Gossip About Gossip: The Inner Workings of Hedera’s Governing Council CorpComm

Oh welcome to gossip about gossip. Powered by Hedera Hashgraph. And each episode will cut through the hype of blockchain promises and explore real world examples of organizations creating the next generation of decentralized applications, which will bring trust back to the internet for us all. Hello everyone, and welcome to the latest episode of gossip about gossip, the podcast where we talk about real world applications of distributed ledger technology. My name is Zenobia Gottschalk and I'm the SVP of communications here at Worlds labs. Developing and furthering everything related to the ecosystem today is we are going to have part two of our podcast with Andy Ashworth from DLA Piper. Hi, Andy, how are you? Great Thanks for having me back. Awesome so, Andy, you wear many hats. Obviously, we have just talked about your role at toko in our previous episode, but you also chair the corporate utilization committee for the Hedera governing council. Now, that is a lot of words, but I think this committee is really exciting and it's one that our community has perhaps not had purview into before. So can you share what is the mission and vision of the corporate utilization committee? So corp or corporate utilization committee or corp comm as it's we're going to talk about from now on, very limited time. Corp comm. The mission is at the top level is to encourage council members and their partners to come in and in a sandbox with funding and with resources available, build proof of concepts for use cases that they have to get them to market. So it really is based on taking solutions, working with other council members in a safe place to get these proof of concepts built and then giving people a path to actually go to market. So that we're actually increasing the network utilization on Hedera. So that's our main mission and we're relatively new. It's just been a few months that since we've really officially started. And since we've been having meetings and it's probably, in my opinion, I sit on a number of the committees, but I've seen a really great deal of excitement here among the participants and it's growing very quickly in a number of areas. But I think the one that is growing most quickly for us is under the area of environmental, social and governance, which I had given a little teaser on in the previous episode. But it is the one that's our, I think our killer use case for corp Comp. Yeah and I want to come back to ESG. I feel like there's a lot of discussion around that before we do. From my perspective and my purview, it feels like there's a lot more enterprise interest in blockchain and distributed ledgers as people become aware of why would you need to use that? What are the kinds of things that you want to bring transparency to? So can you share a little bit? It sounds like there's a ton of engagement on that committee. Are you all seeing that same sort of increasing interest? And what was the Genesis of the committee? So the committee went through a couple of earlier iterations. We had the Hedera enterprise alliance, we had user groups and special interest groups. But what we were really missing was that people were presenting use cases, but they didn't know how to actually engage and get started in building them. And that, I think is really the critical difference here is that again, with Grant funding and with the ability to bring resources to help organizations understand how to integrate with Hedera and actually get the solutions moving. That's the difference here. And that's where we're actually seeing real traction amongst the council members. And again, there are partners out in industry. The other thing that we've done is that in addition to presenting use cases and actually moving through and obviously keeping them updated and talking about the challenges of the opportunities that are out there, the other thing that we do is we have invited experts that participate within Corp. They can be people from industry, they can be folks. We have constant participation from the bar foundation, but what we're really trying to do is avoid a myopic view of what we just do within the council or what we just do within Hedera. We want outside influence so that we can make sure we're helping to make Hedera that much more attractive to other folks, to either join as council members or develop apps on the platform. But it's building that developer community and that Enterprise Community within and outside of Hedera currently that is, is really key for us growing the network and the collaboration and showing people how you don't have to look at someone else as a competitor. You can look at them as a partner in an ecosystem and really use the sum of, of your business. Says to create something productive. That's what we've seen a lot of excitement around is again, being able to get past that first step of I don't know where to start. And that's what corp has been the catalyst to do. Yeah and I think that's much needed, right? I don't know that most people realize what it takes to create an enterprise scale application. You know, there's a lot of considerations when I think about an organization. Who are the key stakeholders that have to be educated before they can even give you the green light to start building? Where do you get the funding from to support that project? And what are the key criteria that you have to think about along the way? So I know you mentioned you've had that experience at toko. I would imagine that probably informed your decision to be to run this committee. Yeah and you know, I've been very adamant about focusing on what is the problem. And in the case of enterprise, what is the business problem or organizational problem that you're looking to solve? If you're talking to executive stakeholders. From my experience, most of them are not interested in the technology that you're going to use to go about it, but they're interested in what are you actually going to accomplish and having real metrics or service level agreements that this is the definition of success, whether it be a proof of concept or further stages down the line. If you can lay that out and articulate it as a business problem that you're solving and then show them that it is solvable. Then you have go forward with that discussion. The other thing is, from a technology perspective, we often have sea level of personnel come to us from different organizations and say, I know I'm supposed to be doing something on blockchain, but what does that mean? And that's where we get to flip the conversation around. And depending on industry or the specifics of an organization and the problems that they may be facing, there's usually an existing use case that we can show them that would fit with their getting started on blockchain and having a productive product, product or service to develop out of that. But those are generally the two ways with the real stakeholders that we involve them accordingly. I think