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Decarbonizing Logistics with Tim Weiss
65 Plays1 year ago
In this episode, Tim Weiss, Co-Founder and CEO of Optera, joins Host Brian Glick, CEO of Chain.io, to discuss:
- Balancing grassroots impact and corporate regulation in sustainability
- Environmental activism strategies for businesses
- Reducing emissions and decarbonization efforts in the logistics industry
- New regulations, taxes, and considerations for shippers and forwarders
- Climate tech for emissions reduction
Tim is Co-Founder and CEO of Optera, a platform that helps corporations measure, manage, and reduce their carbon emissions up and down their value chains, backed by comprehensive and trusted data.
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Transcript
Introduction to Podcast and Guest
00:00:04
Speaker
Welcome to Supply Chain Connections. I'm Brian Glick, founder and CEO at Chain.io. On this episode, we have Tim Weiss. Tim is the CEO at Uptara Climate, one of many companies working to further our advancement towards a low carbon economy and CO2 emissions reductions. And we're going to spend some time here talking about balancing the
Balancing Incentives with Challenges
00:00:29
Speaker
incentives to do good in the boardroom versus how it sometimes feels in the real world and change management and all of these things other than just calculating your emissions and how they're going to drive real change. So I hope you enjoy the episode.
Tim Weiss' Journey into Sustainability
00:00:56
Speaker
Tim, welcome to the show. Well, Brian, thanks for having me.
00:00:59
Speaker
So why don't we start with the basics? Give us a little bit about how you got into the industry. I would say yes. I might start all the way back. I went to college down in Colorado Springs at Colorado College. And when I started my undergrad, I was very much a bleeding heart and I wanted to focus my career in issues in areas that I cared about and I felt like I could help make a difference in. That quickly led me to exploring a lot of issues in relation to sustainability.
00:01:28
Speaker
social justice, other things. And I found that climate in particular was an area that really melded my heart and mind very well. I'm very much a data nerd and I love being able to use information and data and sciences to inform better decision making, inform, you know, the way in which we as a species can improve. So very quickly started focusing in on all issues in related to climate. And I realized the nexus of
00:01:59
Speaker
the kind of global economy and market economy to how we're going to adapt to the low carbon economy was an area that suited my skill sets well in my interests. So really had a number of different opportunities in undergrad to unpack that and unwind. And what portion of this do I want to work on? That led me to working with an organization that helped set up markets for small scale solar energy technologies in sub-Saharan Africa. So I went and lived in Namibia during college and after college.
00:02:26
Speaker
I was helping manage and set up their on the ground operations to expand how they were helping people who live without any access to electricity really find a way to power their lives with renewable energy. And I loved it. It was kind of my first start into what a startup might look like, but also in the area in the sector of sustainability and renewables that I cared a lot about.
00:02:50
Speaker
That ultimately led me to, I took a detour as a teacher for a couple of years and ultimately led me back to my now career, which is really post-business school. So back in business school in CU, I focused on all things climate and energy and sustainability, and really focused on what portions of the market that I wanted to focus on. I worked in social impact for an accelerator called the Unreasonable Institute, helped people raise money, different entrepreneurs and investors.
00:03:20
Speaker
And then I started working at AES in their commercial renewables division. So I tried kind of large scale utility solar and wind and found that the startup space was really where I love being involved and met my co-founders around that time in 2016.
Corporate Carbon Management Post-Paris Agreement
00:03:35
Speaker
And they had a boutique consulting business that was helping corporations manage their carbon emissions. And we saw post Paris agreement.
00:03:44
Speaker
really a big shift of interest in this space. A lot of companies starting to set more ambitious goals, think about how they were going to potentially reach net zero and felt that they legitimately had no clear path to just managing the information needed to make that sort of transition, let alone having a meaningful plan. And so we began bootstrapping, building a software off of this kind of consulting expertise that they had garnered over the last decade or so.
00:04:12
Speaker
And we really started MPP to the world and became a SAS startup kind of around 2019. That's what brought me all the way through my early career into now. So I wrote down a bunch of notes of a bunch of different directions. I want to take this conversation based on all of that, but where I want to start is there's a moment you're in school, you're in Colorado Springs and for,
Cultural Shifts in Environmental Engagement
00:04:38
Speaker
are international listeners who may not kind of understand the cultural references there. This is an area of our country known to be very sort of engaged with the environment and the outdoors and people who are very grassroots engaged in things. So you're there. And then at some point you're in business school and you're working with a large corporate and you're doing these practical projects.
