#56 The Deep Dark Web Of Carbon Accounting with CarbonClick CEO Dave Rouse

Hey, Kia ora and welcome to the latest episode of the Be Better podcast. And with me today I have Dave Rouse from Carbon Click. So, good day. How are you doing? Pretty good. How about yourself?

Thanks.

You're dialing in from sunny Auckland, is it?

That's right, it is sunny today, which we're lucky. We've had a great autumn so far and long may that continue the winterless.

North as they allegedly like us to believe. But we know it's all a ruse, so. Yeah. So for people who don't know who Dave Rous is and maybe what Carbon Click is, who are you? What do you do? Give us a. Give us a brief intro.

Yeah. So I guess my background has been in building businesses with a philanthropic spin to it. Triple bottom line and now quadruple bottom line. Profitability has always been a big part of my life. Never until Carbon Click have I had the opportunity to be part of the B Corp. Whnau and Carbon Click is a climate tech startup from, based here in New Zealand that's got a fairly global reach. And what we do is connect good businesses that are on a strong decarbonization journey with and their consumers with carbon offsets that are of high integrity. Native reforestation type projects that will enhance the net zero journey that those businesses are on and give their consumers an engaging way to participate and do something extra while they're purchasing as responsibly as they can.

Nice. And so how did you get into that?

I was angel investing for probably the last nine or 10 years and this was an opportunity that came up in the early, early stages. The co founders alongside me were working for an international airline and had built their carbon offsetting platform and decided there was a better way to do things that could be far more impact and create more tangible benefits to the environment and be more engaging for the individuals that were clicking the little green button when they wanted to offset their flights. And at the start, you know, I wanted to back the guys. I loved them, love what they stood for, but they didn't have a good commercial person on board. So I sort of stuck my hand up and said, let's make this happen. I'll, I'll jump in with you if you want, and.

We'Ll take this to the market, build the product and see what happens. So that's where we are almost four years on from first registering the business and starting that tech build process, coming through Covid and all the rest of it. We broadened our horizons significantly through that period as online retail shopping increased considerably and airlines Vanished considerably over that period. So now we've sort of come through the tail end of it and we're focusing on a number of different areas. One is the travel sector, including travel turner from events. So events ticketing platforms can allow consumers when they're traveling to and from those events to offset that. And we also offset big major events like we offset FIFA, World cup last year and so on. And we were able to redirect those offsetting funds into far more meaningful and tangible projects than what they were earmarked for. So we're pretty proud of the benefits that we're able to bring in that space.

Wow, that's pretty cool. Yeah. Because I think the last time I was talking to Jan, a couple of, well, it's for like an in depth conversation was probably before COVID So Jan is one of your co founders and yeah, you were very much focused on that airline market and I guess, yeah, Covid.

Will make that challenging. As you said so four years ago. So what's that with 2023? So kind of 20, 2018, 2019. So carbon, I suppose was, was on the radar then, but possibly not as big on the radar as it is now. So what timing wise? Yeah. How have you seen?

Yeah, I mean I saw as being perfect timing to go early into the markets. Obviously Covid had a massive impact on, on all of our early plans. But we certainly, you know, aside from COVID it was the right time. Greta Thunberg was bringing in the, you know, the fluke scum, the flight shaming movement and having the strikes, school strikes for climate and so on. Around that time it was, it was really getting airtime and gaining rapid momentum. Businesses were faced with this new term called social license to operate that was being forced upon them. And boards were struggling to understand what that means and what the threat was to their businesses if they didn't address it. So it was all a rapid learning curve. A lot of it was also to do with the maturity of the scientific data around climate change as well. So back then the AR5, which is the IPCC report at the time, had some major challenges with it that were subject to criticism and.

Deeper interrogation. So you had the Donald Trumps of the world who were saying, well, hang on this, some of this data doesn't make sense to some of these scientists. And so climate change is a hoax. And they were right that some of the data didn't make sense, but they were leveraging that heavily. And at the time I remember not being sure about what side of the fence to sit on with regards to the climate change debate, because I didn't know the facts. I thought the biggest problem in the world was single use plastics back then, and that was my mission to, to tackle. But I read the IPCC report end to end, the 1500 page sort of version. It took me a year.

I can imagine. Yeah, it's not, it's not like a bedtime reading.

Yeah. Page one took me three hours to read because I was having to.

Google the acronyms and then go down rabbit holes with just about every line. But by the time I got to the end of it, I was really comfortable with understanding where the data discrepancies were. And things like, you know, in some parts of the world, they measure mean sea level temperature as the temperature of the actual surface of the water. In some countries they measure it as a meter above the water, of the air temperature above sea level. So you get data which sometimes would show that the temperature hadn't changed, but it was just things like measurements being done differently. And once you understood that and could unpack those arguments that were coming from the Trump scientists of the world and see the document as a whole, not just as individual pockets, it was quite easy to see that we had a huge problem and a huge challenge ahead of us. And you can't unlearn this stuff once you've gone deep into the science. And.

I don't know if you. Good Canterbury boy, you've probably been to Fox Glacier and Franz Josef Glacier a few times in your life. And if you've compared those photos from childhood to what they are now and seen, hey, this, this is very real retreat and it's consistent. And combine that with the messages from Sir David Attenborough and, you know, some of my other heroes around, look at the consistent trends of polar ice caps and so on. Of course, when polar ice caps melt, that doesn't, if they're floating, that doesn't displace or change the displacement in the seawater. So sea levels don't rise, but it's an early signal of what happens as the land meltdown occurs, permafrost occurs and so on, where you really start to see that acceleration of sea level rising which we've, we're staring down the barrel of, and extreme weather.

