Well Made

Peter Dering, Climate Neutral: Offsetting Carbon – Well Made E109

February 12, 2020 · RSS · Apple Podcasts

Peter Dering knows that there's some controversy around purchasing carbon offsets, but as the founder of Climate Neutral, he thinks it's an immediate path forward. Before Climate Neutral, he founded Peak Design. He and his team design photographic accessories and outsource the manufacturing. After visiting one of his factories, he was looking around at all of the materials and energy that went into production and he started strategizing options to cut down on resources where they could, and offset carbon where they couldn't.

He and his team always made sustainability a priority, but they wanted to do more to quantify their footprint and measure improvements. Peak Design took a huge step in January by getting B Corp certified. The other huge step they took was starting the nonprofit, Climate Neutral. 

Peter found out that paying to offset carbon is not an unwieldily cost — it's actually affordable. Carbon Neutral provides a consistent system to measure carbon usage and pay to offset it. Hear exactly how Carbon Neutral calculates emissions businesses, and how offsets can actually make a real impact for climate change.

“I don't think that begging the world to change so fundamentally something about who we are and how we behave is the right way to try to attack something as pervasive as climate change.”

Peter starts off by talking about his background in photography, his favorite drone, and the biggest problem that DSLRs have yet to solve. He shares how he scaled Peak Design from his first Kickstarter campaign to a full collection of photographic accessories (6:09). Peak Design has relied entirely on Kickstarter crowdfunding. Peter shares why crowdfunding has worked so well and why they have no intention of changing that any time soon (8:19).

Stephan and Peter pivot to Carbon Neutral and when Peter first started caring a lot about energy in elementary school (13:01). He partnered up with the founder of Biolite to come up with the concept for Carbon Neutral (19:39). The act of purchasing carbon offsets has two main criticisms. Peter argues his case about why he thinks it's a good path forward (21:53), then he dives into exactly how they measure offsets at Climate Neutral (26:32). It's not about precision.

Finally, he shares Climate Neutral's goals for customer recognition and the struggle of crowdfunding a concept instead of a product (39:11). Full transcript below.

Also mentioned on the show: 

Peter: Hey, thanks. Pleasure to be here.

Stephan: So you are the founder and CEO of Peak Design, which I'm sure people know from your amazing camera gear, your bags. You've launched a lot of products on Kickstarter and have built an amazing brand there and we'll talk about that. Most recently you've become the cofounder of Climate Neutral, which I really want to spend some time digging into with you, which is a nonprofit involved in helping brands with their carbon footprint. I kind of want to touch on both of these things because they're so interrelated and then we'll talk about one and then the other. If that makes sense to you.

Peter: That sounds like a deal.

Stephan: So, with Peak, how do you describe it today?

Peter: That actually gets a little bit challenging because we keep adding products to the mix. I don't like to pigeonhole ourselves into a photographic accessories company, of course, because we sell a lot of bags to people who don't even own a camera. And the next products are going to kind of even bring us further afield from photography. But we still sell what I think are the world's best photographic accessories, camera clips, camera straps, and now tripods as well as camera bags. Also travel gear, also luggage. Fortunately, I'm not the type of CEO who has to go and raise money and give that type of pitch very often which is why it isn't very polished, but we just make a wide variety of things that help myself and my coworkers at peak design navigate our lives.

Stephan: Yeah, and I was re-watching some of your videos for the research and back in 2009, 2012.

Peter: They're cute aren't they?

Stephan: Well, the original one is very memorable to me, which is just you explaining a problem that I had when I was starting with photography, which is just like you're carrying this DSLR nowadays. I'm not sure how many people are carrying DSLRs, at least I haven't been as much as I used to. But this problem of this thing bouncing around on you and how can we create a clip that makes that easier. And so, back around that time I was very involved in the Kickstarter community, and I remember that video very clearly, but that came from a problem that you had experienced yourself. And were you the industrial designer behind the actual product itself?

Peter: Well, I think that's a generous term. But, yeah that was truly me doing everything and that's probably why it looked a little bit like a DeLorean and you know why it was a little bit pointy to the touch. It was kind of riddled with problems, but it wasn't perceived that way because it was the first product of any kind in its category. I think there was a lot of forgiveness there and it very much did indeed solve the problem that I was having, that you were having, that pretty much everyone with a camera had. And it is interesting to me personally, I'm looking at my camera sitting on my desk right now. I probably won't bring that to work with me today on a capture camera clip as I did for many, many years. That's because I got this cell phone in my pocket. It's kind of funny. Like a lot of people traded a lesser quality picture for convenience, which is something that is kind of permeating photography. I'm curious to see where it goes. I kind of roll with a combination of my phone and my drone most of the time at this point, but I'm not entirely happy about it. I'm optimistic that the world of photography is going to kind of put itself back on the right track. I think once they just make cameras integrate much more thoughtfully with phones is the time when they'll become more relevant again. But then again, you're not really asking me about the future of photography. So I thought I'd just throw that in there.

