Project Canary Measures Facility Level ESG Data With Focus on Methane

Environmental Business Journal Q2 2022: Environmental Industry Outlook

Project Canary (Denver, Colo.) is a data analytics company focused on accurate facility-level climate ESG data for emission-intensive companies, namely the energy value chain. A leader in holistic environmental assessments (air, water, land, and community) the company is focused on reducing methane emissions. Project Canary scores responsible operations, delivering independent emission profiles through high-fidelity continuous monitoring technology to provide actionable environmental performance data. The firm’s sensor portfolio includes high-fidelity spectroscopy-based methane detection and emissions quantification for the oil and gas sectors, plus Aeris Technologies’ laser-based gas analyzers covering other emissions, including ethane, nitrous oxide, formaldehyde, ethylene oxide, benzene, and more. A Public Benefit Corporation, Project Canary’s scientists, engineers, and industry operators identify and quantify areas to reduce emissions.

Will Foiles, chief operating officer and co-founder of Project Canary, is responsible for overseeing day-to-day operations, including supply chain management, field monitoring systems, new product development, growth strategy, partnership building, financial modeling, clean gas market development, operations, and long-term data projects. He plays a crucial role in coordinating company resources to fulfill the Project Canary brand promise and ensure customer success as the company grows. His background in energy finance and work developing data acquisition technologies are vital to Canary’s long-term technology goals. Will holds an MBA from the Stanford Graduate School of Business, an MS in Environment and Resources from Stanford’s School of Earth, Energy & Environmental Sciences, an MS in Finance from Villanova’s School of Business, and an BBA in Real Estate from the University of Georgia’s Terry College of Business. He is a Chartered Financial Analyst (CFA) Charterholder.

EBJ: Congratulations on completing Project Canary’s series B financing (see sidebar). That’s quite a list of investors. Are they seasoned environmental industry investors or are some new to this world because of interest in ESG?

Will Foiles: All our investors are hyper-focused on ESG, climate technology, and the ongoing energy transition. They are significant, sophisticated institutional investors with specific environmental strategies, goals, and objectives. Some of our investors are “climate funds” and only focused on climate-related investments. 

EBJ: How important do you believe transparency will be in terms of the regulated industry reporting emissions and carbon and greenhouse gas footprints?

Foiles: Project Canary firmly believes that net-zero is a math problem – glossy ESG headlines don’t equate to actual environmental performance. To achieve net-zero, methane zero – or however you want to classify it – you need verified proof using independent data. You can’t get to net zero on estimates and self-attestations. We also think that broader market forces will drive change faster and hold companies to higher standards.

Regulatory requirements will become the floor, not the ceiling. Buyers want transparency into the environmental footprint of their energy supply chain. Investors want a more granular and specific demonstration of annual progress in achieving GHG reductions and other ESG goals and understanding environmental risks and associated costs embedded in companies’ balance sheets and operations.

Companies themselves are starting to view emission-reduction strategies as a part of their core mission and a competitive differentiation – for financial markets, buyers, and increasingly high-caliber talent. All three require more transparency and, more importantly, trusted data. 

Transparency is essential to us as a company as well. Project Canary recently engaged the services of a Big Four audit and consulting firm to assess our internal standards, procedures, controls, and technology supporting our solutions. This initiative supports our goal of providing SOC1 and SOC2 reports to customers who require additional data validation to be used in financial and other reporting regimes. Utilizing independent, third party auditors to examine various aspects of a company, SOC reporting offers added trust and transparency to customers that the service organization has the appropriate controls and structure for business processes. 

EBJ: How will you contribute to the communication or compliance strategy around voluntary and regulated reductions and reporting?

Foiles: Our goal is to create the needed facility-level, minute by minute, 24×7 data and associated analytics to truly understand each facility’s emission profile and environmental footprint that generates high levels of methane, GHG, and other dangerous emissions alongside various other environmental attributes, such as water. We also provide independent validation of such data relying on the highest standards of any other certifying body.

