Can Transparency and Data Save Our Planet?
Luminar Ventures and ByFounders recently announced our investment in Normative. For Luminar, this isn’t just an investment; it’s a step towards reducing climate impact, specifically climate damage caused by business. Normative has developed an ingenious platform to automatically calculate a company’s sustainability footprint using their own data from financial or enterprise systems.
Normative’s value proposition is so interesting to us because it addresses one of sustainability’s biggest pain points: knowing exactly what we can do to minimize our own footprint. Is it to reduce the amount of air travel? Sell our cars and bike to work? Eat less red meat? While all of these are advisable — not only for the climate but also for our health and well-being — alone, they will not be enough for the planet to become sustainable. The problem is compounded by the fact that, at the same time, there is a rapidly-growing middle class in emerging economies that aspire to (unsustainable) lifestyle precedents that we have set. Our negative impact on climate, fresh water supplies and sea levels, plus the mass extinction of species, will continue or even accelerate.
As always, in order to find a solution, we need to go to the root of the problem. Where does most of this pollution come from? In fact, 75% of CO2 emissions come from the companies that we work at and buy our products from. In Sweden, you need only to take the three largest corporations to amount to the same tonnage of CO2 as the whole of Sweden. Indisputably, the impact of corporations is the number one root of the problem. That said, a great part of the solution also lies here. I have understood that many of the companies don’t even know that they are part of the problem.
This is where Normative comes in. As most companies today are more or less digitized, the information from their ERP systems, bookkeeping or bank transactions is a true goldmine of information. When this information is imported into the Normative platform, you can automatically generate your sustainability profile and follow it over time. This will be very valuable to companies in giving them a view of their current impact, but even more so as a dashboard to guide them in their work to reduce their impact.
And here is more good news: There are many reports that reducing your sustainability footprint also increases profits . It’s costly to operate your logistics with gas-guzzling premium cars, air travel is far more expensive than Video conferencing, etc. And consumers will, at some point, start to compare companies and choose the one that is not destroying our planet. Our collective environmental conscience is gaining strong momentum, and it’s only in its infancy.
The Normative team has been working on this since the company’s inception in 2014. At first, they developed an application aimed to help consumers to reduce their climate impact. After a while they realized that corporate activities are by far the largest contributor to climate change. Also, by helping companies, the underlying data needed to calculate climate impact is then available and in the hands of the company to improve their impact status. In parallel, making the B2B approach more interesting, the regulations in this area are advancing rapidly in the EU; in the US, similar laws are being proposed right now.
Furthermore, there is a great impact underway from the United Nations PRI initiative that will soon dedicate over 100 trillion USD in capital towards sustainable investments. This is a rapidly growing movement in the investment community and is expected to make non-sustainable businesses less attractive.
We’re thrilled with our investment in Normative and to be on the right side of climate impact. Hopefully you agree with us after reading this blog post; make sure to engage your employer or favourite brand to sign up at normative.io.
Have any thoughts you want to share with me or the Luminar Ventures team? Remember, there’s no planet B — so reach out now: mbergman@luminarventures.com.
