An interview with Bastien Sachet, CEO of The Earthworm Foundation. A dive deep into the importance of managing forests and soils. The key is a humble approach for large brands and commodity buyers as they need a more holistic view to shift from extractive to regenerative.
What is the role of the largest commodity buyers and brands like Nestlè and Ferrero in the world in the regenerative transitions? At the Earthwork Foundation they tackle the tension between top down and bottom up approach, being very humble and how large brands need a holistic view of quality (which includes their full supply chain, not just their final branded product).
Koen and Bastien also discuss why you need to work on small and very deep regenerative projects that seem to be impossible to scale.
LISTEN TO THE CONVERSATION ON:
In this episode, Koen van Seijen speaks with the CEO of The Earthworm Foundation, Bastien Sachet. They discuss the work of The Earthworm Foundation and how they started.
A Change in the Supply Chains
The Earthworm Foundation is a non-profit organization that focuses on the relationship between people and nature. It works with some of the largest agricultural commodity players in the world. They aim to create more life in their value chain through key ecosystems, forests and soils.
“Personally, I’m an agronomist, and I’ve grown up in the countryside. I ended up at some stage after various steps, having this vision in Argentina on a soil field where I see the soil going up in dust, and GMO crops and cans of roundup on the side, and I’m thinking, ‘That’s not what I want to do, we can change that.’” – Bastien Sachet
Deforestation through Agricultural Commodities
In essence, the Foundation has been leveraging the power of businesses to change the origin of their supply chains. In the past, the focus was on the main supplies like timber and wood to make garden furniture. Consequently, these productions lead to deforestation, especially in Asia.
“We proved then we learned how to use the purchase and the procurement of companies in the downstream to leverage change in the upstream. We saw it was possible.” – Bastien Sachet
Taking on a Holistic View on Quality
Bastien and his team started tackling deforestation through agricultural commodities which led them to the farmers and smallholders who managed the land. Above all, the way these people manage their land makes a huge impact on the forest and you will get the sense of where everything comes from. In this holistic approach, they witnessed in some way how workers are being exploited.
Convincing Large Commodity Buyers
The goal for a change can start from understanding the source, from the forests, soils, and the people that manage them. Starting from these are two aspects you can get large brands and large community buyers to care and do something in regards to their supply chain. Bastien explains in the episode:
“Ask yourself a question, ‘How do I relate to people in nature? Where does it come from? Has it been made?’ Everyone can ask all these simple questions. If you start asking those questions, then you open the opportunity to change.” – Bastien Sachet
Bastien related his approach in gathering support from large brands to somewhat similar to visiting a doctor. First, you have to make an appointment and then start the healing process from there. Aside from the plan that Bastien intend to do, there is a review, or a diagnosis where they adapt together with the client to find a solution together.
“So, the company comes and says, ‘Look, I want to change.’ Either it’s because of an NGO campaign or consumer pressure or the CEOs decision or just some individuals within the company thinking ‘Hey, why don’t we try something different?’ So, we sit down, we listen, and we understand what is the magnitude of their problem, how deeply they want to change.” – Bastien Sachet
Aside from that, one of the best ways to convince the senior management of a large company is to let them experience the field, let them feel the soil, and convince them to meet and talk to people who manage the land. Reconnecting with where their supplies come from is just as important as the meetings and calls they work on in the office.
To hear more about Bastien Sachet, CEO of The Earthworm Foundation, and understand the role of large brands in regenerative transitions, download and listen to this episode!
Bastien is the CEO of the Earthworm Foundation since January 2016, electing during his 10th anniversary of presence at the Earthworm Foundation. He started as a team leader before becoming a director in 2011 and then CEO five years later. His background and experience in business and agriculture are closely linked to what the Earthworm Foundation does in both business and nature. Bastien helped coordinate the oil palm strategy of the Earthworm Foundation, by leading the teams from France, Switzerland and Africa and by launching the Rurality program, the goal of which is to empower farmers. Before joining the Earthworm Foundation, Bastien worked for several years in Brazil, Australia, England and Argentina, where he led product and sales teams in logistics and food for Hamburg-South and the Roullier Group respectively.
- The Earthworm Foundation
- Stern Review on the Economics of Climate Change
- Scott Poynton’s website – He is the founder of the Forest Trust
- CEO Airbus to transform the company
TRANSCRIPT OF THE INTERVIEW
companies, people, farmer, supply chain, forest, deforestation, earthworm, nature, question, bit, soil, big, scale, commodity, pulp, agriculture, suppliers, thinking, world, ceo
Bastien Sachet, Koen van Seijen
Koen van Seijen 00:00
What is the role of the largest commodity buyers and brands in the world like Nestle and Ferrero in the regenerative transition? How can they be part of de-modifying their supply chain from an extractive to a regenerative one? Today we tackled the tension between top down and bottom approach, being very, very humble, and how large brands need a much more holistic view of quality. And why do you maybe need to work on small and very deep regenerative projects that seem to be impossible to scale?
Koen van Seijen 00:30
Welcome to another episode of "Investing in Regenerative Agriculture: Investing as if the Planet Mattered", a podcast show where I talk to the pioneers in the regenerative food and agriculture space to learn more on how to put our money to work to regenerate soil people, local communities and ecosystems while making an appropriate and fair return. Why am I focused on soil and regeneration? Because so many of the pressing issues we face today have their roots in how we treat our land grow our food and what we eat. And it's time that we as investors big and small and consumers start paying much more attention to the dirt / soil underneath our feet.
Koen van Seijen 01:07
In March last year, we launched our membership community to make it easy for fans to support our work and so many of you have joined as a member, we've launched different types of benefits, exclusive content Q&A webinars with former guests, ask me anything sessions plus so much more to come in the future. For more information on the different tiers, benefits and how to become a member, check gumroad.com/invest_in_regen_ag or find the link below. Thank you.
Koen van Seijen 01:33
Welcome to another episode today with Bastien Sachet, the CEO of the Earthworm Foundation since 2016. The Earthworm Foundation exists for much longer, and we'll go into that but as a nonprofit organization that build on values and driven by the desire to positively impact the relationship between people and nature. It work with some of the largest agricultural commodity buyers in the world to cultivate more life in their value chains, and we're also going to get into what that means. They're focusing on deforestation, agriculture, chocolate, coffee, hazelnuts, and much, much more. Welcome, Basien.
Bastien Sachet 02:04
Koen van Seijen 02:05
And to start with a question, how did you end up in soil, agriculture, deforestation, land use, and what brought you there?
Bastien Sachet 02:12
Well, personally, I'm an agronomist and I've grown up in the countryside so of course, these are things I've always been close to. But it's only as I went into my professional career that I started to do different things. And I ended up at some stage after various steps, having this vision in Argentina, on a soy field where I see the soil going up in dust and on GM crops and cans of roundup on the side and I'm thinking "That's not what I want to do, we can change that". And then I found this organization, which at the time was called The Forest Trust which had the objective to make forest well managed and I thought, wow, that's great, because it combines the business side, we can have products coming out of the forest, wood, etc. and keeping them as they should be, healthy. So I started to work with the TFT in 2006 and then we started to work on really two key ecosystems, forest and soils, because they are the main habitats for life. I like to say they're kind of the belly of the earth. They are where life starts, and what we eat, what we wear, what we burn, what we use to live basically comes from there. So for us, it's really what needs to be the focus.
