by Bruce Dudley, Senior Vice President at GLOBE Series and The Delphi Group
Agtech, also known as agritech, is any technology or application that ensures agricultural practices are more efficient, productive and/or safe. Think the production of higher yields using fewer resources, reducing waste or pesticide use, or improving food safety and animal health and welfare.
Agriculture is ripe for the picking when it comes to disruptive technology. Other large industries, such as mining, forestry and transportation are already well down the path of transformation. The need for innovation in the ag sector is only going to increase, and here’s why:
Food demand is growing. The population is projected to grow to 9.7 billion people by 2050, up from 7.6 billion today. According to the FAO, global agricultural demand is expected to rise by 70 percent by 2050 as a result.
Available land is shrinking. Arable land is decreasing by 100,000 hectares per year. Climate change and mass urbanization will shrink the availability of arable land even further, according to the World Economic Forum.
GHG emissions are on the rise. Agriculture, forestry and changes in land use together produce 21 percent of global greenhouse gas emissions, making them the second largest emitter after the energy sector, according to the FAO. Emissions could increase an additional 30 percent by 2050.
Canada has a lot to gain. Canada is one of the world’s largest agricultural producers and exporters. According to the Canadian Agri-Food Trade Alliance, Canadian agricultural exports total $56 billion a year and the sector employs one in eight Canadians. As a trusted producer of sustainable produce, Canada’s brand will be in high demand.
The Trend to Watch
The future of agtech is precision agriculture. This includes using remote sensors and real-time data so that farmers only deploy water, nutrients and fertilizer where they’re needed, when they’re needed. It means using drones, satellites and in-field sensors to monitor soil conditions and indicate optimum planting times. And it means using smart machinery and transportation networks to make and distribute food products.
Not only will agtech reduce costs for farmers (many of whom run small to medium businesses) and result in fewer resources being used, but it will reduce the risk of over-fertilizing and the related costs to our environmental health. You only have to look at the recent romaine lettuce scare to realize the potential impact.
Automation is also positioned to transform the sector. For example, wasted food is a huge issue in Canada and the U.S. because we don’t have sufficient labour and resources to get produce to market – the UN conservatively estimates that about 17% of food grown in North America is lost or wasted on the farm. This represents tremendous stranded value for the producer.
Robots, autonomous vehicles and equipment that can be deployed in the fields 24/7 will not only increase productivity, they will reduce food waste and improve safety. This is extremely important when you consider that, according to the Center for Disease Control and Prevention, agriculture ranks among the most hazardous industries and farmers are at very high risk for fatal and nonfatal injuries. Technology has real value to add.
Supporting domestic production is important, but it is even more important to develop safe processes and secure food quantities in developing countries. Precision ag for countries like Mexico as well as regions in Asia and Africa is going to be very important given limited access to resources like water, fertilizers and energy for processing and safe storage.
The Opportunity
Globally, the case for agtech is pretty clear. Here in Canada, the government has set an ambitious target to grow its agri-food exports to at least $75 billion annually by 2025. According to Innovation Science and Economic Development Canada, bolstering technology adoption and advancing digitization in the sector is key to achieving this goal.
Agtech is attracting a diverse range of investors who recognize that the sector needs to innovate to meet the challenges of the 21st century. According to Finistere Ventures, a venture capital firm dedicated to the agtech market, the interest in precision and digital agriculture has grown tremendously in the last few years. Most investors are still seeing agtech opportunities at the early stage, and valuations seem to be trending upward. While there were 76 investments totaling $309 million in 2013, in 2014 this grew to 153 investments and $666 million, and $1.4 billion in 2015. This is likely just the tip of the iceberg.
Agtech is at the leading edge of disruption that will transform the way we produce food and move it to market. Canada is on the front edge of that transformation and, with our existing reputation as a global leader, there are incredible opportunities for clean growth and value creation.
Bruce Dudley is a Senior Vice President with The Delphi Group and GLOBE Series. Join Bruce and hundreds of investors, innovators and business leaders at GLOBE Capital (February 27-28 in Toronto) to learn more about digital agriculture and other opportunities in the clean economy.
GLOBE Capital returns to Toronto on February 27-28, 2019.
Join us at GLOBE Capital 2019 (February 27-28, Toronto) where we will be discussing the potential for innovation to enhance productivity, improve efficiency, and reduce waste in the agriculture sector, and the impact this has on the investment community, in our session Opportunity Spotlight: Digital Agriculture.
Getting Canada’s northern communities off diesel helps everyone
In the Arctic community of Iqaluit, average daily temperatures fall below freezing for eight months of the year. In the depths of winter, it is bitterly cold.
In such harsh environments, energy is vital to survival in Iqaluit, and in some 300 other remote communities across northern Canada largely populated by Indigenous Peoples. Far from provincial and territorial power systems, these off-grid villages and towns rely on diesel fuel for power and heat.
Such an energy reality has significant economic consequences. Diesel power is costly. Petroleum must be transported by ice roads and marine tankers over vast distances. For some communities, air freight is the only feasible way to get fuel to residents.
The social and environmental impacts of diesel-based energy are also debilitating. Reliance on diesel perpetuates an import economy; bleeding scarce funds from community coffers instead of utilizing local energy resources. Fuel spills are common. Diesel generation pollutes the air and emits greenhouse gases that contribute climate change.
“For some communities, air freight is the only feasible way to get fuel to residents.”
For decades, off-grid First Nations, Métis and Inuit communities have sought alternatives to diesel-based energy. The Inuit community of Inukjuak in northern Quebec, for example, has been diligently developing a small hydro project to replace diesel fuel used for power and heating.
