People often ask what our ESG strategy is. The answer is simple. We don’t have a separate strategy. Our mission is to create accurate trusted data which allows DCX users to assess the ESG impact of their commodity purchase decisions. As our platforms become more widely adopted, ESG gains grow in tandem as users will have access to more data on the social and environmental impact of what they are buying and selling. Traceability allows users to make better choices.
The best business ideas are the ones which allow our planet to survive and flourish. DCX CEO Stephen Edkins has spent the last 15 years focused on three areas - renewable energy, edtech and agtech, all sectors that focus on improving the lives of everyone on Earth.
Most activities on this planet involve trade-offs. There isn’t a clearer example of this in the agricultural commodities space than fertilizer. In the hierarchy of preferences, food security is paramount. The agricultural revolution has in large part been driven by greater fertilizer use – nearly half of all agricultural yields today can be attributed to it. Yet the fertilizer industry causes significant environmental damage during raw material extraction, manufacturing, transport and post application (both through emissions and water pollution).
How does DCX help? The inspection companies that we work with can provide accurate and reliable data on the origin of all fertilizer traded on our platform and how it is manufactured. This data allows users to assess the environmental impact of the fertilizer they buy. We are developing an environmental impact calculator to make these choices explicit. Having clear, accurate data is key to incentivizing behavioural change.
Rice has a big environmental footprint, higher than is commonly thought. After the rice harvest, if the rice straw is left in the field and the field is subsequently flooded, anaerobic digestion occurs producing significant amounts of methane. In terms of its contribution to global methane emissions, rice is second only to cattle farming – over 700 million tons of CO2 equivalent annually, more than 1% of global emissions from this one seemingly innocuous source. Furthermore, a lot of nitrogen is removed from the soil in the process.
The good news is that this is relatively easy to solve. By clearing rice straw and avoiding flooding the fields at the wrong time, it is possible to reduce methane emissions by over 90%. Education plus financial incentives are required to make the change. DCX is working with the Sustainable Rice Platform to show farmers the benefits of producing rice that conforms to its low methane standards. The market is ready. DCX Rice has unsatisfied demand for several thousand tons of SRP-Verified rice with the amount increasing every month.
Adoption will be quick if the right financial/risk incentives are in place, the knowledge is shared, and there is a clear path to market. We are exploring ways to make this happen with VC climatech venture builder, Wavemaker Impact. Given the urgent need to reduce emissions, we hope enabling the market’s move to ESG compliant commodities will act as a bright example of what is possible with the right business innovations.