Fixing the climate crisis is a vast, world-sized puzzle. But one particularly large piece of this ginormous conundrum is construction and real estate — which collectively amount for around 40% of global greenhouse gas emissions. Enter Munich-based data startup Emidat, which has built a software platform for automating the generation of validated Environmental Product Declaration […]
© 2024 TechCrunch. All rights reserved. For personal use only.
Fixing the climate crisis is a vast, world-sized puzzle. But one particularly large piece of this ginormous conundrum is construction and real estate — which collectively amount for around 40% of global greenhouse gas emissions. Enter Munich-based data startup Emidat, which has built a software platform for automating the generation of validated Environmental Product Declaration (EPD) certificates for the construction sector.
EPDs are a critical piece of the puzzle for understanding and mitigating the climate impact of the built environment. They require undertaking a product lifecycle assessment (LCA) to declare standardized info about the environmental impact of construction materials and products at each stage of their lifecycle, from production through use to end-of-life.
The problem is that EPDs are typically an arduous and expensive piece of paperwork for manufacturers to produce, says Emidat CEO and co-founder Lisa Oberaigner.
This is where the startup’s data platform comes in, opening up a digital channel for ingesting product data and automating environmental impact declarations via a queryable database that accepts uploads via API, Excel, or BIM (building information modelling); and can itself be accessed via API and UI.
By standardizing the construction sector’s EPD reporting for products, the startup thinks its data layer will fire up the incentive for manufacturers to compete to produce more sustainable buildings materials, helping to shrink the carbon footprint of future builds as a byproduct of platform-enabled transparency.
“The really large manufacturers, the ones that are responsible for these emissions, it’s not like they don’t know how to decarbonize; they know exactly what they need to do, and they invest a lot in these new technologies to produce sustainably,” Oberaigner said. “Now they cannot charge for it, and with what we do, they can put a price tag on it — show that it’s actually more sustainable.
“So what we’re building is essentially an incentive structure so that the manufacturers get something for their effort. And I think, right now, this is what the market needs,” she said. “In a couple of years, when we’re not talking about ‘do you have this data available’ … but we’re talking about the actual impact of the materials, then it will be even more important to have the sustainable solutions implemented.”
The startup is also using AI to analyze data ingests so it can present information back to its customers. This includes being able to create industry benchmarks for different products so manufacturers can compare their performance against peers. It also plans to use AI to analyze 3D models so it can produce emissions calculation projections based on analysis of the materials proposed for the construction project.
Emidat’s software as a service platform cuts the time it takes its manufacturer customers to produce an EPD from as long as up to a year currently (using conventional approaches such as where a manufacturer engages a consultancy firm to compile the data and an external verifier to sign off on the declaration), to as little as a week per product, according to Oberaigner.
The cost per EPD (and therefore per product) is also slashed dramatically, she says, down from the circa €15k it costs using the conventional multi-step, multi-agency reporting process down to as little as €50 using Emit’s platform.
Beyond the existential imperative of the climate crisis itself there is a driving force on the horizon in the form of regulations that will apply across the European Union from early next year: aka the Construction Products Regulation (CPR).
This pan-EU law brings in sustainability requirements for construction industry products and harmonizes the bloc’s rules for assessing environmental performance. It will also introduce a regime of audits to check the construction industry’s environmental declarations. And Oberaigner suggests the law will help accelerate adoption of Emidat’s platform given how the verification piece is also baked in.
“Essentially, right now, the way [the industry] works is that there is a third party that just looks at the [manufacturer’s product] data that a consultant created, puts their signature under it, and then this is published … The problem is that they all work with different standards,” she said. “So even if you produce the exact same product, and it should be the same results, it’s not at the moment. So our core piece in is in making this calculation unified — and this is what the verifier verifies in the first place.”
Oberaigner and her co-founder, CTO Florian Fesch, set out knowing they wanted to found a climate startup but otherwise had a blank slate for what their first company would focus on. Researching impact opportunities, and doing hundreds of interviews around sustainable construction, led them to narrow their search and settle on data reporting for construction as the mission.
They saw a particular opportunity to build a platform geared toward materials manufacturers — getting these key players and their supply chains uploading product data to automate EPDs — as a way to respond to rising demand for environmental impact info which is coming from the architects and project developers who want to improve the sustainability of their projects.
Other approaches in this area had focused on serving the latter customers directly, she suggests, rather than directly supporting manufacturers to report environmental data. Oberaigner name-checks the likes of One Click LCA and Sphera as longtime players selling LCA support services but which are targeted at expert users (rather than manufacturers).
“We’re not the first ones who realize embodied carbon in buildings is a problem, but we’re the first ones to tackle the manufacturers,” she said, adding: “I think this is a really smart starting point, because this is where the data is generated, but this data is then needed along the whole value chain. So we can essentially layer applications on top of this.”
Giving manufacturers the tools to manage their EPD reporting themselves also looks like a smart tactic to lift key emissions data all the way down the supply chain, as the approach requires major manufacturers to ensure their suppliers are providing the necessary data to complete the environmental declarations.
So far, the 2023-founded startup’s has 25 customers who have used or are using its platform for some 350 construction plans. Its database of materials contains information on over 150,000 construction products, spanning 13 product categories so far. But it’s just getting started.
Oberaigner says Emidat’s initial focus has been onboarding manufacturers of structural components where environmental impact is greatest (e.g. cement/concrete; steel; windows; roofing, etc.) — and its customer roster includes “three of the world’s largest concrete manufacturers” (though she didn’t disclose any names).
But she says the company plans to keep expanding the product categories covered. So EPD generation for operational components like building heating and lighting and interior decoration, could be added down the line.
