PURPOSE, INC.

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S2 Ep13 Talking carbon-negative solutions from algae with Elliot Roth of Spira and Balaji Ganapathy of TCS

Transcript

Michael Young:

Welcome to the Purpose, Inc., the podcast where we discuss corporate purpose and stakeholder capitalism. I'm your host, Michael Young.

My guests today are Balaji Ganapathy, the Chief Social Responsibility Officer at TCS, the big IT consulting firm and a longtime friend of the podcast. Welcome back. Welcome and welcome back, Balaji.

Balaji Ganapathy:

Thanks, Michael. It's a pleasure to be here again.

Michael Young:

Excellent. And our other guest, Elliot Roth, the founder of Spira, a startup that creates industrial chemicals using carbon negative genetically engineered algae. Hope I got that out right. Elliot, welcome to the Purpose Inc Podcast.

Elliot Roth:

Thank you so much. It's great to be here.

Michael Young:

Fantastic. So lots to talk about. And Balaji, I thought we'd lead off with you, and if you could, give us a rundown on this year's Pitch for Purpose. This is the second time we've hosted the winner of this competition. So just run us through this year and maybe anything else you're up to. I know it's a huge topic but anything else you're doing in sustainability and social responsibility at TCS. Would love to hear it.

Balaji Ganapathy:

Thanks, Michael. It's a pleasure to be here again, and I think today is about celebrating Elliot and all of the incredible social entrepreneurs who are fighting the good fight and helping us advance our mission as society to make the world a better place. It's really gratifying to see the kind of response that we had for the Pitch for Purpose competition this year. I mean in context, the reason why TCS started this competition as part of a Digital Empowers program is exactly the outcome that we are seeing today, which is to give entrepreneurs especially social entrepreneurs who are really driven and close to the ground an opportunity to highlight the kind of innovative solutions that they're creating using technology and the impact that it can create in accelerating the goals that we have as communities, as companies, as countries to a more equitable future, right? And this is important for TCS because our mission is to create greater access, equity, and inclusion in society by connecting people to opportunities in the digital economy. And we're doing that on the business front by working with customers. We're doing that on the talent front with over half a million people working for us globally.

And on the community front, it's the same kind of approach where those who are closest to the problem, those who are closest to the ground almost always have better answers, better solutions than we can parachute in with, right? And I think the three main areas that Digital Empowers has always stay true to is to raise awareness of digital technologies and social issues, explore the art of what is possible and leading edge, and foster cross-sector partnerships that accelerate innovation for both social impact and business good. And I think Pitch for Purpose from last year to this year, the big change has been the kind of uptick that we have seen in people applying to this competition. We had over 200 organizations, social entrepreneurs, and startups that applied this year, and I think it is very gratifying to see that kind of a response. Because each of them represent organizations, individuals that are driving solutions on the ground, especially in a post-COVID environment. If you look at what small businesses have done for America, I believe that social entrepreneurs and social enterprises can do the same for America and the world in the future, right? They're as significant a part of our economy as small businesses are. And so we're very happy to see the diversity of applications that came in, and I think all the way from carbon and climate to using less textile so that you're reducing your consumption footprint to creating algorithm-based services that can improve public services and advisory for where equity can be created through use of public funds and use of budgets that organizations are allocating towards that. I mean the kind of diversity has been incredible. We had a lot of assistive technology related social entrepreneurs also who were part of the finalists, and it's really heartwarming to see the kind of ideas that they have. So kudos to Elliot and his innovation, Spira’s innovation because this was a tough competition, and we had really good industry experts, CIOs, and contributors from leading media outlets who are part of the judging panel. It was not easy given the level of competition out there. So kudos to Elliot and all of the finalists for this year's Pitch for Purpose.

Elliot Roth:

Yeah, it was fantastic seeing all the different competitors. And really I think that it should be said again that the quality and caliber of the people that were involved, I was absolutely blown away. And so it's an honor to be among even the finalists, let alone be chosen. So thank you everybody for helping kind of bring us to this point. I have a lot kind of to give back to both my team and the other finalists.

