TRANSKRIP 🔗
WEBVTT
00:08.216 --> 00:11.795
Hi and welcome once again to the Renewable Roundup podcast from
00:11.891 --> 00:15.614
Schneider Electric. I'm Russell Redding, Head of Energy Markets at ZYGO.
00:16.080 --> 00:19.017
Every week I aim to bring you a podcast with some top stories,
00:19.514 --> 00:22.708
critical sustainability topics, insights, and expert voices.
00:22.820 --> 00:26.158
So please, please hit subscribe button and don't miss
00:26.254 --> 00:29.564
a thing. I've been thinking about attribute certificates and
00:30.064 --> 00:33.790
what they really mean, so I was really pleased that Xander Dale, one of Schneider
00:33.822 --> 00:37.695
Electric's managing consultants, agreed to join me and share his
00:37.743 --> 00:41.198
extensive knowledge in the area. Those of you who
00:41.698 --> 00:45.247
listened to it will remember that part 1, we looked at what an EAC
00:45.376 --> 00:49.232
is, how the E is changing, and what
00:49.732 --> 00:52.205
was going on in SBTI version 2.0.
00:53.096 --> 00:56.908
This week in part 2, we're going to discuss why it's a hot topic
00:57.376 --> 01:01.075
and what the differences are between certificates and carbon credits, and we're going to
01:01.575 --> 01:05.586
finish up with some practical examples and some steps. If you're
01:06.086 --> 01:09.546
interested to learn more about EACs, this is the podcast for you.
01:09.787 --> 01:10.383
I hope you enjoy.
01:16.630 --> 01:20.105
Hi Xander, how are you today? Hello Russell, I'm very good,
01:20.153 --> 01:23.907
I'm very good, thank you. Super, thanks for joining me again for part 2.
01:23.987 --> 01:27.597
We're talking about, um, EACs. I was
01:27.661 --> 01:31.383
really interested last week that we talked all about,
01:31.912 --> 01:34.912
um, you know, what the E is. It's expanding,
01:34.976 --> 01:38.490
it's not just energy. We talked about what an environmental attribute certificate
01:38.990 --> 01:42.677
was, and obviously we then got into some exciting news and some exciting stuff
01:43.177 --> 01:47.936
around SBTi and what's that Um, so before we jump in to
01:48.192 --> 01:51.415
kind of part 2, which as I sort of kind of hinted
01:51.915 --> 01:54.669
on the last one, we'll talk about why the market's moving, some sector examples,
01:55.246 --> 01:59.013
um, commodity versus carbon integrity, some, you know, what it
01:59.513 --> 02:03.213
looks like and some practical next steps. Would you like
02:03.713 --> 02:06.852
to just introduce yourself once again for anybody who may
02:06.868 --> 02:10.458
have somewhat foolishly missed, uh, your insetting
02:10.490 --> 02:13.616
podcast, your last EAC podcast, or to be
02:14.116 --> 02:17.448
a bit like me who's just slept and can't remember who you are? It's a
02:17.464 --> 02:21.119
bold move to start with a part 2, isn't it? But hello everyone,
02:21.471 --> 02:24.629
my name is Xander Dale. I am a managing consultant here at
02:25.129 --> 02:28.573
SE Advisory Services, part of Schneider Electric. I am the offsetting
02:28.829 --> 02:33.238
and insetting service line lead, so I look after all of our
02:33.254 --> 02:37.614
offsetting strategy work, project development, and value chain intervention aspects
02:37.726 --> 02:41.237
as well. Fabulous, thank you very much indeed.
02:42.809 --> 02:46.726
So, Xander, we were talking about environmental attribute
02:47.369 --> 02:50.740
certificates. I'd be interested to know,
02:51.447 --> 02:54.498
you know, why it's moving up the agenda at the moment.
02:55.863 --> 02:59.347
You know, why is the, the conversation on EACs
02:59.893 --> 03:03.682
accelerating? I mean, I, I'm guessing it's because there's change
03:04.182 --> 03:06.909
and, you know, certain things are accelerating and changing, but,
03:07.439 --> 03:11.011
you know, What's going on right now? No,
03:11.108 --> 03:14.676
I think it's a key question and it's why I came banging on the podcast
03:15.176 --> 03:18.519
door saying we need to talk about this. But there's kind of
03:18.551 --> 03:22.263
3 connected reasons. I'd say that there's a big,
03:22.409 --> 03:26.865
big focus on Scope 3 and it needs practical delivery mechanisms.
