stronger with time. In 2019 alone, more than $16bn were invested in climate tech startups. The space we evolve in is a $10bn opportunity growing at double digits year on year. 

Like many of my fellow founders in the climate tech space and their teams, I feel privileged to be able to work everyday on the biggest challenge humanity has ever faced. And although it is daunting at times, everyday I see new startups addressing the issue or companies committing to act on their emissions. Hopefully, very soon, everyone will be driven by climate urgency.  

What is preventing companies from taking action against climate change?

As Millenials, we are the first generation born knowing the risks our lifestyle will have on the planet. I always thought at some point we would have blamed our parents for their lack of action. Today I am a father, and I start to understand that we will be part of the blamed generation. We are now adults, we have jobs, some even pretty cool ones with great responsibilities in amazing companies. (Maybe,) it’s time for us to leverage our experience to move the lines. Long story short, we have to act. I refuse to be held responsible and have to find a way to explain “why?” to my grandchildren … All things considered, it’s way easier to act than to experience flashback flame or backlash in the future from our children and family.

Today, climate sceptics are the exception. Most companies acknowledge the situation, the risks and the potential consequences. In our collective unconscious, when a problem that might impact our lives so greatly is identified, we fix it or at least we try. If I’m detected with cancer, I will try to fight and cure it even though no miracle solution exists yet. In our case, why are companies not acting on climate change? Problems have been identified, risks are widely documented (pretty scary ones) and solutions exist however action leaves much to be desired. Why? 

After 18 months building Tapio, I personally met and interviewed over 100 companies (SMEs, listed corporations, international NGOs, SaaS, natural-based solutions, green-tech, etc.). I started to identify a pattern as to why companies are so slow to respond  to the climate situation. 

First, companies face a massive lack of internal competences. Fixing climate change is not part of their core business. It is a resource they have to acquire, develop or hire for. As we can imagine, they already have work to do. So, as long as they can avoid it, some will. Who are we to blame them? Luckily, climate change is becoming a pressing priority due to public, and government pressure.

Then, when they decide to act, they face an incredibly complex universe made of standards, calculation protocols, external auditors, a wide variety of solutions, regulations and frameworks. Highlighting a lack of human and financial resources. They have to find a way to act with precision and quickly on their main emission driver(s). They have to move forward step by step and the first step is the most important one but also the most complex one.

Eventually, the process is taking place in a changing environment. Indeed, mentality and regulation are evolving, luckily for the better but still evolving. Companies do not know the destination, they just started to accept they’ll have to start the journey. This adds a layer of uncertainty to the whole process. How to measure which action is worth taking if you do not know the exact goal or how results will be calculated? Companies are blind sailing on an unpredictable ocean.

To conclude, highlighting the problems does not mean we defend inaction. If we remember one thing from primary school is that “you have to read and understand the problem statement to respond to it”. Now that we roughly know the issues, let’s act.

At Tapio, we created a Carbon Management Software trying to take action as easy and efficient as possible removing external blockers, like the ones we just mentioned. Our goal is to build the tool that will allow your company to take its responsibility and transform your carbon-related commitments into reality. Together, let’s walk the talk.