Stephan: Well, maybe we should talk about that. Photography is still a big thing for me, but I agree that for day-to-day standpoint, I have gradually- There is the studio photography, which I almost don't count because that is like still very much the domain where I'm still involved in product photography at Linean. And so that kind of stuff, we're still very much using all the professional and gear for that. But for the day to day and even travel, I'm mostly using my phone. I haven't gone the drone route yet. But what drone do you use?

Peter: Well, I've used them all because I've crashed them all and then you upgrade. But the Mavic 2 Pro. I mean it's a whole new ballgame, this aerial photography thing. And I think that's what gets interesting to a lot of creatives is they'll find a new medium and kind of flex on the possibilities that exist there. And that's the one that's got my current attention. It leaves me just longing for the days of that mechanical clunk of my Nikon D 600.

Stephan: Well, I do agree. And now there's so many great apps for iOS in particular that I've played around for photography and they let you do so much with even the sensors that you have on your phone. The camera companies are just not quite as good at making software. And I would just love to be able to plug my phone right into a big, nice lens. And I know there's a lot of companies that are involved in making small lenses that connect to your existing lens on the camera. But I dunno, they said there's an opportunity there.

Peter: Yeah, there's definitely an opportunity there. It's so simple. What I want to happen is when I click the button on my Sony that it takes a photograph there and then works in the background and just puts it on my phone. I don't want to have to link up to the wifi. I don't want to have to do Bluetooth. Whichever camera company solves that problem first, I think they will see a big increase in sales. And I don't know why they're not all pursuing that immediately.

Stephan: I think they're just afraid to lose the primary interface. They want to control that. That would be my guess.

Peter: Well,I guess, but that seems like the wrong thing to be prideful of.

Stephan: Well, I'm with you. You've expanded the product line into so many different areas. I think the bags in particular, people probably see them all the time without noticing. A good friend of mine, Chase Reeves is a YouTuber who talks about bags all day long and he's done multiple almost hour-long videos explaining all the features and things that you've built into your bags. What I'm curious about is: As you were scaling the team at Peak, and I should give for context the fact that you've now run nine Kickstarter campaigns. They've accumulated over $32 million in total across all of those campaigns. It's a really incredible thing as far as I know, that's gotta be like the biggest for any creator on Kickstarter.

Peter: I think that The Pebble Guys did over 40.

Stephan: Wow, that's amazing. Yeah. But what have you learned about kind of scaling that innovation? You were the one dealing with this particular problem, solving it from that industrial design point of view as you've gone to so many more products, how did you figure out how to bring that to your whole team?

Peter: Slowly. We've always added people to Peak Design very slowly and kept the design process very much the same. You know when we got into bags for the first time, we had not designed bags before and so we just had a very fresh approach. I'd say kind of the opposite of scaling it big and far and wide as you see a lot of companies doing. I think that we just tried to nail one category of products, like we feel really good where our clips are right now. We feel really good where our straps are right now and it kind of frees the entire design team to think critically about the next big thing. And so I'm really excited for this year's release. I think it's going to be one of the coolest suites of products that we've ever brought to market. And it's something completely different than we've brought to market before. And because everything else is in a healthy place, you know, we just launched the next iteration of everyday bags. We have time to think and really work hard on bringing the next products to life.

Stephan: Why have you kept using Kickstarter as a mechanism for funding?

Peter: Well, we certainly haven't encountered a good reason not to.

Stephan: Yeah, I didn't mean it in any other way. I think it's great, but sometimes I think companies, maybe they move on from that method or you feel like you need it right in the beginning, but then once you're up and running you can get products off the ground without having to do that. Why do you continue using that as a method?

