1 00:00:16,090 --> 00:00:18,970 Hi, I'm Helen Avery with the Green Finance Institute and 2 00:00:18,970 --> 00:00:20,570 you're listening to Financing Nature. 3 00:00:21,050 --> 00:00:24,890 This week I'm joined by Mike Azrust, Co Founder and Chief 4 00:00:24,890 --> 00:00:28,690 Executive Director, El Estari Capital, to hear about the Rimba 5 00:00:28,690 --> 00:00:31,760 Collective. If you are going to speak to the 6 00:00:31,760 --> 00:00:34,640 CFO, to be honest, I think in many ways that is the most 7 00:00:34,640 --> 00:00:37,800 important person right in to to persuade because they will not 8 00:00:37,800 --> 00:00:41,360 come from this world and being able to articulate the business 9 00:00:41,360 --> 00:00:45,120 case to them is, is really the most fundamental. 10 00:00:45,800 --> 00:00:49,760 And I think that does come from supply chain resilience and 11 00:00:49,760 --> 00:00:54,200 supply chain security, right? And really demonstrating how 12 00:00:54,200 --> 00:00:57,200 does that natural capital achieve that. 13 00:01:00,200 --> 00:01:03,680 Good afternoon or whatever time it is for you and thank you for 14 00:01:03,680 --> 00:01:07,160 joining us for this Episode 4 in our special Revenues for Nature 15 00:01:07,160 --> 00:01:09,440 series. And we are leaving the oceans 16 00:01:09,440 --> 00:01:14,560 behind us today and spending the next few weeks looking at land. 17 00:01:14,920 --> 00:01:17,040 Today, we're still sticking with this collective action theme 18 00:01:17,040 --> 00:01:20,800 we've explored before with the responsible commodities facility 19 00:01:21,000 --> 00:01:22,360 and the Fisheries Improvement Fund. 20 00:01:22,800 --> 00:01:25,520 And this week, Mike's Rust at Lestory Capital is going to walk 21 00:01:25,520 --> 00:01:29,400 us through the Rimba Collective. That's a forest conservation and 22 00:01:29,400 --> 00:01:32,720 St Petland actually and restoration financing mechanism 23 00:01:32,720 --> 00:01:36,920 that started in Southeast Asia, where payments into these 24 00:01:36,920 --> 00:01:40,960 projects are linked to companies procurement of palm oil. 25 00:01:41,480 --> 00:01:43,680 And then members of the collective can claim for their 26 00:01:43,680 --> 00:01:47,720 sustainability commitments for the projects from their verified 27 00:01:47,720 --> 00:01:50,080 outcomes. And Mike is just brilliant and 28 00:01:50,080 --> 00:01:52,440 I'm really excited you're going to get to hear not only what 29 00:01:52,440 --> 00:01:54,480 they're doing and all the lessons they've learned about 30 00:01:54,480 --> 00:01:57,440 how to move supply and demand together, but really he's 31 00:01:57,440 --> 00:02:00,120 broader thinking about this nut we're trying to crack around 32 00:02:00,120 --> 00:02:02,320 private sector investment into nature restoration. 33 00:02:02,680 --> 00:02:05,720 And he'll also touch on the role of biodiversity credits. 34 00:02:05,920 --> 00:02:08,039 So lots to lots to talk about today. 35 00:02:18,510 --> 00:02:21,590 Mike, thank you so much for being with us today on financing 36 00:02:21,590 --> 00:02:23,550 Nature and how are you, first of all? 37 00:02:23,710 --> 00:02:25,550 Very well, thank you and and great to be here. 38 00:02:25,910 --> 00:02:29,110 So we're going to. Sort of get down into the Rimba 39 00:02:29,110 --> 00:02:32,630 Collective in particular today and really understand how that's 40 00:02:32,630 --> 00:02:35,750 mobilising private sector investment, what the work has 41 00:02:35,750 --> 00:02:37,270 been to date. And I know you've got plans to 42 00:02:37,270 --> 00:02:39,350 scale and replicate and we'll talk about that too. 43 00:02:39,760 --> 00:02:42,120 But first I wondered if you could. 44 00:02:42,640 --> 00:02:44,800 So it's set up by Lestari Capital. 45 00:02:44,800 --> 00:02:47,400 So I wonder if you can give us a bit of a background on Lestari 46 00:02:47,400 --> 00:02:50,840 Capital first as a Co founder? Sure. 47 00:02:51,360 --> 00:02:55,600 So we, we started actually as a as a concept in 2015 already 48 00:02:56,080 --> 00:02:58,640 where we were in a sort of a very different world I think 49 00:02:58,640 --> 00:03:01,360 when it comes to sort of natural capital finance with even even 50 00:03:01,360 --> 00:03:04,880 the carbon markets at that time. And so certainly nature finance 51 00:03:05,240 --> 00:03:07,680 was really in very, very early stages. 52 00:03:08,000 --> 00:03:11,440 And really the sort of the reason for being full of starry 53 00:03:11,440 --> 00:03:15,240 capital is to leverage market based demand for conservation 54 00:03:15,240 --> 00:03:19,240 and for restoration in order to move us away from grant 55 00:03:19,240 --> 00:03:22,600 financing and short term financing philanthropy in terms 56 00:03:22,600 --> 00:03:25,320 of driving money into conservation and achieving 57 00:03:25,480 --> 00:03:27,880 global climates and nature targets. 58 00:03:28,280 --> 00:03:32,760 And so we set ourselves up and, and had some really kind of 59 00:03:32,760 --> 00:03:36,120 forward thinking companies that, you know, helped us identify the 60 00:03:36,160 --> 00:03:38,440 the potentials of models about how we could work. 61 00:03:38,880 --> 00:03:41,520 And we were seeded by partnerships Forest, which is 62 00:03:41,520 --> 00:03:45,000 under the UK aid, really with the purpose of becoming a 63 00:03:45,080 --> 00:03:49,040 company that can demonstrate that there is revenue to be made 64 00:03:49,040 --> 00:03:52,720 from nature conservation rather than nature exploitation. 65 00:03:53,080 --> 00:03:56,320 And so I think that's really the sort of being the driving ethos 66 00:03:56,320 --> 00:04:02,680 of of how we started and really sort of the idea of working with 67 00:04:02,680 --> 00:04:05,680 sort of forward thinking companies that want to explore 68 00:04:05,680 --> 00:04:09,560 new models, not only to, you know, finance, conservation and 69 00:04:09,560 --> 00:04:11,880 restoration and achieve impact on the ground. 70 00:04:12,320 --> 00:04:15,480 But how does that actually links to corporate business cases And 71 00:04:15,480 --> 00:04:20,000 how does that actually drive value for the companies is is 72 00:04:20,000 --> 00:04:21,959 really sort of where where we are at. 73 00:04:21,959 --> 00:04:24,120 And I think that's the sort of the edge of the development of 74 00:04:24,400 --> 00:04:27,800 where we want to be because that is really something that is a 75 00:04:27,800 --> 00:04:32,120 really tough nut to crack and understanding really, you know, 76 00:04:32,120 --> 00:04:35,280 how does nature get valued on the on the balance sheet? 77 00:04:35,280 --> 00:04:38,720 How do shareholders view natural capital as a, as a value 78 00:04:38,720 --> 00:04:42,280 generation rather than, you know, something that is, that is 79 00:04:42,280 --> 00:04:44,840 nice to have. But of course, a lot of this 80 00:04:44,840 --> 00:04:47,720 doesn't actually exist. I mean in terms of working to 81 00:04:47,720 --> 00:04:51,280 actually develop systems in place or leveraging systems to, 82 00:04:51,280 --> 00:04:54,440 to actually make this happen is really quite difficult and it 83 00:04:54,440 --> 00:04:57,840 requires a lot of innovation where it is sort of overused and 84 00:04:57,840 --> 00:05:01,360 I hesitate almost to use it. But we need to develop new 85 00:05:01,360 --> 00:05:03,280 mechanisms of how to actually do this. 86 00:05:03,280 --> 00:05:07,280 How do we link natural capital into shareholder value? 87 00:05:07,280 --> 00:05:10,840 But then if that demand is there and we can to structure that 88 00:05:10,840 --> 00:05:14,360 demand for protection and restoration of natural capital, 89 00:05:14,680 --> 00:05:18,000 how do we then actually build the systems around being able to 90 00:05:18,000 --> 00:05:21,480 raise the money, manage the money and then deploy the money 91 00:05:21,480 --> 00:05:24,360 to the ground? And so Lustari works, yes, with 92 00:05:24,360 --> 00:05:28,120 the corporates on kind of structuring the demand side, but 93 00:05:28,120 --> 00:05:31,120 we also work on actually conceptualising and creating the 94 00:05:31,120 --> 00:05:34,840 financial models that are managing the finance over the 95 00:05:34,840 --> 00:05:38,760 long term and also deploying the finance to the ground. 96 00:05:39,080 --> 00:05:41,600 And so our companies, we're headquartered in Singapore. 97 00:05:41,600 --> 00:05:44,320 We have two large offices in Indonesia. 98 00:05:45,240 --> 00:05:46,960 We also have an office in in Malaysia. 