StepChange Announces a Strategic Investment from Flourish Ventures to Build Sustainability Tools for Financial Institutions

Bangalore, 29 February 2024: StepChange, a leading enterprise sustainability platform, has raised investment from global venture capital firm Flourish Ventures to fuel its growth plans in the BFSI sector. Founded in 2022 by Ankit Jain and Dr. Sidhant Pai, StepChange offers a suite of integrated solutions to large enterprises and financial institutions that enable them to track, improve, and report on a wide variety of ESG performance indicators, with a particularly deep focus on best-in-class carbon accounting and climate risk management solutions.

Dr Sidhant Pai

Both founders are alums of the Massachusetts Institute of Technology. Ankit Jain, the CEO of StepChange, holds a bachelor’s degree in CS from IIT Bombay and an MBA from MIT Sloan. Prior to StepChange, he was a business head and board member at Ola Electric Mobility, a leading EV company in India. Dr. Sidhant Pai, the Chief Science Officer of StepChange, leads R&D efforts to conceptualize, develop, and validate best-in-class tools around carbon accounting, ESG management, and climate risk. Dr. Pai has a PhD in Atmospheric Chemistry and Compositional Modeling and an S.B. in Environmental Engineering from MIT. He has over a decade of experience working at the intersection of science, technology, and environmental solutions, including as a postdoctoral scientist at the Columbia Climate School and as a founding director at the Indian non-profit Social Seva.

Since its inception in early 2022, StepChange has built a talented and passionate team that is more than 50 strong, attracting top-tier talent across software engineering, climate science, ESG solutions, and business development. In contrast to traditional models that silo innovation in climate science from that in enterprise software, StepChange boasts one of the largest teams of sustainability and technology experts in India, enabling a novel and fully integrated climate-tech solutions stack. The company is guided by an elite set of advisors, including Dr. Jason Jay, who leads the MIT Sustainability Initiative, and Dr. Erez Yoeli, who leads the Applied Cooperation Initiative at MIT, both world-renowned experts on leadership, strategy, and innovation in corporate sustainability.

StepChange is deeply committed to developing climate decision-making capabilities within the Indian BFSI sector, partnering with industry and governmental bodies on capacity-building efforts, while simultaneously offering a suite of targeted solutions that are priced and configured in a manner that provides much-needed flexibility. StepChange’s suite of BFSI-specific sustainability tools enables clients to (1) measure, reduce, and report portfolio emissions; (2) measure and mitigate climate risks, and (3) develop and deploy sustainable finance products like green deposits, and sustainability-linked loans. With 5 of the top 10 BFSIs in India on the client roster, StepChange has already taken concrete steps towards influencing decarbonization and climate resilience in the sector.

In just 18 months of operation, StepChange has become the partner of choice for a number of large enterprises across both BFSI and real economy sectors (consumer goods, real estate, manufacturers, MSMEs, and growth-stage startups). Given its advanced Scope 3 emissions estimation capabilities, the StepChange tool suite has already been leveraged to account for over 450 million tonnes of CO2e (around 15% of India’s total emissions), a major portion of which stem from financed emissions across top Indian banks. The StepChange solutions suite has also supported enterprises in the setting and tracking of Net Zero and Carbon Neutrality goals, enabling real action and impact.

“Our vision is to build out a comprehensive and financially accessible suite of sustainability decision-making solutions for BFSI stakeholders across both developing and developed economies. Given the complexities and uncertainties inherent in carbon accounting and climate risk assessments, we invest in dedicated R&D to model the impact of individual capital allocation and lending decisions on the broader socio-environmental system (and vice versa). This allows us to develop reduced-order relationships that can inform in-house decisions for BFSIs while limiting over-engineered and expensive solutions that can provide a false sense of accuracy in data-poor environments. In an attempt to make sustainability more accessible to our clients, our solutions are intentionally designed to allow for a variety of different data input modalities. We will utilize this funding to further improve our capabilities around leveraging existing data streams, unlocking the potential for immediate action in data-poor conditions” – Dr. Sidhant Pai, Co-Founder and Chief Science Officer of StepChange.

“Climate Change is the defining problem of our generation and getting to NetZero requires trillions of dollars in annual investments. At StepChange, we work on targeted solutions that empower financial institutions to channel capital allocation in an efficient and impactful manner, while simultaneously developing sophisticated ESG and carbon management tools for large real-economy enterprises that are ultimately going to lead our transition to net zero. The new funding will enable us to start serving the large and growing demand for our solutions suite across India and the rest of the global south” – Ankit Jain, CEO at StepChange

Commenting on the investment, Mr. Harsh Gupta, Principal, India, at Flourish Ventures said, “The timing to invest is apt for us as India’s central bank has introduced comprehensive guidelines for financial institutions in the country to incorporate climate risk into their decision-making processes. Flourish via its investments aims to catalyze the development of these innovative solutions that will help the economy and Indians to build resilience, adapt to a world of climate shocks, and mitigate climate change risks.”

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