Jane: Welcome to the LSEG Sustainable Growth Podcast. I'm your host, Jane Goodland. In today's episode, I'm talking to the CEO of Climate Impact Partners, Sheri Hickok. They're a fascinating organization connecting companies with projects on the ground to create carbon offsets and climate solutions. So, let's get straight into the conversation.
Hi, Sheri. How are you doing today? It's really good to be able to talk to you today.
Sheri: Thank you, Jane. I am doing great and it is honestly a pleasure to be here with you.
Jane: Great. I'm so excited to hear all about you and your career and Climate Impact Partners because it's a really exciting, super exciting organisation. But before we get into Climate Impact Partners, I want to know about you because I understand you're quite new to the organisation. and you've got a really interesting backstory. So what have you been up to before Climate Impact Partners?
Sheri: I think this will be the least interesting part of your podcast, but we'll start there.
Jane: Not at all.
Sheri: I've just been with Climate Impact Partners for about ten weeks now, and I actually joined from large corporate, so I came from GE Renewable Energy, where I spent the last six years working in our onshore wind business, leading teams across Asia and then after that actually our full purview of international operations, happy to talk about that. And before that, I actually spent 22 years from the age of 17 at General Motors. So being really trained up in corporate manufacturing lean operations type mentality, but focused on delivering for both the client and with a product mindset. So that's my background where I come from.
Jane: And so your time with the renewables industry, did that give you the appetite to focus on kind of climate solutions, or what was it that made you think, right, time for a change, let's go and do some funky stuff in carbon?
Sheri: Yeah, exactly. I don't know, like if it's age or what happens, right? But there's like this seed you're born with and it just starts to grow over time and it eventually blooms. And for me, that seed that really started early on was just always wanting to help people on the ground in developing countries. And so it actually started back at General Motors when how can we bring transportation to people to enable them to have better livelihoods, jobs, school, etc. Moving into renewables gave me the opportunity to actually really be focusing on clean energy and again, then having the pleasure to work and lead an organization across Asia was really fantastic and working with a lot of developing countries. But through those phases I had amazing learning opportunities and amazing exposure but that itch to really drive impact where it's needed on the ground for the people continued to resonate for me and just grow stronger and stronger and climate impact partners came knocking and I was like, this is too good to be true. I'm pretty excited to be here.
Jane: Great. Well, it sounds like you've found a perfect match. So tell me about the organization because it's a relatively small organization, so people may not have come across it before. So, give me the headlines and then we can delve in a bit more.
Sheri: So Climate Impact Partners is a primarily carbon finance organization where we bring technical expertise and relationships and connections to enable connecting large corporate clients and the funding they want to do to drive towards their climate goals with actual project execution on the ground where we're developing carbon sequestration projects, which is either a removal or avoidance of some kind. So that sounds technical, but it's really funnelling the dollars from the clients, the large corporates, to the projects in the communities to really fund them, which deliver community impact, but ultimately also carbon offsets. And we serve as that connection and the technical expertise there in the middle.
Jane: And so just to be super-duper clear, this is all about kind of the voluntary carbon end of the spectrum, right? So this is nothing to do with regulated emissions. This is really about corporates who are looking to use offsets, credits, whatever you want to call them, as part and parcel of their climate goals, climate transition.
Sheri: That's exactly right. So this is where corporates have leaned in set targets, know they can't through whether it's a straight avoidance today have a carbon neutral footprint they'll do offsets to help achieve that sooner versus waiting until they have a full path to avoidance.
Jane: And are your clients typically very large organizations, or have you got a spectrum of clients?
Sheri: We have a full spectrum from some of the largest corporations in the world that you would know very well to really small businesses that are maybe spending £1,000, for example, to offset their footprint. So we really try to make it available across the board.
Jane: Yeah, that's kind of nice, right? Because the whole climate transition can't be done by one single party or segment of the industry. It has to be a whole scale effort, doesn't it? So, I was checking out your website, as I do, of course, ahead of these conversations, and I saw that there was some punchy numbers in terms of the goals of climate impact partners. And I think there was something about the ambition to reduce a billion tons of CO2 by 2030. So, is that your organization's overarching purpose? I mean, it feels like a bit of a purpose led organization, right? But do you have this big picture goal in mind and then you pursue that?
Sheri: So I would tell you the intrinsic purpose that's been built into this organization over the 20 plus years, it's the companies have existed in the background that's made, is really about having impact every day. That's the purpose. Every human in this business wants to do good and drive impact focused on climate every day. Now how do we do that? Our mission and the target we've set for ourselves is how do we achieve with our corporate clients and the project partners on the ground a billion tons of carbon offset. Which can happen again through avoidance or removals. And that is a very big, ambitious goal, which leads I think part of the reason to why I'm here and what I think our next goals are and our strategy going forward.
Jane: So why don't we talk about that then? So, what's the plan?
