.png){kind=logo}
In this interview, we discuss carbon emissions and carbon accounting, distinctions between the emissions scopes, Aclymate’s unique model for carbon calculating, and opportunities for any business to reduce its emissions to become carbon neutral.
0:04
[Music]
0:11
foreign welcome on to the podcast Mike thank you
0:18
for being here with us um this is approachable sustainability the green Business Bureau podcast and
0:26
before we get started do you just want to introduce yourself Mike Smith I'm the CEO at Acme
0:36
our customers figure out what their footprint is reduce it offset it if it makes sense and then report that work to
0:43
their stakeholders as well as a certification that they picked up on their website to Market to show their
0:49
stakeholders my background is I used to fly for the U.S Navy I spent about 12 and a half
0:54
years active duty duty playing f-18s had a great career but had an experience with a wildfire that caused me to
1:01
reevaluate what I wanted to do uh left the service in order to start my first company called renew West
1:07
uh renew West it was all about post fire reforestation for climate outcomes
1:13
um along the way development expertise in carbon markets and climate policy was an advisor to the U.S climate Alliance
1:18
and uh our big claim to fame at Renew West was the largest carbon reforestation project in U.S history we
1:24
planted two million Trees in Northern California finished up on Mother's day of this year
1:29
um but along the way also had developed a real passion for the the idea that there was this big chunk of of human
1:36
society that wasn't being given the tools to engage with their own emissions for Peru and then I wanted to help with
1:43
that so internal dorini West has started a company called acclimate recognized it had legs of its own and spun it out
1:49
about a year ago and have been doing it ever since so beyond that my personal hobbies are mostly involved being a dad
1:55
a lot of backpacking and skiing with my kids who are seven and eight and a half and a phenomenal wife named
2:02
Lindsay who puts up with it all so
2:08
that's that's really fascinating that um you used to be in the Navy and then
2:14
kind of had a well concerning that you had a kind of scary run-in with a
2:19
wildfire but it's really cool to see how you took that and you turned it into action
2:25
um not many people do that so that's really cool to see a case in which you actually did that and you talked a
2:31
little bit about how through this process you got some expertise in carbon
2:37
accounting and then you talked a little bit about how acclimate came to be but can you talk a little bit more about
2:43
what the vision was and then kind of the evolution into being what it is today
2:50
yeah so in my time at Renew West I remembered that I would go and I'm going to talk to
2:56
like smart people in the sustainability space and I'd have to explain about carbon markets and the bad climate and
3:02
um a lot of them felt a little overwhelmed it just felt uncomfortable to them and
3:08
that they they knew that there was something that needed to happen but they just didn't understand how it all worked
3:14
um and I got to thinking that if we are creating a system that requires people to have like essentially expertise in
3:21
carbon markets in order to engage with climate or carbon more broadly like we're not we haven't built a system
3:26
that's going to work and so um my co-founder William and I had a big whiteboard session we sat down we looked
3:33
at it all and saw that there was a really big opportunity uh to to help an underserved segment of the U.S
3:39
population specifically small and medium-sized businesses when you look at small businesses
3:45
um which the U.S small business administration defines as fewer than 500 employees that's um
3:50
there are uh uh 30 million small businesses in the United States they
3:56
employ almost uh half of the US Workforce they're about 44 of US GDP
4:02
so like small and medium-sized businesses and fewer than 500 really is more of a like a medium-sized business
4:08
uh that was a big opportunity um and so there was a lot of these tools that were out there you know well-known
4:14
competitors of ours that we're solving the needs for like the large corporate sustainability departments
4:21
those experts in those spaces that needed very specific tools but there wasn't something for the rest of us something that would allow you know the
4:29
average person who wants to do something about climate change but doesn't really know how to do it there wasn't that tool and so we wanted
4:35
to build that at acclimate we're really proud of what we've built yeah that sounds great it sounds like
4:41
there's a real need in the market I mean I know at the very least that you see
4:46
these big companies and you see you know all their carbon avoidant carbon
4:52
reduction tactics and they have that capital and that ability to really put a
4:58
big investment into it and work with these larger companies or hire someone specifically so it sounds like you're
5:04
helping kind of the smaller guys be able to get the same effect but without the huge Capital that you may need or the
