How to use carbon credits in the CSRD with Adrian Wons

Hey, do you have to comply with the csid then this podcast is exactly the right thing for you because at the Atlas Zero podcast we are talking to companies that have to comply with the CSRD and with experts that know very well about specific topics of the csrd. In this talk we are going to talk with Adrian Wans, who is an expert in compensation and can explain to you how exactly you can use compensation in your CSID report. Enjoy. Hey Adrian, thank you so much for taking the time. In the past weeks we have been working much more together and yeah, we actually also launched our compensation guide within the ccrd. And for all of the listeners that have not seen that, I will also put the notes down below with the podcast. But in this episode I actually would like to focus a little bit more on Senken and talk a little bit more about this. So Adrian, can you tell us a little bit more about Zenken and how did you come up with this situation or with your company and how did everything start?

Totally. Thanks for the invite. Yeah, and I think we did some great work with the guide and it was a pleasure to work with you. And yeah, let's see where it takes us. But going back to the roots, how did I actually come or end up founding Zenkin? So originally I'm an engineer. I come from the wind energy space. Later I went into consulting to Ernst and Young first, also in the wind energy space. Later I went into the area of all sorts of new technologies because for instance, I wrote the first blockchain book in German language for springer back in 2017 because I was really interested in the technology on the side. But of course there was no direct connection to the wind energy at that point, maybe to energy a little bit. So after a short while at ey, I was like, hey, now I want to get more into technologies. And then EY helped me actually founding the blockchain department at EY itself. So we then had a lot of customers. It was always in the B2B space where a lot of customers in helping them bring more transparency and traceability into their supply chains. Like for instance, the biggest wine manufacturer in Italy said, oh, we have a problem. 20 to 30% of all the wine that you buy at your supermarket is actually fake wine, but our label is on it. And first of all, I was mind blown because I thought, how can that be? Like, I think all the bottles of wine that I ever bought from the same brand tasted the same, but even the taste is really well copied. And then for instance, for this project we brought a blockchain solution in there where you could track all these different kind of suppliers and supply chain. And you could also look into who is liable at what point in time in the supply chain. And after three years, doing a lot in traceability and transparency with new technologies, not only blockchain, but a big part of it, I wanted to go completely back to sustainability. And I founded a research institute for a new German university around the topic of sustainable innovation. Because I thought, hey, I want to bring these two things together, innovation and sustainability. And with that I went to South Africa, where I'm actually right now.

And.

I had this research topic around. How are farmers, local farmers, incentivized to switch to regenerative agriculture? And they said there are many two things, and the one is subsidies, of course, subsidies, especially in Africa, not the easiest topic. And the other thing would be carbon credits or CO2 certificates. But they also said they're not working. And I was like, why are they not working? And then they said also two reasons. The first reason is the money is not arriving. So we had this case which was a little bit of the catalyst for founding Senken, where farmer here in South Africa sold their carbon credit for €3. And a carbon credit always stands for 1 ton of CO2, either avoided or directly removed. So avoided means, for instance, the farmer switches from a really chemical fertilizer that takes a lot of CO2 to produce it, to a more natural fertilizer, which basically avoids the production of that fertilizer or remove. So remove or sequester additional CO2 means the soil maybe suddenly, through different measurements, take on more CO2 and sequesters and draws down more CO2 out of the atmosphere. So they sold one of these credits for €3. And we found exactly the same credit in Germany being sold for €15. And I was like, hey, how? How can this happen? And we then found out that first of all, most of the climate projects 90% under Global south, but 90% of the buyers of carbon credits sit in the Global North. So this kind of geographical gap has been almost used by intermediaries, brokers to bring opaqueness, so no transparency actually into the market and also to take a lot of margin on every transaction. So we found that for instance, for this specific Credits, there were three brokers involved and each of them took between 40 and 100% margin on top. So basically, if you paid €15, only €3 arrived at the impact at the cost, which is mind blowing because that directly shows us one of the biggest tools we have fighting climate change. Can't scale, right? No one. Especially if you look at financial markets, right? What financial market would scale if you know only like 20% arrives? It's impossible. And the second thing they said it's really hard to prove that we actually did a good job, that our soil, for instance, stores an additional 1 ton of CO2, so even if they do a really great job, it's tough to show. But also if they would do a bad job, it's hard to expose. So that's the second thing. And at this point I was, hey, that's actually what I did at ey, right. I always try to bring in traceability, transparency, and thus trust. Right. It's always around trust. So I was like, hey, we definitely can solve these two problems with technology. And that was like two years ago where I then said, okay, let's found zing.

