2024-11-06T11:26:13-06:00 2023-12-31 410746749 CLIFTONLARSONALLEN LLP 227 WEST TRADE STREET SUITE 800 CHARLOTTE NC 28202 990 2023-01-01 861877472 ECOSYSTEM SERVICES MARKET CONSORTIUM ECOS 7754768248 12835 COOK DRIVE THORNTON CO 80241 DEBBIE REED EXECUTIVE DIRECTOR 7754768248 2024-11-05 1 0 JOHN NORMAN P01506766 7049985200 2024-11-05 2023 2024-10-15 13:58:12Z X ALANA PACHECO 12835 COOK DRIVE THORNTON CO 80241 2834189 0 X HTTPS://ECOSYSTEMSERVICESMARKET.ORG/ X 2020 VA TO ADVANCE ECOSYSTEM SERVICE MARKETS THAT INCENTIVIZE FARMERS AND RANCHERS TO IMPROVE SOIL HEALTH SYSTEMS THAT BENEFIT SOCIETY 6 6 0 6 0 0 6538452 2113031 60679 721074 84 84 0 0 6599215 2834189 0 0 0 0 303658 322052 0 0 0 6403171 3322600 6706829 3644652 -107614 -810463 4460746 3913667 1870589 2133973 2590157 1779694 X ESMC IS A NON-PROFIT THAT WORKS TO COMPENSATE FARMERS AND RANCHERS WHO IMPROVE THE ENVIRONMENT THROUGH THEIR AGRICULTURAL PRACTICES. OUR MARKET PROGRAM REDUCES GREENHOUSE GASES, IMPROVES WATER QUALITY, AND INCREASES OTHER ECOSYSTEM SERVICES TO BENEFIT SOCIETY. 0 0 2980343 721074 ECOSYSTEM SERVICES MARKET CONSORTIUM (ESMC) IS A NON-PROFIT, MEMBER-BASED ORGANIZATION LAUNCHING A NATIONAL SCALE ECOSYSTEM SERVICES MARKET PROGRAM FOR AGRICULTURE TO RECOGNIZE AND REWARD FARMERS AND RANCHERS FOR THEIR ENVIRONMENTAL SERVICES TO SOCIETY. ESMC MEMBERS REPRESENT THE SPECTRUM OF THE AGRICULTURAL SECTOR SUPPLY CHAIN WITH WHOM WE ARE SCALING SUSTAINABLE AGRICULTURAL SECTOR OUTCOMES, INCLUDING INCREASED SOIL CARBON, REDUCED NET GREENHOUSE GASES, AND IMPROVED WATER QUALITY AND WATER USE CONSERVATION. (CONTINUED ON SCH O)DURING 2023, WE CONTINUED TO SUCCESSFULLY ENGAGE AGRICULTURAL VALUE CHAIN AND SUPPLY CHAIN PARTNERS IN MARKET PROGRAM INNOVATION, TESTING, AND REFINEMENT TO FURTHER BUILD OUR PROGRAM. REFINEMENTS TO PROTOCOLS, DATA COLLECTION, PROJECT DEVELOPMENT AND PARTNERSHIP ENGAGEMENT MODELS PROCEEDED, AS DID EFFORTS TO TEST AND EMBED ADVANCED TOOLS AND TECHNOLOGIES INTO OUR PLATFORM. THE RESULTS INCLUDE CONTINUED PROGRAMMATIC STREAMLINING AND ACHIEVEMENT OF CRITICAL COST-EFFICIENCIES TO ENABLE SCALED PROGRAM OPERATIONS. WITH THE GENEROUS SUPPORT OF A GRANT FROM THE FOUNDATION FOR FOOD AND AGRICULTURE (FFAR) AND FROM MANY ADDITIONAL FUNDERS, MEMBERS, AND COLLABORATORS, WE HAVE ACHIEVED CRITICAL PROGRESS SINCE LAUNCHING OUR PUBLIC PRIVATE PARTNERSHIP IN 2019 AND OUR MARKET PROGRAM IN 2022. WE LAUNCHED 5 NEW PROJECTS WITH PARTNERS ACROSS 6 ESMC PROGRAM REGIONS. ENROLLMENT IS ONGOING, BUT TARGETS OVER 300,000 ACRES ACROSS MUCH OF THE UNITED STATES, PARTICULARLY IN THE SOUTHEAST AND CHESAPEAKE BAY REGIONS. EXISTING PROGRAMS IN THE SOUTHERN PLAINS, NORTHERN PLAINS AND CANADA ALL