SPEAKER_00: 0:01

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SPEAKER_01: 1:42

If you think about it, the mother or the father in this case of all market failures is the way we deal with land. In the end, our social well-being, our ecological well-being is the sum of all the individual land use choices that we make every day, every morning, hectare by hectare, everywhere on the planet. It's done by many, many people who sort of seek for a good livelihood. And currently those land use decisions are always cued towards extractive use. It's the only way to make a living. And that is at a moment where we know that land is where we get healthy food from, where we get energy from, where we get water retention from, where we get carbon storage from, where we get biodiversity from, where we get temperature regulation from. All of that comes from the land. And currently we don't take decisions that actually add up to the social well-being that we as a society are looking for. It hasn't been like that all the time. If you actually go back in history, which is quite an interesting journey, there was a moment, the very beginning of economics, where land was the only legitimate production factor. The so-called physiocrats, Francois Kisney, he made this point. He said that it's the only source of wealth. Labor, capital, in fact, are less important. They are sterile if it wasn't for the potency and the fertility of land. And we've lost that completely. Then we went into a completely different school of thought that was the classicals, the neoclassicals. And they always looked at the marginal pricing, where the value of something was equal to the price, and the price was equal to the marginal utility. And the marginal utility of land, particularly if you can expand it, because there's always a new frontier, actually was seen very little. And so we ended up in a mindset that land is worth nothing if it wasn't for human ingenuity and for capital and labor. But now we are finding out that in fact these production factors are sterile. They're worth nothing if there wasn't fertile land. And it took us to grow to 8 billion, and it took us to get into a 1.5 degree world to find out that there is intrinsic value that comes with thriving nature and the land on which that sits. So and land banking group, long story short, is the attempt to reward better land use decisions for everyone worldwide.

SPEAKER_00: 4:21

In that answer, you used two words, price and value, which these days are probably far too often interchanged. And you've said once before that in reference to nature, that everything must have a value, not everything must have a price. And I like the way that sounds, and intuitively that feels right. But I wonder if you could talk a little bit about what you meant by that.

SPEAKER_01: 4:45

Nature has value, and we all feel it, we all know it. That's where we like to spend time. 85% of us have nature as a screensaver. So it must be a reason for that. It seems to be part of our fiction of wealth, of our fiction of value. But it doesn't have a price. So the landscape that you look at on your screensaver, in fact, is not creating any GDP. It's anything between neutral and negative, even if a dump side would be GDP positive versus the use as a current landscape. And in a way, if you're thinking about it, there is such a massive divergence between our intuitive sense of value and our economic sense of value, which is reflective of a world where we always knew nature or beauty was there anyway. But now we are finding out that nature is in fact depreciating, to use the word of Hartada Skupta, and we are not reinvesting into it. And so that means that we have to change that. One way of changing that is just to recognize the value and to protect it for its spiritual value, for its cultural value. And another part of that actually is to reward it, and for that we need to give it a price. So the first step is to give it value, and then there will be domains in which we find out the best way to protect it is actually to give it a price, but it's not the other way around that it's the price and the market that solves the problem. The first step is for us to discover that it is of value.

SPEAKER_00: 6:21

And can you talk a little bit about how the land banking group is doing this? What are your products? What are your services? Who are your customers?

