Tim Weiss: 0:00

We have to get to a point where all of the work that's happening across a large corporation is serving the ultimate end of de-risking their business, eliminating the carbon emissions associated with their activity, and moving us towards the low carbon economy.

Tom Raftery: 0:15

Good morning, good afternoon, or good evening, wherever you are in the world. This is the Climate Confident podcast, the number one podcast showcasing best practices in climate emission reductions and removals, and I'm your host, Tom Raftery. Don't forget to click follow on this podcast in your podcast app of choice to be sure you don't miss any episodes. Hi everyone and welcome to episode 154 of the Climate Confident podcast. My name is Tom Raftery, and before we kick off today's show, I want to take a quick moment to express my gratitude to all of this podcast's amazing supporters. Your support has been instrumental in keeping the podcast going, and I'm really grateful for each and every one of you. If you're not already a supporter, I'd like to encourage you to consider joining our community of like minded individuals who are passionate about climate. Supporting this podcast is easy and affordable, with options starting as low as just three euros or dollars. That's less than the cost of a cup of coffee, and your support will make a huge difference in keeping this show going strong. To become a supporter, you simply click on the support link in the show notes of this or any episode, or visit tinyurl. com slash climatepod. Without further ado, with me on the show today, I have my special guest, Tim. Tim, welcome to the podcast. Would you like to introduce yourself?

Tim Weiss: 1:45

Sure thing Tom. Thanks for having me. I'm Tim Weiss. I'm the CEO and Co-founder of Optera. We are a software company that's helping large multinational organizations manage their carbon emissions.

Tom Raftery: 1:56

Okay. And Tim, tell me first of all, why ? As in I, we, we know why, but why as in, there's lots of problems out there in the world you could be tackling. What made you decide to tackle this one?'cause you are one of the co-founders.

Tim Weiss: 2:15

Yeah. well, I'll, it kind of starts quite a ways back, in, in my origins, back in undergrad I was studying, I ultimately decided to study environmental policy, which was a mixture of economics, political science, and environmental science, and that wasn't a discreet intent when I started my undergraduate career but as I went through, I realized that climate issues and environmental issues, really were very fulfilling to me, because they were as interesting and demanding on my heart and my mind. I think that climate issues are a societal issues that we can use data to inform really discreetly and we can understand and measure the impacts we're having on the world. We can use science, technology, to improve, in many of these areas. And I also believed that we have to use the tools of capitalism to fix capitalism, and realize that early on that the ability to scale, the meaningful solutions that we need to address the climate, were going to be fueled by investments and decisions made in the, in the economy, and in traditional markets. And so as I navigated my, my college career, I found that a focus on really this blend of climate science, natural science, environmental science, as well as economics, really suited my heart and mind and allowed me to focus, my career in an area that was deeply fulfilling. That ultimately led me to my first job, which was actually during college and then after was working for a nonprofit, that was scaling solutions for people that lived without access to electricity in Southern Africa and on the Navajo Nation here in the US. And I actually went down and lived in Namibia, in Southern Africa, for a couple different stints over, over a couple years, to really help scale their operations and provide greater and greater access to individuals that lived without any grid connectivity, with renewable, clean, and, and affordable solutions that help them power their homes, light their homes, and have kind of basic fundamental, a access to energy that is kind of transformative. And so that was really my first foray into this side of things, into the re the renewable energy economy into the clean, clean tech world. Ultimately my path to corporate climate emissions management and kind of really the more, the really more scaled up version of this came after business school, when I had a desire to really, really think about how the economy is gonna transform. and part of that was exploring, commercial scale renewables in the utilities markets. I worked for AES in their, their commercial renewables division. That was right around the Paris Agreement and, and found that I met my co-founders who had a boutique consultancy supporting large multinationals. And ultimately they we started seeing kind of right around the Paris Agreement companies really stepping up, and setting more and more ambitious goals, more and more ambitious commitments that required a much more significant attention, data and investment. And, I was just excited by it. And I think that it was a way to, to really start to move the economy forward, towards the low carbon economy. And, and I wanted to be involved. And so that's really where the origins of Optera began. And now I've, I've been on this journey for, for quite some time.