99 00:05:46,960 --> 00:05:50,280 And we have people from everywhere from the UK to France 100 00:05:50,720 --> 00:05:53,280 to India and, and also to Australia. 101 00:05:54,000 --> 00:05:57,000 But half of the company is actually focused on the project 102 00:05:57,000 --> 00:05:59,880 side of the work that we do. So we identify the projects on 103 00:05:59,880 --> 00:06:03,640 the ground, we do due diligence. We actually provide a lot of 104 00:06:03,640 --> 00:06:06,120 Technical Support to the projects because really the 105 00:06:06,120 --> 00:06:09,440 infrastructure around making this happen at scale isn't 106 00:06:09,440 --> 00:06:11,720 really there. And so we have to be part of all 107 00:06:11,720 --> 00:06:14,960 of these different aspects. You know, we're in it for the 108 00:06:14,960 --> 00:06:18,640 long term and we, we finance the projects with the view of 25 109 00:06:18,640 --> 00:06:21,760 years as a minimum. And so we're locked in really. 110 00:06:21,840 --> 00:06:25,280 And you know, we tried to find a way of of making it work because 111 00:06:25,280 --> 00:06:28,000 this is a marathon rather than a rather than a Sprint. 112 00:06:28,320 --> 00:06:30,320 Yeah. So just to clarify, it's, I 113 00:06:30,520 --> 00:06:33,320 mean, what I love about the model and the work you're doing 114 00:06:33,320 --> 00:06:36,640 is you are building the supply, building the demand at the same 115 00:06:36,640 --> 00:06:39,840 time looking at the model in terms of the financing, if it 116 00:06:39,840 --> 00:06:42,240 needs upfront financing, how that needs to be constructed. 117 00:06:42,600 --> 00:06:45,320 But also I know maybe we'll get to this later that you're 118 00:06:45,320 --> 00:06:47,640 looking at. How does that all fit in and 119 00:06:47,640 --> 00:06:52,440 feedback into like that bigger systems change we need so that 120 00:06:52,440 --> 00:06:56,920 we're not just seeing one off projects which you know we might 121 00:06:56,920 --> 00:07:00,080 be at risk of, of seeing through this sort of early grant 122 00:07:00,080 --> 00:07:03,160 funding, demand and supply come together, it's done, but then 123 00:07:03,160 --> 00:07:05,920 what next kind of thing? So I think I think you raised an 124 00:07:05,920 --> 00:07:08,000 important point. You know, we need to be looking 125 00:07:08,000 --> 00:07:10,680 at the demand and of course we need to be looking at the supply 126 00:07:10,800 --> 00:07:12,920 as I mentioned. But I think this is also about 127 00:07:12,920 --> 00:07:17,280 scale and, and long term sort of nature of, of the models that we 128 00:07:17,280 --> 00:07:19,680 need. We obviously we, we're not 129 00:07:19,680 --> 00:07:22,840 interested in CSR, we're not interested in one of grants. 130 00:07:22,840 --> 00:07:25,480 So we're not interested in short termism because that's been the 131 00:07:25,480 --> 00:07:29,080 status quo for for far too long and it hasn't really got us to a 132 00:07:29,080 --> 00:07:30,600 place I think where we need to be. 133 00:07:31,200 --> 00:07:34,440 So you, you know, understanding how the demand is able to 134 00:07:34,440 --> 00:07:38,960 actually incorporate nature financing into procurement for 135 00:07:38,960 --> 00:07:42,320 example or into operations is really important to us. 136 00:07:42,640 --> 00:07:46,960 And so innovating around that and understanding exactly what 137 00:07:46,960 --> 00:07:50,120 are the driving forces that create that sort of business 138 00:07:50,120 --> 00:07:53,640 proposition is something that we work on very closely with our 139 00:07:53,640 --> 00:07:56,360 corporate partners and and also by speaking with new corporates. 140 00:07:56,680 --> 00:07:59,840 And you know, it is a little bit of kind of Co creation to be 141 00:07:59,840 --> 00:08:02,560 honest. I don't think there is 100%, you 142 00:08:02,560 --> 00:08:07,640 know, watertight regulation for example, that would say you must 143 00:08:07,640 --> 00:08:11,600 put X amount of financing over X amount of time into nature 144 00:08:11,600 --> 00:08:13,560 conservation. But there are many different 145 00:08:13,560 --> 00:08:16,800 kind of trajectories of this and pulling those together and 146 00:08:16,800 --> 00:08:18,840 understanding that and structuring it is, is really 147 00:08:18,840 --> 00:08:21,840 important. The second part is obviously on 148 00:08:21,840 --> 00:08:25,400 the project supply. I somewhat controversially say 149 00:08:25,400 --> 00:08:28,840 that I think there is a real systemic issue in how nature 150 00:08:28,840 --> 00:08:32,960 conservation is delivered. And I think it has been going on 151 00:08:32,960 --> 00:08:36,280 for a really, really long time. And I think a lot of the 152 00:08:36,280 --> 00:08:40,120 financing that has gone to major conservation over the past let's 153 00:08:40,120 --> 00:08:44,159 say decade or two decades even longer really struggles to 154 00:08:44,159 --> 00:08:47,960 demonstrate the impact of that that financing has actually had 155 00:08:47,960 --> 00:08:50,920 on the ground and on the communities that are in, in 156 00:08:50,920 --> 00:08:53,480 these areas which are incredibly valuable. 157 00:08:53,920 --> 00:08:58,440 And so for us also, you know, supporting the projects in 158 00:08:58,440 --> 00:09:01,840 professionalising effectively and is very important. 159 00:09:01,880 --> 00:09:04,240 A lot of the projects haven't thought about budgets that are 160 00:09:04,240 --> 00:09:06,880 over five years long simply because of the nature of 161 00:09:06,880 --> 00:09:08,520 financing that they've received to date. 162 00:09:09,080 --> 00:09:12,400 But also, you know, the mind shift that you need to create 163 00:09:12,760 --> 00:09:14,360 that you know, this isn't a grant. 164 00:09:15,040 --> 00:09:17,840 We are effectively purchasing an outcome from you. 165 00:09:17,920 --> 00:09:20,240 You, you are effectively a business. 166 00:09:20,240 --> 00:09:22,440 We are paying you to deliver an impact. 167 00:09:22,480 --> 00:09:27,280 That conversation is really quite sometimes tricky to have 168 00:09:27,280 --> 00:09:30,040 and, and, and it takes a lot of work to be able to kind of 169 00:09:30,400 --> 00:09:32,320 explain that. But you know, we're driving 170 00:09:32,320 --> 00:09:35,520 towards what we all want, right. We want with the communities to 171 00:09:35,520 --> 00:09:37,560 preserve the ecosystem. We want with the project 172 00:09:37,560 --> 00:09:41,400 operators or NGOs to deliver that impact. 173 00:09:41,400 --> 00:09:44,840 And so how do we ensure that that product, if you want to 174 00:09:44,840 --> 00:09:48,240 call it, you know, which is the impact in conservation and 175 00:09:48,240 --> 00:09:52,160 restoration is actually fit for purpose that aligns with the 176 00:09:52,160 --> 00:09:55,400 demand that you're generating. And so that requires really long 177 00:09:55,400 --> 00:09:57,960 term thinking. And if you're trying to do 178 00:09:57,960 --> 00:10:00,760 something at scale, the Rimba Collective is well over half 179 00:10:00,760 --> 00:10:03,800 million hectares of contracted demand that we're basically 180 00:10:03,800 --> 00:10:07,120 pulling into the portfolio over the next couple of years 181 00:10:07,200 --> 00:10:09,200 further. So we we are about halfway 182 00:10:09,200 --> 00:10:11,960 there. We, we're under about 300,000 183 00:10:11,960 --> 00:10:16,720 hectares right now across 17 projects and and we're 184 00:10:16,720 --> 00:10:18,200 effectively going to double that. 185 00:10:18,480 --> 00:10:21,760 And if you're going to try to do something so impactful at such 186 00:10:21,760 --> 00:10:26,000 scale and do it incredibly and robustly, it really requires not 187 00:10:26,000 --> 00:10:28,520 just the demand and the financial systems in place, but 188 00:10:28,520 --> 00:10:32,600 it also requires for the supply side to effectively restructure 189 00:10:32,600 --> 00:10:35,040 itself somehow. And that's a long process. 190 00:10:35,480 --> 00:10:36,640 Yeah. No, I hear you. 191 00:10:36,720 --> 00:10:38,120 We've gone through. In. 192 00:10:38,160 --> 00:10:41,320 A different part of GFI, something similar over the last 193 00:10:41,320 --> 00:10:45,080 few years of and it was actually through government grant. 