03:27.290 --> 03:31.259
We've seen that within the SBTi Net Zero 2.0. We're seeing that across
03:31.759 --> 03:35.020
everyone's Scope 3s being large and we need
03:35.520 --> 03:40.853
to join up that thinking. There's a big push on energy intensive
03:41.192 --> 03:44.065
aspects of value chains as well.
03:44.582 --> 03:48.133
And companies need a focus
03:48.633 --> 03:52.970
and need ways of mitigating these large emitting
03:53.230 --> 03:55.978
areas that usually sit within their purchase materials,
03:56.570 --> 04:00.185
agriculture, logistics, fuels, or product use. And I think we
04:00.685 --> 04:03.200
see that defined within the SBTi Net Zero 2.0 as well.
04:04.670 --> 04:08.525
Second, I think we're seeing producers who are trying to scale
04:08.654 --> 04:12.040
these low carbon commodities. We know that
04:12.540 --> 04:16.480
they are needed. But at the same time, it's very tricky to
04:16.528 --> 04:19.045
kind of scale it to get it into the right hands of those who need
04:19.545 --> 04:23.534
it. And I think a recurring point during London Climate Action Week in
04:23.598 --> 04:27.285
2026 was that the technology may exist, but the
04:27.785 --> 04:32.382
projects are still struggling to secure that investment when kind of green premiums
04:32.639 --> 04:36.165
are kind of more uncertain. And that demand from the
04:36.246 --> 04:39.452
buyers is kind of fragmented. You know, some people are doing it to report
04:39.952 --> 04:42.917
to specific tenders, others doing it because it's the right thing, others because it's for
04:43.417 --> 04:47.110
targets. So, you know, that having been brought up with the SBTi Net
04:47.610 --> 04:51.174
Zero 2.0 and all the others, then that's the exciting part
04:51.674 --> 04:55.190
that there is going to be that push, but
Load full transcript
the producers need that
04:55.690 --> 04:59.528
funding. So they need that, that signal. And I think
04:59.705 --> 05:03.592
the third one, the market is developing faster than its infrastructure.
05:03.640 --> 05:07.303
And I've seen this firsthand where, you know, we're looking
05:07.319 --> 05:10.753
at different commodities,
05:11.186 --> 05:14.921
and a lot of them are just being calculated. That pool is being calculated on
05:14.953 --> 05:18.800
an Excel spreadsheet, which is obviously where most things start, but the
05:19.300 --> 05:22.856
demand has kind of kicked up. And so there aren't those kind of joint registries.
05:23.609 --> 05:26.847
I think looking at Silvera's survey
05:27.200 --> 05:31.240
on EACs, they stated that there were kind of 75%
05:31.740 --> 05:35.423
of producer respondents to their survey expected to begin issuing
05:36.289 --> 05:40.345
EACs within 3 years. And buyers indicated significant
05:40.845 --> 05:43.984
appetite through 2030. But the pricing benchmarks,
05:44.000 --> 05:47.969
registration, and some verification capacity is still a lot lower.
05:48.490 --> 05:51.760
And so that combination of demand and immature infrastructure
05:52.260 --> 05:55.014
creates opportunity, but also a lot of risk.
05:55.807 --> 05:58.561
And so, you know, that if there is a big push, that we need to
05:59.061 --> 06:02.368
start acting now. Okay, that, that makes sense.
06:02.646 --> 06:05.765
So what should listeners take from the market signals, would you say?
06:07.798 --> 06:10.604
Optimism, but caution, I would say.
06:11.341 --> 06:15.188
But, you know, not that scale is guaranteed. It's not. There are a lot
06:15.688 --> 06:19.116
of people talking about it. But, you know, it doesn't mean that it's— you're
06:19.616 --> 06:22.931
going to be able to go source low-carbon cement like that tomorrow.
06:23.347 --> 06:27.339
I'd say the kind of more useful conclusion is that supply ambition is
06:27.371 --> 06:31.459
definitely running ahead of the systems that it needs to make issuance
06:31.959 --> 06:35.066
and claims credible. So if you are kind of buying certificates, just be
06:35.566 --> 06:39.540
careful, make sure you're reporting and claiming in line with what is possible according
06:40.040 --> 06:43.939
to your targets and the other frameworks you report against.
