Are Generic Emission Factors Over?

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Transcript

Saif Hameed [00:00:00]:

The product carbon footprint world will very, very rapidly outpace the emissions factor world. Let's take a good example. There's basically one beef emissions factor that pretty much every American beef company is using. And that beef emissions factor is like super general beef is a high emissions material. There's a lot of variations in beef actually like beef yield, beef can vary quite a bit, geography to geography, breed to breed, practise to practise as well, I imagine. And, and so it doesn't make sense that there should be one factor. Almost certainly we're going to have hundreds of PCFs related to beef being generated and exchanged over the next couple of years, like next one to three years. It is a certainty in my mind that there will be hundreds of beef related PCFs.

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Saif Hameed [00:00:42]:

So you already have this proliferation of actual supplier oriented data replacing the one general emissions factor that was used.

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Isobel Wild  [00:00:50]:

And how does this change how businesses are going to conduct supply, supply chain engagement?

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Saif Hameed [00:00:55]:

I think that it is going to nudge. Businesses are going to find that the places where they have the weakest secondary data, the weakest emissions factors that are also material are going to be the places where they want to push hardest on supply chain engagement. And so when we talk about hundreds of thousands of factors, emissions factors being created, the place where those are actually going to be created is all the white spaces probably first and all the spaces where there's like one or two factors and very insufficient coverage, but there is also materiality. And I think that those PCFs are going to be seen as interchangeable to some extent with EF's, but also just better, like interchangeable in how they're used, but better in their provenance almost, because you can actually say, well, this is closer to the truth.

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Isobel Wild  [00:01:55]:

Emission factors as we know them are over. This is a punchy statement, I know, but whilst we're trying to make a style, we also see a bit of truth in it. So today we're going to be unpacking just what we mean by this and how you, our listeners, can prepare. Saif, I can see you itching in your seat to jump in. So over to you.

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Saif Hameed [00:02:14]:

Yeah, I don't think emissions factors are going to be over anytime soon, but we could get to that. We could get to that, Izzy, we could get to that. I wonder if we should stop, start with some of the headlines because it's like all headlines. There's a headline a minute right now.

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Isobel Wild  [00:02:29]:

Let's do it.

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Saif Hameed [00:02:31]:

Yeah.

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Isobel Wild  [00:02:31]:

Should we start off with Bezos stopping the funding towards SBTI banxi?

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Saif Hameed [00:02:37]:

So that's like today's news, I think, or yesterday's news, depending on kind of when we publish this. I was intrigued to read that for so many reasons. So in, you know, where I heard about this was the ft. And one of the pieces that the FT mentioned was how there's speculation that Bezos Earth Fund, which used to be the most prominent funder, I think, of SBTI until now, I guess that one of the reasons for them pulling out was, or the main reason for them pulling out was actually this sort of Trump scepticism around climate change and that Bezos personally wants to align more closely with Trump's agenda. And therefore SPTI was a bit of a distraction there, there. I think that's really interesting. I also wonder whether there was any element of this whole backlash against SBTI that happened last year around SPTI's position related to offsets and credits and so on. I don't know if that creates just the kind of noise that Bezos didn't want to be associated with.

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Saif Hameed [00:03:38]:

I don't know if the whole thing just became a bit too messy and you add in the new political environment and actually then maybe if you're Jeff Bezos, you start to wonder, do I really want to be in this? What I am thinking now, though, is I'm wondering how much this is really a bad thing, actually. Like, we were sitting here, Izzy, a year ago or thereabouts, and we were probably thinking to ourselves, you and I, I don't know if we verbalised it, but we're probably thinking, oh, look at this SPTI corporate overtake. And, you know, people like Bezos basically bankrolling and getting their way with standards. And now we've kind of got, I guess, what we wanted in a way. There's obviously a problem here, which is how does SBTI get funded? I think it is a good thing in general for an SBTI to exist. I think it is a good thing for an SBTI to get better and therefore I do want to get funding. I would just rather it be funding that is either more ideologically aligned with what SBTI used to stand for, or at least funding that is quite detached from corporate interest. And so I'm keen to see what happens in the fallout or next steps on this.

