Episode transcript: Is net zero even possible without open data

DAVID ELLIMAN

Hello and welcome to Tech Tomorrow. I'm David Elman, chief of Software Engineering at Zühlke. Each episode we tackle a big question to help you make sense of the fast-changing world of emerging tech.

Today I'm joined by Gavin Starks, founder of Icebreaker one, and a leading voice in open data and net zero. He'll be helping me answer the question: ‘Is net zero even possible without open data?’.

GAVIN STARKS

So, my name's Gavin Starks. I'm the founder of a nonprofit called Icebreaker One, which is focused on data governance and net zero, and I've got a long background in Data. I help to co-chair the Open banking standards, was the founding chief exec of the Open Data Institute, and I've set up about a dozen different companies over the years, working on Data.

DAVID ELLIMAN

Oh, that, I mean, that's fascinating in itself. I'm sure we're going to  draw a lot on the parallels between open banking and net zero. But when we talk about open data in the context of climate action, what do you think we actually mean?

GAVIN STARKS

Great question. I think we need to unpack a few words there. One is open data. So, the formal definition of open data is data that anyone can use for any purpose for free. So obviously that's quite limited to things that are in the public domain or are openly licensed. And when we talk about climate action, a lot of the climate science is made available as open data, but when we look at what do we do about it, what actions can we take, we need to get into commercial information and other sensitive data.

So, for example, consumption data for an organisation, manufacturing data, supply chain information, energy data, and so on. And that is typically not open data, it's what we would call shared data. And frameworks like open banking, which is an open standard rather than open data, help people share data at market scale, while maintaining data rights, liability and a whole range of other attributes, but enable that data sharing to happen at a large scale.

DAVID ELLIMAN

So, it is more about maybe constructing sort of interoperable flows between businesses or between regulators to enable the free use of the information that that provides, I guess.

GAVIN STARKS

Yeah, free or paid. And I think this is one of the big challenges in the mix here. When you say open data, even when you say open banking, people think that everything's free. Actually, it isn't. So, there are plenty of business models for open data itself, so even if the data is licensed for free, there are business models that support open data publishing where you can charge for things like service level agreements and contractual agreements, while keeping the data open for anybody to use.

When we get into the shared data landscape, that's really permissioned data with common rules. So in open banking for example, there's no cost to the customer for sharing data, but there's costs that are born within the sector itself. And when data is shared outside of the banking sector, let's say out into an accounting package, there is a commercial value exchange for the delivery of the data.

But this is part of the challenge here is dissociating the ownership or the data rights around who has control and access to that information, and who charges for it. And so there's a whole ecosystem and economy around that. And if we look at open banking, it's generated about 7 billion of economic value for the UK, and there are 14 million monthly active users using open banking across the economy.

DAVID ELLIMAN

Oh, that's incredible. The concept to value, you know, 7 billion, that's huge. I'm kind of fascinated with the parallels between, uh, open banking as an entity and also as a success story and how you view the parallels for net zero.

GAVIN STARKS

I think, firstly, executives and policy makers often think of data as a technology, when it isn't a technology. It's also not the new oil. I prefer to think of data as infrastructure. Like all good infrastructure there was a huge technology component to delivery, but we don't just let everybody do whatever they want when we're building national infrastructure.

We have clear governance and guardrails around the development of national infrastructure so that it works for everyone. If we look at the parallels here between open banking and the delivery of data infrastructure, the features of open banking include the fact that it was predominantly a regulated standard.

And that meant we had to harmonise the legal contracts, the definition of rights, get clear about what the use cases were and the business cases. And the fact that we had a technical solution at the heart of it to help it all wire itself together was absolutely a feature. But the technology has existed for years.

And predates the standardisation of open banking. But it wasn't until it became a standard, until it was regulated where it got harmonised across the market. And without that intervention, we'd still have lots of silos and high cost and friction for data exchange.  