06:44.533 --> 06:47.744
I think producers don't always have visibility
06:48.244 --> 06:51.726
of the demand. And so that's a lot of the work the SE Advisory Services
06:51.823 --> 06:54.889
does. We connect those who are looking to buy with those who are looking to
06:55.389 --> 06:58.711
sell. So that's a really kind of fun part of the role as
06:58.887 --> 07:02.596
well. But those who are selling, they need verified carbon
07:03.096 --> 07:06.192
intensity and not just some random label. It needs to be legit.
07:06.369 --> 07:09.580
It needs to be backed up. Is that EPDs? Is that LCAs?
07:11.054 --> 07:14.523
Base it on a clear methodology. And,
07:14.603 --> 07:18.612
you know, the final point there is probably that the SBTi is a major
07:18.822 --> 07:23.039
demand signal, but it's only just come out. And that doesn't—
07:23.120 --> 07:26.694
and that always is a push to scale something. We need to learn from the
07:27.194 --> 07:30.332
voluntary carbon market over the last 10 years. And, you know,
07:30.429 --> 07:33.883
make sure that the market integrity is created alongside
07:33.916 --> 07:37.060
that demand. Okay,
07:37.560 --> 07:41.040
that's, that's, that's fabulous. Um, I like optimism, even if it's
07:41.540 --> 07:45.560
cautious optimism. I think that's really good. Um, for me,
07:46.060 --> 07:48.270
I don't know if you've got any kind of examples,
07:48.840 --> 07:52.280
um, but I think if you had something where you could kind
07:52.780 --> 07:56.160
of maybe bring it to life for a few sectors, it'd be really interesting.
07:56.260 --> 07:59.260
I think sometimes those practical examples, um, for me,
08:00.330 --> 08:03.440
without— sometimes things seem a bit abstract, and I think when you actually talk about
08:03.940 --> 08:07.708
real things, it's helpful. So where, where do you think certificates might
08:07.724 --> 08:11.250
genuinely add values under? Uh,
08:11.571 --> 08:14.841
I think that there is, uh, there's a lot
08:15.341 --> 08:18.737
of different sectors that we're kind of covering, um, but I'll lean on steel
08:18.785 --> 08:21.911
and cement as I was talking to a steel and cement, uh, producer the other
08:21.991 --> 08:26.191
day. Um, so steel, um, low-carbon steel
08:26.239 --> 08:29.686
projects often need that long-term demand to finance
08:30.186 --> 08:34.272
the production. Um, you know, it is a large project to create
08:34.772 --> 08:37.031
steel. It takes a lot of money, a lot of energy.
08:37.801 --> 08:40.545
So it needs to know that they are going to be able to sell that
08:40.593 --> 08:43.770
steel at the end. So there's the physical kind of
08:43.866 --> 08:46.337
offtake from direct buyers, which is important.
08:47.572 --> 08:51.070
But then you need those certificate agreements to kind of bring in
08:51.118 --> 08:54.744
additional buyers that can't directly buy the steel.
08:55.257 --> 08:57.953
So they want people to buy the steel, have the steel, use the steel.
08:58.482 --> 09:02.461
But if they can't kind of do that, and those people might not want
09:02.961 --> 09:05.699
to do the claims, they can get that additional funding and kind of book that
09:05.763 --> 09:08.985
in for longer using that environmental
09:09.485 --> 09:13.297
attribute certificate process. If we look at cement,
09:13.313 --> 09:17.449
cement is a very local commodity. It's produced locally
09:17.625 --> 09:21.537
and needs to be used locally. You can't be shipping it around the world.
09:21.889 --> 09:24.823
You know, it is very heavy, it's very cost sensitive.