Peter: Well, for Peak Design in particular, we have such a kind of legacy of doing it. And certainly it's partially that. And at this point I think our backers are just ready to come support this and there is a greater groundswell every time. But I think our ability to get a lot of eyeballs on the company for an extended period of time, you know, a 60 day duration of the campaign, it's kind of like having a launch event that takes two months. During that time you're interacting with the backers so sincerely and so regularly that other good ideas come up and there is always this interesting period of time where it's late in the product development, but changes can still be made and the input from the crowd is truly useful during that time. Also, it's a way that people can get a discounted product before it ever comes to market and I mean that's highly unusual, right? Usually you would be eroding your price if you're doing that, but Kickstarter works in this interesting way where you're kind of allowed to give that Kickstarter upfront. There's just a huge boost. Think about Tripod. That'll officially be going on sale April 7th, 2020. We launched that campaign a year ago and began taking income on that product a year ago. That is incredible. Anyone who runs a business understands that cashflow is a challenging thing, no matter how successful you are. And so having that money upfront and the backers in exchange for that, getting a healthy discount on the product is just a great trade off that we'll continue to make every time.

Stephan: What is the reason to keep using Kickstarter as opposed to setting up a preorder on your own website?

Peter: Kickstarter's brand and ethos is so solid. They bring more people to the table. There's people just cruising around Kickstarter and who are loyal to that. And I think that they've created a great product. I have zero confidence that we would create a better product and we're very happy to nurture that community, you know, continue kind of saying: Hey, these guys built this thing and we want to continue to support it.

Stephan: What has changed about Kickstarter? You're a company that's been doing it for so long in your most recent campaign, I think was your most funded one. The tripod at $12 million is pretty incredible.

Peter: It was. It was certainly our best campaign yet. And I think one of our best products. I don't think that Kickstarter has changed that much. I think that a lot of things have changed around it. There are so many kind of cottage industries of Kickstarter marketing and crowdfunding fulfillment. And I mean the industry of crowdfunding has grown up tremendously and it has become very commonplace. Kickstarter has maintained so much about their original identity and their intentions. I'm actually reading Yancey Strickler's book right now. Which is great. And actually he's rolling through town next week and I'm looking forward to sitting down with him for a couple hours and hanging out. But I'm very proud that that company has stuck to its laurels and they're not profit seeking the way that so many tech companies are. And I just have a great deal of respect for that.

Stephan: Yeah. One thing that you've been involved with in terms of Peak and the products that you've built is finding ways to be mission driven and focus on the big picture through the products that you've made. And so I just saw that you recently became a B Corp, which is really exciting. Congrats. You've been involved with the 1% For the Planet Conservation Alliance. You've had some of your products certified through Blue Science. So, you've been very involved in this area. I'm curious, what first got you interested in all of that? Was that before Peak or was it through Peak? When did you first become fascinated by this area

Peter: I'd say elementary school. There was this program called Kids for Saving Earth that the mother of a kid who passed away from brain cancer sadly started along with her son Clint at the time. That was my introduction to environmentalism. The next big wave of that was in college where I first encountered the word sustainability. I was a civil engineer and got into construction engineering and became really fascinated with this concept of green buildings. After the green building thing for me it was clean tech more generally. Got really excited about applying my engineering skills to energy solutions, smart grid stuff, utility scale, photovoltaics. I tried to start a company that was creating a mechanism for capturing energy from electrified trains. And so I've always had this really big fixation on energy and that's where a lot of that comes from. But, I also have to give credit to Annie Nyborg who runs sustainability at Peak. I mean she in so many ways is kind of the beating heart of this. And when she brought the idea of joining 1% of the Planet for me, I mean she didn't have to do that much arm twisting. It was hundreds of thousands of dollars the first year we did it. And we weren't exactly used to giving so much at that point. I really hadn't thought about it that much, but when she presented it, it seemed like the right move and it really set us on a path of charitable contributions. That is one of the things I'm most proud of at this point with Peak Design.

Stephan: So, there is quite a cross pollination and now you're starting climate neutral, which we'll get into, of what these different certifications and nonprofits are doing. Clearly you saw an opening there with climate neutral, which is focused on offsets. Can you describe what made you want to create something new in this area? I think of the- There's a classic XKCD comic, I dunno if you know the one I'm referring to called About Standards. There's 14 standards in the world. This is ridiculous. We need to develop a new universal standards that covers everyone's used cases and now there's a 15th standard. And so I'm curious, when you started to think about the idea of expanding into this area, why did you feel the need to create something new?

