How veritree Is Helping Restore Our Planet
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With earth day upon us, May Lim sat down with David Luba, co-founder of veritree, which connects businesses with verified tree-planting projects to restore our planet and an important partner in BMO's Trees from Trades Initiative.
Listen to May and David dive into veritree's mission, the underlying technology, and the importance of this verifiability in directing capital toward nature-based solutions.
In this episode:
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The strategy behind veritree planting more than a hundred-million trees
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How veritree is helping restore developing countries
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Why coral reef is incredible for biodiversity
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How the technology veritree uses allow them to monitor projects for up to 25 years
Sustainability Leaders podcast is live on all major channels including Apple, Google and Spotify.
David Luba:
So not only are we helping the planet, we're helping people, but we're doing it using technology, which is pretty cool.
Michael Torrance:
Welcome To Sustainability Leaders. I'm Michael Torrance, Chief Sustainability Officer with BMO Financial Group. On the show, we will talk with leading sustainability practitioners from the corporate, investor, academic, and NGO communities to explore how this rapidly evolving field of sustainability is impacting global investment, business practices and our world.
Speaker 3:
The views expressed here are those of the participants and not those of Bank of Montreal, it's affiliates or subsidiaries.
May Lim:
Hi, I'm May Lim and I'm an associate at the Sustainable Finance Group here at BMO Capital Markets. Today I'm thrilled to be joined by David Luba, co-founder of Tentree and Veritree. Veritree is an important partner for BMO's Trees from Trades Initiative, an innovative fundraising event we launched two years ago. As the name suggests, around earth day each year BMO donates a portion of our global markets trading proceeds to planting trees as part of our bank-wide commitment to combating climate change. We're proud to share that since the initiative's launched in 2021, BMO has planted 250,000 trees that will sequester over 60,000 tons of CO2 over their lifetime.
We also have a target to double this to 500,000 trees by 2025. Veritree is a fully integrated blockchain based platform that uses on the ground monitoring and verification to improve transparency and trust in nature restoration projects. Today, David and I will be diving into Veritree's mission, the underlying technology and the importance of this verifiability in directing capital towards nature-based solutions. David, thanks so much for joining us today.
David Luba:
Thanks so much for having me.
May Lim:
So I'm personally a customer of Tentree. So I want to say I'm relatively familiar with the mission here, but for our audience who may not be as familiar, can you share with us how Veritree came to be?
David Luba:
Absolutely. So just for some context, Tentree is a restorative lifestyle brand where we plant 10 trees for every item purchased. Over the last 10 years, we've planted over a hundred million trees all around the world. And about five years ago, we were raising money and a potential investor was asking us, "How do we know these trees are actually planted?" So we went back and we looked at the paper trail of all the donations we made, we kind of recalculated and talked about all the different tree planting trips we went on. But at the end of the day, there was no way that we could prove which trees were ours versus other donors.
We didn't have the visibility into when trees are being planted. We didn't have the visibility into survivability metrics, and we also found it very challenging to centralize all the investment in nature into one location across multiple NGOs and share that with our community. That led to the creation of Veritree. And over the past five years we've been perfecting this platform, and now we're offering it to hundreds of other businesses that want to restore the environment in a measurable, impactful way as well.
May Lim:
That's truly awesome, and I'm excited to unpack the individual elements of Veritree today. So it seems like Veritree kind of acts as a conduit between businesses looking to invest in restoration projects and the planting organizations on the ground who deliver the impact. So starting with the first group, can you tell us about the businesses that partner up with Veritree?
David Luba:
Absolutely. So what we're seeing is pretty much every business wants to invest in the planet, but they just don't know how. They want it to be simple and transparent. So, we've been working with small businesses to large businesses such as BMO. And we're either working with our partners from an ESG perspective where we're really trying to make a measurable impact to link back to the science-based target initiative or to report back to the TNFD reporting standards, or we're working with businesses that are really looking at the opportunity to invest in the planet as a CSR initiative.