00:05:05
Speaker
I was at an event last week put on by S&P Global for investors talking about the pressure that investors and like Citigroup is speaking, that they're putting on companies to do carbon reporting where the investors are actually pushing for more regulation to have more disclosures and these things as opposed to the kind of traditional sense of investors railing against regulation. What has it been like for you to have to live in
00:05:35
Speaker
both the worlds of kind of grassroots impact, you know, let me see what I can do with my own two hands and this world of large corporate and investment and all of this regulation. Yeah, I think that's a really good question and one that I think anyone that cares about
00:05:53
Speaker
any sort of environmental issues has to grapple with early on. And I think that the way I think about it is, this is an oversimplification, but there is the path of Greenpeace, right, where you're essentially banging down the door of every company and you're trying to, you know, shame them and blame them into
Corporate vs. Grassroots Environmental Strategies
00:06:08
Speaker
doing good things. And then there's the folks that are internal, who I work very closely with now, they're essentially our customers who are trying to solve things from within. I kind of reflected early on, I'd say, in my path in this and
00:06:22
Speaker
realized that given my natural inclinations and kind of how I communicate and how I like to operate in the world, I felt like my best service to the world and to the environment was to be inside, was to help insiders do more. The way I talk about it with our team is that we're using the tools of capitalism to fix capitalism. And I believe that to be the most effective strategy for myself and for many, many people in this space
00:06:52
Speaker
That being said, everyone who does what I do needs the other side. We need the people that are advocates. We need the people that are forward thinking. And so I would say I have a respect for the people that choose the more grassroots approach to environmental issues. I just realized early on that I'm better suited kind of being a part of boardroom discussions and helping drive decision making at that level from within organizations rather than from the outside.
00:07:20
Speaker
When you're in those boardrooms or talking to your customers, how would you characterize those conversations as far as the tone? Is this a position of the people coming at this from fear, from opportunity, from what's driving your customers as a large group? So we don't have to call any of them out.
00:07:42
Speaker
Yeah, it's interesting. So I've had a lot of conversations with kind of C-level executives within either customers that we work with your Fortune 500, Fortune 100 type companies recently. And ultimately, there is an appreciation and understanding that we are transitioning to the low carbon economy.
Corporate Climate Action: Fear and Opportunity
00:07:59
Speaker
It's not a if anymore. It's not a, is this a problem that we have to look at? It's really a conversation around how urgent is it and how urgent is it for my organization?
00:08:11
Speaker
And that's how businesses and business leaders are, I think, across the board are thinking about this, where they know they have to dedicate resources to this. They know they have to ultimately manage this new version of risk, which is climate risk. Like every business is exposed to it.
00:08:28
Speaker
and they need to understand how exposed they are and what they need to do about it. What we find is that there are differing horizons that ultimately business executives have to make decisions against. There are more immediate pain points and then very long-term pain points from their vantage point. The concern I have is that because most C-level executives have to respond to more immediate pain points,
00:08:58
Speaker
Climate is always the second or third priority on their mind after keeping their business afloat, hitting quarterly numbers, competing in the marketplace. And so the level of urgency for some of the biggest climate challenges that organizations face, it's not going to be front and center until that horizon shifts enough. And you see it happening with
00:09:26
Speaker
Big chemical companies, I listened to the CEO of Dow Chemical and Eastman talk, I think it was last year,
Long-term Investments in Sustainability
00:09:33
Speaker
a year before. Essentially, they were saying every new plant that they design and that they build for these massive chemical companies is
00:09:41
Speaker
under the pretense that this has to be producing product that's conducive to a low carbon economy. It's fundamentally based on recycled inputs or non virgin materials. It's based on non petrochemical based products. And I think that's what we're seeing is like long term capital investment is being deployed in a way that's responsible because that's managing risk appropriately. But short term and medium term
00:10:07
Speaker
Folks aren't spending enough. They're not doing enough yet. The level of urgency isn't there, I would say. Everyone's being quite rational about this. Everyone is certainly bought in and understands the problem, but the level of urgency isn't quite to the point that it will be, I would say, in the coming years, and hopefully it will be. And I think that there's, in that level of urgency, right, it's not evenly distributed. If I make steel for a living, this is highly urgent, highly regulated.
00:10:34
Speaker
And if I'm the guy who runs the convenience store down the block, I have less impact and less, I think, transition risk is the term, right? So where does shipping and logistics and all that fit in on that scale?
