StepChange is a VC-funded organisation that specialises in sustainability and enterprise technology. It offers sophisticated climate decision-making tools that empower enterprises to make informed choices, set ambitious sustainability goals, and take tangible actions towards a Net-Zero future. Their comprehensive suite of services includes end-to-end SaaS platforms, benchmarking capabilities, target-setting assistance, emissions reduction guidance, and portfolio management tools, tailored to each client's needs and constraints. They simplify the process of ESG compliance and carbon accounting, allowing organizations to measure, manage, and reduce their carbon footprint effectively.
Initially working with prominent organizations in India such as SBI, ICICI Bank, and ITC, StepChange's client base has expanded rapidly. They have received funding from reputed investors, including $4M recently raised from BEENEXT and Global Founders Capital. The funding will be instrumental in enhancing region-specific carbon accounting models, expanding their presence in the Indian market, and meeting the growing global demand for climate tech solutions. Furthermore, StepChange is also looking at supporting mid-level and small enterprises on their sustainability journey. They are developing simple, accessible products that enable SMEs to adopt sustainable practices and capitalize on the growing market demand for environmentally conscious solutions.
With their innovative approach, extensive expertise, and commitment to positive environmental impact, StepChange is driving change and shaping the sustainability road-map of businesses across India. In this insightful interview with TheCSRUniverse, Ankit Jain, Co-Founder & CEO, StepChange discusses the gaps that led him to start the company, their services and the impressive progress they have made so far.
Read the full interview here:
Q. What inspired the founders to start StepChange? Were there any specific gaps that you identified that led you to establish the company?
A. Sidhant and I actually met at Massachusetts Institute of Technology (MIT), where we both had unique experiences that shaped our journey to founding StepChange. Prior to my role at Ola Electric, I had the opportunity to work with McKinsey, where I gained valuable insights into how technology and innovation can drive positive change, especially in the tech industry. Returning to India, I joined Ola with a strong commitment to sustainability and the belief that addressing climate change is one of the most critical challenges of our time.
Similarly, Sidhant was working on his PhD focused on developing tools to support environmental decision-making. His academic background provided him with a deep understanding of the complexities surrounding climate change and the importance of effective solutions.
We both recognized that while progress was being made in climate action, it wasn't happening at the pace or scale necessary to avoid the worst impacts of climate change. This realisation fuelled our determination to create StepChange. We understood that corporations play a vital role in reducing emissions, particularly in sectors like power generation and industrial activities. However, many of these organisations lacked the tools and expertise needed to navigate the complexities of climate action and meet ambitious targets within shorter time frames.
That's where StepChange comes in. We offer sophisticated climate decision-making tools that empower enterprises to make informed choices, set ambitious goals, and take tangible actions to accelerate their transition to a Net-Zero future. Our aim is to be a trusted partner for businesses across sectors, providing them with reliable solutions and support to achieve their sustainability objectives effectively and swiftly.
Addressing climate change requires urgent and concerted efforts. StepChange is committed to driving positive change and enabling businesses to make a real difference in the fight against climate change. We hope to be a catalyst in the transition to a net-zero emissions future, contributing to a greener and more sustainable world.
Q. Who were your initial clients and how has your client base expanded over time?
A. We are working with companies across the breadth of India. We find that sustainability is not limited to any sector or size or geography but is driven by the realisation among our early customers that sustainability is no longer a good to have but a business imperative. You cannot expect to grow and prosper as a business in the 21st century if you are not making sustainability a core pillar of your organisation.
Our customers include some of the biggest names in corporate India including ICICI Bank, SBI, and ITC. In the last year we have also had interest from several international organisations and are in the process of expanding our footprint internationally.
Q. What are the key offerings or solutions that StepChange provides to its clients? Can you highlight 2-3 significant services or products that differentiate StepChange in the market?
A. A lot of the work in this space is consulting heavy and for good reason. However what we’ve been able to do is productise much of it allowing us to scale much faster and offer solutions at a much lower cost. We also have one of the largest India-focused carbon accounting databases with over 75,000 emission factors for different products and services in India.
Our offerings can be looked at as two categories. The first, ESG Accelerate is a horizontal end to end SaaS platform that enables companies to measure, analyse and report their ESG metrics to improve operational efficiencies and future proof any product or service.
This involves benchmarking ESG metrics, identifying emissions hotspots, setting achievable targets, track improvements, report ESG performance, comply with regulations and communicate the benefits of their sustainability initiatives to their consumers via internationally-recognised science-based methodologies and intuitive cloud-based tools that integrate seamlessly into existing enterprise systems.