For instance, we're working with hotel chains, where if a guest opts out of cleaning service, verified trees are planted. There's a QR code in their room and on the tag they put on their door. When you scan that code, you know where your trees are going, who's planting them, the benefits in the area. And it's helping hotels save money, it's helping them save resources and it's helping a lot of hotels that are having staffing challenges right now. We're working with groups in the financial space, such as yourself, for the Trees for Trades Day. So we're seeing a lot of groups invest in the nature, not only from an ESG perspective, but also a CSR perspective as well.
May Lim:
What do you think brings these organizations to the table? Why do they want to partner up with Veritree?
David Luba:
Yeah, there's a lot of consumers, a lot of employees, a lot of investors that are demanding action. 75% of Gen Z consumers have stated that sustainability is now more important than brand when making decisions. This is from a Forbes report. And 90% of Gen Z consumers have also said they're willing to spend an extra 10% or more on sustainable products. Now, when you think about what'll happen over the next few decades, there'll be a huge wealth transfer from baby boomers to that younger generation. It's estimated that $30 trillion will be transferred. And from a Shopify report I was reading, 68% of this next generation digs for more information to make informed decisions. More information is readily available. So what Veritree's really helping businesses do, is build trust through technology. We're helping them create an authentic impact that's true to their brand or true to their initiative, which ultimately helps them increase on brand value and provide that transparency.
May Lim:
And I think anecdotally for BMO, the engagement on the floor and with our clients on the Trees from Trades Day is really special and it really brings us to the table. So, for the planting organizations that Veritree works with, can you share a little bit more about who you work with on the ground to execute these projects?
David Luba:
Yeah, absolutely. So we work with a number of NGOs around the world and they've got to meet our criteria. We've got a 40 question survey they've got to fill out, and these questions are linked to the 2021 UN 10 principles of ecosystem restoration. So the projects and the groups that impacts have to meet three or more UN SDGs. We have to have local stakeholders involved in the restoration process. We've got to ensure there's positive impact for the ecosystems over time. And the benefits are realized for both nature and people in the area. We also need to make sure that the drivers of degradation are assessed and mitigated, and the locals will benefit from local knowledge from the projects. The projects have well defined short and long-term goals. As well, we've got to make sure that the project adheres to our transparency and accountability standard through monitoring using our technology.
May Lim:
So I'd love to come back to the United Nations Sustainable Development Goals, SDGs that you mentioned because I know they're social goals as well as environmental goals under that framework. But before moving on to that, I wanted to spend a minute on the four categories of restoration projects that Veritree covers. Can you tell us about what these four types of restoration projects are and how are they different?
David Luba:
We've done restoration work around the world to restore areas in developing countries such as mangrove projects. And these projects are incredible because they're really helping estuaries and helping create habitats for fish as well as lifting people out of poverty. We've also invested in agroforestry projects where we're planting trees with locals to help lift people out of poverty, but also help their food source as well by planting fruits and vegetables in the soil that the trees we're planting are helping restore.
We've also done some local sea forestation projects. We're doing a kelp project off the west coast here in British Columbia as well as a coral reef in Florida, which is pretty cool. So, we kind of look at things both from a land perspective, from a ocean perspective, and really think about the socioeconomic gains as well as the environmental. Those are the main categories we focus on from a Veritree perspective.
May Lim:
On a side note, I never thought coral reefs counted as trees, but I guess they do. They're like sea trees.
David Luba:
Our name, Veritree, could be a little bit deceiving because we started with the Tentree name and we started off by verifying trees. But what we found is it's not just trees we need to restore the planet. It's the ocean. Coral reef is incredible for biodiversity. When you look at the different fish species and everything that kind of takes refuge there, it's pretty incredible. So, we go beyond trees when it comes to restoring the planet.
May Lim:
So, I imagine tree planting to have more impact on the ground beyond just the environmental, the carbon sequestration elements. Can you tell us more about maybe the impact on the socioeconomic levels?
