How We Can Fight Climate Change By Using AI
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I'm Amy Farley, and this is Most Innovative Companies, where we're talking to business leaders about how they've found creative ways to confront some of today's biggest challenges and point the way forward for both their industries and society at large. Today, I want to talk about AI. Once the villain of sci-fi thrillers, AI is one of the most crucial and misunderstood sectors that we cover here at Fast Company. The truth is, AI in some form or another is not the only thing that we can do.

underpins the operations of just about every company these days, from powering self-driving technologies in our cars to serving up product recommendations when we're shopping online. And though we're increasingly aware of how algorithms can perpetuate and amplify inequities, AI is also being used by companies to solve some of the world's most pressing problems, increasing crop yields, fighting disinformation, and helping us track and control a global pandemic.

I'm featuring one such company today, Pachama, an MIC honoree that's taking on climate change with the help of some advanced AI and data science. I'll be speaking with co-founder and CEO Diego Saez-Gil about how Pachama is revolutionizing the fight against global warming. But before we focus on Pachama, let's take a look at the larger context of AI and data science as it stands today.

Fast Co-Works contributor Ted Brown spoke with Ryan McCormick, who is an equity product strategist at Invesco QQQ, to get his take on that ever-evolving world in a special custom segment called Inside the Industry. I'm Ted Brown. My guest on this series is Ryan McCormick.

Ryan, thanks so much for joining us. It's great to be here. Thanks, Ted. All right. So, Ryan, do you expect any seismic shifts in the sector in the next 12 months? Which one of these developments that's coming over the next year are you really excited about? Well, I mean, I think when you're looking at the world of AI, there are so many potential developments or shifts. I mean, the landscape there is ever-changing. But I think one of the more immediate opportunities is the prevalence of AI-enabled smartphones using AI chips. And

It goes beyond just your voice recognition, the image recognition. I mean, you're seeing significant increase in command speed really being processed at the device level rather than in the cloud.

So what you see there is just a faster phones, less drain on the battery, and it's more efficient representing, and frankly, it can represent greater privacy. Your phone is going to be the one that essentially creates a picture of the user, the user's likes, their dislikes, their interests, their tendencies, rather than personal information being kind of shuttled back and forth to the cloud. Well, I was going to ask because the

Phones are such a vital part of how we live our day-to-day life. You can do everything from make a dinner reservation to buy stocks now. Do you think given all these advances in technology on our handheld devices, do you think that's going to spill over into the wider economy? Do you think there's going to be other sectors that would be touched by that, other economies?

parts of the economy that will be touched by that? Well, I mean, I think immediately as it relates to the smartphones, right, you can see probably some pretty dynamic shifts happening in the world of marketing, right? Definitely dynamic shifts in the world of advertising. But beyond that, I think when we look at sort of the spillover from AI in general, it's just different types of jobs being created. Different segments of the economy, kind of new arenas of growth, I think represent

you know, really significant opportunity for the workforce broadly. Not just from necessarily AI enabled chips within smartphones, but you know, I think there is some immediate impact as well as sort of broader implications of that. And I wanted to ask about AI specifically, because for a lot of people, it has this sort of sci-fi connotation to it that AI is going to change all these things magically, and it's going to be in the background of everything and sort of transform our world into, you know, this sort of sci-fi utopia. But

What's the biggest misconception about what AI actually does? And is there anything that you'd like to dispel right now about what AI can do or can't do? Well, I think kind of the dystopian narrative is a good one, right? I mean, I think that's always been kind of the knock on technology. But I think when you're looking at AI on the whole, probably the biggest misconception is that it's a job destroyer.

I think when you look at statistics from the World Economic Forum, they're anticipating 85 million jobs being displaced by AI by 2025. But in that same timeframe, they're expecting 97 million jobs to be created. So it isn't this thing that's looking to kill jobs and put everything automated and allow the efficiency and ease and ability to make money to only rise to the top. I think

there is real opportunity for new jobs and with that comes the need for upskilling. I want to change gears just slightly here because I know that AI and data science, they aren't the same thing, but they rhyme with each other, right? And we're talking about sort of what this upskilled world looks like and how we can leverage AI and data science to unearth new advances in technology, unleash business opportunities, things like that.

