Most fans of world-building video games are familiar with SimCity. Each player, in the role of the mayor, must build government buildings and public utilities, raise money through taxation, and handle natural disasters. The game is not just a source of fun for children and adults alike but also a source of inspiration for the co-founders of an ESG planning and transformation platform focused on assisting other businesses in their emissions-reduction efforts.
The team at Actual consists of CEO Rajesh Chandran (founder of sales software company Heighten, which he sold to Linkedin), President Karthik Balakrishnan (founder of consumer electronics company Coin, which he sold to Fitbit), and CTO Derek Lyons (an engineer and product designer who previously worked at Heighten and Linkedin). They recognized that with the ramping up of ESG goals and trillions of dollars being shifted toward reaching net-zero, businesses would need a way to make and execute practical and effective transition plans. Lyons remembers thinking, “what if we could change planning for real-world sustainability so that it’s not staring at a spreadsheet of notes that are in the abstract, but instead at a view that looks like the real world? Where we can move things around and tinker in the way that you would when you’re in your SimCity. That’s what we’ve spent the last several years working on.”
Actual helps companies to make decarbonization decisions in areas where they do not have perfect information and are not experts.
“It’s this whole other world where we don’t want people to have to spend years developing expertise on their own. We want to help them stand on the shoulders of the experts and get to a solution faster,” Lyons explains.
The platform allows companies to lay out their ESG goals.
They can then play around with 3-D, interactive software similar to SimCity to evaluate the impact of alternative solutions. After determining the environmental impact and return on investment and what combinations could help them achieve their goals, they can choose the best ones to implement in the real world.
Actual therefore has several advantages over competitors. First, these “tactile models” make it easier to visualize the impact of prospective solutions, and multiple stakeholders can work on and interact with the data in one space. Second, the science behind these models ensures the solutions chosen will have their desired impact. Sarah Cone, the founder of Social Impact Capital, notes that “there were no good tools to model the ROI of decarbonization until Actual. Fifteen minutes with the Actual tool, and it’s easy to get buy-in from senior management for cost-cutting decarbonization projects.”
Actual’s appeal to investors is apparent. The company raised $5 million in seed funding in February from Cone’s Social Impact Capital and a number of others. Buckley Ventures and Sequoia Scout invested again in that round, having previously supported Actual during its pre-seed financing in 2019. And, TIME included the company’s platform in its Best Inventions of 2022 list.
One of Actual’s most notable collaborations thus far has been with the New Zealand Merino Company, which claims to have the world’s first regenerative wool platform, called ZQRX. Together, they are helping 600 wool farmers across 3.5 million acres to achieve net zero production. Actual provided each farmer with all the personalized data they needed to play around in the platform and experiment with possible decarbonizing solutions, including reducing their animals or increasing the number of trees and native plants on their property.
Lyons describes the unlocked possibilities: “we worked with the company to identify specific acre-by-acre actions that could reduce emissions at these farms by nearly 70%. That reduction is an emissions reduction equivalent to replacing every gas car in San Francisco with an electric vehicle.” Such change is necessary for the face of New Zealand’s “fart tax,” where farmers will have to pay for methane and nitrous oxide emitted by their livestock, a plan for which the government resurfaced in November.
Actual is thereby also helping ZQRX fulfill its promise of net-zero fibers to foundational brand partners and purchasers of their wool, like Allbirds, Reda, and VF Corporation brands icebreaker and Smartwool. Not only will the wool sourced from ZQRX growers be ZQ certified, with guarantees for animal welfare, environmental and social responsibility, source traceability, and quality fibers, but these partners can also get specific details about the sustainability efforts being undertaken by their suppliers. “For the first time, each member of the supply chain will be fully supported in reaching their sustainability goals,” Actual expressed in a press release.
This ‘Made for Good RX‘ agreement between Actual and ZQRX was signed at a ceremony in San Francisco in May that represented a larger collaboration between California and New Zealand, as was evident by the presence of Governor Gavin Newsom and Prime Minister Jacinda Ardern. Noting the importance of “not just what Government can do but what business can do,” Ardern expressed that “the signing of this agreement between ZQRX and Actual is exactly the type of innovation we hope to see from the Memorandum of Cooperation, with two organizations from each respective nation, paving the way as change makers and innovators within the sustainability space.”