Considerably increasing over the next 30, 40 years. That's, that's the sort of thing that really drove me to say, well, hang on, what am I going to be proud of when I'm sitting on my deathbed, hopefully in a very long time?

And, and this was one of those opportunities to leverage the knowledge that I had to.

I guess, myth bust those that were out there denying and spreading false news. But also to leverage the good and really double down on, you know, even in the carbon offsetting world there are bad projects that are just an accounting exercise. And you know, I'm pretty heavily lobbying against some of the standards that include them as valid carbon offsets. But that's where I saw my calling. The ability to leverage this, to drive impact at scale through the carbon offsetting piece. And a lot of the time being the tail that wags the dog. So organizations that say, hey, we want to go to net zero and we want to offset our emissions and we want to do it responsibly, it's an opportunity sometimes to say hey, you guys are not quite ready because you not on a strong enough decarbonization journey, you're going to get accused of greenwashing even though your intentions are good, you've got a bit of learning to do there and, and it's not going to come across right if you don't get that balance right of decarbonization first. So.

Yeah, I hope that answers your question.

Yeah, I would imagine you're possibly like number of people that have actually read the full IPCC report. I'm, I'm thinking it's probably not in the thousand maybe.

No. And this surprised me. Even a lot of the authors and contributors hadn't read the full report.

Expert on their section. But they're not seeing, a lot of them are not seeing the whole end to end big picture which, which did really surprise me. So we, we also had, you know, some arguments when I sat on some of the observation panels. There are arguments between academics as well because each of them hadn't read the others.

Story. Really.

Yeah. And it's that classic because I used to sell medical devices and it was, you know, orthopedic surgeons, neurosurgeons. And I guess it's the same with academics. You know, if you put 10, 10 orthopedic surgeons in the room, you'll have 20 opinions. And it's possibly the same with academics, you know, talking themselves in and out of positions and round around.

No security for reading that because I think it's hard, it's hard to know what to believe fully unless you've actually done the full work yourself and have internalized that have done the research. So massive kudos to you because it does feel to a degree, I guess from, from a lay perspective to a degree but obviously heavily involved in the world of B Corp. And impact reporting and you know, try to make businesses better. It does feel like the last couple of years has just become the carbon offsetting wild west and there is now thousands of companies that are carbon something where it's like you pay us some money and we can make stuff go away. And then, and then you hear, you know, there's companies making claims around, yeah, well we're carbon zero or we've offset our carbon and it's like well what exactly have you offset and how have you offset it? Because are you, you've offset your scope one emissions which were zero. Okay, so you've planted one tree. You're now carbon positive in your designation. So yeah. Thoughts, thoughts on, on this carbon wild west. Where are we at?

It's, yeah, it's certainly such a big challenge and I think there are enough for the big organizations that attract enough attention. There are the journalists, there are the whistleblowers that catch them out and that's, you know, that's self regulating.

Excuse me.

Bless you.

The, the challenge that we have is in the mid tier markets where companies are not big enough to, to attract the attention and be called out by consumer commission or you know, the relevant watchdog authorities for grain washing. And there's a lot of it that does go on. You know you picked on the scope one emissions thing. We know in New Zealand roughly 75% of all emissions are scope three. So most, most businesses are count if they're counting emissions accounting scope 1 and 2. But we know we're 25% of the emissions really are being offset in that business if it's being tainted as green. They're encouraging consumers to move away from other brands that potentially were no worse or potentially were even better because it's, it's a bit of a creative accounting exercise. It's like you know, coming to tax returns at the end of the year for IRD.

Yeah. So the 101 crash course in, in scope one, two and three for people who don't know. So scope one is basically emissions from company owned facilities and company owned vehicles. Scope 2 are emissions from purchased power that runs your owned facilities. And then scope three is everything else. And pretty much like you say for most businesses, scope 3 is where most of your emissions lie. And I guess even for the B corp assessment realistically you only get well under the current framework you get points recognition for tracking your scope one and two and they ask you questions about carbon intensity which is basically how much carbon do you emit per million dollars of revenue. So scope three is Not a compul. Compulsory measurement for B Corp. Even at the minute. So, yeah, I think there's a, there's an event coming up in Sydney later in the, in May or mid May that I'm talking at and one of the other events or panels is called my Scope three. Is your Scope one. We need to talk.

And it does, it does sort of feel like. Yeah, Creative accounting Wild West.

Yeah, absolutely. Do you include your flights or do you not. You know, there's some gray area, areas like that that can be really creatively avoided or included depending on how honest or. Yeah. Or, you know, technical a company wants to be.

And even, even like the, you know, like the FIFA events. Well, it's kind of like, well, yes, it's me as the consumer or the ticket holder who has traveled there, but I've had to travel to your venue because you can't bring your game. So it's kind of like almost where does the, you know, where does it, who does it lie with to. To make changes? I guess it's collectively. But yeah, it kind of, I guess the risk is. Goes to people just kind of go, what's not my problem? You know, that's on you instead of. Yeah, what are your thoughts on that?