And I think when we look then at the translation of that into the climate world, well, guess what? We've got a systems level challenge. We need to connect data systems across sectors, not just within sectors. And we also need to connect the real economy, so our manufacturing, our industrial base, and so on into the financial economy in a way that they haven't done before.

DAVID ELLIMAN

When I speak to leaders about carbon capture they often talk to me about certain pain points. And you know, the biggest pain point I see is how fragmented everything is. And Gavin mentioned this, companies are pulling data from literally 20 or 30 different systems just to calculate one emissions category.

And here's the thing, even when they use the same standards, they can get wildly different results. And from an engineering perspective, we're also dealing with massive technical debt. Our systems weren't built for this.

So we need to think about where business leaders look for clarity on these issues. And I think Gavin's Perseus project shows us the way here. You find industry consortium that are actually solving these problems, not just talking about them. Look at regulatory sandboxes, where you can test approaches with guidance and build cross functional teams that combine engineering, legal, sustainability, expertise, and whatever else you need, but most importantly, steal the patterns that work.

Open banking took 10 years to get this right. We don't need to reinvent that wheel. We can learn from what they did and apply it faster. Look for proven patterns and adapt them to your context.

Gavin has worked in carbon reporting for over 20 years, and he thinks that the complexity of the space is hurting its progress.

GAVIN STARKS

We absolutely have I'd say a crisis in carbon reporting, because the era where it was fairly straightforward to know what to do if you're burning lots of fossil fuels, just replace them with renewables.

You know, we're still on that journey, but we're getting to the point now where the financial sector is saying, how much difference is it making? Can we trust the data? Is it high enough quality? Can we compare apples and apples with these standards? And the answer that up until now is not very easily, it's very straightforward to use the Greenhouse Gas Protocol aligned with one of the global reporting standards to create wildly different results. So, if you want your carbon footprint to be X, I can probably show you how you can make it two X or half X. And even when you're getting quite good data in the number of ways you can change the outputs, it leads to a lack of trust and, and transparency in the mix.

When we come to how does this then interface with a financial ecosystem, which does get forensic, it is regulated and it does want trustworthy, quality, comparable data. If you don't have trustworthy data, you misallocate capital, you have inconsistent reporting. And the transition plans stall and it's easy for people to shoot down green financed initiatives.

So we needed to move from a situation which has poor data quality to high assurability with comparability and with standards at the heart of it. And there's a program that we're leading, called Perseus, which is designed to look at this exact problem. And rather than saying ‘how do we automate all carbon reporting?’, we started from the other end of the telescope.

We started from the perspective of saying, ‘what one thing can we get through the system here that makes sense?’. That can be reasonably assured, and is in every standard and applies to every SME. And the starting question there was for the banks is ‘what do you need in order to make a difference to your benchmarking and baselining for green lending?’.

We're now at a point where a bank has issued a loan using smart meter data from an electricity smart meter, that has gone through an entire supply chain of data flow, from the smart meter through various bits of national infrastructure through into carbon accounting applications. And the carbon accounting application has created the carbon impact of that in a harmonised way.

DAVID ELLIMAN

Uh, that's, uh, fascinating. I just got this image in my mind that while everybody struggles to understand the way that they do their carbon accounting and reporting through the different standard bodies that exist and trying to then, I guess, look at their energy bill and attribute it. Somewhat post hoc.

And what you've got here is something that says, actually we're gonna take one thing and we're gonna construct a golden thread from point of use through the network, through the system. And we're gonna be able to connect that to the people that make the decisions in this case based on green lending, and harmonise on something that they can actually have some trust in terms of data quality and certain assurances.  

GAVIN STARKS

Absolutely correct. And a lot of people at the beginning of this process, usually the technology provider said, ‘well, this is easy, how hard can it be to get the energy data through the system so that we can create a harmonised carbon calculation?’. The technical bit isn't the hard bit. 90% of the effort is governance.

