Episode 28: Austin Whitman, Climate Neutral
Today’s guest is Austin Whitman, Executive Director of Climate Neutral.
Climate Neutral is an independent non-profit organization working to accelerate the transition to a low-carbon world by putting a price on carbon emissions. They are enlisting brands in the fight against climate change by showing them that measuring and paying for their carbon emissions is cheaper and easier than they think. Climate Neutral believes that brands, together with their consumers, can lead the transition to a low-carbon economy by placing a price on carbon within their business.
Enjoy the show!
You can find me on Twitter @jjacobs22 (me), @mcjpod (podcast) or @mcjcollective (company). You can reach us via email at info@mcjcollective.com, where we encourage you to share your feedback on episodes and suggestions for future topics or guests.
In today's episode, we cover:
Overview of Climate Neutral
Intro to carbon neutrality
Intro to offsets
Founding story
Reason for being a non-profit
Process of raising money for non-profit
Pitch to brands
Traction to date
Future plans and long vision
How it fits into broader climate fight
Where Austin would put $100B to maximize its impact in the climate fight
Advice to people trying to find their own paths to help with this problem
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Jason Jacobs: Hello, everyone. This is Jason Jacobs, and welcome to My Climate Journey. This show follows my journey to interview a wide range of guests, to better understand and make sense of the formidable problem of climate change and try to figure out how people like you and I can help.
Jason Jacobs: Hi, everyone, Jason here. Today's guest is Austin Whitman, the executive director of Climate Neutral. Climate Neutral is an independent nonprofit that is working to accelerate the transition to a low-carbon world by putting a price on carbon emission. They aim to make this process simple, actionable, and as credible as possible. Their four-step process enables brands to measure their footprint, identify opportunities to reduce purchase offsets for unreduced emissions, and finally, market their commitment to climate action to consumers through the use of the Certified Neutral label.
Jason Jacobs: Austin was a great guest, because his nonprofit's only a few months old, and he had grown up professionally working in energy companies in roles of increasing responsibility and finally decided to put decarbonization more front and center and do something to more urgently address the climate fight. We covered a number of things in this episode, including Austin's experience that led him up to starting Climate Neutral. We talked about Climate Neutral's mission and vision as well as where they are today on the journey. We talked about the process of starting something new in this space, which, as I've experienced, is super hard. We also talked about a general discussion around climate change and what types of things can be most impactful and most importantly, what advice Austin has for other people looking to follow down a similar path. I thought Austin was a great guest and hope you do as well.
Jason Jacobs: Austin, welcome to the show.
Austin Whitman: Thanks, Jason.
Jason Jacobs: I'm glad you're here. You're a few months into a new adventure, it sounds like.
Austin Whitman: Indeed. It's coming up on four months into a new adventure running an organization called Climate Neutral. It was a interesting outgrowth of the conversation I started having with couple guys last November about ways to make bigger impacts on climate, and looking forward to talking about it.
Jason Jacobs: Awesome. Yeah, and I think your story is particularly relevant because, I mean, you've worked in energy for a long time, but you took the leap a few months ago to do something that was more squarely focused on climate change. And you also chose the nonprofit route, and so I think there's a bunch to dig into there in terms of your motivations and learnings and what was scary and what was intuitive and all that because a bunch of our listeners are in various stages of thinking through similar types of things, and a lot of them, like me, didn't really know where to start coming in and are just trying to figure it out.
Austin Whitman: Yeah, definitely. It felt, in a way, for me like back to the future, because I was working on something similar 2005, 2006, and then took a long hiatus where I was working more in traditional energy and then came back to this. And we're about to kind of explore some of the reasons I did that, but I think one of the ... When we started talking, one of the interesting things that I heard from you was this is about kind of mobilizing large numbers of people to think about how they can have their own impact on climate.
Austin Whitman: Something that I've encountered even just in the last four months is just inbound phone calls to a degree I've never had before, people saying, "You know what? I've been doing this thing for 10 years or 15 years, and I really just want to take what I'm good at and turn it into something that's really going to have an impact on climate change." I guess my point there is I think there are a lot of people out there having their own journey toward climate work, so I love what you're doing with the podcast because it's allowing those people to hear from those of us who've done it on changes and learn from that, get inspired, hopefully.
Jason Jacobs: Well, thanks. You're a part of the journey as well. What is Climate Neutral?
Austin Whitman: Climate Neutral is a nonprofit organization that has one main goal, which is to create a label that customers can look at on a product and understand that the brand that created that product has gone through the steps of measuring its entire carbon footprint from supply change all the way to the point where their customer gets ahold of their product and identified some concrete ways to reduce their carbon footprint and then offset the entirety of what's left. We're creating a simple methodology for companies to measure their footprint and then document their reduction efforts and then a label that says, "We've offset the whole kit and caboodle from supply chain all the way down to the customer."
Jason Jacobs: It's like the carbon equivalent of fair trade coffee?
