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Gravity Climate launches platform for industrial supply chain footprinting

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Tech start-up Gravity Climate announced the launch of a new platform to help measure and manage emissions from industrial supply chains. It also announced $5m in venture backing from Eclipse Ventures.

Net zero requires GHGs to be tracked across supply chains

According to a report from the Rocky Mountain Institute, industrial supply chains are responsible for over 40% of all greenhouse gas emissions globally. This includes industries such as construction, metals, and energy services that have significant physical operations and infrastructure.

Although many software companies tackle climate management broadly, Gravity is catering to industries – like construction, metals, and energy services – that have these dependencies. For these industries, reducing their own emissions also reduces their customers’ supply chain emissions, creating positive feedback loops.

There is an interconnection between energy use, embodied carbon in the built environment as well as resource management and consumption. That means that collaboration and efficient management of the supply chain should not only lower emissions but cut costs for all parties at the same time.

In practice, the platform will map and measure a company’s carbon emissions reductions goals, identify emission reductions opportunities while maximising return on investment (ROI), and the platform includes comprehensive reporting data.

Industrial supply chains touch everything

“Industrial products are instrumental to nearly everything we interact with […] That ubiquity paired with the carbon intensity of their operations means industrial businesses play a critical role in tackling climate change”, said Gravity CEO Saleh El Hattab on the company’s decision to target industrial businesses. He also believes that the new platform “can make meaningful emissions reductions while protecting [companies’] bottom line”.

The market for disclosures is growing rapidly. According to the UNFCCC initiative ‘Race to Zero’ (which brings together several net zero initiatives under the UN banner), over 5,235 companies have pledged net zero targets to date.

Industrials make up the majority of members of in the initiative, after the consumer discretionary sector. However, a report released by the initiative notes that the definition of net zero targets and carbon reduction strategies vary greatly between companies, and “many have set net zero goals that focus on a specific scope or subset of their emissions, rather than their entire footprint”. Data gaps are cited as a pervasive challenge to meaningfully assess a company’s overall carbon footprint and reporting on real progress towards achieving net zero targets.

Rising net zero ambitions for businesses – but are they for real?

While an increasing number of companies may be targeting net zero, there is significant divergence in terms of deadlines for when those targets are to be achieved, and the baselines from which performance is going to be measured.

Where industrial supply chains come into play is where corporates have committed to the decarbonisation of their Scope 3, or supply chain emissions. This can include not only full decarbonisation of the supply chain but even downstream consumption-based emissions. That means that when a leading corporate is disclosing, that pressure moves throughout the supply chain.

Understanding the Scopes of the Greenhouse Gas Protocol

The Greenhouse Gas Protocol, a multi-stakeholder partnership convened by the US-based environmental NGO the World Resources Institute (WRI), outlines three ‘Scopes’ by which companies can reduce their carbon footprint.

Scope 1 and 2 entail emissions produced directly by companies or indirectly through the purchase of energy. Scope 3 includes all indirect emissions that occur in the value chain of companies, both upstream and downstream.

According to consultancy McKinsey, Scope 3 accounts for 80% of a company’s overall climate impact, thus making managing that scope a priority for an economy wide achievement of net zero. However, the consultancy notes that a lack of carbon-accounting foundations makes it difficult for companies to meaningfully understand and account for their Scope 3 emissions.

It’s necessary to measure in order to manage

The new Gravity platform claims to simplify and automate measuring Scope 1, 2 and 3 emissions. Eclipse Ventures partner Aidan Madigan-Curtis cautioned that reporting on emissions data without a streamlined solution could represent a major challenge for industrials.

Demand for this technology extends to the investment community, where many investors have made sustainability and ESG commitments and are increasingly facing disclosure requirements over financed emissions. Private equity firm Blue Wolf Capital Partners is now using Gravity to measure the emissions of more than 10 of its portfolio companies.

Given the rapid increase in requirements for supply chain to fulfil ESG and sustainability reporting requirements around the world, such automated support could find a strong demand. While there are increasing number of tech companies targeting the space an investor like Eclipse Ventures, which brings along partners from industrial giants including Flex, Tesla, Apple, Samsara, Virgin Hyperloop and GE, puts the company in an interesting position.

“Industrials are being driven to decarbonize by not only regulatory bodies, but also their supply chains; yet they still aren’t able to reliably measure their emissions or access cost-effective decarbonisation opportunities” warned Madigan-Curtis. But, she added, “Eclipse believes the world-class team and technology Gravity has built will deliver a tech-native approach that will resolve this challenge for industrials.”

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