Yeah, everybody's keen to point the, point the finger to somewhere else, but in fact, we all need to play our part. If you're traveling to FIFA, you need to, you know, we all want to live an enjoyable life. If you're traveling to FIFA in Qatar, for example, it was difficult because it's only really air travel that can get you there. You know, FIFA could probably make a mandate that they have to choose venues that at least 50% of their attendees can arrive by train, for example, would make a big difference to that carbon footprint. There is a responsibility on both parties, but certainly in the Qatar case, they had some big problems, both humanitarian and environmental.

I was going to say maybe the carbon emissions were sort of the least of the impact worries for the Qatar world.

Yeah. Number of challenges to unpack there. But certainly, you know, the silver lining is we were able to redirect $1.4 million of that was destined for rubbish carbon offsets into some really meaningful projects that make a big difference to not only the environment, but also the communities, the social impact around those, those projects. So that's where we try and, you know, understand the fact that there's a lot of bad happening and we, we need to look through that and say, what's the good that we can do right now? What's the maximum impact we can have that changes the state of the planet.

Yeah, so what, what specifically that is different about how you're doing your offsetting that is at a higher level or higher benchmark compared to others who we won't name and shame. But you know.

Yeah, absolutely. So the key thing is that we, we run a secondary audit process over the carbon offsets. So first of all we'll look for the type of carbon offsets that will resonate with our customers and their consumers or their stakeholders often. Native reforestation is a really popular one, but it's really expensive because the, you know, the growth in indigenous species is slower than a species like pine. So you've got to recognize that in making sure that these people running these projects can actually do it affordably and sustainably themselves. And we know that it's not going to be as profitable for them as running a big pine forest. So we're all in this together. They're doing their part, we're supporting them as much as possible. But it does cost a lot more per tonne for native reforestation because you're getting lower yields but you're getting all of the biodiversity impact that goes with that. So we're working with the likes of WWF and have a look at where their projects are or where the albatross, royal albatross are nesting for example. And we'll pick projects on Banks Peninsula, reforest that and help with pest control and all that kind of thing so that we're helping multiple outcomes from the carbon spinoff. We're making sure that that involves public access from the community so that community members can go and reconnect free of charge with nature there, which brings all the mental health benefits and so on. And it's not becoming an elitist, locked away part of forest or anything like that.

So we look at first of all additionality. How genuinely additional is this project and is it genuinely bringing emissions out of the atmosphere by putting money into it? The next thing is permanence. So how long is it doing it for? And my example before with pine, you know, the 1 degree in climate change, pine has a 700% higher likelihood of coming to forest fire. So the risks there is that 30 years time, yes, it's sequestered all with the carbon, but there's a high chance that it gets released back into the atmosphere. And this is the problem Microsoft faced, you know, best of intentions, but they lost a good chunk of their carbon stock to forest fire. The next thing is biodiversity, which I've touched on what biodiversity values can we bring? And not all of the projects have a biodiversity value. And then the fourth thing is social impact. So what's the maximum amount of social impact that can be created when we're comparing different projects? And sometimes it can be things like solar hot water in India, which is very cheap to put solar water heating on the roofs of all of the hospitals, apartment complexes and so on that reduce that power loading that's coming from coal. And the social benefits that come from that as well is a lot of those communities are without power for a day at a time and can't have refrigeration. The food goes off and so you get all the methane issues and wastage issues and like sort of thing as well. So there's, there's all these co benefits that go with it that are often not calculated in the carbon but have much wider social impacts beyond that. And then there's the unintended consequences which is kind of the least, least talked about, but often the biggest challenge. And, and we see a lot of that with, for example the Red plus projects where they're avoided deforestation and some avoided deforestation is really good, don't get me wrong. But in a lot of cases we've found in the Amazon, for example, we've done research, the owners of these projects or the ultimate beneficiaries of some of these carbon projects are the landowners that also own soy beef and so on. And when you look at it, you identify the patterns where they're ring fencing steep, hilly, rocky areas.

That logically they wouldn't be able to farm very easily. Right. And they're calling that a carbon offset project. And all the flatland is being bulldozed and burnt out. And so by funding them more, all they're doing is expanding their business activities and actually burning down more areas of the Amazon for farming and just refensing the pockets that they can't and claiming carbon credits on those. So that's, that's something that I am pretty passionate about exposing and a lot of the topics that I'll try and get across in COP28 later this year.

Yep. Yeah. So yeah, I think this is the thing, isn't it? Like not all, not all carbon offsets are equal across any level. And so.

Is there any thoughts around regulation or legislation around tightening up? You know, like I say, because we could make a claim on our website that we are, you know, carbon positive and that could just be like I say on our scope, one emissions which are zero and we, I go and plant one tree in the local reserve. And I don't really know whether that tree survives more than me putting it in the ground, but I can still, I can make that claim. And no one other than maybe a really, really savvy consumer who might ring me and say, hey, tell me about how you did it. But beyond, you know, most people I would suggest don't have time to ring most companies to ask them actually how are you doing this? So yes, I mean is there regulation or is that something that you'd want to have? Or do you think the sort of, the less good players will just be found out over time with the results heavily unregulated?

I mean the, the standards are far too low for acceptance of carbon credits in most, in most standards. And that's, you know, that's what I've been lobbying at COP26 and COP27. There is some tightening going on and some attention being brought to this as well as some.

At an intergovernmental level. For cop, for example, they made a rule not to recognize credits from pre2013 vintage which, you know, the additionality really comes into question if you're trying to sell 10 year old credits plus.

For something that's already happened. And you can't really argue anymore that that will only happen if you get the funding because the horse is bolted.