SAW INCREASED ENROLLMENT, ENGAGING NEW PRODUCERS AND PARTNERS ACROSS THESE GEOGRAPHIES. ESMC HAS SUCCESSFULLY GENERATED SCOPE 3 CARBON OUTCOMES FROM THESE PROJECTS AND CONTINUES TO ENGAGE FOOD AND AG COMPANIES ACROSS THE SUPPLY CHAIN TO SUPPORT THEM. NEW PROJECTS LAUNCHING IN 2023 THROUGH 2024 INCLUDE PROGRAM EXPANSION IN LIVESTOCK GRAZING SYSTEMS (BEEF) AND DAIRY. PILOT PROJECTS WILL ALLOW ESMC TO REFINE PROGRAM PARAMETERS AND EVENTUALLY SCALE TO DELIVER OUTCOMES TO THE MARKET. ESMC HAS PARTNERED WITH NEW MODELING SERVICE PROVIDERS AND IS DEVELOPING PROTOCOLS FOR THESE SYSTEMS. WE INCORPORATED ADDITIONAL ENHANCEMENTS AND INNOVATIONS IN PROGRAM OPERATIONS AND SYSTEMS OF OUR NATIONAL SCALE, HARMONIZED, STANDARDIZED ECOSYSTEM SERVICES MARKET PROGRAM. THE DEVELOPMENT PHASE OF OUR PROJECTS HAS GENERATED SIGNIFICANT IMPROVEMENTS IN EFFICIENCIES AND COST REDUCTIONS FOR EVERY STEP OF THE PROGRAM, WHICH IS GRAPHICALLY DISPLAYED IN THE FOLLOWING PROCESS DIAGRAM. ESMC'S V9.0 CROPLANDS PROTOCOL WAS UPDATED, EXPANDED, AND IMPLEMENTED FOR 2023 CROPLAND PROJECTS TO INCLUDE NEW CROP TYPES, SUCH AS COTTON AND NEW REGIONS, SUCH AS SOUTHERN CANADA (MANITOBA AND SASKATCHEWAN). 2023 PROJECTS WERE SUBMITTED IN Q1 2024 FOR VALIDATION, VERIFICATION, AND CERTIFICATION BY SUSTAINCERT WITH RESULTS AND APPROVAL EXPECTED IN Q4 2024. SIX CROPLAND PROJECT PRODUCERS PARTICIPATED IN THE VALIDATION/ VERIFICATION AUDIT PROCESS THAT REQUIRES RANDOMLY SELECTED AUDITS. THE SUSTAINCERT AUDIT ASSESSES PROJECT DESIGN, PROTOCOL, AND CULMINATES IN IMPACT UNITS GENERATED ON THE VIVID PLATFORM. A SIGNIFICANT REVISION OF ESMC'S INTEGRATED PROTOCOL (V9.0) WAS STARTED IN Q3 2024 TO SIMPLIFY AND STREAMLINE THE PROTOCOL TO MAKE DATA ENTRY BURDENS LOWER FOR PRODUCERS, ADHERE TO NEW RULES FROM STANDARD BODIES SUCH AS GREENHOUSE GAS PROTOCOL AND IMPROVE DOCUMENTATION AROUND PROCESSES LIKE QUALITY CONTROL AND QUALITY ASSURANCE. ESMC IS ALSO DEVELOPING PROTOCOLS FOR GRAZING SYSTEMS (LIVESTOCK) AND BIODIVERSITY IN WHICH ESMC WILL DEVELOP A METRIC AND PROCESS BY WHICH BIODIVERSITY CAN BE MONITORED OVER TIME ON AGRICULTURAL LAND. THE ESMC MMRV (MEASUREMENT MONITORING REPORTING VERIFICATION) PLATFORM UNDERWENT SIGNIFICANT DEVELOPMENT UPDATES, IN TERMS OF NEW FEATURES, AN IMPROVED USER EXPERIENCE AND MORE PERFORMANT WEB APPLICATION, API INTEGRATIONS, DATA PORTABILITY AND ACCESSIBILITY, AND MULTI-MODEL CAPABILITY (UTILIZING BOTH DNDC AND ECOSYSTEM MODELS TO GENERATE OUTCOMES). ADDITIONALLY, ESMC DEVELOPED SOFTWARE FOR AUTOMATED LCA EMISSION FACTOR GENERATION AND DATA ENRICHMENT, WHILE ALSO PRODUCING VERIFIED OUTCOMES WITH THIS DATA. WITH THE AGI API INTEGRATION, ESMC HAS BEGUN UTILIZING MACHINE