Silvan Andermatt - Unlocking the Potential of Nature Backed Finance with Blockchain

Thank you for having me here today. Uh Steve Clutch. So one of the biggest problems these days is that we have greenwashing. So many of the claims are little bogus or misleading and some executives allegedly even acknowledge that they actually just want to mislead the audience. And how can we solve that or kind of how which role does technology may play in ESG?

So environmental, social and governance impacts. So we can see that it is an intersection which is roughly here where we can use DT specifically part of like the provenence part that we can integrate information into the token. Um and in that regard we can then have like supporting ESG aims and goals objectives by just using what is at our heart which is like blockchain AI and a couple of other technologies in that direction. Um effectively kind of on the voluntary and uh mandatory carbon markets. Um this is very useful kind of to have an intersection with DT.

All right. I want to present you like two projects. The one is car carrot foundation which is mainly a recycling to earn way. So it's uh all about circular economy and the other one is greener tokens where they are preserving an area within the Amazon forest. Let's start with current first.

Um it's a recycling approach. So it's a digital measurement and uh kind of recording and verification way. So you want to have it all on chain. It's a network approach and we want to have an inclusive circular economy. This is why kind of if we look at the planet today, we see there's a lot of inefficiencies.

We see on the one hand side that kind of most of the things we produce tend to land in a sort of a landfill. So kind of in a deposit or being just kind of thrown away somewhere and not recycled. And that's one of the biggest problems because actually resource consumption will go up like three times in near future. Um we also will have like a lot of uh waste which is generated out of that and ultimately we have then greenhouse gas emissions which will lead to a pretty substantial increase in temperature global warming as we experience it these days. So what can we do about that?

Um, we could like reuse about 90% of the resources that we are currently just dumping or wasting by doing some recycling and with that we could preserve our natural resources and even help ourselves on the way. What we could also do is actually we could employ a lot of people along the way and generate jobs. So this is pretty important as well kind of if we double our current secularity rate in the sense that we would double the amount of recycled resources we would have we would have a very significant impact we could address like 85% of the greenhouse gas emissions and just to put that into comparison by having all the Paris two kind of all the Paris uh treaty uh measures implemented we could not address a fraction of this year. So really kind of increasing uh recycling will be one of the best ways to solve the issues we have and since circular economy is the answer we can really not do it alone. So kind of we need to have a community approach on that.

So we need to look into the people that generate the waste, those that actually handle waste and everyone which is producing the rules around it, the organizations and basically everyone in society has a stake on that. So we shall reuse and recycle the what the polluters do and make a network together and I want to explain you how we do that. So we have a real world activity which means we have a kind of the garbage that is put out of your doors that is being collected. We record that with some APIs in the moment where it reaches the treatment facility and kind of we can tap in onto like the ERP um the enterprise resource u management systems like SAP or so on. Then we can give it like a mess ID in the sense that we would just identify okay which um garbage bag has been uh deposited in front of which door and what travel route has it gone through where did it arrive and was the treatment facility like a professional uh waste composting facility.

By doing so we can certify that there has been some actual recycling. We can then measure what is the environmental gain as compared to having like just a landfill and then we can issue and sell kind of carbon credits out of that difference and we can also um register everything on chain because we can issue them in a tokenized way. So that's a part of the governance and if it look like this is kind of how it looks like on our on the platform of carrot and to just go through kind of the the process once again you have like a waste generator which is basically us or kind of the households then you have like a bin custodian and the hauler which is um basically the guys that pick it up and bring it to the tra treat treatment facility. you have a processor recycler and all along that it's basically just the the mess. So 1 kilo of organic waste all along the way where it has been.

It's just a journey basically in the real world. And that's one layer and we can add the other layer on top of that which then brings us to kind of have a circular economy because in the end when we sell the token we can credit back by smart contract pretty easily actually to everyone that has contributed a part of the proceeds. And by doing that, you start earning money by doing recycling. And we believe that kind of instead of having a stick and tried to punish people that don't do recycling, you better incentivize them by giving them more money. And actually one of the founders of Carrot Foundation, he went around kind of for one year in Brazil and kind of in collected the organic waste in the restaurants and increased basically the recycling part of quota of that from almost zero to something over 90% because they started earning money with it and kind of that started making sense for them.