Yeah, super interesting to hear how then your past and the backstory actually with the traceability comes back and you can apply that in South Africa. So how's the project in South Africa going right now? Is this your first case that you're working with or how did things develop from there?

Yeah, good question. I mean, there was, I think I interviewed them two and a half or almost three years ago. So a lot has happened in the world of carbon credits and in the world of sustainability. As you probably know, this specific project is one of the projects that we work together with. But in the meantime we actually founded Zenken, which is a platform bringing project developers or farmers off climate projects together with corporates around the world that have net zero ambitions or just want to invest into nature. So during these two years and two years in the startup history feels like 10 years. I grew. Like, I think when I started I did not have a single gray hair. And every day now I look into a mirror and I get additional one. So I think these two years were definitely the most, yeah, I would say challenging, but also the most rewarding and learning years in my life. But what happened in these two years? We created a technological infrastructure where first you can track the money, so you can see exactly that your money arrives, that there are no other intermediaries involved, and you always directly transact with a project and you see the money actually arriving at the cost. This is number one. And for the second problem that I described before, we created an intense due diligence process which is based on an insane amount of data to actually see and show that the projects that we work together are of high quality and the risk is really, really low of them to actually not avoid or sequester 1 ton of CO2. And these data points could be all sorts of things. There could be satellite data, there could be sensor data, the rating data out there that we use. We also use credit scores of project developers and past history of what the project developers did before in other projects. We also have scores for different kind of countries and their policies towards carbon credits. And all this massive mix ends up in our due diligence process which is like super data driven. In the end only 3% make it through this due diligence process. And over this year we supported a lot of companies putting up long term strategies in how carbon credits actually fit into their whole decarbonization strategy. Because it's never really a completely secluded topic, it always needs to fit into the broader strategy which we also going to talk about in a second. But yeah, this specific project is actually like 50 kilometers from me right now and yeah, is thriving I would say.

Nice. It's super. Yeah, very glad to hear. So for companies that actually don't know that much about carbon credits and are not so much into all of that, like how could you explain shortly and easily to them what Zenkin is doing right now?

So it is actually quite easy. The market is not easy, but what we are doing is easy. We are just connecting corporates with carbon projects that issue carbon credits.

Okay, yeah, and you just said like that the market is not really easy. Like when I talk to companies and then the compensation topic comes also in. Like sometimes there's like some skepticism with like the scandals like with Vera and such in the last year, like how do you think the market developed or what is the current situation with that in your opinion?