There is good news on the horizon. Through the foresight of Indigenous leaders and increasing receptivity on the part of utilities and governments, Canada is on the cusp of a northern energy revolution. New investment is being committed to cleaner energy technologies in remote communities countrywide, anchored to three key pillars.
The first is to adopt an integrated approach by building energy-efficient homes and optimizing the potential of local renewable wind, solar, hydro and bioenergy resources. Gull Bay First Nation located north of Thunder Bay has embraced such an approach. The community will bring Canada’s first remote renewable energy micro grid online this spring and is also implementing an energy efficiency program.
Second, it is essential that Indigenous Peoples play a central leadership role in developing clean energy to meet their needs. Proactive community planning and engagement is proving to be much more effective than top-down directives of the past. In an era of reconciliation, it is also the right thing to do. The Vuntut Gwitchin government of Old Crow, Yukon will break ground on a solar power array with partners this coming summer to replace diesel fuel now being delivered by airplane.
Third, forging partnerships between Indigenous organizations, utilities and developers is of critical importance; drawing on the know-how of clean energy companies and the local knowledge of First Nations, Métis and Inuit peoples. The pioneering efforts of Watay Partnership in northern Ontario, comprised of 22 First Nations and a private energy company, is bringing power to communities like Pikangikum with new electricity transmission infrastructure. In Nain, on the east coast of Labrador, the Inuit Nunatsiavut government along with Newfoundland and Labrador Hydro is planning to erect wind turbines to reduce diesel reliance.
The large electricity transmission and supply systems in southern Canada were built with long-term investment provided or backed by governments. So, too, must this be the case for our country’s North. The federal government has stepped up its support, allocating over $700 million to off-grid energy projects. Those resources, coupled with provincial and territorial contributions, are leveraging new investment from private sector partners, fuelling clean energy based economic development across Canada’s hinterland.
Yet, there are key pieces missing from this story. There is a pressing need for supportive public policies and revitalized energy market regulations across the country. Provincial and territorial governments must introduce independent power procurement policies to facilitate 21st-century clean energy infrastructure in remote communities. Energy rate-setting agencies should work together to establish a fair price for reducing diesel reliance through energy efficiency and renewable energy; a price that provides full value for diesel reduction including economic, social and environmental factors. Finally, there are compelling reasons for provincial and territorial governments and utilities to make a commitment to First Nations, Métis and Inuit leadership of clean energy assets, including local ownership.
The potential of Indigenous clean energy for remote communities across Canada embodies words of our national anthem, “True North, Strong and Free.” That’s a future most Canadians could support.
GLOBE Capital returns to Toronto on February 27-28, 2019.
How Investors and Entrepreneurs Can Capitalize on the Trillion-Dollar Cleantech Opportunity
by Carol-Ann Brown, Vice-President of Cleantech and Innovation at GLOBE Series and The Delphi Group
A World Resources Institute (WRI) report estimated that the potential market for clean technologies in the developing world alone is US$2.5 trillion through 2022. The International Energy Agency (IEA) predicts that renewable energy will account for almost a third of total world electricity generation in 2023. These are big numbers, demonstrating the sheer size of the opportunity for investors and entrepreneurs.
Small and medium-sized enterprises (SMEs) are poised to capitalize on many of the business opportunities in the cleantech space. Here in Canada, the sector employs more than 55,000 people in more than 800 firms, according to Analytica Advisors’ 2017 Canadian Clean Technology Industry Report. The same report confirms that growth capital is the number one barrier for Canadian clean technology companies. As firms scale up and look to commercialize and export their products and services, they often find themselves limited by a lack of financing.
The Proverbial Chicken and Egg: Financing vs Revenue
Commercial banks are constrained by strict regulations with respect to how much risk they can take on in their lending practices. Cleantech companies looking to scale typically can’t meet their conditions. It’s a chicken and egg scenario: cleantech firms need the cash to get past the first demonstration stage and shift to commercialization and sales, and banks can’t lend them the cash until they can show they have viable revenues.
Not all cleantech requires the same level of investment. Digital technologies, such as sensors, as well as software don’t require the same levels of investment as hardware, which often requires many millions of dollars to prototype, test and demonstrate, let alone commercialize . Many of the stickiest challenges in our resource sectors require hardware-based solutions such as:
Turning waste to fuel and chemical such as Enerkem
Capturing carbon from post combustion industrial sources, such as Inventys
Replacing steam produced by natural gas with solvents for extracting bitumen – like producing companies Imperial, Cenovus and others are testing, or heating the reservoir with electromagnetic heating to extract bitumen, such as Acceleware’s technology
Creative Solutions are Beginning to Emerge
Fortunately, creative solutions as well as non-traditional players can address this financing gap. For example, RBC has a partnership that allows them to funnel money into the cleantech sector via Espresso Capital, which has the ability to lend at different levels of risk tolerance. Espresso leverages an experienced team and proprietary software that takes in all the particulars of a company and, by evaluating the history of investing in the cleantech space, predicts the likely return for a debt-based instrument.
Another example is the Ontario Teachers’ Pension Plan taking over BluEarth Renewables, which focuses on commercial-scale renewable energy development. This followed an initial equity investment several years earlier, following increasing calls from its constituents to invest in socially and environmentally responsible enterprises and projects.
Video: Jennifer Reynolds, President and CEO of Toronto Finance International, talks about the understanding and appetite for investment in clean technology in Canada.