Peter: That's a great question. And I would have been the first one to be in line saying the last thing we need is yada yada. But what happened was this: End of 2017 or maybe early, yeah, end of 2017. I was in Vietnam and we had just consolidated factories and I was just gazing upon all the material that went into our bags, all the phones and fabrics. It really strongly hit me like, okay, we're definitely just another big part of the problem at this point with respect to carbon. Because all of those raw materials ladder up to energy expended to put them in that room with me right there. And though I consider myself a decently environmentally savvy person, I had no idea how much carbon I was actually responsible for. So, we came back to San Francisco, did some digging, found a firm called Three Degrees that not only do they develop and sell offsets, but they also have a branch of their business where they measure carbon footprints. And we got in a contract with them that was pretty pricey. It was not to exceed $40,000 in measuring our carbon footprint. And you know, we kind of swallowed the pill and said, okay, let's do it. And as they're going through their process, with the first $10,000 it just did an early analysis that said this is your carbon footprint plus or minus 20%. It wasn't that effortful to obtain. And they quoted that margin of error 20%. And they said we were responsible for about 16,700 tons. And with that estimate they were going to go then take the next $30,000 and refine it and get it down to about a 10% margin of error. And it was kind of like, well, what if we just were to round up by the full 20% and offset that whole amount? What would that cost?

Peter: And 20 you know, adding 20% to 16,700 that's 20,000 tons. An offset in today's market costs anywhere from, well you can pay as little as three bucks a ton or $25 a ton, but verified offsets, the average price at that time was $3 a ton. So it cost $60 to offset our whole footprint. And it became this weird situation where I was being asked to pay $40,000 to measure something and then pay $60,000 to actually do the work of eradicating the carbon that we had put up there. And the ridiculousness of that was the first thing that I wanted to attack because I don't care if you're Patagonia or Peak Design or North Face or the cheapest maker of Chinese goods in the world, the fact is that depending on what your cost of goods sold are for the most part, that is going to track fairly uniformly with your carbon footprint. And that's not to say that Patagonian and Peak Design manufacture things in the exact same way as a t-shirt maker in Bangladesh. There are lots of social standards and chemical standards that we follow far more rigorously. But from a carbon standpoint, there's not that much we can do about it to reduce those things. Despite how much the industry talks about production. And so that's where this notion of offsets came in. It's like, well, we're not going to stop doing business. We can't snap our fingers and turn all of these industrial processes that require heat and electricity that's fired up from coal. We can't turn those over overnight. So what can we do? And that's when we took a very hard look at the offset mechanism. And that is a long winded way of explaining things. But basically we looked at the offset market, said this is our only hope for the immediate time while we transitioned to a de-carbonized economy. And it feels like something that every business that wishes to call themselves responsible should it be doing right now.

Stephan: What was the birth of Climate Neutral as its own entity? I know that you had a few partners early on that were part of that group. What was the process of kind of making that its own entity?

Peter: I'd have to point to a dinner I had with Jonathan Cedar, the CEO of BioLite. BioLite is a company, they make- they have two sides of their business. They make basically camping gear, lighting and heating and stove tops for western markets. And then for developing markets they make a clean cookstove and actually generate their own offsets. In addition, they have been adding up their scope one, two and three carbon footprint since 2012 and offsetting it. And they were one of the only companies in the outdoor industry that I found that was doing that. So I teamed up with him. We sat down for a long dinner, kind of aligned our principles and said, this is something that every company should be doing. And if you looked around at sort of the certification standards that exist out there, they already, to some degree they do exist. The carbon neutral protocol run by Natural Capital Partners is for companies to measure their whole footprint and then offset it all. The two problems with that are that they make it very hard to do the measurement. They have a kind of an outsized focus on the precision of the measurement and I think that's because they are a company that sells carbon offsets. So, they kind of have a slight conflict of interest there. We wanted to make it easy and streamlined, and we specifically thought that this needs to be a nonprofit. Our goals are only to drive demand for carbon offsets and make sure that companies are taking necessary steps to eliminate their carbon footprint. If there was any sort of profit motive involved there, I think that it would be too easy to become skeptical of what we're doing here.

Stephan: I want to address some of that skepticism because I think offsetting in general has had some criticism associated with it. If you had to describe what the prevailing like criticism of the way that the industry has done it, how would you describe it?

