It's no longer good enough to buy carbon offsets.
Twenty-five years ago, the Kyoto Protocol established the first carbon offsetting market to encourage heavily polluting industries to reduce the overall impact of their operations and help countries reduce their greenhouse emissions.
But carbon offsets aren't without controversy, and there's a growing recognition that industries need to actively reduce their emissions in order to get to what's referred to as "net zero" emissions.
And a San Francisco startup is helping businesses with just that.
Gravity Climate helps businesses analyze energy usage in order to calculate their carbon footprint and then, ideally, work towards becoming more efficient.
Founded by CEO Saleh ElHattab, 29, in 2021, the company has raised $5 million in seed funding from Eclipse Ventures.
"There's an incredible groundswell of money going towards carbon offsets which are either natural or technological. Tree planting or avoiding cutting down trees, as well as direct air capture technologies. We think there's a massive role those offerings play," ElHattab told me, "but when we look at the path to net zero for society, it's only 20% carbon offset and 80% carbon reduction."
After studying math and computer science at Indiana University, ElHattab worked in tech and venture capital, and climate-related work became a recurring theme.
While at Salesforce, he worked on robotics in the "internet of things" division before spending time at Samsara building devices for long haul trucks. But it was his time working as a venture partner at Eclipse Ventures that really solidified his conviction that he wanted to focus on climate solutions.
At Eclipse, "I studied everything from fusion to parametric insurance but really fell in love with this tranche in the middle which was industrial decarbonization," ElHattab said. "I thought, how do I create the flywheel that can actually leverage all these existing technologies and connect them with physical operators?"
So he left Eclipse last year to launch Gravity Climate.
The company works with industrial customers to set goals, measure and optimize energy usage, and then create reports on their progress.
To measure and analyze a customer's energy use, it can integrate its own APIs to pull internal data or even scan digital copies of energy bills. Around 80% of its customers are industrial operators and 20% are private equity firms that want to measure the carbon impact of their portfolios, ElHattab told me.
Gravity charges customers annual subscription fees based on the size of the organization, such as the number of facilities or portfolio companies that will be measured and analyzed. And Gravity is targeting medium to large operations with around 300 or more employees.
It currently has 13 employees and ElHattab expects to double or even triple its headcount this year, and the company will focus its hiring on its sales team, climate scientists and engineering.
Industrial uses are one of the largest contributors to carbon emissions.
Globally, industrial activity contributed to 21% of greenhouse gas emissions in 2010, according to the Environmental Protection Agency, but that figure more than doubles to 46% when accounting for energy and heat production.
In the U.S., industrial activity and electricity production contributed to 49% of emissions in 2020, according to the agency.