We provide such data to companies themselves. This allows the company to decide how best to share its specific data with various stakeholders and integrate it with other data sets. Various companies have included Project Canary high fidelity data in their ESG reports (for example, Ascent, DT Midstream, and PureWest). Ultimately, industry benchmarks and other comparators can be created and used to measure and improve against those benchmarks. Having real-time, ongoing data to reveal an accurate emissions profile allows companies to accurately benchmark progress, locate and mitigate any size leak, find new efficiencies, and deliver a differentiated product to the market. 

EBJ: It sounds like your mission for detailed, transparent environmental information will cover air quality and water quality and climate-related supply chains, and presumably circular economy elements. Do you expect to acquire companies with digital assets in these verticals?

Foiles: Yes, we expect to see both solid organic growth of our product footprint and digital offerings, as well as growth and expansion through acquisitions and other forms of partnerships. We foresee the creation of a more comprehensive and granular digital canopy from the bottom up and the top down to better understand emissions and other environmental attributes. 

Project Canary firmly believes that net-zero is a math problem – glossy ESG headlines don’t equate to actual environmental performance. …You can’t get to net zero on estimates and self-attestations. 

We also anticipate the need for more detailed methane and carbon tracking systems to activate the circular economy. The creation of digital twins to better access or the use of blockchain and related ledgers and registries to better trade and track emissions are other nascent developments. All of them require trusted independent facility-level data. The old engineering adage remains true – garbage in, garbage out.

Our goal is to accurately measure everything to drive positive climate impact today and over time. We are exploring multiple ideas and strategies in respect to verticals. Project Canary recently acquired Aeris Technologies, a leading provider of laser-based gas analyzers and leak detection systems, to provide high fidelity data.

Different sectors—utilities, landfills, agriculture, industrial—have complex but differing facility-level operating and emissions profiles requiring various technologies to detect and monitor GHGs accurately. We’re working to ensure that we have the correct technology to address these issues, whether externally through partnerships, acquisitions or our in-house tech development team.

EBJ: Will you be looking for partners with assets in sources of data and proprietary databases or existing software-as-a-service business models in either environmental media specialty or industry sector specialty?

Foiles: We already actively work with other SaaS companies and aim to work with more in and outside of the energy value chain. The problems we are trying to solve span a variety of sectors and involve different critical technology issues, making collaboration necessary and a means to accelerate innovation and change that benefits all of us in the form of slowing the advance of climate change.

A great example of this is our collaboration with Xpansiv and Validere related to Certified-Responsibly Sourced Gas. Project Canary quantifies the methane emissions at the facility level, Validere quantifies the methane production at the facility level, Xpansiv verifies the rules are met and lists the Certified Responsibly Sourced Gas on their exchange for easier trading of differentiated commodities.

We expect more partnerships with various companies in and around the space in the coming year. Climate change is a global problem, and stopping methane now will be hugely beneficial. We all need to work together to help solve it.

EBJ: How does being a public benefit corporation affect your ability to raise capital and complete transactions with venture or private equity investors? Does it give them confidence in an exit?

Foiles: Our status as a public benefit corporation did not negatively impact us; instead, it helped us differentiate our mission and strategy. Ultimately, we raised $111 in our latest Series B (close date Feb- ruary 2022) round at an attractive valuation. We’re also a Certified B-Corp with a score of 107. Just as we expect from our customers, we go through a rigorous assessment process and will do so every few years while continuously monitoring our culture and triple-bottom-line ethos. Everyone in business knows that you measure what matters. We measure and track our impact on workers, community, environment, governance, and customers. Impact requires focus and persistence. Our investors have confidence that Project Canary holds itself to the highest standards.

Capital helps us achieve our mission of altering the course of climate change. A market-based solution for one of the biggest problems we are facing has the best chance of success. We have a vital mission, which attracts the right type of capital and the right type of high caliber talent. It’s core to who we are. 

Our goal is to create the needed facility-level, minute by minute, 24×7 data and associated analytics to truly understand each facility’s emission profile and environmental footprint. 

EBJ: What climate change impacts on the natural or built environment have you observed in your lifetime?

