Think positive, think regeneration: Chief Vision Officer @ Handprint
Beyond just reducing their pollution footprint, corporations must create a positive impact with regeneration. More from Handprint’s Simon Schillebeeckx.
Simon Schillebeeckx has three jobs. He’s an assistant professor of strategy and entrepreneurship at the Singapore Management University. He’s also the founder of Global Mangrove Trust, a mangrove protection non-profit, and the founder of Handprint, a B2B funding platform for impact projects.
But because he’s triple hatting as an academic, conservationist, and an entrepreneur, he’s got some pretty interesting ideas on how regenerative finance could be our way out of the climate crisis.
Here’s my favourite part: he’s got a moonshot idea of how a currency pegged to the value of nature could be much better than currencies created by central banks. Scroll to the last question to read it.
Handprint raised US$2.2 million in seed funding from payments network Thunes in March 2022, and an undisclosed amount from a subsequent seed round from Singtel Innov8, the corporate venture arm of Singaporean telecoms group, Singtel.
The company is currently doing an equity fundraising campaign in the US on WeFunder.
These are some highlights from our podcast recording. The transcript has been edited for flow, clarity, and brevity. Check out the podcast recording on Spotify and Apple podcasts to listen to the whole interview.
I was going through the Handprint website. From a cursory glance, it looks like a donation platform for impact projects throughout Asia. Is that correct?
Yes and no. Handprint operates only in the B2B corporate philanthropy or corporate social responsibility (CSR) space. We don’t do B2C.
Typically donations or grants are either given out with very little transparency on what’s being done with that money. But on Handprint, you can buy quantifiable units of impact. For example, if you give $50,000 to a non-profit that does education in Cambodia, we’ll tell you that it’s the equivalent of 38,000 hours of education provided.
Handprint will then demonstrate on its platform that these hours have indeed been provided and that they are claimable by the corporate sponsor.
We work with our non-profit partners to transition them from a donation paradigm where they simply ask for money, towards an impact selling paradigm, where they sell units of impact that have quantifiable, specific outcomes. These could be carbon sequestration, biodiversity benefits, or educational benefits, but the point is that they can sell a unit of impact that has a price.
This approach enables companies to have much more predictability and much more confidence in terms of the impact that they make with their donations. They know in advance what they’re going to get and Handprint takes care of all the complexity in the backend in order to guarantee that the money is well spent, that the money reaches the partners and that the money is deployed in a way that is aligned with the units of impact that were bought.
Right, so you’re basically breaking down impact, impact work and impact results into homogenised, commoditized units that can be easily quantified and, increased or decreased, is that it?
Yes, although commoditized sounds a bit like a stretch, right? Within the impact space, commoditization is really hard, because even a mangrove tree in Bintan is not the same as a mangrove tree in Batam. So there is not really that much commoditization.
What we are doing is enabling every individual project to have a very unique demonstration of what they’re doing. But we will provide some kind of quantification and comparability that makes it easier for companies to figure out how their money should be best spent.
There is some element of commoditization, but without the goal to, for instance, turn everything into carbon sequestration or quantifying the contribution to biodiversity.
For carbon, the game is pretty clear. Companies need to offset the emissions that are hard to abate. So that drives demand. But for projects on Handprint, how do you drive demand without converting all these impact units into offsets?
“Offsets” is not a thing that really exists. Offsetting is a choice that companies make to allocate carbon credits, which is a thing that exists, to a narrative that supports the idea that companies can emit carbon and then take some of the carbon off their carbon balance sheet by purchasing carbon credits. That’s the idea of offsetting.
So that offsetting practice you can actually do on Handprint as well. So you can buy trees or even carbon credits and then use those to offset existing emissions. But it’s a very small part of what we do.
The real focus for handprint is demonstrating that creating a positive impact in the world can create business value. That’s the concept of a “handprint”, which refers to the positive impact you can make on the world, as opposed to your “footprint”, which is your negative impact.
We see that, for instance, in e-commerce, companies that integrate reforestation into the checkout process can increase sales. Or in advertising, if you integrate positive impact in the ad unit, you can increase attention and increase ad performance. Or in the international remittance space, if you integrate positive impact into your international transactions, you can attract new customers and increase the volume of money moving between two spaces.
