Accelerating Sustainability with a Carbon Credits Marketplace
How does an inspiring idea turn into ambitious innovation that brings about a better world? Mikkel Larsen, Chief Sustainability Officer at DBS Bank and interim CEO of newly launched Climate Impact X (CIX), knows that journey better than most.
Mikkel recounts how a vision to fight climate change created the dialogue and collaboration between DBS Bank (DBS), SGX, Standard Chartered Bank and Temasek to establish Climate Impact X (CIX). CIX is the first-ever platform that combines AI, satellite monitoring and blockchain to enhance the integrity and trust in the carbon offsets trading on it.
From conception to experimentation incubated at DAX, to a fully-realised carbon exchange and marketplace based in Singapore, CIX’s birth is the story of ambitious innovation at DBS.
Q: Good afternoon, Mikkel. Thanks for taking the time to do this. You’ve just come off the launch of Climate Impact X, an ambitious global carbon exchange born out of the Bank’s innovation practice. How did it come about?
Mikkel: So this started about August last year, when it came out of the Emerging Stronger Taskforce that Piyush [Gupta, CEO and Director of DBS Group] was leading. He asked me to set up a Private-Public Partnership. And at that point in time, it was quite a daunting task to undertake and I needed a structured way to think through the challenge.
So immediately, the Innovation team was there to help. They facilitated the initial workshop where we started to brainstorm. They facilitated the closed-loop experiments that came after that, to help us think, what are the fantastic ideas that help us sift through what is good and what is not so good. And since then, if truth be told, they have been an equal part of Climate Impact X. The collaboration is a great example of the synergy between the sustainability team and the innovation team.
One of the things they did to move the things forward was to set up the Sustaintech Xcelerator. And from there, one, we now have a good explorative relationship with Google, and two, as a result we also have the technology that we will use practically for our exchange.
One thing the Innovation team are really good at is opening doors, here, there and everywhere. With tech providers, with companies interested in the tech angle or any other angles. The Innovation team did the facilitation, they did the door opening, they very completely built the Sustaintech Xcelerator programme. They were also very involved in grant seed funding, which we obviously didn’t have the capacity or the knowledge to do. So, it’s really been a whole suite of offerings that we’ve received from them.
One of their least tangible but most valuable contributions is this constant challenge to improve, this mindset of “10x, 10x, 10x.” Whenever we say, “You know what, it’s good enough,” they’ll challenge us, “Well, are you sure?” And that is very time-consuming, I’ll be very honest with you, but it also keeps us on our toes. We could have missed many ambitious goals or continued down many wrong paths if we didn’t have that.
Q: Do you think the ambitiousness of the CIX project is informed specifically by how the Bank treats innovation?
Mikkel: Yeah, I think it is. Innovation is not a function of its own, right? It helps to give birth to the idea… it enables sustainability to relate to many other functions. Think of it as a framework for thinking. Rather than “Look, we’ll take it over, we’ll develop the idea, here it is,” it’s much more service-centric. Like a mentor, a guide. Bidyut [Dumra, Head of DBS Innovation] is obviously a living example of that. He bombards you with ideas, but you make the decisions. In many ways, it’s been for me a fantastic journey with the Innovation team because we are being challenged by them to make the ideas really practical to move forward in terms of workshops and the way of framing things. Very different from having a silo function of innovation by itself. It’s definitely the right approach.
Q: That’s the Innovation Pyramid working, isn’t it?
Mikkel: Exactly!
Q: How is Blockchain being adopted at CIX?
Mikkel: Blockchain is a future-ready system for settlement. It means that you can imagine there will be use cases in terms of points of sale. You can also imagine that you will have an easier settlement flow which is DVP (delivery versus payment). In a way, our consideration would be, how should we already be using this rather than introducing a new set of tools.
Q: Switching gears a little bit. How large is the CIX team?
Mikkel: So, you have to remember that we’re still a start-up. So, in a way I haven’t had an entire team. When we really get going, we’ll look to get it up to 25 to 30 people on Day One. But until then, we’re a group of secondees from the core shareholders, which means we’re often working with people from different companies, smashed together for long periods.
Q: What does a day in your life look like?
Mikkel: What my day looks like right now, gosh… like any start-up, there are a lot of brilliant ideas that are thrown at us, especially because this venture here is working in a really fast space where the relationships are unclear, where competitors are cropping up everywhere, where the product is unclear, and where there is a lot of reputational risk. So, having to navigate through all of this, and dealing with all this uncertainty, it is off the charts.
On top of that, there are, I don’t know, 20, 30 different value propositions we can pursue, and we spend a lot of time trying to plan what we want to do conceptually, but once we get into execution, even at this point of time, there are so many lingering doubts, “did we make the right decisions?”
You have to be really clear about what is your MVP (minimum viable product). What are we going to do on Day One? Because there’s so much excitement from the partners, there’re so many things we can do. On a normal day I have an average of 15 to 20 meetings every day. I get up around 5am, get 2 hours of exercise, then I get in, and then most of the days, I don’t leave until around bedtime. That’s my life right now.
Q: What advice would you give someone who wants to do what you do and innovate for a better world?
Mikkel: My first advice is, if you really want to do this, the timing might as well be now. I’d been thinking about it so long and I was always hoping for the right time, but to be honest with you, I won’t have any way of knowing when is the right time because there’s always something off. So, if someone is thinking “I’m not right for this task,” trust me, I feel like that, everybody feels like that.
The question you really have to ask yourself then, is what makes you satisfied every day? If you really want to make an impact, then you have got to find a way to make that impact. Think about what makes you happy, what you want to do on a daily basis, then think about what you want to do in 5 years, in 10 years.
Q: What’s one thing that nobody knows about you?
Mikkel: I have an extreme relationship with wildlife, with animals in general. I’m the kind of person that if an ant comes into my house, I will grab a piece of paper and help him back out. And if he comes back in again with a friend, I’ll take them back out again. And then when I look away, my wife will come rushing in with a spray can and kill all of them!
Watch the video below to find out more about Climate Impact X!
Innovation Pyramid
The Innovation Pyramid is DBS’s proprietary framework that ensures innovation is pervasive, ambitious, and orchestrated.
