You started working on Sylvera with your friend Sam in 2019 and incorporated in 2020, but how long has it been since you’ve had the idea for the business and what has it inspired you to do in departure ?
Sam and I actually converged on the insight behind Sylvere from different directions. As a lawyer, Sam worked on commercial contracts between a project developer and a buyer. In this context, it was clear that there was a need for data that defined whether a quality criterion, or specification was met, beyond the validation built into voluntary carbon standards. The absence of this data was delaying not only the financing and execution of this particular project, but of the entire market.
I came across a similar observation, originally I intended to create software to discover and optimize large-scale land use change projects, but two things were clear. First, the correlation between price and quality in the market was low, you could have the best project and not be assured of a higher price, projects with serious problems absorbed money and only got very few climatic benefits. Second and related to Sam’s experience, due to a lack of data and the resulting lack of market confidence, having a carbon offtake agreement, analogous to a power purchase agreement, was fundamentally a refusal (especially in 2019). Without the levy, the project is not bankable and the resulting lack of funding will hamper supply. In short, the market was inefficient and was not set up to channel the scale of capital needed to deliver the tens of gigatons of emission reductions and sequestration that the world needs the voluntary carbon market to provide, if we want to achieve net zero.
Sam and I were totally aligned, if you could solve the data issue, the market could thrive and that’s what we had to do with Sylvera.
Could you explain the Sylvera service to our readers and how it is different from other carbon management technologies?
We provide data that helps a seller, trader or buyer understand the quality of carbon offsetting – think of a Moody’s debt rating and you won’t be far.
Our ratings mainly concern whether the volume of credits issued corresponds to the reduction or sequestration of emissions in the real world and whether the credit is really additional (for example, would an area have recovered its forest naturally without the intervention of a project), but also the permanent sequestration of carbon outside the atmosphere. We also separately assess the positive externalities or co-benefits that the project may bring about, i.e. biodiversity or socio-economic benefits.
With this data, if you sell a good project, you can now reliably attract a fair premium. Buyers and sellers can build an independent quality metric into sales agreements and thus fund future sourcing. Exchanges and traders can set prices and transact with a high quality benchmark which makes offsets more fungible. Buyers reduce the risk of their purchase, can hedge future price volatility with futures or levies, and they have the data to communicate to their stakeholders the real impact of their compensation.
Crucially, and currently unique, we do not sell offsets, we have told our investors and clients that we prefer to close the company before selling offsetting – as soon as we do, there would be a conflict of interest, we would lose our independence and the trust of our users. Our only interest is to provide the best information to the market.
Where do you hope Sylvera will be in 3 years and in 5 years?
Sylvera’s mission is to help the world meet or exceed a 1.5 degree net zero trajectory. Emissions reductions must be the first priority, but there is no mandatory disclosure for companies. The business sector must be accountable for its emission reductions and be held accountable. When offsets are used, and should only be used for temporary deficits and truly irreducible emissions, the disclosure situation is even worse. So how is the world supposed to go to net zero if there isn’t even basic reporting – measure what matters, right?
In this 3 to 5 year horizon, the world is in serious trouble if there is no strict accountability on these two elements and we want to play our part to make it happen. Because asset managers have to take some $ 100,000 billion in assets to net zero, liability will result in cost of capital premiums for executives and penalties for laggards. Sylvera can help build that flywheel where asset managers fund the transition to a future non-catastrophic climate scenario, which hopefully will suit everyone, is a very good deal for everyone.
Likewise, projects of all types on the ground require tens of billions of dollars in CAPEX per year or they will not reach the scale required – our data can help support levies, project funding, etc., who will pay for this activity in the field.
If you could go back a few years into your career, what would you do differently?
Honestly not a lot, even the tough experiences were great learning opportunities and I have worked with some amazing people. Looking back, I could have spent more time with people who knew better what I was getting into, especially in terms of economic structures, and that would have accelerated my learning and maybe even improved my success 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 would just start working on this most impactful list. It just turned out that Sylvera was by far 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, desalting, materials science. Biotechnology is also a huge lever for efficiency gains, but rarely seen as a climate game.
If you could adopt one policy, what would it be?
I mean for me, it has to be the point from above, ubiquitous, regular and full disclosure of emissions and offsets against a clear standard from the public and private sectors. There is no way to net zero otherwise.
What are the major challenges for Sylvera today and in the years to come?
Well, while we intend to cover all types of offsets, from renewables to direct air capture, the lion’s share, now and at least for the next decade, will come from natural systems. From day one, it was blindingly clear that the data available to quantify carbon in forests and soils was far from what would be required for a normal commodity market. A 40% error would be considered normal. We have invested a lot of time, money and effort alongside institutions such as UCLA, University College London and NASA JPL to collect a lot of data in the field using research approaches. generation and create custom LIDAR processing software just to create datasets to train and calibrate our models. This job is going incredibly well, but a similar challenge is at play for soil carbon. Getting the wrong numbers is not an option.
Commercially, if we don’t have market acceptance for our data, then we’re irrelevant, so we’re working hard on distribution and partnerships. year!
You work with emerging investors. How difficult has it been to set up the cycle in the current environment?
Yes, it has been wonderful bringing Revent, Form, Foobar and others alongside amazing angels and more established investors like Index and Seedcamp. Everyone has contributed something at one point or another that has moved the business forward in the strangest way – we are very happy with our ceiling table.
Currently the business is foamy and the climate is a hot topic which is fortunate for us and funding has not been a problem but I’m sure the feeling will change so we are just focusing on our mission and on the creation of a large company.
Is there a favorite cleantech company or character that inspires you?
An inspiration to me has certainly been Mark Campanale of Carbon Tracker, an amazing climate think tank. They generate the most incredible, famous economic analysis on stranded assets that has laid a whole foundation for thinking around climate risk disclosure. This has diverted inconceivable amounts of capital from big emitters like coal. This is a clear demonstration of the potential leverage effect of using data to correct the failure of financial systems to assess externalities. The work of Mark and his team really inspired our philosophy on building the market information infrastructure to ensure that capital is allocated to provide net zero and not work against it.
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