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Isobel Wild  [00:04:47]:

Do you think it's going to leave a vacuum for other players to jump in on, or do you think actually standardisation won't be as necessary?

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Saif Hameed [00:04:55]:

So it always. I think there's like the piece around a vacuum related to funding and there's maybe a piece around vacuum related to pressure like, who's going to be pressuring SPTI to move in a particular direction. Now, on the funding side, it can sometimes be a challenge when a big funder leaves, and usually that's when you have one funder who is outsized, and the organisation has ramped up spending and ramped up its programmes to meet the ability of that funder to back it. And I actually have faced this recently with a nonprofit that I was involved with, where we had probably two funders that were outsized versus all of our other funders, and one of them pulled out. And as a result, we just had to downsize one entire programme of that organisation because it just didn't have funding. So, like, a third or more of the organisation was impacted by that. I haven't looked closely into what SBTI's headcount is, just how big it's grown on the back of Bezos Earth Funding's financing, which I imagine would have been significant because the sums that Bezos was giving out in form of grants and support to nonprofits were very substantial funds. And so I do expect that it is going to be very hard to replace Bezos Earth Fund.

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Saif Hameed [00:06:18]:

There are probably only two or three nonprofits that could be at that scale, I imagine, unless a smaller entity wants to really step up and kind of make this its flagship programme. So I think there is that gap that we're going to see SBTI try and fill somehow.

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Isobel Wild  [00:06:36]:

Yeah. I'm also intrigued to see where the funds will be allocated that haven't gone towards sbti. Maybe they'll go towards something which is equally as important and can help scale into, like, a recognisable business that SBTI is. So there could be some actual benefits from reallocating funding.

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Saif Hameed [00:06:56]:

Yeah. You know, it's kind of interesting to see, because Bezos Earth Fund was, like, intended to be a sustainability vehicle for sustainability funding, and its leadership was also from the sustainability community and its advisory board and so on. You know, like, it was really a dedicated vehicle. And so I do wonder if you're not going to do stuff like spti, maybe SPTI was just too close to the corporate regulation space and the corporate kind of. And that side of things is more difficult to square with maga. I don't know, maybe there are other areas that are less controversial, like maybe something like wildlife preservation, national parks. You know, often those things can be less controversial.

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Isobel Wild  [00:07:39]:

Saif, onto the second headline, which is Trump's dropout from the Paris Agreement. What's your take on that?

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Saif Hameed [00:07:45]:

Yeah, I don't know if we've touched on this enough in previous episodes, but I think I was actually, I was with Anthony Scaramucci yesterday. I didn't think I'd be saying this on this episode. And for anyone who's kind of not familiar with Anthony Scaramucci, he's. He was, I think, the White House press secretary for 11 days, Juan Scaramucci. And I'm a big fan of the Rest Is Politics USA podcast, where he's one of the co hosts. And I was actually asking him what he thought the general trajectory would be on the US government's approach to climate change and whether actually sort of the federal position would be a short term thing that would shape the next four years only, or whether it was actually more of a seismic ideological shift that we were seeing represented in the US and that would be there for a decade to come. He had a really nice response to that, which is he said, look, the states are gonna take matters into their own hands in the US and actually you're gonna start to see many individual states just taking action themselves. And at times that's gonna be at odds with the federal government and at times not.

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Saif Hameed [00:08:59]:

But it's probably gonna drive just how the US as a overall entity approaches this sort of problem. And I think that with the Paris Agreement, we already now have this precedent for the US pulling out and then coming back in and now pulling out again. So there's potentially a chance the US is back in a while later. I think that we are probably overdue to revisit the Paris Agreement in general. When we start talking about 1.5 degree scenarios, I just wonder how long do we continue to hold ourselves to something that everyone is starting to recognise is just a pipe dream. I would almost rather we have something pragmatic that everyone can agree to and align on and work towards and have a solvable approach, have an actual solution, rather than we keep flip flopping over something that actually probably is slipping out of our grasp anyway. So I think it's sort of due a revisit just on what if the US is not happy to go along with this? What is the US sustainably happy to go along with? Same goes for Indonesia and all the other countries now that are talking about pulling out.

