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Carbon accounting catches fire as Plan A raises $27m

© Shutterstock / DesignRageclouds and a graph representing Co2 emissions
What is carbon accounting?

Lightspeed led an investment round of $27 million in Plan A to scale its business decarbonisation platform. As AI options support more detailed analysis the carbon accounting and decarbonisation market is heating up.

  • The capital raised will be used to scale the company’s presence in the French, UK, and Scandinavian markets, double the headcount, and advance the platform’s decarbonisation tooling, Scope 3 data processing, and reporting capabilities.
  • Clients such as Chloé, BMW, Deutsche Bank, Visa, GANNI, N26, HomeToGo, trivago, Personio, Sorare, KFC, and DFB rely on Plan A Sustainability Platform.
  • The carbon accounting market is set to be transformed as a growing number of jurisdictions are demanding mandatory climate risk and sustainability reporting. 

Plan A, one of Europe’s leading corporate carbon accounting, decarbonisation, and ESG reporting software provider, has closed a $27 million funding round led by Lightspeed Venture Partners.

Visa, with whom Plan A signed an exclusive global partnership in December 2022 (see press release here), has also joined the round, along with Deutsche Bank, Opera Tech Ventures (VC arm of BNP Paribas), and a large number of unicorn founders, including those of Supercell, Aiven, Zalando, and Wolt. Julie Kainz, Partner at LSVP said: “The strength and flexibility of Plan A’s platform has the capabilities to drive change in organisations from across sectors on a global scale.”

Plan A’s growth is what is attracting investor interest

All existing investors such as HV Capital, Keen Venture Partners, Demeter IM, and coparion have also participated. Plan A was able to secure the investment as it has demonstrated significant growth in customer base (1,500+ clients) and software revenues (>600% YoY Dec 2021–22), a pan-European partnership network, and a market-leading climate data processing and business decarbonisation technology.

The funding now heralds the next growth phase. With the fresh capital, Plan A will double its headcount to 240+ employees to expand its market penetration in Europe with a strong focus on France, the UK, and Scandinavia, as well as deepen its platform capabilities. For the latter, the aim is to further advance its platform’s decarbonisation tooling, Scope 3 coverage and actionability, as well as policy alignment capabilities. With this, Plan A says it intends to further its mission to empower hundreds of thousands of businesses to self-manage their net-zero journey by using its end-to-end SaaS platform.

What does Plan A offer?

By automatically mapping all necessary data across Scopes 1, 2, and 3 and merging them with national emission factors and datasets, the Plan A Sustainability Platform is able to provide granular emissions profiles and ESG insights in dynamic dashboard overviews.

Based on the indicators with the most significant reduction potential, the software then empowers companies to set science-based net-zero targets and achieve them through 1,000+ decarbonisation solutions and activities, best practices, as well as a network of service providers and sustainability professionals. At the end of this holistic process, the platform produces what Plan A calls “regulation-proof ESG reporting”. Due to the high degree of automation, deep decarbonisation and compliance in a highly fragmented regulatory market becomes manageable, less complex, and cost efficient.

To meet the highest scientific standards, all platform-embedded calculations and decarbonisation solutions are fully aligned with internationally recognised scientific methodologies and standards such as the Greenhouse Gas Protocol and the Science Based Targets initiative (SBTi). The scientific accurateness of the applied Corporate Carbon Footprint (CCF) calculation methodology is certified by TÜV Rheinland, one of the world’s leading verification bodies.

The carbon accounting and decarbonisation market is getting increasingly crowded

There are many different providers of carbon accounting and decarbonisation services, but the market is getting increasingly crowded. Investors are showing growing interest in the opportunity and global giants like IBM and Salesforce are rapidly development their own platforms. Both for example have recently announced new additions to their own platforms – with AI and machine learning to smooth the path.

IBM recently said it had added AI capabilities to its Envizi ESG suite, helping companies to address their Scope 3 emissions. The system automatically captures data from ERP and finance systems, property management databases, supplier data files and other business platforms and is integrated with IBM Maximo, IBM Tririga and IBM Turbonomic to provide a comprehensive view of sustainability performance and opportunities.

By integrating  NLP in the IBM Envizi ESG Suite the company says it can t can help organizations accelerate the capture, calculation and analysis of Scope 3 greenhouse gas (GHG) emissions  The new text classification capabilities are designed to help enable a leap forward in efficiency and accuracy by helping organisations automatically ingest, organise and manage the spend data required for emissions calculations and external disclosures.

IBM also released a preview of findings from the IBM 2023 Sustainable Business Snapshot, conducted by Morning Consult on behalf of IBM, revealing that there’s a perception gap among corporate sustainability professionals, including sustainability and IT decision makers. 93% of respondents think their company is somewhat or very mature in using data to track sustainability progress. But only 45% say they are ready to report on Scope 3 emissions. The new functionality in Envizi is expected to help address one of the key challenges organisations face with Scope 3 emissions, which is the categorisation of spend data drawn from financial or ERP systems.

Earlier in September 2023, Salesforce announced the release of Einstein for Net Zero Cloud. The goals is to simplify ESG reporting for companies as they navigate an evolving regulatory landscape. Research has shown that a successful ESG execution cuts company costs up to 60%, yet 51% of finance leaders grapple with time consuming reporting.

According to Salesforce, Einstein-powered AI in Net Zero Cloud streamlines ESG reporting by suggesting key data, aggregating past disclosures, documents, and other Net Zero Cloud insights. It then provides reliable responses that align with framework-specific requirements and auto-populates reports.

Moreover, two new Net Zero Cloud offerings include:CSRD Report Builder, which automates CSRD-aligned reporting, and Materiality Assessment, which enables ESG managers to identify the topics most material to their business. In 2024, 50,000 E.U. firms must adhere to CSRD legislation, disclosing financial risks and societal impact, along with scope 3 emissions, with 3,200 US companies affected.

Gartner has predicted that by 2026, 75% of organisations will increase the amount of business they do with IT vendors that are focused on specific environmental, social and governance (ESG) goals “and will seek to replace vendors” that don’t demonstrate sustainability progress.

SGV Take

That’s not to say that there isn’t a massive market to target. While the global giants have their own customer networks within which to roll out additional offerings, there is little question that as more jurisdictions impose mandatory climate risk reporting, the need for such services at multiple scales.

The issue is finding the right solution for your company, ensuring that it fulfils your accounting and reporting needs today and that it can evolve as the market environment changes. A lot of that change is going to happen far faster than expected – and the longer the delays, the harder the regulation is going to be. A strong growth market to be in and it’ll interesting to see how the introduction of AI changes the game.

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