Episode 229: Michele Demers, Boundless Impact
Today’s guest is Michele Demers, Founder and CEO at Boundless Impact Research & Analytics.
As companies pursue sustainability targets, having an accurate measure of their carbon footprint provides transparency, accountability, and benchmarks to reach and improve on. Boundless is an industry research and impact analytics platform that provides quantitative and evidence-based research and data for investors, companies, and funds. They offer Scope 1, 2, and 3 climate data, analysis and market intelligence across a growing number of emerging sectors that address significant environmental challenges.
In this episode, Jason and Michele dig deeper on this important area to better understand what the landscape is, how well adopted these frameworks are, how much standardization there is out there, what types of incentives exist, which ones are helpful, and which ones cause friction. They also cover the types of companies that are taking advantage of this work, how consistent it is across sectors, and of course, what we can change to help get to where we need to be.
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Episode recorded on September 8, 2022.
In today's episode, we cover:
[3:19] An overview of Boundless Impact Research and Analytics
[4:54] The company's origin story
[9:35] How companies understand their true carbon footprints
[14:32] Tooling available to understand risk and environmental impact
[21:25] Boundless' balance of software vs services
[24:31] Which industries the company is focused on and why
[29:12] How the annual assessment process changes across industries
[31:24] The role of life cycle assessment as the standard
[33:09] The process for companies working with Boundless
[37:22] The future of a real-time dashboard for emissions
[39:02] What happens when reports are not favorable
[42:10] How Boundless works with companies on improvements based on first analysis
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Jason Jacobs (00:02):
Hello everyone. This is Jason Jacobs.
Cody Simms (00:04):
And I'm Cody Simms.
Jason Jacobs (00:06):
And welcome to My Climate Journey. This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (00:16):
In this podcast, we traverse disciplines, industries, and opinions to better understand and make sense of the formidable problem of climate change and all the ways people like you and I can help.
Jason Jacobs (00:27):
We appreciate you tuning in, sharing this episode, and if you feel like it, leaving us a review to help more people find out about us so they can figure out where they fit in addressing the problem of climate change. Today's guest is Michele Demers, founder and CEO of Boundless Impact Research and Analytics. Boundless is an industry research and impact analytics platform that provides quantitative and evidence-based research and data for investors, companies, and funds. They offer Scope 1, 2, and 3 climate data and analysis and market intelligence across a growing number of emerging sectors that address significant environmental challenges. I was excited for this one as a follow-up to the recent discussion I had with John Dees from Carbon Direct.
Jason Jacobs (01:14):
John focuses on lifecycle assessment for emissions footprints, and Boundless does as well, but from a bit of a different perspective, they work more with companies that are looking to hold it up almost like a certification to stamp off on their footprint to show investors, for example, as opposed to Carbon Direct, that's working on it more through the lens of helping companies like Stripe assess carbon removal projects to fund or helping investors themselves to diligence companies that are considering backing.
Jason Jacobs (01:48):
At any rate, it was great to dig deeper on this important area. It is early days, and it's helpful to understand what the landscape is, how well adopted these frameworks are, how much standardization there is out there, what types of incentives exist, which ones are helpful, and which ones cause friction in the market, or maybe lower quality or consistency. And also just what types of companies are taking advantage of this work, how consistent it is across sectors, across stages, across geographies, and of course, what we can do or change to help go faster to get to where we need to be. Michele, welcome to the show.
Michele Demers (02:31):
Thanks for having me.
Jason Jacobs (02:32):
Thanks for coming.
Michele Demers (02:33):
Thanks for being here, Jason.
Jason Jacobs (02:34):
Yeah, I'm excited. This is just such a natural follow up these life cycle assessments for carbon and other GHGs. It's such an important topic and we recently had a discussion on the show with John Dees from Carbon Direct, who is doing these assessments, but from the perspective of either diligence on investments or to enable selection in RFP process for the Stripes and Shopifys or stuff like that. It sounds like for, at least from our pre-show discussion that you do this work, but from a bit of a different angle, which is just a natural compliment to the ground we've covered and I'm really eager to dive in and learn more about it.
Michele Demers (03:11):
Sounds good. Yeah.
Jason Jacobs (03:13):
Great. Well, maybe for starters, tell me about Boundless Analytics. What does the company do and how did it come about?
Michele Demers (03:19):
Sure. So Boundless Impact Research and Analytics is a industry research and environmental data and analytics firm. We came about because there was a sort of paucity of sort science-based methodologies around impact measurement in the environmental space. There's a lot of ESG frameworks out there and the majority of them are focused on financial performance and governance, and the questions they're asking about environmental performance are only super high level touch points. We're dealing with, obviously, as everyone is aware, a serious climate change crisis. There's a tremendous amount of interest in climate solutions, I think something like 27 billion were invested in cleantech startups in 2021.
