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Mike shares his extensive knowledge on how businesses can reduce their carbon emissions and offset their remaining footprint without greenwashing. He explains the concept of scope emissions, the impact of climate change, and the ultimate solution for the climate crisis.
0:00
Mike describes himself as a stubborn
0:02
Optimist and a former fighter pilot turn
0:05
serial sustainability entrepreneur who
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built two award-winning companies in the
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Clement space so today's going to be
0:14
really interesting about carbon carbon
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accounting uh carbon neutral and what
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this means for business owners it's
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really on The Cutting Edge if you're
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thinking about electrical vehicles
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um ESG and all of that so uh welcome
0:28
Mike to the show welcome Hey Chris
0:30
thanks for having me yeah uh I'm really
0:32
happy to have you on um really you know
0:34
most people don't really understand you
0:36
know Carbon accounting but they can
0:39
understand that you know we're facing
0:41
tornadoes and hurricanes and floods and
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you know climate change so uh tell us
0:47
more about yourself and how you got
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started and we'll go from there all
0:50
right uh so the name is Mike Smith as
0:53
you've already mentioned I'm the CEO of
0:55
a company called acclimate I grew up in
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Boise Idaho and when I was a kid I
0:59
experienced a wildfire
1:00
uh that put up a mushroom cloud it was
1:02
just really memorable to me as a child
1:03
and everybody told me to grow back and
1:05
so I said what do I know great I'm a kid
1:07
uh I joined the Navy saw the world I was
1:09
an F-18 pilot in the US Navy for about
1:11
12 and a half years active duty which
1:12
was just a real
1:14
real fun way to spend your 20s and uh in
1:17
2010 I got married in 2011 I brought my
1:19
wife to Idaho to kind of show where I'd
1:20
grown up
1:21
and we went by the scar of that fire and
1:23
it wasn't coming back and it just got
1:25
under my skin to the point where I
1:27
decided to leave what a lot of people
1:28
kind of considered to be a dream career
1:30
to
1:31
get out and go find meeting with my life
1:33
um and so I left the Navy and about as
1:36
soon as I could about 2014.
1:39
and I started my first company called
1:41
renew West which was about leveraging
1:43
carbon markets for post fire
1:44
reforestation uh
1:47
kind of a tough time to get into a
1:48
carbon Market company but I felt very
1:49
committed to the fundamentals and
1:51
developed some expertise I was an
1:53
advisor to the US climate Alliance for
1:55
example
1:56
and they claim to fame at Renew West
1:58
uh was the the largest carbon focused
2:01
reforestation project in U.S history we
2:03
planted two million Trees in Northern
2:05
California and I'm just as as proud as
2:07
can be of that the US is doing great
2:09
it's Off to the Races but uh
2:12
I started a second company initially
2:14
internal to renew West and then spun it
2:16
out in 2021 uh call to acclimate and
2:19
acclimate is climate management software
2:21
for small businesses
2:22
uh we help them small to medium-sized
2:25
businesses figure out what their
2:26
footprint is reduce it when it makes
2:27
where it makes sense offset it when it
2:29
does make sense for that and then report
2:31
that work to the people that care about
2:34
it employees investors
2:36
uh and other stakeholders and so uh
2:40
Acme's been doing great we uh we've gone
2:42
through
2:43
a well-regarded business accelerator
2:45
called techstars and now we're out you
2:47
know helping people with their with
2:48
their problems so that's a bit of my
2:50
background
2:51
uh most of my hobbies beyond that just
2:53
involve uh being a dad so uh Happy uh
2:56
happily married father of two uh two
2:58
great kids and my wife and I really
3:00
enjoy spending time with them yeah it's
3:03
a very interesting story uh you know I
3:05
know especially after the covid pandemic
3:08
a lot of countries started really
3:10
focusing on climate change and so tell
3:13
us more what is for example what is
3:15
carbonate counting and why is it so
3:17
important for businesses sure
3:19
um so everybody has an impact on the uh
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the environment and
