Building CarbonAgents: AI-Powered Carbon Management Solution

The problem

Small and medium-sized enterprises (SMEs) face overwhelming barriers in implementing effective carbon management strategies, despite representing 90% of businesses worldwide and accounting for approximately 43-53% of global greenhouse gas emissions. These businesses are increasingly pressured by regulatory requirements in the EU and USA, supply chain demands, and stakeholder expectations to track and reduce their carbon footprint, yet they lack the resources, expertise, and tools necessary to succeed.

Impact of the Problem

• Resource Constraints: 68% of SMEs cite lack of resources as the primary barrier to climate action, including insufficient personnel, knowledge, and time to dedicate to carbon management. Unlike large corporations with dedicated sustainability teams, SMEs often require employees to handle multiple responsibilities, making carbon management an overwhelming addition to existing workloads.
• Financial Limitations: Nearly half of businesses report lack of funding as a significant barrier, with many unable to afford expensive carbon management software or consulting services that can cost thousands of dollars annually. Current solutions are designed for large enterprises and remain financially inaccessible to smaller organizations. UK SMEs emit on average 15 tonnes of CO₂ annually (1-6 tonnes per employee), while EU SMEs average 75 tonnes. Though far below large firms (~22,345 tonnes), SMEs collectively contribute 63% of EU business emissions due to the large number of SMEs.
• Complexity and Expertise Gap: 65% of SMEs describe current reporting standards as overly complex, particularly regarding Scope 3 emissions which represent 80-99% of most organizations’ total carbon footprint. According to the European Commission, 72% of SMEs lack concrete strategies to reduce their carbon footprint, with 63% of small business owners worried they don’t have the right skills and knowledge to tackle the climate crisis.
• Regulatory Compliance Challenges: SMEs operating in the EU must navigate the Corporate Sustainability Reporting Directive (CSRD), which will apply to listed SMEs from 2026 that meet at least two criteria: balance sheet total of EUR 4 million or above, net turnover of EUR 8 million or above, or average of 50 or more employees. Those in the USA face SEC climate disclosure rules and various state-level programs, creating a complex multi-jurisdictional compliance landscape that small businesses are ill-equipped to handle.
• Data Collection Barriers: SMEs struggle with incomplete or missing data necessary for accurate carbon footprint calculations, often described as “data poor” organizations that lack the infrastructure for systematic environmental data collection. This creates a cycle where poor data quality leads to inaccurate assessments and ineffective reduction strategies.

The goals

The ultimate objective of this project is to develop and deploy an innovative multi-agent AI system that transforms carbon management from a resource-intensive burden into an accessible, automated process for SMEs. This initiative will create a collaborative ecosystem of specialized AI agents working together to provide comprehensive carbon management capabilities at a fraction of traditional costs.

Phase 1: Foundation and Data Collection (Weeks 1-2)

Data Collection & Research:

• Comprehensive market research and competitor analysis of existing carbon management solutions
• SME carbon footprint data collection methodologies and best practices analysis
• Regulatory framework mapping covering EU CSRD and US SEC climate disclosure requirements
• Technical feasibility assessment for multi-agent system architecture using frameworks like LangGraph or CrewAI
• Industry-specific emissions factor databases compilation

Phase 2: Automated CO2 Calculation Engine (Weeks 3-4)

Core Calculation Development:

• Implementation of Scope 1, 2, and partial Scope 3 emissions calculation algorithms following IPCC methodologies
• Integration with real-time emissions factors databases (EPA, DEFRA, IEA)
• Development of machine learning algorithms for data validation and anomaly detection
• API endpoint development for core calculation functions with response times under 2 seconds
• Basic calculation validation and accuracy testing frameworks

Phase 3: Multi-Agent Architecture and Additional Calculations (Weeks 5-6)

Intelligent Processing System:

• Multi-agent system foundation implementation with specialized agents for different carbon management tasks
• Advanced Scope 3 emissions estimation framework for supply chain calculations
• AI-powered recommendation engine that provides personalized reduction strategies based on industry benchmarks
• Cost-benefit analysis capabilities to prioritize the most impactful and affordable reduction strategies
• Regulatory compliance agents for automated report generation aligned with EU CSRD and US SEC requirements

Phase 4: Platform Integration and Optimization (Weeks 7-8)

Agent-Based Data Extraction and Parameter Optimization:

• Unstructured to structured data API development for automated data collection from utility bills, accounting software, and supply chain systems
• Container optimization over distribution: Containerized deployment using Docker for consistent performance across environments and improved scalability
• Distribution optimization over time: Implementation of time-series analysis for emissions tracking, trend identification, and continuous monitoring capabilities
• Energy efficiency optimization: Power consumption monitoring, carbon-aware computing implementation, and system resource optimization
• Final integration testing with real SME data and MVP deployment preparation

Expected Outcomes

AI Agent Ecosystem

A collaborative network of specialized AI agents that work together to automate carbon management tasks for SMEs, featuring:

• Data Collection Agent: Automatically extracts emissions data from multiple sources with minimal human intervention
• Calculation Agent: Applies real-time emissions factors using latest IPCC methodologies with 94% confidence scores
• Compliance Agent: Generates audit-ready reports aligned with EU CSRD and US SEC requirements
• Recommendation Agent: Provides AI-powered reduction strategies based on business characteristics and cost constraints