Michele Demers (04:08):
So we really need, investors need accurate data and companies need reliable ways of measuring their performance so they can differentiate their products. We innovated on life cycle assessment back in 2018 and developed our own methodology that is very much rooted in life cycle assessment, but is slightly different in that we can do it better, faster, cheaper. We do a Boundless environmental analysis in fraction of the time and cost of a traditional industry standard life cycle assessment, and that has enabled us to get quite a following of cleantech investors and companies.
Jason Jacobs (04:43):
And so when you set out to build the company, what did the landscape look like at that time? And what were the elements of it that led you to believe that something else was needed?
Michele Demers (04:54):
So there's a lot of so called data-driven impact measurement out there. We wrote a white paper, it was kind of seminal, back in 2017 around data driven impact measurement. We found that there's too much survey-based methods that are a holdover from the 20th century being used by traditional impact frameworks and ESG ratings agencies. And so the problem is that that even though they're called quantitative or data, they're not actually quantitative because they're based on self-reported data. So what's important is validating data and what's great about lifecycle assessment is that it actually does that. We hire an industry expert to review the data for every single company we assess.
Michele Demers (05:43):
We have this method of building industry benchmarks using our proprietary data sets and methods that enable us to have the latest and most current data on industries so that when we gather data on a product, we can compare it to very reliable data sets about that particular industry. We develop our own metrics for every industry, so if we're measuring an energy storage technology, we'll use different metrics, then we would use if we were assessing a bio digester for food waste or a water purification technology. And that level of accuracy and attention to detail is missing in mainstream impact measurement and ESG ratings.
Jason Jacobs (06:28):
Gosh, I mean, my mind goes in so many different directions here since there's so many interesting threads to pull on with what you just said. But one question I've got is just, it seems like when you talk about, for example, and this is not company or industry specific, but even just decoupling emissions from GDP growth. As one example, what I've heard some critics say is, "Well, those claims aren't really warranted because it doesn't factor in this emission source or that where the supplies are coming from or things like that. So I wonder sometimes whether the data is accurate or whether it's just kind of pushing paper around to make it look like it's decoupled, but actually it's because emissions just aren't getting factored in elsewhere in the system. Do you have similar concerns as it relates to life cycle assessment that is industry specific and how do you account for that or make sure that that's not the case?
Michele Demers (07:23):
So product LCA is what we specialize in at Boundless, and that is going into the supply chain and looking at the full life cycle of a product. So it's not just looking at the emissions of a product in terms of its use, it's looking at its waste, its transportation footprint, where the materials were sourced, it looks at the supply chain emissions. These are all things that are part of what they call Scope 3 emissions, but Scope 1, 2 and 3 emissions are looking at the operational emissions of a company. If you're doing scope three emissions properly, you're including product emissions in that and that's what we do, which is why we are seen as so accurate and science based.
Michele Demers (08:06):
There's a lot of folks, a lot of emergence of a lot of these AI based carbon accounting platforms that are still based on self-reported data and that are not factoring in all of the aspects of a supply chain. So with something like batteries, for example, it's incredibly important to factor in the emissions required around let's say mining lithium or cobalt or graphite, which are all part of lithium ion batteries, which are driving... Lithium ion batteries are the most common battery used in electric vehicles today, and so there's a lot of concerns right now around the supply chain issues around battery minerals. That's just one example of something that would need to be factored in that maybe isn't all the time when they're assessing a market or a technology.
Jason Jacobs (08:57):
It's a weird analogy, but before I got into working on climate change, I worked in digital fitness and I remember that... I mean, what you don't measure, you don't improve so it's important to measure. But the accuracy and consistency is also important. I can remember the frustration that the users of our mobile application would have if they would go out for a long run, let's say, and the GPS worked and they didn't get accurate data. What is the state of the state? And maybe it's industry specific or stage of company specific, I don't know how you break it down, but where are we in terms of companies understanding their own footprints truly?
Michele Demers (09:35):
We're a long way away. So the European Union has put some regulations in place around environmental reporting around that kind of Scope 1, 2, 3 that I was just talking about as well as product LCA. They developed a taxonomy and they put regulations out in the spring of 2021. So they've been requiring both investors in companies and companies themselves to adhere to much more stringent environmental reporting guidelines. And there's some very interesting data coming out of some of these European countries that their emissions are going down as a result of this more stringent approach. In the US, we're a little behind, but we're catching up fast because the SEC, I think Gary Gensler, has a real vision for these new rules that he's prop- They've been proposed, I think they're imminent at this point, they're expected to go into effect sometime later this year. Those of us who really care about this are hoping maybe next year because of politics, but those SEC rules have emerged and are so important because of the predominance of greenwashing and ESG non-compliance that's happening.