09:26.217 --> 09:30.726
I think the book and claim model we've
09:31.226 --> 09:35.289
seen can
kind of help aggregate the demand where
09:35.789 --> 09:39.294
an eligible plant is not accessible to every buyer. So, you know, if you don't
09:39.311 --> 09:42.588
have someone in your local area, there are a lot of people who still need
09:43.088 --> 09:46.874
that green cement. But product comparability
09:47.374 --> 09:51.494
becomes kind of fundamental when we're talking about that. And I think Silvera's
09:52.107 --> 09:55.944
analytical finding in their recent kind of report
09:56.444 --> 10:00.392
saw that fewer than 2% of cement products in its dataset would
10:00.892 --> 10:04.656
meet a 500-kilogram CO2 equivalent per ton threshold on carbon
10:05.156 --> 10:09.032
intensity alone. And so, you know, obviously I'm kind of referencing Silvera's
10:09.532 --> 10:13.328
benchmark there and not a universal SBTi eligibility rule, but it
10:13.921 --> 10:18.650
kind of illustrates how sensitive the
10:18.730 --> 10:22.401
outcomes and the conclusions can be to product definitions and thresholds.
10:23.075 --> 10:27.210
And what I mean by that is basically, you know, we need that defined,
10:27.323 --> 10:31.474
what is low carbon? And so we need to be able to be comparing cement
10:31.974 --> 10:35.056
types and low-carbon commodity types across things.
10:35.169 --> 10:38.855
And cement's a very interesting one. Is it across a benchmark
10:39.355 --> 10:42.952
of cement, this is lower carbon, or is it just lower carbon than
10:42.985 --> 10:46.040
the previous cement that you were using on your sites?
10:46.723 --> 10:50.437
So there's a kind of few different examples of
10:50.453 --> 10:53.823
book and claim where it can add value, but there are still things
10:53.839 --> 10:57.726
that need to be sorted out and confirmed before wide-scale
10:58.226 --> 11:02.198
rollout, I think. That's interesting.
11:02.327 --> 11:05.767
So are there any other
11:06.267 --> 11:09.916
sectors that may be of interest? I mean, I kind
11:10.416 --> 11:14.111
of sort of saw a few bits around fuels and maybe the chemical
11:14.611 --> 11:17.515
sector. Yes, I mean,
11:17.708 --> 11:21.391
and this is kind of where we're seeing a big link with CBAM as well,
11:21.568 --> 11:24.925
which I won't go into in detail today. That's probably
11:24.973 --> 11:28.299
a topic for another time. But, you know, chemicals and fuels definitely add another
11:28.315 --> 11:31.631
challenge to to this, and I think
11:32.131 --> 11:35.547
it's because the processing stages and kind of the kind of
11:36.047 --> 11:39.334
wider pooled supply chains really make it difficult to
11:39.834 --> 11:44.180
know where you are using things. And so I used the, the, the shipping example
11:44.276 --> 11:48.192
earlier, but let's take an airline. Just because you fly on an airline and
11:48.545 --> 11:51.433
on a plane doesn't mean that plane is going to be using SAF,
11:51.995 --> 11:55.461
but you can still fund for an airline to use SAF and kind
11:55.961 --> 11:59.188
of get the right to report that and claim that. Even though you're not actually
11:59.204 --> 12:01.684
flying on that specific SAF-fueled plane.
12:03.004 --> 12:06.159
And so, you know, that's where the book-and-claim model could potentially help,
12:07.270 --> 12:09.865
but it needs to be kind of preserved and proportionate.
12:11.860 --> 12:15.402
And I think, yeah, it's all got to be aligned
12:15.902 --> 12:17.398
with the evidence and just not overstated.
12:19.717 --> 12:23.229
And it is tricky in those different bits. Yeah,
12:23.537 --> 12:26.418
I get that. And I think that's a good— that's in some ways a good
12:27.082 --> 12:31.899
analogy for that in saying, you know, you're taking action somewhere,
12:32.044 --> 12:35.335
you're fueling a plane somewhere with SAF, but you
12:35.835 --> 12:40.072
may not be on that plane yourself. And I kind of get that. Living kind
12:40.572 --> 12:44.199
of where I do, I also think that agriculture potentially seems quite
12:44.699 --> 12:47.121
complex. You know, commodities get aggregated,
12:48.181 --> 12:51.890
you know, landscapes produce all sorts of outcomes at once. Would you agree with that?
