19 Apr, 08.11_ (1) (online-audio-converter.com)

Marta Alvarez is the founder of Foxy and she is a guest on the Gaia Entrepreneur Show. Foxy is a platform that helps finance environmental transition projects. Marta talks about her background and how she shifted from being a lawyer to working in digital business before becoming an entrepreneur. She emphasizes the importance of tangible results and collaboration among different stakeholders. Marta also discusses the need for accurate carbon accounting and the potential negative impact of certain decarbonization projects on biodiversity. She believes in finding a balance and taking a holistic approach to environmental challenges. Welcome to the Gaia Entrepreneur Show of Odentia Entrepreneurship Podcast. We are Alejandra Montoya, Annie Matthew, and Nadia Salas, students in the Gaia semester at Odentia. The aim of this show is to offer a better understanding by sharing several testimonies of what a Gaia entrepreneur could be, an entrepreneur who takes environmental and social transitions as a key component of their entrepreneurial opportunities and ventures. Our guest today is Marta Alvarez, founder of Foxy. Welcome to our podcast, Marta. Hello. It's a pleasure to be here. It's a pleasure to be in my team. Good morning. To start off, could you please introduce yourself and provide a brief overview of your background, including what inspired you to found Oxy, and your role within the company? Okay. Yes. So, first of all, I'm often laughing that I'm Polish by design and French by training, because it has been 12 years that I'm in France since I came here. The other reference is that when you ask me about my background, I'm also like a cat, because I have a few lives before, so I'm on my third life, and now I should start paying attention to my future choices, but I initially was a lawyer in international European law, and then I shifted to business, and I was working in digital business for big industries like CMACGM or Airbus in the big transformation digital project. And since over a year ago, I shifted to entrepreneurship, and I launched Oxy. It took me a little bit of time to find the right approach in terms of something that I was considering tangible results, and it was very important for me to avoid another layer of some functional that would be really cool and really tech, but at the same time would not be concrete. So, I launched officially the company in June last year, and I have my co-founder who joined me in January, so I'm super excited to have her on board. So, I don't know if you want for me to continue with Oxy, or should we keep it for... You can continue. Okay. So, what is Oxy? Oxy basically is the platform for co-financing the environmental transition project. So, the purpose is to help the people who have the leverage of natural resources that are being damaged, for them to get financing to restore them. We've all seen the manifestation of farmers across Europe, especially they were very angry against the environmental measures, but I'm profoundly convinced that was not the problem of measures. It was a problem of application and financing. So, basically, the purpose is to allow the companies that are willing to take some kind of engagement in concrete ways for the environment to help transition and transform, for example, the agriculture. So... Okay. Thank you. Moving on, drawing from your experience, what are some practical strategies or frameworks that aspiring entrepreneurs can use to identify specific environmental and social challenges that present impactful entrepreneurial opportunities? Well... Can you do it again? Sorry. Yes. I needed to focus. Sorry. What are some practical strategies or frameworks that aspiring entrepreneurs can use to identify a specific environmental and social challenge? That's a cookie. I think that the practical advice, I think, first of all, try to look for something that like... Again, I think that there are so many entrepreneurs that I meet that are doing great stuff, and I think that everybody has a little bit of a different journey towards this. So, for me, what was most important is, like, how can I put my skills and what I have actually acquired as a skill set, how can I put this at the service of the most rapid results? Because we don't really have much time, and even when I'm saying that, I know it's absurd because it's already too late for a lot of people across the world. So it's quite egoistic point of view, again, that we're talking about for whom it's going to be too late. So for me, the most practical example is, like, really just, like, try to... I think that the key problem here is that a lot of actors are not collaborating together. So orchestrating this and making sure that there is a platform where scientists, when the business people, when the actual people in the field can collaborate together, from my standpoint, this is where we're trying to build Oxy. So I don't know if it's the best way. I'm testing it. So I don't know if I'll fail or if we'll succeed, but, yeah, basically, I think that the most practical rule is just, like, first of all, do what you love because you're going to get stuck with your project for a long time. So doing it for the wrong reasons is going to be a very, very, very long marathon. But, yeah, like, I don't know