Many companies grapple with tracking Scope 3 emissions, which constitute a significant portion of their carbon footprint but are both time-consuming and expensive to monitor. The imperative to address this issue becomes even more pronounced with the increasing regulatory emphasis on Scope 3 reporting. Avarni, a Sydney-based startup, plays a crucial role in this landscape by assisting companies in quantifying carbon emissions, pinpointing supply chain hotspots, and devising strategies to achieve net-zero targets.
Today, Avarni announced the successful completion of an extension round, securing $2.5 million AUD (approximately $1.64 million USD). The funding comes from returning investor Main Sequence, as well as new backers Sprint Ventures and AfterWork Ventures. This follows a $3 million funding round in November 2022, bringing Avarni’s total funding to $6.1 million.
Avarni primarily targets large enterprise organizations with public SBTI (Science Based Target initiative) or net-zero goals, spanning sectors such as professional services, engineering, pharmaceuticals, hospitality, energy, and manufacturing. Notable clients include Schneider Electric, Jacobs, KPMG Australia, and Morrison Hershfield, alongside public sector entities like the City of London Corporation. Avarni boasts analyzing over $1.58 trillion worth of data across 311,000 suppliers, identifying more than 487 million tonnes of carbon dioxide.
Scope 3 emissions, emanating from sources beyond an organization’s ownership, can constitute 65% to 95% of its carbon impact. With increasing legislation mandating Scope 3 reporting, such as a recent Senate bill in California and upcoming regulations in Australia, Avarni’s role becomes pivotal.
Misha Cajic, Avarni’s co-founder and co-CEO, highlighted the challenge companies face in obtaining accurate and comprehensive data on indirect emissions due to limited transparency and data from suppliers. Avarni simplifies this process by examining the percentage of a company’s supply chain with SBTI-validated targets. It does this by initially analyzing procurement spend data, identifying key suppliers contributing to supply chain emissions. Avarni then enables organizations to engage suppliers through customized questionnaires and platform access, facilitating the collection of procurement spend and activity data. By utilizing this data, Avarni calculates supplier-specific emissions factors, enhancing accuracy and insights. The platform also incorporates forecasting and initiative planning tools for modeling future emissions and providing actionable steps based on supplier data.
Avarni has witnessed a surge in U.S. clients, driven by businesses proactively preparing for reporting requirements. In Australia, Cajic anticipates growing demand, particularly with new decarbonization regulations affecting companies and financial institutions from July 2024. Only 22% of the ASX200 (approximately 43 companies) currently have Scope 3 emissions targets and strategies, indicating a substantial market potential. Avarni distinguishes itself from competitors by enabling organizations to involve suppliers in managing emissions data within the platform for free, fostering collaboration and generating more accurate calculations.
In the pursuit of net-zero goals, Avarni’s technology, as noted by Main Sequence investment manager Alezeia Brown, addresses the challenge of precisely measuring emissions, particularly Scope 3. Companies often rely on third-party data or unverified numbers from suppliers, resulting in imprecise carbon accounting. Avarni’s innovative approach positions it as a pioneer in tackling this issue, empowering organizations to plan and reduce impacts across their entire supply chain more effectively.