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Isobel Wild  [00:10:10]:

Yeah, like would the US even be? From my humble opinion, I don't think it's as much of the 1.5 degree target as by the impact of pulling out of the Paris Agreement does for Trump's Persona or what he's standing for, because I think his whole stance is around climate change and that not necessarily being the biggest driver to all our worries that we're seeing. So I don't know whether the Paris Agreement is actually just a bit more of like a metaphor for his wider ideological take versus the actual specific target.

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Saif Hameed [00:10:46]:

Yeah, I think you're right. I think a lot of this is about the noise and the symbolism. If you look at the last Trump tenure, you actually had some really meaningful decarbonization happening in relative terms with the. Of not alternative energy, but just lower emissions intensity energy sources, which includes gas when you're shifting away from coal, for example. And I think there's a pretty solid chance that continues to happen over the next four years as well, despite the big focus on energy, on growing the energy share of market that the US has. So I kind of think we're going to see what happens over the next four years. I don't think this is going to be. I don't think the impact of them pulling out of Paris is going to be as substantial relatively as the impact that this administration in the US is having on other areas of policy.

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Saif Hameed [00:11:41]:

Like if I look at usaid, for example, just to give a left field example, USAID has been a mainstay of the development aid institution globally, or industry or economy globally for decades now, and has been one of the largest funders of many development projects around the world. And I don't know if you already saw this, Izzy, but as of again, I think as of this week, the whole entity is basically frozen. So all grants are frozen, everyone has been sent home and they're effectively trying to wind down the whole organisation. That kind of stuff, I think is almost, again, relatively speaking, just much more radical because you're. Whether the US kind of meets Paris Agreement goals or not is in some ways so distributed across so many different actors in the us, private and public. Whereas you have all these massive steps that this government is taking pretty rapidly to stuff that is relatively quite clearly in their control.

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Isobel Wild  [00:12:41]:

Right, let's move across the. Well back across the pond to the eu. And the EU is about to drastically simplify the sustainability reporting landscape with the EU omnibus regulation. Seb, can you give us a bit of a taster of what that is?

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Saif Hameed [00:12:59]:

Yeah. So omnibus is basically. There has been a push that is not new actually. There has been a sort of a movement within, within the European Community to tone down refined CSRD requirements. And this is, this is not something that's happened just in the last couple of months or even couple of years. Like we've been hearing about this since well before csrd was approved where there was just so much back and forth and so much talk of the onerous nature, let's say, of the CSRD requirements and how this should be limited and made easier and so on and so forth. And the movement has been particularly strong from Germany and from a few other actors in the EU as well. And where we now are landing is that in the current environment where you have massive trade tension potentially between the US and Europe, there's a big incentive to actually now change the sort of CSRD requirements, narrow the scope, simplify the reporting and so on.

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Saif Hameed [00:14:04]:

So if I kind of reflect on what the big changes are, we're looking at a 25% reduction in reporting requirements for larger companies and we're looking at a 35% reduction for small. So a lot of smaller suppliers to large companies are just getting carved out of some reporting requirements. Mid cap companies which have 250 to 1500 employees are going to have a lot lighter obligations. Some disclosures are going to become optional and there's also the potential that's been introduced for some deadline extensions of one to two years. And then the big thing is probably also just merging csrd, CSDD and EU Taxonomy into a single framework. I think that some of this is net positive. I'm going to start with the positives. I think some of this is net positive, which is, I actually think it is very helpful to merge csrd, CSDD and EU Taxonomy.