What industries are really under utilizing data science? Are there any sectors that would benefit from a renewed focus on data science, data analysis, data generally? I think when we're looking at data science across the landscape, pretty much all sectors are using it in some way, shape or form. It's a huge part of the healthcare system, right? And we've seen the continued adoption, whether it be digitization of records, as well as as it directly pertains to medical research.

You know, you look at energy and utilities, they're relying on AI to monitor, you know, their infrastructure, their uses from an industrial standpoint, very well documented, whether it be automation on assembly lines, et cetera. But I think you'll probably just continue to see these types of sectors and companies adopt this. Now, Ryan, I want you to look a little bit into the future and get the crystal ball out a little bit and think about what we're doing right now that you think will change significantly because of either data science or advances in AI.

If you look at the past three years of the opportunities, again, the runway here is really long. We should see fully autonomous vehicles here in the next couple of years. Beyond that, autonomous trucking. There's no need for sleep. There's no need for bathroom breaks. We're living in this world of supply chain disruption right now. I think moving towards that autonomous trucking can certainly help mitigate some of those issues that we're currently seeing day to day.

But it goes beyond just the cars. I mean, there's traffic mitigation, right? The predictive capabilities of AI helping to kind of ease the stress, particularly when you look at sort of major cities, not only domestically, but globally. You know, electronic police detecting traffic violations. Even beyond that, you have systems that can identify, you know, people that are potentially texting or drivers that are under the influence. I mean, this is an arena to make roadways significantly safer. Now, what about looking backwards a little bit?

I'm curious, as you've obviously seen a lot of these sectors grow over the last few years, you see them transform and the transformative impacts of things like AI and data science. What's really changed over the last few years in your experience, in your view? Well, you know, I think last year is probably a perfect example, right? When you look at some of the COVID implications, you look at companies kind of conversing with potential customers, whether it be chatbots or web chats.

right, in arenas where, you know, that didn't exist previously, or at least the offerings were not as robust. I mean, it really helped a lot of these business help to mitigate some of their customer pushback or questions that surrounded the events of the past year. So companies were really able to lean on the capabilities of AI and kind of big data analysis to not only weather the storm, but really kind of change the way that their business operates functionally.

Ryan, thanks so much for the time and for being here. Really enjoyed the conversation. Thanks so much, Ted. It was great. Inside the Industry is produced by Fasco Works in partnership with Invesco QQQ. I'm Ted Brown. And now, back to Most Innovative Companies. And we're back with Most Innovative Companies. Forestry preservation and restoration projects can play a major role in fighting climate change.

And companies that are looking to reduce their carbon footprints and achieve net zero are increasingly willing to fund these efforts through the purchase of carbon offsets. But tracking the effectiveness of these forestry projects can be a challenge. It's traditionally been a labor-intensive manual process without a lot of transparency. The year-old startup Pachama is changing all that using cutting-edge technology, including satellite images and AI, to measure changes to forest cover around the globe and to ensure the quality of the carbon credits sold on its platform.

Thank you so much, Amy, for having us. So Diego,

So Fast Company recognized Pachama on our list of the most innovative companies of 2021, because within just a year of launching, your company is already playing an enormous role in shaping an emerging market. By some estimates, the market for carbon offsets could be worth $100 billion by the end of the decade. That's up from $300 million in 2018. Can you explain where Pachama fits into this market? Yes, absolutely. As

You very well said nature is a key solution to climate change and companies that are committing to reach net zero are looking to invest in projects that either remove emissions by growing forest or avoid emissions by conserving forest.

But historically, it was very difficult to trust. You had to send money to another country. There was not an easy way to monitor and verify that those forests were effectively sequestering the carbon that you were paying for.

So our role is two hands. In one hand, we connect the companies with projects from around the world who are doing reforestation and conservation, but also we validate and monitor the claims of these projects using satellite images and AI.

