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E180 Nature Inc. Live: Live From London Climate Week · Second Nature

0:08
SPEAKER_00: Good morning.
0:10
SPEAKER_00: Welcome to what is probably your first event of London Climate Action Week.
0:15
SPEAKER_00: Woo! Thank you.
0:17
SPEAKER_00: Yes, loving the energy.
0:18
SPEAKER_00: I hope we've had lots of coffee and uh water as well.
0:21
SPEAKER_00: My goodness, if it's not warm already, it's warm under these lights, panelists.
0:25
SPEAKER_00: I hope you guys are going to be okay.
0:27
SPEAKER_00: The irony that this is going to be an incredibly hot week.
0:31
SPEAKER_00: What I'm sure everyone during this week is going to allude to.
0:35
SPEAKER_00: So I'll be the first to start on that.
0:38
SPEAKER_00: On that note, please, if anyone needs a drink, please to leave any one moment and please just make your way out the door to just be uh very conscious that it is a live podcast recording, suggested please be as quiet as you can be.
0:50
SPEAKER_00: And I'm absolutely delighted to be joined by an exceptional uh group of incredible environmental leaders working across nature finance, conservation and technology.
1:01
SPEAKER_00: So hopefully you guys are going to have a really varied conversation here.
1:04
SPEAKER_00: Um but this is a live recording of second nature.
1:07
SPEAKER_00: Has anyone listened or watched a second nature episode before?
1:11
SPEAKER_00: Yes, thank you.
1:12
SPEAKER_00: I see some hands.
1:13
SPEAKER_00: Um we are the UK's leading network capital focused podcast, but we do a variety of incredible guests from um you know small startups right the way through to incredible corporate entrepreneurs all the way through um scaling finance scaling efforts and scaling leadership in this sector.
1:30
SPEAKER_00: So if you haven't given us a listen, um I advise you to please go do so.
1:34
SPEAKER_00: Our incredible podcast producer Penny is in the room filming for us, supported by incredible photographer and videographer Ben.
1:41
SPEAKER_00: So any questions around it, please ask them afterwards.
1:44
SPEAKER_00: All I quite kindly ask is please could we just have phones on and silent, please.
1:49
SPEAKER_00: Um just because we are recording, that would be really incredible.
1:53
SPEAKER_00: Other than that, I'm just gonna warmly welcome all the guests that thank you so much for joining here.
1:58
SPEAKER_00: Thank you for kind of coming and trekking through this heat.
2:01
SPEAKER_00: And I hope you guys have an incredible land and climate action week.
2:04
SPEAKER_00: I hope you feel inspired, feel excited, and God, do we need a little bit of hope in the world?
2:09
SPEAKER_00: So hopefully we will come out of the week feeling a little bit more positive around what's going on.
2:14
SPEAKER_00: Um today we're answering the question if nature is the parent company of the economy, does AI finally give us the core tools to measure, manage, and invest in it properly?
2:29
SPEAKER_00: So without further ado, please can I firstly introduce Rick Wall, the founder and CEO of Pantheon and the founding partner of the railhead capital, whose work has helped pioneer innovative approaches to investing nature capital and conservation of big round approximately.
2:49
SPEAKER_00: Joining Rick is the incredible simple title, the CEO of Nature Metrics, who is a global leader in biodiversity, intelligence and environmental DNA technology helping organizations better understand, measure, and value nature.
3:02
SPEAKER_00: Thank you for joining us.
3:07
SPEAKER_00: Incredibly pleased to welcome to Darf Japan, investor at Justice Climate and author of The Case of Nature, who brings a powerful perspective on how investment can accelerate nature-positive outcomes.
3:18
SPEAKER_00: Thank you so much.
3:22
SPEAKER_00: And of course, this is an OC event.
3:24
SPEAKER_00: So our incredible CEO, Richard Dockdown, who is also the author of Scaling Conservation.
3:29
SPEAKER_00: And if you haven't purchased it, rewarding well, it's just come out now.
3:33
SPEAKER_00: Copies downstairs side.
3:34
SPEAKER_00: But huge congrats.
3:35
SPEAKER_00: Thank you for joining Rich.
3:38
SPEAKER_00: I'm going to pass over to this incredible panelist.
3:40
SPEAKER_00: Thank you all.
3:41
SPEAKER_04: Good morning, all, and welcome to London Climate Week.
3:44
SPEAKER_04: Uh, can I get another round of applause for our incredible panel, please?
3:50
SPEAKER_05: What a super cool venue.
3:52
SPEAKER_05: And I use that word cool on purpose because it's not going to be outside.
3:55
SPEAKER_05: So I'm gonna see if the climate has given us a warning ahead of this week, isn't it?
3:59
SPEAKER_05: Um so, trip.
4:01
SPEAKER_05: Um the the theme, the premise of today's event is largely based on a paper you wrote recently.
4:08
SPEAKER_05: Can you unpick that for our audience and talk to us about that?
4:11
SPEAKER_03: Well, I think I um and and similar to the conversations we've had before, you know, nature or the economy as really a wholly owned subsidiary of nature, right?
4:24
SPEAKER_03: And I think what we're on the precipice of is being able to have, you know, technologies, science, um, really confluence around a catalytic moment for large-scale restoration, rewilding, and I think a reawakening of our sort of ancient covenant and relationship that we had with nature for millennia, sort of a referential and deep stewardship model, which I think is um is been lost.
4:52
SPEAKER_03: But I think maybe the Anthropocene, you know, for the benefit of nature can be a sort of a utopian potential outcome.
5:01
SPEAKER_05: And when you uh when you were preparing to come across the UK looking from a US context, what did you think you'd find in London and what did you hope you'd find in terms of climate?
5:12
SPEAKER_03: Yeah, I mean, I think because you know, we have a an incredible set of investors that are that are UK and EU-based.
5:19
SPEAKER_03: And so, you know, I felt like as the US, and I felt like this for a couple of years now, is sort of in a retrograde motion around climate, around policy, um, uh some you know really irrational things around our water policy and and even biodiversity and land.
5:37
SPEAKER_03: You know, optimistic that the there's sort of a vacuum being filled by, I think, the maybe the enlightened sort of European and UK mindset in and around nature.
5:49
SPEAKER_03: Uh where I think we can take some some notes and hopefully um make some changes.
5:54
SPEAKER_05: That's a beautiful segue uh in enlightenment across the SID.
5:58
SPEAKER_05: Uh 2023, you you wrote the case for nature.
6:02
SPEAKER_05: How has your mind about the challenges we face from climate and nature changed in that period from then until now?
6:09
SPEAKER_02: So, I mean, I wrote this book basically for myself.
6:12
SPEAKER_02: I did it so I could learn about it.
6:14
SPEAKER_02: All authors do, really.
6:15
SPEAKER_02: Yeah, let's be honest.
6:16
SPEAKER_02: But it was, I thought it was an amazing learning experience for me to actually go visit some of these places and hear the stories and retell them respectfully, hopefully, and in a way that kind of highlights all of the amazing things going on.
6:27
SPEAKER_02: In a sense, that hasn't, that's only grown since then, right?
6:30
SPEAKER_02: Like if you if you kind of skip the headlines and just focus on what people are doing, in every place around the world, people are finding ways to reimagine their relationship with nature, find economically viable models to protect and restore it in the context they operate in.
6:43
SPEAKER_02: Um that hasn't slowed down.
6:45
SPEAKER_02: I think it's continued.
6:46
SPEAKER_02: Um, obviously the macro has changed a lot, right?
6:49
SPEAKER_02: And in a way, I hear much less of this in rooms that don't look like this.
6:55
SPEAKER_02: And that's a problem, I think, because we ultimately money flows in investors are not very smart.
7:02
SPEAKER_02: As an investor myself, I can tell you, we're not very smart.
7:05
SPEAKER_02: Um, and that's the first sound by of the show.
7:08
SPEAKER_05: Investors are not any investors, we apologize for the offense offered so far.
7:11
SPEAKER_02: I apologize, truly sorry.
7:12
SPEAKER_02: Um, but it's true.
7:14
SPEAKER_02: And the mindset of okay, let's look at the next big thing and try and if if you're chasing the next big thing on everyone else's, it's already too late, basically.
7:23
SPEAKER_02: Um but we still do it because yeah, that's that's the way it works.
7:27
SPEAKER_02: And so that is a problem if all of the flows of money that were coming in almost passively because this felt like an interesting area.
7:34
SPEAKER_02: I think that's slowed down, and we have to be honest about that.
7:36
SPEAKER_02: Um, but there is a lot of work still going on, which is really good.
7:40
SPEAKER_05: And how much has the role of technology changed in your day-to-day thinking about investment from 23 to 26?
7:47
SPEAKER_02: I mean, I can start personal and kind of go a high level, but personally, it's completely changed my work.
7:52
SPEAKER_02: I mean, I've automated a huge chunk of what I used to do.
7:55
SPEAKER_02: Um, and it's mostly things that I think of as machines are better at this stuff than I am.
