The drive towards integrating carbon insights into business operations is primarily fueled by a few key factors: regulatory compliance, the potential for cost savings, revenue opportunities, and pressure from investors. As Mark Fischel, Carbon Product Lead at Novata, puts it, "companies now see managing emissions as critical for doing business and attracting funding. For investors and general partners (GPs), GHG emissions are one of the most important metrics. They are in almost every single data request”.
However, despite the clear demand, many companies find the process of understanding their emissions to be daunting, time-consuming, and costly due to the complexity of calculations and lack of in-house expertise. “We hear this first hand from our clients and from their portfolio companies,” says Fischel, “they need a solution that is easy, accessible, and really straightforward.”
Challenge: Simplifying carbon management for private markets, ensuring compliance and accessibility
Recognizing the critical need for an intuitive and effective carbon management solution, Novata sought to integrate this functionality into its ESG platform. “We built a digitally native carbon tool, which is available at the very moment where companies are being asked for GHG emissions. This tool radically lowers the barrier to entry for thousands of companies in two ways: First, in terms of cost and the other in terms of complexity,” says Fischel.
However, Mark was no stranger to the complexities of building these solutions, having previously founded a business in the world of carbon accounting software. He noted, "at a previous company, we managed an extensive internal emission factor database which powered our carbon accounting tool. I lived and breathed the pain involved in maintaining and updating that database."
Approaching this task for a second time, Fischel aimed to address three key challenges:
- Trusted Data: Ensuring streamlined access to comprehensive, trusted, and updated emission factor data.
- Easy Integration: Achieving seamless integration with Novata’s existing platform, while maintaining the ability to support a large enterprise client base.
- Automated and Transparent: Tackling the intricacies of emission calculations across a wide range of business activities, while maintaining calculation transparency and compliance.
Solution: Climatiq integrates automated carbon estimates for business travel, purchased goods and services, and energy consumption
Climatiq's API integrates seamlessly with Novata’s ESG platform, powering a user-friendly carbon calculator tool for investors and their portfolio companies to confidently measure and report emissions. Fischel notes, “By way of analogy, building an in-house payment system incurs ongoing costs and requires regular maintenance. Using a payment processing company, like Stripe, involves a fee, but it eliminates these overheads. Similarly, opting for Climatiq as a carbon calculation backend may have costs, but offers significant savings by reducing internal resource commitments.”
With Climatiq's extensive and verified emission factor database at its core, the Climatiq API provides Novata with automated emission calculations across a range of activities such as business travel, purchased goods and services, and energy consumption. “The API streamlined the selection of appropriate emission factors, eliminating the need for extensive custom logic. Its well-structured documentation also facilitated our front-end design and user data input for calculations,” says Fischel.
Climatiq’s API is helping Novata reach its goal of providing a market-leading tool to simplify carbon data management and reporting in the private markets.
The integration with Climatiq empowers Novata users to:
- Manage Emissions: Accurately track emission activities and classify suppliers to gain a complete carbon footprint overview.
- Save Time: Effortlessly upload business expenses and automate complex emission calculations within Novata’s ESG platform.
- Stay Compliant: Access an investor grade audit trail, ensuring full confidence to report emissions and meet regulatory requirements.
"While we have carbon experts in-house, the intricate challenges of developing a carbon calculator – particularly for scope 3 emissions – made outsourcing a practical choice,” says Fischel, “this strategic decision allows us to concentrate on our core strengths: deeply understanding our customer needs, enhancing the user interface, and ultimately improving the user experience."
Results: Novata launches an investor-grade carbon measurement solution in just three months
Over a span of three months, Novata developed and launched the Novata Carbon Navigator, marking a major advancement in simplifying the measurement of scope 1, 2, and 3 emissions for a wide range of businesses.
The Novata Carbon Navigator has seen remarkable adoption, with hundreds of companies signing up even before its official launch. “We're growing absolutely rapidly,” says Fischel, “one portfolio company, in December, described getting access to this tool as Christmas coming early”.
Through reducing entry barriers and demystifying carbon measurement, together, Climatiq and Novata are setting the stage for a future where corporate sustainability and transparency are the norm.
