Saif Hameed [00:00:00]:
They want to invest in change at the level of the farm, and they want to find a good way to reflect the return on sustainability investment of doing that. So they want to, let's say, invest in an activity that would result in a removal at the farm level, or they want to invest in a change in agricultural practice that would result in an avoided emission.
Isobel Wild [00:00:26]:
I'm Isobel Wild. Welcome to the state of Sustainability podcast, a show for professionals transforming corporate sustainability strategies brought to you by Altruistiq. Today we're going to talk about the supply shed, what it is, what's the purpose, how to create value from it, and whether it is as a concept. Here to stay Saif, welcome. Can I land you straight in it with a question?
Saif Hameed [00:00:50]:
Go for it, Izzy.
Isobel Wild [00:00:51]:
What is the supply shed?
Saif Hameed [00:00:54]:
So a supply shed is basically a concept or a terminal to define supplier zones where you have imperfect data. And the term was originally produced by. It was most commonly associated with something called the Value Change Initiative, originally spun out of something done by gold standard and a few others. Sustain. CerT is now one of the organizations that kind of brings together and convenes the value change initiative, but there are a number of other corporations that are part of it as well. Basically, the problem it's trying to solve is when you start to get into the agricultural space, most companies and most brands and retailers certainly don't always know, and don't usually know the individual farms that they're sourcing from. So if you're buying, let's say, cocoa or you're buying chocolate, you don't know the individual farms supplying the cocoa beans in. If you're buying wheat, you don't know the individual farms growing the wheat and supplying them into the mill, let's say.
Saif Hameed [00:01:51]:
And so the supply shed is a way to approximate which farms are likely to fall within that catchment or that zone. And so you say, rather than identifying these ten farms specifically, I say, well, I know I'm buying wheat, and I know I'm buying wheat, roughly from a few different areas. These are the areas. And so any farm within these areas producing wheat has a certain probability of supplying into my value chain, maybe taking.
Isobel Wild [00:02:16]:
A step back, where does insetting fit into this?
Saif Hameed [00:02:20]:
Insetting is term with very little structure and definition around it. And so insetting usually means some sort of in value chain reduction. And it typically also refers to something that is agricultural in nature, where it's some sort of a removal happening right up in the value chain at the farm level. And it could be mechanical or it could be natural removal. And that's sort of generally the amorphous territory associated with insets. Insets are now commonly being associated with the actual credit generated as a result of that sort of removal. And then there's also some, let's say, negativity around that space because often those credits exit the value chain. So insetting, I'm finding, at least, is kind of interesting in that it's sort of on the up in the market at large, but on the decline with the sorts of companies that were early proponents of the thinking behind inset.
Saif Hameed [00:03:17]:
So when you speak with the big food businesses, let's say that might have been very early in the definition of what value chain reductions look like, how to account for them, et cetera. They're increasingly becoming disillusioned with the insetting term because they're finding the insetting term has been sort of captured by another set of stakeholders and sort of pumped full of gas.
Isobel Wild [00:03:37]:
Okay, so in terms with terminology, we want to use value chain reduction here versus insetting, is that correct?
Saif Hameed [00:03:46]:
Kind of. I think the jury is still out, to be honest. I think that we'll probably see insetting referred to with gusto in some places and with a wince in other places. And I think that people who are likely to be wincing might refer to something like in value chain reductions as a proxy. But let's, you know, let's watch this space and see what happens.
Isobel Wild [00:04:08]:
Right. There are pros and cons to each. I maybe want to take another step back and actually look at how the value chain initiative and the GHG protocol actually track the effectiveness of value chain interventions and how these are grouped. So I think there are three defined groups. So there is the first group, or the first case, which is a customer for a supplier, has within its own supply chain. So this is what I'm going to call direct traceability. There's then a second group, which is a customer for a supplier within a relevant supply shed. So this is what we're talking about here.
