(A Few Good Men: CLIMACT’s Pascal Vermeulen, Dimitri Mertens and Hugues de Meulemeester)
Carbon Catalog’s been globetrotting over the last few months, but virtually in a carbon neutral sort of way. During our travels, we’ve handpicked a sample of carbon offset providers from the offsetting world, in order to make sense of the market, because consumers want to know: If given a choice, is it better to offset with a for-profit provider or a non-profit one?
An entire series (see roundup here) on non-profit providers has already been prepared. And earlier in this series on for-profit providers, we’ve met with Canada’s ZeroGHG and America’s TerraPass.
Today we speak with Belgium’s CLIMACT: A few good men who have one very clear mission: Preserving the environment for future generations by minimizing GHG emissions.
Leaving some impressive high-end careers in their wake, the company’s three founders now poised to tackle climate change, see both local and international players such as ClimateCare and Carbon Neutral as competition.
They also think that fighting climate change should be a positive action, and not something companies or individuals do as a punishment: “Bottom line ROI always has to be positive,” says Hugues de Meulemeester, CLIMACT’s engineer and financial expert, “even if the company is very CSR minded. And we can help make the ROI of fighting climate change positive.”
Read on for more:
What motivated your company’s founders? Profit or the environment? What is their background?
All of us are very motivated by preserving the environment for future generations. Our only mission is ‘minimizing GHG emissions,’ locally and remotely. We left our jobs and former careers to start CLIMACT on this mission.
Pascal’s background is Sales and Marketing at Unilever and general management Sara Lee; Dimitri was legal at the EU Court of Justice in Luxemburg and I worked in Finance for Cisco Systems before.
In running your business, how do you strike a balance between achieving environmental goals, and making a profit for your shareholders?
Of course, CLIMACT has to become self-sustainable to accomplish its mission, but our shareholders have chosen to support us in alignment with our mission.
Our biggest shareholder is the Belgian Federal Fund for Sustainable Development. We also have to be very coherent: we will not be successful if we do not succeed in helping companies reduce their emissions locally, and therefore selling them the least [amount of] carbon offsets as possible.
Again, in order to best fulfill our mission we need to generate positive cash flow and growth in the long run.
Who is your competition? (A few names)
In Belgium, CO2Logic and CompenCO2 are local players but we also see international players such as ClimateCare and CarbonNeutral company.
A recent study published in Belgium (in French only) has ranked us well among other EU carbon offset retailers, on the basis of the quality of our projects and transparency of operations.
The voluntary carbon market is experiencing a lot of growth, but there is also an increasing amount of competition. From your sense of the marketplace, do you think there is room for more players, or do you expect consolidation?
The market of voluntary offsetting is still emerging in Europe and certainly in Benelux where we are most active. We currently do not consider other players as competitors. There are so many urgent actions to be taken that all initiatives are welcome.
However, I do expect consolidation to happen at least vertically to propose the best services as possible, both in terms of project quality as value-add services (carbon footprint, communication…). The example of JPMorgan and ClimateCare is a good example.
Can you estimate the value of the carbon offset market in Belgium today? Projected growth in the next 5-10 years?
Recent articles have shown that only 12,500tCO2 have been sold in Belgium this year on the voluntary market by the three Belgian players. This is a very small volume and it leaves room for a lot of growth. Belgium’s total emissions are about 140MtCO2 or about 12tCO2/capita.
Considering the additional tax advantages that non-profit providers can give their customers, do you believe you can compete in the long term?
Carbon Offsets will probably be deductible for everyone sooner or later. The Belgian government has already taken steps to incentivize small cars or energy savings measures for buildings (wind or photovoltaic cells).
The Government is currently evaluating tax benefits for carbon offset solutions as well. Moreover, we do propose services beyond carbon offsetting. Many companies prefer to outsource services to for-profits rather than to non-profit.
What are the most attractive benefits you offer your clients?
We propose complete end-to-end solutions to make our customer carbon neutral. Carbon offsets are only at the end of the line after all reductions have taken place.
So we start by measuring, then we highlight reduction opportunities and work with partners to implement them, only then do we complete the offering with carbon offsets to reach the objectives that our customers have set.
In doing so, we can help justify the investments financially. Reductions and energy savings can often help fund the carbon offsets.
Bottom line ROI [return on investment] always has to be positive, even if the company is very CSR [Corporate Social Responsibility] minded. And we can help make the ROI of fighting climate change positive.
What do you think motivates your corporate customers to voluntarily buy carbon offsets? Are their customers demanding it?
They want to keep the lead on addressing new constraints, to anticipate new regulations, to save energy costs and improve their image. They want also to remain coherent towards their customers –– Walk the talk internally before communicating and proposing carbon neutral products or services.
Pressure is coming from everywhere: customers, regulations, shareholders but also employees. But the trigger always comes from the mindset and attitude of key decision making executives at the top. If they envision their company taking its responsibilities towards climate change, the whole organization will follow.
How do you feel about possible stringent cap-and-trade regulations, or a carbon tax? Would it affect your business?
Extended Cap & Trade regulation is coming towards more industry sectors or even individuals. It is a good solution since the GHG emission reductions will definitely happen that way.
Adding a constraint will motivate people to act proactively, more than a carbon tax which is often seen as a punishment. That being said, a cap & trade is complex to put in place and the thresholds need to be evaluated with care to be be efficient.
How much did you help offset last year?
We just started our activities in November last year. It is for us a bit early to communicate numbers but we see a very strong demand both in terms of consulting than carbon offsetting. Individuals are more difficult to motivate than organizations.
One of the oft-cited reasons for being a company is the ability to raise money from investors. Has your company raised any funds, and if so, can you give some indication of how much, and from which sources?
We have indeed raised about 800K€. As said above, about a third is coming from a Belgian Federal Fund for Sustainable Development. The rest is coming from the founders, family and friends and other individual investors.
Most indicators suggest we’re at the start of a recession, or at the very least a slowdown in growth. How do you think this will affect the carbon business? Are you seeing any changes already?
We are not seeing a slowdown but a growth. Clearly, as for any project, companies are questioning the costs/benefits of such initiatives.
They are OK to invest in reductions and carbon offsets if they see a benefit in image value and energy savings. The decision making process can be a bit longer.
Some companies invest directly in carbon offset projects, without using the services of a provider such as yourselves. What value does your company provide, in its role as an intermediary?
Carbon offsets management is not core for most companies. They need to outsource that competence to specialists. Most company do not know where to start to initiate a carbon strategy. They need someone to help them measure and reduce before offsetting. Our services even help regulated companies from a legal perspective. Our role as an integrator has a lot of value in that context.
Does your organization have an environmental hero or role model? If so, who?
We have a lot of respect for people who evangelize about climate change and take action to fight it. They clearly see that our children’s children planet is at risk and make people aware that we need to change the way we live, use energy or conduct business.
A lot of their action is directed towards the younger generation to trigger change. In Europe, Nicolas Hulot, Ken Livingstone, Bertrand Picard and his team of the Solar Impulse project, or Alain Hubert and the International Polar Foundation are leading figures.
Thank you, CLIMACT