Startup Series: Everledger
Today's guest is Leanne Kemp, Founder & CEO of Everledger.
Leanne is a serial founder and spent 20 plus years in the tech sector, from RFID to Supply Chain to AdTech. After successfully exiting four companies, Leanne served as a Blockchain expert and Entrepreneur advisor for private, public, and educational boards and committees, including IBM, Queensland University of Technology, and The World Trade Symposium. In addition to her current role as CEO, Leanne is also a member of The University of Queensland's Entrepreneurship Advisory Panel, a Fellow at Blockchain Australia, a member of Nation Brand Advisory Council, on the Board of Stewards for Accelerating Sustainable Production at the World Economic Forum, and a BlockChain, Trade, & Circular Economy Policy advisor at OECD-OCDE. Leanne is an internationally recognized, award-winning innovator and leader.
Everledger is an independent technology company that helps businesses surface and converge asset information using a wide array of secure technologies, including blockchain, AI, IoT, and more. By digitally streamlining compliance processes, Everledger can help customers share the history of an asset more efficiently and accurately. As a technology partner, the startup up also helps to build resilience and sustainability. Everledger's premiere platform brings additional transparency to various industries by highlighting critical characteristics of assets on their platform: quality, origin, sustainability footprint, and compliance standards.
In this episode, Leanne walks me through her climate journey, the motivations for founding Everledger, and her obsession with where our products come from. We also discuss Everledger's customer base and funding, the company's goals over the next two years, and how Everledger fits in the carbon accounting landscape. In addition, Leanne explains the importance of critical minerals, transparency in the supply chain, and blockchain in a sustainable future. Leanne is a great guest.
Enjoy the show!
You can find me on twitter @jjacobs22 or @mcjpod and email at info@myclimatejourney.co, where I encourage you to share your feedback on episodes and suggestions for future topics or guests.
Episode recorded December 20th, 2021
In Today's episode, we cover:
An overview of Everledger
The importance of knowing where products originate from
What led Leanne to pursue climate change and her motivations for founding Everledger
Why Leanne was eager to focus on the diamond industry and track & trace technology
The opaqueness of the diamond industry and why it's a climate problem
Everledger's role, the gap the company is filling, and how the team sources its data
Everledger's target customer base
The different factors in the supply chain and how to gather accurate data from the many players
Everledger's revenue sources and income breakdown
How brands are marketing more transparency and the motivations behind it
Where Everledger fits in the larger carbon accounting landscape
Everledger's relationship and interactions with the power holders in the gemstone and diamond industry
Taking Everledger's solution to market and who they are typically selling to
The role of blockchain and its power in distributed ledger technologies
How Everledger works to improve disclosing data
Why critical minerals are the key focus of Everledger over the next two years
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Jason Jacobs: Hey, everyone, Jason here. I am the My Climate Journey show host. Before we get going, I wanted to take a minute and tell you about the My Climate Journey, or MCJ, as we call it, membership option. Membership came to be because there were a bunch of people that were listening to the show that weren't just looking for education, but they were longing for a peer group, as well. So, we set up a Slack community for those people, that's now mushroomed into more than 1300 members. There is an application to become a member. It's not an exclusive thing. There's four criteria we screen for, determination to tackle the problem of climate change, ambition to work on the most impactful solution areas, optimism that we can make a dent and were not wasting our time for trying, and a collaborative spirit. Beyond that, the more diversity, the better.
There's a bunch of great things that have come out of that community. A number of founding teams that have met in there. A number of nonprofits that have been established. A bunch of hiring that's been done. A bunch of companies that have raised capital in there. A bunch of funds that have gotten limited partners or investors for their funds in there. As well as a bunch of events and programming, by members and for members, and some opensource projects that are getting actively worked on that hatched in there, as well. At any rate, if you wanna learn more you can go to myclimatejourney.co, the website, and click the Become a Member tab at the top. Enjoy the show.
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. Today's guest is Leanne Kemp, founder and CEO of Everledger. Everledger is the digital transparency company providing technology solutions to increase transparency in global supply chains. Their mission is to provide visibility on environmental standards in complex value chains. Major players in the diamond industry, for example, are increasingly committed to providing further evidence and taking real action regarding their responsible business practices, in particular around positive environmental footprint, and this is where Everledger comes in.
In this episode, we talk about the origin story for the company. We talk about these opaque industries where there isn't a lot of transparency or visibility around supply chains. How products are getting built. What labor practices are employed. What carbon and environmental footprints occur, et cetera. We also talk about Everledger's solution, what makes it possible. The role of blockchain empowering it. We talk about where it fits into the broader landscape, the big consulting firms that are providing consulting in these areas. We talk about other competitive products, and we talk about what makes Everledger different. And, of course, we talk about where they are on their journey, their progress to date, their goals over the next year or two, and if they're successful, 10 years out, 20 years out, what have they achieved? I enjoy this one, and I hope you do, as well. Leanne, welcome to the show.
Leanne Kemp: Hey, Jason, how are you? Good to be connected.
