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# €2.5m Grant from the EU to finance Tanso’s Carbon Intelligence Platform

_[Tanso](www.tanso.io/en) works every day to revolutionize the way manufacturing companies calculate, manage and reduce their CO₂ emissions. As part of the EIC Accelerator Programme, the [European Innovation Council and SMEs Executive Agency (EISMEA)](https://www.linkedin.com/company/eismea/) finances Tanso’s next step in making carbon accounting processes in manufacturing companies more accurate, effective, and accessible._


## What problem are we tackling?

Working closely with manufacturing companies daily, we pinpointed a critical issue in the carbon accounting market. 

-  **Regulatory pressure to disclose:** With the climate disclosure regulations and standards passed (e.g. CSRD, Carbon Boarder Mechanism, etc), manufacturers, are pressured to provide reliable emissions values and reduction targets. This is effecting companies downwards in the supply chain.

- **No effective solution on the market:** Current solutions and incomplete, inaccurate or expensive and limit the manufacturers in meeting all regulations and the increasing customer pressure.


## What is our project?

In the next months, we will double down on expanding our software for European manufacturers. Collaborating with leading players in the automotive, machine manufacturing, and steel industries, our software at Tanso takes the lead on this technology innovation project to bring carbon management to the next level of automation, within and between manufacturers. 

We are developing a first-of-a-kind holistic carbon accounting methodology that bridges the gaps between standards and requirements. Our methodology makes carbon calculations scalable and accessible, creating the foundation for effective carbon reductions in all parts of the business. 


## Why is the EU supporting our project?

Through the EIC Accelerator program, the [European Innovation Council and SMEs Executive Agency (EISMEA)](https://www.linkedin.com/company/eismea/) supports high-potential startups in developing and upscaling game-changing innovations to address global challenges, such as decarbonizing hard-to-abate industries.

Our mission is to be a key actor in the decarbonization of the manufacturing sector, a market responsible for ~34% of the EU’s CO₂ emissions. The jury of the EIC Accelerator therefore recognized our potential as a strategic partner of the EU to reach its goals to become “Fit for 55” and reduce 55% of its greenhouse gas emissions by 2030. 

As a result, they selected we were selected as part of the top 7% of the applicants within the final stage of the EIC Accelerator competition and were granted €2.5m in innovation financing.

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Tanso secures €2.5m in innovation financing from the European Union

As the effects of climate change evolve and countries announce net-zero targets, incentivizing the private sector to decarbonize is becoming increasingly critical. 

Customers and legislators are now pressuring companies to disclose environmental indicators, including carbon emissions, considered as the first step towards reduction measures. 

In addition to the existing frameworks and standards available, governments across the world are working on new laws, to ensure higher adoption and standardization of carbon accounting processes, letting companies’ stakeholders use carbon emission values as a KPI for decision-making. 

This article clarifies the current and future reporting requirements for companies in the European Union and Switzerland, which include Scope 1-3 GHG emissions disclosures. 

# Is carbon reporting mandatory in the European Union?

*Yes - currently large public-interest companies (listed companies, banks, insurance companies) with 500+ employees must report on carbon emissions, based on the Non-Financial Reporting Directive (NFRD). The level of detail of Scope 1-3 emissions disclosures depends on a materiality assessment explained below.* 

*Starting in 2025, the Corporate Sustainability Reporting Directive (CSRD) will amend the NFRD and extend its scope.*  


***What is the Non-Financial Reporting Directive (NFRD)?*** 

The Non-Financial Reporting Directive (2014/95/EU) lays down the rules regarding non-financial information reporting requirements for large companies. This Directive amends the more general Accounting Directive (2013/34/EU). It is in force until the beginning of CSRD starting 1 January 2024 (detailed below).


***Who is affected by NFRD?*** 

Approximately 11’700 companies and groups across the EU are affected by NFRD and shall include a “Non-financial report” in their management report.

