Embracing Digital Solutions in Commodity Trading: Insights from Richard Williamson, CEO & Founder at Gen10

Ben Hillary – Hello and good morning, afternoon or evening from wherever you are listening in from today. My name is Ben Hillary, Managing Director of Commodities People, and I'm absolutely delighted to be joined here today by a long term partner and friend, Richard Williamson, CEO of Gen10, a leading provider of digital solutions for commodity management and environmental markets. So over the next 10 to 15 minutes, very appropriately, we'll be exploring what the upcoming United Nations Climate Change Conference, or COP 28, taking place just a few weeks from now, might mean for the global commodities and environmental market sector.

So Richard, welcome and thanks very much for being here. 

Richard Williamson – Thanks for having me, Ben, good to see you. 

Ben Hillary – Pleasure. Well, diving right in. First question, some of the major goals COP 28 are to accelerate emissions reductions through a pragmatic energy transition, reform land use and transform food systems. What implications do you see these as having for the commodity trading community? 

Richard Williamson – Well, I guess it goes to the point of back in the day, life used to be simpler. You needed to be able to buy at the right price, sell at the right price, hedge it appropriately and ship it on time, whereas today you have such an increased burden of reporting for various things and a lot of it is around, well, what's our scope three emissions? Which farm did these goods come from? Were any trees harmed in the process? So it has made everybody's life more complex, which obviously has an effect on the trading community and those of us who try to serve those communities with tools to help them do their job better. 

Ben Hillary – Yeah, excellent. And how might traders adjust their traceability and sustainability approaches in light of this? 

Richard Williamson – How might they adjust their approaches? Well, I guess they have, there is the traditional CTRM system that helps the front, middle and back office with that buy, sell, ship sort of thing.

But it's how, I guess, what a lot of them are doing. They might create another silo of responsibility, have a sustainability manager who's in charge of ESG audits across their supply chain or something, and so they will have their spreadsheets or a lot of information to manage there. And I guess through the meetings, that's the approaches that you tend to see where you would have someone responsible for those areas or someone responsible for scope three emissions calculations, where they might go and inquire from the different departments and gather that information so they can put their report together.

That probably is the approach that most people are taking today. Now that we're taking it very seriously on the ESG and scope three parts of the business. 

Ben Hillary – Excellent. What should traders be doing to improve and future proof their carbon accounting systems and approaches? Surely it's not more silos, more spreadsheets. What should they be doing to improve and future proof their carbon accounting systems? 

Richard Williamson – Yeah, exactly. I mean, what we've been doing as part of our commerce ecosystem of apps, if you put to one side the monolithic CTRM type approach and building out functionality within that big code base, I think it's being able to have these point solutions that help to manage. There's a lot of data to manage. They'll have the workflows and you'll have analysis that you need to run on top of all of that. So for the computer, it doesn't matter what kind of data it is, you just need to know how to structure it and know how to make it available and things like that for your reporting, which again, a first step for people, a first logical, pragmatic step, might be to do that. But then you still have your silos of, you’ve got this app for that, you’ve got this website for calculating footprints, you’ve got this other one for finding vessel information so that you can use it for the carbon accounting that's on the other side, you've got another one that's looking at deforestation in Brazil, where it's another website someone has to go to. And so what we've been busy doing over the last 24 months or so is building up this sort of silver thread that connects the physical movements and the practical things that people need to do in their day to bring it together, to stitch that all together, so that they can get back to buying, shipping, buying, selling and shipping. And we leverage information that's out there on the web to bring it together so that your scope three reporting is not an additional job, it's a service we provide that alleviates that burden.

At the same time as helping somebody trace the revised ETA of a shipment, they no longer need to go to another website. Remember to go to the website, check on it, and then come and update the CTRM system. What we have is, because we're integrated with those tracking services, they just have a dashboard business alarm that pops up and says, oh, the following shipment ETAs have slipped. Whilst in the background, it's calculated what the emissions were for that particular voyage. For the scope three carbon accounting. You see what I mean? Yeah, I go on for a long time about it.

Ben Hillary – No, that's excellent. Generally, beyond what was just mentioned, how can broadly digital technology help address and take advantage of all these drivers we're seeing associated with the Green revolution? 

Richard Williamson – I guess I sort of jumped ahead with my answer to the previous question and addressed a lot of this, but to keep it going, you know it is a lot of information and trying to structure it, finding ways of sharing common information. You know, the technology is there to do it. I guess the protocols on how and what to share and what you're allowed to share between stakeholders. There are certain policy underlying issues that are. Perhaps they're off topic for today's interview. But it's not just technology that is the solution to it. But digital technology can certainly help facilitate it once they sorted out some of the policies and the ways and where for all. And I would say to take advantage of all of these drivers. Information is power, makes you make faster decisions and be first movers in opportunities. Right. So that's how people can. If you're not able to manage these things and coordinate things efficiently and appropriately, then you're behind your competitor, right? I mean, if we take the EU deforestation regulations that are coming into effect. Well, it used to say 18 months, it's closer to twelve months now, maybe 14 months time for the audience that may not know, this EU directive is initially focused on soybeans, on palm oil and on coffee products that are being shipped into Europe. And there is an onus on the merchants, the supply chain traders to prove that, for example, no trees have been harmed in the production of this bag of coffee or this 6000 ton vessel of soybeans. And you know, if you, if you don't have the traceability embedded in your digital environment so that you've got the audit so that you can prove to them that no trees were harmed in the process, the fines are up to 4% of your European revenues, I believe, which is certainly making people pay attention. So, the digital technology can certainly help address a lot of that and make sure that when you do get audited that you can prove, there you are, we have all of the checks and balances in place. So that's how we can help take advantage of these drivers moving forward. 

Ben Hillary – Yeah. Excellent. And I guess the final question from my side would be is this a broad brush for all or do you see differences between the various commodity types? 

Richard Williamson – We handle over 100 different commodities on our commodity management platform, right? So we understand the nuances. I guess it's fairly common knowledge things are priced differently, there are different workflow processes, the quality of things and how they affect the prices across all these, ags, softs and metal, even within ags and softs, it's different for different product, fixed price on call, you got blended things, you got different price curves and just because of the physical practicalities of something simple like you have a bag of coffee, it has a QR code, a barcode on it. You can trace that from the point where it's been bagged all the way through. And so you've got something you can tag onto it.

The challenge that you have with soybeans and palm oil is the commingling and the blending and all of the physical things that the physical practicality, the changes to the physical way of doing business in order to 100% scientifically prove and isolate without fear of contamination, enough beans ready to load into a ship in this three day window where it hasn't been commingled with soybeans that have perhaps come from further up north in Brazil or something like that, that might be questionable. Ultimately, yes, there are different challenges for different commodities, and that's even within these different commodity streams in metals and concentrates. Well, between the ores and the concentrates would be different to the pallets of billets and stuff like that.

So there is no broad brush for all, but there are some general concepts that apply. I guess one thing that we believe that we're providing is being able, with our background knowledge in these different areas and the nuances, not within commodities, but within geographies of commodities, of how we've gone about trying to standardise the flexibility of these different areas so that you can tag on the different data. You've got your APIs so that you can have web services and leverage other things to bring in.

There's a lot of stuff that these commodity classes can share, but you can only apply them properly if you understand the nuances in each of them as well. So, yeah, no broad brush, I'm afraid, but there are some tools that can be leveraged. Definitely

Ben Hillary – Yeah. Excellent. Well, thanks very much, Richard, for a fascinating conversation. And thanks to you, our listeners, for joining. So, until next time, wishing you all the best. 

Richard Williamson – Thank you, Ben.