Tips for Making the Most of Your Time at GLOBE Capital and Capital Exchange
One of the greatest barriers to finding creative solutions and instruments is that financial institutions, investors, and cleantech companies don’t always have the full picture when it comes to the requirements and restrictions of potential partners. They don’t necessarily understand each other’s pain points, or the potential opportunities.
Government policymakers will be at these events, as well as other large financial institutions and investors. Together, they will collaborate on models and mechanisms for financing the 21st century. Here are our top tips for making the most out of this unique opportunity.
If you’re a cleantech innovator:
Talk to BDC and ED about their financing mechanisms.
Talk to the people representing hundreds of millions of dollars in potential investment.
Talk to corporates for whom cleantech may be a strategic investment.
Talk to the big pension funds about how your solution can help them address financial and climate-related liability.
If you’re an investor:
Talk to Generate Capital and others about aggregating projects so they are a more viable investment.
Talk to growing cleantech companies to find out what they need – you might be surprised by their answers.
Talk to other investors to learn more about what deals they can or cannot fund, and to learn about new deals and partners.
No matter who you are:
Find three people you’ve never met because you don’t know what you might learn.
Talk to fellow attendees about how we can adjust the policies that maintain the reliability we need in our banking system to help us achieve our economic and environmental goals. What are the enabling conditions for large banks, pension funds, and private equity to partner and create different vehicles for companies that don’t fit traditional risk profiles?
Take a long look at the big infrastructure projects and partnerships being showcased at Capital as they could very well provide roadmaps on how to make cleantech an essential pillar of the 21st century economy.
Carol-Ann Brown is a Vice-President of Cleantech and Innovation at GLOBE Series and The Delphi Group. Join her and hundreds of investors, innovators and business leaders at Capital Exchange (February 26) and GLOBE Capital (February 27-28) in Toronto to learn more about opportunities in the clean economy.
Canadian Cleantech in 2019: Foresight Cleantech Accelerator Centre Weighs In
Cleantech is one of the biggest opportunities in the clean economy. We talked to Jeanette Jackson, Managing Director of Foresight Cleantech Accelerator Centre, to get her insights on the evolving cleantech landscape – the companies to watch and areas of untapped investment potential – as well as how Canadian start-ups can grow and compete in the global marketplace. Foresight is Western Canada’s first clean technology accelerator to foster the growth of businesses who are growing and commercializing technology solutions.
How do you expect the Canadian cleantech scene to change over the next five years, and what role do you see Foresight playing?
I see the cleantech sector evolving over the next five years to be much broader, with a lower level of capital required to advance technologies. In the past 10 to 15 years, cleantech start-ups required millions of dollars in capital to develop large renewable energy projects and biofuel systems, for example. What we’re now seeing are cleantech entrepreneurs being much more focused on a specific area in the value chain of the industry that they want to serve.
Canadian entrepreneurs are also much more globally focused. While we have a robust start-up sector here in BC and across Canada, they’re now being very strategic in the markets they can serve.
We’re positioning Foresight to be facilitators and champions of Canadian start-ups. We are also working alongside experts to help new organizations penetrate international markets, such as Australia, Europe, South America, and throughout the US.
Who are the ones to watch on the Canadian cleantech scene?
Minesense is a BC-based company that has developed innovative technology for the mining sector. Carbon Cure in Alberta are doing some very interesting work in the cement industry, amongst other sectors.
What area in cleantech has a lot of untapped potential?
There’s obviously been significant investment in our resource sectors over the last several years, which has resulted in an interesting space. Two other sectors that are particularly interesting right now are robotics and manufacturing. Especially when artificial intelligence (AI) is included, connecting the advanced robotics and manufacturing sectors allows us to do things much more efficiently in the waste and production processes.
On the consumer level, advanced materials in smart buildings and transportation will result in exciting developments. Another interesting space for advanced materials is the fashion sector. Almost 10% of GHG emissions can be attributed the fashion industry from a fabric manufacturing perspective. This means there is significant opportunity to optimize textile waste management, and reuse these waste products in new products.
What strengths do Canadian cleantech companies bring to the global cleantech table?
Traditionally, cleantech start-ups have been immersed in the sectors that they serve. Canadian experience in mining, oil and gas, and forestry has resulted in some big evolutions in manufacturing and production in these industries. At Foresight, we encourage companies to really think through the opportunities that they have – there is always the danger of being drawn in to “shiny object syndrome”. We are seeing companies become much more realistic about where their market is, and who is going to be the best fit for them to build a business around.
What advice would you give to Canadian cleantech organizations looking to grow in the next few years?
The challenge is being able to move fast and furiously, but also making sure that you check all the boxes you need to be successful. You need a great team, you need to validate your technology, and you need to make sure that you have the right funding mechanisms in place to grow. You have to make sure that the team, the technology and the funding aligns with the vision that you’re working towards. The more quickly you can get those things aligned the better.
With that said, start-ups must be able to make smart decisions quickly because people are going to catch up. You need to be nimble and be able to take calculated risks. Of course, you can mitigate that with really good advisors and mentors, which is a lot of what Foresight focuses on.
We’ve Only Just Begun: Securing a Safe Water Future – An Interview with Rebekah Eggers
Cloud computing. Augmented intelligence. Blockchain. The business landscape is changing rapidly, observes Rebekah Eggers, IBM’s Global Water Lead. She also believes that new tools open up endless possibilities in the water industry
What are the current threats and opportunities for the water industry?