194 00:10:45,080 --> 00:10:47,600 It was a what was called an investment readiness fund, which 195 00:10:47,600 --> 00:10:52,120 was really designed to pay grants to help farmers and NGOs 196 00:10:52,120 --> 00:10:55,720 who largely received grant funding and would have expected 197 00:10:55,720 --> 00:10:58,800 to continue to see grant funding start to instead switch to 198 00:10:58,800 --> 00:11:01,880 developing business cases where they would then be selling 199 00:11:01,880 --> 00:11:05,280 outcomes to the private sector. And yeah, it takes a while to 200 00:11:05,280 --> 00:11:07,760 make that shift and certainly a lot of support. 201 00:11:08,200 --> 00:11:10,160 I feel like this is a very exciting conversation. 202 00:11:10,160 --> 00:11:12,720 We've kind of jumped to the end of the page here, but can we 203 00:11:12,720 --> 00:11:15,160 sort of backtrack? And for those listening who 204 00:11:15,160 --> 00:11:19,120 don't know what Rimba Collective does, could you explain what it 205 00:11:19,120 --> 00:11:21,160 does, how it was set up, how it works? 206 00:11:21,800 --> 00:11:25,000 Yes, I mean, sorry about that. I think the the Remba Collective 207 00:11:25,000 --> 00:11:27,720 is effectively an encapsulation of what we've just been talking 208 00:11:27,720 --> 00:11:29,680 about, as you say, jumping to the end of the page. 209 00:11:30,880 --> 00:11:34,440 So the Remba Collective, it's an impact sourcing mechanism. 210 00:11:34,960 --> 00:11:39,560 And So what we have is we have a group of founding partners on 211 00:11:39,560 --> 00:11:43,040 one side where the demand is structured, where the vision for 212 00:11:43,040 --> 00:11:46,840 what it is that we're actually seeking to achieve is sort of 213 00:11:46,840 --> 00:11:50,840 encapsulated. The financing which is linked to 214 00:11:50,840 --> 00:11:55,280 procurement volumes is actually managed by the Remember 215 00:11:55,280 --> 00:11:58,080 Collective, kind of a financial platform, which obviously has 216 00:11:58,080 --> 00:12:00,400 its own governance. It has its own financial 217 00:12:00,400 --> 00:12:04,160 platform, overview, audits, operating plan and so on. 218 00:12:04,720 --> 00:12:08,360 And then that financing is then delivered into a portfolio which 219 00:12:08,360 --> 00:12:11,240 is growing over time. Off projects. 220 00:12:11,600 --> 00:12:15,560 We have 17 projects right now. Actually 15 of those projects 221 00:12:15,560 --> 00:12:19,480 are community forest projects. Two of them are what I would 222 00:12:19,480 --> 00:12:23,400 kind of consider really to be sort of a, a slight sort of Holy 223 00:12:23,400 --> 00:12:26,480 Grail I think in, in terms of what we would like to achieve. 224 00:12:26,560 --> 00:12:29,360 I think well, both of those kind of project typologies are really 225 00:12:29,360 --> 00:12:33,000 important. One is that on the community 226 00:12:33,000 --> 00:12:36,280 forest side is that we're actually able to show to the 227 00:12:36,280 --> 00:12:39,760 communities that there is value in keeping the forest standing 228 00:12:39,760 --> 00:12:43,800 and supporting development of alternative livelihoods and 229 00:12:43,800 --> 00:12:47,320 generating obviously income, but generating employment in these 230 00:12:47,320 --> 00:12:49,920 in these areas. Some of these areas are 231 00:12:50,080 --> 00:12:53,240 effectively in the high deforestation risk zones of 232 00:12:53,240 --> 00:12:55,280 production, right? So they are protecting the 233 00:12:55,280 --> 00:12:58,640 supply chain from deforestation. They are creating greater 234 00:12:58,640 --> 00:13:02,800 resilience in the supply chain, but really kind of being able to 235 00:13:02,800 --> 00:13:06,680 say to communities, no, you have long term financing heading your 236 00:13:06,680 --> 00:13:10,280 way and we will off take the impact that you're generating, 237 00:13:10,280 --> 00:13:14,080 which until now has been seen as a, you know, as a nice to have. 238 00:13:14,080 --> 00:13:18,160 The forest to them in many ways hasn't actually yielded value 239 00:13:18,160 --> 00:13:22,560 other than from exploitation. The other project typology is 240 00:13:22,560 --> 00:13:26,920 taking large concession areas that are slated for exploitation 241 00:13:26,920 --> 00:13:29,520 and turning them into conservation and restoration. 242 00:13:29,520 --> 00:13:32,720 And so those are the projects then that the Rimba Collective 243 00:13:32,720 --> 00:13:35,560 platform is financing within the portfolio. 244 00:13:35,840 --> 00:13:38,920 That portfolio on an annual basis gets verified and 245 00:13:38,920 --> 00:13:41,120 validated and certified independently. 246 00:13:41,480 --> 00:13:45,640 They generate the impacts that are then effectively retired in 247 00:13:45,640 --> 00:13:47,760 the name of the Rimba Collective. 248 00:13:48,280 --> 00:13:52,240 So retiring means that they really cannot be double counted 249 00:13:52,680 --> 00:13:57,040 and the impacts are then proportionally provided to as 250 00:13:57,040 --> 00:14:00,040 rights to claim to the corporates that are funding the 251 00:14:00,040 --> 00:14:04,760 portfolio and the corporates themselves then utilise the 252 00:14:04,760 --> 00:14:06,600 outcomes for a number of purposes. 253 00:14:07,600 --> 00:14:10,320 The first one, actually the most important one I think for the 254 00:14:10,320 --> 00:14:14,200 for the companies is to ensure that they are protecting their 255 00:14:14,200 --> 00:14:17,280 supply chains through conservation and restoration in 256 00:14:17,280 --> 00:14:20,400 supply shed areas, right? So that means protecting the 257 00:14:20,400 --> 00:14:23,440 natural capital that the production is effectively 258 00:14:23,440 --> 00:14:26,560 dependent on whether it's watershed protection, avoidance 259 00:14:26,560 --> 00:14:29,760 of deforestation or restoration. And and of course all the 260 00:14:29,760 --> 00:14:33,600 benefits that that demonstrates as well as you know, kind of 261 00:14:33,600 --> 00:14:37,080 resilient communities in their sourcing land since all of this 262 00:14:37,240 --> 00:14:39,720 protect the supply chain. And I think that's a matter of 263 00:14:39,720 --> 00:14:43,080 thinking that the corporates are starting to understand. 264 00:14:43,080 --> 00:14:46,560 But actually it is not just about the farm from which I'm 265 00:14:46,560 --> 00:14:48,960 sourcing. It is about the supply chain 266 00:14:49,040 --> 00:14:52,400 area that about sourcing landscapes more broadly that 267 00:14:52,400 --> 00:14:55,080 actually that supply chain itself depends upon. 268 00:14:56,080 --> 00:15:00,160 In addition to that, the portfolio generates validated 269 00:15:00,720 --> 00:15:04,160 and certified impacts around hectares of conservation, 270 00:15:04,160 --> 00:15:08,440 hectares of restoration, around climate reductions and removals, 271 00:15:08,720 --> 00:15:11,360 around biodiversity and around livelihood. 272 00:15:11,520 --> 00:15:16,080 And all of these actually then independently or as a bundled 273 00:15:16,080 --> 00:15:19,280 kind of unit go against corporate sustainability 274 00:15:19,280 --> 00:15:21,160 commitments. And so they're able to actually 275 00:15:21,160 --> 00:15:26,800 utilise it against their own commitments around SPTISPTDNTNFD 276 00:15:26,800 --> 00:15:30,160 And of course, as well. So the stakeholders require them 277 00:15:30,160 --> 00:15:34,800 to to actually demonstrate the impact from these activities as 278 00:15:34,800 --> 00:15:37,680 well as sort of more broadly sustainability commitments that 279 00:15:37,680 --> 00:15:39,880 they themselves as a singular entity might have. 280 00:15:39,880 --> 00:15:42,720 For example, a hectare of conservation. 281 00:15:42,960 --> 00:15:46,920 A number of our founding partners, which are Unilever, 282 00:15:46,920 --> 00:15:51,560 Procter and Gamble, Nestle and Pepsi have a hectare focused 283 00:15:51,800 --> 00:15:54,240 commitment in terms of conservation and restoration. 284 00:15:54,640 --> 00:15:55,560 So. Mike, I'm just going to 285 00:15:55,560 --> 00:15:58,800 summarise here, which I know won't do justice to everything 286 00:15:58,800 --> 00:16:02,480 you've just shared, But essentially companies including 287 00:16:02,480 --> 00:16:05,520 Procter and Gamble and Unilever, like you mentioned, are making 288 00:16:05,520 --> 00:16:09,520 payments over 30 years, depending on how much palm oil 289 00:16:09,520 --> 00:16:13,200 they procure that go into an SPV That then distributes those 290 00:16:13,200 --> 00:16:16,360 payments into projects that Lestari is sourcing that are 291 00:16:16,360 --> 00:16:20,120 delivering environmental and social outcomes from peat and 292 00:16:20,120 --> 00:16:23,960 forest restoration. So can you just sort of down? 293 00:16:23,960 --> 00:16:26,400 As you know, that's that's a huge feat to have been able to 294 00:16:26,400 --> 00:16:29,000 pull that supply and demand together and then set up the 295 00:16:29,000 --> 00:16:31,600 structure that enables those payments and measuring all the 296 00:16:31,600 --> 00:16:33,240 outcomes. I mean, how has the process 297 00:16:33,240 --> 00:16:34,280 gone? I. 298 00:16:34,320 --> 00:16:36,880 I have to say this is one of the most rewarding experiences I 299 00:16:36,880 --> 00:16:40,000 think of, of, of my career, which is to sit with not just 300 00:16:40,000 --> 00:16:42,840 forward thinking companies, but forward thinking individuals. 