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Saif Hameed [00:15:00]:

I think there was a lot of confusion and just overlaps and frankly I think we can all agree that in general more streamlined regulation, more streamlined, simpler reporting requirements are better as long as we don't compromise pace of change and momentum and so on. I think it is in everyone's interest for this to just be easier for business when it comes to excluding these smaller or mid cap companies that are 250 to 1,500 employees. I don't think that the inclusion of these companies or exclusion is going to move the needle a huge amount. And I say that for two reasons. One is often these companies are not very impactful anyway. Often they might even be service businesses, just not very emissions heavy. The ones that are higher emissions intensity I actually think will end up being captured anyway either by virtue of voluntary disclosures by their investors, their customers or by required disclosures and the momentum that that creates from their investors and their customers and so on. So I think we'll end up seeing some of those companies indirectly captured anyway and other companies not that impactful.

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Saif Hameed [00:16:14]:

I think there is a piece around how much does this change, the urgency with which the larger companies. Let's exclude those small mid caps now for a moment. Does this impact the pace of change that the larger companies were going for? I don't know. I think we're going to see. I think this is still an evolving piece. I think there's still a lot of speculation on whether there's going to be more than this, more than what's conceived. I think it's going to be something we're going to have to keep an eye on. From the conversations I've had with food businesses, at least when I speak with sustainability teams and leaders in their organisations, I do see a general step back, is maybe a big framing.

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Saif Hameed [00:17:00]:

But I would say that most of the players that fall into two camps, either those that are very US centric or those that are a little smaller, tend to be consolidating what they're doing on sustainability as a result of the current political and regulatory environment. What that means is that they are planning to talk about stuff less and planning to maybe do fewer things. They may still be planning to do those few things to the same extent. So if they were running a Region Ag programme and it was a serious programme for them, maybe they're still doing the same programme to the same extent, but they're actually saying we're not going to go out of our way to try and redesign how packaging is used in our organisation, for example, like they might just be having fewer things on the menu. And I think that that's also just, you know, in some ways a good thing. More focus, more pragmatism can be a good thing. I think it's not the pace of change that any environmentalist would want. I think we'd all like, from a system level, more pressure to change rather than less.

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Isobel Wild  [00:18:04]:

Saif, 30 second answer. But do you think the sustainability bubble has burst even from those top three headlines?

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Saif Hameed [00:18:12]:

I was actually going to say, yeah, if you put it that way, I would definitely say the bubble has burst. I was actually going to say, I think the bubble burst last year, maybe, or maybe even the year before. And I think that there's a really clear reason why the bubble burst. The bubble came about because in my view of a low cost of capital, low interest rates and low interest rates made a lot of initiatives seem viable and a lot of future cash flows from initiatives seem attractive. And so you could actually kind of say, well, what are all the things that we could do if money was cheap? What are all the things that we could do in a high growth environment? And Actually, I think that a lot of that is just looking quite different today. And as a result, it's not just sustainability interventions. There's more pressure on a bunch of stuff. So I think to that extent, the bubble definitely burst some time ago.

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Saif Hameed [00:19:05]:

I don't think we're seeing it burst now. I think this is almost the after ripples. At the same time, the bubble kind of didn't necessarily help things in a huge way. You sort of have these peaks multiple times over the last 20, 25 years where everyone has thought, okay, great, we're taking climate seriously now. Now there's going to be real change. Let's not forget there was like Kyoto, that was a big deal. There was Paris, Paris was a big deal. Glasgow looked very promising.

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Saif Hameed [00:19:41]:

So there have been a lot of these sort of peaks. And actually the truth is that the world keeps getting worse. Like it is getting hotter. It is having more exposure to extreme precipitation, more exposure to extreme heat waves. So the physics of it are not necessarily improving at all. And I think that means that where we will inevitably end up, I believe, is where this issue just continues to trend long term, more and more important. So if you think of it almost like parallel with the U.S. stock market, actually, which is a nice parallel, the U.S.

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Saif Hameed [00:20:16]:

stock market has, over the last 20, 30 years, had lots of dips, but overall, it's continued to kind of just track upwards. And I think that sustainability awareness and sensitivity is just going to continue to track upwards because of the physics. And you may have these peaks and troughs within that trending as there's a fad or, you know, a new political movement, but the physics of it just mean that inevitably we will care about it more and more, you know, over the long term.