And our innovation is that we combine a lot of different remote sensing data sources, including high definition satellite images, historical satellite data, LiDAR data. And then we train algorithms with that data and with ground truth coming from the sites, coming from the forest.

that then allow us to predict how much carbon has been sequestered and then monitor the ongoing progress of these projects in real time. So when you started Pachama, traditionally companies were doing just this process of validating the sequestration abilities of different projects. That was all manual. Nobody had thought to bring in the satellite images and start looking at it from that perspective?

So there are registries and certification bodies that have been around for a long time, validating the accuracy of these projects. But generally, the methodologies entailed sending people to the forest to take sample plots and in those sample plots count every tree and measure every tree with tapes. And that was a very labor intensive work that is difficult to scale, that is prone to error, and that is expensive to do.

So these technologies were not applied before because they weren't ready. Only a few years ago, these different technologies converge. Now we have private companies launching nano satellites to space and making that data available for other companies to consume.

We made tremendous progress on the field of artificial intelligence and deep learning in particular. And we have cloud computing that allow us to process terabytes of data. Even for a small startup like us, we can process enormous amount of data and train those algorithms.

So all these technologies only converged a few years ago. What we saw is that these technologies were being applied on other things such as mining or defense and not in forest carbon. So our role is to accelerate the adoption of these technologies so that this market can become more effective and scale faster.

To dive further into the AI aspect, the way you use AI, because we did put you on the list of the most innovative AI companies of 2021. Is that you're creating predictive models based on the canopy cover, size of trees, age of trees to start making models for different projects around the globe? Exactly. So the way that it works is we train algorithms to

correlate features of a satellite images, such as the greenness of the trees that the algorithm is observing on those images with the height of those trees, which it takes from LIDAR captures. LIDARs are laser beams that get shoot from an airplane or a satellite, like NASA has a laser LIDAR device that then allows us to know the height of the trees.

And then the algorithm correlates that also with carbon measurements on the field that are made by foresters that go and measure every tree. So with enough data, then the algorithms learn to the next time that it sees a certain greenness in a certain type of forest, it can predict how much carbon is being sequestered there.

It's actually similar to the way that Google and Facebook and Apple know that our face is asked. That same way we can know how much carbon is there in a forest provided that we have trained with enough data about that biome. - So are there additional technologies that you're piloting or exploring that could also aid in these efforts? - Yes.

We are experimenting with drone data. Drones have advanced a lot. And today you can attach a LiDAR to a drone and fly a drone above a forest and collect LiDAR data more affordably. And frankly, the internet, cloud computing, and the ability to

collect data in real time from a lot of different sources. You can imagine sensors on the ground to inform you about a lot of different things. An objective of the field is being able to determine what is the level of biodiversity concentration on a given forest. Because a forest is not just carbon sequester there, but it's also an ecosystem with different species and we want to increase the biodiversity of those forests.

So yes, we have a team of engineers, scientists, and innovators that are looking at new ideas all the time and seeing how we can continue expanding our innovations. There are a lot of conversations these days about how big tech has a lock on AI talent. I'd love to know if you find it difficult, especially as a mission-driven company, to recruit the right engineers for Pachama. Yes, I mean, definitely it's hard to hire great engineers, but we had the benefit of these very important missions.

And we are very explicit with our mission is to restore nature, to solve climate change. And there is a lot of young engineers who want to work on climate. So we were able to hire people coming from Google, OpenAI, Microsoft, some of the best technology companies in the world.

it's really encouraging to see more and more young talent that want to work on climate. - It also helps that people's dissatisfaction with big tech is increasing, I assume. - Yes, I mean, definitely some of these big tech companies are also working on climate solutions and there is opportunities for people

to go work there on climate solutions. But we have the benefit of hyper-focus on this mission, right? So I think that is also what attracts some of the talent. So I want to take a moment to explore your personal journey to Pachama because before you started it in 2015, you founded the smart luggage company, BlueSmart.

