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Green Fix
Welcome to the Green Fix, the climate & sustainability podcast for Australian corporations and their ESG practitioners. We explore the top challenges and opportunities in the industry, how they are impacting your business and your work, so that you can keep your sanity.
Green Fix
S1 E8: Bridging Risk and Sustainability Management with Ruby Yadav, OpenXchange
Ever wondered how to get your Sustainability initiatives on the Chief Risk Officer's radar? Ruby Yadav, former Chief Risk Officer turned entrepreneur, reveals powerful strategies for building bridges between the Sustainability and Risk functions in this illuminating Green Fix episode.
Whether you're a sustainability practitioner seeking to influence your organisation's risk framework or a risk professional looking to better integrate climate considerations, this episode provides practical wisdom for breaking down silos and creating powerful partnerships. Listen now to discover how shared language and mutual respect can amplify your impact in addressing our most pressing environmental challenges.
Your Hosts:
Dan Leverington
Loreto Gutierrez
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There's a sustainability practitioner. If you can come and educate me, help me come up the learning curve, then I, as a chief risk officer, my job is to have that systems thinking interconnected what's moving. I can help you bring that in and have that shared language that together we can have a bigger impact.
Speaker 2:Welcome to the Green Fix, the climate and sustainability podcast for Australian corporations and their ESG practitioners. We explore the top challenges and opportunities in the industry and how it impacts your business and your work. So that you can keep your sanity. I'm your host, Dan Leverington.
Speaker 3:And I'm Loretta Gutierrez, and today we are joined by Ruby Yadov, a corporate executive turned entrepreneur. Ruby has been a change agent for over 25 years. She started her career in risk and compliance and rose to the executive ranks, leading risk functions for some of the largest institutions in the country. Most recently, she led Mercer's superannuation administration and financial advice businesses. She is now pursuing her passion and building an ecosystem for governance, risk and compliance professionals to help elevate their experience and impact. Ruby, welcome, can you tell us about your background and your motivation to create OpenExchange?
Speaker 1:Thank you. Thank you for having me today and thank you for that generous introduction as well. As you just mentioned, I'm a corporate executive. A lot of my training has been learning on the job and then supplemented with education on the side, as opposed to coming from a very structured learning academic background and implementing it. That approach has really impacted the way I think about work, think about the problems at hand and how my career has grown as well.
Speaker 1:I'm bringing my values, my learning, my experience everything to the front, and that's the project Open Exchange. It is an ecosystem for governance, risk and compliance professionals that really puts human peer connection ahead of anything else that's happening in the market today. We start with peer connection, support that with a free, democratized knowledge center and then connect them with real practitioners on the ground where particular skill sets and knowledge and support is required. Then looking at the innovation in the market of where there are better ways of doing things. Who are the people that are finding solutions to problems that can really support businesses to solve complex risk challenges? It's hard to do that as an individual leader because there's so much resource, time and capacity bandwidth everyone has. It's all about bringing that together and doing it through the power of collective. That's really the ethos and that's what we're building now.
Speaker 2:What was the gap in the market that you identified, based on your experience as a chief risk officer?
Speaker 1:All good things are born from a gap, dan, aren't they? It's sitting at the intersection of my experience, learnings and value system as well. One of the gaps that I saw in the market was there's a lot of top-down consulting in the market. While that's really important and valuable, the gap really was there's not enough peer connection and value exchange between the actual practitioner, the people who are actually practicing things on the ground as well. It's connecting those professionals and practitioners at a real action level, as opposed to the top-down consulting. That's where Open Exchange exists and is trying to bridge that gap.
Speaker 2:A very important addition to the Australian corporate landscape. Let's dive into risk management.
Speaker 3:Absolutely, and I'd like to start by asking what is a chief risk officer? What is a chief risk officer?