that's a great way of flipping things on their head, right? So it's no longer just blockchain for blockchain sake, but it's solving a problem that you already have. And I think you've mentioned one of those that a lot of people seem to have these days is around ESG and their ESG goals or regulations that have been set for them that they need to comply with. Yeah so I would say, much like we have people say, I know I'm supposed to be doing something with blockchain, but what does that mean? We also have people come to us and say, I know I'm supposed to be doing something around this ESG and what does that mean? And I had also alluded to this in the previous episode. Just because you're doing something that is ESG driven and you're helping an organization go towards either science based targets or sustainability in their operations, it doesn't mean that just is only a green project and that it's just going to be a cost center for someone as they're pursuing something. You need to turn that from being seen as like a punitive of thou shalt meet these science based targets and turn it into incentive of if you went about transforming your business and here's a way to do it. Not only are you going to be able to chase after that sustainability and meet those targets further down the road, let's set a plan in place. And that's obviously not just technology. It's what are your people doing? What are your processes? And then also, how are you leveraging technology to get there? But this can be a profitable project that drives a strong business case, drives our return on investment, and at the same time is driving sustainability. So that's the conversation that I prefer to have again with those same type of stakeholders, flipping it again into a business perspective. And for many of these people who have to answer to boards and to shareholders on a quarterly basis, that's an easier message for them to deliver, along with the fact that we're doing this for sustainability. So that's been our focus there. And so when you dive into those conversations, what types of projects, if you can share, are they starting to think about? So one of the biggest areas that we've seen is supply chain and a lot of large organizations, whether they're in services or manufacturing, they're going to pharmaceuticals, food production, really it really doesn't matter. They're going to have very complex supply chains. And what we're seeing more and more. And what these organizations are becoming aware of is that it's not just good enough for you in your organization to drive towards sustainability, but really be responsible to the left and the right in the supply chain and make sure that all parts of those supply chains are acting in a sustainable way and that there's good governance there, and that when you're doing what you're doing all the way from natural resources to finished product and then reclamation and going back through another lifecycle that that's being done responsibly. So a great example of things that we're working on, which are along the lines of supply chain are building circular economies. So for instance, if you look at batteries, there are raw materials of lithium that may be going into that battery. How do we work with the mining companies to allow them to not only be more profitable in how they're extracting raw materials, but how are we tracking the raw materials that are being extracted from the ground going to manufacturers? They create batteries out of this. Those batteries get set into commercial instances like electric vehicles. And then instead of the batteries coming out of those vehicles when they're expended and then just going into a burn pit in Ghana, for instance, we don't want that to happen. Nobody wants that to happen. But that currently is what is happening. So the alternative there is if we can track these effectively where the materials are going and we can do that obviously with a distributed ledger, technology and sensors and compliance governance as the material moves through the ecosystem and through its lifecycle, that final step is, OK, let's reclaim that material. Let's bring it back around to be reprocessed and let's focus on how you profitably do this, but at the same time, use 80% of reclaimed material, along with 20% of new material. And that actually solves a lot of issues across the supply chain from a sustainability standpoint and an environmental one, a social and from governance standpoint, you're actually able to account for these things because you have a distributed ledger that is auditable and reportable and working with great projects like the guardian, which is an open source project, that's part of the ecosystem. Using that policy work engine, you're able to actually take data, move it through an algorithm and show that you actually met these sustainability targets. And I think for now, there's a whole extra potential work for carbon credit tokenization. I'll come back to that in a minute. But for right now, what the organizations really want to know is at least how do I start monitoring where I am from a sustainability standpoint and how do I look at my business processes and my people and how do I improve what we're doing to drive towards sustainability, but also just get tighter control of my business and then actually be able to know that what data is being collected and reported on is accurate and is going to be acceptable to regulatory bodies. So I think that's the first step. The next step really are things like tokenization of carbon credits. Yeah so first of all, baseline so that you can demonstrate your hopeful improvement times. Yeah and there is a huge, an incredibly diverse ecosystem of ESG products and projects being built on top of that era. How are you as corp potentially engaging with some of these applications? You mentioned the guardian, but we seem to see them popping up almost daily. Yeah, I think it's good. It's the old adage of it's going to take a village, you know, these problems or challenges that we have in front of us again using supply chain. But there are many different examples of it. It's such a large and complex problem or challenge and environment that it's never going to be a single entity or organization that is going to come to the table with an end to end solution. The proper way to do this and I think why corp comm is really taking off and especially around the area of ESG is that we have a number of council members and partners again that they work with that come into the corp environment and then actually start solutions out and say this is my area of expertise or this is my concern. I want to invest either the time or the resources to build out this part of it. But when we. Look at it, we're definitely stronger with some of solutions that are integrated together with Hedera as the core of that integration and then be able to move through that. We built a wonderful proof of concept with service now, which actually does corporate chargeback tracking in real time. It's cost efficient