Jason Jacobs: I'm doing okay, hanging in there, still waiting with bated breath to see how this Omicron stuff plays out and how much of the world is gonna get shut down again. I sure hope it doesn't come to that. Not the best feeling heading into the holidays to be honest.
Leanne Kemp: Yeah, a little thing from Australia. I left there in May and, for me, I just have this sink, like water, so let's see how it goes. Let's be fluid and a glass half full, instead of half empty. We live with hope.
Jason Jacobs: Yeah, we were chatting a little bit before we hit record, and you definitely seem to be cool as a cucumber. I-I should hang around with people like you, cause I don't know how many people would describe me in a similar way.
Leanne Kemp: Being an entrepreneur, and a serial one at that, sometimes it's two hands on the steering wheel and no airbag, and then just keep running until it's down to empty, so. Yeah, pretty cool.
Jason Jacobs: What is Everledger? We can just take it from the top.
Leanne Kemp: Sure. Look, Everledger started in the heart of London in 2015, and I'm the founder and the CEO of the company today. We began by asking a pretty simple question, where does it come from? Whether it is a diamond ring, or a piece of steak on my plate, or even an electric vehicle in a car. That question, of course, wraps the minds of many consumers in the world. But there's been no platform of providence that's ever really been built. We have ERP systems, and marketplaces, procurement software, but we don't necessarily have a technology that can connect and combine, or build, a network across the world to simply ask that question. And, pretty much, that's where Everledger began. We started in 2015 in the heart of London, and we thought we'd tackle some of the most opaque conflicted supply chains in the world. And we st- began in the diamond industry, which arguably has its own shades of gray, black and white, in terms of its history. Whether it be the Blood Diamonds movie with Leonardo DiCaprio, or whether it be to bind itself against the promise of I dos.
Yeah, Everledger started in 2015. We're about 110 odd people now around the world with operational centers in Australia, India, Israel, UK, USA and mainland China.
Jason Jacobs: Why do you think it's important to know where things come from? And-and who do you think wants to know the most?
Leanne Kemp: There's a rising curiosity from, as they say, millennials, or the next generation, and whether that be linked directly with the climate and environment agenda, or whether it just be the curiosity of asking questions about why or how is it that Hollywood blockbuster movies are telling these atrocious stories? And is there truth behind the story? And I guess that's really Everledger's purpose, is to bring a truthful narrative and allow the product to tell its journey. And, as I said, bearing itself back onto that big question about where does something come from? We're also married to understanding where does it go to after it leaves me? And this sorta plays into the larger narrative around waste, or the externality of cost that waste is causing against the economy and against the planet. And so, the principles of circular economy apply to the platform that we've built, as well.
And I think it is a question. I often walk into a store and ask myself the question about where does something come from? And up until today, we're really just trusting the brands. You know, someone that... A company that might've been in existence for more than 100 years. Potentially, we've already accepted that they have a social license to operate, but no longer should that just be a given truth.
Jason Jacobs: Do you mean that Poland Spring Water might not come from Poland Springs? [laughs].
Leanne Kemp: Well, that's true. Exactly, right. Nations care, as well, today. Everledger operates with the Australian government under some nation brands, and one of those is critical minerals for electric vehicle batteries, the other is Australian wool, and even Australian pearls. And so, this isn't just a question that consumers are asking, or millennials. This is a proud nation brand position that countries are now chasing down to enable them to have a rite of passage to trade across the world.
Jason Jacobs: And what was your personal journey that led you to landing on this problem to devote your professional life to solving? And after that, we can get into the origin story for the company, but maybe just a little bit of context for what led up to Everledger being born.
Leanne Kemp: Ah, look, I think pretty close to 50, right now, so I have a patchwork quilt of experience that seen me in track and trace technology since the mid '90s. And working with RFID, radio frequency identification, which today is probably most well-known to many consumers as NFC, sort of intelligent labeling or smart tags. And everything in Australia I tracked from cows to kangaroos. And the combination of my working life has seen me in various different disciplines of technology. I'm a software engineer, but I've also been involved in a diamond and jewelry industry, and the overlay of insurance. And, I guess, everything, for me, has come down to how can we best use technology at the bleeding edge? Is there next generation technologies that could be combined successfully together to solve for pretty hairy audacious goal, or a hairy audacious problem? And when we start to front and center bringing diamonds to the forefront of the industry that we ended into, we knew that bringing traceability and transparency to one of the most opaque industries, and ancient industries, in the world would prove a point.
Jason Jacobs: What came first with the chicken and egg? Was it looking at w-what's happening with track and trace technology, and finding markets to apply it? Or was there something specific about the diamond industry that made you look for how you might solve a particular problem?
