Isobel Wild [00:00:07]:
Hello, everyone. This is the state of sustainability podcast brought to you by altrustic. Today we're going to discuss the SEC ruling on climate disclosures, and we're going to unpack what you need to know and what changes you might need to make to your business. We're then going to run into a topic deep dive. This is going to focus on managing resource constraints and competing priorities. We're going to look into how to communicate the importance of sustainability data to your management team, but also company wide. Let's get on with the show. Hi, Saif.
Saif Hameed [00:00:39]:
Hey, Izzy. How are you doing?
Isobel Wild [00:00:41]:
I'm well. How are you? You seem to be recovering from a virulent virus.
Saif Hameed [00:00:46]:
Yeah, feeling a lot better this morning. But if I kind of just burst into hysterical coughing, then I'll hit the mute button.
Isobel Wild [00:00:52]:
Thank God for that. A bit of podcast hygiene. I wanted to flag to you a cool announcement that I saw in the papers last week, which was that Burger King announced that their meat free burgers will actually be, on average, $0.10 cheaper than the meat option. This is super cool. And I think it's like, amazing that they've got to a place where that's happened, because obviously there's demand growing for no meat alternatives. But I'm just wondering, how does this work at scale? How can other businesses go about this? Because we always hear sustainability comes at cost premium. So how do you actually find these workarounds to make it the cheaper, better option?
Saif Hameed [00:01:39]:
Yeah, so, Izzy, the truth is that sustainability is not uniformly at a cost premium. And so think of sustainability as a bundle of interventions where there might be 20 different categories of intervention that a business might undertake. Some of those will be expensive, and some of those will be cost parity, which means neutral versus whatever else they were spending on. And some will be in the money, which means that they actually make money, and the business can pass those on to the consumer or the customer, or they can pocket the difference. Back when I was a consultant many years ago, I used to advise my clients to always internally communicate the bundle rather than just get going with the stuff that makes money. Because when you get budget sign off internally, there's a problem. If you just get budget sign up for the stuff, let's say that makes money, or is cost parity, and you kind of say, hey, we can get 10% reductions, we actually don't need to pay anything for it. And then eventually you sort of hit the roadblock where you're not going to have to pay money for the additional tons of reduction and the finance team at that point is like, hey, can't you just go back to the drawing board and look for something that doesn't cost money? Whereas if you actually communicate a bundle and in your roadmap, let's say next year, you start with interventions that you start with some that are expensive and some that are cost positive.
Saif Hameed [00:03:02]:
That's usually a better way to align these. That said, there are some freebies. This is a good example of one of them. And actually, I'm seeing a lot of burger interventions in my community. One of these is the Burger King format, which is a plant based burger. The other one that's getting quite popular is a Blender where you substitute some of the beef for mushrooms. And I'm seeing different companies go with different percentages of mushroom mix. And so I know one company that does 20% mushroom mix, I know another one that does 50% mushroom mix, and then there are varieties in between.
Saif Hameed [00:03:38]:
Happy to talk more about that at some point, because apparently there's a bit of a science to where you deploy a certain mushroom mix.
Isobel Wild [00:03:45]:
Yeah, well, and also, as we spoke about in our previous podcast, Peat grown mushrooms aren't always the best the environment. On those freebie points, Seth, do you have any kind of rules of thumb of what the cheaper initiatives are? Because I've had a lot of especially kind of agri value chain reduction initiatives always running over cost and over time. What are the kind of the easy go tos that can make up this Portfolio of maybe more expensive, cheaper?
Saif Hameed [00:04:13]:
Yeah. So basic rule of thumb is that anything involving waste reduction and efficiency tends to be in the money up to a certain point. And so let me give two examples. Energy efficiency was actually, for a long time, the mainstay of emissions reduction, because most businesses were able to get something like one or 2% emissions reduction on, let's say, their scope, two year on year, just through energy efficiency interventions that they would do in the normal course of business. Optimizing a process, for example. And that also saves money because it just reduces the energy bill. So that's one good example. I think that, to be honest, any kind of efficiency or any kind of waste reduction is probably going to help you on both measures.