SPEAKER_01: 6:28

In a way, it's super simple. So we go four steps. The first step is we've built a technology. It's called landlar.io. It works. You also find it in the web, which has the ability to give every pixel of the planet an ecological passport with regard to its biodiversity, with regard to its carbon, soil quality, and water. We call that a nature capital account. And we like that word a lot because it also links back to UN natural capital accounting. Um, the second step is then to use that nature capital account as a reference point, as an underlying for the issuance of nature service agreements. So every land steward can enter a contractual relationship with anyone who is in need of positive nature outcomes. These are businesses, these are insurances, these are offsetters, contributors, investors, governments, whatever. So it's the ability to create environmental or nature capital contracts at scale through a modern contracting engine. The third step then is to take these contracts. We gave them a name, we call them nature equity, which we think actually might be a good candidate for hard currency that actually conveys the attribution rights to nature capital. So nature equity contracts, we take them and we help our customers to bring them on their balance sheet. I think that's an important one because so far when you put money into nature, it always is either philanthropic or it runs through your PL. And nature equity, because every one of those contracts has a biological or a biophysical twin back in nature. So it is anchored in a nature capital account, it is collateralized. Through that, they actually qualify as a balance sheet asset. And that is anything between boring and technicality and a real paradigm shift because that's and also linking back to your former question, Ryan. Um, it's the moment when we start looking at nature improvement as a source of wealth, as something that deserves to be investable. And it's the moment where we've created a new currency that has value to you because it shows that your value chain is safe, which shows that you are insurable, which shows that you are contributing, which shows that you are storing value. And all of this you can only do if you have a trusted contract. And nature equity is a way to bring together nature tech and fintech to create a very high quality of trusted contract. So that's what land banking does.

SPEAKER_00: 9:15

Interesting. Okay, so I think I understand the mechanics of it. Can you give an example of one of the projects or you know, a location and a customer and how they work together?

SPEAKER_01: 9:24

Currently, most of our work is within setters. So these are companies where that feel that they actually are increasingly exposed to nature risk, to the default of ecological systems, and they want to protect themselves from that nature risk. So because nature risk was theoretical in the past, it's real now. No oranges from the Mediterranean, no hop for your beer, no home insurances in California anymore for wildfire risk.

SPEAKER_00: 9:55

No coffee and chocolate, those are my biggest.

SPEAKER_01: 9:56

No coffee and chocolate, no coffee arabica anytime soon, which sort of is a particular blow to most of us. So this is real now. So welcome to a 1.5 and soon two degrees world. In such a world, you as a food brand, or you as a cosmetic brand, you want to know whether your growers are actually improving nature capital every year, whether there are more and more shadow trees, whether there's more and more soil organic matter, whether water holding capacity is increasing, whether there is still abundance of pollinator insects, you want to know. And you're even prepared to pay for it. But it's a very difficult problem for you to solve. It's a complex multi-polygon, multi-tier problem, and it's very heavy on your PL. So having a platform that actually allows you to sign on thousands of polygons to assess them automatically, so automated MRV, then to have what's an MRV? That's a monitoring, reporting, verification. So basically, that's the ecological assessment, the stock of nature capital at any moment in time. So, and then to have a nature capital asset management system where you can see on your screen, here are the projects, here is the total amount of nature capital under management, and then to take that to your chartered accountants for them to look at it and say, Okay, I got it. This is a real investment in the viability into your business. So that's the easiest of examples. That's the insetors, everyone who has exposure within the value chain. Food chains is most evident, and that's also where most of our activities are now agri-food chains, cosmetics, but we see the same in energy, we see the same in mining, we see the same in construction. Very soon afterwards, we think that insurances can not afford to invest into nature uplift anymore. And very soon we think that also banks, financial investors, institutional investors will actually have need uh tools to manage nature exposure of their portfolios. And for everyone, we can offer the lander platform as a solution to that challenge.

SPEAKER_00: 12:05

I would love to be a fly on the wall at board meetings of insurance companies in 2024. I can't imagine you know some of these conversations that they're having because we're living in a world that's increasingly uninsurable.

SPEAKER_01: 12:17

Uninsurability is going to be a word that will haunt us in the future. I mean, if you decide as a major insurance company to step out of the Californian home insurance market, which is a big part of the insurance market there, that comes with quite a cost. And for the first time, you would actually think hard is there anything that we can do to manage nature risk ourselves, to ensure that there is a forestry that is actually resilient to wildfire risks, or should we actually make our insurance premier contingent on whether our customers are investing into nature? And so for the first time, we really are forced to understand how do we actually invest into the resilience of ecological systems.

