 Hi everybody. Thank you for taking the precious last few minutes of Day 2 of Slush to join us today. My name is Mia Jawara. I'm a partner at Lower Carbon Capital. We're an early stage venture firm who invests across the globe too, and I hope I can say this here, unfuck the planet by backing companies that are building technology to reduce CO2 emissions, remove CO2 from the atmosphere, and buy more time for communities on the front lines and for ecosystems impacted by the climate crisis. I am really excited to be joined here today by three founders building incredible technologies in this space with that mission in mind. From literally thousands of companies setting commitments to reach net zero emissions by 2050 to billions of dollars flowing into carbon removal technologies, durable carbon dioxide removal, including the $925 million Frontier Fund advanced market commitment to looming environmental disclosure regulations, there are two things that are clear right now. One, companies, the pressure is on to take action on climate change. And two, companies are stepping up to the plate to do that. But complexity, gaps in data availability, lack of transparency, credibility in the carbon markets are making their jobs pretty difficult. And each of the folks on stage today is tackling different challenges in that space to make it easier for companies. So we have Michelle Yu, who is previously the co-founder of Songkick and a venture partner at Local Globe. She's now the co-CEO and co-founder of Super Critical, which is a software platform that helps companies measure, reduce, and offset emissions with high quality carbon removal. David DiPicciotto co-founded Media Startup I Rewind and was then an investor at Partners Group before founding Pledge in 2021. Pledge is a climate infrastructure platform that makes it easy for businesses to embed carbon measurement and offsetting tools into their customer experience. And last but not least, Marta Sugrin spent a decade as an early stage investor before co-founding Pebble, the carbon-restoring company. Pebble takes captured CO2 and stores it permanently in industrial material. I'm so excited to be having this conversation with you three. And again, thank you for being with us in these last few minutes. So let's get started. And what better place to kick off than focusing on the beginning of a company's net zero journey? Where in my experience, companies start off with far more questions than answers and need a lot of help. So why do businesses need so much support in starting their journey to net zero? And how are each of you making their lives easier? Michelle will start with you. Yeah, great. So I really came up with the idea for Super Critical when I was at the VC Fund Local Globe because I was tasked with getting them to net zero. You know, they were like, LPs are asking us questions. You go figure this out. And I found that process incredibly frustrating. I talked to loads of consultants, carbon accounting companies. I think from my experience starting consumer internet business, I just think we didn't make it super simple and straightforward for a late person to understand. People just wouldn't act because there was too much confusion. What we do is we automate the process of measuring carbon emissions for asset-like businesses like VC funds and tech companies. And then once you have that measurement, that's the first step. You need to know what is going on. And really, I've seen customers try to struggle with spreadsheets and do it themselves, but it takes expertise, like knowledge of the databases, emissions factors. So you should hire someone to help you do that. And once you know where those emissions are coming from, you need to come up with a plan to reduce. And you won't know from the outside what you can do. You need guidance and expertise around what works and what are the low-hanging fruit you can do. And once you've set down that reduction class, then the final step, which I think is the most confusing, is what is a high quality offset? And what's the type of offset that counts towards a net zero claim? And that's only durable carbon removal. And I think there's a lot of confusion around that as well. Definitely. David, Marta, is that resonating your experience? Yeah, maybe to tell also about the founding story. So I came up with the idea of a pledge when I was working in private equity in a fund that has a big focus on ESG and a big ESG team. And I saw how tedious it was for that team to essentially understand at the portfolio company level the relevant ESG and specifically climate metrics. And based on previous experience in technology companies like Revolut and Financial Services, I saw how software can help streamline processes in highly complex and often regulated industries to make the process of, for example, understanding, managing, reducing, and eventually offsetting emissions in a way that is easier, faster, and more transparent than existing processes. It's important. Yeah, well, I know everyone has to start somewhere. And I think often what I see is companies really stuck in this stage of paralysis where they've made the commitment, but they don't know the first step of what to do next. It kind of is just a lofty goal that someone at the C-suite is committed to and then gets kind of passed down to the people below them. And people are kind of spinning their wheels. So I guess in your experience, what is kind of the first step that a company can take? Or what is setting that initial roadmap in place look like? What are the first few things that companies can do, David? Maybe just starting with definitions. If we think about what net zero means, net zero is essentially a target to negate greenhouse gas emissions caused