Watershed's Emissions Reduction Platform - A Chat With Taylor Francis

emissions. In this climate 21 podcast, I will showcase best practices and thought leadership by SAP, by our customers, by our partners and by our competitors if their game in climate emissions reductions. Don't forget to subscribe to this podcast in your podcast app of choice to be sure you don't miss any episodes. Hi, everyone. Welcome to the climate 21 podcast. My name is Tom Raftery with SAP and with me on the show today I have my special guest,

Taylor. Taylor, welcome to the show, would you like to introduce yourself?

in half by 2030. And our view is that the core moment where that carbon graph bends is where companies make decisions, they make decisions about how to keep their buildings, how to move goods, how their employees will get to work, what suppliers to use, they make decisions about where to source agricultural products. And so our mission is to give companies the tools that they need to make different decisions so that that carbon

graph bends. And, you know, I think it's just essential if we're actually going to get to zero if we're gonna fight this crisis, that there be better tools at the moment where the decisions that matter get made.

was 13. And walking out of the movie theater, you know, reflecting on Al Gore's slideshow about this climate emergency, just feeling riled up, that this was going to be a problem that was going to really affect my future as a kid. And I went home that day and tried to guess Al Gore's email address, and wrote a note saying, Hey, I'm a 13 year old, I want to

help. And someone wrote back from info at Al Gore calm and said, we're actually training volunteers to give their own version of the slideshow in their local communities. And so I spent High School going around talking at schools and libraries and community centers. So I've been really passionate about this since I was 13 years old, at the end of that, and you Gary, and I did get to meet aguar with the training was in Nashville, Tennessee, and I got

to meet him. He's, I mean, I think all of us in this climate movement owe him a major debt of gratitude for putting this on the headlines 15 years ago, phenomenal. And so, at the end of that experience, you know, I felt a lot of passion about solving this problem. But I was also a little bit disappointed, anxious, that for all the time I spent talking about climate, I don't think I did anything to actually bend the carbon graph. I don't think there was any tons of co2 that didn't end up in the

atmosphere as a result. To those PowerPoint presentations, and so, kind of I've always been searching for, what is the thing that I could work on, that actually moves the math, the unforgiving math of 50 billion tons of co2 belts into the atmosphere every year, kind of went to college went to work at stripe. And it was in 2019, that Abby Christian, and I kind of came back to that question, what is the thing we could do in this decisive decade on the climate fight that actually been the

carbon graph. And Christian had helped start stripes climate program, which began as kind of a traditional carbon neutral, measure your missions, get a PDF from a consultant by some cheap carbon offsets plan, and emerged or transformed into this really transformative carbon removal commitment where stripe is kickstarting the carbon removal market by committing to spend millions of dollars every year on permanent carbon removal. And through that experience, he saw that companies can have big

impact. The tools that exist today are woefully inadequate for the net zero future we're trying to build. And there was an opportunity for for watershed to basically build the tools companies need to do climate, the impactful way, and the way that actually bends the carbon graph. And so that's that's kind of the genesis of how we started working on this. Okay, so

effective. And as part of that, we've built a few pillars of the product, the first step is fast, accurate, actionable measurement of your carbon footprint, upload a bunch of raw data about your business, it can be as messy of format as possible. In fact, the Messier the better. watershed gives you an X ray view of the carbon of your entire supply chain. So that's the first piece kind of know where you are

today. The second piece is a set of recommendations tailored to your business about how you can actually cut carbon, get rid of natural gas, and this one office switch suppliers for this one, carbon intensive PC or supply chain shift from air to ocean on how you're moving goods across the ocean. And so that's this kind of carbon reduction recommendations engine on helping companies decarbonize.

