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The effort to measure companies’ carbon footprints is remarkably imprecise — and suddenly more important than ever.
Large companies generate a gargantuan amount of carbon-dioxide pollution.
Take the big-box retailer Costco. During the financial year 2020, it emitted 144.5 million metric tons of carbon dioxide — a number on par with the Philippines’ annual emissions. Nike pumped out the equivalent of 11 million metric tons of carbon during the same period, a footprint roughly equal to Zimbabwe’s. Apple, meanwhile, was somewhere on the order of Estonia.
You’ve probably seen data like this before. But here’s a question: How do companies actually arrive at these numbers? How did Costco know its carbon footprint in 2020? Carbon dioxide and other climate-warming gases are invisible, potent even in trace amounts, and constantly absorbed and produced by hundreds of billions of different organisms and chemicals around the world. Costco alone directly or indirectly choreographs the actions of millions of people and things: sailors and longshoremen, factory workers and cotton farmers, employees coming in for their shift and marketing managers spending down an advertising budget.
How could a company like that possibly know its carbon footprint?
Here’s the sorry answer: Most companies don’t. They estimate.
Those estimates are suddenly looking more important. New laws and a proposal from the U.S. Securities and Exchange Commission could soon require that companies treat this data with the same seriousness that they devote to their accounting books. Companies now need their corporate climate data to do something that it was never meant to do: help them make decisions.
So the race is on to help companies estimate better. On Wednesday, Watershed, a startup that helps companies run their climate programs, bought VitalMetrics, a climate-data mainstay that owns and manages one of the most important tools that companies use to estimate their carbon footprints.
That tool, called the Comprehensive Environmental Data Archive, or CEDA, provides what’s known as carbon-intensity data for hundreds of products as made in more than 140 countries. It is one of several tools that has been used to advise Microsoft, Kellogg’s, and Virgin Atlantic since Sangwon Suh, an industrial-ecology professor and Intergovernmental Panel on Climate Change author, founded VitalMetrics in 2005.
Watershed’s acquisition of VitalMetrics signals that corporate climate data is entering a new stage, Taylor Francis, one of the company’s cofounders, told me. Watershed, at least, is a different kind of company than the climate bean counters of yore: Founded by former employees of the payments behemoth Stripe, it has raised $84 million from the venture-capital firms Kleiner Perkins, Sequoia Capital, as well as the billionaire Laurene Powell Jobs.
“The traditional corporate climate complex was basically designed for a world of numbers in the corporate social responsibility report, and a pledge, and a press release,” he said. ”We’re shifting to the new world of numbers in a 10-K,” the annual financial report that public companies must file with the government, “and a planet running out of time.”
I will admit I had it all wrong. I had assumed that because corporate carbon footprints sounded precise and vaguely science-adjacent, they were produced by something like a scientific methodology themselves. I imagined a company’s employees — or at least their consultants — collecting emissions data smokestack by smokestack, pacing around factories while studying air-quality monitors, and doing careful math somewhere in the vicinity of a bunsen burner or two. (I believed this, I should add, despite knowing that many corporate climate reports contain glaring arithmetic errors and sometimes literally do not add up.)
That sort of methodology is the “platonic ideal of carbon accounting,” Francis, the Watershed cofounder, told me. In a perfect world, a company would have measured the per-ton emissions of each of its processes, and it would know these for each of its suppliers down to the raw material.
Yet this is still a ways off for most companies. Instead, the bulk of carbon accounting today now happens in spreadsheets, and it uses dollars, not tons, as an input. Each consumer good or raw commodity aligns to a “factor,” a multiplier that says that for every dollar spent on, say, glass or aluminum, a certain amount of carbon is emitted. A climate team inputs the dollar amount, multiplies it by the factor, and arrives at a result: a company’s annual carbon footprint.
Until now, Watershed and other firms have often calculated corporate climate emissions by using a U.S. Environmental Protection Agency-made database called the Environmentally Extended Input-Output, or EEIO, model, Francis said. “You start with very coarse input data like, we spent $100 million on marketing. So you go to the old EEIO database, and the EEIO says that in the U.S. 10 years ago, the carbon emissions per dollar of marketing spend was X, and you multiply that to get your emissions number.”
“I think that gets you into the right order of magnitude,” he said, but it was messy. The EEIO data is roughly a decade out of date, meaning it overstates climate pollution from the power grid and understates the role of inflation.
