Accounting for the Planet: A Conversation with Offsetted

Our NextSpace Broadcast host Rachana Mamidi sat down for a chat with Alex Lazarenko and Daria Lipatova from Offsetted , the innovative deep-tech carbon reduction engine that's changing the way companies can monitor, reduce, and communicate environmental footprints. In this abridged transcript, learn about the power of satellite imagery in carbon accounting, the game-changing potential of real-time environmental data, and the future of ESG reporting software. Listen to the entire, unabridged conversation on Spotify.?

Rachana: You develop and provide carbon accounting products for your customers, can you talk about how you use satellite imagery or any other satellite applications like GNSS or Positioning Services in your emission models or in any other customer product offerings?

Alex: We've been looking quite heavily in the space of how we could actually implement such data in our platform. We have started to enter the market with a slightly lightweight solution for small and medium-sized companies.

We are currently working on the new version of the product, software that allows you to manage the whole process from measurement to reporting side. In this case: The detection of leakages of methane or the huge leakage of CO2 emissions.

Rachana: Have you tried already to access these satellite imagery or, let's say, applications? And have you encountered any barriers in accessing them?

Alex: We have tried several solutions and spoke with some partners on our side–both from research institutions, and from startups like ourselves, and we all [agreed] that currently, the main barrier is the price.

The data resolution of free data sets is too low and accessing high-quality data requires a lot of imagery, so it becomes pricey for a startup to implement if they don't have any commercial projects ongoing or dedicated budgets for this activity.

Rachana: Aside from the price, is there enough satellite coverage? Have you encountered any geographical areas where even though you're willing to pay, there's not enough satellite coverage in the bands that you want in the spatial resolution that you want, or the spectral bands that you want?

Alex: Since we are working with customers well-located in the major centers of the world, mostly the data is available. But I think that for some other companies in the space who are working with customers with a more distributed geographic position, the problem might be a persistent one for them.?

Rachana: Have you ever thought about owning your own satellite constellation? Because in the long run, it could become more inexpensive than buying this imagery.

Alex: This is a very good question. I think that some of the customers really might want to have their own satellite imagery. Especially if they're in some kind of business where they need to have this data updated very frequently, and that will be really dependent on the type of business of which we are speaking about.?

This is definitely an area where companies are very interested in because, besides carbon emission monitoring or methane leakage, you can find out a lot of different applications of satellite imagery, especially in the agriculture sector. For example, if you are monitoring the quality of trees or you’re monitoring the different quality of carbon offsets, the add-on of that data might be beneficial for lots of companies.

Rachana: Can you walk me through how you build your product or any other product offerings? Just to have an understanding of other areas where satellite applications could be useful for you.

Alex: For our case, the satellite imagery is going to be another data source for our platform, because typically we integrate with different software which is installed inside the company like CRM systems, CRP systems, energy tracking systems, logistics systems and other types of software. Basically, we're aggregating this data, and getting that carbon emission monitoring on top of the data which we get from those platforms. And definitely, satellite imagery will be a data provider, as soon as we acquire customers who are willing to take this approach, we're more than happy to integrate it into our platform.

Rachana: Daria, now that you're based in Singapore and trying to expand into that market, are there any cultural differences or geographical differences in how customers come to you with the kind of products they want? How is it different from the U.S. or from Europe?

Daria: We're currently entering Singapore as a part of the German Accelerator Asian Market Access Program, but we started our journey towards Singapore about six months ago when we first learned about the great national initiative called Singapore Green Tech Plan 2030. The major goal of this green tech plan is to put Singapore on the avant-garde of the development of clean tech in the world.?

Currently we are preparing to launch our new product that is focused on working with our financial institutions as well as a Singapore exchange listed companies that would allow them to better understand ESG-related monitoring, benchmarking, as well as provide them with easier reporting opportunities.?