Leanne Kemp: If you're a great entrepreneur, it's nothing more than just getting the timing right. As I said, if it wasn't for the patchwork quilt of experience that I held over the past 25 years, and I'm a serial entrepreneur, I guess, that also translates to being unemployable by virtue of my attitude, or sometimes the way I speak, and even the way I dress and act. But on a more serious note, there were very real economic reasons and the challenges of industry that intersected the rising of new and immersive technologies that we know we could combine together. So we built a platform on the blockchain distributed ledger protocols and brought those together with advanced machine vision and AI capabilities to be able to identify diamonds. And then, of course, enabled the tracking and tracing of that gemstone across the world.
So I wouldn't say there was a defining moment, a lightning bolt, you know, too many gins one night in a great bar in London. It was the combination of my skills together with the rise of this emergent white paper, which was Soshi Sakamoto's... Satoshi Nakamoto, I must say, sorry [laughs], not... That is too many gins to get that word wrong [laughs]. Natoshi Sakamoto, that is the reverse engineering of Natoshi, Nat-, who knows? On a serious note though, it's when we start to see the emergence of new technologies, like blockchain, and intersect that with a-a problem that exists in the world that hadn't been able to be solved. It wakens the beast within entrepreneurs to do something about it.
Jason Jacobs: And when you looked at the diamond industry. You mentioned that it was opaque and that there wasn't a lot of visibility and transparency. Why do you think that was, and also, was the data there and just not being disclosed? Or did nobody know?
Leanne Kemp: This industry is still based on a gentleman's handshake, a sheet of paper, and a promise to pay. There's very large forces in the world where diamond tiers and traders come together and trade diamonds in the physicality of space and time. And given that there hasn't undergone a significant transformation with digital tooling and/or data related to each trade, we were able to take advantage of that. So in some respects, many parts of the data around the diamond identity, and even around the diamond journey existed, but there were technology gaps. Different types of technologies that we could apply to bring together that identity gap that didn't exist, where diamonds just simply weren't blind in terms of the paper trail. And when we were able to connect that together, um, and combine, as I said, the machine vision, resident ultrasound, blockchain technologies, a series of these. We were able to bring the truthful story of the object to the forefront.
Jason Jacobs: What's an example of a gap that existed with the gentleman's handshake way of doing things that Everledger is now helping to shine the light on?
Leanne Kemp: There are many gaps when we think about the entire journey of the diamond, whether it be at the time when it gets captured as it comes out of the ground. At the point where it crosses borders there was a paper-based certification system in place called the Kimberley Process, which is a three-step validation system. Beyond the track and trace across the supply chain, which effectively shows the journey of the diamond, I'd say the biggest missing piece is the environmental story, the use of water across the manufacturing leap of the supply chain. The carbon sequestering and/or carbon footprint that it's leaving behind, as the diamond changes hands. And it's the combination of the identity of the diamond, with track and trace, as well as advanced calculations in environment is where Everledger is effectively bringing an entirely new ethical trade platform to the forefront of the world.
Jason Jacobs: And the data that you're getting around things like water usage, is that self-reported, or how is that data getting collected?
Leanne Kemp: We're connecting both man and machine to the platform. And what I mean by that, there are various types of machines that are already connecting, collecting and reporting. And so, it's not as though we need an interpretive keyboard dance to be made by data entry people. It's, in fact, the connections and using the backbone of IoT devices to enable that data to flow directly onto our platform. There are also gemologists, people that are traded professionals by their expert eye, to understand the identity of a diamond, and they have a yielded opinion on the characteristics of the stone, and we also capture that. So it's a fine balance between some data points are connected directly from machines, others are by the opinion, or the expert eye, and they're entered into the system. And others, of course, many data points exist already in trade systems, or ERP systems, or marketplaces and we connect those via APIs.
Jason Jacobs: So what type of customer are you targeting?
Leanne Kemp: Everledger wants to track some of the most opaque supply chains in the world. And by virtue of that, we need to understand its origin, and where does it go to, and where does it end up into the hands of a consumer, or someone that is consuming it as a product. But the story doesn't end there, it goes even further afield into that circular economy use, so repurposing, recycling. And so, the consumers and the users on our platform are everybody in a particular industry and the supply chain, whether it be a mining company, a manufacturer, a grading or certificate laboratory, a consumer itself. And then, of course, when we think about recycling and repurposing, we also see that secondary market movement, as well. So it's a pretty broad net that we need to be able to cast.
And many, many companies are now looking at provenance, where does something from, traceability, track and trace. We've chosen very specific industries that we're most heavily involved with and interested in, and that's the highly conflicted, largely opaque, industries, where there's yielded high value or high risk of that supply chain.
Jason Jacobs: And you mentioned a wide range of stakeholders. What is the pitch and how similar or different is it from one of those stakeholders to the next?
Leanne Kemp: Each have various different challenges and problems to solve, even within one industry. But there's similarities across many different industries, whether it be counterfeit goods, whether it be double financing of the pipeline, whether it be concerns in supply chain finance in the mid tier of the pipeline. A lot of these concerns are quite synergistic across many different industries. What we often champion ourselves towards is understanding where provenance, where the identity of an object, rather than just the customer plays a role in the risk calibration of the supply chain. And so, one prime example is when we start thinking about the fundamentals of KYC, know your customer. It's been in existence for some time. Banks, insurance companies, regulated markets, use that as a way to endeavor its understanding of risk.