by a business, for example. And if we look at, for example, the SBTI net zero framework, there's essentially four steps in that journey. Just for context, SBTI is a leading body that essentially sets emission reductions targets for companies across various industries in line with the Paris Agreement, so the goals of the Paris Agreement. So this famous 1.5 degrees compared to pre-industrial levels. And these four steps to supplement what Michelle shared earlier are measuring emissions, reducing emissions, removing emissions, and finally reporting on the progress until you reach that net zero journey. So the big prerequisite is essentially having the data and then understanding which methodology or framework you need to apply to compute emission in the way that is the most accurate possible. Marta, Michelle, anything to weigh in on there? Are you seeing folks start in a similar place? Yeah, I mean, I can't tell you the number of tech companies we've worked with where the CEO is like, I want to get to net zero. They don't know what means. And then they hit it off to the CFO or the chief people officer. And there is a lot of confusion and paralysis, like you said. And I think the most, the first step is just to start and not let that fear, apparently, hold you back and just measure your emissions. That's like stepping on the scale and then you can figure out what to do. And I think the other thing that a lot of companies neglect to do is just measuring the full kind of supply chain emissions. So not just your energy-related scope one and two, but what's going up in your value chain. So your cloud usage, your work from home emissions, that is all what has to be measured and reduced. So that's the starting point really. I think just to add to that, I mean, I'm a newcomer to this. And I'm super thankful that you guys are doing what you're doing because we're in the actual removal space. We try to provide a service that removes the carbon dioxide, right? And we have a lot of demand from either platforms or direct companies. And I'm sorry, I'm losing my voice. That's why I sound like this. Slush, well done, I guess. Yeah. But what I've discovered just in the last, we said the company a year ago and in the past year, what I've discovered is that companies oftentimes just don't really even understand scope one, two and three. And what that unfortunately ends up in, and part of the reason I ended up doing this company, is that there is a lot of greenwashing. Involuntary greenwashing is one thing, and that's where I think education can really help. Voluntary greenwashing is where I think it should basically be criminalized. I'm pretty strong minded about this. And this is where I don't really know where the border is, right? I think I feel like what would be helpful to your previous question is audit standards. It's not just about measuring, but it's just like, are you even measuring the right thing? Or do we have the same definitions? That would, I think, be incredibly helpful. Yeah, I mean, I think greenwashing is like one of the biggest issues. And it's an interesting distinction you make between what's voluntary versus what's involuntary. You know, what's a result of bad information or a lack of data versus kind of intentionally saying something that's not true. And I think the involuntary and unintentional greenwashing is like the category that a lot of folks are unfortunately falling into at no fault of their own, but it's really important. I think we see this a lot. I unfortunately saw a lot of greenwashing and my time working in emissions reduction work with the large companies. And I'm curious if there are steps companies can take to try to avoid greenwashing pitfalls or like what you think needs to happen to help to avoid some of the involuntary or unintentional greenwashing. Michelle, I'm sure it's something that happens a lot with the company. I actually do think ultimately it will be regulated. We're starting to see, you know, financial or climate disclosures starting to be regulated in the U.K. and the U.S. with the SEC looking at it. So that will bring a lot more rigor to what people are reporting and measuring on. Actually what I see is a lot of people are so afraid of greenwashing that they don't want to say anything. And I think if you're happy to learn in public and be honest and transparent about what you're doing, what you're learning, then that benefits the community. Like I'm part of a task force in the U.K. called Tech Zero. That's a bunch of tech companies that have made a net zero commitment. Like Revolute is one of them-wise, you know, all the big tech companies. And we're just kind of learning together on what good looks like. And I think that you can think that there's some expert right answer, but net zero is such a new concept that everyone's figuring it out. But in terms of greenwashing, I mean, I really do think that not measuring your full scopes one, two, and three. And again, like I hate all the acronyms and all the like new, you know, kind of inside baseball terminology. I think that that's what makes people feel like they're on the outside. But everything that's in your value chain. So everything you do by, you know, produce as a company that should be measured. And that's one way, I think, to avoid greenwashing. And then similarly, buying durable carbon removal offsets. Those are the only high-quality ones that count towards a net zero claim at your end target date. So there's a lot of greenwashing in the conventional emissions avoidance offset market. And that's a real challenge. Yeah. Which I want to bring everyone onto the same page. I know that like some of these definitions, the terms we're flowing around, like we're kind of like stuck in the jargon. But