DATA, GENERATED FROM THE TRACTOR CAB, AND MAPPED TO ESMC'S DATA STANDARD TO ENABLE INCREASED AUTOMATION OF DATA ENTRY (AND STORAGE IN THE MMRV DATABASE). AS WE TEST MORE ACRES UTILIZING MACHINE DATA, ESMC WILL ANALYZE THE DATA TO GENERATE USEFUL INSIGHTS ON THE POTENTIAL OF THIS TECHNOLOGY TO SCALE THE DATA ENTRY NEEDED FOR GHG REPORTING. ESMC HAS ALSO BEGUN WORK TO AUTOMATE WATER QUALITY IMPACT GENERATION (CO-DEVELOPING A PYTHON SDK WITH TETRATECH) FOR EVENTUAL INTEGRATION AS A MODULE WITHIN THE ECO HARVEST MMRV. IN TERMS OF SOIL STRATIFICATION AND SAMPLING WE HAVE DEVELOPED A TOOL FOR AUTOMATICALLY GENERATING SOIL SAMPLING POINTS FROM A FIELD BOUNDARY (UTILIZING A STRATIFICATION ALGORITHM PREVIOUSLY DEVELOPED THROUGH A PARTNERSHIP BETWEEN ESMC AND OURSCI). ADDITIONALLY, WE HAVE BUILT DATA INTEGRATION WITH ANOTHER THIRD-PARTY SOIL STRATIFICATION AND SOIL SAMPLER EARTHOPTICS, WHILE ALSO IMPLEMENTING A PROJECT LEVEL STRATIFICATION APPROACH AND MAKING PROGRESS TO INCREASE SOIL SAMPLING EFFICIENCY AND REDUCE PROGRAMMATIC COST. THE ESMRC TEAM WORKED TO ADVANCE AND IMPLEMENT NUMEROUS MEMBER-APPROVED RESEARCH AND DEVELOPMENT PROJECTS FOCUSING ON SOIL ORGANIC CARBON, GHGS, WATER, AND BIODIVERSITY DURING 2023. - ESMRC MADE SIGNIFICANT PROGRESS ON THE ADVANCED SOIL CARBON QUANTIFICATION TECHNOLOGY ASSESSMENT PROJECT, WHICH FOCUSES ON THE IDENTIFICATION, ASSESSMENT, TESTING, AND DEVELOPMENT OF ADVANCED TOOLS AND TECHNOLOGIES TO MORE EFFICIENTLY AND COST-EFFECTIVELY MEASURE AND QUANTIFY CHANGES TO SOIL CARBON AND AVOIDED OR REDUCED GHGS. - ESMC REVISED THE CROPLAND SOIL SAMPLING PROTOCOL TO REDUCE THE DENSITY OF SAMPLING REQUIRED WHILE STILL MAINTAINING 90% CONFIDENCE THAT SOIL SAMPLE RESULTS WILL INFORM BASELINE SOC REQUIRED FOR MODELING. ESMC HAS WORKED WITH THE TECHNICAL WORKING GROUP AND EARTHOPTICS TO REFINE AND REVIEW THESE PROTOCOL CHANGES. REDUCTION IN SOIL SAMPLING NEEDS HAS REDUCED LABOR, COST AND ROOM FOR ERROR IN THESE PROCESSES. - THE ALTERNATIVE SCOPE 3 WATER QUALITY QUANTIFICATION TOOL EVALUATION PROJECT COMPLETED A TECHNICAL EVALUATION OF POTENTIAL WATER QUALITY QUANTIFICATION MODELS AND TOOLS TO MEET SCOPE 3 CORPORATE SUPPLY CHAIN REPORTING NEEDS. BASED ON PROJECT RESULTS, ESMRC HAS DEVELOPED A SIMPLIFIED WATER QUALITY AND QUANTITY CALCULATOR TOOL THAT COULD BE UTILIZED VIA SPREADSHEET. ESMC IS CURRENTLY WORKING WITH TETRATECH TO INTEGRATE THE PLET WATER QUALITY TOOL (DEVELOPED FOR EPA) INTO THE ESMC MMRV SO THAT WATER QUALITY OUTCOMES WILL AUTOMATICALLY BE GENERATED WITH CARBON OUTCOMES. THIS IS EXPECTED TO BE LIVE IN Q1 2025. -ESMRC COMPLETED, IN PARTNERSHIP WITH A CONSULTANT, A REPORT ON THE CURRENT STATUS OF BIODIVERSITY