Koen van Seijen 03:22
No, completely, I think for, hopefully for anybody listening to this podcast, if not, there's some great books you should read, reach out to me, I will let you know some great farms to visit. But then, I mean, the organization was mostly, when you joined, mostly focused on forest, obviously forests grow in soil but how did that gradual or quick transition happen too much more focused on commodities, agriculture, you're also working in grain at the moment, how did that come back to the soy discovery you had when you were in that field?
Bastien Sachet 03:50
So we've always been leveraging the power of businesses and their supply chains to create change at the origin of those supply chains. And at the time, the supply chains were really the timber and wood supply chains linked to garden furniture, because that's where the focus was, and the realization that all these production was driving deforestation, especially in Asia. And we proved then we learned how to use the purchase and the procurement of companies in the downstream to really leverage change in the upstream. And we saw it was possible. So we thought, okay, that's a great thing. And in 2007, the Stern Reports come showing how important forests are for climate. And personally, I was sitting in a four wheel drive, visiting one of our projects in Indonesia, in Kalimantan, and I see all these logging trucks and bulldozers being lined up just nearby the forest and I say "How was that?" And the forest manager says "We just saw half of the forest and he's going to become a palm plantation". And I'm like, "Oh, no. So we've done all that in vain. And maybe we need to focus on other supply chains. And our model could work with palm, with cocoa with all these commodities that drive change". And so we waited into these commodities, and we started to work on tackling deforestation through agricultural commodities. And of course, when you dig deeper, you get to the farmer and the smallholders and how they manage the land. Because the way they manage their land is going to impact the forest. And then quickly you come to the source and the the esence of everything is: what do you get from your soil? How do you interact with your soils and agriculture? And we realize that all of this is one whole thing. It's a holistic approach. In the same way we were seeing human beings, people, workers being exploited, we think, yeah no, we're not an environmental organization and we will leave your social to other people. We take this holistic approach that is about human is part of nature. Soil is forest, and people, rural communities, and workers, well they are really our focus. And that's how we really embrace the whole thing, and that's what we work on it at the moment.
Koen van Seijen 05:51
And it's a great bridge to unpack a bit how you're working. Because I think it's, it sounds amazing, we're working on the big commodities that cause deforestation, if we like it or not palm oil, many others, I mean, chocolate in an industrial way coffee, I mean, there's so much stress on the forest, that if you only focus on the forest, you're just not going to win the battle, even though it started with garden furniture, which I still remember the teak discussions a long time ago, which started a lot of awareness, actually. But we thought only wood, and of course there are many products. So can you describe in a way, how you then work with a large commodity player, large commodity buyer, large brand, obviously, you don't have to name them. But what is a good example of how a process like that starts? How do you get them to really care and really do something?
Bastien Sachet 06:37
There is two aspects, I think there is an aspect where you engage with people, individuals in those companies. So often we say we've got member companies, but often we work with individuals. And when you see those individuals switch from company to company, you see that there they ignite an approach and a process in their own companies. And then there is a real, the practicality of what we do.
Koen van Seijen 06:58
Do you then follow them as well? Like, if they move to another company, that old company, hopefully stays a client and then a new one, as well?
Bastien Sachet 07:05
Often it happens, and it's quite interesting, because you can see the impact spreading a bit in this way. And then as I said, there is a practicality of what we do. We believe that sustainability is nothing else than managing environmental and social quality. And what companies know how to do is to give you quality products. If you drink a can of coke, to take a very well known product, you know you're not going to get sick. Companies have put all the processes in place so that they check everything before it gets to your mouth and to your body. And we're thinking, well, today, what consumers are asking for is really a more holistic view of quality, environmental and social quality are important, but it means companies need to shift their thinking and extend the worlds of the factories if you want, which traditionally, were the limits of what they look at, to the whole supply chain starting at the farmers plot. So it makes companies think a bit differently about that. And then it's just a normal process of taking interest, being quite humble, not coming with norms, and don't do this and don't do that, which has been a lot of the punitive ecology approach, I would say in the past. They need to come with an open mind to say, how do we create something that benefits everyone? One thing we have to remind is that supply chains today, commodity supply chains, they are inherently extractive. So they are built, and the business model is built on extracting natural capital, extracting human capital. This is why you still have trade labor in cocoa, this is where you have people working for very low undecent salaries in palm oil plantation sometimes, this is why we are tapping into forest all the time to get fertility. And it's not like there are no ways to do differently. It's just the way it's been because of opacity, because of not really looking after where, or asking the question, where does it come from?
Bastien Sachet 08:55
So if you want in a way, what we ask companies is, ask yourself the questions, how do I relate to people and nature? Where does it come from? How's it been made? All these simple questions everyone can ask them. And if you start asking those questions, and you open the opportunity to change, and that's what we do with companies. Going in the field, asking, discussing with the suppliers, but not in a way where everything comes with: you should not do these, stop that, put a norm, verify that. No. First understand, ask questions, two engage, three build trust, and then together with everyone in the supply chains figure out how everyone can be winning out of that. And I mean economically as well. Mainly, you know how a farmer can make better business, how a supplier can thrive, and how a brand can be successful as well as its consumers by taking such an approach. So I would say more in ecology of solutions.
Koen van Seijen 09:48
So you let's say a company calls you up and says we've heard about you Bastien and Earthworm. It's fascinating. We probably have a problem or we get a lot of questions about our supply chain etc. What do you do first? Whats your first step in engaging with them? Which is the first step of how do you engage with them? You meet the people? Is that the people on the top is that the people buying the cocoa? Is that the first, let's say, discovery contract with them? Because you probably want to ask a lot of questions. But you also don't want to lose the potential of having a client. So how would they hire you for a period and allow you to ask a lot of probably difficult questions, but humble? Is that how it works?
Bastien Sachet 10:25
I would say we're a bit like a, you know, when you go to the doctors, you got this first appointment.
Koen van Seijen 10:29
You're not a consultant, right?
Bastien Sachet 10:31
Ah, no not at all.
Koen van Seijen 10:31
How would you describe yourself?
Bastien Sachet 10:33
I like the work, you know, a doctor is not a consultant, he does consult, okay, but he's not a consultant. So I would really compare the process that we implement, to the ones that doctors implement. It's kind of a healing process. So the company comes and says Look, I want to change, either, it's because an NGO campaign, consumer pressure, the CEOs decision, or just some individuals within the company thinking, hey, why don't we try something different? So we sit down, we listen, and we understand. What is the magnitude of their problem? How deeply they want to change? And then we will try to together start a journey where we're going to go quickly on the ground and assess, engage suppliers, we will check whether they've got something in writing about what they want in terms of environmental and social quality. If they don't, we will start by writing that together. Because we believe that turning the intention into words, and then putting those words into action, is what we do. So if there are no words, we'll put the words on the paper. Recently, Ferrero is working on its hazelnut charter. Okay, what is responsible hazelnut?