So actually the market is really old already. It always feels like the market only came up in the last five years, but it got created in doing the Kyoto Protocol which is I think 1997. So it's already almost 30 years old. So it's not a completely new topic and not a completely new, I would say instrument because the carbon credit is a little bit like a market based instrument to give a little bit of a background. So I would say what most people currently connect carbon markets with is basically what I heard in media around lack of quality in these carbon projects and I think fairly so. The market was really small. There was not a lot of innovation going on and there was not enough scrutiny on the market. In my opinion example, we have satellite data for a long time now already we have a lot of different data points that came through technological advancements over the next, over the last 20 years. But none of them have been used in order to verify a project. It was mostly about, for instance, a forestation project. Someone flies over to the project, comes with the measuring band and says, yeah, this tree has a diameter of 1 meter or something like that. Which is mind blowing because it will take you a lot of time to measure all the trees. That's the reason you don't measure all the trees. So you only take like a small probe. But you could just use satellite data, right? I mean it would take you one second. You can also have, you can check on, analyze over time so you see how, for instance, there was no tree 10 years ago, now there is a tree and all these things. So I think first of all, no technology has been used or not a lot of technology has been used which only came into the whole market over the last, I would say four years, a little bit also because the market was growing. And there's also a lot of policy work that will funnel capital into the market and if there's capital, it attracts innovative people and startups to bring the technology in there. So I think that has been a really exciting development and definitely changes the market. So all these media articles was aware about the legacy market that I described before and that's 100% fair because I think what we need is really high quality projects. And by high quality project I mean a really low risk of them actually not achieving what they're promised. And promise is, hey, one certificate ticket stands for one ton. But before and you see that if you for instance, look at the big rating agencies, there's a couple of rating agencies like B0 or Silvera rating all the projects from Vera, gold standard and so on. 85% were on the lower crates of the grading scale and only 15% on what you call high quality credit. So a lot of these standards, Vera, based on the scrutiny, now working really hard to implement new technology. All the standards are currently being redone. But also I think we need quality assessment on top of it. So I always love to take the analogy like VERA or gold standard is only as high as a horse has to jump. But for the rest you still need more quality assessment. And that's what we are for instance doing with different kind of partners, like for instance these rating agencies, satellite data and so on. So the scrutiny was good, it pushed the market forward. But now of course we need solutions and that's exactly where we come in. And we even created something like a buyer protection, like a little bit like the eBay or PayPal buyer protection, because we're so, I would say, proud of our due diligence process and confident with it. We integrated this buyer protection or guarantee that if something ever happens with the project and the carbon credit on top of it, that we just exchange it with an equivalent quality credit. So I really saw that this gave even more confidence to the buyers because I think most of the buyers, they really want to do something good, but I think it's more about like them being scared of greenwashing accusers or just spending money on something that actually doesn't promise what's. Or like doesn't deliver on the promise they bought into.

Yeah, no, and understandably. So, like, I can completely understand that companies are then, yeah, scared about that. But it's very. I'm very glad to hear that you are taking measures against it and improving on that. Yeah. Since this is actually the CCID podcast, I'm trying to like, shift the topic now a little bit towards csrd because, yeah, compensation and carbon credits also play a role in the csrd. Can you maybe explain a little bit more about the importance of carbon credits and compensation within the csrd?

Yeah, totally. So we get that question also quite often because I think a lot of people don't know that carbon credits actually have already a place in the csrd. So you can report on your carbon credits in the csrd and it's not mandatory. So it's not that you have to report on or that you have to buy carbon credit. Let's put it rather like this. It's not mandatory that you have to buy carbon credits at this point in time. I think we talk about it later. I think there will be changes in the future. So basically what you have to do at the moment in the CSRD is that you have to report on how many carbon credits you bought. So what is the tonnage amount? So how many tons of CO2 did you bought? And then you have to report on what is the split between removal and avoidance. And that comes back to the first thing I have explained. In the carbon world, you always distinguish between removal and avoidance. Avoidance meaning because of your purchase of one ton of CO2, this ton is just not being released. Like, for instance, switching from energy generation from coal to energy generation from renewable energy. And removal means one extra ton of CO2 is being sequestered. Like, for instance, I plant a new tree and that through photosynthesis, takes extra CO2 out of the atmosphere. So you have to report on what is the split of removal and avoidance. Because the general, I would say Recommendation by the UN last week from Oxford. They also work a lot on carbon credits, but also for instance things like science based targets initiative say at the end of your net zero journey. So basically when you hit your net zero goal, for instance reducing your footprint 90% with only 10% remaining remaining unavoidable emissions. So things that you just can't avoid due to nature of your business up to that point, that share should go all the way up to 100% removal credits, they're always a little bit more expensive. But of course not everyone directly can say I going to offset my whole footprint with removal credits because that would be way more too expensive. So that's the reason that split that you have to, that you have to report and then you also have to report how many of these credits did you actually use this year for compensation measurements? You always talk about retirement. So only buying a credit doesn't mean you retired, means you have it on your balance sheet. It's basically like a financial asset and only if you retire it and then you get a certificate of retirement, then you used it to compensate for your footprint. So why is this important? Because you also have to report on how many credits you bought, but also in how many purchases of maybe your future credits did you go into. Because a really important topic around this whole industry of carbon credits is we need to finance these projects also for the future. Because it's not like let's talk about that pharma in the beginning again it's not like you get the carbon credits basically on day one when he decided to now changed to regenerative agriculture. Of course there were a couple of years involved an investment for him to actually get to this point to issue a credit. And that can be three years, five years. And for that there are measures in order to invest early in this project and support the farmer with the promise of a future credit. So that's another thing that you that you have to report on. And then there's a separate topic around insetting and how the word insetting already says a little bit is that it's basically reduction measurements or removal measurements in your own business that you invest in in. So whereas offsetting mostly means and science based targets initiative, for instance call it beyond value chain mitigation. So basically things that you invest in outside of your value chain insetting is more around things that's in your value chain. So for instance, if you are a supermarket and you have products in your supermarket that come from a local farmer, if you basically invest into that Farmer to switch to renewable regenerative agriculture, then your scope free emissions go down. Right. So you're basically invested in your own kind of value chain and that's what we call insetting. And you also can report on these kind of measurements. But these are the big two topics.