- Large public-interest companies (listed companies, banks, insurance companies)
- with 500+ employees


***What must be reported in the NFRD?***

The companies concerned with this regulation must report information in relation to, at least, the following 5 matters: environmental-, social & employee-, respect for human rights-, anti-corruption- and bribery matters.

This non-financial report must therefore include: 

- a brief description of the company’s business model;
- a description of the policies pursued in relation to those matters and the due diligence processes implemented, and the outcomes of those policies;
- the principal risks related to those matters and how the company manages those risks;
- relevant non-financial KPIs.

The EU Commission published a non-binding guideline to clarify how to report this non-financial information. It includes a list of indicators that companies should disclose, such as Scope 1-3 greenhouse gas (GHG) emissions in metric tons. 

To understand whether one of these indicators, such as Scope 1-3 GHG emissions, must be reported, it is important to know that: 

- **The NFRD is based on a “comply-or-explain principle”**, stipulating that where a company does not pursue policies related to one or more of the matters above, it should provide a clear and reasoned explanation for not doing so;
- Whether or not an indicator recommended in the guideline should be disclosed is subject to the **company’s materiality assessment**;
- The NFRD follows the **“double-materiality” concept**, meaning that the company should consider
    (1) how sustainability issues may affect the company and its financial value (”Financial-”, “outside-in” materiality)
        
    (2) how the company affects society and the environment (”Environmental & Social-”, “inside-out” materiality).
        

In other words, taking the case of Scope 1-3 GHG emission indicators as an example, companies concerned by the NFRD must provide metrics tons of GHG emissions along the 3 scopes if GHG emissions (and changes thereof) affect the financial value of its company, and if an important amount of GHG is emitted by the company. 

If the reporting company does not report on this indicator, it must provide a detailed explanation of why it is not relevant to its business. 

*As a result, a vast majority of the companies under the scope of the NFRD will have to provide Scope 1-3 GHG emissions in metric tons due to the breadth of the materiality assessment.*

In 2020, the [Climate Disclosure Standards Board](https://www.cdsb.net/nfrd2020) analyzed a sample of the reports due under NFRD and declared that 100% of the companies disclosed GHG emission KPIs, including 74% along Scope 1-3. 


***What is the Corporate Sustainability Reporting Directive (CSRD)?***

*The CSRD (Directive EU 2022/2464) will amend and replace the current NFRD, from 1 January 2024 onwards. It requires companies related to the EU and EEA under the criteria listed below to provide Scope 1-3 GHG emission data in an auditable manner, including Scope 1-3 GHG emission information.* 

The scope of the CSRD is much larger than the NFRD: 

- 50’000+ companies will be required to report according to CSRD, compared to 11’700 companies with NFRD.

The text of the CSRD is of EEA relevance, meaning that it applies to all EU countries including Norway, Liechtenstein, and Iceland. **The requirements under the CSRD also applies beyond EU boundaries, as non-EU parent companies with significant operations in the EU and EEA, as described below, must also comply.** 

In [this link](https://eur-lex.europa.eu/eli/dir/2022/2464/oj), the CSRD as approved on December 14th 2022 can be found. It will apply from 1 January 2024, for the financial years starting on or after 1 January 2024.


***Which companies are affected by CSRD?*** 

- All large companies (>250 FTE, >40M EUR annual revenue, or >20M EUR on the balance sheet).
- All listed companies (except listed micro-undertakings).
- All non-EU companies with >150M EUR net turnover achieved in the EU and with at least one subsidiary or branch based in the EU or EEA.


***When does the CSRD apply?*** 

The CSRD applies gradually to different categories of companies, starting 1 January 2024:

- reporting in 2025 (on financial year 2024): all companies already subject to NFRD, meaning large public-interest companies with >500 FTE
- reporting in 2026 (on financial year 2025): all large companies not yet subject to NFRD
- reporting in 2027 (on financial year 2026): all listed SMEs, except micro-undertakings
- reporting in 2029 (on financial year 2028): all third-country undertakings with net turnover above 150 million in the EU if they have at least one subsidiary or branch in the EU exceeding certain thresholds.