VitalMetrics’ CEDA database, on the other hand, is updated every year. It contains carbon-intensity factors for more than 300 products and — most important — it varies these factors based on the country of origin. Going forward, Watershed will calculate corporate emissions data using these CEDA estimates.
This kind of data-gathering isn’t fine-tuned enough for companies to actually make better decisions with their data, Madison Condon, a law professor at Boston University who has criticized the reigning approach, told me. Under the current approach, a company can improve their carbon-accounting data only by shifting production to countries with lower emissions factors. It doesn’t get credit for, say, installing technologies at its existing factories that lower emissions.
That is unsustainable because corporate carbon accounting is becoming important to governments around the world. The Securities and Exchange Commission has proposed requiring publicly traded companies to disclose carbon data and major climate-related risks. Even if that rule is swatted away by the Supreme Court, the European Union will soon require tens of thousands of companies to disclose sustainability and emissions data; these rules could apply to more than 10,000 foreign companies, including many mainstream American brands. California could soon pass its own law mandating that companies produce carbon-accounting data.
Even apart from those disclosure requirements, carbon-footprint requirements are now written into laws. Some of the Inflation Reduction Act’s subsidies will pay out only if a product’s carbon intensity is below a certain threshold.
Eventually, Watershed hopes to produce a hybrid tool that can use dollar-based production factors, tonnage estimates, and technology-based improvements together, Francis told me. More broadly, Watershed’s acquisition of Vitalmetrics — not to mention Watershed itself — is a gamble about how the climate economy will eventually work.
“Five years from now, the disclosure piece is just part of the water. No one talks or writes about it because it is an expected part of doing business for every company. And it’s relatively low friction. It’s a part of your annual close, your quarterly close,” Francis told me. “We don’t really talk about climate as a political issue because businesses don't think of climate as a political issue because they see it as, you know, the biggest growth sector of the decade.”
Of course, if that’s true, then companies may not need a startup like Watershed to do their climate counting for them. Bog-standard corporate accountants, like KPMG or Deloitte, will do the task just fine.
But Watershed is betting that climate accounting will remain both more technical and more central to a company’s employee and investor relationships than, say, its power bill. Just as companies use Salesforce specifically to manage customer relationships, or Justworks to manage payroll and benefits, Watershed hopes they will need a single place to manage all their climate data — a single source of emissions truth. It’s investing in its database to try to make that bet payoff.
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The energy sector — including oil and gas — and manufacturing took some heavy hits in the latest jobs report.
We got a much better sense of what the American labor market is doing today. And the news was not good.
The economy added only 22,000 jobs last month, far fewer than economists had predicted, according to a new release from the Bureau of Labor Statistics. The new data also shows that the economy gained slightly more jobs in July than we thought at the time, but that it actually lost 13,000 jobs in June — making that month the first since 2020 to see a true decline in U.S. employment.
The unemployment rate now stands at 4.3%, one tenth of a percent higher than it was last month. All in all, the American labor market has been frozen since President Trump declared “Liberation Day” and announced a bevy of new tariffs in April.
On the one hand, some aspects of that job loss shouldn’t be a surprise. As we’ve covered at Heatmap, the Trump administration has spent the past few months attacking the wind, solar, and electric vehicle industries. It has yanked subsidies from new electricity generation, rewritten rules on the fly, and waged an all-out regulatory war on offshore wind farms. Electricity costs are rising nationwide, constraining essentially all power-dependent industries except artificial intelligence.
In short: The news hasn’t been good for the transition industries. But what’s notable in this report is that the job declines are not limited to these green industries. The first eight months of Donald Trump’s presidency have been more and more damaging for the blue collar fields and heavy industries that he promised to help.
For instance: Mining, quarrying, and oil extraction lost 6,000 jobs in August. These losses were led by the oil and gas industry, as well as mining support companies. Other industries — such as coal mining firms — saw essentially no growth or very slightly declines.
More cuts are likely to come soon for the fossil fuel industry. The oil giant ConocoPhillips says it will lay off about a quarter of its roughly 13,000-person workforce before the year is out. The oilfield services company Halliburton has also been shedding workers in recent weeks, according to Reuters. The West Texas benchmark oil price has lost nearly $10 since the year began, and is now hovering around $62. That’s roughly the average breakeven price for drilling new wells in the Permian Basin.