Isobel Wild [00:04:44]:
So that's limited traceability. But you've got some kind of, you've got a bit of context, you've got some guardrails to work within. And then the third bracket is a company outside the suppliers value chain, aka beyond value chain traceability. And the reason why I want to bring this in is because I want to talk about who can actually account for these interventions, because I think, obviously you can try and account for the first one. That's direct traceability. But it does get a bit gray and it gets a bit murky. So maybe just to run through a bit more detail of these three case points and then SAF, I'd love to get your thoughts on, on the matter, but for case one. So, back to the directory stability point.
Isobel Wild [00:05:27]:
This is easier to track and invest due to established relationships with your suppliers. So it means investment, collaboration and tracking are way more straightforward, forward and streamlined. So in this case, if emission reduction happens with a customer supply chain, and the reduction has not been monetized as a credit and sold off elsewhere. I think we've made the joke previously about selling it off to Delta Airlines, but this one stays within the value chain. The customer can track it within their GHG inventory and create an updated emission factor for the years in which the intervention was successfully implemented. And the case two, which is the one we're going to dig into a bit more, is this limited supply shed. Limited traceability, the supply shed. So this is when full traceability is lacking and a clear supply chain shed can be defined.
Isobel Wild [00:06:19]:
But whilst these interventions might not occur in the exact supply chain, it allows action and it allows companies to actually be able to validate some of these reductions that are happening. But maybe to caveat, these reductions count towards scope three only if the supplier doesn't sell this reduction to somebody else or other companies in the direct supply chain are unable to account for it. And also there is clear documentation to avoid double counting. The last case is where it happens outside the supplier's value chain. So this is what I think SBTI referred to as beyond value chain mitigation. So it means that the final retailer in the value chain may not be able account for the reduction because it's being claimed elsewhere by another company, or it's been claimed elsewhere. But Saif, I would love to get your thoughts on where these gray lines kind of merge, and especially on the supply shed section. Do you have any recommendations to how to make sure that actually you are within the guidelines of being able to account for that reduction?
Saif Hameed [00:07:27]:
Let's maybe make this a little more tangible. So let's say that you're making oat milk, for example, you're an oat milk brand, and there's a mill that is one step removed from you and you're buying from the mill. And then behind the mill, there's a catchment area of farms that are supplying into the mill. They're growing the oats and they're supplying into the mill. And so, just to bring some color around your example, I think that there are a few ways in which supply sheds as a concept really makes life easy and a few ways in which it maybe gets still to quite murky waters. I think that there is this inherent grayness in that end of the supply chain, and the supply chain concept brings some structure and focus and rigor to it. And I think that that's in the absence of anything better. And so there are kind of two approaches you could be applying here.
Saif Hameed [00:08:17]:
There's like a mass balance approach, which is where you're saying, I'm buying from two different types of supplier. One is selling me the good stuff, one is selling me the bad stuff, and I'm going to mix the two together in accounting terms in proportion to what I'm buying and what I'm processing. So the finished output, let's say the oat milk or whatever, has 60% of low carbon material coming in and 40% of high carbon material coming in. And what I get out of that is a blend, because I managed to trace along the flow of what I'm buying and what I'm processing, that 60 40 apportionment. So that's like the mass balance approach, which is more robust, for sure. The supply share concept is a way to get around the ambiguity that exists with much more fragmented buying relationships. I think the only way that you get something better, and therefore the only way in which supply sheds as a concept looks much more murky, is if you have a way to actually get all of the fragmented supply chain onto the same data, data infrastructure, let's say. And I think that there, you know, we've talked about this in previous episodes, where we say there are these two schools of thought.
