You began working on Sylvera with your friend Sam in 2019 and incorporated in 2020, but how long before did you have the idea for the company and what was it initially inspired by?
Both Sam and I effectively converged on the insight behind Sylvera from different directions. As a lawyer, Sam was working on commercial contracts between a project developer and off-taker. In that context it was clear that there was a need for data which defined whether a quality criteria, or specification was being met, over and above the validation embedded in the voluntary carbon standards. The lack of that data was holding up not just finance and execution of that particular project, but of the whole market.
I stumbled across a similar observation, originally I’d intended to build software to discover and optimize large scale land use change projects, but two things were clear. First, the correlation between price and quality on the market was poor, you could have the best project and not be guaranteed a premium price, projects with serious issues were soaking up cash and achieving very little climate benefit. Second and related to Sam’s experience, because of a lack of data and resulting lack of trust from the market, having a carbon off-take agreement, analogous to a Power Purchase Agreement, was basically a no-go (especially back in 2019). Without the off-take, the project is not bankable and resulting lack of finance will throttle supply. In summary, the market was inefficient, and was not set up to channel the scale of capital to deliver the tens of gigatonnes of emissions reduction and sequestration the world needs the Voluntary Carbon Market to deliver, if we’re to get to net zero.
Sam and I were totally aligned, if you could solve the data question, the market could thrive and that’s what we needed to do with Sylvera.
Could you explain the Sylvera service to our readers, and how it’s different from other carbon management technology?
We provide data that lets a seller, trader, or buyer understand the quality of a carbon offset — think a Moody’s rating for debt and you won’t be far off.
Our ratings primarily relate to whether the issued volume of credits matches real world emission reduction or sequestration and whether the credit is truly additional (for example, would an area have recovered its forest naturally without the intervention of a project), but also the permanence of the carbon’s sequestration out of the atmosphere. We also separately rate and the positive externalities or co-benefits the project may cause, i.e., biodiversity or socioeconomic benefits.
With this data, if you sell a good project you can now reliably attract a fair premium. Buyers and sellers can embed an independent quality metric into off-take agreements and therefore finance future supply. Exchanges and traders can price and transact with a high quality benchmark that makes offsets more fungible. Buyers de-risk their purchase, can hedge future price volatility with futures or off-takes, and they have data to report to their stakeholders on the real world impact of their off-setting.
Crucially, and currently uniquely, we don’t sell offsets, we have said to our investors and customers we’d rather shut the company down before we sold an offset — as soon as we did that, there would be a conflict of interest, we’d lose our independence and the trust of our users. The only interest we have is in providing the best information to the market.
Where do you hope Sylvera is in 3 years and in 5 years?
Sylvera’s mission is to help the world deliver or exceed a 1.5 degree net zero trajectory. Emissions reductions have to be first priority, but there is no mandatory disclosure for business. The commercial sector needs to account for their emissions reductions and be held accountable. Where offsets are used, and they should only be used for temporary shortfalls and genuinely unabatable emissions, the disclosure situation is even worse. So, how is the world supposed to transition to net zero if there is not even basic reporting — measure what matters, right?
In that 3-5 year horizon, the world is in serious trouble if there isn’t strict accountability on both those elements and we want to play our part in making that happen. Because the asset managers need to transition some $100 trillion of assets to net zero, accountability will drive cost of capital bonuses to the leaders and penalties for the laggards. Sylvera can help build this flywheel where the asset managers fund the transition to a non-catastrophic future climate scenario, which hopefully all would agree is an incredibly good deal for everyone.
Equally, projects of all types on the ground need tens of billions of dollars of CAPEX a year or they won’t hit the scale required — our data can help support the off-takes, project finance, etc., that will pay for all this activity on the ground.
If you could go back a few years in your career, what would you do differently?
Honestly not a lot, even challenging experiences have been great learning opportunities and I’ve worked with some incredible people. Looking back, I could have spend more time with people that knew more about what I was getting into, particularly in terms of the economic structures, and that would have accelerated my learning and possibly even improved my hit rate!
What would you aspire to do personally, if you weren’t the CEO of Sylvera?
There is literally an endless list of technologies that can benefit climate and biodiversity, I’d just start working down that list from most impactful down. It just happened that Sylvera was by some margin the most impactful thing Sam and I thought could be built right now.
What are the most overlooked opportunities in cleantech and climate, in your opinion?
The unsexy stuff: compressors, aerothermal efficiency, distillation and separation, desal, materials science. Biotech is also a huge lever for efficiency gains, but rarely seen as a climate play.
If you could enact some policy, what would it be?
I mean for me it’s got to be the point from above, ubiquitous, regular, and comprehensive disclosure of both emissions and offsets to a clear standard from both public and private sector. There is no path to net zero otherwise.
What are the major challenges at Sylvera today, and in the coming years?
Well, although we aim to cover all offset types from renewables to direct air capture, the lion’s share now and for the next decade at least will be from natural systems. From day one, it was blindingly clear that the data available to quantify forest and soil carbon was nowhere near what would be required for any normal commodity market. An error of 40% would be considered normal. We’ve invested a lot of time, money, and effort working alongside institutions such as UCLA, University College London, and NASA JPL in collecting a lot of data in the field using next-generation approaches and building custom LIDAR processing software just to create datasets to train and calibrate our models. That work is going incredibly well, but a similar challenge is at play for soil carbon. Getting the numbers wrong is not an option.
On the commercial side, if we don’t have market acceptance for our data, we are an irrelevance, so we are working hard on distribution and partnerships — all going well you’ll see some exciting news on that front over the rest of this year!
You’re working with some up & coming investors — how difficult was it to put together the round in the current environment?
Yes, it has been wonderful to bring Revent, Form, Foobar, and others alongside some incredible angels and more established investors like Index and Seedcamp. Everyone has contributed something at some time or another that has kept the company pushing forward in the most uncanny way — we’re very happy with our cap table.
Currently, venture is frothy and climate is a hot topic, which is fortunate for us and funding has not been an issue, but I’m sure sentiment will change, so we’re just focused on our mission and building a great business.
Is there any favorite cleantech company or persona which inspires you?
For sure an inspiration to me has been Mark Campanale of Carbon Tracker, an incredible climate think-tank. They generate the most incredible economic analysis, most famously on stranded assets, which has laid a whole foundation of thought around climate risk disclosure. This has shifted inconceivable amounts of capital away from heavy emitters like coal. It’s a clear demonstration of the potential leverage using data to correct the failure of financial systems to price in externalities. Mark and his team’s work has really inspired our philosophy on building the market information infrastructure to ensure capital is allocated to deliver net zero and not work against it.
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