Adrian Enright joined carbon offset company Tasman Environmental Markets (TEM) in 2017 and became its CEO in March 2022. TEM is Australia’s largest carbon offset provider specializing in indigenous offset projects. A climate activist at heart, Enright’s impressive career over the past 15 years crafted his carbon specialty and granted him with a sharp commercial acumen. Enright’s gravitas is evident through his focus and deep understanding of the opportunities offered by compliance and voluntary carbon markets.
In this conversation with Fatima Sadouki, Senior Writer for HC Group, Enright looks at the growing role of the private sector in climate action and shares his expectations for the upcoming COP27 and the future of voluntary carbon markets.
Since 2014, TEM has partnered with carbon farming and offset projects in Australia and South-East Asia and has now expanded into project development. Offset projects form the basis of TEM’s work in helping businesses develop their own voluntary carbon portfolio to shape their sustainability strategies and achieve net-zero.
TEM has been growing fast, mirroring the development of voluntary carbon markets over the past years.
But Enright is realistic that the road to net zero is a long-term journey. What drives him is more the desire to achieve progress in carbon markets, than perfection. This is exactly how he is approaching the next Convention Of the Parties (COP) conference, COP27, to be held in Egypt from 6 to 18th November.
Policies and regulations have been rapidly evolving especially since the Paris agreement in 2015, which he calls “the mother of all market signals”.
“At a macro-level, we must remember that the COPs always represent huge market signals for progress. My expectation is that we continue to make significant progress on that signal rather that striving for perfection, and that that will happen because after every COP, there is progress however small or big,” he says.
A lot still needs to be fleshed out. This time at COP27, Enright will specifically be focusing on the outcome of negotiations on the rules and regulation on how carbon offsets will be traded and accounted for across different countries and corporate entities. “If we can get clarity on that, a lot of decision-makers will become much more certain and a lot more cash will flow,” he says.
During his career, Enright has witnessed first-hand different cycles of government action and inaction. As policy infrastructure has been gradually set up, he quickly understood the weight of the private sector in driving change by filling the void caused by regulatory uncertainty.
“I set out to work in policy when I started because that was really the space that was moving quite fast,” Enright recalls. But circumstances changed particularly in Australia, which introduced carbon pricing measures in 2011, paving the way for the creation of Australian Carbon Credit Units (ACCUs) under the Carbon Credits Act 2011. And with Australia now ratcheting up its climate targets, demand for ACCUs from the private sector is expected to increase further. “We’re seeing that already. But we also firmly believe that the role for the voluntary market is only going to rapidly increase side by side with compliance.”
Enright praises the role of compliance markets citing the Emission Trading Scheme in Europe, New Zealand, and the Low Carbon Fuel Standards in California. But there's been no slowing down of voluntary action, he affirms. “There will always be a role for private organizations and businesses to want to punch above their weight and go beyond where they are mandated by policy,” he predicts. Crucially, pressure has been coming on organizations from boards, investors, staff and customers demanding that they continue to move forward.
“We are also seeing organizations using the voluntary market as a test case for their future compliance, so they're purchasing offsets through the voluntary market to help hedge positions both for their future compliance under policy, but also for future voluntary targets as well.”
After serving as policy advisor for the government of Victoria, he moved to much lower-paid jobs in South-East Asia with the United Nations and Dutch NGO SNV to gain ground experience in projects to Reducing Emissions from Deforestation and Forest Degradation (REDD+).
“I was fortunate enough to have had almost four years of experience working across South-East Asia and putting carbon projects and sustainability projects on the ground,” he reminisces. “That really gave me an insight as to what it looks like to mobilize capital on the ground, whether that be through renewable energy or forestry projects or clean cook stoves.”
After that, he returned to Australia to work for World Wildlife Fund (WWF) in another policy-focused role as carbon policy manager and finance manager. But this brought him back to a “fairly unconstructive” policy environment. “I soon realized it was the private sector that I really wanted to thrive in.”
One thing he came to understand too is the fundamental difference between lobbying, negotiating with government entities and building a business case for corporates to act on climate change.
This helped him draw on his economic training more than his environmental science had ever done in his career, he says. “You've got to learn what motivates organizations and actually build the business case for them in the framework of risk mitigation, risk management, of customer sentiment, of responding to board pressure and financial risk. Those conversations are very different to ‘you should be doing this because it is the right thing to do for the planet’. It’s about building a business case now.”
His next move allowed him to do just that. When first joining TEM, Enright worked closely with key client Qantas – Australia’s largest airline - where he served as Partnerships Manager for the airline’s Future Planet Program. The program empowers corporate clients to reduce emissions and is delivered in partnership with Qantas and TEM. Today, Qantas and other major airlines like Singapore Airlines continue to maintain strong, growing partnerships with TEM.
For Enright, the aviation sector is a great example of how compliance and market-based mechanisms like the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and voluntary carbon markets complement each other. But more importantly, this sector is an example of how carbon offsets complement technology change like hydrogen or electrification, fuel change to SAF and behavior change. “Increasingly consumer demand points to an awareness of airlines’ activity and its impact on the planet. So they're requiring airlines to put in place voluntary solutions.”
