Saif Hameed [00:00:00]:
What makes flag different to how you would go about, let's say, measuring your scope one and your scope three, ordinarily, particularly your scope three, is that flag requires you to get into weights, activities, and locations in particular. And so I can kind of, right now, I can do, in most regions, I can do a compliant scope three calculation using primarily spend based data. And even if I want to refine that a bit, maybe I go down to the region specific spend based emissions factors. But I really don't need to get into the weeds, no pun intended, on activities and practices and so on. And I probably don't need to get into the weeds on weights. Whereas actually, if I'm going for a flag conformant or flag conformant ish, and I say this because the guidance is still not out, a flag conformant ish emissions calculation, I am likely heading down the road of waits activities and regions, and the process of doing that will likely surface a lot of insights that I wouldn't get otherwise. I'm Saif Hameed. Welcome to the State of Sustainability podcast, a show for professionals transforming corporate sustainability strategies brought to you by Altruistiq.
Saif Hameed [00:01:26]:
Super excited to join you all again today. We're going to discuss flag. We're going to talk about what it is, if you should prioritize it, and if you do prioritize it, how you maximize your returns from it. I'm joined today by Piers Cooper. Piers is one of my favorite altruists, one of my favorite people at Altruistiq. He is also our resident senior LCA expert. He's also our resident flag leader. And so I'm super excited to have Piers with us as we delve into all things flag and flaggish.
Saif Hameed [00:01:58]:
Piers, great to have you on the show.
Piers Cooper [00:02:00]:
Great to be here. Saif, looking forward to the conversation.
Saif Hameed [00:02:03]:
Excited to have it. Piers, where does this podcast find you today?
Piers Cooper [00:02:06]:
Currently my current location. Saif, I'm sitting in sunny London.
Saif Hameed [00:02:10]:
Enjoy it while it lasts. Enjoy it while it lasts, Piers. That's all I have to say about that. Well, Piers, thank you for making time for us. Maybe just before we get into the meat of the questions that I have for you today, could you tell us a little bit about your long term association with flag and flagish topics, basically, and so more, looking for a sense of why this topic is relevant for you, why it's important for you, and then we can get a little into the meat of things. But I know that you've been interested in this side of the LCA world and in this side of the environmental science world for some time. And so I think it would be great to bring some of that color out for our listeners.
Piers Cooper [00:02:48]:
Sure, Saif. So, yeah, as you say, that's something that has been quite close to my art for a long time now from sort of doing my early research at Imperial College, I did quite a lot of work, art in Malawi, working as smallholder farmers. And with that sort of where I really sort of cut my teeth learning LCA and particularly in sort of agricultural sort of value chains and supply chains and also working sort of biomass supply chains. So when sort of three years ago flag started rearing its head, or two years ago, I was actually quite excited because it's fantastic to see real movement in terms of understanding this rather quite sort of complex, intricate, and obviously to often quite sort of gray area of emissions accounting. So, yeah, with that, I've been sort of focused in sort of developing Altruistiq land based emissions approaches and with that sort of aligning as best as possible to SBTI flag.
Saif Hameed [00:03:35]:
Fantastic. Yes. Thank you so much for that. And could you maybe just for our listeners, give them a bit of an overview on what flag is for the uninitiated? And so where does flag come from? What mean by it? What does it require?
Piers Cooper [00:03:48]:
Yes, definitely, Saif. I probably should start with that. So flag, as you mentioned, is an acronym. It actually stands for forest, land and agriculture. It's being set up by the SBTI. So that's a science based target initiative. And it focused, focusing specifically on sectors with significant land use, land exchange and forestry emissions. So as you can imagine, those are companies that sit within the food and bev, space forestry, and also fashion.
Saif Hameed [00:04:16]:
One of the things I find interesting, piers, is we talk about flag, or at least I talk about flag in an SBTI context and in a greenhouse gas protocol context. And while the one references the other, in this case, it is a bit like the tail wagging the dog in the sense that the greenhouse gas protocol kind of originally set up an accounting framework for measuring emissions. And the SBTI target setting framework references carbon accounting very extensively, whereas here it's almost the other way around, where you have SPTI flag targets coming out first and the greenhouse gas protocol guidance being almost endlessly deferred. How does that work exactly where the target guidance is out before the accounting guidance?