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Isobel Wild  [00:20:44]:

Okay, well, I feel like we ended on a bit of more of a positive note then. I was worried in the middle of that that we were going down a dark tunnel, but thank God, right onto emission factors. I'm just going to quickly strip it back to what is an emission factor? And then, Saif, I'm going to get into the weeds of this controversial opinion. Is our emission factors over. So an emission factor in its simplest form is a value that quantifies the amount of specific greenhouse gases per unit of activity or material consumed. It is something that you're going to multiply against a unit of what you make or what you do. It's typically expressed as a CO2 equivalent per unit of activity. So, for instance, per kilometre driven or per unit of fuel burned or per tonne of product manufactured.

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Isobel Wild  [00:21:36]:

But There is serious lack of standardisation in the name convention. I mean, I think even in our podcast we've spoken about an emission factor, an emission coefficient and an environmental impact factor, like the list goes on. But Saif, what terms should actually, before we get going, what time should we be going by and, and why?

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Saif Hameed [00:21:56]:

I actually use a few different terms. I use emissions factors with any audience that understands what I'm talking about. I use environmental coefficient with an audience that might not understand what I'm talking about because that's kind of what it is actually. It is a coefficient in an equation that you're using. And I also just think about it from a data perspective as like a reference table. Effectively it's like a reference table which you're pulling coefficients from and multiplying against elements of data from your business. But emissions factors works for anyone who's in this space. What's tricky, actually, at some point in our business, I think we've actually walked away from this.

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Saif Hameed [00:22:41]:

We tried to really start referring to them as environmental factors rather than emissions factors because we actually kind of see water factors being relevant as well. And you could have nature factors or biodiversity factors. Like you could have a range of different factors as you pull them out. And many of these are all derived from LCAs, which might actually include the potential for multiple factors to be pulled out, not just emissions factors. But that didn't catch on even in our business it seems. And so we're back to emissions factors.

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Isobel Wild  [00:23:13]:

Emission factor it is. Saif, when I first said emission factors are over, I could. For people who are listening, Saif was like wincing and cringing in his seat. So I want to get your opinion on how businesses are currently using emission factors and actually how is this set to change?

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Saif Hameed [00:23:33]:

Ooh, this might take more time than we have, but if we put it simply, most businesses that have been new to measuring emissions will probably have outsourced this problem, let's say, to a consultant or otherwise. And the emissions factors that were used in their calculation would probably have been fairly few. By fairly few, I mean maybe several thousand factors would have been in the database that was leveraged. And of those several thousand factors, it could well be the case that only a few hundred factors were actually applied. And that if you think of what that means from an emissions calculation perspective, let's say that I am first time doing this. I'm a small or mid sized business. I have basically an Excel spreadsheet or I have a tab and a spreadsheet and that tab has a hundred line items and those hundred Line items are a high level categorization of everything that I've done in my business. So I have a category for tomatoes, I have a category for potatoes, I have a category for, you know, all the other macro level ingredients of soup, which is maybe what I'm producing, right? I have tomatoes and potatoes in the soup and leeks and all the other things that go into a good soup.

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Saif Hameed [00:24:42]:

And so I have maybe 10, 20 ingredients. And it doesn't matter how many batches I'm buying these in, how many places I'm buying them in, I just have 20 line items and the other 80 line items are all the other things that I'm buying or using or doing, et cetera. And against those hundred, I need to find emissions factors to use. And maybe I have 100 emissions factors that I match against my 100 line items. That's your carbon calculation, basically at its essence. And you now say, well, there's also an element around what is the logic that governs the matching? So I know which emissions factor I'm matching and what is the logic that governs the calculation. Because actually, maybe there's some nuances there. And as this has gotten more complex, what's happened is that people have wanted more accuracy and more precision and more flexibility and more analytical power behind this.