Peter: Well, I think there's two aspects to it. There are those who say offsets aren't real, that the actions being taken aren't producing the results that they claim. And I'll address that in a second. The other one is you shouldn't be allowed to pay for your sins. That one I think is absolutely ridiculous. Specifically, you should have to pay for your sins. I think that people are trying to make the argument that we ought to reduce, like instead of emitting carbon in the first place, you should just stop emitting carbon and you just can't do that with a product that depends on a supply chain. You may interface with the assembly factory and maybe the subcontractors who made the actual parts that went in. But supply chains run deep. You could either stop doing business altogether or you can have a carbon footprint at this point and there is no company in the world today for whom that is not true. Zero. And so there is this, frankly, what feels like hypocritical notion that company should just be stopping things. Well, if we all stopped doing work and all stop producing things, the world experiences an economic shock that is probably far worse than any effects of climate change. It's going to cause war, poverty, famine, all those terrible things, the same things climate change will cause, but it'll happen acutely and I don't think anybody wants that. The other idea behind that is that for some reason, companies should have to take care of their carbon internally from within their own supply chain or something. Let me tell you what Peak Design is expert at very few things. We're good at designing products and we're at marketing them. We're not good at manufacturing them. We have outsourced partners for that. We are not good at removing the trash that we create at our peak design office. We pay someone else to handle the recycling and handle the compost and handle the trash. Why would carbon be any different? I really don't understand why it is somehow judged as immoral to pay someone else to handle your carbon footprint problem. The only thing that's immoral, in my opinion, is allowing carbon to go up in the air and not paying for it to be sequestered in the form of soil, carbon or trees or prevented from getting there in the first place by paying for a wind turbines to be erected so that they can take a coal plant offline. So, I'm most harsh on the criticism that says that we shouldn't be doing this because you shouldn't be allowed to just pay your way out of the problem. Bullshit. We have to pay our way out of the problem. Stopping carbon is not free.

Stephan: Yeah. And you wrote a great blog post about that on the Peak Design blog called "Yes, Throw Money At It"(https://journal.peakdesign.com/yes-throw-money-at-it), and it goes into more depth on that. But I think that was really eloquently said and it's a very nuanced point. I think it's easy to try and fall on one of the extremes. But in practice when you're operating a company or trying to make something useful for the world, you have to be operating in this gray and be willing to get your hands dirty to some extent. If I had to play devil's advocate to you, I think that one aspect is like you should incorporate in your design process, in your choices of suppliers, etcetera, decisions that try to aim for a more sustainable approach. And that's where the kind of offset the rest phrasing that you have comes into the picture.

Peter: True. And I'd like to point out that if you agree to offset the rest, that means for the first time in the history of your company you have financial motivation to lower your footprint. It's kind of like, well of course you're going to do that. And if you can more efficiently reduce your carbon footprint, then you can offset it. Then those are the first steps that you should be taking. And even in the cases where it's more costly to do it, I think that you should definitely be reducing your carbon footprint. Using recycled aluminum is a great example for Peak Design. It is a little bit more expensive and it's a slight reduction in aesthetic quality to our products. But we're doing it because we think it's worth it also because it saves a hell of a lot of carbon virgin versus recycled aluminum.

Stephan: Let's go to that first point that you were talking about, which was like some people think offsets are fake or what does that actually mean? I'd love for you to describe what the problem might be and how you're addressing it.

Peter: Well, let's take forestry for an example. You can take land that is fallow or farm land and you can plant a forest on it. And that forest will undoubtedly sequester carbon. Whereas before it was a city sitting vacant. And so what your carbon offset provides is the money to plant it in the first place and then the money to secure the land rights to make sure that this thing remains forest. I think that most people can see how that is a carbon sequestering activity. Unquestionably, trees are made out of carbon that is sucked out of the air. Where it can get dodgy though is well what if that forest burns down. I feel like the articles that seek to malign carbon offsets will find the examples of cases where those forests have burned down. They have failed to show the models of the carbon offsets, which has built in the expectation that a certain amount of the forest that we plant will be burning down and they're not going to be perfect every time. These are economic models and they're not designed to handle sort of the one off case. So, anytime you want to go out there and find an example of a failure of a carbon offset project, you should be able to do that. The question is on balance across an industry. Are these offset projects doing the work that they suggest they're doing and my evidence that they are is simply one having laid eyes upon projects, but more importantly having trust in a couple of organization's. They're gold standard, climate action reserve Vera and the Verified Carbon Standard and the American Carbon Registry. These are the four standards organizations that take projects and create criteria in the first place to be submitted for a carbon offset and then do the auditing and the monitoring or rather ensure that that is done to make sure that these offsets are happening. These are smart people's jobs and these organizations depend solely on maintaining their reputation and as far as I'm concerned, these organizations also do not have a profit motive. They're nonprofits. Their goal is to make sure that carbon reductions happen and from everything that I have seen on balance, carbon offsets are a very meaningful part of any hopes that this economy has to de-carbonize.