Saif Hameed [00:04:59]:
Packaging waste, great example. Reducing packaging waste also can reduce. You can either sell on the wasted packaging you can often sell it back to, or give it back to the vendor. You can sell it onto a third party, you can optimize your processor using less packaging and buying less of the material. And the same is true for pretty much any category of stuff that the business is using waste reduction is great from an emissions or environmental perspective. Waste reduction is also, in my view, one of the best interventions you can take because it covers the whole value chain. So whatever you do to reduce waste at your point will effectively decarbonize the whole upstream of you. So let's say your coffee is another good example.
Saif Hameed [00:05:43]:
Let's say that in most cases, the coffee that you use to make a cup of coffee at the coffee shop or wherever is used once, whereas you can typically use it twice and you get a lower yield and you might. There's some yield differences there, but you can use it twice and by using it twice, you're effectively reducing the emissions by. It's not quite half because of the yield difference, but I think it's about 40% because you're covering the air freight it took to get the coffee there or the ship freight. You're covering what it took to roast it, you're covering what it took to grow it. All of that is covered by virtue of reducing the waste. At the final point.
Isobel Wild [00:06:22]:
I love these anecdotes and stories that come out about these mythical reduction initiatives that have all these commercial benefits. If you are a professional looking into doing that in your own supply chain, is it through word of mouth that you come across users generally through trialing it? Is it like, where can you find these little nuggets of kind of fail safe initiatives to intervene with?
Saif Hameed [00:06:46]:
Yeah, right now, a lot of it is practiced wisdom, which means that it's sustainability professionals moving from one business to another and transporting ideas that worked. There are a few companies, actually, that I think are known for having built good sustainability teams and that, I've noticed, tend to export their teams elsewhere. Anecdotally, I notice a lot of great people from Mars in different businesses. For instance, I know that the team from Griffith Foods is led by a Mars alumnus. I know that the impact team at Starbucks is led by Mars alumnus. There are a lot of great alumni from the Mars sustainability team in different places. Similarly, in the UK, the MNS sustainability team has exported a lot of alumni, different businesses. And so there's a bit of a virality of just interventions going from one business to another.
Saif Hameed [00:07:42]:
The consulting space also kind of lifts and shifts ideas from one space to a different space. Often from the corporate world, people will jump ship and join a consultancy and then take the ideas that work from one place to another. I think that this space will become a lot more. I don't want to say consolidated, but I think the. I think they'll become more of a practice playbook that businesses will go for. But if you look at just other business areas like digitization, cost reduction, other transformations, then it is often just led by bringing in a professional who's done this before or bringing in a consultancy that has done this before.
Isobel Wild [00:08:18]:
Yeah, I think we've previously mentioned that a good way of looking at recruiting sustainability practitioners into your team is actually to look at what change transformation they've done before versus actually their subject matter expertise. I want to move us on to the SEC mandatory disclosure ruling that was adopted this month. So just to do a quick rundown and then, steph, I'm going to pass the baton over to you for your thoughts, feelings and fears, maybe. So it's really cool to see that the US has set a national requirement for climate reporting. So this includes a focus on climate risk, which slightly echoing the TCFD framework, with also some disclosures on GHG emissions. So I'm going to run through what businesses actually need to do as a result of this. So, covered companies, which are those which have an annual revenue greater than 100 million, are required to publish climate disclosures in their annual reports and IPO statements. What they need to disclose is their financial statements, which follows a TCfD style structure, but also a list of other things which I'm going to run through now.
Isobel Wild [00:09:28]:
So your ghT emissions, this covers scope one and two with the methodology report. Note the absence of scope three there, but I'll come to that later. Your governance. So the board and management oversight of these climate risks, the strategy, which is the climate risks that have been identified, the material impacts of these on strategy businesses, business models and any activities to mitigate material risks. So your transition plans, scenario analysis, carbon costs using your phrasing set rather than price risk management. So the process of identifying managing climate risks and then lastly your targets. So any climate goals that will materially affect your business and financial impact of meeting the goals. The important thing to know though is that this rule is far weaker than the draft, which is mainly down to political pressure.
Isobel Wild [00:10:21]:
But I think a few of the key things that have changed as a result is that scope three is no longer required. There are much longer timelines for the covered companies. So most have two years for disclosures and three years for GHG accounts, and some even have six years. And then also it removes a couple of opportunities that are no longer mandatory. So steph, I guess the question here is that because we've got a lot of other mandatory rules out there. So California's SV 257 rule which makes scope three reporting mandatory. But also the CSRD. Does this mean much? I don't know.