Michael Young:

And Elliot, you're getting after a big problem, and it's a big idea that you're addressing. And I wonder if you could just unpack what it is that the company is setting out to do in using algae across a number of different categories and industries and just run it down for us if you would please.

Elliot Roth:

Yeah. I don't know if anybody noticed lately, but the world's kind of on fire and there's a lot that has been going on recently that has been getting worse. We have bush fires in Australia and drought in the United States and really all over the world. And what seems to be the big biggest challenge facing humanity right now is climate change and all of the inequalities and challenges and problems that are associated with a changing climate and a warming Earth. And the main culprit of all of that has been CO2, and the carbon emissions coming from human activities. And so when you look at the global supply chain, one of the fundamental challenges and problems that we have with the supply chain is that the basic raw materials that we're using, no matter what we do, are emitting CO2. Whenever we use the kind of products that we consume in the supermarket or the clothes we wear, any of that, it is producing CO2. And so Spira started with this fundamental idea of how do you get as close to energy conversion from the sun as possible and sucking up CO2 while you do it by using this incredible organism known as algae and replacing the raw material feedstocks, raw materials that we use in our day-to-day lives? And we're starting with pigments.

Michael Young:

Pigments for food? What applications?

Elliot Roth:

Yeah, yeah. So one of the main concepts is that artificial colors right now are made with leftover oil gunk. And so any of the foods we eat or clothes we wear, like cosmetics that you put on your face, all of that uses petrochemical-based pigments, and these pigments are pervasive all over the place. And so anytime you're walking around after it rains and you see that rainbow shimmer on top of the asphalt or an iridescent shine in gasoline, those are the artificial colors you end up consuming in beverage products or food products. And so really the first focus, and kind of our beachhead market that we started working on, is replacing artificial dyes and colors using this carbon negative algae. And so we're starting off by swapping out all of these artificial dyes in consumer food products and then moving on from there, going from pigments to proteins, replacing animal proteins, plastics, and starting to phase out all kinds of petrochemical-based plastics, and then finally moving on to higher value products like pharmaceuticals.

Michael Young:

Fantastic.

Balaji Ganapathy:

And Michael, this is so important because I want to contextualize this in the context of COP 26 and everything that's happening around climate change and pledges to support that. Because organizations, small, large, and medium, are coming out with goals to say this is what we want to do to be carbon neutral and this is what we want to do to be net zero. It's important to realize that within the scope 1, scope 2, scope 3 emissions that they're trying to control, a lot of it is about carbon offsetting versus decarbonization. And this is going to be an important topic in future years because right now we are seeing this wave of organizations starting to look at how to offset the impact that their production is creating, their manufacturing, their services are creating. But soon enough, you're going to move into an era where decarbonization and carbon capture is going to be the prominent area to look at and focus on. Because if you don't produce carbon, you don't need to then offset or neutralize it by other accounts. So I think the relevance of innovations like what Elliot and Spira have come out with is definitely a timely and I would say a little ahead of its time. So kudos to them for thinking about this because this can have a huge impact in so many industries in moving from offsetting to decarbonization in their whole operations.

Elliot Roth:

Yeah, yeah. I mean I think you said it really well, is you kind of have to think of the way that we're going to decarbonize in two different ways. So the first way is by displacing and replacing carbon emitting materials. And so that's kind of what I was talking about when talking about the raw materials that we end up using, whether it's food ingredients or if it's cosmetic ingredients, if it's textile ingredients. All of those different ingredients are emitting carbon right now. And so how do you phase out those ingredients with something that's a carbon negative alternative? And so carbon negative just means that it absorbs CO2 as it grows, and you see this happen with very, very complex plant species. But we decided to start from a first principles basis and start with something very simple and do the simplest plant imaginable and grow algae. And so a key kind of aha moment that we had, and I like building companies on the basis of philosophical principles. So one of them was that human conflict occurs through Maslow’s hierarchy of needs. If you don't have your basic needs met, you end up coming into conflict with the people around you. So that's food, water, shelter, those basic necessities. And oftentimes what is really important to provide are the basic necessities through locally produced sustainable material. So that's part of the reason why we started focusing on raw materials and really growing these raw materials as opposed to extracting them from the Earth.

