Climate Choice aims to make emissions in the supply chain more visible and greener

The World Economic Forum says so-called “Scope 3 emissions” or CO2 in supply chains can account for up to 90% of a company’s carbon footprint and that more than half of all global emissions come from just a handful of current suppliers. Tracking and reducing these emissions is easier said than done; and if you can’t follow it, you can’t improve it. Berlin-based startup Climate Choice has closed a $2 million round to help companies get some of their carbon from that part of their emissions, too.

“In 2014, I experienced the problem first hand when I tried to reduce the climate impact of my first company, Resmio, by sourcing products from environmentally friendly suppliers. The task was impossible for someone who was not a climate expert,” explains Yasha Tarani, CEO and co-founder of The Climate Choice. “After selling Resmio, I took a year off and witnessed the catastrophic impact of climate change. In Delhi I reached temperatures of 122 degrees while people slept in the streets, in Thailand my hut was destroyed by flooding and in New Zealand I saw the glow of wildfires on the horizon. So I decided to devote my life’s work to undoing the destruction of our planet.”

Tarani has joined forces with co-founder Lara Obst, who launched the EU’s flagship climate innovation. Together, they decided to focus on decarbonising corporate supply chains, along with a third partner: data scientist Dr. Rey Farhan, who recently worked on data-intensive products for the financial industry.

The $2 million equity financing round was led by Gutter Capital.

“We believe the world is at a turning point. From 2024, approximately 49,000 companies will be required to disclose Scope 3 emissions data under the EU’s Sustainability Reporting Directive. We believe that The Climate Choice can be the partner of choice to help these companies keep up with the times,” explains Tarani. “We’ve already seen our platform succeed in streamlining data collection and supplier collaboration with our customers, and we’re excited to empower companies around the world to make climate-sensitive procurement decisions.”

The company created a platform to help companies understand their suppliers’ emissions, collect verifiable data and take action to decarbonise their supply chain. The product is used by several old customers, including O2 Telefónica and HiPP. The company says it actively monitors thousands of suppliers.

“Our mission is to train all companies to become climate champions. We believe that the mission is now more than ever within reach. Today, about half of European companies have a climate protection plan, but less than 5% of these companies show the necessary will to implement these plans. We believe that the TCC will fundamentally change that,” says Tarani. “Within ten years, our platform will automate supplier engagement for the world’s largest companies, and all companies will have access to real-time supplier data to make informed decisions.”

The company insists it is not a carbon accounting platform, but something else entirely.

“Traditional carbon calculation practices rely on averages and assumptions to calculate supplier emissions. This approach is useful for deriving an estimated carbon footprint and understanding pain points, but since all suppliers in a category look the same, it is useless to make decarbonisation decisions,” Tarani explains. “The TCC starts where CO2 accounting normally ends. Our platform automates supplier engagement and profiles real raw data on supplier emissions and practices. Supplier profiles are shared openly on our network, so work is not duplicated between companies. Armed with comprehensive supplier data, companies can compare suppliers and make informed purchasing decisions to decarbonise their supply chain.”