התמלול המלא של Why tracking carbon emissions is big business | EP 4

00:05:53 Speaker 1: 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 00:06:09 Speaker 1: 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. 00:06:39 Speaker 1: 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 00:06:53 Speaker 2: proof from a user point of view? Yes, it's absolutely as easy as uploading a file to the platform behind the scenes. Obviously 00:07:01 Speaker 2: there's a lot of work that goes on to get to this point. So a lot of very rigorous data science, a lot of collecting high quality data, machine learning and then improving our data sets over time as more and 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 00:07:23 Speaker 2: 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 00:07:45 Speaker 2: indirect emissions, the emissions associated 00:07:48 Speaker 1: with special license. So 00:07:50 Speaker 2: the emissions associated with the things you buy or the things you do your products do downstream, they've typically been very inaccurate using really high level factors that say when you spend a dollar on food that's equal to x number of kilos and all food is pumped into the same bucket, whether it 00:08:09 Speaker 1: makes sense, right, 00:08:11 Speaker 2: Whether it's a dollar for a dollar on kale, same outcome and it doesn't make sense from a decision making point of view because the only way to reduce your emissions is to spend fewer dollars that should be actually actionable insights where we can go on an item based and saying, well actually if you bought this thing from this other person or if you replace this item with something else that's similar, then there's a way for you to reduce your impact. 00:08:36 Speaker 1: Interesting Sir, 00:08:37 Speaker 1: I wonder how many companies are you currently working with? Who's your target clientele and sort of which sectors are you seeing

most traction and demand, wow great questions. There are 12 major sectors globally and we are building engine by engine so we have 12 engines to build but the algorithm is actually the same at the core of it. But the data, the pricing the items, the emission factors differ sector to sector, 00:09:03 Speaker 1: 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 00:09:26 Speaker 1: 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 00:09:44 Speaker 1: 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. 00:10:01 Speaker 1: 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 00:10:31 Speaker 1: 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, 00:11:01 Speaker 1: how would it work in that industry? 00:11:03 Speaker 2: Yeah, fashion is a big impact industry. So as great point on balance when we add up all of the indirect emissions and the direct emissions from the industry, it is a larger, better and of course fashion itself is this sort of high volume product for better off the west. That is just the society that we're in at the moment. And on top of that 00:11:29 Speaker 2: fashion supply chains have typically been very, very opaque, So really hard to get any decent information anything past the 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. 00:12:05 Speaker 1: Hi, I'm Adrian Tan and I'm Christina robert. We are the host of a new podcast called working. We're here to get into the essential things that no one tells you about working and company culture from office politics to dealing with burnout. If you've ever wanted to eavesdrop on an interesting conversation by the water cooler. This podcast is for you look out for our episodes wherever you get your podcast. 00:12:35 Speaker 1: So it's not just salad stop. You mentioned a few 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 00:12:53 Speaker 1: 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 00:13:10 Speaker 1: 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. 00:13:36 Speaker 1: 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. 00:13:49 Speaker 2: There's a little bit of that going on. There's certainly a little bit of trying to maintain the status quo and that's natural change resistance of any organization and I've been doing this for 20 years, why would I need to change? Why do I need to do things differently? 00:14:03 Speaker 2: Experience when I started in climate change in 2007, you really couldn't talk about climate change to people. And in fact, all of the conversations I would have framed around so 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. 00:14:29 Speaker 2: 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, 00:14:54 Speaker 2: 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 00:15:16 Speaker 2: 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 00:15:43 Speaker 1: And 90% of global GDP economies of global GDP have pledged but we have to already move away from promises and pledges to the other P which is the actual pathway the plan, all these pledges are there, but they are looking for solutions like ours and others to create the other piece. 00:16:05 Speaker 2: The 00:16:05 Speaker 1: Carbon ization movement as so to speak, has led to many other startups that promised to help companies track, reduce and offset their emissions as well. A real booming market out there, which means some tough competition for you guys there are those who are even offering the service for free, how is unraveled carbon, trying to stay ahead of the game. 00:16:26 Speaker 1: We are a sous plus service model. So our clients don't just get thrown with a platform, they still get 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 00:16:54 Speaker 1: 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 00:17:24 Speaker 1: 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 00:17:48 Speaker 1: 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. 00:18:00 Speaker 2: Yeah, I have many thoughts but as a principle within unravel we are always reduced first. 00:18:10 Speaker 2: This is a good general principle for use of offsets. Right? So it should be, you need to do as much as you can with the sort of funds and resources you have available to reduce your own emissions, both yourself and within your supply chain before you then use offsets for residual unavoidable emissions sometimes termed. 00:18:31 Speaker 2: 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 00:18:55 Speaker 2: 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, 00:19:16 Speaker 2: 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 00:19:44 Speaker 2: 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 00:20:06 Speaker 1: and grace Well, I just have one line to add to Mark's very detailed analysis which is unravel is an offset last platform, not an offset first platform that many other platforms 00:20:18 Speaker 2: are 00:20:19 Speaker 2: fantastic. 00:20:20 Speaker 1: Wouldn't have any impact on brainwashing. How seriously are you looking at that challenge? But that's the thing, we don't 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 00:20:47 Speaker 1: 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 00:21:12 Speaker 1: 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? 00:21:41 Speaker 1: 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 00:22:04 Speaker 1: 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 00:22:27 Speaker 1: 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 00:22:44 Speaker 1: 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? 00:22:59 Speaker 2: Oh gosh, tech is for me this way to achieve that scale. One of the things that I really love about carbon is the fact that 00:23:13 Speaker 2: it can take what I was doing as a consultant and just do more of it quicker because consulting is a little bit unsalable. There's only a finite number of hours in the day. Currently one day will be able to solve that too maybe. But you can only work with a certain number of clients at one time, you can only deliver the certain amount of work at one time. So, leveraging tech 00:23:34 Speaker 2: 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. 00:23:48 Speaker 1: Thank you and grace your outlook of climate landscape for me. Technology enables us to think the unthinkable 00:23:55 Speaker 1: and to hope the otherwise impossible many years back, we would not think that we are streaming music from anywhere or playing multiplayer games with people around the world or watching people play games through Youtube, right? Or having a global e commerce economy or having a social network that transcends geographies and borders 00:24:17 Speaker 1: 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 00:24:45 Speaker 1: 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. 00:25:00 Speaker 1: 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