301 00:16:42,840 --> 00:16:46,160 You know, we started with A2 pager and thought is this a good 302 00:16:46,160 --> 00:16:49,320 idea? And you know, these guys said 303 00:16:49,320 --> 00:16:51,680 yes. And so we said, all right, this 304 00:16:51,680 --> 00:16:53,280 is going to take quite a bit of work. 305 00:16:53,680 --> 00:16:58,280 It did take us almost 18 months and slowly we developed this and 306 00:16:58,280 --> 00:17:01,280 so this kind of Co creation was a was a really rewarding 307 00:17:01,280 --> 00:17:03,960 experience I've got. So many questions, but the first 308 00:17:03,960 --> 00:17:06,200 one I suppose is staying on that point. 309 00:17:07,599 --> 00:17:10,480 I mean, you talked about sort of supply chain resilience as being 310 00:17:10,720 --> 00:17:14,200 one of the driving factors. And one of the things we see 311 00:17:14,200 --> 00:17:17,560 often is, you know, a CSO says, yes, we love this idea of a 312 00:17:17,560 --> 00:17:21,040 project and I'm all in for investing, but I need to get it 313 00:17:21,040 --> 00:17:24,560 through my CFO. So what was that conversation 314 00:17:24,560 --> 00:17:28,280 like in terms of was it very clear how this was going to then 315 00:17:28,720 --> 00:17:33,480 impact positively or at least avoid losses on future growth 316 00:17:33,480 --> 00:17:37,240 for these businesses? Well, I mean we started this in 317 00:17:37,240 --> 00:17:42,840 2019 and so at that time I don't think that the business case was 318 00:17:42,840 --> 00:17:45,040 100% clear. And I think things were changing 319 00:17:45,040 --> 00:17:47,040 a lot. You know, we even in those days 320 00:17:47,040 --> 00:17:51,160 we talked about potential pathways of how SBTI will 321 00:17:51,160 --> 00:17:54,760 develop and, and what sort of factor of sort of business case 322 00:17:54,760 --> 00:17:58,640 that was going to drive. We were discussing, you know, is 323 00:17:58,640 --> 00:18:02,200 climate the primary focus of the portfolio or should it be 324 00:18:02,200 --> 00:18:04,400 biodiversity? Should it be livelihoods? 325 00:18:04,400 --> 00:18:07,120 You know, and we didn't really, to be honest, I think at that 326 00:18:07,120 --> 00:18:10,400 time we didn't really know. We, we were working on the 327 00:18:10,400 --> 00:18:13,120 assumption that what we were striving towards was that, you 328 00:18:13,120 --> 00:18:15,960 know, was hectares of conservation and hectares of 329 00:18:15,960 --> 00:18:18,880 restoration. I think that business case is 330 00:18:18,880 --> 00:18:22,760 clarifying more and more and more partly because the also the 331 00:18:22,760 --> 00:18:25,120 demands I think of the state stakeholders of the 332 00:18:25,120 --> 00:18:29,680 shareholders, but also, you know, the requirements in terms 333 00:18:29,680 --> 00:18:33,080 of regulation are all starting to sort of converge, right. 334 00:18:33,080 --> 00:18:36,560 Whether it's the developments in the EU regulation, whether it's 335 00:18:36,560 --> 00:18:40,240 sort of demands from from investors as well and the 336 00:18:40,240 --> 00:18:44,080 alignment I think of how the sustainability commitments are 337 00:18:44,080 --> 00:18:46,520 starting to take shape. And so there were many different 338 00:18:46,520 --> 00:18:48,600 factors that were sort of narrowing this down. 339 00:18:49,560 --> 00:18:52,760 I think if you are going to speak to the CFO, which I think 340 00:18:52,760 --> 00:18:55,720 is the to be honest, I think in many ways that is the most 341 00:18:55,720 --> 00:18:58,880 important person right in to to persuade because they will not 342 00:18:58,880 --> 00:19:02,680 come from this world of sustainability and being able to 343 00:19:02,680 --> 00:19:06,600 articulate the business case to them is, is really the most 344 00:19:06,840 --> 00:19:10,360 fundamental. And I think that does come from 345 00:19:10,360 --> 00:19:14,440 supply chain resilience and supply chain security, right? 346 00:19:14,440 --> 00:19:18,640 And really demonstrating how does that natural capital 347 00:19:19,200 --> 00:19:24,840 achieve that because shocked to supply chain sourcing, whether 348 00:19:24,840 --> 00:19:27,160 it's because of reputational aspects, right? 349 00:19:27,360 --> 00:19:30,720 And of which I think to be honest, those are, yes, they're 350 00:19:30,720 --> 00:19:33,080 part of it, but they shouldn't be the main driver of it. 351 00:19:33,600 --> 00:19:37,280 But supply chain resilience, you know, if there is deforestation 352 00:19:37,280 --> 00:19:41,440 and there is fire and the crop burns down, which raises prices, 353 00:19:41,840 --> 00:19:45,840 you know, you can put a monetary value around and say, well 354 00:19:45,840 --> 00:19:49,800 actually if we put that money in, frankly if we put a fraction 355 00:19:49,800 --> 00:19:52,960 of that money in into protecting that supply chain in the 1st 356 00:19:52,960 --> 00:19:56,080 place, we would have achieved the goal at a much lower cost 357 00:19:56,080 --> 00:19:59,800 and protected our supply chain from a lot of negative aspects 358 00:19:59,800 --> 00:20:02,640 that are, you know, adjoining this and so. 359 00:20:03,120 --> 00:20:05,560 This is an evolving case, of course, and you know, the EU 360 00:20:05,560 --> 00:20:09,520 regulation is now kind of maybe being slightly delayed and maybe 361 00:20:09,520 --> 00:20:12,480 it's going to be revived under the omnibus kind of laws and 362 00:20:12,480 --> 00:20:15,360 directives and so on. But I think the trajectory is 363 00:20:15,360 --> 00:20:19,480 relatively clear. And so this will become a more 364 00:20:19,480 --> 00:20:23,960 important argument. The key here is to demonstrate 365 00:20:24,040 --> 00:20:28,720 that actually the financing that you are putting in, he's 366 00:20:28,720 --> 00:20:31,280 actually delivering that supply chain resilience and the 367 00:20:31,280 --> 00:20:32,800 protection of the natural capital. 368 00:20:33,400 --> 00:20:35,840 Because I imagine, and it's a conversation we're only just 369 00:20:35,840 --> 00:20:39,040 starting to have really, but I think it's super relevant is, is 370 00:20:39,040 --> 00:20:42,120 how does the financing start to get affected? 371 00:20:42,120 --> 00:20:44,320 So for example, if you just say your Procter and Gamble will use 372 00:20:44,320 --> 00:20:47,200 one of your corporates that you talked about, they're obviously 373 00:20:47,200 --> 00:20:52,080 financing this investment into these projects through their own 374 00:20:52,080 --> 00:20:56,120 balance sheet, which is probably drawing on a facility that they 375 00:20:56,120 --> 00:20:59,480 have with a large commercial lender or perhaps it's through a 376 00:20:59,480 --> 00:21:00,760 bond. I don't, I don't know. 377 00:21:01,160 --> 00:21:04,600 And so to what extent can that feed into that process where 378 00:21:04,600 --> 00:21:08,440 they may get preferred rates from a loan because of the 379 00:21:08,440 --> 00:21:11,440 resilience that they're now delivering through this 380 00:21:11,440 --> 00:21:13,680 investment? It feels like we're quite a long 381 00:21:13,680 --> 00:21:16,520 way off making that final connection through to the 382 00:21:16,520 --> 00:21:20,240 finance sector that will be financing those corporates in 383 00:21:20,240 --> 00:21:22,240 turn do the investment. But am I wrong? 384 00:21:22,240 --> 00:21:25,840 Are you seeing that already or do you see that's quite far, far 385 00:21:25,840 --> 00:21:27,880 down the line? No, not at all. 386 00:21:27,880 --> 00:21:31,200 And you know, there have been a lot of high profile cases 387 00:21:31,200 --> 00:21:34,040 actually just recently, right, where shareholders have taken 388 00:21:34,040 --> 00:21:36,840 action within companies. You know, there, there are 389 00:21:36,840 --> 00:21:41,080 lawsuits, right, against companies that are seem not to 390 00:21:41,080 --> 00:21:44,800 be taking enough action on climate, that are seem not to be 391 00:21:44,800 --> 00:21:48,000 taking enough action on deforestation, for example, 392 00:21:48,000 --> 00:21:50,200 right? It's just last year, I, I, I 393 00:21:50,200 --> 00:21:53,040 heard that there were 800 different lawsuits against 394 00:21:53,040 --> 00:21:56,760 corporates on either climate or nature already under way. 395 00:21:57,000 --> 00:22:01,680 Now that to an investor is a red flag, of course, right? 