5:11
huge support that you would need yeah absolutely um you know when we look at small
5:16
businesses uh you know there's kind of three neat things that has there they have a lack
5:22
of resources a lack of time and they have a lack of knowledge on climate and so we wanted to make sure that whatever
5:27
we built uh you know our design standard was this shouldn't take you more than five or ten minutes a month it shouldn't
5:34
take uh um any special knowledge about it other than the only thing you should have to know about climate is that you want to
5:40
do something about it and that it's it should be an affordable price point that every small business
5:45
would be able to afford and we we've built that cool so with that being said you've kind
5:52
of talked a little bit a little bit about different jargon that you relate to um in your field can you give me a
5:58
brief overview of carbon Accounting in offsets and maybe some other terms that
6:04
people would need to know to understand the work that you do sure um
6:09
so one of the first things that kind of scares people off from it is this discussion around scope emissions and
6:15
you'll notice actually in our uh our application we very rarely talk about scope because it's
6:20
um it's an important distinction for larger climate accounting but for small businesses we don't think it's as big a
6:26
deal so scope permissions are they call them scope one two and three scope one emissions are your emissions the things
6:32
that you burned or you directly admitted in the atmosphere scope two is where you use that energy but
6:38
somebody else did the emissions typically this is electricity and for most small businesses like
6:44
that's that's a big chunk of it scope one and scope two is where you need to focus your efforts and then there's this
6:49
scope three which is kind of a all of the above it includes everything and scope three emissions can include
6:56
things like business travel and commuting but it can also include the embodied carbon associated with your Investments or the products that you're
7:03
buying and that can get pretty complicated pretty quickly um yeah when I the when people start
7:08
talking about scope towards the typical small business owner their eyes roll back a little bit like we don't need to
7:14
be doing that but it is worth noting that uh the people that your other
7:19
stakeholders maybe actually care about that so we do account for that in the back end and when we do our reporting we
7:25
report the scope emissions but we don't really expect you to have to learn about what they are um and then within carbon offsets
7:32
um so a carbon offset is uh falls into roughly two buckets uh those associated
7:38
with avoided emissions and those associated with carbon removals so an avoided emission is where you pay
7:46
somebody else to reduce their emissions that they otherwise wouldn't be required to or wouldn't be financially available to do
7:53
um some examples of that are like methane off of landfills or avoided uh
7:58
methane from abandoned coal mines where like this methane's leaking to the atmosphere it's a problem
8:04
and nobody's required to do it so if it just keeps leaking then we have problems and then carbon removals are
8:11
where you pay somebody to actually pull the carbon dioxide out of the atmosphere or the carbon dioxide equivalent
8:18
um and so my previous work in renew West where we planted all those trees like that was a carbon removal we planted a
8:24
tree it grew and absorbed carbon dioxide out of the atmosphere you'll see that there's more modern
8:29
technologies that are coming out there like direct air capture and enhanced mineralization and a bunch of
8:34
stuff out there where uh that's starting to happen as well um so
8:41
that's generally what's happened there you're paying somebody either to reduce emissions that would already be happening or paying somebody to to
8:47
capture the emissions that have already occurred and pull them back out of the atmosphere um people feel strongly one way or the
8:54
other um I think there's Arguments for both and I wouldn't worry too much about it as
9:00
far as that goes broadly within offsets there are public registries
9:06
uh you can kind of think of offsets as like the original crypto where there was like a proof of work and you had like a
9:11
token that was issued for it and so in the case of my planting trees my proof of work was I planted a tree it grew you
9:17
measured the growth of the tree that was the proof that the work happened and the carbon had been absorbed
9:23
um and then uh the the token if you will that was issued was the carbon offset
9:28
and so that's sometimes referred to as a carbon credit um the the technical term is a ton of
9:34
carbon dioxide or it's equivalent tco2 we eat but again more than the small business owner really needs to know about
9:42
um and so then that token that credit can be exchanged back and forth that is
9:48
um has its own inherent value that goes up and down based upon like the needs of the market and then at a certain point somebody
9:54
decides that they want to retire and so they want to consume it as part of their
10:00
