Fix the climate crisis: a world-sized puzzle. But a particular large piece of that ginormous conundrum is construction and real estate-the industries together account for about 40% of greenhouse gas emissions. Here is Munich-based data startup Emidat, which built a software platform for the automation of generation of validated Environmental Product Declaration certificates for the construction sector.

EPDs are that critical piece in solving the jigsaw of better understanding and mitigating climate impacts within the built environment. For this purpose, there must be a product lifecycle assessment declared to state standardized information on the environmental effects of building materials and construction products in every phase-from production, use, up to the end of the lifecycle.

EPDs are normally paper burdensome and expensive paperwork to make, said Lisa Oberaigner, CEO and co-founder of Emidat.

This is where the startup's data platform comes in, opening a digital channel for ingesting product data and automating environmental impact declarations via a queryable database that accepts uploads via API, Excel, or BIM (building information modeling); and can itself be accessed via API and UI.

A platform that standardizes the reporting of EPDs for products from the construction sector, the startup believes its data layer will fire up the incentive among manufacturers to compete to produce more sustainable building materials, and in doing so, it will help shrink the carbon footprint of future builds as a byproduct of transparency.

The very biggest players, those that drive emissions, are not people unaware of how to become a low-carbon organisation — no, they know fully and completely what they are going to have to do. And they invest tremendous resources in those new low-carbon technologies to power sustainability. And now cannot demand a price for doing this, but with our method, they can charge it and, in point of fact, prove something, namely, that something really is more sustainable than someone else's.

So basically what we are building is a motivational system so that the manufacturers actually get something out of the deal. And I really think, now, what the market requires. I mean, after a few years, we are talking and not anymore, but it's not going to be 'do you have this data available', that it will talk about more on the real effect by materials, and so so on.

The company uses AI for data ingestion, allowing it to present data back to customers. This ranges from offering an ability to generate industry benchmarks for products that would be offered to a manufacturer in terms of comparisons of its peers' performance. The next move by the company would be applying AI in 3D model analysis for production of projection on emission calculation for given materials used for a project.

Towards much faster and cheaper EPDs
Emidat's software-as-a-service platform cuts from as long as up to a year currently the time for its customers who manufacture goods to make an EPD. To do so cuts it drastically down to just one week per product. This said Oberaigner.

That slashes the cost per EPD (and therefore per product) dramatically, she says-from about €15k using the traditional multi-step, multi-agency reporting process down to as little as €50 using Emit's platform.

Beyond the existential imperative of the climate crisis itself, however, lies a driving force on the horizon in the form of regulations that will apply across the European Union from early next year: aka the Construction Products Regulation (CPR).

This pan-EU law brings in sustainability requirements for construction industry products and harmonizes the bloc's rules for assessing environmental performance. The law will also introduce a regime of audits to check the environmental declarations of the construction industry. And Oberaigner suggests that the law will help speed up adoption of Emidat's platform given how the verification piece is also baked in.

It is basically, at the moment, the way [the industry] works, is that there is a third party who just looks at the data created by a consultant on [manufacturer's product], puts their signature under it, and then this is published … The problem is that they all work with different standards," she said. "So even if you produce the same product exactly, and it should result in the same, well, it's not that way today. So our key piece to get in is that this makes the calculation integrated— which is what the verifier confirms first of all."

Oberaigner and co-founder/CTO Florian Fesch left with a clear goal to start a climate startup-but otherwise had a clean slate for what their first company would focus on. Hundreds of interviews around sustainable construction narrowed down the search and eventually settled on data reporting for construction as the mission.

They perceived an opportunity to respond to architects and project developers seeking environmental impact information for their projects and to the increasing demand of such information by developing a platform designed for materials manufacturers — bringing these major players and their supply chains on board, uploading product data to automate EPDs.

One Click LCA and Sphera are the examples of companies which are long-term providers of LCA support services. Again, though, Oberaigner mentions firms like the one which offers LCA software aimed at specialist users rather than manufacturing business clients.

"We are not the first ones to realize embodied carbon in buildings is a problem, but we are the first ones to tackle the manufacturers," she said. "I think this is really a smart starting point. This is where the data is generated, but the data is needed along the whole value chain. Therefore, we can essentially lay applications on top of that."

Providing manufacturers with tools to manage their EPD reporting themselves also seems to be a clever move to lift key emissions data all along the supply chain, where the approach makes large manufacturers ensure that suppliers submit the necessary data to make the environmental declarations.

… to support "millions" of declarations
So far, the 2023-founded startup has 25 customers who have used or are using its platform for some 350 construction plans. Its database of materials contains information on over 150,000 construction products, spread across 13 product categories so far. But it's just getting started.

According to Oberaigner, the focus of Emidat thus far has been onboarding manufacturers of structural components where environmental impact is greatest - cement/concrete, steel, windows, roofing, etc. Its customer roster already includes "three of the world's largest concrete manufacturers," she said, without revealing any names.

But she says the company plans to continue to expand the product categories covered. So EPD generation for operational components like building heating and lighting and interior decoration, could be added down the line.

How many declarations might be required to fully cover all components involved in just a single construction project? It's very easy to see why a scalable platform that could automate key stages of the EPD process — to speed it up and dramatically shrink the cost of reporting — is going to be transformative in getting data much more quickly while getting much more of the built environment disclosing critical information on climate impact.