8:00
SPEAKER_02: Machines are better at reading my inbox and figuring out what my to-dos are.
8:04
SPEAKER_02: And you know, I that has been a huge unlock for me because I can then spend more time with people in places actually understanding how things work and kind of making those human decisions.
8:13
SPEAKER_02: At a macro level, it's been really interesting across our portfolio in HMAX being one of our companies.
8:18
SPEAKER_02: Um, I think technology, AI, all of these different things has it's it's made it possible to do much more with less.
8:25
SPEAKER_02: So, in a way, it's good timing because you're able to scale impact and operations without necessarily scaling her head count and spend using AI.
8:34
SPEAKER_02: And that is really powerful because it's not like the magic money tree never really existed, but in a capital-constrained environment, companies are becoming more efficient and becoming better at doing what they do.
8:44
SPEAKER_02: So I'm really excited about that as well.
8:46
SPEAKER_02: Um but I think of myself and many of our companies as kind of fast followers of AI.
8:50
SPEAKER_02: And I'm happy with that, with that positioning, actually.
8:53
SPEAKER_02: I think the frontier will keep moving.
8:54
SPEAKER_02: I have no idea where it's going, but I'd love to be kind of close to that and and and use it.
9:00
SPEAKER_05: Speaking of the frontier of nature tech, Dimple, you have one of, if not the most exciting company working in the sector in doing this.
9:07
SPEAKER_05: Can you bring it alive for our audience, please?
9:09
SPEAKER_01: Yeah, of course.
9:10
SPEAKER_01: So we always say in nature metrics, our mission is to make biodiversity metable at scale, but really is to it's to change the way that businesses are making their decisions around nature and the way that we're valuing it as an economy.
9:23
SPEAKER_01: Um, so I mean we've been around for over 10 years.
9:25
SPEAKER_01: We actually started as an environmental DNA company, but what that means is fundamentally we've been collecting ground-based data for over 10 years.
9:34
SPEAKER_01: And so now, if you look at our database, we've got a total of four million detections, 116 countries, and we've mapped about 10% of the Earth's surface.
9:42
SPEAKER_01: So this is on kind of a forensic level.
9:45
SPEAKER_01: But what it means is when you have that level of accuracy with data, what you're able to do with it is incredibly powerful.
9:50
SPEAKER_01: So you're able to bring these entire ecosystems to life.
9:53
SPEAKER_01: You're able to match the scale of some of the global enterprises that are having the greatest impact on nature, um, and you're able to then reshape the way in which they're operating.
10:03
SPEAKER_01: So for us, it's really, you know, data generation was just a starting point.
10:07
SPEAKER_01: I mean, now we're looking at, you know, working with multiple data sources, geospatial data, starting to build out models, like really thinking about if a client has 40,000 assets, how do we help them measure their performance of 40,000 assets, which is an enormous job.
10:24
SPEAKER_01: But actually, you can only build that level of scale if you've got kind of your foundations in a good place.
10:28
SPEAKER_05: Considering you were so far ahead in terms of data and technology a decade ago, have you felt the acceleration the same as everyone else across the sector is, or has it been less slow?
10:38
SPEAKER_05: Has it been, sorry, less fast in terms of how things have changed for you?
10:42
SPEAKER_01: I think the way in which it has evolved has it's gone through phases in a way.
10:48
SPEAKER_01: So for us, EDMA was quite a niche technology when we started.
10:52
SPEAKER_01: You know, the the sectors where we could apply it was that were actually quite narrow.
10:57
SPEAKER_01: And then over time that expanded.
10:59
SPEAKER_01: We started to see kind of oil, gas, mining companies having to come in and report on their impact, which is great.
11:04
SPEAKER_01: But as an area becomes more mainstream, it starts to what it requires from the market, what it requires from the product changes as well.
11:13
SPEAKER_01: So for us, that has meant companies that don't need that same level of depth and detail that actually need to go broad, but they still want a high level of accuracy.
11:22
SPEAKER_01: And so when you look at cross-natch tech, you have players that have come in and either do our quick high-level screen, or you have players that are kind of on the ground doing incredibly deep, detailed surveys.
11:32
SPEAKER_01: We've really tried to connect the two.
11:35
SPEAKER_01: So being able to kind of dial across or go deep, depending on uh a company's requirement.
11:40
SPEAKER_01: But it's meant that we've had to be at the forefront of AI, we've had to be working really closely with our clients, we've had to be mindful of what is happening across different geographies and ecosystems, as well as regulation.
11:51
SPEAKER_01: I mean, we can't overlook regulation in the space.
11:53
SPEAKER_01: And a lot of the clients that we're working with are responding to regulatory pressures.
12:00
SPEAKER_01: So every time regulation shifts or gets watered down, or there's a threat of it coming in in a certain way, we've got to think about how our product stack has got to evolve to meet those needs.
12:10
SPEAKER_05: So, Tripp, with with Pantheon, you are one of the world's leading proponents of Peatland restoration.
12:16
SPEAKER_05: Surely something as old and as ancient as P can't have a data or a technology element, can it?
12:22
SPEAKER_03: So I, you know, I think uh there's an amazing amount to Devil's point of information and and you know the beauty of sort of nature's intelligence is you know something that we as humans know so little, such a thin slice of.
12:41
SPEAKER_03: And so I do actually believe that you know we're enabling our understanding and knowledge of the interconnectivity of all of these things.
12:50
SPEAKER_03: So whether it's the sort of the animal microbial bacterial species inventories, right, across sort of trophic levels, how that interacts with the water, how that interacts with the soils, the atmospherics, so not just carbon, uh, but also the superpollutants and other things.
13:13
SPEAKER_03: And then for us, the the food system, right, the the sort of quartet of that interactivity, those four things, um, is something that's very complicated.
13:24
SPEAKER_03: The biology is very complicated, um, the science is very complicated.
13:28
SPEAKER_03: And so, like nature's metrics, but in a different way, you know, we take instrumentation and technology, AI, and sort of the ground truthing as our as our sort of North Star to be able to build a dashboard to understand these environments and then display and help people understand why they're so critical, why they're they're climatological superheroes that are bringing back when restored or when in their sort of native states.
14:00
SPEAKER_03: They're bringing back biodiversity, they're bringing back um clean water, they're bioaccumulating toxicity out of the waters, uh, whether that's PFOS or whether that's NPK runoff from AG, right?
14:12
SPEAKER_03: They they perform all these things, but it's very hard to know actually without technology.
14:16
SPEAKER_03: So we use eDNA, you know, we use gas chambers, eddy covariance flux towers.
14:23
SPEAKER_05: Um, layout people.
14:25
SPEAKER_03: So the well, the the gas chambers are a an instrument that you can use at the ground level to understand um gas flux.
14:34
SPEAKER_03: Um eddy covariance flux tower arrays are very similar.
14:38
SPEAKER_03: It's the same, it's a it's the same concept, but you can do a mass balancing across all atmospheric gases.
14:44
SPEAKER_03: So you can look at the methane, the nitrous, the carbon, and sort of the directional flow.
14:49
SPEAKER_03: Is it going in photosynthetically or out from an emissions perspective?
14:54
SPEAKER_03: And you can do that on a 24-7, 365 um perspective.
14:59
SPEAKER_03: LIDAR, you know, obvious obviously is looking at sort of the um topography of the ground cover.
15:05
SPEAKER_03: Um, and then we look at our water transducers, which give us water level information that we can then tie to water control structures.
15:16
SPEAKER_03: So what we do, and this all ties it back into the technology, is we take wetlands and peatlands that have been degraded.
15:23
SPEAKER_03: So they've been trenched and drained for a variety of uses.
15:26
SPEAKER_03: And then we engineer a solution which is basically to put in water control structures around the perimeter.
15:32
SPEAKER_03: And using the water transducers, we're able to then control and manipulate the structure level to ensure that the water levels revert to their natural historic mean.
15:45
SPEAKER_03: So these are systems that we've radiocarbon dated back to 15,000 plus years.
15:50
SPEAKER_03: Different systems that you guys have, but very similar in some ways.
15:55
SPEAKER_03: And so we're able to keep those water levels where they have been historically for the benefit of the biomass, the peat sequestration, um, carbon sequestration, and um the water benefits.
16:08
SPEAKER_05: How do you get a better answer than that?
16:10
SPEAKER_05: Round applause, please.
16:13
SPEAKER_05: How on earth do you begin to evaluate an investment now which pertains to be an environmental, an impact, an environment, an environmental improvement investment, but is also as technologically advanced as what you just heard.
16:25
SPEAKER_05: How do you think about that now and how has that changed in the age of AI?
16:28
SPEAKER_02: Yeah, so maybe I'll step back.
16:30
SPEAKER_02: So I just like me, we built our natural climate solution strategy around a few transitions we want to see in the world.
16:36
SPEAKER_02: One of them is a transition of this kind of fragile, fossil-intensive food system to a more regenerative one.