The manufacturing industry has lost 78,000 jobs since the year began. In the past month, it shed jobs almost as fast as the federal government, which has deliberately culled its workforce, as the economic analyst Mike Konczal observed.
This manufacturing weakness is also showing up in corporate earnings. John Deere, the American farm equipment maker, has seen its income degrade through the year. It estimates that Trump’s steel and aluminum tariffs will cost the company $600 million in 2025, and it recently laid off several hundred workers in the Midwest.
Even industries that have previously shown some resilience — and that benefited from the AI boom — have started to stall out a bit. The utility industry lost about 1,000 jobs last month, on a seasonally adjusted basis, according to the new data. (At the same time, the number of non-managerial utility workers slightly increased.) The utility sector has still gained more than 6,000 jobs compared to a year ago.
A few months ago, I quipped that you could call President Trump “Degrowth Donald” because his tax and trade policies seemed intent on raising prices and killing the carbon-intensive sectors of the American economy. (Of course, Trump was doing plenty that radical climate activists didn’t want to see, too, and his anti-renewable campaign has only gotten worse.) Now we’re seeing the president’s anti-growth policies bear fruit. It was a joke then. Now it’s just sad.
Trump’s enthusiasm for the space has proved contagious — building on what Biden started.
It’s become a well-known adage in energy circles that “critical minerals are the new oil.” As the world pushes — haltingly but persistently — toward decarbonization and electrification, minerals such as lithium, nickel, and copper have only risen in their strategic importance.
These elements are geographically concentrated, largely in spots with weighty implications for geopolitics and national security — lithium largely in South America and Australia, copper in South America, nickel in Indonesia, cobalt in the Democratic Republic of the Congo, and graphite in China. They’re also subject to volatile price swings and dependent on vast infrastructure to get them out of the ground. But without them, there are no batteries, no magnets, no photovoltaic cells, no semiconductors, no electrical wiring. It is no surprise, then, that it’s already been a big year for investment.
Sector-wide data is scarce, but the announcements are plentiful. Some of the biggest wins so far this year include the AI minerals discovery company Kobold, which closed a colossal $537 million funding round, software-driven mining developer Mariana Minerals landing $85 million in investment, rare earth magnet startup Vulcan Minerals raising $65 million, and minerals recycling company Cyclic Materials announcing plans for a commercial plant in Canada.
“The good investments are still the good investments,” Joe Goodman, co-founder and managing partner at the firm VoLo Earth Ventures, told me. “But I think the return opportunities are larger now.” VoLo’s primary bets include Magrathea, which has an electrolysis-based process to produce pure magnesium from seawater and brines and is reportedly in discussions to form a $100 million partnership for a commercial-scale demonstration plant, as well as Nth Cycle, which recovers and refines critical minerals from sources such as industrial waste and low-grade ores and is well into its first full year of commercial operations.
Much of this activity has been catalyzed by the Trump administration’s enthusiasm for critical minerals. The president has issued executive orders aimed at increasing and expediting domestic minerals production in the name of national defense, and a few weeks ago, announced its intent to issue nearly $1 billion in funding aimed at scaling every stage of the critical minerals supply chain, from mining and processing to manufacturing. As Energy Secretary Chris Wright said at the time, “For too long, the United States has relied on foreign actors to supply and process the critical materials that are essential to modern life and our national security.”
Ironically, the Trump administration is building on a foundation laid by former President Biden as part of his administration’s efforts to decarbonize the economy and expedite the energy transition. In 2022, Biden invoked the Defense Production Act to give the federal government more leeway to support domestic extraction, refining, and recycling of minerals. It also invested billions of dollars from the previous year’s Bipartisan Infrastructure Law to secure a “Made In America supply chain for critical minerals.” These initiatives helped catalyze $120 billion in private sector investments, the administration said.
While they were “motivated by radically different ideologies,” Goodman told me, the message is the same: “We care a lot about our minerals.” As he put it, “The last two administrations could not have been better orchestrated to send that message to public markets.”
Ultimately, political motivations matter far less than cash. In that vein, many companies and venture capitalists are now aligning with the current administration’s priorities. As the venture firm Andreessen Horowitz noted in an article titled “It’s Time to Mine: Securing Critical Minerals,” an F-35 fighter jet requires 920 pounds of rare earth elements, a Navy missile destroyer needs 5,200 pounds, and a nuclear-powered submarine take a whopping 9,200 pounds. Rare earths — a group of metals that form a key subset of critical minerals — are crucial components of the high-performance magnets, precision electronics, and sensors these defense systems rely on.