Austin Whitman: Totally. I think there are 436 eco labels or something in the officially Go Label directory, but only a small handful of those are actually recognizable. But right, Fair Trade, USDA Organic, people respond very well to visual cues of information. I think what we've learned in the effort to kind of educate people is that simplicity is king, and if you can boil a lot of complex work down into a very recognizable and simple picture, in this case, or logo, then you can convey a lot of information very quickly and give people the opportunity to make a binary choice, do I support and like what this brand has done or do I not?
Jason Jacobs: If you look at the overall landscape of brands, what percentage of them would you say is carbon neutral today?
Austin Whitman: By our definition, a fraction of 1%, because ... Let's look at Earth Day this year. There were 10 major corporations and who knows how many small companies that made announcements about carbon neutrality, but let me ask you. What does carbon neutrality mean?
Jason Jacobs: Yeah. I think if I had to answer that, I mean, it's at the amount that I'm emitting minus the amount that I'm offsetting equals zero or below.
Austin Whitman: Correct. But there are a lot of assumptions and sort of what are you emitting, what do you count? If you're a company, do you count just the emissions from your biggest factory or your biggest office building? What exactly are you counting on that left side of the equation? What steps are you taking to subtract so that the right side of the equation is zero?
Austin Whitman: Getting back to your question. Lots of companies have made carbon neutrality announcements, and countries are actually looking now at net zero or net zero carbon legislation, which would set goals out over the longer term of being net zero. It's still the Wild West out there. It's very poorly defined as to what carbon neutral is and companies are making big, bold claims, unfortunately, about being carbon neutral when all that might mean is they bought some renewable energy to power one of their data centers.
Jason Jacobs: Are there any standards that exist today in terms of what types of things need to be tracked? And is there any auditing process as well?
Austin Whitman: There are a handful of labels out there. One group of them is run by consulting firms, and in our view, they are somewhat effective, but they haven't been heavily marketed. Consumer-
Jason Jacobs: What's it called, the group?
Austin Whitman: There's a group called Natural Capital Partners, fantastic consulting firm out of Europe. They've got their own carbon neutrality standard, but it's kind of ... There's some versions of it that are product level, some versions that are brand level. There's a lot of nuance to the label, and the label hasn't achieved consumer recognition at the level that we think is necessary. The UN has a program called Climate Neutral Now. There are a lot of companies that have signed up for it, but ultimately, you print out a PDF, you sign your name on a paper, and you email it back, and that's the extent of the pledge. It's not really time bound, immediate.
Jason Jacobs: It's like the people that ... Like the New Year's resolution on Facebook that says, "I'm going to lose 100 pounds this year."
Austin Whitman: And we all know how long those resolutions last, which is not very long. How often do you go to the gym after you buy the membership? How many times in January is probably the right answer. And then once February rolls around, people are off the wagon. Yeah, I mean, so there are labels. There are programs. Not to say they haven't made an impact, but they are not complete in the sense of looking at the entire corporate footprint. You used the term audited, which is probably the right word, but in many cases, nobody's actually requiring or checking to see if those companies are actually doing what they say they would do and actually achieving the emission reductions that are needed.
Austin Whitman: There's another piece of this, too, which is immediacy of impact. There's a large and very successful coalition of companies. It's called the Science Based Targets initiative. Companies are signing up for this and creating quantitative reduction goals for how much they're going to reduce their own footprint. This would be like if you were to say January 1, "I'm going to lose 10 pounds over the next eight months." Although, in the Science Based initiative case, it's more like, "I'm going to reduce 20% over the next 30 years." They tend to be long reduction goals.
Austin Whitman: It's a meaningful effort, but you've read stuff on climate. A lot of people have now been told the next 10, 12 years is really critical for climate change. The impact of those reduction efforts is going to be longer term, and we need something that's more immediate. And so what we're looking to do is build this platform that will actually get companies investing in carbon reductions that happen today while they work on a longer term strategy of reducing emissions within their own corporate footprint.
Austin Whitman: I know there's a lot baked in there, but that's sort of the way these pieces, different pieces fit together.
Jason Jacobs: Are you basically saying it's going to take time to get all my processes and reductions and efficiencies et cetera, so we're going to help these brands just offset a crap load of emissions in the short term? Is that what you're doing?
Austin Whitman: That's exactly right. I don't think we use the word crap load on the website, but it's the right sentiment. I think we should-
Jason Jacobs: Well, if you need any copywriting now, I mean, I'm looking for some freelance writing.
Austin Whitman: I hear you are. Yeah. Yeah.
Jason Jacobs: Podcasting doesn't pay very well.
Austin Whitman: Yeah. I'll put a tip in the tip jar on the way out. But, no, that's exactly it, right? I mean, when we hear from companies, "We're not going to do this because we've got our own reduction plans," when you hear that, you got to push back and say, "Well, okay. What's the timeline and how extensive?" If you really press for details, you'll find, especially with small and medium size companies, that they have not figured out how to reduce anymore than 5, 10% of their initiatives, which is just not the kind of cut that's going to make a difference.