Saif Hameed [00:11:02]:
Yeah. So, Izzy, I'm going to be a little controversial. I think it means a lot. And I know that this is not as far as most environmentalists as wanted it to be. And if I kind of look at the LinkedIn activity on my feed right after the, in the days in the build up to the final announcement and the days right after I had two camps and I noticed that everyone who was on the european side and a few, let's say, people who are deep in the weeds of driving sustainability across ecosystem. So not in a corporation, but more in the stakeholder groups in the US. So all those who are kind of trying to drive across industry action in the US and those who were at corporate sustainability or otherwise in Europe felt that this was a big step back from the original drafting and that ultimately this was watering down a defeat of some sort and a step in the wrong direction. Then there was another group, which was a lot of the corporate sustainability professionals I'm connected with in the US.
Saif Hameed [00:12:10]:
And most of them seemed very excited that this was actually a big step forward and that this was a huge deal to have gotten this across. Yeah, actually more in that camp. And the reason for that is I think that the political disagreement in the build up to including scope three was a good sign of things to come where if this had gone ahead with the scope three inclusion, I think there was a much higher chance that it would be rolled back, lets say next year. Imagine, for example, you get a change in the balance of the White House and Congress and the Senate in the US, which is the odds are high that this happens. I think there was a pretty good chance that this ruling would be rolled back. I think its on balance worse that these things get rolled back than that they get watered down when they come out. Because if they get rolled back, everyone who is involved in getting it across the line loses faith and starts to think, well, I don't want to go through the whole effort again. Two years later, three years, you kind of lose four or five years just in the kerfuffle of having tried to get it across the line and then having it rolled back and then mustering up the gumption to get it going again.
Saif Hameed [00:13:24]:
And so actually, I'm personally just again, as an environmentalist and as someone trying to drive change, I'm quite happy that we got something across the line. I say we in a kind of global sense, I think this is a big step in the right direction. I think it expands the net of companies that are going to be proactively reporting on this and therefore thinking about it and trying to change it. I think that if you look at scope one and two, you capture, I think, 2800 companies that will be impacted by this in the US. That's a big number. If you look at the largest companies around, I think that there will be ripple effects and sometimes will start to require and request the same of their suppliers, even if they're not thinking about scope three. I think there's just a mindset that they'll start to slip into. And I think we can always bring back the scope three battle later.
Saif Hameed [00:14:12]:
Yeah.
Isobel Wild [00:14:12]:
I also think another great area is that it should bring a lot better consistency and trust the accounts that are being now reported because there's obviously a bit more global coverage on that. There seems to also be a lot of emphasis on climate risk, which I think is another great area. What are your thoughts on that emphasis in the SEC ruling?
Saif Hameed [00:14:36]:
Yeah, I think it's really interesting that often climate risk and emissions reporting are sort of conflated or positioned as the same thing, whereas I actually think they're totally different. Take our business altruistiq, our emissions is super low, hyper well under 100 tons per annum, and we pose, no, there's no climate risk involved in that. We're not increasing climate risk for anyone, we're not impacted. It's just a totally different ballgame. I think that the way that I think you should think about this is adaptation, mitigation and resilience. I think those are the best three categories to approach this topic. And most of what we're approaching with emissions reduction and scope one, two, three, reporting is we're looking at mitigation. We're trying to mitigate or kind of reduce the impact.
Saif Hameed [00:15:27]:
We're trying to reduce the supply side, let's say a negative impact. And I think that with a lot of the risk conversation, we're actually talking more about adaptation and resilience. We're sort of saying we need to actually adapt ecosystems so that they can better deal with the negative impacts of climate change. And a lot of the resilience conversation is we need to actually make infrastructure, for example, more resilient so that actually it's just more immune to any of the negative impacts. So for instance, like a greenhouse, as a way to reduce the impact of shifts in temperature on agricultural production. That would be a good resilience intervention because it's just making it less susceptible to impact and putting up new forms of housing in locations where you think people are going to have to migrate to because the area where they were living is now too hot. That would be a good adaptation intervention in my book. And I don't think we actually talk enough about those two camps.