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we tend to think that we know what our
3:28
our major factors are but we generally
3:30
make uh poor guesses
3:32
and so
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um you know I'm a data guy I was trained
3:36
as an engineer and so providing people
3:38
the data in an approachable and easy way
3:40
is is what uh carbon accounting is
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we measure where your footprint is in a
3:46
way without you having to become an
3:48
expert
3:49
um and so that uncovers some pretty
3:51
interesting things you know you'll find
3:53
people that like uh some of our
3:54
customers have like really wanted to
3:56
like lean into sustainability and so
3:57
they have like whole green teams of
3:59
employees that are
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uh like really focused on a recycling
4:02
program and they think that that's you
4:04
know how they're going to really make an
4:05
impact on the climate and it turns out
4:07
that it's uh it may be a lot of flying
4:09
associated with one of their Executives
4:10
or we have another company that
4:13
essential to their business models they
4:14
fly people in from International
4:16
locations to do it like on-site training
4:18
and they thought there was like just
4:20
nothing they could do about their
4:21
footprint and they came to realize that
4:23
actually a big part of like what they
4:25
were doing on the climate was associated
4:27
with a couple other employees that were
4:28
commuting via pickup 40 miles each
4:30
Direction and um so there's a lot of
4:32
assumptions that we make when we don't
4:33
like you know lean into the data and so
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how do we make the data accessible and
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approachable is what carbon accounting
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is all about
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uh especially for the small business
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small to medium-sized business owner
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yeah um and then why your business
4:45
should care is
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um maybe it's part of your ethos but
4:50
beyond uh you know why you personally
4:52
should care
4:53
um is it's good for your business
4:54
generally reducing carbon emissions also
4:57
indicates uh where you have business
4:59
inefficiencies
5:00
um you're probably spending too much on
5:02
your electric bill for example or are
5:04
you maybe having somebody that's flying
5:05
just a little too much and you can save
5:06
some money that way but even Beyond kind
5:08
of the bottom line stuff
5:10
um you're going to have to here
5:12
um increasingly if you want to sell to
5:14
The Climate generation Millennials and
5:16
gen Z that really care about this stuff
5:17
or employ any of them they're gonna
5:20
they're starting to demand this kind of
5:21
work and it's a way for you to start to
5:23
really break out from your competitors
5:25
um in that regard
5:27
um if you are part of a supply chain for
5:29
a large public company in any way shape
5:31
or form that reporting is going to be
5:32
required if you're raising investment
5:34
increasingly investors are going to
5:36
require this accounting um it's it's
5:39
just part of the the business and so we
5:40
like to think of acclimators like Get on
5:42
get on the bus or get run over like it's
5:44
it's you might as well get ahead of the
5:46
trend yeah uh and what's what's
5:49
interesting is that there's so much um
5:51
misinformation out there and especially
5:55
um because I know
5:57
for a long time the um the oil companies
6:00
were saying that um climate change
6:02
global warming is you know it's a fad
6:05
just like the just like the tobacco
6:06
companies back then said smoking doesn't
6:08
cause cancer and then then Al Gore came
6:12
out with this movie which you know
6:14
really explodes the truth um so uh what
6:18
what is uh in terms of uh politics and
6:21
policy what what is being done on that
6:25
front yeah it's funny that um and it's
6:27
great that as a physician you go to the
6:29
cigarettes cause cancer I use that all
6:31
the time as my kind of you know we all
6:33
grew up we knew it was all junk science
6:35
there was a bunch of people that just
6:36
kind of believed the lies and were
6:37
willing to kind of go with it because
6:38
they you know were resistant to change
6:41
and then we had a whole generation of
6:43
people that changed and got tired of the
6:45
grandmother dying of cancer for dumb
6:47
reasons
6:48
and they were just got sick of the lies
6:50
right and so you're seeing a lot of that
6:52
in the climate space too right which is
