Neil Koenig, ideaXme board advisor and former Senior BBC Producer, interviews Gyri Reiersen, Co-founder Tanso.
Despite countless warnings from scientists about the dangers that greenhouse gas emissions pose to our environment, it seems that many businesses have still to wake up to the gravity of the situation.
“It always surprises me how little companies know about for their emissions” says Gyri Reiersen. An activist, entrepreneur, and self-confessed “nerd”, she is also co-founder of Tanso, a start-up based in Munich that offers software to help industrial companies understand and manage their carbon footprint. Although Tanso was only recently founded, it has attracted support from a range of venture capital and angel investors, whilst its products are already being used by some large German industrial enterprises.
I had the chance to interview Gyri at this year’s Symposium, an annual event organised by the students at the University of St. Gallen in Switzerland.
In this interview for ideaXme, Gyri Reiersen talks about how the idea for her start-up came about, the challenges of helping enterprises to understand the role they need to play in tackling climate change, and her optimistic belief that, if we all work together, we can solve the difficult challenges that lie ahead.
Power of Data to Reduce World’s Carbon Footprint.
Neil Koenig, ideaXme: [00:00:00] Our environment is threatened by ever increasing levels of pollution. One key step that might help us reduce carbon emissions would be to measure them. Tanso is a Munich based start-up that aims to do just that by offering software that helps industrial companies to measure, manage and cut their carbon footprint. Gyri Reiersen is a co-founder of Tanso, and I met her at this year’s symposium organized by the students of St. Gallen University in Switzerland. I’m Neil Koenig. And I began this interview for ideaXme by asking Gyri Reiersen to tell us more about herself and her company.
Gyri Reiersen, Co-founder Tanso: [00:01:02] I’m Gyri Reiersen. I am a nerd. I’m a climate activist. I’m a Norwegian. I’m an AI engineer and a founder of a climate tech startup.
Neil Koenig, ideaXme: [00:01:17] And what’s the startup?
Gyri Reiersen, Co-founder Tanso: [00:01:18] The startup is called Tanso Technologies. It’s a software company based in Munich that is decarbonizing the industry and making sure that every industrial manufacturer can manage their carbon in an effective way and also be competitive against other competitors just through their carbon management.
Neil Koenig, ideaXme: [00:01:40] So how did you come up with the name Tanso?
Gyri Reiersen, Co-founder Tanso: [00:01:43] The name Tanso comes from Japanese. It means carbon. And we had in the beginning a lot of discussions around what should be our identity. And since one of my co-founders spent quite some time in Japan, we spent we then decided to call it Tanso and say, you know, carbon is the most important factor for reducing our emissions at the moment and therefore should be at the heart of our name as well.
Neil Koenig, ideaXme: [00:02:11] How did the idea come about?
Research Focusing on the Use of AI and Data to Cut Emissions
Gyri Reiersen, Co-founder Tanso: [00:02:15] The idea came from my studies. I studied AI and machine learning and did research at ETH researching how to use machine learning in order to quantify how much carbon is stored in forests. And this type of carbon is often certified and therefore used as carbon offsets. And when you see the carbon offsetting market, it’s growing. There’s more and more interest in carbon, but that doesn’t solve the issue in the first place. The issue is that we’re emitting too much carbon and currently even forests, we’re cutting more forests so emitting more carbon through forests than sequestering carbon. And that led to me and some friends of mine to do interviews with industrial players, the companies and the stakeholders that are emitting the most carbon to figure out why are they not reducing what are really the core, the root issues of carbon emissions. And if you look at Europe, 32% of emissions come from industry, it comes from production. And through our interviews we realized that the problem is not necessarily an unwillingness to reduce. There is a will there and there’s even a business case for it, but there’s no transparency. And that led us to develop this software that easily helps track and manage actively your carbon emissions. So first, getting an overview. Where do they even come from? And then analysing the hotspots. What is the most effective way to reduce your emissions fast, the low hanging fruits? And then going beyond that into how do you even change your core business? What will be different products to develop? What are recycling rates you can incorporate? What are different processing steps that you can take and changing fossil fuel-based processes to, for example, more electrified processes or maybe even hydrogen or nitrogen in the long run. So that’s how it came about. And now we’re a VC backed startup and growing towards 30 people at the end of the year.