Jason Jacobs: Well, what's the pitch? I mean, is a pitch like, hey, I have a way that you can pay more and it can impact your profitability in the short term, and in return, you get this shiny sticker?
Austin Whitman: That's the cynical pitch. The hopefully less cynical pitch is companies out there are profiting heavily from unrestricted carbon pollution, which has quantifiable damages on humanity, the entire planet, and as long as that's allowed to continue, we're essentially doing nothing to fix the climate problem. We're nibbling around the edges with policy changes and with some of these efforts that I mentioned earlier. You can make the moral case, you can make the economic case, you can make the personal accountability case, but it is fundamentally wrong for companies to be allowed to profit from unchecked emissions. There are market mechanisms out there today that can allow companies to rectify that for a surprisingly low cost. The initial work that we've done, ballparks, at least at today's market prices for carbon offsets, ballparks, the average reduction cost is around .3 or .4% of revenues, which is not a huge number, especially when you look at the $2 trillion of profits that companies actually generate.
Austin Whitman: It's something that needs to happen. Governments are working on their own carbon pricing policies, which will take a long time to bite and take hold. Companies need to realize that this is a new way of doing business. Another way of thinking about it is sustainability claims have done tremendous things for the business of companies who are investing in sustainability, but they're very inconsistent and often meaningless. This commitment from companies to look at their carbon pollution and invest to clean it up should be considered the absolute bare minimum for any company that is thinking about sustainability.
Jason Jacobs: What is the pitch? I still don't have a good sense. You made the pitch for why it's good for the world, but what is the pitch to the brand?
Austin Whitman: Right. There's another piece of what your cynical pitch had, which is they get this shiny label. Yes, that is part of the pitch. We're purveying a label that companies can put on their products and on their hang tags and that will show their customers that they are taking steps. The more we understand sort of how people are thinking about climate change ... by people, I mean consumers ... the more it becomes clear that consumers are rewarding companies who are doing stuff to address their footprint. There's commercial benefit to companies who are doing this.
Jason Jacobs: I mean, here's another, I guess, cynical angle. I'm not saying that because I'm necessarily cynical. I'm saying it to pressure test what you're trying to do. If you take food, for example, you see labels and one of the labels you see is Fat Free, right? You see Fat Free, consumers gobble it up because they say, "Oh, fat free, so I can eat as much of it as I want."
Jason Jacobs: But the reality is that there's a bunch of ... There could be chemicals. There could be preservatives. There could be sugar. There could be different things that may not technically be fat, but aren't good for you. If you kind of bring that analogy around, it's like carbon neutral, right? Well, okay, carbon neutral, but how high-quality are the offsets? Are they really doing what they say they're doing? Or is it just essentially shifting paper around but continuing to emit just like I have been? How do you respond to that?
Austin Whitman: I totally hear you on the fat-free cookie thing. I think it's a great analogy. I think the reality is that companies have very few options short of just shutting down their business, which we guarantee is zero footprint. There are very few options to do things in the near term. When you look at where their emissions are, companies outsource much of their pollution to places where they have factories in China and Vietnam. They outsource emissions to their employees who work from home or commute. A company's emission footprint is incredibly diverse, yet we've had this problem with the idea of the company paying somebody else to reduce emissions on their behalf.
Austin Whitman: This is one of the fundamental narratives that we're looking to change, is that we live in a globalized world and companies do push pollution out to other countries and to other companies, and it should be okay for them to pay to reduce emissions. Now how do we know that they're actually reducing emissions? How do we know that there isn't an adverse effect happening from a company buying a ton of carbon, or worse, no effect at all? There are systems and there are entities called verifiers that spend their entire lives making sure that when you invest in a ton of carbon, that that ton of carbon is actually being avoided or sequestered.
Jason Jacobs: Are those verifiers the same verifiers across all the different types of offsets, or is it kind of vertical-specific? Is a reforestation offset a different verifier than a different kind of offset, a wind offset?
Austin Whitman: Right. Yeah, no, exactly. Every verifier has a multitude of project types, and not every verifier has the same exact project types that they'll verify. This gets into the realm of probably more complicated than the average consumer will ever want to understand. What we're doing is we're hand-picking a small set of verifiers and a small set of project types from those verifiers and working with a group of third-party experts as an additional layer of scrutiny and saying the only credits that companies have this label, this shiny sticker, the only credits that they're using as part of their offsetting strategy have passed through these multiple filters so that a consumer at the end of the day can say, "Yeah, I see that sticker and I know that what's behind that is quality."
Jason Jacobs: The brands that are declaring themselves carbon neutral today, are they being certified by anything or are they just declaring themselves carbon neutral today?
Austin Whitman: Just declaring themselves carbon neutral today.
Jason Jacobs: I mean, do they get enough brand equity from that? Do they need, I guess, an extra certification or ...
Austin Whitman: They certainly get press. I mean, you see large companies making big carbon neutrality announcements and they get a lot of press about it.