Koen van Seijen 11:42
Just as background Ferrero is the maker of Nutella and a lot of other products with hazelnut in it, just for the people that don't know the company behind it.
Bastien Sachet 11:49
Exactly. So that's one example. We did that with Nestle on palm oil, we worked with Wilma in the same way. So we try to put words, with these words we will then engage the suppliers, and the suppliers will tell us well, this is where we're at, this is what we think, and we'll deploy the teams on the ground to figure out, to test, to visit some suppliers, etc. Then we'll prioritize. We said, okay, where should we focus first? You know, what are the biggest challenges that this supply chain faces. And it varies from country to country. So palm oil in Malaysia, it's mostly a social issue. In Indonesia, we'll talk about deforestation and expansion. And so we really try to build a plan of transformation. What becomes really interesting is that we will ask, systematically to know where the raw materials come from. This is a big hurdle. Often people say, Well, you know, traceability is not so important. I said, Yes, you need to know where things come from because we cannot change what we cannot see. And then we talk to the traders, we talk to the commodity suppliers, who have, for years, thrived on opacity. They are the kings of making one ton of palm oil equivalent everywhere in the world. And what we say is you source from different landscapes from different terroir and you have to recognize first that these exists. And that is done by highlighting the information of where it comes from.
Bastien Sachet 13:12
I remember, I talk about palm oil because it's a commodity we worked a lot on, when we started the buyer of Nestle told us, it will be very difficult to get traceability it's almost impossible, it gets traded so many times, etc. I mean, 10 years later, most of the industry have traceability to all the mills that 2500 mills on the planet, and now progressively towards plantation, it's possible. And then after that, we'll engage on the ground, and that becomes really interesting because then we will pull the influence of different brands in a given landscapes. You take a landscape in Indonesia, or in Africa, you got all sorts of raw materials coming out of it. So we enter with one raw material, let's say rubber, and then you see they produce cocoa, they produce flavor and fragrances, palm, food. And then we'll start working together with the government, with the different companies that source from there, and the farmers to figure out, okay, what's the path towards regeneration? And that's, I think, what, also companies appreciated that they are doing the work in their supply chain, but eventually at landscape level they connect with others.
Koen van Seijen 14:17
And is it difficult to get in that buy in, like you said, sometimes it's people within the company, let's say, a medium or senior level, but you need to buy in from the top. And you target specifically the top, as I know? How do you get the real senior management that probably has never visited a palm oil plantation? Or how do you get them to support it? I wouldn't say excited but to see the potential of region ag, to see the potential of agroforestry, to get them out of their office, basically, maybe literally, what's your strategy there?
Bastien Sachet 14:49
You just said it. We tried to get them to the field. The best ever engagement I've noticed is to take a CEO to the field. Get him to touch the soil. Get him to meet people. Het him to reconnect with the reality is connected to, and that he has long forgotten about because his worries are in meeting rooms. His days are in meetings and calls and dealing with problems that are more linked to the downstream part of their work, to the branding, to the supermarket, the retailers, etc. his clients. But he rarely focuses on the suppliers. So we take the opportunity together with a staff of the very company we work with to say, hey, let's organize a little trip, let's go and see by ourselves. And I seize any opportunity I can to do that. I remember once with the CEO of Nestle France, he says, look, regenerative agriculture is really interesting. Then I said, let's go and have a look and we got Professor Boivin, who is a researcher on soils in Geneva, to organize a little visit with us at a farmers who are you know, doing regenerative agriculture. And I remember that day when we came and it was, you know, really cold, the wind blowing, and I'm like, oh, my goodness, am I not killing my relationship with a guy by bringing him?
Koen van Seijen 16:00
Or the guy itself? Yeah.
Bastien Sachet 16:01
Yes, or the guy itself. And, you know, we had this lovely moment where the farmer had prepared a little foldable table, and he had some warm coffee. For some reason, I didn't even ask him, you know, he had prepared a pot of Nescafe, you know, hot water and Nescafe. And he says...
Koen van Seijen 16:18
Which is a nice touch for a Nestle CEO of France. Yeah.
Bastien Sachet 16:20
Very nice touch. It's funny. And he had bought some croissants from the local bakery. And he said, Look, I'm going to show you what I'm doing. And he was not at all impressed, he was just being himself and very frank, even asking challenging questions to the CEO but we had this very human connection. We all got some Earth in our hands and starting to touch the mud, and try to understand. And I know that from this point, you know, the CEO really said, Look, that makes total sense, I had a feeling this was important but that just reminds me how really important it is for me. And I think that these are the kinds of moments where it's not the only thing you know, there are many things that make people change, but reconnecting to nature, feeling that you're doing something important for the world, I think all of these are things that are buried into how human nature, and then when they have the opportunity to come out, I think it's important. It was the same for me when I had this wake up call early on, so I know that this process is multiple, like impressionist touches, that comes from conversations, the investor saying you need to do that and yourself walking through an exploratory journey and reconnecting to nature.
Koen van Seijen 17:29
I think many listeners can connect to that. And I mean, it's actually in your mission statement of the connection between people and nature. And probably, it's one of the core challenges we have, we are so disconnected and thus we don't know where, in our personal life and obviously in our business life, we have no idea where the palm oil comes from or where our food in general comes from. Plus, we are mostly in meetings in offices, etc. And we're now starting to see the terrible price we pay for that. But to get people out in the field, it's not easy, but once it happens, I have seen it a few times as well. It really gets people, like everything they thought about agriculture, or read etc. Even if they didn't pay too much attention turned out to be way more complex and way more interesting and way more opportunities than they could ever imagine and enforce obviously, that's the same.
Koen van Seijen 18:15
So you get the CEO on board, but then you go very, very deep, like you go deep into one landscape. It's not that you try to change the whole palm oil sector at once you decide to go very deep into even different produce in the same landscape. That's very deliberate. Can you explain why that is?
Bastien Sachet 18:34
Yes, what we believe is that we should take a supply chain of a Nestle, a Ferrero, a Mars, these large companies. It just connects to pretty much everywhere in the world. I remember when we started looking at Nestle's pulp and paper supply chain for the packaging. And we contemplated 3000 suppliers. And this are just the converters and behind the converters, you have the mills and behind the mills, you have the forest owners and you're like oh my goodness, this is just too complex. We'll never get to the end of it. So what we do is to look at Okay, where does it hurt? Where are the supply chains connected...
Koen van Seijen 19:09
Hurt for the company?
Bastien Sachet 19:11
No for nature and people, so where the companies connected? So it's important for me as a company that region because it's where I source and I need that sourcing. Lets say the south-east of the US for example is a basin in where a lot of the pulp and paper from the world comes out. There is no single company, large company, that cannot source from their for its pulp and paper supply. It's impossible. You are necessarily connected there.
Koen van Seijen 19:33
Sorry, you say pulp and paper meaning the ingredients basically to make the packaging.