396 00:22:02,120 --> 00:22:05,520 And so, you know, they have also been really high profile cases 397 00:22:05,520 --> 00:22:08,520 where because of environmental impact or potential 398 00:22:08,520 --> 00:22:11,680 environmental impact, you know, even pension funds have actually 399 00:22:11,680 --> 00:22:15,640 moved away from investing in certain companies and that 400 00:22:15,640 --> 00:22:18,040 raises a real cost to the company. 401 00:22:18,040 --> 00:22:21,160 If they're not then able to refinance their loans, if 402 00:22:21,160 --> 00:22:24,440 they're not able to get loans at concessionary rates and so on, 403 00:22:24,440 --> 00:22:28,800 as a result of this, then this is a huge cost to company. 404 00:22:28,800 --> 00:22:33,160 So I think maybe the case isn't being made clearly enough, but 405 00:22:33,160 --> 00:22:36,400 certainly this is already happening and there are already 406 00:22:36,400 --> 00:22:38,440 examples of this, of this taking place. 407 00:22:38,440 --> 00:22:41,360 And I and I do believe that actually the CF OS do see this 408 00:22:42,040 --> 00:22:43,960 as well as the lawyers within the company. 409 00:22:44,000 --> 00:22:46,560 They do see where that risk comes from and they do 410 00:22:46,560 --> 00:22:48,880 understand that this is going to impact, you know, their 411 00:22:48,880 --> 00:22:51,680 profitability. And as you said, not just 412 00:22:51,680 --> 00:22:55,320 because of lawsuits, but also because of just being able to 413 00:22:55,400 --> 00:22:59,280 operate business as usual in light of some of the activities 414 00:22:59,280 --> 00:23:00,800 that are happening around their supply chain. 415 00:23:01,520 --> 00:23:03,000 It'd be great to sort of understand. 416 00:23:03,000 --> 00:23:06,440 So correct me if I'm wrong, but it's palm oil that Rimba 417 00:23:06,440 --> 00:23:09,480 Collective kind of really started with in terms of, you 418 00:23:09,480 --> 00:23:11,160 know, the commodity that you've been looking at. 419 00:23:11,360 --> 00:23:14,920 Could you talk to a sort of why, why palm oil, although, you 420 00:23:14,920 --> 00:23:17,200 know, it's, it's what everyone's been talking about for a while. 421 00:23:17,400 --> 00:23:21,880 And then also your plans to look at other commodities as well, 422 00:23:21,880 --> 00:23:24,520 which might be sort of involve different types of corporates? 423 00:23:25,080 --> 00:23:28,440 Yes, I mean, you know, the palm oil link is there partly because 424 00:23:28,440 --> 00:23:32,320 of my own, my own history. So after, you know, finishing 425 00:23:32,320 --> 00:23:37,000 work in sort of nature conservation in various places, 426 00:23:37,000 --> 00:23:40,760 I started working in sustainability of the palm oil 427 00:23:40,760 --> 00:23:44,240 industry for the Zoological Society of London and then 428 00:23:44,240 --> 00:23:47,360 continued over a longer period. And so I was really quite, you 429 00:23:47,360 --> 00:23:50,560 know, heavily involved in round table and sustainable palm oil 430 00:23:50,560 --> 00:23:53,160 and various working groups and in the development of the 431 00:23:53,160 --> 00:23:55,800 compensation mechanism. And really it was sort of 432 00:23:55,800 --> 00:23:59,520 understanding and, and having close relationships with the 433 00:23:59,520 --> 00:24:02,920 companies and being able to speak to the, you know, sort of 434 00:24:03,160 --> 00:24:06,360 off the record a little bit and, you know, better understanding 435 00:24:06,640 --> 00:24:09,720 the people personally and, and understanding, OK, well, what is 436 00:24:09,720 --> 00:24:10,720 it that you need? Right? 437 00:24:10,720 --> 00:24:14,480 What, what do you see as the key challenges and rather than going 438 00:24:14,480 --> 00:24:20,120 into it, you know, thinking up products or, or a solution, but 439 00:24:20,120 --> 00:24:22,680 actually sort of coming at it from the problem side of things. 440 00:24:22,680 --> 00:24:26,480 What is the problem that you're trying to solve for and not 441 00:24:26,480 --> 00:24:30,680 being a consultancy effectively right where where we sort of 442 00:24:30,680 --> 00:24:33,520 help them to think about the problem, but actually say no, 443 00:24:33,520 --> 00:24:36,600 What we want to do is we want to partner with you to provide a 444 00:24:36,600 --> 00:24:40,880 solution and to operate and deliver that solution right over 445 00:24:40,880 --> 00:24:42,960 the long term. I think that was really the key. 446 00:24:43,520 --> 00:24:47,400 The palm oil industry, you know, it has been hit very heavily for 447 00:24:47,520 --> 00:24:51,920 the last 20 years and you know, partly as a result of that. 448 00:24:52,560 --> 00:24:55,720 I think I do actually believe looking at lots of other 449 00:24:55,720 --> 00:24:59,000 commodities and that they are actually quite advanced and sort 450 00:24:59,000 --> 00:25:01,800 of understanding actually what are the problems, what are the 451 00:25:01,800 --> 00:25:03,360 drivers. But also in terms of the 452 00:25:03,360 --> 00:25:06,400 commitments that they have and the level of scrutiny that they 453 00:25:06,400 --> 00:25:09,280 were basically under. All of this, you know, people 454 00:25:09,280 --> 00:25:10,880 complained about at the at the time. 455 00:25:10,880 --> 00:25:14,360 But I do actually think that it has got the sector and the 456 00:25:14,360 --> 00:25:18,360 commodity to a better place. And so, you know, we started 457 00:25:18,400 --> 00:25:22,440 focusing on palm oil and palm oil sourcing regions really to 458 00:25:22,440 --> 00:25:26,520 identify #1 how do we allocate what should be kind of a 459 00:25:26,640 --> 00:25:30,160 commensurate or what should be an, an equitable sort of country 460 00:25:30,160 --> 00:25:32,720 financial contribution. But we had to start somewhere, 461 00:25:32,800 --> 00:25:35,000 right? And because I think the, the 462 00:25:35,000 --> 00:25:37,680 sector was advanced and because the companies were forward 463 00:25:37,680 --> 00:25:40,600 thinking and there was a lot of focus on the, on the commodity, 464 00:25:40,960 --> 00:25:44,120 we have the people around the table to, to really take this 465 00:25:44,120 --> 00:25:46,480 further and, and to be ambitious, right. 466 00:25:47,120 --> 00:25:50,720 And so really, you know, the project's portfolio is related 467 00:25:50,720 --> 00:25:54,400 and it is within the supply basis of the palm oil kind of 468 00:25:54,400 --> 00:25:59,040 growing region. But you know, over the years 469 00:25:59,040 --> 00:26:01,400 we've, we've looked at other opportunities to actually 470 00:26:01,400 --> 00:26:04,680 replicate this in, in other sectors, in other commodities. 471 00:26:04,680 --> 00:26:08,080 And I and I believe actually, you know, if you are dependent 472 00:26:08,720 --> 00:26:13,280 on a growing Agri commodity, especially in the global S, 473 00:26:13,920 --> 00:26:18,520 actually the issues are relatively similar, right? 474 00:26:18,520 --> 00:26:21,760 I mean, you know, this is about deforestation, it is about 475 00:26:21,760 --> 00:26:25,040 nature degradation, it is about local communities and, and 476 00:26:25,040 --> 00:26:27,480 livelihoods. And for most companies, you 477 00:26:27,480 --> 00:26:31,040 know, where wish we could say this, you know, with, with data 478 00:26:31,040 --> 00:26:33,000 on nature. But I think we can make the same 479 00:26:33,080 --> 00:26:37,280 similar assumption that where your scope 3 is the largest 480 00:26:37,280 --> 00:26:40,440 climate impact of most companies downstream, right? 481 00:26:41,040 --> 00:26:44,320 And I, I would think that it would be exactly the same if we 482 00:26:44,320 --> 00:26:47,520 were talking about nature. And so where you where you 483 00:26:47,520 --> 00:26:52,000 really have to focus your energy and your efforts is really 484 00:26:52,040 --> 00:26:56,840 around that sort of supplier area where the commodity is 485 00:26:56,840 --> 00:26:59,760 coming from. Because frankly, in most cases, 486 00:26:59,760 --> 00:27:02,720 you know, if we're talking about Brazil for soy, if we're talking 487 00:27:02,720 --> 00:27:06,800 about, you know, palm oil in Indonesia, you know, that is 488 00:27:06,800 --> 00:27:11,160 where the biodiversity still is. And that is where the standing 489 00:27:11,160 --> 00:27:14,840 forests, which we so desperately need to protect are remaining. 