16:42
SPEAKER_02: Um, the transition from kind of linear, wasteful supply chains to more circular, less wasteful, less polluting supply chains, and then the kind of ecosystem resilience and restoration pieces we want to see as well, and a set of enabling technologies that set across those transitions.
16:56
SPEAKER_02: Um, the way we think about impact really starts with where are the emissions coming from when we care about climate.
17:01
SPEAKER_02: And when we care about nature, what are the drivers of nature loss that we're then going after?
17:06
SPEAKER_02: Whether it's biodiversity loss or water stress in terms of access or quality.
17:11
SPEAKER_02: So that helps us prioritize where we focus because we focus on solutions businesses.
17:16
SPEAKER_02: We don't focus on large businesses that have problems that we can try and move here and there.
17:21
SPEAKER_02: So that's that's kind of step one.
17:23
SPEAKER_02: I think the other piece we've been thinking about a lot is what are the modes in this market and how does how have they changed over time?
17:29
SPEAKER_02: I think it's fair to say if you're a pure software company and we have those in our portfolio, um, it is increasingly hard to defend your moat against AI-driven competition.
17:39
SPEAKER_02: Um, recently we invested in a company called Tropic Biosciences.
17:42
SPEAKER_02: They've spent 10 years figuring out how to, you know, basically figured out the banana genome and a bunch of other tropical crops, and bananas are going extinct.
17:50
SPEAKER_02: But they figured out a way to actually precision breed bananas using you know gene editing and so on.
17:55
SPEAKER_02: Really interesting technology.
17:56
SPEAKER_05: It's a really physical bananas are going extinct.
17:59
SPEAKER_02: Bananas are going extinct.
18:02
SPEAKER_02: Yeah.
18:03
SPEAKER_02: Let me actually, you know, so this is one of those things.
18:05
SPEAKER_02: Like we see bananas in the the price of a banana in the UK.
18:08
SPEAKER_02: We looked at this up the other day, hasn't changed in about 15 years.
18:12
SPEAKER_02: Everything else has gone up.
18:13
SPEAKER_02: Bananas haven't changed.
18:15
SPEAKER_02: Um, we just assume it's always going to be that way.
18:17
SPEAKER_02: Um, it's a lot later in most supermarkets, but the the supply chains that deliver those bananas to your doorstep or supermarket are incredibly complex.
18:26
SPEAKER_02: They're in a few tropical countries in the world, mostly in Latin America.
18:30
SPEAKER_02: Philippines is a really big one in Asia.
18:32
SPEAKER_02: And we rely on a single cultivar called Caffendish that basically came about when the last banana, Groma Shell, went extinct about 80 years ago.
18:43
SPEAKER_02: We had this one spare.
18:45
SPEAKER_02: Pretty much every single banana is in the export market is a clone of every other banana.
18:50
SPEAKER_02: So super fragile.
18:51
SPEAKER_02: And two fungal diseases are going after them, and they're destroying banana populations around the world.
18:57
SPEAKER_02: What do farmers do when that happens?
18:58
SPEAKER_02: They go deforest a piece of land and start again because the fungus lives in the soil, it does move, and so you're seeing progressive deforestation in many of these countries for understandable reasons when you're thinking about it from a farmer's perspective.
19:10
SPEAKER_02: But they don't want to deforest, they actually want to find a solution to their problems so they can continue growing on the land they've steered it for how many of the years.
19:17
SPEAKER_02: Um tropical crops, generally, we've underinvested in from a genetics perspective.
19:22
SPEAKER_02: This is one of those companies that's invested over the last 10 years and has figured it out.
19:26
SPEAKER_02: Um, the business of what they do is looks like biotech on the RD side.
19:31
SPEAKER_02: It's a very physical business when you think about it from a supply chain perspective.
19:34
SPEAKER_02: Because they're now setting up operations in Costa Rica, Honduras, Philippines, Ecuador, Colombia, building propagation facilities, producing seedlings.
19:43
SPEAKER_02: They ship these tiny seedlings from Norwich out to the countries, and then you have to kind of replicate them hundreds of times before you can have seedlings to sell.
19:50
SPEAKER_02: Um, that's a physical mode that looks very different in the age of AI.
19:53
SPEAKER_02: It's an example of a physical mode.
19:55
SPEAKER_02: But it's the figuring that out, I think, with the IP protection that comes with it, I think builds a really interesting business relative to some of the businesses where you could easily replicate it.
20:05
SPEAKER_02: Now, our thinking has not gotten to a point where I can tell you this is what it looks like in the future.
20:09
SPEAKER_02: It's changing every single day.
20:10
SPEAKER_02: Every week something new comes out.
20:12
SPEAKER_02: So maybe this is not going to be true next week.
20:14
SPEAKER_02: But we what I like about the space we're in is we're not chasing the companies that have incredibly high valuations and you're trying to get on the train before it leaves the station.
20:22
SPEAKER_02: Um we're typically looking at businesses with physical modes and a value prop for someone, um, ideally a value prop like this one, where it's truly existential for growers and they're willing to pay.
20:33
SPEAKER_05: Dimple, in terms of your workflows at the moment, where does that balance between the human talent and the technology sit?
20:40
SPEAKER_05: And how is that changing for you and how might it change into the future?
20:44
SPEAKER_01: Yeah, so in Age Metrics, we've our integrity and our data integrity is fundamental to everything that we do.
20:51
SPEAKER_01: So even as we've developed that product stack, we're not willing to compromise on the quality of the information that we're putting out to our client.
20:59
SPEAKER_01: And you know, fundamentally, if you're moving to a world where you have when nature becomes an auditable space, you're thinking about it in terms of financial metrics, you need to know that that data would withstand an audit.
21:11
SPEAKER_01: So when we think about implementation of AI, we have to implement it in a way that maintains the quality of the data, the metrics, the insights that we're we're providing to our clients.
21:21
SPEAKER_01: So, on the one hand, there's a piece that Sid mentioned, which is how do you automate the manual stuff?
21:26
SPEAKER_01: And you know, you want to automate that stuff away because that's just called business efficiency.
21:31
SPEAKER_01: That's just how you should be operating in the in an age of AI.
21:34
SPEAKER_01: But when we're thinking about the data itself, there's certain parts where you know we have the labs that um are semi automated, it's it's more robotics than it is AI that gives you the data sets.
21:47
SPEAKER_01: Um, but those raw data sets then need kind of processing.
21:50
SPEAKER_01: And that's where you know we have been using building AI workflows to help accelerate some of that.
21:57
SPEAKER_01: It means that clients, instead of having to wait two weeks.
22:00
SPEAKER_01: For a data set to be processed, could get in two days.
22:02
SPEAKER_01: So it massively speeds up getting those insights to market, which is really important because you think about the feedback loops and those cycles in nature, they're long.
22:12
SPEAKER_01: So, you know, help anything we can do to accelerate the decision making and the actions is help in that recovery process.
22:18
SPEAKER_01: Once we have those data sets, they are still checked by the ecology team, by the bioinformatics team.
22:25
SPEAKER_01: Everything that is displayed in the platform, again, we run around of checks.
22:29
SPEAKER_01: We check that it is aligned with all of the discovery that we've done with the client as part of the initial scoping process.
22:37
SPEAKER_01: And we also hold a huge amount of data in terms of other projects that we have done in the region as well.
22:43
SPEAKER_01: So anything that looks slightly out of place based on kind of the broader knowledge that we have of that ecosystem, we're able to kind of dive back into as well.
22:52
SPEAKER_01: So some of those feedback loops can be built with AI, where we can just run checks across everything and say, okay, flag anything that looks out of place, flag anything that actually we want to first investigate and then really highlight to the client.
23:06
SPEAKER_01: But then importantly, which is the part that we found our clients really have struggled with historically, is interpreting the data that is then provided to them.
23:17
SPEAKER_01: And you know, nature and biodiversity is incredibly complex.
23:22
SPEAKER_01: So, you know, on the one hand, you could abstract that complexity away, but then you lose all meaning, or you find a way for our clients who are not ecologists and not subject matter experts to actually really understand what that data is telling them about the environment in which they're operating and what they should do next.
23:42
SPEAKER_01: So a lot of the new uh reporting that we've been building is AI powered, but it really brings to life the species that that we detected.
23:51
SPEAKER_01: Why are they important to your environment?
23:53
SPEAKER_01: What are the things that you should be watching out for?
23:55
SPEAKER_01: Um are they helpful?
23:57
SPEAKER_01: And then if you address that, what would you then expect to see?
24:03
SPEAKER_01: And when you get into scenario modelling, you know, the range is so wide in terms of what those outcomes could look like.
24:12
SPEAKER_01: But sometimes a lot of the paralysis that we see from clients comes from if I do this, I don't know if it's going to work or I don't know what's going to happen.
24:20
SPEAKER_01: So sometimes just providing a little bit more confidence that it is a step in the right direction, um, is helpful.
24:27
SPEAKER_05: So it sounds like rather than so, um, and we'll come on to this, I'm sure, but lots of people fear the impact on the job market of AI.