Bastien Sachet 19:38
Yeah, and it's made from forests.
Koen van Seijen 19:40
So every company in the world that makes packaging at some point sources part of that from that region, like you're touched by it.
Bastien Sachet 19:47
Inevitably, because a lot of the pulp that is produced in the world is coming from those areas. It's a bit like soy in Brazil. The commoditization of supply chains have located the supply of cocoa in Ivory Coast, Indonesia palm, it's very concentrated. So basically, supply chains are what they are, we're not judging of whether it's good or bad. We're pushing for more resilience, more diversification. But still, you see these pockets of impact that exist on ecosystems. So we've got forest, and we get a lot of people sourcing from them. And then we look at what's critical. What are endangered ecosystems, things that really need to be preserved, because they matter for for nature. And then we will work at the heart of that, and we will focus. So rather than doing assessments and visits everywhere, we will focus there, and we'll say, look, let's try to find a solution.
Koen van Seijen 20:36
So where it hurts the most in, let's say, this watershed? Shere the most, I'm just making up an example, the most chemical leaching of this paper production, or the most soil erosion, or like where hurts the most, within this area where most in this case of the pulp and paper comes from, that's where you want to be.
Bastien Sachet 20:53
Absolutely. So for example, we engaged in Indonesia, where we know, there's palm plantation planted on peat, and there are social conflicts, we know this is a place that you need to look at with a lot of care. And if we can find solutions there, or if we can find solution in the southeast of the US, these solutions can be replicated at scale. And then what we will do is we will innovate together with the various partners in the landscapes to say, for example, how do we measure the forest health knowing that you got people coming in taking biomass? Are they taking wood for pulp, wood for cellulose, wood for viscose, wood for packaging? So you got all this uses, and people are not equipped today to have indicators to know how we manage this forest. So we will work together with them, we'll bring in a scientist. We say "hey, how do we keep the finger on the pulse of that forest?". We'll bring technology. They we'll go deep, we try, we fail, we try, we fail. And then eventually we come up with a methodology or a solution that we deliberately want to remain open source. And then we said, okay, you can use it.
Bastien Sachet 21:55
I give you a great example, which I'm very proud of, which we did in on forest products. In 2004 we started to work with a timber company in Congo, which had 1.2 million hectares of management of concessions, pristine forest.
Koen van Seijen 22:09
Not small, yeah.
Bastien Sachet 22:11
Quite a lot. And really, in the middle of the Congo Basin, with the elephants, the gorillas, everything you can imagine that is pristine about our forest, emblematic animals. And they had a big challenge because they wanted to get this FSC certification. But they could not because they were pygmy population, indigenous population in the middle, who use the timbers, and you need to get their consent, and the free prior and informed consent concept and impossible to get. And we thought "Oh", and everyone, the industry was saying "yeah, FSC is bad, it's impossible for Africa, it's not suited for Africa, etc." And we thought, how can we unlock that problem? So we worked with this company, we brought scientists from the University College of London, we brought technology company, we started to work and say "How can we get the consent from people who are not literate, semi-nomadic, and who are not organized in a traditional society?" They are little groups of people, there is no boss. So we thought, okay.
Koen van Seijen 23:10
No, they are organized in a traditional society, but not ours. They were maybe the traditional one.
Bastien Sachet 23:14
Yes, exactly not the traditional way as we think it, as you say. So we worked with them, and we found a way where the communities could actually map on a GPS by themselves, all the trees that are important to them in the forest, and say to the company, don't touch these trees, because they are ours, and we need them. Trees for prayer, trees were they eat their caterpillars and everything. And it happened. So they mapped all the trees, the fishing areas, the sacred areas, and you had a new layer of the forest that was the layers of the pygmies coming on top of all the other environmental and social layers that existed already.
Koen van Seijen 23:48
Which completely ignored any of these layers, I mean, completely ignored their layer obviously.
Bastien Sachet 23:52
Completely. And the company said "okay, we are committed to manage things in the best possible way. So we'll do that. And we will give up on harvesting those logs, those trees etc. And it happened. And so the company got FSC certified. And then what happened is, you had a wave of companies who committed to do that in the Congo Basin. Up to 6 million hecares I think got certified. We didn't do it. We just shared the methodology. And we created a Center for Social excellence to train young experts. So suddenly, scale happened, because there was a practical solution to a given problem that created value for everyone. And I think to do this, funnily enough, everyone says, "Yeah, you need to go to scale" and then think scale first. I think we need to have faith that scale comes when you create something useful, which means letting go of the desire to power and manage everything, control everything, power everything. You need to let go and trust the fact that complex systems will self reorganize. And it's a bit like what happens in nature, nature come up with something and then the world reorganize. It's chaotic. I don't know if you know the theory of chaos in physics, but I very much believe in that. Because that's how chain reactions happen. And so all we have to do focus on trying to solve the problem in a practical way, and work with people to find what creates value for everyone, and then share it, share it with communication. Scale it with finance, scale it was technology. There's plenty of tools to scale. Our role is to incubate and make that new solution emerge. And I really believe that that way, we can really tackle things at scale, without ourselves becoming big and powerful, etc. And we very much see that working in practice.
Koen van Seijen 25:39
Wow, there's a lot to unpack but let's start with the devil's advocate question. That sounds amazing. But let's say I'm Nestle or I'm a big commodity buyer in general. I'm imagining it's quite difficult for me as a senior manager there to accept this fluid chaotic process, because I would love to have a project with you, I'm hiring you, and it needs to be outcome ready. And at the same time, in that question actually, the company even if it's one company working in a much bigger base, and the company pays for that process, even though their impact might be on the whole basin, on many other companies that are also getting FSC. So they're sort of agreeing to that open source-ness, chaotic-ness process, that maybe nothing comes out, or maybe something completely different than they imagined or they called you for. Like, we need a solution but we actually already have an idea but maybe in your work, you find something completely different. How do you deal with very rigid potential clients that are not made for the chaos yet?
Bastien Sachet 26:33
Sometimes we don't even deal with them. They don't want to work with us. So I give you again, the metaphor of the doctor. For diseases or illnesses that are well known, there are treatments that are well known, and some doctors who are just, you know, even eyes closed, they said "Okay, this guy has got a flu. Aspirin plus this plus that go away." And these are the traditional consultants who will churn out a lot of that, and then their model is to just do as many of that as possible. And then you've got the complicated illnesses, the complex disease, the things that, you know, it doesn't yet exist the treatment for, deforestation, human exploitation, how do you change the climate impact of your supply chain, all these things,
Bastien Sachet 27:16
De-commodifying, all these things. And then companies, I think it required a dosis of humility from the side of companies, and also from our side to say "Well, we don't know if we can heal, but what we can do is to have a go at it". What our plan is, and this is what we tell companies, is that we intend to do it this way. But we constantly review and adapt, so the challenge is this very adaptive and agile nature that we need to keep alongside with key principles that "Okay, we will find a solution, we will be open to be surprised by what the reality tells us, so it's a very much a giant trial and error process, but guided by the constant desire to have an impact. And we measure results, we measure results so that we can see, is it working or not?