So the second key principle that we started working with is how do you get as efficient as possible at producing these materials locally? And so we started looking at what is the simplest organism and most ancient organism imaginable? And that's how we came to algae. I was a student doing some research and had set up an independent laboratory actually in a garage space in Richmond, Virginia and stumbled across algae that was being used as a food source for astronauts. It was previously used all the way back in time in terms of the time of the Aztecs and has been grown all over the world. And so I started growing algae kind of as a means of feeding myself when I was food insecure a couple years ago, about five years ago when I first started Spira. And that's the genesis of the company was I needed to provide for my own basic needs.

Michael Young:

So you grew algae for yourself as a food?

Elliot Roth:

Yeah. Initially when I was getting started, I was growing algae as a means of feeding myself, and I kind of thought, there's got to be, basically more people have to start producing algae because this stuff is amazing. I can provide for all my basic needs. I can kind of have this major protein source and grow everything that I need in a fish tank in this garage space and live on something like that. And so I was living on that for about two and a half months when I was getting started, and I applied to a program called Indie Bio. And luckily, I was accepted. They thought it was crazy enough that my business was never going to fail because I could always live on my own algae. So that was kind of the genesis of Spira. And I realized I had this aha moment that fresh algae had no taste, and it was only when you process it and break it down that it starts having that umami flavor. And if I was to get more people to adopt algae as a raw material or basic ingredient, that I really needed to find a new way of processing it and a new way of working with the material itself, working with the organism itself to make it so that it could be used as an ingredient in other food products. So that's what we started doing. I started using stuff like CRISPR to knock out bad tasting flavor molecules. CRISPR is a genetic editing technology. And then using this kind of novel technique of refining the algae to pull out pigments and proteins, plastics, and other kind of compounds. And so it's taken years of research to get to this point, but now we have a number of different products and we're about ready to release some more pigments, protein ingredient for the food industry. And I have a team of about seven and ten to twenty contractors. And we work with a number of farmers all over the world to actually grow our algae and absorb CO2 while doing it.

Michael Young:

That gives really new meaning—oh, go ahead.

Balaji Ganapathy:

No. Again, I want to stress upon this point that Elliot said because if you zoom back and look at where some of the problems are today and the challenges that exist in the space of climate change and climate commitments, it's often the underdeveloped parts of the world that are facing inequitable challenges. Because the technology and the innovation that goes into making this shift is all with the developed world or the Western world and mostly the global south is expected to meet these targets but does not have the innovation or the models to sustain it, right? So what is refreshing about approaches like this is that not only is the technology and innovation that is going to advance what we want to do as society, the model itself is to democratize and put the power back in the hand of farmers in South Africa or other parts of the world where their sustainability, their income, their community growth is not going to get stunted as a result of these advances, right? So that kind of models I think are refreshing and more needed as we make pledges as countries and as society to achieve our climate change targets.

Elliot Roth:

Exactly. Yeah. I think it takes really—what we realized when banging our heads against the wall of saying, hey, everybody should grow algae and kind of provide for themselves is that you can't reinvent the supply chain by creating a brand-new supply chain. The supply chain itself is set up in such a way that it provides for everybody in the world. And so my company is located in the port of Los Angeles, and I look outside and see a backlog of container ships all the way back as far as the horizon can see. And you see the challenges associated with the global supply chain of how in times of stress, like in times of the coronavirus, we have challenges getting the basic necessities that we need. And so it's my motivation, my mission to produce raw materials locally, and we're starting to do that using farms and working with farmers mostly in developing countries to produce the basic materials that they end up using on a day-to-day basis.