Logistics and Sustainability Awareness
00:10:49
Speaker
Every single company that is providing logistical services around the world, I think, is paying very close attention to this. They're either actively investing in alternatives or helping
00:11:02
Speaker
of build the market case for those alternatives that are still being developed. So I know that every big shipper is really paying attention and invested in sustainable aviation fuel. One of the largest logistics companies in the world has held back
00:11:16
Speaker
this medium duty electric vehicle startup that's going to be using that platform for all of their medium duty package delivery and all those kinds of things. So what I see is that all the logistics companies I know of, you know, the big names, UPS, FedEx, Deutsche Bahn, you know, DBS, all of them, they're all very attuned to the need to shift how they do what they do. I'd say that their problems are so challenging, they will take so long to fully unwind
00:11:46
Speaker
that I think that we're not yet seeing the full return on that from a carbon reduction perspective, but I'm hopeful that it will really start to pick up as the technology starts to be used. But obviously, sustainable aviation fuel is a ways out. Improvements in shipping, I mean, ultimately right now we see the biggest mechanism for decarbonizing logistics is mode shifting, is getting things out of planes and onto boats. We see a lot of organizations trying to work with their logistics providers to make that happen.
00:12:16
Speaker
So I was going to ask you about actually that exact comparison, right? Of something like sustainable fuels versus something like mode shifting, actually the exact two examples I was going to use. So perfect. We're well aligned. One of those things involves very speculative new technology.
00:12:35
Speaker
The other involves everyone doing their jobs a little bit better. How much of that low-hanging fruit do you guys see out there of the things where you don't need to invent an autonomous truck or you don't have to invent a magic fuel that converts energy without having to store it or something like that?
Efficiency and Tech Solutions for Climate Change
00:12:53
Speaker
How much of this is just teaching companies to be better companies? Yeah. I think of this in two very broad phases when we think about decarbonization, where
00:13:04
Speaker
We have seven years-ish to cut emissions in half, and the deployment and scale of some of the technologies that we're going to rely on for the low-carbon economy, like sustainable aviation fuel, like thermal batteries, all the big things that are coming, they are not likely going to be deployed at scale.
00:13:25
Speaker
during those first seven years, right? The next pivotal point that we are essentially buying ourselves, we're not even buying ourselves time, we're just mitigating damage to the planet. And so the solving that immediate problem is all going to be about doing business better, from my perspective. When you're mitigating risk, what you're essentially doing is
00:13:45
Speaker
operating in a way where you've squeezed all the efficiency gains out of how you operate today, and then you've bought enough time for us and the market economy and the planet to then be deploying the scalable big technologies that remove the last 50% of emissions from how we operate. So in a lot of ways, we can't wait for that stuff, or that stuff won't have a big enough impact to mitigate the damage that's been done. So I think investors
00:14:15
Speaker
And anyone who's consumers, folks that are really paying attention to this information now, appreciate the fact that we need to see results now. And that's going to happen by kind of exactly to your point, by people just really deciding to do business more efficiently and operate more effectively in the world. So as someone who has a background in the transportation side of logistics, whenever I hear about mode shifting,
00:14:43
Speaker
I always instinctually start doing what I would say is not a positive behavior, but I start going, Oh, I know that looks like a logistics person's job, but it's actually a buyer's job to actually buy the product on time. So we don't have to move it to air freight, right? Like when you're engaging with these companies and it's one thing to collect the data and, and, but when you start analyzing it, you start talking to them.
00:15:07
Speaker
You have to become a change agent for this. How deep do you go with these companies to go, okay, you've got to go change your planning process or where do you guys draw that line? Yeah, it's really interesting. One thing I'd characterize is that our customer, I spoke to one of them last week and he had a really great way of putting it where he's like, Tim, I'm essentially the UN. I can get into any meeting.
00:15:31
Speaker
I have no budget and I have no power. So all I have is influence, right? And that's the sustainability function within big companies. And so for us, our job with our software and with our kind of complimentary services team is to empower that, you know, UN member to be as effective a stakeholder, a communicator, a leader for the organization as they can be. Because ultimately they are not going to
00:15:59
Speaker
be the one implementing solutions, to your point. When you're thinking about logistics emissions, it all comes down to procurement and how they are managing and forecasting the needs of their business and how far out are they looking, how are they going to capacity plan and do all the things that they need to ensure that they have enough lead time to use boats and not planes. And our customer is not making that decision. They are trying to essentially convince procurement
00:16:28
Speaker
that this is a better way of operating. It will serve the business in achieving their net zero goals and also help them control costs and improve how they're performing.
Climate Change as Core Business Risk
00:16:39
Speaker
And so we're trying to be in this position of saying, how do we arm this change agent to your point with as much compelling, strong evidence as possible to do their job? Do you think that's going to change as a former CIO now putting that hat on?
