Empowering carbon project developers, with Vivian Bertseka of BlueLayer

Vivian Bertseka is co-founder of BlueLayer, the first end-to-end software platform for carbon project developers. In this episode we talked about how:

📈 The carbon credit market is growing but also experiencing growing pains, with issues around transparency and trust.

🔍 There is an urgent need for more transparency in the carbon credit market to improve data disclosure and data system organization.

🧾 High-quality carbon credits are in high demand but short supply — companies need to act early to secure them.

🍷 Carbon credits are like wine — although the container is always the same size, the contents can be radically different!

#carboncredits #climatetech #netzero 

Promo partner for this episode is Grizzle, helping B2B ClimateTech companies generate demand and customers through high-quality content, social media, and SEO services. Podcast listeners can book a free consultation here.

Transcript

Ryan Grant Little: 0:06

Welcome to another Climate Tech Podcast interviews with the people trying to save us from ourselves. Vivian Bertseka is co-founder BlueLayer, a software platform for developers of carbon projects to manage their credit issuance. She's a veteran investor in climate tech, having written big growth stage checks in the past, and so I also wanted to talk to her about her shift from investor to founder. I reached Vivian in London I'm Ryan Grant. Little Thanks for being here, Vivian. Welcome to the podcast.

Vivian Bertseka: 0:38

Thank you, Ryan. It's great to be on.

Ryan Grant Little: 0:40

You're the co-founder of BlueLayer, which is a software platform for developers of carbon projects, and it helps them manage the issuance of carbon credits. Talk a little bit about the company and why you started it, great.

Vivian Bertseka: 0:53

So BlueLayer is the industry's first end-to-end software platform for carbon project developers, and you can really think of our customers as companies or even NGOs that run projects across carbon removal or reduction activities For example, things like reforestation, forest conservation, mangroves, but also frontier solutions like direct air capture and in-hand straw weathering, and so, amongst the things that we do for those clients, we enable them to digitize their workflows to streamline their carbon credit management, maximize their revenues, but also accelerate the certification process. And really we work with developers across all stages, sizes and solution types, as I said, from reforestation to biochar, and we work with them throughout the entire project lifecycle with all of their needs and so from when they're just setting up all the way to when they're selling millions of credits. So we're not an intermediary, we're not a marketplace, but we're fully aligned with our customer outcomes, and what that gives us is a mission, which is really to empower those project developers who are the true changemakers on the ground, with the software that they need to scale and deliver high-quality credits.

Ryan Grant Little: 1:57

Listeners to this podcast have definitely heard about carbon credit markets definitely also on a couple of the episodes that we've had before but I wonder if you could just give us a quick refresher about these markets, who they serve, why we need them.

Vivian Bertseka: 2:09

Absolutely, and so, as your listeners probably already know, almost half of large public companies have pledged to achieving net zero emissions within a certain timeframe, and this number has been growing.

Vivian Bertseka: 2:19

It's actually more than doubled in the past three years. To fulfill those commitments, companies should first focus on reducing emissions within their operations and supply chains, and so, in climate speak, this is often referred to as scope one, two and three emissions, but that takes time and, most off, experts now agree that decarbonization of one's own value chain alone won't suffice to get most companies to net zero on time. And so, really, to offset what we're calling hard to abate, or unavoidable emissions within companies value chains, these companies must also invest in solutions beyond their own value chain, and so that's usually in the form of well-defined projects which avoid or remove carbon in the atmosphere. So, really, carbon markets are there, and they're essential for connecting those large companies with commitments to net zero with carbon projects that will enable them to achieve impact beyond their own supply chain. And so carbon credit is really a means of making that transfer. It's essentially a certificate that indicates the carbon abatement of a project, or the carbon removal of a project has been transferred to a buyer with that credit.