90% of the effort is getting everybody to agree. Getting two people in a room, you tend to have at least four opinions. Getting, as we had last year, 200 people working on this program, both on the legal, the compliance, the business models, the use cases, the user needs, the technical standards, the ontologies, right the way through to API standards.

So most of our work at Icebreaker one is to coordinate all of these different threads and bring them together. Around that one use case. And I think the parallels here with the development of open banking and how we've gone about doing this are really close.

Because people look at open banking now. It was 10 years ago, actually this year that I co-chaired the development of the original standards. I think what sometimes gets forgotten in the story now is people look at it and say, well, this just supplies across the banking sector. We've got lots of different use cases, we've got lots of different users and applications, but we didn't start by trying to boil the ocean.

We started with one use case, which was, can we better enable account switching? Now, many of the stakeholders in that, particularly banks, didn't like that use case, as you might well imagine. It's a good way to lose customers. However, we had 150 people working on that original standard and we had three months to deliver it at the behest of the Chancellor.

So we had a fairly hard deadline. The only way we navigated through that was to keep a firm hand on that use case and say, can we solve for this use case? But keeping in mind that we want to support other use cases, but unless we solve for one, we're not gonna solve for any.  

And what we're seeing is now that the data act has passed in the UK, all sectors now have to have a smart data strategy.

And we're seeing many of the same patterns where people are saying, oh, we need to create a general data licensing scheme. And actually we see the same conversations playing out. If people don't start with a very narrow use case, which is anchored in business value and user needs, then you end up having an infinite conversation.

DAVID ELLIMAN

A narrow use case would look exactly like what Perseus is doing. They pick one thing, the electricity smart meter data, going to carbon calculations for loans. That's it. One data pipeline, one clear outcome. When I'm building software, I'm always pushing for this approach.  

Organisations need to think about how to approach and identify the right use case to begin with, and that needs to be more science than magic, maybe. And you've gotta look for the high frequency pain points, problems that people face daily or weekly, and not annually. Annual problems can wait, daily problems can't. Make sure you can actually access the data today, even if it's manual.

If you can't get the data manually, you won't be able to automate it. Get everyone to agree to this, and that this is the problem, get everyone on board with the priority from day one. If you're still debating what to focus on, then you're not ready.

And here's my litmus test. Can you build a proof of concept in, let's say, three months? If not, it's too big. Can this solution become a platform for other use cases? And if not, it might be too small. You want that sweet spot where you can deliver quickly, but build something that scales.

Even though open banking had a narrow focus, it wasn't successful straight away.

GAVIN STARKS

I think that open banking took quite a while to get to market, partly because it was the first of its kind, partly because it was also in the financial sector and therefore was also quite expensive. And because it was regulated, had to jump through lots of regulatory hoops.

However, what we've seen as people have copied open banking around the world, usually what happens or what has happened people have come and said, oh, it's just APIs, we'll copy the API piece of it. And then they find out that isn't enough and they come back and start copying more of it.

And one, the reason that I think open banking is kind of remarkable as the thing that has actually worked, is it's really the first time we've regulated something for the way the internet actually works.  

DAVID ELLIMAN

Hmm.  

GAVIN STARKS

You know, we have a decentralised and federated distributed marketplace and we needed something that was commensurate with, and supportive of, the way that the web works, supported by regulatory instruments. And so when we look at that through the lens of what happens next, as we've gone through open energy, we got, you know, KRI funding, research funding to kick that off. We brought together hundreds of different organisations across the energy sector to say, this is how to think about this, and of course, everybody started off by saying, ‘but we're not a bank, we're nothing like banks.’.

Now you fast forward two or three years and people go, ‘oh, the data transfer is kind of the same, isn't it?’. You've got a data payload in one system. That you can give, some unique identifiers to, it can go through other systems, you can track the provenance, and it needs to go to multiple places with rights and provenance and liability. And so you people start to see the design patterns.  

And when we bring back the sustainability lens to this, a lot of the sustainability work was about compliance, and it wasn't really about the size of the opportunity. So you could say, you know, compliance should really be the floor and opportunity should be the ceiling.

