Automated Carbon Accounting for Supply Chains | CarbonChain

Understanding Carbon Footprints in Supply Chains

Modern supply chains are complex networks involving numerous activities that generate substantial carbon emissions. Determining the specific contributions of individual companies to this pollution has historically proven challenging.

CarbonChain, a London-based startup founded by experienced supply chain professionals, aims to simplify the process of tracking and accounting for carbon emissions throughout the entire supply chain.

CarbonChain's Approach to Emissions Tracking

“Our primary focus is on comprehensively tracking the carbon footprint of all processes,” explained Adam Hearne, CEO and co-founder of CarbonChain. “We specialize in Scope 3 emissions and target industries with the largest environmental impact, automating carbon accounting for businesses.”

The company’s platform, powered by artificial intelligence, endeavors to quantify the carbon usage associated with every global asset – a notably ambitious undertaking.

“We employ a ‘bottoms-up’ methodology, assessing emissions from each emitting asset worldwide, which is a significant undertaking,” Hearne stated.

Addressing Data Gaps and Verification

Hearne conceded that some companies may be unresponsive to data requests. In such instances, CarbonChain generates informed estimates, which are then submitted to the companies for validation.

He noted that, in the majority of cases, companies do not challenge CarbonChain’s assessments.

This acceptance is often driven by financial considerations, as providing carbon emissions data is increasingly a requirement for securing financing from banks.

The Role of Financial Institutions

Banks that provide funding throughout the supply chain are now prioritizing knowledge of a company’s carbon profile.

Hearne referenced a study conducted by CDP Financial Services, which demonstrated a correlation between a company’s carbon emissions level and the stability of its cash flow.

“The study revealed that high-carbon investments frequently involve outdated infrastructure, such as aging coal-fired power plants,” Hearne elaborated. “These facilities are less reliable and prone to disruptions, impacting operational consistency.”

He continued, “An asset operating at 90% capacity due to outdated technology could achieve 99% uptime with a modern solar-plus-wind-plus-battery system.”

Focus on Commodities and Real-Time Data

While the company’s carbon measurement technology has broader applications, the founders initially focused on the commodities supply chain due to its status as a major global polluter.

Measuring pollution within this sector is considered a crucial first step toward effective control.

“CarbonChain’s detailed, real-time supply chain carbon footprinting addresses a critical data deficiency, enabling climate-focused sectors and their financiers to take immediate action,” Hearne emphasized.

Funding and Participation in Y Combinator

The company secured a $2 million seed funding round in late 2020, led by Lowercarbon Capital, a fund dedicated to supporting companies like CarbonChain that are working to reduce global carbon emissions.

Additional investors included Blackbird.vc, Aera, AmAsia, Pioneer Fund, Starlight Ventures, and Mava VC.

CarbonChain was also a participant in the Y Combinator Summer 2020 program.