Ryan Grant Little: 3:25

I hope I made that as simple as possible. Yeah, I think that's pretty good. It's been interesting to see a lot of these companies making these net zero commitments by 2030, by 2040, that type of thing. And my sense is that there's a huge internal battle with a lot of these companies to get to that point. And you see, in my conversations with some of these companies there's kind of like the ribbon cutting ceremony of getting through to making the commitment, and then it's kind of like well, actually now you have to do it and hit that. And that's when kind of the big realization dawns on them that like, oh man, this is hard.

Ryan Grant Little: 3:58

And definitely one of the kind of tools in the toolkit that they're looking at are carbon credits. It's a tricky space right now. Also, there are lots of players. There's sort of a mixed record on the quality of credits out there, and my sense is that a lot of these companies aren't sure who to trust. You know some of the biggest names out there that they'll kind of hitch their wagon to. And next thing, you know there's a big story in the newspaper about some of the sources of those credits. What would you say to these people, to the company that has just cut the ribbon on their net zero target and now has to get started.

Vivian Bertseka: 4:31

Yeah, absolutely, and you're right, it is a very tricky space, and there's been some news flow over the past couple of years, or a year probably, specifically around two things. Really, it's been around the quality of some of the projects, but it's also been around the use and the claims that some of the buyers are making, and so both of those things have seen criticism, and in both of those things the market could probably improve. But really, you know, like any new market, the carbon market is going through a period of change, and so it's maturing from a very small, opaque market to a larger and more transparent one. And what's important to understand is that this used to be a small, voluntary market, mostly catering to philanthropic and niche interests, and so, as net zero has become more and more relevant in boardrooms and in large companies, it's now found itself at the center of all of this attention. But it really wasn't ready for that, and so, on the other hand, what we are seeing is that things are changing in the right direction, and so we're seeing increasing guidance for buyers of credits that is really describing some of the way that those credits could and should be used, but we're also seeing increasing consensus on what makes a high quality project.

Vivian Bertseka: 5:39

Even through the last 12 months, even through the past week, we've actually seen more and more guidelines that are actually fairly aligned and are pointing in the same direction. And then you're seeing a lot of market enablers, such as rating agencies, buyer advisory firms, technology enabled MRV that that's initials from monitoring, reporting and verification and all of those companies and that technology ecosystem is helping professionalize the market and its data systems and give advice to buyers. So right now, even though the landscape for buyers is complex, what I would say to them is that there are many reasons not to sit in the sidelines and instead lean into some of that complexity. Try to understand it, start getting advice and set up a buying program today, because that is, those that are early will be rewarded later on.

Ryan Grant Little: 6:27

It's interesting because we think about things like accounting, like financial accounting, as kind of set in stone. But I mean generally accepted accounting practices or GAP are only about 70 years old, and before that it was like a bit of a free for all, and it takes time for industry standards and kind of best practices to emerge. So I guess it sounds like we're seeing some of that. Are you happy with kind of the level of transparency and the pace at which this stuff is developing right now?

Vivian Bertseka: 6:53

Yeah, we've definitely. We've definitely called for an increase in transparency, and a lot of industry players have as well. I think transparency is a difficult concept to define right now because there's confusion around both what data to capture and how to display that data, and really what we need first is consensus on what data should be disclosed, but also in what format, and then, once that is set, we need tools that can help project developers collect, organize and display that information. So, to make that very simple, right now you have PDD documents that are project design documents. Those can be over 200 pages. They're posted as a PDF on kind of various websites.

Vivian Bertseka: 7:33

They're very difficult to access, they're very difficult to read and it's really hard to get all the relevant information out of them. But also, what is necessary to disclose on those documents, or the guidelines on disclosure don't capture all of the elements of quality that buyers want to know about. So that is changing and we're seeing that evolution happen real time. But also because it takes time to shift things in this industry, the change is probably happening slower than we would like it. Blue Layer, canon is already helping with this, and so we're not attempting to set those data standards, but we're creating the software system. So, if you want to call it, the piping that can help those developers organize and display the data.