Piers Cooper [00:04:58]:
I mean, great question, Saif. It does present some challenges and I think, as well as being challenging, its been quite an interesting process in terms of developing our approach, and it has left the ambiguity and sort of, I would say an alignment in some places has allowed for different types of interpretation. But what has also really brought is a lot of industry alignment and collaboration in terms of actually setting up. Okay, cool. How do we actually go and sort of have an approach that is comparable across consultancy, startup or software, etcetera, which I think has been quite a sort of, yeah, a valuable learning exercise for the sector in general, industry in general.
Saif Hameed [00:05:34]:
When you think about who should be thinking about flag in any context, let's just say like, is flag a topic that should come up on your radar? I approach this with two lenses or two filters. One is, are you a company that is captured by flag standards or requirements? So do you source from flag centric centers? Are you one of the categories of companies that flag captures? And the second is, even if you are, is anyone asking you for this or are you just kind of shouting into the wind here? And I'm thinking of companies, let's say, that aren't setting SBTI targets maybe at all, and therefore SBTI flag guidance is kind of irrelevant to them? Is there a world where actually you are a food business, for example, and flag just doesn't matter to you because it's not something you have to think about?
Piers Cooper [00:06:26]:
Doctor Steph so, yeah, I guess in terms of the initial threshold. So for a company to set, or sort of have to set targets, they need or should have, will have at least 20% of their emissions coming from land based activities. What I've seen with companies in terms of, I guess the stick or the carrot to be set in these targets is they're either very proactive in the sustainability journey and are now using flag as a great opportunity to actually go out, measure those emissions and then sort of look at setting targets. Then on the other hand of a company who's doing it just for the sake of setting targets, because they are a large corporate, have already had their corporate SVT set and now also have to set these flag land based targets. So it does depend on the company. But what you often see with that is even the companies that are doing it just for the sake of reporting actually find these insights pretty sort of insightful, as they are insightful and actually starting to use that to leverage either further research to sort of really dig deeper into their supply chain and then also sort of looking at ways they can actually sort of start making commitments to reduce deforestation, sort of looking at ways they can implement any certain interventions to reduce those emissions within their supply chain. So I think in general, its having quite a positive impact on the industry.
Saif Hameed [00:07:42]:
Raoul Piers, could you just tell us a bit more about why you think flag is insightful in its own right. Lets kind of forget about the targets and so on. You said that actually flag is a useful way to look at your emissions. Regardless, could you tell us a bit more about why?
Piers Cooper [00:07:58]:
I think with any type of sort of emissions measurement or sort of, it doesnt. Im just saying sort of impact measurement, that could be any metric youre looking at, the first thing is just starting and gaining that initial understanding. And I think flag, for a lot of companies, they wouldn't be doing this if it wasn't for flag. So that initial step in their sustainability journey, particularly looking at why they often not looked at these very sort of complex, diverse, uncertain supply chains and sort of actually then begin to start unraveling those supply chains and actually sort of capturing that data, calculating their impacts, and then starting to make decisions based on that information I think is incredibly valuable.
Saif Hameed [00:08:39]:
And Piers, if I was to again press you a bit on being specific around what is different about flag and therefore what makes it insightful, let me go out on a limb here and say, and you can correct me if I'm spouting nonsense, right. But from my perspective, what makes flag different to how you would go about, let's say, measuring your scope one and your scope three, ordinarily, particularly your scope three, is that flag requires you to get into weights, activities and locations in particular. And so I can kind of, right now I can do, in most regions, I can do a compliant scope three calculation using primarily spend based data. And even if I want to refine that a bit, maybe I go down to the region specific spend based emissions factors, but I really don't need to get into the weeds, no pun intended, on activities and practices and so on. And I probably don't need to get into the weeds on weights. Whereas actually, if I'm going for a flag conformant or flag conformant ish, and I say this because the guidance is still not out a flag conformant ish emissions calculation, I am likely heading down the road of weights, activities and regions, and the process of doing that will likely surface a lot of insights that I wouldn't get otherwise. Am I right here or am I totally off beast?