So overall kind of it's always good to incentivize people instead of trying to punish them just yeah so um of course kind of you want to avoid greenwashing so you want to certify the whole process if buro veritas and a couple of people that kind of are are credited and really check these things. Um yeah, and if we kind of look at how carbon credits are structured these day, you see that the are not really trusted or kind of not trustworthy even because sometimes they're certified like three times the same thing or kind of you yeah it it's pretty expensive and it's not really clear what's beyond it. But in this case you can really look on the blockchain and can you can verify okay what was certified why and kind of what was the journey and everything. So kind of blockchain gives you that layer of transparency that you were looking for and it's of course scalable and pretty inexpensive and we see ourselves at the center of a bigger system and the network. So really believe in this community approach.

One of the first things is kind of uh is bold. So we try to sell kind of this um carbon credits which are recycling credits because we recycle and kind of on that you have the environmental gains. You can click and read kind of uh afterwards if you're interested. And our mission here for Carrot Foundation is to kind of increase by 90% uh within 15 years the global recycling rate. That will be amazing and hopefully even save a little bit our planet.

Sorry. Feel free to take a picture. Yeah. And what I would also like to talk about is about greener tokens which is a second project. Um greener tokens they have the objective of preserving a part of the Amazon forest.

So Brazil overall is one of the biggest emitter of kind of pollution and it has also a very big amount of forest. When we look at kind of uh the greenhouse gas emitters, we see that Brazil is like number five in the world. So they are very high. And if we look into the specific sectors where those greenhouse gas emissions happen like forest is astonishingly number one. So the problem is that actually that kind of they don't protect the forest enough and so kind of you generate those emissions.

It also means on the other side that kind of if you would protect the forest or you do reforestation and so on, you have an immense potential on doing good. And Brazil is on the interesting side very nice um well positioned to have this nature-based uh solutions NBS because um it's rather cheap kind of you have rather cheap labor and uh kind of surface so that you can do pretty easily actually reforest or kind of preserve forest and then do good in that direction. So the question is maybe as a kind of why would you do that or kind of is there any market for that and the market is there it's kind of about one trillion in the in the regards of carbon credits in the coming years and so on and kind of we still need a solution for greenhouse gas emissions so better start working a bit on every front and yeah Brazil is could actually instead of being just one of the biggest poller become the carbon sink and kind of part of very leading the solution for issues that we have at the moment. So why invest kind of leave that up to you but I mean you will see that um carbon emissions and basically kind of all sort of emissions are starting to become even more kind of subject of getting a a price tag on it. So people and companies especially get aware of it that this has a cost and that this needs to be somehow priced in.

This is why also investment in those assets is becoming more interesting. We see roughly kind of an increase of 30% per year um steadily over the years. And what I want to show you is actually how it is done in this case. So we see oh kind of yeah before we go into my case just kind of briefly we see a lot of different topics or kind of areas where you can have like this carbon credits derived from. So you have like this waste management as you've little seen before, agriculture, renewable energies, solar panels and kind of tons of different areas where it comes from.

Um and I mean some you like more and some you like less but what we see is that regenerative finance is becoming a big trend and actually will be let's say using blockchain and other technologies to do something good. Um what we can see is okay we use blockchain in this case we also use like soulbound tokens probably you're all techsavvy and you know that soulbound tokens are just non-ransferable tokens once they're deployed and we have like CO2 credits what we do is here we protect the forest and the biodiversity in that area and then there has been like a university which will then come in and really kind of manually they they just stake out an area of the forest about thousand square meters and then they start counting the plants in there like the trees, plants and everything. they do like soil probing. So like on a vertical scale but also then on a horizontal at different depths and then they will um esicate everything and then they will measure what actually is in there and part of that methodology has been published in the science magazine nature and what it addresses is actually that we have a lot of different elements that come together. So we have local communities living in that areas.