The third piece is a marketplace, where companies can use watershed to buy clean power, fun carbon removal, find low carbon suppliers, in a way that actually is impactful. And then the fourth piece is we help companies report on this as as your audience will know, well, there's a whole new alphabet soup of tcfd and CDP and SAS B and sccr. And we help companies kind of with a few clicks, do investor grade reporting on

their climate program. And so all of this is geared towards, you know, if there was an old world of sustainability that was measure your footprint, sorta once a year publish a PDF. By some offsets, watershed is the set of power tools that companies actually need for very different objective, which is get to true netzero. Fast.

carbon. But at the end of the day, you know, every company's carbon footprint reduces to those four or five big categories around energy transportation, heavy manufacturing, agriculture, and so, you know, watersheds job is to kind of boil down everything that like boil down is maybe not the best metaphor, but it's to distill everything that scientists and policymakers and innovators know about how to decarbonize those sectors into the decisions that these

companies make every day. Okay, superb, can

affordable for customers. And so watershed and climate fit into that mission really naturally, sweet green has set a goal of getting to kind of true carbon neutral by 2027 20 years after they founded the company, the way they're doing that is by cutting emissions intensity from an already very low base, because they're a plant forward, you know, no beef on the menu restaurant in half over the next

seven years. And then funding high impact carbon reductions for whatever emissions remain sweet greens, really designing carbon into every piece of their business. And so they are designing new menu items. Looking at the carbon footprint of the menu item at the same time, they look at costs and

calories. They are sourcing suppliers and making procurement decisions about where to source different ingredients based on the agricultural practices and the sustainability and carbon practices of their suppliers. And it all kind of ladders up to this low carbon, or this this vision of a low carbon food system. And they're a good example of looking at climate as something to embed really deeply in every single part of the

business. And what's true for them on goat cheese is true for square on low carbon hardware, and trying to find ways to decarbonize the blockchain of their Bitcoin business. It's true for Shopify, on how to ship

goods to customers. And so I think it's a good example of what you see across all of these different sectors, which is the new mode of a climate program, you know, not just this bolt on thing at the end of the year, where we published a sustainability report, but built into the decisions about how to make the product, how to bring it to consumers and how to run the business. Okay, super.

by the way. And for the companies that want to do that, we try to find the not necessarily sexy, but actually prevents carbon from being emitted. Avoid admissions projects. But the real imperative is that we got to invent a way to take Giga tons of carbon out of the atmosphere every year by the middle of the century. And if you talk to folks in the space, there's a lot of good ideas, but we are so far from the scale, it's necessary and price it and from the scale and price. Absolutely.

And you know, Shopify, stripe, Microsoft, a couple other companies had this notion that in the same way, you had Michael trel on the podcast in the same way that Google and Facebook and Apple have brought clean power down the cost curve by buying solar and wind before was affordable. We need companies to bring next generation carbon removal down the cost curve,

too. And so, you know, we are really proud to be partners with stripe and Shopify, we are admirers of the work that they've done to basically take this carbon removal for Corporation space from zero and put it on the map. And we're excited to be helping watershed customers who may not have the resources or the scale, also direct their carbon budgets towards permanent high potential carbon removal technologies that need early adopters today, if they're going to get to scale

and $50 a tonne by 2050. Sweet,

climate problem. But there are a few sectors that are pretty stubborn to decarbonize. And so the notion behind the net and net zero is that for those sectors that are stubborn to decarbonize, we're gonna need at scale, permanent, durable carbon removal on a scale of five to 10 Giga tons per year by the middle of the century. So that's the policy and science idea behind that zero. And I think that's

pretty clear. In the last couple years, it is kind of made the jump from the land of science and policy to the land of corporate commitments. And that's where it gets pretty murky. Our view? Well, and I think just to state the obvious, there's a lot of companies out there that are claiming net zero, and it's kind of a new coat of paint on old, not terribly effective carbon

neutrality commitments. Our view is that if a company wants to truly get to net zero, that is, what they're signing up for, is an imperative to accomplish in their own sphere of influence, what the entire world must accomplish to be climate change. And that's kind of the litmus test at the entire planet did what your company is doing? Would we have stabilized the

climate or not? And I think that litmus test kind of answers a lot of questions and argue that the kind of pillars of a true net zero commitment for a company are number one, you are considering your entire footprint, you are looking at the carbon that comes from your own buildings and your own facilities and your own vehicles. But you're also looking at the carbon that comes

from your suppliers. It's part of why I'm excited to be on the podcast with you is, you know, the the deep commitment around supply chains, that's huge to net zero. And you're also looking at the carbon of your customers. So that's I think step one is like any net zero commitment needs to encompass every tonne of carbon connected to a company both up and down the value chain. Step two is that companies need to first deeply decarbonize that entire

