Most ESG solutions in the market only refer to non-primary data sources like financial and accounting data, which may not provide the most accurate assessment of the corporate situation. There needs to be a way to incorporate operational data into the mix to track emissions and provide data-driven insights. Having an added layer of granularity and precision is critical to measure corporate impact and develop actual impactful solutions.

However, this is a new industry, so there’s still a lot of growth. To find out more, we spoke to Hari Nair, Co-founder and CEO, Zuno Carbon about the growth of the industry. The Singapore-based startup just raised US$2.5 million in seed funding, led by Wavemaker Partners, and has over US$3 million in collective funding.

Here is why RHL Ventures bets big on ESG in Southeast Asia

Zuno Carbon’s solutions have been employed in industries with the heaviest carbon footprint, including oil and gas, logistics, and real estate, and with great success. Companies in Singapore, Malaysia, and Saudi Arabia have been enabled by Zuno Carbon in reducing their carbon emissions through data-driven insights to inform better decision-making.

Here’s what Hari had to share.

Congrats on the funding. Can you share how the investment will be used?

Thank you, we are glad to have the endorsement from our investors Wavemaker Partners, SEEDS Capital and Blue InCube Ventures, and support from our advisors, Ching Tao and Gretchen Kern, as well as my team. The collective funding of over US$3 million will be used to ramp up 4 main areas: user-centric product development, regional and global marketing efforts, strategic business partnerships, and the strengthening of our in-house sustainability capabilities.

First, we will invest in developing innovative new features that will continue to address our users’ pain points when it comes to ESG reporting and decarbonisation, so that we can continue tailoring our solutions according to their needs. 

Second, as a player in a relatively young industry, we also want to solidify our footing here in Singapore and Asia through marketing and awareness building, and eventually further our presence in the Middle East and the US.

Third, we will continue to strengthen and expand our partnership ecosystem and reach globally. We are finalising a partnership with Yokogawa, a titan in the industrial automation and engineering space to be able to provide Zuno Carbon’s solutions for their clients in the industrial and manufacturing sectors. We also have a partnership with global carbon marketplace Climate Impact X to offer easy access for businesses to offset their emissions through trusted, credible carbon projects. 

Lastly, as expertise plays a significant role in choosing the right solution for ESG reporting, we’ll build up our in-house team with a deeper understanding of sustainability reporting and industry-specific challenges. This will help our prospective clients and users simplify their ESG reporting and emissions reduction journeys.

Could you explain how your platform works and how businesses use it?

Zuno Carbon believes that sustainability should be easy, and we are here to help companies make adopting sustainable practices as painless as possible. With the growing push for sustainability globally, and decarbonisation being a big part of it, we help companies plan and execute the right carbon reduction strategy for their business.

Veridis is our AI-powered ESG management platform that helps companies capture primary operational data to monitor direct and indirect GHG emissions (Scopes 1, 2, and 3). Offering an added layer of granularity and reliability, Veridis analyses the data collected from across the supply and value chain, generates sustainability reports based on global regulatory frameworks, and provides actionable recommendations on how companies can improve their ESG metrics. The level of data granularity and comprehensive emission sources database allows for auditable tracking and higher quality decarbonisation insights compared to other solutions. 

For example, for a large oil and gas company, we facilitated performance tracking and compliance reporting of greenhouse gases based on the GHG protocol, covering scope 3 activities ranging from renewable and non-renewable energy plant operations to accounting activities of over 250+ employees. This resulted in a reduction of time and resources by 75%. 

Where do you see the most impact coming from in terms of geography or industry?

The most impact would be hard-to-abate sectors with the largest carbon footprints like oil and gas, manufacturing, logistics and real estate. According to a McKinsey report, the oil and gas industry alone is responsible for more than 40 per cent of global emissions.

Asia is home to many legacy organisations that are struggling to implement ESG management/monitoring systems, often due to hesitance from the management and a shortage of resources and expertise required to make the change. Coincidentally, these are the same organisations that are huge emitters of greenhouse gases, like companies in real estate, oil and gas, petrochemicals, logistics, and manufacturing. We therefore see a lot of potential for Zuno Carbon to accelerate Asia’s journey to net zero and beyond. 

How do you educate businesses that most likely don’t fully understand the complexity of managing carbon emissions and don’t have the infrastructure to deal with it?

Tracking and managing carbon emissions is a hardware-, labour-, time-, and resource-intensive process. It’s certainly tough as businesses are feeling the pressure to undergo transformation even when they don’t have the time, manpower, or skill sets to fulfil these regulatory requirements.

Education is a tricky subject as we meet organisations that vary in terms of comprehension and expertise in emissions management, requiring us to have a nuanced and personalised approach. The good thing is that, by coming to us, we know that they are looking for help with the process, and we are confident that we have the tools and expertise to accelerate their ESG journey. 

We see this as being a wide gap in the market, which is why solutions like Zuno Carbon’s Veridis platform help to fill in with an intuitive solution to help bridge the gaps in knowledge, insights, data collection process, and reporting needs.

With this belief, we are ramping up our marketing efforts and releasing content to educate key decision makers on the pertinent and complex issues surrounding decarbonisation. We hope to be at the forefront of change in the market and be able to ease the transition to a sustainable business for organisations of all sizes. 

Are you seeing any significant traction (or growth) from Southeast Asia and if so, where is it coming from?

Our goal is really to make ESG management solutions accessible to organisations of all sizes, no matter where they are. We want to support the markets where we are most needed, so geography is not quite a limitation for Zuno Carbon. That being said, we are witnessing a lot of potential in Southeast Asia as more stringent regulatory standards are introduced and demand for comprehensive ESG solutions grows rapidly. 

While our Western counterparts have led the game in terms of emissions reporting and regulations, Southeast Asia is catching up fast. For example, in Singapore, the Singapore Exchange (SGX) has mandated climate reporting for all registered issuers since 2022. Even non-SGX companies may soon be required to provide climate-related disclosures aligned with ISSB standards. In Malaysia, Bursa Malaysia and Petronas have partnered to advocate for standardised ESG reports. In Thailand, the Securities and Exchange Commission, Thailand mandates that issuers of green bonds, social bonds, and sustainability bonds must comply with applicable disclosure requirements in accordance with internationally recognised standards.

We are already working with companies in Singapore, Malaysia, and Saudi Arabia. Veridis has been implemented for customers including Cyan Renewables (Singapore), HBA Future Energy (Singapore), and South Korea-headquartered Lotte Chemical Titan (Malaysia), where we’ve helped these companies accurately track their emissions with operational data, provide actionable insights to reduce their emissions, and reduce operating costs as well.

What’s next for Zuno Carbon?

We hope to continually upgrade our solutions by considering feedback from users, providing them with ease of access and the best experience in adopting sustainable practices. As a team, we are also dedicated to advancing our knowledge and developing a deeper understanding of sustainability which allows us to better advise on their industry-specific challenges – easing their ESG reporting and emissions reduction journeys. We also hope to strengthen and expand our partnership ecosystem and reach globally to allow us to extend more value-added offerings to our customers.

With our base in Singapore, we also have plans to solidify our footing in Southeast Asia – eventually expanding to the Middle East and North America in the long run.

We also hope to strengthen our customer base across various sectors further and secure 50 active customers by the end of this year.