Our platform has been tested for scale to work with billions of data points across multiple silos in an organisation such as Facilities data, Financial Data, Travel Data, Transportation Data, Employee Data, Supply Chain Data, Production Data, and Training Data. It is supported by a suite of custom tools for product sustainability, supply chain sustainability, ESG goal setting & roadmap development, and finally intervention planning and program management.
NetZero Portfolio, our other offering for financial institutions, is a comprehensive program designed to help financial institutions meet their NetZero goals. We help them measure financed emissions with confidence, set net-zero targets aligned with SBTi, Receive tailored emissions reduction guidance (with quantified impacts) developed by our team of researchers & industry experts, improve loan-level sustainability and incorporate long-term scenario planning to de-risk their portfolios.
Q. StepChange has recently received funding from BEENEXT and Global Founders Capital. How will this funding impact (or has impacted) your strategy and growth plans?
A. We are committed to driving positive environmental impact and sustainability across organisations worldwide. The foremost goal for us is to help accelerate the global journey to Net-Zero. A key area of focus for us at the moment is enhancing our region-specific carbon accounting models. We recognize the importance of tailoring our solutions to specific regions, considering the unique challenges and requirements they present. With the recent fundraise we have allocated resources to further develop and refine our environment models, ensuring their accuracy and effectiveness in measuring environmental impact. Additionally, the funds raised will play a vital role in strengthening our presence in the Indian market. India represents a significant opportunity for StepChange, given its rapidly growing economy and increasing focus on sustainability. By expanding our operations and strengthening our presence in India, we aim to cater to the evolving needs of businesses in the region and support their journey towards environmental stewardship.
There is also a growing global demand for reliable climate tech solutions, we have had a lot of interest from key international markets in the last year and are looking forward to meeting this demand by extending our reach to new geographies. With the support of our investors, we will strategically establish our presence in targeted international markets, ensuring that organisations worldwide have access to our solutions.
Q. How does StepChange support organisations in their pursuit of Net Zero? Can you provide examples of specific tools or methodologies the company employs to help clients reduce their carbon footprint?
A. We have developed a comprehensive playbook to help organisations with their transition to NetZero which is of course adapted to each organisation’s needs and constraints.
We start by working on a company's ESG foundations by ensuring that there is good understanding of ESG and specifically climate change among the members of management and board. We then support the company conduct materiality and additionality assessments to help them prioritise the right areas of focus. At times, we would also help them define their ESG vision, policy and governance structures.
We then use our sophisticated SaaS platform to create a baseline of all relevant ESG metrics including Scope 3 emissions across 15 different categories. By utilising our vast carbon accounting database, specifically tailored to India, which consists of over 75,000 emission factors, we ensure precise metric calculations. We simplify emission calculations by utilising existing data streams, including accounting and HRMS data. In situations where data collection is difficult, we provide a user-friendly system for distributed data collection, validation, and aggregation.
With a reliable and accurate baseline in place, our automated benchmarking system compares a company's performance to relevant national and international counterparts, offering valuable insights. Combining this with their ESG strategy and additionality assessments, we help companies set targets at corporate, product and supply chain level. These include NetZero targets under Science Based Targets Initiative following the sector specific guidance and requirements. These targets are set up and managed using our SaaS platform.
We have further developed tools to help companies evaluate the cost-benefit of different interventions to meet these targets. And as companies implement these interventions, we help them track their progress and see the impact against their set targets. Finally our platform streamlines the process of ESG and climate related disclosures in different formats worldwide so our customers can transparently share progress with their stakeholders.
We are collaborating with prominent financial institutions and major FMCG conglomerates in the country, assisting them across their portfolios and value chains to expedite their progress towards achieving their NetZero objectives. Our Company specialises in helping businesses create a thorough ESG foundation, which encompasses Scope 3 emissions across 15 different categories. By utilising our vast carbon accounting database, specifically tailored to India, which consists of over 75,000 emission factors, we ensure precise metric calculations. Moreover, our automated benchmarking system compares a company's performance to relevant national and international counterparts, offering valuable insights. Our platform streamlines the process of ESG reporting in different formats worldwide. We simplify emission calculations by utilising existing data streams, including accounting and HRMS data. In situations where data collection is difficult, we provide a user-friendly system for distributed data collection, validation, and aggregation.
Q. What is Carbon Accounting, and how does it contribute to sustainability efforts? Could you provide a simplified explanation of this concept and its significance in measuring and managing greenhouse gas emissions?