Stephan: When someone signs on for Climate Neutral, how deep do you go in terms of trying to measure, and there's a terminology that people might not be familiar with that I'd love for you to describe around scope one, two and three. How deep does someone need to go to be certified?

Peter: Well, in part that depends on how large your company is. Companies north of a hundred million, we actually make sure that they use third-party audited carbon financials. So, that is getting into that situation where you probably need to pay a consultant, at least to do the double check and make sure your carbon accounting is good. But for companies smaller than that, we are creating a really powerful carbon estimation tool. We're not doing it ourselves in that work, paying consultants some of the world's best carbon life-cycle analysis people to help create this tool. To get back to your question about scopes one through three. Scope one is carbon you create in and of yourself as your business. So within your own facilities, are you burning natural gas, are you burning coal, are you emitting carbon. Scope two is generally speaking, your purchased electricity, you're buying power from PG&E. Their power mixes involves some natural gas. As well as here we've got a lot of hydro and other types of power and so you'll have some carbon footprint from that scope. And another thing that kind of led me to co-found Climate Neutral was that people were claiming carbon neutrality based on scope one and two saying like: Oh, our own facilities. We cover our employees commutes and our own facilities and we're scope one and two carbon neutral. And that is just a steaming pile, because the vast majority of a carbon footprint for Peak Design; for example, it's 97% scope three. Scope three is essentially everything else that you were responsible for, both upstream and downstream. Upstream that means for us, take a look at a backpack of ours, right? There's like something like 60 materials that go into that backpack. And when you get down to the ink for the silkscreen and the dyes that go into each of the fabrics and the aluminum. That supply chain is massive. And the best way to know is to utilize industry averages. There are huge datasets that a couple of organizations compile that showed different emissions factors for different manufacturing processes and materials being used. And what we have done is I think taken the right balance of looking at the precision of knowing exactly what material goes into your products with just a little bit of inability to say, okay, you make backpacks and you make luggage products. What did you spend on your cost of goods sold? And that'll kick out an emissions factor that is certainly within reason close to your carbon footprint. Remember that precision is not what matters here. It is the purchasing of carbon offsets that matters along with reduction strategies that are much- You don't have to perfectly measure your carbon footprint to know that it's useful to use recycled aluminum over virgin aluminum. So, by removing the onus of perfection in that measurement, we're clearing the path for companies to take meaningful action rapidly.

Stephan: That's a really interesting point because there's a gradient of accuracy versus speed and easiness of the process. And so it seems like you're skewing a little bit more towards easiness at the expense of accuracy. Maybe there's a plus or minus range of how accurate your report is going to be. But, are you incentivizing or asking brands to skew on the higher end of what your margin of error might be? Or how do you think about that?

Peter: Yeah, so essentially the tool says that there are all sorts of inputs after you get that first level one analysis, it'll say, okay, now we want you to refine each of these points. And if you're not able to dig up the data to refine them, you get tacked on a 15% penalty, which basically says, well, we're going to take the high end then of the estimate. That right there basically ensures that the carbon footprint that you're signing up for is at least as high as but more, most likely higher than your carbon footprint is in actuality. And the result of that is you're probably going to have to end up offsetting more carbon than you're responsible for.

Stephan: And there's lots of amazing brands have already signed on. I've been really impressed with how quickly you've been able to get brands to commit. You've been up and running for less than a year and you've got companies like Reformation, Allbirds, Ministry of Supply, you mentioned BioLite. There's a whole list that I'm sure people who are listening to this will be familiar with that will share. If you could give a sense of, it must be relatively quick for some of these companies to go through the process. How quick is it? If I'm listening to this and I'm thinking maybe I'd like to do it myself.

Peter: Well, these companies have committed and starting at the end of February is when they are going to be going through the measurement process in earnest for their 2019 footprints. But the goal is for the actual data collection and measurement to take less than a week from an individual who is not- You don't need to be a hired consultant from outside. You're going to get your level one estimate in a matter of minutes so long as you know your cost of goods sold and then going through and refining those other aspects that you will get there in less than a week. And the goal we cannot stress enough because I think a lot of us have worked with tools like the Higg index and other types of measurement softwares, and you just tear your hair out. By controlling the process and the needs for precision, we are eliminating that friction. But right now is literally the period where people are going through the beta and submitting the feedback. And we are at the beginning of this thing and certainly this tool is not perfect at this point, but that's kind of the nature of software is that you get to continually refine. That's going to be the plan for frankly for years to come.

