Why tracking carbon emissions is big business | EP 4

and transparent way? And how will this affect decarbonization efforts? That's where innovative startups like unraveled carbon come into the picture. Their aim is to help businesses track and reduce carbon emissions and they use artificial intelligence to do it. But how does it all work? And can it really be foolproof? What are the deep challenges that come with

tracking emissions and at the heart of it? How does the world benefit to have this conversation with me today are co founders of Unraveled Carbon Race I and Mark Ellen. Grace. Mark, thank you so much for joining us. It's great to see you, Grace, great to hear from you, Mark,

I didn't even know what was the difference between net zero and carbon positive. Yeah, just 18 months ago. So it's for any ordinary person to pick this up. I think my turning point came when I knew my second company was going to be acquired last year and my daughter was just going to turn two years old and when you have a child you start to do things like wills and legacy planning and when I was doing my will there were some assets and properties that were going

to leave her. It suddenly just struck me that that's all well and good. But if I left her properties on the planet that is no longer going to be habitable by the time she grows up. What's the point of it all? And then I spoke to the 20 smartest people I know reconnected back to Silicon Valley and Oxford where I studied. They pointed me to this whole area, very few companies measuring their carbon footprint and even fewer are doing anything about it and we have no time left in trying

to decelerate the impacts of climate change. So I thought using my tech startup and V. C. Venture capital background, can I do something that is product lead scalable, accessible, small and big companies can use to accelerate participation in the solution rather than all of us being like passive bystanders, wow. And one of the smartest people that you reached out to was Mark

could use chemical engineering skills for a positive outcome. And I was like, okay, because in the university were not taught about sustainability, we weren't back then and then did my research into sustainability and decided that of all of the very broad church that is sustainability and sustainable development. Climate change is just one of those really, really big, really tough problems. And

by and large it's an existential problem for everything, right? So, I'm like, well, that seems to be like a really great area for me to devote my time into at the time. I told my wife I'm gonna pivot into climate change and she's like, you know, there's a lot of money and engineering, why would you want to do that? Now? I'm vindicated 15 years later, why emissions management? Because that's

the basis of everything, right? So, knowing your emissions and knowing where your starting point gives you a way to plot a pathway to your endpoint being zero or climate positive or any one of the millions of US waves that float around at the moment. But you need to know where you start to get to where you need to be. And of course the old adage, what gets measured gets managed at the end of the day.

value supply chains as well. We've started serving clients even were just less than a year old and the clients who converted to us the fastest were the ones that have felt the most pain before. So

they have worked with the best consultants. But the approach was still very manual, literally collecting paper, invoice, voices, electricity bills, reading the kilo watts from each one, putting into an excel that Mark has used a million times and that entire process can sometimes take up to nine months in a year just to gather data in a non automated fashion and to get the measurement

out and that just doesn't make sense. Right Then everyone is left with what, 23 months to actually de carbon eyes. That's a good point. And then it's the next financial cycle already. So I think Unravel really wants to take that problem by the horns and reverse the effect impact ratio. So now we are specialized in converting any company's accounting data because that's the richest source of truth. A lot of people spend time preparing their financial data

and we convert that into carbon data in seconds. Wow. So Mark, is it as easy as uploading files on the platform and how accurate is it? And can it really be full

more users come onto the platform as well. So I guess that's one all calm on the surface but going a million miles an hour underneath just to make sure that everything is robust and scientifically useful to provide high quality information that clients can actually make decisions from. So in terms of accuracy, what we're doing is certainly a lot better

than the norm. Right? Because I've been doing these emissions inventories for quite some time and particularly when we start talking about supply chains and indirect emissions, the emissions associated