I, I do see it as being the largest players called out by the volume of consumers. You know, you'll get 1 in 1 in 10,000 might be that whistleblower, but the chance of that 1 in 10,000 shopping with a smaller local store is pretty slim. Yeah, and so the chances of a smaller operator being called out for greenwashing is very low, which is unfortunate.

Yeah, yeah, no, totally agree. I did hear a few years ago I was working with a, with a mate, Jay Scott and he, we were trying to wrangle some people together to try and plant as many trees as we could. And yeah, it was a really interesting project. We were trying to get off the ground and we were trying to get some investors or kind of almost like trying to create opportunities for tree planting as part of carbon offsetting. But more it, more so it was around, look, let's just plant some trees. And one thing we were told at that time, and whether this is still true or whether it was never true, theoretically planting trees on the equator is better than anywhere else because of the amount of growth that the tree has and the types of trees. Was that or was that complete bro science that we were told?

No, it's, it's quickest to reach maturity.

Right.

The equator. But and this is another thing that we've got to consider long term. When you look at, you know, the Cody tree, that can offset for a thousand years plus and you build the micro riser in the soil. In the soil and, and that's soil integrity and you get a healthy ecosystem that continues even when those trees reach maturity. To, to offset. Planting around the equator does, does have strong advantages because it's, you know, the sunlight hours, the walls and, and so on is, is good. But, but you do reach. It's just a steeper growth curve. Right. More than, more than anything, you know.

It'S sucking more carbon more quickly in the early piece. But like you say, you've got to look at the long term, you know. Is it. I mean, I guess, yeah. Because I'm originally from the UK and you kind of, you know, there's some trees, oak trees that have been there for close to a thousand years, you know. Yeah. And clearly that's. Yes, it's growth might have not been as quick, but it's, it's been here for a long time and it's pretty, they're pretty stable, sturdy trees. Yeah. So yeah, I don't envy your job trying to work out like, and I guess it's different in different parts of the world. Like optimal. Yeah. Like I say, with all the social stuff, consideration and yeah.

You try and plant in an alpine environment, you might never really capitalize on the carbon footprint to go and plant those plants.

Yeah, yeah, yeah, yeah, yeah.

By the time you've driven up there and they grow so slowly, you know. But, yeah, but.

In, in most subtropical areas as well, it's, it's fantastic, fantastic growth. If.

It'S, you know, New Zealand, latitude upwards.

Yes, there are advantages to species that grow quickly like mangroves, but that's, you know, you've got to balance out short and long term prospects as well.

And so I'm just, I'm just generally curious. So would it be better? Because there's, there's an element around, you know, using wood as a material in general. You know, historically it seemed to be that, you know, you, you'd grow a tree, the tree would get to maturity, we chop the tree down, we'd use it for our tables, our chairs, for our buildings. But as long as you're planting another tree, you know, you're getting that sustainable benefit of a young tree growing quickly, harvesting it, making use of it for a product that will ultimately fail, that then needs replacing by the next tree. Does that, is that. Yeah. Is that kind of what we should be thinking about or is it actually we want this tree to be here for a thousand years and kind of almost like utilization rate of a tree. Is it better to have? But again, I guess it's complicated. But yeah. Should we, should we be making more use of timber and wood as a raw material that's ethically and sustainably farmed in a manner that keeps a high growth of tree that's sequestering as much carbon as possible?

Yeah, so it's, it's fairly carbon neutral in the process. So by the time you've milled it and shipped it and use it for building and so on it, you know, the carbon that's embedded in the wood has been well and truly expended during the process, but it's, it's still a low carbon way to do things. So I'm not saying pine is, is terrible. It's, it's a great building product, it's quick to grow and it's.

It'S a good material to work with. The challenge is using it for carbon offsetting. So yeah, you know, fit for purpose.

That's where we would, we would suggest that. And the other thing with pine, of course, is that it, if you're using pine to substitute the logging of native timbers, for example, where you've got a great ecological balance, that's sequestering carbon, you've got good soil sequestration going on, you know, people need to live and build things. You can only do that a certain number of ways. And yeah, all of those ways have a carbon footprint. So yeah.

That'S the challenge that we have with population growth. I guess.

It'S complicated.

Pine is a, the lesser of many evils and in many ways for building. Unless when it comes to effort versus cost versus social impact and environmental impact.

Yeah, and that's, I think that's increasingly the challenge, isn't it? It's not just recognizing the impact of the one thing that you think you've recognized. It's trying to look at that ripple effect and provide that depth and perspective and unintended consequences and really trying to work out. And that's quite hard to do that.

Yeah, you've got to take a high level pragmatic approach and make it palatable for people. You've got to make it practical for people to participate in. If you build the gap too far and say we've all got to live in earth homes and we've all got to, you know, or straw bale homes.

Yeah.

The level of expertise and and shift would be just too great a leap for everybody to make. Yeah, yeah. And you'd end up going backwards.

Yeah. Although possibly less leaky than some houses built in Auckland.

Oh, I'm not saying all of. Yeah, I'm not saying all the buildings being done properly. You know, we've, we've had a, a shocking building industry from a sustainability perspective. But even the way that cement is produced in New Zealand, you know, there's all sorts of opportunities for improvement.