12:52.778 --> 12:56.184
Yes, and that's probably a lot of the work that I
12:56.684 --> 13:00.704
actually do. We kind of do call that more land sector
13:01.204 --> 13:04.389
strategy work, joining up the carbon, the water,
13:04.485 --> 13:08.407
the social, the biodiversity and nature aspects of different
13:08.907 --> 13:13.313
parts. And I think that comes into the environmental attribute certificate discussion because
13:14.154 --> 13:17.243
the forest, land and agricultural sector, so I'm going to call
13:17.743 --> 13:20.880
it the FLAG sector, that's really where activity pools
13:21.380 --> 13:24.560
and supply sheds are particularly useful. You know, if you're sourcing a coffee bean,
13:24.736 --> 13:27.443
you might not be able to trace it back to that coffee plantation.
13:27.860 --> 13:31.849
You're going to go through an aggregator in the middle. And so,
13:31.881 --> 13:34.188
you know, you're not necessarily able to trace it.
13:35.310 --> 13:39.651
Credible interventions within the agricultural kind of point
13:40.151 --> 13:44.009
of view is lower carbon, lower emission fertilizer, methane reduction,
13:44.297 --> 13:47.229
regenerative agriculture, soil management, agroforestry,
13:47.677 --> 13:50.801
etc., etc. Water retention, very topical right now,
13:51.410 --> 13:54.935
and landscape restoration. These are all kind of key parts that the
13:55.015 --> 13:59.168
agricultural value chain can focus on. But integrated
13:59.184 --> 14:01.366
action does not make,
14:02.232 --> 14:05.424
you know, these environmental attributes interchangeable.
14:05.617 --> 14:08.921
So if you're looking at it, one program of work that's
14:08.985 --> 14:12.963
kind of operating over a few different farms could generate that carbon,
14:13.076 --> 14:15.867
water, biodiversity, soil health, and resilience
benefits.
14:16.604 --> 14:20.534
And each of those kind of claimed attributes still need to
14:21.034 --> 14:23.710
be defined by what we discussed earlier: units, boundaries,
14:23.823 --> 14:27.239
baselines, methodologies, monitoring, ownership, etc.
14:27.914 --> 14:31.542
And I think that attribute stacking can become
14:31.783 --> 14:34.946
several organizations counting the same intervention in different ways,
14:36.005 --> 14:40.084
e.g., someone is funding someone to carry out regenerative agriculture,
14:40.276 --> 14:44.290
increase the water retention within soils. One organization might be claiming
14:44.790 --> 14:48.448
the carbon, someone else might be claiming the water savings, someone else might
14:48.948 --> 14:51.965
be claiming any biodiversity and nature benefits there. Ideally,
14:52.061 --> 14:55.754
you'd be thinking it'd be one organization claiming what they're funding and
14:55.770 --> 14:58.949
trying to push that out. But I think the agricultural value
14:58.981 --> 15:02.577
chain is a really, really interesting one because it links a lot of
15:03.077 --> 15:06.013
those wider attributes, not just carbon.
15:07.250 --> 15:10.670
It's a developing area that I'm working very hard on.
15:11.280 --> 15:15.406
Excellent. I like it. It's— I think it was right. Obviously, it is
15:15.503 --> 15:18.585
complex, which is, you know, it kind of
15:19.085 --> 15:23.088
needs to be understood, which is good. So just moving
15:23.137 --> 15:27.033
on a little bit around the kind of commodity certificates
15:27.533 --> 15:31.609
versus carbon credits. Briefly, I imagine
15:31.690 --> 15:34.699
that some people are going to hear all this and just go, well,
15:34.959 --> 15:37.497
isn't this simply the carbon market with a different label?
15:40.276 --> 15:44.328
No, but it's similar. And I think, you know, when the second
15:44.828 --> 15:48.218
draft of the SBTi Net Zero 2.0 came out, it did throw in carbon credits
15:48.283 --> 15:51.516
under environmental attribute certificates. So that's where kind of some of the kind of confusion
15:52.016 --> 15:55.524
is. And I think there's a lot of learning earnings from the voluntary carbon market
15:56.024 --> 15:59.612
that we can take. So, you know, the infrastructure integrity requirements
15:59.756 --> 16:03.139
are kind of probably very similar, but the actual instruments are very different.
16:04.261 --> 16:07.066
I think I would kind of attribute it to like for like.
16:07.323 --> 16:10.448
So, you know, you're not, you're not kind of protecting a forest for,
16:11.218 --> 16:15.081
you know, burning oil in an office, for example.