David Luba:
Yeah, we've seen the impact from these projects is pretty incredible. For instance, one of our first tree planting projects was in Mahabana, Madagascar. I was lucky enough to visit years ago, before the pandemic. We restored an area that was a fishing village. The locals cut down the mangrove trees to use it as a source of fuel. They would use the mangroves for firewood, for building supplies. But what they didn't know that when the mangrove trees were cut down, the fish would leave the estuaries. This was a fishing village, so the locals, obviously their food source left. What we found is this village was left of about 30 people and they were having to go further and further out to catch fish. This was incredibly dangerous, and only a few individuals in the area had boats. What ended up happening is these individuals would lend their boats out to other people in the village to go fishing, and you would owe that person two fish or three fish even if you caught one.
So it turned into this modern day form of slavery where a few people in the village, everyone owed them fish but no one else could then eat. So, what we started doing in this area is we started restoring it and paying the locals to plant trees. The village is now 2000 people, and what we've seen after the 17 million trees we've planted is the fish are starting to come back. The locals that got paid to tree plant, through us, were able to pay off the fish lords is what we called them. But they were also able to start saving money. And we've even seen people in this village in Madagascar start their own businesses. For instance there there's a lady who started a convenience store. She tree plants during the day, and the money from tree planting goes towards buying the goods for her convenience store. In the evening she sells those goods and she's able to send her daughter to school now, which is pretty incredible.
So when you think about the area before we started restoring it, it was a really challenging situation with no food, with no income. People were struggling to survive, and now we've given them a hand up instead of a handout, which has taught them to essentially... Given them their independence. So it's pretty incredible when you're able to give people their independence through restoration efforts such as this. And that's just one of many stories.
May Lim:
It's clear that when you plant a tree, it doesn't really stop there. It doesn't stop with the initial dollar that goes in. You spoke about the different outcomes and metrics that Veritree measures and covers. I also imagine there are different stages in a tree's growth. Is there a stage at which a tree is considered maybe fully mature or at its prime for a carbon sequestration? Or maybe this is not even how you think about a tree's lifecycle. What happens once a tree is planted?
David Luba:
From a carbon perspective, for instance, we're planting dry deciduous trees here in the West coast. We're doing a really cool project in Williams Lake where there was a forest fire, and the number of trees aren't nearly as fire resistant, so they're not coming back as quickly. So those trees, it keeps sequestering carbon over like a hundred years. But the carbon sequestration age and kind of the maturity, so for instance, right out of the get-go, they aren't going to be sequestering a ton of carbon. But that sequestration rate deeply increases until around 15 to 20 years of age. So, 15 to 20 years of age is when its sequestration rate's the highest, and then it slowly declines kind of over the next 75 years.
When you look at mangroves for instance, the carbon sequestration rate is much more linear with the highest rates being in the earlier years. And what's interesting about mangroves is they're a little more cost effective, and a lot of that carbon is stored in the soil. So what we're doing is we've created our carbon assumptions with a number of universities here in Canada, and we're validating them using technology. So we're doing photogrammetry in the fields to get 3D rendering of trees to actually look at the biomass and validate what we're doing. We're using a group called E Plant where we put sensors in trees so we can see the moisture levels overnight versus during the day. It almost looks like a heartbeat. And that helps us with carbon numbers. As well as doing different things like looking at the soil and to really kind of validate our carbon assumptions versus our models.
May Lim:
So I think that's a great segue into talking about the technology underlying Veritree. Tree planting as a solution to climate mitigation has had its share of criticisms. As you know, some of them around additionality of these projects, whether they're incremental, some around the end-to-end transparency, risks or end greenwashing or double counting, and whether the impact claimed measures up to the actual impact realize. So I think here a key theme that continues to come up as lack of trust, and I think Veritree's platform presents a very innovative solution to this. Can you share with us how Veritree addresses these pitfalls of tree planting as a climate solution?
David Luba:
The Veritree process, it starts with a baseline assessment. We look at an area we're going to restore. We understand why it was degraded in the first place, and what are we hoping to accomplish as a result of restoring the area. After the baseline assessment has been done, we identify the right species of tree. Our team will work with our NGOs and we use a group called World Forest ID to make sure we're planting the right trees in the right area to bring back biodiversity and restore the area to the optimal state. After that, we get to work and Veritree is based on cell phones. So our Veritree Collect app, we either have a cell phone or a GPS tracker. And we've partnered up with Telus to get thousands of refurbished phones into the hands of individuals around the world.