Michele Demers (10:42):
That means a lot of companies are producing data around Scope 1 and 2 emissions that is just self-reported data and hyped up impact reports. So we've got a lot of work to do to educate companies on how you do Scope 3 accounting, and at Boundless we have both Scope 1, 2 emissions calculator and scope 1, 2 emissions inventory calculation capabilities, but we also do Scope 3. We're working with public companies to develop essentially a way for them to embed our data collection into their accounting software, I think it's called ERP, enterprise resource planning, software like Oracle and SAP.
Michele Demers (11:24):
We're doing that for a large biotech company right now, for example, using their SAP software so that it's easy for their accounting departments to measure their emissions according to what they're spending money on, like travel or commuting or shipping or supply chain partners. There are ways of doing this in a fairly intelligent way and the companies that are going to be ahead of the curve, and there are some companies doing this, are going to be the ones reporting on their Scope 3 emissions and not just their Scope 3 emissions, but their full product cycle emissions. And so we're getting there, but we've got a long way to go in terms of actual compliance with these rules.
Jason Jacobs (12:05):
So it sounds like if I'm hearing writing and correct me if I'm mishearing, but that in the voluntary world, it was few and far between, but as the governments in different parts of the world are starting to impose regulation that requires this type of reporting, it is starting to spur action. I guess the natural follow up in my mind is as it spurs action, where are we in terms of tooling to actually... So let's say these companies become motivated because of the regulation, does the tooling even exist for them to measure their footprints accurately?
Michele Demers (12:45):
Yes. So before I answer that, I do want to talk about one other really important factor, which quite frankly, I actually think is going to be even more influential in changing behavior. And that is the emerging carbon economy. Some people call it carbonomics, carbon credits. It's essentially carbon pricing. As the markets start to put a price on carbon, there's going to be a really emerging and very important set of economic incentives for companies that have a lot of emissions to actually start to reduce those emissions, because they're going to actually be in trouble financially. There's going to be real financial risks with having emissions that they haven't done the work to offset through either other activities or I...
Michele Demers (13:31):
There's one large German chemical company recently just bought several wind farms in Texas, because they're trying to get those carbon offsets. Companies are starting to realize they need to be much more active. And I think the economic incentives of carbon pricing and the opportunities that carbon credit markets and purchasing sort of carbon credit intensive technologies as part of their operations, it's going to just really revolutionize the adoption of clean technologies. And so I actually think even more than regulation, the regulation and the economic incentives together are going to catapult things along a bit faster.
Jason Jacobs (14:14):
Uh-huh. And so as they do, then where do we sit in terms of tooling? So the motivation switch flips on, let's say, at scale; let's even say in across industries; let's even say, are we equipped as an economy, as a society to understand our footprints as we get motivated to do so?
Michele Demers (14:32):
We're getting there. We definitely have... So Boundless is a firm among several others that are emerging like Persefoni and Watershed and ClimeCo, which is more of a carbon credit broker, but has a whole advisory business. All of those companies I mentioned have gotten significant funding. We're doing a funding round right now. A lot of other emerging carbon platforms are emerging. This space is exploding. You've got MSCI bought, I think it was called Carbon Delta a couple years ago, S&P bought The Climate Service recently, I think Moody's acquired Four Twenty Seven, a climate analytics firm. So there's sort of two sides of it: there's the sort of climate data and analytics services like The Climate Service and Four Twenty Seven and whatnot that actually provide data on the risks that climate change presents to companies. The inverse of that is what we do at Boundless, which is we measure the environmental footprint that a company has.
Michele Demers (15:35):
And by doing that, we can hopefully enable companies that have really impressive capabilities of reducing GHG emissions, we can enable them to just really dominate the carbon credit markets and grow exponentially. Companies like CarbonCure is a really interesting company that is essentially selling credits. They've got a technology that enables concrete. So concrete manufacturing is one of the worst offenders in terms of emissions, and the building industry in general is a tremendous emissions creator. CarbonCure has created a technology that enables cement manufacturers to sequester carbon, so they have this revolutionary technology. They have done so well in the carbon credit market, Jason, that they literally have an entire finance arm, a corporate finance arm that is focused on their carbon credit business. So not only do they have this technology that's sequestering carbon in the cement industry that is going gang busters, their carving credit business is going gang busters.