Yeah, yeah, no, I was talking about that. I had breakfast with a couple of mates this morning and we were just talking about that how when the building code was, was first introduced, there was no consideration that, you know, Whangarei in the far north is tropical and you can watch everything just rot in your wardrobe down to Gore or Invercargill, where, you know, in the winter you're consistently getting minus temperatures. And how it was just kind of like, yeah, we'll just kind of go with one code because it just seems easier. Yeah, I think that's, I mean, that's kind of humanity, though, to a degree, isn't it? We, we, we take the path of least resistance normally. Because do you know, it's, it's the, the easy wrong versus the hard right decision. It's. We're, we're. Yeah. Humans discuss. Sometimes it amazes me we've lasted this long sometimes. Yeah, yeah. But so, so young Dave, growing up, you grew up in Auckland?

Yeah, I grew up out in the White Tuckeries.

Out in the bush. Really? Yeah, with a mother who was a naturopath and a father who was a merchant banker. So I had sort of polar opposite parents.

That's, that's quite a mix.

Yeah, yeah, yeah, absolutely. So I had a good business, business influence and I also had, you know, we're running around bare feet at school and on an organic only type of diet.

And so, yeah, sort of. Young Dave, did you, did you kind of have a feeling growing up that you would end up doing something like what you're doing? Or was there a different path that you'd sort of identify, you know, because like, say you got different tensions there, you know, was sort of. But you, I mean, maybe you've got the perfect balance because you seem to have got that financial now, you've got that business side of you, but you're doing it in a manner that's, you know, holistic and taking care of the planet. So. Yeah. Was that always the path you kind of felt you're going to be on or, or.

Yeah, it wasn't always I sort of felt fell into it out of necessity because I saw too many problems with the way business was done. And I first noticed that when I went to, you know, our high school and. Oh, actually, no, it was earlier than that. I went to, on a primary school visit to the rubbish tip. And we didn't have rubbish collection where we lived, so we had to take things down to the refuse center and recycling center. So when my parents went shopping, they would deliberately not buy things that had plastics because, you know, we couldn't burn it in the fire and.

Yep.

And so on. So from that early stage, you know, we grew a lot of our own things. We're buying, you know, flour and 10 kg or 5 kg it was, it was all very low waste for the amount of food produced and, and that we lived off when I went into high school in particular and intermediate, sort of more towards. I call it the big smoke. But Titarangi, which was kind of on the fringe of the bush. Yeah, you know, everybody's bringing chips in these multi packs and there's like three chips per bag and more, more plastic than there was food in the plastic and, you know, stuff blowing around everywhere. And we'd been to a visit to the tip and I'd seen, you know, the stream just on the way as we're walking to the tip, looking down the bridge and there's disposable nappies and oil, you know, all over the surface of the water. And then I was just thinking, that is disgusting. And then how do we generate so much waste? And people just have no idea. They put everything in a bin and it just vanishes and they think it's gone for good and it's no longer a problem.

So we're, we have no discouragement to generate shitloads of waste, as you know, certainly in New Zealand. I'm not sure what the rest of the world is like, but unless we start really charging by, you know, by weight and volumetric weight and toxicity weight or whatever of rubbish, we won't be driven to change our behaviors. And that was at an early stage where I sort of was in shock and started talking to my own social circle, like, do you guys not realize what happens with this stuff? Like, this is 4 million people, 5 million people behave like this. Can you imagine what it's going to be like in 20 years time like this? We're going to run out of room to walk because everything's going to be landfill.

That sort of concept, which started to catch on with some of my friends And I found I was able to have a bit of influence there. And I thought, you know, this is, this is cool and, but we really need businesses to adopt this sort of shift. And I got into business out of, I guess being entrepreneurial, but always those values. With every business I got into, those values remained strong. I never understood carbon. So some of those, you know, businesses I was flying around in helicopters and jets and things and without really knowing the damage that I was doing. I thought trees loved carbon dioxide. So back then I thought I was, you know, as long as they were running, clean them a favor. Yeah, that was a big thing. I was a big advocate for anti air pollution issues, which is, you know, the nitrous oxides and particulates and so on. So I did lots of lobbying for that. But clean CO2 I never realized was actually the invisible enemy. Yeah, but, but you know, as, as we grow and learn and mature, we realize what, what we thought.

Was behaving well is, is actually not necessarily the case and. Yeah, yeah, learning about methane as well was another thing. I thought, you know, organic farming was probably good because it's all, it all seems natural and you know, the cows naturally fertilize the soil and so on. But realize it was probably not quite as good as I thought it was back, back in the early days.

Yeah, I mean, yeah, you don't, you don't know what you don't know, do you? And. No, no, until you go on a bit of a journey of discovery or you start going down some rabbit holes. Yeah, you don't know until, until you do. Yeah. So it kind of sounds like you've always had that sense of values and, and wanted to do the right thing. It's just always interesting because some people, and probably myself included, like I, I probably wasn't very connected to. Well, I mean I was in interested in the outdoors growing up. We do lots of hiking, it's sort of in Wales and a bit in Scotland and stuff in the holidays with my dad. But yeah, not having, didn't really have that real sense of social and environmental connection and wanting to do good. Yeah, for me it was, it was much more of a early midlife cris. Massive shift in, in me. So it's just always interesting to find out from other B Corps, like have you been always been this way or have you, have you come to this realization at a later point or at some point in life?

I guess lots of mini realizations along the way, you know, where I think I'm doing good and then I realize Ah, yep. Actually, no, no, I've really stuffed up. Yeah, there's plenty of those moments in my life.

Yeah. And so when did B Corp as an idea pop up on the radar? Was that just a carbon click or had you heard of it before you started?