MARKETS, AS WELL AS DEVELOPING A PILOT PROJECT WITH PARTNER NONPROFIT ORGANIZATIONS TO TEST A BIODIVERSITY ACCOUNTING METRIC. ESMC IS WORKING WITH TETRATECH AND THE ESMC TECHNICAL WORKING GROUP TO DEVELOP A FRAMEWORK FOR BIODIVERSITY MEASUREMENT AND MONITORING THAT WILL BE COMPLIANT WITH SBTN AND OTHER STANDARDS IN THIS SPACE. -ESMC PARTNERED WITH NUMEROUS COMMUNITY-BASED ORGANIZATIONS TO FURTHER ITS OUTREACH EFFORTS TO HISTORICALLY UNDERSERVED PRODUCERS. THIS WORK INCLUDES WEBINAR SERIES WITH PARTNERS, Q&AS WITH INTERESTED PRODUCERS, AND PROGRAM DEVELOPMENT WITH COMMUNITY-BASED ORGANIZATIONS. 2980343 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 0 1 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 1 118 0 0 0 0 0 0 0 0 0 0 0 0 0 0 X 6 6 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 VA X DEBBIE REED 2027014298 3426 GREENTREE DRIVE FALLS CHURCH VA 22041 DEBBIE REED EXCUTIVE DIRECTOR 50.00 X X 322052 0 0 CHAD ELLIS CHAIR 2.00 X X 0 0 0 KRIS JOHNSON PHD VICE-CHAIR 2.00 X X 0 0 0 EMILY JOHANNES BOARD`MEMBER 1.00 X 0 0 0 ASHLEY MCKEON BOARD MEMBER 1.00 X 0 0 0 JAY WATSON BOARD MEMBER 1.00 X 0 0 0 RATTAN LAL BOARD MEMBER 1.00 X 0 0 0 322052 0 0 1 0 1 0 HEARTLAND SCIENCE AND TECHNOLOGY GROUP 801 WEST MAIN STREET SUITE B214R PEORIA IL 61606 SOFTWARE DEVELOPMENT 848116 DEBBIE REEDDRD ASSOCIATES 3426 GREENTREE DRIVE FALLS CHURCH VA 22041 CONTRACTED EXECUTIVE DIRECTOR 322052 JOHN JEWORSKI 2889 24TH STREET APT 2 SAN FRANCISCO CA 94110 OUTSOURCED CHIEF PRODUCT AND BUSINESS OF 211558 PLANT GROUP 2315 SPRUCE STREET PHILIDELPHIA PA 19103 OUTSOURCED PRODUCT MANAGEMENT & DEVELOPM 202245 ISIDORA JIMENEZ 87 PACKERS FALLS ROAD DURHAM NH 03824 OUTSOURCED FINANCE DIRECTOR 170000 8 365000 115879 1632152 2113031 MARKET PROGRAM PARTNER 541700 721074 721074 721074 84 84 2834189 721074 0 84 X 322052 289847 32205 92083 92083 103351 103351 2681577 2074444 607133 28796 28796 3953 3577 376 59816 59816 120786 120786 15269 15269 9231 9231 SOIL SAMPLING 192131 192131 DUES AND SUBSCRIPTIONS 15512 15512 95 95 3644652 2980343 664309 0 3895707 3310777 426294 426378 129903 175337 8842 0 1175 4460746 3913667 1156455 315833 696803 1363115 17331 455025 1870589 2133973 X 2590157 1779694 2590157 1779694 4460746 3913667 -810463 0 X 0 1 X 1 0 X 1778442 6538452 2113031 10429925 60679 721074 781753 1778442 6599131 2834105 11211678 30240 467016 590811 1088067 228651 18016 375285 621952 258891 485032 966096 1710019 9501659 7 84 84 175 7 84 84 175 1778449 6599215 2834189 11211853 0.84750 0.91120 0.00000 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 MARKET PROGRAM PRODUCER LIABILITY 455025 455025 X 6505120 3670931 3670931 2834189 0 2834189 7315583 3670931 3670931 