Keynote: Data isn’t just valuable, it’s going to save the planet! Miles Cheetham
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TADSummit EMEA Americas 2021 Keynote: Data isn’t just valuable, it’s going to save the planet! Miles Cheetham, Co-Chair Open Energy Steering Group, developing standards-based marketplaces for environmental & financial data. How Open Banking proved how we could share data securely at scale (and we’ve now realised that it’s one use case of many) Open Energy showed how the approach and infrastructure is transferable to other sectors (and that interoperability across sectors is possible) What else is possible? (when you start thinking about what you can do with data, you realise the wealth of use cases and problems you can solve) How data will lead us to better decisions (informing corporate and consumer behaviour, investments/use of capital etc.) What we need to do to make this real? (what government, treasuries, regulators and industry need to do)
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Keynote: Data isn’t just valuable, it’s going to save the planet! Miles Cheetham
- 1. data isn’t just valuable it’s going to save the planet …if Miles Cheetham
- 2. Open Banking proved how we could share data securely at scale it’s just one use case of many so what else can we do? openbanking.org.uk
- 3. Open Energy showed how the approach and infrastructure is transferable to other sectors and that interoperability across sectors is possible energy.icebreakerone.org
- 4. Open Energy • Open standard • Strong use cases and commercials • Delivered beta, now in pilot • Interoperable energy data infrastructure • Open market for data sharing • Drives decarbonisation
- 5. what else could we do?
- 6. Use cases across agriculture, water, transport, energy, manufacturing, logistics and the built world
- 8. Standards- led machine readable data …in a conducive, enabling environment …with interoperable sector specific initiatives …enabling high quality information …which provides insight and advantage …accelerating clean growth and reducing risk …leading to improved, greener outcomes
- 9. Policymakers: Create the legal and regulatory framework that: Encourages organisations to share and consume data Promote investment in the the infrastructure required Mandates key aspects such as types of essential data, taxonomies, standards and governance
- 10. Miles Cheetham Reach me: miles@icebreakerone.org +44 7767 332211 More information: https://www.openbanking.org.uk https://icebreakerone.org https://www.dgen.net
Editor's Notes
- Hi, I’m Miles Cheetham and I today I want to share an idea with you that’s taken about 5 years to fully form. It started with Open Banking, where I led the customer and proposition team for 4 of those years and matured with my colleagues working on Open Energy earlier this year. But the possibilities of data, to me at least, is like one of those tunes that gets into your head - an earworm – and I’ve been lucky enough to work with some fabulous free-thinking and innovative people . So I’ll fill you in.
- So it all started for me in a pretty anonymous office in London, close to Tower Bridge and the Tower of London. It’s nice to see those places every day but the motivation was to create something transformational. And we did – today there are over 3 million users of Open Banking, using third party services that draw directly from your bank data and allow you – SECURELY, and with your CONSENT – to budget, prove affordability for a loan or mortgage (or bond, if you prefer), forecast your cashflow, draw down a % of your earnings early if the month is longer than your salary, sweep money away for a rainy day, pay directly from your account and so on. It’s become a fast growing global phenomenon and is happening worldwide today. It promises to usher in a new era of fintechs, and in the UK there are around 350 live and about the same again applying for regulatory authorization or in the sandbox
- And so we thought why can’t we do the same thing for energy. Some of you may have heard me talking about Open Energy last year. Over the last 12 months it’s made huge strides…. Energy got some major structural changes underway as it moves from a highly centralized system to a very decentralised one. PV solar panels on your roof, heat pumps, Evs, it’s all changing. No more gas boilers. No more petrol and diesel cars. A huge, transformational shift. So we saw the potential both for industrial scale data – that’s sub stations, transmission networks and the like, right down to household and vehicle level. And of course there are issues like data privacy – strictly covered by GDPR in Europe – to throw into the mix. So we looked at it in the context of an Innovate UK competition. We were able to create and analyse our hypothesis, looking at what mapped from data sharing in financial services over to the energy sector. We looked at user and market needs, policy, regulatory requirements, operational requirements and of course technical feasibility. And, by and large, it mapped. We were able to make appropriate amendments to policy and participant management, but the underlying architecture was a good fit and technically required little modification. So much so, that interoperability between fintech and energy tech companies will be straightforward. So we built an alpha prototype. It looked very much like it was going to work, and we convinced the competition judges who awarded the funding to build a beta an onboard real users to access real data. We knocked out some big brand names by the way, which is always very satisfying!