Our clients include major utilities and cities, and they are really focused on securing a safe water future. To us, that means working to establish the ecosystem necessary to plan, design, and develop adaptive and resilient measures into solutions that will ensure sufficient clean water for all in perpetuity, based on sustainable management and use of water resources and water infrastructure. These cities and companies are inherently very risk-averse, but they’re facing a water landscape that is undergoing massive change. Technology is evolving, stakeholders are expecting more, and water infrastructure is aging—along with the people in the industry that oversee it. Our clients are having to reinvent how they do business. They’re regularly making extraordinary things happen, against all odds. I get to work with some incredibly visionary leaders.
We hear a lot about the challenges cities face with aging infrastructure. How can better data help rusting water pipes?
Utilities, cities, and regional governments don’t always have the funds to replace infrastructure outright; they often need to use their existing infrastructure more strategically. Our Intelligent Water software helps them manage pressure, detect leaks, reduce consumption, mitigate sewer overflow, and better manage infrastructure, assets, and operations. It adds a layer of “digital intelligence” to water infrastructure, bringing together data that is often otherwise stuck in silos, and puts it to work. Our clients use it to optimize their resources; it gives them finer control over assets and maintenance, and helps them with asset investment planning. By harnessing data, they’re able to prioritize and also maximize the capacity of existing infrastructure. We identify which pipes are most likely to break next year; and we helped one agency save over $100 million in capex by showing them how they could better configure their existing CSO system rather than building a new one. Other clients have reduced capex needs by 10% or more.
The theme for GLOBE Forum 2018 is ‘disrupting business as usual.’ What technologies are doing that in your world?
Three groups of technologies come to mind: Cloud computing, cognitive computing, and the blockchain. With cloud computing, processing can and does happen anywhere. Already, we have smart water systems where sensors are monitoring water quality at fixed intervals. If the system detects an anomaly—something that isn’t supposed to be there—it can automatically increase sampling rates.
Cognitive technology is allowing us to ask more questions. We don’t call AI “artificial intelligence,” we prefer to say “augmented intelligence.” Our position is that AI is more of a symbiotic relationship—it’s not “man against machine in the battle for our jobs.” The magic is in the people who are training the machines to learn.
Finally, blockchain, or distributed ledger technology, allows people to interact instantly based on mutual trust, and without any central monitoring body. In the context of the water industry, you can imagine what opportunities this technology could enable when it comes to shared processes such as water trading or managing home water purification in the distant future.
Can you give us a hint?
If home or decentralized water treatment takes off as we are starting to see in places like Australia, blockchain could potentially be used in validating when someone contributes purified water back to the system, or validating that waste water has or has not been treated. A new business model could emerge here. But it has a more immediate role with things like water wheeling and water trading—automatically validating that water was or was not supplied as contracted and that payment was made accordingly.
In some industries, we’re seeing not just the power of the cloud, but the power of the crowd. Is that happening in the water industry?
I think it will be inevitable. In 2015, when IBM acquired the Weather Company—the company behind the fourth most popular app in United States—we also ‘adopted’ the Weather Underground, a community of more than 300,000 amateur meteorologists. They feed data from their own home weather stations into the company’s forecasting engine, which now runs on IBM’s powerful cognitive and analytics platform. The system processes 26 billion inquiries through its cloud-based services each day. Now imagine if we had a similar approach to measuring water quality in our homes. Many people have water treatment units in their home. What if all of them were connected, and able to share data? Residents and businesses could consume water with confidence and providers would be aware of issues in near real time, enabling more timely issue resolution. I believe that we can make a huge difference if we empower people with information.
You’re based in Los Angeles. Other than sampling our incredible tap water, what are you hoping to accomplish when you join us in Vancouver?
GLOBE Forum 2018 is an incredibly important opportunity for the industry to come together and share expertise. When projects, departments, agencies collaborate and share information, when vendors like IBM come together with competitors and others, in a business ecosystem to solve a problem, we get closer to that vision of a bright future. That happens when we put all our power, and all our effort into the same challenge, and that’s what GLOBE Forum is all about. We’ve only just begun to uncover what is possible. Let’s work together to drive real progress in our world!
This article is part of our new six-part content series, “Echoes of the Forum”, which provides exclusive videos, interviews, and key takeaways and actions from our world-leading sustainable business event – GLOBE Forum.
Our third chapter focuses on the role that materials and resources play in the transition to a circular economy.
The Restoration Club – An Interview with Sally Uren
Companies that want to change the world need to be a meaningful part of the solution—and not just a smaller part of the problem. Sally Uren, CEO at Forum for the Future, explains.
What can business leaders do to address social and environmental challenges within their organizations?
I’m going to push back a bit on your question, and suggest that business leaders actually need to look beyond their organizations and consider how their companies can put more back into society and the environment than what they take out. At Forum for the Future we call this ambition “net positive”—the state in which you are not only ensuring economic viability, that is, you are making money, but you are also making the world better—ecologically and socially—than it would be if your business did not exist. I say this because the fact is, the stocks of our natural assets and societal assets are dwindling and we need to rebuild them. We just can’t assume business as usual will deliver the sustainable development goals anymore.
That sounds like a tall order, and perhaps a bit tricky for some companies to wrap their heads around. Are some better positioned for this approach than others?
At Forum For the Future, we tend to engage with businesses that understand that success comes from solving complex sustainability challenges in a way that builds value back into the business. Beyond that, I would look for willingness in the company’s leadership to embrace the four principles that we think of as kind of prerequisites for a net positive company.
And those are?