Speaker 1:What is a chief risk officer? That's a great question. Chief risk officer is your partner that brings a certain discipline to help you achieve the objectives and increases the chances of you getting there. A chief risk officer is somebody who's not going to let you leave things to chance that things might go the right way. They're going to put all their knowledge and their learning and might behind making sure you're more successful and increasing your chances of being more successful. We say the word risk. What's the first thing that comes to your mind? Things going bad, things going wrong. But risk is not about things going wrong. Things is about outcomes being uncertain, and it's. What does that uncertainty do to whatever you're trying to do? That uncertainty might be good things or bad things.
Speaker 1:Climate change this is a horrible example, but there's a positive side to climate change. I'm enjoying the longest summer that I've ever enjoyed in Melbourne. I love it, but I also know that there's a really, really big downside to it as well in the longer term. So how do I not prioritize my short-term gain of enjoying my summer on the beach over the long term? What are we doing to this planet at large? They're the trade-offs. It's about threats and opportunities and, what's more important, it's constantly following that balancing act and we intuitively do that as human beings. It's not leaving that just to intuition but putting some science and discipline and rigor behind it. That's what the risk person comes and does. They're really just bringing the rigor. My individual perspective is just as valid and important as yours. Just because you and I have a different title doesn't make one perspective better or more important than the other. But the world and the practice on the ground is often oh, you are the risk person, you must know all the outcomes. By definition, risk means no one knows the outcomes.
Speaker 2:So, given your extensive experience leading risk and compliance programs, what do you consider to be the most critical element in a chief risk officer's role in 2025?
Speaker 1:I always talk about what it's not before I go to what it actually is. I think risk profession for the longest time has been seen as the gatekeeper or the cop In a corner. You get to a checkpoint, somebody to sign off work. It is absolutely not that. Keeping a business safe and protected is everyone's responsibility.
Speaker 1:What a chief risk officer really needs to bring, particularly to the environment today, given how rapidly things are changing around us, is one the interconnectivity. We all often think about risks and neat lists and tables with neat colors and rag status around them. That's not how the world operates. How can you manage risk around that as well? Really simplifying what that interconnectivity and complexity is, bringing clarity into that uncertain, complex environment and also having a lot of foresight is becoming more crucial now than ever. Topics like technology, environment regulation, climate these are fast-moving beasts. 10 years ago we would have thought about climate in a very different way than perhaps the world is thinking about it now. So how do you maintain that foresight and be part of that strategy setting and working with the leaders and the boards of the organizations head to head, and working in that way is really what the chief risk officers today need to bring.
Speaker 3:In your experience, what does effective risk and compliance look like and what are some serious consequences of getting it wrong?
Speaker 1:Effective risk and compliance. It's about actually integrating it with the business. For the longest time it's seen as a checklist and a sign-off that sits on the side. It's a step in a process or sometimes, in its worst state, an afterthought. There are never ways that you can really get the business to own and manage risk as well. It's really about how do you integrate it in the way any leader thinks. How does a board think? Integrated in that process or that thinking? How does a CEO lead an organization? Integrated in their mental models? And how does somebody on the front line with fingers on keyboards working integrated in their work? The more you can actually create that integration with different roles and different people who are running the businesses, the more effective risk management becomes.
Speaker 1:I think the consequences of getting it wrong. There's so many stories. It is a bit of a pave of mind because there's too many stories around failures of risk management, not enough around the success of risk management. They're the stories that often go untold. But impacts can be physical in terms of real asset loss, life loss. It can be financial in terms of the impact that it has on the bottom line and the balance sheets, impacts it has on your reputation. There's so much regulatory action that's happening in the market today. It really jeopardizes the trust that corporates have with their consumers and their people, and I think they all have a long-term impact on the organisation and its standing in the economy so wide-ranging impacts when you don't get things right.
Speaker 2:And we're recording this the week post the Australian federal election, so another election for us to incorporate into risk matrices. How are you seeing these geopolitical and macro trends influencing risk management strategies, both this year and in the short to medium term?