if I really answered your question. And do you think you've always been on the right track or do you think sometimes you've had to... In Oxy or in my career? With Oxy. Oh, yeah. In all your backgrounds. I think that, like, typically, if I would give a concrete example, it took, I'm pretty sure that we're going to pivot at some point again, but I started initially, if I would explain, like, a bit of a journey of how I got to Oxy, is that, actually, I had a discussion with a friend who was basically, I don't know if... Around the ecological challenges, there is a lot of, I have to say, like, extremism. So a lot of people are just like, yeah, like, you're an asshole because you're taking a plane and sick. But just, like, let's try to find some kind of equilibrium. There are efforts that people are willing to do and there are efforts that people are not ready to do. But the question is that, and I'm really convinced about this, is the awareness of the actual impact. Because when I look at myself, there are so many moments in my life that I took some decisions because I was not aware of environmental consequences of what I was doing. So after this chat that we had, I went back home and I did, like, my carbon footprint analysis on five different tools and I got, like, an extreme different result. I got from 5.6 to 12.8. So I was like, how is it possible that I have, like, almost double the score? So I was like, basically, there was a question, for example, that how much money do I spend on clothing? So basically, I'm not very, I'm a little bit of a fashion victim. I'm joking. But I just don't like buying clothes. So when I do buy them, I try to make them, like, responsible clothing and I take time to choose the right thing. But I buy very rarely. So typically, and I got, like, two tons of CO2 for just the fact that I said I spend, like, 300 euros per year for clothing. But it was not fast fashion. It was, like, three pieces of clothing, which are... So those are the examples of how crazy it was. And I started having a look into this thing, like, this is not possible. Like, we're benchmarking so many decisions in business around carbon emissions, but we don't know, actually, what we're counting. And I had a look into it and, actually, I discovered, like, that was just the tip of an iceberg because precisely today, we're talking a lot about scope one, scope two, scope three. So direct emissions, indirect emissions, and then supply chain. But majority of companies are dependent on supply chain emissions for this famous scope three. But, like, really, this is, like, I'm sorry to say that because people who are going to be listening to it, they might get just, like, freaked out about this. But it's really bullshit. Like, we are counting multiple times. It's not a double counting, but multiple counting of something that the companies didn't want to share. So it's not a really precise data. So very often, it's pictorial average. But I won't get into technicalities of it. But basically, the majority of emissions is not really something that the company can act upon. So I started to – I told myself, like, there are so many smart people in the world. Somebody has thought about it before me, though. I just went through, like, some research work. And I found an article which was published in November 2022 by two professors from Harvard and Oxford University, so Professor Ramana and Professor Kaplan. And they were saying that basically they're financial accountants. And they say we should be counting carbon like we're counting money. So I'm not asking you to know how much do I earn, but I tell you how much do I earn. And then we follow it down. Like, when you buy your product, you know, the price that you're paying is including the production costs, the buyout costs, and the margins. So it's very straightforward. I'm not asking you to guess how much my product should cost. We should apply a similar rule to the carbon accounting. And I've done some pilots with them last year. And I was, like, so obsessed at the beginning. Like, I got through this, and I love data, and I love precise data. So I was like, yeah, this is amazing. We should all be doing that, blah, blah, blah. And there was, like – I discussed with some really super smart people who were telling me that there's so much things in technology that you can use, like the IoT and, like, this direct air capture technology, which is amazing. And I was like, wow. Again, like, human innovation is just crazy. I'm just so excited about this. This is amazing. But the actual, let's say, the other side of the picture is 70% of projects of decarbonation destroys biodiversity. And when I discovered this, I was like, we're so much in the carbon tunnel that we're not thinking straight about what is actually the most important thing that we should, like – what is the big picture here? And this is where we shift from initially, like, solutions, which is, like, really based on carbon with a very precise technology for calculating it into, okay, it's not going to be perfect, but it's going to be, like, at least holistic. And we're going to get to perfection with time by gathering more and more data. So definitely, like, it has been a long answer, I guess. I'm sorry for that. But I just wanted to explain a bit of a journey on how did