Our investment in Accacia: helping real-estate managers design their journey to net-zero
Illuminate Financial is pleased to partner with Accacia by leading its oversubscribed $6.5 million Pre-A round alongside AC Ventures, Accel India & Southeast Asia, and B Capital!
Climate change is happening. In September 2023, the global average temperature was 1.8°C above pre-industrial levels, making it the hottest recorded month ever. According to the 2023 Emissions Gap Report by the United Nations Environment Programme, the world will become warmer by 2.5 to 2.9°C this century if proper actions are not taken. Even though more than 140 countries by 2022 have made net-zero pledges, including more than 700 enterprises globally, predicted 2030 greenhouse gas emissions must fall by 28% for the Paris Agreement 2°C pathway and 42% for the 1.5°C pathway.
Based out of Bangalore with offices in Delhi, Singapore, and the U.S.A., Accacia leverages its carbon validation engine to measure carbon emissions at the asset level, assess operational blind spots in carbon reduction at the entity level, and make recommendations to help companies transition into net-zero operations at the group level.
Modernization is the product of carbon binge
According to the International Energy Agency’s estimation, the operation of commercial buildings represents 30% of global final energy consumption and contributes to 26% of global energy-related emissions, with 8% being direct emissions and 18% indirect emissions from electricity and heat production. There are more than 1.3 million commercial buildings running daily, including ~652,000 office towers, ~280,000 hotels, and ~50,000 shopping malls that are the top 3 biggest sub-contributors to carbon emissions. Therefore, decarbonizing the real estate sector, including construction and retrofit, should be prioritized by governments and companies.
The complex data challenge for measurement
Measurement is always the first step of any improvement. However, it is very complicated to keep track of emissions data within one building, let alone multiple buildings across different locations, as emissions data is often collected manually or extracted across different legacy systems. Indirect emissions, such as Scope 2 and 3 emissions, are even more sophisticated to measure across entities and organizations. Furthermore, processing these emissions data into meaningful insights to take decarbonization actions requires know-how in both data and climate science, which is very costly for enterprises to source the right talent to fulfill their net-zero pledges.
Introducing Accacia — carbon assessment tool to assess, report, and reduce carbon emissions across multiple buildings and organizations
Uniquely designed and tailored for real estate assets, Accacia’s carbon validation engine integrates with the data collection systems at the building level, including more than 40 brands of Building Management Systems (BMS) and various kinds of sensors, and the management systems used at the group level, such as ERP, project management tools, and utility systems, to measure Scope 1 and 2 carbon emissions at the building level and Scope 3 at the group level. Accacia’s carbon validation engine is then able to identify the heavy emissions “blind spots” and recommend actionable initiatives based on the aggressiveness of the company’s net-zero target. Accacia also automates the reporting process for companies to meet disclosure requirements based on different international protocols and reporting frameworks.
“Carbon Risk” to be factored in by investors
While global policies are maturing to regulate companies to report and reduce carbon emissions, the pressure from investors for companies’ commitments to sustainability efforts becomes another major driver. Major exchanges around the globe are introducing tighter and more specific frameworks for listed companies to disclose their ESG data, while institutional investors are divesting from emissions-heavy assets. We believe that carbon is not merely a number that is regulated to be disclosed by the companies, but also a critical risk factor determining the long-term value of the company and driving companies’ adoptions in technology solutions that decelerates climate change to avoid being “punished” by the capital market.
Bridging the “Green Financing” knowledge gap
Bridging the green financing gap has remained one of the top priorities for international organizations, governments, and global financial institutions. The world needs ~$8.1 trillion investments in nature-based solutions to halt climate change, and Asia-Pacific alone sees a $800 billion gap in climate financing. While capital supply is on the rise (i.e. UN commits $1 trillion to regional energy transition in UN SDG Summit; Citi commits $1 trillion to sustainable financing by 2030, and so on), there is an actionable knowledge gap between the financiers and the project developers. Challenges in understanding project development and origination, analyzing dollar-to-impact value, and tracking post-implementation progress is making it hard for financiers to price the premium and, most importantly, justify impact to the policy makers, leaving the cash on the table. We believe that Accacia will become the “vertical knowledge bridge” between green financiers and the building operators to facilitate the mass adoption of climate technologies through green financing.
A mission-driven team
Led by Annu Talreja, Jagmohan Gaarg, and Piyush Chirkara, Accacia is the intersection of real estate, climate, and product development. Annu, founder & CEO, has more than 15 years of experience in the real estate sector across Marriott Group, Surbana Jurong Group, and AECOM. Prior to Accacia, Annu was the founder & CEO of Oxfordcap which offers an online community designed for students to access accommodation booking facilities. Jagmohan is experienced in leading B2B sales in real estate across APAC and Middle East, and Piyush has 10+ years of experience leading product development across Cisco and Rakuten.
We firmly believe that Annu, Jagmohan, and Piyush, alongside their 20+ strong team across Bangalore, Delhi, and Singapore, are the most exceptional team in helping commercial buildings transition into net-zero at scale. We at Illuminate are proud and humbled to partner with Accacia to catalyze their go-to-market across Asia and North America and strengthen their green financing offerings to real estate developers.
If you would like to connect with the Accacia team, or if you are building a next-generation enterprise technology solution and believe we could be of any help, feel free to give me a shout at ty@illuminatefinancial.com.