which pioneered the idea of embedding tracking devices in suitcases, which sounds ingenious. But how do you go from luggage to forest preservation? I mean, I would say that I always was an ecologist and was in love with nature. But in a way, I didn't think that I could make a difference on climate. Climate seems such a big factor

thing that governments needed to solve, right? So instead, more humbly as an entrepreneur, I decided to focus on something else like travel, right? But then I actually doing that experience of building an innovative technology for suitcases and travel, I realized that it's really hard to do any type of innovation and that the same tools and techniques to bring technologies to market

in something such as creating a luggage could be applied to protecting nature and solving climate change. So that experience taught me the power of an idea, the power of bringing smart people together. And then at some point I just made a decision to make the jump and dedicate my life to this. I wasn't sure whether I was going to be able to raise capital and whether this was going to get support.

but I just found it so important to work on solving climate change that I just made the jump. But BlueSmart did encounter some problems, right? The lithium ion battery problem. Can you talk about that and what you might have learned from that experience that has helped you with Pachama? You know, what we wanted to solve is that 25 million suitcases get lost every year and the airlines don't know where they go, right? So what we created was a tracker that was embedded into the suitcase that allow you to

know where the suitcase was at all times. But in order to do that, we needed to power that device with a lithium ion battery. And then one day what happened is that some Samsung phones were defectuous and they were getting on fire on airplanes and airlines decided to ban from one day to another all lithium ion battery products on their airplanes. So from one day to another, our products couldn't be sold. That was of course a big black swan event for a startup.

We were able to sell the company to a big, lavish company because of the patents and the team and the innovations that we had. But that unfortunately forced us to close down the company. And then, yes, after that, I took a sabbatical and I took some time to reflect and then came up with this new idea for Pachama. So what did you learn about sort of being...

I guess the first with a new idea from BlueSmart that doesn't always pay to be first. Well, yes. I mean, I guess I learned that in certain things it's important to move fast and in other things it's important to move slow. And it's always important to have a long-term view. I think that it is important to move fast on experimentation and it's important to move fast on learning from customers and the market. But it's also important to move slow on things that can have policy implications.

And it's important to sequence your steps very thoughtfully and to think long term. So probably in my previous company, I wasn't thinking so long term. And right now we are trying to move fast every day, experimenting and learning, but also move slow on things that have policy implications and really make long term decisions, even if that means moving slower in certain things.

And the climate crisis is also very personal for you, right? I mean, I imagine you're from Argentina originally, and a lot of your forestry projects are in South America. But also, did you not recently lose your home to a wildfire? That's right. Yeah, yeah, yeah, yeah.

In a very ironic turn of events, I had decided to move to the forest because I wanted to be close to what I wanted to protect. So I moved to a house in the Santa Cruz Mountains in California. And last year on the fire season, all this region got on very strong fires and my house burned down to ashes.

Unfortunately, I wasn't there. I was camping that weekend. So when I came back home, everything was gone. And of course, it was really hard, but it was also doubled down my intention to dedicate my life to work on the climate crisis and to remind myself and others around me that climate change is not something in the future. It's actually happening right now.

We're going to have fire seasons more and more often. And right now, you know, probably the next fire season is coming to California. So it was just a very, very personal touch that I had to leave probably in order to build this company with empathy. So back to how Pachama works and sort of the forestry offsets market, there are

some concerns around the effectiveness and the transparency of forestry offsets. There have been prominent reports over the past year of carbon offsets being sold to protect land that actually isn't threatened or that some projects overestimate how much carbon they're sequestering.

As the CEO of Pachama, how do you address this skepticism and what larger changes need to happen industry-wide to bring more trustworthiness to it? Yes, those reports point to real issues on this market. And precisely what we are building aims to address those issues and to prevent

errors of the past. I think that in some cases, it was just lack of data that led some projects to get over-credited. You know, without the technologies that we count with today, it was difficult really to make an estimation of what was going to happen

a certain region. But today we can. Today we can look at the satellite data of a region and see what is the risk of deforestation. We can see what is a business as usual practice of logging on a certain area, and we can estimate with high degrees of accuracy how much carbon is there, and we can monitor the permanence of those efforts.