So the goal of Handprint is really to help companies capture business value from the creation of positive impact, not achieve some kind of legitimacy based on what we increasingly believe is a narrative that’s based on offsetting.
Offsets are not going to be very viable in the long run.
Last year was basically the year of forest carbon exposés. For Handprint, how do you ensure that, for example, the New Yorker doesn’t go to one of the impact projects and find that, oh, something dodgy is going on. How do you ensure that there’s integrity from end to end?
I think we’d be very happy if the New Yorker were to go through our impact projects and found something that we did wrong, that means we’ve reached a specific status that makes it worthy of investigation.
Regarding the scandals involving Verra and South Pole, these things were entirely predictable.
We had conversations with Verra in 2019 and 2020, arguing that if you guys are not adopting these new digital technologies at scale, at speed, you’re going to be exposed. That’s at Global Mangrove Trust, we ended up working with a variety of partners to develop a new carbon crediting agency out of Oxford University.
(Note: The carbon standard is called OxCarbon. See project information on the Global Mangrove Trust website and the project dossier on the OxCarbon database.)
So in a way, that’s not a surprise.
Handprint’s approach is really different. We make transparent the process of impact creation, rather than just focusing on the outcomes.
For example, issuing carbon credits requires a very long ex-ante process. The pre-feasibility study can take two to three years and cost $300,000. Then a benchmark and a baseline is set — that can take one or two years. So we’re like three, four years into the process.
Then somebody or some piece of tech comes in and does an evaluation of, let’s say, the state change in a forest. They then verify there has been additionality — this much more carbon has been absorbed compared to the baseline and this much carbon has been preserved.
Then another authority comes in and approves that audit. And then the carbon credits are issued based on the historically sequestered carbon.
You can sell those in terms of carbon credits and try to monetize that. The buyer can then resell those because carbon credits are liquid assets.
Handprint doesn’t do liquid assets and at the moment, we don’t sell outcomes. We sell inputs — we sell one tree planted, one coral restored, one kilo of plastic removed from the ocean. As a consequence, it’s much easier to validate the impact of each project.
We also contract directly with the non-profit organizations rather than using an intermediary. As a result, we’ve built a lot of trust with these groups, we have weekly, bi-weekly conversations with them. During these calls or meetings, they have to report on each stage of the impact process — what they do from the point they receive the money, to when the tree is planted, and so on. This information then gets relayed back to our clients on the platform.
For some of the groups, providing this level of accountability isn’t intuitive yet, so we have to provide some coaching along the way. But it’s a critical process because it creates transparency and trust between them, us, and our clients.
What is important for us is this continuous assurance process, it’s not one audit per year. As a consequence, if some opportunistic NGO were to slip through the cracks and make it through our KYC process, they would be called out much more quickly.
(Note: After the recording, I followed up with a question about ensuring permanence. How does Handprint ensure that the trees that are planted stay planted. Schillebeeckx says that it’s part of Handprint’s KYC process. The company first looks at the NGO’s historical performance and the legal rights to the land, and then tree survival is monitored in the following years using initially just site visits and over time drones or satellite images.
Handprint is also considering adding an insurance layer to protect against force majeure or illegal logging.
I also asked how the local stewards would be compensated for the continuous upkeep of the project given that payment is once-off. He says that at the moment the full price of the impact creation, including monitoring, is paid up front. At some point Handprint will transition towards a more stretched out conditional payment process but because this comes with a lot of additional costs as money transfers are expensive, it only makes sense from a certain scale.)
You pointed out that the cost to validate impact data could rack up overheads. What’s Handprint doing about that particularly sticky piece of the puzzle?
If you buy and retire a carbon credit, between 60 and 80 percent of the money you spend on that carbon credit doesn’t reach the local community. It’s all disappearing in this ambiguous soup in-between.
There is value in that ambiguous soup because there is verification, there is validation, there is quantification, there is monitoring, there are resellers (their value is slightly more questionable), and there is speculation. But is it really worth like 4x or 5x?
