Hello, welcome to Status Sustainability, where we unpack sustainability issues.
Isobel: Today, we're joined by Henry Dimbleby, co-founder of LEON and author of National Food Strategy, and Saif, obviously, who we all know, CEO of Alturistiq. And we are here at COP, which is exciting, but actually quite weird. The music has just started, so if you hear a deep bass in the background it is, it is literally that they've opened up into concert mode.
Henry: Although it's very nice it's not quite so hot.
Isobel: Henry, what are your thoughts on COP so far?
Henry: Well I don't know, this is my first, so I haven't been to the Blue Zone yet. This is my first day in the Green Zone. I've been outside of COP and I don't really know what's make it, it's a lot of people saying a lot of the same things.
And obviously there are the, there's the kind of, you know, the, the UAE's contribution and then there's the formal negotiation, which is just getting serious and we don't know what's going to happen. And then there's this whole game around it. I spoke to some people who make renewable cement, who've done some business and this kind of thing, but, I guess if you didn't have it at all, that would be problematic. But the form it has taken is quite weird. I mean, theoretically, it could just be a group of people negotiating in a room.
Saif: And actually I think you, you still have a lot of rooms. I think there are like a hundred rooms in the city where business is being done and deals are being negotiated. And then there's Disneyland, where we are right now, full of fantasy and fun.
Henry: I mean, I was wondering if in Paris 1919 around those negotiations, I wouldn't be surprised if a similar thing didn't build up with kombucha and iced tea and camel ice cream and party bags. Yes, exactly. And also the glitzy hotels that every other corporate event is hosted at as well. Yes. It seems just to be excess beyond excess. Exactly.
Saif: Henry, you were telling me that one of the banks that you were speaking with was just saying they've already done several deals over the last few days.
Henry: Yeah, they've done, for companies that they've invested in, they've done four deals, I think, over the last few days. They said it's the first COP that that's happened. And then, I posted about speaking with them, and I hadn't realized that this bank apparently has, according to the people on social media, a very bad climate record. So that kind of, that kind of goes on, but this place is so extraordinary.
I went to Dubai, for people who haven't been here, it's like kind of metropolis (the film). The greenery that you can see behind us, it's probably about 90% of the greenery in Dubai.Most of it is just concrete buildings. We saw a bird yesterday. I'm looking for a bird! If you want to see nature, you don't go to Dubai. And of course, that bird was mechanical, powered by hydrogen. We actually didn't see it. We only heard it. So it might just have been a speaker.
Isobel: So would you go as far to say this is like the corporate COP?
Henry: I've only been to Glasgow.. So I'm like someone who doesn't understand formula one and has been to one brave new world.
Isobel: I feel like that as well. I think everybody secretly just feels completely overwhelmed by the whole scenario. Saif, what do you think about it? And what do you think about the corporate role.
Saif: Yeah, I mean, I think it's I was kind of saying this a bit earlier. I think you could spend almost any amount of money here if you were a business like you could come here and you could do a $10, 000 booth somewhere. And actually, Izzy was wandering through the desert land of startup exhibit or whatever startup pavilion. And she saw just hundreds of startups that have probably all paid $10, 000 to be there. And no one was there. It was just totally deserted. And so there are these kind of desert pavilions where people have put up shop and no one shows up.
And then at the same time, there are maybe 50 hotels here where all the sort of big corporations are doing business. And, you know, there's something a bit weird about that for me. COP used to be government delegates, multi-laterals, NGOs and a few corporates that were early movers. And it does seem to be a big corporate junket now.
But, you know, some of that is good, right? So one of the businesses that I was speaking to who had done a lot of business was someone who makes hydrogen generators. So electricity generators out of hydrogen. And he came to someone who was doing a development in the UAE. And they ordered, like, 150 of these things. And they'd sold, in the whole history of the company, they'd sold five. So, you know, if you care about Climate, we know that a lot of it is gonna be what it is. It's driven by the economy, and therefore, most of the solutions are gonna come from businesses doing things differently.