Michele Demers (16:43):
These kinds of companies, that's why the carbon credit economy is exploding. That's why ClimeCo, the company I was mentioning, did a 54 million Series B and they are one of the kind of leading carbon brokers out there. There's a bunch of them that are exploding and emerging. However, there's a lot of issues around carbon credits and how to obtain those. Boundless is getting set up to be a verification in validation body for Verra, which is one of the leading global carbon crediting agencies. But you've got kind of this very busy marketplace that is this carbon economy that I was mentioning that is emerging. And Carbon Direct is very active in it as well. It's super exciting and it's not a situation where we don't look at some of our competitors like Watershed and Persefoni as much competitors as compatriots, if you will, because we all need to exist and we all need to grow and we all need to grow fast so that we can enable large companies to reduce their carbon footprint.
Michele Demers (17:44):
And the emerging clean tech companies and solutions that are out there that are amazing, and that's something I hope we have a chance to talk about, is all of the amazingly cool emerging clean technologies that we get to learn about because they come to us and they say, "Please Boundless, can you put together an environmental impact report for us? Do an environmental impact assessment and measure our mission savings as well as any other environmental savings?" So we can show investors and show customers why we're going to be a Tesla of tomorrow. And we've got hundreds of companies that we've assessed that are in those from taking methane gas and turning it into green hydrogen, or turning into a single cell protein fish food to really amazing methane paralysis technologies and carbon capture and taking carbon and turning it into materials, turning into thread for clothing. The circular economies really, really has some really cool ideas. The biotech space, we've done a lot of work in ag biotech.
Michele Demers (18:47):
We do a ton of work in biologicals for crop control because all of these industrial pesticides that have really caused problems in our ecosystem are being replaced by biopesticides that are much better for the environment and that are sort of enabling our soil to better sequester carbon. And that's another area. I think that's on Bill Gates's list of top 10 industries is the soil sequestration industry in terms of climate solutions. So it's amazing. We just learn so much every day and we come across just tremendously inspiring climate solutions entrepreneurs that are doing rockstar things.
Jason Jacobs (19:30):
We're going to take a short break so our partner Yin can talk about the MCJ membership option.
Yin Lu (19:36):
Hey folks, Yin here, our partner at MCJ Collective. I want to take a quick minute to tell you about our MCG membership community, which was born out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast. We started in 2019 and have since then grown to 2000 members globally. Each week we're inspired by people who join with differing backgrounds and perspectives. And while those perspectives are different, what we all share in common is a deep curiosity to learn and bias to action around ways to accelerate solutions to climate change. Some awesome initiatives have come out of the community. A number of founding teams have met, nonprofits have been established, a bunch of hiring has been done, many early stage investments have been made, as well as ongoing events and programming like monthly Women in Climate meetups, idea jam sessions for early stage founders, climate book club, art workshops, and more. So whether you've been in climate for a while, or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to mcjcollective.com and click on the Members tab at the top. Thanks and enjoy the rest of the show.
Jason Jacobs (20:38):
Back to the show. So as you were talking, I was just drawing some notes and there's a few areas that'd be great to dig in on. So I'll list them all, but then it'd be great to tackle them one at a time if it's okay, and I'm talking about your industry versus their clients. One is the balance of software versus services or product versus consulting, I guess is another way to frame it. One is vertical versus generalist, given that we need to decarbonize every sector and sectors are so different from each other, just how that landscape should shape out and is shaking out. And the last is around data and proprietary methodologies versus standards and uniformity and consistency across regions across geographies, across industries, across companies. So if it's okay, can we just hit those one at a time?
Michele Demers (21:25):
Absolutely. Those are both such excellent questions. So on the balance of software versus services, let me just tell you how I see the landscape and I'll kind of put ourselves in the middle of that. You've got a lot of firms that are traditional environmental consulting firms and even mainstream consulting firms like McKinsey or Booz Allen that have LCA divisions now that do life cycle analysis, but they are traditional consulting firms and their model is not to do kind of independent analysis, their model is consulting. Consultants are hired to solve problems, consultants are also hired often to... It's not a perfectly unbiased situation, they're hired to help the companies they work with to succeed and so making them... Taking their data and building their sustainability story doesn't always involve purely objective science-based analysis.
Michele Demers (22:20):
So we're different than them, a lot of them, in that we do this LCA based method. We're seen as a true third party assessor of environmental performance. And we always bring in an independent expert that has no connection with the company, they have no contact with the company. They review the data, they put a report at the end of our report, they do an independent review of our report. And so we abide by certain aspects of life cycle assessment that traditional consulting firms can't always do because of the nature of their business. So the other side of the coin are these AI based tools that are very data driven and that are working with a lot of the conventional data sets out there that we see ourselves as different than because they are using a lot of traditional data sets like the government data sets like the GREET Model or the WARM Model or the ecoinvent database. But we always supplement that with our own industry research and we update all of our benchmarks because we have our own proprietary data sets.