To address that, Handprint provides a much wider portfolio of options. The companies that are comfortable with a very low level of confidence can purchase units of a product without making specific claims, about carbon sequestration for example. As a consequence, they don’t have to pay for all these additional trust or credibility layers.
Companies like banks that want to pay a lot more for very high levels of security and trust will have access to a different tier of projects. Basically every company, no matter how large or small, and no matter what they do, can find something that is good enough for them.
How would you define regenerative finance (ReFi) and does it need to involve blockchain?
I don’t think ReFi necessarily involves blockchain — Handprint is an example of a ReFi organisation that doesn’t use blockchain. We build software development kits (SDKs) for banks so their customers can access our platform directly through the mobile banking app.
ReFi is derived from the concept of regenerative agriculture. But because most of the literature in the ReFi space currently really comes from the blockchain space, there is this assumption that they are intrinsically linked.
There are many other actors now that could be considered to be playing in the ReFi space that have nothing to do with blockchain. Alipay’s work through Antforest is a great example. It’s a finance app that does a lot of tree planting, not on blockchain at the moment, but it’s clearly financing regeneration.
From your point of view, is regeneration fundamentally different from sustainability or ESG?
Corporate sustainability, or what I now call legacy sustainability, is really an attempt for a company to reduce the negative impact it has on the planet by focusing on reduce, reuse, recycle.
It’s anchored in the age-old principle that the polluter pays. That has resulted in companies focusing a lot on reducing carbon emissions, reducing water consumption, reducing plastic pollution, and trying to measure and report their existing footprint, their existing negative impact and reducing that over time.
Then we applaud them for being slightly less bad actors compared to the past.
It’s the equivalent of your kid coming home from school and saying, Dad, you should be really proud of me. I only punched a teacher five times.
That is what sustainability has focused on for the last 30 years–being less bad.
The regeneration space focuses on the creation of positive impact. The priorities are not reduce, reuse, recycle, but reserve, restore, and rewild. It’s about contributing to the creation of natural national reserves, restoring nature, and then eventually rewilding by taking human intervention out of the equation.
Regeneration provides a more aspirational narrative that guides us towards creating more positive impact, rather than producing less harm. I think it’s easier to get people, both employees as well as consumers, involved in something like this that is more aspirational. It’s also easier to understand.
Most people that are not in the sustainability space still don’t really understand what carbon is or why it even matters. But if you’re talking about restoring corals or removing plastic from the ocean, that’s much easier to understand.
Furthermore, 70% of the global economy has little to do with activities related to reduce, reuse, or recycle. Because if you’re not in manufacturing, logistics, or extracting resources, you have almost nothing to reduce.
Digital organisations, services businesses and governments — they can try to reduce their electricity consumption a little but fundamentally, they don’t have that much to do when it comes to sustainability.
So it’s very strange for, for example, a small accounting firm, to be obsessed about sustainability by printing less paper and switching off the lights religiously, when the impact is really marginal. But the same accounting firm can say that for every page that I write for a client, I can create some positive impact. That in turn could be part of a new business strategy to attract one new client a year.
That doesn’t mean that we should stop decarbonization. On the contrary, we need to accelerate it. But I do think ReFi creates a space for many companies that want to do something, and have realised that within that classic sustainability paradigm, there’s not that much they can do besides reporting on how bad they are.
That makes a lot of sense because the companies that have a very low footprint have a lot of anxiety about indirect emissions–scope 2 and scope 3 emissions. So rather than focusing on emissions that are indirect, they could do something more positive.
The obsession with scope one, scope two, and scope three footprints is really detrimental. Because now companies have to measure indirect emissions that don’t originate from the country which they operate from.
Measurement and reporting costs can go up to billions. That, I think, is a misappropriation of resources that could be better spent doing something good for the world.
By having this kind of footprint approach where you say this is your environmental footprint and you have to undo this, you’re making the companies that are responsible for the destruction of the environment, the stewards of the future health of the planet. This is a very strange idea.
Why would we believe that the oil majors or the heavy polluting steel industry or cement industry are the best stewards of the environment? It’s like saying we believe that the best educator is the paedophile.