Saif Hameed [00:09:28]:
One is the world that says every supplier should be reporting data and be on the same platform and on the same system, and the other which says, hey, actually that's never going to happen. So let's just get better data science, better modeling, better estimations to make life easy enough for everyone. And then there's a hybrid zone where you say, let's take some elements of primary data and train the secondary data to get better. And supply chains, I would say, is firmly in that hybrid zone where you're saying, I'm going to take elements of primary data, because I'm going to say, well, I know roughly which zones I'm buying from. I'm going to get some rigor around the characteristics of those zones and average suppliers in those zones, and I'm going to try and link that up to the processor level. And then from the processor onwards, I'm going to try and get really good primary data because the processor is the first aggregation point. And that to me is like a really good hybrid approach, which I think is the most likely way forward, frankly. Like, I don't see the world where you get, you can get the largest farmers in America to report their data in some level of fidelity and on some platform.
Saif Hameed [00:10:32]:
You can have a slightly harder time doing that in Europe because farms, I think are the a little more fragmented, but start to get into the global south and this is virtually impossible. Just forget about it.
Isobel Wild [00:10:45]:
And a few questions. First question other specific companies that this actually the supply chain applies to more and is more useful to versus others.
Saif Hameed [00:10:54]:
My suspicion is that it is useful to everyone as a concept. And there's some big questions around, let's say regulation or quasi regulation and acceptability, and let's come back to that at some point. But barring that, I think that it's an approach that certainly simplifies workload for everyone. It basically makes what would have been a really difficult field exercise, a reasonably difficult desk exercise just to simplify things. The field exercise of going out there and actually surveying every individual farm on a routine basis and gathering data and trying to trace everything through becomes mostly a desk exercise of running approximations and estimations. And I think that just makes life easier. I think that there are some companies for which it makes life vastly easier and some for which it makes life moderately easier. And I think that distinction is based on how fragmented your supply chain is.
Saif Hameed [00:11:50]:
So if you're buying, let's say small amounts, let's say you're buying, let's go back to the oats example. Let's say that actually you're not making oat milk, you're making something else. And oat is a very small proportion of what you're making. Snack bars and oats are a trace ingredient in that it is just not worthwhile for you to go and figure out the oat supply chain in huge levels of detail. It's not important enough. So this can simplify life significantly for you there. And the other is where maybe oat is a significant part of your supply chain. But actually you're a very small part of the oat supply chain.
Saif Hameed [00:12:23]:
You're a very small buyer in that ecosystem. You just don't have any level of authority over the value chain such that you can actually start to figure out where everything comes from to a great level of granularity. You're a standard taker in some ways, you're an estimation taker, and therefore it also makes life very easy for you, I think where it is less of a game changer is where you are the dominant buyer of the material anyway. Your value chain is short, you're already buying from very discreet catchment areas. And maybe even the farm supplying into your value chain are large farms which you could actually get to know reasonably well. And therefore this might still be time saving, but it would not be impossible for you to go for the mass balance approach.
Isobel Wild [00:13:08]:
Okay, is that better applied to companies that have single crops or single like quite strong value chains in a specific crop? Or does it actually benefits people who have companies that have multi crops and multi, multi supply chains?
Saif Hameed [00:13:24]:
So I think it can benefit everyone. And that's the logic, right. It's an estimation approach that simplifies the work of having to go. And it's a sidestep on traceability. Basically it means that you don't have to trace down to the individual farm, you just have to trace down to the region so you still have the work of understanding. Where do the oats I'm receiving come from originally? Is it from country A or country B? And within country a, ideally, can I even get sub national specific specificity and can I get some idea of like what types of farms are supplying me within that region? But it is definitely a simplification that I think everyone would benefit from who's buying, particularly from agricultural value chains. I have not seen lots of applications outside agricultural value chains. I'm sure it's theoretically possible.
Saif Hameed [00:14:14]:
And I actually think a lot of the same learnings could apply to just high levels of fragmentation in other value chains as well.
Isobel Wild [00:14:21]:
Okay. And in a world where. So this is an approximation and in a world where I want to use this. So I've, I've accounted for this reduction via the supply shed logic. And then actually I want to put my numbers on. So oatly I want to put it on pack. Can I trust this logic and concept enough to actually externalize and put my neck on the line to have that number on pack? What do you think about that?