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Saif Hameed [00:25:31]:

And they start saying, well, 100 line items is actually not sufficient. I have a million transactions going on in my business, I have a thousand different activities, I have 10,000 people doing stuff. This is not 100 line items, this is more like 100,000 line items or a million line items, actually. And I'm not going to need 100 emissions factors, I'm going to need 10,000 emissions factors because now for those tomatoes, I need 20 different factors for 20 different places. I'm buying tomatoes and 10 different varieties as well. So that's 200 tomato factors alone, for instance. And that then drives you towards this interesting complexity in, in what databases you might be using. And so, like at altruistic, we have somewhere between 25 and 30 different databases I think, that we licence and we kind of pull together and we aggregate and then we've built our own data sets on top because we found a lot of white spaces.

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Saif Hameed [00:26:23]:

And so we have a couple of hundred thousand emissions factors in the full database that you can leverage and that can be matched to activity data using a custom logic or a customizable logic. But sorry, that's the three, four minute version, something like that, or two minute version of emissions factors, if truth be.

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Isobel Wild  [00:26:42]:

Told, I got a bit lost in the potato tomato soup at one point there, but I'm glad I got there in the end. So how are these emission factors? So when people are looking for greater accuracy, greater volume, greater quantity of emission factors, how is this going to change? Use them and actually procure them.

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Saif Hameed [00:27:03]:

So I think the interesting, we could obviously have multiple episodes on emissions factors. But I think the interesting thing that I want to talk about right now at least is where does IP sit in emissions factor land and where is value in emissions factor land? And I think that there are these two schools of thought. One is that the value is in the factor itself and you could have a proprietary factor. And right now you have proprietary factors. You have like eco invent emissions factors or you have World Food LCA database emissions factors or there are different companies building their own factors as well, much like we've built some of our own factors. And so we could, let's say, have an altruistic branded. The factors that we've created could be altruistic branded and we have 10, 12,000 altruistic own brand, Altruistic's finest emissions factor, for instance. And you could then say, well, the IP is the factor and the branding behind the factor and that you trust the brand behind the factor and that this factor is credible.

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Saif Hameed [00:28:07]:

And if you're in the tomato business, you want to have the company that has the best emissions factors for tomatoes and Ultra 6 Finest is the brand for you on the emissions factor side. And I think the other school of thought is actually the brand is not going to be in that because you can't police that actually if those factors get shared around, let's say that your ChatGPT now has access to these factors and is happily sharing them willy nilly with anyone asking, what is the emissions footprint of a tomato in Spain? Potentially actually there's no value in the emissions factor, which is just a number hard to police. The IP potentially quite fungible actually. It's a scientific output, which means that it's hard for me to really say that the emissions of something is 1.67 and I have patented that or I've copyrighted that or that 1.67. No one else can claim it to be. You have to claim that it's 1.68 or 1.66. You can't stake your claim on 1.67. So I think there's an inherent challenge in, in IP around the emissions factor.

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Saif Hameed [00:29:16]:

The next place is actually it's the framework, it's the methodology, it's the process by which you generate the emissions factor where the IP sits and actually anyone should be able to use that framework or with the proper, whatever it is, licencing fee or approach or whatever. Some people have tried to patent the framework, but the logic is then that the framework or the methodology is what is proprietary and actually anyone should be able to use this to spin up lots of factors and then, you know, the factor is what the factor is. I think that's a little more plausible. But at the same time I think that we're moving towards a world where actually everyone recognises that it is in everyone's interest for methodologies to be open source and transparent. Like you. Sustainability reporting and regulation orients towards disclosure. It orients towards making clear what is happening and how it's happening by its very nature. And I think an essential part of that is to say this is the methodology that was used to derive these numbers.

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Saif Hameed [00:30:23]:

So I think the direction of travel is actually that you can't really patent those things. There is really no ip, which means if the methodology to get the number is free for all open source, like actually emissions factors I think very quickly become a commodity. And so I think that this world that we're in right now, where I know a lot of databases are trying to charge for factors and charge higher and higher licence fees to extract value, I actually think that it almost accelerates the movement towards commoditization of factors because it creates an incentive for all the other stakeholders to turbocharge efforts to open source methodologies, frameworks and emissions factor creation. So I think we're going to end up with hundreds and hundreds of thousands of emissions factors on an open source framework or methodology. And that kind of in a way destroys value for the emissions factor vendors. Altruistic's finest will almost certainly not be an emissions factor brand, but it creates a lot of commons value or a lot of value for everyone else.

