(L to R) Siddhanth Jayaram and Anirudh Gupta, Co-Founders at Climes. New Delhi, 27th August, 2022. Image: Amit Verma
Wouldn’t it be great if with every delivery of food, groceries and ecommerce purchase you make, you are offered a simple and affordable way to also make a dent in the urgent fight to tackle climate change? What if someone goes a step further and offers you an option that is even fun, and intellectually engaging by giving you ways to decide where your money should go?
Meet Anirudh Gupta and Siddhanth Jayaram, who are attempting to do exactly this at their climate finance venture Climes. Jayaram and Gupta have developed a solution that allows people to opt in to pay a little extra, each time they make a purchase online, be it a bus ticket or an apparel or even a flight ticket. In the backend, they’re curating a growing list of local climate action projects to which the money thus collected can be channelised by the consumers themselves.
After a degree in political economy from the University of California, Berkeley, Gupta worked in the aerospace industry with Airbus for more than four years till early 2020. He then co-founded a non-profit organisation called Sustainability Mafia, before starting Climes with Jayaram.
Jayaram started out with a degree in industrial engineering from Purdue University, but, after an internship with Toyota, switched to finance, and was a founding member of a fintech startup that was acquired by KredX. That led to a five-year stint at the venture capital (VC) firm Kalaari Capital, before he and Gupta teamed up.
The duo founded Climes Inc in the second half of 2021, with a fully owned Indian subsidiary, Climeverse Private Limited. A $4,000 grant from US-based Terra.do, which offers an immersive course on climate change, helped them test out their idea, that brands could offer a simple carbon neutralisation option to individual consumers via the checkout process.
They also created an eponymous instrument, called climes, where each clime is the equivalent of 1 kg of carbon emission neutralised, that the consumers collect, every time they carbon neutralise their purchases. The consumers then visit a Climes website to select where their money should go. Any money that hasn’t been allocated through the consumers’ selection, gets automatically distributed among available projects around the 15th of each month.
In July, the founders announced $1.2 million in their first significant VC backing from Sequoia Capital India, Kalaari, Rainmatter, and angel investors including Akshay Singhal, co-founder of Bengaluru EV batteries tech company Log9 Materials.
“Going into the next decade, looking at what’s the biggest problem that I could work on, climate change was the biggest problem on the planet,” Gupta says, recalling his decision to do something in this space. “And if we don’t do something in the next six- to seven-year window, we don’t have a future to look forward to.”
“And especially with respect to carbon avoidance or removal, there are so many solutions with so many entrepreneurs working on them, but the biggest problem is that not enough finance is moving to them fast enough,” he says. In order to solve the 50 billion-tonne-a-year carbon problem, money flow into these ventures has to accelerate, he says. That’s the problem that Climes is tackling.
“This decade is the decade of climate action,” Jayaram says.
In addition to finance, Jayaram and Gupta are working to change the behaviour of both consumers and brands. Today, one big way in which climate projects get funded is the carbon credits route, but the current status quo of carbon credits is “very, very warped,” Gupta says. “There’s too much friction, too many middlemen, too much inertia and a lot of just perverse incentives too.”
Climes, therefore, is an attempt at re-imagining the carbon market, where millions of people can get involved, not just institutions and governments. Imagine 100 million individual consumers making a small contribution each, with every purchase, literally every day. That immediately unlocks a massive pool of capital that currently has no simple way of supporting any worthy cause, let alone a climate change project.
And the entrepreneurs figured out that for most individuals, their carbon footprints are only in kilograms, not tonnes—be it watching a movie at the cinema or buying an air ticket for business or vacation. For instance, a Delhi-Mumbai flight for one person has a carbon footprint of about 120 kg; a T-shirt purchased, is around 5 kg. Now, with one clime equal to 1 kg of carbon emission neutralised, Climes offers a simple way for consumers to pay to neutralise their purchases.
“Think of it like this,” says Prashant Kumar, co-founder and CEO of Zingbus, who partnered with Climes a little over two months ago. “Our average daily ridership is about 7,000, and about 2,000 of them are app users. Of them, about 1,200 opt in to neutralise their trips, which means over a two-month period about 72,000 individual rides were carbon neutralised, and at an average of about Rs 7 per person, about Rs 500,000 has gone into climate action projects via Zingbus.”
At sustainable apparel company Tamarind Chutney, co-founder Tanvi Bikhchandani offers the example of a top for women called ‘Baazi printed short top (no buttons)’. Its price on the retailer’s website is Rs 799, and in comparison, the carbon neutralisation amount is just Rs 8. To opt in, a buyer just needs to select the check box that says ‘make my order carbon neutral for Rs 8’. That’s how easy and affordable it is.
Farmers for Forests (F4F) is an example of the type of projects that benefit from the money that Climes collects from Zingbus, Tamarind Chutney and other brands. The non-profit company works to conserve and expand biodiverse forests by incentivising local rural communities to participate in that process. “Everyone focuses on forests for carbon sequestration, but forests do so much more,” says Krutika Ravishankar, co-founder and executive director of the company. “They help preserve biodiversity, provide habitat for endangered species and play a critical role in the global rainfall cycles, prevent soil erosion and are a source of livelihood, with food, fodder and medicine.” Further, harvests from forests are far more resilient to climate change than traditional agriculture, she adds.
Now, if consumers decide to send their carbon neutralisation money to F4F, then F4F will use it to plant trees in the forests it is helping conserve. And F4F will periodically send data to Climes on carbon sequestered and so on, and there are fairly standard equations to make those calculations, Ravishankar says.
Jayaram explains that depending on the sector and activity, there are independent, third-party databases of such estimates. Some of these databases are backed by the United Nations and others are available from various industry lobbies and coalitions. For example, in the case of flights, the data is available with the International Civil Aviation Organizations (ICAO) database.
On the tech front, in a nutshell, Climes makes all the different pieces work together via application program interfaces (APIs), Jayaram explains. Therefore integrating Climes solution is easy for any brand.Also read: Climate activists slam 'carbon-neutral' World Cup claims
That said, Climes is still at a nascent stage, working with only about eight brands and the turnaround time for determining accurate carbon footprints needs to come down further and of course the sectors and activities covered needs to expand, before it can be seen as comprehensive. “We are confident that we can go from eight brands to 15X of that over the next few months,” Jayaram says.
And, from a viable business perspective, he points out that eventually the sophisticated software the company is developing, by itself will have enterprise sales potential.
As to individual climate-conscious consumers, Climes has been seeing over 50 percent daily opt-ins, which validates the idea that “people genuinely care a lot”, Gupta says, “if we can make climate-positive features easy to access, economically viable—a small fraction of the total cost of the product—and fun to use. That last piece is very important—don’t make me donate; give me something transparent to use—then people are very willing to do it.”