24:34
SPEAKER_05: It sounds like yours is a case in point whereby it's allowing you to do more for clients rather than replacing anyone.
24:40
SPEAKER_01: Absolutely.
24:41
SPEAKER_01: I mean, you know, we are fundamentally, we're we're still a scale-up.
24:44
SPEAKER_01: And, you know, if a client comes to us and says, I've only worked with you for two sites, now I want you to do 2,000.
24:50
SPEAKER_01: We need AI to help us reach that level of scale as quickly as possible, but we also want the quality of the information we're giving them for those 2,000 sites.
24:59
SPEAKER_05: Yeah, you must scale with no changing quality up.
25:01
SPEAKER_01: Absolutely, yeah.
25:03
SPEAKER_05: Um, so I'm unabashfully an optimist when it comes to AI.
25:06
SPEAKER_05: I think technology of all kinds ultimately have created more jobs than not.
25:12
SPEAKER_05: Am I naive and wrong?
25:14
SPEAKER_05: What do you guys think we're gonna see?
25:17
SPEAKER_05: Look, I mean, I think, you know, when I when I That was the first intake of breath from the audience.
25:22
SPEAKER_05: They were like, I think you're gonna get way more than this.
25:25
SPEAKER_03: Wait till we get really interesting with the questions.
25:27
SPEAKER_03: I mean, as as I I I think about future outcomes across sort of a stochastic modeling scenario, right?
25:33
SPEAKER_03: And so I do I think there are some fairly macabre potential outcomes.
25:38
SPEAKER_03: Yes.
25:38
SPEAKER_03: Um, that said, I'm like you.
25:40
SPEAKER_03: I I'm I have a sort of an abundance mindset in and around what I think the sort of optimistic and utopian scenarios could be.
25:49
SPEAKER_03: And I and I think we still have agency in how we drive towards those potential outcomes.
25:56
SPEAKER_03: And so, uh like you, I'm going to put all of my energies into ensuring that this actually is an era of abundance for everybody and that we have, you know, these these things, whether it's the you know longevity exit velocity that we have for human health in and around disease prevention, um, management medicines, there's some amazing things that people always go to that, but I do think that's a very important, um, interesting thing.
26:23
SPEAKER_03: I mean, that Deep Mind here is working on, obviously, amongst others.
26:26
SPEAKER_03: And I think for the nature set, for me, you know, as you talk about the complexity of these things, I think thinking about and being able to articulate what Denville was talking about, sort of species richness in a given ecosystem or native habitat, being able to understand, you know, what all of those interconnections are and why that's important, you know, to creating a you know a microclimate with more rain, um, to creating a balance across species levels that that manages itself.
26:57
SPEAKER_03: Um, AI is going to enable us to understand and do all these things at a at a rapidity and with an accuracy that we as humans have never been able to do before, that nature was doing sort of self-recursive learning for the past, you know, millennia.
27:18
SPEAKER_03: And then we sort of intervened and I think have have um affected that so far on a fairly extractive negative basis.
27:26
SPEAKER_03: I think AI enables us to do an enlightened, you know, sort of rework of the way that humans interact with nature in sort of a restore, reintroduce, and conserve model, you know, that allows us to re-corridor, to re-flyway, to re-wild really large amounts of our natural resources for the benefit of everybody.
27:50
SPEAKER_05: I mean, we've had a decade of people saying, oh, if only we had the data, if only could make we have more data than we know what to do with now.
27:57
SPEAKER_05: Like we just need to take a look and listen.
27:59
SPEAKER_05: Where are you on the optimism, pessimism scale?
28:02
SPEAKER_02: I don't know.
28:03
SPEAKER_02: Honestly, this is one of those questions where whatever you're gonna say is gonna be wrong pretty quickly.
28:07
SPEAKER_02: So I worry about that.
28:08
SPEAKER_02: Um I do I will say it is interesting that lots of extreme techno-optimists in the Bay Area are increasingly worried about the distributional consequences.
28:18
SPEAKER_02: Lots of them are calling for some sort of wealth or capital tax on capital rather than labor, because labor becomes less and less competitive in a lot of AI.
28:25
SPEAKER_02: Um, Minod Goslow wrote this column recently, surprising from him, but I think people are really worried about that.
28:30
SPEAKER_02: So we there's a for me, I'm less worried about AI than technology.
28:34
SPEAKER_02: I'm more worried about AI in terms of how we govern it and the distributional impacts of it.
28:38
SPEAKER_02: Um I'm also increasingly aware that the gap between organizations or people who have access to the knowledge it takes to get on the the on-ramp into this AI world is much easier for some people than others, much easier in some places than others, and that gap is only going to grow up so those things I really worry about.
28:56
SPEAKER_02: Um but I can clearly see all the benefits and see it every day, right?
28:59
SPEAKER_02: The uh the thing I do want to mention, because we are talking about nature, is this thing has a huge physical footprint.
29:04
SPEAKER_02: Yes, a massive one that's growing.
29:06
SPEAKER_02: I can't source this for you, but I heard it the other day that data centers today already use more water than all of the UK combines today, right?
29:13
SPEAKER_02: And you can see the projections for data center bells and so on.
29:17
SPEAKER_02: Um that's in terms of energy use, water use, physical.
29:19
SPEAKER_02: I mean, these things are made of steel and cement, and they have chips that are.
29:23
SPEAKER_02: Yeah, the cloud's not in the sky.
29:24
SPEAKER_02: The cloud's not in the sky.
29:25
SPEAKER_02: I mean, even if it gets in the sky, it'll be full of things we mine and push up there, right?
29:29
SPEAKER_02: No, yeah, exactly.
29:30
SPEAKER_02: Um I think that to me is I'm mostly kind of worried about that, but I do think there's a world in which companies can drive the adoption of technologies that solve the kind of water efficiency problem that become kind of dematerialized fundamentally because those are becoming constraints.
29:47
SPEAKER_02: And so if you think about who the kind of early adopters and a lot of this stuff, there's a chance for these companies to be that because they need to grow so quickly.
29:56
SPEAKER_02: It's interesting, like in I I read the other day in in um the US, data centers are overwhelmingly adopting solar because it's the cheapest and quickest to build.
30:05
SPEAKER_02: Much cheaper and quicker than you know, trying to get trying to get a great connection.
30:09
SPEAKER_02: Um maybe those things operate on water efficiency, material efficiency, pollution and waste, which is a really big one as well.
30:16
SPEAKER_02: We'll see, but I I think we should pay attention to that piece as well.
30:20
SPEAKER_05: Really interesting point about the the on-ramp and the access for people within your respective businesses.
30:25
SPEAKER_05: Are you actively training people on the sort of frontier models that are available?
30:30
SPEAKER_05: Or is it more oh I mean, I I pretty much walked in and told everyone if they didn't start using AI immediately, I'd fire them.
30:35
SPEAKER_05: So there's a there's a range of options available at this.
30:38
SPEAKER_05: Um, how are you broaching it in terms of guiding opportunities, opening up for chances?
30:43
SPEAKER_01: So I think a bit of both.
30:45
SPEAKER_01: Um, I think when it first started, you know, you you've got to kind of kick start the adoption, you've always got to provide that sponsorship from a senior level.
30:54
SPEAKER_05: That's the polite way of what I did.
30:55
SPEAKER_05: Yeah.
30:57
SPEAKER_01: And you know, that meant that, you know, I spent a huge amount of time trying to get ahead of all of the things that were coming out.
31:03
SPEAKER_01: Our CFO COO did the same.
31:05
SPEAKER_05: Why did you do that?
31:05
SPEAKER_05: Then why was it important for you to get ahead of it?
31:08
SPEAKER_01: I think one is to see the opportunity.
31:11
SPEAKER_01: AI is it's fundamentally going to be part of any business's strategy.
31:14
SPEAKER_01: So, you know, there's kind of what you're doing with it in the day-to-day operations, and that's how it forms your business's growth trajectory going forward.
31:21
SPEAKER_01: And that's an important part of my role in terms of kind of charting that path.
31:25
SPEAKER_01: Um, and then actually being able to then work with the team and say, well, these are the opportunities in terms of product, market, clients, etc.
31:34
SPEAKER_01: But actually, this is how it impacts our business's route to scale.
31:39
SPEAKER_01: And that's everything from future funding requirements, it's everything from how we expand geographically, who we're hiring, our culture.
31:47
SPEAKER_01: Um, and we we did a really big push at the exec level.
31:50
SPEAKER_01: We got everybody set up, we ran some like show and tells and training, but then there was also a very clear message that we are fundamentally a technology company, and it is the responsibility of everybody within that organization to make sure that they are actively bringing this into the way that they learn, the way that they operate, they're testing things out.
32:11
SPEAKER_01: I don't, I mean, the pace at which AI is going, no company is going to be able to spoon feed its employees the full spectrum of everything that is happening in AI.
32:20
SPEAKER_01: And I think, as Sid said, that is where the divide is coming from.
32:24
SPEAKER_01: You have the early adopters that are just racing ahead.