6:54
is that there's this Rising demographic
6:57
shift of people that have just grown up
7:00
their entire lives knowing about climate
7:01
change and just getting sick of a lies
7:04
and that's having some really profound
7:06
effects and so you know when I first
7:08
started at Renew West like climate was
7:10
like an eighth or ninth or maybe tenth
7:12
level issue for people like it was like
7:13
something they kind of cared about but
7:15
if they didn't vote like they had like
7:16
priority issues you have climate voters
7:19
now uh people that like this is their
7:21
number one priority and it's not a small
7:23
percentage of the population and so
7:24
that's changing one of the places like
7:26
politically that you see changes uh like
7:28
the Pew research uh did a survey of
7:30
people around climate and in our highly
7:34
you know bifurcated political
7:36
environment uh the one place where
7:38
Republicans and Democrats start to agree
7:40
is amongst younger Republicans and
7:41
Democrats care about calling both care
7:43
about climate
7:44
and it's the difference between younger
7:45
and older Republicans
7:47
um and you're starting to see that shift
7:48
how they want to engage with it's a
7:50
little bit different but they're not
7:52
denying its existence any longer and so
7:54
just like the smoking causes cancer
7:56
thing in the span of of a couple of
7:58
years things have rapidly shifted you
8:01
know when I was inspired me when I was a
8:03
young uh person like you know you could
8:06
still smoke in restaurants and they were
8:07
still occasionally an airplane you could
8:09
smoke in and then you know it went to
8:11
the point where you couldn't even smoke
8:12
outside of bars in about in a 10-year
8:14
period like not even near the door you
8:16
had to leave the bar and go away to have
8:19
a cigarette
8:20
and that's a that's a good thing you
8:22
know and but like I think it shows how
8:24
rapidly these things can change
8:27
um and about how important it is to like
8:28
I said to get on that bus now before it
8:30
get before you run over it by it later
8:32
and then uh what does the average person
8:35
need to know about carbon offset yeah so
8:38
part of the reason I started this was I
8:41
felt like that we had made a lot of
8:43
carbon accounting and carbon offsetting
8:44
really inapproachable to the layperson
8:47
um that it was like only something that
8:48
was built for like Fortune 500 like
8:50
sustainability officers and that was it
8:53
just didn't sit right with me that was
8:54
that's why you built acclimate and so
8:57
the first thing that you need to know
8:59
about offsets is that they're not a
9:00
substitute for actually doing the work
9:02
on emissions reductions like the first
9:04
thing that you need to do is is do the
9:06
accounting figure out what your Baseline
9:07
is and start to identify the places
9:08
where you can reduce your footprint
9:10
that's the way that you demonstrate like
9:11
meaningful Improvement and that's the
9:13
what your the people that are pressuring
9:15
creating the pressures for you to do
9:17
this work they're going to expect of you
9:19
the second thing about offsets is is
9:21
that
9:22
um generally you'll probably want to buy
9:24
from the big four Registries American
9:25
carbon register uh American carbon
9:27
registry climate action Reserve uh gold
9:31
standard or Vera sometimes known as VCS
9:34
and those have independent auditing
9:37
processes they have processes for for
9:39
example if you buy from a forestry
9:41
project
9:42
they make the forestry project
9:43
overproduce so in case there's a fire
9:45
there's a kind of reserve of additional
9:47
offsets that are you know in the system
9:48
and just buying from those Registries is
9:52
uh is generally a good thing and then uh
9:55
you know think about like how because a
9:58
lot a lot of the reasons that you buy
9:59
offsets is is to tie into kind of
10:01
generally either part of your ethos or
10:03
marketing and branding and think about
10:05
who your audience is
10:06
right and so if you're buying offsets
10:08
for you know to to help with like your
10:11
employees
10:12
um because if you're trying to you know
10:13
retain you know talented young adults
10:15
they probably want something close close
10:18
by or that has like a good social story
10:20
and so you should know who you're you're
10:21
going to
10:23
if you're uh doing it for like an
10:26
environmental justice component you
10:27
might want to think about like okay what
10:29
are the what are my priorities there
10:30
part of our software actually helps to
10:32
provide that we have like a survey it
10:34
will help you to kind of filter out
10:35
which which projects make the most sense
10:37
for you
10:38
and that's that's pretty much it and