Carbon click no, it was, it was actually. It was actually getting into carbon clicks that I started looking at. How do we audit for robustness? How do we prove our credentials.

A cut above the others entering the industry? How do we prove that we're genuine when we can see a lot of competitors are not? And I came across B Corp.

As, as I was researching a number of different standards and found that, you know, that seemed to be the gold standard in challenging a business to do better. And that's what I really resonated with. It wasn't just a stamp that said, yeah, we're good at pat on the back, but it was a process that we could go through that really challenge us to search deep and see what we could do better, as well as, you know, giving a stamp that. That would add credibility to the business.

Yep. No. 100%. It's said it 100 times. It's definitely not a pay to play certification framework or, or a club where you just pay some money and you get to put logo and say, hey, we're kind of thinking about doing some good, but please don't ask us what we're actually doing. Yeah, rigorous, but achievable is how I like to describe it, because I think Jamie Oliver from his restaurant group in the uk, who got B Corp a few years ago, he described it as like having the tax man have a good rifle around your nicker drawer, sort of in terms of how deep the. The process goes. Yeah. So it sort of highlights anything. Yeah. Anything unexpected, good or bad, that, that came out from going through the B Corp journey. Because I think you scored pretty well, I seem to remember. I think you were.

We had some good help maybe.

Yeah, you might have had a guy, but I mean, you were clearly a B Corp. Because it's. Again, you know, when we work with companies, some companies are new to the idea of business for good and purpose and impact. And we are kind of a part of their transition journey to get them over the edge to go, okay, right, we're now in the world of B Corp, but carbon click, like, you were clearly a B corp from day one. Like just how you were, what you're doing and how you're doing it. You were clearly a beacon from day one.

Yeah.

So was there anything, anything from within the assessment or any changes that you had to make that you can remember because it was a couple of years ago now or maybe even more.

Yeah, yeah. There were certainly some challenges to our policies that we realized we, you know, had internalized but hadn't.

Hadn'T properly communicated to the wider team because we make a lot of assumptions that everybody knows how to do this or everybody knows that this should be how we acted.

So, you know, that was really helpful for us, for our staff onboarding process as we're bringing new members into the team to highlight all of the things that we expect behavior wise, all of the things that we can help them with on their journey.

So, so bringing the impact of, you know, our core leadership team who live and breathe this, breathe this into the wider community that work with us, including contractors and so on. Those were really valuable processes to go through and realize that we actually had made so many assumptions that weren't translating to the action we would expect from everybody in the team. Yeah, so that was really good. Challenging those standards and having to come up with some of those standards to back fill the gaps when we're asked the questions. The other thing that was really good about it was the B Corp community that.

That were around us. So, so when we, when we reach out to others or others reach out to us, knowing that we're both B corps is.

It brings a lot of instant credibility. Instant.

Being in the same whnau together or family together.

Feel to it, which I didn't realize was, was so strong in the B Corp community. So there's a lot of networking. There's, you know, we've hosted a few. Sorry, we've hosted one, but attended a number of the B Corp networking events and so on. And yeah, that was, that was a lot more than I was expecting.

Nice. Yeah, because I guess you guys were in that classic startup phase. It's kind of like, you know, who's this person? I don't know. But do you work. Yeah, you do work here. You know, you've got all of that going on. And so yeah, we definitely see that, that the startup world using B Corp as a tool to just make sure that, yeah, like I say, backfilling the stuff that you think you're doing. But actually who's. Is someone actually measuring that or are we, are we managing that or actually, can we just write that down as to how we do that? Because like you say, when I've kind of gone through that process myself, I've got a team that are working with me now at Grow good. And it's. I've been trying to dump the business out of my head into documents and videos and other operational bits so that other people, you know, because in my head I know what I think I want to be doing. Yeah. So it's quite a useful process having, having the B Corp framework just to think about. Okay, yeah. Well, how are we going to onboard a new employee and what do they need to know about how we operate and why do we do this and you know, carbon 101 and what have you. So I know that's cool.

Any sort of challenges or hurdles for you guys? Like I said, I think you were pretty B Corp aligned.

So probably no massive fundamental shifts in how you did stuff perhaps, or was there?

No, nothing fundamental.

But the challenge that we had was the timing was we really underestimated how long it would take to process everything.

So that was really difficult from our perspective is keeping the inertia going. You get your head into the program and then you wait months for feedback and then by the time the feedback came, you sort of had to try and remember where everything was at again. Kind of refamiliarize yourself with everything again.

Or the application again to resubmit it. That was a really difficult process from the, from the time delays and the amount of disconnect and rework that goes on. Yeah.

Particularly being a startup where actually the business might have changed significantly over two months. Like actually we, we don't do, we.

Don'T do that anymore. We're growing quickly, you know, bringing team members on quickly. We're in different, you know, every time we went back, the application needed to change because of the time.

Yeah, they're definitely getting better at that. It feels like. Yeah. I think if I remember when you guys were going through the certification, the verification phase, that was like the beginning of the acceleration of the busyness, whereas now it does seem to be coming down a bit. So yeah, brilliant. Bad timing for you maybe. But yeah. And so now what does being a B Corp mean to you on the sort of the day to day as, as a CEO of a fast growing company that's, you know, doing some good in the world.

Yeah. So what it means to us is stopping and taking a step back every single day at where we're going, the deals that we've got on what.

What we're developing and, and saying, and the people that we've got doing it and saying, look, is there a way that we can do things more impactfully here? Is there a way that we can engage somebody Better here.