Saif Hameed [00:16:26]:
Most of the regulatory climate risk topic is around talking about your exposure levels. So where are you exposed to climate risk? Where do you think climate risk is going to hit hardest? And I think businesses need to sort of couple that with also what measures are they going to be taking, either around resilience or around adaptation. And it's probably mostly going to be resilience in a corporate setting.
Isobel Wild [00:16:50]:
Yeah, that's interesting. I think this also seems to reflect perhaps why this was pushed through, which I think came a lot down to investor pressure. So the fact that resilience, adaptation, litigation, all of these things are wound up into the ruling almost like reflects that quite heavily, and maybe, perhaps gives us some hope that scope three will also be included in the future. As you said.
Saif Hameed [00:17:16]:
Cool.
Isobel Wild [00:17:17]:
Let's have a quick break before we go into the topic. Deep dive. Today we're focusing on managing resource constraints and making the business case not just for sustainability, but also for society. Sustainability data. This isn't a new challenge. By no means. Managing resource constraints for sustainability is something I think all of our listeners can relate to, because there are always those competing business priorities for budget, for internal resources, you name it. But I want to dig into this, and I also want to build out a bit of a toolbox about how we can actually make the business case and then specifically go into the tension between allocating resources across different goals.
Isobel Wild [00:18:07]:
Seth, from all your wonderful years of consulting, how would you frame the business case? Like getting resources across the line for sustainability?
Saif Hameed [00:18:16]:
I think, Izzy, these discussions with finance or other parts of the company always work best when you start with the value proposition. And so I think you kind of need to start with, are we responding to, are we responding to a customer pressure, an investor pressure? Is this about the share price? There's an IPO coming, and we want to be able to access the widest set of the investor landscape as possible? Or is it that we're actually looking to capture the hearts and minds of a specific niche of consumers? There are a lot of angles you can go with, and I think you always need to start with that. I find it's best to start with the narrative. So, for example, we've analyzed our customer base. We find that out of 100% of our customers, 50% really don't care about sustainability. The remaining 50% do. And out of that 50%, let's say two thirds care about it but won't pay extra, and one third cares about it and will pay a bit extra. For example.
Saif Hameed [00:19:16]:
And we think that this set of consumers of our product is a high value segment. And for the two thirds that will choose our product over the competition at the same price, we want to make sure that they do that. And for the one third that actually kind of is happy to pay a bit extra. We want to have a niche brand or a niche product that we release that is a sustainability purist brand. And we think that doing these things will actually contribute x to the top line and y to the bottom line of the business. This is the normal language of business. And I think you always want to communicate the sustainability imperative in the normal language of the business. So start with the problem you're trying to achieve or the problem you're trying to solve and what that problem is worth if you solve it right, I think you then kind of want to work back and you want to say, okay, so now if we're aligned on where we're going and what we want to achieve and what it's worth, what are the pieces that we need to move? And I think in that sense you want to sort of say, look, these are the different topics that we need to cover.
Saif Hameed [00:20:17]:
We're going to have to address water, we're going to have to address emissions on a bunch of other stuff. Maybe we don't need to actually be the best in class, but we need to be good enough. So the framework that I often talk about is winning the game versus playing the game, which I stole from someone else. And in winning the game, you sort of say, these are the territories that we really want to be the best in the world at. And ideally, these are only one or two. And in playing the game, these are the territories that actually you just want to be as good as everyone else. One of the examples I like quoting is Tonys chocolate, only, for instance, which is a good challenger chocolate brand in the sort of mid to premium range, I would say, depending on your chocolate tastes and preferences. And if I look at them outside in, I would say that Tonys really wants to win the game at fair wage and income distribution across the cocoa value chain.
Saif Hameed [00:21:08]:
Thats like what theyre betting the house on. Thats the ethos of the business. And so everything around the business is really geared towards that. And then, for example, maybe actually emissions or water intensity is more of a playing the game because these are topics where they know that they need to be good enough, but maybe this isn't something where they need to be the best in the world or the lowest emissions coco in the world. They can't own every topic to the nth degree. And so then you kind of say, okay, well, the ones that we want to win the game or play the game on, what is this going to cost to change and what are the steps we're going to have to go through to deliver that change and how are we going to phase it? And then I would start thinking about these bundles of interventions where you kind of look at some stuff that's going to cost money, some stuff that's going to be free, some stuff that's going to pay for itself. And you create these little bundles which you could then sort of phase into a roadmap. And I think that if you always position it that way, you can benefit from a lot of existing alignment within the business because, for instance, those sets of consumers might already be identified by the business, might already be seen as priorities.
