CarbonChain is a carbon accounting platform based in London, UK, that provides real-time insights.
As the need for businesses and organizations to accurately measure and report carbon emissions becomes more pressing, so does the demand for reliable carbon accounting services, which is what CarbonChain strives to provide.
We had a chat with Adam Hearne, CEO and co-founder of CarbonChain, to discuss responsible supply chains and the importance of validation when it comes to global carbon accounting.
Tell us a little bit about your background. What brought you to the world of carbon accounting?
My path to carbon accounting was one of bushfires, Bezos and iron ore… Prior to co-founding CarbonChain, I worked for Rio Tinto, a global mining company, for more than a decade, and then transitioned to a Senior Manager for Amazon’s European supply chains. Inevitably, I gained a deep understanding of the complexities of global commodity and manufacturing supply chains, and the reality that they produce the majority of the world’s carbon emissions.
I grew up in Australia, and when the devastating bushfires of 2019 threatened my childhood home (literally, my backyard was on fire at one stage), this was a key turning point for me. I realized I could use my experience and knowledge of supply chain operations to help fight climate change and bring transparency to the world’s most carbon-intensive sectors. From there, CarbonChain was born.
A 2021 survey by Boston Consulting Group showed that 90% of companies don’t measure their emissions correctly. Why do you think that is and how can this be solved?
When it comes to Scope 3 emissions in particular, companies often struggle to measure their emissions accurately due to gaps in supply chain data. Accurate approaches to emission tracking based on companies’ specific supply chain activities require a huge amount of data gathering, and this information is often incomplete, unavailable, or expensive to obtain — especially in the most climate-critical and complex supply chains like manufacturing, metals, agriculture and energy. CarbonChain is solving this problem by using granular data to provide end-to-end visibility into the carbon footprint of a company’s supply chain.
Is there something that CarbonChain does differently from other carbon accounting platforms?
CarbonChain’s methodology is independently validated and verified, and our database includes over 80% of global emissions, which allows companies in the highest-emitting industries to track the emissions for every supplier they use. Methods based on broad industry estimates are popular, but lead to weaker insights for tackling important carbon hotspots.
The granularity at which we operate and the expansiveness of our database are some of CarbonChain’s key differentiators for our customers. We provide a foundation of truth for decarbonizing global economic production through every step of the supply chain, from source to shipment and beyond. That chain of accurate tracking of emissions — every footstep of the carbon footprint — is what we like to call the CarbonChain.
Why do you believe responsible supply chains are crucial for moving the needle in the fight against climate change?
60% of global emissions comes from the supply chains that feed global merchandise trade — which exceeds $20 trillion a year. This means the opportunity is larger than most of the world’s highest emitting economies, including the EU 27 EU members.
What’s more, the World Economic Forum estimates Scope 3 emissions make up as much as 90% of a company’s carbon footprint. In order to prevent global warming at catastrophic levels and achieve net-zero by 2050, decarbonizing supply chains is crucial.
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With this goal in mind, leading companies are developing a greater understanding that they must take responsibility for their impact on climate change — and pressures are mounting from stakeholders and regulators worldwide, whether that’s SEC disclosure rules in the US or the EU CBAM (Carbon Border Adjustment Mechanism, informally described as a carbon tax for items entering Europe). If a company neglects the carbon-intensive activities of its suppliers, freight providers and customers, this undermines decarbonization efforts and impedes progress when it comes to fighting climate change.
Could you speak to the role of validation in carbon accounting?
Validation in the carbon accounting world is paramount to ensure carbon reduction efforts can be tracked and trusted. Inaccurate calculations can cause reputational risks like greenwashing, and can mean organizations miss opportunities to reduce emissions.
Independent validation can happen at various stages: for example, validating the methodology used by a carbon accounting provider, validating the accuracy of input data, or validating a specific output emissions report produced for a company.
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CarbonChain’s carbon accounting methodology V0.94 has been validated by SGS and verified by Bureau Veritas according to international best practice standards. We pride ourselves on this validation, as it underscores our commitment to providing companies and banks with the most accurate accounting of Scope 3 and supply chain emissions. In turn, the emissions reports that CarbonChain provides are transparent and auditable, so companies can have their specific reports verified by independent third parties.
Looking at the big picture, carbon accounting is becoming as important as financial accounting. When accounting and independent auditing goes wrong in financial markets you end up with a global financial crisis. When carbon accounting is not done accurately you could end up with an even worse global climate crisis, which is harder to fix. That’s why the world needs to get carbon accounting right the first time.
What emissions reduction solutions does CarbonChain offer?
CarbonChain enables companies and banks to measure, report and reduce their carbon impact, through accurate accounting of Scope 3 and supply chain emissions.
Customers realize that different suppliers can produce identical products with vastly different carbon intensities. Sometimes one supplier is 20 times more carbon-intensive than another on a like-for-like product basis. Procurement departments can weaponize their wallets and buy lower-carbon products, but only if they have the right emissions data at their fingertips. In turn, suppliers can only reduce their product emissions if they have data about their own supply chain emissions, and about alternative assets, suppliers, or power sources.
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Incentives matter too; banks like Societe Generale use CarbonChain to set and track decarbonization KPIs with clients, as a critical step towards sustainability-linked financing.
Whether product carbon footprints or portfolio emissions inventories or corporate carbon footprints, CarbonChain incorporates data from the point of resource extraction, from raw materials, all the way through to the point of consumption, to create emissions insight across the entire supply chain. We enable full carbon traceability and the identification of real-time reduction opportunities.
What are CarbonChain’s plans for the future?
We’re dedicated to transitioning the world’s supply chain to a net-zero economy. As we continue to expand our customer base in the most carbon-intensive value chains (manufacturing, commodities, and heavy industry), CarbonChain will build new carbon accounting and reporting products, and grow our team by 30 in the coming year to meet increasing demand. We’ve also just launched a New York office to better support the North American market, as it prepares for regulatory shocks to high-carbon trade flows in and out of the region.