Outside the organisation or influence somebody outside the organization to adopt these values? Is there someone that we're working with that we think should be put through the B Corp process? You know, particularly customers that are wanting to offset, but they're too early in the sustainability journey, for example. So on a daily basis we're sort of thinking very actively about who we're working with from a consumer perspective and what we're doing from an impact perspective and whether we can improve on that. And that also is I guess, core to our principles of how we select carbon offset projects when we're auditing them. The B Corp values are really adopted into our audit methodology.

Nice. That's super cool. Yeah. Because there is the risk is that B Corp is just a certificate that sits on your wall and it doesn't get integrated and.

Clearly you've made really good use of that, I guess. One question really keen to get your insights on. So you are a fast growing startup. You know, money hungry is typically what startups are. You're typically on the lookout for more cash to keep the Runway going and you know, build and get the product to the next level. Keep your customer experience going and what have you. So do you feel that there's a tension between doing good and making money for you? And I think you're quite similar to sort of Jamie from Twice Cups, you know, start startup business, B Corp, trying to balance purpose and profit. He's got the bonus that he's a family owned business, so it's him and his mum and dad and wife with a young kid in the business. So they've got an extra layer of pressure on that one. But yes, how do you find balancing the money side of the business and maintaining doing good?

I find that quite easy. We've got investors that are well aligned and as long as there are profits that are sustainable as well, as long as the business model work and there are a few basic rules to business models. If we step outside them, it doesn't work and then it becomes a charity. So as long as in a charity it's very difficult to get investments for unless you're wwf. In fact, it's even difficult for people like that to get investment or donations. But.

We certainly have to make sure that we follow the business sustainability rules from a financial sustainability perspective. And that can involve some tough decisions. You know, poor performers have to be weeded out of the team and so on.

Unfortunately. But that's, you know, generally speaking.

The fact that whenever we're making profits we're making significant impact because it's directly tied to the number of customers we've got, the volume of carbon off, getting flowing through the platform and so on.

We can take care of both at the same time. But it does involve some tough decisions. You know, sometimes people are going through tough things, tough periods of their life where they've got maybe repeated, repeated illnesses and things like that where we've had to say, look, we, we can't at this stage in our journey afford to support that, otherwise we're going to be unsustainable ourselves as a business. We're going to have to refer you out so that you can go on a sickness benefit or something like that and stop working for us. Those are the tough calls that I hate making. But at the same time, if I didn't, we wouldn't get investment, we wouldn't be able to continue scaling at the rate that we are and we wouldn't have the wider impact that we're having. So it's a case of balancing what are the tough decisions that we have to make with the resources that we've got to be able to generate the maximum impact we can for the planet.

Yeah, I think that's really cool. The focus on the impact is kind of the key thing I think, which helps you make those tougher decisions. Whereas.

Maybe having come from a background of being in more money driven enterprises where it's like actually we don't really care about the impact. It's literally, I mean it makes it easy to make decisions when it's just about the bottom line. But typically those decisions lead to worse long term outcomes for people and planet. Whereas I guess you've got that real clear lens and focus on the environmental and social outcomes that you're trying to create, which you are creating. And so yeah, it's kind of, I guess, yeah, you just need to put your lens more towards the impact side of it. Yeah.

Also balancing out social impact on one person versus how many people are going to benefit socially from this project. You know, if we had that money redirected instead of supporting somebody, really there are, in New Zealand in particular, we've got good government support able to, to step in in difficult times. So yeah, a little easier decision here in New Zealand.

Yeah, exactly. And I don't, I'm not looking forward to being faked with some of those decisions again in the future.

Yeah. And so plans for, for the business, you, you go in big. What's. Yeah, where are you at? What are the plans for the, for the next little while?

Yeah, so the plans for the next little while or two, continue. I mean, 90 of our business is offshore as it is, so it's sort of a global from day one kind of setup. But the plans now are unlocking what we call a series A investment rounds to bring on more funding for the business, to bring on an international team, sales and partner management team, really. We've got great partnerships in place from SAP to AWS and so on that will leverage us into their customer base. But we really need humans on board to drive that partner partnership channel.

And that's expensive.

So we've, you know, we've set up our US and UK companies and.

In the process of Singapore and Abu Dhabi as well, so that we can sort of base, base our soldiers on the ground, so to speak, in the markets that we're expanding out of strategically.

Nice.

And that'll, that'll see us. You know, there are spaces like the event space, for example, that we're going into in a big way over the next 18 months leveraging organizations like Formula One and FIFA that we've been very lucky to win those big contracts. Yeah. And yeah, I'm, I'm very grateful for those opportunities.

For a little New Zealand tech startup to be out competing much bigger incumbents that were, that we were against in the tender process.

Nice. And do you think that's coming back to your methodology, like how you're doing it? Do you think that's what else is there?

Certainly, yeah, that's certainly a part of it. There's, there are a few different aspects. There's the geopolitical nature. New Zealand is a good geopolitically neutral country as far as the rest of the world goes. So do not seem to be supporting their competing countries. So that's a small advantage. But the main thing is, yeah, the, the robustness of our audit process, the genuineness of the, the whole team and the organization comes through from everybody that interacts with a carbon Click team member. Yeah, that's, that's a common comment. But the software itself, the platform that we've got, the end to end engagement that it takes consumers on the journey of as well as the businesses on the journey of that, that is really the key.

Building a great product.