00:16:53
Speaker
There was a time when every CIO like magazine and these going back far enough that they were like these paper weeklies you would get would talk about when is the CIO going to have a seat at the table, right? When is a CIO going to actually be considered a C-level executive and not someone who was just sort of given that title to shut them up, you know, or to illustrate a point to someone else, you know, and that did over a period of time changed the fact that we like conceptually
00:17:21
Speaker
everyone understands that technical role or many roles now in companies have as a lot of real decision-making power, not just influence over someone else's budget. Does the regulatory environment create an environment where these sustainability leaders are going to start having some real teeth because there's going to be laws to meet? It definitely does. I think of the data security world as a pretty good
00:17:51
Speaker
example of how our industry is going to unfold. So I think it's kind of a good example where the reason CIOs have a seat at the table now is because data theft and ultimately information security risk is huge risk to a business. It can kill a business. It can determine whether you can function anymore or not. That will be true for climate. Ultimately, this new version of the economy is going to create a lot of winners and a lot of losers.
00:18:19
Speaker
And it's very core to how you operate. It's saying how coupled is the way in which you function your business with the production of emissions. We are now seeing those things being intertwined in how companies operate, and that's increasing the leverage that ESG practitioners have. I think the best example is in Europe, we now have, it's the very beginning stages, but we now effectively have a carbon tax regime, which is the carbon border adjustment mechanism.
Global Impact of Carbon Tax Regimes
00:18:48
Speaker
And it's going live. It's kind of just getting started this month and it's going to impact all the heavy emitting commodities that are imported within the EU. And so now every steel aluminum cement making company in the world now knows that they're going to be judged based on the emissions intensity of the products that they sell. And it's going to impact their pricing. It's going to impact their ability to compete. And I see these sorts of things and regulation is helping
00:19:18
Speaker
but it's based on a very core premise that investors are driving. And to your point, investors have always been driving this market to saying, I want to know who's going to win and who's going to lose in this market. And I want to make sure that we have our bets on the right companies. And that puts ESG and climate right front and center. And it builds the credibility and builds the need for ESG and climate programs across all big businesses. Yeah. I think specific to the shipping industry, you know, January 1st,
00:19:45
Speaker
you know, the ETS taxes go into effect on the ships themselves too. So, you know, one of the things we've been starting to talk about is the ocean carrier is saying, okay, well, we're not just paying this, right? That that's not how ocean carriers function, you know, so passing this feel long and the different steps along the journey from, you know, the ocean carrier potentially passing it to, you know, an intermediary, you know, like a DB shanker, like a, you know, a DSV.
Supplier Adaptation to Low Carbon Economy
00:20:14
Speaker
who in turn ultimately is passing it to the shipper and maybe less connected but passing it along to the consumer. And that if you're in those intermediary positions, understanding it and being able to meaningfully talk about it and communicate it both when you're doing your negotiations with your carriers and your negotiations with your customers, there's gonna be some haves and have nots based on who really knows what they're talking about
00:20:42
Speaker
I don't know that there's a question in here, but I get really nervous for us based companies who operate in those markets and have no education on this and are going to walk into, you know, contract negotiations in the spring with carriers, not knowing what this new charge even means. Oh, totally. I think you're exactly right. And I think that like companies now have a new lens to look at all of their suppliers and they say, all right, are you
00:21:06
Speaker
a risk for my decarbonization regulation and plans and all this stuff, or are you going to be a partner? That lens, suppliers are going to feel the most market pressure to adapt to the low carbon economy than I think anyone else will, because it's rooted in what they sell. They have to prove to their customer that they are not only a good supplier,
00:21:28
Speaker
and a partner, but also producing a product that is helping that customer with their regulatory compliance, with their decarbonization commitments.
Market Economy Tools for Scaling Impact
00:21:39
Speaker
So if we played that sentence back to the 18 or 19-year-old you who was in Colorado Springs and who had a spark to go help the world, that sentence probably isn't very compelling versus how it sounds in a boardroom.
00:21:58
Speaker
Kind of how do you think or kind of personally reconcile the excitement for doing the right thing with having to reframe it as a business objective? Yeah. So what I learned early in my career is that NGOs nonprofits are a beautiful thing. They are a great place to develop ideas and test viability of ideas. They are not a place to scale.
00:22:24
Speaker
To scale impact, to scale good things in the world, ultimately it has to adhere to some version of the market economy. And I've kind of fully, I just fully understand the power of these tools now and I can sleep well at night. And I think that these are tools that I would be more nervous if we had to rely on the moral compass of every human in the planet.
