Banyan.eco's Unique AI Solutions Revolutionising Electronics ESG Reporting

The European regulatory landscape is changing, and a key focus is on sustainability. As part of this, the EU's Corporate Sustainability Reporting Directive (CSRD) requires companies to publish regular reports and how their activities impact the environment. Larger companies are already doing this, but from 1st January 2026, smaller companies will also be required to submit reports. For some this will not be an easy task, so for this podcast we talk to Francis D'Souza from Banyan.eco, who is helping companies meet the requirements.

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Podcast Transcription: Banyan.eco’s Unique AI and ML Solutions Revolutionizing ESG Reporting

 [Jan] (0:12 - 0:27)

Hello, everyone, and welcome to this Counterpoint podcast. I'm Jan Stryiak, Associate Director at Counterpoint Research, and I'm delighted to be joined today by Francis de Souza, founder of Banyan.eco. Francis, welcome. Thanks very much for joining me.

[Francis] (0:27 - 0:28)

Thanks for having me, Jan.

 [Jan] (0:29 - 0:33)

Hope you're doing well. Yep, all good, thank you. Hope you are too. Yes, indeed.

 [Francis] (0:33 - 0:34)

Thanks.

 [Jan] (0:34 - 1:01)

Great. Okay, so today we will be talking about sustainability, and in particular, one area of regulatory change that we will see in Europe over the next year or so, and that is around emission measurement and reporting. So, before we get on to what Banyan.eco does, Francis, please help me set the context here. What is changing around emission measurement and reporting in Europe, and what does this mean for the electronics sector?

 [Francis] (1:02 - 2:44)

Indeed, very happy to delve into that, Jan. The world is changing about reporting because there's need to create an impact, as in reduce emissions, and we're seeing the effect of climate change all around us, all across the world, and there is actually a regulatory push to have companies more sensitized towards understanding what their emissions are, reporting them, and then improving them so that we can hit the goals that have been set for net zero targets by 2015, et cetera.

The EU and the EU regulation, the CSRT, Corporate Sustainability Reporting Directive, is forward leaning in this respect, which needs companies to start to report by early 2026. Some of the bigger companies are already subject to the regulation, but the vast majority of them will be in early 2026, to report three types of emissions. Emissions from their actual activities called Scope 1 emissions, direct emissions from their manufacturing, et cetera.

Emissions from the energy consumed by them, and the emissions to produce that energy, so this is energy typically from electricity or heating. And third, energy or emissions from all the upstream activities, so from the supply chain, from the business travel that they actually incur to be able to do their business, and in the downstream, in the usage of their products, in the end-of-life stage of the product, the emissions linked to that. So you've got these three scopes of emissions, Scope 1, Scope 2, and Scope 3, but the EU CSRT is not the only regulation that's going in that direction. You have other regulation coming in too.

[Jan] (2:45 - 2:51)

Okay, yeah, okay. So do you want to explain what some of those new regulatory changes are?

[Francis] (2:52 - 3:53)

Yeah, exactly. So in fact, you have a similar kind of regulation coming in in Singapore called the CRT, the Climate Regulatory Disclosures. In Australia, in California, where you have SB 253, where companies from 2026 have to start to gradually report similar kind of emissions.

And this is very interesting for the world of electronics. The regulation goes across all sectors, but for the world of electronics, it's particularly important, because as we know, electronics is a global business. A lot of the design actually happens in the US, a lot of the manufacturing activities in Asia, a lot of the usage and also design is in Europe.

So because of the global nature of the electronics business, the regulation that is also global in nature is very impactful, this being Singapore, Europe, and California, and the US. The good thing about these regulations, they all ask for the same thing, Scope 1, Scope 2, Scope 3. So they are homogenized to that extent.

[Jan] (3:54 - 3:59)

Okay, so they complement each other. They're not asking for different things, they all work together.

[Francis] (3:59 - 4:34)

Correct, absolutely. And that's really very important, because one of the elements in this regulation is the Scope 3, which is everything in your supply chain. So even if a company itself might not be subject to the regulation, it is in the supply chain of someone else who might be.

So you need to have this homogeneity to be able to have consistent reporting, to not have companies drowning under regulatory overhead. And more importantly, to be able to do better measurement, to be able to have better impact, which is eco-design and reducing your emissions.

[Jan] (4:35 - 4:42)

Okay, so of these, the Scope 3, so 1, 2, and 3, which is the most difficult, do you think, when it comes to reporting?

[Francis] (4:43 - 5:53)

By far, Scope 3 is the most difficult, because Scope 1 and Scope 2 are within the control of the company. You know what you consume. You look at your meter bill, you know the energy mix in the country, you can easily calculate your emissions.

Scope 3 is everything in your supply chain, and that includes the suppliers of your suppliers. So you can actually go very far upstream. And similarly, downstream, if you're making intermediate components that is applying to someone else, who in turn supplies to someone else, who in turn supplies to the end user, that's a very long chain as well.