But the data, the pricing the items, the emission factors differ sector to sector, the first sector that we chose to build for is in food and agree because if you take a step back the five highest emitting industries in the world are of course petrochemical then food and agree built environment, transportation,

logistics and fashion. So we chose food and agree we took four months to build the first engine and it's now done so now we can serve anyone starting from seed propagation, whether it's vertical farms or landfills all the way to final use restaurants, hotels. The second engine that we're 95% done is to serve e commerce platforms. So that's why we're talking to read martin Lozada and we're talking to carousel and grab all these wonderful unicorns. Right? Because the leaders helping these

companies are very progressive. They don't need much convincing to know that this is the right thing to do, although they are not yet asked by any stock exchange or anything to do that. Some are, some of our clients are public listed. I think in terms of traction, I would say that the tech sector is responding a lot faster sometimes within two weeks from the demo they already want to sign up on our platform. For example, salad stop the Mastic

bag Asia's largest salad chain. They're opening the first net zero branch in capital spring on monday as a net zero branch, the first ever Net zero outlet. That's amazing. Yeah. And and revel is the data platform behind and the leaders that said stop Adrian and Catherine. It's in their DNA to do the right thing and they are manifesting that through everything they're building. So that's a great example. We could even see that their highest emitting

ingredient was the feta cheese. They get to innovate. Do they replace the energies did they find from a local supplier? So it gets more fun from a decision making point of view. And Mark and Grace just mentioned the food and a great sector. But you guys are also looking at fashion y fashion, how would it work in that industry?

first level suppliers. So we're hoping that by leveraging technology, we can actually shine some light into those areas and look at some of the true emissions impacts of the fashion industry and then help them dig carbonized, make smarter decisions around their supply chains and see benefits overall.

tech companies as well. Recently. We've been seeing the number of companies with net zero emission targets surging around the world. Are you sensing there's that tectonic shift on the ground as to how companies are viewing their carbon footprint and their desire to reduce them. So we group, our leads were talking to over 100 life leads right now into two buckets. One bucket is they respond because it's regulatory pressure, right? So they're responding because it's compliant to

the second bucket is from voluntary pressure. These companies are responding because they know and believe fundamentally that's the future of business and they know what that's directing to do. I think everyone is on their own journeys. I think as long as you get started, that's good. So we definitely see a lot more happening on the ground. But ASIA in general lacks behind.

Would you agree, Mark, what's your observation? Is there still resistance with companies opting to stick to their old ways and given that the transition towards net zero can be disruptive, sometimes expensive.

we can save you energy and save your money. And then as a byproduct, obviously, emissions reduced because you're reducing your energy consumption. That has changed completely. And in the last 18 months, everyone's talking about emissions and then zero targets and decarbonization. I feel led largely by the finance industry because finance industry has gone, oh, all of our money is tied up in the status quo and that status quo has got to change. So how do we know whether that

money is at risk of long term? Alright, particularly institutional investors investing for like 2030 years a pension fund. So that's caused a huge shift. Now, the steps that we need to take now is moving on from making a commitment to net zero. And I was on a panel recently, which was really enlightening because this guy who was on the panel said, we've set a net zero by 2050 target, but he said, what's important is we've also set an actual emissions reduction target for 2025

and I'll still be working here in 2025. So I've got to deliver that. I don't have to deliver a 2050 target because that's 20 years away. I'm not going to be here. But the important thing is now this road map, how are we actually going to achieve that? One of the points along the way and how do we set those interim targets, which is something now that companies are grappling with countries grappling with 2050 years, 10 prime ministers away, it's, you know, five ceos a lot can change in that time

Mark's team specifically to handhold them and guide them. We have just raised AsIA's probably ASIA's largest seat round ever for climate tech platform. That's part of the mod. We get to get the best talent on board like we have 30 people now. A bulk of them are software engineers, data scientists, data architects ph D s that are reading the most advanced research papers on how to apply machine learning on climate change. We are talking about building the best climate tech platform out of little

Singapore with the best talent possible globally. We're hiring from all around the world. So I think at the end of the day it's our people that will be our greatest defense. But having said that the more they are those that are at least doing it properly with a lot of scientific backing, the better competition or collaborators? We don't really mind. As long as more people are helping tackle this problem against more of

a wider landscape when it comes to carbon emissions. I want to get your thoughts on carbon offset because I'm sure your services give companies the option to offset their emissions. There's been quite a heated debate about whether it really works. Is just a distraction. Does it enable polluters to continue polluting? Where do you stand on this Mark? Does it have a role to play? Do you have any plans to collaborate with? I don't know offset project developers. Maybe your thoughts.

