"We are helping the world decarbonize by making it profitable" - Mauro Cozzi - Founder Series #2

Mauro Cozzi is the CEO and Co-founder of Emitwise, a company focussed on a combination of people, planet, and profit.

With his co-founders Ben Peddie and Eduardo Gomez, Mauro founded their ‘brainchild’ Emitwise. Their mission is to future-proof businesses as they accelerate the transition to a net-zero carbon world. The company has worked with clients across industries for the past four years and with the recent announcement of their partnerships with CBRE, Emitwise is set to continue growing exponentially in the Real Estate sector.

Interviews with inspiring Founders, Investors, and Real Estate Executives will be shared weekly on this podcast series - follow the PropTech Talks interview series and stay tuned!

Connect with me on LinkedIn: https://www.linkedin.com/in/matthew-maltzoff/

Transcript

00:00:04 Matthew Maltzoff
 Nice one. So Mauro, thanks for taking part in the interview today. It's part of our interview series, getting insights from founders, investors and executives in real estate, part of our mission to provide cutting edge insights to our real estate community. So, Mauro, thanks for coming.
 
 00:00:23 Mauro Cozzi
 Thank you for having me, Matt. Pleasure to be here.
 
 00:00:25 Matthew Maltzoff
 Cool. So we normally start with a question that's a little bit of an intro question so our listeners can get an understanding of who you are and the journey as a founder to get where you are. So would you tell us a little bit about how you got to founding this company and about your background?
 
 00:00:43 Mauro Cozzi
 Yeah, of course. Well, look, I always say my I've never had a real job. Emitwise is my second company. I started my first company when I was in university here in the UK at the University of Southampton. That company was all around machine learning and it was being applied in particular for analysing and summarising research articles. So I think I'm I'm a big fat nerd. Anybody that knows me knows that. And before my first company, I also spent a lot of time all over the way since my teenage years through university working on social and environmental charities and NGOs and social entrepreneurship initiatives. And Emitwise really is my brainchild with me and my two Co founders Ben and Ed started four years ago today. And it was sort of the coalition of our three worlds of technology startups and building these exponentially impactful businesses and our deep passion for climate change and for doing good for the world. And basically us trying to answer the question how can we use technology to accelerate action against climate change and avoid the worst of of climate disaster. And the answer that we to is we think that data and technology can make it profitable for companies to decarbonize, which is really the mission of Emitwise today.
 
 00:01:55 Matthew Maltzoff
 Fascinating. And you mentioned you and your Co founders, would you put yourself then more in the sales and marketing side as a founder or more on the product side as a founder?
 
 00:02:06 Mauro Cozzi
 Well, I started as a product founder. I'm an engineer. I used to write code, not well, but I did. But I I ended up going on the sales and, and marketing, I guess. So today at this stage in the company, we have more traditionally split roles. I'm the CEO and my Co founder's been under chief technology and chief design officer. We own our functional areas respectively. But yeah, I, I would say I was more the sales guy. Ed was more the design guy who really, really understood the problem needs and and Ben was always a tech guy who really knew how to build a product from the ground up.
 
 00:02:34 Matthew Maltzoff
 Interesting. OK, cool. So tell me a bit about the founding and how we started Emitwise. Tell me about that journey because I think every single founder has a different story. Each one seems to be pretty exciting, so I'd love to learn what happened with Emitwise and how you actually found it.
 
 00:02:50 Mauro Cozzi
 Yeah. Look, my big takeaway from my first company was it's relatively straightforward. It's tough, but it's not the toughest thing in the world to find a business problem to solve and to go and build some technology to solve that business problem. I think it's much harder to find our true mission and a really big North Star driver. And that's really what we started with that in Emitwise. We said that the thing that really fundamentally matters to us as a funding team is that we are helping the world decarbonize and everything will be a function of that. And then our vision was that the way that we would help the world decarbonize was to make it profitable. And then with that lens, under that framework, we were able to go and essentially do an extensive use of research exercise. We went and we spoke with folks all across the industry, different types of companies, different types of functions from sustainability teams to procurement teams to operational teams, across construction companies, real estate companies, but also manufacturers. And we just asked them the question, hey, what is your business doing to become quote unquote green? And what would be ways in which you could profit from that transition to being green? And along the way we run into some really interesting examples. Josh Davis, who was sustainability manager for Multiplex, the construction company, and he was doing some really great work on how to reduce the embodied carbon of the projects that Multiplex was carrying out. And through that research exercise, we must have spoken with 100 plus people over a six month period. We came to learn of this concept of organisations need to disclose to report their environmental impact. And they have to do that whether they like it or not. And it's a a bit of a burden. It's a cost of doing business. It's an Excel spreadsheet driven approach. You spend a lot of money on consultants. And what we saw there was opportunity to automate away all of that reporting and instead to take that additional capacity that you would have from sustainability experts to actually use it to drive reductions. GPE, we went on to be one of our first customers and I think you're seeing now how companies like GPE are starting to profit from sustainability because they're positioned as green. They have a revolving credit facilities that have better terms based on their ability to hit targets, etcetera, etcetera, etcetera.
 
