Tanso Raises $1.9M to Simplify Sustainability Reporting for Manufacturers

The Growing Demand for Sustainability Data

The escalating climate crisis is generating substantial demand for comprehensive data collection, as various industries strive to achieve decarbonization. Essentially, effective carbon emission reduction is impossible without first establishing a clear understanding of current emission levels.

This imperative to collect data presents a significant opportunity for startups. A number of early-stage companies have already emerged, aiming to address the sustainability data deficit through solutions like APIs for evaluating emissions related to carbon offsetting initiatives – which, in turn, has spurred further startups focused on resolving data inconsistencies within offsetting projects.

Expanding Regulatory Requirements

It is evident that the scope and depth of sustainability reporting requirements will continue to broaden in the future.

Munich-based Tanso is a nascent startup, established this year, that is developing software to facilitate sustainability reporting specifically for industrial manufacturers. Their objective is to create a data management system capable of automating data capture and sustainability reporting, tailored to the unique requirements of this sector.

The founders chose to concentrate on industrial manufacturing due to its substantial emissions output and relative lack of dedicated digital technologies compared to other industries.

The founding team initially connected during their academic pursuits at universities in Munich and Zurich, where they were conducting research into the assessment of organizational climate impact. This collective expertise led to the recognition of a business opportunity: building a data management system for a sector known for its pollution, now facing a mandate for change.

European Regulations and Sustainability

Over the next few years, European regulations will expand sustainability reporting obligations. The EU’s “Green Deal” plan sets a broad goal of establishing Europe as the first “climate-neutral” continent by 2050.

Currently, the EU Corporate Sustainability Reporting Directive (CSRD) is in effect, applying to over 50,000 companies and mandating the reporting of sustainability metrics, beginning in 2023.

The U.K., despite no longer being part of the EU, has also implemented reporting requirements for domestic companies through the Streamlined Energy and Carbon Reporting (SECR) regulation, which has been in place since 2019 and affects more than 12,000 businesses to varying degrees based on company size.

This clearly indicates a regional trend towards requiring businesses to gather and disclose sustainability data.

Tanso’s Pre-Seed Funding

Tanso recently secured $1.9 million in pre-seed funding to launch its data management support software, anticipating a surge in demand as regulations like the CSRD take effect.

The funding round was led by German early-stage B2B fund UVC Partners, with participation from Picus Capital, Possible Ventures, and several business angels.

Currently in the R&D and product development phase, Tanso is collaborating with manufacturers to refine its data gathering automation capabilities and develop a scalable product offering, as explained by co-founder Gyri Reiersen to TechCrunch.

The team deliberately sought a substantial pre-seed investment to ensure the development of a fully functional and scalable product by the end of 2022.

The Product Vision

The intended product is a unified platform for collecting and storing a customer’s sustainability data, automating the creation of reports to meet regulatory requirements, including auditing processes.

Reiersen highlights that, from 2025, CSRD reporting will require auditability, necessitating transparency and traceability. Furthermore, the accuracy of sustainability reporting will become a responsibility for C-suite executives, prompting greater attention from boardrooms.

“Beyond compliance, the focus shifts to leveraging this data and the resulting insights to forecast future developments, inform product development strategies, and guide decision-making,” she adds.

“Our current prototyping efforts center on streamlining the information gathering workflow and prioritizing a user-friendly experience. We are also focusing on developing robust integrations over time,” Reiersen explains.

She acknowledges the challenge of balancing usability with in-depth data analysis. A scalable product is crucial, especially with the anticipated demand following the implementation of the CSRD in 2023.

“Our aim is to provide solutions that benefit all companies, not just those achieving carbon neutrality. This requires identifying and developing productizable use cases to ensure scalability,” she states.

Concerns About “Greenwashing”

However, Reiersen cautions against the proliferation of superficial offerings driven by marketing-focused “greenwashing” and unsubstantiated carbon offsetting claims, rather than a genuine commitment to accurately identifying and addressing the problem to avert climate disaster.

Reiersen’s interest in this field originated from her university research, which revealed the overestimation of carbon offsets through deep learning techniques.

“Accountability and ensuring the effectiveness of developed products are paramount. It’s easy to rely on a ‘black box’ without questioning its validity. We cannot tolerate systems that overestimate or underestimate emissions; accuracy and validation are essential,” she emphasizes.

“Moving forward, accuracy will become increasingly important, requiring access to ‘real data’ rather than mere ‘guestimations.’ This necessitates a user-friendly interface that guides users through the process of providing accurate data, while simultaneously focusing on integrating and accessing data at the database level,” she predicts.