So the Scope 3 part of the reporting is the most complicated part, and specifically Scope 3 purchased goods and services, because within Scope 3 emissions, you've got lots of different categories. But Scope 3 purchased goods and services is very complicated, especially so in electronics, because electronics is a sector where you've got a lot of different components, each of which themselves go to multiple possibilities of industrial processes in their value chain. So electronics can be very complex in being able to calculate Scope 3 emissions.

[Jan] (5:53 - 6:14)

Okay, so you've mentioned some of the complexity already, and you also mentioned earlier that some companies are already doing this reporting. How's that going? And what are the main, you've mentioned some of the challenges, but what are the main challenges companies are facing when it comes to this emissions reporting?

Is it mainly the smaller companies that are going to find it more challenging? How do you see that?

[Francis] (6:15 - 7:51)

Yeah, so the challenge that one has in Scope 3 emissions is that typically it's about 85 to 90 percent of a company's emissions, and it's in the company's supply chain. And in the world of electronics, for example, that supply chain is very complex. It's multi-component, multi-supplier, multi-geography, multi-industrial process.

So how does a company that's making, let's say, a cellular module like this one, which itself has 120 components under it, each of which go to three or four steps in its industrial process, how does this company work out its Scope 3 emissions? The second thing is this company that's making this cellular module is in the supply chain of another company, and that customer is going to ask for what's the carbon footprint of this thing that he's selling me, because you're in my Scope 3. And this is the challenge, being able to work out the company carbon footprint and at the same time working out product carbon footprints, because as we all know in electronics, a company doesn't have one electronic product.

You have multiple variants and SKUs, and it's easily a minimum of 30 to 50. And taking an industry-specific approach for electronics, one could really go bottom up to go from components to products to company. And doing that, you get your Scope 3 reporting for your company carbon footprint for CSRD, etc.

And along the way, because you've gone through component to product to company, you get your product carbon footprints ready for when your customer is asking.

[Jan] (7:52 - 7:59)

Okay, so this sounds like a good time to ask, what does Banyan.eco do? How can you help with all of this?

[Francis] (7:59 - 9:02)

So in fact, Banyan.eco is built just for the electronics sector and for electronics companies to actually help companies measure quickly their emissions, especially Scope 3 emissions, improve the quality of the data, so as to be able to create an impact by doing better. That's a step. Faster measurement, better data, more impact.

And Banyan.eco does this by leveraging a very important aspect of the electronics ecosystem, which is that most of the components we use are commercial off the shelf. So why does everybody have to reinvent the wheel? And Banyan.eco actually uses this power of the network and uses data to be able to estimate what is the product carbon footprint of a given product, multiplying that by the volume of all the products in the company, you have just practically most of your Scope 3 emissions for your company carbon footprint. And Banyan.eco actually has built a software that calculates your product carbon footprints in seconds, as against weeks and months in the alternative.

[Jan] (9:03 - 9:11)

Okay, that's fascinating. So in terms of the components then, do you have any examples of the kind of the typical carbon footprints of these electronic devices that you're tracking?

[Francis] (9:11 - 10:56)

Indeed. So take for example, let's take an individual component like this cellular module, for example, that's used to connect a device. So the cellular module itself has between hundred, between 70 and a hundred components in it, depending on whether it's used for automotive or a big one, etc.

This itself is about two kilos of emissions, cellular module, to make it. Then of course, there's also emissions during use phase. This would typically go into a device.

Let's say it might go into a telematics device, you know, the kind of infotainment systems you might have in buses or trains, etc. An infotainment system in the bus or train is probably about a hundred kgs of CO2 emissions to make that. So that gives you an idea of the different levels of emissions in different products.

And by the way, there's no surprise that from a cellular module, even this tiny thing is two kgs, to the telematics device, because the telematics device itself has about 300 components like the cellular module. So it's no surprise that it actually becomes pretty intense in terms of emissions to make. There's other elements out there, which is what are the components that contribute most to these emissions.

And typically what we're seeing from industrial electronics devices are that the PCBs and semiconductors, specifically the logic semiconductors, so computing CPUs kind of semiconductors, and the memory semiconductors are typically in the carbon heat map of the carbon footprint, pretty intensive, and followed by screens, if there's a screen in the device.

[Jan] (10:57 - 11:13)

Okay. Now, so speaking of Banyan.eco, what is it that you do that's different to anyone else? How are you getting this measurement to go down to seconds rather than weeks and months, where others are not quite able to do that same thing?

[Francis] (11:13 - 12:35)

Very good question. So Banyan.eco is built specifically for the electronics sector, and we use AI intensively. We use the power of the ecosystem, the electronics ecosystem, the network electronics ecosystem intensively.