Michael Young:

Elliot, I was just taken by the fact that you sustained yourself on algae. As a founder, I think that gives—we always hear about founders kind of going to any length to get their startup off the ground. I think that is a new level. So that is amazing. You are a serial entrepreneur, and I just wanted to maybe shift gears and spend a minute if you would talking about what you've learned over your journey doing multiple startups and maybe what advice would you give other social entrepreneurs and what have you learned over the past few years especially during the pandemic?

Elliot Roth:

That you could always eat algae. Joking, joking. But basically I think I've started seven companies and two non-profits over the course of my career. And of the companies that I started, one of the main things that I learned is keep going. One of my investors once told me that there are two things that cause a company to fail. And one of them is you run out of money and the second is that you give up. And I think that for me, I don't have to worry too much about running out of money because I could always eat my own algae to survive and giving up really isn't an option. I think what we're doing in terms of fundamentally shifting our supply chain to a carbon negative localized supply chain by producing these kind of raw materials is something that I think needs to happen and it's something that I hold really near and dear to my heart. And so for entrepreneurs I think it's really important to live your mission, feel the pain point of the problem yourself, and keep going. I mean I think that's what I needed to hear when I was getting started.

Michael Young:

That's great. That's really great. And just in terms of next steps and scaling up, you mentioned localized farms in many places. And I'd maybe want to just kind of unpack that comment you made a moment ago, Balaji, about how the change to carbon neutral will not be evenly distributed. And so how do we start to think about that change on a more global basis?

Elliot Roth:

Yeah, yeah. I think that our business model just in general is set up in such a way that we rely heavily on working with partner farmers in developing countries. And I'm kind of indebted and really honored by the fact that these farms choose to partner with us. These are small-scale algae farmers in places like India, Peru, Thailand, Indonesia, all over the world. And what we do with these farmers is work with them to grow our special algae strains that have certain criteria, certain kind of attributes that food companies or cosmetic companies, textile companies want in the United States. And so they grow these specific types of algae, these seed cultures of algae, and then dry it out and send us back raw materials. And so right now when I'm working with these farmers, we're paying them more than a living wage, they're growing algae, it's absorbing tons of CO2 from the environment. We try to support female farmers in these developing countries. And when they send it back to us, we then use all those materials, those compounds to replace petrochemicals, animal compounds from the supply chain and kind of swap out these materials, these carbon emitting materials with something that's healthier for people and the planet. And so the way that I see it right now is we're steadily chipping away at that, and it operates on a hub and spoke model. So all of our farmers are overseas or most of them. We have some farms in the United States but only a few. And they ship it to us in Los Angeles in the port of LA, the biggest port in the United States. And we process those materials here and then ship it back out to our clients. So the dream is to go from this hub and spoke model where all of them are shipping it to us to a more decentralized and distributed model where we would be able to process and ship out in the countries where the algae is farmed so you get a much more local supply of materials.

And currently right now, the thing that kind of is holding us back, the thing that's the main barrier is one of two things. So number one is adoption from the main companies that are buying different kinds of materials. Petroleum and animal compounds are still very cheap to get. And so there's this barrier of pricing that we are steadily getting better and better and better at pricing. We're scaling larger and larger and larger as a means of dropping the price so that we're competitive with petrochemical based ingredients. And then the second thing that seems to be the barrier is the ability of implementing our kind of processing techniques and technologies in these developing countries. Many of them are in the middle of nowhere in desert regions, and during COVID, it has been almost impossible to get on site to help these farmers out. And so those are the two main barriers that we have right now as a means of getting from this hub and spoke model to a more decentralized distributed model. And of course, some financing always does help grease the wheels a little bit.