like to the average person, it might be a little hard to kind of wrap your mind around. And it's like, what is a durable carbon removal? You know, when you think about durable or permanent, and obviously there are variations also in the definition of durable and how people think about it, which is part of the problem. But how do you, yeah, how does each of you who are kind of deep in the space define durable? It's a great, I mean, I think first making the distinction between avoidance and removal. Yeah, that's a great place to start. So in the conventional offsetting market, which is 95% of the credits bought and sold today, it's essentially paying other people to stop doing something, avoid an emission. So this is renewable energy project, clean cook stove to burn a cleaner fuel, protecting a forest. That may or may not have a place, but it doesn't help you as a business get to net zero because the mass of net zero is super simple. If you emit a ton, you've got to remove a ton. And there are these early stage technologies that literally absorb carbon dioxide and sequester them for a period of time. Now durability, I think we've had a learning journey around that. Permanence isn't this like on or off flag. There's just a time frame. And what do you consider durable? And the way we look at, or my head of climate looks at it, it's not my answers. We look at the rate of decay of carbon dioxide in the atmosphere and over a thousand years, it gets down to 20%. And you need to remove an equivalent amount that stays sequestered for at least that length of time, right? So it is very nuanced and challenge. And I think the other thing about it is removals, science measurement gets updated all the time. And things change as people are doing more tests. So the time frames and the kind of the measurement of what's sequestered and how long also gets updated. Marta's itching to sit in here. I want to interject because, again, as a newbie in this space, and you guys know way more than me, I just don't understand why a thousand years. I mean like surely like 200 years would be a good starting point or something like that. I have a friend that does CO2 removal through biochar and there there's evidence of 800 years. And apparently that's not permanent. I mean, how? Why? Do you understand this? I think the 1,000 years was initially so Stripe who's been leading, and I talked about the advanced market commitment earlier in the charge and kind of getting private capital flowing toward durable carbon removal. I think 1,000 years is the target for and then their definition of permanent for their program. And so I think it has kind of like caught on in that way. But you know, so Ryan Orbuck on our team leads our carbon removal fund. We have a dedicated $350 million fund to carbon removal. And I think we're going to see some some flexibility around that definition. Or I think the buyer, you know, different buyers are going to be looking for different time horizons. And so I think it's something that will evolve and it's just new and you know, people have different perspectives. The reason I bring it up is just because it's a bit of a ridiculous number, both that it's kind of short. And in our case, we turn CO2 to rock. I mean, it's going to be around for more than 1,000 years, but it's sort of like, what do you why? And so I think getting some sense of different tiers of carbon removal will be so beneficial because we need to solve this problem in the next decades. And that it's again, I don't I'm not an expert again in many of these fields. So I just ask the questions that I asked, which is like, why can't we be happy with 300, 200, 700 years, whatever? But anyway, I think that these, this topic we're discussing, it shows our nation to immature the spaces. Yeah, that's what it comes down to. And if I look, for example, at what was announced last week at COP in Egypt around ISO net zero standard, this ISO net zero standard is very different from other types of frameworks or guidance out there, like the science based target initiative, which says that to get to net zero, we can use initially of avoidance offsets and then eventually removals, while the ISO net zero standard only allows removals types of credits. So you can still feel somehow within the industry, you have varying thoughts from what was what is supposed to be leading bodies. Yeah. I mean, and I think the lack of standards or kind of coming and starting at different places is a problem across not only measurement, not only target setting, but then like the removals as well. The carbon markets obviously have a very important role to play in net zero, but are obviously flawed. And so I'm curious what your thoughts are on, you know, what is working well in carbon markets or why they're so important for this, but then also what are the gaps, what are the things that are missing, how can we make it better? David, why don't we start with you? Yeah, sure. So just to again be on the same page, I think the science is clear across different types of report from different scientific bodies. There's no path to net zero without carbon removals. So I think even after businesses embark on these reduction journeys and meet the relevant industry targets, there will still be what is called unavoidable or residual emissions. And this is where we need to scale these technologies that absorb carbon dioxide from the atmosphere. The only thing is that when we look today at the percentage of removals, credits out of the total market, I think it's around just five percent. So there's an enormous potential to scale this. And if we think about also today the production of offsets in circulation, I think it's less, it's clearly less than one gigatons. And the demand for