A. Carbon accounting is the process of quantifying and tracking the amount of greenhouse gas emissions produced by individuals, organisations or activities. It involves measuring and reporting these emissions to better understand their impact on the environment. The primary goal of carbon accounting is to provide standardised and transparent ways to assess and manage GHG emissions. By quantifying emissions, carbon accounting provides valuable information for sustainability efforts. It helps organisations and policymakers understand their impact on climate change and identify areas where emissions can be reduced. With this information, they can develop strategies to mitigate emissions, set targets for reduction, and monitor progress over time. It enables organisations and governments to understand their environmental impact, set emission reduction goals, and take actions to promote sustainability.
Q. What are financed emissions, and why are they important to consider in the context of sustainability? Can you explain how StepChange addresses the issue of financed emissions for its clients?
A. Financed emissions, also known as embedded emissions or portfolio emissions, refer to the greenhouse gas (GHG) emissions associated with the production and consumption of goods and services that are financed or supported by financial institutions, such as banks and mutual funds.
In India itself, more than 15% of the greenhouse gas emissions can be attributed to the production and consumption of goods and services financed by scheduled commercial banks, with a significant multiplier effect on the rest of the economy. Given the size of the Indian economy, a top-five bank can expect to have a financed emissions footprint in excess of 50 million tonnes of CO2e. To put that number into perspective, that’s more than the total emissions attributed to countries like Norway and Switzerland.
We are currently working with some of the largest banks in the country and have been able to account for 250 million tCO2e in the last year which is equivalent to around 7.5% of India’s emissions. A large part of this has come from our work in financed emissions. At StepChange, we run a comprehensive program designed to help financial institutions meet their NetZero goals. We start by measuring financed emissions using three different methodological approaches to estimate financed emissions based on data availability - Subsector EEIO Approach, Company-specific (Proxy EI) Approach and Company-specific (Native GHG Accounting) Approach. We then help these organisations set net-zero targets aligned with SBTi and other industry standards and incorporate long-term scenario planning at a sectoral and asset class level to de-risk their portfolio. We then work with them to measure & improve loan-level sustainability by making informed granting decisions, set sustainable policies at the organisational level and develop a green portfolio.
Q. In your view, how do Indian companies generally fare in terms of ESG compliance? What are the common areas where we often fall short, and what steps can be taken to address these shortcomings?
A. Most Indian companies are just starting on the journey of sustainability and hence are struggling with getting started with the right way. One place they often fall short is by treating ESG as another “compliance” area that needs to be “managed”. I think they miss out on really using sustainability as a competitive advantage to drive business forward.
Some of the more common shortcomings we see include using poor quality and incomplete data to support ESG measurement, half hearted and cookie cutter responses to ESG disclosures put together by external consultants, inability to navigate evolving regulations and lack of standardisation, lack of meaningful or strategic ESG targets, reducing emissions in their operations and within their supply chain and finally, communicating a clear ESG strategy to their stakeholders.
Q. How feasible is carbon neutrality or voluntary ESG compliance for mid-level and small enterprises? What are the main challenges and opportunities for smaller businesses in this regard?
A. Carbon neutrality and voluntary ESG compliance are certainly feasible for mid-level and small enterprises, although they may face specific challenges compared to larger businesses.
SMEs have certain advantages when it comes to tackling sustainability. It also helps that most SMEs don’t have complex supply chains and are expected under most global frameworks like SBTI to focus on their Scope 1 and Scope 2 emissions - both of which are under their direct control. The size of their operations further allows for more flexibility in adopting sustainable practices and transitioning to cleaner energy sources. Smaller businesses often have the advantage of being more quick and adaptable since decision making is centralised and they don’t need to worry about public shareholders. They can implement changes in their operations more swiftly, enabling them to adopt sustainable practices and adjust their business models to align with ESG Principles.
However, Small enterprises may face financial and resource constraints in implementing sustainability measures and transitioning to cleaner technologies. Smaller enterprises may not have dedicated sustainability teams or personnel with in-depth knowledge of ESG compliance. They may require external support or guidance to develop and implement effective sustainability strategies, which could be an added challenge.
We believe that forward thinking SMEs have a unique opportunity to capture significant market share as large businesses with NetZero targets move their business to sustainable suppliers. Similar opportunities exist for SMEs and startups building for conscious customers who are willing to pay more for sustainable products.
Q. Does StepChange have (or plans to develop) specific programs or tailored approaches to support smaller or mid-level businesses in their journey towards carbon neutrality and voluntary ESG compliance?
A. Absolutely. For us to have the type and scale of impact that we wish as an organisation, we have to create solutions that help SMEs become sustainable. We are working towards building simple products that SMEs can use. Infact, on the 50th anniversary of the World Environment Day this year, we offered 50 SMEs the opportunity to do a free ESG diagnostic and try our pilot ESG product for free.
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