So you don't want to be too cynical, but at the same time, it's hard. It doesn't feel like a utopia. It feels more dystopic. I would say. I kind of wonder, how much we're actually talking about the global south, where a lot of the large-scale devastation that we're going to see from climate change is going to occur.
And, you know, I have two hats. I started Altruistiq, but then I also started an organisation called the Pakistan Environment Trust, which works with the textile industry and many other companies in Pakistan. And I don't hear much talk about adaptation and resilience. And how do we build new homes for those who are going to be displaced?
And how do we ensure that food is affordable for countries which are actually going to see their agricultural production halve because of heat waves. I feel like there's a lot of talk on renewable energy and cool new technologies that will have most of their application in developed markets. I just don't hear a lot about the other, the other half.
Henry: I was standing here at midday today wondering, if I just stood there, how, how many minutes would take melt. I could have desperately lasted hours, not days. And so, you know, it clearly has, for this area, very real issues.
I guess they don't really have agriculture here, and, you know, as I was saying to you earlier, it feels like the money is just kind of pumping up out of the ground, and that obviously helps you, if you happen to be in a country that has money, you can obviously adapt much more easily than if you're in Sub Saharan Africa, or India, or Pakistan, or Bangladesh, or one of those countries.
Saif: Maybe if we actually would just talk a bit about the agriculture side of things, right, and Regen Ag.
Isobel: We're seeing a lot of commitments coming out. Well, I think that's one of the biggest themes that have come out of the conversation so far. What is regenerative agriculture. Everyone's talking about it, but what does that actually mean?
Henry: It's interesting, from the food perspective, being here is quite interesting because we have, in the UK, we have a very myopic view what food sustainability and security looks like because we happen to live on an island that's still… And DEFRA did this, the Department of Environment and Food and rural affairs did this work a few years ago, we could still feed ourselves from our own resources if the U-boats came back. And coming somewhere where, this is impossible, puts a different lens on it.
So, in UK context, regenerative agriculture is a much debated term, but, you know, the kind of leaders in the movement, people like Martin Lines, who created the regenerative agriculture network, or the nature-friendly farming network. They would say there are certain features of it that are common in our kind of climate. So they would be lower or no tilling, cover crops, often using a, uh, some kind of ruminant in a rotation, but not essentially. But fundamentally the name tells you what it is. We have lost 69 percent of our biodiversity since 1970. And regenerative agriculture is agriculture that is a net positive for nature. And in the end, hopefully, a net negative for carbon oil.
We haven't achieved that yet. And I think it sits in a continuum. So on one end you have agriculture that could be sustainable but definitely isn't regenerative. So you can imagine high-yielding agriculture. I'm sure it will be the case, that science gets us to a place where we can have huge hundred-hectare American fields, as we do now, growing corn. But that they grow that corn in a way that is carbon neutral. And you don't have the pollution input. But that would not be regenerative, it would still be effectively one species above the ground, dominating the environment. That’s one end.
At the other end, you have the kind of organic, really low yield. And in between, you're going to have whole farms saying “we want to have lower yields because we want to have other yields species to become an organic farmer”. And then you'll have all sorts of things in the middle which adopt different different pieces. And even actually the people who are going for that kind of scientific approach, ”more yield, less input”, they're already using some of the techniques of regenerative agriculture. For example, cover cropping, salt and soil.
So I think it's a pretty futile debate. And getting into a debate about what it is it a bit futile. And then, so if you look at that in a, then to take the context here, you know, obviously or in India. Yeah. It's going to be a completely different set of techniques.
Yeah. So, you know, but you can imagine still in India or Pakistan, the outcome would have to be, for me, nature up, carbon down. That is the fundamental outcome.
Isobel: And how does that translate into like a corporate sustainability agenda? We've seen a lot of regenerative alliances happening at COP, but like how do they translate that into day to day practice or into their strategy? When you look at Nestle's announcements, for example, and you know, all the other large food businesses, do you think that we're looking at a real deep, lasting large-scale transformation across the supply chain or do you think this is a bit of piloting?