Balaji Ganapathy:

And that's where exactly, Michael, to your question, where we want to play is to elevate great innovations, great founders and companies like Spira, and provide them the opportunity not just to win a prize money which is notional but have the opportunity to work with some of the best technologists and problem solvers in the world at TCS over the next year. And the 2020 finalists, not only Symba who was the winner, but all six companies benefited from the mentorship and support that our business leaders, our technology, and domain experts could provide over a period of time and are able to, especially at the stage of the growth that they are in, accelerate that through those interventions, right? So that's our goal, to demonstrate that with the right kind of support from private sector and other participants, social entrepreneurs and social enterprises can really substantially scale and provide very nimble solutions that can drive change. I mean I'm really encouraged by Elliot and what he's doing at Spira. Similarly, if you look at the story of other finalists like Shelly who is a founder of SXD, her invention is also using less textiles to produce the clothes that we all wear but using climate refugees to support that in Bangladesh. So there is that model of giving it, paying it forward, and as Elliot was talking about, the supply chain and how to not change the supply chain but to reinvent it in a way which is more equitable. Or another of our finalists, CassVita is doing the same with cassava, which is a vegetable that's grown, a root vegetable that's grown in many parts of the world but especially in Africa and using preservation techniques to help farmers increase the time that cassava can be utilized to convert from raw material into finished products of different kinds. So the spirit of a lot of the social entrepreneurs who have come through this program is very similar. It is to create equitable futures which is very much in line what TCS wants to see in the world. So I mean I'm my call to action to organizations is, and there are a lot of organizations doing terrific work in this space. And finally, I do want to leave on a high to say that while the E and the G of ESG has got a lot of focus in the past several years, I think the S of ESG is really where social change can occur. I'm not saying any of this is in isolation, but I think we have underappreciated the social impact that can be created by businesses, large, small, and medium, and social entrepreneurs for the way we want to envisage a new future for ourselves, whether it is for 2030 goals, 2050 goals, or beyond. I think that's a big part of the answer, and I believe that at TCS, we're just playing a small role to elevate that and amplify that so that founders and organizations like Elliot and Spira can really leapfrog to the next level.

Elliot Roth:

So to the social goal and that effect, I think that it's very difficult to convince people to shift from the pre-existing habits that they have. And so I'll give an example because I'm a biologist. The fat cells in your body have a lifespan of about seven years. And so what that means is that if you are to minimize the number of fat cells in your body, not just grow or shrink them, if you go on a diet for a short period of time, what ends up happening is your fat cells shrink. But if you're to actively make sure that you have less fat cells over a period of time, it takes seven years of consistent dieting and lifestyle change in order to diminish the number of fat cells in your body, and this is an alternative version of malnutrition that we're talking about, not like the lack of proper nutrition, not the lack of the basic necessities, but an overabundance of the wrong kind of inputs into somebody's body. And so when somebody goes on a diet, it's pretty easy for you to get fast food or to have a dip in your willpower over the course of those seven years. And so rather than trying to convince people to maintain that willpower for long periods of time, it's just not in human nature. We are genetically predisposed to want to seek out easy access to calories. And so instead of trying to change somebody's willpower, change the social context and try to influence in that way which is a very, very challenging problem. Instead, if you replace the raw ingredients that are in fast food, as an example, or in the grocery store items, rather than poisoning our bodies when we consume just the basic necessities that we eat on a day-to-day basis, instead we'll start influencing positive human health outcomes. And that's what I'm really excited about is convincing these larger companies to start phasing out the more harmful petrochemical, animal based compounds, and ingredients they use, starting to replace it with carbon negative algae ingredients. And so in doing so helping both from a planetary impact perspective as well as a human impact perspective.

Michael Young:

That's fantastic. All incredible. And I just really love the globalization and the localization of innovation that I know TCS has been working on for many, many years. And Elliot, to hear your application is really, really exciting. So we are going to have to leave it here, gentlemen. I very much appreciate you both coming on the podcast. Thank you so much.

Elliot Roth:

Of course. Yeah. Anytime. It's a pleasure and I thank TCS, Balaji, all of you for everything you've done. And I'm very excited to work more with you in the future.

Balaji Ganapathy:

Absolutely. Such a pleasure. And thank you, Michael, for shining a light on great innovators like Elliot and Spira. Thank you for that. It's been a pleasure to come back and talk through this.

Michael Young:

Thanks to both of you for being on the podcast.

Conclusion:

The Purpose, Inc. Podcast is a production of Actual Agency, helping innovators communicate in a changing world. More at www.Actual.Agency.