Ryan Grant Little: 8:11

It's not also just a question of information or transparency, but it's also a question of availability. So if I'm a company and I decide, okay, we want to include this in our toolkit, it's not the case that I can just go tomorrow and buy an unlimited amount of high quality credits. Is that right? Yeah, absolutely, at the moment.

Vivian Bertseka: 8:29

It's definitely right, and those looking for high quality credits know that this market is really supply and constraint.

Vivian Bertseka: 8:35

That's all the more reason for buyers to get active in this market early, particularly since projects have a very long incubation period, and so it can take five years in some cases more than five years for a project to go from getting its first licenses to issuing credits, and so those that wait too long to access these markets might find, in five years from now, when we're closer to 2030, they really can't find the credits to fulfill those obligations or the high quality credits, and so, importantly, we need to find ways to accelerate the growth of those high quality projects.

Vivian Bertseka: 9:06

But it is really a bit of a chicken and an egg, because what you need is buyer commitment to this market, and you need those buyers to make long term commitment, which they're then going to fuel investment into those projects. But you also need the tools and the partners that developers can rely on, and you need to help that standard setting bodies that are very often NGOs and have been under a lot of criticism but, frankly, are probably not getting the help and the support that they need from the ecosystem.

Vivian Bertseka: 9:31

So, finally, we believe that we need to work together to find complementary solutions, and so all these things need to work in unison, and while software is not a panacea for this industry and it would be very wrong to say that it's going to fix everything, because a lot of the problems are on the ground in these projects software can help and it can help connect the different pieces together. So that's where we stand and what we advocate for.

Ryan Grant Little: 9:53

Once a piece of paper becomes valuable and there are lots of them out there usually bankers start to get involved and pick up the trail. I wonder if you could talk about you know, as in 2024, are carbon credits being viewed by financial markets as tradable commodities? What role is big banking playing in the carbon market space?

Vivian Bertseka: 10:11

That's a very interesting question. I spent a lot of time on the fine-man side in my previous life, and so I could talk about this for too long, but I would actually argue that I'm not sure the carbon credits will or should ever be traded like commodities, and so credits will always have very different characteristics and they will never really be fungible like a commodity would be. Some people liken credits to fine wine, which is a very interesting analogy. I've always found it interesting, because almost every bottle of wine out there at least the standard size is 750 ml, but what's inside that bottle varies greatly and people are willing to pay very different prices for that, and so that makes it really hard to have a liquid market for fine wine, just like it makes it very hard to have a liquid market for high-quality credits.

Vivian Bertseka: 10:58

And what we're seeing is that high-quality credits very often trade directly from producer to consumer, like fine wine in some ways, or they trade through a more opaque system of brokers and advisors that really need to advise the buyers on the quality of what they're buying, and so over time I would expect that market to get a lot more liquid and to develop, but I would expect it to look a bit more like the bond market or the equity market, where you have a security which is traded, that has a certain characteristic, like a bond, that might have a face value which is a ton of credit, but it will carry a lot of differentiating characteristics that will set its price differently.

Vivian Bertseka: 11:36

And if you actually see, very interestingly, what we've seen with some of this critique and the press over the past year is that there's been increasing bifurcation on how credits are priced between the lower end and the higher end, and so the lower end credits have seen a hit on their price and higher end credits are actually trading at very healthy prices, even maybe healthier, and so you're going to continue to see that price discrimination over time as we introduce many more removals and durable removals. Things like durability of that credit, of that carbon capture, is going to play a huge role and actually, you know, show that the upper end of pricing for credits is going to be a lot wider than what we see today.

Ryan Grant Little: 12:13

You just touched on the point that you used to work in finance, and I'm curious about that because you have quite a tony career in finance as a climate tech investor in the past number of years. I wonder if you could just talk through that period and some of the investments that you made. And then I'd love to hear a little bit about the transition to becoming a founder.