490 00:27:14,880 --> 00:27:19,560 And so if you want a bang for your buck, you know, that is 491 00:27:19,560 --> 00:27:21,560 really kind of where you can achieve it. 492 00:27:22,320 --> 00:27:24,600 And I'm not sure how much you can share, Mike, I know you have 493 00:27:24,600 --> 00:27:27,480 got sort of some plans in the pipeline, but they might not be 494 00:27:27,480 --> 00:27:29,560 public yet. Are there? 495 00:27:29,880 --> 00:27:31,880 So that's a bit of a. Load of question, I suppose. 496 00:27:32,240 --> 00:27:34,960 Are there other commodities that you're looking at? 497 00:27:34,960 --> 00:27:38,200 Are there other regions that you're scaling up into? 498 00:27:38,240 --> 00:27:41,240 We'd love to sort of know how you can, you know where you're 499 00:27:41,240 --> 00:27:43,560 seeing replication scaling opportunity. 500 00:27:44,000 --> 00:27:47,240 I mean, certainly what I can say is that we found the kind of the 501 00:27:47,240 --> 00:27:51,120 collective model of the Rimba Collective highly scalable and 502 00:27:51,120 --> 00:27:55,160 highly replicable. And so we we are looking at 503 00:27:55,280 --> 00:27:58,440 other potential areas, other potential industries where we 504 00:27:58,440 --> 00:28:02,120 can replicate the model. But we also understand that you 505 00:28:02,120 --> 00:28:06,320 can't just take the model for one industry and fully replicate 506 00:28:06,320 --> 00:28:09,520 it for another. So this does require still a lot 507 00:28:09,520 --> 00:28:12,720 of Co creation, a lot of understanding what the different 508 00:28:12,720 --> 00:28:15,240 sectors look like and what the other industries will look like, 509 00:28:15,240 --> 00:28:18,600 what are their dependencies, where are their risks and what 510 00:28:18,600 --> 00:28:21,120 is it that they're seeking to achieve. 511 00:28:21,760 --> 00:28:24,840 So yes, we are. That's probably as much as I can 512 00:28:24,840 --> 00:28:28,160 reveal right now. At the same time you know it is 513 00:28:28,160 --> 00:28:30,920 going to be and I'm really looking forward to another 514 00:28:30,920 --> 00:28:34,360 effort of Co creation and really working closely with the demand 515 00:28:34,360 --> 00:28:37,800 side and understanding exactly what is needed and what scale 516 00:28:37,800 --> 00:28:39,880 can be achieved, what ambition we can achieve. 517 00:28:40,520 --> 00:28:42,120 And well, thank you. I know it's you have to be 518 00:28:42,120 --> 00:28:44,360 suitably vague, but I know I'm sure at some point this year 519 00:28:44,360 --> 00:28:47,600 we'll, we'll hear more about the specific industry that you might 520 00:28:47,600 --> 00:28:50,480 be working with. Just before we let you go, I 521 00:28:50,480 --> 00:28:55,040 think I'd love to circle back on to the impacts and measurement. 522 00:28:55,040 --> 00:28:56,880 I think there's something we talk about quite a lot in this 523 00:28:56,880 --> 00:29:00,360 podcast because people are very keen to understand or how are 524 00:29:00,360 --> 00:29:02,080 you really measuring those outcomes. 525 00:29:02,680 --> 00:29:05,000 So I wonder if you could just sort of share with us that and I 526 00:29:05,000 --> 00:29:08,240 know you and I have spoken as well in the past about 527 00:29:08,560 --> 00:29:11,880 potentially the role of biodiversity credit sort of 528 00:29:11,880 --> 00:29:16,560 standards as being able to slot into being a standard from for 529 00:29:16,560 --> 00:29:19,520 those outcomes as well. So when we talk, when we talk 530 00:29:19,520 --> 00:29:22,240 about sort of the MRV frameworks, the, the, the 531 00:29:22,240 --> 00:29:24,960 monitoring evaluation and learning frameworks that we 532 00:29:24,960 --> 00:29:30,320 apply, we really would like preferably to use third party 533 00:29:30,320 --> 00:29:34,680 standards which are accepted by the market and which are as as 534 00:29:34,680 --> 00:29:38,360 far as possible aligned to what it is that we're actually 535 00:29:38,360 --> 00:29:41,880 seeking to achieve. Like what is the demand required 536 00:29:41,880 --> 00:29:46,360 from the monitoring, evaluation and reporting from the projects. 537 00:29:46,560 --> 00:29:50,320 Unfortunately that isn't currently a standard out there 538 00:29:50,320 --> 00:29:53,000 that would match perfectly exactly what it is that you 539 00:29:53,000 --> 00:29:55,760 need. So what we do is we effectively 540 00:29:55,760 --> 00:29:59,400 utilise kind of more, more market accepted third party 541 00:29:59,400 --> 00:30:03,200 certification, which we then support the project portfolio 542 00:30:03,200 --> 00:30:05,720 and the individual projects to war towards. 543 00:30:05,800 --> 00:30:08,760 So we are actually kind of financing the projects at a very 544 00:30:08,760 --> 00:30:12,040 early stage, which I think would be financing that the projects 545 00:30:12,040 --> 00:30:15,280 would struggle to to get otherwise so that they 546 00:30:15,320 --> 00:30:18,520 effectively become certified under these standards. 547 00:30:18,920 --> 00:30:23,560 But we also add our own Mel framework on top of that and and 548 00:30:23,560 --> 00:30:27,640 again, which is independently validated by by third parties. 549 00:30:28,080 --> 00:30:30,400 The reason why we have to put that kind of additional 550 00:30:30,400 --> 00:30:33,320 framework to it is because actually the outcomes that we're 551 00:30:33,320 --> 00:30:36,960 seeking and that is needed on the demand side need to be 552 00:30:36,960 --> 00:30:41,200 differently monitored and reported than is currently under 553 00:30:41,200 --> 00:30:43,480 these particular certification standards. 554 00:30:44,480 --> 00:30:48,880 So you know, really we are sort of, I would say we're sort of 555 00:30:48,880 --> 00:30:52,920 agnostic in some ways as long as that has that market buy in, as 556 00:30:52,920 --> 00:30:56,080 long as it's credible, as long as it's robust of course, but 557 00:30:56,080 --> 00:30:59,240 we're relatively agnostic around what certification standards we 558 00:30:59,240 --> 00:31:02,520 would put over the portfolio. Unfortunately, we're sort of 559 00:31:02,520 --> 00:31:04,640 having to do a lot of this ourselves at the moment because 560 00:31:04,640 --> 00:31:08,080 there isn't really anything fit for purpose out there. 561 00:31:08,640 --> 00:31:12,040 You know, I, there's a lot of talk about biodiversity credits 562 00:31:13,080 --> 00:31:16,720 and, you know, around value and, and nature and, and, and 563 00:31:16,720 --> 00:31:18,800 biodiversity credit markets and so on. 564 00:31:19,760 --> 00:31:21,440 Yes, I think things are moving fast. 565 00:31:21,440 --> 00:31:23,520 I think there's a lot of fragmentation in that. 566 00:31:23,560 --> 00:31:27,240 And you know, we even commissioned a, a study done by 567 00:31:27,240 --> 00:31:29,720 another party to, to look at biodiversity credits. 568 00:31:29,720 --> 00:31:32,600 And I think by the time they finished the study, there were 569 00:31:32,640 --> 00:31:36,800 50% more biodiversity credit standards out there than when 570 00:31:36,800 --> 00:31:40,920 they when they started. And so I actually see this as an 571 00:31:40,920 --> 00:31:45,440 additional sort of MRV framework that can really help bring 572 00:31:45,440 --> 00:31:48,440 credibility, bring more robustness into sort of bio 573 00:31:48,440 --> 00:31:51,960 specifically biodiversity outcomes monitoring within the 574 00:31:51,960 --> 00:31:54,800 portfolio. But really at this moment in 575 00:31:54,800 --> 00:31:58,160 time, you know, we're waiting to see which, which particular 576 00:31:58,160 --> 00:32:01,960 certification standard is going to become market accepted. 577 00:32:02,560 --> 00:32:04,840 I would just, I mean, I, I, I think, you know, despite my 578 00:32:04,840 --> 00:32:07,560 comment around the market itself, around biodiversity 579 00:32:07,560 --> 00:32:12,080 credits, I mean, I, frankly, I would, I feel that biodiversity 580 00:32:12,080 --> 00:32:15,640 credits per SE might not necessarily be the, the best 581 00:32:15,640 --> 00:32:18,000 direction to go. I might be shown to be wrong on 582 00:32:18,000 --> 00:32:19,800 this. I, I would say that sort of more 583 00:32:19,800 --> 00:32:24,040 of a bundled nature credit would be more valuable to the market. 