SPEAKER_00: 13:03

I want to change gears a little bit and talk. You've had a really interesting career, to say the least. And I want to explore that a little bit and find out how you made some of the decisions that you made going from soldier in the Alpine forces to geologist to management consultant. I want to start with management consultant. You spent, I think, the lion's share of your career at McKinsey 20 years or so, eventually becoming the managing partner of the Munich office. And you've done a lot to bring the topics of environment and sustainability forward. You've set up different kinds of groups within McKinsey focusing on this. But McKinsey also famously has some of the brightest minds working there, but infamously working a lot of times on mandates that are contributing to climate change. And I wonder what your view is in 2024 of the responsibility of big business and its management consultants on this topic specifically.

SPEAKER_01: 13:56

Look, I think, first of all, we all have responsibility. We can't be the children of enlightenment. Look at the numbers of what's happening to our societies, what's happening to uh climate, what's happening to biodiversity, what's happening to our planet, and continue to do business as usual and run what used to be a normal career. We can't. That is true for every individual, for every professional, for every consultant. Consulting put itself a bit on the line, frankly, because all consultancies are taking the sustainability trend with both hands as a growth engine. And you can't do that if at the same time you commit your organization to a Paris compliant development path. And that means that you have to make choices. You can't take advantage of greening and at the same time take advantage of serving industries that are deliberately not consistent with 1.5 degrees or that are consistently not consistent with SDGs, not consistent with Montreal. You can't. So you cannot have the cake and eat it, and you have to make some hard choices. I see that sometimes I don't see enough of that. So I think in the long run, as ever, this will not only be required, it will also be attractive to consultancies because it's the only way to pull the talent, it's the only way to create a space where talented people are uh solving problems. You can't have that if there is a secret little lie that you're also serving interests that are not consistent with Paris. So I think it's we are all up to a character test, and the more you expose yourself, the tougher the character test is going to be on you.

SPEAKER_00: 15:44

This episode is supported by Grizzle, B2B content to create and capture demand. I first met Grizzle's founder, Tom Watley, five years ago at a conference in Dublin. I was so impressed that I signed a deal with him to do all my software company's content that same evening at the pub. Remember that, Tom? Um, kinda. And they're still doing it two years after we sold the company because the new owners love Grizzle as much as I do. If you sell B2B, book 30 minutes in Tom's calendar at grizzle.io slash climate. That's g-r-i-z-z-le-dotio slash climate. You talked about Paris and Montreal. You mentioned there as well. You were at COP28 in November and the biodiversity COP15 in Montreal in 2022. And my impression is that you're a regular at these events. And I'm curious about what your impressions are at these events, how they've developed kind of over the years. Are they going in the right direction? I know that at COP28, they had three times as many food lobbyists as the year before, which is concerning for me as someone working primarily in alternative proteins. I wonder if you could just kind of talk about what the feel is and how that's changing for better or worse over the years.

SPEAKER_01: 17:06

I think you're barking up the right tree here. These things are ambiguous at best. It's very easy to be super cynical about it, how the wrong people turn up, how we are embedding ourselves in false certainties, how we are indulging in this sense of community, how we are not recognizing that we as a community may also turn into part of the problem because we also have developed a bit of a business as usual in the way we are trying to drive the climate agenda. So all of that is true. However, I happen to think that the alternative is much worse, particularly now with a near-complete breakdown of multilateralism, with the return of geopolitical agendas with war. It's important that people talk. And isn't it cool that the cops are now almost out competing the World Economic Forums in terms of attendance and vibrancy? I mean, at least you have people discussing the right stuff and being driven by the right question. And in the end, we have to recognize that progress requires everyone to come on board. And for example, fossil interests, whilst we might not like it, they need to be part of the conversation. And um COP28, I think in hindsight, we will say, despite all the evident, despite some of the hypocrisy and despite some of the vested interests, in the end, it was good to have all of them at the table and to have also a leadership that is able to talk to all parties. So on balance, it's good we have these things. We need to be super, super critical with ourselves, not with the others, that we have to do as well, but we also need to be super critical as a climate community, not to be lenient with ourselves. And I see a bit of that. We also have to shake ourselves up, be bold, be naughty, be innovating, but also be surprising. We have to break the patterns, and we are also part of a polarization game, and we need to be the ones to find new ways to find openings, and we don't do enough of that.