Well, first there’s materiality. Where can your business can make a big positive social and/or environmental impact? What are the big levers you have to work with? Second, transparency. Are you willing to speak openly and honestly about those challenges, and how as a business you’re addressing them? Then there’s regeneration. Where are those opportunities to restore damaged ecosystems, to actually rebuild some of the systems that we rely on? Finally, a company needs to be prepared to embrace systemic thinking. It needs to really understand the system it operates within, and address social and environmental challenges such that it builds resilience.
You’re talking about characteristics that may already be hard-wired into a company’s culture. For example, a brand built on confidentiality and discretion may have a hard time really embracing transparency. It sounds like this is about the people, the leadership, the tone they set, and the culture they create?
If an organization really wants to embrace sustainability, it is going to need to embrace a shift in mindset and culture. Companies and organizations need to really understand that their ability to drive value is inextricably linked to these big environmental and social challenges. And that actually helping to restore the systems that we rely on is a fast track to long-term value creation.
Tell us more about the systemic characteristic of a net-positive company. How might that play out in the real world?
Let’s say you run a business in the agricultural system. Clearly, you’re heavily reliant on the productivity of crops, and access to raw materials such as seeds, and water, and healthy soils. And, if as a business you don’t really understand how that system works and what it’s going to take to secure your supply over the long term, then, actually, there’s a really significant threat to your business. One of the projects that we run at Forum for the Future is called Cotton 2040, where we’re working with a range of apparel brands, retailers, standards bodies—essentially, everyone—to bring them together to “mainstream” sustainable cotton. The organizations involved in that project understand that their financial viability is already linked to the vibrancy and resiliency of the cotton system.
Why is it a cotton system, not a cotton industry, or sector?
Industry doesn’t really adequately capture the complexity of value-creating relationships which underpin the delivery of goods and services to market. A sustainable cotton system that is climate resilient and delivering sustainable livelihoods to millions is much more fit for the future, and far better positioned to deliver on the United Nations Sustainable Development Goals. So, we can create what we would call systemic change by understanding the levers that might create a new way of operating, a different way of interacting. And that’s what business leaders should be driving for. With incremental change, we’re not addressing the root causes of challenges, we’re just putting bandaids on some of the systems. That isn’t going to deliver the sustainable development goals.
Why did you choose to focus on cotton?
Cotton is ubiquitous, it is in most of the clothes that we wear, and yet it is associated with some really significant sustainable development challenges. It has environmental challenges because it can be quite a water hungry crop, and is also grown in parts of the world likely to be significantly impacted by climate change. There are also big societal challenges with respect to working conditions, living wages, and so on. We also came to this system out of a recognition that there are efforts already underway in the cotton system, but they’re not necessarily “joined up.” If we find a way to link these existing activities – for example, by harmonizing the language between all the different,cotton standards – then perhaps we can create a blueprint that we can replicate across other commodities.
Are we seeing more collaboration between competing brands on sustainability. If so, why?
It’s taken a while, but many businesses are starting to recognize that many challenges—particularly supply-chain challenges—are just too big for one brand to tackle solo. There are areas where you can use sustainability to compete and to differentiate your brand. However, when we’re tackling issues as complex as labour rights, climate adaptation of a global crop, like cotton, then actually brands need to collaborate.
Could blockchain help ensure supply-chain accountability in an industry—sorry, a system!—like cotton?
I’m convinced blockchain will form at least part of the future of supply chains, and it also has applications in finance. It’s effectively just an open ledger that allows transactions to be recorded in a completely open and secure fashion. So yes, it allows us to deliver complete transparency through a supply chain. But it might also be used to deliver access to capital and to reduce the price exposure that smaller players face in buying commodities. Blockchain won’t solve all of our challenges, but I do feel it can help us get closer to sustainable supply chains.
What other emerging technologies are on your radar these days?
I’m quite intrigued in the potential to merge blockchain with the internet of things. So blockchain, actually as an open ledger, gives you transparency. If that open ledger can talk to the internet of things, then you potentially end up with a much smarter supply chain. I’m also really intrigued by this trend we are seeing where distributors can become “light manufacturers,” meaning we may no longer be so reliant on large-scale manufacturing. The technology is now there to move from globalized infrastructure to much more localized infrastructure. Digital printing has really evolved over the last few years and is now used in many different applications. There are lots of ways in which the way goods and services make it to market could really radically change.
I’m curious about what advice you offer organizations and leaders who are ready to take on a net-positive approach. How do you message this stuff?
Communicating sustainability is no different than communicating anything else. It’s about good storytelling, and about making people feel good, and speaking to their aspirations. Don’t appeal to gloom and doom—the sense of what we stand to lose. Rather, appeal to people’s desires to live better. This is about making people feel good about what they’re doing. People don’t want to be told what they can’t do; they want to hear what they can do.
This article is part of our new six-part content series, “Echoes of the Forum”, which provides exclusive videos, interviews, and key takeaways and actions from our world-leading sustainable business event – GLOBE Forum.
Our second chapter focuses on the role of business in accelerating the clean economy.
Blockchain is a series of data transactions. These transactions are added chronologically as blocks, making up a chain requiring validation by other parties. The data in these blocks can’t be erased or altered, as a result, blockchain is a distributed ledger which is secure and un-hackable. Though commonly associated with Bitcoin and other cryptocurrencies, blockchain technology offers immense opportunities in the field of sustainability.