Jason Jacobs: If I was going to [inaudible 00:18:26] my earnings, I would just commit to being carbon neutral by 2030 and just tie that in to solving the blow. There you go.
Austin Whitman: Yeah. Or if you were any one of any number of fossil fuel companies, you'd say, "2070, 2080 is a reasonable timeframe, and we're on the path, so rest easy."
Jason Jacobs: And the CEO says, "I'm going to be long retired by then. What do I care? It's someone else's problem."
Austin Whitman: "And so will my successor and his or her successor." Yeah, exactly. It's a successor process of kicking the can down the road. Part of why we think this is striking a chord is that in the last couple of years, the dialogue has really changed. There's a level of urgency that I've never heard before, and it comes down to maybe a better understanding of science. I think more people from different walks of life paying attention to climate. In a weird way, I think there's a backlash from the current administration that more states and municipalities have decided that they've got to do something because people are actually kind of ... Well, they know that the federal government's not doing anything, and they're actually pretty legitimately worried about things.
Jason Jacobs: Should we thank Donald Trump for mobilizing people to take climate action?
Austin Whitman: You could. I don't think you'd be wrong to do it.
Jason Jacobs: One question I have for you is, you just launched recently and from talking to you before we started recording, it sounds like you've gotten quite a bit of early traction.
Austin Whitman: Yeah. We-
Jason Jacobs: That wasn't a question, but that was a statement.
Austin Whitman: That's an observation.
Jason Jacobs: Yeah.
Austin Whitman: I can react to observations as well as questions. The statement-
Jason Jacobs: You have a dry sense of humor that I appreciate.
Austin Whitman: Good. Good, good. Probably won't come through over the microphone, but ...
Jason Jacobs: But I feel you.
Austin Whitman: You feel me. And, yes, I've been told that it's bone dry. It is what it is.
Jason Jacobs: It's there, though.
Austin Whitman: It's there.
Jason Jacobs: Yeah.
Austin Whitman: Yes, we're doing well. We have 20 brands committed and even brands that you would recognize. I'm drinking out of a Klean Kanteen coffee mug here, which is one of the brands that's committed.
Jason Jacobs: Nice.
Austin Whitman: I'm not wearing-
Jason Jacobs: I just left my Klean Kanteen in Uber last week.
Austin Whitman: Ah, too bad.
Jason Jacobs: If you can get me another one. I'm a poor podcaster.
Austin Whitman: I probably could. Yeah, we did an initial industry-facing launch.
Jason Jacobs: Not Evan. Don't get Evan one.
Austin Whitman: Yeah, no. The guy behind the controls over there. Yeah, no beverages.
Speaker 3: [inaudible 00:20:46].
Austin Whitman: We did an industry-facing launch last week at the Outdoor Retailer Show in Denver. 3,000 people came to the show. We had a huge splash with logos all over the doors, so everybody who walked in the doors got hit with our logo. And then anybody who came to our-
Jason Jacobs: Did you have to pay for that?
Austin Whitman: We did pay for that.
Jason Jacobs: Wow. Look at you. Brand new nonprofit sponsoring big shows.
Austin Whitman: Thanks to our generous seed funders, we were able to get that. Honestly, I did a lot of groundwork in the months leading up to starting as executive director, and a lot of the feedback that I got boiled down to one thing, which is lots of people have tried to build coalitions in the past and mobilize groups. The key thing is to get critical mass early. And so my own sort of puritanical nature was, and the dry sense of humor was, "Should we really spend that kind of money to do this?" But it's really important to just go out and go out hard and go out strong. You're an endurance athlete. It's not. It's the opposite of endurance, which is just running really, really fast at the beginning and getting a head start. Because otherwise, you can spend a year or two sort of slowly ramping up and just find yourselves never getting off the ground. Lots of mixed metaphors there, but you get my point.
Austin Whitman: Last week we came out, big splash. We had the professional climber Alex Honnold, Oscar-winning and also, more important than the Oscar, he did an amazing athletic fete, climbing El Capitan without ropes. He moderated the panel for us and is super into the idea. It's totally compatible with what his foundation is trying to do. So that, as you can imagine, drew a huge crowd. I came back from the show with literally hundreds of companies interested in what we're doing. So, felt like that was a really culmination to the first four-month period that we've had. And from here, just a lot of effort will go into recruiting additional companies and then eventually building out the awareness that people have of the brand so that when they see it on a Klean Kanteen water bottle, they know what it means.
Jason Jacobs: How many brands have signed up so far?
Austin Whitman: 21.
Jason Jacobs: And what does that mean, sign up? What did they sign up for exactly?
Austin Whitman: They're signing a memorandum of understanding, a commitment to be certified for their 2019 year emissions. We're doing this on an annual basis. Every company that joins us in 2019 during the first quarter of 2020 will go through the process of measuring their emission footprint, creating a plan to reduce emissions in meaningful and immediately addressable ways, completing the purchase of offsets for the entirety of their footprint, and then they get certified and can use the label.