However, this will take years. “The carbon market is going to continue to play a very significant role for airlines, at least for the next two to three decades,” he predicts.
Cross-sector business model
Airlines are representative of TEM’s clients’ profiles (they are close to 100) across diverse sectors - transport, building infrastructure, mining and resources, and food and beverage companies.
While these businesses are fundamentally different, they are all faced with the same long-term challenges: they are large emitters operating across large-scale supply chains and hard-to-abate sectors. TEM already supports large organizations like industrial infrastructure and logistics group Goodman and global beverage company Lion and Kentucky Fried Chicken (KFC), the American fast-food restaurant chain. TEM’s portfolio is so diverse that it is hard to segment TEM’s customer base. Enright says that is a good thing because this enables TEM to cast its net wide through the respective supply chain of its clients.
“What we are really looking for are solutions where, if we can work at one end of the supply chain with that organization, we can often develop solutions for their suppliers as well. So in creating an offset solution that might help solve the scope 1 and 2 emissions of our client, we're also helping address the scope 3 of their supply chain and that strategically allows us to be able to work with their suppliers.”
As part of this business model, shipping and freight is a strategic market sector. TEM is currently building on its strong ties with Qantas Freight. But its emissions tracking and reporting technology platform called BlueHalo is another way of supporting participants in this segment.
In the energy sector, TEM already does a lot of work Tier 1, large energy companies, whether they are electricity or resources providers. But the market is moving so fast that many now tend to build their own, in-house carbon offset capabilities.
Yet, Enright is convinced that there is a role for TEM to play for second-tier energy participants as well as for mining and resources companies.
Expanding in Asia
In fact, these are the type of entities TEM is eying as part of its expansion plans in Singapore and the wider Asian market. The recent push from Singaporean authorities to make the city state a new hub for carbon trading (as discussed with Lee Pak Sing, Assistant Chief Executive of Enterprise Singapore) is a major incentive for TEM to boost its presence there.
“A lot of investment has gone into Singapore to make it one of the trading hubs of carbon, particularly in the Asia Pacific region. Setting up somewhere where you've got that capability, where you've got the drive from government and from the private sector is really exciting,” Enright explains.
In such a fast-moving market, TEM has so far managed to differentiate itself through the values of high integrity and quality and being a trusted advisor. “The complexity of the market is also moving fast. We're operating an environment where greenwashing and fraudulent credits are causing concern, where issues associated with carbon projects on the ground are becoming headline news and rightly so,” Enright says.
“Corporate organizations understand their need to interact with the carbon market from a risk management perspective and see offsets as part of their strategy. But at the end of the day, their brand reputation is on the line. Most of them don't have the expertise or time or desire to travel on-site to go through the due diligence and be able to unpack all the methodologies associated with projects.”
Through TEM, organizations invest not only in the offset of emissions but also in the communities, people, biodiversity, and climate finance that are associated with it. “Organizations are seeing more of that, and really want to be a part of such projects. That's setting us apart from brokers or traders or computer screens or small-scale one-off projects.”
People and Talent
TEM is banking on its people to deliver on those values. “We are a relatively small organization, but we probably have more collective years of experience than any other organization in the Asia Pacific,” he says. “We always say that six weeks with TEM will give you 6 years’ worth of experience at any other organization”.
The company intentionally hired people who have been in conservation and carbon markets for decades, he explains. “If we've built that foundation, we then can speak to the projects with high integrity. We know where those projects are. We can trust them because we've been on the ground and we can bring that insight back to our corporate clients.”
Today, there is clear shortage of talent in this space, he admits. “There is a real fight for high quality carbon specialists in the market because we have moved from a fairly small ‘cottage’ industry to something that is highly valuable.”
The gap is slowly filling with the emergence of a more climate-conscious caste of talent who is also increasingly attracted by the multiple rewards this industry can bring, especially the economic and social benefits. “We work in such a unique industry where if we're more profitable, the more carbon emissions we’re mitigating and vice versa, the more successful we are as a business. So that's incredibly motivating for anybody coming into an organization,” Enright rejoices.
He is impressed by the level of maturity of some new graduates, who have grown and evolved in such a fast-paced world. While he says he’s still learning a lot from them and from the wider industry, he’s also setting the pace for this new generation to shape the future of carbon markets and climate action.
“I genuinely think that in 25-30 years’ time, the people who will be working in this industry will look back at the people who are in the early 2020s and say ‘wow, they were genuine pioneers of what we are doing now’. We are creating in the carbon market the new Zuckerbergs of this marketplace, just like what we saw with the dot.com era,” he smiles.
For queries related to HC Group’s activities in carbon talent in Asia Pacific, please contact:
Amelia Chahal, Senior Associate at HC Group in Singapore.
Doug Ferguson, Portfolio Director at HC Group in Singapore.