At GLOBE, speakers and participants discussed four different environmental applications that blockchain could have across various industries, including: recycling, energy, and materials and resources:
Plastic Bank: Tackling plastic waste and global poverty
LO3 Energy: Bringing power to the people
Xpansiv: Transforming the global commodities market
Consensas: Confidently sourcing natural resources in conflict-affected areas
Plastic Bank: Tackling plastic waste and global poverty
Working with IBM and The Cognition Foundry, Plastic Bank has created a social enterprise which rewards community members for recycling plastic. Operating in Haiti as of 2015, it follows pilots in Peru and Colombia. Community members, often those living in low-income and impoverished conditions, collect plastic and drop it off at a local Plastic Bank processing centre. Using an app, they receive token payments in exchange for the collected plastic. These tokens are kept in a digital wallet that is blockchain securitized (thanks to IBM’s LinuxONE), and can be exchanged for cooking fuel, access to phone chargers, toiletries, and other necessities.
Plastic Bank is currently scaling the model so communities around the world can start creating their own plastic ecosystems. By giving plastic monetary value, the Plastic Bank team is incentivizing the collection of recyclable material and ensuring it doesn’t end up as ocean plastic. The team is currently developing plans for expansion into China, Vietnam, Thailand, and the Philippines, among other countries.
Through partnerships with corporations interested in buying the recycled plastic, such as Henkel, Plastic Bank is also enabling big brands to develop more sustainable packaging for consumer products.
LO3 Energy: Bringing power to the people
Through their Exergy platform, LO3 is disrupting centralized power systems by introducing innovative local micro-grids – localized groups of electricity sources and loads that are often connected with the traditional centralized electrical grid. Through blockchain technology, users of the micro-grid can harness, monitor, and exchange energy within their own community. Blockchain not only securely captures the transactional data, but also empowers people to instantly choose how they want to use the energy in their homes, based on real-time price signals.
Applications of LO3 Energy’s blockchain technology are being implemented around the world, in partnership with Siemens. The most prominent example is the Brooklyn Microgrid, which has given home owners and local businesses the ability to become prosumers, producers, and consumers of the local grid’s affordable renewable energy. Other LO3 Energy projects are being developed in South Australia, Germany, and the United States.
Xpansiv: Transforming the global commodities market
Xpansiv is transforming the global commodities market, which so far has relied heavily on manual approaches for data processing. Driven by a concern over climate degradation, Xpansiv created the Digital FeedstockTM, a digital representation that can be used to track the environmental cost of every unit of energy produced.
Through the creation of the Digital FeedstockTM, Xpansiv leverages distributed ledger technologies to analyze and refine the production data of commodities. This data-driven approach unlocks the true value of each commodity by “de-commoditizing” it, and creating a unique “fingerprint” for each unit of production, which is then published on the blockchain.
Joe Madden, CEO at Xpansiv, believes tracking the environmental impact of commodities through the supply chain in this way, will help consumers make informed decisions regarding the impact of the commodities they purchase. Madden also hopes it will not only help global markets determine whether certain commodities have a high-carbon or low-carbon cost, but also price that environmental impact into the commodity itself.
Consensas: Confidently sourcing natural resources in conflict-affected areas
Companies extracting minerals in conflict-affected areas are under increasing regulatory and consumer pressure to address supply chain risks such as corruption, human rights violations, child labour, gender-based violence, and environmental degradation. Drawing upon key elements of blockchain, Consensas created a system for the mining industry that follows all mining materials through the supply chain. It automates the collection of data required for investor disclosures, compliance and assurance reports on a secure and encrypted platform.
Working with non-profit, IMPACT, Consensas is adapting its technology to help industry ethically source natural resources in conflict areas, while compensating women and men in local artisanal mining communities for providing information on how materials are sourced and extracted. IMPACT’s Just Gold project is the first to successfully bring traceable, legal, and conflict-free artisanal gold from Democratic Republic of Congo to the international market, using a traceability and due diligence system, powered by Consensas.
This article is part of our new six-part content series, “Echoes of the Forum”, which provides exclusive videos, interviews, and key takeaways and actions from our world-leading sustainable business event – GLOBE Forum.
Our first chapter focuses on the role of energy leaders and technology in accelerating the clean economy. View content
Harnessing the Power of Emerging Technologies to Solve Complex Problems
By Gordon Feller, Consultant – Cisco Systems & Founder – Meeting of the Minds
Where and how are cities harnessing the power of new digital tools to transform how they organize their systems? Or how they deliver their services in new and better ways to residents and visitors? Can cities create a prosperous environment for small and larger enterprises?
In the mid-1990s, after Bill Clinton assumed his eight year Presidency, he appointed a new World Bank President. James Wolfensohn focused part of his term on helping cities to make big changes happen, especially in the Global South. He pulled a team together to work on finding ways that could accelerate the progress for cities and bring innovative solutions to bear on the full range of problems facing cities: urban energy, urban water, urban transport, urban education, urban health care. A group was formed inside the World Bank, with a focus on ‘The Urban Age’. In the year 2000, the Urban Age Institute became an independent non-profit organization. One of the best of Urban Age’s corporate partners was Cisco Systems.
Another early partner was Siemens, along with a variety of leading corporates and leading foundations. Working with Urban Age, they saw the world’s rapid urbanization and they sought out technologies which enabled a positive transition for cities around the globe.
In 2006, the Urban Age began working with the Canadian government, the German government, and many cities around the world. What was born was Meeting of the Minds to ensure that the leaders innovating with the very best emerging tools — urban technology, connected solutions, and sustainability – could jointly build a common platform.
In 2009 or thereabouts, Cisco’s executive team invited me to work on these problems, from a base inside the headquarters in Silicon Valley. I took on the assignment of helping Cisco, via teams around the world, address this challenge of getting cities aligned with the data generated by a myriad of assets (buses, taxis, street light, etc.) – so that the city leaders could fully utilize what was readily available to them. Over time, cities were provided with a new way to accelerate their transition to a more equitable, prosperous, environmentally sustainable future.