16:15.322 --> 16:18.688
It is you are purchasing low carbon steel certificates to
16:18.752 --> 16:22.391
link up with your low carbon steel. And that is attributed
16:22.439 --> 16:25.902
to your value chain. While, you know, the wider benefits of carbon credits
16:25.918 --> 16:29.257
is beyond that, kind of supporting global net zero.
16:30.637 -->
16:34.538
And then any claim you're making against that, this is within
16:34.570 --> 16:38.487
your value chain. So it is very similar,
16:38.503 --> 16:42.468
but I would say it's more like for like rather than just
16:42.580 --> 16:45.855
wider kind of carbon reduction avoidance or removal
16:45.951 --> 16:49.434
projects globally. Right. And do either
16:49.934 --> 16:54.282
instrument reduce your— or a company's reported
16:54.395 --> 16:56.449
inventory even automatically?
16:57.075 --> 17:01.844
No, no, no, no. So I think the
17:02.344 --> 17:05.955
carbon credits, to kind of talk about the elephant in the room, there was a
17:06.455 --> 17:09.632
blog post put out at one point that carbon credits could help organizations meet their
17:09.648 --> 17:13.309
targets. But I think that's been walked back now. And what we're seeing
17:13.421 --> 17:17.259
is carbon credits support that. The purchase of that, the internal carbon
17:17.759 --> 17:21.594
pricing, the bringing in of the kind of ongoing emissions responsibility and
17:21.610 --> 17:25.174
mandatory neutralization is a really good way of saying, hey,
17:25.687 --> 17:29.134
reduce your footprint quicker. And you will have to
17:29.775 --> 17:33.398
pay less to buy carbon credits off the market for
17:33.898 --> 17:37.293
this ongoing emissions responsibility, for example. So it's a really good tool
17:37.630 --> 17:42.118
to leverage decarbonization. While the market-based
17:42.618 --> 17:46.270
instruments and environmental attribute certificates, they have now been confirmed
17:46.302 --> 17:49.572
that they can be utilized within targets. And we'll wait for the
17:50.072 --> 17:53.884
SBTi to kind of fully confirm what that looks like. But within
17:53.900 --> 17:57.258
that mitigation hierarchy, it can be encountered within inventory
17:57.371 --> 18:01.088
and can be accounted as part of your targets. Okay,
18:01.104 --> 18:05.561
cool. Um, thanks for that. So in terms of claiming
18:05.593 --> 18:09.344
and, and what, what companies doing, if a company is
18:09.376 --> 18:12.582
considering looking at an EAC, what do you,
18:12.956 --> 18:16.128
would you say it should test before it buys or makes a claim?
18:17.723 --> 18:21.266
I would start with, um, start with matching. So, you know,
18:21.444 --> 18:25.294
is it the same activity type? Uh, is it the same
18:25.327 --> 18:28.766
product, material, fuel, et cetera? You know, and is it part of
18:29.266 --> 18:32.757
the underlying kind of activity. Can you link it to your value chain?
18:32.854 --> 18:36.396
Can you link it to specific geographies, to relevant systems, etc.?
18:37.438 --> 18:40.612
And don't stretch that, you know, really have that built in.
18:41.366 --> 18:45.085
The next up I would say would be quantification.
18:46.175 --> 18:50.599
So use a recognized methodology, be transparent, and list
18:51.099 --> 18:55.151
it out. I appreciate that's probably a few more NBs under
18:55.651 --> 18:59.143
GHG inventories in annual reports. And I think, you know, according probably
18:59.159 --> 19:02.775
linked into basis of reporting, reportings, et cetera.
19:02.952 --> 19:06.504
But just linking that up with clear requirements and clear methodologies for
19:07.004 --> 19:09.156
the quantification aspect is going to be really, really important.
19:10.745 --> 19:14.316
And so where obviously people are listening to this and thinking, okay,
19:14.462 --> 19:17.868
you know, I'm hearing that. What, what would you say is the
19:17.933 --> 19:21.215
danger zone? Where do companies often get, you know, just have
19:21.715 --> 19:25.362
a stumble or maybe get into trouble? Don't overclaim.