It's been, really, the backbone for anti-money laundering, as a prime example. We go one step further to understand the object, so we fundamentally believe that the world's moving more aligned with KYO and KYC coming together. Know your object, and we think it's a knockout punch, if you can bring that closer together to a KYC. So the participants of a supply chain, the direct tier one participants, those that handle the physical stone itself, rather than those that are a derivative supply to that industry, for example, like banks and insurers, that don't physically handle a diamond, but are a large service entity to it, have a great interest in the work that we're doing, because they can't see or understand where the object is. But if they were able to, then there's various risk calibration events they can put towards their own business endeavors.
Jason Jacobs: The different inputs that are relevant to map out that supply chain. How much involvement do those entities, suppliers, et cetera, need to have for you to get accurate data? Do they need to be bought-in, or get that data with or without them?
Leanne Kemp: They're hardwired. I-I mean, it's a heavy lift. We're solving one of the hardest problems there is in climate and environment. When we start to consider greenhouse gas emissions, scope one and scope two, whether it be direct or indirect, are largely going to be solved by direct infrastructure change. And so, it's a singularized participant that is able to replace, for example, the types of electricity or regenerative stored energy environments on their building. More than 60, 70% of the problem in greenhouse gas emissions is in scope three, and that's the work that we do. You can't get to scope three greenhouse gas emissions, calculations or reduction, if it's not for provenance, understand the origin of something and the full participant of the supply chain.
We began six and a half years ago, and we've done incredibly well to represent 30% of the entire world's trade of colored gemstones and emeralds on the platform. And therefore, we have the most rich truthful data connected to the supply chain than anyone else. So therefore, we're able to calculate, with certainty, around scope three greenhouse gas emissions, and that isn't an easy task to do. So it's taken the better part of seven years to build a 30% knowledge positioning in an industry, and that's not necessarily an easy job.
Jason Jacobs: Is it just a subscription model, where the stakeholders that want this data, essentially, subscribe to monthly access to the platform?
Leanne Kemp: Some industries are already heavily bound by certification, and the diamond industry is definitely one of them. There are 81 countries came together to form the Kimberley Process, and there's a Kimberley Certificate that must be adhered to and attached to a diamond as it's mined and as it's crossing borders across the world. And it's that certificate that we're able to enable, as one method of transactional trade, that we can capture. And so, our system is both as per seat license, like a SaaS application, even though we're vertically focused, and thus are vertically SaaS applicated. We also have transaction fees which is based per stone, or per gemstone, and so it's for every time a change of ownership occurs, not necessarily just a chain of custody, where that transaction fee is yielded.
Now, the total inbound effective nature of that is about 1% of the value of the stone across the entirety of its pipeline, or its lifetime, is where the constructed transactional value comes to play.
Jason Jacobs: You're not only providing visibility, but you're also enabling and facilitating the transaction, essentially a marketplace it sounds like.
Leanne Kemp: It is, but we fundamentally don't get involved with the trade itself, so we're not involved in the payment, or the transfer of payment. What we have enabled is an entirely new rich source of data that goes just beyond how long will it take for you to deliver it to me, and what's the price I pay? And we started to see, in the last number of years, new participants coming onto the platform that are utilizing sources of data, whether it be a greenhouse gas emission footprint, or a source of origin, as a different way of understanding the suppliers that are doing good while doing well, like doing better for the planet. So it's not our endeavor for us to become a marketplace. In fact, we integrate with marketplaces, and there are many in the diamond and gemstone industry that have been here for quite some time. But they don't have the enriched truthful linked live data feeds that we do from industry.
And so, the combining of that together is not just about what is the price am I willing to pay for the diamond, or the gemstone, or the wool, but it's also what's the cost to the planet? And so, we're able to get the cost of the planet to align to the price to pay.
Jason Jacobs: And is the bulk of your revenue, to date, coming more from subscription than transaction, or how does that breakdown?
Leanne Kemp: We're seeing transaction fees really build over time, and we know that, that's a very longterm sustainable position, particularly for items of value where there is a circular economy effect, because people want to understand, not just only the first time use of an object, but it's second, third and fourth time use. Diamonds are traditionally, particularly, in the marriage or the luxury goods space as a one-time purchase for life. Yeah, I would say we're, probably, 60 odd percent in terms of license fees, and 40 odd percent in transaction fees.
Jason Jacobs: Out of the stakeholders that you mentioned, where are you seeing the most pickup? Is it one particular kind of customer, or is there a long tail?
Leanne Kemp: I think the really exciting question is less about the personas of industry, and actually more about the types of companies that are now accelerating through the use of a platform, like this, or taking the opportunity to rethink their entire brand and value proposition. And we're starting to see acceleration points, in certain parts of industry, where the entire brand promise is really linked back to that truthful story. And one more recently is Brilliant Earth, it's just become Nasdaq listed, and they are absolutely running like a freight train, in terms of their growth and the adoption by consumers. And those consumers aren't millennials, right? They're everyday people asking that very conscious question about where something comes from, and are making very definitive decisions based on that price to pay and cost to planet.