Saif Hameed [00:22:12]:
You can start to graph the initiatives on top of existing programs, maybe in procurement or operations. And we've talked about this in previous episodes, Izzy, you want to be able to piggyback off existing budgets as well as much as possible.
Isobel Wild [00:22:25]:
Yeah, I think Chris Allen, who's director of sustainability at Decafel, gave a really good tip of this and he said he's actually hired in a dedicated society, sustainability finance expert, into the sustainability team for exactly your points of being able to communicate in the right language, like communicate to the board, communicate to the within the commercial realm to actually make the case for this, have those financial models available, have all your data available to actually be like, you know, this doesn't just make sense for, like, this is our sustainability, our mission, our purpose, but actually it makes commercial sense as well. I think there's also a point maybe to dig in on. This is actually like the setup of a sustainability team and how the setup of a team can actually enable these resources to flow more easily. Steph, I'd love to get your thoughts on a distributed team setup. So when your sustainability win team, as you call it, are within different functions for an independent team setup and how each setup can perhaps work in the favor of resource flows.
Saif Hameed [00:23:32]:
Yeah, so I think this is an interesting topic with some different viewpoints. The centralized setup I see as the sort of the old center of excellence model, which is when businesses used to be instituting a new kind of change, they would often create a center of excellence of some sort or a dedicated function to really drive the change across the business and be the source of expertise that anyone else could come to. I think this is a great way to start, and it's a great place to. Great way to get people into the business. And then you can have a team that can support each other and really try and kind of COVID all the bases, whether it's supply chain engagement, or data and carbon accounting and all that stuff. Reporting can be another role, etcetera. Longer term, I think that most businesses recognize that they want sustainability to be embedded in every existing function, because you need to move the rest of the business. Sustainability is one of the few functions that doesn't really own a p and l and can often end up sitting really outside the realm of the normal business.
Saif Hameed [00:24:38]:
And you want to be able to actually have sustainability embedded in the procurement team. We want sustainability to be something that procurement individuals think about in the course of the day to day business, and they have the tools to do so. You want sustainability to be embedded in operations so that whenever the operations team is thinking about, let's say, purchasing new equipment, they're looking at energy efficiency, for example. You want it to be embedded in the R and D team, so that as they think about new product design, they're looking at alternative materials and innovation at the material level that would again drive environmental impact down. And for that, you're going to eventually migrate to a distributed sort of setup. And so if you sort of see the star starting point as sustainability function, fully dedicated, and you see the end point as sustainability is a way of life in every individual function, then there's also kind of a midpoint, which is you have a distributed setup where you have a sustainability person or individuals embedded in each function. So in the procurement team, you have a sustainable procurement team. In the R and D team you have environmental scientists, and in the operations team you have energy efficiency experts, for example.
Saif Hameed [00:25:46]:
And that distributed setup can be also a nice way of bringing it closer into the function that you're looking to change. There are companies that are looking to just retain the centralized model indefinitely. And I think that can also work really well. So it depends really on the business. My personal preference, if I was setting this up, would be to eventually gravitate towards having sustainability embedded into the normal KPI's of the function. And therefore, I would gravitate to that midpoint as well of having sustainability teams distributed into different functions.
Isobel Wild [00:26:18]:
And to this point, I think education and communication with the wider company versus just the management team. I hear a lot about improving sustainability literacy. So, like, how do we actually communicate the message and the importance of sustainability, not to the, not just to the decision makers, but to the, some of these large F and B companies or retail companies have tens of thousands, if not hundreds of thousands of employees. How would you communicate en masse? Like, your sustainability targets, your sustainability purpose and also your progress that you're making. When it's quite a daunting, it's quite a daunting prospect, especially if you are seen as a sustainability expert and people that might come at you being like, oh, do you know about this latest policy or regulation? What does that mean for me? What are the workarounds there? Like, how would you frame it?
