Helping companies calculate and reduce their carbon footprint
Anna Alex believes that Planetly, the Berlin-based startup she co-founded in 2019, is one of a new generation of companies that combine the traditional pursuit of profit, with a necessary positive purpose that is beneficial for the planet. When the company was started just three years ago, she says such thinking was quite radical. Now, she observes, the belief that “purpose and profit can go together” is becoming the norm for many new companies.
Alex is chief customer officer of Planetly, a climate tech company that creates new digital tools to help corporates calculate, reduce and offset their carbon emissions – and communicate about their achievements to their shareholders and the media.
Planetly has gained more than 250 corporate clients, including some major names listed on large European and US stock exchanges. As of April 2022, it had 200 employees worldwide.
Alex, who has been recognised by industry media as one of the most influential people in the European tech space (1) , says she started the company after she identified a gap in the market.
In her previous startup, in the online fashion sector, she had found it difficult to accurately calculate her company’s carbon footprint and to find an effective action plan to reduce it. Companies should aim to calculate and act on their emissions in three separate areas, or scopes, according to the Greenhouse Gas Protocol devised a few years earlier by the World Resources Institute and the Business Council for Sustainable Development.
Scope one emissions are those from the fuel any given organisation burns in its business, from heating to company cars. Scope two emissions are those made by power companies that any given organisation buys fuel from: for example, the emissions made by a power station providing electricity for the organisation. Scope three emissions encompass all emissions made by an organisation’s supply chain, as well as during production, transportation and distribution by subcontractors, as well as waste disposal, employee commuting and other factors.
The tools to calculate these numbers were, according to Alex, insufficient and vague.
“All the calculations were based on estimates and averages, so the number you got in the end was very wrong. A very rough number does not qualify for targeted reduction actions.”
“In my last business, when I had tried to find out what the carbon footprint of the business was and what I could do to make it more sustainable, there were no real tools that would let me do that. I just got a spreadsheet from a consultant saying, ‘This is your carbon footprint for last year’.
“It was on such a different level to my other KPIs (key performance indicators) that I used to steer my business on for marketing or finance. I didn’t just look at my revenue once per year, looking backwards. I felt we needed to be able to make proper sustainability KPIs.”
The business model of Planetly is based on software, which also gives the company fast scalability, and Alex and her co-founder Benedikt Franke recognised that the software had to be optimised for individual clients. But there is also an important personal touch, she says. As soon as they are appointed by a client, Planetly employees embed themselves with the client to understand needs and develop the system that will work best for them. “Then can we start developing the software, not the other way round as many businesses are doing. Because once it’s written, it’s hard to change the software. So, putting a lot of user research and testing into it initially makes so much more sense. At first it might feel like it’s slowing us down, but in the end, it’s better.”
They also ask clients to appoint one of their own employees to a new role of Climate Officer.
“For many customers, this is only a part-time role. The Climate Officer doesn’t need to be on the C-level; it’s often people who have been in the company for a long time and know who to talk to in order to get good data and the best overview. We focus on how we can give them the best tools to have the numbers in their hand when the CEO is asking for it.”
After that, Planetly has a four-stage model: first it provides its proprietary software, appropriately customised for each client, to accurately calculate footprint across the three scopes of the Protocol. Secondly, they identify “reduction levers”, key points where emissions can be reduced, as well as a roadmap for long-term reduction. Thirdly, Planetly provides a “climate action portfolio” for “hard to abate” emissions that cannot be eliminated, but can be offset, as well as the mechanisms for offsetting them. And finally, it provides a plan for clients to “showcase their commitment” both internally, and externally.
A key area of focus for Planetly is working with funds to help them take responsibility for the carbon footprint of the companies they hold. Funds can have an “immense impact” relatively efficiently, she says, because a small number of investors can hold significant stakes in large companies. “The leverage and impact that you can have on your portfolio companies is huge,” she says.
Alex says being able to offer software solutions for all elements of a client’s ESG strategy was one of the drivers behind Planetly’s acquisition by US-based data firm OneTrust at the end of 2021, which has given them a significant boost in scale of clients.
There are still opportunities, she says, around developing software for ESG metrics for both corporates and for funds and investors, who will increasingly feel required to take responsibility for their investments, even if they hold minority stakes. “We’re still at the beginning,” she says. “You as an investor are holding an important part of the puzzle in the climate crisis.”
2009: Starts her career at start-up incubator Rocket Internet
2012: Sets up digital personal shopping service Outfittery
(1) 2017: Chosen to be among Europe's Top Women in European Tech by ‘InspiringFifty’
2017: Named one of Capital magazine’s ‘Young Elite – Top 40 under 40’
2018: Leaves full-time role at Outfittery, remaining as a director
2019: Joins Leaders for Climate Action
2019: Co-founds Planetly
2020: Named one of Capital magazine’s ‘Young Elite – Top 10 Founder’
2021: Co-authors the bestselling book Zukunftsrepublik: 80 Vorausdenker*Innen springen in das jahr 2030 [Future Republic: 80 thinkers jump into the year 2030]
2021: Joins the Vodafone Climate Advisory Board