Okay, super interesting. Are there any other topics in the CSRD when it comes to reporting like certain claims or something that are relevant to know?

Yeah, definitely. I think this also comes a little bit into the whole topic around people are scared of or people. Yeah, that's what people connotate with carbon credit are the different kind of claims that you can make. Right. So I think last year was a lot about being carbon neutral. And everyone I think without being verified or without being audited quickly said they are carbon neutral. Which I think sometimes is not really beneficiary because carbon neutral stands for hey, I know my footprint right now and completely or my completely existing footprint I gonna offset with carbon credits. What is the problem behind it? First of all, no one verifies it. There are always two providers. Right? On one hand you have the provider for carbon accounting. So basically measuring your footprint when there's a completely different provider that says okay, here's a carbon credit that matches that. But it's not that someone says okay, I verified that both things worked out correctly and they match each other. So people just gave themselves a lot or a lot of them gave themselves carbon neutral claims, which I thought is quite dangerous. And of course the danger also is a little bit in are you paying your way out of actual development towards the second claim being net zero? Because why do I think this could be a danger? I don't think it is the case, but it could be a danger is that if you every year are carbon neutral because you just buy carbon credits worth your footprint, then you also could just say why do I even have to reduce my footprint internally if I can just buy credits and be carbon neutral all the time? Right. And that's the reason I think net zero claim is way more important and stronger. Because net zero claim means you did everything possible to reduce your footprint on scope 1, 2 and 3 to a point where there's nothing to reduce anymore. And then you only have unavoidable emissions. Mostly it's different for different industries. It's 10% from your base year. So the first year you measured and I mean SBTI science based targets Initiative is an initiative that helps you setting these goals, these science based goals based on the IPCC 1.5 degrees pathway and only then for the last 10% you use removal carbon credits. So then you're allowed to call yourself net zero. Both these things you have to report in the csrd. Also carbon neutral. I think it doesn't mean carbon neutral is dead completely. For instance, EU said that they from 2026 on you have to verify and probably also be audited on carbon neutral or the claim carbon neutrality. Because I think it's still great for company to just take responsibility of the footprint and try to invest in.

In.

Climate based on what they emitted. But I think always, always, always first you need this bigger strategy that guides you towards net zero. So I would always start with a strategy around net zero and then only I would even think about other kind of claims. But that's a little bit mixed opinion. And actually what is what is needed to report on the claims side.