sphere of influence. And that means that they are going to cut emissions, wherever emissions can be cut. We think the science based targets initiative does a really good job of setting some rules, guidelines, standards sector by sector for what emissions reductions are enough. But again, if you come back to the litmus test, it's basically if the whole planet cuts emissions, this much will we be

in good shape or not. And I think the third pillar of net zero is permanent carbon removal for whatever emissions remained by your target year, and ideally, kind of funding technologies in a way that bring those technologies down the cost curve for everybody. So if every company that kind of is claiming that zero, we're following those three steps, look at the whole picture, deep decarbonisation true removal for whatever remains, it would put us well on the pathway to getting to net

zero for the entire planet. But we got to dig like that, that really is the minimum bar. And we got to be careful about companies that are recycling old, cheap offset pledges into kind of the new marketing term to Sure.

carbon lives. But you know, this stuff is only going to matter if companies change, where they are pointing their dollars and point their dollars towards low carbon solutions. And a big piece of that is connecting companies with low carbon innovators who need customers. So I'll give you a couple examples. And so the watershed marketplace is an attempt to do that we help companies buy the stuff that is actually going to decarbonize their own footprint, and decarbonize the broader world.

I'll give you a couple examples. Right. Clean Power. This is the Original success story of companies acting on climate. The kind of recent podcast with Michael trail at Google invented this. Google has a massive team of clean power experts who are experts in local regulations and partnering with developers and getting regulated themselves and power markets all over the world. There's lots of companies that want to buy clean power in an effective way, but can't do

it with Google's might. And so, you know, watershed is democratizing, kind of high impact high additionality, clean power projects for companies.

That's one example of where we think we can bring a lot of trust verification, efficiency to decarbonisation purchases, other great examples, carbon removal, you know, again, it's Shopify stripe, Microsoft, who have kind of pioneered this view of, hey, let's let's buy expensive next generation carbon removal technologies that, by the way, aren't certified by offset registries, because they kind of don't play by the old

offset rules. And that's critical work, it's not something that a company can do on their own. And so we've been really excited to help a lot of our customers kind of with a click of a button in the dashboard, by next generation cutting edge, you know, fresh off fresh out of the lab, carbon removal purchases from companies like charm and others, that that's, you know, really accelerating the whole carbon removal space. And I'll say that's just kind of that

beginning. You know, so much of decarbonisation is about changing purchases for businesses. Yeah. And so, you know, sweet green, it's all about goat cheese, and chicken and kale, for square and other electronics supply manufacturers. It's about semiconductors and aluminum and

plastic. And so, yeah, part of the watershed mission is to kind of level the playing field, create this layer of trust and verification, so that companies can point their dollars towards the low carbon solutions that need them.

information. As you look down your supply chain, you need to be able to make decisions based not just on the financial implications of what it is you're purchasing, but also on the climate implications. And today, that's almost impossible

for most people. It's almost impossible.

and imperfect produce. And there's a lot of great research that shows two or 3x variation in the carbon footprint of the

exact same food product, where you know, someone on the other end, doing a taste test is not going to notice the difference. But depending on what's done on the field, depending on you know, the source of feed or the approach to fertilizer, or, you know, on cheese that turns a lot on, what do you do with the manure? Is manure being fed

through a methane digester? Or is it out in an open pit just belching methane for a whole year, these decisions way upstream, that oftentimes don't cost extra can have two or 3x carbon differentials in a way where the consumer is not gonna even notice the difference. And if they are, maybe it's a positive difference, like that is this incredible secret of decarbonisation? This is not something where we are going to need to force widescale austerity on the planet in order

to get to zero. It's actually just about policymakers, suppliers, companies making different decisions with technology technologies that oftentimes already exist, that have cascading decarbonization impact down the supply chain.

world. And we are not constrained by people's kind of traditional perspectives of what is and is not a software company. So yeah, there may indeed be some some goat farm visits and watersheds future more seriously. I think, you know, this is part of what is powerful about doing this as a platform, any individual company, it's just not reasonable for them to contact on their own 1000 plus suppliers, and collect PDFs and spreadsheets on 1000 plus

suppliers. That's the way they are innovators in the space have done it. You know, apple, and Google and Facebook have been trading spreadsheets across the Pacific Ocean with their suppliers for years. And it's awesome, they've done it, but

not every company can. And so I think this is part of the power of taking a kind of stripe style software based platform approach where we can act on behalf on behalf of all of our customers, and build this carbon data graph all across different supply chains that then, you know, lots of new companies can can benefit from and lower the friction of getting that kind of verified trusted carbon data to the decision makers.