Henry: So I think it has to be large scale across the supply chain or we all lose, right? So we have to, and the only way that happens is to have land use frameworks by country. So each country has to look at how it uses its land and work out which areas are most suited to the very high yielding, potentially not very nature-regenerating approach where carbon is carbon zero through sustainable intensification.
It also need sto look for the areas to take out of conservation altogether because they’re marginal and don’t matter. Instead use these areas as an opportunity to have regenerative agriculture, nature and farming living alongside.
And then critically, they have to design their methods of regulating and paying subsidies or payments to farmers to incentivise the farmer on each. Because you're never going to have a Stalinist approach where you get tell each farmer what to do.
Luckily farming is subsidised by every country in the world and therefore you can change the subsidies to incentivise the right thing from the right places. And that will then feed into what the big food companies do. Now, the other reason I'm, I'm actually quite optimistic funnily enough on the environmental element of the food system being fixed because there is a huge surge of interest in rejected farming when the Ukraine war and oil prices and fertiliser prices went up because suddenly the farmers were actually making more money.
Yeah, because they weren't having to rely so much on pesticides and nitrogen and all of that. The big companies such as the Nestle's and the FMCG companies, some of these things, you could have really quite a big bang for your buck, without it costing much money.
So rather than on health, where I think we're a bit stuck, I actually think these companies could do quite a lot, even now, even with regulation as it currently is, to begin the movement. They will need the changes of regulation to complete the journey.
Saif: Henry, one of the things that I actually often come across that's missing is a change in how supplier contracts work, where actually these sort of the, the impetus is still pushed onto the farm. And while there might be a payback over the next 10 years, the farm has to make an investment up front to make this work.
And we heard a great example a couple of days ago in coffee, for instance, where for farms that have low yielding coffee plants, there's actually solutions to make them higher yielding again. And cut it off near the base. And in three years time it'll go back to high yields, but the investment up front for the farm to be willing to take that hit of the next three years is something most farms are not willing to undertake.
Do you think that actually the large corporations are going to help with that either in capital or contractural terms?
Henry: So you see it beginning to happen a little bit with capital, but actually in terms of supply agreements. So you're beginning to see people say, If you farm in this way, I guarantee to pay you X for that wheat, whatever it is.
And some of the cereals companies are doing that, some of the bread companies are doing that. And I think that will, that'll be the thing. I'll say, okay you're gonna do the investment, but I'm gonna take the risk away from you. I think that, that is quite a neat way of doing it. Oh, for sure.
Isobel: So we've spoken about the corporates role and what they're doing. But what about the farmers? I know that there's a lot of pressure on farmers to like supply data, but like what does that mean?
Saif: Yeah. And also just again, another bugbear, right? I feel like a lot of us in the global north are talking about universal primary data capture. What I mean by that is there's an expectation that every farm should be filling out some sort of a survey or providing some sort of data in.
And right now, many farms that we know in the U. K. have the nephew or the cousin of the farmer just filling this out and putting in virtually anything. And that's a problem in itself from an audit and insurance perspective. At the same time, when I think about what a dairy farmer in India looks like, it's a person who owns a cow. It's not a farm in any shape of the word. And so I wonder whether this sort of primary data, you know, the fetish almost has gone too far and we need to reconcile to a world where we actually have better sampling and we can train models to generate secondary data.
Henry: Well, it depends on what you want to do. So I'm not an expert on the global South. But the work that I did was a UK food strategy and it dealt with a lot of bits in the North, where the answer depends what you're going to do with the data.
So if you are going to pay for results, then it has to be farm by farm and it has to be done well farm by farm. So for example, there is no way one or two agricarbon technologies that automatically takes loads of soil samples on a farm and measures the carbon in them will be feasible to all farmers. It's very data intensive. So we're miles away from being able to pay for carbon. If you did, you would have to have private data. There are other things, if you're thinking about your land use framework and about what your land is like, where clearly you can do sampling. So I think it really depends on what you want to do with it.