After the baseline assessment is done, data is collected through the Veritree Collect app. This data includes a socioeconomic questionnaire, how many meals did you miss today, how long were you planting for? It includes GPS coordinates, so when and where are the trees being planted. How far apart are the trees and what types of trees? And as this data is getting captured as the work is getting done, we're then getting field updates right directly from the field. This data then comes into our system, it gets reviewed and it gets tokenized using blockchain. Now a huge risk we had and a huge risk for tree planting is the risk of double counting. So by having individual field updates backed by blockchain, we then know exactly which trees are BMO's, for instance, and which trees are Tentree's, and that eliminates the risk of double counting.
Now this data that's collected in the field is then linked up to longer term monitoring technologies such as geospatial or random aerial drone checks as well as soil sensors, bio acoustic monitoring. So we're listening for frogs and indicator species, and crickets. And even environmental DNA samples where we're looking at soil health and looking at the biodiversity in the DNA of mosquitoes to see if we're we're making improvements over time. That data is then consolidated into a dashboard that our corporate partners can then share with their investors, they can share with their employees, they can share and celebrate with their community to have full transparency right from seed to sponsor.
And then we monitored these projects for up to 25 years to see how the impacts from our efforts are actually creating positive outcomes. By bringing this technology to the field and enabling us to really get connected with some of these projects in developing areas, it's so cool what you see. Like we got photos the other day from our Kenyan project of a field of elephants that were in our field and we saw the elephant tracks and we saw them kind of taking refuge in the area, which was really cool. But also empowering people with technology that have never used technology before, is pretty cool.
We've got thousands of phones now into the hands of individuals that wouldn't have a phone if it wasn't for us. So, just thinking about the ability to take photos, to see pictures of themselves. A lot of individuals had never seen themselves before on a camera. As well as making banking accessible to individuals. At our Kenyan project, the head of the NGO there, said his team is absolutely ecstatic because they're all able to have M-Pesa bank accounts now. Before that, they would get paid, and it was a huge risk that you might lose your money or maybe somebody mugs you. It's not safe when you're going through the country. But now, they're able to distribute and disperse payments through M-Pesa, which is pretty incredible. So not only are we helping the planet, we're helping people, but we're doing it using technology, which is pretty cool.
May Lim:
And as somebody who works in the ESG space, I feel like we often overemphasize the environmental factors in the ESG, environmental social governance, and it's really important to remember that they can go hand in hand. And social impacts are almost as important, if not more. So, David, thanks so much for joining today.
David Luba:
Thanks for having me.
May Lim:
David. Thanks again for joining us on Sustainability Leaders and sharing Veritree's awesome story and mission. Be sure to tune in to part two of this series as we dive further into the technologies underlying Veritree and the intersection with Nature-Based Solutions financing.
Michael Torrance:
Thanks for listening to Sustainability Leaders. This podcast is presented by BMO Financial Group. To access all the resources we discussed in today's episode and to see our other podcasts, visit us at bmo.com/sustainability leaders. You can listen and subscribe free to our show on Apple Podcasts or your favorite podcast provider, and we'll greatly appreciate a rating and review and any feedback that you might have. Our show and resources are produced with support from BMO's marketing team and Puddle Creative. Until next time, I'm Michael Torrance. Have a great week.
Speaker 3:
The views expressed here are those of the participants and not those of Bank of Montreal, it's affiliates or subsidiaries. This is not intended to serve as a complete analysis of every material fact regarding any company, industry, strategy or security. This presentation may contain forward-looking statements. Investors are cautioned not the place undue reliance on such statements as actual results could vary. This presentation is for general information purposes only and does not constitute investment, legal or tax advice, and is not intended as an endorsement of any specific investment product or service. Individual investors should consult with an investment tax and or legal professional about their personal situation. Past performance is not indicative of future results.
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