So, I think, that's the exciting piece that we're seeing. People understanding the importance of this data, changing their purchasing habits, or asking questions, but entirely new brands are being built. For example, in our textiles industry, we worked on Web Three Grand with Alexander McQueen called MYMCQ, where it re-imagined the entirety of that luxury brand, based on the principles of what we're able to provide with provenance and the planet, and the impact for circular economy.
Jason Jacobs: Is it one dataset that companies are paying to tap into? Or when you work with companies, do you then tailor your capabilities to get visibility into their efforts specifically? Are you reinventing the wheel with the same assets for each new customer? Or is it build once, and then just get people a window to-to look into what's already there?
Leanne Kemp: The wonderful world of which we're living in is beginning to understand the layers of the onion, and the complexities around supply chain data, and how that consciously assists businesses in ethical trade, but also helps to answer that very simple question. So as we give a window and an access into that single level data, because there are tier two, three and four levels of supply chain, we're seeing it layer, upon layer, upon layer being built. And so, therefore, the derivatives of data that is coming out of that compounding effect, whether it be new suppliers connecting with different forms of manufacturing capabilities that might be yielding an entirely different greenhouse gas footprint. We're seeing that drive the complexity of our data, in such a way, where we're needing to marry it with artificial intelligence, and really smart algorithms to be able to profile nearly, to a certain extent, the types of data that people want to see.
So it's becoming quite intuitive, in terms of how that data is being delivered, or how that data is being sourced.
Jason Jacobs: Is a or the primary use case that I'm a company that makes products and I want to be able to, essentially, certify that my products bring light to my processes, and I've historically been in the dark, or had no way to beautifully display. So by working with you, it essentially almost gives an x-ray into my supply chain so that I understand better, and can inform my decision making and that of my team, and our customers can see. And we're going to, essentially, build in public, in a way, that brands hadn't either been able to, or hadn't chosen to, or both do historically so that there's more trust and transparency than ever before?
Leanne Kemp: Absolutely. You hit the nail completely on the head.
Jason Jacobs: Because I wasn't confident with that. I was just testing my... Testing if I got it.
Leanne Kemp: Yeah, you got it in one. I mean, it... The simplistic nature of our say that the story about where does something come from resonates with the simplicity of those questions that we all ask quietly in our mind, or some that are more bold to verbalize it. But then banks and insurers are also needing more than just the KYC element to understand who are the registered directors of the company. They want to understand the flow of trade. And I think that there's a whole nother derivative of... In terms of consumers that consumers of the platform.
Jason Jacobs: So what is that brands are actually claiming, if they do incorporate this into their outward messaging? What are they saying and how does that manifest? So, it is like an intel inside from a certification standpoint? Or is there certain data that they're disclosing that they wouldn't otherwise been able to disclose? What is it they feel their customers are getting out and how is that positioned to them?
Leanne Kemp: I'll come back to the diamond and gemstone example. There was no such thing as showing the origin of the stone, of which country it was mined from, let alone how it traversed across the world, and where it was manufactured. So, these are entirely new datasets that are now being brought to the forefront, and directed directly into retail for consumers to see and to interact with. There are other parts that the industry has already defined, in terms of the four Cs of a diamond, and now we're going one step further in showing the greenhouse gas emission. So the existing providers of industry, like certification and laboratory houses, are able to now look at the greenhouse gas effect of a gemstone. And a pearl is very different to a diamond is very different to an emerald, and they all have incredibly vast ways upon which they traverse across the world. But also, the processes that yield that greenhouse gas emission footprint is very different too.
Jason Jacobs: And in terms of the data that you are giving visibility to, so you mentioned GHGs. What are the other key datasets that the customers get access to, and are able to provide access to, to their customers?
Leanne Kemp: Definitely origin of where something comes from, greenhouse gas emissions, and the footprint, and sequestering carbon in some gemstones, which is a pretty exciting next generation work that we're bringing out early next year. In pearls, as a prime example, where pearls sequesters carbon. They're the guardians of the ocean, so they're the cleaning mollusk that ensures that we have a healthy ocean, and they're sequestering it. So they are a technology, like a tree, which is pretty exciting. A very vastly different... The other is, of course, um, in critical minerals, the work that we do there.
Yields upon air quality, beyond greenhouse gas emissions of carbon, is methane. It's another fast follower, which we're able to start to see and report on. And also, use of water. Being from Australia, we're a drought ridden nation, and we have to make very serious decisions about how we're utilizing water and how, of course, we're recycling it.
Jason Jacobs: So where does this fit in versus the more general carbon accounting platforms? The Normatives, the WATERSHEDs, the Sinais, there's many of them, as you know.