Tom Raftery: 5:49

Cool. And how are you helping organizations with their carbon footprints? What? What are you doing for them?

Tim Weiss: 5:57

Yeah. I mean, ultimately, , we're the, the way I think about this is we're now transitioning to a new version of how the, the global economy works and functions. And that produces meaningful risk and opportunity to all large businesses. And when you think about that, it has very little to do with whether they have solar on the rooftops of their headquarters. What matters is how are their products made? How do they get to market? How are those products used by consumers? Does any of that need to change fundamentally as we move to the low carbon economy? If you think of an investor, where you have assets, are those assets gonna retain value, or not as we move to the low carbon economy? How well positioned are you to be a successful enterprise through this transition? That requires organizations to have data across everything that they touch and influence from their supply chain, from the logistics of how their goods are moved around the world to their operations and how, if they have, especially if they have manufacturing or any sort of kind of heavy emitting energy, energy consuming practice, under their tent. And then ultimately the downstream impacts of how their products are used, how they, how they move through society, and are used by consumers, and then also investors as their, all the things that they own. And so for us, we're helping organizations quantify their, their emissions across their entire value chain, which would include scope one, scope two, and then of course scope three. And that's, that's largely been our focus, for, for many years.

Tom Raftery: 7:29

And how are you doing that? Are you just, you know, saying, well, you bought 10,000 liters of fuel based on your bank statement. So fuel has a carbon footprint of x per liter by 10,000, therefore, your emissions are, or is it something you know, is, is it averages, is it calculated? Is it based on sensor data? Is it a mix of all of the above? How are you doing it?

Tim Weiss: 7:58

Yeah, there are, many different approaches that you, we all have to take, to get a handle on different sources of emissions. So the first, the easiest way to understand this is the operations side of things. So things that are within your operational control. You own the asset that is combusting fuel, burning fuel. You own the manufacturing process that's emitting fugitive emissions, or you own the facility that's consuming electricity. Typically the source of data for us is going to come from utility data, where we're directly pulling data from all of your utilities. Or we have, you know, on-prem, if, if there's on-premises kind of emissions monitoring, we would be pulling in that data from manufacturing operations, other things. That data is is really relying on primary data. And then we are converting it into emissions, using kind of the, the, kind of equivalence of how gasoline, given the efficiency assumptions of certain engines and, and, and, and, and kind of how they're, how they're used, how that would ultimately translate into carbon emissions or CO2 equivalent, across many greenhouse gases. When you think about scope three emissions or supply chain emissions, the ways in which this has been done historically is using very high level commodity or industry averages. So, an organization would be compiling all of their spend across their supply chain and then assigning it to different commodity groups. And then there's been academic research that has produced the average emissions per ton of steel or per ton of aluminum or things like that. That's helpful for organizations to get a first understanding of where risks might lie, or where the order of magnitude of the problems that they are exposed to, probably persist within their organization's supply chain. We go far deeper than that, because that's not actionable. You can't really pick up the phone and, and solve the problem when you have just a, a tons of emissions associated with aluminum. And so what we need to do is pair your supplier procurement information with direct data from suppliers or even direct facility data of where those goods are being manufactured and made. And that's what we do. So we're, we're ultimately enabling companies to go past assumptions into direct data across their supply chain, their product mix, their investment portfolios, and really uncover which entities are responsible for those emissions, and we can, we can treat them as an aggregate and, and allocate their emissions based on their share of revenue or things like that. But we can also go far deeper into which factory is producing these goods. You know, if you're, if you're a large tech company, like many of the folks we work with and they're relying on Foxconn, we might have specific data on the factory and the factory line that's producing those electronics goods. And we can help, really under unpack the true exposure, the true risk, the true emissions coming from those manufacturing processes. And then the, the organization can actually engage with Foxconn to help improve those activities, and, and really help them mature as a business. That's what De-risks us. That's what helps us transition to the low carbon economy.