Michele Demers (23:23):
But the biggest problem with the AI based tools is they are relying too heavily on self-reported data. They're not actually validating performance. You need a human being to look at that data and to actually give it a sniff test. We've always said, even though we're raising around and investors in us want us to automate as much as we can and we're going to, we're going to automate the way we collect data, we're going to automate the way that we produce our reports, but we're not going to ever lose that expert reviewing that data independently and making sure.
Michele Demers (23:56):
With public companies, we use multiple experts because that's abiding by the fidelity to the LCA method. So we really do believe in this life cycle assessment method and making sure science and validation and accuracy are part of our process. So it makes it harder to fully automate it, but we believe semi automation is sufficient because if you can build process efficiencies and automation into almost every aspect of the process, you're still doing something highly efficient and more reliable than the classic AI platforms. So let me stop there, if you have any questions before I move to the next one.
Jason Jacobs (24:31):
No, why don't we jump to the next one so that I guess boutique versus generalists getting at the different verticals.
Michele Demers (24:38):
Yeah. So, I mean the clean tech universe in and of itself is massive, right? So a lot of the carbon accounting platforms that are emerging are working with every company and that's every consumer product, good company and large company across the universe. And that is very ambitious. Some of these like Persefoni and Watershed that are just working across the board with any and all types of companies. I actually think that's very ambitious. I think it's tough to build the right data sets for these industries and that's what we're doing. We're focusing only in on cleantech. So the industries we are focused on are energy, transportation, food and ag, circular economy, advanced materials, and water. Those are the industries and that's a lot of industries. We consider ourselves boutique in that way that we're only building data sets in those industries. And of those industries, Jason, we're mostly focused on the highest growth, the high Kager industries within those.
Michele Demers (25:39):
So within food and ag, we're focused on, like I said, ag biotech industries like bio pesticides because they're skyrocketing right now. Alternative proteins is another area that's skyrocketing. Within energy storage, we're focused on batteries because batteries for grid scale, batteries for EVs, batteries for data center storage. These are all really high growth emerging clean tech verticals that are getting a lot of investment and just take by way of example, data storage. So large companies like Amazon, Microsoft, they're all wanting to be seen as and behave as sustainably as possible. They want to get access to the kinds of batteries like one of our customers ZincFive produces, which is a zinc based batteries, zinc nickel battery that essentially enables much easier storage because the materials in zinc batteries are safer and more abundant than some other types of batteries that are more traditionally used for grid scale storage like data centers.
Michele Demers (26:40):
And so that company is doing really well. Just got several investment rounds. They used our report as part of the diligence process for showing investors how their product is distinct and performs better than traditional lithium ion or lead acid batteries. There's a lot that goes into understanding the battery industry and we have a specialty in the battery industry. We have specialty in ag biotech. Like I said, it is wise to work with companies that have experience in an industry. So I definitely believe that more boutique approach is going to get you more accurate data and also you have a deep... In our case, we have a deep bench of industry experts in the verticals we have a lot of experience in. And we've lost contracts to move into new areas, Jason, because we don't have a deep bench and we haven't done a lot of work in that area. We haven't done as much work in smart grid thus far, so we're not as involved in smart grid as we are in other areas.
Jason Jacobs (27:40):
Two questions before we move on to the next one, one is around other than the data sets being different, is the process the same as you move from industry to industry? I'll tell you the second question now, although we can tackle the first one first, which is the cadence of doing this work, is it an annual certification process? Or given how quickly everything is changing, is this a one time thing? And then you just kind of do it again when you want, or is there a certain hygiene to it?
Michele Demers (28:07):
Yeah. So let me just answer your last question first, just because I think it's a little simpler. So we recommend companies do an annual assessment. We don't think it's necessary beyond annual because the industries are shifting and growing and changing, so we want to update the benchmarks annually and we want to gather their data and reassess annually. We don't recommend it more than that. We can do it quarterly. Once we get our various systems in place to be able to update data, we can easily do it quarterly. I don't think investors are going to demand more than an annual impact report on their environmental performance. So that's the answer to that question in terms of just if you're going to use a science based method for actually validating your data, I don't think companies are going to want to invest in that more than an annual upgrade and I think that's perfectly sufficient. So that's the answer to that. So, sorry, can you ask your first question again? [inaudible 00:29:02]
Jason Jacobs (29:01):
Yeah, the first one was around, you mentioned that if you don't have the data set that you might lose some deals and I was curious other than the data set, what's different about the process from industry to industry, if anything?