The military is also certainly interested in energy storage systems, including novel battery chemistries with potential to be more efficient and cost effective than the status quo. This just so happens to be the realm of many a lucrative startup, from Form Energy’s iron-air batteries to Lyten’s bet on lithium-sulfur and Peak Energy’s sodium-ion chemistry.
The Army has also gone all in on microgrids, frequently building installations that rely on solar plus storage. And batteries for use in drones, cargo planes and tactical vehicles are often simply the most practical option, given that they can operate in near silence and reduce vulnerabilities associated with refueling. “It’s much easier to get electricity into contested logistics than it is to get hydrocarbons,” Duncan Turner, a general partner at the venture capital firm SOSV, told me.
Turner has overseen the firm’s investments in minerals companies across the supply chain, a number of which focus on the extraction or refining of just one or a few minerals. For example, SOSV’s portfolio company Still Bright is developing an electrochemical process to extract copper from both high-grade ores as well as mining waste, replacing traditional copper smelting methods. The minerals recycling company XEra Energy is initially focused on reclaiming nickel from ore concentrates and used batteries, though it plans to expand into other battery materials, as well, while the metal recycling company Biometallica is developing a process to recover palladium, platinum, and rhodium from e-waste.
These startups could theoretically use their tech to go after a whole host of minerals, but Turner explained that many find the most lucrative strategy is to fine tune their processes for certain minerals in particular. “That is just a telltale sign of maturity in the market,” he told me, as companies identify their sweet spot and carve out a profitable niche.
Clea Kolster, the head of science at Lowercarbon Capital, was bullish on the potential for critical minerals investments well before the Trump administration shifted the conversation toward their role in the defense sector. “Our view was always that demand for these minerals was just going to increase,” she told me. “This administration has certainly provided a boon and validator for our thesis, but these investments were made on the basis that these would render metal production cheaper and more accessible.”
Lowercarbon was an early investor in the well-capitalized startup Lilac Solutions, first backing the company’s pursuit of a more efficient and sustainable method of lithium brine extraction in early 2020. Since then, Lilac has raised hundreds of millions in additional funding rounds — which Lowercarbon has led — and is now seeking additional capital as it plans for its first commercial lithium production plant in Utah. Lilac isn’t the firm’s only lithium bet — it’s also backing Lithios, a company developing an electrochemical method for separating lithium from brines, and Novalith, which is working on a carbon-negative process for extracting lithium from hard rock without the use of environmentally damaging acids.
Kolster admitted that in Lowercarbon’s early days, the firm “didn’t fully appreciate how significant those additional narratives would become beyond decarbonization,” pointing to critical minerals’ newly prominent role not just in defense, but also in the AI arms race. After all, no new transmission lines, transformers, gear to turn circuits on and off, or other critical grid components can be built or scaled to support the rising electricity demands of data centers without critical minerals.
Goodman told me that some generalist investors have yet to take note of this, however. “There’s large pockets of the investment community who feel like climate is out of the rotation,” he said.
“So in a way we’re experiencing a better pricing opportunity right now, access to higher quality deals.”
From here on out, he predicts we’ll see a steady stream of announcements signaling that the U.S. has secured yet another link in the minerals supply chain, which will be crucial to counter China’s global influence. “I think annually you’ll be seeing the US raise the flag and declare success on another mineral,” Goodman told me. “It might be two years after we raise the flag that a facility is actually operational. But there's going to be a cadence to us taking back our supply chain.”
On a Justice Department crackdown, net zero’s costs, and Democrats’ nuclear fears
Current conditions: Hurricane Lorena, a Category 1 storm, is threatening Mexico and the Southwestern U.S. with flooding and 80 mile-per-hour winds • In the Pacific, Hurricane Kiko strengthened to a Category 4 storm as it heads toward Hawaii • South Africa’s Northern Cape is facing extremely high fire risks.
The owners of Revolution Wind are fighting back against the stop-work order from President Donald Trump that halted construction on the offshore wind project off the coast of Rhode Island last month. On Thursday, Orsted and Skyborn Renewables filed a complaint in the U.S. District Court for the District of Columbia, accusing the Trump administration of causing “substantial harm” to a legally permitted project that was 80% complete. The litigation claimed that the Department of the Interior’s Bureau of Ocean Energy Management “lacked legal authority for the stop-work order and that the stop-work order’s stated basis violated applicable law.”
