incentivising a more sustainable world
How do companies use their position in society to act as a catalyst for good?
In this increasingly fragile world, companies are being scrutinised by multiple stakeholder groups to see if they can be trusted to make a positive impact on society and the environment.
If they can’t, they won’t survive.
The PyTerra Exchange is a platform being developed in partnership with UK cities, where companies can build mutually beneficial relationships with the communities in which they operate.
How? Quite simply. Companies buy ESG* sponsorship vouchers for their staff, customers and others to invest in local social and environmental initiatives AND solution suppliers sell ESG sponsorship opportunities which they have created with local collaborators.
Welcome to the PyTerra Exchange, where local people connect their companies to local communities through sponsorship.
*Environment, social and corporate governance
Key market driver
Local is the new force to be reckoned with.
On the one hand, communities are awakening to the need to develop resilience against social and environmental challenges such as climate change.
On the other, companies are discovering the value of becoming a trusted local community partner.
Sponsorship benefits
For sponsors (primarily companies, but other organisations too)
- enhanced brand
- local social and environmental impacts
- reinforced social licence to operate
- more satisfied people in their value chain
- protecting their future by tackling issues such as climate change
For voucher holders
- personal satisfaction and empowerment
- personal connections across home cities
For communities
- enhanced local profile
- increased inward investment
- increased local employment
- increased sense of local pride and social cohesion
For solution suppliers
- larger projects
- improved cashflow
- support for collaboration and innovation
For cities
- more rapid delivery of ESG targets, eg Net Zero by 2030
- less pressure on public finances through increased private finance
- levelling up as all communities have access to transformational funding
- stimulation of the local economy through the application of ‘buy local’ funding criteria
Types of sponsored initiatives
Sponsorship is being initially targeted at decentralised low carbon and renewable energy initiatives across cities, examples of which fall under the following two categories:
Place-based initiatives
- microgrids
- district heating
- micro-generation
- energy storage
- prosumer market development
- Net Zero residential and commercial development (new and retrofit)
- demand-side management and optimisation
- factory-based food production
Communications-based initiatives
- EV networking, charging, storage and servicing
- conversion of petrol/diesel vehicles to electric
- cycle storage and servicing units in city centre multi-storey car parks
- drones for local delivery and servicing
- traffic congestion reduction systems
How the PyTerra Exchange works
The more brand enhancement achieved by companies, the more companies will invest in ESG sponsorship.
The more sponsorship funding made available, the more solution suppliers will present investible initiatives and the more capacity there will be for brand enhancement.
How sponsors achieve their return on investment
There is nothing more powerful than a story to convey the transformation that a social or environmental initiative can have across communities.
The PyTerra Exchange enables the creation of film clips by talented local production teams, capturing these stories and providing the raw material which sponsors and their voucher holders can share with their social media channels.
Telling these stories shows how companies are stepping up and making a positive impact on the local communities within which they operate.
This helps companies to gain their social licence to operate and to enhance their brand.
For companies, this is not just about philanthropic giving. It about how they can become both a force for good and a catalyst for change by becoming active sponsors. It touches on multiple aspects of their operations: CSR/ESG, HR, marketing, supply chain management, and risk management.
How the PyTerra Exchange leverages value
The PyTerra Exchange acts as a catalyst in the supply side of the market, leveraging value from every initiative.
- The Exchange especially uses sponsorship to seed fund initiatives, closing the affordability gap and incentivising action which otherwise would not take place – this is called ADDITIONALITY.
- Either by itself or when used as part of a blended finance approach, this approach leverages value from the supply side of the market. For sponsors, this means their contribution has a significant multiplier effect (see opposite).
- Funding is paid direct to suppliers once trigger points in an initiative have been reached and independently validated. This direct route improves supply chain cashflow, favours investment into local UK businesses creating local jobs, and helps smaller businesses to raise finance.
- Example:
A £1m initiative needs to raise 10% to close its affordability gap. This £100k is raised through sponsorship on the PyTerra Exchange. If the initiative creates 5x more benefits than costs (£5m), the original sponsorship of £100k has actually leveraged 50x the sponsorship value.
How sponsorship funds are managed
Governance is a critical part of the PyTerra Exchange.
The Exchange is a blockchain-facilitated system, enabling faster, safer and more effective sponsorship transactions.
Every unit of sponsorship funding is directed, tracked, managed and evaluated across every stakeholder during the life of a sponsored initiative.
This technology is combined with a market network model being developed by PyTerra to facilitate collaboration between suppliers in order to enhance the supply and quality of investible sponsorship applications.