Jason Jacobs: Out of those 21, are there commonalities? Where do you think this story is resonating the most in the brand world? There's a lot of different types of brands out there, so are there themes that are emerging?
Austin Whitman: Well, we started off in the outdoor industry, although we have a couple companies that are not from the outdoor industry. Of course, you start with the low-hanging fruit. These are companies who have sustainability programs, companies who wear their brand identity is heavily wrapped up in their understanding of their impact on the planet, and so they're the ones who've been the first to jump into this. But there's going to be another wave and successive waves. We've heard a lot of great feedback from some of the larger tech companies who are just trying to figure out how to manage the many risks that they perceive in doing this as a large enterprise, how to justify it internally to their corporate finance teams and so forth.
Austin Whitman: But getting back to your original kind of, what's the commonality? Generally, they tend to be smaller companies. By small, I mean 10 up to $150 million, but not multibillion dollars. They can move more quickly. They have people internally who are passionate about doing this. They have forward-looking marketing teams. And they've got some sort of planetary idealists, in a way, some people who are really aware of the climate problem and see that their place in the world is, in part, their position's going to be improved if they actually take action to do something as a company.
Jason Jacobs: What's the role of the person that ends up being a sponsor typically of these brands? Does that mean it's the CEO? Is it the head of sustainability?
Austin Whitman: Good question. Yeah, we've seen it all over the map. We've met with CEOs of large brands. We've gotten tremendous positive feedback from them. We've also met with managers and directors of sustainability and marketing. Ultimately, the question, of course, is where does it come from in the budget? And I think we're typically seeing marketing dollars, which maybe flow through a sustainability budget. But it's the marketers who see this as a cost of creating the brand that they want to show to customers.
Jason Jacobs: Is this your first foray into the nonprofit world?
Austin Whitman: Directly, yeah. It's the first time I've run a nonprofit organization. As a consultant and then as an intern long time ago, I've worked with nonprofits before. I think, though, this experience has been a really fun one so far because it's made me rethink the role of nonprofits in some ways. And eight months ago, one of my colleagues in my last job said to me, "I would never work for a nonprofit." I think when people hear nonprofit, they think an entity that moves slowly and people kind of work 9:00 to 4:00 with two-hour lunch breaks, and there's not really much in the way of deadlines and accountability because there's no profit that they're driving toward. None of that has to be true, and there are a lot of amazing nonprofits that are working totally against what a typical sort of nonprofit stereotype would be. We're trying to build this like a tech startup, building technology into the strategy, working quickly, building aggressively, and investing heavily where we can.
Jason Jacobs: Was it a tough decision that this should be a nonprofit? How did you go about making that decision and what was it that ultimately convinced you that nonprofit was the right path?
Austin Whitman: Well, I'll say one thing, which is we haven't proven out that this thing can survive as a nonprofit model, so all the high net worth listeners that you have, feel free to hit me up on email. We're happy to take donations, and that will help us prove out that the nonprofit model can work. But we didn't have much of a conversation about whether this should be a nonprofit because the goal of recruiting these companies is not to create a new business. There are plenty of businesses out there that charge companies on sustainability strategies and what have you. The goal here is to get companies investing in decarbonization. Additional dollars to the company's budget, we want those dollars to go into decarbonization, not our profits.
Jason Jacobs: Got it. You realized that from a mission standpoint, you would be more credible and more helpful on the problem if you are funded through philanthropy versus being funded through your customer's [inaudible 00:27:26].
Austin Whitman: That's right. Yeah. I've been on the sales side of for-profit companies before and now this nonprofit venture, and I can tell you when I sit down across the table with a CEO or a director or even try to get a meeting, it's a very different type of conversation when you say, "I'm not in this for my commercial interest. I'm in this because we have a mission that has a public purpose." And it doesn't feel like a sales conversation. It feels like more of a partnership from the beginning.
Jason Jacobs: When you were just getting going, trying to figure out how to get that operating budget for year one, how did you think about fundraising in terms of ... I have no nonprofit experience, but on the for-profit side in the startup world, it's like, oh, do we want individuals? Do we want funds? Do we want to go through an accelerator? What does that landscape look like in the nonprofit world and how do you approach it?
Austin Whitman: Yeah. We've been lucky. I've been lucky in that this, in a sense, came pre-funded by two companies, a company called Peak Design and a company called BioLite, who in essence went through their own journeys toward being carbon neutral and decided that their experience was frustrating and overly complicated and not accessible to the average company, and they had to work really hard to get where they had come so far. Both of them agreed to provide seed funding for the platform. We're now looking at other sources of funding, ranging from traditional foundations that have funded environmental causes to more radical ideas like trying to crowdfund our budget.
Jason Jacobs: Typically, in the nonprofit world are nonprofits raising money for several years of runway or are they back to the till every year? Are they just constantly fundraising? How does it work?
