196 countries around the world have adopted the Paris Agreement to limit global warming to no more than 1.5C. This requires us to reduce emissions by 45% by 2030 and get to net-zero emissions by 2050. More than 70 countries have set net-zero targets and more than 3000 global businesses are working with Science Based Targets Initiative to set their net-zero paths. However, the biggest “stock” of emissions for most companies is their Scope 3 emissions, which are the hardest to manage. This is because Scope 3 emissions are in a company’s supply chain but come from entities over which these corporates have no financial or operational control. While many companies have treated this lack of oversight capability as an excuse to pass the problem over to others, this isn’t a sustainable strategy for bringing about our climate goals. It requires collaboration across the supply chain, the industry, and incentive structures that require objective measurements, open and verifiable datasets, and mechanisms to deliver incentives, globally, at scale at marginal cost. Imagine Nestle paying a farmer in India a few dollars to have successfully sequestered carbon in their field – this is the kind of structural change that is needed to drive the change that we need.
But, as with any new mechanism, there are complexities and challenges. The carbon market is still maturing, and there are issues around verification, transparency, and accountability. It’s a space ripe for innovation, and that’s where companies like Epoch come in. The current ecosystem(pun intended) for carbon credits lacks this kind of transparency and most importantly, accountability. Massive corporations have been buying carbon credits in bulk that only offset emissions, instead of truly accounting for them, and this kind of behavior is indicative of a strong latent demand that the market hasn’t served. Epoch’s approach, which allows them to provide a more transparent and accountable solution, has the dual benefits of serving this demand and incentivizing companies to use carbon credits in greater numbers.
Invest with Impact Form Submission:
Join the Invest With Impact Movement
First Name: Jinal
Last Name: Surti
Email: jinal@epoch.blue
LinkedIn/Twitter: Jinal Surti
Where should people find you? I am most active on LinkedIn.
What kind of member are you? Startup
What kind of Invest with Impact persona best describes you? I am an optimizer; I like creating the tightest possible link between impact and returns.
Define Invest with Impact: Investing with Impact should be market-leading returns that drive positive impact. The biggest hurdle in doing that is making sure there is no potential conflict between optimizing for impact and optimizing for returns. This means thinking through all possible corner cases and defining operating principles when there is a conflict.
Startup Sector: FinTech
Startup Name: Epoch
Startup URL: epoch.blue
Startup Problem: Today, a third of the largest companies in the world are bound by net-zero targets. These net-zero targets include Scope 3 emissions, which are emissions from a company’s supply chain, from entities over which the company has no financial or operational control. Epoch uses geospatial data and smart contracts to monitor a company’s supplier’s emissions and incentivizes reductions in a way that is verifiable, scalable, and efficient.
Startup Funding Target: $3,000,000.00
Startup Stage: Prototyping
Startup Impact: At scale, we have a shot at enabling 10 Gt CO2e emissions reduction annually with a $100M+ ARR business model.
Epoch helps these companies monitor their supply chain (Scope 3) emissions at a granular level in near-real-time, use that data to quantify carbon impact with smart contracts an open and trustless arbiter, and process global payments using web3-powered smart contracts. Epoch’s state-of-the-art solution has only become possible recently because of the advances in earth observation technologies and scalability in smart contract platforms. Using Epoch, Nestle (as an example) can collaborate with and monitor hundreds of thousands of their supplier’s farms, quantify carbon impact at the farm level, and pay sustainability premiums in a scalable way.
Everything about Epoch’s approach links directly with one of the fundamental concepts of the Invest with Impact movement, total factory productivity – though in this case, it is the productivity of societal benefit, not just one worker’s labor. Total factor productivity is an economic measure that captures the efficiency with which inputs (like labor and capital) are combined in production. In the context of climate change mitigation and the idea of investing in carbon mitigation technologies, such investments are indeed a form of direct investment in climate-related total factor productivity improvement. They represent an application of capital (in the form of investment in new technologies or methods) that can potentially lead to more efficient ways of reducing carbon emissions – in essence, getting more output (in terms of carbon reduction) from the same or less input. With companies like Epoch leading the charge, we can look forward to a future where sustainability and profitability go hand in hand, where every investment helps contribute to a healthier, more sustainable world.
If you liked this, please consider sharing it with someone else who might – the power of the Invest with Impact movement is only as great as those who know about it. If you haven’t already subscribed to the substack, please do so!