Normative Raises €10 Million Series A Round To Expand Its Net Zero Emissions Proposition

Wednesday, 06 October 2021. Normative Raises €10 Million Series A Round To Expand Its Net Zero Emissions Proposition

On October 6th, Stockholm-headquartered Normative announced that it had secured an additional €10 million of funding in a Series A round led by growth investors ETF Partners and 2150. Normative's existing investors, Luminar Ventures, Lowercarbon Capital and ByFounders also participated in this Series A round. The 50-employee firm has hundreds of customers in part acquired through its role as the software platform for the UK's SME Climate Hub. Verdantix estimates that Normative's revenues have approximately doubled in the last 12 months. Terms of the deal were not announced but the involvement of ETF Partners and 2150 indicates how founders in the ESG and sustainability market are aligning with impact funds and investors dedicated to sustainability goals.

The Normative value proposition is focused on the small and medium sized market - with customers like 413-employee Swedish construction firm Castellum - and also the lower end of the enterprise market with named customers such as 4,000 employee radiation medicine firm Elekta. This market focus aligns with the EU's Corporate Sustainability Reporting directive which intends to require all entities with more than 250 employees in the EU to disclose their carbon emissions from 2023. The Normative value proposition is focused on resolving the challenge of generating a complete and accurate GHG emissions inventory across Scopes 1, 2 and 3. The Normative Series A round enables the firm to compete with comparable next generation, AI-powered, carbon management and sustainability software providers like Persefoni, Novisto and SINAI Technologies.

The big question for carbon, energy and GHG emissions management software providers with a Series A round under their belt is about the scale of their vision. Today vendors like Emitwise and Normative provide the core GHG inventory management functionality. This includes APIs and workflows for data collection, emissions factor databases, a calculation engine, a reporting module and data audit tools. It may also include legal entity management and emissions-to-physical asset mapping. These capabilities were available in 2008 from firms like CA Technologies, Clear Standards, Enablon, Envizi, Hara and Verisae. Whilst the 2021 flavour uses new technology to solve the same problem, these products will become commoditized as more than twenty providers crowd into the market.

How to differentiate? As firms commit to net zero emissions goals, initiate climate risk reporting and start to implement decarbonization projects, the capabilities they will require of a digital platform will expand rapidly beyond GHG data aggregation and reporting. A comprehensive net zero emissions information architecture builds on the GHG emissions management inventory platform. A forthcoming study from the Verdantix ESG & Sustainability team will detail three new usage scenarios: 1) Climate risk and emissions disclosure to align with TCFD reporting and mandatory emissions disclosures; 2) Carbon financial management to enable decisions using internal carbon prices, optimize carbon trading and generate carbon-adjusted financial reports; and 3) Net zero emissions programme management to plan, control and measure the implementation of carbon reduction projects. What does this look like? The ENGIE Ellipse digital platform is a good start point.