Speaker 1:I think, the macro trends. There's a lot that's happening in the politics in different parts of the world. The policy changes, the recent debate on tariffs, for example. What's happening even in the political environment within our own country we're just in the week after the election results have been announced as well All of those things are impacting businesses quite directly and quite significantly. It's really integrating and going. What does that mean to the operation of my organization? Also, where I'm taking my organization strategically, because certain things that made sense in the environment a few years ago may no longer make sense given what's happening in the policy settings Keeping being nimble, keeping those things front of mind.
Speaker 1:I don't have a crystal ball to gaze where this is heading or what's going to be the next big thing, but it's keeping your eyes open and peeled and going. How do you're constantly doing that balancing act and making sure, having that foresight that I talked about of you need to think about the scenarios and possibilities and constantly remodeling that and changing your response to it quite rapidly. It's not an annual exercise. You can't sit back and wait for the next annual strategy planning or the risk planning thing to come up, because those days are gone. I don't think there ever were the right things to do, but now more than ever that's just not the way the organizations can function.
Speaker 3:Absolutely. And one thing that you have mentioned a few times already is regulation, which again draws a very strong parallel to the work of heads of sustainability and practitioners all around because, of course, the tightening of regulation in the environmental space. Are there any good examples of where new regulation has significantly impacted Australian businesses?
Speaker 1:One thing I say Loretto, is that regulation is often designed to bridge the gap between the current practices and unmet stakeholder expectations, and that is why every time a new regulation is imposed, the organizations go oh I need to make all of that change and now I need to respond to that. But the reality is they probably needed to be on the front foot and addressing those needs already. It's the unmet needs that land them in the position where they often end up. A good example of one of those regulations was the data risk regulations that were rolled out by the Prudential Regulator for the Financial Sector, apra, and that's where I think the organizations or corporates were very heavily focused on using data to achieve a certain outcome. What they weren't perhaps looking at is the whole life cycle of how the data is created, managed, saved, protected and then finally disposed of as well, and that meant there was a lot of risk throughout that life cycle. That wasn't particularly well managed, because it was all about how can I use this data and knowledge to generate more revenue, to have better member connection and other things as well. So regulation almost forced the hand for many organizations that weren't there already. One of the things that I ended up doing was really taking them back to the drawing board, of saying you need to understand what data really is.
Speaker 1:Who, then, owns the data? That's often a big question in corporates, as well as to where's the ownership, where's the mandate, where does the prioritization and focus needs to come from? Anytime, it's just the chief risk officer or the chief financial officer flying the flag that you can see is, you know, a siloed mentality of a certain function trying to do something. It's educating the whole leadership to go why this is important. What's the gap it's trying to address? And then how do you sustainably address that gap as well? We ran a program at the time where there was that big education, pace and understanding and clarifying those roles and accountabilities, and once the executives started to own that pace and started to question that why are we doing this and what do we need to do about it, you suddenly knew that that risk was top of their mind and how they were responding to it.
Speaker 2:And there's such a clear overlap or opportunity for collaboration between the risk and sustainability functions.
Speaker 3:Really good segue into the next topic, which is how do we now overlay the work of the risk team with the work of the sustainability team? Of course, climate change is becoming an increasingly significant commercial risk factor. Sustainability teams need to effectively engage with the risk teams. What would you suggest are good ways for collaborating with the risk and compliance teams to align, first of all, but also achieve common targets?
Speaker 1:It all starts with the shared language. It all starts with actually making people understand what the topic or issue on hand is. It then starts with going what's your superpower versus mine? So when I'm talking about climate risk in particular, I'm not a climate scientist or expert by any stretch of imagination. There's much that I need to learn, but I have limited time and understanding and bandwidth. So I think that sustainability practitioners are really helping me come up that knowledge curve and understanding so I understand the motivations and what we're trying to do, and then equally understanding what the risk team brings to the table in the conversation as well.