Piers Cooper [00:10:03]:
You're 100% right. And as you said to nice follow on there. If you're doing a land based assessment, and this is also expected of a lot of the customers we worked with, they are wanting to compare farm, not just in one country, but in a particular region, and are expecting to see the difference between those farms. So when you're looking at emissions sources such as your soils and activities affecting that, like tillage, no tillage, using cover crops, application of organic fertilizers versus synthetic or inorganic, you're really looking at sort of quite specific changes or sort of impacts in a particular region. So stepping away from that country level, even sort of regional emissions profile, down to the very sort of location specific. And that also does aid in sort of making or sort of helping make the sort of specific and targeted implementation actions for these companies.
Saif Hameed [00:10:59]:
And, piers, what are some of the interesting insights or actions that could get bubbled up from a flag centric analysis? Could you give us a couple of almost even real world ish examples of what you might realize or what you might decide to do as a result of having taken a flag lens to your emissions calculations?
Piers Cooper [00:11:19]:
So, yeah, I guess it depends on which particular component you're looking at. If we just consider some of the core sort of emission contributors, inorganic fertilizers being one. So those be your synthetic fertilizers you often find, even though you wouldn't call those directly sort of land related emissions, they are included within the flag assessment. And with that, you have the upstream production of those fertilizers, and then you have the on farm release of nitrous oxide, and that's from the nitrogen fertilizers only. But with that, you can often find those hotspots can often be addressed by substituting those synthetic fertilizers for organic fertilizers. And that can either be compost to manure, and those natural fertilizers will thereby offset or displace those upstream emissions. And then also some of the arm farm as well. In terms of other key reduction areas, we often see, as you sort of mentioned a few times, are the incorporation of spot agriculture techniques.
Piers Cooper [00:12:12]:
So sort of using either sort of introducing cover crops or, or even sort of shade crops you've seen with it. And then I have a few customers producing coffee. And then obviously that improves the soil quality and the soil carbon stocks, but then also provides, I guess, as they do shade cover to the actual crops being produced in the ground.
Saif Hameed [00:12:30]:
And, piers, a lot of what we're discussing right now is related to land management and land management practice, whereas flag actually covers three component parts. Right. There's the land management, there's land use change, and there's land based removals, am I right?
Piers Cooper [00:12:48]:
Yeah, that's correct. Yeah.
Saif Hameed [00:12:49]:
And within these three, it seems to me like actually each of them presents inherent complexity in terms of measurement and accounting, and that it's actually like different complexity. When I think about land use change. I think about satellite based data feeds around forest cover, for example, and forest density or density of COVID When I think about land management, I'm thinking about understanding fertilizers, crop rotation, a lot of stuff that you need probably good survey data, ultimately from farms to enrich your data with. And when we're getting into land based removals, I'm thinking, like, physical testing and soil sampling. Am I right here? Like, how would you think about the data complexity of each of those three buckets?
Piers Cooper [00:13:39]:
Very good question, Zef. And I think it does differ. And I think because of that complexity, you can start off at a high level, and that's almost sort of aligns, or it does align with the IPCC Tier models, where you sort of a tier one, which is more sort of a national level modeling approach, tier two, which relies on more primary data, more location specific data, and then a tier three, where you're sort of feeding in and you're sort of developing a very sort of specific model for that particular emission source. What we've done with our customers is we staggered that, that we are able to undertake an assessment, no matter what the level of data is. So we have a minimum requirement which allows our customers to undertake an assessment and start pulling out those insights with that, start feeding in more and more data. In terms of the complexity, it does vary from tier one down to tier three. An example of that would be if we just sort of consider land use change, for example, you have your direct land use change, or measure of that which would be going out. And that can be measured by a farm who's captured or has owned that piece of land for 20 years or more, and with that, has recorded the change in land type over that period.
Piers Cooper [00:14:48]:
So it could be from forest to cropland to grassland, whatever it may be. And with that, you're then able to calculate, or you are able to calculate the changes in carbon stock associated with that land type change. Then you have a statistical land use change estimate. And what that does is it takes some sort of satellite imagery data and then couples that with largely sort of production or import export data for a particular country or region, and then attributes those or those changes in land types to the amount of crop that's being produced within that and the land area used. So it's a sort of proxy for direct land exchange, but it still sort of aligns with, or does align with, both the greenhouse gas protocol and the flag guidance. So you do have these varying levels of data complexity, which largely sort of falls onto what the company or company is able to provide and what level of data they are collecting. And that sort of feeds into the complexity and the detailed assessment that is a result of that here.