Saif Hameed [00:14:49]:
Let's first just calibrate. The numbers that any company is putting on pack are already hugely estimated. So there is no number out there. I'm going to stick my neck out and say that almost no number out there on any pack in the world would stand up to any level of scrutiny. There is an estimation beneath each of those numbers in some shape or form, and it's probably at the level of an individual emissions factor. But if you go back to when you look at the largest databases for food level emissions factors in the world. We're talking about a couple of thousand or a few thousand unique data points for the global wealth of ingredients out there going into the agricultural system. So there's huge estimation behind those numbers anyway.
Saif Hameed [00:15:36]:
If anything, I would say that going out there into the huge gray zone of the far end of your supply chain and understanding which regions supply you with raw materials, which regions supply the raw materials into your value chain, and what are the characteristics of those regions, I would say is already a huge step up from where we are today because it's big inclusion. And the companies that tend to be going deepest into the supply sheet logic are probably understanding their value chains in much more depth than companies that aren't, because companies that aren't applying this logic are likely not applying anything else in its place at any kind of scale.
Isobel Wild [00:16:15]:
Yeah, that makes sense. And for companies like Trinin, do you have any recommendations for how to navigate the supply shed and make best use of it?
Saif Hameed [00:16:25]:
So I think the question is what you're looking to do as a business. Most companies that are toying with the supply shed approach to understanding their value chains are doing so because they want to invest in change at the level of the farm and they want to find a good way to reflect the return on sustainability investment of doing that. So they want to, let's say, invest in an activity that would result in a removal at the farm level, or they want to invest in a change in agricultural practice, let's say that would result in an avoided emission. Maybe there's different stuff that they want to do at the farm level and they want a way to trace that back to their business so they can say, hey, we spent a million dollars. The impact in emissions. Ideally, they want to be able to do that in a greenhouse gas protocol aligned way that can result in a reduction in their scope. Three, emissions. Whether or not they can do that is pending the final flag guidance due to be released.
Saif Hameed [00:17:26]:
But if you look at the draft guidance, then supply sheds are very similar to sourcing regions as conceived in the greenhouse gas protocol draft guidance for land related emissions. So there's some momentum towards making this work in a way that can allow them to do that. I think the ideal would be if you can actually have some combination of being able to identify supply sheds, but then also being able to apportion the change that company a finances at the product level and trace that product movement through the value chain. So you can say, well, I financed change at the farm level. These farms sold material into this processor. This processor has now processed those oats. This mill has processed those oats and sold the output to ten different producers of oat milk, of which I am one. I am the only one that paid for the change.
Saif Hameed [00:18:18]:
So I should actually be the only one that benefits from the activity I've sponsored in that supply shed, whereas right now, you kind of still have this, this murky zone where actually that apportionment becomes very difficult. Unless you are the only buyer from that processor, or unless that processor segments out the material being bought from one supply shed versus another, that becomes quite murky. We're actually leaning into that part of the problem. And so our approach to developing differentiated product carbon footprints at Altruistiq helps solve for that piece of the puzzle, because we can work with the processor and generate differentiated product carbon footprints at the processor level, which would attribute the benefit, then uniquely to one buyer or multiple buyers from that processor or that mill, let's say, versus others. And I think that's probably the missing link in this chain today.
Isobel Wild [00:19:10]:
Do you see any collaborative partnerships happening around companies that work within the same supply shed? And are there any kind of recommendations on how best to navigate these collaborations?
Saif Hameed [00:19:21]:
I think that we're seeing a lot of different forms of collaboration. It is also, at the same time, a tricky area legally, just because there's an anti competitive element to it as well. And so right now, companies are coming together in organizations like the Value Change Initiative, for example, they're convening in groups, and they're aligning on standards and approaches and expectations. And then I think there's a cross fertilization that happens at the solution provider level as well. And so, for example, at Altruistiq, we convene our customer advisory board. We bring together multiple large companies from the food and beverage space to help align our approaches, and we're developing a technology solution based on that guidance and input that helps us be an effective solution provider in this space, and that helps standardize as well across the companies that we work with. And I know that others in this space, whether they're consultancies or otherwise, we'll be applying similar approaches, and I think that's going to help catalyze standardization.