we get there. Okay. Thank you. Could you elaborate on the concrete steps or initiatives that Oxy has taken to build a responsible organization that supports its entrepreneurial mission, particularly in terms of governance structures, internal policies, or stakeholder engagement practices? That's a very good question. So we have the advantage in comparison to, let's say, historical companies is that we're being designed sustainable by design. So it's – per principle, we know that the – typically, when we're building something, are we gathering the data that we actually need? Do we stock it in the cloud, which are actually environmentally conscious? Are we optimizing our usage of data? Because, again, fun fact, the data will be responsible for 8% of carbon emissions around the world by 2030. So we cannot ignore it because it's invisible. So typically, this is the part that we're taking care of. And from the funny story, it's like we decided with my lead, so my co-founder, which I kiss, we decided that we're going to put – whenever we're making the decisions, we're going to have two chairs. Okay. Except for us. So one chair is for the planet. Are we actually making the right decision for the big picture? And the second one is crazy Bob. So crazy Bob is like an equivalent of Donald Trump, you know, like the guy who doesn't believe in environment or climate change, et cetera. So it's like, are we able to convince that guy? Like, would he – if we would be talking to him, would he understand? So that's the, let's say, our approach in terms of stakeholder engagement. It makes laugh a lot of people when we're saying that. So we have our crazy Bob with us, and we're always trying to think whether he would disagree. And if he does disagree with us, then we're happy with it. It challenges you. Exactly. Okay. And in terms of internal policies and governance structure? So governance is really like – I think that the governance is really like how we do operate. Again, we're a startup, so we don't have a very like kind of stuffy processes. I think that processes are necessary, and I truly do believe in processes. But you should not get overwhelmed with it too early. So we don't have much of a governance organization. I think that we're just aligned on what we're trying to build and how we want to build it. But stakeholder engagement, this is the tricky part because a lot of people – so we also have the three key letters, so the easiness of use, so the facility of user journey on both sides, transparency of information because a lot of people are just like saying that they're doing and they're not showing. So I have a strong conviction whenever I see a project and there are only positive sides. It's like, you're not telling me everything. And the R is for redistribution. And this is where we get a lot of, let's say, difficulties to involve people with us. It's that we want to ensure that 70% of money that is being shipped through our platform goes to the people in the field. Taking the example of Amazonian Forest, which is one of the, let's say, most frequently used as a leverage for nature-based solution around carbon capture. None of the projects that I analyzed out of, like, at least 30 was actually providing any information on how much money goes to the agriculture in Amazonian Forest. So if you're not willing to share, that's probably that you're not doing it right. So if you would be distributing the value in the right way, then you will be proud of it and you'll be happy to do it. So we took this engagement and it discouraged quite a lot of people because now it has become a good business, like the green tech. I was listening to one of the politicians who came recently to La Contine and he was saying, like, oh, when I was graduating from Polytechnique, all of my friends wanted to be traders and brokers and now they all want to build a startup in green tech. It's like, okay, so that's a good thing. Like, really, that's a good thing for the planet, I think. But again, they're not always the people who are being driven by the big picture kind of approach. So I'm not criticizing, I'm just, yeah. I think you answered part of our next question, which is how does Oxy actively engage with its various stakeholders, such as clients, investors, and local communities to ensure that its activities and initiatives are aligned with its core mission and values? And if there have been any specific challenges that Oxy has faced regarding this? Yeah. So I think that the engagement between every stakeholder is very different. And this is related basically to the fact that the awareness of the business is very variable. So there are some companies which are very well aware from a long time of those challenges and they have a level of maturity that allows them to understand the difficulties that we're trying to handle. There is a kind of a wow effect when you're talking to the companies that do not know anything about this. And you're kind of like, oh, this is possible? Like, well, okay, that sounds crazy, but okay, let's go for it. So we're categorizing it by, in French, it's the principle of four Cs, but in English we translate it into pact. So pricing, awareness, costs, and trust. So those are the key challenges that exist within this ecosystem and we're trying to find the responses