For many of the smartest and best-led cities the focus has been on infrastructure, which is a strong tie-in to what we’ll be talking about on April 4th and 5th at GLOBE Capital. GLOBE has always been focused on infrastructure problems facing cities and businesses, including the vital digital infrastructures like wireless networks that make so much else possible.
The 3 Stages of the Internet
Think about the transformation of technology in the last 10 years, especially the big changes in how we communicate. The Internet’s first age was all about basics like email, enabling better communication and changing some of the ways we do things. The second stage of the internet was e-commerce and buying things online instead of in person, and then, the third stage – which we’re in now – includes the immersive social media that we’re surrounding ourselves in 24/7/365 and it includes the Internet of Things.
We can now connect with people and project teams we’ve never actually met. Going beyond just better and more efficient communication, we’re surrounded by both e-commerce and by the commercial development of the Internet as a tool for transforming how we live. This 3rd stage of the internet is being characterized by the Internet of Things where all of the objects in the world – city streets, parking meters, traffic lights, street lights, doors, windows, etc. – are all going to be emitting data about their conditions.
Data Is The New Oil
The priority is gathering data that helps generate insights that can make traffic flow more smoothly, and make the parking experience both better and more affordable. Embedding technology into infrastructure systems, like transit, means that technology is going to have an impact on the 99 percent of the world that hasn’t yet been connected to the Internet. New opportunities come with new insights; the data itself doesn’t provide those insights. The insights are derived by analyzing and interpreting the flow of data, and preferably doing so in real-time. This is precisely what allows a smart city to embrace smart infrastructure — receiving data inputs and/or transmitting data about the conditions in this very moment. For example, if you don’t have a way of using real-time data to generate insight on-the-fly, then it’s not very useful to the driver who’s looking for an open and affordable parking space.
Hundreds, maybe even thousands of companies, are busy building the analytical tools that enable big data to become little insights, each of which are (ideally) actionable. The cities in North America starting to make headway along these lines are early leaders. They are the cities investing in the big data analytics to make those little insights available to whoever inside the city needs to take an action.
The Road to Becoming a Smart City
On the road to this smart-city future there are many big challenges, however. Much of the US city infrastructure currently in place was built 30 or more years ago. How do you take digital intelligence and overlay it on top of a city’s aging physical system? A convergence of digital with physical is imperative, since this is what makes it possible to manage infrastructure in ways that reduce energy consumption and decrease overall energy demand.
Expensive physical assets, into which we’ve invested trillions of our treasure, do not change without a fight. How do existing structures — buildings, roadways, pipes (water, sewage, gas, oil), bridges, tunnels — become a hyper-intelligent, more responsive, sustainable infrastructure? One method is by using digital sensor networks placed on top of old existing systems. This seems to make more sense than ripping out these degraded physical systems.
Achieving important goals – such as reducing climate-changing gas emissions — means reducing energy consumption and softening the natural system impact of human activity. In essence, we must re-engineer our collective metabolism. This becomes a bit easier when connected things transmit data – and due to their connectivity these smart-objects have the potential to effect change. When data is analyzed in real time, it then becomes possible to change the business process, whatever it might be. It could be commuting from point A to point B; finding a parking space; lights turning on and off, as needed – all of these systems can be made more responsive to real world conditions.
Canadian-Style Public + Private Sector Partnerships
There are an abundance of innovative solutions emerging from the private sector. Public sector agencies – often lacking technology backgrounds – do struggle to figure out which technologies are the best for their city. Unfortunately, this often results in a state of confusion, especially with such an abundance of choices.
Public/private partnerships, Canadian style, will inevitably become much more prevalent around the world. Canada’s certainly been a pioneer by developing innovative approaches to public-private partnership.
There are many companies who offer smart streetlights and many other companies providing smart parking meters. The question is, how best to help the decision makers in these cities make the most appropriate choices? Sometimes public agencies will have to partner with the private sector; sometimes they need to turn to their citizens; and sometimes they need look closely at what other cities are doing and learn from their lessons.
The good news is that we can and will transform the built environment. There are always going to be unknowns, and we’ll find some unintended consequences that we didn’t expect. Consider the situation facing my home city of San Francisco. One of the unintended consequences of the economy’s digital transformation is that living in this city has become much less affordable than it should be. A shift has occurred, rending any semblance of economic balance, accentuating big divides between the haves and the have-nots. Those who historically lived in the downtown are now in conflict with young, highly-paid technology workers who want to live downtown — even if it means crowding out the people who have historically been there. This is same situation in other cities, like Toronto and Vancouver. An unintended, negative consequence for all the people suffering through resultant dislocations.
The Bankers’ Lens
What’s holding us back from making all the changes as fast as they’re needed? How will these changes be financed? GLOBE Capital in Toronto on April 4th and 5th will address this head on. We’ll debate how to finance the innovation economy in ways that enable the deployment of transformational digital tools — and in ways that make all lives better.
In this domain the visionary bankers are key. Bankers will always look at new opportunities through a banker’s lens. They do want to know the risks, and to understand the impacts: What will generate new revenue? What will reduce existing costs? Offering solutions that reduce costs or increase revenue or create new revenue models – this is key. Without these, the banks won’t step up and participate in financing smarter urban infrastructure.