3644652 0 3644652 PART X, LINE 2: THE ORGANIZATION IS EXEMPT FROM FEDERAL INCOME TAXES UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE, AND IS NOT A PRIVATE FOUNDATION. ACCORDINGLY, NO INCOME TAXES HAVE BEEN PROVIDED IN THE ACCOMPANYING FINANCIAL STATEMENTS. MANAGEMENT HAS EVALUATED THE EFFECT OF THE GUIDANCE PROVIDED BY THE PROVISIONS OF U.S. GAAP ON ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES. MANAGEMENT BELIEVES THAT THE ORGANIZATION CONTINUES TO SATISFY THE REQUIREMENTS OF A TAX-EXEMPT ORGANIZATION AT DECEMBER 31, 2023. MANAGEMENT HAS EVALUATED ALL OTHER TAX POSITIONS THAT COULD HAVE A SIGNIFICANT EFFECT ON THE FINANCIAL STATEMENTS AND DETERMINED THE ORGANIZATION HAD NO UNCERTAIN INCOME TAX POSITIONS AT DECEMBER 31, 2023. 1 NORTH AMERICA 0 0 PROGRAM SERVICES ECOSYSTEM SERVICES DESIGNED TO ENCOURAGE FARMING PRACTICES THAT ADDRESS SOIL CARBON, GREENHOUSE GASES, WATER QUALITY AND WATER USE CONSERVATION. 176265 0 0 0 0 0 0 176265 0 176265 0 0 0 0 0 0 PART I, LINE 2: ESMC RECEIVES FUNDS TO DISTRIBUTE OUT TO SPECIFIC CUSTOMERS. FOR 2023, THE FUNDS WERE DISTRIBUTED TO CANADIAN PRODUCERS THAT ALIGNED WITH A SPECIFIC PROJECT. THE PAYMENTS MADE TO THE PRODUCERS WERE CAREFULLY MONITORED AND DISTRIBUTED IN STAGES UNTIL THE FULL AMOUNT WAS RECEIVED BY THEM. X 0 0 0 0 0 0 0 0 0 DEBBIE REED EXCUTIVE DIRECTOR 322052 0 0 0 0 0 0 0 0 0 322052 0 0 0 PART I, LINE 3 THE BOARD REVIEWS AND COMPARES LOCAL CEO AND TOP MANAGEMENT POSITIONS TO SIMILAR POSITIONS IN THE DC AREA. THE BOARD REVIEWS AND APPROVES THE COMPENSATION PACKAGES ON AN ANNUAL BASIS. FORM 990, PART VI, SECTION B, LINE 11B THE DRAFTED FORM 990 IS REVIEWED INTERNALLY BY THE CFO AND FINANCE DIRECTOR THEN PROVIDED TO THE EXECUTIVE DIRECTOR FOR REVIEW BEFORE FINALIZING. FORM 990, PART VI, SECTION B, LINE 12C THE CONFLICT OF INTEREST POLICY AND DISCLOSURE FORM IS REVIEWED AND SIGNED ON AN ANNUAL BASIS. FORM 990, PART VI, SECTION B, LINE 15 WE REVIEW AND COMPARE LOCAL CEO AND TOP MANAGEMENT POSITIONS TO SIMILAR POSITIONS IN THE LOCAL DC AREA. MANAGEMENT POSITIONS ARE BENCHMARKED ON AN ANNUAL BASIS. THE PROCESS DESCRIBED HERE WAS LAST COMPLETED IN 2023. FORM 990, PART VI, SECTION C, LINE 19 ALL GOVERNING DOCUMENTS, CONFLICT-OF-INTEREST POLICY, AND FINANCIAL STATEMENTS ARE AVAILABLE TO THE PUBLIC UPON REQUEST. FORM 990, PART IX, LINE 11G OTHER PROFESSIONAL SERVICES: PROGRAM SERVICE EXPENSES 2,074,444. MANAGEMENT AND GENERAL EXPENSES 607,133. FUNDRAISING EXPENSES 0. TOTAL EXPENSES 2,681,577. ECOSYSTEM SERVICES MARKET CONSORTIUM LLC 3426 GREENTREE DRIVE FALLS CHURCH VA 22041 861877472 TO INCENTIVIZE IMPROVEMENT IN CARBON AND WATER QUALITY VA 0 0 ECOYSTEM SERVICES MARKET CONSORTIUM