and it solves a real problem for business. Bringing that into a proof of concept environment and having the right resources available. We were able to actually bill the initial version of the proof of concept in four weeks. So you're not talking about months and months or years here like we've seen with traditional development. This is getting to a proof of concept quickly, demonstrating that you could do what you set out to do. And now let's have a discussion on again, where do we take the next step and preferably together with council members and partners, to actually put a solution out there that's going to meet the requirements instead of someone trying to go it alone. Yeah and these are huge market markets, right? I mean, you talk about supply chain, you talk about things like corporate chargebacks. These are not the sexiest things out there, but they are incredibly large markets and it feels like there is a lot of demand to bring some transparency there, allow everybody who is involved in that process to be singing off of the same hymn book. So seems like there's a lot of those untapped areas that there's going to be a huge number of transactions, a huge amount of engagement, even if they're not in the headlines every day. Yeah, and I agree with you. It sometimes may not be the most exciting thing. There are definitely are use cases within ESG that are very progressive, very public facing, and that's an important part of it. But if you look at it, at least in my opinion, how large organizations or groups of organizations, again, in a supply chain get to sustainability? It's an aggregate of all of the activities. And it's not, again, a silver bullet or a panacea of one application or one service that's going to get them there. So if you look at a supply chain, let's say manufacturing, you have your raw materials, those have to be monitored. What was human trafficking eliminated was good worker conditions maintained in that early stage? Was was the environmental fallout from performing the work they did manage properly and cleaned up properly accordingly. So it goes from that to manufacturing. Maybe there is a measurement of energy that's being expended, a quality assurance that the products that are being made are fit and safe. How much of that is shipped and where does it go and how do you track it effectively? You know, this could be food, this could be pharmaceuticals. It could be weapons. I mean, it could be really anything that's being manufactured. And then what happens when it goes out and is used in the field? How did it perform? These are the type of things that if you're going to improve your organization, knowing how the products performed, how long they lasted, you know, these type of things, it's very important data that goes back towards the governance. And then also when they were finished being used, what happened to them and what were you able to do with the raw materials again and bring them back? We have even in transportation, being able to pull data off of airplanes or trains or buses, whatever it may be, and say, OK, well, you know, how efficient are these systems running? How could we improve the efficiency here? You know, do we even have a driver of a bus that is more aggressive in their driving than another one? And this is what the result was. How many people came into an office with location and activity tracking? All of these things are what we would call sensors and collecting. The more data you collect and aggregate and put it through a policy work engine like the guardian, the better the chance you have of being able to build up the aggregate, of knowing where you stand from sustainability and certainly going after those targets. Yeah, and I think that is exactly why the tagline for this podcast is talks about the real world applications for distributed ledger technology. Andy, before we wrap up, anything else you'd like to share with our audience? Yeah, you know, I'd like to say from a Hedera perspective, you know, one of the things that I don't think it's the first thing that's going to happen because so many organizations that are at the beginning of their journey towards ESG, but where we really see a huge capability and a differentiator for Hedera is with carbon credit tokenization. You know, we have seen other groups going after doing this on Ethereum and just from an energy expenditure and from the cost of gas prices. On that deal. It doesn't make it an effective way to actually chase sustainability when you just as an example and this data is publicly available, but a transaction, an average transaction on Hedera is 0.04 Watt hours for that transaction. On Ethereum two, it's 557 Watt hours. So you're talking about a huge delta in the amount of energy that's being consumed for transactions, which if you're driving after sustainability, again, this is really important that you minimize the amount of energy that you're consuming. And then from a cost perspective in the ServiceNow DLA Tokyo example that I was talking about, our average transactions were a 10,000th of a cent. So when you're looking at enterprise solutions and you have a lot of data or transactions coming through, it makes it cost effective for these enterprise solutions. And then if you look at the natural extension of that and tokenizing carbon credits, let's say we put data through a policy work engine and use something like toko to create carbon credits that are available on Hedera network. Well, people can buy and sell these tokens for meeting sustainability or the surplus they have in a cost effective way, in an energy efficient way. And that's again a huge differentiator which we want to see people focus on once they start to aggregate their data and move towards sustainability with their ESG initiatives. Absolutely and to your point, not only low cost per transaction, but fixed and predictable cost per transaction. Right not dependent on fluctuations in coin price or anything like that. Yeah and having those transactions settle in near real time. And that's important obviously from an enterprise perspective of really being on top of your data and your performance. Yes, I don't know any enterprise that's like, sure, go ahead and confirm my transactions whenever is convenient. All right. Well, Andy, Thank you so much. I have really enjoyed this conversation. We so appreciate you coming on and we look forward to hearing more from you in the future. Yeah and if anybody has interest in, you know, corp and some more detail on that look on the Hedera website, there's a lot of information as well as if you want to learn more about toko, our digital creation and ESG platform, it's token network. And from a perspective of ESG consulting, you can always go to DLA Piper and look at our ESG practice there, which front ends what we do on Tokyo from an ESG perspective. And I really appreciate you having me back. And hopefully this was a valuable discussion for the folks that listen to the podcast. Absolutely fantastic. Andy, Thank you so much. Thank you.