So I think what we should do is kind of gravitate away from this. We should say: there’s one planet, there’s about 8 billion people. Everybody has a responsibility.
Your responsibility shouldn’t necessarily be because you cause a lot of damage. It could just be your responsibility because you’re very rich, because you have a very high valuation, because you’ve made a shitload of money last year.
As a consequence, your responsibility should go up, especially when it comes to nature restoration.
I think it is incredibly important that we let go of this obsession with the polluter base and as a consequence, hang our wagon on the largest polluters in history to solve the problem.
The footprint narrative and the footprint approach doesn’t create the change movement that the world needs. What it creates is a narrative around guiltiness rather than a narrative around power or aspirations.
What we know from organisational psychology is that if you want to shock people into action, making them feel guilty is very effective because nobody likes to feel guilty. So you show them images of the war in Gaza or the war in Ukraine and people donate.
But if you do that every day as we see now, then people just don’t open the email or they don’t click on the donate button anymore. Because nobody wants to feel guilty all the time.
The same is true in the climate conversation and the biodiversity conversation. As long as the focus is on attribution of guilt, more and more people and companies will just say: I don’t want to know about it.
So we need to shift that guilt-based narrative towards a positive aspirational narrative. Most of the companies around the world need to shift their focus on doing something great in the world, while a very small but very important group of companies and industries should continue to decarbonise and fix their industries so that it is more in line with planetary health.
You had another interesting idea that we talked about on Telegram. You mentioned that you were looking at cryptocurrencies tied to the value provided by ecosystem service restoration. Could you kind of describe to me how that works, using simple terms. Because not everyone that listens to this is in the crypto space.
The crypto market broadly is 95 to 98 percent speculation and I would say bullshit. Not relevant, not interesting. A bunch is really valuable infrastructure that comes with utility tokens that give you access to that infrastructure.
Then you have a variety of alternatives that try to provide a link between the crypto space and the existing fiat currency system. Such as stablecoins that are pegged to the US dollar, or flatcoins that are pegged to a variety of other metrics that for instance tell me something about the cost of living, cost of commodities, or cost of living.
Those are less anathema to the original idea of the crypto anarchists who wanted to create a new currency out of nothing, and who wanted it to exist independently of any existing currency.
An existing currency is basically a system of debt that governments issue and can inflate at whatever rate they want, whenever they want. Governments continuously devalue their currency to pay off debt, because money is debt.
For instance, our Singapore dollar today is worth a lot less than our Singapore dollar in the 1960s, right?
I’m hopeful for an alternative currency to emerge that is pegged to natural capital.
It has to have some aspect of speculation, because speculation attracts lots of people. It also needs to go up in value or that has the potential to go up in value. But it shouldn’t be too volatile, like 50% up in one day and 10% down the next day, like what we see in the crypto space.
You basically want something that goes up in value regularly, predictably, so that it’s not super speculative, but that it adopts, say, the characteristics of an exchange traded fund or an exchange traded product, or like special drawing rights.
We know the value of nature is incredible. If people have any doubt about the value of nature, imagine if nature stops providing services for 10 minutes, we are all dead.
No more air.
That’s as simple as it is. You can switch off the global economy for a day and you’re gonna have massive disarray, massive casualties. You switch off nature for 10 minutes, everybody dies.
So can we create some kind of currency that quantifies the value of ecosystem services? This valuation has to go up as nature is cared for more, and it should also go up if nature is destroyed because then the value of the remaining ecosystems increases.
Currently, the literature on ecosystem valuation doesn’t have that second tendency. So the value of the ecosystem goes down if it is damaged, if surrounding ecosystems are destroyed.
This currency, like any currency, could be used to underpin many other types of contracts and would create very good incentives to invest in nature because that investment then should increase the value of this currency.
This could appeal to both individuals and also companies that might want to put natural capital on their balance sheet. This is the one thing that accountants can do to help advance the world–it’s not about better measuring the carbon footprint but how do we put nature on the balance sheet of companies?
And if we can do this, then like human capital and organisational capital and brand capital and all of those capitals, if nature becomes something that lives on the balance sheet, it will be something worth protecting.