10:39
then the last part I would say is just
10:40
buy from somebody that you trust uh one
10:42
of the things we're proud about
10:44
um is having like a leading selection of
10:46
offsets available you're going to have a
10:47
hard time finding a greater selection of
10:50
offset projects available anywhere on
10:51
the web yeah
10:53
um and for businesses interested in um
10:56
purchasing uh an offset how do they know
11:00
what their purchasing isn't fake
11:03
that's part of the trust component uh
11:05
make if you're dealing with somebody
11:06
that's reputable and that has
11:08
connections to a registry and they
11:10
should have integrated accounting
11:12
um that will help you out a lot you
11:14
can't buy from the Registries directly
11:16
um generally and so you have to go
11:17
through some uh some third party uh
11:20
trusted brand names is is the place to
11:22
start
11:23
um so that's where you want to go unless
11:25
you know this is uh you know these um
11:29
it's uh quite interesting because
11:32
um especially in terms of climate change
11:36
um it seems bad right now but how bad is
11:38
it really and how bad can it get if
11:40
governments don't do anything so to get
11:42
a little technical so the the un uh body
11:45
that's in Reverse responsible for kind
11:47
of collecting all the science and
11:49
consolidating it is known as ipcc and
11:52
they created these uh they called them
11:53
RCP Pathways relative concentration
11:55
Pathways based upon a variety of factors
11:59
population growth the ability of uh us
12:03
to decarbonize energy sources industrial
12:06
production Etc in some of the worst
12:08
scenarios like an RCP 8.5 scenario there
12:11
are huge chunks of India that like
12:13
physically become unlivable
12:16
like there's something known as a
12:19
um too hot to live like a 35 degree C
12:21
wet bulb temperature which is where the
12:24
exterior temperature like it doesn't
12:26
matter like how good you are sweating or
12:28
sitting in the shade or having a fan or
12:30
hydrated uh perspiration actually only
12:33
warms you up
12:34
the humidity the the dew points that
12:36
high and so that's there's some pretty
12:39
catastrophic stuff when that happens
12:40
you're starting to talk about like huge
12:43
displacements of people both internally
12:45
and then to move you know across borders
12:47
you have like destabilization of
12:49
National Security like it gets
12:50
catastrophic cataclysmic really is more
12:52
the word thankfully uh in the last five
12:55
to six years the world started to bend
12:57
that curve
12:58
um and that's that's really good RCP 8.5
13:00
is not the most likely scenario that's
13:02
like a four to five degree C warming
13:04
scenario
13:05
um the more likely scenario right now is
13:07
about three degrees of warming three
13:10
degrees of warming still has a lot of
13:11
problems you're going to see a lot of
13:13
environmental collapse you'll see like
13:15
for example like
13:18
most of Europe's agricultural system
13:20
right now wouldn't work uh they would
13:22
have to like build out a significant
13:24
irrigation structures and things along
13:25
those lines
13:27
um you'd have massive die off of fish in
13:29
like the Black Sea the western United
13:31
States becomes essentially uh informable
13:34
um and so you're going to have like huge
13:36
shifts in like agricultural production
13:37
so that's a really bad scenario
13:40
um the goal uh since the Paris climate
13:42
Accords has been that we want to Target
13:44
1.5 C of total warming and right now
13:47
we're at 1.1 so we don't have a whole
13:49
lot left and they the absolute they said
13:51
the worst case scenario is about 2C
13:54
so we still have a lot to go 3C is is is
13:58
is way warmer than we can accept 2C is
14:00
really warmer than we should except in
14:02
one and a half C is as bad as as good as
14:04
we could absolutely hope for
14:07
um and so there's there's a lot of room
14:08
there one and a half C still has
14:10
problems
14:12
um we're still going to start you know
14:13
see some some real strain on a lot of
14:15
different systems but uh but things will
14:18
probably work out okay yeah another uh
14:22
another question that I get from the
14:24
audience is um what is what is the term
14:27
green washing and what does it mean so
14:30
it's an important question for your
14:31
audience to to ask themselves so green
14:33
washing is the concept of uh trying to
14:37
display that you're claiming
14:39
sustainability when not really being
14:40
sustainable you
14:42
you know you brag about how you're using
14:45
renewable energy but you're not really
14:47
sourcing renewable energy just happens
14:48
to be the utility company that's doing
14:50
that anyways or uh you know oh we have a
