Is sustainability reporting ready for its Xero moment?

Editor’s note: This sponsored post has been published in partnership with AgriFutures Australia.

The author is Oli Madgett, co-founder and CEO of Adelaide-based precision ag app Platfarm and a member of AgriFutures’ Ignite Advisory Panel, which works with the organization to connect rural leaders, facilitate collaboration, and shape the future of Australia’s rural industries.

Climate change is a force that’s shaping the future of agriculture. This force is being driven by a trifecta of carbon neutrality commitments by nations, industries, and companies; the finance sector managing its risk profile as well as sensing opportunities; and increasingly sustainability-conscious consumers and communities.

As a result, there has been a profusion of innovation in areas such as remote sensing and AI modelling, with companies like Cloud Agronomics, Cibo Labs, and HoneAG leading the charge.

Working to join the technical dots to help corporates and governments take meaningful action around climate change is FLINTpro.

The Canberra-based startup’s CEO Rob Waterworth and his team have had a ringside seat over the past two decades. They helped build Australia’s carbon accounting system during their time within government; then, with the support of the Clinton Foundation, they worked on Moja Global – the open source toolkit developed under the Linux Foundation to better manage the global land sector.

From this unique vantage point they learned that there’s no one single technology that can meet everyone’s needs, and that scaling and mainstreaming monitoring, reporting, and verification (MRV) for sustainability purposes needed a platform approach. This led the team to create their FLINTpro software to bring together maps, data, and models in a consistent and coherent manner – so that they’re creating environmental sustainability reports and projections that are practically useful for business leaders, policy makers, and investors, and are empowering their decision making processes.

Predicting net carbon for the farm

FLINTpro’s technology is designed primarily to help agrifood corporations and governments answer the question of what they need to report on in order to improve their land management practices.

In the last decade, this was often seen as simply a case of creating a table to go into an annual report. But now. organizations need to use a tech tool like FLINTpro to properly understand their projections right across their supply chains – and what their mitigation options are.

As an example, Matthew Harrison, systems modelling team leader at the University of Tasmania, is leveraging FLINTpro for scenario analysis and identifying farm level opportunities for carbon sequestration.

“We’re going to be working with livestock producers to use the tools to map what proportion of their farm is vegetation and trees now, and we can use FLINTpro to see what will happen if we plant shade or shelter belts, woody shrubs, or perennial legumes at various locations in the landscape,” he explains.

“It enables us to predict net carbon for the farm, taking into account emissions from livestock as well as sequestration in vegetation and soils.”

MRV for businesses

With the emergence of the Task Force on Climate-related Financial Disclosures and carbon border tariffs on the horizon, there is an increasing demand to disclose climate-related performance and risk factors.

Waterworth sees sustainability reporting being a core function of business in the future. “We see users logging into FLINTpro to see their key sustainability data, just like they log into Xero to see the status of their financials,” he says.

This vision of the digital transformation of natural capital reporting is one shared by Matthew Pryor, co-founder of agrifoodtech VC firm Tenacious Ventures. He uses the analogy of the tax system today compared to 1990s.

“Back then, paper receipts were the basis of the claim you put in for legitimate deductions against taxes paid, whilst today you literally just press a button in Xero,” he says.

“It’s now this frictionless because everything came in via Xero, or it got scanned into Xero, with the expense being categorized and the [tax] being identified, and the submission to the tax office is fully digital as well. Within natural capital accounting and reporting we’re seeing a growing opportunity for this type of enterprise software, and it’s going to look more like a Xero, Yellowfin, or Tableau.”

Consistent data along the supply chain

Although FLINTpro has been designed primarily for agrifood corporates, investors, and policy makers in the land sector, the team are also working on API integrations with farm management tools – so they can supply the same level of data and insights back at the individual farm level and create consistent data at all levels of granularity along the supply chain.

One of the companies they’re collaborating with is Cibo Labs, and its co-founder and managing director Phil Tickle can see benefits flowing in both directions.

“We’re integrating outputs from FLINTpro into our MyFarmKey application that can generate auditable baseline reports in a few minutes showing trends in ground cover, tree cover, and carbon stocks and flows for any farm in Australia, on-demand,” he says.

“These tools are being used by farmers, valuers, and carbon project developers. Going the other way, Cibo Labs will soon be providing our weekly-monthly, satellite-derived pasture biomass products as inputs to FLINTpro soil carbon sequestration predictions at farm-to-national scales. Collaboration and integration across specialized and agile companies is driving step-change advances in capabilities, and making it much easier for Australian farmers to derive benefits from the adopting these technologies.”

Where the opportunity is

Carbon and agriculture feels like a really noisy and chaotic space right now. The FLINTpro team believe that their design decision to put everything into a single technical framework, where consistency and compatibility are key, will enable the platform to have the flexibility to manage the current variability of standards across ag industries and countries.

With its modular approach, it will also need to accommodate initiatives like the Australian Agricultural Sustainability Framework and the Natural Capital Investment Initiative, which are still being finalized.

FLINTpro is just going into its Series A round with a focus on expanding the platform from carbon and greenhouse gas emissions to also covering biodiversity and water, as well as further improving interoperability with the carbon trading sector and integrations with farm management software.

Pryor sees the increasing importance of environmental credentials being at the root of where the opportunity is.

“On the supply side of the market, farmers are interested in income diversity and opportunities to secure premiums in their supply chain; whilst on the demand side, many of the participants in the supply chain need to reduce their environmental footprint,” he says.

“They can only do so much internally, so they’re looking at what they can do upstream. There’s also changing consumer sentiment, where increasingly consumers are wanting to have a greater understanding of the environmental footprint of the choices they’re making, and the outcomes they want to see. This is all driving towards the need for a digital transformation of natural capital reporting.”