offsetting mechanism so in acclimate you don't see any of the
10:05
trading all that stuff that's happening in the background all you see is a Marketplace of different offsets that are available for you to purchase and
10:11
the moment you purchase it it's retired and so like there's a whole back end of like of Market happenings that's going
10:17
on and you don't really have to worry about that you just say this is what I want when you buy it it's it's retired and
10:24
your accounting is updated with that with that offset so it sounds like what you do acclimate
10:32
is you take what can be complicated in a little
10:38
um seem a little insurmountable for a small business to do on their own you take it and you present them with the
10:44
options of what they want to do but they don't have to worry about all the complicated jargon or all the choices
10:50
you kind of deal with that on the back end as opposed to on the front end them trying to sift through all of that
10:56
information on their own yeah exactly you know one other thing that we add in is is that um
11:03
the existing Solutions before acclimate were that you would go hire a consultant and they would talk to you about all the
11:08
scope of missions and the offsets and you know you'd spend five to ten thousand dollars a lot of your own time get that console enough to speed
11:15
they'd give you a report and then say see you next year and it was up to
11:20
you to kind of to track and implement it for thereafter or you would try to teach yourself and generally you'd get it
11:26
wrong uh because it can get a little complicated um and so yeah we're very very proud of
11:32
the idea that we can just just make this easy all you have to do is make a series of decisions laid out
11:39
in plain plain language about what you want to do and then off you go
11:45
yeah that sounds like it's you've really simplified that model
11:50
um is there anything I know that that you mentioned there's some competitors out there and there's
11:56
um some other places out there what's unique about acclimate model compared to
12:01
the other alternatives we we say that we're the only purpose
12:07
built from the ground up end-to-end Small Business Solution in the United States a lot of qualifiers in there
12:12
which is just to say there we have competitors that service large companies we have competitors that service you
12:19
know small companies in other countries we have competitors that are starting to
12:24
think about moving into the small business space um but we're the only ones that have been focused from the job on that
12:30
problem and that gives us like a really unique perspective and ability to kind of to help those or Target demographic
12:37
those small businesses deal with their problems yeah I can see where maybe if um a
12:43
solution we're focused on large businesses to begin with it would maybe be a little more difficult to scale it
12:50
down to where it would apply to smaller businesses that don't have all the same resources but it sounds like you're
12:56
going more from like a bottom up level as approach to top down yeah exactly
13:04
um so with that being said I know that you really focus on small to medium
13:09
businesses and why would you say that it's important for all businesses to
13:16
reduce their emissions and do so through your model sure
13:22
um you know so one number that gets thrown out a lot is about like how there's a hundred companies that are accomplishing 71 of the world's
13:28
emissions um and that is both right and wrong
13:33
um and so back to that scope discussion about that scope three is being everybody all the the kind of the
13:39
included emissions associated with like Supply chains so that scope one that that those
13:45
hundred companies and they're 71 like that includes all the downstream uses of their problems
13:50
what scope really describes about though the scope emissions is actually relationships which is that
13:58
um the emissions of those large companies are also driven by the decision makers of their employees their
14:04
Partners their supply chain a thousand different independent
14:09
decision makers and all of those decision makers um have their own incentives
14:15
and so a top-down approach where you create some sort of pressure and say well you need to get on top of your
14:20
supply chain emissions is work some way right but like we're actually
14:26
people are just a much more effective you know species in its its capacity for
14:31
organization when you enable independent decision makers to do those things and so that that's where it gets wrong
14:39
about this this the 100 companies and the 71 because
14:44
um you know for anybody that drives like drives a a car that uses fossil fuels right you
14:51
you've made that decision shell has also made that decision to sell you the gas but you're the one that's burning it
14:56
right that would actually it may be as an individual your scope one emission and shell scope three and so we can kind of point fingers and
15:02
do this game we're like no shell should do it or you should do it well actually the reality is we both we all should be
15:08
doing this um and if we're not all doing it we're actually probably you know tying one hand behind our back as far as being
