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Topl's Theory of Change

Topl's vision for the world

Positive Sum Economics

Topl’s theory of change centers around enabling the monetization of positive impact or “building good” in the world. Our technological innovation is designed to unlock new economic systems that fully account for both the positive and negative impacts of our economic actions.

Terms like impact, sustainability, inclusivity, and social good have many interpretations. For some, these are narrow terms, firmly siloed in the realm of this or that non-profit and philanthropic endeavor or handled by a corporation’s ESG (Environmental, Social, Governance) department making net-zero commitments and increasing diversity and equity.

Efforts by non-profits, multilateral organizations, and corporate ESG initiatives do take us individually and collectively in a more positive direction—providing basic social services, making investments into historically exploited regions, reducing carbon emissions, and rebuilding biodiversity and natural resiliency. But while this work is worthwhile and necessary, these are only bandage solutions. Our current economic systems tear holes in the environment and our societies, leaving under-resourced governments and philanthropic organizations to patch treat the symptoms, including destabilizing wealth inequality, an increasingly hostile and unpredictable climate, the collapse of vital natural ecosystems, and large-scale labor exploitation.

To understand Topl’s theory of change, we must first recognize that all of these symptoms are acknowledged as real and problematic in current economic and financial frameworks. They’re called externalities. An externality can be thought of as a side effect, either positive or negative, of an agent’s business or financial decisions that has an impact on other agents or the environment but is not perceived to incur a cost (or produce a benefit) for the decision-makers themselves. Examples of externalities include the effects of climate change stemming from the widespread use of fossil fuels or the loss of economic prosperity felt in much of the North American and European Rust Belts caused by the offshoring of jobs.

These effects are called externalities because they are, simply put, considered external to economic decision-making and do not have any impact on the agent(s) making decisions. However, Topl maintains that such simplistic labeling belies a more complicated reality. Not only are we as individuals beginning to see the effects of climate change and growing social unrest caused by economic insecurity, but firms and states now need to account for the risks posed by the exact climate change and geopolitical turmoil to which they contributed.

For Topl, “building good” means building the rails to unlock new economic systems that consider not only an immediate share price or short-term profit margin but also fully recognize and embrace that we live in a collective and interdependent ecosystem. And whether that ecosystem flourishes or declines is something that has fundamental effects on every single one of us. There is no second Earth that we can buy with the profits gained from exploiting the first, and there is no value in anyone’s assets if the systems in which they exist are depleted and left to crumble.

Exemplary Pillars

To better understand the what and how of Topl, we first move from the lofty goal of establishing a new, more sustainable, and inclusive economic system to concrete examples.

One way of understanding the idea of internalizing externalities into our economic actions is to think about moving to a more holistic accounting and pricing for what we do, make, and sell. In other words, we need to account for and consider the externalities explicitly in our decision-making and price setting. A second way would be to restate Topl’s vision or goal as simply “to make purpose profitable”, creating an essential causal link between an organization’s positive impact in the global community and its profitability.

Though not exhaustive, the following examples illustrate the broad scope of opportunity for economic change that Topl can facilitate.

Supply Chain Transparency and Resiliency

Any economic system must pay close consideration to the physical supply chains that produce and move real goods for consumers around the world.

As a first step to driving toward supply chains that are more inclusive and resilient (another way of thinking about sustainability), we must be able to reliably capture and relay relevant data around labor practices, including wages and working conditions, as well as potential environmental impacts such as deforestation or carbon emissions.

Focusing even further on production and supply chains for natural commodities, roughly two billion people—more than a quarter of the world’s population—depend on agricultural production for their livelihoods. In many countries in the Global South, this sometimes exceeds 50% of the inhabitants. At the same time, these natural commodity supply chains are some of the most opaque, especially at the critical first mile where labor practices can be most questionable and practices potentially leading to environmental degradation most acute.

Markets for Carbon, Markets for Impact

Climate change is considered by many to be among the most critical threats ever to face humanity as a species. Increased weather and environmental risks are already needing to be priced in, insured against, and considered in long-term business and government planning, despite the fact that carbon and other greenhouse gas (GHG) emissions are perhaps the quintessential economic externality, a byproduct that can no longer be ignored.

That GHG is no longer a throwaway externality when we think more than 20 years into the future is perhaps the greatest evidence Topl draws upon to justify the need for a new economic system.

Topl derives inspiration from early work done turning carbon into a tradable, monetizable asset and maintains that this model can be extended to support investment into other forms of social and environmental impact. Today, businesses and investors put money into carbon reduction and avoidance not only because it is necessary to help mitigate climate change but also because there are financial returns to be gained. Therefore, such a model can help power economically sustainable investment into areas like clean water access, biodiversity, and even gender equity.

At the same time, Topl recognizes the need and potential for innovation in carbon markets themselves. We are actively supporting the development of new, digital-first standards for nature-based carbon sequestration as well as entirely new classes of carbon assets for industries like construction and renewable energy.