 00:04:52 Matthew Maltzoff
 It's an interesting dynamic with real estate at the moment because on the one hand you have increasing pressure now to decarbonize and increasing regulations, and on the other hand you have increasing pressure to digitalize as well and improve operational efficiency. Solutions like yours solve the two main problems at once quickly.
 
 00:05:13 Mauro Cozzi
 And and that's often the wave that we ride, right? At the end of the day, if you have all of that data digitally already, then you're great. Of course, the counterpoint is also everybody's under pressure of driving costs down, right, which is where rubber meets the road. And I think a big part of the pitch is always you can find ways to cut carbon and cut costs at the same time. And indeed, digitalization's a big part of achievement using that.
 
 00:05:34 Matthew Maltzoff
 OK, so tell me about actual data and how that works and what are the current issues with data and how is Emitwise helping that?
 
 00:05:44 Mauro Cozzi
 Yeah. So the uniquely complex thing about carbon is that it needs data from every single thing that your organisation does and consumes. So in the context of real estate, if we think about buildings as assets, it's not just the development and the construction of the building itself where you have the emissions of the materials, concrete, steel, cement panels, wood, but also everything that's inside it. And then it's the actual emissions of the operations of the building and throughout its lifetime. So energy, the cleaning products that are used on a day-to-day basis. And of course different stakeholders across the life cycle, you know, would be responsible for these different pieces. But ultimately, you need all of this data, right? And this data that might be in the energy management systems, it might be on the accounting systems that tell us how much money was spent on cleaning materials and the bill of materials that was used at the construction point of the building. So ultimately, the answer is we need as much data as you can possibly get your hands on. And of course, the chance tends to be that a lot of the time this data is not readily available. And so a big part of our job is to help organisations first figure out where might the data be available, but also to accurately and scientifically fill in the gaps where the data is not available. And essentially help make the case for why, hey, next year we really need to get more granular metre readings and put in those digital metres across these buildings because we're missing key data that we need to comply with regulation or to actually meet our targets.
 
 00:07:06 Matthew Maltzoff
 So does that almost become one of the major selling points as well as look, you actually will get insight into all of these data components. Not only do we give you action points to net zero, but also there's just giving you so much more insight into your organisation. I guess the the question is what is the main problem that is being solved for real estate organisations? Why do they start to commit to you?
 
 00:07:26 Mauro Cozzi
 Yeah, I, I think very, very often the, the starting requirement is simply like, hey, I need to report my environmental impact, somebody's asking me for it. Here in the UK there's SCCR which requires you to report the energy related emissions. In Europe, CSRD is coming out, which also requires you to discuss scope 3 supply chain related emissions. So I think organisations are feeling this and often their investors and financiers are asking for this information. That's typically the first reason folks come to us. And then the next piece is actually, well, hey, how the hell are we going to actually hit targets? The most sophisticated and serious companies in the real estate world have all set some sort of net zero target or another. And the main challenge point there is what am I actually going to do about it? To your point, Matthew, the interesting thing is that what sustainability is actually doing is helping solve other business problems and helping get a carbon reduction in the process. In manufacturing, and often what we see in manufacturing is I need to reduce waste. Waste translates to lost dollars because I'm wasting materials that I don't need to. In construction, you see the exact same thing, so many wasted materials. And it turns out that if you reduce waste, you reduce cost and also you reduce your environmental impact, right? So the idea is like using sustainability to help drive the business case for a problem that already exists.
 