32:27
SPEAKER_01: Every new model they test, you know, they connect things up that you never thought could be connected before.
32:32
SPEAKER_01: And then you have people that are kind of standing on the edge saying, I don't know where to start.
32:36
SPEAKER_01: And as that gap widens, it's not just going to impact, you know, career progression and those things.
32:42
SPEAKER_01: It's actually going to really impact the resources you have within your organization and the agility with which you're able to respond to market needs as well.
32:50
SPEAKER_05: We have a really interesting spectrum because we've got um manual workers through estate managers all the way through to people with PhDs in in data science.
32:59
SPEAKER_05: What's been the most exciting is seeing the tools and techniques that people on the ground delivering change have produced who coding wasn't available to them before, but now through co-work and things like that that make it possible through natural language, we're seeing innovation and development from the people who know the ground the best.
33:15
SPEAKER_05: Is that entering your world in terms of the restoration stuff, Tripp?
33:18
SPEAKER_03: Absolutely.
33:18
SPEAKER_03: I mean, I think on a couple of different levels, and I go back to your thinking about sort of the eDNA question, but as we think about capturing biodiversity data in our properties, you know, we're using eDNA, we're using um bioacoustical towers that listen and can um inventory species, we're using thermal cameras and game trap cameras.
33:41
SPEAKER_03: And you know, that amount of data, which is is so much, used to be interpreted by a set of wildlife biologists, let's say, for instance.
33:50
SPEAKER_03: And so, you know, that analog process of filtering through that information and then building a sort of an algorithm to extrapolate what species inventories look like is a very laborious and and long process.
34:02
SPEAKER_03: And we can now do that, you know, almost instantaneously, I mean, within hours, if not less than hours.
34:09
SPEAKER_03: And so, you know, I think that's one of the amazing places.
34:12
SPEAKER_03: The other thing for us is we we have an AI software with sort of an LLM that we've been building in and around all of our hundreds of thousands of data points, um, which are you know soil, which are water, which are biodiversity, which are atmospherics, and being able then to quickly assess acreage that meets the criteria for our restoration efforts, right?
34:38
SPEAKER_03: And I know you guys do this too.
34:40
SPEAKER_03: So, you know, we can now parse and do fatal flaw analysis on two million acres in a week, right?
34:47
SPEAKER_03: And understand in rank order, you know, where are the biggest needs, the most degradation, where are the opportunities that allow us to bring our set of subject matter expertise and restoration reintroduction opportunities, whether that's across megafauna or tree species, and have a site selection criteria that's immediate that we can act on.
35:11
SPEAKER_03: And for me, I feel this climatological urgency that we haven't been able to keep up with with sort of philanthropic or non-profit capital that I think requires the private market to fill in the vacuum for the benefit of the climate.
35:27
SPEAKER_03: And I think this is an enabling tool to do it.
35:30
SPEAKER_05: Um Fable Five.
35:33
SPEAKER_05: So we we sat in a world, was it a week ago?
35:38
SPEAKER_05: It was something like that where uh Anthropic released the most powerful model ever.
35:42
SPEAKER_05: Prior to that, they told the government, don't let us do this, it is essentially a weapon, you should definitely stop us.
35:48
SPEAKER_05: Then got really surprised when they were stopped.
35:50
SPEAKER_05: Um, it really brought the question of sovereignty about the access to leading intelligence to life.
35:55
SPEAKER_05: Um, did that disrupt your businesses, the fact that the best tools were taken away?
35:59
SPEAKER_05: And how are you thinking about the impact it might have in the future?
36:03
SPEAKER_05: Just to frame that question, we were sat at uh an an all-senior team meeting, and virtually every solution was, oh, we've built this in Claude and we've got this.
36:10
SPEAKER_05: And I was like, what happens if we don't have Claude anymore?
36:13
SPEAKER_05: Oh, it'll be fine.
36:14
SPEAKER_05: And then ironically, two days later, it it wasn't fine anymore.
36:17
SPEAKER_05: So, how are you thinking about the sovereignty and the access to those things that are so important now?
36:22
SPEAKER_03: I'll just say real quickly that I was in a uh our office is in Boulder, Colorado, and I had a summit going on.
36:30
SPEAKER_03: We have Microsoft as an investor in our platform, and we had engineers and a large team summit going on in Boulder.
36:37
SPEAKER_03: And so we all, you know, basically were using uh 4.8, and then we all switched that afternoon as soon as Fable was released to Fable and started running sort of sub-agents on a whole bunch of things we're doing within our software.
36:51
SPEAKER_05: That change was astonishing, right?
36:52
SPEAKER_05: Astonishing.
36:53
SPEAKER_03: It was so different.
36:53
SPEAKER_03: I mean, we we we were still sort of you know analyzing all of the deltas, but but a big step change for sure.
37:01
SPEAKER_03: And and so you know, we were really excited about some of the some of the insights we were garnering from that, and then all of a sudden, you know, it was pulled.
37:07
SPEAKER_03: So I would say, you know, we're we've reverted back to what's basically a set of AI tools.
37:14
SPEAKER_03: That's just one of the things that we use because we actually use them to kind of double check um each other.
37:20
SPEAKER_03: But yeah, I mean, I think it's I think it's fascinating.
37:22
SPEAKER_03: And I, you know, I think the sovereign piece of that question, and it always gets brought up, is like the the the reason that this is moving so fast is that it's a race.
37:32
SPEAKER_03: And the reason why we talk about these potential sets of outcomes is because there are some scenarios in which you know a maybe a moral normative or a guardrailed AI go forward is is not there because of a certain sovereign, you know, intent.
37:50
SPEAKER_03: Um, so I you know I think the export control on Fable, uh I hope they get it resolved quickly because I think I want at least UK, US to be at the forefront of that before you have some kind of a rogue actor that gets there before us.
38:06
SPEAKER_03: I'd love to get your views on this.
38:07
SPEAKER_05: You always have an interesting take.
38:09
SPEAKER_02: I think, I mean, I think sovereignty is relevant for pretty much everything we do, not just AI.
38:13
SPEAKER_02: It's relevant for you know how we think about think about the AC backlash and how companies support back based on essentially extraterritorial policy making by often US states, not even the federal government.
38:25
SPEAKER_02: Um I think we should think about that in every I mean Iran's just been, you know, it's it's there's so much happening that affects companies that don't have anything to do with geopolitics.
38:34
SPEAKER_02: So we all need to be really, really aware of this.
38:37
SPEAKER_02: I spent a lot of time in India and we have we have investments in in India, and it always and I grew up in India, but fundamentally I think it gives me a different perspective, I think, on these things because it's the the assumption I think the assumption that the West is ahead is sort of true ish but changing very, very quickly.
38:59
SPEAKER_02: Um and if uh I mean if if even if the West has a claim to moral superiority, which I don't think it does, fundamentally, you know, this is this these technologies are developing all over the world.
39:10
SPEAKER_02: Um the thing I've realized on sovereignty is you don't need access to the frontier models for most of what you do, frankly.
39:17
SPEAKER_02: One of our companies, AgroStar and India, they they they work with two million farmers a month.
39:21
SPEAKER_02: And they have transcripts for call like thousands, tens of thousands of calls every single day.
39:26
SPEAKER_02: We had a call last week on what models do you want to use, and they're using five models, including Gemini Flash Light 3, um, right, which you would never use.
39:34
SPEAKER_02: But frankly, for transcription and then incentive analysis, it's it's perfect, right?
39:39
SPEAKER_02: And they use a bunch of open source models for all the low-value work because the other thing is happening is token costs are rising very quickly.
39:46
SPEAKER_02: It's getting extremely expensive.
39:48
SPEAKER_02: And so I do think actually, this is for most of what we do, I think we should this forces us to become more efficient anyway.
39:56
SPEAKER_02: Um and it also forces us to find kind of redundancy in what we're doing.
40:00
SPEAKER_02: Um, I do really, really worry about kind of frontier models because currently the gap is meaningful, but I actually don't think FAPA was a step change.
40:07
SPEAKER_02: I think we haven't seen a step change yet.
40:09
SPEAKER_02: Um, there probably is a step change on the horizon pretty quick.
40:12
SPEAKER_02: When that happens, I think the answer will change.
40:14
SPEAKER_02: And I do wonder who's gonna get access to that.
40:17
SPEAKER_02: Um, but you also really can't keep these things locked down forever.
40:21
SPEAKER_02: Um and so it will eventually diffuse.
40:24
SPEAKER_02: If as a techno optimist, hopefully that resonates.
40:27
SPEAKER_05: I'm gonna use the the point about cost to take us into capital.
40:30
SPEAKER_05: So um if if this week does not mobilize and move more capital to climate and nature-related issues, then without it, then the week was an abject failure.
40:41
SPEAKER_05: Over the last two or three years, where you've been in and around London Climate Week, how has the conversation around capital and raising in our sector changed?
40:49
SPEAKER_05: Timple, do you want to kick us off?