“Revolution Wind secured all required federal and state permits in 2023, following reviews that began more than nine years ago,” the companies said in a press release. “Revolution Wind has spent and committed billions of dollars in reliance upon this fulsome review process.” The states of Rhode Island and Connecticut filed a similar complaint on Thursday in the U.S. District Court for the District of Rhode Island, seeking to “restore the rule of law, protect their energy and economic interests, and ensure that the federal government honors its commitments.” Analysts didn’t expect the order to hold, as Heatmap’s Matthew Zeitlin reported last month, though the cost to the project’s owners was likely to rise. As I have reported repeatedly in this newsletter over the past few weeks, the Trump administration is enlisting at least half a dozen agencies in a widening attack meant to eliminate a generating technology that is rapidly growing overseas.
After the cleanup in Altadena, California.Mario Tama/Getty Images
The Department of Justice sued South California Edison on Thursday for $77 million in damages, accusing the utility of negligence that caused two deadly wildfires. Federal prosecutors in California alleged the utility failed to maintain infrastructure that ultimately sparked the Eaton fire in January, and the 2022 Fairview fire in Riverside County, The Wall Street Journal reported. The fires collectively killed about two dozen people and charred more than 42,000 acres of land. “Hardworking Californians should not pick up the tab for Edison’s negligence,” said Bill Essayli, the acting U.S. Attorney for California’s Central District, where the lawsuit was filed.
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It sure sounds like a lot of money. In a new research note released this week, the energy consultancy BloombergNEF calculated the total cost to transition the global economy off unmitigated fossil fuels by 2050 at $304 trillion. But that’s only 9% above the cost of continuing to develop worldwide energy systems on economics alone, which would result in 2.6 degrees Celsius of global warming. That margin is relatively narrow because the operating costs of cleaner technologies such as electric vehicles and renewable power generators are lower than the cost of fuel in the long term. The calculation also doesn’t account for the savings from avoided climate disasters in a net-zero scenario that halts the planet’s temperature spike at 1.7 degrees Celsius. While the cost of investing in renewables, grid infrastructure, electric vehicles, and carbon capture technology would add $45 trillion in additional investment, it’s ultimately offset by $19 trillion in annual savings from making the switch.
Microsoft has signed a series of deals that tighten the tech giant’s grip on the nascent carbon removal market. With new agreements that involve direct air capture in North American and burning garbage for energy in Oslo, Microsoft now accounts for 80% of all credits ever purchased from tech-based carbon removal projects. The company made up 92% of purchases in the first half of this year, the Financial Times reported, citing the data provider AlliedOffsets. By comparison, Amazon made up 0.7% of the market and Google comprised 1.4%.
We are still far from where carbon removal needs to be to make an impact on emissions. All the Paris Agreement-consistent scenarios modeled in the scientific literature require removing between 4 billion and 6 billion metric tons of carbon per year by 2035, and between 6 billion and 10 billion metric tons by 2050, as Heatmap’s Emily Pontecorvo wrote recently. “For context, they estimate that the world currently removes about 2 billion metric tons of carbon per year over and above what the Earth would naturally absorb without human interference.”
At a hearing before the Senate Environment and Public Works Committee, the two Democrats left on the Nuclear Regulatory Commission told Congress they feared Trump would fire them if they raised safety concerns about new reactors. Matthew Marzano said the “NRC would not license a reactor” that didn’t pass safety standards, but that it’s a “possibility” the White House would oust him for withholding approval. “I think on any given day, I could be fired by the administration for reasons unknown,” Crowell told lawmakers, according to a write-up of the hearing in E&E News.
Hitachi Energy announced more than $1 billion in investments to expand manufacturing of electrical grid infrastructure in the U.S. That includes about $457 million for a new large power transformer facility in Virginia. “Power transformers are a linchpin technology for a robust and reliable electric grid and winning the AI race,” Andreas Schierenbeck, chief executive of Hitachi Energy, said in a press release. “Bringing production of large power transformers to the U.S. is critical to building a strong domestic supply chain for the U.S. economy and reducing production bottlenecks, which is essential as demand for these transformers across the economy is surging.”