***What must be disclosed according to the CSRD?***

The undertakings must provide the information necessary to understand their impact on sustainability matters, and how sustainability matters affect their development, performance, and position in their management report. 

This includes information on the actual or potential impact connected with the company’s value chain and operations, including its products, services, business relationships, and supply chain, as well as measures to prevent, mitigate and reduce these negative impacts. 

*The undertakings must therefore include, among others, auditable Scope 1-3 emissions data, or follow the comply-or-explain principle applicable as part of the NFDR.*


# Is carbon reporting mandatory in Switzerland?

*Yes - carbon reporting, including Scope 1-3 GHG emissions data, is mandatory for large companies in Switzerland, starting 1 January 2024, based on the [Ordinance on Climate Disclosures](https://www.newsd.admin.ch/newsd/message/attachments/74006.pdf) adopted on 23 November 2022.* 


***Which companies are affected by the Ordinance on Climate Disclosures?*** 

The following companies are obliged to report publicly on climate issues under Swiss law starting 1 January 2024.

- *Public companies, banks, and insurance companies in Switzerland;*
- *with >500 employees and CHF >20 million in total assets or CHF >40 million in turnover.*


***What is required under the Ordinance on Climate Disclosures?***

With this ordinance, the Swiss Federal Council provides for the binding implementation of the recommendations from the Task Force on Climate-related Financial Disclosures (TCFD) in Switzerland.

The reporting requirements are two-fold: 

- Information on the financial risk incurred by the company as a result of climate-related activities, as well as on the impact of the company on the climate must be provided.
- Where possible and appropriate, quantitative CO2 targets and disclosures of all GHG emissions must be provided.


# **How can companies comply with carbon reporting regulations?**

Due to the importance of carbon reporting from a legal, financial, and competition perspective, as well as the difficulty and granularity behind the calculation processes of Scope 1-3 GHG emissions, automated processes using software are strongly recommended. 

Tanso provides carbon accounting software automating processes in Scope 1-3 CO2 emissions calculations, specifically for manufacturing companies. It is available in German and English and trusted by a growing list of customers in Germany and Switzerland. 

*To learn more about Tanso, feel free to book a demo [here](https://tanso.io/en/demo).*

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Does your company need to disclose Scope 1-3 emissions? EU and Swiss Carbon Reporting Requirements in a Nutshell

## **Tanso published PCF Guidelines for the Machinery and Plant Engineering sector, together with VDMA**

**Companies in the machinery and plant engineering sector get clarity on the steps to PCF calculations, detailed in the PCF Guideline published by the VDMA, Tanso, and selected VDMA members.** 

Studies have shown that greenhouse gas (GHG) emissions of OECD and BRIC countries could be reduced by ~90%, if the machinery and plant engineering sector moved towards green products and systems (*Green Technologies for Green Business*, BCG & VDMA, 2020). 

This transition requires the players of this sector to calculate the total GHG emissions caused by each of their products along their respective lifecycle - a calculation which is perceived as highly challenging, due for example to the lack of transparency of the typically complex and global value chains. Additionally, the existing general standards for Product Carbon Footprint (PCF) calculations fail to support machinery and plant engineering companies efficiently due to their lack of sector specificity. 

To provide that missing solution, Tanso joined the largest association of machinery and plant engineering companies, the VDMA, as an active member of its Expert Group on PCF calculation, together with other notable companies from this sector in Germany. In the past months, they developed the standards for PCF calculations of complex mechanical engineering products: the “PCF Guideline”. 


**What is the PCF Guideline?**

The VDMA PCF Guideline provides a clear and practical framework for companies in the machinery and plant manufacturing industry to start calculating the PCFs of their various products.

