Normative, a Stockholm-based startup that helps companies automate their carbon and sustainability reporting has just picked up $2.1 million in seed funding. The backing comes from ByFounders, with participation from Soundcloud co-founder Eric Wahlforss, Luminar Ventures, and Wave Ventures.
Dubbed the ‘Quickbook of carbon reporting,’ by helping businesses calculate and understand their carbon footprint, Normative hopes that it will make it easier for them to offset it.
Founded in 2014, Normative says that the modest cash injection will be used to “accelerate growth” and expand to key markets, namely the United States and the rest of Europe. Existing clients include Summa Equity, Bonava and Ikano.
It then automatically calculates a report of carbon usage and emissions — a process that can be incredibly time-consuming, complex and costly.
Normative says that when a company becomes a partner, reporting can be done instantly. The algorithm immediately returns several quantitative Key Performance Indicators (KPIs) for each report that are supplemented with qualitative data templates which cover that specific standard.
In recent years — as we have grown increasingly aware of the effect that the actions of corporate giants are having on the Earth — the regulatory, shareholder and consumer push for companies to improve their environmental footprint and report carbon emissions is becoming increasingly compulsory.
Recent EU rules stipulate that all large public companies with more than 500 employees must “disclose certain information on the way they operate and manage social and environmental challenges,” and similar laws are set to be passed in the US.
This means that Normative comes at an opportune time as companies are now scrambling to show their commitment to protecting the planet.
“It is widely recognized that corporate activities are by far the largest contributor to climate change,” Normative co-founder and CEO Kristian Rönn told TechCrunch. “To use my own country as a case study, H&M, Ericsson and Electrolux reportedly have larger CO2 emissions than the entire population of Sweden put together. This highlights the reality that in order to mitigate climate change, large companies need to mitigate their emissions”.
Rönn says the first step to mitigating climate change is for companies to measure their climate impact. But, seeing as collective climate concerns are relatively new and companies are only just feeling the pressure to change, only around 5,000 of an estimated 200 million companies are thought to measure sustainability at all.
Of the companies that do measure their carbon emissions, reports typically only include emissions that are easy to track, like electricity and car fuel consumption. These are estimated to make up less than 10 percent of a company’s total emissions.
What Normative is offering is a complete and clear picture.
“Normative helps large companies to go from mapping 10% of their CO2 to mapping 100% of their emissions for every product, service and activity, by reading data directly from their existing business systems e.g. SAP, Oracle, Microsoft, Visma etc.,” Rönn explained. “Moreover, sustainability reporting has been completely inaccessible for the small enterprise segment (who would afford to pay $50k-200k per year?), but Normative makes the whole process 10x times cheaper.”
The company also goes so far as to calculate how a company affects biodiversity and human health.
The United Nations Sustainable Development Goals for 2030 have massively helped raise public and corporate awareness of what we need to do to ensure ample resources for future generations and corporations have started to build them into their business model.
Normative is no different: “Normative is the first software in the world to quantify how companies influence the Sustainable Development Goals. With Normative, KPIs for 14 of 17 SDGs are given,” states the company’s website.
“Sustainability reporting is a pain and a huge cost in time and money. However, more and more stakeholders — everything from investors to consumers as well as the legislative sector — demands transparency about companies’ unpaid externalities,” says Rönn. “Recently many large investors have signed the UN PRI, saying that they will look at sustainability data and comprehensive reporting when they invest”.