Karthik Balakrishnan, the president and cofounder of Actual.
Alanna Hale/Insider
The cofounders of Actual said its SimCity-like software helps make decisions on climate solutions.
The startup modeled hundreds of sheep farms in New Zealand to show ways to reduce emissions.
The farms supply wool to global-fashion brands like Allbirds and Helly Hansen.
Merino wool is well known for its softness. The industry wants to broaden that reputation to include being climate-friendly.
So how do you get hundreds of sheep farmers to adopt new practices to reduce greenhouse-gas emissions and store more carbon in their land?
It’s a major task for the New Zealand Merino Company, which markets wool products by connecting its network of farmers across New Zealand, Australia, and South Africa with global-fashion brands.
Each of these countries and companies has a climate goal of its own, but the problem of agriculture emissions is one of the trickiest to solve. Farms are both polluters and carbon sinks — making the math more complicated — and owners make countless decisions each day about how to run their operations.
“At the end of the day, we have to shift mindsets,” Donna Chan, who manages the New Zealand Merino Company’s regenerative-wool program, told Insider. Regenerative farming represents a range of practices aimed at meeting the needs of humans while preserving nature. “We need to show farmers where they are now, what action they can take and why, and how we will help them get there. We’re trying to prove what’s possible and give people hope.”
Enter Actual, a Silicon Valley startup that’s trying to make decarbonization efforts similar to playing the video game SimCity. The goal is to help break through what Actual’s cofounders describe as analysis paralysis. Derek Lyons, Karthik Balakrishnan, and Rajesh Chandran found that companies want to take action to hit their climate goals but often can’t decide where to start because the data is overwhelming and imperfect.
Creating a visual and interactive experience is more in sync with the way humans learn, Lyons, who has a background in cognitive-developmental psychology, machine learning, and game design, said.
In just over a year, Actual modeled more than 500 sheep farms participating in New Zealand Merino Company’s new regenerative-wool program using a mix of data from the farms as well as from satellites, government agencies, and universities. The program plots the information across a map like building blocks and users can simulate the climate benefits and costs of actions that reduce emissions, which are based on scientifically validated models, Lyons said.
Actual relies on a visual and interactive experience to help companies better understand how to take action on their climate goals.
Actual
“We now have a first-cut model in New Zealand that can project out to net-zero emissions within 10 years just by the regrowth of native plants,” Lyons said. “That isn’t realistic because there are other commercial pressures on land use, but we have a ground floor that we can add to, like layering a cake.”
Those layers might be how farmers manage a pasture, use fertilizer, or feed sheep so they emit less methane when they burp. But to start, Chan said the New Zealand Merino Company will roll out a native-planting pilot next year to help soak up more carbon from the atmosphere and store it in the soil.
Brands like Allbirds, Helly Hansen, and Icebreaker have bought in, too, because they are trying to reduce emissions in their own supply chains. The global-fashion industry is responsible for about 10% of annual greenhouse-gas emissions worldwide.
Allbirds, for its part, told Insider it hopes to cut its carbon footprint in half by the end of 2025, in part by making investments in the farms that supply its wool and by relying on regenerative agriculture.
“Brands have very public goals and commitments that they’ve set,” Chan said. “One of the main things the platform has done is given them relief that these targets are possible.”
Another feature that distinguishes Actual’s software from other carbon- and sustainability-management platforms on the market is a return-on-investment calculator, something that enticed early investors in Actual.
Sarah Cone, a founder and managing partner of Social Impact Capital, said Actual is the only tool she’s seen that helps organizations figure out how to get the highest return on investment, or ROI, from decarbonization.
“Net-zero goals will only be met if doing so can be done profitably,” Cone said in an email. “Once you show that decarbonization is actually one of the most ROI-positive ways to invest corporate resources, it’s easy to get everyone on board.”
Actual has raised $5.65 million from firms including Social Impact Capital, Buckley Ventures, and Sequoia.
Balakrishnan, the president of Actual who formerly worked at Airbus and founded a wearable-payment company Fitbit acquired, said his latest venture has given him confidence that solving the climate crisis is within reach.
“The solutions are there and the money is there,” he said. “If we can get people over some of these cognitive blocks and help them make decisions, we actually have a fighting chance.”