15:14
able to deal with climate yeah I know exactly what you mean it's almost like a double-edged sword where
15:20
yes those big companies they are responsible and they should be held responsible I think that that statistic
15:27
kind of gets at the fact that the responsibility right now is kind of put on the consumer and a little bit taken
15:34
away from those larger companies um but consumers are also responsible for consuming more responsibly and
15:41
limiting their own emissions and it's not just on the people that are giving you the gas as you
15:47
um described it's on you to also limit your use of that gas yeah absolutely and you know there's
15:54
there is that history of the fact that like BP created like your whole carbon footprint routine right
15:59
um and so there's definitely a history there that has to be acknowledged around like uh emissions accounting associated
16:05
with that and that it shouldn't be a passing notebook this should be an added responsibility not a replacement of
16:11
responsibility so absolutely the large companies they have a responsibility that they have to be doing this and we
16:17
should give them uh very you know a few concessions in that uh you know
16:22
insistence upon that responsibility but the other point is is that climate
16:28
change is really a collective action problem and how do we change the behaviors of those large companies is this by all lacking uh collectively to
16:35
uh to change the demand signals and so I think that's where it's it's the additional responsibility not in replace
16:41
of I totally agree with you there so with that being said and talking about kind
16:47
of the responsibility of people what would you say your vision for the future
16:53
is either for your company but then also for the world of people use acclimate
17:00
solution yeah um you know my vision of the future is
17:05
is that everybody um you know knows what their emissions uh
17:10
for their individual and for their their organizations are um you know very
17:16
quickly and at a glance you can almost kind of think of it like almost like as a credit score or you should have a right to uh to know
17:23
about this and that's not obviously the best analogy because like getting your credit score sometimes is a little bit like pulling teeth
17:29
um but that this is you know that this is something um that you should know about moreover you
17:36
have a lot of control over your own footprint you should be able to kind of see how that goes um you know to kind of boil down into a
17:43
more simplified version you know my wife and I every morning uh we have a a small EV a Chevy bolt that
17:51
we um and then we also have like you know the the kid hauler the road trip mobile the Ford Escape right
17:59
every morning she and I have a conversation about okay who's driving more today what car are you taking
18:06
um and then you know that's just a little thing that we build into our life um and part of that is is just like is
18:11
building in climate as part of like what we think about for our
18:16
um you know as part of our decision Matrix and that's kind of the vision that I have moving forward on this is that like
18:22
there's a lot of things that balance into uh the decisions that you make
18:27
um and you know every individual has to kind of weigh those but like part of that should be climate and it should be
18:33
something that's very approachable and that they can use to uh to manage yeah I totally agree with you um I know
18:41
that one quote that I really like is Greta uh tunberg uh she said that once
18:47
you actually become aware of the climate crisis and about climate change then you
18:53
can never stop thinking about it and I think that that's true like definitely in my own life the example that you
19:00
Illustrated with your your it becomes a regular part these little switches
19:05
um and these considerations it's the same thing as I go to the grocery store I grab my reusable bags if I just went
19:11
to the store and I didn't plan for it and I don't have reusable bags then I just get what I can carry and I just
19:18
carry it because I don't want to have that extra plastic and it's these little switches that may be on the outset may
19:25
seem a little bit hard to manage and a little difficult but once you incorporate it into your life it happens
19:31
without even thinking about it 100 I mean even uh as it's fun you know
19:36
as the founder of acclimate so I watched uh employees in my company the longer that they work there
19:42
and you know I tell them about like climate you know as part of the onboarding and how uh you know these are
19:48
some of the consequences for it but I never have told them once about like you should be driving this car versus that car but it's fun for me just you know in
19:56
this low-key way of watching them start to make smarter decisions just because to your point and just like Miss
20:01
tunberg's Point once you start thinking about climbing you can't stop um and so that gets a little sticky
20:08
sometimes though because sometimes people make assumptions um and that's the other part of this is that like
20:14
