There are now many carbon accounting and emissions management platforms. But startups tracking the emissions problem tend to tackle the easiest problem to solve first: direct greenhouse gas emissions from a company's owned sources. In climate industry jargon, these are called “scope 1.” “Scope 2” emissions relate to greenhouse gas emissions from the energy a company uses. Scope 1 and 2 together only account for about 25% of global emissions. The rest fall into scope 3 emissions, which are hidden in the supply chain and therefore very difficult to track.
Startups are beginning to address these supply chain emissions: Clearly, for example, recently raised a $4.3 million seed round to address supply chain emissions related to transportation.
As another example, Nestlé emits 113 million tonnes of CO2 equivalent to the entire greenhouse gas emissions of Belgium, with over 107 million tonnes emitted throughout its supply chain.
Now another “vertical” effort is attracting investors: this time a startup aiming to decarbonize agricultural supply chains.
Root helps food and beverage companies collect primary data on agricultural supply chains. The RootOS platform was launched in October 2023 by co-founders Eric Oancea and Maurice Hensle, and currently has clients in dairy plants and fast food chains, though the company has not disclosed their names for now. The company has worked with more than 10,000 farmers to date.
Root has now raised €8 million in a seed round led by Point Nine’s Christoph Janz, with participation from Project A, HelloWorld, Arc Investors, and other startup operators including P9 alumnus Robin Dechant and Cargo.one CTO Mike Rötgers.
Root said food companies' sustainability and sourcing teams use the company's platform to collect verifiable primary data from farmers, who simply answer a few simple questions. The rest of the data needed to calculate greenhouse gas emissions is pulled from existing documentation and other data sources.
Root then models the environmental footprint of each product, allowing companies to see “emissions hotspots” throughout their supply chain.
Oancea believes emissions-tracking companies like Watershed, Sweep and Normative are too “one-size-fits-all.” “What they do is use secondary data and industry benchmarks to calculate that, on average, the carbon footprint of, say, one piece of aluminum is five kilograms of CO2,” Oancea says. “Or the carbon footprint of one litre of milk is two kilograms of CO2. But in reality, these numbers vary dramatically.”
He said the food industry needs to move away from using generic software solutions and climate consultants that use market benchmarks “towards systems and processes where we as a company actually start to collect activity data from our supply chain.”
Of course, that means getting very granular: the hundreds of thousands of farmers who supply McDonald's, for example, emit CO2 based on a number of different variables, including the number of cattle they have, what they feed them, and the fertiliser they use.
Oancea said these variables “drive huge differences in greenhouse gas emissions between suppliers, so unless we get there and collect data from these suppliers, it's not possible to make better decisions to reduce carbon.”
He says Root's platform is used by sustainability and procurement managers at major food companies to communicate with farmers and other suppliers. It connects to farm management information systems to pull in relevant data. “We feed that into our carbon calculator and then use that to get each supplier a customized score that reflects the reality of their farm.”
Currently, Root is only available in German-speaking DACH markets and some Eastern European countries, but the company plans to expand across Europe later this year.