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Isobel Wild  [00:31:26]:

All I could think about was the M and S advert. This is not a normal emission factor. This is an altruistic, succulent, accurate emissions factor. But Saif, what about emissions factors that people are creating from their own supply chain and their own data? What will happen there?

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Saif Hameed [00:31:47]:

I think that we will need to have some level of comparability where we can say, well, this product carbon footprint that we've acquired is as good or better than the emissions factor that we were using. That was general. And I think that in some pockets, in some categories, maybe not pockets, pockets suggest it's too small. But in some categories I think that the product carbon footprint world will Very, very rapidly outpace the emissions factor world. Let's take a good example. There's basically one beef emissions factor that pretty much every American beef company is using. And that beef emissions factor is super general. Beef is a high emissions material.

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Saif Hameed [00:32:23]:

There's a lot of variations in beef actually, like beef yield. Beef can vary quite a bit, geography to geography, breed to breed, practise to practise as well, I imagine. And so it doesn't make sense that there should be one factor. Almost certainly we're going to have hundreds of PCFs related to beef being generated and exchanged over the next couple of years, like next one to three years. It is a certainty in my mind that there will be hundreds of beef related PCFs. So you already have this proliferation of actual supplier oriented data replacing the one general emissions factor that was used.

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Isobel Wild  [00:33:02]:

And how does this change how businesses are going to conduct supply chain engagement?

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Saif Hameed [00:33:06]:

I think that it is going to nudge. Businesses are going to find that the places where they have the weakest secondary data, the weakest emissions factors that are also material, are going to be the places where they want to push hardest on supply chain engagement. And so when we talk about hundreds of thousands of factors, emissions factors being created, the place where those are actually going to be created is all the white spaces probably first, and all the spaces where there's like one or two factors and very insufficient coverage. But there is also materiality. And I think that those PCFs are going to be seen as interchangeable to some extent with EF's, but also just better, like interchangeable in how they're used, but better in their provenance almost, because you can actually say, well, this is closer to the truth.

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Isobel Wild  [00:33:53]:

And so for. Do you have any advice for professionals who are directly or even indirectly using EF's?

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Saif Hameed [00:34:01]:

I think that, I would say that. I think that a lot of sustainability professionals don't really get under the hood enough in terms of what the emissions factor choices are. I think a lot of them can get quite involved in querying the data once it's calculated and then trying to drill down into what emissions factors were used and why and so on. This is when they're working with solution providers. But I think there's also a process of just understanding this in more depth upfront, like what types of factors will be used, where will these factors come from? What is the methodology behind them? Let's go category by category, actually. What is the coverage for beef or chicken or whatever might be material? And then if you kind of start identifying that early, you can start to frame Almost like an emissions factor strategy, a data acquisition strategy. And there you could say, well, where do I need better secondary data versus where do I need better primary data or closer to primary data from suppliers? And I've seen companies that have tried to explore everything from building their own modelling capability to running supplier engagement programmes, where actually acquisition of another set of emissions factors from secondary data was easier and quicker and more verifiable and there might be situations where actually it's one of the other two.

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Isobel Wild  [00:35:14]:

Awesome. Thanks, Saif. Well, today I feel like we've covered a lot today. We've hit the headlines pretty hard. Two biggie, three biggies. We then got a handle on emission factors, whatever their name may be, how businesses are using them, how this is actually set to change in terms of commoditization of emission factors and then also an emission factor strategy. In the next episode that's coming out, we've got Beth coming on, Beth Jones, talking about supply chain engagement, where we're going to dig into a little bit more about how your supply chain engagement strategy can change to accommodate this new shift in how we're looking at EF's and supply chain specific emission factors. Saif, are there any other points or thoughts at the top of your head that you want to mention before we say goodbye?

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Saif Hameed [00:36:05]:

No. Nothing else to add from my side. I'm all good.

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Isobel Wild  [00:36:08]:

Thanks, everybody. Bye.

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