Leanne Kemp: These initiatives are great initiatives to start with, but they're spend-based calculators on estimations. They're not at scope three. They're not in the supply chain as deep as we are, at the point of origin, when it was first instantiated mines, farms, and tracking it across the world. They're doing aggregated spend-based calculators, or estimators, and the world... Not all supply chains will be able to have as much accuracy as we are forming. But the diamond and gemstone industry is hyper-consolidated, in that there's only a handful of countries that mine. There's only 10 major mining companies in the world that mine diamonds. And then, you know, we have one, two major locations in the world where it's cut and polished, in terms of diamond manufacturing, in India and in Antwerp, and a small amount in Israel.
And so the hyper-consolidation of a supply chain enables us to be able to get this scope three level calculator with more accuracy in certain industries faster than others. That same accuracy would be very difficult to achieve well before 2050 in, say, the food supply chain, as a prime example, or even some of the textile supply chains, because it doesn't have the hyper-consolidation that other industries do.
Jason Jacobs: The big incumbent, whether it's the countries themselves, or the miners, or the De Beers of the world. How much interaction do you have with them? And what do they think of Everledger?
Leanne Kemp: Well, firstly, from a government's perspective of the world, Australia has a mandate for the track and trace of critical minerals. And, of course, Australia is the largest producer of lithium, and we know where the story's going in terms of acceleration around electric vehicle batteries. So national traceability programs are starting to awaken the minds of governments. I speak about Australia, because I'm from Australia, but it's not limited to Australia. Russia is the largest producer of diamonds in the world and has been for some time, and they too have had national traceability programs in place with their major GDP commodities, and so diamonds being one of those, as well. You talk about De Beers, De Beers has a very well positioned blockchain enabled, full traceability, bringing origin to the forefront with diamond traceability, and that didn't exist when Everledger started. And our engagement with them has been longstanding since 2016.
So, we are seeing the awakening of industry, alongside government, and the careful positioning and repositioning of brand. Whether that be the nation brand, or whether that even be the luxury goods brands of retailers that are well-known to consumers.
Jason Jacobs: Where do the big consulting firms that do supply chain consulting, as an example, fit into all of this? Do they come up much in your travels?
Leanne Kemp: Ah, they love to call, and there's no doubt about it, they also love to understand what we do deeply. We don't have any direct aligned relationships with the big consulting companies. In fact, if-if anything, the critical minerals work with the Australian government was awarded to us over other consulting companies, because it's about real software, and they're not technology companies. So, ultimately, we can consult as much as we want, and I think the world is starting to move well beyond PowerPoints and Google slides to solve the problem of carbon, climate and environment. And we need technology to be able to connect of the networks to be born. And that's going to come out of companies and entrepreneurs, like us, that have the ability to be a bit speedboat like, in terms of bringing us alongside the large incumbents that have the data, or the industry participants that are effectively digging holes and shipping dirt.
Jason Jacobs: How do you sell? Is it a-a direct model, inside, outside, channel? How-how are you actually taking this solution to market?
Leanne Kemp: Because we've chosen very particular industries, where we hold deep expertise, diamonds, gemstones, Australian wool, Australian critical minerals, as a prime example, we have a direct model. So we're not engaged in using the big consulting firms to leverage our way through. If anything, actually, the big consulting firms do us a great favor by delivering a board level strategy of which people need to execute against, and therefore they can start plugging into the platform that we've created. Never say never, maybe in the future we'll think about channel strategy, but right now, we've got more than we can chew.
Jason Jacobs: What functional area are you typically selling into? And how do they justify the budget? Is it out of an existing pool and, if so, which one? Or are they creating a-a new category from which to find the funding for this initiative?
Leanne Kemp: Given 2015 to 2017, was relatively ersy-early for enterprise, blockchain applications. There was a fair engagement then with the chief technology officer or innovation, as a prime example. And parts of that were pilots and CapEx spend that was really outside of operations. But today, when we have such an enriched process of understanding, and a maturity in the blockchain distributed ledger protocols, it's less about those CapEx check sizes, and now it's purely by license. Um, the new purchasing officers that have really come in, CIOs, are very much front and center. Chief procurement officers is another one, so someone who is actually procuring goods and services needs to be able to have a clean conscious supply chain. And the third purchasing officer that we see in engagement is the chief sustainability officer, or the responsibility officer. And we're starting to see those migrate to the forefront of decision makers.
Jason Jacobs: And is it primarily like a branding and trust story? Or are there savings involved? Or performance improvements? Or what's the story that's really hooking them?
Leanne Kemp: In some of our industries, we've seen consumers willing to pay more, knowing and understanding the entire story of a highly conflicted supply chain. And so by virtue of that, you're able to economically model based on an increased GP, gross margin. We're also seeing, as well, that those particular gemstones move faster through the supply chain, because consumers are willing to make that decision with more trust enablement. So in an environment where there's consignment stock, and particularly it's, you know, on a forward trade, in terms of the trade days and the amount. Then it's to the advantage of the industry, as a whole, to bring technologies, like this, to the forefront, because people are paying more for it, and they're making faster decisions to get it. Whether that will become the norm in five years time, where pretty much we think providence will be in built into every object. It's a bit like when we think about calories on the label of food. I think carbon will be the next calories. It'll just be on the label of everything that we buy or consume.