And therefore, Banyan.eco uses automation throughout. Banyan.eco will actually recognize just from a bill of material with manufacturer part numbers what those part numbers are, classify them correctly into the various categories, and calculate the emissions. So that moves it down to seconds from weeks and minutes, because the algorithms are trained to recognize components, know what they are, calculate the emissions from them.

The second thing that Banyan.eco does is start to improve the quality of the data, because the initial data is very good for the reporting, but it's also based on industry averages. To be able to do eco design and improve, you need to get into what's called primary data, a data that's a lot more closer to the reality. And this is where Banyan.eco uses the power of the ecosystem, because why reinvent the wheel?

Banyan.eco's machine learning algorithms gather data and help propagate it across the ecosystem to be able to get to a better level of data intelligence collectively faster.

[Jan] (12:35 - 12:58)

Okay, thank you. Now, you mentioned eco design there, and we're hearing a lot more about this, and we will be hearing a lot more about this over the next year or so, particularly as the new eco design for sustainable product regulation comes in next year. Can you tell us a bit about it?

So what is the ESPR and how does it impact the industry?

[Francis] (12:58 - 14:16)

So interesting that you mentioned the ESPR. So you mentioned what it's about. So the ESPR is a regulation, eco design sustainability product regulation, that actually requires makers of certain categories of products to actually declare a lot of different factors that go into making that product.

For example, the emissions is one of the factors, but also what can be done with the product in terms of recycling, in terms of reusability, if someone wants to take it back, what are the options available? So that anybody down the value chain knows what to do with it using reuse, recycle, etc. This is enabled with something called the DPP, which is the digital product passport, where products would actually have a digital product passport that gives us information for people to be able to use further down the chain, further in the life cycle.

So you mentioned about ESPR coming in, and that's absolutely true. They're coming in first for EV batteries in Europe. Then textiles is going to be a category where you also have eco design and ESPR and digital product passports coming in.

And the electronics and ICT sectors has also been flagged as an important sector where one needs to have eco design and digital product.

[Jan] (14:16 - 14:22)

Okay. And how does Banyan Eco help in this regard?

[Francis] (14:22 - 15:23)

So absolutely. So in the first case, what Banyan Eco is helping companies calculate their scope three, scope one, scope two as well, of course, for their CSRD emissions. Now the emissions for the CSRD reporting, which is based on carbon emissions, the emissions is one of the aspects of the digital product passport declaration as well.

However, the digital product passport and the ESPR is also to move to better design to help in the circularity of the product. And because Banyan Eco is constantly improving the quality of the data, Banyan Eco's algorithms will be able to provide guidance to device designers, even before a first prototype has been made, as to what is the environmental impact or a potential environmental impact of a product. And therefore, Banyan Eco can help forward-leaning companies at the state of conceptualization itself to work out the environmental impact, make their trade-off choices and then introduce a product under the law.

[Jan] (15:24 - 15:31)

Okay.. Thank you. Questions just occur to me. What's behind the name Banyan.Eco? What's the significance of the name?

[Francis] (15:32 - 16:15)

Great question. So, you know, the Banyan tree is a tree with a very specific characteristic. So it's a tree where it drops down roots from the branches and then the tree expands both vertically and horizontally, creating a virtuous ecosystem.

And a lot of what Banyan.Eco does, I mean, the founding principle of Banyan.Eco for electronics is use the power of the network, use the power of the ecosystem, don't reinvent the wheel. Everybody's using commercial off-the-shelf components. Why don't we get to a better level of data intelligence collectively faster?

And the Banyan.Eco is about exactly that. Using the power of the network to create a virtuous ecosystem to improve the data quality and then hence to do better ecosystem.

[Jan] (16:15 - 16:20)

Brilliant. Makes sense. Okay. So what's next? What's next for Banyan.Eco?

[Francis] (16:20 - 17:05)

So Banyan.Eco, we're off to a flying start actually. And we've got our product starting to be deployed in customers. And we actually are selected in the startup competition at Electronica in Munich.

So one of the biggest electronics trade shows in the world. Going to be at the show. So we're very looking forward to meeting potential customers, partners, prospects of the show to be able to show them what we've done in Banyan.Eco, where we've actually taken carbon footprint calculation at company level from months to hours. Carbon calculation of product carbon footprint from weeks to minutes. And at the end of the day, what we actually want to do is faster measurement, better data, more impact.

[Jan] (17:06 - 17:16)

Brilliant. Okay. Well, we could talk about this stuff for hours, but I'm afraid we're out of time. So Francis, thanks very much for joining me today. It's been a pleasure and yeah, good luck.

 [Francis] (17:17 - 17:18)

Great. Thanks so much, Ian.

[Jan] (17:18 - 17:22)

Thank you. Okay. And thanks very much everyone for tuning in and we'll see you next time.