Speaker 1:I think risk professionals are typically system thinkers. We always look at interconnectivity, dependencies. We're looking at how, when one part moves in an organization, how it impacts some of the others as well, leveraging that system thinking, helping partnering together, to then see the rest of the business understand where the impact of this risk lies and why it should be important to them. I think individually when a risk person pushing the agenda or if the sustainability person's pushing the agenda, it's a hard battle, but I think when you can combine that, create that shared dialogue and really drive the impact, what it means, it just becomes that much easier to sort of get the outcome that we need to get.
Speaker 3:I think about our listener? What they're probably asking themselves is I've got a chief risk officer in my organization. Very hard to get a meeting with this person. I'm wondering what is the best way to get attention from this person and align strategically.
Speaker 1:It's again that worldview and the mental model when you describe that person. I'm actually not that person. I'm like why the hell aren't you coming and talking to me? So I'm probably the CRO who's going and chasing the sustainability person saying why aren't we talking about this? Why aren't you helping me with this?
Speaker 1:So I think what I was saying it's about having the shared language and not leaving the burden of doing to any one individual, because everyone has an agenda that they're running anyways as well, and every time you try and integrate it in somebody else's agenda. I think it's really practical stuff like that where don't just go to the CRO with here's the new air service requirements, here's the new deadline, and it's really teased it out of what am I trying to achieve and how we can share our language and integrate the two. I'm not a climate expert or scientist by any stretch of imagination. There's a lot that I don't know to be able to have the impact that's required. So, as a sustainability practitioner, if you can come and educate me, help me come up the learning curve, then I, as a chief risk officer, my job is to have that systems thinking interconnected. I can help you bring that in and have that shared language that together we can have a bigger impact.
Speaker 3:Are you hearing much from the risk community around sustainability and the challenges and opportunities that are already identified?
Speaker 1:I'm hearing a lot more than I've heard before, which is very, very encouraging. I do come from an industry where it is already quite an important topic superannuation. As an industry, we think about intergenerational investments. We're not looking for a quick buck. It's about thinking on 10, 20, 30-year horizons, which means topics like climate are really, really important. As some of the largest investors in the country, these funds really want the transparency and really want to make sure where the investments are being made there's transparency around what is the risk, that it's been factored into the balance sheet. So I think the regulatory and the legal changes that are coming around the reporting are really important, and now there's that shared language and agenda. As I said, it's really brought the attention that it's not just the investors looking at it but also the supporting functions around them. They're taking a keen interest in getting involved to have a more impactful voice around this particular topic.
Speaker 3:Absolutely. One concept that has been frequently brought up in this podcast is the tension between delivery of sustainability programs or the transformation related to sustainability, and commercial outcomes, and risk would tend to have a similar challenge. Would you say that there is a way for organizations to better articulate to the market and their employees as well, what is the commercial value of being compliant with regulatory requirements in areas like sustainability but, of course, other important risk management areas like cybersecurity?
Speaker 1:I think it's about that trust and transparency, loretto, isn't it? It's in my mind. Everyone approaches the world with their worldview. When you're talking to the risk person, the most important thing is risk. When you're talking to a board member, the most important thing is governance of the organization. If you're talking to a financial leader, it's all about the numbers. So for me, it's about a balanced outcome view.
Speaker 1:Financials and commercials are really important, but what is that balanced picture that speaks to the worldview of all the leaders that you're trying to engage in? That dialogue is really critical, I think, where a risk professional or a sustainability professional comes in and all they want to talk about is their topic, their agenda, you might as well be speaking a different language to the person in front of you. So it's how do you see their worldview, how do you see their perspective and how do you shift your language and your positioning? So it's about their agenda. And the shared outcome is the commercial outcome, is the member outcome, is the social outcome, and they're equally important in my mind. Member outcome is the social outcome and they're equally important in my mind. But having that holistic perspective and that shared language is probably the key to unlocking that. And what?
Speaker 3:would you say, are some good ways to build?