19:26.020 --> 19:29.360
You know, I think that that is the kind of key one. If we're
19:29.860 --> 19:33.160
looking at the SBTi Net Zero 2.0, that's a name that I keep saying over
19:33.660 --> 19:37.240
and over, but it's obviously very relevant right now. Um, you know, the claims
19:37.740 --> 19:40.420
guidance is due to come out, so if you want to make a claim before
19:40.920 --> 19:44.640
that, be transparent and maybe don't put it in your GHG inventory until you really
19:45.140 --> 19:48.440
see how the SBTi want it, for example. So just
19:48.940 --> 19:52.060
be transparent, don't overclaim, be specific on that claim.
19:52.560 --> 19:54.300
What are you doing? Where are you doing it? How are you doing it?
19:54.800 --> 19:58.433
What methodology? Has it been verified, etc., etc.? And just really kind
19:58.933 --> 20:02.577
of lay it out. So, you know, don't overclaim, be transparent,
20:03.171 --> 20:06.704
and ensure that the actual underlying data is robust. And if it's not,
20:07.684 --> 20:11.731
again, links back to being transparent. Yep, I guess that makes sense.
20:12.727 --> 20:15.762
So if someone is listening to this, Xander,
20:15.923 --> 20:19.906
and is wondering where to start and what
20:20.179 --> 20:23.905
kind of, I don't know, process to follow, what would be your
20:24.146 --> 20:27.149
sort of experienced view of a practical sequence being?
20:28.625 --> 20:32.442
I think this is, you know, this is another mechanism and opportunity
20:32.554 --> 20:35.232
to help fuel decarbonization,
20:35.922 --> 20:39.498
but it depends on where you are within that process.
20:39.546 --> 20:42.096
So, you know, you need to know where you are, then you need to know
20:42.176 --> 20:45.047
where you're going, and then you can start working out how you're going to get
20:45.547 --> 20:49.296
there. So start with your emissions, then make sure you've got your target, and then
20:49.796 --> 20:53.995
you can start looking at decarbonization levers within your activity level.
20:54.220 --> 20:57.235
So in your operations and within your visible value chain.
20:57.892 --> 21:01.450
Within your activity pool where you can't do it to kind of push that
21:01.562 --> 21:05.424
within the kind of wider sourcing regions, for example. And then if
21:05.488 -->
21:09.142
you've kind of still pushing and you need to think about the future, that's when
21:09.174 --> 21:12.411
you can start looking at the sector level. So very much linking to that
21:12.780 --> 21:16.562
mitigation hierarchy. If you are looking at
21:17.062 --> 21:21.193
certificates, just make sure it's useful and specify properly what
21:21.693 --> 21:25.200
unit. Is it carbon? Is it biodiversity and nature? Is it water? You know,
21:25.216 --> 21:28.469
what is the product? What is the geography you're sourcing from? When was
21:28.501 --> 21:31.948
this certificate made? What is the performance?
21:32.028 --> 21:35.781
What's it based on? What's the methodology, etc., etc.? Do your
21:36.281 --> 21:39.148
due diligence if you're going to do it. Ensure that it is robust and it
21:39.164 --> 21:41.970
isn't just someone saying, hi, I've calculated this and then,
21:42.114 --> 21:45.946
um, you know, on the back of a piece of paper and this product is
21:45.962 --> 21:49.891
really good. But I think we should be past that within the
21:50.391 --> 21:54.284
sectors that we're talking about. And I think, yeah, the accounting and
21:54.316 --> 21:58.340
claim at the end, again, as I said, base it against clear
21:58.388 --> 22:01.817
methodologies, demonstrate it as part of— as
22:01.913 --> 22:04.733
a short-term action within a long-term target,
22:05.374 --> 22:08.658
base it against clear methodologies, and ensure you're kind of
22:09.158 --> 22:12.664
aligning with the kind of local rules, regulations, and laws that
22:12.728 --> 22:15.196
are applicable to your organization and operations.