 00:08:34 Matthew Maltzoff
 Understood. Cool. So I can see you're in a few different industries. The one we are most interested in here is real estate and construction. I know you use AI, which is kind of a buzzword that's thrown around quite a bit at the moment. I mean, it sounds like my janitor is using AI. So yeah, I was wondering, so how is AI incorporated and the sort of what are the effects of it?
 
 00:09:02 Mauro Cozzi
 Yeah, we use machine learning and we always have for a long time now across the process anywhere from helping clean the customer's data so that nobody has to manually plug in data into a template. But we could actually use machine learning to understand like, hey, this spreadsheet that was submitted by a user has these columns that mean these things and we can apply it to our own formats. And it's all just about making the users life easier. If folks at companies spend less time crunching numbers and working with spreadsheets and help them focus on carbon reductions, we also have built our own proprietary machine learning carbon accounting software. We spend three years hiring experts from places like PwC to help us train the algorithm on how to calculate the carbon footprint of different companies of large complexity. And now the system works fully automatically with 85% accuracy. And what that means to us is that all of a sudden we can deliver automatically the same level of rigour that organisations like PwC would have been delivering in a manual basis, which again is just freeing up expert time from crunching numbers to actually doing something with that data. And then the final frontier that we're working on at the moment is of course this idea of automated recommendations, but we're really working to develop a sophisticated recommender engine that acknowledges that as an organisation, as a real estate company, as our construction company, you can't simply switch your provider of bricks, right. So we're we're developing a recommender engines that actually learns from how companies are actually driving the carbonization on the ground with all of the nuances and multi stakeholder management that it takes and helps bring solutions accordingly.
 
 00:10:27 Matthew Maltzoff
 Well, it sounds like the opportunity from having this data and having intelligent systems, it just acts as a platform where you can launch new products. And actually the direction of Emitwise, something I'd like to go into in just a sec, but we do have quite a few founders who listen. We also have quite a few executives who sometimes wonder about these sorts of journeys. And I'd like to just take a step back before we go about talking about the direction in the future. Tell me about what's happened in the last four years. Before the call, Mauro asked me, how many employees are in your office? We said just 7. And he said, oh, I missed those days. And so I was wondering, So what was the journey like? What was the takeaways from, you know, founding it to now what looks like, I want to say around 50 employees?
 
 00:11:17 Mauro Cozzi
 Yeah, that's right. That's right, that's right. Which by the way, it's also very fun, just very different. It has been a constant exercise. Anybody who's been in entrepreneurship, I, I, I think any other high intensity role, probably like the same executives that are listening now. It's always a roller coaster of a journey, right? Constantly things are breaking and you are under a resource to solve challenges that you should have no business solving and you just push ahead. And again, the takeaway from last company was have a strong mission and strong focus. And I think that's what's really allowed us to be successful at Emitwise because for us in the last four years been an exercise of continuous refined focus, constantly finding the next thing that we can hone in even further on that actually makes our total addressable opportunity bigger because we are able to be better and excel at something that is a bigger problem. We started knowing for a fact that we were going to help with reporting and reducing carbon emissions and not go full ESG and that it was going to be for businesses and not go for consumers or governments, which we were seeing a lot of our peers doing. And then about a year in, we came to the realisation that industrial focus was really important for us and we focus on a few industries, including real estate. And then over the last couple of years in particular, our focus has been around supply chain emissions and really coming to the recognition that they're both the biggest challenge, but also the biggest opportunity for impact, how you accurately measure supplier emissions, how you help large supply chains decarbonize by providing free tools and education, etcetera. If I had to boil down the four, the four years onto sort of a positive outlook is that we've really found the focus for the company to have a lot of impact. And I think today we're seeing that. We recently announced our relationship with CBRE. That's a big important customer and partner to us and we're seeing them manage their entire global supply chain using Emitwise. I think that's very exciting, of course, but along the way you get punched in the face, you know, 10 times a day. But that's part of the fun. We do it because it matters, right?
 
 00:13:07 Matthew Maltzoff
 No, for sure. So that CBRE partnership's quite exciting. You're not just helping CBRE, but you're actually helping CBRE’s clients, helping them decarbonize, and that is a fantastic deal. Would you shed some light on that and what that's going to be doing? Yeah.
 