Neil Koenig, ideaXme: [00:04:32] You say you’re helping companies to measure carbon. How do you actually do that? Are you attaching probes to chimneys?
Gyri Reiersen, Co-founder Tanso: [00:04:42] It’s quite interesting because how to manage and how to calculate emissions and is less real life than what you would believe. It’s a lot of assumptions and it’s similar to financial accounting. Where you say there’s a pluses and minuses coming in and out of your business and those are determined by your customers or determined by your suppliers. If the price of something you pay or the price that you set for your customers. When it comes to emissions, they’re real. There are CO2 molecules flying around in the world and being emitted, but they’re not being measured in the same way as you would think. It’s not a physical measurement of CO2 emissions. It can be. And what currently is a status quo of carbon accounting or the state-of-the-art carbon accounting, is to make sure that you make assumptions based on processing steps, so you calculate based on one offs. So, you take a one product and say one process, let’s try this out, measure it with actual hardware and measure how much CO2 comes out of it. Then you do that for a couple of products, similar processing steps and then you make an industrial average out of it.
Gyri Reiersen, Co-founder Tanso: [00:06:01] And often those industrial averages are a good estimate for how much emissions are there. For example, a one kilogram of steel being produced in Europe compared to a kilogram of steel produced in China. And then you take these industrial averages, and you use those as factors. So, emission factors, and then you calculate your emissions based on the emission factor together with the actual consumption. So, you buy 1000 tons of steel, and you multiply with the per ton emissions associated with that steel. In the long run, what we see is that more and more companies will actually measure how much in their production steps or in their supplier’s step in the entire life cycle of a product and will actually measure it. And you will have real data and primary data if you want and not assumption based. And that only will come in the future when we have good enough transparency throughout the entire supply chain. So, everything from mining the steel to melting it to producing it, every single step needs to be documented. And currently we’re working with industrial averages for that to at least create an infrastructure for sharing the data through the supply chain.
Neil Koenig, ideaXme: [00:07:12] So just to be clear about this, when you’re coming up with this model for the industrial average, this process does actually start with putting a probe on a chimney or measuring a production line, is that right?
Gyri Reiersen, Co-founder Tanso: [00:07:28] Yes, it’s all scientifically based. So, every calculation that we do are based on a database of emission factors or industrial averages that come from scientific peer reviewed papers. So, these are scientists that actually sit there with their measuring tools, measuring every process, measuring every, every step of a production, and then calculates an average based on that. And that is what we use in our calculations.
Neil Koenig, ideaXme: [00:07:56] But it presumably would be better if you could have little sensors or probes attached to every part of the process, or wouldn’t it?
Gyri Reiersen, Co-founder Tanso: [00:08:06] I have to say I’m quite a pragmatic person. The question is what increase in accuracy would you get? And currently the level of uncertainty in carbon calculations are quite high because there are these industrial averages that still have a variety in their data, in the original data. And you have to kind of narrow the confidence interval down into how accurate it is.
Gyri Reiersen, Co-founder Tanso: [00:08:53] Some of these measurements are also factored in with the global warming potential. So having CO2 has a different warming potential than methane, for example. And that is also an equation you kind of have to put together. What is the effect of these molecules, not only what is the presence of them or the emissions of them. You have to say to calculate that in as far as is it needed? I don’t know. I think for the next 10 to 20 years, carbon will be more and more directly measured. But whether that is the best way to get to a level where you can still get to zero and with the lowest cost possible, I’m not sure.
Neil Koenig, ideaXme: [00:09:43] So you’ve got these industrial averages, you’ve got these yardsticks, these ways of arriving at some sort of measurement. Then what, what are the companies do with this information?