Tom Raftery: 11:10

Okay, and obviously Scope three emissions are the most challenging because you know, not on your premises, it's somebody else's. Say, I am a small to mid-size organization today. I've got, I don't know, a thousand, 5,000 suppliers, whatever it is. How do I go out to all of those suppliers and say, I need your data in my system so I can figure out how to get your carbon footprint down so I can get my carbon footprint down.

Tim Weiss: 11:49

Yeah, it's a, it's a massive challenge. and it's one that is a daunting prospect for companies that have never done this before. And the answer is you don't have to do that as your first move. That's not the first step. The first step is, and, and I can speak from our experience of how we approach this problem. We work with many of the largest automakers in the world, but also some, some manufacturers now that are brand new to this space, but have a discrete need to get better and better, more granular data on their supply chain. We have a, we have tens of thousands of companies in our database that have been reporting, and, and sharing information publicly over many years. And we have unique partnerships with the Responsible Business Alliance, which is the largest trade association in the world that spans responsible procurement. And our platform is essentially the data surveying platform behind that association. And what we've done is help essentially define a standard single survey that all these organizations from Apple to Amazon, to, you know, Tesla and Ford, and Volvo, all these folks now have access to, and send the same survey out to all their suppliers. That data then comes back in and we can use it in all sorts of novel ways with our customers, and help provide if for a very newbie into this world, it's very likely that we can provide really robust estimates for their suppliers if we don't have their data already. So that your step one is actually to quantify your emissions using as much close and proxy data or direct data if we have it as possible. And then you decide where you should target your efforts. And the best way to do that is to think about who are your top 50 suppliers that are most material, and what are the, what is their level of maturity today? What is, what do you need them to do? Do they need to report better data? Do they need to actually set meaningful goals? And what we find is that most organizations have a pretty significant concentration of reliance among maybe 50 to a hundred suppliers, and that it constitutes up to 90% of their total supply chain spend or total supply chain activity. And so we can really start in a much more targeted way and model the long tail and we can get to the long tail later, or never. With some companies that have hundreds of thousands of suppliers, you're never really gonna engage with your, you know, 2000, 5,000 supplier. And that's not really that big a concern because the emissions you're responsible for are just really negligible at that point. Someone else is probably a much more material customer to that business than you are.

Tom Raftery: 14:28

Okay. And how, I mean, if I am going to my top 50 suppliers or top 100 suppliers, or whatever it is, how do I get them to give me access to their data? What's in it for them?

Tim Weiss: 14:46

Yeah, it's a, it's an interesting question and one that what we find now is really coming to a head among many suppliers in the market where the first step is they are likely subject to regulation. And what their customers are asking for is exactly what the market's asking for and regulators are asking for. In some cases, that's not true. And they may be a private company, a much smaller entity that is not subject to regulation discreetly. And the real, the real driver in these markets is the overall sharing of risk. And so ultimately you think of data security as the first big example of this. Where me as a company, if I'm gonna go procure software and I'm gonna put my data in that software, I have to know that that data is safe, for us to operate, right? Because you, I'm now providing this third party with a whole lot of information that creates a whole lot of risk potential for my business. And so you're relying on that third party, that supplier for protecting that information. Um, the example in carbon is if you are a large automaker, you might manufacture just the final pieces, the final assembly of your, of your automobile. If you're an electronics company, if you're, if you're Dell, And you are manufacturing your laptops, you might, you might not even own any of the manufacturing process, and so your reliance on your customer is, is a, is a hundred, like, it's a, it is intrinsic to how you operate. There's no real other option. And so you can't isolate Dell's risk from their supplier risk. They're a true partner in this world and what we see is that businesses, large corporations are treating this partnership with that level of care and respect. And so they're trying to capacity build in their supply chain. They're saying, Hey, we're in this together. You need to decarbonize. I need to decarbonize. Prove to us that you are a partner for us long term, not a liability. Because every company now has to think on this decade, multi-decade long horizon of saying, we're gonna have to produce laptops in a low carbon, zero carbon way. Are you on this journey with us or not? And if a supplier invests in that relationship, if they're proven to be trustworthy and a more of a partner in this, they get discrete benefits for that. Where they might get a price premium, they might be able to sign longer multi-year deals. It is very entrenched in the transaction now, far more than it has ever been because this is driven by market forces more than it's ever been. Where companies treat this like true risk. It's, it's a true kind of defining characteristic of how an organization needs to mature over the next 10 years. And they're really looking at their supply chain as one of their big problems they have to tackle.