No, I understand. Okay, so this is basically the CSRD mandatory part. Like what companies need to report on. How is it with like additional benefits that companies could get if they use carbon credits or use compensation? Like what are like more incentives for companies to do that?

So there are a couple of incentives but in the end we always put it when we talk to customers into three buckets. So the first one is the biggest one and it's about reducing costs. Why do I think so I talked before already about the farmer that needs money to even change to regenerative agriculture and therefore being able to issue credits at a certain point. And at the moment there is a massive climate funding gap. So actually we need a lot of funding in order to close that gap. And carbon credits are one of the tools to close that gaps. So that's the reason there are a lot of tools being created in order to invest into carbon credits early. So for instance, mostly when we create longer term strategies, we work together with a company. Then on the other hand with a couple of projects and we not only say okay, this year you have to buy, let's say 5,000 credits, but now we also already say, hey, for the next five years we already lock in a price with the project developer and the quantity and this price is way lower than what they would pay in the next years. Why? Because with this kind of agreements it doesn't mean you have now have to pay for all five years. It only means on delivery in the specific year you're going to pay this and this amount of credits for this and this quantity of credits. Why is this so important for a project developer? Because now this project developer can go to a bank and ask for a loan against that offtake agreement which is really important to close this funding gap because every action being done now compared to action in five years is way more worth. So that's the one thing, it's not only good for nature, you get a cheaper price and then you also are a little bit or you have security about your planning. Because for instance a study from, from Ernst and Young says that all these prices they're going to rise 20, 30, 40% per year. And if you look in the price now, you're a little bit secure about that. The change of price that stems from how every market works. Supply and demand. There going to be a lot of demand over the next years because of new regulation, because of new things like science based targets initiative and also new quality controls that brings trust back into the market. So number one, reduce cost. So that's a big one. The second one is reduce risk. Feels like that's always the big thing. Reduce cost, reduce risk in all things sustainability and reporting. But that's, that's really it. So risk, of course first of all the risk around planning. So I mentioned that already a little bit is there even the supply I need in the next years. So with, with long term strategies and portfolio setups you can lock in supply. That's the one thing then and I think I hinted to that a couple of times already, I think there will be a lot of regulation coming out around carbon credits over the next years. I think we, over the last four weeks we saw massive changes already. What do I mean by changes? One thing for instance is the science based targets initiative. So basically that initiative that helps, I think almost 10,000 companies already around the world to set up net zero plans, gave guidance around how to report and implement carbon credits into that strategy and they give different kind of recommendations. What kind of credits, what kind of quality of credits do you need to buy? And even though parts of it is a recommendation, I definitely see the change every year. I think four years ago SPTI said we don't need credits only at the stage of net zero. And then over the last four years they changed their opinion more and more towards like oh, we actually really need it. And I have a feeling they're going to face it in slowly at a certain point that you actually need to buy credits to a certain amount and everyone needs to buy credit at the end. So that's already the stand in the end you need to buy removal credits. So it's number one. But I also can imagine because at the moment we are failing our climate targets, right? I mean Everyone who thinks that we are still on a 1.5 degrees pathway lives behind the moon. And even the 2 degree pathway going to be a big, big challenge. And we don't have a lot of tools in our tool set. Right. You have to reduce your footprint and you can do that with policies like for instance CSRD and other policies. But then there are also market based instruments and carbon credits are one of the only market based instruments that you, that we have. And I can imagine that. And at the moment we always call about, talk about the voluntary carbon market, that the voluntary carbon market becomes a compliance market. What does that mean? We already have a compliance market in Europe which is the EU ets so the European Emission Trading System and that already I think 15,000 companies in, in Europe that have to buy allowances in this market. And a couple of weeks ago the EU and the European Commission actually came out with a carbon removal framework. And a lot of people think, and the European Commission also hinted that that this will be a set up to implement the voluntary carbon credits in the compliance market. And why do they doing that? Because they know we're failing our goals and they need to put more tools into the basket, more eggs into the basket. So I can really imagine at a certain point a lot of companies have to buy carbon credits by law number two, reduce risk. And then the third one is an opportunity but also a risk at the same time. And you mentioned that already. I think in all the different kind of surveys always like what hinders you from buying carbon credits. The number one answer was we're scared of bad branding, of greenwashing, accused or being accused of greenwashing. And I already explained rightly. So I think there were a lot of bad solutions out there. And that's why we came into the market, because we saw one of our biggest tools that we have fighting climate change. But it needs to be trustworthy, otherwise there will be no market for these credits. So if you do it wrong, I think carbon credits can be a huge risk. If you do it right, it could be great for your branding. Why? There are different kind of ways, of course, branding as an employer branding and we see it as a startup. We just put out a job opening a couple of days ago and in a couple of days we had 250 applications in my company that I had before I put out a job opening and it was not in climate and you got like 20. So I think there is, it's such a big topic. There's insane awareness around climate and companies doing the right, that it will be a massive magnet for talent and there will be a talent problem. Or for a lot of companies there is already a talent problem. Right. I think this is one thing, but then also if it's a consumer brand, I think products, I have probably an opinion. I don't think that companies that.