I spend much of my time advising investors, and the very first priority is to find the inefficiencies. Consider Uber, as an example: take on the highly inefficient taxi industry, build a platform that allows the car owner to provide their own asset, thus making it possible for Uber to not own a single vehicle while being the largest provider of taxi services in the world. The same with Airbnb – as the largest hotelier in the world they sell a million room nights every day, but don’t own any hotel. These companies have created ways to engage asset owner who are willing to make their asset available for a fee. Technology enabled these transactions between asset owners and short-term buyers who had a need. Look first to the inefficient systems that the economy has slowly built, over decades or centuries, and change those systems very fast.
Can digital innovation disrupt those businesses in a ways that don’t create economic dislocation for those who depend on incomes built on the older models? Uber creates a lot of disruption, and not all of it is ethical or sustainable. Impact-minded investors increasingly want to see responsible investment opportunities created by emerging technologies.
The challenges ahead are fourfold: keeping the new economy people-centered; minimizing potential negative impacts; bringing wealth-generation opportunities to all classes of people; and, reducing the environmental impacts of human activity.
We are in the middle of an historic time as we experience a big, fundamental transition to a new technology-based economy.
Breaking Down Barriers in Clean-Tech Infrastructure
By Markus Lampinen CEO, CrowdValley
Making Economic and Regulatory Sense of Investment Channels
On an institutional level, there are a number of barriers that impede both clean-tech innovation and the implementation of available green technologies. Primarily, these barriers appear to be economic in nature and are most obvious with attempts to adopt new technology or engage in disruptive practices.
However, looking deeper into these barriers reveals that in the long term, they no longer hold argument. Over time, the energy and cost savings more than compensate for the upfront costs associated with the implementation of green innovation. Alternatively, businesses, government, and municipalities need to consider the implications of not going green. Dismissing or delaying the transition to clean infrastructure has the potential to cost far more than embracing it does, considering the emergence of stricter environmental regulations, stakeholder demands, competitiveness, brand image and corporate social responsibility.
A recent HBR blog highlights a new study that reveals sustainability is an increasingly important factor in attracting and managing talent. Current employees also indicate that they want to be involved in developing a sustainability strategy. When you consider that 50% of younger employees and 20% of older employees expect to play a role in how their employer approaches sustainability and building for the future, this factor is extremely important.
The Future of Green Technology Investment
2016 saw significant gains in green and sustainable energy investment. While there was a reported 18% decline in the level of new investment (falling to $287.5bn in 2016, from $348.5bn in 2015), such investment was indicative of gains in infrastructure and economy of scale following lower equipment and implementation costs. Additionally, we saw a 40% increase in capital spending commitments for offshore wind power, hitting $29.9bn in 2016, highlighting a strong institutional belief in the efficiency and returns that this industry presents.
Factors contributing to the slight decline in green infrastructure investments include the Chinese economic slowdown and the fact that both China and Japan have cut back on large scale renewable development projects in a bid to focus on the capacity they have developed to date. Reduced equipment costs can also be attributed to competitiveness in solar and wind power. This is an early indicator of the future benefits society will accrue as efficiency becomes an increased focus in this sector.
In the past, most corporations and institutions tended to ignore the public benefits of clean technology and green innovation. Employment, fuel diversity, price stability, and other indirect economic benefits of renewables also accrue to society as a whole. With fossil fuel infrastructure previously being the best cost-effective option, along with it yielding greater returns, a company would experience more inertia from it’s investments in sustainable practices. At this time, we are privileged to enter an era in which green technology is attractive both from a societal and economic perspective.
Creating an Enabling Environment for Green Investments
Public finance is a key policy instrument to both incentivize and enable the transition to green growth. Some estimates suggest public finance has the potential to mobilize 5X the contribution of the private sector. However, this mobilization is thought only likely if combined with aligned policy and regulatory measures.
We cannot over estimate the need for a strong and binding policy and regulatory framework. Having this in place will create demand for investment in green products and services. Additionally, new standards should be given sufficient lead-time to alert and encourage investors in clean-tech growth.
Price signals can create both incentives and disincentives for investors. Green taxes and prices should be kept progressive to promote equality among income groups and, if necessary, provide grants to low income sectors especially if other subsidies are removed.
In the early stages of sustainable market development, governments should have active financial programs to develop investable projects. Public finance can be used to lay foundations through demonstration, public procurement, and support for project preparation.
Regulations need to be complemented by infrastructure that creates channels of investment for both institutional, accredited and non-accredited investors. Recent years have seen the rise of a number of financial technology firms providing these channels, among which Crowd Valley stands at the forefront. Crowd Valley provides a comprehensive back office cloud and API-based infrastructure needed for the creation of streamlined investment and capital marketplaces. As well, Crowd Valley seamlessly integrates 3rd party payments, ID verification, credit review and equity management, to name a few.
Channels such as Crowd Valley increase accessibility for a majority of the population to partake in alternative finance and provide the necessary ability for individuals to have a direct stake in the future of the planet. Through its internal infrastructure, such channels demonstrate the fintech industry’s commitment to a more sustainable and efficient future.
Will There Be Profit?
Today’s highly dynamic technology environment increases the profitability potential of clean-tech investments as nations lay the physical and regulatory infrastructure for a greener future. Hence, it is in the best interest of both corporations and civil society to funnel investment towards green technology and low-carbon infrastructure. Practically speaking, the boost in financial inclusion is increasing the volume of funds into this sector – incentivized by societal benefits and a high rate of return due to clear long-term efficiency gains.
Increased democratization of finance, the challenging of cultural norms, and the circumventing of institutional inertia opens the door for green technology and infrastructure to provide a huge financial and public interest pay off.
