Why we invested in Pathways
Buildings are a major contributor to global carbon emissions, accounting for 39% of energy-related emissions. Significantly, the production of building materials is a primary source of these emissions, spotlighting the urgent need for sustainable practices and materials in the industry. Pathways is at the forefront of addressing this challenge, leveraging AI to revolutionize the environmental assessment of building materials. By focusing on creating material-level Life Cycle Analyses (LCAs) and Environmental Product Declarations (EPDs), Pathways provides a necessary innovation in a field that is becoming increasingly critical.
LCAs and EPDs are invaluable in today’s regulatory and consumer-aware market. LCAs offer a comprehensive view of a product’s environmental footprint throughout its lifecycle, from raw material extraction to disposal. EPDs, meanwhile, present this information in a standardized, transparent format, making them essential for compliance with evolving legislation, satisfying sustainability criteria from major asset owners like Google, Apple, and Amazon, and contributing to sustainable building certifications such as LEED. Generating these analyses is complex and resource-intensive, but Pathways simplifies and streamlines this process with its AI-powered solution.
The demand for EPDs is surging, driven by environmental regulations such as federal and state Buy Clean initiatives, especially in the North American market, which includes nearly 250k manufacturing companies generating over $2.3 trillion in gross profit. This market is experiencing a significant need for EPDs, a demand projected to grow fourfold by 2030. Pathways’ unique approach, which automates the generation of LCAs and EPDs by transforming unstructured supplier data into actionable insights, positions it to capture this expanding market opportunity.
Pathways utilizes API integrations, natural language processing, and Python-based models to automate and enhance environmental reporting. This technology-first strategy not only facilitates regulatory compliance and sustainability reporting but also enables manufacturers to identify and act on carbon reduction opportunities efficiently. The ability to visualize emission hotspots and model scenarios for carbon reduction underscores the tangible benefits of Pathways’ solutions.
In essence, our investment in Pathways reflects our confidence in their potential to reduce the environmental impact of the building materials industry significantly. By streamlining the creation of LCAs and EPDs, Pathways is not just simplifying compliance and reporting; it’s paving the way for a more sustainable and environmentally responsible future in construction and manufacturing.
We are convinced that Pathways meets the 3 central elements of our thesis:
Founder Market Fit: Leise and Alex, united by their Harvard studies, bring a potent mix of sustainability expertise and operational excellence. Leise’s background in green strategy at McKinsey complements Alex’s tech operations experience at companies like Uber, crafting a team uniquely equipped to innovate in the environmental impact space.
Market and Scalability: Pathways addresses a growing demand in a market poised for significant expansion, driven by stringent environmental regulations. Leveraging AI for efficient LCA and EPD creation, the company offers a scalable solution to the North American manufacturing sector, simplifying compliance and reducing reliance on costly consultancy processes. This positions Pathways as a key enabler of sustainable manufacturing practices in a rapidly evolving regulatory landscape.
Decisiveness: The built environment represents 26% of total GHG emissions globally, and building and infrastructure materials and construction (typically referred to as embodied carbon) are responsible for 8% annually. Decarbonizing the building construction would improve people’s lives and the prosperity of the environment.