Michele Demers (29:12):
So looking at a product is different than looking at a project. Right? Okay, so if you're building a solar farm in a location like, I don't know, Arizona, you're going to have a different set of geographic circumstances that we'd be measuring a different grid than you would in Massachusetts or in Thailand. So when you're measuring up the impact, the environmental impact of a project, it's going to have a different sort of more of a scenario analysis that takes the grid and other geographic considerations like how sunny it is, the weather in mind. When you're doing a product like a alternative protein, for the most part, you're going to be doing that in a way that you can do that product and you can assess that product based on where the soy has grown or where the feed stock is grown for that alternate protein. We assessed a really cool technology in Noblegen that uses kind of a microalgae based. It's called Euglena. It's found in soil and brackish water as their feed stock versus like soy or P flower that needs to be farmed.
Michele Demers (30:21):
They have their proprietary process for cultivating that Euglena and that's in a lab. That's actually done in a physical operation in Canada, in a lab, but we definitely also measure ag companies, plant-based proteins that have, I don't know, a field and farming operation in Minnesota and we'd need to take into consideration the water and the soil and the various weather conditions in Minnesota, as well as the grid in Minnesota that's used for the manufacturer of that. So there are geographic considerations with some products. And with a lot of the companies we look at, we look at the GHG. As part of the GHG, we look at the use of energy in their manufacturing process.
Jason Jacobs (31:06):
What about in terms of proprietary versus standards? I can envision if it's the wild west, which it kind of sounds like, and then there's different firms emerging that have different processes and different companies in a given sector use different firms with different methodologies. Then how do you find some apples to apple's way to make sense of it all?
Michele Demers (31:24):
That's where lifecycle assessment comes in. It's been around for several decades. It's highly respected. It's used widely across the cleantech universe and that's why we're very much rooting our methods in lifecycle assessment. Lifecycle assessment is the standard. It already exists and that's why we rooted our methodology in it and that's why we're very focused on maintaining a fidelity to LCA methods. There are ISO, you're familiar with ISO, these international standards built around different methodologies. So life cycle assessment is ISO 14044 is the number, right? For carbon credit verification or validation, there are other ISO standards. I think there are ISO 14067 and 14064 for carbon credit and GHG emissions. And they have different methodologies that are in place, so you're going to have different groups developing their own so-called proprietary method, but it's really how the LCA method and the science of it is going to be standardized. The ones that are taking too much of a shortcut and where you don't read LCA anywhere, I would say buyer beware.
Jason Jacobs (32:37):
I'm hesitant to ask this question because I don't want to get too far into the weeds on a short podcast, but I'm just thinking if for those that are listening, let's say they work in a big company in sustainability, let's say, or CFO or whatever, and they've not done one of these assessments before. Can you just give kind of a snapshot of if a company does take you on to do one of these projects? Just what are the timelines? What's entailed? What do you need from them? What are the stages? I almost just want to kind of double click on what an engagement actually looks like.
Michele Demers (33:09):
Sure. So as I said in the beginning, we do these assessments in a matter of weeks versus months in a fraction of the time. So a traditional ISO compliant LCA of a product for a public company would take nine months to a year. And traditional ISO methods have a number of very academic, bureaucratic aspects to them; or technical, I should say, not bureaucratic; aspects to them that are not necessary if you're talking about needing to understand an emerging clean technologies potential for GHG admissions avoidance, as well as its actual and potential. So what we do is we sit down with the company after we've engaged, we send them an RFI and a list of 20 or 30 questions that are... We have a whole team of environmental engineers with expertise in life lifecycle assessment. Though, we send them an RFI, we go and we do research on the industry and we build our own benchmarks, as I said, and then we engage an independent expert for that project who is expert in that industry.
Michele Demers (34:16):
Like I said, we have a deep bench of over a thousand industry experts. And over the process of that, of a four to eight weeks, depending on how complex the product is and whether or not we have existing benchmarks in that industry that we're either developing from scratch or updating, we meet with the company only a couple of times in that process. We're doing this mostly independently. Other than the engagement on the RFI, we do put together metrics for that industry. So as I said, we'll have different... Usually it's for public companies and grow stage private companies, we're looking at seven or eight metrics. And so for a circular economy product, we might look at like ocean plastics avoidance or acid rain potential or different metrics around air or water pollution. For a alternative protein, we might look at land use or nutritional waste.
Michele Demers (35:12):
For a bio pesticide, we're going to look at biodiversity metrics in addition to GHG. We're going to look at ecosystem impact, human health impact, water toxicity, water unification. So there are different metrics we put together and we use. A lot of these metrics are already standardized in the LCA literature and databases, but we are developing them for each and every project. And the product is a report, environmental impact report produced by Boundless. It's a seven or eight page report that puts into very nice visual detail, the story, the sustainability story of the company.