Isobel Wild [00:20:23]:
Interesting. And I think maybe just to double click on what these value chain interventions are, are there any best practices around the ones to choose that you could actually easily monitor and track for supply shared reduction purposes?
Saif Hameed [00:20:41]:
Short answer is probably not, but there are gradations of difficult, let's say. And so what I'm finding interesting is I'm kind of finding, let's say, two or three different types of intervention. And my classification of these two or three different types is based on ease of monitoring and verification. So there's stuff that happens above ground, and there we see a lot of mrv or measurement reporting and verification companies that are active in the satellite imagery space coming in to play to provide high fidelity imagery, let's say, of what's happening above ground. So if you think about, let's say, anything in a space where deforestation is a risk, or there's a land use change element which will increase or decrease the density of COVID above soil, this satellite imagery plays interesting there. And that's kind of one way of monitoring and seeing whether the change happened. There's a second, which is around what happens below the ground. So soil testing and soil soil related analyses to see whether the carbon density increased or the carbon stock increased.
Saif Hameed [00:21:48]:
And then there's the third, which I would say is more practice level, where maybe it's something like you're swapping out, let's say, a diesel generator with a renewable system or a tractor with an electric vehicle. And that, I would say, is probably harder to ascertain with any of the first two approaches. But you might have things like invoices for energy consumption, substantiating a greenhouse gas inventory as a way of demonstrating that that happened. So there's, anecdotally, just a few different ways of doing this for a few different categories of intervention.
Isobel Wild [00:22:20]:
Interesting. I think our overarching challenge, if I'm wrong, so our overarching feel for supply sheds are that they're good, they're easy to use, they make life a little bit easier. They allow. They incentivize traceability investments and allow companies to claim reductions. They allow action within the value chain despite this limited traceability. So are there any challenges or are there any watch outs that you would just flag to our listeners if they are embarking on their supply chain journey?
Saif Hameed [00:22:53]:
So, Izzy, I would take everything you've said, and I would subtract a few amounts of optimism and excitement. And so are they easy to use? As a concept, it is easier to use than the alternatives. I don't think anyone applying this approach would say it is inherently easy to use. It involves a lot of approximation, a lot of you still have to gather a fair amount of data. You still have to go into the unknown in terms of tracing your supply chain. So there's a fair bit of work at play in terms of then actually taking credit for changes that you've made. There's huge challenges there as well. I think it is easier for large buyers of certain materials that have a dominant role in that value chain and much harder still for smaller organizations, organizations buying trace elements.
Saif Hameed [00:23:42]:
This apportionment problem that I've described just becomes much easier if you're a big buyer of something and if you're dominant and much harder if you're smaller. So there's big challenges. Let's not sugarcoat it. I think that it is still a nice conceptual framework to simplify a very difficult problem. And I have yet to see something that is a much better alternative out there.
Isobel Wild [00:24:03]:
So the million dollar question, do you think they are here to stay?
Saif Hameed [00:24:08]:
I think what's interesting is actually whether it remains a million dollar question or whether it becomes a hundred billion dollar question. And the reason I say that is because carbon offsets as a parallel market have been frequently touted as a hundred billion dollar opportunity. And I actually remember when I was at McKinsey CI was part of helping set up the early task force for scaling voluntary carbon markets. And that involved Mark Carney when he had sort of, I think was just stepping down from his role at the bank of England. And this hundred billion dollar number came out of that sort of process. And I just always was a bit mind boggled by this number and then started to see it surface in documentation and pitch decks for any number of carbon offsets solution providers. Anyway. So I'm skeptical a bit about that number in general.