these credits is expected to grow a hundred falls to up to 10 gigatons by 2050. So we need to have the right building blocks in terms of speaking under a common voice from a policy regulatory standpoint, but also putting in place the right economic incentives for corporates to have confidence in buying these type of solutions. Yeah, Marta, do you want to comment on that as well? I was at a dinner the other day and one of the hosts said it so well. It was it was actually kind of a depressed, I hope he's not here, or even if he is, it doesn't matter, kind of a depressing, welcoming speech. He said, and it was like it was a bunch of climate tech entrepreneurs and investors and policymakers. And he said, it's really great that you guys are doing everything you're doing, but it's not enough. And what he was trying to say or what he said eventually is that we need to do more. We need to get policy to act faster, because it's just not fast enough. I'm in Brussels quite a bit working on, you know, government affairs with regards to carbon removal, and we're in mineralization, so mineralization turns CO2 to a carbonate, again a rock. And the fact that it wasn't written in the ETS, European Trading System of Carbon Credits, as, you know, like an accepted category until now is shocking to begin with, when the science has been around for over 20 years. We're building on top of science that's been around for 20 plus, in fact sometimes 30 years. But the next time they can define it, like bringing it into ETS so that our industrial emitter customers can use us instead of paying for ETS, is 26, 27, something like that. That was what I learned the other day. I just found that shocking, like how is there not a fast lane for this this kind of stuff, not just mineralization, I mean just in general technologies or pathways to get us to net zero faster. Similar for suppliers, we're in a global supply chain shortage of all sorts. We're really affected by it, and again here I am like trying to figure out how to get some like pumps. This is very clear things and I had to explain to this management saying you are starting to be a supplier in a pretty urgent category of businesses. Do you not have a fast lane? And I think that can be the first thing, it's like what technologies can really have an effect in the next decade that need to scale in the next decade that we can again prior process without risking biodiversity issues ecosystem issues of other sorts and similar. So that would be my say. Yeah, Michelle, any thoughts on what we can do better in carbon markets? I mean I think it ultimately has to be regulated but I'm not holding my breath it just move as you say it moves so so slowly and I think what I've seen is that the the voluntary commitments from companies are leading the way and regulations following after. So I you know I don't know if you follow the TSVCM like that's been around now being debated and like whatever working documents it's like nothing's been said over here. I'm going to do an acronym police. What is TSVCM? I'm not giving it it's like something about the Task force for scaling the voluntary carbon markets yeah again yeah sorry no not at all just yeah just saying and they still haven't made any decisions and I just think we don't have time we don't have a year to wait for these things to happen I think it's I think businesses really have a lot of impact by being leaders showing what good looks like and then policy will follow actually yeah yeah which is I think I want to applaud actually you know Stripe to begin with for taking that huge step in becoming a serious buyer and then being sort of the the catalyst to the frontier vehicle I guess we can call it and I know I know people who've gone through that process of going through the RFPs with with frontier it's grueling it is really really hard stuff so I want to applaud that because compared to some of the stuff I'm seeing that's regulated it's very serious so I think what would be really helpful actually not on this is coming out loud now as I'm thinking is if there was an NGO of some sort that could be like the auditing body made up of scientists basically and then the private money coming in through companies saying we need to set the standards that's what it's utopian I know I know no I mean that's what the third party certifiers are today vera and gold standard should I think do a terrible job their NGOs right set up by scientists and they do a terrible job of certifying like real credit so I don't yeah I'm not sure there must there must be something we must do better like that's what I find myself saying a lot of the times like yeah it's not that we can't we must do better yeah we have to yeah I will say as as an investor I am seeing some innovation in the measurement reporting and verification of carbon removal I think it's like a very critical piece to the puzzle so stay tuned and hopefully a year from now when we're back in these same seats there will be a lot of innovation happening in that space and folks tackling that gap in particular because I agree that the certifying bodies are not able to move fast enough they're not set up in a way where they can kind of create that fast lane as you mentioned so I guess in your discussions with corporate buyers David because I know you talked to a lot of your customers are thinking about ways not only to do the measurement themselves but also embed it in their own solutions what are the biggest challenges for integrating you know we talked about avoidance credits of avoidance offsets versus some of these more durable permanent carbon removal what's the biggest challenges that they're facing and integrating those into their credit portfolios that they're purchasing or into their