um an important part of acclimate was is that we wanted to make this quantitative rather than like a qualitative yeah
20:21
and those those assumptions can kind of get you into trouble um so like two examples that we have like companies that have used our
20:28
software one company um was really they wanted to do something about environmental they had a
20:34
green team in their company they were doing a lot of work and they were really proud of the recycling program they put
20:40
together um and they thought that that was like they were really doing their part for for the climate
20:45
and uh you know when we got him into the accounting they were like oh maybe not like you know like they've been a lot of
20:52
a lot of effort in order to have relatively I mean there's a lot of other kind of co-benefits to recycling and boy
20:58
you know but they hadn't really actually made much impact on the climate um another company they were flying
21:05
people in from all over the world Argentina Hong Kong in order to attend these training events of theirs
21:11
um and it's like an essential part of their business like that they do this training in um they're actually in the sustainability
21:17
field so they train these people up to go be like local sustainability folks um and uh so they were like well there's
21:24
nothing we can do about climate because we have to fly these people in from all over the place um but then when they got down to their
21:30
climate accounting um they looked at it and they're like oh actually it turns out that you know Bob that drives 40
21:36
miles in his F-150s you know repeatedly is is the bigger issue uh because he's
21:41
driving a large truck as a certain amount of distance and so like all these assumptions that you make in your head
21:46
of like no this is the big thing and you're like nope actually you know the the big things this thing over here and so giving people the tools
21:54
to make it quantitative like to actually look at it say no this is the thing that we need to work on this is what I uh
22:00
um you know that's that's been important to what we do I think that's a really great point I
22:05
mean that's a big issue when it comes to climate action is that like I know that this isn't specifically with carbon
22:12
accounting but you look at the whole plastic straw movement and how now
22:17
everyone has reusable straws but is that really making a huge difference in terms
22:23
of our plastic bags being limited are people driving less are people using public transportation more there's these
22:30
bigger beasts that sometimes people make assumptions about or like your example with Recycling and I think that that's a
22:36
really great point that you're taking these assumptions and you're helping businesses that may think oh we're doing
22:42
great because we recycle or we're doing great because maybe they transition an
22:47
event to Virtual or something like that but you don't see the true picture unless you get it laid out right in
22:53
front of you yeah exactly yeah I think that that's really great um
22:59
and I know you kind of touch on this a little bit but how would you say that acclimate shows that sustainability is
23:06
truly approachable you know I would say that part of it's
23:13
just the business model right make it affordable you don't require a whole lot of knowledge and it shouldn't take you very much time uh is part of it but like
23:21
part of it is like where we go from here um with that coming which is that we're not just stopping in like offset so
23:27
we're not just stopping at Carbon accounting we actually want to be able to like um help you figure things out on your
23:33
own somebody to have our software make some recommendations for you we want to be able to sell you Solutions Beyond
23:40
just offsets like offsets I think are a very important part of the mix moving forward but like they're certainly not a
23:46
replacement for actually reducing your emissions and so how can we take the data that you
23:51
provide us and give you some some tailored solutions that make more sense to your company um so
23:57
the example I like to give is like perhaps your company owns its own facility and we can help you to identify
24:03
uh rooftop solar installer to eliminate your scope to emissions and or maybe
24:09
connect you up with the financing uh you know necessary to do that uh maybe you don't own your own facility and we can
24:15
connect you up with the community solar garden you know like there's a lot of ways that like we just see this as like okay Step One
24:21
is kind of getting this data and helping you to identify where this is and then step two is actually steering you into
24:27
solutions that make this just like really easy so you just look at and you go yep that's the thing that I need here's the
24:34
solution I can go Price shopping elsewhere if I want to um but um you know you know what the idea here
24:41
is that you know it'll be uh it'll be kind of a One-Stop shop for you that sounds great
24:47
um so are you saying then that there's an element of almost Consulting where
24:53
you're putting you're connecting people with these Solutions or what does that look like
24:59