Tom Raftery: 17:44

Okay. And if I am a supplier, what's to stop me just, you know, kind of wettting my fingers ticked up in the air and going 42, or in other words, as the manufacturer or whatever, how can I know that the data I'm getting from my suppliers is trustworthy?

Tim Weiss: 18:01

Yeah, there's, there's a few different areas in which we address this. The first is there are more and more standards around verification, right? So actual third party verification of data, and that's the first screen is like, are suppliers actually going through that exercise and using a third party to audit this data? Which provides a level of confidence, in terms of the underlying methodology and, and the, the fidelity of the information. There's many companies that don't go through that process yet. And that process is, is pretty, pretty commonly now required in all regulation from Europe and California and others. But the other way we can do this is to actually use proxy data, use other companies of the same industry to assess what their emissions should be. And that is a remarkably accurate way to understand whether an organization has really defined their emissions or included and calculated their emissions using everything under their roof and not just kind of self-selected or done certain kind of small, you know, portions of their business. And we find that there's really kind of nowhere to hide at this point, because there's enough information out in the world across every industry where we can produce pretty high level estimates of an organization's emissions using proxy data. And so it's quite easy to sniff out when organizations are not really going through the process meaningfully. And that, that's kind of taken time to get to this point. But we are very much at that point, I'd say, in the evolution of this market.

Tom Raftery: 19:36

Okay, so do you see it as a market that is now becoming mature or still very immature, or where do you see it there?

Tim Weiss: 19:48

I would say the easiest way to define it is maybe we're in the awkward middle school phase. Where there's a whole lot of, a whole lot of things and lessons that have been learned over the many years of helping organizations and moving, moving standards in the, in this area. There's a whole lot that still needs to get figured out. And a lot of that is gonna become, is, is in narrowing the field of what's important. Right now we are, in terms of how organizations are, are moving forward, we have a many different directions that we see. And some of them are creating, what I would characterize as, kind of more busy work, than meaningful work. And we have to get to a point where all of the work that's happening across a large corporation is serving the ultimate end of de-risking their business, eliminating the carbon emissions associated with their activity, and moving us towards the low carbon economy. We have a little bit of, we have quite a bit of messiness right now where companies are asking for data in many different formats and shapes and sizes, and a lot of companies are, are stuck trying to respond to all of the different calculation methodologies, whether it be product LCAs or, you know, scope one, two, and three, or, kind of other, other ways in which this data can be kind of constructed. And they're not able to actually focus their efforts and attention on emissions reduction, and the actual changes of their, of, of their business that are gonna be, you know, de-risking them long term. I think that we're we're getting close to a much more standardized world, that's gonna help businesses move faster. We're not there yet. and I have really the mission of Optera, like we're trying to help make that happen so that organizations stop doing all of the busy work, the craziness of reporting, and actually can spend much, much more of their time on decarbonization.

Tom Raftery: 21:50

Okay. Do you have any kind of customer stories? Customer wins, customer, you know, we had this enormous carbon footprint, but then we, changed and now we have this tiny carbon footprint.. Any any wins like that you can speak to?