Koen van Seijen 27:16
De-commodifying huge commodities.
Koen van Seijen 27:23
And how do you measure? Or what do you measure? Normally? I mean, it depends, obviously, but what are like key metrics that usually come back?
Bastien Sachet 28:09
So we try to objectivize nature. So we'll try to measure the deforestation, right?
Koen van Seijen 28:15
How? Yeah, okay, deforestation rate obviously, biomass in a forest.
Bastien Sachet 28:19
Yeah we take, I'll take proxies for the health of those ecosystems, so soils, soil health, which is based on structure, carbon, etc. so we try to measure that. Farmer prosperity, farmer resilience, these are two important things. And then forest health, which is a good proxy of it is forest density or forest cover. And these are not complicated things to manage. And they're good proxies or so for the climate impacts.
Koen van Seijen 28:43
No, they are not complicated things to measure, probably they're difficult to manage.
Bastien Sachet 28:46
Exactly. But once you know what the impact is happening, you try different things to see whether you know, the system will change or readapt. Just like a farmer tries, "I'll tried that cover crop, ah it didn't work this year, the yield was not so good, why?" And you constantly try to play with this system, to try to adjust. Yes, for big corporates, especially industrial ones who are used to fully control the environment. Before they land, they want to know where they start. These five years project, in five years where will I be? I can give you an indication of the direction but I can't give you a guarantee that this is exactly where you will be. Magellan when he started to think "I believe we can go to the Pacific, there is a Pacific Ocean". I believe there is a world without deforestation. But how do we get there? When he's along the coast of Argentina and he's trying and he doesn't get there, his funders in Spain and in Portugal are like "come on, what is he doing?" But somehow they are trusting, there must be something and we will find.
Koen van Seijen 29:43
Also they were so far away that they couldn't really control him as well. I mean, the communication lines were very, very long. So you had months and months of freedom before the letters arrived.
Bastien Sachet 29:53
That helps. Unfortunately, the companies keep asking every month where we are on the project, but we don't have that freedom. But yes, in a way there is trust, there is mutual trust, so we need to deliver progress, but on the other hand, there is a mutual trust and humility from companies saying "we can't do everything by ourselves, we need others, we need collective action, and here is a path that seems to make sense to us". You know, they trust their gut they're like "hmm, sounds good". And there is really a typology of company that works with us is these companies that are able to do that, and the companies that are not able to let go, and they're like "No, we need to control everything. We need to know the metrics". And these companies that will try to fall back on more traditional approaches, they will try to seek big coalition's that predefined everything. Logically, it can make sense. But in practice, it doesn't work.
Koen van Seijen 30:42
Yeah, you mentioned in the pre interview, like as soon as you get to the big consortium, big groups, scale becomes political very quickly. And thus, everything stops or moves in an incredibly slow pace and that's one of the reasons you chose to go deep, and really deep into and not choose to have every buyer of every palm oil or every buyer of every pulp combined into into tackling these issues.
Bastien Sachet 31:07
Yes, it's a different theory of change that the one that has been predominant for the last 20 years, which was to say: "let's agree on what sustainability is."
Koen van Seijen 31:16
Let's agree what regeneration is, which nobody knows. Yeah.
Bastien Sachet 31:19
And then you often, you've got a group of people who try to hijack the discussion and say "This is what it's going to be". And they try to use their political power to impose a certain vision, it is doomed to fail. Why? Because when you put people together, inevitably, it becomes political, unless you have nature in the middle or map or something to discuss concretely. But if it's just to align, it becomes political. To stay relevant, they will need to have everyone on board, to have everyone on board you need to dilute your values, and you need to adopt the lowest common denominator, so it will lose ambition. And third, last but not least, if you don't work with the farmers, if you don't work with the communities on the ground, with the people who are managing the land, you missing the main actors. And so if all the cooperates and you know, governments sit down together, and this is what it's going to be, it is inevitably profiting them first, it's not co-designed, therefore, it will never go to scale, therefore it's going to have to be pushed on to people, and therefore it will never work.
Koen van Seijen 32:19
Extractive, it has to be extractive.
Bastien Sachet 32:21
Extractive, top down, and it doesn't work. So we prefer this bottom up approach, supporting by a kind top down approach, bottom up rooted in practice, rooted in concrete, producing solutions that create value and that by themselves they can scale.
Koen van Seijen 32:37
And just to give an indication, and actually, we can get you to name them, because we started in what's called forest trust. You took over in 2016, you decided to change the name, can you give a bit of an indication, first of all, why? And also what's the size of the organization just to give an indication that it's not three people in a room somewhere, it's actually quite sizable. And then we get to why Earthworm.
Bastien Sachet 32:59
So the founder, Scott Pointin, he's a great guy who started the organization.
Koen van Seijen 33:03
When was that?
Bastien Sachet 33:04
It was in 1999. He's got a blog and I encourage you to have a look at it. When he started the organization, he was very inspired by earthworms. And it's been something that we've always had within the organization, and when he stepped down and I stepped in this idea of being named Earthworm was not new, this is something we wanted to do. And so I decided, let's go for it. And it was a bit of a shock initially, because it's not like we're going to be called the eagle or the bull or something, you know, quite powerful. earthworm is a bit dirty. It's not the animal you necessarily identify to.
Koen van Seijen 33:39
You don't want to touch, I do, but some people are like "yeeew" yeah.
Bastien Sachet 33:42
It's a bit weird.
Koen van Seijen 33:43
But actually it's one of the most powerful animals, one of the most, yeah, powerful relevant in the universe.
Bastien Sachet 33:48
And I'm glad you're saying that because that's the way we see it as well. For us, an earthworm is, it's the best symbol of circularity. It recycles constantly, it connects the world between the surface and the depths. We talk to NGOs, we talk to communities, we talk to big multinationals, we try to connect these people to create something fertile. And the earthworm does that! It connects the organic and the mineral and eventually produces humus, which is something that nests life, that hosts life. So we like that. And we also like the idea of working at the roots of supply chains where it's needed, and getting our boots on the ground and our hands dirty with mud. Okay, doesn't have hands nor feet, but you see the metaphor. And that's how we thought, we need to become who we are. We had not had the opportunity to do that before. But then it made total sense to become who we wanted to be. Also because you are more and more into agriculture, and I mean, obviously very deep into forests, but not only anymore.
Bastien Sachet 34:46
Koen van Seijen 34:47
Can you describe a bit of your work, let's say on row cropping or non forest commodities at the moment?
Bastien Sachet 34:53
Exactly. And so it made sense to say, you know earthworms, you find them in the forest, you find them in agricultural fields, and you find them in companies. All the people we work with the earthworms within their companies. One day, there was a lady from the bank, she said "You know, I'm the earthworm here. I'm the earthworm in this bank." and I like the image because it's this relentless cultivation of life, whatever happens, whatever is dumped on the soil, you know, problems, etc. the person keeps going and trying to cultivate something healthy and fertile. And I really like that. Maybe just to answer your question, the organization today is about 230 people around the world, we are in 16 offices, but 80% of the staff is really on the ground, close to suppliers, farmers, forest, and working actively in landscapes.