Emidat's service brings data collection closer by hooking into manufacturers' systems via API and uses these data unloads for generating the EPD — ensuring verification is baked in through its service.

"Manufacturers really need this at scale for hundreds of different products, so the current process just doesn't work," said Oberaigner. "Within the European Union we need to increase the number of EPDs from 30,000 up somewhere in the millions. We don't really know how many construction products there are, but it's very, very high. And then outside the European Union, you also have the same standard."

It is something nobody else really has done before, because it is quite a complicated document … that explains exactly how everything has been calculated," she said. "And then the calculation needs to be accurate as well.". So we ensure that the calculation is accurate for every single product that you want to output, which means that there are a lot of sanity checks in there — everything that a verifier would usually do — so the declaration, again, is autogenerated.

We are the first ones to do this in a fully verified model, which means the output is so accurate that the verifier guarantees that anything that comes out of Emidat is verified," said she. "And that's very new in the market.". It hadn't really been possible up until now, and demand wasn't there because you could do this once a year and then it lands in the drawer. Now we really need this at scale. So it's the first time, essentially, that people are asking for this kind of solution.

Emidat checks data uploads to its platform automatically to "sanity check" that the data customers are providing is correct and within certain thresholds; if it is not, it flags the upload to the customer.

It also has a staffer doing sample checks of data uploads as another check for accuracy. But next year, regional audits will be the norm as the industry gets regulated under the EU's CPR.

The startup believes the European market for EPDs alone would be worth at least €5 billion annually, but based on the cost of production of a verified certificate of 500,000 construction products. In this light, it further explains, "It's estimated manufacturers will need to produce 25x all the EPDs that have been published so far as environmental regulations dial up.". So the regional market for environmental declarations in construction appears set for serious heat.

In U.S., for example, the Biden-Harris administration announced a $100 million fund for cleaner manufacturing last year that's providing grant support to U.S.-based manufacturers to produce EPDs. And Oberaigner says EPDs are also being used in Asia and Australia, so there's global alignment on the approach.

Hitting a transparency tipping point?
Data reporting itself can be a change catalyst. Therefore, Emidat believes that its platform will reshape incentives for the construction sector to compete and innovate on producing and using more sustainable products.

The flywheel for industry change is to have a proper picture of the data by making it easier to report and generate EPDs," Oberaigner predicts. "What it really does eventually is it creates a competition between manufacturers that is based on environmental impact, and that is what we find really exciting.".

A year from now, Emidat says she expects to be hitting some 200 customers; that's where she believes the platform would unlock other business opportunities: for example, by allowing architects and developers to pick more sustainable materials for their project.

"We see ourselves as a data company, because we think that's the self-reinforcing wheel," she said. "The reason why manufacturers are willing to create all of this data is that they want to share it, and because they want to differentiate through it. And when they use our platform to share the data, we have this other side – project developers and architects choosing the materials through Emidat, so comparing materials through Emidat."

I believe that once we have a really good base on the manufacturer side — so we have the best database for the materials, and we also have a really good database on the architect project developer side — it's really, really hard to beat us. Because every new manufacturer will see, oh, all my customers are working with Emidat, so I might as well.

Emidat is announcing a seed round of €4 million, which the firm closed this summer, led by U.S. VC giant General Catalyst.

Commenting in a statement, investor at the firm Samuel Beyer added: "We see Emidat as a turnkey solution for decarbonizing the mission-critical built environment from the ground up; it will increasingly function as a collaborative platform where the industry can collectively access and exchange material data. We believe this will help drive the speed of industry transformation and value chain efficiency."

Previously, Emidat had raised a €500,000 pre-seed last summer with support from several unicorn founders and two Atomico angels among others.

The latest injection of funds will go to ramping on the commercial side ahead of EU regulation biting early next year as well as continued product development. "Closing the largest names in the highest emitting product verticals," said Oberaigner.

Given how desperately the construction industry needs to start reporting carbon emissions, why hasn't more action been taken on this problem in the startup space before? Oberaigner says a mix of considerations have stood in the way to this point: which customers to target and timing, with relevant regulations only set to bite soon.

"One piece of it is that it's more intuitive to go to the data user, so the architect and the project developer, because they're the ones making the material choices," she said, saying this had been her assumption, too, when the two founders started looking into the market.

On the other hand, in their research market phase when they had conducted an interview on approximately 400 people they had found that the pressure to generate data was instead being driven upon manufacturers. Which explains how effective accurate customer research would have proved to be.

"I do think a lot of the startups have tried the user side of data, and that is really tough, because they don't need it yet," she hypothesized. "And on the manufacturer side, it really is a new need, so the regulation is really coming up now. So it's really hard to find this right timing,"

"For us, it was very conviction-driven," she added. "Because if you look at the emissions in construction, it's just a no-brainer that something needs to happen there. And in many industries, the urgency is not yet as big, because regulation looks again where the emissions are big first."

How do you see the built environment change? Now that we are getting better insight into the environmental footprint of different construction materials, "sustainable concrete" for example will be key, but decarbonizing in all respects, and in particular agreeing that wooden buildings are going to become vastly more prevalent.