Foiles: I’ve seen the impacts of rising sea levels and erosion in the backyard of my childhood home on Hilton Head Island, South Carolina. Only a King Tide on rare occasions could bring saltwater into my backyard when I was a young child. Today it feels like it happens multiple times per year. Fifteen years from now, I wouldn’t be shocked if there was no longer a house there. The National Flood Insurance program will eventually have to stop insuring some of these areas because they will be rebuilding homes every few years. The numbers are shocking. Communities will be forced to begrudgingly relocate, with some folks refusing to move. This whole thing is like watching a car wreck in slow motion. And seeing this all play out first-hand, albeit on a protracted timeframe with uncertain parameters, led me to get involved. People can talk about climate change all day, but your time is the most valuable resource you have at the end of the day. As the saying goes, it’s later than we think. We have to actually do more and talk about doing more, less. 

EBJ: What inspired you to get involved in this industry?

Foiles: Methane only lives in our atmosphere for 12 years, but in those 12 years it is over 100 times more harmful than CO2. After that, it goes away. If you reduce methane emissions today, it will have a material impact on the next decade. You can reduce greenhouse gas warming by lowering methane emissions rather than slowing its increase like CO2 solutions.

I saw this massive problem with methane emissions from industrial facilities. Using metal straws or rolling out your overflowing recycling and compost bins each week is easy for people to wrap their heads around. Still, neither will make a material impact on climate change (though I hope people understand we have to modify our lifestyles too). The missing piece isn’t the technology to stop the emissions but rather proper accounting for those emissions. You can’t improve what you don’t measure. We set out to change that. 

Project Canary raises $111M from top climate tech and SaaS investors

Project Canary (Denver, Colo.) announced raising $111 million in Series B funding in February. The data analytics company plans to scale its core environmental assessment offerings and expand to new sectors as it helps companies reach a net-zero future, with a keen focus on reducing methane.

Insight Partners (lead investor), Brookfield Growth, Canada Pension Plan Investment Board (CPP Investments), and Carica Sustainable Investments (the sustainable investing arm of the Hamilton James Family office) invested alongside previous backers Quantum Energy Partners, Energy Impact Partners, and Frontier Venture Capital. Insight Partners will receive a seat on Project Canary’s board of directors.

“The measurement economy has arrived – expectations for precise, verified environmental action are the new normal,” said Project Canary CEO and co-founder Chris Romer. “We provide net-zero proof with trusted data that demonstrates ESG progress to all stakeholders. You can’t get to net-zero using estimates.”

The new investors bring software as a service (SaaS), climate technology, energy transition, and industry expertise to support Project Canary’s expansion throughout the energy lifecycle and into other emission-intensive sectors.                   

“Software-based solutions are key to helping companies understand emissions profiles and take the meaningful action needed to alter the course of climate change,” said Matt Gatto, Managing Director at Insight Partners. “Project Canary has a viable, measurement-based model for helping companies mitigate climate impacts, and we at Insight are excited to help them reach their high-growth potential.”

Project Canary’s solutions also help financial markets differentiate environmental performance – a matter of interest for Brookfield and CPP Investments, collectively managing over $1 trillion of assets.

“Our investment in Project Canary is aligned with Brookfield’s broader support to accelerate the transition to a net-zero economy,” said Josh Raffaelli, Managing Partner at Brookfield. “Working to expand Project Canary’s solution to other emissions-intensive sectors and activities is key to achieving a low-carbon economy.” 

About Project Canary

Project Canary is a SaaS-based data analytics company focused on accurate corporate climate ESG data for emission-intensive industrial companies. We are the leaders in holistic environmental assessments (air, water, land, and community). Project Canary scores responsible operations, delivering independent emission profiles via high-fidelity continuous monitoring technology to provide actionable environmental performance data. Our sensor portfolio includes high-fidelity spectroscopy-based methane detection and emissions quantification for the oil and gas sectors, plus Aeris Technologies’ laser-based gas analyzers covering other emissions, including ethane, nitrous oxide, formaldehyde, ethylene oxide, benzene, and more. Formed as a Public Benefit Corporation, Project Canary’s Denver-based team of scientists, engineers, and seasoned industry operators identify and quantify areas to reduce emissions. www.projectcanary.com

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