A conversation with Chris Tolles, founder of Yard Stick, about soil carbon and the connection to changing agriculture practises, insetting vs offsetting, where in the hype cycle the soil carbon market is and why more companies should get really good at doing one thing instead of saying yes to every opportunity.

LISTEN TO THE CONVERSATION ON:

• Google Podcasts
• Apple Podcasts
• Spotify

How difficult is it really to measure in field, instant, accurate and cheaply? Yardstick just raised $12 million, mostly VC climate money, to commercialise their technology. Warning! This is super difficult and won’t go as fast as many of us wish or want it to go.

INSETTING VS OFFSETTING

According to Chris, insetting project developers are thinking they have to directly participate in management decisions or directly influence management decisions, if they expect to buy, for instance, lower carbon intensity milk. They are behaving the same as an offset project developer.

”We sell to offset project developers like in Indigo. They have their soul carbon measurement obligations, and we’re a service provider. We’re the same service provider as a regular sampling company. We’re just doing it with spectroscopy, but a drop-in alternative. The second bucket is insetters or scope 3 folks, a good example here is Organic Valley. They’re doing many of the same things as an offset project developer in terms of incentivizing management practice changes, but they’re doing it within their own supply chains.” – Chris Tolles

”For all the criticism of offsets that we agree with, I think we are super thrilled that a good amount of our business is increasingly focused on companies like Organic Valley who are like, ‘Hey, we’ve differentiated ourselves for many, many years on the basis of organic for example, this is a new opportunity as we start to look at CO2 e per quart of yoghurt if you will. Today I buy great milk, tomorrow I want to buy great milk that also has lower carbon intensity. And that’s also because most food brands are there, emissions are overwhelmingly scope 3, so-called 80 to 90%.” – Chris Tolles

ALWAYS WONDER ABOUT HOW IT BENEFITS LAND MANAGERS

There are lots of opportunities, which look compelling, but they need to be meaningful to land managers, which is an often-overlooked gap.

”I’m exactly the type of person who is more likely to overlook the realities of agricultural producers, which is why especially at Yardstick, we have an amazing field team that can bridge those worlds who can speak farmer and understand that world and understand how these opportunities are compelling or not. That’s where I’d certainly spend a lot more time for many of the investors who are keen on the sector.” – Chris Tolles

”I think a common problem in investor mindsets is a misunderstanding of some of the fundamental motivators of land managers. I started Yardstick not because I care about agriculture, per se. I mean, obviously, I do, I consume food, therefore, I care about agriculture. But I was motivated, firstly, by the climate benefit. And I think there are similarly many other investors who are excited about the climate angle, or the tech kind of novelty angle and forget that there are millions of real human beings with their own independent goals and ambitions and needs on the other end of all of this work. So most fundamentally, I think I encourage them to get proximal to actual agricultural communities, whether it’s farmers or ranchers or foresters.” – Chris Tolles

WE HAVE A LOT OF REAL SCIENCE QUESTIONS UNANSWERED

Chris would put 40% of the 1 billion USD into lobbying in the US, and probably 60% of it behind a program that looks like USDA climate-smart commodities.

”Fundamentally, the causal relationship between management practices and low-carbon soil health outcomes is poorly understood. If that’s true, then we have to answer that question before we answer many others. And for all the criticisms that it deserves, I think climate- smart commodities are a great example of fundamental research that should be happening. There’s some quite basic science that just hasn’t been done yet.” – Chris Tolles

”That’s the kind of original research that means we can go from a lot of the hand-waving generality of cover crop and no-till right to what actually matters in your context. Again, all of this is inseparable from place. And so, if it’s inseparable from place without understanding the interaction between place, and practices, you don’t really have any advice to give.” – Chris Tolles

ALL THE VENTURE CAPITAL IN THE WORLD CAN’T MAKE SOILS CHANGE FASTER

Most startups fail because they’re trying to do too many things too fast. And they do many of them poorly.

”There’s so much opportunity for ambitious, innovative teams, that it’s really easy to just grab on to any shiny thing that flashes in front of your eyes, especially because you constantly have the VC monkey on your back saying like go faster, do more […] Stick to your knitting, do a narrow thing really, really well before you aspire to do something way more difficult than only that. In my opinion, far more companies would be better served by narrowing the total scope of things they’re trying to do simultaneously, by deploying resources on a smaller set of hard problems, especially when there’s science risk involved.” – Chris Tolles

”I was talking to a company doing ocean CDR [Carbon Dioxide Removal] MRV [Monitoring, Reporting and Verification] recently, kind of like the Yardstick of motion. And it’s like an incredible CEO, so inspiring. And I was basically, go slow, default to longevity, not to speed because, man, there is a lot of original science to be done here. And this person has ocean CDR VC just banging down on their door. And I don’t know if that’s the right kind of money for this problem, which has ecological scale timelines of problem solving. It’s not a piece of marketing software. It’s not a neat mobile app. All the venture capital in the world can’t make soils change faster.” – Chris Tolles

OTHER POINTS DISCUSSED

Koen and Chris also talked about:

• Consumer doesn’t care about anything except taste and price
• Ecological time frames take longer

LINKS:

• Yard Stick website
• Video of Yard Stick spectral probe
• Soil Carbon stock report by Yard Stick
• Soil Health Institute’s work on farm profitability with soil health practices
• Report Evaluating Literature on the Relationships between Soil Health and Food Nutritional Quality
• Scope 3 Inventory Guidance
• Indigo AG valuation down 94% to $200 million in latest funding round
• My Climate Journey
• Carbon insetting vs offsetting

LINKED INTERVIEWS:

• Jill Clapperton, a 25 years learning journey on nutrient density, healthy soils, food and people
• Eric Smith on why regenerative agriculture is a neglected climate opportunity for the Grantham Foundation
• Ivo Degn and Philippe Birker – Does a low interest, 3,5% on $2,5 million loan, really qualify as a regenerative investment?

——————————————

Feedback, comments, suggestions? Reach me via Twitter @KoenvanSeijen, in the comments below or through Get in Touch on this website.

Join the Investing in Regenerative Agriculture and Food newsletter on www.eepurl.com/cxU33P

The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.