to each of those. The pricing, typically, we've addressed it by the co-financing because the project of transition, of investment transition, for example, of the agriculture or restoration of the fuel system, it takes a long time and it takes a lot of money. So not a lot of companies can actually engage in a long time in this kind of project. But you do see companies that are doing this, like typically Maif, which is one of the French insurer companies. They spent $3 million last year in restoring environmental ecosystems, natural ecosystems. There is also, we've discussed with them recently, they spent 15% of their profits into social and environmental projects. So there are companies which are investing already. And here is a very interesting debate as well. It's should they invest their profit or should they decide to reduce their profit in order to reduce their impact as well. And here is a great example of a company which is called Mustela. I don't know if you've heard of them. They are producing baby wipes and baby creams. And last year, honestly, I will send you the link because it's amazing and I congratulate the CEO of Mustela because I'm very much impressed with the position that she took. But she was at the media interview and she announced that she refused 20% of the profit because she's going to stop baby wipes by 2025 and baby wipes are responsible for 20% of her profit. And the journalist was like, why are you saying like, are you crazy? Like, how can you announce something like this? And the fact that she said like, I'm very much aligned with my company, with my shareholders. We're all aligned with the fact that it's not sustainable in time for us to destroy something that our clients will need tomorrow. And our clients are babies, basically. So if we destroy the planet for them, then what is the point? Like, we're going to make ourselves money for the next 10 years, but then there's going to be nobody left to buy our product. So if we're, and this is what is funny also around the world, sustainability. In French, there are two words, so durabilité, which is more regarding time, and pérennité, more about the resources. So more from the material, like physical perspective. And in English, it's both packed in the world, sustainability. So you have the notion of sustainability, financially sustainable. So you can, of course, not refuse a part of the profit that is necessary for you to pay your salaries, but you can still be a profitable company and decide that this is not good for my business. I'll find other ways for me to generate profit without destroying natural resources and natural resources. So thumbs up for her. Okay. Moving on, we want to ask about the other competitors in the market. And what specific features or aspects of Oxy's consulting services differentiated from other players in the market? And how does Oxy measure the effectiveness or impact of its solutions in addressing environmental challenges? Again, no question. So first part is like how, so what are the competitors look like? I have this question every single time. And I'm probably very naive, but I consider that there is no competition, because the problem is so huge that honestly any viable solution has its place. For me, like any person who's like trying to build something, but really, really, really carefully thinks about the potential externalities, and I'm not saying this just like to get overwhelmed with all the potential things, because every time like we talk about the risk management during the entrepreneurship, let's say, the problem is like typically Mark Zuckerberg probably would never build Facebook if he knew that it's going to become a tool for bullying at school, right? So you cannot stop and focus like only on negative things. You have to balance them and say like I will manage it once it hits my face. But try to think of a really big potential risk that you're having with precisely, as I mentioned, like the carbon tunnel and the destruction of biodiversity behind it. So those are the externalities that you can think from the start, and there is some kind of compromise probably to be done. And the second part of your question? How does Oxy measure the effectiveness or impact of its solutions in addressing environmental challenges? So we have three elements that we are evaluating every project upon. So it's the carbon absorption, so we're not talking about the reduction. This is very important, because there's so much confusion when we're talking about the carbon credits. You can have carbon credits on reduction and you can have carbon credits on avoidance. This is not the same thing. And when we're talking about the actual absorption of the carbon of the atmosphere, typically I referred to it before, there are some technological solutions around it. But from what I studied, and again I'm really open if there are some new technologies popping up every day, so we're trying to be aware of it, but if you only have 0.04 carbon in the air, imagine the quantity of energy that you have to use to pump it and to be able to capture it from air. So we are putting infrastructure, we're building new kind of factories now, which are circulating on green energy, using a massive amount of this energy, when there is still like 95% of the entire world energy that