So it is very important not to throw the baby with the bathwater, right? It is important to understand the issues of the past, but then it's important to continue to invest in this world, ensuring integrity, transparency, and accountability, because we need nature. And if we don't fund the conservation and restoration of nature, it's going to be way, way harder to mitigate climate change. So we need a new generation of forest carbon.

And that is happening. We are just one of many organizations that are working on the future of nature-based solutions. The problems of the past that you're talking about, are those the result of good intentions, bad execution, or are there actually bad actors in this space? I think probably there were a few bad actors that took advantage of certain loopholes on the system, but that is a very small minority. Other problems were mostly good actors with good intentions that just lacked

the data or misunderstood protocols. And then I do want to point out that there is a vast majority of projects that did very conservative assumptions and did a great job at conserving and restoring forests. So yeah, I mean, there is a few bad apples, but we don't have to throw everything because of these few problems. Do offsets need to be more expensive? Are they too affordable by and large and not

valued as much as they should be. Yes, I think that's another failure of the market that we are hoping to help fix, which is that in many cases, the price of the carbon credits didn't cover the efforts that were needed to effectively restore or conserve a forest. And in many cases, because of lack of transparency on the marketplace, project developers couldn't get the right price for the project. So fortunately, prices are going up. The

market is starting to pay the true cost of carbon sequestration. We still have a long way to go and it's expected that prices will continue to rise. And yeah, we hope that the cheap, unreliable carbon credits of the past will go off the market and new investments will go to highly reliable, highly transparent

projects that are more expensive, but are causing an effective impact on removing CO2 from the atmosphere. And how do you respond to critics who sort of critique corporate offsetting efforts altogether? They see it as greenwashing as a way for companies to not actually address their carbon footprint, but just purchase their way to a lower one. Do you think that's an accurate critique to any degree? No, I don't. I think that we should applaud

the companies that are voluntarily deciding to invest millions and sometimes tens of millions of dollars into nature conservation and restoration. What is a legitimate criticism is that it could be the case that some companies, especially energy companies, for example, who have a very big footprint, just make publicity with investing in a few tree planting initiatives and don't do the hard work of transforming their businesses to move away from fossil fuels

to invest in renewable energies and to invest in a new economy that is zero carbon. Right. So that criticism is valid, but again,

Again, another instance of let's not throw the baby with the bathwater, right? We do need to applaud that the companies are doing a good job and we do need to support their efforts and we don't have to write everything off as screenwashing. Corporations play an essential role. They are incredibly influential players in the market. Many cases, corporations play

are more influential than countries, right? Microsoft, Apple, Google, Amazon and Facebook can probably invest more than Uruguay, Bolivia, Zambia and Zimbabwe together, right? So we have to encourage them to invest in protecting and conserving nature. They're key players and we welcome them.

What happens when a company reaches out to Pachama about purchasing offsets? I mean, are there moments, do they need to be a certain step on their journey to reducing their footprint to sort of start with offsets? I mean, you don't start there, right? That's further down the path. We welcome conversations with companies at any stage of their journey. But if we see that they are very early in that, for example, they haven't even made a measurement of their own carbon emissions, we guide them through

that. And sometimes we connect them with consulting firms or with other technology firms that specialize on carbon accounting so that they understand their footprint. If they want to make a voluntary investment on nature, not as a part of a climate claim, but as part of a corporate responsibility initiative, by all means, they can invest in reforestation and conservation at any times. But if they are going to do a carbon neutrality claim or a net zero claim, then yes, they have to go through

several steps before being ready to purchase carbon credits and make those claims. And as I said, we're also advising freely to these companies so that they can accelerate their journey towards net zero. So as a mission-based company and as a company whose mission attracts tech talent away from big tech,