Vivian Bertseka: 12:31

Absolutely so. I am a little bit unusual in that I spend almost two decades as an investor and so that makes me makes me a little bit older than most of my co-workers at Blue Layer. But I also worked for about a dozen of those years as a climate investor before starting Blue Layer, and I think you know there wasn't that many people around back then. I would say I started my career in traditional finance and more specifically in leverage buyout in the early 2000s, and that was very different from where I ended up, and so it's also been a very interesting journey.

Vivian Bertseka: 13:02

But my sustainability and climate journey really began in 2010, when I was doing my MBA at NCA in Singapore and I realized that I wanted to do something with a bit more purpose than simple buyouts, and I found a very young at the time firm called Generation, which has now evolved to be a real bellwether in sustainable investing, and joined the climate solutions funds, which was a very early platform.

Vivian Bertseka: 13:24

It was an early iteration of the platform that was investing in both software and hardware behind the climate transition and so the early days of clean tech, and I made many investments in that early wave. I can talk about them in a second, they included companies like Nest Home, which is now Google Home, and Solar City, which is now part of Tesla. But really, after many years as a growth equity investor, my last role within generation was to start a new business for them called just climate, which is a climate led investment platform across both industrial and nature based climate solutions. And that's really where I got a chance to speak to developers of carbon projects and realize that there was a big need for tools that would help them scale, but also, you know, for a lot of work the work and the quality of the work we have to do to really scale this market.

Ryan Grant Little: 14:08

And were you tempted at all to set up your own fund? I mean, with your pedigree in that space, you could have probably spun out a pretty large climate tech VC fund.

Vivian Bertseka: 14:17

That's an interesting question. Interestingly, just climate was meant to be spin out initially. It ended up spinning back in becoming part of generation, but that was the idea behind it and when we put together the team that started, it was really about launching a climate-led platform. Interestingly, I took the role of building the business and so I said that, for the first couple of years at least, I was going to be pulling together the team and the strategy and running the fund raise.

Vivian Bertseka: 14:41

We actually spun out for a little while, started doing all of the early founder functions, like doing our first payroll and setting up IT, and I found myself really getting drawn in to building something from scratch and I realized I didn't really want to be on the investment side anymore when the opportunity came. And so when just climate went back into generation and we became closer to the firm, that was just around the time that my two co-founders reached out to me, and Alex and I knew each other from before. We actually went to the same high school in Greece. Strangely so, more than 20 years ago, alex and Jerry both had experienced building software and they wanted to build something for the carbon markets, in particular, targeting tools for developers, so it really felt like the right opportunity to do something. I've been thinking for years about being an operator and I've had this easy slide into the operational role through starting a fund manager and business first.

Ryan Grant Little: 15:34

And any surprises, going from the role of investor to a founder. Was it kind of as advertised on the tin or was it a different journey than expected?

Vivian Bertseka: 15:42

Yeah, it was very interesting doing it properly, not in a fund business, and I think what surprised me the most is the speed of execution, and so we went really from incorporating to having a live product and first paying customers within 12 months, and I think that's very much a testament to my co-founders being experienced founders, having done it before, but also to the exceptional early team that we pulled together Blue Layer. I don't think I'd ever done something that scaled that quickly and the pace of decision making incredibly different than being part of the larger fund manager, for sure, but also doing things without a support system. So even when launching just climate, we did have a support system from generation to effectively got incubated in some ways, and so that realization that you're on your own and every decision has to be made quickly and from scratch, it was a surprise, a good one in some ways.

Ryan Grant Little: 16:40

Over the years when I've been hiring people from corporate or from banking into startups, that's always been the assembling block. I think sort of everybody prepares for a cut in salary or these types of things. But when you actually make perfectly clear the lack of support, that kind of every idea like there's no junior that you're handing stuff off to, you're doing everything from booking your flights to proofreading your writing and that tends to be the biggest stumbling block and the one that people aren't kind of expecting. Do you have any other advice? For I think there are probably a number of investors who are listening to this and who are thinking about going out on their own at some point. Any advice for them? I?