Saif Hameed [00:15:46]:
So I have a bunch of questions. What puts an organization in tier one territory versus tier two or tier three?
Piers Cooper [00:15:53]:
So I'd say, I mean, largely this falls onto the sort of level or granularity of the data that they do have and I guess also from their side as well in terms of what their sustainability goals are as well. Because obviously as you'd expect, the more data that you have and the more data that you're going to collect and the more complex it gets, the bigger lift it is. So if you're sort of just doing it to set very basic flag targets, you'd probably just sit. Okay, I'm happy with the tier one modeling approach and with that I'm able to populate my flag excel and with that submitted targets. Great. But if you're actually looking at cake, how can we really look at reducing our impacts within this particular coffee value chain or supply chain? And let's dig into, we've started collecting satellite data and other imaging data and we also working directly with the suppliers and collecting tree loss, et cetera, et cetera for that, then you can start really pulling out those insights. But instead of that being a sort of, I don't know, a one month to two month process for doing that flag assessment, you then extending that to include the entire data collection phase as well, plus the calculations, plus pulling the insights into sort of looking at a six month onward or plus process. And obviously you have the resource time commitments that then are required for that.
Piers Cooper [00:17:06]:
So yeah, it entirely depends on, I'd say data that is available and then also your sustainability agenda.
Saif Hameed [00:17:13]:
Super helpful, piers. And how do you see satellite imagery and satellite based data evolving in this space? And I guess where I'm coming from is there's a lot of hype around this right now, certainly in the technology world. And I know there are a lot of startups that are focusing on providing and enabling this sort of data. My read a little from the market is that that tends to function well in certain geographies and poorly in certain other geographies and better for certain crop types and worse for certain others. So for example, in the case of lets say palm oil, what ive heard is that you often have trouble getting kind of, I dont know what the best way to put it this is, but because you kind of have dense forestry, its very hard to get into the forest as it were like, youre still at the superficial level. You cant really judge density and sequestration potential and so on. And similarly, I think that you have better coverage where potentially in sort of, lets say large scale commercial farms in the US, you could get actually coverage that is good enough for decision making, whereas where you have maybe lots of smallholder farms in rural areas, in emerging markets, actually, you dont have high enough quality of satellite imagery to really inform your decisions. Am I right here or am I just highlighting all of my ignorance?
Piers Cooper [00:18:34]:
Youre definitely right. Also, im not a satellite imagery expert, but just from my experience with it, I mean, obviously you're collecting that satellite data that then needs to be processed by these models, which then pull out the insights, as you said. Okay, this is this tree type. This is the amount of CO2 that can or has been sequestered by this tree, both in the above ground and below ground biomass. And then with those models are then calibrated to specific areas. So palm oil for existence, for example, that's one tree type in a particular thing that can be calibrated quite easily. As you say, it gets quite challenging when you have not one massive commercial farm setup and you have all these different smallholded plots with different vegetation types, et cetera, which creates these extreme challenges in terms of how these models actually run and calibrate to that particular environment. So, yes, as you say, a lot easier to do those calculations for the largest commercial facilities or if you are a company that works with smaller cooperatives, which thousands of farms of varying sizes from an acre to a few hectares, even bigger, using satellite data for that.
Piers Cooper [00:19:39]:
And also, I mean, just capturing the geolocations of these farmers and sort of ensuring that they may have planted an extra acre, purchase extra acre here and ensuring that you're capturing the land that's actually producing the crop is also quite tricky. So, yeah, and that also does fall into sort of looking at more sort of, I guess, western all that's the west side, but more developed countries and then largely in the global south, you'll see more smallholder farmers and less commercialized farming as well.
Saif Hameed [00:20:05]:
Thanks, Piers. I want to avoid taking us too far into a rabbit hole on satellites, but maybe just to close off on data and measurement. Before we talk about commercial opportunities and strategy, what are the other data pitfalls or measurement pitfalls that you see companies running into? And how would you say they should try and avoid or mitigate some of those challenges?