Tim Weiss: 22:05

Yeah, I mean we, there there's a lot of great wins that we can speak to, across different sectors. The short answer here is there's no silver bullet for any organization. And so we have examples of, you know, a food retailer like Bloom and Brands that, you know, using, data and systems like ours has figured out how to electrify all of their cooking operations. So essentially eliminating natural gas across tens of thousands of locations in the world. We have examples of, of helping HPE and Intel and Dell and Cisco and many of these very large tech companies essentially uncover where all of their emissions come from across their entire supply chain, and they are influencing the behavior of thousands of the largest manufacturing, you know, electronics, manufacturing companies in the world. And you we're seeing really meaningful reductions like th 20, 30% emissions reductions across their supply chain because of all of that activity. And when you think about how that amplifies, HPE might be a certain portion of that supplier's business and so, you know, maybe it's 10, 10 million metric tons or so, but the total impact of that is actually 10 times larger than that.'cause it, it impacts that company's total operations, not just the portion HPE is influencing. And so the work that we're doing on Scope Three is driving towards, you know, tens of millions of metric tons being, managed more effectively and reduced year to year which I'm really excited about and really proud of. And that requires organizations to become much more strategic, where you're thinking about, okay, what, what are the long-term challenges that my suppliers have to manage? So the, one of the key ones in the electronics industry is the emissions from semiconductor manufacturing. When you have a fab and you're making a semiconductor, you're emitting greenhouse gases just because of the chemicals used in that process. That's a long term challenge to solve. We have to figure out new, new chemicals to be used in chips, over the long term and changing the, the manufacturing processes. That's not the first thing that's gonna drive emissions down within a year or two. What we think about is how can we electrify as much as we can within that manufacturing operations, and then apply renewables and batteries to really shift, much, much more of that energy load to green, you know, and renewable based electricity. And that has been the quickest, fastest move for emissions reductions across large manufacturing operations. So really thinking about we've done a lot of work with individual companies about their own operations. I think that's, that's exciting and, and interesting and cool. What I'm most excited about is the supplier engagement work that our team and product have helped facilitate across tens of thousands of companies across the economy and helping them all move incrementally to a more mature space. And whether that's, you know, kind, kind of some of the examples that I just walked through.

Tom Raftery: 25:05

Okay. Interesting. It is a maturing space, awkward middle school, as you said. Where to next? Where do you see this space going? You know, this is the start of 2024, so, you know, what do you see in 2024 out to, let's, let's say out to 2030, given that that is where, you know, a lot of targets have been set for, so next six years, what's, what's gonna happen in this space?

Tim Weiss: 25:37

Well, what I'd like to have happen is kind of what maybe I'll speak to is like what I think needs to happen for us to actually solve this problem. I am a relentless optimist. It's why I've worked in climate my entire career. I think anyone who's in this space has to be, there's a lot of reasons to be pessimistic. And I believe that it's human nature to kind of procrastinate. It's also human nature to make every conceivable wrong decision before we ultimately finally make the right one.'cause that's the hard one to make. I think that we're gonna do that. What is going to help move the, our sector forward is the level of urgency stepping up from markets to say, I need to understand who is going to be driving the economy forward towards this low carbon future and who's gonna be left behind? And when real money gets spent, when real opportunity is seen from investors, from businesses to capitalize on gaining market share by being a leader in the low carbon economy, that's what's gonna move us forward quickly. That is starting to happen in certain sectors. You see that some large chemical companies are really making all of their long-term betts in their manufacturing processes, are all based on renewable fuels, recycled content, things that they know are gonna be key drivers in the future. And they're not making bets on petrochemicals and, you know, heavy emitting chemicals. And I think that's, that's been pretty commonly understood. What's gonna really transform over the next few years is the level of consistency across every large business and how they manage their emissions and report their missions out to the world is gonna be at a much more sophisticated level, which means everyone can rely on this data to actually monitor and track corporate performance. Greenwashing is gonna be very hard to get away with. It's already much harder than it has been historically. And we now see regulation, stepping up in that area where the, you know, you're essentially banned from making carbon neutrality claims.'cause we know that they don't hold water anymore. I think that that's the first indication of where we're going, where everyone's gonna be far more data driven. It's gonna look a lot more like the performance based milestones and management of the financial sector that's now applied to carbon. And we're all, we're all able to trust and, and make decisions based on this emissions data in a much more discreet way than we ever have before. I believe that that's gonna help drive a more rapid response and rapid decarbonization of the economy than anything else is, in relation to corporate climate emissions. And so I'm, I'm quite encouraged. I think that we are on the precipice of getting there. and I think we'll, we'll likely get there in the next couple years.