Michele Demers (35:50):
And we score companies against the benchmarks, which are the more traditional technologies as a way of highlighting the product's difference. That report is one of our hallmarks that were known for very clean, nicely designed reports, where the data really can tell a story easily and the investor or the customer can easily understand the sustainability story. A lot of LCAs that are more technical results in like very complex models on Excel or what have you, that are Greek to most people to be able to interpret. So we definitely do that translation when we produce our reports and put together graphs and scores and charts and such.
Jason Jacobs (36:32):
Putting my futurist hat on, I keep coming back to health since that's the world that I come from. But go to your doctor and get some tests and then you come back a year later and get some more tests and you see how you did on those new tests versus the ones a year ago. But as devices like Apple Watch and WHOOP and Fitbit and things like that come out that are on your person all the time while you're sleeping, while you're awake, et cetera, you get almost like this real time dashboard and there could be alerting and notifications and things like that. Putting on my futurist hat, is there ever a world where we would get to a point where it wouldn't be this kind of project to pull together a report, but it would be more like an ongoing, real time dashboard? And I guess my questions are, one, is it possible? Two, would it even be valuable to have it? Three, how do we get there?
Michele Demers (37:22):
So it's just like when you sign up for cable, the Verizon guy comes to your house and he sets up the little cable box and the router and everything. We got to do the first assessment, right? But then we set up the dashboard and we update it. Every year we add other products, we do similar analyses. We can totally build a dashboard. That's what we're raising money to do and we already are starting to do through this company portal we launched earlier this year. But you have to, when I said about hiring the expert to look at the data, giving it a sniff test, you have to do that thing, that initial engagement, where the Verizon guy comes to your house, where you do the setup, where you build the tools.
Michele Demers (38:06):
If you're doing Scope 3 analysis, we've got the capabilities to come in, work with your ERP software and set up the way that you can measure your Scope 3 emissions using your cost based estimations, using your own existing accounting software, but the system for doing that needs to be built for the first time. Does that make sense? But it's a one time setup fee and then it's a dashboard going on from there.
Jason Jacobs (38:33):
And I guess semi-relatedly, you mentioned that you do this primarily for products and that one use of these reports is for investors. I guess my question is what happens when your work tells clients something that they don't want to hear and maybe cast their products, not in the favorable light that they were hoping for investors. Is there an incentive misalignment similar to what you were describing with the McKinseys of the world?
Michele Demers (39:02):
It's definitely happened. Because we use this LCA method, we do the research on the benchmarks and we let the data speak for itself. We have had instances where a company engages us. We do research on their competition. We collect data on them. We have an expert essentially review that data, and sometimes the expert tells us that the data seems a bit too optimistic that the company provided us and we have to go back to the company and say, "We need further substantiation that you can actually do this." So you're a battery technology and you're claiming you can have certain energy density, we have sent data back to them and said, "This looks a little too rich. We need further substantiation." And I think in most cases with the battery companies, they've actually substantiated and shown us case studies and built their models that they built and we share them with our expert and it has satisfied their skepticism.
Michele Demers (40:02):
But we also have had instances where we do research on competitors. There was a company that we assessed last year that I'm not going to even name the industry, but we did some work on assessing their competitors and they did not think that their competitors should perform as well. We let the data speak for itself and they didn't look as impressive, again, next to the competitors because some of the other emerging technologies were quite impressive in their performance. So they didn't score as high and I have a feeling that our report is collecting dust. So, yeah.
Jason Jacobs (40:37):
But I guess it's a double-edged sword, right? Because if you build a reputation for being objective, then it might turn some people off if they're looking to go to some place that's going to... But at the same time, if they want to actually show their customers or their investors that they pass the real test, not the fuzzy test, then they go to you, right?
Michele Demers (40:57):
Right. I mean, we got engaged by BlackRock to carbonization partners, which is the billion dollar growth equity fund that BlackRock in the Temasek, which is the venture arm of the Singapore government created. And they are using our analyses and reports in their technical diligence. That just shows you right there that they trust our analyses to be truly objective, and we're doing that more and more that we're working with investors and not just companies that see that our assessment is truly giving a proper sniff test to whether a technology can do what it says it can do.
Jason Jacobs (41:33):
Uh-huh. I know we're starting to run up against time here, but one other juicy question I wanted to make sure to get in is, and again, I'll use a fitness analogy. When you work with a personal trainer, they start with an assessment. They give you an assessment and they identify where you are, but that's just a baseline and then they put together a plan to improve. And so my question is once you do this assessment and you lay out the state of the state for where the company or the product is, what happens in terms of the improvement plan? Is that something that Boundless helps with, or are there partners that do that or other industries or how does that work get done and what's the state of the state there?