needs to be transitioned to the green energy. So we're adding on some new infrastructure, which for me personally doesn't make much sense. So I think that for us what was very important from the start to think about the big picture, and we didn't get it right from the start, like we had to understand those challenges, but once we did and we adapted to it, so yeah, I would say. Okay. Moving on, can you provide examples of the key metrics that Oxy uses to measure its own impact? Ah, sorry. And could you highlight one specific instance where you believe Oxy has made a significant positive impact on stakeholders? Yeah, you're right, I didn't answer your question, I'm sorry, I'm just like... So I go through all of the different anecdotes, but just to go back, so the measurements, we do measure this on three key elements. So the first one is carbon, as I mentioned, absorption, it's a biodiversity, and it's a social impact. So each project, depending on what the company is looking for, because there are some companies that already have their social projects, so they're more interested in biodiversity protection, and there are some companies which basically are looking to have some kind of a good level of helping on all of those three layers. The most tricky one is the biodiversity, because the KPI doesn't exist yet, but now you have a regulation which is coming, which is called Corporate Sustainability Directive Reporting, so CSRD, Reporting Directive, sorry. And CSRD is basically, again, it's an elephant that is coming in the shadows, so like nobody is really aware that it's like, people heard of it, but they don't know how to handle this, so it's really freaking out a lot of companies, because for now, the extra financial reporting was obligatory for big corporates that had like people taking care of it, and still the reality was just basically consulting companies that are coming in and taking some bits and pieces of data and trying to figure something out. But the fact that it's going to go down now, and there's going to be so many more companies involved directly, and so many more impacted indirectly, this is going to be a real challenge for a lot of companies. But challenge, in Chinese, the word crisis is built from two characters, so one represents opportunity and one represents risk. So if you are in the face of a crisis, it's up to you to decide if it's going to become a risk or if it's going to become an opportunity. And I'm strongly convinced that a lot of companies now can actually use this kind of challenging situation of the obligatory of the reporting, even though I do not consider this is the best layer, but this is the stick that works. So for those ones who are not interested in the character, they can take the stick. And here, typically, more and more companies are being aware of it and saying like, okay, so if I have to take some kind of engagement, how can I translate it into my business pilot? So that's really cool. And the second part, so the first one is about the measurements, and the second one was? An example where you believe Oxy has made a significant positive impact on its stakeholders. So positive impact on stakeholders, I think that every time we're talking to somebody and I have this kind of feeling like that the person starts questioning itself, even if it's not going through Oxy solution, for me, it's like I'm already super happy. Like I had recently a discussion also around the access on information, and I think that there's still profoundly naive and profoundly optimistic, and I think that humans are profoundly good. So if we made them assholes, it's probably there has been some reason for it. And if we're telling people for as long as the business has existed, this is also not true. It's actually started in the 18th, 19th century to speak exclusively about the profit, but before the company had actually some kind of social responsibility, and it has been very, I don't want to be offensive, but very kind of American way of thinking that more money you have, better you're in business. But actually being able to distinct what is the profitability of the company in terms of its social impact, in terms of making sure that their employees are happy, in terms of making sure that the environment is not being destroyed, that there is some kind of share redistribution of value. Those for me are the companies to follow. So if I manage to have a discussion with somebody and they feel like, okay, I want to give it a try. Again, I'm doing a lot of even consulting to the companies that just want to discuss this, because for me, our solution is one of the solutions. But if somebody has some other journey towards it, it's already asking yourself the right questions. It's super cool. So go for it, guys. Okay, our next question, you already answered a bit. It has to do with the regulation. My answers are too long, so I'm just covering it all. It has to do with the regulations that are impacting Oxy directly nowadays within Europe. But we want to know what challenges it has presented for Oxy and what strategies you're using to navigate them. Okay, so first of all, the challenges I would say, again, I consider this more as an opportunity, because there has been a lot of regulation in Europe going in that direction. The notion of green deal that