Gyri Reiersen, Co-founder Tanso: [00:09:56] It always surprises me how little companies know or have a gut feel for their emissions. So, for example, we see a lot of companies reducing their flight usage. So, they ask the CEO, please don’t take so many flights. But if the amount of flight emissions, you shouldn’t take them anyways. But if the amount of flight emissions are just a 0.001% of your corporate carbon footprint, it’s not even a drop in the ocean. And that, I think, is the most interesting is first to just get the overview. What are the proportions of emissions? Where are the most emissions coming from? What are the low hanging fruits, like I said. In most companies look at three levels. So, you can either look at your own production, especially producing companies, they look at how much energy are we consuming, are we wasting energy? Are we putting the heating on over the weekend? We can turn it off. We can save costs while also saving emissions. Can we change over to green electricity? Should we invest in our own solar panels and also secure energy, which is a hot topic at the moment. Even maybe change their processes internally just becoming more effective and changing the energy source that they’re using internally. And the second point is going into your supply chain. So corporate carbon footprint is not only your own operations, you are also partially responsible. Even though you cannot control it, you’re responsible for your supply chain emissions as well. That means everything that your suppliers do. You’re also responsible for and everything that your customers do, you’re also responsible for.
Gyri Reiersen, Co-founder Tanso: [00:11:54] That means that every product decision that you make. So, if you decide to buy steel from a supplier, one or supplier two, this decision you can make and therefore you’re also responsible for counting in if one supplier is much worse in their processing of steel, for example, using a lot of fossil fuel, transporting it around the globe before it comes to you, you’re responsible for that. And on the other hand, and the last point that I want to make is you can also change your own products. You see that a lot in energy consuming goods. Most of the emissions come in the use phase of your product. So, if you as a dishwasher or a washing machine producer, if you look into your products and say, actually you use 30% less energy, when you wash with my machine, that is 30% less emissions in the use phase and that is maybe 10, 20 years running weekly, That’s a lot of emissions. Even though the energy grid is now currently improving and becoming greener, there’s a lot of emissions there in energy consumption. And when you think about it, fossil fuels are the main source of emissions. Yes, we have some burping cows, but most emissions come from fossil fuels. It means that if you can either electrify or reduce the energy need in your supply chain, be it through your suppliers choosing the ones that are using the electrified processes and electrified transport. Same goes with your own operations and then also your own products and your core business. If you make your core business not dependent on fossil fuels, you have a chance to reach net zero as a company.
Neil Koenig, ideaXme: [00:13:44] These approaches that you’ve been outlining, are you providing this kind of advice to companies as well as offering this service of helping them to get a handle on how much carbon they are producing?
Gyri Reiersen, Co-founder Tanso: [00:13:59] I think it’s similar to asking a software provider for accounting software if they can help you make your numbers less red. I don’t say that I know the business better than the business owners themselves. I can show them the numbers and be clear on here’s where emissions are, but I cannot run the business for them. I cannot necessarily make a decision that oil companies should stop with oil production and go over to wind. I cannot make that decision. I can make the business case for it through numbers. I can help them through software showcase. And say hey, here’s suggestion. If you change this energy source to another one, you will reduce by 10%.
Gyri Reiersen, Co-founder Tanso: [00:14:44] One we had a discussion with one customer and highlighted that if they changed to 50% of recyclables from their suppliers in aluminium, they would reduce their entire corporate carbon footprint by 30%, and that was just by the top five suppliers. And if we can encourage these conversations through data, that’s the way to go and that’s how we can do it. We’re not offering any consulting because there’s nothing specifically, we can do. We work very closely with industry associations who are creating initiatives and best practices and sharing platforms that we contribute to and say this is what we have aggregated from many customers doing the similar things or doing the same, but doing one on one decision making for companies is not something we see as our role.