Sheri: So it's really fascinating. I think when you look at this industry today, even more so than 12 months ago or 20 months ago, it's quite fragmented but with a lot of small companies, the numbers that we need to achieve as a world literally halving emissions by 2030, achieving 1.5 degrees by 2050, you hear these words, they require significant scale. If I really explain an example of a carbon offset project, I just actually got back from one last week in Indonesia. It's really working through co-ops and farmers on the ground to fundamentally plant trees. And that comes with actually growing seedlings at nurseries, deploying millions of trees across rural Asia, in this case, Indonesia, nurturing those trees over 20, 30 year period. That is hard work it takes a lot of humans. It's a very complex footprint. We need to think about and this is not just for Climate Impact Partners, but across the industry and really across the world, how do we do this in a more efficient fashion? How do we get more scale, whether it's finances going in to fund more faster and the development of technology to support it, whether that's planting, whether that's digital monitoring, etc, we have to figure out how to scale more. And so what that billion tons target does for us is it forces us to ask that question, to lift our heads up, to say, hey, doing these next five projects or next 500 projects won't get us there. How do we get to 5,000, for example and that's game changing.
Jane: How did that 1 billion number get decided?
Sheri: I wasn't here for the history of the 1 billion, but I know it was like, let's shoot for the moon. What can we do? We're 100% organisation and we want to set our sights high and that's how the mission was set. Now it's our turn and our time to unwind that. So how do you actually mechanize that and what does it mean that we have to do differently? And who do we have to be partnering differently with etc to actually drive that outcome?
Jane: Yeah and one of the questions that always comes to my mind when I think about this because you've just really eloquently talked about, I guess not the problem, but the challenge. It's one of connections and one of making sure that capital is flowing in the right way but there's also that supply element there as well in terms of the projects. So it strikes me that the super hard part, is really the supply side and making sure that there's sufficient projects on the ground at the right stage to be able to release the required credits. So you've just come back from Indonesia, you said. So it would be super interesting to understand how does that happen? How do you find the projects and is that the Climate impact Partners doing that or is that someone else or a combination? How do you find those projects?
Sheri: I'd say they come from all over, quite frankly. Some are bottoms up where a developer or a small co-op in a country says we have land; we have forest that's been degraded. We want to invest in that. We need help because often it's just the financing side that they need. They have the capability to do the work. That's one way. We do taps on, I just had a conversation with someone today about an amazing potential future project that again, they're looking for financing, but it's coming kind of more from a top view as they see an opportunity looking from a country level. So the projects really can come from all over. What's interesting is the analysis of what makes a good project? And you hear a lot right now and there's a lot of negative media around quality credits and we spend a lot of time really in what we call our due diligence phase to understand what makes projects good. You might think, well, why not just plant trees I mean, that's what you're trying to do and that's true, but when you're actually charging someone for a carbon credit, you need to make sure there's two really important words additionality, meaning this work wouldn't be done if we didn't put the project in place and permanence, it will stay, can't plant a tree and cut it down later. So when you think about why it makes it complex on the ground, you have to first before you even look at like how to do the work, are those things in place and can you prove it? And there's a lot of elements that come into that. One specific element that I find is the most complex is land rights. So you have to have rights to sell the carbon which is on the land. And you're often working with indigenous families and communities and these far remote areas. I mean, those are really complex. You have to follow cultural norms. You have to figure out the appropriate documentation, how do you communicate and make sure they understand what they're getting out of it. So just in the spirit of the big picture, the complexity, that's one element of the complexity that has to be in place and done well to ensure quality, which is the headline of what we're talking about outside.
Jane: And so is that something that your organization gets involved with at that micro level?
Sheri: Absolutely. So, we'll do things anywhere from just partner with the developer who knows how to do it, has done it a thousand times type thing that's great and we're also at a point where, you know, we're working specifically with how do we develop a developer. If I say that like to actually have people on the ground because you really need people embedded very often in these communities, it can't be like, Hey, the American CEO that shows up and mucks around and get something done like that's really ineffective. But how we think about who we work with is really important and that statement, if you just spent a minute unpacking that, you can see the complexities and the challenges too.
Jane: Presumably you have a bunch of people on the ground around the world or are there particular regions that you focus on?
Sheri: So we have a different, I'll call it go to market model from a project side. Some areas we have people on the ground, like in Kenya, we have a full office, we have a long history in Africa, which with clean cook stoves. So essentially using electric stoves instead of people cutting wood down to burn for cooking. We have other areas around the world in Asia where we work more through partners and how do we develop those relationships there on the ground executing etc. But obviously we're always touching base going and seeing. I think it's super important to go see what's happening, to know that what's actually being executed is what we expect and anticipate.
Jane: And so talking about that seeing is believing type of thread. Tell me about what was the impact on you when you went to the project that you've just come back from? I guess a personal and professional perspective. What did it do for you?
