Beyond Data Monetization: Pathzero’s Radical Transparency Model

When organizations think about monetizing data, their thoughts go to aggregation, ownership and selling data products.

Australia-based company Pathzero is pursuing a different model, which has created a data and software solution for institutional investors and fund managers.

Founded four years ago by Carl Prins, whose previous experience was in financial markets as a hedge fund manager, Pathzero offers a solution enabling customers to determine their carbon exposures from investments in typically opaque private markets.

Pathzero’s approach has been to create a software platform where institutional investors can interact with the fund managers they mandate and the companies they invest in. It also uses software tools to deliver the most accurate view of their exposures through the investment chain.

“The software we create enables the flow of data, and I think one of the innovations is how that data moves and the gated nature of it,” says Prins. “The large superannuation funds and institutional investors we serve need data about the funds they invest in and the assets within those funds so they can perform their disclosure obligations and also conduct their risk management.”

“We enable an institution to reach out to the fund managers they allocate capital to and say, ‘we need these disclosures on an asset level for every fund that we allocate to.’ When everyone plays ball, that makes the whole thing run,” he adds.

Permission to use

The data is uploaded by its owners on the platform and remains their property, even as it resides in the Pathzero library database.

The owners permit other Pathzero participants, typically institutional investors seeking information on emissions, to view and use the data in their exposure and risk calculations.

Other Pathzero users, who might also have holdings in the same fund, can ask permission to use the data. At the same time, Pathzero anonymizes the data and uses it to create benchmarking and analysis.

“When everyone plays ball, that makes the whole thing run.”

Users can ask each other questions about their disclosures and drill down for greater detail and accuracy.

This differs from other solutions, which obtain data through internet scraping and not through voluntary uploading of data from the source as Pathzero does.

“We manage the data and control the database, and we have very specific governance mandates and policy around that,” says Prins. “So we can’t look into the data or go into individual holdings that someone has published to Pathzero, but we do allow the use of the data on an anonymized basis to play back benchmark information to those who’ve participated in providing data.”

“That is what enables us to provide insights into what is happening in the market, what good practice looks like and trends around disclosures,” he adds.

Transparent disclosures

For institutional investors, the motivation to participate through Pathzero is clear. Australia is adopting mandatory reporting on scope 1, 2 and 3 emissions in line with the global TFCD (Task Force on Climate-related Financial Disclosures), with the first reporting required at the end of the 2026 financial year.

Motivation might be nuanced for fund managers mandated to invest in institutional funds, but it is likely to become more compelling.

Put simply, institutions will have more confidence in allocating funds to managers with the most rigorous and transparent disclosures because otherwise, they risk not only being accused of greenwashing but can cop fines from regulators.

For example, earlier this month, investment giant Mercer was fined AUD11m for greenwashing several of its superannuation funds.

The firm’s apology showed that the greenwashing was not a deliberate policy but rather the result of poor processes and the often opaque nature of unlisted private investments.

Pathzero estimates that private markets comprise around USD13 trillion globally or around 14% of the assets held by institutional asset owners.

Beyond compliance

In over four years, Pathzero has created an emissions data network with over 400 participating fund managers covering more than USD4.5 trillion in assets.

Beyond compliance, the Pathzero model enables a more accurate understanding of risk as companies transition to a low-carbon economy and one where their emissions are likely to have financial consequences.

Using data to create an accurate “greenhouse gas inventory” through an increasingly outsourced supply chain helps quantify risk and can drive change through investment allocations or pivots in business models.

“You’ll be able to price in the externalities more comprehensively when making long-term investment decisions, and the data is the basis for that,” says Prins.

“We have great coverage at the moment, and as we add more asset owners and fund managers around the world, we are confident this will become the most efficient way to get the best quality data.”

Image credit: iStockphoto/Ирина Мещерякова