Speaker 1:that shared language. One tip that I give to any professional is actually understand the business, understand what is the success of the business look like not the success of your agenda when you can link it back to what is the success of the business look like not the success of your agenda when you can link it back to what is the organization as a whole trying to achieve, what is their strategy and how the particular topic that you want to engage the leaders in. If you can connect it back and you need to find a sharp connection, if you draw 37 lines and dots, you can connect anything to anything. I'm not talking about that. I'm going just being really, really clear of how does it help the organization move the dial on the things that are important to them, whether it's their reputation, whether it's their performance, whether it's their balance sheet, whether it's the members or compliance, whatever the case may be. The sharper that connection, the clearer that language. I think, better the impact and the ability to succeed in driving that.
Speaker 3:Yeah, that's a really great tip. And what about? You have been a chief risk officer, but you have also been a CEO, so you have had a different perspective on the management of the organization. Vice a CEO, on their decision-making process when they're faced with complex risks like those related to climate change.
Speaker 1:My way of thinking it is bringing that systems thinking piece back into it as well, understanding what am I a part of and what's part of me, and where things connect within that system and forming a part of a whole.
Speaker 1:It feels congruent, it feels integrated. I think that just helps the flow and helps make sure that all the different objectives and priorities you have and it's probably a bastardized word, but we say priorities as a pruler, as it can be, it can't be. You really have to have that clear. What is it that you're driving? So the more these different requirements and expectations can be part of that key priority, I think, easier that flow and integration. The more they're bolt on and added on and, another step, adding complexity for any business leader and that means you're going to get limited attention, limited focus and a limited impact out of that as well. So it's going back to the integration that we were talking about earlier and thinking of it as a whole system and making sure things connect and flow seamlessly rather than feel like a Frankenstein put together, because that'll be clunky.
Speaker 3:Let's talk about your career as a leader and as a chief risk officer, as well as a CEO, and today your mission is to build community around these leaders. Risk management governance leaders. As a leader that values courageous leadership, how do you foster collaboration and compassionate accountability within your teams?
Speaker 1:It's a question I get asked often and the answer is often met with surprise as well. So I always go. It starts with kindness, and most people don't associate kindness with courage. Kindness, in my mind, is not softening the blow or just being nice and too polite. I think as a society we are a bit too polite and we pay a price for that as well.
Speaker 1:So for me it's everyone needs to have a voice on the table and that voice needs to be respected. It shouldn't be glossed over. And how do you create that space? How do you make sure that voice is heard? And it goes both ways as well.
Speaker 1:You know, when I'm leading people, being kind and creating that space doesn't mean that I'm just listening, but equally, if I've got a perspective to share, there's a performance challenge. Some things are not going right. Often we tiptoe around those things and don't necessarily have that direct, open, honest conversation. It still needs to be respectful. It still needs to be mindful that we're dealing with humans in here as well. But I actually think you do a big service to people when you give them real, meaningful feedback.
Speaker 1:And that requires a lot of courage, because nobody wants to have the hard conversation as well, or sometimes it swings a bit too far when we think we're being bold and courageous and direct, but at the expense of really disrespecting the people and shutting down voices as well. So I think it's balancing the two, taking that kind honest but also open and respectful approach to people. And how do you take the business forward? Compassionate accountability for me and I think that's sort of my definition that I learned years along and it really resonated with me it's about struggling together when things are not going well, not leaving people behind, not letting them struggle on their own, but going. You know that I will hold you accountable, but I will struggle there with you and we will get there together. That, to me, is compassionate accountability and part of that, being kind yet holding people firmly to account.
Speaker 3:One thing that we love talking about in this podcast is the idea of talent development.
Speaker 3:So, in particular, in sustainability. What we're seeing is a very rapid increase in demand for talent that relates to implemented sustainability practices. Everything from the regulatory, the consulting side, accountants, data scientists, strategists, communications there's a lot of demand for new talent. I know that is something that it's a value we shared, because you have a big focus around coaching and mentoring and talent development. So why is that important to you and how do you see it impacting organizations where you have held senior positions?