 00:13:22 Mauro Cozzi
 I, I think, look, obviously I'm biassed, but I have to say like I really, really applaud CBRE’s leadership on this matter. And it is one of the reasons that we were really excited to work with. And we're constantly looking for who are the true pioneers in this space. And what CBRE has essentially done is said, look, being sustainable as an organisation is obviously going to be a competitive advantage because eventually everybody will need to do it. But folks are moving really slowly on this. And therefore if I move fast on it, I will differentiate myself. And then they went to step further and they said, well, a lot of people are talking about this, but what will it really, really take? And it turns out that for an organisation like CBRE, which has a mammoth of supply chain and ultimately their supply chain is 90% plus other emissions, you know, what they said is look, we will actually need to truly decarbonize our supply chain, make sure that every single one of our suppliers is really reaching net zero. And to close the loop with what you mentioned, ultimately the reason that that matters to them is because CBRE’s biggest customers who are the biggest corporations in the world, they are the consumers of that supply chain. Right We now sit in a CBRE managed office space. We like to be close to our partners and whenever the cleaning crew comes around at the end of the day and use cleaning materials really that's part of my supply chain now as Emitwise. And so the the whole idea is to close the loop in full, is to help CBRE’s customers know that their supply chain is net zero and that CBRE is the middle manager here, ensuring that that supply chain is indeed net zero and they're able to offer that as a product to their customer base.
 
 00:14:49 Matthew Maltzoff
 What an awesome case study. So that's where we are today. Where are we going tomorrow? What are the next four years look like?
 
 00:14:58 Mauro Cozzi
 Yeah, I think you picked it up. I think the big idea for Emitwise is basically, and and this brings it back to Ben, my Co founders and our original starting vision, which is that carbon footprint as a data point, as a variable needs to be used in the decision making of every function in the business. So if you think about it today, if you're a marketer, when you're running a campaign, you're thinking about how many eyeballs will I get on this? That's one variable and the other one is what's going to be the return on investment? How many sales am I going to drive? If you're a procurement manager or a product engineer, you're thinking about what's the quality of the material that I'm buying? Does it meet my quality requirements? That's one variable and the other one is cost. Am I going to get this within budget? And our vision is that simply for the world to actually meet our climate change targets, we need to have carbon be an additional variable. I studied engineering, we used a lot of computer aided design software to create the signs for buildings and parts and whatnot. And I dream of a world where carbon footprint is one of the numbers that you're looking at because you have a target for carbon footprint. And to do that, you need a platform where solutions can be spun up for every different function, every different vertical, right. And so the vision for Emitwise is we are the underlying data and we power up an ecosystem of solutions that help the entire every function, any type of individual contributor to help in their own day-to-day work actually help get their company to Net 0.
 
 00:16:17 Matthew Maltzoff
 The implications of that make decarbonization a core component of almost every business conversation. And if you think the triangle of cost ROI or cost and desired effect, it's no longer just a one way St, it's now a triangle where we're always considerate of effect on decarbonization. So that cost then has two components attached to it. So as you can imagine, that goes far beyond real estate, the data access, the platform that enables organisations to make all those decisions.
 
 00:16:47 Mauro Cozzi
 That's it. And that's why real estate is particularly exciting as well. I mean the built environment is, I don't remember the exact number, but it's like 1/3 of global emissions when you look at the full value chain, right? And and at the end of the day, we have such an opportunity here to not just drive impact in the real estate in the built environment, but also throughout the rest of the economy because we're essentially funding R&D for the rest of the economy, right, on new materials and new production techniques, etcetera, etcetera. When we started the company, it was a matter of we hope the world is smart enough to pick this up. And now with the regulation being here, it's just as a business, you know for a fact that it that you will need to decarbonize. So this is just a matter of you have to get on with it now.
 
 00:17:27 Matthew Maltzoff
 Yeah, fantastic. OK, well, that wraps up this session. I just want to give another thank you to yourself, Mauro, for providing these insights. You can book a demo with Emitwise on their site and get involved with them if you want to decarbonize your business. And we'll also have a link to that if you're reading down below. Marrow, any last words from yourself?
 
 00:17:48 Mauro Cozzi
 No, thank you for having us. And I guess the message that I'm always trying to give is decarbonization is a must have. It's possible, it's doable, you can do it profitably, and you don't have to get stuck. There's easy next steps. So yeah, get started.
 
 00:18:00 Matthew Maltzoff
 Awesome stuff Mauro, thanks for your time today and looking forward to other interviews and sessions together.