People.

Buying products are necessarily want to pay way more for a product that is sustainable, maybe a little bit. But I wouldn't go about that. Cause I would just say, okay, that's just what we stand for and go around, this is the brand we have. Don't say it needs to be more expensive. Because I think there are ways to make this more like a competitive advantage and find ways to make this even like maybe cheaper in the end than a non sustainable, unsustainable product. But I would definitely know it's in the mind of every consumer out there. And then employer branding Also in a B2B world, we see it really often that now customers come to us and they ask us, Adrian, always when we now have to supply something. For instance, in the automotive industry, we're getting asked around. SPTI targets, our scope, 1, 2, 3 emissions, what kind of projects do we invest in and all these things. And I see that a lot of companies now choosing their suppliers based on their sustainability endeavors. And it makes a lot of sense, right? It's your scope, free emissions. And if this company you're working with has absolutely no idea what they're doing, it's going to be a long, long way for them to reduce their footprint. So I think this is also a massive push which goes into improved branding, but also a little bit creating a competitive edge. And I think especially in the European market, we're in a really good position for that compared to other markets.

Okay, let's say I'm a company that has to comply with the ccd. And I understood the three reasons, like I know about, like, hey, it can save costs, it reduce risk, and it also potentially has a branding advantage. Like how can a company like build up a strategy for carbon credits? What different options are there? Like, how do companies approach that?

It's pretty easy because we're gonna launch a tool also in two weeks and that we now tested with a couple of German companies which is called the Net Zero Planner. And there you can put in all your different goals, your emissions scope, 1, 2, 3. And then it gives you different kind of recommendations. It shows you on which pathway you are. 1.5 degrees, 2 degrees. And then it gives you recommendation about a portfolio based on your Net Zero strategy. So you need a strategy based on that strategy, it gives you a recommendation of portfolio that's aligned with IPCC and also the Oxford principles of net zero carbon portfolios. And based on that, so that's for free, everyone can use that and play around and also see a little bit what approximate estimate of price will be for the future. Of course we don't know prices in 15 years or something like that, but there are a couple of forecasts and we just want to show how much that probably will cost over the years. And yeah, then you can just connect with us and we can basically also go a little bit into the details of a portfolio because it makes a lot of of sense if for instance a supermarket wants to invest more into regenerative agriculture because it's directly at least close to their value chain, but shipping company rather wants to invest into mangrove projects because that's directly in their value chain. Right. So we then personalize these portfolios together with the companies. So it also makes sense also around the branding, but also like what they believe in. So yeah, based on that and we also give you all the reporting materials that you need later on for the csrd.

I think that sounds super helpful because like a lot of companies that I talk to like sustainability in general is like a super holistic topic. The CSRD is super complex. And then to be like an expert with like all the different fields is like just a huge challenge.

