Climate change has begun dictating the policies of companies as a growing number of consumers now prefer environmentally friendly products and services.
This push towards sustainability has also set the stage for climate tech start-ups that help identify and monetise carbon emissions.
UAE-based start-up CarbonSifr was founded last year by former Boston Consulting Group and Talabat executives Onur Elgun, Mustafa Bosca, and Muhammed Yildirim.
Mr Elgun spent nearly nine years at BCG where he worked on social impact and net-zero strategies in the Middle East.
After joining food delivery platform Talabat in 2019 as chief strategy officer, Mr Elgun had the opportunity to explore customer expectations and concerns related to climate change action.
“The one thing we observed was increasing demand from our customers for sustainability,” says Mr Elgun.
“When Talabat came up with the no cutlery as an option … the number of people who opted [for it] well exceeded our expectations.”
There is a strong willingness among businesses and customers to combat climate change, but they lack the required tools to effectively translate that into action, Mr Elgun says.
At a national level, 82 per cent of UAE consumers, compared with 76 per cent in Egypt and 74 per cent in Saudi Arabia, will pay a higher price for goods that are made from recycled, sustainable and eco-friendly materials, according to a PwC survey from last year.
CarbonSifr enables “decarbonisation at scale” by allowing companies in sectors such as e-commerce, grocery delivery and mobility to embed climate action into their own products.
The start-up integrates its application programming interface into a client's online customer touchpoints, enabling them to measure and report their carbon footprint.
By doing so, companies not only set realistic sustainability goals but also actively engage with their customers, Mr Elgun says.
CarbonSifr's popular product, the carbon emission calculation engine, can instantly estimate emissions from online transactions, leveraging information such as vehicle type and distance travelled.
Subsequently, the company assigns a value to the emissions, providing the end customer with the option to decide whether to pay for them.
“Let’s say 1kg of carbon dioxide is equal to 60 fils … with a click of a button, you can add this to your basket,” Mr Elgun says, adding that the company also charges a service fee per transaction.
CarbonSifr invests in local and regional projects that remove carbon from the atmosphere, which can include activities like planting mangrove trees and direct carbon capture, according to Mr Elgun.
“Eventually, they all serve the same cause … because there's excess carbon in the atmosphere, which is causing global warming.”
The UAE, the Arab world’s second-largest economy, is in a region that is extremely vulnerable to the impacts of climate change, such as hotter weather, less rainfall, drought and higher sea levels.
It has been focusing heavily on renewable energy as part of its Net Zero by 2050 initiative. As part of the strategy, it plans to invest Dh600 billion ($163 billion) in clean and renewable energy sources in the next three decades.
The size of the global climate tech market is expected to reach $20.34 billion this year before soaring to $182.54 billion by 2033, growing nearly 25 per cent every year, according to Future Market Insights.
In March, CarbonSifr raised $1 million in a seed funding round from investors in the UAE, Saudi Arabia, Kuwait, Switzerland and Germany, says Mr Elgun, who declined to disclose their names.
“Our product solutions are ready, and we are currently in the process of signing partnerships and running pilots,” Mr Elgun says.
The company, which plans to participate in Cop28 in Dubai at the end of the year, will present its carbon offset impact during the climate conference, he says.
CarbonSifr, which currently has a team of seven engineers and data scientists, will expand its workforce next year as it moves into tourism and services sectors.
Tourism is “very relevant” because hotels emit a lot of carbon-dioxide from cleaning activities and cooling, Mr Elgun says.
Hotels need to reduce their absolute carbon emissions by 66 per cent by 2030 and by 90 per cent by 2050 to ensure that the predicted growth of the industry does not lead to a corresponding increase in carbon emissions, according to the Sustainable Hospitality Alliance.
The UAE is home to one of the “richest” hospitality markets in the world with an expected 25 per cent growth in the industry by 2030 and 40 million new visitors staying at hotels in Dubai by 2031, according to KPMG.
CarbonSifr, which has been selected for an accelerator programme organised by Saudi Arabia’s Ministry of Environment, Water and Agriculture, plans to expand into the kingdom next.
“We are getting a lot of interest from [Saudi Arabian] companies. The problem is very simple – no one is able to get quick access to tangible climate action,” Mr Elgun says.
Saudi Arabia, the Arab world's largest economy, has taken an early lead in the carbon credit sector in the region.
The Regional Voluntary Carbon Market Company, which is jointly owned by Saudi Arabia's Public Investment Fund and Saudi Tadawul Group, plans to launch a carbon credit trading exchange in early 2024 and establish a fund to invest in climate projects, chief executive Riham ElGizy told The National in an interview this month.
RVCMC will also offer advisory services to companies looking to decarbonise their operations, Ms ElGizy said.
On June 14, the company sold over 2.2 million tonnes of carbon credits at the largest-ever voluntary carbon credit auction event in Nairobi, Kenya.
Carbon credits, also known as carbon offsets, are permits that allow companies to emit a certain amount of carbon dioxide or other greenhouse gases. The funds from the sale of the credits are used to finance climate-action projects that would not otherwise get off the ground.
When asked about the company’s revenue targets, Mr Elgun says CarbonSifr is focusing on a different set of key performance indicators at the moment.
That includes making sure that “as many people as possible in our region take the first ever climate action in their lives”, Mr Elgun says.
He says the company hopes to remove “one giga tonne” of carbon from the atmosphere – which is equivalent to the mass of 200 million elephants.
Q&A with Onur Elgun, co-founder of CarbonSifr
What does the name of the company mean?
Sifr in Arabic means zero. More than one billion people from Tanzania all the way to Indonesia use the same or a similar word for zero, so we thought that resonates well with the mission we have.
What already successful start-up do you wish you had started?
I would say mission-driven start-ups, which have a very clear cause and objective. UK-based FinTech firm Revolut has democratised having a bank account. I love the mission they are on. A company like Khan Academy in the education technology sector is highly respected and they have been able to reach out to millions, almost at no cost.
What is your next big dream to make happen?
There is almost an Orientalist view towards our region. The view is that companies here do not care and that people are disconnected from nature. But, if you talk facts and numbers, this region is doing a lot to move the global sustainability agenda of the world. My dream would be to prove this to the rest of the world by leveraging the great infrastructure and ecosystem here.
What new skills have you picked up in the process of launching your own company?
Perseverance, and resilience. A mission driven company takes a lot of courage and wit and passion to build, especially when you're building something new. The second thing is deep knowledge on climate. I wasn’t a climate scientist when I started, but I was very passionate about the topic.
Where do you see yourself in 10 years?
I see myself as someone who will move the needle at a global scale on the climate topic. I hope to have a tangible impact in collaboration with the businesses, consumers and the governments of the region.
What would your advice be to someone who's trying to get into the climate sector?
The first thing is to focus on where one can have a very tangible impact. They should also focus on understanding local realities because if you try to apply the playbook of the Global North to the Global South, it will most probably not work.