The researchers estimate that the world’s emissions of carbon dioxide will exceed 40 billion tons in 2023, including nearly 37 billion tons from fossil fuels. Overall emissions are up 1.1 per cent compared to 2022 levels and 1.5 per cent compared to pre-pandemic levels, continuing a 10-year plateau as reported by the Global Carbon Project.

To tackle the ongoing climate crises, a Singapore-based climate-tech startup, Carbon Balance, is aiding e-commerce companies by leveraging technology for a balanced approach to business growth and sustainability. The company focuses on cutting emissions and funding initiatives that absorb more carbon than produced. The goal is to make sustainability accessible for businesses and consumers, fostering a more responsible and environmentally conscious digital marketplace.

Carbon Balance’s tech-driven approach to climate crises

Carbon Balance aims to transform the e-commerce sector by aiding brands in measuring, reducing, and offsetting their carbon footprint. Employing an AI-driven approach, the company estimates the carbon footprint of e-commerce transactions by analysing product details. It provides free integration with platforms such as Shopify and WooCommerce, simplifying online store setup in under five minutes and eliminating manual data input for brands.

Upon integration, consumers at the checkout page receive a transparent insight into the carbon footprint linked to their purchases. A quick glance allows them to understand the environmental impact and, with a single click, choose to offset this footprint.

“My journey to founding Carbon Balance combines my computer science background with a deep concern for contrasting environmental attitudes. I noticed a clear divide: on one side, a group indifferent to their ecological footprint focused solely on consumption and profit; on the other, eco-extremists advocating for impractical bans on essentials like oil, plastic, and meat without considering the economic implications. Believing in a more pragmatic approach, Carbon Balance was born,” said Homam Alghorani, Co-Founder and Chief Executive Officer.

Alghorani is joined in this mission by his co-founders, Vikash Bengani and, later, James Connell (now advisor), who shared similar concerns about climate change and its current approaches.

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While many SMEs in the region are just beginning to recognise the importance of sustainability, Carbon Balance stands out by targeting larger corporations and empowering SMEs to embark on their sustainability journey amid increasing governmental push towards regulations and ESG requirements.

“Starting with e-commerce, we plan to broaden our reach across related sectors like logistics, delivery, shipping, packaging, and eventually into hospitality and events. We aim to make sustainability accessible and practical for businesses of all sizes,” said Alghorani.

The primary revenue stream for the company is a commission model, charging a 20-30 per cent fee on carbon offsets made through its platform. In the future, Carbon Balance plans to offer advanced features and a comprehensive footprint calculator for logistics and other sectors, transitioning to a subscription-based model for a steady revenue stream and continuous service enhancements.

“The combination of these revenue streams allows us to invest in research and development, ensuring we stay at the forefront of innovation in the climate tech sector,” said Alghorani.

Overcoming challenges in client focus and strategy

At Carbon Balance, the primary target clients are brands in the lifestyle consumer product sector, specifically those with monthly sales surpassing US$50,000 and a consumer base predominantly consisting of Gen Z and Millennials.

“Our solution is uniquely designed to resonate with this demographic. By integrating Carbon Balance, brands enable their consumers to participate actively in environmental sustainability. Each purchase becomes more than a transaction — it becomes a step towards a greener future. This feature particularly appeals to younger consumers who are increasingly conscious of their ecological impact and the ethical practices of the brands they support,” said Alghorani.

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Addressing challenges in the climate tech sector, Alghorani stated, “Getting into the climate tech sector in Southeast Asia has brought its share of challenges, particularly regarding SME awareness. Many SMEs in the region are unfamiliar with sustainability-focused products like ours. They often prioritise immediate operational needs over sustainability and typically adopt eco-friendly practices only when they lead to cost savings.”

To tackle these challenges, Carbon Balance has adopted a strategic two-pronged approach. First, the company has ensured its solution is easy to integrate and free, removing barriers to adoption, which is crucial for businesses new to sustainability or reluctant to adopt new technologies. Second, Carbon Balance is dedicated to educating these businesses on the value of sustainability, extending beyond environmental benefits to emphasise how sustainable practices can enhance their business model.

Funding journey and future plans

Carbon Balance secured a pre-seed round from Antler, whose support has been crucial in the early stages. The company is currently in the process of raising its seed round.

“Our aim with this funding is ambitious yet clear — we intend to offset 34,000 tonnes of CO2 and remove 800 tonnes of plastic while generating US$1 million in revenue by the end of 2024. To reach these goals, we’re looking for the right venture capital institute for our seed round or an angel investor who resonates with our mission and can provide the necessary boost to enter the seed round confidently,” Alghorani.

The company’s long-term vision is centred on providing easy-to-implement sustainability options for businesses of all sizes.

“In the coming years, we aim to expand our reach across various industries, enhancing our technological capabilities to support a wider range of businesses in their sustainability journey. A key milestone we’re targeting is the widespread adoption of our integrations, leading to a measurable impact on global carbon reduction efforts,” said Alghorani.

Carbon Balance’s approach to e-commerce sustainability, coupled with its strategic vision and commitment to addressing challenges, positions it as a key player in the climate tech sector.

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Image credit: Carbon Balance

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