In terms of digital transformation, we're also able to see the replacement of paper into a fully digital environment is, pretty much, a zero sum game, as well, so. And that's not including the environmental hazard, or the footprint that is left behind with paper across the supply chain. That's purely just an inefficiency in industry is able to justify the cost. In 2015, 2014, when blockchain was very early, it was a really difficult technology to be able to build with robustness and at scale, and it was quite an expensive technology. But today, you can equate it to an equivalency of any other web-based technologies. And I'm not talking about, ah, permission cryptocurrency ledger, where you have to be considered in the volatility of cryptocurrency for gas fees. But I'm talking about an enterprise environment, which is not dissimilar to any other sorta web based implementation.
So by virtue of that, we're often seeing a rationalization of the technology stock being made, and there's savings to be made as a part of that.
Jason Jacobs: The things that you're doing, and the value that you're providing, is that reliant on blockchain? Or is there a world where it could be done without? And if not, what is it about blockchain that makes it essential as an enabler?
Leanne Kemp: There are ways, and there are companies that provide a centralized highly vulnerable centralized store of information based on a registry and/or an identity of an object. We certainly see the power in distributed ledger technologies. The evolution, over time, of peer-to-peer trading. What's happening in the space with web three and NFTs, combining with NFCs, that physical digital link. And we fundamentally believe that blockchain is the next generation of the internet, and it's here to stay. We did choose an environment where we had a centralized store. I'm not sure that the entirety of the incumbents of industry would trust a single store of truth. But certainly a network that is able to be connected, where everyone is in control, but no one person is in control of the end result is, pretty much, where the world is moving, and we seem to be in the right place at the right time.
Jason Jacobs: And does that mean that there'll be one network? Meaning that, it will be a network that's provided by a private company, like an Everledger? Cause, if it is a network, but it's an Everledger network, isn't it still putting your trust in one company?
Leanne Kemp: I don't think it's going to be one network. I think it might be one protocol, and those protocols would be driven out by the W3C and the international standards that are moving. So, we're already seeing that there are multiple networks that exist in the diamond industry, colored gemstone industry, and textiles. And it's the connectivity of that together through a data exchange environment that helps to bring the solution to the world. So it's not really one winner takes all. I think we looked at those models already, whether it be Facebook, Google or the others, and I think that the world is slowly bringing themselves back into a distributed sense of power.
Jason Jacobs: And we've talked about getting visibility and disclosing that visibility to end consumers, as well. Once you have the visibility, does Everledger get involved, at all, in terms of improving the data, or just disclosing the data?
Leanne Kemp: Well, this... This is the big question that's on the minds of many right now. And that is, we have a linear economy, and that once it's built, and it's priced, and it's bought, it effectively just doesn't improve. It ends up in the bin or in landfill. And the major kinda concern that many people have is that the externality of cost of that single life, or single use, ends with exactly that. The world is now looking at how can we repay, repurpose, recycle, and even up cycle parts of the materials supply chain. And so, if there is a second endeavor to the value of life of an object, or of a material base, then Everledger certainly does get involved, because we are seeing the waste from electronics as a prime example. You know, Dell Computing, a number of years ago, stripped back a significant amount of their metals that was then repurposed and reused into the jewelry supply chain.
And we see that, and we add value to it through that process of regeneration. And so I would say, yeah, there is a story, and we are involved, because we actively and fundamentally believe that the linear economy is not sustainable and we do need to move to a regenerative environment, where we are consistently looking at and adding value. We shouldn't be thinking about supply chains. We should be transforming it into value chains. And by virtue of that, it's a continuous loop.
Jason Jacobs: And is that largely part of the future vision and aspirational? Or is the making improvements around the data something that is manifesting today with real customers?
Leanne Kemp: Right. That was two years ago, so it's in the scale. Um, Dell Computing is very real. They're entirely large circular economy precincts that reside in our technology that take the waste out of retail and repurpose them into new furniture items, as a prime example. So, no, it's a very... It's a very, very real implementation uplift that's occurring right today.
Jason Jacobs: Great. So if you fast forward, let's say, 10 years, and Everledger is successful beyond your wildest dreams, what have you achieved as a company? And what have you achieved for the world?
Leanne Kemp: I'd imagine... Look, we wouldn't be talking about blockchain, because it would be ubiquitous and will just become the protocol of the web and many of us in terms of looking at our wallets and our digital vaults would just be driven by those protocols. So it's not going to be the technology of the month. In fact, it's not even going to be... NFTs won't be the word of the year, and the same too with the circular economy. We won't be thinking about that in an economic construct, because it will just be the economy. And so, Everledger is, probably, one of the larger providers of transparency in hyper-opaque supply chains, where we fundamentally believe that transformation is the key to value. And, you know, who knows, if we can start to reverse parts of the climate environment disasters that are around us will make accountable those, ah, or even give visibility to parts of those atrocities, then we've already done well.