And if you can get shared data flowing across, the different parts of the supply chain here, it enables people to create new financial products, it enables better risk management, and it brings transparency to the market that we didn't have before to counter greenwash claims and so on.

So that's where we’re starting to see the opportunity unlocked.  

The predictions in various national reports a few years ago were that green lending should be about 40 billion in the UK. If you look at the reality of that today, it's probably more like 1 billion.

DAVID ELLIMAN

Right.

GAVIN STARKS

So we have a market gap. And I'd say it's not the only solution, but having credible information flow that you can check, you can audit, that meets the compliance criteria and enables new product invention and makes it easier for the customer – because one thing, you know, just bring the customer right back to the fore here –  we've got this to the point that the SME in, in this instance, in order to share all of this data into the calculation process and share the report back to the bank is one click. In the same way that open banking enables you to share your data between different organisations with, you know, very low friction.

A critical piece here is, you know, if SMEs don't have the time, the understanding, the money, even if they've got the desire to engage in this space. So we need to make it trivially easy for them to engage in the market and do that personalised matching for them in a way that they can trust.

So really when we're thinking about how do we move the sustainability agenda forwards, whether it's called energy efficiency or cost savings, or net zero, or carbon reduction, or transition plans, doesn't really matter from our point of view. Can you get the credible information through the chain here to justify and validate and enable the assurability of the decisions that are being made, the financial decisions that are being made.

DAVID ELLIMAN

So the UK Data Act is going to shape the way organisations handle and share data. It's new for 2025, and it's really going to affect technology and software engineering. It's forcing a complete mindset shift in how we build systems. As engineers, we're moving from building castles with moats to building bridges.

Every system now needs to expose data through standardised APIs. It's becoming mandatory, not optional.  

It's the biggest architectural shift I've seen in a while.

The Act is gonna present some opportunities and challenges for businesses trying to innovate and staying compliant. The opportunities are huge. Startups can now compete with incumbents because the data playing field is leveling.

Integration costs are dropping because APIs is becoming standardised or, let's say, harmonised, and new business models are emerging around data orchestration and value-added services on top of open data.

But the challenges are real too. Compliance is tough for small teams. You need to understand the regulations, implement them correctly, maintain them. The security complexity of Open ecosystems keeps me up at night. How do you ensure data security when it's flowing through multiple systems? And there's the constant tension between being open enough to comply, but still maintaining competitive advantage.

That's a conversation happening in every boardroom right now.

Gavin sees the Data Act as an inflection point in the UK's journey to creating common standards.

GAVIN STARKS

I think this year for the UK is a big year. The data bill, as it was, took several years to get through the process, but it is now the Data Act. And it establishes rights, you know, builds on GDPR. But those rights are not just for consumers, they're also for businesses.

That's something that I'm not sure if the penny's completely dropped on it yet, but we're at an inflection point here in the same way as telecoms, finance, and the internet, and common standards are the gateway to scale. The Data Act and the subsequent rules and secondary legislations are gonna come into place here, are going to change the way that we move data around the country. And we need to think about data not as the new oil (I've always objected to that framing, for many reasons).

So, data is infrastructure. A bit like roads, you know, you can have toll roads, open roads, public paid roads, private roads and so on, or energy grids. And like infrastructure's got to be governed, it has to be standardised, and it's got to be maintained so that everybody can build on top. And I think one of the things I'd point at Perseus, what we're trying to do there is move the floor again from compliance. And move the bar upwards so that what is pre-competitive is the raw data sharing and the calculations. That should all be effectively, not a competitive space.

Creating a better carbon footprint than another organisation shouldn't be something we're competing on. It's physics. You're consuming this much, you're emitting this much. What we must be competing on is what do we do about it? How do we finance it?

