Podcast’s Essential Bites:
[2:24] AH: "CarbonChain help[s] companies in the most polluting sectors track their emissions so that they can monitor and reduce those emissions and enable green finance to accelerate their ambition. [...] The most carbon intensive sources of emissions in the world, your oil and gas areas, agriculture, metals and minerals, we have actually mapped out [most] of those sources down to asset level [...]. And we give customers the visibility of their end to end supply chain. So when they're making sourcing decisions, purchasing decisions, and when they're importantly, enabling finance to do those purchases, we can help measure those emissions and put them on a trajectory so that they can increase their ambition and reduce over time."
[3:38] AH: "A customer has to share with us their activity data. And sometimes they're in the middle of very complex supply chains, so they have quite a long upstream supply of goods to them [...]. We can help unlock that visibility, because we traced emissions back to Mother Nature in a lot of cases, so back to the primary sector. And they can now get this unprecedented visibility of the goods, the materials that they make, and compare that to global averages."
[8:08] AH: "The ideal partnership is where we also liaise with [our customer's] banks. So it's a three party meeting, where we speak to their main finances, and the trading desk ourselves and we set up a sustainability linked loan or some other KPIs that can link financial debt instruments to actual decarbonisation goals. [...] And then we create this greener financial mechanism to incentivize those companies to reduce emissions. So we look at it beyond the step of just compliance. We look at it as these customers need a financial reason to do this and to measure and reduce."
[10:33] AH: "We've also seen the power of small incentives. So there's a case for a carbon tax bringing emissions down, if you tax x percent, you might see y percent reductions. But we've seen in this environment around debt facilities that if you just offer a small basis points discount on interest rate, you actually get a 20 fold or 50 fold reduction in carbon emissions. So it's good value for money for financial systems to do this [...] and I think it needs to be explored more in the coming years. So that the global markets, the invisible hands to markets can be directed towards these greener projects with very robust credentials behind them that show that they are on a decarbonisation pathway."
[20:20] AH: "What we're trying to do here is create a green discount. If you fundamentally have lower carbon products to the market, then you've had the financial platforms in place to help bring that to market for a lower price or a discounted price. So in future, we imagine a world where you're purchasing something and it's cheaper because it's actually greener, because the upstream supply chain [...] have been supplemented by trade finance, or they've had supply chain finance giving them discounts, or even in a retail environment, you can start to get discounts for purchasing greener products. And that enables an incredible positive reinforcement loop."
Rating: ☁️☁️