Neil Koenig, ideaXme: [00:15:42] But on the other hand, given all the data you’re processing, you might be seeing, patterns emerge and maybe that’s something that, in the future you could start sharing with your customers.
Gyri Reiersen, Co-founder Tanso: [00:15:58] So I’m an AI engineer, meaning I love everything that can be automated and done without manual input and without humans. I think that you cannot go away from human ingenuity. Yes, you can copy paste from others. Yes, you can make best practices shared and you make smart suggestions. You can encourage people to spend less by incentivizing them and through software, through technology. But at the same time, it’s up to them to figure out how to break the cycle of our mental models internally.
Gyri Reiersen, Co-founder Tanso: [00:16:40] My goal would be that no one has to think about emissions and that they’re automatically reduced. But then you also take away the freedom of decisions from humans. It’s the same as financial decisions or calorific decisions. I can decide that I now want to eat a chocolate. It’s not good for me. It’s not good for the health care system. It’s not good for any system around me, maybe a little bit of dopamine will help my mood. But I make that decision as a free human. I can do that. And that’s the same for businesses. You can automate up to a certain point or make suggestions and encourage and incentivize and even set up locks on the fridge type of technical solutions to prevent people making the worst choices. You can set up that in a technical and automated way. But when it comes to it, ultimately humans have to make the decisions and have to stand be responsible for them.
Neil Koenig, ideaXme: [00:17:45] Some years ago, I talked to Amory Lovins, who was founder of the Rocky Mountain Institute, an environmental think tank based in Colorado. And he used to talk about approaching big companies on the question of being more environmentally responsible in their activities. But his pitch to them was always, you’re paying for the pollution that you’re sending up the chimney. And actually, you can also do some good for the planet and save a lot of money at the same time. The kind of service you’re offering you might be able to highlight the sort of financial benefits as well as the environmental ones?
Gyri Reiersen, Co-founder Tanso: [00:18:31] Yes. So, when it comes to putting a price on carbon or incorporating or if you want internalizing the externality that carbon is, that is definitely something, that we do. What I what I sometimes find interesting is that we’re as a society, as businesses, we’re so optimized for profit. We have one KPI that we’re optimizing for, and we make it hard for ourselves to incorporate other factors. And we see this with ESG or environmental, social and governance, and that they try to create a more complex equation with more factors in it that try to weigh the different benefits of the different factors. And where you see long term versus short term profits has an influence. If you take the other impact factors into it or not. I think you more and can make the business case for long term reduction of carbon, but also other environmental factors such as water consumption or even energy consumption. There is a business case for it. We see the same thing on the social side of ESG, that having more inclusion gives higher performing teams. You have better profit as a company if you have teams that perform better. And think more of new ideas and be more disruptive in their innovation. It’s a no brainer.
Gyri Reiersen, Co-founder Tanso: [00:20:11] But at the same time, how do you balance that, especially when humans are biologically wired for reducing the importance of the future compared to the current state. When they say: I want chocolate, now. I don’t care if will make me fat. So, it is a problem for the future.
Gyri Reiersen, Co-founder Tanso: [00:20:34] I’m a “technology optimist”. I believe that we can use technology and complex equations to improve businesses carbon footprints and profitability. It gets more complex, the more factors you include, both in terms of forecasting and creating a picture of how you can motivate yourself or play around with human biology. And to make the case of how it will be more profitable. To make it possible to forecast that if you install your PVS after five years, even including all the risks with it, you will have profit. And all the years after those five years you save money. Technology can make a great case.
Gyri Reiersen, Co-founder Tanso: [00:21:17] But experience needs to form part of the equation also. I think in the last 20, 30 years, we have started to build up on the one side use cases or business cases for it. On the other side, the technology has developed crazily, and green energy is cheaper than fossil fuels in most cases. And I think there there’s still a work to be done to integrate that into companies. And where we see that a lot of companies face a lot of fear for change. There can be “push back” from their own employees because they don’t necessarily see the future. They may not see the current or future benefit of this change that we want to have, especially because it’s going so fast.