Piers Cooper [00:20:27]:
I mean, yeah, good question, Saif. And I mean, when it comes to, I guess, your data journey of any type. When it comes to impact accounting or emissions accounting, first thing is start early. It's also, particularly when it comes to land based calculations, to have a good sort of initial framework or structure set up for your data collection. Because even with our conversation around satellite data, it's quite easy to go down these rabbit holes. And a good way to start is to sort of set up a structure where you have the raw sort of core minimum data requirements and with that then start adding on nice to haves and sort of work from that structure. If able to capture sort of more depth through your supply chain, great. But sort of start at I guess a raw minimum and then sort of work your way towards a more sort of in depth, detailed assessment.
Saif Hameed [00:21:11]:
And would you say, piers, that, would you kind of target building that depth at an overall level or actually even based on commodity or ingredient or input? Would you say that you're likely to get pockets of great depth much more quickly, both because you need to and because it's easier and you're going to be shallow on certain areas because it's either not important or just harder?
Piers Cooper [00:21:37]:
Yeah, that is definitely an option. So it can either be as a company you start looking at, I mean, that's even how you do set your flag targets. It's based on your most intensive or largest producing commodities. You can also do it potentially on the emission source. And if you realize, okay, cross all the products that we produce, our nitrogen fertilizer emissions are really a lot higher than everything else. Let's go have a look at how we can reduce those across all commodities. You can do it both ways like that. That's why it's incredibly useful.
Piers Cooper [00:22:11]:
Having that initial assessment allows you to, you get a layer of the land, if you will, and be able to say, okay, cool, lets go really target these specific areas or these specific commodities and really understand whats driving those underlying those emissions that are coming out of that or impacts that are coming out of that. And with that then going and doing more targeted research or looking at deploying and testing targeted interventions for reduction.
Saif Hameed [00:22:36]:
Super helpful, Piers. I want to just pivot over to, to commercial opportunities. But before we do, I wonder if we should take a quick break. So maybe if we just draw it there for a minute, Piers, and give our guests time to recuperate and then we'll be right back after it and shift focus to the commercial side.
Piers Cooper [00:22:53]:
Awesome.
Saif Hameed [00:23:02]:
And we're back. Welcome back and thanks for staying with us. Going to move on to talking about commercial opportunities. And Piers, I'm going to actually partition this by thinking about brands and brand partners. And what I mean by that is I see the brand as anyone who is selling products directly to consumers, whether they're doing that through established retail channels, whether they own the retail relationship or not. But you know, I think of like Unilever and Kraft, Heinz and Starbucks and a bunch of others as, as brands on this journey. And then I think of brand partners as the companies supplying them. So companies like Meadow Foods, ADM, Cargill, various others as the brand partners supplying into the brands.
Saif Hameed [00:23:51]:
And I think that theres likely to be slightly different commercial opportunities for both of them. I want to suggest what I think those are and then I want to get your feedback on whether you would enrich those suggestions or replace them or add anything to them. But I would think that for a brand, as you're looking to commercialize sustainability, and I think every brand should think about commercializing sustainability. And as an environmentalist, I think that's how it sticks. I think that as a brand, you're looking for great narratives. How do you build a great narrative that reinforces your challenger story? If you're a challenger, if you're like an oatly or a Tony struck alumlee or a challenger brand, what is the narrative that supports that? If you're an incumbent brand, like Heinz ketchup for instance, then I think you want to still think about how does the narrative support your brand identity and support how the consumer sees your business. And often the incumbent leaders are also just great brand builders. And that's why they've earned the right to be incumbents.
Saif Hameed [00:24:52]:
And I think that flag gives those players great narrative material, great fodder for narrative, because flag helps them get deeper into the weeds on, again, weights, activities, locations. But that builds characteristics around a supplier. If you are seeing your suppliers only in terms of how many millions of dollars did you spend buying cocoa or dairy products, that's one thing. And that doesn't build great narrative. If you see your supply chain as collections of characteristics. I am buying from smallholders in Ghana. I am buying from certain types of providers or suppliers in certain geographies. And that may change and be dynamic.