Koen van Seijen 35:39
And what kind of clients, I mean you mentioned a few, what are the biggest commodities or biggest crops you work in, or the biggest landscape? Whatever you want to define it, if somebody asks you about your clients, what do you answer?
Bastien Sachet 35:49
We work with a lot of brands, and some of their suppliers. Among the biggest brands will be Nestle, Ferrero, Mars, Reckitt Benckiser, B. Z. Cussons, brands who are relying on natural raw materials be the pulp and paper, rubber, palm, cocoa, soy, cereals, things that will go really in their products and be important for them. And then we'll engage their suppliers and some of the suppliers like "Oh, I like this approach, I want to apply it not just for that time, but for everyone." And that's what we do. Sometimes we engage with investors as well, who are more and more starting to think, you know, I'm invested in all these companies, how are they doing? How can I get them to embark on an approach that is transformative? And so we work with them?
Koen van Seijen 36:31
How many clients do you have? In total.
Bastien Sachet 36:33
We work with about 120 companies, the smallest one probably is a charcoal producer in the east of France and the biggest one will be Nestle I would say.
Koen van Seijen 36:42
The full value chain.
Bastien Sachet 36:43
Koen van Seijen 36:44
That's very interesting, and in terms of outside, I mean, you mentioned cereals and grains. Have you seen that grow? Like the agriculture and not necessarily the agroforestry piece? Is that something that has been moving?
Bastien Sachet 36:55
You mean, the how companies are priced?
Koen van Seijen 36:57
Yeah, no row cropping as well, I mean, obviously, Nestle buys everything, but you've started, I think, working with them mostly on the forestry products, or the plantation products, how has been your shift or your broader focus now on agriculture?
Bastien Sachet 37:11
What I'd say look is that a lot of companies have engaged on their raw material purchase through risk management. So the 2000s, the year 2000s, you know were marked by "Oh, shit, we need to find out where that comes from. And we need to clear that risk. We don't want a problem. We don't want a reputational issue". So the management would tell the people in the sourcing "do whatever it takes to solve that, that problem, I don't want my name in the papers". That was the mandate initially. And you go only that far with that mandate, because you just, you don't really engage in regeneration.
Koen van Seijen 37:46
The bare minimum, yeah.
Bastien Sachet 37:48
You tried to clear out the risk, but eventually it's not fully associated to the creation value. What's happening, I would say, since a few years now, is that you have another community asking companies to change. Before it was the NGOs, now it's the NGOs plus the consumers, plus the investors. Consumers and investors are much more important to your bottom line if you're a company, to your survival, economic survival, than NGOs. So it's creating different things. The leaders that are put at the head of companies, they need to have sustainability in mind. Just take the new CEO of Airbus, he had, and one of his key things going forward is, you know, how do we shift aviation? Right, big challenge. But that's also why probably, as a CEO, he can't dismiss the topic, he's being asked by investors to deal with that. Mark Snyder, the CEO of Nestle, is the same. He has to put sustainability and take it in account as part of one of his key objectives. One. Two, consumers are asking "Do I want to buy your fake story about this chocolate bar? Or can you tell me the real story, because otherwise, I'm going to shift to another brand, I'm going to shift to the local serial bean to bar who can tell whose story is the very story of how it's been made by whome, etc. but if I buy it from you, I get something a bit fake, and I don't know really where it comes from, and people are telling me it's bad, so I'm going to probably shift". So there is an inherent need to shift that is being put back to the businesses by consumers and investors. And then it makes business think "Hey, I really need to embrace that differently".
Bastien Sachet 39:23
So what the change is marked by much more proactivity from companies to say "I want to know where it comes from. I want it to be good. I want it to be good for planet for people. Please help me." So it's not about why should I do it, it's about how can I do it. And what's fascinating is we see a big appetite, despite the current recession, to keep that journey going. We were expecting that people would completely, you know, drop the investment in these aspects because it was kind of CSR stuff. It's not, it's like we want to accelerate, the climate crisis is still there, Covid is linked to that, we'll have other episodes like that, so we need to change. And of course, some companies are suffering, but we can see the intentions are still there.
Koen van Seijen 40:05
It's very interesting. To shift gears a bit, I mean, you mentioned already investors a few times and you have an interesting overview of the sector, obviously, as you are deep into the supply chains and you know the brands. And so it's a question I like to ask, if you tomorrow morning, you wake up and you're the head of an investment fund, of a one billion investment fund. Let's put a nice amount in that. How would you put that to work? Obviously, we're not giving investment advice here, but I'm very curious on your view of where you think a fund like that, so it's investment they're not grants, but they could be very long term investments. What would you do?
Bastien Sachet 40:38
What I observe today is that there has been a lot of investment going to the downstream. So the downstream of the supply chain, for me is the part that is closest to the consumer, and the upstream is closest to the farmer. If you look at how many brains and how much investment is put into the downstream to optimize the route of the yogo pot between the industry and the retailer. How do we make sure the packaging is lighter? That the cardboard box is this and that? Everything is optimized to the maximum. And there are a lot of investment and business models are being developed there. It's also you know, where people are in the cities, so they look at what they've got around them and they start developing ideas and pitching to people who have money, who are in the cities, this kind of same things.
Koen van Seijen 41:25
The same bubble, yeah.
Bastien Sachet 41:26
The same bubble, and they get stuck very quickly, because they're like "Ah, well, you know, that's not really changing the world, a little bit but you know..."
Koen van Seijen 41:32
Most of the impact is not downstream, yeah, it's upstream.
Bastien Sachet 41:35
Exactly. The impact on forests, on people, on climate is upstream. And this realization is accompanied by the fact that when you look at what's happening between the farmer and his first client, the co-op, or the guy who buys his raw materials, there is very little innovation, I would say, near to nothing, it's like a desert. So if you put a little bit of money there, to sprout new ideas, to incubate new ideas, or to stimulate new ideas, there is entrepreneurship. You look at Africa, for example, there's lots of entrepreneurs there, but they are not revealed, they're not supported. So you don't have a deal flow of investment coming out of that. But that's where investment could make a lot of difference. I give you an example. We're in the palm oil supply chain of Nestle, we have companies in Ivory Coast who supply palm oil. So the farmers harvest the palm, they put it on the side of the road, and then the mill comes and collect them. As part of a diagnostic we talked to the mill, and the mill says "Oh, you know what, you know, these guys are useless. Whenever we come to pick up the food with the trucks, the fruits are rotten. And when we go to the mill, we can't process them, the quality goes down, etc." Palm oil, you need to process it in within 24 hours. And then on the side, we talked to the farmers and the farmer says "Ah, you know, these mills they are really useless, you know, they always come up late."
Koen van Seijen 42:51
Come late, yeah.