40:51
SPEAKER_01: Yeah, so I mean I have noticed London Climate Week has got bigger and bigger every year.
40:56
SPEAKER_05: Um Thank you for coming, everyone.
40:58
SPEAKER_05: We appreciate that.
40:59
SPEAKER_01: And to some degree that has been accelerated by what's been happening in the US.
41:02
SPEAKER_01: So, you know, people pull it back from New York Climate Week, thinking about using London as kind of that stage to have those conversations.
41:09
SPEAKER_01: Um, and I think for me, what's really interesting is there's a lot of you see commitments, shared commitments coming through during Climate Week, you know, that that is very much the forefront of everyone's conversation.
41:22
SPEAKER_01: Um it obviously helps that we are spending this week in a furnace, so that kind of illustrates the point.
41:29
SPEAKER_01: But the capital conversation for me is really interesting because whilst it's there, it's almost slightly in the background.
41:38
SPEAKER_01: You know, there's whereas before Climate Week for me felt like a call to action.
41:42
SPEAKER_01: I don't think we need the call to action in the same way.
41:45
SPEAKER_01: I think people are aligned that the action is important.
41:49
SPEAKER_01: Everybody knows.
41:50
SPEAKER_01: Like we know that something has got to happen.
41:53
SPEAKER_01: Now the conversation is shifting much more to the house.
41:55
SPEAKER_01: So whether that is talking about different climate solutions, like how do you solve a specific problem, what are the technologies that are available, how do you scale those?
42:03
SPEAKER_01: Critical conversation around capital.
42:05
SPEAKER_01: And I think capital is one of those spaces that has been really heavily impacted by the geopolitical volatility that we've seen over the last two years.
42:15
SPEAKER_01: And you know, from my perspective, that is almost the most important conversation that we should be having this week because without the capital, we can't scale anything else.
42:25
SPEAKER_01: And I think a year ago, we were almost in a holding pattern.
42:29
SPEAKER_01: You know, we'd had the tariffs, people weren't quite sure how the Trump presidency was going to play out, but you know, the sustainability agenda, we were trying to hold on, and we hadn't quite seen the pullback that we have over the last 12 months.
42:44
SPEAKER_05: To bring that through with a the story I had.
42:46
SPEAKER_05: So um a few of us went out to San Francisco Climate Week.
42:49
SPEAKER_05: Um, it's my first time over there.
42:51
SPEAKER_05: Um, and everybody around the space was like, oh, you should have been here two or three years ago.
42:55
SPEAKER_05: It was way easier.
42:56
SPEAKER_05: Everyone was talking about climate and nature, and there's so much money around.
42:59
SPEAKER_05: And I got back and I and I rang Sid and I was like, loved it, it was so great, AI was everywhere.
43:04
SPEAKER_05: I'm still optimistic, but I wish I'd been there earlier.
43:06
SPEAKER_05: Everyone will say it was easier.
43:07
SPEAKER_05: And he was like, no, no, to just change the words.
43:10
SPEAKER_05: Every conversation was about adaptation and resilience instead of nature and climate.
43:14
SPEAKER_05: It those conversations are still the same.
43:16
SPEAKER_05: You think there's still money out there to be raised?
43:18
SPEAKER_02: Absolutely.
43:19
SPEAKER_02: I mean, we've we've raised capital into our natural climate solution strategy in one of the toughest years for fundraising, I think, of the last 18 months.
43:25
SPEAKER_02: We worked with asset owners, pension funds, you know, endowments, you know, large family offices, all of those folks.
43:31
SPEAKER_02: Um, I think there's enough capital to deploy into the space.
43:36
SPEAKER_02: We know who they are.
43:37
SPEAKER_02: Certainly that pool has shrunk a little bit, and lots of people who were kind of playing with this have decided not to.
43:42
SPEAKER_02: That makes sense.
43:43
SPEAKER_02: But there's plenty of money out there.
43:45
SPEAKER_02: I do think it's often like I think of myself as in the same position as as trip and dimple in this sense, because we serve the kind of mandates that we're given, right?
43:55
SPEAKER_02: And when it's mentioned money, it's ultimately your money.
43:58
SPEAKER_02: Um, but we have To find a good product that actually works, right?
44:02
SPEAKER_02: And so making it relevant for the investor or ultimately your user and showing how this is relevant for adaptation or resilience or near-term energy or food security or supply chain security in the geopolitics conversation is relevant, right?
44:17
SPEAKER_02: I think there's we've been surprised at how many people could have this kind of a harm over where they go, oh, I I thought nature was just abstracting.
44:24
SPEAKER_02: I love nature, but you know, I want to go on holiday there and maybe donate a million.
44:28
SPEAKER_02: Um, but this is interesting because this these are the solutions to some of the biggest problems we face that are not going anywhere and that are only getting worse.
44:35
SPEAKER_02: And if we believe those solutions will have markets and will be adopted, then we should be putting some money in here.
44:41
SPEAKER_02: So I do think we've had to get sharper as well.
44:44
SPEAKER_02: And I'm sure if anyone is an entrepreneur will resonate with that, right?
44:48
SPEAKER_02: But um it's probably been a healthy period to sharpen that.
44:52
SPEAKER_02: Um so we're not relying on you know people who didn't really believe it anyway, um but decided to throw some money around to see what happens.
45:00
SPEAKER_05: So you've worn every hat when it comes to investment from raising, from allocating to managing.
45:07
SPEAKER_05: How have you seen the relationship between nature and climate and capital change?
45:12
SPEAKER_05: And more importantly, what's coming next?
45:15
SPEAKER_03: So uh a bit of a dichotomy in terms of sort of geographies, and I, you know, I'd nod my hat to the UK and the leadership in and around you know, the biodiversity net gain markets, um, the the regulated carbon markets.
45:31
SPEAKER_03: Um I think it's a it's been it's been a really you know catalytic piece for the climate industry sort of writ large.
45:41
SPEAKER_03: I would say, you know, in if you just pause there one second.
45:44
SPEAKER_05: Um we're really bad at this as a country.
45:46
SPEAKER_05: I am especially bad at this.
45:47
SPEAKER_05: Um we don't do that enough.
45:49
SPEAKER_05: We don't recognize the things we actually do well.
45:51
SPEAKER_05: And natural capital and the infrastructure around it is one of the things that we do have the potential to lead the world in.
45:57
SPEAKER_05: So thank you for pointing the capital.
46:02
SPEAKER_03: Well, so I think when I think about the US, and I think to your point, Sid, you know, the the inflows of capital for nature-based solutions, regenerative agriculture, you know, have been have slowed down dramatically.
46:15
SPEAKER_03: Everything has been AI or defense, honestly.
46:17
SPEAKER_03: And so, you know, we have um at Trailhead just under 40 portfolio companies, and they're in a variety of stages.
46:25
SPEAKER_03: Uh, some are out raising capital right now, some are finding success, um, especially if, to your point, you can actually demonstrate sort of the unit economic value.
46:36
SPEAKER_03: So, you know, take a uh we have an enhanced rock weathering company, which is actually you know spreading um high alkaline silicates or basically an amendment onto degraded farmland that has all these co-benefits, right?
46:50
SPEAKER_03: It helps water holding capacity, it actually creates an inorganic carbon, there's an agronomic benefit to the yield, um, there's even a sort of a weed seed suppression benefit to it.
47:03
SPEAKER_03: So it's really easy to demonstrate to the both the landowner and to the market what the benefit is.
47:09
SPEAKER_03: Um so I think companies like that are actually doing really well.
47:13
SPEAKER_03: Um I think the ones that are, to your point, touching atoms and combining technology with actually doing work, planting trees, um, doing, you know, we have a fungal, uh Michael Risel fungal carbon company doing amazing work.
47:29
SPEAKER_03: Um we have who you've had on the show before, um, Earthshot Labs, which is a an incredible developer of really high-quality projects thinking about restoration.
47:41
SPEAKER_03: And so, you know, I think it depends.
47:44
SPEAKER_03: It's pretty nuanced.
47:45
SPEAKER_03: But if you're if you're doing demonstrably good things for the benefit of the landowner and for the return profile of that equation, you're getting funded and seeing things happen.
47:58
SPEAKER_03: You know, I also think the one sort of tenor that I've seen change across the last 12 to 24 months is sort of a a deconstruction of what was, and I call it the sort of molecule myopia, because I think for the last four or five years, it's been only about carbon, right?
48:17
SPEAKER_03: And so I think the carbon markets have driven what is the nature finance markets for the most part.
48:21
SPEAKER_03: And I'm now seeing a sort of a more holistic or exhaustive way of thinking about nature and investing in nature, thinking about the water we've heard today, biodiversity, um, you know, thinking thinking about all of those things and superpollutants, like methane is nitrous, are having their moment right now in the markets and with protocols.
48:41
SPEAKER_03: And so I think that understanding is helping sort of map to this environmental inflation that companies can no longer deny, as this global sort of volatility around climate hits income statements, hits balance sheets.