Tom Raftery: 29:50

Okay, so no more announcements from Apple that their Apple watches are carbon neutral

Tim Weiss: 29:57

None, you might see them, but hopefully there's data to really back it up.

Tom Raftery: 30:04

Fair enough. Fair enough. We're coming towards the end of the podcast, Tim. Is there any question I haven't asked that you wish I had, or any aspect of this we haven't covered that you think it's important for people to be aware of?

Tim Weiss: 30:18

Well, I think that the, the main perspective that I think is important here is, we're on a very long-term journey together, across the globe, in marching towards a low carbon economy. And I, I don't want people to be discouraged by, kind of missteps or imperfect solutions, right? We saw like offsets have taken a big kind of hit in the past year and a half. And I think that's necessary, needed scrutiny that's been applied to that market because we need to under, we need to understand the long-term benefits that we're getting from these sorts of investments and technologies. Um, I think the, the thing that we're balancing against that kind of long-term, credible, approach to things is is the need for really rapid decarbonization. We have this kind of concept of like the time value of carbon where a million metric tons saved today is worth a whole lot more than a million metric tons saved in 2049. And so we're gonna have to find a balance of how we can move very quickly, but also hold ourselves accountable to a high standard. And I see that as, a bumpy road. But it's important that we try to do both, and manage towards both. So that what I don't want is to discourage rapid action, across the board because we're trying to be incredibly thoughtful and holistic in our thinking because we're, we're gonna be too slow. I also don't want us to be, just thinking super short term and fast when we're actually not producing meaningful outcomes. And so we have to have this necessary tension. I think people feel it that follow climate news. So they say, oh, I thought this was a good thing. Oh no. Now it's a bad thing. And there's kind of this pendulum, whip lashing effect, but that's us just figuring this out in a more genuine way. And this pressure to act fast, but also act in a way that is meaningful. And also just, for our society and for kind of everyone across the globe. It's just this is probably one of the hardest challenges we ever faced in society because it requires so much coordinated action. And I, I look at kind of all of these tacks that we're making, as effective, you know, forward moving momentum, kind of gathering activities. And I hope that other folks don't feel discouraged by these as much as they're feeling. Okay. This is the next iteration of evolution for us in the market. And, and we're starting to figure this out even better now.

Tom Raftery: 32:50

Okay, great. Good, good. Tim, if people would like to know more about yourself or any of the things we discussed in the podcast today, where would you have me direct them?

Tim Weiss: 33:01

Yeah, so you can learn more about Optera and everything we're doing at opteraclimate.com. You'll find us on LinkedIn. You'll find me on LinkedIn. And, you know, I'm, I'm regularly, you know, writing articles in, in various, various areas, you know, from climate, you know, from the climate news, periodicals and other things. So yeah, I'd be happy to, to be in touch with folks if you're, interested in digging into these challenges. And so we're, we're always looking for partners and forward thinking organizations that are looking to solve real, real problems with real data. And so we, we'd be happy to connect.

Tom Raftery: 33:38

Fantastic. Tim, that's been really interesting. Thanks a million for coming on the podcast today.

Tim Weiss: 33:42

Tom, thanks so much for the time. Really appreciate it.

Tom Raftery: 33:45

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about the Climate Confident podcast, feel free to drop me an email to tomraftery at outlook. com or message me on LinkedIn or Twitter. If you like the show, please don't forget to click follow on it in your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.