customers credit portfolios and how can we address them when speaking to customers I think there are three things that that are frequently mentioned thing one is price secondly is the credibility as we just touched on or is this carbon removal verified and finally it's more I think the issue that stands is the maybe an educational gap they don't really know what to do with these with these credits this is the more traditional ones which they can use for some sustainability claims so if you look at price technology based carbon removals are notoriously more expensive than these more traditional type of offsets which are affiliated with with these registries called Vera and Gold Standard and they're much more expensive by a factor of 5, 10, 15 sometimes 20 times more across different project types the director capture that maybe some people in the arts will be familiar with to ocean based type removals to concrete based type removals so that's the first big hurdle subsequent to that given that these carbon removal technologies of this market is so nascent as we just touched on there's a lack of established standards and so as a result companies don't really know if they can use these credits for example for a carbon neutrality claim or for a net zero claim because nobody has really said the policy yet to say what you can't and can do with these credits and there's so many different types of technology based removals and they're so different to each other some are on land some are just pure technology that director captures some use natural processes with rain for example and so a methodology and a verification process has to be developed for each of these types of of carbon credits and this is the work that's that's currently being done so I think we're seeing now in some of these projects out like biochar the first methodologies being published but it will be a couple of more years so that we can cover the entire spectrum yeah what what steps need to be taken do you think to get a more corporations familiar with you know durable carbon removal and kind of this distinction between avoidance versus kind of removal credits and and to kind of start to purchase them or support them yeah I mean that's that's why we started out with tech companies as the buyers because I feel like they're the perfect early adopters for carbon removal they're comfortable with risk they're comfortable with uncertainty and they understand scaling like they understand we need to buy now but send this demand signal to bring it down the cost curve and scale the technology and I feel like you know I don't know if I mean you you've probably found other sectors that are that are kind of eager buyers of it but we've really been inspired and encouraged by that because they need to be comfortable with something being a bit shit and not as good right and there are more risk averse bigger corporate buyers probably that need things to be you know have a track record and have you know dot the eyes and cross the T's so I think it's finding those early buyers who are willing to to take that risk and make a lot of noise like striped Microsoft and Shopify and then you kind of go down they're like you know it's a crossing the chasm I guess yeah I think what what we've seen as well is some some corporates leveraging if I can call them traditional carbon markets for there to meet their sustainability goals and carbon neutrality claims but then doing on a voluntary basis contributions towards or financial contribution towards scaling carbon dioxide removal technologies I think Microsoft is a great example they pump millions every year into these technologies but if you go on the sustainability report I think you'll find more of a than not that the leverage traditional offsetting markets yeah Marta any thoughts yeah just to add I think Microsoft again is a good example of a company that's gone a few steps further and has committed to removing their historical emissions as well I think if we could get you know whatever a hundred of the fortune 500 for all of the fortune 100 for that or even hell even 10 10% of that to do the same thing would come a long way you know I think just getting those larger commitments and in something that can be measured and seen in the next five years could make a huge difference the other thing I believe in is and we're sort of in that market is that decarbonizing heavy emissions industries is actually incredibly difficult let's take cement for example you have two sources there you know per ton of cement you emit somewhere between six and eight hundred kilos of CO2 per ton of cement even if you electrify the whole process yesterday you still have 60% of the problem left so the problem is more in the material that it is in the process itself and that's difficult so if you're a if the voluntary carbon markets are able to help with the economic shift there I think that could be really interesting so you know that's what we're trying to innovate within as well is to help decarbonize these heavy industries through voluntary buyers as well that can commit somewhat to that well we are very sadly running out of time and I know folks want to get the after party started we're standing between folks in getting to various things tonight on the last night of slush so Michelle David Marta thank you for so much for joining and for talking digging into these really complex and difficult issues and to all of you thanks for sticking with us and hope you learned a little bit that we helped demystify some of the the net zero puzzle and that you feel one step closer to either as your own company for your customers your portfolio companies taking a step closer to getting to net zero emissions by 2050 yeah thank you so much