Saif Hameed [00:24:58]:
But I think that if supply share, the concept gathers momentum and steam, if the solution providers, and obviously I see us providing solutions here as well, can actually bring what they're doing to scale and make this the operating model of the industry, then I think there's a world where actually there is a hundred billion dollar plus opportunity to drive interventions in the value chain that impact the far end of the value chain in primary production at farm level. And I think that's very exciting because I think that means that we can actually turn agriculture into a real positive driver of change, where it's not just about reducing emissions, but it's actually about net sequestration. And it's actually a role that agriculture can play as a carbon sink in the value chain which becomes possible. I think for farms it can be a huge boon because it can create just another revenue stream. Right now we've talked a bit about this Delta Airlines problem and we're probably just slandering delta airlines here, but please don't sue us. But if you kind of see this problem of insets exiting the value chain or insets becoming offsets and exiting the value chain, then I think that getting a robust way for reductions to be financed, reductions in removals to be financed in the value chain and preserved in the value chain can not just bring revenue to those farms, but can also strengthen relationships with their customers, strengthen transparency, strengthen visibility at the buyer level and the consumer level on where things came from and what happened to make those things and how your purchase is making the world a better place. I think all of this supply sheds as a concept is foundational for that. And so I think this is a pretty exciting territory potentially, if it can.
Isobel Wild [00:26:43]:
Gather steam and momentum and working with your suppliers. Do you have any advice for actually, like we spoke about, you know, you just mentioned financing within your value chain. Do you have any advice or any practical tips for actually making sure that engagement and also those reductions stay within that value chain beyond just the financing incentives?
Saif Hameed [00:27:06]:
I think there's a question of legal incentives and, you know, maybe this is an episode for another day, but how to structure legal incentives and purchasing agreements to make sure that you both incentivize the value chain and also preserve reductions and removals within the value chain. But I think there's another aspect, which is a lot of weight goes on the first level of processing with this concept, as in the first, let's say, Mill, the first buyer from the farms, from the supply shed, that first processor, you need to have really good visibility on that first processor. And progressively, if you think about what I was referencing with Altruistiq, with the differentiated product carbon footprints, we would also want to be able to develop that at the processor level, at that first processor level, so that we can apportion credit where credit is due from that level onwards. Let's say if you don't have visibility on who that first processor is, or even if you do have visibility, but that processor actually is not really, let's say, sophisticated enough or leaning forward enough to help you navigate an understanding of the supply chain that sits behind that processor, then there's just a lot more burden on, let's say, the brand to figure those things out, which I think will make life harder. So I would say there's a big focus on building stronger relationships with that first level of processing, better visibility, and also probably upskilling and capability building at that first level in the chain. And I don't think most brands are yet really doing that naturally.
Isobel Wild [00:28:34]:
Yeah. And we have spoken about supplier engagement in another podcast, which we'll link in the show notes below, which will perhaps color this process of prioritization within your supply chain a bit more, for sure.
Saif Hameed [00:28:46]:
But Izzy, just to jump in, Izzy, when we talk about supplier engagement, we are still usually talking about tier one suppliers. So we are still usually talking about your direct suppliers. But what I'm referencing here might still be a tier two or tier three supplier, actually, where it's not a direct supplier for you, but it's that first level in the chain where your supply chain concept will break down. Because if you don't actually know who that first processor is, then good luck figuring out what zone that processor is buying from.
Isobel Wild [00:29:17]:
Okay, got you. So actually prioritize your tier one suppliers first off with your reduction initiatives. Then you get your tier two, tier three, which is your supply shed, and. And then you've got to layer on those other elements, like how forward leaning it is.
Saif Hameed [00:29:32]:
I would actually say that I think there's some logic in parallel processing two streams. One is your suppliers at large, which is, let's say, here are my tier one suppliers. Let me figure out materiality. There's a subset of my suppliers that are high materiality for me. Let me engage intensively with those suppliers. Let me have a different model, maybe for engaging with the less material suppliers suppliers. But then I think there's a subset of that first pool, which is these are high materiality suppliers, and a subset where I actually want to drive change in the supply shed. And for that subset, you then want to go further and understand what is the first level of processing within that part of the value chain, because that's the pivot point on which any far upstream changes you're investing in will be driven.