We're talking about 145,000 square actors kind of that are protected at the moment. Um and they also have like own firefighters there that really try to extinguish fires if something happens. The communities are looking at it so that kind of there is no um yeah no people coming in and doing harm to the forest. So it's everyone is is paid and incentivized by actually keeping that ecosystem alive and then working. Uh I want to show you the journey.

So kind of you start with a due diligence application of what actually the area of the credit is. So we have this area staked out is 145,000 hectares of Amazon forest that is protected since many years. we have um kind of we checked then what is the methodology which I told you is about the university that's been published in the best basically um scientific magazine and every month there's a satellite imaging mhm done uh from the top and then audited by one of the big four so KPMG and that they look that actually there's a difference between what you have what happens s within that square and what happens outside of it. So you actually see that the kind of there was this preservation effort done every month. Um now we'll skip that and just go to the last part kind of.

So we see that uh when the token actually kind of the token that you can buy then has all the information in there. So you know kind of okay from which year the carbon emission was was uh saved that is in there from which area and so on. Um of course we have reputable partners that just kind of show you the whole journey. So kind of it's like a 10step program um from kind of the beginning where you have the forest and the the selection and have like the the satellite imaging done. Then you have like the audits by the big fours.

We have like an audit that's from a financial perspective from another big four in the end of the year and then um in the end you issue those uh you issue those soulbound tokens which come into the wallet of the buyers. Yeah. And of course you can compensate either like actual uh emissions or you can start buying carbon credits for investment purpose for like future uh offsetting and you can do good in in many perspectives. Yeah. From environmental, social and also governance perspective and the local communities are sustained with that because they get a part of the proceeds.

um and even kind of where during this uh recent floodings that happened in Brazil kind of so they conveyed the part of their profits um to kind of really just build up schools in the impacted areas that's a part of the communities that are supported there locally and yeah maybe one of the part is that even Formula 1 which I'm not a great supporter but nevertheless I mean kind of um the carbon offsetting of the Formula 1 Grand Prince Sa Paulo was one of the uh one of the events that they did. So overall try to be greener and thank you for your attention. I think we are just on time.

Awesome. Thank you so much for that. Cheers.

#be greener everyone. Now we've got a few more minutes left for some questions. One is already here on the board. Um how does carrot network generate revenue from the approach? Yeah.

So by selling the carbon credit in the end, the tokenized carbon credit, the proceeds will be split on the smart contract according to a fixed uh key to the waste generator and the holder and everyone that contributed along the supply chain until it actually have been um recycled and the current foundation which is kind of operating the whole thing becomes also part of the proceeds. So this is how it can actually survive.

Awesome. Um, are you guys looking to focus on any other geographies around the world after Brazil?

Yeah, we're looking into that. I mean, first you want to start with Brazil u because of a couple of reasons I explained and then afterwards I mean we open to look into other countries as well. Yeah, I mean the idea is to develop something which is scalable and basically can have a global impact.

Okay, fantastic. Are there any other questions from the crowd? in that. Oh, is that one there? Yeah.

Uh, what are some of your main challenges as a business? Some of the main challenges is sure that um even though I think everyone agrees that we want to be more greener and kind of offset our emissions, you would actually need to do something which means you would need to buy them or kind of find um yeah, find institutionals to want to buy it. And those are rather newer methodologies. So kind of there you need to find customers that actually want to jump the ship or kind of really try it. Um because so far many funds or investment funds they just focus on whatever was like standard so far.

They may acknowledge actually that this was not the best solution but as long as it is s the solution which is used by industry then that's what they want to go for. So they wouldn't even bother to kind of look into other solutions even though they would be better. So that's maybe one of the biggest issues yet is kind of you need to find those bareheading partners.

Awesome. Um are you looking ever potentially in the next few years to set up any kind of carbon credit projects here in Romania, do you think or was that a bit farfetched still?

Uh you have a lot of nice mountains and forest kind of that could be an option actually. Um we have not yet kind of contemplated it to for business purpose but you never know.

Okay. Transian carbon credits coming soon.

Would be amazing.

Nice. Any other questions anyone?

Okay. Well, thank you very much then. Let's put our hands together one last time. Cheers.