Even by startup standards, the mission of Gro Intelligence is lofty. Sara Menker, the company’s founder and CEO, says its goal is to provide tools to help confront “two of the biggest challenges we face as humanity: food security and climate change.”
Gro Intelligence uses AI and machine learning to provide thousands of clients, ranging from big food companies like Unilever and Yum! Brands to financial institutions including BNP Paribas and Wells Fargo, with a host of data and analysis on the global agricultural ecosystem. In all, Gro computers hoover up 650 trillion data points from more than 40,000 data sets—crop forecasts, satellite images, topography, reports on precipitation, soil moisture, evapotranspiration—to provide insights into 15,000 different agricultural products. The company also works with governments around the world on food-security issues to help them adequately plan for food reserves.
Want to know how the African swine fever impacted the Chinese pork market and its subsequent cascading impact on global commodity prices? Gro has a model. Companies are anxiously tracking Gro’s intelligence from Brazil, the world’s leading sugar producer, where a threatened trucker strike over the cost of diesel fuel recently drove global sugar futures prices to a four-year high. Gro even created a climate risk score for 300 ski locations around the world. “Southern-hemisphere ski destinations like Patagonia and New Zealand are likely to remain good or get better for skiers, while Japan, interior U.S./Canada and parts of the Alps will experience degradation,” reads one of Gro’s reports.
Menker, a former Morgan Stanley commodities trader—she still reminisces about mildly profane ditties to describe trading strategies (“Sell a teeny, lose your weenie”)—is laying the foundation for a new class of financial instruments, based on its comprehensive data, to help companies hedge against climate change. The company already has an index that measures the severity of drought that could serve as the basis for one such instrument. To help with this effort, the firm recently added Gary Cohn, a former president of Goldman Sachs, who has a deep background in commodities trading, to its board. (Cohn served a stint as senior economic adviser to President Trump.)
The move comes as major financial regulators are calling for the creation of such new products to help manage climate risk. “Financial innovations, in the form of new financial products, services and technologies, can help the U.S. economy better manage climate risk and help channel more capital into technologies essential for the transition,” according to a recent report by the Commodity Futures Trading Commission. Both the Federal Reserve and the Treasury Department have recently created new senior-level positions to address the risk of climate change to the stability of financial markets. The SEC is also expected to introduce new requirements related to carbon emissions and other sustainability metrics. In the wake of the devastation and economic disruption of the power outages in Texas this week, Fed governor Lael Brainard gave a speech on Feb. 18, noting that “financial institutions that do not put in place frameworks to measure, monitor and manage climate-related risks could face outsize losses on climate-sensitive assets caused by environmental shifts.”
For Menker, it’s the latest development in an active year. Gro recently completed a $85 million funding round. Menker was born in Ethiopia and went to the U.S. to attend Mount Holyoke College.
Amid the fundraising and growing the business in a pandemic, Menker was intensely involved in efforts to combat the locust swarm that has devastated hundreds of thousands of acres of crops and pasture land in Africa, including her native Ethiopia. The Gro team pored over satellite data to monitor and predict the path of the swarm to help figure out where best to deploy scarce pesticides, and worked with the government on how to ramp up food reserves ahead of a projected increase in global food prices.
Menker recently joined TIME for a video conversation about the importance of using financial tools to help manage climate risk, the coming calorie deficit and why her company employs people who collectively speak more than 30 different languages.
Read the article and interview here: https://time.com/5940733/climate-change-gro-intelligence-ceo-sara-menker/