(Bloomberg) -- A new startup run by former employees of the payment processor Stripe Inc. will help companies analyze the full range of their carbon emissions and figure out the best way to reduce and offset them.Watershed Technology Inc., which said Wednesday it has raised funding from Sequoia Capital, Kleiner Perkins and Laurene Powell Jobs, has built a software tool that lets customers such as mobile payment firm Square Inc., e-commerce platform Shopify Inc., and salad chain Sweetgreen Inc. make sense of their own and their suppliers’ emissions. It also shows companies which decisions they could make to most drastically change their carbon footprint.Watershed and its customers are part of a growing movement of companies realizing that fighting climate change needs to be a fundamental part of their long-term business plan. BlackRock Inc., the world’s largest shareholder, warned last week that it could vote against directors who don’t present strong plans to lessen their environmental impact.Christian Anderson, Watershed’s chief executive officer, said that “old-world” companies often have climate programs that are “bolted on to the business rather than being core to the operation — so we’re going to do exactly what we were going to do anyway and buy offsets.” But the market is going through “an inflection moment,” he said. “You’ve got this generation of fast-growing companies that are coming to climate for the first time as a corporate imperative and want to do something very ambitious on it.”Watershed helps companies assess more than just their Scope 1 and Scope 2 emissions — direct emissions from a company and emissions from the energy a company buys, like electricity to power its offices. It also helps companies understand their sprawling Scope 3 emissions, which includes the impact of their supply chain and customers’ use of their products and can often make up the majority of a carbon footprint.“You have to collect all this data,” said Taylor Francis, Watershed’s president and another co-founder. “Sweetgreen’s carbon footprint is in their supply chain.” Restaurants know which lettuce farms have better quality and prices. But it’s much harder to know which ones are low carbon. “The climate solution is locked in all this complexity,” Francis said. “We’re trying to give them the keys and the tools to work through that.”Watershed’s tool has three goals: Let companies measure their impact, make plans to reduce it, and make reports on progress. Shopify used it last year to assess how its workforce, suddenly all working from home, would change its emissions. And they also were able to analyze choices beyond their own, such as different shipping methods used by stores on their platform. At Square, analyzing Scope 3 emissions meant looking at the carbon intensity of its suppliers — in this case, Bitcoin miners. Square doesn’t mine the cryptocurrency itself, but it buys lots of it from miners, and pledged $10 million last year to support cleaner energy initiatives for Bitcoin alongside a goal to hit net zero carbon by 2030.Sweetgreen already uses its menu to feature unusual but environmentally restorative ingredients such as kelp, clover and sorghum. But they wanted better data to make their menus even lower carbon, so Sweetgreen’s suppliers filled out forms to tell Watershed more details about their farms. Watershed’s co-founders get particularly excited talking about the far-flung web of emissions numbers behind a single salad. “A typical cheese supplier doesn’t know what their carbon footprint is,” said Francis. “But they do know if they have a methane digester, what type of feed do they use, how do they get it from their suppliers.” (Anderson added: “There is so much data in that salad!”)Collecting new, more granular data meant Sweetgreen, when choosing a feta provider, could pick between two that seem the same but have drastically different footprints, or encourage some partners to make investments in their farms to reduce their impact. “The biggest differentiator here is we were using actual emission numbers from actual suppliers, not just estimates or averages,” said Sweetgreen co-founder Nicolas Jammet. Sweetgreen has pledged to cut emissions per dollar of revenue in half from today’s levels by 2027. And Jammet sees benefits extending beyond his own business. “Ultimately what’s exciting is that when we work with suppliers to upgrade the way they make food, it doesn’t affect just the food they sell to Sweetgreen — it affects all the food they sell,” he said.Watershed’s three co-founders weren’t originally hired at Stripe to work on climate; they worked on engineering and built various products for Stripe customers. But in 2019, Stripe’s co-founders, John and Patrick Collison, became interested in how Stripe, which was valued around that time at $35 billion, could help fight climate change, particularly by being an early customer for fledgling climate-related technologies. They turned to Anderson and asked him to figure out what Stripe could do.Anderson consulted with academics and climate experts and came back with a proposal, which Stripe announced in August 2019: The San Francisco-based company would commit to spending at least $1 million a year on carbon sequestration, something few other companies had done.That pledge prompted some of Stripe’s peers — other tech companies who wanted to use their money to help fight climate change — to reach out to Anderson and ask how he had approached the proposal. In those conversations, Anderson realized these companies shared a broader problem: Before they could shrink their carbon footprint, they needed better tools to measure it. He started talking to two of his former co-workers, Francis and to their third co-founder Avi Itskovich, both of whom had left Stripe earlier that year. In September, Anderson quit Stripe and the three of them started Watershed.As is common in Silicon Valley’s clubby world, Stripe became one of Watershed’s first customers, and the Collison brothers became early investors. So did John Doerr and Michael Moritz, who share a friendly rivalry as chairman and partner of their respective venture capital firms, Kleiner Perkins and Sequoia Capital. Watershed declined to say how much the company had raised. Both Moritz and Doerr joined Watershed’s board. Doerr and his firm have had a decades-long history of funding climate-related companies, with mixed financial results. Moritz, on the other hand, said his firm avoided green tech investments in the “huge frenzy” in the early 2000s because he thought they weren’t a good fit for venture financing. “I don’t mean to pound our chest about it,” he said. “It was the right thing to do to allow others to lose money in that particular phase of climate investing.”Moritz is writing a check now because Watershed is selling enterprise subscription software, not expensive equipment that needs to be approved by a utility or by regulators. “We’ve always been very careful not to confuse noble crusades with solid investments,” he said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.