Bastien Sachet 42:52
So we said okay, let's coordinate. So we take a piece of paper, we put it in the village and we say the truck will be there on Tuesday, and the truck is there on Tuesday. And then the fruits are picked up. So farmer get more money, the mill gets more money, everyone's winning, and a lot more production because you reduce waste. I mean, this is dead simple. We then talk to people to say "Look, why don't you invest a bit of time to make that digital, everyone's got a smartphone, you just can coordinate this kind of stuff". And then we put it into the hands of local entrepreneurs, and they are developing this kind of stuff. So I'm thinking, this is just giving a little bit of attention to a problem, which is present all across Africa, touches all the smallholders and could drastically reduce the waste, drastically reduce the need for expanding on new plantation, drastically increased farmers income. So to respond to your question, let's take some of that billion and put it to identify opportunities, identify opportunities at the very roots of the supply chains, in between the farmer...
Koen van Seijen 43:53
You're meaning one step after the farmer, that't the sweet spot you're thinking about.
Bastien Sachet 43:58
Yes. All the fertilizer chemical companies, they have a lot of thinking around how do we make the farmer more efficient? There is a lot of business around the data and technology. How do we get the data from the farmer? Yeah okay, that's alright. And I think it's probably too much thinking going in there. I would really focus on that first step, on the collaboration and all the opportunities around the value chain connection, supply chain connection that exists between the farmer and his first client. There is a lot there.
Koen van Seijen 44:24
The first chain, basically the first piece, yeah.
Bastien Sachet 44:26
Exactly. That would be a first thing. And then I would really use the money, and this is my second point, to ignite, to start, to seed fund to try and fail. Because I believe the funds, the big funds are there, the other billions are there to scale up, I'm not worried about that.
Koen van Seijen 44:44
Now I'm asking this question literally because I made a prediction, I don't know, it was pre Covid, but this year we as a sector but probably maybe me even would get calls from people saying "Okay, I'm ready to put serious amount of money to work. So where do I go?" I'm not giving investment advice. But I'm also thinking, are we as a sector ready to absorb that. So I have no doubt that the money is coming or maybe even already there and knocking on some of our doors of people that we've interviewed or other people in the space. And they're going to be nine zeros, and maybe even more. The question is, do we have the infrastructure? Do we have a tissue to put that to work?
Bastien Sachet 45:21
Well, before I answer that question, I would say, myy view is where do you focus? So you focus at the roots of the supply chain, and you focus on the risky stuff. Taking risks, and because the scale-up thing will come from others, okay. Or you split your thing into one thing that is less risky, and one thing that is more risky, but you need...
Koen van Seijen 45:39
Yeah you take a portfolio approach? Yeah, you could, yeah, you're in charge Bastien, you can do whatever you want.
Bastien Sachet 45:42
Exactly. So I take a portfolio approach. I put something on things that are already scaling up, so I'm almost sure I'm going to get a return. And then I'm taking the other half on risky things, really at the roots of supply chain, Indonesia, Africa. And then I try to work with a coalition of actors which is backed by the offtake of big companies. So a Nestle can say "Yeah, I'm going to continue to buy that palm oil, but if you can make it better, I will continue to buy it, I can commit that I'll stay and stick with the supplier. Because if he makes effort to change I'll stick to that." And that's the first point for an investor is to have a strong off-taker. So within the supply chains, and not somewhere else, within the supply chain I will work with it. I will connect with any organization that helps in stimulating entrepreneurship. We've got a great organization called Seed Stars around here. They do incubation work in Africa, and in developing countries, mostly on entrepreneurship and tech. Let's take these guys to the countryside and rural areas. I'll connect with universities and young people.
Koen van Seijen 46:43
Otherwise, they keep coming up with better yogurt routes for stuff, no they need to come up with stuff for farmers, yeah.
Bastien Sachet 46:49
And connect with local organization, people who have you know, boots on the ground, we'd be happy to participate to this kind of stuff and identify, okay, here, there is an opportunity, here there is an opportunity, lots of organization locally are in touch with farmers, they're in touch with those opportunities, but they can't, they can't come and say "You know, this is a company that you can fund". Because often the investors that are "Oh, it's too risky, I need to have my return, etc. etc." So it's about creating a fertile environment within supply chains, at the roots of supply chain, to take some risks, try things out. And you can be sure, because it's so deserted in terms of funding there, that if you put a little bit of investment with this entrepreneurial spirit, in connection with the purchase from brands, you will succeed. As I said, with the example on palm oil in Ivory Coast, there's so much to do, there's so much to do. So the value in that you almost have to pick it from the trees, but you need to get organized to have a basket.
Koen van Seijen 47:43
Low hanging fruit, literally.
Bastien Sachet 47:45
Koen van Seijen 47:46
So you would pick Indonesia palm oil and Africa? What would you do in Africa? I mean, where does it hurt the most, you think?
Bastien Sachet 47:51
No, I've put Indonesia as a whole, not just by mode but I would pick regions in Indonesia, Africa, are places where you could have a huge impact on ecosystems and on people, by looking at that. I'll give you an another example, because to me, it's it's so impressive. We worked a bit with Givaudan in flavors and fragrant supply chains. And you know, vetiver and...
Koen van Seijen 48:15
Sorry for anybody, who are they? What do they do?
Bastien Sachet 48:18
So Givaudan is one of the leading brands that supplies all the flavors and fragrances that you will use in products, in food, etc. So they have hundreds of raw materials from, you know, orange peel to turpentine to patchouli and vetiver. And all these things that you will use. They do it chemically, but they also have a big division on naturals. And the appetite from the market is "Okay, can you can we have natural products". So the natural flavors are important. So they go all around the world, and they source those raw materials. And we realized that in Indonesia, this was vetiveria and patchouli, and we studied the process.
Koen van Seijen 48:54
What are they they?
Bastien Sachet 48:56
They are a grass and a little tree, a little bush and that you know, you can harvest their flowers, fruits, roots, and then you can process them into flavor. So if to distill, so you heat the water, you process it and then you will collect the essential oil, which is a real small fraction of it. So what you need to do, on the agricultural side, a lot of things have already been done. But then when you look at the transformation in distillation process, lots of very artisanal distillers burn a lot of wood to heat up the water, boil it, collect the essential oil, and then they have to cool it down. So they take the water from the river, they heat the water from the river, which has huge impacts. And then they cool it down. We sent one student for three months to look at the process and like look, we could really recover the heat from that system. So you don't have to use so much wood, which is coming from illegal areas sometimes, and you could really transform the process. So we sat down with Givaudan to say okay - and this is a discussion that is ongoing - how can we create a more efficient distillation and create models that are practically working for the communities who distill. It's not a huge investment, but could be backed up by Givaudan to scale. And this has been, you know, these kind of ideas that are, as you said, low hanging fruits, just have to study a bit, take interest in what's happening, and then you see opportunities to drive change at scale.
