Pathzero, backed by Carthona Capital, is led by a passionate team on a mission to accelerate the decarbonisation of the world economy. Pathzero’s Co-Founder and CEO – Carl Prins – is a chartered accountant, former hedge fund CFO and registered sustainability consultant, so he knows plenty about the impact that climate change can have on financial performance and the ability to attract investment. As climate change brings serious economic challenges, he and his Co-Founder and CTO, Charbel Ayoub, have developed a comprehensive online platform that has ‘SaaSified’ carbon accounting to enable companies to easily measure, reduce and disclose their carbon emissions and share this information with investors.

“By directing funding towards low-carbon organisations, capital markets can act as a powerful force for decarbonisation. At Pathzero, we enable investors to exercise that positive influence by giving them the tools and information they need, with a focus on providing transparency about corporate carbon emissions” Prins explains. “If we can help investors understand the emissions they’re financing through their investments, they can better manage climate risk. This means they can deliver on their fiduciary responsibility to act in the best interest of their stakeholders while maintaining a competitive edge.”

Through their platform, Pathzero has automated as much of the data gathering process as possible. However, they make a point of using sustainability consultants to validate clients’ emissions information and help them figure out where to begin – or how to take the next step – in their climate journey.

“What we’ve found is that every organisation’s climate journey is going to be somewhat unique, and the ‘human element’ is really important in navigating that inherent complexity”, Prins says. “Additionally, the industry is awash with announcements on new target setting protocols, certifications and standards, making it difficult for organisations to make sense of climate jargon and determine the best course of action. That’s why we’ve combined our digital platform with the advisory expertise of our certified sustainability team, helping our clients understand this evolving industry and set clear goals that align with internal business objectives and stakeholder needs.”

Today, Pathzero has built an ecosystem of members comprising institutional investors, asset owners and portfolio companies who are already sharing their carbon information with each other and seeing the benefits this transparency brings to their organisations’ emissions reduction objectives. This includes IFM, Blackbird, Advent Partners and of course, Carthona Capital, an Australian early-stage venture firm that led Pathzero’s Series A funding round in October last year.

Carthona takes a hands-on approach and prefers to remain as backers for the long term by investing in capital raising rounds as required. Carthona Partner Dean Dorrell explains that ESG issues are among the first screens in the due diligence process that his firm makes before making any investment. Part of its due diligence before investing in Pathzero was to apply the screening process to Carthona itself, which has attained carbon neutral status.

“What is severely lacking at the moment is disclosure of corporate carbon emissions,” Dorrell explains. “If we can help surface those emissions and help companies articulate what they are doing to transition, that will help the economy to effectively de-carbonise.” Once Carthona identified that there was an investment opportunity in tracking and disclosing carbon emissions, it set about finding the best investment, the right people and getting its timing right. “It became clear to us that this was a compelling opportunity. We understand the desire for transparency from the end investor. We have end investors ourselves who have reporting requirements.”

Dorrell is a vocal supporter of Pathzero. “We have the ability to invest (in this) over a long period, and potential later stage funders for the business could also be customers. The mix will change over time, although I don’t think it will need a huge amount of capital. The business is going to grow and grow, and the product is going to sell itself. It’s not like we are building a battery factory or a solar farm that needs huge amounts of capital upfront.”

So what’s next for Pathzero? Having closed a successful US$5m investment round in October 2021, Prins says now is the time to grow Pathzero’s member ecosystem and maximise the benefits of the ‘network effect’ the platform offers to its users. “As more companies join Pathzero, the more we increase carbon transparency across networks and supply chains. This is really exciting because it means investors can make more informed decisions during deal screening, due diligence and reporting activities and our impact on reducing emissions will scale exponentially.”

Published February, 2022