Circulor

Though large companies know that understanding supply chains is on their critical path to reducing emissions and ensuring compliance with global ESG standards, they find themselves unequipped to peek into their supply chains, and are actively looking for ways to account for their interconnected links.

Nowhere is this more true than for complex supply chains with increasingly critical materials, such as electric vehicles. As the world increases its dependence on batteries, consumers and governments alike are raising questions about the sustainability and ethicality of the battery supply chain.

The cathode of a typical lithium-ion battery cell is a thin layer that contains micro-scale crystals that pair up negatively charged oxygen with positively charged lithium and various other metals, including a mix of nickel, manganese and cobalt in most electric cars. As demand for batteries increases, demand for these rare metals will explode.

However, many of those are concentrated in regions of the world with less stringent requirements for provenance or working conditions.

Brands like Mercedes, Volvo or BMW cannot afford the reputational and operational risks that come with unethical supply chain practices, and are now required to invest in monitoring, greening and transforming their supply chains.

We were introduced to the Circulor team by our friends at Systemiq.

If supply chain transparency was still a “nice-to-have” prior to COP26, it became a “must-have” after the event as institutional investors and regulators asked companies to release detailed net-zero plans. Supply chain visibility is now an essential feature.

Our diligence showed us that Circulor had the most mature, proven, and complete technology solution available to track complex supply chains, especially when it came to high-risk and high-human-impact materials.

Circulor’s platform assigns a digital fingerprint to strategic commodities, and tracks any event associated with those commodities at every stage of the supply chain – every time goods change hands (through QR codes), who is accompanying the package (through facial recognition), when goods are on the move, how they are combined and transformed into new materials, etc. Every data point is logged onto a blockchain, allowing permanent and immutable data recording. Most critically, Circulor developed tight built-in processes to control data inputs and provide accurate and reliable information, with the help of scanners, sensors, scales, and smartphones.

Real-time data analysis, thanks to machine learning, then provides customers with complete visibility across their traditionally opaque supply chains, with valuable and granular insight that helps them identify – and eventually solve – potential anomalies. These could include ethical breaches, fraudulent activity, or batch errors.

The platform also analyses embedded carbon at each stage of production, recycling and end-of-life, as well as other sustainability metrics such as water use. Customers come to rely on it to understand supply chain emissions, identify emission reduction opportunities, improve sourcing practices and ultimately move towards more sustainable and environmentally-friendly supply chains.

Beyond the quality of their product, the team had a track record in deploying their solution in complex supply chains (like batteries) and in remote areas that are traditionally difficult to do business in (like Rwanda or The Congo).

Finally, we were impressed with the founder, Douglas Johnson-Poensgen, who combined experience developing and deploying enterprise-grade software, with entrepreneurial acumen and an intense pursuit of excellence.