Yeah, yeah. Well, it's the only platform that has instant traceability tracking sites so that you can see your donations actually being accounted for on the registry where that carbon offset project is, is registered. So you know, you know, you know exactly what component of your money reaches the end project after any transaction fees and so on.

Yeah, super cool. And this has B Corp come up in terms of like mentions and dispatches when you've, when you've won a tender or has that. Yeah. Has that led to any opportunities?

It's certainly enhanced and wrapped some robustness around.

Around who we are. It's some external validation and it's, it's much.

It'S actually much more cost effective than the other validation processes that we were looking at. You know, customized audit processes with one of the big four accounting firms and so on. So from our perspective it was a great balance because it brings in a lot more actual improvement to the business by making us think about things as well as it being a. You know, we repurposed really our budget that we were going to put into just a compliance type stamp and I think that we needed something for winning those big contracts and B Corp has satisfied that.

Nice. Super cool. So the future looks pretty exciting for you guys.

Thoughts on. Yeah, the future of B Corp. Where do you think in 10 years time? What does B Corp mean to people? What does it. Yeah, what does the movement look like in your eyes?

Yeah, so I mean I see B Corp as being the standard, the upper, upper echelon of standards that organizations aren't just doing the bare minimum for social license if they're B Corp certified. They're actually organizations that are not only have reached a certain standard but are continuously pushing the boat out as far as what else is possible? What else could we do?

I think that continuous improvement will be a really important factor as far as credibility for B Corp goes. You don't just sit and forget and say yeah, we're good because new technology, new products, new ways of thinking come, come to, come to life that need to continuously be embedded if you really want to be in those top environmental and social performers globally.

So I would say it's really important to have the continuous improvement standards. You should reach a higher score every time you go for your recertification, for example. If you don't reach a higher score there should be some questions asked.

I think those kind of things would be really important. The new standards look more comprehensive and I'm hoping that or the new draft standards rather, I'm hoping that that will be able to be maybe broken down into two steps so that more organizations can still participate without the resources that may be needed for the B Corp certification under the new draft framework. We certainly don't want to see good minded organizations not going through the B Corp process because it's too expensive or too cumbersome. But certainly, you know, based on revenue or volume or size, it would be good. The draft standards that are coming out look like they'll really address taking enterprises to the next level.

And accountability which, which is a good thing. So hopefully, hopefully it can be split into a couple of approachable versus high compliance, fit for purpose for the organization size so that it's not just a big boys game.

Yeah, yeah, no it's going to be, it's going to be really interesting to see how, where it lands. Yeah. Like I said, I think that's my kind of fear is that. Yeah. Does it become overly cumbersome and does it restrict the mid. The middle, the middle ground business that could sneak in to be a B Corp currently.

Who would then be on a journey of discovery and improvement whereas they might just go oh this is way too hard. So we're just, we're not going to bother. And I think where the movement is at globally, we're just on that, you know, we're just sort of hitting the, the real growth phase. It would seem silly to sort of chop that.

Stand halfway and then reset it and make it harder again.

Yeah, yeah. The world needs a standard like B Corp that's on you know, 10% of products, 10% of businesses that.

Yeah. To get that critical mass.

That's the top 10% and that gives you plenty of selection because you know, got 10 products to choose from. One of them will be a B Corp product.

That's where it needs to get. And then people can become, or consumers can become creatures of habit of knowing which products that they're going to switch to. I think it's, it doesn't have that critical mass that would be exciting to see.

Yeah. Again it definitely feels like you go around the supermarket now, there's quite a few more options with a little B logo on it compared to even two to three years ago.

Yeah, yeah. I guess it's like the options vegetarians had 10 years ago versus now and vegans especially.

Yeah, yeah, it's getting there.

It's getting on the right journey.

Oh well, yeah, that was super cool. It was really good to know, to get to know you a bit more and get to understand the depth that you've got behind carbon.

Click.

Yeah, just a super cool business. You're super cool humans doing some really good stuff. So keep up your great work I suppose and yeah, look forward to seeing, seeing you get some money. If I had some money for a Series A's, Series A fundraise, I, I give you some but I don't, I'm going Have I'm going to have a look behind the sofa. Might find a couple of dollars. But yeah, all the best of that. If, if anyone's listening in and, and and wants to get hold of you, we, we'll put your details down. If you've got a couple of mil lying around for Dave to help him grow his business. How much are you allowed to say how much you're looking for or is that complicated?

We're going to do a 10mil US raise which carries through about a three year sales cycle because dealing with organizations like airlines and large.

Yeah, we'll come back to you next year. Yeah, yeah.

The sales cycle can be a solid 1212 months so we want to fully capitalize on that by the time we're ready for the next scale up raise.

Yeah. So you think it'll be multiple investors or do you think there's absolutely not looking for one person? Yep, yep.

No, it'll be a team of 10 to 20 each that bring their own strategic for the business that we can leverage as well to help us.

Nice. Oh well, yeah, all the best for the fundraise. Let us know. No doubt we'll see on social media when you're popping champagne corks to to celebrate that milestone. But yeah, no, really great to catch up Dave and yeah, keep doing what you're doing mate. Love it.

Hey, it's Tim here, that B Corp bloke from Grow Good. If you want more content on purpose, B Corp how to do more good in the world as an individual or a business, then you know the drill. Hit the like and subscribe. Check out some of our other videos. They're probably floating around here somewhere. You know how it works. Thank you so much. See you next time.