Saif Hameed [00:25:33]:
That gives me an ever fresh palette for storytelling. And that's how I think about the opportunities for brands. I want to just pause there, piers, and get your thoughts before I move on to brand partners. But how would you think about commercial opportunities for brands coming out of flack?
Piers Cooper [00:25:50]:
Yeah, stef, I think you covered quite well there. I mean, the big thing, as you say, is that market I mean, both differentiation, but then also if you are an incumbent brand, sort of really establishing yourself and using something like flag and sort of really pushing the insights and outputs from that into either sort of an existing brand that you may have or sort of established brand that you may have, or as you say, sort of really being sort of those companies like Tony Chocoloni that are really sort of trying to change the game are really sort of using those sort of impact insights, just really push their brand forward into the space. So, yeah, I think you covered it very well this.
Saif Hameed [00:26:26]:
And on the brand partner side, I think the opportunities get almost even more interesting, actually. And I say that because if you're a brand, you're going to be struggling with the data acquisition side here. You are going to be struggling with understanding what is in your supply chain because you are one step removed from the final tier or the primary production. You're two or three steps removed from the primary production. And so I think there's an opportunity here for the forward leaning brand partners to leverage flag standards to their advantage. By saying a, as a forward leaning brand partner, we're able to give you the data that you need because we have built the capabilities to do so. And we may be one of the few providers that can give you the data that you need, and that distinguishes us from others. The second is that because we can give you the data that you need for flag, we can also substantiate opportunities for you to invest in changing your supply chain.
Saif Hameed [00:27:26]:
And we can do that because we have specificity and so we have the color that you need for your brand narrative. But we also have the specificity that you need to invest. And what that means is that if you invest a million dollars in change in the supply chain that we control for you, and I see each brand partner as controlling parts of the supply chain for a brand. If you invest in the supply chain that we control for you, we can demonstrate change and provide you with the data to back up that change, and that creates a new revenue stream for the brand partner. Curious to get your thoughts on that, piers.
Piers Cooper [00:28:01]:
I mean, it's something that we're pushing through for and encouraging and facilitating is having those links between the brands and those supplies. But with that, as you say, if you're moving from a brand that's solely reliant on secondary data, and then that's fine, you can still run and do a flag assessment like that. You can do your scope three assessment, which is pretty much separating out the flag, non flag, land use change, land management components of an emission factor. But in the end, that's still a secondary emission factor. If you're then, you know, and fair enough, you can build a fantastic narrative around that as well, and saying, look, we've set these flag targets this, and how are we going to reduce them? But then if you have those brand partners which are close to the farms, which are probably already looking at and deploying interventions there, youre engaging directly with that. Even if its not sort of a full inventory of primary data, youre still collecting data for either some products or sort of different, as we discussed earlier, different sort of emission sources. And youre feeding that in that whole conversation and narrative becomes so much stronger because youre sort of pulling, you have that increased certainty from that primary data, and then with that sort of a lot are able to drive a lot more impact through that supply chain and.
Saif Hameed [00:29:12]:
Pierce just to build on that. If you had to bet, what are the types of winners from flag that you would bet on? And what I mean by that is, if you had to describe one, two or three company archetypes that are likely to emerge as net winners as a result of flag standards changing the game for emissions accounting in flag centric centers, what types of companies do you think are winners? Either because they create these new revenue streams that were talking about, or they benefit from an influx of investment that wouldnt have come otherwise, or they can really help to boost their brand profile through the types of data that a flag centric approach gives them. What are a couple of types of companies that you think really win from this?
Piers Cooper [00:30:02]:
Interesting question, Stefan, something I dont commonly think about that much. Its more on the technical side, but as you say, a big one will definitely be the marketing side of things and being able to push that, I guess that sustainability journey and the impacts of that. Another big one is if youve captured and really got into the depths of a flag assessment and are working with your suppliers and generating those insights, youre reaching a point. And I know youre talking about this quite a lot, where youre using the sustainability data in the same way you would financial data, and youre able to make those really, really informed purchasing decisions and sort of with that sort of not just and driving, yes, in your sort of direct supply chain, but with, and then have that sort of butterfly effect that spills out into the sort of wider value chain in terms of making those improvements. So I think its companies that are going to be, yeah, the main benefits are those ones that are really proactive about going and sort of driving that highest that change through the supply chain.