Consider how many declarations would be needed to comprehensively cover all the components involved in just a single construction project, and it’s easy to see why a scalable platform that’s able to automate key stages of the EPD process — to both speed it up and radically shrink the cost of reporting — could be transformative in delivering data much more quickly and getting much more of the built environment disclosing critical information on climate impact.
Emidat’s platform streamlines data collection by integrating with manufacturers’ systems via API and then uses those data unloads to automate the generation of the EPD — baking in verification as part of the service.
“[Manufacturers] really need this at scale for hundreds of different products, so the current process just doesn’t work,” Oberaigner said. “Within the European Union, we need to increase the number of EPDs from 30,000 to somewhere in the millions. We don’t really know how many construction products there are, but it’s very, very high. And then outside the European Union, you also have the same standard.”
“[Generating EPDs] is something that nobody else has really done before, because it’s a rather complex document … that explains exactly how everything was calculated,” she said. “And then the calculation needs to be accurate as well. So we make sure that the calculation is accurate for every single product that you want to output, which means that there are a lot of sanity checks in there — everything that a verifier would usually do — so the declaration, again, is autogenerated.”
“We’re the first ones to do this in a fully verified model, meaning that the output is so accurate that the verifier guarantees that anything that comes out of Emidat is verified,” she said. “And that’s very new in the market. It hasn’t really been possible before, and the demand was also not there because it was fine if you did this, like once a year, and then it landed in the drawer. Now we really need this at scale. So it’s the first time, essentially, that people are asking for this kind of solution.”
Emidat runs automated checks on data uploads to its platform to “sanity check” that the data customers are providing is accurate and is within certain thresholds; if not it flags the upload to the customer.
It also has a staffer doing sample checks of data uploads as another accuracy check. But, from next year, regional audits will be the norm as the industry gets regulated under the EU’s CPR.
The startup thinks that just the European market for EPDs could be worth at least €5 billion a year, based on the cost of producing a verified certificate for 500,000 construction products — though it says it’s estimated that manufacturers will need to create 25x the amount of all the EPDs that have been published so far as environmental regulations dial up. So the regional market for environmental declarations in construction looks set for serious heat.
In U.S., for example, the Biden-Harris administration announced a $100 million fund for cleaner manufacturing last year that’s providing grant support to U.S.-based manufacturers to produce EPDs. And Oberaigner says EPDs are also being used in Asia and Australia, so there’s global alignment on the approach.
Data reporting itself can be a catalyst for change. Emidat therefore thinks its platform will help reshape incentives for the construction sector to compete and innovate on producing and using more sustainable products.
Having a proper picture of the data by making it easier to report and generate EPDs is the flywheel for industry change, Oberaigner predicts. “What it really does eventually is it creates a competition between manufacturers that is based on environmental impact, and that is what we find really exciting.”
In a year’s time, she says Emidat hopes to be reaching some 200 customers; she suggests that would be the tipping point for the platform to unlock other business opportunities, such as by being able to support architects and developers to choose more sustainable materials for their project.
“We think of ourselves as a data company, because we think there will be a self reinforcing wheel,” she said. “The reason why the manufacturers create this data is because they want to share it and because they want to differentiate through it. And when they use our platform to share the data we have this other side — of project developers and architects choosing the materials through Emidat, so comparing materials through Emidat.”
“We think that once we have a really good base on the manufacturer side — so we have the best database for the materials, and we also have a really good database on the architect project developer side — it’s really, really hard to beat us. Because every new manufacturer will see, oh, all my customers are working with Emidat, so I might as well.”
Emidat is announcing a €4 million seed round, which it closed this summer, led by U.S. VC giant General Catalyst.
Commenting in a statement, Samuel Beyer, investor at the firm, said: “We see Emidat as a turnkey solution for decarbonizing the mission-critical built environment from the ground up; it will increasingly function as a collaborative platform where the industry can collectively access and exchange material data. We believe this will help drive the speed of industry transformation and value chain efficiency.”
Prior to this, Emidat raised a €500,000 pre-seed last summer, with backing coming from several unicorn founders and two Atomico angels, among others.
The latest funding injection will go on ramping up on the commercial side ahead of the EU regulation biting early next year, as well as continued product development. “Closing the largest names in the highest emitting product verticals,” is the plan, Oberaigner said.
Given the pressing need for the construction industry to be reporting carbon emissions, why hasn’t there been more startup action to this problem before? Oberaigner suggests a combination of factors have hampered progress to date: the choice of which customers to target and timing, with relevant regulations only set to bite soon.
“One piece of it is it’s more intuitive to go to the data user, so the architect and the project developer, because they’re the ones making the material choices,” she said, saying this had been her assumption, too, when the two founders started looking into the market.
On the contrary they learned through the 400 or so interviews they conducted during their market research phase that pressure to serve up data was being pushed onto manufacturers. Which underscores the value of proper customer research.
“I think a lot of startups have tried the data user side, and that currently is really tough because they don’t have the urgency yet,” she suggested. “And then on the manufacturer side, it’s really a new need. So the regulation is only coming up now. It’s really hard to find this right timing.”
“For us, it was very conviction driven,” she added. “Because if you look at the emissions in construction, it’s just a no brainer that something needs to happen there. And in many industries, the urgency is not yet as big, because regulation looks again where the emissions are big first.”
Asked how she thinks the built environment will change — as we get a better handle on the environmental impacts of different construction materials — she points to “sustainable concrete” as key to decarbonizing the sector, as well as agreeing that wooden buildings are likely to become a lot more common.
Leave a Reply