00:22:50
Speaker
That's a fair point. I'm far more encouraged now that ultimately people's self-interest and I mean, I sound like a total economist here and I'm not, but I believe that because climate is now becoming a core business problem, it might actually have a chance of being
Challenges and Hope in Climate Commitments
00:23:10
Speaker
solved. Until then, I didn't believe it. And I think even my 19 year old self started to understand that early on. That's promising. Kind of as a wrap up question.
00:23:19
Speaker
If there was something that you could get peers, your competitors, everyone on board to change, kind of what's the thing that frustrates you the most? It's an interesting question. I know you live in an environment of very high frustration all the time in climate change. I mean, the thing, and I talked to this, I'm pretty actually open with our customers and everything. I think the thing that frustrates me the most is that there's a lot of attention paid to
00:23:47
Speaker
decarbonization and ESG issues, there is no money spent in it. The largest companies of the world still think they can fulfill their obligations or are still operating in a way where they think they can kind of hit their net zero goals or continue this process without spending that much money. And I think that that is coming to a head now.
00:24:08
Speaker
where they need real solutions. They need real direct data. We cannot rely on high level assumptions, high level things that, you know, high level kind of data that's not actionable and ultimately quality costs money and having real moving the needle in your business is going to cost money. And I'm concerned right now that how long we will live in this in between.
00:24:32
Speaker
where commitments continue to be very high and very ambitious across every company you talk to, but the actual resources against those commitments are really, really negligible. As someone who has personally really only gone deep into the space, say in the last year, it blows my mind that that is a top. And I've heard it from other people, not just from you, but this idea of this lack of budget,
00:25:01
Speaker
Like I, you know, I understand certain groups and areas and companies that don't have budgets. This one just absolutely breaks my brain that this is an area where people are still fighting to have any budget like that. I don't understand it. It's really hard. I think it's really, I mean, for me, like obviously I care about it as someone who's running a business in this space, but ultimately like.
00:25:25
Speaker
It's just kind of common sense that if you have companies making the most bold claims out in the world possible, saying, hey, we're going to reduce the emissions across everything that we do, our supply chain, our products, our operations, everything, and you're going to spend pennies a year on it. I think we all know that that just won't work. And I think they know too. The problem is it's like, we just have to turn the tide. Like it's got to start getting solved and we can't just have like two or three companies in the world really putting money towards this. So let's flip the coin a little bit.
00:25:54
Speaker
What has you excited? What's coming up? I think what I'm excited about is I think people just have more courage now than they used to, to do big things. Like I genuinely think that we have kind of ridden this path of our societal development for as long as we can. We all kind of understand that this isn't going to, this is just a train to nowhere and that people are really being bold and willing to be bold.
00:26:23
Speaker
I think when you're looking at what's coming out of Europe right now, it's leadership and what's coming out of California, the regulations there. Like it's also leadership, what investors are saying and what they're asking for and saying compelling companies to do bold and big things. Like I love seeing, and I'm sure you can relate to this, but like I love seeing real leadership in the world. I think it's the most powerful thing when people are vulnerable, put it out there and say, this is the right thing to do. And we're going to do it. And I think that you're starting to actually see it.
00:26:53
Speaker
It's not just a one-off situation like it used to be. And I'm encouraged by it. I think it's inspiring and I'm just hopeful that it's blasting. So if people want to learn more about Aptara, learn more about you, what's the best way to get engaged?
Conclusion and Future Content
00:27:09
Speaker
The website is AptaraClimate.com. You can find me on LinkedIn. I'm Tim Weiss and all the things. I don't have the largest social media presence.
00:27:19
Speaker
nowhere else to really follow me meaningfully. LinkedIn is the only social media platform that exists anywhere anyway. We talk about at least around here. So, yes. Cool. Yeah, no, we'll make sure that those links are in the notes. Again, thank you so much for being here and helping to educate us all on this where it's obviously goes without saying, but it's an extremely important topic. Well, yeah, Brian, thanks for the conversation and yeah, I hope this was in some way helpful to your listeners.
00:27:49
Speaker
Thanks again to Tim. That was so insightful. And it's always great to talk to someone who can be open about their journey and really give us some context to how some of these news articles and very generic feeling things are actually playing out in boardrooms in the real world. And we're going to be having a bunch more content about CO2 and emissions throughout the rest of this year and next year.
00:28:15
Speaker
the year after on the Chain.io blog and on our LinkedIn. So in addition to making sure you follow up Terra, make sure that you are checking that out. We'll have the link in the show notes to everything that you need to subscribe to. And until next time, I'm Brian Glick and thank you for listening.