there's a potential for Consulting I think there you know um software is good at certain things uh
25:05
which is is like you know repeating you know uh you know repetitive or repetitive tasks you know
25:12
automating that like that's a that's what software is really good at AI is getting better um and being able
25:18
to make certain recommendations but there's nothing that really totally replaces um
25:23
you know a knowledge expert in the in the field um and so uh if people want to have that you know
25:32
a lot of times what those experts would do uh before acclimate was is that they would do the accounting themselves and
25:38
then they would try to do the report on top of that but most of the expense was in doing those highly repetitive tasks
25:43
around the accounting right so if we can automate that and then hand that off to a consultant if that makes sense that's
25:49
I think is is a real pathway for us yeah so yeah
25:55
yeah that sounds interesting um well I just have one last question
26:00
for you and I know this is kind of more of like a big picture because I know that often times when people work in the
26:07
sustainability field and you're dealing with things such as the climate crisis and seeing the news every day it can
26:14
kind of bring you down but what would you say that either you've seen or something
26:19
through your work what gives you hope with what you do and for the future
26:25
yeah absolutely um so when I first started in climate uh
26:30
was in 2014 uh that was not only like the not the right time to get in the
26:35
carbon markets uh like it was the worst time you know people their trust in carbon
26:41
markets was not only low it was getting worse every day and so
26:47
um about 2017 it kind of bottomed out and it started climb it back up
26:54
um and that has been just like really invigorating the amount of intelligent people that are getting
27:00
you know that are moving to the space the kind of capital that's getting uh connected to it and that's starting to reflect actually
27:06
in like some of the scientific projections about like where our future emissions you know and what the global
27:12
warming is you know eight you know RCP 8.5 like over four
27:18
degrees of warming was was still very much on the table when I first started talking about it um you know they're looking now at 2.2
27:25
to 2.7 that's still entirely too warm that's a lot of problems you know but like
27:31
things are happening like that's really really exciting and I think the thing that drives that the most is
27:37
um is a demographic shift um but I'm kind of a between Gen X and
27:43
Millennials I kind of align a little bit more with Millennials but um but the oldest Millennials now are in their 40s
27:52
um gen Z is even more motivated than Millennials on climate um that generation I like to refer to
27:58
him as the climate generation uh two-thirds of them would take a pay cut to work at a climate Alignment
28:03
Company like that's like a really powerful thing and that's driving a whole host of behaviors from top to
28:09
bottom you know and credit tunberg is like a great example but like she's one of literally millions of of people of that
28:16
generation that are voting with their pocketbooks and with her feet on what to do
28:22
and uh you know when I first started in this
28:28
space everybody was like well you know this thing has is kind of a bubble it happened the last time you know in 2008
28:35
2010 where well cleantech is going to be a thing and then it went away nobody's
28:40
talking about that now and the reason is is because there's just this absolute Grand Groundswell of this climate
28:47
generation that's going to refuse to let anything like that happen ever again um and I think that's just like
28:54
we've got a lot of challenges in front of us but I'm also like super motivated by those people uh kind of you know
29:00
committing to that yeah I that's a great answer and I feel the same way as you
29:06
um I'm kind of in between Millennial and gen Z and my younger sister her and her
29:11
classmates like when she was in high school they did a March for science in their high school and um I just think
29:18
it's really inspiring and empowering to see and that's honestly that your answer is the same thing that gives me hope it
29:24
is seeing that they really care and they're walking the walk and I feel like it's not just going to be allowed to
29:30
just Fall Away anymore yeah 100 where there's no going back
29:36
um and that's a good thing yeah it is um well do you have any last
29:42
anything you would like to add or any last words that you'd like to say
29:48
other than the fact that we're a partner with the green Business Bureau and I'm really proud of that partnership um and
29:54
I uh thank you for the opportunity to come and speak today yeah thank you so much for joining and
30:00
to those of you listening uh check out acclimate they do great work and as Mike
30:05
mentioned their partners with the green business bureaus so as part of your green Business Bureau membership you
30:11
would also get access to that Clement well thank you so much Mike have a good day you too take care
30:23
foreign [Music]
English (auto-generated)