22:16.493 --> 22:19.554
So we're kind of getting towards the end of it. We've covered loads of stuff,
22:19.778 --> 22:23.079
um, not only in this one but obviously in part 1, which hopefully
22:23.579 --> 22:26.868
people listen to. So to wrap it What would
22:27.111 --> 22:30.561
be, please, Xander, your one final thought
22:30.609 --> 22:33.927
for anyone listening to this podcast? I think,
22:34.007 --> 22:37.694
you know, I wrote a blog about this, but the
22:37.871 --> 22:41.091
E still stands for energy. And I don't, you know, I think that's really,
22:41.172 --> 22:44.156
really important. And the energy market has kind of pushed this forward,
22:44.659 --> 22:48.112
but it increasingly stands for environmental as well.
22:48.792 --> 22:52.569
And that really, really allows and creates an
22:52.586 --> 22:56.922
opportunity to channel finance towards these lower carbon productions
22:57.115 --> 23:01.108
and other credible environmental outcomes that we're seeing associated
23:01.608 --> 23:04.620
with these different kind of products. And that's really, really important.
23:04.957 --> 23:08.293
And I think that gives a big opportunity. But we need to scale
23:08.582 --> 23:12.190
carefully, you know, no hand waving, no double counting, no trust me,
23:12.270 --> 23:16.007
this is green, based on evidence methodologies,
23:16.504 --> 23:19.728
clearly explained, transparently reported, and not overclaimed.
23:20.385 --> 23:23.482
So I think, yeah, Yeah, that's probably where I'll leave it.
23:24.144 --> 23:27.831
Credible action, properly evidenced, and with a clearer explanation
23:27.880 --> 23:30.952
of what you're trying to do, what the instrument is, and how it
23:31.452 --> 23:35.072
works. I think that's good. And I think perhaps, you know, maybe it's the analyst
23:35.572 --> 23:38.349
in me, I kind of, I get that. I think, uh, you know,
23:38.414 --> 23:39.938
understanding the evidence, you know,
23:41.407 --> 23:45.282
understanding what you're doing and having that sort of chain and knowing what's—
23:45.427 --> 23:48.413
what you've got, getting the evidence, keeping it all in track.
23:49.350 --> 23:53.270
And, and what you can claim, and, and obviously having clear explanations of what
23:53.770 --> 23:56.850
you've done and why. Because I think often, sometimes, um, and I've,
23:57.350 --> 24:01.010
I've sort of seen this in other things, people do, you know, people do things,
24:01.510 --> 24:04.290
we've done things, and you kind of think, go back to it later when,
24:04.790 --> 24:06.890
when it's questioned or it's audited, and people say, why did you do that?
24:07.390 --> 24:09.410
And if you've got the— if you've got that sort of stuff there, you go,
24:09.910 --> 24:11.550
well, we did it because this is what happened, this is what the advice was,
24:12.050 --> 24:13.530
and this is what we did, and we did it for these reasons. And sometimes
24:14.030 --> 24:17.150
you have all that, maybe you haven't logged it. So, um, now let's be really
24:17.650 --> 24:21.270
interesting. Uh, Xander, I, I want to say it's been an absolute pleasure talking to
24:21.770 --> 24:25.690
you again. I really appreciate it. I've really enjoyed it and I've
24:26.190 --> 24:29.670
learned loads of stuff on an area when I came in thinking, well, what's all
24:30.170 --> 24:32.610
this going to be about? And it's been really interesting. So thank you very much
24:33.110 --> 24:36.350
indeed. A pleasure. Yeah. And I do like
24:36.850 --> 24:40.210
to talk, so hopefully you'll invite me back at some point soon. Oh,
24:40.710 --> 24:44.230
definitely. I think there's probably loads more that people want to hear. So I think
24:44.730 --> 24:48.650
let's have a chat and sort something out. Definitely. So much exciting things happening
24:49.150 --> 24:52.739
across the kind of sustainability sector at the moment. So many, uh,
24:52.980 --> 24:56.884
interesting, exciting pieces of guidance, more to read, more to understand,
24:56.916 --> 25:00.739
and more to put into actual credible action. Excellent. And you're absolutely
25:00.771 --> 25:04.224
right. And I think people— I'm hoping, like I said, the Insetting podcast—
25:04.724 --> 25:07.758
there's another plug for that one if you're listening— um, has been one of our
25:08.258 --> 25:11.790
most popular ones. You know, Xander went through that in 2 parts in, in some,
25:11.870 --> 25:15.404
some great detail. So I reckon there's some more interesting stuff
25:15.904 --> 25:21.968
to cover. Looking forward to it.