14:54
you know recycling program that you know
14:56
we participate in but meanwhile like
14:58
sending a ton of waste to landfill like
15:00
there's a lot of things there
15:02
um and so it's important because this
15:04
younger generation of climate generation
15:05
completely intolerant of greenwashing
15:08
they have like they're very much and
15:11
they they want uh verifiability they
15:14
want to know that you're doing what you
15:15
say you're doing and we've built a
15:17
little bit of that into our software
15:18
which is we actually have like we
15:20
provide you with your own sustainability
15:21
page that you can share to show that
15:23
you're doing this work they want a
15:25
demonstration of of action and it's not
15:28
just enough to make a claim you've got a
15:30
show and
15:32
um the next question is for example
15:34
green washing for when once a business
15:37
becomes carbon neutral what is the best
15:39
way to Market this to its stakeholders
15:41
without appearing to be green one yeah
15:44
that's a you know part of that I think
15:46
starts with leadership which is that a
15:48
leadership actually talks you know makes
15:50
a public statement about like what their
15:52
values are why they're doing this
15:54
um and it's one of those you know prove
15:57
it scenarios
15:58
so when we looked at the the system out
16:01
there for companies that wanted like
16:03
reduce their footprint and or and or buy
16:04
offsets
16:06
um it was very Reliant upon them to make
16:08
the claim and to back it up
16:11
um they had to like do their own
16:12
accounting
16:13
you know there were very few like
16:16
you know public accounting structures
16:18
available to them and then if they did
16:19
the accounting then they had to go out
16:20
and buy offsets and then usually they'd
16:22
have to write up like a press release or
16:24
a blog post or something along those
16:26
lines and it was just really like
16:28
cumbersome right and if you're a small
16:30
to medium-sized business owner you don't
16:31
have time for all that stuff like you
16:33
want to do the right thing and you it
16:35
should be easy and so one of the things
16:37
that we built in there was is that we
16:38
wanted to have it all integrated in one
16:40
piece of software where you do the
16:42
accounting you can buy the offsets you
16:44
get a a certification from our company
16:46
that you can put on your website it's a
16:48
widget that ties back to ours and it
16:50
actually helps to demonstrate like where
16:52
you've bought the offsets from how long
16:54
you've been doing it it demonstrates all
16:56
of that stuff and so with you know
16:58
pretty quickly you can to you can do
17:00
that demonstration you have that that
17:02
link that's you can place right on your
17:04
website and anybody that has questions
17:06
they click on it and it shows you know
17:08
what's your current accounting yeah
17:10
obviously we have to be you know careful
17:12
of of business confidentiality and a
17:14
couple other you know important things
17:15
around you know customer privacy but
17:18
there is you know some stuff that we can
17:19
display very quickly and immediately and
17:21
make the make the claim real very
17:25
fascinating discussion I learned so much
17:26
about
17:27
um you know this area and uh it has so
17:30
much because um Elon Musk said you know
17:33
one of the biggest crises that we face
17:36
is um climate change and you know we
17:39
start to see what's happening and um the
17:41
other is artificial intelligence you
17:44
know we're starting to see that as well
17:45
so
17:46
um how can people
17:48
um follow you contact you ask you
17:50
questions visit your website Etc yeah
17:53
absolutely
17:54
um so there's again the name is Mike
17:55
Smith you can find me on LinkedIn uh you
17:58
can search by company on LinkedIn as
17:59
well or on the web company's name is
18:02
Ackley a-c-l-y-m-a-t-e
18:05
um you can go to acclimate.com and
18:07
contact us there so those are some of
18:10
the primary points for uh for being able
18:11
to kind of follow along with me I do
18:13
post to LinkedIn as well if you want to
18:15
follow me as an individual yeah
18:17
you can email us at hello acclimate.com
18:20
h-e-l-l-o at acclimate.com
18:23
um and then if you'd like to email me
18:26
personally it's just Mike at
18:27
acclimate.com and I'd love to to help
18:29
you in any way I can yeah and for all
18:31
the listeners out there uh thank Mike
18:33
for a fantastic discussion all of his
18:36
resources will be in the links and show
18:38
notes
18:39
um be sure to follow him on Facebook
18:41
LinkedIn Instagram Twitter as well as
18:44
his um website acclimate.com and with
18:47
that thanks so much and it was a great
18:49
discussion thanks for having me