48:57
SPEAKER_03: Um, there's no longer the ability to kind of put your head in the sand and deny it because it's affecting everybody, whether it's insurance, whether it's shipping lanes, um, whether it's cold storage chains, whether it's um pest pressure and species insurance around ag, they're all being affected.
49:15
SPEAKER_03: And so you're starting to see, and and Dibble, you said this in behind stage, more institutions showing up.
49:22
SPEAKER_03: You're starting to see the banking institutions showing up.
49:24
SPEAKER_03: So, like for me, for New York Climate Week and for some other things that we do, more banks for the first time are showing up to try to figure out ways of lending into the space.
49:35
SPEAKER_03: Missouri Climate Week was all insurance companies.
49:37
SPEAKER_03: So that was absolutely crickets, that market was even two years ago, maybe, maybe three.
49:45
SPEAKER_03: Um, so seeing those institutions, seeing more Napital natural capital funds being raised across geographies and deploying, um, I do feel like it's it's there's sort of a different day and and more of an institutional tenor to that.
50:01
SPEAKER_05: One of the frustrations I've had about the environment sector for a while is uh certainly in the UK context, we can be quite protectionist and it's very much, oh no, you're not from the environment sector or it's the wrong type of capital.
50:12
SPEAKER_05: I think that's changing.
50:14
SPEAKER_05: What what do you guys think?
50:15
SPEAKER_05: Is it changing and does it need to if we're going to attract the investment we all need?
50:19
SPEAKER_01: Yeah, so we saw it quite a bit when we were raising our C.
50:23
SPEAKER_01: So in 2024, our initial conversations were very much with um kind of climate fund, so who really understood the space.
50:30
SPEAKER_01: Nature was still quite new to them, so we got a lot of the um comparisons to carbon.
50:36
SPEAKER_01: Um, and it was really interesting because part of it was educating that market, helping them think about how they can not just invest in sustainable solutions, but actually really thinking about sustainable finance more broadly.
50:49
SPEAKER_01: And so a lot of our interaction with these funds now is less on the um venture capital side, thinking about how they can invest in us, but more about how we can kind of support the broader infrastructure that is coming up around sustainable finance.
51:03
SPEAKER_01: So thinking about nature metrics as an MRV solution, if you're selling blue bonds, green bonds, etc., how do you actually prove that your investment is having the impact that you say that it's going to have?
51:16
SPEAKER_01: And so, you know, when you think about that as a channel for deploying more finance into nature, that is where we're seeing more institutions that weren't typically within the space and now starting to see the opportunity, but actually fundamentally put more resource behind it as well.
51:32
SPEAKER_01: So it's it's starting to come together, but I think it's those markets can only really flourish when they have the same kind of infrastructure that we see across other types of investments.
51:43
SPEAKER_01: Um, and so for me, the last two years in particular have been really interesting for that.
51:47
SPEAKER_05: Do you think the composition of LPs and investors is going to change into the future?
51:51
SPEAKER_02: So I think a lot about this in the context of like, where how can we learn from other sectors and how they've evolved, right?
51:57
SPEAKER_05: Even asking that question is something the environment sector didn't do five years ago, it would have gone, well, of course we can't.
52:02
SPEAKER_05: We're better and superior.
52:03
SPEAKER_05: We can't possibly learn anything from anyone else.
52:05
SPEAKER_02: And we're really good at using jargon to make sure no one can speak to us either.
52:08
SPEAKER_05: Just throw their acronym into the mix.
52:09
SPEAKER_02: Exactly.
52:10
SPEAKER_02: Um so take biotech as an example.
52:12
SPEAKER_02: Healthcare and biotech and life sciences generally.
52:14
SPEAKER_02: There's a set of specialist investors in that space who know it really well, who usually make venture bets into really exciting, you know, big bets on, you know, curing this or that.
52:23
SPEAKER_02: Um, requires deep science knowledge, requires kind of a deal track record, and it's just tricky.
52:28
SPEAKER_02: But as those companies mature, you very quickly institutionalize and generalist investors come in, and because they can see that these companies are exciting and have potential.
52:36
SPEAKER_02: So once you've got your clinical results, actually lots more capital comes in.
52:40
SPEAKER_02: I think that sector is a good playbook for how to unlock different kinds of capital.
52:43
SPEAKER_02: The same is true here, like trip is explaining at equivariance flux towers.
52:47
SPEAKER_02: Lots of people don't want to hear about eddy covariance flux towers.
52:50
SPEAKER_02: That's okay.
52:50
SPEAKER_02: Right?
52:51
SPEAKER_02: Like specialist investors have a role to play in kind of taking a view earlier than others would.
52:56
SPEAKER_02: And it's hard, but that needs to exist.
52:59
SPEAKER_02: But I do think we need to very quickly transition to generalists who say this is a really interesting business solving a really big problem.
53:04
SPEAKER_02: And I'd like to be a part of that story.
53:06
SPEAKER_05: The other thing I'd encourage you all to do, so um, we were invited to go speak at a essentially a fossil fuel funded pure finance conference in Rome last week.
53:17
SPEAKER_05: Go and sit in a room where you have the different opinion.
53:21
SPEAKER_05: Go sit in the room where everyone have built significant wealth and success on a different set of beliefs and philosophies and challenge your own understanding and see what you can learn from an environment where you don't already know all the words and all the acronyms and everything.
53:34
SPEAKER_05: It I I found it such an incredible experience.
53:36
SPEAKER_05: Did I agree with everything?
53:37
SPEAKER_05: Absolutely not.
53:38
SPEAKER_05: Was I horrified when I realized that Aramco are producing 10 million barrels of oil a day?
53:43
SPEAKER_05: But don't worry, we'll get to 12 million soon.
53:46
SPEAKER_05: And I was like, wow, okay, that took my breath away for a second.
53:49
SPEAKER_05: And then it was a realization of, okay, there's an opportunity in this because the amount of money that's flowing to this, I could do a lot of good with some of those billions.
53:58
SPEAKER_05: Okay, we're almost up.
53:59
SPEAKER_03: You want to find it?
53:59
SPEAKER_03: I just let me I just want to double tap on what Sid said because I think it's it's so true.
54:04
SPEAKER_03: And I think for this space, and I have I have entrepreneurs always ask me, like, you know, what's what should I be thinking about?
54:11
SPEAKER_03: How do I, as I build a company or I want to think about doing something, I'm gonna leg in, how do I think about it?
54:16
SPEAKER_03: And I think historically, you know, this this space has been very entrepreneurial.
54:23
SPEAKER_03: Um, it has been sort of at an early maturation point where you really didn't have the opportunity to have growth capital and institutional capital in, right?
54:33
SPEAKER_03: And it comes from sort of an ethos of academia, right?
54:38
SPEAKER_03: And so you have a lot of science, you have a lot of academics, and that doesn't always transliterate to the investment committee or the boardroom.
54:46
SPEAKER_03: And so what I always tell everybody is to get past this sort of early stage startup mode, which I believe we're all on the process of.
55:00
SPEAKER_03: Precisely, and and don't speak the same language.
55:03
SPEAKER_03: So I think I always want to sort of ground it in like in unless we're gonna say this is the role of government or this is the role of nonprofit and and philanthropy, which I believe it's not, because I think it's desperate.
55:16
SPEAKER_05: They're not coming.
55:17
SPEAKER_03: Then then we have to be able to think about it from uh an IRR and a financial perspective.
55:23
SPEAKER_03: Like you've got to be able to actually map all of that together and be able to talk to the allocators on a level of what they're looking for, because they have stakeholders that have certain expectations, and being able to understand and map that all together is kind of what's what's now beginning to happen, I think.
55:39
SPEAKER_02: So I'm gonna challenge in that.
55:40
SPEAKER_02: I'm not sure they're coming in terms of like massive new markets for carbon or biodiversity, but we spend$30 of harmful subsidies, public money, your money.
55:50
SPEAKER_02: So we spend$30 destroying nature for every dollar we spend on protecting and restoring it.
55:55
SPEAKER_02: So I do think there's a lot of room to go after harmful subsidies, because that is making it harder for exactly what you're saying to be competitive, right?
56:03
SPEAKER_02: So if we have to focus our efforts on policy, I would love to go after harmful subsidies.
56:09
SPEAKER_02: Fall back the bad and save that money.
56:10
SPEAKER_02: You spend it on all of our priorities, health, education, maybe a bit of nature, but that's public money, right?
56:16
SPEAKER_02: We should be spending.
56:17
SPEAKER_05: How do we begin to move that needle?
56:19
SPEAKER_02: So again, I think the people, I think people do not understand this because they seem to assume that like oh things are cheap because they're just cheap, right?
56:28
SPEAKER_02: They're not cheap because they're cheap, they're cheap because they're massively subsidized by governments.
56:32
SPEAKER_02: Um think about pretty much the whole food system anywhere in the world.
56:35
SPEAKER_02: Um and the fuel fruit to fuel system, which I think is in its own way crazy.
56:39
SPEAKER_02: Yes.