Vivian Bertseka: 17:18

think my biggest piece of advice is find the right co-founders and focus on your early team. It's an interesting balance because you need to have enough in common with your co-founders that you speak the same language and you're moving at the same pace, but also you need to be complementary in your skills and able to split out areas of ownership effectively. You have to be similar, but not too similar, and that's a tricky balance. But also you need to make sure that you're aligned on a lot of different things. I would say make sure you spend time together as a team, understand each other's motivations, limitations, be clear on why you're committing to each other and make that very explicit.

Vivian Bertseka: 18:00

We did that over a couple of months in our founding team and I'm very glad that we've had such a strong base to that relationship because, even as an investor, if you look at why companies fail, it's equally about founding teams either not getting along or not being fully aligned on what the idea is and how that scales. That's a really big risk, particularly when you've given up other things and you've put your time and commitment into a business. That's the one advice, and attached to that is also the early team. I couldn't be more grateful to our early team, and that includes everything and everyone, from our VP of Engineering all the way to our first founder associate, who's really built the business with us.

Ryan Grant Little: 18:42

I would add to that values alignment with your co-founders. I've learned that one the hard way a couple of times. You've still got the investor's mindset, I'm guessing, because that's hard to shake. Basically right, you get to see these really interesting carbon offset projects. You're in the startup world beyond blue layer. Is there anything that you're really excited about out there in the market in climate tech in 2024?

Vivian Bertseka: 19:05

Yeah, that's a great question. I'll leave it and say I'll say beyond carbon removals, because we're clearly very excited about carbon removals, but that, I think, falls in the same space. I would say agri-tech. I've been looking at agriculture markets for over 12 years now. Really, we're now just seeing the beginning of what I think is going to be an enormous acceleration in the change of our food systems. That's coming together from many different perspectives.

Vivian Bertseka: 19:33

Food systems are a huge part of global emissions, but they're also the only system that has the potential to go from being a carbon emitter to being a carbon sink. But it also ties into global health. I think we're increasingly seeing evidence about how the way that our food system has evolved has really shifted diets in a way that is really detrimental to humans. It's an argument that comes from multiple directions. We're now really starting to see all the pieces aligned the motivation from all the different actors, the willingness to pay, but also the incentive systems to change agriculture. That's a space I'm watching quite closely. It definitely ties to the carbon markets as well, but it falls in a category where carbon can be a byproduct and you can actually have a food investment case based on all the other outlets of a company or a company's operations.

Ryan Grant Little: 20:27

I couldn't agree with you more. I think this is an area that we're not looking at closely enough generally as a society and on the investment side, but that could be the biggest game changer in terms of climate and planetary health as well. Is the best place to reach you online LinkedIn.

Vivian Bertseka: 20:42

LinkedIn always works really well. You can always connect with me and please do if you have an interesting idea or any thoughts on possible partnerships. If you are a carbon project developer, you can get in touch with a team of players through our website. We do have a forum and we can very easily arrange for a demo of our product, but we are also looking to have a very collaborative approach to building solutions to the problems that we're solving. We'd love to connect with other players in the market Anyone from service providers, marketplaces, buyers, certification bodies. I will close this by saying also we do have an innovation program for younger companies, particularly carbon removal companies that are at the earlier stages. You can get access to the Blue Layer software with a very attractive proposition. Please do get in touch. Don't think that we're only working with large developers, but otherwise I'm available in all the usual needs.

Ryan Grant Little: 21:37

Great, and I'll put links to those in the show notes. Vivian, thank you so much.

Vivian Bertseka: 21:40

Thank you, Ryan. It's a real pleasure being on the podcast and I really appreciate it.

Ryan Grant Little: 21:45

Thanks for listening to another Climate Tech podcast. It would mean a lot if you would subscribe, rate and share this podcast. Get in touch anytime with tips and guest recommendations at hello at climatetechpodcom. Find me, Ryan Grant Little, on LinkedIn. I'll be back with another episode next week. Bye for now.