Stephan: Something you pointed out in your blog post was that there's a lot of low hanging fruit in terms of carbon offsetting and that right now the price is quite inexpensive. How long will it take for it to become increasingly hard or what are the diminishing returns that we're going to find using some of those strategies? Or how is that number, if it's $3 or $5 today going to scale up if a lot of companies do this? I mean that would be a good problem to have obviously, but is that a problem you're thinking about?

Peter: It is. We just had our board meeting last week and it was 0.5 and it was the supply. And we have an advisory board that's made up of Garmin offset developers and also the organizations I mentioned before that are the standard bearers. And I think that there is some fear of a short term spike because offsets are- It's so funny, a year and a half ago when I started talking about this, offsets were barely anything, barely a whisper. And in these last 18 months, everyone's talking about offsets right now. And it's phenomenal to see. I think that there were four times as many voluntary offsets purchased last year as the were in any year previously. This is really good news. There might be a short term spike. There might be a longer term spike. I don't really know. Predicting markets is not really my forte. I do know that when you get into the $15 range, for example, there are soil carbon offsets that are essentially limitless, because of all the arable land that we have on this planet that could start producing offsets. So, the more that price goes up, the more types of projects can get green-lit. And I think that's going to be really interesting, especially if consumers start demanding of companies that at the very least they offset their carbon.

Stephan: You mentioned this was point number five in the board meeting. Is there anything else you're willing to open up about some of the conversations or challenges that you all are talking about?

Peter: Sure. I mean, absolutely. I'm pretty transparent guy and I think we are in the entity as a whole. I think transparency and credibility are at the top of it. And so a big part of the board meeting was spent on talking about our tool because that is our ticket to getting companies to do this. And also it's critical that that tool is received with enough credibility that it lends credibility to our, as a whole. So, in kind of thinking what sticks out in my mind. It is that we nailed that tool and you nail early carbon accounting. I think that you're going to see a lot of people come our direction, because suddenly there is a focus. Every company now wants to know, because their customers want to know, how much is your carbon footprint? So, that's where a lot of the work lies at least in the first half of this year. If we nail that tool then we get to resume the work of marketing more broadly and just getting the name out there. But right now we're a little bit internally focused.

Stephan: There's a label that comes with this certification that brands can print or put on their website, that kind of thing. What are you hoping for in terms of consumer adoption or recognition of the brand? Do you have goals for that specifically or how do you think about how do we get the word out there to the end consumer?

Peter: We've got goals that have to do with number of tons offset and things like that, but I like to think about it in softer terms. And that is in five years time when a consumer picks up a package, if there is any meaningful percentage of people, and by that I mean 1%, 2%, maybe 5% of consumers that actually search out that label and that logo that we've created to ask themselves: Did they pay for their carbon or not? Before they purchase a product that would be incredibly meaningful. And similarly, Microsoft, Ernst and Young, there are a lot of larger companies, a lot of service companies that are coming out and making these claims right now. And they're not attached to anything other than their own notion of carbon neutrality. Someone needs to say: We checked their homework. Indeed they are carbon neutral. As a result, they've acquired the ability to use this label. I think that's a useful thing for the world. And I hope that this label is it. If it's not an a different label wins today, that's okay too. This isn't about winning the label game. This is about making it the common practice that companies around the world accept their responsibility for their carbon footprint.

Stephan: You mentioned that there was such a big increase in voluntary offsets. It feels to me like we're at an inflection point, and in the consumer's mind as well, and I don't know if you have data to back that up. But something feels like it has happened over the past 12 to 18-months in terms of consumers really looking for this. Is that something that you're seeing as well or is there any data that you can point that would point to that would, would reinforce that?

Peter: I could show you my email inbox which is full every day. Some random connection of mine, a couple people down the line has caught wind of Climate Neutral and says: Hey, I'm interested in this for my own company. And that just wasn't- Obviously this organization didn't exist. I don't think carbon offsets were being talked about 18-months or two years ago, barely at all. And now it's everywhere. It's everywhere. So, specific data. No, I'm not your guy for that. I think that you have the same pulse on the world that I do right now and I don't think you're wrong about it. We're sensing the same thing.

Stephan: You have now started building a team around Climate Neutral and trying to kind of let it thrive on its own, it seems. Austin Whitman is your CEO there. I'm wondering, what is your point of view just from a governance standpoint and where you want it to go and how you are planning to spend your time on Peak versus Climate Neutral?