And the reason for that is there's just not enough offsets to go around and there won't be enough offsets to go around and in the future, limited supply, huge demand, the price will go bananas and that's just the market at the moment. So pinning your entire corporate strategy on buying offsets, ad infinitum is not really an amazing strategy going forward because you'll just find yourself exposed to pretty high costs. Now offsets themselves are actually really useful. The thing that we have to

just keep considering is are they high quality offsets? Are they real emissions reductions? Are they permanent reduction in emissions reductions? Are they timely. So you're not buying offsets from some refrigerant destruction project in 2007 they've got the right vintage and of course there are additional so it, emissions reductions that wouldn't otherwise have happened without the offset.

So with the right governance processes, offsets are really, really useful. Now, one of the issues has been sort of a tendency to be a bit like the Wild West in some ways and some crazy projects in some less than reputable registries turning up, but that will get filtered out as users of offsets become more aware Now, the one interesting thing that's happening at the moment is now this Divergence between avoidance and removal offsets, offsets generated for emissions

that were reduced against some baseline or those that actually removed to go two from the atmosphere and you see someone like stripe recently spending $600 a ton, which is right at the top end of what one would pay for direct air capture to try and promote that industry and scale that up

want any sloppy pathways because that's slippery. We want proper reduction. Right, part of the second engine we haven't talked about is a solutions recommendation engine that's also maybe one of the first in the world that exists where we automatically recommend decarbonization pathway for our clients based on their data and because we have done a lot of user discovery, we have pre packaged these pathways into lowest cost, lowest effort, most urgent, highest R. O I and try to bring

in that consumer flavor into an otherwise very deeply scientific enterprise platform. So hopefully our clients are going to implement what we recommend both for The engine and our sustainability consultants and really only use offsets as the final move for unavoidable emissions, not for emissions that they can avoid by reducing point taken and grace, you know, looking ahead now you've set some ambitious goals removing one gigatons of carbon emissions or 5% of the

global target by 2030. Wow, that's ambitious. How are you planning to successfully scale up your operations to achieve this? Well, we want to be the default decarbonization platform for any companies in asIA to use. That's why we are measuring our own success with our client success in removing emissions. So the one giga is through the work, the reduction work of our clients and their supply chains. We just

want to own Asia as a geographic market. But the way to scale is that we want to get deeper and deeper into the supply chains of our clients. So our client has the best incentive to want to get the original carbon data from their suppliers. And these suppliers are also incentivize to remain a vendor or supply to our customer and therefore have to respond to this request. There's no point us or even anyone else asking suppliers to disclose these things because it's

not something that they think about. But when the pressure is applied by the grabs the salad stops of the world, then the vendors will respond. So that's our plan to scale. We go deep. But having said that we have opened our new Zealand as a second market and Mark and I will be in Sydney in the next two weeks to also explore the Australian market exciting times. So before we let you two go, perhaps a final word on how tech can help with climate change and where do you see it headed? Mark?

can only deliver the certain amount of work at one time. So, leveraging tech technology to do all of this grunt work and then leaving people with more time to do the fun strategy and the decarbonization implementations, that's really where I see it going and why technology is really important.

technology enabled, all of that. We would not have otherwise thought we could get all those things. So the same with this, climate change is a long old stubborn problem. It's time that speed and skill are introduced into it, but also to make it sexy to make it fun to make it painless. That's the only way that the human behavior will want to do something. They wouldn't do it if it's difficult and laborious and expensive. So hopefully

we're onto something here. Hopefully, thank you so much Grace, thank you very much, Mark, thank you both for joining in best of luck in your efforts and hopefully we'll see you general progress in the fight against climate change. Thanks to my guests, Mark Allen and Grace sigh and thanks to all of you for tuning in. We hope you enjoyed this episode and do remember to subscribe and

like this podcast. So you know when a new episode drops, you can find Ciena's climate and sustainability coverage online at sienna dot asia. The team behind this podcast is Jacqueline chan, Audrey, juan daniel lee and Christina robert and I'm julie, you signing off