Jason Jacobs: Great. And as you think about other opaque areas, you mentioned that you're particularly experienced and well connected in diamonds, which was one of the reasons to start there. How much of your infrastructure, expertise, DNA in the company is transferrable to other sectors? And how much would be reinventing the wheel?
Leanne Kemp: The biggest sector we're wholly involved with now, and we began a year after Everledger started in 2016, was, um, enabling the battery passport. Ah, you know, choosing how we might bring critical mineral traceability to the forefront with the, um, nickel, cobalt, as a prime example. And then linking that to the battery, itself, not only in its first life, but its primary and secondary life. That work has taken some significant acceleration forward, whether you look at Boris Johnson bringing half a decade forward for electric vehicle adoption in the UK. The European Union now has a battery passport policy that is bringing towards the entirety of the EU. Which looks at extended producer responsibilities, and it says even though you might be the manufacturer of the battery, the OEM of the car, whether it be Ford, BMW, Audi, they have an extended producer responsibility to know and understand the battery and it's recycling and repurposing.
So there's a mass acceleration underway in that automotive space, but also in the critical mineral space. We saw it in 2016. We committed to it, and we're well positioned for it now. And we think that, that's gonna be an industry that will keep us incredibly busy for the next 10 to 20 years. When we consider the breadth of critical minerals and the change-up of what is defined as critical, and the existing geopolitical tensions globally, in terms of the battery manufacturing and the manufacturing sector as a whole, we understand new car brands, beyond Tesla, are coming to the market to be able to fulfill the needs of the nations. And we were able to, in six short months, take the platform that was wholly designed for diamonds, and bring it across and place it into the hands of Ford, Ford Motors, for their electric vehicle battery traceability and recycling.
And now, about nine months, in the committed energy for the Australian government for critical mineral traceability.
Jason Jacobs: What are the key priorities for the company over, say, the next 12 or 24 months?
Leanne Kemp: Critical minerals, critical minerals, critical minerals. I mean, I think there's a number of governments where that's the key focus for them, as well. It's securing that pipeline and enabling very clean, green, and uplift of off take agreements. And knowing, ultimately, where that material base is going, and how do they either get it back to recycle it, or how do we enable the value to be created when it does leave the shores? We only have so much life left in our mines. And the prime example in Australia is we had the Argyle mine with pink diamonds, and we don't mine them anymore, because there's none left. And the same tragedy could occur in various parts of the world with the life of mine. And so, the race is on for rare earth, as they say.
Jason Jacobs: If you could wave your magic wand and change one thing outside of the scope of your control that would most accelerate your progress, and the progress of cleaning up these supply chains, in general, what would you change and how would you change it?
Leanne Kemp: Be delighted if we could accelerate synthetic biology in such a way where we weren't reliant on the natural mining extraction, and having to build out this whole urban mining platform of, say, recycling. You know, being able to harvest value from waste. If we were able to harvest synthetic biology in such a way where there were different mechanisms where we could power the world, then that would be brilliant. We're starting to see that in the food sector already, when we think about synthetic biology being created for our food sector. But in the industrialized, highly industrialized, supply chains, where we're still reliant on fossil fuels, and reliant on our natural resources, that is a harder problem to solve.
In one respect, I wish Everledger wasn't really needed, but the reality is we are, so we're here to keep going, until we bring a light to the dark.
Jason Jacobs: And for anyone listening that's inspired by your work, who do you want to hear from? Where do you need help?
Leanne Kemp: Firstly, everyone is a consumer in various parts of the world, right? We all have different decisions in your life, and the decisions that you make, so just ask the question next time you walk into a front door. And if you happen to be walking into to buy a diamond ring, then definitely ask where it comes from, because the industry can tell you, and they will tell you. We're growing as most businesses are, and definitely we have a growth mindset as an entrepreneur, so reach out. You know, I'm highly contactable through Twitter and LinkedIn, and our team stretches across six countries in the world. So if you're curious to know more, or if you deliberately have a question that needs to be asked, we're around.
Jason Jacobs: Amazing. And Leanne, is there anything I didn't ask that I should have? Or any parting words for listeners?
Leanne Kemp: Ah, I don't know. I'm always caught on questions like that. I really don't have much to say to be honest, you know. It's an important part of the time in the world to be able to just deliberately commit to something. And if it happens to be a big idea, don't be fearful because there are many entrepreneurs out there that've got your back and they're putting the wind in your sails, so just go for it, I reckon.
Jason Jacobs: Well, you did actually have something to say. That was a fantastic point to end on.
Leanne Kemp: [laughs]. Look at that, got a face for radio, mate. Who knows?
Jason Jacobs: [laughs]. Leanne, thanks so much for coming on the show, and best of luck to you, and the whole Everledger team.
Leanne Kemp: Yeah, thank you. Brilliant.
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 dot CO, not dot com. Someday we'll get the dot com, but right now, dot CO. You can also find me on Twitter @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.