The Guideline illustrates the procedure to calculate a PCF, and explains the underlying calculation rules and requirements that companies must specify and transparently report. 

It is based on the ISO 14067 and GHG Protocol accounting standards.

In addition, the PCF Guideline provides the basis for the PCF STARTER, a PCF calculation software solution developed by Tanso. To read more about PCF STARTER, click [here](https://tanso.io/en/blog/PCF%20STARTER%20Announcement).


**Who is it for?**  

The VDMA PCF Guideline is aimed at companies in the machinery and plant engineering sector. 

The Guideline is suited to companies which already have basic knowledge of PCF calculations, and want to standardize the calculation across their product portfolio, as well as to companies willing to learn about the topic and make their first PCF calculations. 


**What are the benefits of PCF calculations?**

- Meet the demand from your customers and regulatory requirements (CSRD, Digital Product Passport,…)
- Identify emission hotspots and reduction potential more precisely, leading to optimized production, reduced costs, and increased sales
- Create transparency and awareness of GHG emissions along your supply and value chain
- Pro-actively prepare carbon-related data, which are becoming important KPIs for investors
- Improve “Green Employer” branding, to attract and retain employees


**What does the PCF-Guideline include?** 

*Aim and Scope of the Guideline*

- System boundaries - Cradle-to-Gate
- Definition of the Functional Unit

*PCF Calculation Rules*

- Steps of PCF calculation
- Temporal scope
- Geographical scope
- Cut-off criteria
- Use of standards
- Data types and data sources
- Requirements for emission factors
- Requirements for activity data
- Allocation rules
- Data quality

*PCF Verification and Reporting*


**How can you access the PCF Guideline?**

VDMA members can access the PCF Guideline under [this link](https://www.vdma.org/documents/34570/15397407/VDMA-Guideline_PCF-Berechnung_final.pdf/75b479e6-cba7-4a53-15b0-98a7257d8ecc?t=1671092803597).

You can watch the recording of the presentation, and a demo of PCF STARTER in VDMA’s article [here](https://www.vdma.org/viewer/-/v2article/render/72334734).


## **About VDMA**

[VDMA](https://vdma.org/) is the largest network non-profit organization for mechanical engineering companies, including over 3’500 members in Germany and Europe. It represents the common economic, technical and scientific interests of the industry in Germany and around the world.


## **About Tanso Technologies**

[Tanso Technologies GmbH](https://tanso.io/) (”Tanso”) is a software company based in Munich, developing solutions that support carbon accounting, target setting, and decarbonization for industrial companies, in sub-sectors including mechanical & plant engineering, automotive, or metal processing.

The Tanso software platform is an end-to-end CO2-Accounting and -Management software, creating the analytical basis for effective reductions. Tanso is an official VDMA member, and part of the Expert Group to set the standard for PCF calculations.


## **Contact us**

**Gyri Reiersen, Tanso Co-Founder & CPO**

[gyri.reiersen@tanso.io](mailto:gyri.reiersen@tanso.io)

**Hannah Lena Harlos, VDMA Policy Advisor, Environmental Affairs and Sustainability**

[hannah.harlos@vdma.org](mailto:hannah.harlos@vdma.org)

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Tanso published PCF Guidelines for the Machinery and Plant Engineering sector, together with VDMA

## **Tanso is launching a PCF calculator (”PCF STARTER”) in collaboration with VDMA**

The pressure to decarbonize faced by industrial companies is growing rapidly as environment-related corporate disclosures including carbon emissions data on Scope 1-3 are requested from regulators and customers, and manufacturing companies are responsible for ~30% of Germany's CO2 emissions. 

However, current carbon accounting processes, especially on product-level data collection, are considered by the concerned companies as inaccessible due to financial and time constraints as well as unclear processes. 

Tanso and the VDMA are therefore collaborating to provide a time- and cost-efficient solution for industrial companies willing to improve the granularity of their current CO2-calculations, or willing to get started.