Sheri: It's really amazing, Jane. Like there's layers of learnings for me from a personal to a professional. I say professional, ten weeks in, I really didn't know. Now in my background, I've executed full turnkey or full wind farm build outs and have seen those and been there. But going out to what I just described into rural Indonesia, the level of complexity, we couldn't speak the language, there's regional cultures, there's all these things. You, you have to figure out how to embed yourself. So that was an aha for me. Like whether that is who we pick as partners or how we actually land on the ground. That was a very big takeaway. So, I coined that in the word complexity. It was humbling. I think, a bit bold in my words here we sit in our offices and, and question whether this is good or that is good or who should be paying for that and why don't we have a right to this? When you go see these farmers and how they're living and they're so thankful for 100 fruit trees to better their lives, it's extremely humbling. And it makes you realize, like, I just want to do more of this. How do we figure that out? And I think the third piece of this is, again, we sit in our offices and we critique what quality is. I was talking to a co-worker about this today. The universe actually has a lot to say about that and that sounds really fluffy. But what I mean by that is we're dealing with living species of trees and humans and hundreds of years of embedded cultures that we need to respect as we do this. And this isn't going to be black and white. I come from a manufacturing background. You put a code into the CNC machine it cuts to that degree. That is not what this is. So for me, I came away saying like, how do we share this more? How do we talk about the complexities in a way that gets people to lean in to help solve those instead of leaning out because it looks messy? I just don't think that's an option for us.
Jane: I absolutely understand where you're coming from because I think sometimes in this sustainability world, it's almost quite easy to lose sight of the end game because people quite understandably get bogged down in the detail or the regulation, which absolutely has its role. But sometimes it's easy to lose sight of the end game and what is the outcome we're trying to achieve. So I think it's really healthy and useful for us to always ask the question, okay, yes, we need to think about the rules and the regulations and all that sort of stuff. But actually, is this in service of the bigger picture of the outcome? I agree these things are rarely black and white or easy and if they were, they'd have been done a very long time ago, actually. So these are not clean and tidy. I'm curious to pick up on something you said earlier Sheri, and we were talking about trees but then you mentioned the stoves. So curious to understand what the diversity of projects are, because I think that perhaps there is a perspective that this is just about, this is easy, it's just about planting trees. But I kind of think that this is more than planting trees, right?
Sheri: Yeah, that's right. There's actually a large diversity of projects. We label them in four main categories. So health and livelihood so you might think about water filtration, you think about clean cookstoves. And again, there's always something being delivered to the community that you're engaging with, as in that result is clean water or healthier cooking. And we can talk about the benefits of that while essentially avoiding a carbon offset because it's stopping a behaviour, so that's one. A second is around nature based solutions. So, this is planting trees or protecting trees from being cut down, so that's another one. The third is around like sustainable products. This is renewable energy. You can think about wind farms, solar farms, you can just buy credits because now you're using renewable credits instead of fossil fuel energy. And then we have an ‘other’ category, which is a very broad based approach because there's a lot of specialty projects that can be done, including new ones that are coming up. You may have heard terminology around blue carbon. So how do we start to think about how we're impacting our oceans, how we're thinking about the diversity that's in the water etc. So, it is quite broadening and for me honestly, 11 weeks ago didn't have a view. I didn't have an understanding of all of this.
Jane: Are there any live projects in that blue carbon bucket?
Sheri: There are. In blue carbon there is a series of different types of projects that are being developed. Often in this industry there wants to be a methodology that you can use that structures how you measure carbon sequestration. In the blue carbon space, the first that's developed is mangroves. So mangroves are one of the most powerful from a sequestration perspective, actually taking in and absorbing and holding carbon. There's about ten projects I think globally. So not with us but like globally in that space moving through the methodology so it's quite new. And on the back of that there's new methodologies that are being created around seagrass, for example and there's things all the way down to like, how do we study coral, Can you bring that up back? You know, there's a lot that's happening in that space, but it's definitely on the newer side.
Jane: Sounds really interesting. To wrap this up, I'm going to ask you, this is a big one guess, but we're in this critical decade, the decade that is pretty decisive, right? What we do now really, really, really counts. So what would your message be to companies right now, today about taking climate action?
Sheri: My message to companies today would be, we must see more action and stronger ambition. And I actually will go back to the word action like put your money where your mouth is. There is little downside to trying to hit that end outcome of what we talked about earlier. Let's focus on that real outcome. We need to halve emissions by 2030 and we are nowhere near the point of even remotely achieving that. And a very small portion of corporate profits around the world would enable us to do this. I think we need to stop asking questions and start taking action. We need to lean into quality, we need to develop scale and we need their help in doing it. But it won't happen unless we create the demand pull. So lean in with us, help us improve, but let's get after what we ultimately want, which is a healthy world for what I know I want my children to live in and I'm sure those who have family want the same for theirs.
Jane: Yeah, absolutely. Couldn't agree more. Sheri it's been a delight and it's made me want to go and see some of the projects. So, I'm going to put that on my little to do list in future. Thank you so much for your time. It's been brilliant and good luck and I hope that your entry into Climate impact Partners is super successful. Thanks very much.
