Sydney-based Pathzero helps investors track their portfolios’ carbon emissions


Digital generated image of multiple environment circular pie cross section with different types of energy supply standing on white background. Sustainable energy concept.
Image Credits: Andriy Onufriyenko (opens in a new window) / Getty Images

Financial institutions are waiting for the SEC and other regulators to pass rules about how to disclose emissions from their portfolio companies. Until then, many are following the standard set by the Partnership for Carbon Accounting Financials (PCAF). Pathzero helps them with a platform to exchange carbon information securely and analyze it. The Sydney, Australia-based startup announced today it has raised $8.6 million AUD (about $5.3 million USD) for its Series A+ round, which brings its total Series A funding to $15.6 million AUD.

The funding was led by Carthona Capital (which is also a customer of Pathzero), with participation from Clyde Bank Holdings, Antler, individual investors and Pathzero employees.

Pathzero currently has 142 million tons of emissions under management through its reporting platform, with the target of increasing that amount to 1 billion tons. Its users include companies like private markets firm StepStone, superannuation fund HESTA and Carthona Capital.

Pathzero founder and CEO Carl Prins told TechCrunch that climate action started out as an interest, before growing into a passion. “When I initially started looking deeper into the climate change issue at hand, I came to the realization that just working out what the size of the issue is and accounting for it is the first step in order to make progress,” he said. “When it came to helping financial institutions track emissions, there was already a global protocol on how to do this. From here, this presented us with the opportunity to launch a business internationally.”

Pathzero founders Charbel Ayoub and Carl Prins
Pathzero founders Charbel Ayoub and Carl Prins. Image Credits: Pathzero

Financed emissions are total greenhouse gas emissions from an investor’s portfolio or a bank’s lending book, based on what proportion of each portfolio company’s activity is financed by the institution. More regulators around the world are beginning to hold financial institutions responsible for their indirect impact on the climate, making it important for them to start reporting their financed emissions based on standards like PCAF.

“Such issues were once considered non-financial issues, offering the flexibility to ignore them or gloss over them,” Prins said. “Yet, in the past decade, there has been a considerable shift in the legal recognition of investors’ fiduciary duty to consider climate risk in their decision making.”

Financed emissions tracking is traditionally done on spreadsheets, with the help of consultants. But this approach doesn’t scale, which is where Pathzero comes in. The platform tracks all three carbon emissions scopes based on global standards like the GHG Protocol and PCAF. It allows financial institutions to exchange carbon information with their portfolio companies and limited partners securely, and collaborate to identify carbon hotspots. Then they can use Pathzero to set carbon emissions targets and perform scenario analysis to make sure their activities and goals are in accordance with the Paris Agreement.

Pathzero’s clients include one of the largest superannuation funds in Australia, which used Pathzero to share PCAF-compliant financed emissions calculations with its private equity managers. This enabled them to meet reporting requirements, and it also helped identify emissions hotspots so they could talk to their investment managers about decarbonization.

Another of Pathzero’s clients is ROC Partners. The private equity manager uses Pathzero to manage and measure the emissions in their investment portfolios, and share that information with stakeholders. This allows ROC Partners to use a risk-based approach to ask questions of their portfolio companies. Then their answers are fed back into Pathzero’s platform to create more detailed measurements.

Prins said that in financed emissions, Pathzero competes with ratings agencies like S&P and MSCI, but differentiates by focusing on private markets, where emissions data is usually harder to obtain. For corporate emissions, it’s up against boutique consultants, but Pathzero’s advantage is that it lets clients do more work on their own, using auditable methodology.

In a statement about the investment, Carthona Capital partner Dean Dorrell said, “After first investing in Pathzero over a year ago, we’ve seen the company go from strength to strength. We have every confidence in what their tech offering brings to the wider financial industry and are proud to be early adopters of their services ourselves. As regulation intensifies across sectors, we are looking forward to the years ahead as monitoring and reducing financed emissions becomes second nature to financial institutions.”

Carbon cap and trade for developing world could spur massive investments — if it works

More TechCrunch

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

23 hours ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

1 day ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo

Sony Music Group has sent letters to more than 700 tech companies and music streaming services to warn them not to use its music to train AI without explicit permission.…

Sony Music warns tech companies over ‘unauthorized’ use of its content to train AI

Winston Chi, Butter’s founder and CEO, told TechCrunch that “most parties, including our investors and us, are making money” from the exit.

GrubMarket buys Butter to give its food distribution tech an AI boost

The investor lawsuit is related to Bolt securing a $30 million personal loan to Ryan Breslow, which was later defaulted on.

Bolt founder Ryan Breslow wants to settle an investor lawsuit by returning $37 million worth of shares

Meta, the parent company of Facebook, launched an enterprise version of the prominent social network in 2015. It always seemed like a stretch for a company built on a consumer…

With the end of Workplace, it’s fair to wonder if Meta was ever serious about the enterprise