**What is the PCF STARTER?**

PCF STARTER is a calculator making it possible to quickly and easily create the initial calculation of a specific product’s carbon footprint.


**How does it work?**

The calculation refers to the cradle-to-gate phase in the product life cycle and includes top-down allocated emissions from energy consumption in production, bottom-up emissions on a material basis, and a surcharge factor for transport.

PCF STARTER is optimized for the calculation of the carbon footprints of products with energy and raw material as the main source of emissions. It is developed in accordance with the VDMA PCF Standard and ISO 14067 but is not standalone certifiable and serves as the first step toward a full PCF.


**What are the benefits?**

The assessment made by using the PCF STARTER can be used as a basis for customer communication and for identifying emission hotspots in production. Additional benefits include:

- Fast and simplified calculation of an initial PCF
- Support in identifying emission hotspots in production
- PCF certificate incl. data quality score
- Optional breakdown of data quality
- Accompanying manual based on the standard sheet


**Who is it for?**

The PCF STARTER is aimed at all companies willing to calculate an initial assessment of the carbon footprints of their products. VDMA members can use the PCF STARTER software for free.


**How and when to access it?**

PCF STARTER will be available to VDMA members starting April 26th 2023. The official launch will happen on that same day during VDMA’s Summit in Frankfurt. 

_Sign up to the user waitlist [in the following link](https://tanso.io/pcf-starter) starting today to get early access by end of January already._


## **About VDMA**

[VDMA](https://vdma.org/) is the largest network non-profit organization for mechanical engineering companies, including over 3’500 members in Germany and Europe. It represents the common economic, technical and scientific interests of the industry in Germany and around the world.


## **About Tanso Technologies**

[Tanso Technologies GmbH](https://tanso.io/) (”Tanso”) is a software company based in Munich, developing solutions that support carbon accounting, target setting, and decarbonization for industrial companies, in sub-sectors including mechanical & plant engineering, automotive, or metal processing.

The Tanso software platform is an end-to-end CO2-Accounting and -Management software, creating the analytical basis for effective reductions. Tanso is an official VDMA member, and part of the Expert Group to set the standard for PCF calculations.


## **Contact us**

**Gyri Reiersen, Tanso Co-Founder & CPO**

[gyri.reiersen@tanso.io](mailto:gyri.reiersen@tanso.io)

**Hannah Lena Harlos, VDMA Policy Advisor, Environmental Affairs and Sustainability**

[hannah.harlos@vdma.org](mailto:hannah.harlos@vdma.org)

tel: +49 69 6603-1287

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VDMA members can calculate their Product Carbon Footprints with Tanso’s PCF STARTER

Sustainability management in industrial companies is gaining more and more importance. Investors, regulators and the public are increasingly pressuring organizations to report their double materiality.

In our whitepaper, we shed light on how this pressure is reflected in regulations and initiatives affecting your business, such at the EU CSRD, GHG Protocol, Paris Agreement, and more. More specifically, we underline how your company can adapt to these new to save resources in the long run, by ensuring transparent and comprehensive sustainability data as the new basic requirement for maintaining competitiveness. 


Download our whitepaper [here](/en/whitepaper).

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The EU CSRD and data-driven sustainability management

## Overview
- Tanso is a newly founded startup providing an end-to-end sustainability data management software to industrial companies
- The team has received a pre-seed investment of USD 1.9 million led by UVC Partners, with participation from Picus Capital, Possible Ventures, and leading business angels
- With the newly acquired funds, the team plans to expand its engineering, product, and data science teams in Munich
---

__Tanso Technologies__, the Munich-based sustainability tech startup announces the closing of its USD 1.9 million pre-seed financing round. The round was led by UVC Partners, a leading B2B technology investor with a strong focus on enterprise software, with participation from early-stage investors Picus Capital, Possible Ventures (formerly Inventures), and leading business angels.