Michele Demers (42:10):
So, absolutely. I mean, companies want to continually improve their scores and performance, especially companies in the cleantech universe who are relying on their sustainability story as a key part of their brand and their marketing. So we are definitely influencing our reports and our findings are influencing operational decisions. Companies are moving to renewables because they're realizing, "Oh gosh, our GHG score could be a lot better if we actually moved to a greater, renewable energy usage in our manufacturing process." Or they will change some of the feed stock of some of the materials they use based on what we find from our analysis of their existing feed stock, if you're talking about a protein or it could be a material for clothing, or we do a lot of work in advanced materials because that's another area that biotech is just where biotech and new really cool solutions are exploding right now. So yes, we definitely do a kind of Boundless diagnosis and recommendations and they are definitely part of our reporting process.
Jason Jacobs (43:20):
Uh-huh. My last question is just stepping outside of Boundless for a minute. If you just look at the industry overall, you talked about how it's early days in terms of companies understanding their own footprints and we talked about some of the factors that will accelerate that, which is great. But I guess my question is if you could change one thing outside of your control that would most accelerate the progress in terms of the industry maturing and the adoption seeping in and companies understanding and then ultimately improving, which is of course, what we all hope happens as quickly as possible, what would you change and how would you change it?
Michele Demers (43:53):
So I think it's really problematic that a lot of the mainstream ESG indices are giving investors, mainstream institutional investors, the impression that they are investing in sustainable companies when they're not. They are really overweighted to financial factors and there needs to be a lot more understanding of the actual environmental data and social data too, but that's not an area we cover. But there's a lot of social issues that are not covered properly in mainstream ESG indices. And so I would just like to see these new SEC rules and sort of the carbon economy evolve in a way that really allows a lot of these emerging cleantech solutions to grow and scale. And Tesla is not the only, I mean, Rivian growing. In the transportation space it seems like you're getting some traction, but there's a lot of... There's so much innovation that's ahead of us.
Michele Demers (44:52):
You know, everyone was just beyond, no pun intended, but beyond excited about the Beyond Meat IPO. They still have a lot of emissions and use very traditional proteins in using soy and pea protein. There's lab-based proteins that are going to blow the environmental story out of the water of these more traditional. And I think it's just getting investors to keep an open mind and not glam onto the only stock to hold onto is Tesla when you've got 15 other really cool companies to look at. And just sort of, I guess, moving out of the more traditionalist, there seems to be sort this lemming kind of mentality in the mainstream financial services and ESG's gotten a ton of interest and yet there's a lot of hype out there. Just how to break through that is a continual challenge for us and I think just ways of... If people could just understand the opportunities with getting ahead of the curve and investing in some of these climate solutions and how much money could be made, just a greater and faster widespread adoption of clean tech investing is what I'd like to see.
Jason Jacobs (46:02):
Great. Is there anything I didn't ask that I should have or any parting words for listeners?
Michele Demers (46:08):
Yeah, I mean, I think just understanding that the implications of incorrect data and hyped up impact reports are pretty powerful in terms of our fight against climate change. The best companies, the ones that really are going to make an impact are the ones that really are able to show and prove their product is distinct and just be scrutinous and know that in being scrutinous, you're going to end up making more money as a result. Just keeping that mentality. And then I think the optimism, I am an optimist and as much as we're professional skeptics here at Boundless, I actually think the investment opportunities, trillions of dollars of GDP are going to be created out of all these emerging industries across the kind of clean tech universe, because our physical world is going to have to change to adapt to climate change. And that's an opportunity for investors and seeing that and embracing that is what I'm excited to leave everyone with.
Jason Jacobs (47:07):
Great. Well, great point to end on and thanks again for coming on the show and best of luck to you and the whole Boundless team.
Michele Demers (47:13):
Thanks so much for having us, Jason. We really appreciate it.
Jason Jacobs (47:17):
Thanks again for joining us on the My Climate Journey Podcast.
Cody Simms (47:20):
At MCJ collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity. To do this, we focus on three main pillars: content like this podcast and our weekly newsletter, capital to fund companies that are working to address climate change and our member community to bring people together as Yin described earlier.
Jason Jacobs (47:42):
If you'd like to learn more about MCG Collective, visit us at www.mcjcollective.com. And if you have guest suggestions, feel free to let us know on Twitter @MCJPod.
Cody Simms (47:57):
Thanks and see you next episode.