Saif Hameed [00:30:57]:
Piers, if I put a little flesh around the bones there, let me suggest a couple of builds on what you articulated and tell me if you think these resonate with you. I would identify three likely winners, and good things always come in threes on this podcast, Piers, as our listeners will recognize. One, I would say is likely to be a company that owns the growing and the primary production of a high value ingredient or raw material that is typically sitting in a disparate smallholder value chain. And so im thinking, like in our customer base, Im thinking of companies like Slow Forest and Krakakoa, and Im specifically thinking companies with a big B2B component. And the reason I think that they emerge as winners is because in a fragmented mess of suppliers, where its very hard to get good data and therefore very hard to pick bets to invest in, I think those companies are likely to stand out as primary material suppliers that you can invest in to build them up and grow them, and they can give you great data feeds for a powerful narrative into the brands. And so I think they, in my view, will emerge as winners. I think there's a second category of winners that are likely to be R and D heavy ingredients companies. And so in our portfolio, I look at like a Meadow Foods as a good example, where they're kind of moving from, I would say, the R and D light world into the R and D heavy world, where they're going from relatively simple dairy derivatives to increasingly complex derivatives.
Saif Hameed [00:32:28]:
But I think that there will be other companies like the ADM's and the Givaudans and the Simrises and the Cargills and others that will also be in that camp where they will see R and D heavy products benefiting from better data, attracting a better premium. And I think that's going to be another category of winner. The third category of winner, I would actually say, are more likely the incumbent brands than the challengers. The reason I say this is because I think the challengers are already innovating on supply chain data to demonstrate their credentials and because flag kind of raises the bar for everyone on the field. I think, actually, oddly enough, the incumbents will benefit more because they will be pushed to do a lot of the same stuff that the challengers are doing and they have a larger volume of sales that can benefit from the improved narrative. So those would be my three winners. Would you say I'm backing the wrong horses here?
Piers Cooper [00:33:23]:
I mean, I think those are good three that you've chosen there. And I think it does sort of, yeah, I mean, it nicely covers the types of companies we work with as well, but particularly sort of on the sort of the top of the supply chain there with the likes of slow forest who sort of working directly, first of all with their own sort of farms that they're in, but then also with smallholder cooperatives. I think thats potentially where youre both going to see the most impact in terms of market strength, but then also actual impact in terms of improvements in your land based emissions and other impact metrics as well.
Saif Hameed [00:33:58]:
So, yeah, fantastic, piers, thank you so much. Just before you round out the show, are there any final tips youd share with our listeners who are early on their flag journey?
Piers Cooper [00:34:08]:
First thing, as I sort of mentioned earlier, the main thing id say is start early. And with that, if you do have a large money emissions coming from land related activities, sort of look at how best to integrate that into your sustainability strategy early on. And with that, then you can better allocate resources, sort of account for risk, et cetera. I mean, another big thing, and this is also, I guess sort of, well, trust it can help, is also capturing all this data, correlating it, calculating it, pulling out insights is an incredibly heavy lift. And with that, sort of where you can leverage technology to do that. And that's one thing I have sort of found with the customers that we've been working with and particularly ones who have tried to do these assessments themselves initially and then sort of coming to us for that assistance and the ease of the process really, really, really helps. So that would be the two main ones. Another one, as I briefly mentioned earlier, is engage with your industry or your community in terms of how these done because with the guidance, quite not where it needs to be and I'm very confident I'll get there quite soon.
Piers Cooper [00:35:13]:
But I've found it incredibly beneficial and valuable engaging with the wider network and discussing different approaches and sharing ideas and notes. And it really creates this unity. And also with that, you then creating comparable assessments across, you know, industry, which is fantastic. So even if a company moves from one provider to the other or whatever it may be, or even you just sort of sharing the emissions data more widely, you're having comparable assessments, which is crucial to industry.
Saif Hameed [00:35:44]:
Super helpful, Piers, and thank you so much for joining us. It was a pleasure having you on the show, Piers. We delved into a bunch of fun topics and I think you shed a lot of light for our listeners. So thanks again. Thanks for having me, Saif, and thank you all for listening.
Piers Cooper [00:35:58]:
Awesome.