SPEAKER_00: 19:18

Yeah, it's interesting. The way I look at this is we're so used to seeing change come through kind of incrementalism and then, you know, some occasional big breakthroughs. And that has worked for, you know, for decades and centuries, but we haven't been so much on the clock, right? We haven't had a force that doesn't kind of care what our timelines are working against us, which is basically what the rising temperatures is right now. And so I wonder, you know, do we need to focus on the moonshots and the big breakthroughs rather than kind of the incremental change that I feel like has been part of our movement for a long time?

SPEAKER_01: 19:55

But we have to make sure that we are not getting the victims of this dynamic. A, we live in a world where there is so much pluralization and hate speak. And secondly, we live in a world where we are running out of time on climate. And that does something to us as a community. So we are getting as tense as everyone else. We will be winning if people look at us as the ones who can still listen, who can still empathize, who can still come up with an unusual idea, who are surprising with their generosity and understanding. So we need to be the opposite of what's currently happening to us. We've lost much of the support that we so urgently need at this point. And we need to ask ourselves how that happened. The reason is not just the others. There's so much bitterness in the way people look at the climate agenda now. It's so easy for others to weaponize it. We have to question our ways.

SPEAKER_00: 20:52

Absolutely. Yeah, I totally agree with that. So when you're traveling around to these big conferences, you've got a startup. But in addition to all of this, you're an alchemist, and I'm interested to hear more about that one. An organic farmer, an alpinist, a father of six. If I were to put this in one question, how?

SPEAKER_01: 21:14

Probably because I'm mediocre in everything I do, but it gives me a lot of capacity to do my things. I don't know. When I was born, luckily ADHS wasn't invented, it was not an available condition. So I just tried to do many things and see many things. And now where I ended up in life is just the consequence of that. I've never planned a lot. The one thing that I sort of I guess I did with consistency is apart from my marriage, is uh sort of I spent quite a bit of time at McKinsey, which served me well because it's a very first of all, it was good years. Yeah, I was very critical with my profession a moment ago. I'm very, very grateful for the friendships. I'm very grateful for the learnings. I'm very grateful to have to be exposed to really, really complex problems. A lot of the stuff that we are doing now wouldn't be possible if it hadn't been for that apprenticeship. But most of all, sort of um that worked quite well because there's a new idea, a new problem to solve every day, and that made it uh very entertaining all along. In the end, we have to live our authentic lives, and that's perhaps something about all the next to all the challenges that we have today, where we see uh how spaces are narrowing. I think we are coming to a point now where we see that a lot of the stuff that we did conventionally in the past doesn't work, and that translates into freedom because we are not up against any uh proven orthodoxy anymore. And that can be quite liberating. I mean, you can just uh sort of in the past you always try to look nice in the eyes of an established convention, and you ask yourself, Am I doing it right? And today you don't have to do that because these conventions, uh many of these conventions have uh been proven wrong. And so that gives space for us to live our authentic self and to uh do what we believe in, what we think is right to do.

SPEAKER_00: 23:17

Although for startups working in the space, I would imagine that you know we're still dealing with the vestiges of a capital system that hasn't caught up with this as well. So, and I think we're seeing that very much in 2023 and 2024 now, that we're still using a lot of old thinking in the capital markets as we try to solve new problems and new kind of expensive problems where there's we don't always know who the ultimate payer is for this.