Gyri Reiersen, Co-founder Tanso: [00:22:15] There’s a saying amongst the sustainability managers and companies that from the outside they’re loved and from the inside they’re hated. Internally, there’s so much pressure to optimise profit and everyone feels they have another pressure point coming in instead of thinking that carbon reduction and profit motives could fit together. This is where we come to, to offer tools – software to make decisions simple and make the decision a “no brainer”.
Gyri Reiersen, Co-founder Tanso: [00:22:53] The current status quo is that you feel the pressure from both sides. So, you resist making any changes because at least you won’t be hurt if you’re optimizing for profit.
Neil Koenig, ideaXme: [00:23:11] Like in the 1960s, the IT manager would never get fired for buying IBM.
Gyri Reiersen, Co-founder Tanso: [00:23:19] Exactly. I think it’s a similar one in the business world saying that you will never get fired for hiring McKinsey.
Neil Koenig, ideaXme: [00:23:27] So the biggest challenges you face then are to do with human behaviour, changing that?
Gyri Reiersen, Co-founder Tanso: [00:23:37] Yes, humans have flaws as any system, I guess. The biggest challenge is definitely to work with people. We see that on global scales. Collaboration is hard. Overcoming differences is hard. Understanding and having empathy for different opinions is super hard. Trusting someone you wouldn’t trust is hard. And that, I think, is in general the biggest challenge that we’re facing, especially facing with climate change. Because a lot of trust is based on familiarity, and you need trust to generate the courage to change. And currently we need change that is not only on a linear time scale. We need the speed of change to be exponential. And that means that every single second you have to double your speed of change. And when you’re afraid of change, you push back, and you stop it. So, you don’t even change regularly or stably. You just stop and you want to prevent it. And with climate change, there will be a lot of migration. A lot of new people, with new opinions, new perspectives coming in. And if we are not able to embrace that and it’s hard and it’s uncertain and it requires us to be vulnerable, it requires us to have a lot of courage. If we can’t overcome that and sit at a table, look each other in the eyes and say, how can we make this a good place to be for us and for future generations? That is the big challenge.
Gyri Reiersen, Co-founder Tanso: [00:25:18] Of course, you can sprinkle in that AI has a tendency of increasing differences. It has a tendency of increasing biases or just blowing them out of proportion. We’re currently seeing that inequalities in Europe and across the globe are increasing again. And how will that change and how will the political system also change with more and more migration and people having to leave their homes to find another life?
Gyri Reiersen, Co-founder Tanso: [00:25:48] I myself have moved a lot in my life. I have lived in many countries and had to adapt everywhere I come. And adaption isn’t necessarily great for diversity. If I adapt and leave my own perspectives, my own background and my experiences and not bring them in, no one is better off. And it’s psychological and emotional and your identity is also stirred with when you have to leave and especially forced to leave. I was willingly leaving, but if you’re forced to leave your home and your country, your familiarity, your trust levels are very low, and especially when you then come to another place and the inhabitants of that other place don’t trust you. Who are you? You’re unfamiliar face. You have different opinions, you have different behaviours, you have different cultures, then that is not a good basis to start collaborating. And I think we should not be unconscious of the challenges associated with collaborating and the challenges of coming to the same table. Those challenges are going to become harder and harder.
Gyri Reiersen, Co-founder Tanso: [00:27:10] So what I normally say to our customers and sustainability managers that are working internally is, yes, you have a different set of people that you have to collaborate with currently, but let’s face it, in the future it’s just going to be worse. So, let’s practice on what we have and make the best out of it. It’s not going to get easier, but we can already figure out good solutions with the people we have now.
Neil Koenig, ideaXme: [00:27:36] If what you’re offering is such a good idea, you must have competitors.
Gyri Reiersen, Co-founder Tanso: [00:27:42] Yes, thank God! So first of all, I believe that competition is a good thing, is a healthy thing. We’re all working on the same mission. And if someone is able to calculate carbon emissions for the entire industry before me or before us, great!