584 00:32:24,440 --> 00:32:28,080 But clearly, you know, it's in decades for the carbon markets 585 00:32:28,080 --> 00:32:30,920 to kind of structure and establish and and you know, and 586 00:32:30,920 --> 00:32:34,280 have have a market really in place for them. 587 00:32:34,760 --> 00:32:37,600 Clearly it's not going to take that long in the nature credit, 588 00:32:37,600 --> 00:32:40,280 biodiversity credit space. I think it's going to be much 589 00:32:40,280 --> 00:32:42,320 faster and we're already seeing those developments. 590 00:32:42,320 --> 00:32:47,120 And you know, if that brings more financing to nature, great 591 00:32:47,160 --> 00:32:50,320 by all means. And you know, we are more than 592 00:32:50,320 --> 00:32:54,160 happy to align as long as these standards can show credibility. 593 00:32:54,440 --> 00:32:57,800 Yeah, I mean, if, if nothing, there will be so much research 594 00:32:58,080 --> 00:33:03,480 being done on how to, you know, monitor and measure outcomes of 595 00:33:03,480 --> 00:33:06,240 biodiversity in various levels through all the biodiversity 596 00:33:06,240 --> 00:33:09,560 credit mechanisms that have been set up that we will at least 597 00:33:09,560 --> 00:33:12,000 have that. I know you've got to go. 598 00:33:12,160 --> 00:33:15,400 So just finally, just a bit of an open-ended question. 599 00:33:15,400 --> 00:33:17,360 You're coming over for London Climate Action Week. 600 00:33:17,360 --> 00:33:19,240 I'm sure there's lots of other events you're going to this 601 00:33:19,280 --> 00:33:20,520 year. And I would encourage people 602 00:33:20,520 --> 00:33:23,760 listening to reach out if you wanted to meet with Mike and the 603 00:33:23,760 --> 00:33:27,280 team while they're over. But what are the sort of the 604 00:33:27,280 --> 00:33:30,440 biggest things that you think would make the most impact that 605 00:33:30,440 --> 00:33:34,120 we could collectively do if we want private sector finance or 606 00:33:34,240 --> 00:33:37,840 or general finance, you know, from financial institutions to 607 00:33:37,840 --> 00:33:41,480 start feeding in much more to conservation? 608 00:33:41,960 --> 00:33:45,720 So I think I, I will actually leave the demand side aside in 609 00:33:45,720 --> 00:33:49,160 responding to this. I, I do believe genuinely that 610 00:33:49,160 --> 00:33:53,160 there is a sizeable interest and sizeable market out there for 611 00:33:53,160 --> 00:33:55,480 natural capital protection and and restoration. 612 00:33:55,600 --> 00:33:58,880 And I know that there will be lots of people who will argue 613 00:33:58,880 --> 00:34:00,960 otherwise. And you know, sometimes I would 614 00:34:00,960 --> 00:34:04,800 myself as well. But let's, let's assume that 615 00:34:04,800 --> 00:34:08,320 that is a given. I I think where we really need 616 00:34:08,320 --> 00:34:11,800 to focus on is the project supply, the project supply. 617 00:34:12,199 --> 00:34:13,800 Yeah, I always hear the opposite. 618 00:34:13,800 --> 00:34:15,199 So yeah, no, sorry, I'm intrigued. 619 00:34:15,600 --> 00:34:18,800 And indeed, this is kind of why I decided to leave the demand 620 00:34:18,800 --> 00:34:21,840 side to side. You know what we're seeing as I 621 00:34:21,840 --> 00:34:24,760 mentioned, you know Nastari Capital is 40 people. 622 00:34:25,080 --> 00:34:28,400 Twenty of those people are actually project facing. 623 00:34:29,000 --> 00:34:32,040 We provide so much technical assistance to projects. 624 00:34:32,280 --> 00:34:34,679 We provide guidance on development of budgets. 625 00:34:34,679 --> 00:34:38,040 We provide technical assistance if there is a fire in place, we 626 00:34:38,040 --> 00:34:41,080 provide technical assistance. You know, if, if a project 627 00:34:41,080 --> 00:34:46,159 suffers encroachment, we, we help them develop and we finance 628 00:34:46,159 --> 00:34:49,480 the early stages I mentioned before, right, in developing 629 00:34:49,480 --> 00:34:52,719 management plans, in developing livelihood plans and so on. 630 00:34:53,199 --> 00:34:57,800 You know, I believe that the market will be there if it isn't 631 00:34:57,800 --> 00:35:01,680 already. But we need a credible project 632 00:35:01,680 --> 00:35:05,400 supply pipeline into which that financing will go. 633 00:35:05,640 --> 00:35:08,720 I think for decades people have been saying there isn't enough 634 00:35:08,720 --> 00:35:11,440 money for conservation. Well, I think we're turning the 635 00:35:11,440 --> 00:35:14,640 corner around that. I think now conservation needs 636 00:35:14,640 --> 00:35:19,320 to demonstrate that it is actually worth and able to 637 00:35:19,320 --> 00:35:22,720 demonstrate the the positive impact that it needs to and the 638 00:35:22,720 --> 00:35:26,200 outcomes that it needs to demonstrate in order for that 639 00:35:26,200 --> 00:35:28,320 money to actually flow to those projects. 640 00:35:28,720 --> 00:35:32,560 And you know, I have AI have many ideas about how we can do 641 00:35:32,560 --> 00:35:35,160 that and how we can do that collectively and how different 642 00:35:35,160 --> 00:35:38,400 financial streams and how blended finance can be leveraged 643 00:35:38,400 --> 00:35:40,200 for that. You know, the role of donors I 644 00:35:40,200 --> 00:35:43,280 think is really phenomenal in this. 645 00:35:43,280 --> 00:35:46,720 And you know I will just give you an example, Lestari Capital 646 00:35:46,720 --> 00:35:50,400 and the Rimba Collective, we have captured such significant 647 00:35:50,400 --> 00:35:52,880 demand and we have such significant demand for quality 648 00:35:52,880 --> 00:35:57,280 projects on the ground. If we are able to align with 649 00:35:57,280 --> 00:36:01,480 donors and technical assistance facilities that actually build 650 00:36:01,480 --> 00:36:06,080 that pipeline in place, imagine that that donor is then able to 651 00:36:06,080 --> 00:36:09,360 say, well, I know that if I support this project at the 652 00:36:09,440 --> 00:36:13,640 early stage that there is a market based financing that will 653 00:36:13,640 --> 00:36:16,480 then fund that project for the next 25 years. 654 00:36:16,880 --> 00:36:18,800 Well, isn't that a win for the donor? 655 00:36:18,800 --> 00:36:22,120 Isn't that a win for the market and that that we would represent 656 00:36:22,120 --> 00:36:24,440 the member collected? But isn't that also a win for 657 00:36:24,440 --> 00:36:28,120 those projects and for this country where these projects 658 00:36:28,280 --> 00:36:30,880 then actually have long term sustainable finance? 659 00:36:31,440 --> 00:36:34,080 And so this is really something, and I, you know, I mentioned 660 00:36:34,080 --> 00:36:36,880 kind of systematic failure in, in conservation. 661 00:36:37,400 --> 00:36:40,240 And I think in general, that is unfortunately maybe slightly 662 00:36:40,240 --> 00:36:43,720 dramatic way of putting it. But I, I, I think that is still 663 00:36:43,720 --> 00:36:46,440 the case. And you know, we need to be able 664 00:36:46,440 --> 00:36:50,120 to start demonstrating the, the impact, but clearly we need to 665 00:36:50,120 --> 00:36:53,480 start sometimes with retraining the existing practitioners. 666 00:36:53,840 --> 00:36:56,800 We need to start actually with training a new generation of 667 00:36:56,800 --> 00:37:00,760 practitioners to prepare these countries and these projects for 668 00:37:00,760 --> 00:37:03,120 these markets. Otherwise conservation finance 669 00:37:03,120 --> 00:37:07,480 will go around, especially the community type projects because 670 00:37:07,480 --> 00:37:10,720 they will be viewed as high risk and they will be viewed as 671 00:37:10,720 --> 00:37:13,480 potentially as too small. But look, we're trying to 672 00:37:13,480 --> 00:37:19,120 demonstrate what is possible and yes, it is difficult and there 673 00:37:19,120 --> 00:37:22,880 are risks involved in it, but what other option do we have 674 00:37:22,880 --> 00:37:24,680 other than to make it successful? 675 00:37:24,720 --> 00:37:26,720 And I really believe that that is where the kind of the 676 00:37:26,720 --> 00:37:29,600 collective action more broadly with the stakeholders and 677 00:37:29,600 --> 00:37:33,080 shareholders and and everybody else, the donor community, the 678 00:37:33,320 --> 00:37:37,800 NGO community, where we can all come together and say, you know, 679 00:37:37,800 --> 00:37:40,600 how do we address this issue? I think the money is there. 