ClimateTracker founders Dougal Watt and Sarah Sutherland.
ClimateTracker founders Dougal Watt and Sarah Sutherland.
Dougal Watt swapped a career with a big corporate for a start-up.
The life shift appears to be paying off in the form of earlier success for ClimateTracker, his firm’s software that helps large organisations track their emissions - the better to meet new reporting demands from investors and regulators.
Seeka has signed on as an anchor client, and ClimateTracker has just debuted on AWS Marketplace - giving an easier path to corporate sales, and a global platform for its international version.
ClimateTracker’s three directors have complementary skills. Watt, a long-time chief technologist for IBM NZ, brings the data smarts; interface specialist Sarah Sutherland has a visual arts degree (and has exhibited in multiple countries); and Tim Zonneveld, a Russell McVeagh and Bell Gully alumnus and current partner in BDO’s taxation services division, brings commercial nous and regulatory reporting knowledge.
When Watt first left IBM, he formed Graph Research Labs, a start-up that aimed to simplify compliance with various Government and industry standards. He created ClimateTracker - a fully owned subsidiary - after someone at one of the “big four” accounting firms told him there was no easy, one-stop software for meeting mandatory emissions tracking requirements under the New Zealand Climate Standard 1 (NZCS 1), ushered in by recent legislation.
Amazon's AWS (Amazon Web Services) is best known for its giant data centres and cloud computing services, but it also runs AWS Marketplace, which showcases and sells third-party cloud software, typically aimed at large organisations, and includes tools for quickly adopting new apps for hundreds or thousands of staff. Photo / Chris Keall
Specifically under the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021, climate-related disclosures have been mandatory since January 1 this year for some 200 large entities - any publicly-listed company with a market cap above $60 million (that is, most of the NZX), insurers, banks, investment managers and four Crown institutions, including the New Zealand Super Fund and ACC. The 200 will have to grapple with even more complex reporting requirements from the end of 2024.
Watt knows all about grappling with complexity. He’s built software-as-a-service systems for the likes of Fonterra and the major banks. With ClimateTracker, he bills its ability to replace reporting via a mess of PDFs and spreadsheets with information from many sources, across 1000 points of data, and present it in a single, easily digestible format for everyone from auditors to staff, shareholders or customers.
Large organisations around the world face new legislative and accounting requirements around reducing greenhouse gas emissions - and tracking progress toward targets. There are also new risk management and governance requirements, with increasing complexity and liability. ClimateTracker aims to help firms simplify reporting.
An international version of ClimateTracker, which will help organisations deal with equivalent new rules in Australia, North America, Europe and elsewhere, is due in November.
There’s been a degree of backlash against climate reporting on the right, especially in the US (here, the Climate-related Disclosures Act passed 110 to 10, with Labour, National, the Green Party and Te Pāti Māori supporting the bill, and only Act voting against it), but Watt sees any political setbacks as temporary.
“It’s basically unstoppable now. It’s a global movement,” he says.
Right now, ClimateTracker caters to large organisations, and is priced accordingly (from $15,000 for an annual subscription). But Watt sees climate reporting reaching down the food chain to small and medium-sized businesses and regulatory requirements expanding, or a broader base of firms wanting to cater to eco-conscious customers. The so-called “regtech” market was worth US$10.5 billion in 2022 and will hit US$60.8b by 2030, according to market researcher Gartner.
Seeka has been using ClimateTracker since May.
What made our largest kiwifruit producer opt for Watt’s software?
“Seeka is a business that grows and packs kiwifruit and other produce, so adapting and responding to climate change is critical to what we do,” chief financial officer Nicola Neilson told the Herald.
Love in a hot climate: ClimateTracker is 85 per cent owned by its husband-and-wife co-founders, Dougal Watt and Sarah Sutherland (pictured). The firm's third director, tax partner and regulator specialist, Timn Zonneveld, owns the balance. The start-up is bootstrapped, with no plans to raise outside capital.
“If we can capture what our future environment looks like in a simple format, we can clearly identify what our climate risks are, focus our response plan on those, and ultimately build a better, more sustainable business. ClimateTracker is a tool that can facilitate this and guide you down the right path.”
“The tool highlighted what we were doing well and where we had gaps in our understanding.
“Some aspects of climate disclosure we have been reporting on for years, but [for] others, we needed to think about how we were going to source the information and bring it together in a way our stakeholders could find value in it.
“Climate reporting is mandatory, but whether you do the bare minimum or embrace it is a choice each company gets to make.
“We selected ClimateTracker because it allows you to go beyond simple disclosure and compliance,” Nielsen said.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