- So now it’s in pilot and we expect the regulation that’ll make this fly to be enacted in 2022. It’s an open standard, built on strong use cases and a good understanding of the commercials – and it’s a fraction of the cost of Open Banking, because we learned so much. An order of magnitude cheaper. It’s the key to unlock the data we need to balance and manage energy production and consumption at a national, local and household level. We expect it to be a huge value driver, and to further hasten decentralization and decarbonization. Decentralisation Decarbonisation Digitalisation Democratisation
- With my colleagues at Icebreaker One, we asked “what else is possible?” (when you start thinking about what you can do with data, you realise the wealth of use cases and problems you can solve) Because we’re interested in influencing government policy, we started by thinking about the Prime Minister’s - that’s Boris - ambitious ten-point plan for a green industrial revolution which will create and support up to 250,000 British jobs. We saw that the applications of Smart Data, through which consumers and small businesses get access to their own and product related data via a third party, in the rollout of the ten-point plan are extremely varied and cut across a wide range of sectors of the economy. Furthermore, we saw that policies that enable and promote the wider use of data, for example through easier discoverability and access to datasets beyond individual consumer or small business, will provide very significant benefits. Let me explain
- We looked at over 40 use cases in a 4 week sprint to see what we could learn. These were identified in order to illustrate the key issues faced across these sectors, the types of solutions that could be achieved, and to allow consideration of the implications for government policy. We weren’t trying to drive out the detail, but to identify the commonalities, interdependencies and preconditions that must exist to allow us to use data to solve some of the critical problems that we can see. Our analysis included a scoring exercise in order to provide an initial view on the specific use cases that could be further evaluated as high impact and relatively low complexity to implement. Top of the list were: Smart energy households – using data to manage energy consumption efficiently – so things like when to charge your car, and when to release energy back into your home from its battery to reduce your consumption at peak hours Supply chain analysis, to genuinely understand carbon footprint from the ground to the consumer, all the way through Building data – how does a building perform – important when you’re aiming to be net zero by 2050 and 80% of your building stock will still be in use Local authorities retrofitting a community and needing to understand the impact on the local energy system. What will EV charge points and home heat pumps do to sub-station headroom? And then there were things like understanding water risks and quality, traceable food, use of herbicides and pesticides, rewilding, the list goes on. You get the picture – these are just a few.
- And then there are increasing demands on business to report on their impact. Measuring the things I’ve just mentioned. Opening up access to data in this way will support implementation of TCFD (Task Force on Climate-Related Financial Disclosures) and the associated taxonomy. This is the framework for financial reporting in relation to climate change to support changing behaviour towards Net-Zero targets. In November 2020, the UK Government announced its intention to make TCFD-aligned disclosures mandatory across the economy by 2025, with a significant portion of mandatory requirements in place by 2023. This represents a significant step forward and an opportunity for the UK to lead in understanding and disclosing the climate risks associated with a firm’s business model. These disclosures are a vital sign of progress not only in terms of making climate risk exposure data available to the financial sector (lenders, investors and insurers) but also embedding in every single firm across the economy a true culture of understanding climate impact and climate risk in their businesses. However, in order for the data to be usable at scale as a driver towards greener businesses and investments, it will need to be standardised in terms of base assumptions and inputs as well as format of outputs, accessible, and machine readable. This will ensure that economic activities are labelled as green only if they truly contribute to science-based goals to fight climate change. It will be essential that “green” finance becomes the norm, and not (as at present) just about a suite of green products or financial instruments that can be verified as such. Sustainability must be embedded and green principles extended into every corner of the financial markets infrastructure.
- So here’s the change theory. Data will lead to better decisions, informing corporate and consumer behaviour, and ultimately in our investments and use of capital For example, financial markets factor in market and credit risk already on a large scale. This is not the case yet for climate risk, which is increasingly seen as introducing the type of systemic risk that can precipitate a financial crisis. However, climate risk can be priced in to the same extent if data is available, accessible and standardised within a defined reporting regime. In practical terms this means moving beyond purely publishing data in annual reports or company websites, or non-machine-readable formats, and ensuring that objective reporting (rather than subjective) is consistently applied. It means adoption of standardised, reliable, consistent machine-readable data, available via APIs and accessible through a well governed trust framework. This is entirely achievable, as it already exists in Open Banking and is developing rapidly under Open Energy. This would revolutionise financial decision making and prove to be a major lever of change for transition to a fully green economy, while stimulating widespread economic growth in services consuming the data. Decision makers would understand their exposure to climate risk, and the consequences that arise from raised temperatures, more frequent extreme weather events and the associated systemic threats. Institutions that can clearly demonstrate that they understand climate change risk and have adopted mitigating practices or strategies as a result will therefore ultimately achieve a competitive advantage through greater certainty and lower overall risk in the investments they make and the initiatives they adopt. This will in turn unlock the ESG (Environment, Social, Governance) funding that currently has more capital available than opportunities to invest, because the impact of the investment will be clearer and the risk better understood and priced for. This will drive a transfer of capital from poor practices towards good practices.
- What we need to do to make this real? Remember, we started by asking what government, treasuries, regulators and industry need to do.. We believe that governments should provide the top-down policy and regulatory framework that maximises the potential for data to solve our problems and realise green growth. This is beginning to happen organically, albeit sector-by-sector. If well implemented, this would “uncork” data across sectors and result in accelerated growth for businesses and green economy initiatives. In order to achieve this growth we must Creating the legal and regulatory framework that: Encourages organisations to share and consume data; Promotes investment in the infrastructure required; Mandates key aspects such as types of essential data, taxonomies, standards and governance. Ultimately, enhancing national data infrastructure to support widespread cross-sector data sharing. And what kind of policy stuff? Well, Leverage the power of the financial sector Provide tax incentives Targeted spending and grants Regional incentives and investment Green Economy Challenges targeted at priority issues Digital Twins Harness industry, universities and government – we see a great example in GOFCOE
- So I hope that’s given you food for thought. Please feel free to reach out to me, or to explore for yourself – the links are here. Thank you.