SPEAKER_01: 23:44

And that's why we so firmly believe that the only hack that we can play to the system is to reintroduce the notion of value for nature, for social goods. So rather than there's very little capacity in our society right now to accept extra burdens, to accept um more rules. I think even if it feels like the first best solution, like the Pareto efficient outcome, I think the what we really need to do, we need to have a revolution of what we consider to be of value. And once we see that nature is of value, by the way, we've seen these things before. A Picasso is worth$20 when it just comes to the canvas and we've decided it's worth 20 million. A car, a sort of a brand, an idea, a club right, all of these things that are worth nothing or everything, depending on how we look at it. And sort of if we create a positive fiction of wealth around the things that really matter, biodiversity, pristine landscapes, watersheds, clean air, temperature regulation, if we create a fiction of wealth around these things, then all of a sudden capitalism can turn back to what it should be, a useful engine to help us organize our economies. But first we need to change our fiction of wealth, prosperity 2.0. And I think it's the only the only way, the only answer that I can still think of after having tried so much, actually to work on our fiction of wealth.

SPEAKER_00: 25:23

Indeed, yeah. The idea of I was a baseball card collector as a child, so I I know I internalized that early. And hopefully these days we can find a way to value nature more highly than non-fungible tokens of bored monkeys. Your career is as varied as your life is rich today. And so I just want to name a few of the careers that you've had. You were a soldier in the German army's Alpine forces, a geologist, a farmer, a management consultant, an investor, and now a founder. And so that's not a straight line. I know a bit about this as well if I look at my career. And I've heard you ask in the 21st century, what is a career? What is prosperity, and what is a good life? And as my last question to you, I'd love to hear your answer to that.

SPEAKER_01: 26:12

I think the only currency that counts in the world is your children to talk about you saying that you are cool. It's the only thing that matters. And they don't think I'm cool all the time, by the way. There's also you haven't talked about the other side of me. But overall, it's a good measure of whether we do the right stuff to see how your children look at you and how they want to spend time with you and how you have fun stuff to do together. And sort of we are quite uh blessed with having children who sort of like to live this kind of life and find it uh liberating to depart from a conventional idea of a career, but just live our true self. Much of what you talked about has not been, is not a personal uh sort of has neither been a personal choice nor a personal achievement. It's just the gift that uh from others, and it's the gift of the last decades. I mean, that's also something we forget. I was born in the late 60s. This was a golden generation. We had a peace dividend, uh we had an economic dividend, we had um globalization dividend, we had it all. We had it all. We had all the benefits, and we didn't have to pay any of the price for it. And so we have reason to be grateful, and we should use that to translate that into responsibility, that other generations can also say, we have been gifted, we have been a golden generation. Currently, we seem not to be so generous to allow the next generations to say that, but we should.

SPEAKER_00: 27:48

I think that's really well put. And let me just say that if you have six kids and they all think that you're cool, you're definitely doing something right, Martin.

SPEAKER_01: 27:58

So next time round, you should talk to them and test everything I've said here.

SPEAKER_00: 28:03

In the meantime, where's the best place for people to find you online if they want to get in touch?

SPEAKER_01: 28:08

Look, you find me on LinkedIn and you find me on the landbankinggroup.com and you find us on landla.io and test our tool and give us feedback. Amazing.

SPEAKER_00: 28:19

I'll put all of those links in the show notes as well. Martin, thank you so much for being here. Ryan, thanks for taking the time and the good conversation. Thank you. Thanks for listening to another climate tech podcast. It would mean a lot if you would subscribe, rate, and share this podcast. Get in touch anytime with tips and guest recommendations at hello at climatetechpod.com. Find me, Ryan Grant Little, on LinkedIn. I'll be back with another episode next week. Bye for now. I work with a lot of companies who plan to open up shop in or expand across Europe. My one big piece of advice: don't fall into the trap of setting up a new entity right away. Instead, talk to my friends at Paracar who can help you get up and running without all the costs, not to mention the legal and HR hassle. When I was hiring in different EU countries, I wanted my team to focus on their work, not on the country's bureaucracy. After interviewing a half dozen international expansion firms, I chose Paracar because they were by far the most knowledgeable and they're great people. Whether you're a large multinational looking to expand abroad, a small business looking for the right talent, or a contractor, they'll sort it out. Book a free, no obligation consultation right now at paracamar.eu slash climate. That's P A R A K A R doteuslash Climate.