It's all a matter of protocol

Stricter sustainability requirements from politicians are causing headaches for many investors. Not least because there is a lack of good data collection tools. Plan A from Berlin believes it has found a solution that beats all the competition.

A new era is dawning on the financial markets with the adoption of the new EU taxonomy for sustainable investing. From January 1, 2022, the regulation will regulate the extent to which an economic activity can be classified as sustainable and, indirectly, which investments, such as those made by asset managers or banks, are sustainable.

However, quite a few financial market players have complained in recent months that there is often a lack of data on which to reasonably assess the sustainability of a company. There are dozens of services that companies can use for carbon accounting. However, not all of them offer meaningful results.

For example, some carbon accounting methods rely on average values instead of the specific figures of the respective company. Many carbon footprint meters, which can be used free of charge on the internet, also rely on this approach. However, this is not particularly accurate. Another problem is that there are many different protocols and standards according to which sustainability is assessed. Not all of these take into account, for example, that CO2 emissions from electricity consumption vary from country to country, depending on the energy mix.

Nathan Bonnisseau has been working on the intricacies of the system for years. The start-up Plan A, which he founded together with Lubomila Jordanova in 2017, offers its own carbon accounting software. According to Bonnisseau, Plan A takes a very comprehensive approach. "We include both the emissions that a company controls itself and those that are generated indirectly, for example by suppliers."

Data collection is usually the first problem. "In 99.9 percent of cases, all the necessary figures are already available, we just have to enter them into our system," he explains. This can be done manually or via a programming interface with other company software. Plan A receives subscription fees for its services, with contracts usually running for one or more years.

The young company has already been able to attract prominent customers with its offering, particularly from the financial sector. These currently include the major French bank Société Générale as well as large venture capitalists. The German Bundesliga soccer team Werder Bremen also uses the start-up's services, as do engineering firms and insurance companies. "The fields of application are large, also because we can adapt the software to the respective customer," says Bonnisseau.

With their carbon accounting software, the Plan-A managers are operating in a competitive market. So it's good to have a unique selling point. In the case of the Berlin-based company, this is the reduction strategy that the software generates as soon as the carbon footprint has been calculated. The program provides very specific instructions for action. "This can involve concrete steps, such as switching electricity providers or reducing business travel," says Bonnisseau. If companies wish, some of the now 26 Plan A employees can also advise them on the next steps.

The EU's current plans and other planned pilot projects such as the EU Recovery Fund could give Plan A a real boost. "The situation is currently working in our favor," says Bonnisseau happily. Last month, the company successfully closed a three-million-euro funding round and is already talking to other investors. Profitability could be achieved as early as this year.