Koen van Seijen 50:15
Yeah, I remember I interviewed Paul Chatterton of WWF or of the sustainable finance or the landscape finance lab, and one of, they were working in the supply chain of H&M I think, and one of the main negative impacts was actually the dyeing industry. So the coloring industry and was one of the main reasons of deforestation in, I think Bangladesh, in one of the countries, I'm getting the country wrong... because they needed the boilers, they needed the hot water. So they figured, and many of them could be greatly replaced by solar, etc. just that nobody looked at what was the reason of deforestation. It wasn't the wood, yeah, it was the wood to burn the water to boil for the coloring and that was a huge or is still, they're working on it, a huge negative impact on the supply chain of H&M, which probably they never even knew because nobody went there ask the questions before. But the landscape was being deforested because they were coloring the clothing.
Bastien Sachet 51:08
And the solution is not to say "Hey, guys, don't do this!". No, because you just look at how much they pay. The little entrepreneurs, they still, they pay 25, 30, up to 40% of their cost is fuel costs. Fuel costs to be able to power the machine. If you tell them look, you want to reduce your fuel costs, but you need to go through a phase where your risk is going to be backed by some investment, and maybe some projects, subsidy assistance, etc. That will work. It's not complicated.
Koen van Seijen 51:35
Transition finance, yeah.
Bastien Sachet 51:37
So with the 1 billion we could do a lot.
Koen van Seijen 51:39
It's I think one of the most unsexy/sexy thing is flexible, fair, well structured, working capital. Which probably is going to change the world in many, many ways, but it's something that we greatly overlook in transition from farmers, in transition for companies like there is a way to transition. We know there are more efficient ways but of course there might be some years where you can take a hit or your yields go down, or your production goes down, or etc. etc. etc. But if you structure that, well, you can go through. And that's why I think finance is so interesting, because you can help companies, farmers, consumers go through that transition. And you can finance that. Partly blended, partly invested, I mean whatever situation, I don't say everything has to be a financial investment, obviously. But money can play a very interesting transition role.
Bastien Sachet 52:28
I would indeed really look at not doing it alone. So I would involve brands as off takers. I would work in the supply chain. And I would definitely go for blended finance, because some of the things that will be achieved are for common good. So there are a lot of public finance that is coming in as a grantee, as a support, and then I would go for subsidies and grants to complement some of the things that need to be done. That could be done through a subsidy or grants so that it doesn't affect the yield or the return of the investment. So I would really trying to do this. Collectively, we've been talking with BNP Paribas, there's a guy there Caruso, who's doing an amazing job in starting these kind of projects. So this is the the approach that we often like to take and that's what we would do if we had 1 billion of investment.
Koen van Seijen 53:15
Now it's very interesting. I recorded, or we recorded, last week with the perennial fund who has been a few times on on the show actually and will be out soon hopefully, and their strategy of financing the transition of farmers in the US has been on three pillars. One is access to peer support that you need others that are on the same journey or that are a few steps ahead, you need to see, touch, feel as a farmer but also as an entrepreneur that this is possible that is not crazy. Access to independent advice, like you need someone that's not paid by an input company to tell you how to apply, how to do, you need good economic, in case of a farmer, advice. Access to markets, both the offtake agreements during the transition and after. In the case of organic, in the case of regenerative organic and you need a company that says I'm going to buy it, I'm committing to off-taking, offtake for the common good. Maybe carbon, maybe water, maybe bio-diversity, that depends where you are what is possible. And then the third but only the third, not the first two because the first two are access to support and access to markets, is capital. Bould be flexible, blended, a mix of everything. But it's not, I mean without those, it needs to be the three of them because without the market none of the intrapreneur is going to move. Without the support they don't even know it's possible. So you need those three puzzle pieces for a successful I think transition in general and they really nailed that in terms of agriculture piece and I'm very excited to share the podcast. It will be out when you're listening to this probably so go and go and find it. But there it's very interesting to transition finance piece, it's not necessarily only about the finance, it needs the other pieces because otherwise we're just throwing money at something and putting more depth on the books of entrepreneurs and farmers which honestly don't really need it.
Bastien Sachet 54:54
Koen van Seijen 54:55
It's gonna be funny how much something as unsexy as working capital is going to change things. That's I think, it's transition capital is going to be a big driver.
Bastien Sachet 55:05
Koen van Seijen 55:06
Okay. So we took away, we talked about the fund, you're no longer in charge of that fund, unfortunately. But you have a magic power to change one thing overnight in the agricultural, but definitely, let's say the land use industry, what would you use your magic wand for? If you can change one thing overnight? What would that be.
Bastien Sachet 55:23
I would give a connection to nature and to life sciences, and some kind of basic education about how nature works to every business person in the world. I would make every CEO or the company aware of what are the nature's processes, and how they as a human being are connected and relying on nature. That awareness, if it could be instantly put in them, in the hearts, in the minds and in their guts.
Koen van Seijen 55:51
You can, you have the power Bastien.
Bastien Sachet 55:52
That would be I think, life changing, because somehow it would facilitate and accelerate the alignment and the decision making, because it comes from the gut, that you know, when when someone makes a decision, it comes from the gut, as much as from the heart and the mind. But I would put them connected to that so that they are quicker and making decisions, they are quicker in taking risks, in embracing the unknown. And having this faith that nature can do it and that solutions will emerge, etc. etc. Not trying to control everything but releasing a bit of control and trusting.
Koen van Seijen 56:27
I think it's a really good answer. And what do you believe to be true about regenerative agriculture that others don't believe to be true? And I definitely stole / borrowed this question from John Kempf, who often asked is about agriculture in general. So what do you believe to be true that you see others actually not really believing?
Bastien Sachet 56:45
Well, what I believe is that nature does it for you. And because it does it for you, it costs less, and therefore it's beneficial economically. Often people think that regenerative agriculture is another layer of a punitive ecology approach. You know, it's going to be a series of don't do's, and therefore they're going to be costs, and you're going to produce less, etc. Because it's you know, how normative and punitive ecology has been imposed or proposed to farmers in the past. The thing is, as soon as you do it, you realize that the earthworms, they do plow for you and when they do that, actually, you don't need to go out with your tractor and your plow, and spend time, money, petrol to do that. But to be able to realize that this little earthworm is going to plow that field for you, if you just give him some feed, which means planting some seeds. This is a paradigm shift. We don't think like that. So we as humans, we believe and we had to do that, we had to dominate nature in a way to survive. I was reading Lewis and Clark Odyssey, they were killing bears every day to survive and to eat. So they had to fight against nature. We're now in a new era, where we recognize nature is fragile, but also incredibly powerful. So we can work with her to unlock that power. And that will make us realize that actually, we don't have to do everything ourselves. Nature does it for us. And we have to trust that. It's just a bit like the planting of trees. You know, instead of conserving forest and let nature plant trees, we want to all go out and plant lots of trees. That's good. But just realize that nature does it faster, better and cheaper than us.
Koen van Seijen 58:30
I think it's a perfect way to end this conversation. Thank you Bastien for your time, for your openness, and I don't think it's the last time we talk. I hope it's not the last time we talk. I think we learned a lot on commodities and large companies on what is possible on the ground and how to make change. So thank you so much for for sharing today and we'll be in touch.
Bastien Sachet 58:52
And thank you, Koen for the great podcast you've created and the inspiration you vehicle and you carry to everyone though this podcast. Thank you.
Koen van Seijen 59:00
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