Interview with Alois Flatz

Alois Flatz is an expert in sustainable investments with decades of experience. As a pioneer in this field, he has contributed to the development of the Dow Jones Sustainability Index and held leading positions at renowned investment firms. In this interview, Alois Flatz shares his insights about Tset, an innovative product cost and CO₂ emissions calculation software, and provides perspectives on the future of sustainable business.

Could you tell us about yourself and your professional background? We would like to know how you became involved in sustainability and how you eventually connected with Tset.

Alois Flatz: My name is Alois Flatz and I have been involved in sustainable investments and business practices since 1996. As one of the pioneers in this field, I helped build the foundation for sustainable investments. Between 1996 and 2004, the most important product was the Dow Jones Sustainability Index, which I played a leading role in developing. Subsequently, at SAM Sustainable Asset Management, I was responsible for creating and overseeing all of the company's products as a Head of Research. 

In 2004, I transitioned into venture capital, becoming a partner at Zouk Capital in London. Later, I spent three years as a Permanent Advisor at Generation Investment Management, overseeing growth investments in Continental Europe. At the same time, I also began making business angel investments, with Tset being one of them.

How did you then become an investor in Tset?

Alois Flatz: I was introduced to Tset during its conceptual phase before the company had generated any revenue. What appealed to me about Tset - and still does - is that Tset as software combines both product costs and CO₂ calculations in one single solution. In the future, ecological issues will not develop in isolation, but in conjunction with economic aspects, and Tset combines precisely these two areas.

Another aspect of Tset that I greatly appreciate is its benchmarking capability. "If you can measure it, you can improve it" holds true here. We applied this principle when developing the Dow Jones Sustainability Index, measuring and comparing companies' sustainability, and then including the best performers in the index. Tset follows a similar approach, measuring both costs and CO₂ emissions, which are then converted into financial terms. This benchmarking allows us to develop products that are not only more cost-effective but also contribute significantly to sustainability.

What is your long-term vision for Tset, particularly in terms of environmental responsibility?

Alois Flatz: In 15 years, I envision Tset as a widely recognized tool used by most manufacturing companies to calculate costs. It will be standard practice for CO₂ emissions to be integrated into cost calculations, not just for new product development, but for all products. The "ecological backpack", reflected in CO₂ emissions, will be visible for every product with Tset as the enabling tool.

Moreover, Tset will support the footprint on imports, ensuring a CO₂ measurement for every product entering the European market. These measurements will then be converted into costs. Companies will rely on Tset to maintain competitiveness, while investors and banks will require it as ESG criteria and CO₂ ratings become the norm. Tset's unique value lies in its ability to directly translate CO₂ emissions into costs, making it an invaluable asset.

There are increasing regulations such as CBAM or ESG requirements. Will these continue to increase in the future, and will Tset be needed even more as a result?

Alois Flatz: Tset will certainly be used more due to regulatory requirements, but also because it is a valuable tool. Ideally, we should reduce regulations in Europe and instead directly incorporate CO₂ costs into prices, which is a process that Tset facilitates. If legislators focus more on price signals, we could significantly reduce the need for regulation. While the economy responds to price signals, environmental costs are currently underrepresented in pricing. Tset offers an ideal solution to address this imbalance.

In your opinion, what are the biggest challenges in product cost and CO₂ calculation?

Alois Flatz: The primary challenge is the lack of accurate data. Tset addresses this by providing precise master data that enables the seamless integration of CO₂ emissions into product development. Many current approaches are overly simplistic and use top-down methods, relying on rough estimates that fail to drive meaningful improvements. In contrast, Tset supports bottom-up calculations, which provide a more accurate and advanced way to determine the cost per part. We need more of these precise calculations, especially for imported products like Chinese electric cars. In this example, rough calculations are insufficient. They come with several drawbacks: most notably, the product would not be optimized in the areas most urgently needing improvement. Without accurate data, we are left with bureaucratic obstacles that do not contribute to genuine product enhancements.

Are there industries that you think should pay more attention to sustainability?

Alois Flatz: All industries need to become more sustainable, but this is especially crucial in food production and agriculture. These sectors also have underestimated health implications. Another area that will grow strongly is data management. In countries like Ireland, data centers already consume approx. 25% of electricity - a share that will continue to rise globally. In the future, a nation's competitiveness will hinge on how energy-efficiently it manages its data.

What role do you envision Tset playing in helping companies make more sustainable decisions in this context?

Alois Flatz: Looking into the future, I am confident that Tset will be able to cover this field of activity as well. Tset could calculate the entire energy demand required by Cloud Centers. For example, NVIDIA (the world Leader in Artificial Intelligence Computing) is planning to develop new Cloud Centers in the US that will consume as much electricity as a single nuclear power plant. These are dimensions that we can hardly imagine today.

Do you see Tset as an international tool?

Alois Flatz: Absolutely. Tset's relevance extends far beyond Europe to the global market. Countries like China and the USA will require Tset's capabilities just as much as Europe does for calculating their CO₂ emissions and associated costs.

To conclude: What personally drives you on the topic of sustainability?

Alois Flatz: We are all part of an interconnected system, and optimizing it is not about maximizing short-term profits. For a system to thrive in the long run, everyone within it must grow together. This holistic perspective drives my passion for sustainability and will continue to do so in the future.

Watch the interview recording

Hear from Alois Flatz about the future of CO₂ calculations in the full interview recording (in German).