Northwest. heat waves are coming back to the west coast this coming week, like this is the new normal people are shocked by the wildfires and the heat waves, you know, newsflash, this is going to be 2021 is probably the year with the least climate disasters of the rest of our lifetimes. And 2022 will be the year with the least climate disasters, the rest of our lifetimes like there is some planetary scale impact that is just something we're going to

live with. So I think it's important to be sober about that fact. On the flip side, you know, people talk about the feedback loops of the climate system. And those feedback loops are the ones that are accelerating the impact of warming in such a devastating way. But one thing we've got going for us is that there's feedback loops on the other side, too. There is a policy innovation feedback loop that I think can accelerate decarbonisation faster than

anyone thinks is possible. There was an amazing article in The Atlantic a few weeks ago about the green vortex I really recommend folks read it was by Robinson Meyer. And he really breaks apart the different components of this kind of policy, innovation feedback loop, where more money towards low carbon solutions lowers the price increases the scale means there's more money towards low carbon solutions. That source of demand and supply can come both from policymakers and from

companies. It's already played out on clean power. It's in the midst of playing out on some of these other sectors as well. And the green vortex can accelerate faster than naysayers might expect. So you asked if I'm optimistic I am I believe in the power of the kind of feedback loops that can save us. But I'll tell you, I don't think people realize just how urgent The situation is. You know, everyone talks about 2030 as this big landmark and it is and a decade can seem like a long time, but

it is not. You know between January 1 2021 And today, we are now more than 7% of the way through the decade we had on January 1 to cut carbon emissions in half every month is one percent of our remaining time every day is almost three basis points of our remaining

time. And so, I mean, if you let that sink in that insane urgency of this crisis, it's kind of impossible to think about anything differently when I went, you know, when people email me and say, I can't meet for a month, and my mind that I can't meet for 1% of the remaining time, we have to solve climate change. So anyone working in a space should think about the fact that every month is a percentage point every day is three basis points. And the only way you can be optimistic

is if you act like that. Yeah.

from renewables by 2030. So those three large economic bloc's have set hugely, hugely ambitious goals, which will be really hard to beat. But, you know, and that's why they call the 2020s, the decade of action. But that 55%, which in the EU, we will have to meet, because it's legally binding will be the low hanging fruit. Which means the 2030s, if the 2020s were the decade of action, the 2030s are going to be the decade of a whole lot more action. And the 2040s are going to be the decade

of Holy crap. That's a lot of actually. So this is not going away anytime soon. This is getting more and more urgent with every to your point day and a month goes by it's such a good point.

business as usual. emissions with committed policies and missions with committed pledges and the emissions, the scientists tell us we need to and you know, thankfully, with the Biden ministration, the committed policies line has been coming down a bit, but it's still not where it needs to be. I mean, we were so inspired by this visual that it's actually the homepage of the watershed website. But yeah, you're totally right. It's easy to get caught up in the enthusiasm

about new commitments. And there's something every day that's happening. And I think that is the beginning of the green vortex is the beginning of the feedback loop that will save us. But man, you got to keep in mind how much every day matters. And you got to keep in mind that climate action tracker graph, and the fact that even achieving the goals we've already set is woefully inadequate for the future we need. And we've got,

buying cheap offsets. It's an really rethinking, redesigning their businesses rethinking redesigning their supply chains. And I think there's going to be a new role at companies of climate lead, climate change agent, climate designer. That is one of the most impactful roles of the next decade. careers are going to be minted out of it. And by The effectiveness of that function is going to have a big impact on the effectiveness of us spending the global carbon

graph. And so, yeah, you know, I think there's just a lot of power for the people who know how their businesses work, and want to help their companies re engineer, every piece of their operations. We work for those companies every day, it's, and with those people every day, it's a total privilege, and a joy. And anyway, I hope some of your listeners think about maybe raising their hands to be that person at their company. Because there's a lot of potential

impact. And it's, it's, it's going to be good for those companies as well.

published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.