Saif Hameed [00:30:18]:
So that's maybe the addition that I think we're making to our playbook.
Isobel Wild [00:30:21]:
And just as a side question, who owns the responsibility of this? Where do you see in the sustainability team or the procurement team or the business at large who owns this problem generally?
Saif Hameed [00:30:32]:
What's interesting is, I think actually the old wisdom of buyer beware still applies here, which is if you are the one paying for the reduction or expecting to pay for the reduction or removal, and you're effectively the buyer of this as a service, then it is really, I think, still onto you to figure out how the mechanics for this work. And there is a whole ecosystem of solution providers that can help you and enable you. But ultimately, we're in territory where the regulatory guidance is super unclear. Standards are being defined mostly by industry practice. Actually, it's like the equivalent of the common law legal system. Those actors are the ones right now bearing the largest share of responsibility frankly, for how this works, yes, there are certification agencies and organizations like gold standard that can play a role there, but they themselves are also often deferring to industry practice and co defining standards with individual industry actors, like Mars, for example. So either you kind of end up in this circular loop where everyone is looking at each other, or ultimately you just say, look, people forking up the money are the ones that bear responsibility for making sure that that money is appropriately spent on impact.
Isobel Wild [00:31:48]:
Yeah. And I guess also they, the people who are forking up that money now perhaps have the biggest opportunity for commercial benefit because as you mentioned, with the deprecated product carbon footprint, with the supply shared model, actually, if you can actually package up that reduction for a customer, that's a huge benefit for the customer and can really strengthen that relationship. Is that classic tension between risk and opportunity?
Saif Hameed [00:32:14]:
Yeah, I think it's really interesting. I mean, the Mars sustainability report has just been released. I haven't yet read through it in detail myself. I think it's going to be interesting to see how that plays out, because having now gotten to know the Mars team a bit outside in, they're taking a very thoughtful, very rigorous, very deep approach to this topic. And so their claims are likely to be as well substantiated as any company out there, I think can achieve. And I think there are a few companies in that zone where they're just super diligent in how they're thinking about this. And Patriconia, obviously, is another one that we talk about. And I think that there's a world where you say, well, what is the upside for Mars of taking that approach versus a doppelganger business that actually is nowhere near as rigorous, doesn't really think about identifying its supply chains, doesn't really think about how to attribute an apportioned change to its products, but still make similar claims on the basis of much more shoddy evidence.
Saif Hameed [00:33:13]:
And I think it's just going to be interesting to see what value drivers company a benefits from versus company b. I think there will be a few. I think already, actually, talent is going to be a big one. I think that the people working on these problems respect employers who tackle these problems with seriousness and rigor and depth. And I think that's already one very significant value driver. I think there's also a first mover advantage in some ways where I think anyone else who follows this approach is following a playbook established by another company, and so kind of has to follow their lead, follow their practices, follow what worked for them in their organizational context. And maybe also in the eyes of, let's say, the market, be seen as a follower rather than a trailblazer, which I think has its own.
Isobel Wild [00:34:00]:
It's on upside and downside, a follower versus a trailblazer. Strong note to finish on, and I hope all of our listeners can take some learnings from this to maybe become a trailblazer or a fast follower. Saif, thank you so much. Are there any lasting thoughts that you want to finish the episode on?
Saif Hameed [00:34:17]:
I think my lasting thought, Izzy, is that nothing lasts in this space. So let's see how things evolve. And I'm kind of just quite keen to get deeper into industry practice because I think that the one thing we can be sure of right now in this territory is that industry practice is likely to set the norm rather than established guidance or regulation. Because I actually think we're already seeing that guidance and regulation are two years behind industry practice, and industries are preempting where they think guidance will land and even shaping guidance. So industry practice is the place to be right now.
Isobel Wild [00:34:55]:
Epic. Thank you so much, Saif, and thank you, everyone, for listening. Goodbye.