Austin Whitman: It's probably the exact same answer that you're used to in the for-profit startup world, which is if you do it right, you get yourself two plus years of runway. But that's not the only way to do it. Some people are very successful working off of annual fundraising or even quarterly fundraising campaigns. It all depends on the model and what your donor base looks like. For us, we've got some longer term projects in the hopper where we're trying to build a piece of technology that will take really 12 months of funding to get it fully implemented, and so we're looking for money that will fund that. We're also looking to devote as much of our time to building brand awareness and building company interest in the platform, and that requires 18 to 24 months visibility into where funding's coming from. Let me say this a different way. I don't want to spend all my time just kind of flying around to fundraising meetings, but it may come to that.
Jason Jacobs: You talked about phase one being the offsets because the offsets are here and now. What's the long vision for the impact that you're trying to have and how will that be staged?
Austin Whitman: Yeah. Nonprofits often talk about this notion of theory of change. What are the steps by which you're going to effect the kind of societal change that you're driving toward in your mission? Our theory of change is that the mechanism of the carbon offset really is just a carbon price. Call it an offset, call it a carbon credit. It's a carbon price the company is paying. In this case, it's paying it voluntarily. In two or three years, we'll have a large enough group of companies that are voluntarily paying a carbon price of building an economic powerhouse that demonstrates to policymakers that companies can handle a carbon price and they're paying it voluntarily.
Austin Whitman: And consumers care about this because these companies have been rewarded for the work that they've done, the investments that they're making. And maybe it turns into a federally or regionally mandated carbon price. I think ultimately, we all believe in the importance of government helping solve the climate problem because it's so complex, but that we can't waste time waiting for government and the companies can do a lot in the near term.
Jason Jacobs: There's one way this could go, then, that you're kind of bottoms up, proving out that a carbon price can be beneficial and viable for companies, and then ultimately shift more of your efforts into advocacy over time?
Austin Whitman: Well, we've become a policy advocate. I don't know, honestly. There's a lot of strings attached to that, both in terms of your tax status and getting, mobilizing your members to sort of one common policy position. I've been involved in work like that in the past. Our view is that for the foreseeable future, the world will not have an ample price on carbon that's at scale with where the problem is. World Bank does a great analysis every year of the state of carbon pricing, and 15%-ish of emissions right now have a carbon price; 85%, therefore, don't.
Austin Whitman: We're not going to flip a switch and have the other 85% covered, so it'll be a while before there's a carbon price that governments are mandating. If the world has a suitable carbon price and companies feel great about it, maybe in five years or eight years our mission is complete. Personally, I don't see that happening. I think there are lots of other ways we could continue to engage businesses in raising the bar even higher, but take it one day at a time.
Jason Jacobs: Was there anything in your past that was directly relevant to the work that you're doing now?
Austin Whitman: In 2005 or '06, I started an effort in graduate school at the time to sell carbon credits to students who were taking trips abroad for spring break. We went around, we educated-
Jason Jacobs: Was that a for-profit?
Austin Whitman: I made 10X. Yeah. No, it was not for-profit. We were essentially just trying to get a movement going and [crosstalk 00:33:22].
Jason Jacobs: You've been a do-gooder for a while.
Austin Whitman: Yeah, I guess so. I guess so.
Jason Jacobs: I just recently caught the bug.
Austin Whitman: Good for you. Yeah, no. I mean, we did this out of the goodness of our heart, I suppose. But what we did was try to get classmates to recognize that their trips to Japan and China for spring break, ostensibly for learning, but mostly to try the sake, were having an impact. What those 50 people buying carbon offsets do, I mean, environmentally not a huge amount, but it's part of education. We did that a long time ago.
Austin Whitman: Then I worked for a company for a couple of years that was doing investment more at a global level in carbon markets, carbon financing, and that was in the first... I sort of look back. Every decade has had its major wave of interest in addressing climate, even going back to the '60s and '70s. The major wave in the early 2000s was leading up to some potential legislation that was going to happen in the U.S. which never came together, but at the time, there were carbon financiers who were very interested in the U.S. market. I worked for one of them investing in carbon projects and thinking about how those carbon projects could potentially be funded through U.S.-based investment.
Jason Jacobs: There's been some stuff on the periphery. It hasn't been front and center, but at least wet your whistle and I imagine there's been a big learning curve, but enough of a foundation that the transition's gone okay. Did I get that right?
Austin Whitman: I think you got it right. Yep.
Jason Jacobs: What convinced you that this is an area that matters?
Austin Whitman: This particular platform is attractive or has been attractive to me because very few things feel more direct than getting people to pay more to fix climate change. You've talked to a lot of people so far in this podcast series, and people-
Jason Jacobs: [inaudible 00:35:13]. I've talked to a lot.
Austin Whitman: A lot of important people.
Jason Jacobs: Just scratched the surface. I've just scratched the surface in terms of who I'd like to talk to.
Austin Whitman: Yeah. Your-
Jason Jacobs: All relative.
