E1: Greenly CEO Alexis Normand on Small Business Sustainability & Carbon Accounting Trends
July 20, 2023 by Joe Panettieri
Why should small businesses & midsize companies (SMBs) embrace sustainability strategies & carbon accounting software? Greenly CEO Alexis Normand shares answers in this interview with Sustainable Tech Partner.
Background: Greenly, founded in 2019, develops cloud-based carbon accounting software for small and midsize business (SMB) customers. The company is rapidly scaling toward $10 million in annual recurring revenue (ARR), but this wasn't an overnight success story. Indeed, Greenly pivoted -- twice -- from the consumer market and the API market before the company gained substantial traction with SMB customers, Normand said.
Seven Things You Will Learn: During the expansive conversation, Normand explains:
Key climate change trends, corporate issues and compliance mandates that are influencing small businesses sustainability strategies across Europe, the United States and more.
Why large enterprises and government agencies are demanding that their small business partners align with supply chain sustainability disclosure goals.
How and why small businesses are dealing with Scope 1, Scope 2 and Scope 3 reporting.
Compliance regulations and mandates such as the European Union Corporate Sustainability Reporting Directive (EU CSRD).
Sustainability partner strategies in the SMB market.
Watching the clock: Here's a timeline of the conversation:
0:00 - Intros
0:18 - Greenly's business history and focus.
0:47 - Pivoting from consumer to API to small and midsize business market.
2:47 - Building a global software company to track SMB carbon emissions.
3:22 - Enterprise supply chains are pressuring SMB customers to have climate strategies.
4:29 - Expanding from France to the United Kingdom to the United States and beyond.
5:02 - The U.S. market: The carbon accounting software market so far.
5:42 - Why it pays for small businesses to have a climate strategy.
5:52 - Example: The Walmart supply chain program and implications for small business suppliers.
6:35 - Example 2: The U.S. Army has similar supply chain programs
7:07 - Certain trends are repeating themselves - somewhat akin to Walmart requiring partners to embrace RFID a decade ago.
7:35 - Sustainable supply chains: Is Amazon a laggard?
8:12 - Why previous U.S. compliance mandates like HIPAA and Sarbanes-Oxley may foreshadow the rollout of Europe's CSRD (Corporate Sustainability Reporting Directive) to large corporations and even some small U.S. businesses.
10:00 - Why the SEC hasn't rolled out its climate mandate yet: Potential alignment with CSRD mandate from Europe?
10:59 - Yes, European Union (EU) climate regulations are being exported to the United States and other countries in some forms.
11:39 - Reporting Scope 1, Scope 2 and Scope 3 emissions: What it all means for small businesses in the U.S. that work with customers in Europe.
13:17- Are small companies making progress in reporting Scope 1, Scope 2 and Scope 3 emissions?
13:54 - Why small business tech companies need to understand Scope 3 and consumption of digital products like cloud computing.
15:00 - Two options for Scope 3 and data center evolution1: Consume less electricity and/or choose a data center supplier that leverages renewable energy.
16:32 - Will the SEC issue climate regulations in October 2023 -- and will they truly align with EU climate regulations?
17:19- Estimating your Scope 3 emissions using spend-based analytics and ERP (Enterprise Resource Planning) integrations.
19:35 - The SEC climate regulations are coming -- regardless of exact timing.
21:32 - Why companies are preparing to track and report their carbon emissions before certain regulations arrive.
23:04 - Don't worry about governments imposing regulations. Instead, think of it as a corporate need to address climate change proactively.
24:02 - Why the SEC -- rather than the EPA -- is handling the U.S. climate regulation effort: Understanding the long-term economic performance of businesses and the anticipated effects of climate change.
26:07 - Taking a closer look small business and midmarket engagements: Greenly's customer base so far, and why those smaller companies are embracing carbon accounting strategies.
29:02 - Beyond Scope 1, 2 and 3: What is the definition of Scope 4?
30:07 - Climate, politics and the ESG WOKE debate: Detaching the E from the S and the G.
31:01 - How partners may -- or may not -- assist small businesses with their sustainability strategies.
33:00 - Why specialized accountants may emerge as carbon platform consultants.
33:22 - Enterprise partnerships: How global systems integrators and implementation partners like Accenture, Capgemini and others may assist customers.
34:28 - Greenly's remaining business priorities for 2023, and initial priorities for 2024: Growing beyond $10 million ARR (annual recurring revenue) and more.
36:02 - A Climate App Store that allows you to add vertical carbon calculators specific to your business. A marketplace featuring Greenly and partner solutions.
37:31 - Capturing supply chain emissions data -- including data from Cuina.
Interview Requests: Do you want to potentially share your views on the Sustainable Tech Partner podcast? Email your request to Joe Panettieri, founder of Mentore Ventures and Sustainable Tech Partner (Joe@MentoreVentures.com).