Peter: Sure. Well, Austin's done an incredible job of taking the reins of the organization and in some cases just taking them out of my hands and out of Jonathan's hands, which is fantastic because this organization does need to thrive on its own. I feel plenty challenged being the leader of one growing organization. That said, we're in very regular contact and it's an interesting little mashup my days of dealing with Climate Neutral versus Peak Design. Some weeks, it's almost all Climate Neutral. Which is really fun and it's fun to have these two problems to chew on. But, it's a five person organization right now. We've got a couple of job offers that we need to get out there looking for senior person in marketing and a senior senior product manager to run this software tool that we've got. The was kind of a shameless plug right there to get some more people. But the other thing is budget. We need a budget. And so far the money that is being used to run Climate Neutral is mostly an extraction of the profits of Peak Design. Climate Neutral is in and of itself a 1% For the Planet Foundation. And so majority of the budget comes from Peak Design's 1% contribution, which we first spend on offsetting our own footprint. Secondly, continue to support grassroots efforts that we've been supporting for awhile. And thirdly now is funding Climate Neutral, and we are hoping for a big year for Peak Design, which means more budget for Climate Neutral. But we also know that this thing to really kickass and and to kind of become the world's standard for carbon neutrality, it needs billions of dollars, not $1 million. Okay. It's daunting for sure, but I think that we're, we're as well positioned as anyone to make it happen.

Stephan: Are there things that you have learned over the past year from getting this up and going that you're bringing back to Peak and things that have opened your eyes about certain areas that you're trying to bring back to the design process, the supply chain or anything else, the marketing even I guess of of how you talk about these things?

Peter: Well, I've observed this: It's a lot harder, I feel like to run a nonprofit than it is to run a for-profit, which if you just compare the Kickstarter. We did a Kickstarter for Climate Neutral and of course we'd done nine for Peak Design and we applied the exact same methodology of present the problem, present the solution and package it up nicely. And in doing so for Climate Neutral, we were just nowhere near as successful as we have been for Peak Design. And that's because I think that, and I don't blame them, I think I'm probably the exact same way, the vast majority of the interactions that customers have, we were a nation. We're a world of people that buys things and frankly that that takes actions that benefit ourselves. And I think that's okay. I don't think that begging the world to change. So, fundamentally something about who we are and how we behave is the right way to try to attack something as pervasive as climate change. I think that customers do have- They're going to be willing to take the steps that say: Hey company, you ought to pay for that, but are they going to pay for it themselves? I think that's less likely. So I don't know, your question was what am I taking back to Peak Design from this? I'm taking back some gratitude that it is much easier to present people a product based solution than it is to sell them a concept. Concepts are hard. It's a really, really hairy problem and I'm proud to be working on it, but it's a challenge

Stephan: If brands or consumers want to get involved with Climate Neutral, what should we send them to?

Peter: Go to climateneutral.org and there's a contact form there for brands to get involved at the individuals can donate as well. In the future we do want to have an opportunity for individuals to offset their own carbon footprint, because I don't think you're going to get every person in the world to do it. But I think that there are a lot of people out there who are taking the realization that after companies and governments offset their footprints or otherwise reduce them or eliminate them, the only ones left there are the individual footprints and there is still a good portion of responsibility there. Fortunately, it's not that expensive for individuals to offset their entire carbon footprint for a year. It's obviously, it's price dependent, but we're talking about low hundreds of dollars to offset an entire carbon footprint. So, at some point in the future we will have the individual ability on climate neutral for people to do that.

Stephan: That's really exciting. So, those jobs are out there for the people who also want to help out and commit even more of their time and resources to climate neutral. Is there anything else you want to point people to in terms of everything that we've talked about today? We'll put some links in the show notes to the blog post and some of the campaigns. What are you excited about sharing?

Peter: Yeah, I'm glad that you're pointing people to the "Yes, Throw Money At It" article(https://journal.peakdesign.com/yes-throw-money-at-it). I think that really codifies a lot of my notions about the pragmatism that we need in order to solve this problem. So, the more eyes on that, the better. I still think that Kickstarter is a great opportunity to see in a video what it is that we're talking about. But, other than that climateneutral.org and that'll be an ever changing piece of collateral, that's for sure.

Stephan: Yeah, I'm super excited to see over the next couple of years how many more brands sign on and as they go through the process, how many are able to kind of make that name something that consumers recognize? So, congratulations. It's still super early days, but can't wait to see how it grows from here. Thank you so much, Peter.

Peter: Oh, my pleasure. And thanks for helping get the message out about this. It's, it's super important to us.

You can find this and all future episodes on iTunes, Google Play, and here on the Lumi blog. This episode was edited by Evan Goodchild.

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