Speaker 1:I'm open with saying that. My ethos and way of working is you start doing the job, you learn along the way, but then be supported either by knowledge, education support systems as well. That's the best way to learn in my mind, and it's really important more than ever because you know that need for talent and it's changing every day. Who knew five years ago that you needed to know so much about technology and AI in the way that we're dealing with as well? So I think gone are the days when you could come up the learning curve having studied something, having learned something, and then thinking that you can apply that for the rest of your career, because that is rapidly changing.
Speaker 1:The core concepts are potentially the same, but how it's impacting us today, how it's impacting the society and businesses at large, that is constantly changing. So it's about not just coming up with another degree, but it's creating that learning mindset of how do you bring the best of the people and the knowledge and the resources you have together, how do you create that hyper-connected world where people can freely exchange ideas, grow and learn from that and some things we won't get right, because we are sort of learning. We're flying this plane as we're building it in some way as well. But we definitely want to learn by not trying and sticking to the old way of thinking as well. So I think for me that method of learning and growing talent through coaching connection by giving freely is far more in this world where things are moving very rapidly.
Speaker 3:I love that, and is there some really good examples or stories that you can share from your coaching and mentoring that are worth highlighting?
Speaker 1:I think I'll actually talk about reverse mentoring rather than mentoring, because mentoring is something everyone sort of understands as a concept and we do that and I think a bit that I really enjoy is reverse mentoring and that happens in my home. I don't even have to go far with that right With a younger generation. I'm raising teenage kids. Now there is so much that I don't understand about the social media technology, what's happening, and now that I'm building a whole new business, that is all about building those connections. I think the corporate ways of connecting and networking are no longer relevant in that environment. So where do I go and learn? I turn to my children and go how is today's generation communicating and talking? So there's a lot of reverse mentoring happening in my own household, loretta, that I'm really enjoying. It's opening my mind, it's challenging me in ways that I thought whoa, I don't think I can do that. But that's just the way the next generation communicates and if you want to get through and build that connection and knowledge, you've got to understand.
Speaker 3:I love that. What a beautiful perspective. Are there any questions that you wish we had asked you today? Probably not a question but a reflection.
Speaker 1:I think even thinking about having this conversation today, it's pushed me to think about this whole topic a little bit differently than perhaps I was as well. So I think a question for us as professionals is how do you create the space to have this meaningful dialogue that educates everyone and lifts them forward? So I think what you're doing through this podcast educating the community and professionals around you I think is phenomenal. But how do we increase the pace and increase that sharing and collaboration is probably a question for all of us, and that's one thing I'll take away with me.
Speaker 3:Before you go, we're going to end the podcast on a high note. We ask these final two questions of all our guests, and the first question is the magic wand. So if we give you a magic wand, what would you like to see happen in the next five years?
Speaker 1:One thing I really wish we had more of in the world is people slowing down. The race that we're all running is never ending, and it's not a race I've seen anyone win, and I actually think if we all took a moment to be a little bit more reflective, I think we would actually get a lot further than perhaps we give it credit today.
Speaker 3:I love that Very much. Agree with you. Take us out by telling us a piece of positive climate news that you've heard recently.
Speaker 1:Again, not news, but I think a positive trend that I'm taking a lot of heart from is that growing active engagement, particularly in my industry. Exclusion is easy. Engagement is really hard. Engagement is where you become a real steward in the world and create difference. You're not changing alone, you're changing others with you, and I think the more we can create that stewardship through active engagement rather than boycotting and exclusion, I think it is absolutely a positive way to move forward. So the more I see that, the more it gives me heart that we are heading in the right direction.
Speaker 3:Absolutely Well. Thank you so much for joining today, ruby. It was a pleasure speaking with you. Thank you, this was Green Fix with your hosts, loretta Gutierrez and Dan Levington. You can get your Green Fix every two weeks on Apple Podcasts, spotify or Pocket Casts.
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