680 00:37:40,600 --> 00:37:42,480 We should stop fighting over the money. 681 00:37:43,040 --> 00:37:45,520 How we should focus on where we want to be in 10 years time? 682 00:37:45,840 --> 00:37:48,360 So gosh, so. Fascinating and hearing you 683 00:37:48,800 --> 00:37:52,280 really makes me think about how we could all move a lot faster 684 00:37:52,280 --> 00:37:54,800 through shared learnings. Actually, I mentioned earlier 685 00:37:54,800 --> 00:37:57,320 the investment readiness funds in the UK, those technical 686 00:37:57,320 --> 00:38:00,720 assistance facilities with grants issued to the supply side 687 00:38:00,720 --> 00:38:03,400 to develop a business case, which sounds like. 688 00:38:03,760 --> 00:38:05,440 That. Would actually be really helpful 689 00:38:05,440 --> 00:38:08,640 to be replicated in your world. But then on the other side, 690 00:38:08,640 --> 00:38:11,200 where we're now struggling in the UK for example, is that 691 00:38:11,200 --> 00:38:14,000 there is this willing and ready supply side. 692 00:38:14,360 --> 00:38:17,960 We've got about well over 150 projects in the UK with many 693 00:38:17,960 --> 00:38:19,840 more farmers and land managers within them. 694 00:38:20,280 --> 00:38:22,480 And but it's actually the demand that's lacking. 695 00:38:22,760 --> 00:38:25,640 You know, other than biodiversity net gain, which is 696 00:38:25,640 --> 00:38:28,400 really our sort of lead compliance market, if you were 697 00:38:28,400 --> 00:38:31,120 our only compliance market really there's. 698 00:38:31,120 --> 00:38:32,960 It's it's just all kind. Of voluntary. 699 00:38:33,160 --> 00:38:37,000 So I think there's a lot we could learn from your work on 700 00:38:37,000 --> 00:38:39,280 how to really build that demand, as you say. 701 00:38:39,880 --> 00:38:42,560 But as you know, as you point out, it's, it's really about 702 00:38:42,560 --> 00:38:44,680 Everything Everywhere, all at once, working together, the 703 00:38:44,680 --> 00:38:47,520 demand, the supply, the enabling policy, that philanthropic 704 00:38:47,960 --> 00:38:51,200 funding and the finance. But we could go on forever. 705 00:38:51,200 --> 00:38:52,640 I know. And I promised that I was going 706 00:38:52,640 --> 00:38:55,520 to let you go. So just before you do, you're 707 00:38:55,520 --> 00:38:58,720 over for London Climate Action Week and we'll be hosting an 708 00:38:58,720 --> 00:39:00,640 event. So do you want to share with us 709 00:39:00,640 --> 00:39:03,640 a bit more about that for those who are going who might be 710 00:39:03,640 --> 00:39:06,960 interested in attending? No, I'm, I'm really excited 711 00:39:07,200 --> 00:39:10,640 actually to be coming to the London Climate Week because we 712 00:39:10,640 --> 00:39:14,400 spent so much of our time and I and I and I think we've, we've 713 00:39:14,400 --> 00:39:18,360 really focused as Lestari to try to not talk too much about what 714 00:39:18,360 --> 00:39:22,000 we're doing and focus on actually achieving things on the 715 00:39:22,000 --> 00:39:23,720 ground, right. There are too many kind of 716 00:39:23,720 --> 00:39:25,560 there's and, and there's obviously a sort of an 717 00:39:25,560 --> 00:39:29,320 announcement fatigue and an ambition announcement fatigue 718 00:39:29,400 --> 00:39:32,040 now in this, in this space. And so we really try to move 719 00:39:32,040 --> 00:39:35,080 away from that. You know, we've been operating 720 00:39:35,080 --> 00:39:37,200 now for eight years. The remember collective, it's, 721 00:39:37,440 --> 00:39:40,200 you know, it's, it's halfway to its target and, and it's third 722 00:39:40,200 --> 00:39:42,680 year of operations. And so we're really happy now to 723 00:39:42,680 --> 00:39:45,960 start actually sharing our case studies and, and our work. 724 00:39:46,240 --> 00:39:48,880 And so we will be actually, I'll, I'll be in London for the 725 00:39:48,880 --> 00:39:52,200 entire week from the, I think it's the 23rd. 726 00:39:52,800 --> 00:39:57,880 And we will also have an event at the Guildhall on the 25th of 727 00:39:57,880 --> 00:40:02,320 June at 3:00 PM, which is part of the Climate Innovation Forum. 728 00:40:02,640 --> 00:40:05,680 And we will be there on stage with two of the founding 729 00:40:05,680 --> 00:40:08,880 partners, Procter and Gamble and Nestle as well. 730 00:40:08,880 --> 00:40:13,040 So the the session is titled Where nature meets Procurement. 731 00:40:13,440 --> 00:40:16,040 How can the private sector create value from biodiversity 732 00:40:16,040 --> 00:40:18,120 conservation in sourcing landscapes? 733 00:40:18,840 --> 00:40:23,680 Sort of nice title to summarise what we've just been discussing. 734 00:40:24,640 --> 00:40:27,480 And, and you have to register. Let's just encourage people 735 00:40:27,480 --> 00:40:29,520 don't just turn off at the door, although that's that would be 736 00:40:29,520 --> 00:40:30,880 lovely. But you do have to register. 737 00:40:30,880 --> 00:40:34,920 And we can include the link on the revenues for Nature page or 738 00:40:34,920 --> 00:40:38,280 on the GFI Hive page where the podcast will sit, as well as on 739 00:40:38,280 --> 00:40:41,120 Apple and Spotify, if we can post manage to post the link 740 00:40:41,120 --> 00:40:42,280 there because it's quite a long link. 741 00:40:42,640 --> 00:40:44,680 And otherwise, I'm sure if you Google it or you can e-mail me 742 00:40:44,680 --> 00:40:48,000 and I'll pass you on to the Rimba team who can, the starry 743 00:40:48,000 --> 00:40:50,160 team rather who can send you to that event. 744 00:40:50,680 --> 00:40:53,200 But thank you so much, Wang. It's been so fascinating. 745 00:40:53,200 --> 00:40:54,920 And you know, we just absolutely adore the model. 746 00:40:54,920 --> 00:40:58,560 I'm really excited to see it thriving and and looking to 747 00:40:58,560 --> 00:41:01,640 replicate and scale and whatever we can do to support absolutely 748 00:41:01,640 --> 00:41:03,240 will do. Thank you, Helen. 749 00:41:03,240 --> 00:41:13,320 Very nice to speak to you. So that is it from us today. 750 00:41:13,320 --> 00:41:16,280 Thank you so much for listening. If you want to find out more 751 00:41:16,280 --> 00:41:18,840 about Rimba Collective and indeed the Story Capital, you 752 00:41:18,840 --> 00:41:22,040 can check out their website, rimbacollective.com. 753 00:41:22,560 --> 00:41:25,800 Over on our website, you'll find a longer case study on Rimba 2. 754 00:41:25,800 --> 00:41:29,800 Again, just search revenues for HDFI and you'll end up in the 755 00:41:29,800 --> 00:41:33,600 right place, A very long URL. Over the next two weeks, I'll be 756 00:41:33,600 --> 00:41:38,240 joined by two guests. 1 is Tom Curtis, Co founder of Three Keel 757 00:41:38,240 --> 00:41:41,360 and the Lens model that is Landscape Enterprise Networks 758 00:41:41,640 --> 00:41:44,160 that operating across Europe, unlocking investment from 759 00:41:44,160 --> 00:41:47,280 multiple businesses in the Agri, food and water sector to pay 760 00:41:47,280 --> 00:41:49,600 farmers for climate and nature friendly actions. 761 00:41:49,920 --> 00:41:52,640 We're also going to be hearing from Vanessa Garcia who's over 762 00:41:52,640 --> 00:41:54,800 at Terra Sauce and we're going to be talking about compliance 763 00:41:54,800 --> 00:41:57,760 models, mitigation banking and all the great work they're doing 764 00:41:57,760 --> 00:42:01,800 there and regulated markets that move private sector investment 765 00:42:02,080 --> 00:42:05,640 across Latin America. But next week is London Climate 766 00:42:05,640 --> 00:42:08,760 Action Week or L Core as we like to call it. 767 00:42:08,960 --> 00:42:11,560 I do hope you all have a great time if you're going there. 768 00:42:11,840 --> 00:42:16,320 GFI has partnered with L Seg and Reuters to Co host a morning TV 769 00:42:16,320 --> 00:42:19,920 show every day during L core. I'll be on there on nature day 770 00:42:19,920 --> 00:42:24,520 with UK nature envoy Ruth Davis and TNFT chair David Craig, but 771 00:42:24,520 --> 00:42:27,360 there are many guests as well that day and every day. 772 00:42:27,360 --> 00:42:30,760 So do check that out. Again, a URL that is simply too 773 00:42:30,760 --> 00:42:33,600 complicated to share verbally. But if you search L core L seg 774 00:42:34,360 --> 00:42:36,880 you will get to the right place and it's on the main GFI 775 00:42:36,880 --> 00:42:39,640 LinkedIn page 2. Until next time, I hope you have 776 00:42:39,640 --> 00:42:40,520 a wonderful week.