Austin Whitman: Your career has at least 10 years to go to get to start to scraping the bottom of the depths. Actually, hopefully, it's infinite as more people jump into this movement. But, sorry, what was your question?
Jason Jacobs: Oh, yeah. The question was, why does this area matter?
Austin Whitman: Yeah. It matters because brands are incredibly powerful and the interface between brands and consumers. We live in a consumptive world, and people buy stuff and people like to buy more and more stuff and companies like to make more and more stuff. If we start to raise the level of expectation of consumers and get them to put pressure on companies and similarly have companies show their consumers that this is fine and this is part of doing business, that's really important. That's a really important interface. For years and years, people have tried different educational approaches. I think this one, in particular, is undersaturated. That's a word.
Jason Jacobs: Is it more about the second and third world effects than it is about the direct impact on emissions?
Austin Whitman: Well, see, that's what's interesting. Because if you look at people talking about carbon taxing, the carbon tax is one of the sort of top couple ways of pricing carbon. And people say carbon tax, this can be effective because they get people who are paying the tax to change their behavior. If I pay a tax as an individual, I start doing less of the activity that incurs that tax. I drive less or I replace my gas car with an electric car. If I'm a company, if I pay that tax, I start to shift my business activities away from the high-carbon activities to things that are lower carbon.
Austin Whitman: What I think is fascinating about this particular platform is it actually works on both sides, which is if there's ... We're now, we're talking about a tax on companies which does change or will change their behavior internally, make them think differently about their carbon footprint. On the other side of it, the money, the tax that they pay, if you will, the tax goes right into a decarbonization project. If the government assesses you a tax on carbon, that revenue might go into balancing a state budget or building a new destroyer, not decarbonization. People say, "Well, it's really about the price signal and not about the revenue, what the use of the revenue."
Austin Whitman: In our case, the mechanism that we're trying to get brands to adopt is both, price signal for companies and decarbonization projects. At some level, it's a climate finance vehicle. It's a way of getting more investment into carbon-reducing projects. And just to give you-
Jason Jacobs: It's like a philanthropic, like a corporate philanthropic climate finance vehicle.
Austin Whitman: A corporate philanthropic climate finance vehicle. Yeah.
Jason Jacobs: Unless people really believe that it's like their ... I was going to say fiduciary responsibility, but it's not their fiduciary responsibility. It might be their ethical and moral responsibility, but you could argue it's their fiduciary responsibility not to do this.
Austin Whitman: You could. I think going back to the commercial value of the brand impact is one. Certainly, there are companies who recognize that there is climate risk out there to the economy, and that climate risk is changing the way that they make decisions. And then there's certainly people who say, "We already donate 1% of our revenues to environmental causes because we believe it's the right thing to do. We're going to continue to do that."
Austin Whitman: There's an interesting, I think, split that we're going to see between public and private companies, where public companies may have a harder time justifying this to shareholders. But private companies get into conversation with their boards and with their founders and their owners and have an easier time saying, "Yeah, this is just the right thing to do. This is what I need to do as a business owner."
Jason Jacobs: That's another whole topic for a different day. It's just what do we need to do in terms of public market reforms to properly factor in taking care of the planet that we all depend upon?
Jason Jacobs: At least one Twitter question, so I want to pull it up, but while I'm doing that, if there's any brands out there that are interested in learning more about what you're doing, then what should they do? Where do they find you?
Austin Whitman: They should check out our website, www.climateneutral.org, and we outline the process for getting certified. That's a very simple three-step process leading to the label. They should look at the page of brands that have already signed up, and they should use the Contact Us page to say that they're interested.
Jason Jacobs: Great. Well, there's two questions from Twitter. One is from Jake Douglas. @jakedouglas is his handle. He said he'd love to hear about any tips or best practices for anyone wanting to start internal discussions about this at their workplace.
Austin Whitman: Yeah, great question, Jake. It depends, I guess, highly on what your role is and who you have relationships with within your company. But if you started a sustainability platform already at your company or if there's one in place, this fits incredibly well into it because it starts to quantify the commitments that you're making as a company, and it allows you as a brand to say, "You know what? Other companies out there are greenwashing or they don't have meaningful targets. We're doing something that's meaningful." When that something that's meaningful is communicated to customers, there will be commercial value. There's a little bit of a business case behind that, which is understanding how your customers will respond to this kind of label.
Jason Jacobs: It falls in the marketing group.
Austin Whitman: Yeah. Yeah, for sure. I think finding those people that you have relationships with within the marketing group and/or sustainability teams and showing them what other companies have decided this is an important thing to do ... I mentioned 20 so far, and we've got a growing list ... and starting that conversation. We're happy to provide some of the background thinking on why this is important for companies to undertake. Small movements begin with champions, with individuals, and big movements grow from small movements, and so our view is it doesn't matter what your role is within the company. You can be a CEO, you can be a sustainability intern, but if you pose a question that people have to respond to and that question sort of opens up the conversation with people about how you're approaching sustainability and how you're approaching climate risk, then some productive things can happen.
