Padraig Coffey, CEO at Zartis and podcast host, is joined by Thomas Norman Canguilhem, CEO and Co-founder at EcoTree International, to discuss the latest trends in sustainable forestry as well as the technologies that enable it.
How to Achieve Sustainable Forestry
The Guest – Thomas Norman Canguilhem, Co-founder and CEO at EcoTree
Thomas is a climate-entrepreneur with over 15 years of experience in developing businesses and leading digital and sustainable transitions. Thomas is currently the Co-Founder and CEO of EcoTree, a simple and ground-breaking new way to reward individuals and businesses that support sustainable forestry.
Sustainability and Forestry Investing
Tree planting has become a hot topic worldwide in the past years. Forests are an important tool in combating climate change and have a number of additional benefits including the enablement of biodiversity and habitat protection. However, all of these positive outcomes heavily depend on forestry projects being done correctly and with respect to the complexity and expertise required to run them properly.
In this episode, Thomas shares his insights on:
- The common concepts behind sustainable forestry initiatives.
- Investing in forestry.
- Understanding carbon sequestration within forestry.
- Current and future uses of technology in enabling sustainable forestry solutions.
- The upcoming trends in the reforestation space.
Transcript (abridged version):
Thomas, could you tell us a little bit about EcoTree and what the company does?
EcoTree ultimately participates in reforesting Europe, and then further to the whole world we hope. What’s new and original is the way we do it. We’re moving away from the classic entropic model or donation based model, and we turn tree planting and sustainable forestry into a profitable action. The whole idea is that if we really want to have an impact in the fight against climate change, instead of shaming, taxing and scaring people during this crisis, which sometimes is counterproductive, we realized a couple of years back that it would be more efficient, and we’d have a better impact instead if we financially rewarded the virtuous ones who are actually trying to fix climate change.
We’re inspired by the Scandinavian recycling system. I don’t know if you’re familiar with this, but basically, it’s a system where you pay a little extra when you buy Coca Cola in the supermarket and you get that little money back when you return your cans after use for recycling. Back in 2014 I think it was, we realized that this was actually a fantastically simple and efficient way to monetize the act of recycling, by providing financial incentives in the system. We realized by digging a little bit further into that system, that there’s an extremely high return rate in the countries with such a system. It goes up to 90-95% returns. Almost all the used cans and bottles get returned, versus those countries without such a system, where the VAT return rate is roughly around 50%.
So, that really hit our mind because we realized that this method of financial incentive is actually very simple, and a little incentive led to leveling up how environmentally-friendly people actually behave. So we try to adapt that idea and that concept into tree planting and sustainable forestry. That’s how the EcoTree model started to keep it simple. Basically everyone, so individuals like you or companies basically purchase newly planted trees from our forests. So plants become what we call “tree ornaments”. This concept of tree ownership, where you actually buy and own a tree means that you get both of the environmental benefits associated with that tree and the forest that it belongs to, and the perspective of a financial return because when the trees reach maturity, we selectively harvest. We never do a clear cut like cutting down forests because that’s kind of a nonsense in terms of biodiversity, but we do what we call selective thinning. When your trees are cut, you as the owner will get 100% of the proceeds, which means that ultimately you will double your initial investment, so it’s long term, definitely 30-50-60 years time, but it’s a decent financial return or financial incentive. This is really our vision basically to try to have a model that is not just ecologically sustainable, but also financially, and economically.
In terms of the companies that you’re selling to on the B2B side, are you finding companies of all scales, locations, and industries? Are you seeing any patterns or trends emerging in terms of who’s engaging with reforestation?
For sure, there’s more and more interest from companies – whether it is genuine or forced by the market push is another question. Business-wise, I think we’ve been wise enough to start not necessarily aiming for the big ones, but actually starting with SMEs with quicker decision making processes and companies more likely to have a genuine interest in what we’re doing. So we really started with the lower end of the B2B segment, which helped us actually build credibility, profitability and it helped us to attract the big ones, so to speak. Today, I would say we have a good three quarters of our businesses with smaller and medium sized companies and the rest now with big companies. […]
What we see also as a clear trend these days is the whole carbon sequestration angle. They are desperately looking into trying to reduce their carbon footprint. They also look at how to possibly invest and develop carbon sequestration to remove CO2 from the atmosphere. It’s pretty unique again, because instead of your carbon credits or all sorts of costs in this field, it turns it into an asset. So for the bigger companies it has definitely a very important, very critical impact.
To what extent is technology playing a role in your business, both right now and perhaps in the future? Do you see new means and methods by which you’re going to be leveraging software?
Well, our solution is clearly digitized. As I said, we can buy the trees online and we have built a digital universe around this tree ownership concept. So on your online account, you can localize your trees, and we are continuously developing different types of digital features to make this relationship with your trees and your investment as interactive and extremely exciting as possible. For example, we have developed what we call “forest view” like street view from Google Map. With your phone or your computer you can have a 360 degrees view in your forest, and you can get 20 meters ahead, etc. It’s really exactly like the street view on Google Maps. That is a good way to use this kind of tech to show how your tree or how the forest is doing. We’re also using IoT sensors, for example, to measure the damage or the growth of the trunk of a tree, and we also have some sensors that measure the sap flow in a tree, especially in spring. It’s quite fascinating to see how much water is actually carried through a tree as it keeps growing. So these kinds of features are vital to show the eternity and growth of trees. Probably the most exciting field, which is still the newest as we are testing different solutions from different tech firms right now, is to use a drone or satellite imagery to actually get photos from the bird view or the space you could say, to confirm and demonstrate what’s happening on the ground in terms of biomass growth. […]
But I like to say that a lot of people look at innovation as creating new tech, whereas I believe in our case, we are actually using very old tech. We’re using Mother Nature’s technology. It’s like four and a half billion years of research and development. That’s the time it took nature to develop trees basically, as we know them today.
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