56:40
SPEAKER_02: Um, but we've also got harmful subsidies on extractive activities.
56:44
SPEAKER_02: And I actually think we still need these things, but I'm not sure we should be spending public money essentially subsidizing large corporations to do harm.
56:51
SPEAKER_02: Right.
56:51
SPEAKER_02: I think they should compete um with all the solutions that we're investing in.
56:55
SPEAKER_02: Um when people understand that, and they also understand the kind of personal health consequences, the kind of nature access consequences, the kind of social and cultural aspects of it.
57:05
SPEAKER_02: But I think that the world we want to live in doesn't look like a kind of linear, extractive, um, you know, fossil intensive one that's highly polluted in all sorts of ways, right?
57:14
SPEAKER_02: So I do think people understand that when governments waste money, it gets them angry.
57:18
SPEAKER_02: It gets me angry.
57:19
SPEAKER_02: And we should we should actually call out this as waste and frankly fraud, because that's it's what it is.
57:25
SPEAKER_02: Um, and then transition that money to better use.
57:27
SPEAKER_05: We we have such an unusual relationship with money in the UK.
57:30
SPEAKER_05: Uh well, actually, interestingly, test do we?
57:32
SPEAKER_05: So, from your context, is is this different elsewhere in the world?
57:35
SPEAKER_05: But there was a uh a local news story near one of our Scottish estates last week about how terrible it was that one of the pension funds was buying a forestry investment because rich people were benefiting from this forestry investment.
57:47
SPEAKER_05: They were a pension fund.
57:49
SPEAKER_05: Like it it's all of us.
57:51
SPEAKER_05: Yeah, the the press angle was this is terrible.
57:54
SPEAKER_05: And it's just a fundamental misunderstanding of how pension money moves.
57:58
SPEAKER_05: Is that unique to the UK?
57:59
SPEAKER_05: Do we see it elsewhere in terms of those investments?
58:03
SPEAKER_03: Yeah, I think it it's a bit unique.
58:04
SPEAKER_03: I mean, I I think in the U, you know, these are what we call Timos in the US, but big timber, basically ERISA or pension-based timber programs, um, certainly don't get that get that pushback.
58:15
SPEAKER_02: I think it's there's if you think about like your whatever, cotton and milk or like an ad for something agricultural.
58:22
SPEAKER_02: Imagine this beautiful farm, sunshining, there's like a beautiful sheep lying there on the grass.
58:27
SPEAKER_02: Farmer occasionally kind of walks in and like picks up this beautiful thing.
58:30
SPEAKER_02: Chewing a piece of corn.
58:31
SPEAKER_02: Chewing a piece of corn.
58:32
SPEAKER_02: And you that's the kind of like in our mind's eye, that's what farms are like.
58:35
SPEAKER_02: Farms are massively industrialized in pretty much every corner of the world.
58:38
SPEAKER_02: Yes.
58:38
SPEAKER_02: Um, even smallholder farms are industrial farmers in some ways.
58:43
SPEAKER_02: And again, that that perception gap is is a storytelling gap.
58:46
SPEAKER_02: I think people need to understand how that agricultural system works.
58:49
SPEAKER_02: And then maybe the timber thing doesn't sound so bad when you compare it.
58:52
SPEAKER_02: I'm not for a second saying farmers don't do important work, they do, right?
58:55
SPEAKER_02: And they but they do it in a context that's and it's very hard to actually be a farmer.
58:59
SPEAKER_02: Like I couldn't do it.
59:00
SPEAKER_02: Um, but the context is that capital is already moving in these places.
59:05
SPEAKER_02: You know, they're not, these are not like islands of you know, sanctity that we've protected in some way.
59:10
SPEAKER_02: We've actually, I mean, many of those farms wouldn't exist without public money.
59:13
SPEAKER_03: Well, we're we're losing in the US, we're losing about 9,000 smallholder farms on an annual basis, and that's uh it's a decade rolling average, uh, a massive amount.
59:24
SPEAKER_03: And that consolidation is going to conventional chemical-based agriculture, right?
59:29
SPEAKER_03: And so there is a pocket, I think, um, a small pocket that would be comparable to what you're talking about, because there is a pushback around what we're losing in terms of the soil fertility, the diversity of crop species by going to these huge monoculture um operations for you know ethanol or for all these other animal feed, um, not even for human like nutrient density needs, right?
59:55
SPEAKER_03: And so there is a small amount, but that's only 40 bips um of our farmland in the US is regenerative.
1:00:02
SPEAKER_03: So there's a lot of a lot of room to go.
1:00:06
SPEAKER_05: I um I want to leave enough room for you guys to ask some questions, but I'm gonna close with one quick one for each of you.
1:00:11
SPEAKER_05: Um if we sit here in 12 months' time, repeat performance of Second Nature Live, what do you hope has changed in the sector?
1:00:19
SPEAKER_05: Do you want to start sitting all work this way around?
1:00:21
SPEAKER_02: Yeah, I hope um we've learned to live in a volatile world.
1:00:25
SPEAKER_02: I think we're still in the sort of oh, idle blow of uh things will be fine next month.
1:00:28
SPEAKER_02: I hope we've learned to live in it comfortably and understand that this is an important part of the economy and our society.
1:00:35
SPEAKER_02: And I think the world is going to be kind of volatile and uncertain for a while.
1:00:38
SPEAKER_02: And I hope we've kind of managed to look through that as capital allocators, as investors, as operators, and actually get on with it.
1:00:48
SPEAKER_01: Um I hope that we can kind of feel much more empowered and be much more proactive in the way that we are shaping the world that we want to live in.
1:00:57
SPEAKER_01: I think we're still very reactive.
1:00:59
SPEAKER_01: And I think there's still a lot of we'll wait and see how that thing plays out, or we'll wait for someone else to test that technology, or we'll let somebody else prove that capital allocation model before I go in and have a go.
1:01:11
SPEAKER_01: I think actually, if if we're if we are all aligned in terms of this world that we want to move to where we don't have the pollution and we do have resilient food systems and clean water, then we all have a responsibility to shape that together.
1:01:26
SPEAKER_01: We'll get it wrong along the way, but the technologies exist, the solutions exist, it's the implementation gap that we'll actually close.
1:01:34
SPEAKER_05: And I love how you literally live that every day.
1:01:36
SPEAKER_05: You just you talked about how you did it from an AI perspective.
1:01:38
SPEAKER_05: No, no, I'm gonna lead this, we'll figure it out and we'll go from there.
1:01:41
SPEAKER_05: Final word for you, my friend.
1:01:42
SPEAKER_03: I think so I have two sort of tipping points that I think maybe a year is is tight, but I'm optimistic.
1:01:48
SPEAKER_03: One is I think as it relates to this food system and sort of nutrient density question, I think we're on really the tip of being able to understand from an outcomes perspective what's in our food.
1:02:03
SPEAKER_03: And so the phytonutrient stack, the mineralization, the lack of toxicity, right?
1:02:07
SPEAKER_03: There's companies we have an investment in one, it's an amazing company called Idacious that is using spectroscopy to understand all of the species.
1:02:17
SPEAKER_03: Is grass-fed grass-finished beef better than keifo beef?
1:02:20
SPEAKER_03: Yes, indeed it is.
1:02:21
SPEAKER_03: Ratios of omegas are better, et cetera.
1:02:24
SPEAKER_03: I think once we can know that, um, is that what you want to feed yourself and your kids and your animals?
1:02:30
SPEAKER_03: I think it is.
1:02:31
SPEAKER_03: Um, I also think you're more satiated by that nutrient density, and so you actually don't need as much food.
1:02:36
SPEAKER_03: So there's a there's an economic benefit to everyone by doing this, and then the environmental benefit is huge.
1:02:41
SPEAKER_03: I think we're right there on that tipping point.
1:02:43
SPEAKER_03: The one other thing is I I believe there's a rotation happening, and I'm gonna get some shade, I'm sure, from the um some corners of the carbon market, but there's a rotation to understand the benefit of nature-based solutions versus sort of the engineered solution set.
1:03:00
SPEAKER_03: So instead of building large industrial facilities where we're scraping out marginal amounts of carbon without thinking about the water or the disturbance of the land, looking at nature and restoring natural assets with all the co-benefits that reside, I think are going to have a little bit of a day in the light.
1:03:22
SPEAKER_03: And so I'm really optimistic because I think those entry points from a pricing perspective help people meet their net zero goals.
1:03:29
SPEAKER_03: I think they're more effective for more than just carbon reduction, as I said before.
1:03:33
SPEAKER_03: And I think I'm starting to see that happen with some of the big buyers.
1:03:37
SPEAKER_05: And since it's my show, I get one as well.
1:03:39
SPEAKER_05: Um I'm hopeful that in the next year, and incredibly optimistic, we will see more iconic transactions, we will see individual investments in the hundreds of millions into this sector, to which point allocators across capital types and spectrum generas go, wow, this is a real, real important asset class.
1:03:59
SPEAKER_05: Can I get a round of applause for our incredible pound, please?