So with our product Offsetted Finance that we are launching at the Singapore FinTech Festival, we are dealing with the three scopes of emissions of all of our customers, according to the greenhouse gas protocol. We believe that through space imagery, we could get more precise data for our calculations for our customers.?

Rachana: You mentioned that mostly, it's your customers that use satellite imagery or the products that you provide. Do they also use or do you think they would also benefit from having satellite connectivity, let's say, real-time broadband speeds of satellite connectivity??

Alex: I would say that for our space this type of connectivity isn't really necessary. But there is another area where this connectivity is going to be necessary. And I'm speaking about climate risks. Building just a climate risk model is a very big challenge nowadays because you have to take into account so many different data inputs as well as economical consequences of shutting down a particular manufacturing facility or any other thing. Here, the speed of getting the data and the frequency of updates might be crucial for some components because as we all know, when we calculate risks either in cybersecurity or credit risks or any other area, real-time data really matters.

Daria: We see that there are more and more solutions that are being introduced to the market almost every day, we see that the most competition comes from the speed and the quality of calculation as well as the customer service. So I believe that our approach towards working with technology providers, including satellite imagery, would allow us to win the race.?

The first results show that our approach towards automated carbon accounting really saves time and effort of the companies that want to have their calculations in place, as well as integration of a layer of ESG reporting allows them to further introduce our recommendations to actually enhance and improve this score.

This not only allows them to respond to the pressure that comes from the regulations, but also create long-term opportunities for business growth as well as increase the investment attractiveness of their companies.

Rachana: Let's say tomorrow, high-resolution satellite imagery, real time satellite imagery, is almost free or extremely affordable, and satellite connectivity also becomes very, very affordable. How would that change your idea of automated carbon accounting?

Alex: If we have this data almost free, we definitely going to integrate it and think about the applications of what we can do with this data besides carbon accounting.

But I think from my perspective, I will be looking for ways of bringing additional value on top of our existing products based on the data which we receive from satellites.

Daria: And from my side, I could add something that is connected with the reporting part of things that is currently coming from the regulator pressure. As we know, most of the companies are trying to be as transparent as possible with publishing their ESG reports. And it is also important because you want to avoid any type of greenwashing.?

Cheap and automated access to space imagery, in my opinion, would be leading to avoidance of any possibility of misuse of information in terms of the company's sustainability approaches. And then you could [review] their goals and compare the year to year performance of these companies on their way to actually achieving their net zero pledges.?

Rachana: Absolutely, transparency is paramount. Daria, I have another question for you. What kind of customers are most interested in your products?

Daria: We really need to segment the market. I could say that here in Singapore, for example, the major demand comes from the companies that are first and foremost hit by the regulations.?

For example, if we are speaking about the listed companies here in Singapore listed on the Singaporean exchange starting the next financial year, the most emitting industries such as energy, food and agriculture, as well as financial institutions, will be obliged to monitor and report on their ESG performance. Other industries will join these requirements. We believe that still the regulations are one of the most pressing drivers for companies to look deeper and look more precisely at their performance.

Alex: From a green finance perspective, I think that the most interesting application and the first customers who are going to use this are companies in the carbon trading space. I'm speaking about the validation of carbon offsets, and straightening out the progress of those projects. They typically use satellite data already, and since the market is growing quite rapidly in this space, more and more applications will be used for that.?

Other companies could be green banks, for example, who finance different projects. If projects could be trackable by using their satellite imagery, they would be definitely interested in these applications because this is going to be quite a straightforward way for them to monitor progress and to see if the projects they invested in are meeting the requirements which were set.

Rachana: Thank you for all these insights. As someone who's passionately, personally interested in sustainability, like all of us should, this was very great. I hope to engage much more with you guys in the future. Your journey looks very exciting and I wish you all the best for everything. Thank you for your time today.

Alex, Daria: Thank you. It was a pleasure to participate. And we hope to stay in touch and to be working together more and more as we develop our platforms.