Jason Jacobs: Last question from Twitter from Nathaniel Stinnett @NCStinn, who was also a guest on the show a few episodes ago, and he said, "Ask him if he's still a better runner than me. We were on the same cross country team in high school."
Austin Whitman: We were indeed. I have tremendous admiration for what Nathaniel/Nate has done with Environmental Voter Project.
Jason Jacobs: He's still Nathaniel to me. We're not quite on Nate terms yet.
Austin Whitman: Well, you'll get there. Go for a couple-
Jason Jacobs: Maybe another episode and we'll get there.
Austin Whitman: Go for a couple runs. Yeah, I mean he was a couple years ahead of me. Indeed, he was faster than me, but then I was faster than him. I would say at this point, he's lost a lot of hair up top, which probably makes him more aerodynamic, so I'm guessing that he's probably faster than me at this point based on aerodynamics alone.
Jason Jacobs: And last question. This is not from Twitter. This is just something I've been asking every guest, which is just if you had a big pot of money, let's say $100 billion, and you could put it towards anything to maximize its impact on the climate fight, where would it go? How would you allocate it?
Austin Whitman: Yeah. Interesting question. I love the work that folks like the Connecticut Green Bank are doing, so I think I'd take part of that and I would capitalize more green banks. I've actually been very disappointed at the slow pace of adoption. There's a effort, a senator from Maryland, Chris Van Hollen, who tried a number of years ago to get a federal green bank going. Green banks are just tremendously creative and effective institutions, and Connecticut's kind of a leading example of that. I'd take a chunk of that and I'd put it into just the financing infrastructure. I'd capitalize instant green banks.
Austin Whitman: I think the other place I would put some of it is making cities more livable and more climate resilient because a lot of people live in cities of all income brackets, and investments in cities are going to be critical for the economic future health of the country. Cities continually get decimated. Those are the economic powerhouses, right? That must not happen. Plus, there's some people who live in cities that rolling out things like new public transit and even new educational programs focused on cities can be just a great way of letting people know that it's not all gloom and doom. This can actually improve your quality of life.
Austin Whitman: Then, I guess for a third bucket, because everything nice comes in threes, Project Drawdown that Paul Hawken has run, it's very interesting to see how they have identified the highest impact climate activities. I would look for a couple unlikely places to put money based on their list. I tend to be sort of a more analytical person and like to see, all right, not just because I feel this thing is really important, but because somebody has looked at the numbers and said, "You know, if you invest in education of women and reproductive rights, that can actually have a major impact on climate." And so I encourage anybody to kind of look at what Project Drawdown has come up with. They've just put tremendous number of hours into the analysis. And I would look, for the third bucket I'd look into some unlikely, less likely or less obvious places on that list.
Jason Jacobs: Any parting words for listeners? Anything I didn't ask?
Austin Whitman: Get involved. I mean, I think over the years, I've been asked a number of times, "How do I get an environmental job? I want to work in environmental business." What I would say is there's really no such thing as environmental business. There are businesses whose product may have some environmental benefit or cost, but fundamentally, anybody who does anything can incorporate climate considerations into what they're doing. The world needs great marketers. The world needs great podcast hosts. The world needs-
Jason Jacobs: You.
Austin Whitman: Yes, they do. It does. The world needs great technicians and engineers and anybody in any one of those roles that puts their climate hat on. Climate change is such a wide ranging and deep issue that anybody in any one of those roles can think, "What am I doing today and how could I make that a little bit more effective from a climate perspective=?" Then, at some point in your career, if you want to kind of jump over and start running a nonprofit, I mean I can tell you the road to riches is smooth.
Jason Jacobs: All right. Well, Austin, you've been a great guest. Best of luck with the new venture. I like it. I'm excited to see where it goes. And thank you for coming on the show.
Austin Whitman: Well, it's been great and fun and good conversation, and thanks for the good, hard questions. There's stuff that we will continue to wrestle with, but we feel like we're on to something, so hopeful that we'll get 500 companies on board in the next year and we'll be seen as one of the major impacting groups. If not, I'll have this podcast to show on my track record.
Jason Jacobs: Exactly.
Austin Whitman: Yeah.
Jason Jacobs: You should get something for it. It's like the participation trophy of climate change.
Austin Whitman: Right. Congratulations, you finished something. Yeah.
Jason Jacobs: All right. Thanks, Austin.
Austin Whitman: All right.
Jason Jacobs: Hey, everyone, Jason here. Thanks again for joining me on My Climate Journey. If you'd like to learn more about the journey, you can visit us at myclimatejourney.co. Note that is .co, not .com. Some day, we'll get to .com, but right now, .co. You can also find me on Twitter at @jjacobs22, where I would encourage you to share your feedback on the episode or suggestions for future guests you'd like to hear. And before I let you go, if you enjoyed the show, please share an episode with a friend or consider leaving a review on iTunes. The lawyers made me say that. Thank you.
