Let’s consider a relatively simple market, such as commercial real estate. To assess their carbon footprint, companies need to accurately monitor each building’s energy use, including both energy efficiency measures and onsite energy systems (cogeneration, solar and/or back-up power systems and fuels used), be able to measure and report where the energy is coming from to supply those buildings, and determine the carbon footprint of every kilowatt-hour or Btu of that energy. Evaluating energy use and the associated carbon impact needs to take place in real time, given that the mix of power generation on the grid changes frequently, and transmission and other constraints may limit the availability of renewable energy that a building is deemed to have purchased.
Gathering data from different vendors — from energy use and embodied carbon — and using it to determine emissions that fall under Scope 1 (under a company’s control), Scope 2 (indirect from energy purchases still under a company’s control) and Scope 3 (from activities not under the company’s control) has been challenging due to the lack of comprehensive standards for carbon accounting or a single set of guidelines on how to audit, verify and report.
Most technologies on offer focus on energy and carbon and consider Scope 1 and Scope 2 emissions. A range of solutions that address the challenge are being offered by startups including ClearTrace, Flexidao, The Energy Origin and Allinfra. (My firm, Clean Energy Ventures, is an investor in ClearTrace.)