With the IPCC report declaring “code red” for humanity, sustainability is no longer a “nice-to-have”. Companies across industries are overwhelmed by the increasing public, regulatory and supply chain pressure to make sustainability considerations central to their strategic decision-making. Shortages of natural resources, physical infrastructure risk, and limits on emissions require companies to fundamentally change in order to future-proof their business. The European Green Deal alone forces over 60,000 companies to account for their ESG data – both within the organisation as well as across the supply chain.

Tanso aims to tackle the most pressing issue of sustainability management: ensuring data availability as a first step in enabling the complex process of calculating and reporting environmental effects of physical goods. By building software for industrial manufacturers, it is helping one of the most emissions-heavy, yet highly underserved industries to reach net-zero and measure, manage as well as act upon their sustainability data while creating real business value.

The founders met during their studies at the University of Mannheim, the Center for Digital Management and Technology (CDTM) in Munich and ETH Zurich, where they have worked on assessing organizational climate impact.

„With Tanso, we want to leverage the power of data and machine learning to help industrial manufacturing companies transition towards a lower carbon economy and to efficiently handle the increasing pressure for accountability“, says Co-founder and CTO, Gyri Reiersen, who before founding Tanso researched tackling the overestimation of carbon offsets through deep learning with renowned AI-professor Xiaoxiang Zhu at TU Munich, together with ETH Zurich and MIT.

Fabian Sinn, Co-founder and CEO, adds: “We are a purpose-driven company,
aiming to remove the structural barriers that hinder corporations to reach climate neutrality. We are supported by leading experts and advisors from the fields of ESG, (carbon) accounting and regulation which enables us to tackle climate change the right way. This funding allows us to strongly expand our product and engineering teams and we are looking to hire the best talent wanting to join our mission to a low carbon future.”

### Voices of the Investors
“We are impressed by the founders and their vision to positively contribute to climate action with technology and we are excited and honored to partner with the team and to lead their pre-seed financing round. We look forward to supporting Tanso to become the global category leader in sustainability accounting for the industrial manufacturing sector.” says Alexander Kiltz, Principal at UVC Partners.

Robin Godenrath, Founding Partner and Managing Director at Picus Capital, adds: “We believe that every one of our investments should have a positive contribution to society, and Tanso does just that. We are looking forward to partnering with Tanso on their mission to enable the industrial sector to take the next step in sustainability accounting with a digital end-to-end solution”.

### About Tanso Technologies
Founded in 2021, Tanso Technologies enables industrial companies to become part of the solution to a lower carbon economy. The Munich-based startup aims at making sustainability accounting as integrated, transparent and verifiable as financial accounting. Tanso’s end-to-end sustainability management platform enables industrial companies to actively leverage their data in taking positive climate action and creating real business value.

More information about Tanso can be found here:
www.tanso.io.

We are hiring: https://www.tanso.io/careers/

### Press Contact
#### Fabian Sinn

Co-Founder and CEO

press@tanso.io

### About UVC Partners
UVC Partners is a Munich- and Berlin-based early-stage venture capital firm that invests in European technology-based startups in the areas of enterprise software, industrial technologies, and mobility. The fund typically invests between € 0.5 – 5m initially and up to € 20m in total per company. Portfolio companies benefit from the extensive investment and exit experience of the management team as well as from a unique corporate network which UVC Partners leverages for its portfolio companies. For further information please visit www.uvcpartners.com.

### About Picus Capital
Picus Capital is an international, privately financed venture capital company
headquartered in Munich and with offices in New York, Berlin, London and Beijing. Picus predominantly invests in pre-seed, seed and Series A rounds and focuses on technology companies in the real estate, finance and insurance, HR, renewable energy, mobility, e-commerce and healthcare sectors. As an entrepreneurial sparring partner, Picus pursues a long-term investment philosophy and supports founders from the ideation phase to the IPO and beyond. For further information please visit
www.picuscap.com.

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Tanso receives $ 1.9 in pre-seed funding to enable a low-carbon economy

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