Obviously, it should theoretically become easier and easier to collect. So, I'm going to give you a really dumb example. But I was with a farmer, who was trying to rewild. And he was trying to keep his deer population at sustainable level. So he has started to cull the herd, killing half of the deer every year to keep it to a sustainable level. He couldn’t work out why the herd kept on growing. He then borrowed a drone with infrared thing, and it counted all the deer in his forest, and he had three times the number of deer that he thought he had. So those kind of automated drones are one example of how farmers can gather better data.
Saif: Yes, for sure. I love that example.
Isobel: I think we've heard from brands as well that they are collecting a lot of data from these surveys and not actually knowing what to do with it.
Henry: Yeah, but I do feel with the huge advances in AI now that, working out if data is clean or if it isn't clean in an automated, I mean, you know more about this than me, will become possible, so it'll be possible to go back in time to data collected, get, make an assessment of actually, was it good data or not, or is it something funny about it, and then use it, so I think that form filling in itself for no purpose is a bad thing, but I think having data that is currently not used, is not as you will almost certainly find a way to use this.
Saif: I think you're right. I mean, what we are finding in our business, for instance, is that the bulk of the effort for us has been building technology to take in data and classify it. Yeah. And actually, if you think about our largest customers, we're ingesting maybe a hundred million lines of data and actually tagging all of those in different ways.
And that means that you're preserving it for use in many different use cases. In the future, you could run actually analytics that you might not have conceived of today, later because you've cleaned the data and classified it.
Isobel: And I think you've both spoken about before, being able use the data you collect for carbon for other purposes such as biodiversity and nutritional insights. So I can see how that holistic collection, whilst may not be immediately useful, has future co benefits.
In terms of whether people are actually going to use this data to change their product for the good, what are, what are both of your takes on that?
Henry: I think cynical is the wrong word. I am realistic. So, businesses will only do things that make money. They will go out of business if they don't make money.
And they may do better things, marginally better things, if they make a bit less money. But if they make much less money, they won't do it. And they'll actually be out competed by someone who does things badly. So, for me There are only two ways in which a business will use the data to do something better.
One is if regulation pushes them in that direction. So you have the hand of government, the hand of the state. Or the other is if they see a route to creating something that is either cheaper, or that the customer will pay more money for, and that they can get through to a place where
Saif: You know, actually, just before we kind of wind up and anyone listening can tell the background music is getting louder and louder.
Isobel: I think there's actually a car roaming around COP with a speaker on its bonnet blasting out some inspirational, motivational music. So apologies.
Saif: Before we tie up, i’d love to talk a bit about regulatory capture. Let me just define what I mean for any of our listeners, and then we'd be great to get your take on it, right? I see regulatory capture in sustainability as large corporations increasingly shaping, not just the sustainability debate and norms, but also standards, frameworks, rules and laws in their interest. And I see this happening in a few ways.
Covertly, where they're part of industry coalitions and consortia, and they kind of, let's say, play a role as a technical advisor or otherwise, and they subtly shift the framework, and methodology. Sometimes over years in a particular direction, and there are a number of areas where there's there's high risk of this happening. Methane is a good example.
Overtly, where you see them often in the regulatory dialogue with the regulators actually influencing how the regulator is thinking as part of a working group or otherwise, and of changing the narrative. Like you've been you've been in the room in a lot of regulatory conversations Henry, what are your thoughts on this?
Henry: So I see it very close up in a, in a UK food context. I could probably most comfortably talk about that. And I think you effectively have a gradation of intervention.
So at the most extreme side, you have organisations like the IEA, not the Energy Agency, but the Institute for Economic Analysis, the right wing think tank in the UK, who are paid by Tobacco, we don't know, they don't release it. We only know if there is a leak. They are paid to cast doubt in politicians minds. That is their job.
The next stage on the gradation are bodies such as the BRC, the British Regional Consortium, the FDF, the Food and Drink Federation. They are membership organisations and they will talk a good game on “we need regulation, we need to improve it”, but actually if you are running a such an organisation, you cannot say to a a confectionery company, who is paying your wages, that you want to do something that will reduce the sales of confectionery.