you've probably heard of is very encouraging. I've been also working at the European Commission in the committee around carbon credit policies, how it should look like. And I think that, again, the regulation today is a stick for a lot of people, and as well, again, they just added some new obligations, et cetera, et cetera. And it has been true for a very long time. And precisely as long as we do not fix the issue with the scope 3, asking companies to report on something, it's going to be asking them to waste a lot of money on something that they cannot do anything with. So now there are some kind of efforts to ensure the data transparency, that if you do your carbon footprint information, that you should disclose it. And this will allow other companies not to use the average, sectoral average, but to actually use your company. And, therefore, if you're not willing to make more of an effort on your environmental impact, then you can switch to some other suppliers. I had a lot of discussion, and especially I think about one of the pilots that we've been doing for the last year. They had the Pareto, which was basically only five companies, which was responsible for 80% of their environmental impact from their supply chain. One of them was Total, of course. And they contacted, again, with professors and all of the kind of scientific, you know, oh, let's give it a try. Maybe if it's for the science or for the research, they'll be willing to collaborate. And, unfortunately, the feedback was like, guys, we won't disclose because we won't disclose. Use the average. And, again, this is very frustrating. So I think that as long as the companies are not being forced into transparency, they won't be transparent, or very few of them will. And this will keep on maintaining the frustration of the good players. So I think that today this is the biggest problem, is that companies that actually are playing the right game are being penalized because they have lower results than the ones who are cheating. So we need to change the way that the system operates. And this, for me, it's a real challenge for the company. So how to get this thing between the ones who are greenwashing and the ones who are actually doing the right thing. Okay. Thank you. And moving on to the last question, it has to do with profit. Managing both sustainability goals and financial liability can be challenging. Are there any specific strategies or approaches that Oxy has implemented to ensure the economic sustainability of the venture while fulfilling its environmental and social mission? That's a very good question, because this is something that there is kind of an ambiance when you're working in the environment, you should not be paid for it, because you're doing it for the planet. And I think that this is crazy, because, again, I'm not talking about excessive profit. I'm just talking about the fact that the company, for it to be sustainable, it needs to be profitable. And this is something that we've also aligned with Manish, that we're not going for VC funding, even though we have received proposals for it. It's that we're trying to be bootstrapped as much as we can. Do you know the notion of bootstrapping? Bootstrapping means auto-financing, so that you're going for state subventions, you're going for public funding, but you're not giving a part of your shares for the investors. So we're trying to be bootstrapped. We're also doing some consulting on the side also to finance what we're trying to do. But there are multiple reasons for it, and one of this is precisely the fact that, at some point, the vision that you're trying to build and how you want to build it forces you to be profitable as quickly as you can. And if you're burning somebody else's money, all this takes a little bit more time. So, yeah, there is a lot of, let's say, a notion of frugality, I think, is very important for startups today. And we've been talking about the fact that, yeah, it's getting more and more difficult to obtain the VC funding, but not for a project like ours. So really, the green tech is, again, the one that is still quite protected from this freeze of funding. But for me, any startup that is launching itself today, it doesn't think about the impact either social or environmental. It's not doing it right. You have a chance to start business differently. But without being naive, I think that I've been consulting for a long time to different companies on how to find the right business model. So we are trying a business model now, and we will see if it works. So business model is never finished. It's a moving thing, depending on the advancement of your company and where you are and what is your client base, et cetera, et cetera. So we're starting with one approach. We'll see how it goes. But for me, it's definitely the case. If we're not profitable in the next, I don't know, two, three years, then it means that we didn't get the right approach somewhere. So, yeah, we'll see how it goes. Okay. Thank you, Marta, for participating in our show and for having us here in La Cantina Amérique. Perfect pronunciation. Our podcasts are available on podcast-entrepreneurial.avancia.com and on the main podcast platform. Perfect. I need a link. Brilliant. Thank you so much. Thank you. Thank you so much. Was I talking too much?