So not possible I think. And that's the reason I also see a lot of value especially for mid sized companies, right. Because I see that big companies, they may like massive companies, let's say DAX companies in Germany, that they of course have a little bit more resources on the sustainability side so they can look a bit different deeper into the project. But as a mid sized company, how should you be able to analyze more than thousand projects out there and there are more than 170 different project types. So how should someone be able to analyze that risk, vet them and so on. So I think for that we provide a lot of value especially also with this bio protection. So you can be sure that if something happens that you're just protected by it. So yeah, I think especially you see it probably as well really often they're like maximum a team of three or five, but really often there's one sustainability manager. How should this one person be able to do all of that as a tiny fraction of their daily activities that they have to do anyways?

Yeah, no, exactly, no, yeah, but it sounds super helpful. I think that could be like prove Very valuable to a lot of companies.

Also, question from my side. Question from my side. Do you hear that really often that people already talk about carbon credits in the series id? Or they're like, hey, okay, we know something about scope one, scope two, scope three, emissions, but actually with carbon credits we don't know so much or there's a topic that we need work with or like, how did you came to think this report makes a lot of sense?

So in general, I talk with companies that are quite early in the process. So a lot of those companies, they really, they just start with cisad, they know they have to comply and now they're like standing in front of the jungle and they don't know where it's left and right and how to proceed with that. But then as soon, like this is the first topic, like, hey, how can I orientate what companies can I work with? And like, we specify or focus a lot on that to like help companies to find the right solution in the beginning. But then as soon as companies like are able to make the first step and look into the CCD, then when you look at the structure, like the E1 part is definitely the most focused on. And then if you look at that and you look at the carbon footprint and all of those topics, I feel carbon credits are super closely related to that. And they really like, yeah, they're good, as you said, like in the past 30 minutes, like they are just a really good measurement for companies to go about that. So if companies at a very early stage, like, they just see the jungle and they're completely overwhelmed, they don't start talking about carbon credits yet because they just want to see a pathway to like get the reporting done and survive the next round. And as soon as companies then are more focused on it, or maybe they actually already have a plan to look at the ccrd, then when they start to get a little bit more into it, I think then it's one of the first topics that come up because, yeah, carbon footprint and therefore relates to carbon credits. It's just like one that every company has to do. It's in the focus. So I think it's quite relevant.

I agree. I also see that we talk to a lot of companies that don't know anything about the footprint and then I tell them, I think you're a little bit too early talking to us. But since now there's this massive push due to the Sears id, this whole awareness of their own footprint suddenly becomes big, bigger. Right? And a lot of them that I talked to a year ago. They now come back and said, Adrian, you are so right. You need to invest a lot of time and resources and getting a lot of the foundation done and then you can talk about what kind of strategy you, you want to go for with carbon credits. But it's interesting, how does awareness pushes you forward? I think a couple of companies, they would have still waited two, three, four years and yeah, they would have maybe already implemented some measurements to reduce their footprint, but I don't think that they would have done it like really with a good process, really planned. So I think this is really, this really created quite the momentum, even though it's not easy for the companies.

Yeah, yeah, no, I'm completely convinced that like the CCID reporting is the first step. Like everybody now has to do the reporting, but it's just the first step. Like, just because companies then have a reporting doesn't mean that they are sustainable. So then they have to do a lot of measures to become more sustainable. And I'm convinced that carbon credits play a vital role in that. So, yeah, I'm sure that this is going to be like even more increase in attention over the next years. And it's already now for companies that can focus on that, it's already relevant. Agree.

Cool.

Okay, perfect. Then I would say that's it. Again, thank you so much for taking your time and talking to me. Yeah, I'm really sure that all your expert knowledge about carbon credits and compensations can be super valuable for companies that are on this point. So, yeah, thanks a lot for that.

Thanks, Daniel. Thanks for setting us all up and for the work with the CSRD tools because I think it's, it's super important. And I did already send a lot of people to your tool because they always asked me and I was like, I think other people are better in assessing the situation. I think it's a really valuable service you bring to these companies.

Thank you so much.