Are there corporations that you simply wouldn't work with? If big oil did approach you, would you say yes? Would you let them onto the platform or is that a no-go? I think we don't work with any big oil company yet today, but I do think that we shouldn't ostracize and make big oil companies the enemy. If we do that, they're going to corner and they're going to

continue on their business as usual. Resist, persist, someone said, right? So I think we have to make them be part of the solution. We have to allow them to invest in nature restoration, but always keep them accountable that the true work that they need to do is to decarbonize. So I don't rule out us working with oil companies. There's definitely a limit to who

work with, right? There are companies that are unethical or illegal businesses. Yes, absolutely. We wouldn't work with them, right? But again, oil companies, you know, we are the customers of oil companies. You know, if we took a flight ever, if we ever rode a gas car,

We are customers of oil companies, right? So we have to be very honest with ourselves that oil companies are essential parts of the economy until today. And now we need to help them reconvert themselves into nature positive companies, into planet positive companies. I mean, I hear that Exxon may be changing its tune in the coming months.

Exactly. Yes, there's a lot going on actually on oil companies, you know, with Exxon and BP making huge efforts to reduce their emissions significantly to achieve the Paris goals. So what are Pachama's priorities for the next 12 months, say? Are you focused on moving into new kinds of forestry projects or new regions around the globe or growing demand for these projects? I'm assuming it's both, but maybe...

We are putting a lot of effort into helping originate new forest carbon projects and with a focus on reforestation, which is a lot harder to do than conservation, but also including conservation. So we're working on identifying new potential projects that can use remote sensing data

We're working on streamlining the process of certification and issuance of carbon credits. We're working on increasing the financing to get these projects off the ground before they can sell carbon credits. And all that, we are making it with software technologies on the backbone so that this can be scalable and not one-off efforts, but things that can then start in a country and then be replicated in many, many countries. Have you originated projects before or would that be a new thing? It will be a new thing.

We announced that we partner with Mercado Libre, which is the largest technology company in Latin America, to sponsor a first project origination in Brazil, in the Atlantic Forest of Brazil. That's going to be planting millions of trees and rebuilding couriers for wildlife. We're very excited about that project. That's the first time that we get involved into an origination situation. The other projects that we have in the platform started before Pachama existed, and we just produce data

reports based on remote sensing, and we represent them on the market, but we also continue to monitor them. So presumably this means that you'll be building out models that will be able to make predictions for a totally new kind of forestry project, one that's starting from the ground up. Yes, exactly. And that means collecting more data, developing new models. We're very excited, for example, about mangrove forest coastal ecosystems, as they call them, blue carbon projects.

that entails new data types and new capabilities on our team. So I assume you have to be a climate change optimist to start a company like this. But I wonder sort of more specifically, are you confident that companies that are now pledging net zero by 2040 and 2050 can get there legitimately at the pace that they're moving now? Or are there things that keep you up at night about these promises?

- You know, sometimes I'm a pessimist, sometimes I'm an optimist, but I decide to choose to be an optimist. But I do believe that organizations can transform very quickly. We saw it with COVID, right? Companies from one day to another had to move from an office to remote.

had to reinvent their businesses. I think if there is will at the board, at the management team on these companies, change can happen fast. Investments can be made fast. And I'm very optimistic about the companies that I do see making big pledges such as Amazon and Microsoft and Apple. Those companies are actually, when they say they're going to do something, they do it. So I'm

I think that now it's about the rest of the economy following suit and starting to make serious investments on net zero goals. Great. Well, Diego, thank you so much for sharing your insights into how Pachama works, but also into how this very important market works, which will be essential in the fight against climate change. Thank you so much for the award and big, big fan of Fast Company. So keep it up.

Well, that was a really interesting look inside Pachama and the way that it's using technology to bring more transparency to forestry offsets. But I especially appreciated Diego's candor in talking about some of the more difficult issues that are facing this industry and this market. It's been growing really quickly. Lots of companies are rushing to buy forestry offsets. And as a result, we're starting to see some of the challenges emerging. And it's obvious that Pachama is keeping those in its sights.

That's it for this episode of Most Innovative Companies. Subscribe on iTunes, Spotify, or wherever you get your podcasts. If you like the show, please leave us a rating or a review. I'm Amy Farley. Our producer is Avery Miles.