How do we accelerate organisational journeys towards a net zero and greater sustainability in the long term? So, when I think about this through the board's lens, you know, boards need to see investment in data as a long-term market shaping exercise, not as a cost center. But also, not thinking of it in a traditional kind of mainframe perspective of let's build a castle and moat.

DAVID ELLIMAN

What do you think will happen in terms of this over the next pick your time period? You know, a year, five years?

GAVIN STARKS

Yeah, it is a very important question. So, a few reflections. One is one of the reasons I created Icebreaker One as a nonprofit was to address exactly the challenge I saw of a crisis in confidence around the underlying data for net Zero.

It's easy for geopolitics to get in the way of progress, so a design parameter of everything we do at Icebreaker is to make it almost irrelevant whether or not you care about net zero. Obviously, we say it, that's a big target for us. But by joining together the financial incentives with real world environmental impact in an assurable way means that, from a financial perspective, it doesn't matter whether you believe in climate change or not, it's just a better investment decision.

And the work that we've done across the insurance sector, when you look at which parts of the financial system care most about these long-term impacts, pension funds and insurers are right at the front of that queue.

The banks and the financial lenders and investment community are right behind them, because if you're trying to make good investments right now, all of the risk managers know, regardless of the geopolitics, that climate change is real. Even if you don't believe in the causes of it, it is still destroying your buildings. It is still costing you a lot of money.

So you have to act, actually, you've got a fiduciary duty to act, to protect your shareholders. So if we can wire this up in a way where these things are hard linked with assurable data, then we're not politics proof, but at least politics resistant. And I think when you look at the vast majority of global organisations are already on the train. And it doesn't really matter what a lot of the politics does, and it really does matter what the politics does. Because when you look at what the US is doing right now in rolling back its green investments, that's catastrophic for their economy. It's the precise opposite of their political rhetoric at the moment. And they will suffer as a consequence of it, economically.

They're opening up huge opportunities for other countries, including ones they don't particularly like, to step in and own huge parts of the global infrastructure. But it creates huge opportunities for the UK here, I'd say we are one of the leaders in the renewable energy space, and demand response, and so on.

And there's huge export opportunities for UK expertise, and because the UK's got such a good lead now on the data agenda with the Data Act, I think we're gonna get there first, on a lot of these network-thinking based data sharing models. So, I'm always skeptical of our ability as a species to address climate change, but I am internally hopeful that we have to get there.

DAVID ELLIMAN

That leads us into my final question. So taking everything that we've spoken about, do you think that net zero is even possible without open data?  

GAVIN STARKS

I'd say net zero is impossible without access to shared data and to open data. We've seen with open banking that, if we set standards with robust governance, entirely new markets can flourish.

We now need to do the same thing for energy, fFinance, and the real economy impact data. So, consumption data, supply chain data and so on.

That's highly sensitive, there are national security implications of that level of data sharing. So, we've got to approach with caution, but if we take an approach of ‘data is not the new oil, data is infrastructure like roads or grids’, and if we build to open, harmonised, and trusted standards, we can create foundations that let innovation and investment flow and climate action scale at the pace that we need.

So, I think here it's absolutely critical to our future and what we're hoping with initiatives like Perseus, that we're showing how it can be done. It is not easy to do, but it is possible.

DAVID ELLIMAN

Gavin, thank you very much. It has been an absolute privilege to speak to you today, so thank you so much for your time.

GAVIN STARKS

Thank you.

DAVID ELLIMAN

So to return to the central theme of the episode, is net zero even possible without open data? Well, it's like the old adage: anything is possible if you've got an infinite amount of effort, time, and money to put into it, but there's gonna be certain things that actually make it easier. And having open data (and we've seen that open data can lead to open standards and harmonisation of data exchanges), it's gonna make life a lot easier.

So, whilst it isn't technically needed, it's gonna make life a lot easier if we've actually implemented systems that integrate more openly and cleanly.

Thanks for listening to Tech Tomorrow brought to you by Zühlke. If you want to know more about what we do, you can find links to our website and more resources in this episode's show notes. Until next time.