Ecocene blends a traditional environmental consultancy with new technology.
THE evolution of Perth company Ecocene and its three business arms illustrates how much the environmental services sector has changed.
Its main operating subsidiary, Astron Environmental Services, was established 25 years ago in Karratha and has grown to become one of Western Australia’s largest consultancies, with 50 people delivering biodiversity and geospatial services.
It is also one of the few big players in that sector not to have been bought by a multinational. Ecocene also owns technology company Emapper, which emerged from the growing use of drones and remote sensing technology.
The main focus of its software team is how to process all the data that can so easily be captured in aerial surveys.
The next opportunity Ecocene is pursuing revolves around ‘nature positive’, a nascent sector being driven by the global focus on biodiversity risk and nature-based solutions for climate change.
It is in the process of launching a ‘web3’ project designed to create a market in non-fungible tokens (NFTs) that monetise biodiversity.
If that sounds radical, Ecocene is not alone in this space.
It was selected earlier this year as a finalist in KPMG’s inaugural nature-positive challenge, which supports ventures focused on solving biodiversity challenges.
As a result of that win, KPMG’s web3 team is helping Ecocene develop its NovelEco NFTs, which are digital artworks created by ‘generative artists’ using algorithms.
Deloitte is another major consultancy that recognises opportunities in this space, releasing a report titled Banking on natural capital.
The federal government is also taking action, announcing recently plans to create a biodiversity certificates scheme.
Business merger
Ecocene founder and chief executive Julian Kruger brought these ventures under common ownership by brokering a merger between Ecocene and Astron in June.
His goal is to establish Ecocene as Australia’s leading nature tech and biodiversity advisory firm.
“For us the pathway towards nature positive outcomes was always going to include a mix of innovative technology and specialist technical skills,” Mr Kruger said.
“By bringing Astron’s biodiversity and geospatial capability into Ecocene we’re able to accelerate the rollout of the Emapper platform across a range of sectors.”
Mr Kruger told Business News the merger also helped the business deal with the significant increase in demand for biodiversity practitioners.
“Locally we have already seen a real tightening in the availability of these professionals,” he said.
A big factor, he added, was demand from new industries focused on nature-based solutions and ecosystem restoration competing with industries such as mining and land development, which traditionally focused on meeting their compliance requirements.
Tech focus
The evolution from a traditional environmental consultancy to a technology business started around 2014, when Astron (like all its competitors) was hit hard by the ending of the last resources boom.
“We were one of the first environmental consultancies to get a UAV [unmanned aerial vehicle] licence,” Mr Kruger recalled.
“We went on a very long process of trying to sell drones as a functional tool.
“What we realised at the end was that the drone is a means to an end.
“The thing people couldn’t do is interact with the data and process it into a functional output.”
That led to building a geospatial team in Astron and early development of the Emapper platform.
That process accelerated in 2018 after the business gained federal government funding through the METS United program.
This comprised a $1.2 million grant matched by support from mining companies Roy Hill Holdings, Mt Gibson Iron and Anglo American.
“We were working alongside the industry partners to understand what their needs were,” Mr Kruger said.
Ecocene is not alone in this market.
ASX-listed K2fly offers similar services through its Decipher platform, while Sydney-based Dendra Systems has similar software.
Mr Kruger said Emapper, which uses artificial intelligence and machine learning to manage and analyse data, has doubled its client base annually since 2019.
Its core market is mining, enabling companies to meet their environmental rehabilitation obligations with greater certainty, more detail and at a reduced cost.
It is also engaged by local councils, infrastructure developers and environmental groups such as Greening Australia to support ecosystem restoration projects.
Outside Australia, its clients include Capricorn Energy, which has a mangrove restoration project in Suriname, South America.
Mr Kruger said the merger created opportunities for both sides of the business, which has the largest environmental-focused remote sensing team in Australia He believes remote sensing and data management allows for a more efficient, lower-cost way to deliver environmental services.
“It changes how you use boots on the ground, it allows you to optimise that,” Mr Kruger said.
He is also hoping to foster more continuity in the way companies capture and use their data.
“We want to build a foundation of remote sensing data and use it throughout a project rather than a siloed approach,” Mr Kruger told Business News.
Ecocene is seeking to enhance data capture and management by developing an app that can be used by workers in the field.
“It makes it easier for people to capture the data and sync directly into remote sensing data, and to fuse the data into a form that can be easily used and customised,” Mr Kruger said.
Nature positive Mr Kruger’s current focus on monetising biodiversity is a variation on a federal government plan.
In August, the Albanese government announced its intention to create a biodiversity certificates scheme.
It would recognise landholders who restore or manage local habitat and grant them biodiversity certificates that can be sold to other parties.It would operate in a similar way to the market in carbon credits, with both regulated by the Clean Energy Regulator.
Mr Kruger said one of his goals was to ensure the benefits were retained by the community.
That contrasts with the carbon credits market, which has come to be dominated by the big emitters (such as Shell and Mitsubishi) and big private equity investors (such as KKR and Adamantem Capital) that have bought most of the carbon farming project companies in Australia.
“I want to build a market where the benefits are more fairly distributed,” Mr Kruger said.
He acknowledges two massive issues facing the nascent sector: a lack of data to demonstrate good outcomes on biodiversity projects and lack of funding to develop the projects.
“We need a clear methodology,” he said.
“There is a lot of work to be done.”
The methodology could include integrating carbon co-benefits (such as reduced emissions) and social co-benefits (such as jobs) into the equation.
Mr Kruger, who lives near Margaret River, plans to sponsor a restoration project in the South West and use that as a pilot.
He sees blockchain technology as a good means to monetise the opportunity.
“The biodiversity stays in situ, so you need to create a digital representation of that,” Mr Kruger said.
“NFTs are a fantastic unit to do that.”
He is aiming to sell the first tokens by the end of the year, marking the start of what would be effectively a new industry.