So while they can talk game and they're positive, I’ve sat in on meetings and behind the scenes they'll go, “oh, you know, it's very difficult, very difficult, very difficult”.
The next stage is a body like the IGD (Institute for Grocery Distribution). They have a strong, legal framework for supermarkets and each supermarket can’t talk to each other in case they collude. If you talk, you get sent to prison. So the IGD is there as a forum for them talking.
And actually in that forum, because it's mostly CEOs, you can actually get some quite constructive discussions. But then as you go through to the individual companies, they will often talk a good game publicly, but behind the scenes, it's very difficult.
Now, one thing I get a sense of at the moment, and it's on the health side, is that behind the scenes there are some really senior CEOs, who are prepared to go to whoever the next health secretary and say “we need more regulation” and try to push it through because they see now they have seen that this is dark real health.
We saw in the papers earlier this week that unhealthy eating is destroying the economy as well. The treasury is worried about it. So I think that is likely to happen. The question will be when.
There is a lot of stupid regulation and you don't want to do stupid regulation that will have undesired effects. So it's very hard for government to consult, to try and make the regulation good regulation without then being told mischievous information. You know, that there won't be any children's programming if you take bad food out of the way for children, that you're not going to crash the economy, that all the advertising firms aren't going to bust, so it's really tricky.
And I think that probably most people in that system kind of are willfully blind to think they're doing the right thing. Most of those CEOs in big food will be 60, 70. They got into the game, you know, in the 80s probably. It wasn't clear at that point that food was going to be the biggest cause of biodiversity destruction, the second biggest cause of climate change, the biggest cause of affordable health.
You're just going to make a finger of fudge, to give the kids a treat, was the ad when I was young. And now you're suddenly, you've grown up all your life in that business, and you're suddenly like, and your children are talking to you about it, saying, Dad, Mum, what are you going to do about this? And it's a really difficult place to be.
Isobel: And Saif, do you see a way through?
Saif: Oof. Yeah, big question. You know, I think that we're, we're probably going to see something iterative and something radical, and I think that on the iterative stuff, we are seeing more and more of the companies that we work with, which tend to be a lot of big consumer goods companies, retailers, suppliers and ingredients producers. We're seeing more eco design at the product level. And so it's stuff like saying, look, I have like a six pack of a product and has a plastic film around it can actually remove the plastic film and maybe there's a down small downside commercially because people buy five cans rather than six, but the environmental impact is systematically better.
I think there's more innovation in that sort of side happening right now, and we're facilitating a lot of that, where our customers are able to redesign the individual product at the level of a stock keeping unit, and actually take that apart, and they can do that for thousands of SKUs.
That, I think, is still kind of incremental small stuff, and that can drive a lot of change. You can get a one, two, three percent emissions reduction year on year from that sort of stuff, and that can compound.
I think that what I don't think enough companies are recognising and calling out is that the kind of change that we need to make to have, let's talk about 1.5 degrees or something similar right on climate is going to require large scale capital.
We talked about the system change value, but actually it needs to come down to cash flow, and that's going to require large scale capital. And I think that that will only come from three places:
Pass it on cost to the consumer. The consumer pays more, maybe small fractions, maybe pennies on the pound.
Margin contraction of some kind where actually some player in the value chain. And I think retailers would rather its brands and ingredient suppliers would rather the brands shoulder some of it.
Efficiency and actually efficiency only gets you so far. Efficiency gets you that 1-2% per year. If you want something more radical, you need one of the other two. And I think the only way you get one of the other two (for price passed on to the consumer or margin contraction) is regulation or quasi regulation. I don't see any other way because no one wants to increase costs voluntarily. It won't happen.
Henry: Yeah. I mean, the good news is that we'll find out in our lifetime in 40 years.
Isobel: Tune in in 40 years. And we'll have an answer for you. Well before the roaming megaphone comes back, I think we should wrap up.
But Henry, thank you so much. Thank you. Saif. And thank you for listening. Tune in again and pop us any questions. We'd love to hear them.
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