Neil Koenig, ideaXme: [00:28:02] So there’s a race, is there?
Gyri Reiersen, Co-founder Tanso: [00:28:06] Definitely. There’s a race and an execution game currently of getting out there and also capturing the value that is generated through calculating emissions and reducing emissions, which is not necessarily a bad thing. We need so much reduction. There are so many companies, there’s over 50,000 companies in the EU alone and not including the UK here that need to report emissions starting 2025. And we’re not even close to covering all of them. And it’s a green field. It’s a gold rush if you want when it comes to climate tech. In the future, almost every company needs to be a climate tech company. Every company has to understand their risks, external risks, their infrastructure risks that they have and how they play a role and can capture on this value. Whether is a big company, one of the big tech companies seeing their opportunities coming in. Or if it’s a small start-up like mine, there is a market opening up when it comes to carbon emission reductions, and I’m happy to take a part in it.
Neil Koenig, ideaXme: [00:29:16] And this market works, does the carbon emissions market work? Because some critics are sceptical about it.
Gyri Reiersen, Co-founder Tanso: [00:29:23] I think there’s there are different carbon markets. So, one is the open carbon offsetting markets. So, buying and selling carbon emissions. And then on the other hand, there is the associated market of, for example, energy and energy storage that doesn’t have anything directly to do with carbon, but that is the solutions you would need in order to reduce your carbon. And that is the market that is now opening up people, companies investing more and more into solutions on how to reduce their carbon. And that is also what I mean by the bigger market of how to reduce emissions is very little to do with carbon, often directly. It has everything to do with energy and everything to do with materials and recycling and circular economy. It is about changing business models and that market, if you can capture that value of transitioning to a more electrified world, a greener energy world, your part of that transition. You can take a piece of the pie.
Neil Koenig, ideaXme: [00:30:37] What would be your advice to young people who are thinking of working in the same field as you?
Working in the Tackling Climate Change Sector
Gyri Reiersen, Co-founder Tanso: [00:30:45] We see a huge transition of people quitting their jobs and wanting to work in climate, and I think it’s one of the biggest challenges of our generation. I see myself in 2050 because we talk a lot about net zero until 2050. In 2050, I will be 55 years old and hopefully have children. They are studying and I still have a couple of good years to work until I retire. But the consequences of climate change will happen after 2050. So now in the next 20, 30 years will be the best climatic 20, 30 years we will have in the future. And how I see it is that if you want to work in climate, you have to have a job and then you have to think, how does that how is that influenced by climate and how does that influence climate? And that means, for example, if you work as a truck driver, you have to lobby internally for yourself. How can how can my position be part of electrifying our fleet? How are we future proof for reducing our own emissions and how are we affecting the environment around us? How are we socially doing? And I think that my one tip for people who want to work in climate is to make sure that you’re working on a topic that you care about. So not only climate, climate will infuse everything we do, but work on a topic that you care about. If that’s education, if that’s health, if that’s engineering, like we need everyone, we need the craftsmen in everything we do. And then you should think, how does that impact climate and how can you be a part of changing your industry, your field for the better and therefore be more climate proof?
Neil Koenig, ideaXme: [00:32:51] That’s great. Thank you very much.
Gyri Reiersen, Co-founder Tanso: [00:32:53] Thank you.
Interview credit: Neil Koenig, former BBC Producer and now ideaXme board advisor.
If you enjoyed this interview check out our discussion with Virginijus Sinkevičius, the present Commissioner for the Environment, Oceans and Fisheries, at the European Commission.
Neil Koenig: LinkedIn https://www.linkedin.com/in/neilkoenig/
ideaXme links: ideaXme https://radioideaxme.com ideaXme is a global network – podcast on 12 platforms, 40 countries, mentor programme and creator series. Mission: To Move the human story forward™. Our passion: Rich Connectedness™!
