Coding a Sustainable Future: Technology's Role in Monetizing and Funding Natural Capital

Alex Leong,
Managing Director,
Technology,
Temus

Sustainability is a top global concern today. Amid intensifying climate change and missed targets, there is an urgent need to address sustainability with novel solutions and new, scalable strategies.

What if we could convert the natural resources of a country synthetically into money and utilise the latter to fund sustainable development initiatives to protect these natural resources?

Known as natural capital monetisation, this process creates a virtuous circle of sustainable development that nurtures and preserves the natural environment while facilitating economic growth.

Levelling the playing field

Natural capital monetisation already takes place around the world, though it generally happens on a very limited scale. The lack of scale does place severe constraints on what can be monetised, as it is far easier to monetise and trade a larger volume of carbon credits on carbon markets.

As an example, consider the province of Bali in Indonesia, where the average rice farmer works on slightly more than four hectares of land. The smaller plots of land effectively keep individual farmers from accessing the carbon markets or larger financial markets.

One way to affect change is to partner with sovereign and sub-sovereign entities for natural capital monetisation on a much larger scale. This opens the door to broader market access, bringing with it economies of scale that level the playing field for smaller producers and ensure equitable benefits.

Crucially, this also ensures that the resultant finances go to the correct stakeholders, fostering sustainable farming methods to simultaneously drive environmental and economic progress.

Of course, natural capital monetisation at scale does present a new challenge: How can we accurately and efficiently map every tree and every square metre of foliage across vast swathes of land? And do it all year around to ensure records are up-to-date?

The science of environmental intelligence

When we were first approached by environmental intelligence firm Laconic to partner with them and build the world's first scalable environmental intelligence platform to support natural capital monetisation, the team at Temus went to the drawing board to develop a solution from the ground up.

The technical barriers are nontrivial. The unique identifiers tagged to individual trees translate to a vast torrent of data that must be collected, analysed, and stored. Moreover, imagery from satellites comes in varying resolutions – improving with each generation of satellites – and must be properly extrapolated to be useful.

We carefully studied the problem and adopted a fundamentally new way of looking at the environment. We amalgamated the readings from a plethora of IoT sensors, satellite imagery, and other data repositories, then processed the trove of data using big data and AI techniques to derive the requisite insights.

Leveraging data sources such as land registries was necessary to pinpoint the natural capital being monetised. This allowed us to share revenues directly with stakeholders, ensuring that they are rewarded for their stewardship of the land.

We decided early on that the platform would not be limited to monetising carbon. By incorporating a strong human-centric design, we made it useful to all stakeholders, including the landowners themselves. For instance, farmers could use it to learn more about the condition of their fields. By offering data and social equity, everyone is lifted together.

Shaping the future of sustainability

Around the world, voluntary carbon markets are facing challenges including a lack of governance and unified standards. Due to competing methodologies for the verification of sequestered carbon, carbon credits are often traded bilaterally or directly from the producer to the end user.

While carbon credits traded across an exchange are generally at low volumes today, a foundation of transparent and verifiable data can serve to bring more organisations on board. Done properly, it will allow businesses to confidently participate in carbon markets and put their resources unreservedly into protecting our planet.

Even as public and private sectors work together to address some of the above issues, it is our hope that the platform we built will play a pivotal role in bringing transparency and a level of data pedigree to the table. Only with a robust data-centric foundation in place will further innovation be possible.

At Temus, we seek to provide digital transformation solutions for the private and public sectors, doing our part to create the solutions needed to address global challenges such as sustainability.

It is our fervent hope that establishing a virtuous circle of sustainable development will further encourage efforts to protect and preserve our environment in the Asia Pacific region and beyond.