Saif Hameed [00:27:09]:
Yeah, I think that I'm seeing two approaches and one is much more dominant. I think there's one model, which is the cottage industry model, which I think is the most prevalent, where a business is doing many different things, somewhat disconnected on sustainability. So they have something running on, let's say nature and biodiversity, and it's in pilot mode. They have something else going on, emissions, they have something on recycling. And it kind of seems like they're trying to do everything for everyone. And therefore the communication is also quite fragmented and scattered. They talk about the 15 projects that they did last year and how the projects have improved and gotten better. And as a result, I think stakeholders, both internally and externally, when this works well, those stakeholders will think, oh, this is a really sustainable business.
Saif Hameed [00:27:57]:
Look at all the amazing stuff that they're doing. I think very often it doesn't work so well and there isn't a clear message that penetrates, and the stakeholder doesn't really know what the business stands for. And I think with sustainability, there are going to be, I think of these three groups of companies, there's the companies that are really trying to set the narrative. There are those who are trying to be fast followers, and there are those who are going to be dragged along by virtue of regulation. And if you want to be in the first or the second camp, then I think you want to stand for something. So there's that cottage industry kind of model. I think the second is the companies that set some sort of target and then just rely on the target narrative and the target status as the mainstay of their communication. So they say, oh, we're like 40% of our target, we're 50% of our target.
Saif Hameed [00:28:48]:
And I think that can be risky because it puts a lot of weight on your progress to target and in emissions, for example, a lot of the numbers are going to move around based on emissions factors and methodologies and things that are not really in your control. And if you fall short of the target, then everyone's like, oh, like, this is not going in the right direction and we've kind of failed. Whereas you might have been doing a lot of great stuff. So I think a slightly more effective way to build a narrative internally and externally is you focus on some sort of a north star, a north Star metric or goal. And I would not have that be emissions percentage reduction. I would ideally have it be something different, something a little more easy to control. It could be, for example, that you're actually moving away from single use plastic. It could be something around your choice of suppliers and the number of suppliers you're working with that match a certain profile.
Saif Hameed [00:29:45]:
Ideally, whatever it is has a duplicative impact on your emissions target or your water target or whatever else. But I would put this a little more in qualitative terms because that makes it a bit more real for individuals. And also it is a little more in your control to achieve, rather than the pure numbers in this space which are still in flux.
Isobel Wild [00:30:08]:
Yeah, I agree. I also think making it a bit more tangible than your maybe externally facing mission and purpose statements, which are save the planet, drop by drop, or healthy person, healthy like healthy environment. Adding a little bit of relative like nuance to your business I think will make sense. I've drawn on your expertise as a consultant, and I now want to draw on your expertise as founder and CEO of Altruistiq, a sustainability data management platform. So what we're hearing from a lot of people is that they are more sustainability professionals, is that now that they understand sustainability and the importance of sustainability data, but actually trying to communicate sustainability data as a priority over, for instance, health and communities goal that's so clearly linked to your sustainability strategy. And it's very visual and something that you can easily build up narratives around and report on. It's quite a hard ask and it's a bit of an uphill battle. Do you have any tips for communicating that case?
Saif Hameed [00:31:11]:
Yeah, I think actually the two cases are interlinked. And so if you think about, let's say, data management tools as just a tool, first and foremost, these are tools to enable you to do your job better, which means that these should give you back time. And if they give you back time, that's time you can use for all the other stuff that you want to do. And the way that I think about, let's say, even individuals in our business, is that with the best individuals, you always want to give them back time. So we use a lot of software ourselves, and a ridiculous amount of software, frankly. And when I'm reviewing a business case presented by someone in our team for procuring a certain software, a big part of my thinking is how do I think about the individual making the request? Because if the individual making the request is a real star performer, and actually I think this is going to give them back 20% of their time. That's probably one of the best investments I could be making, period. Because it's like imagine in any business, let's say you have 100 people, you have maybe 15 or 20 people, if you're lucky, who are really amazing.
Saif Hameed [00:32:18]:
And those 15 to 20 people, it took you the other 80 to get to those 15 to 20 people. You're trying to get the best person every time, but there's a yield on that. And if you can effectively get one of them back 20% of their time, I think that's a fantastic investment. So I would always look at tools in the context of just driving efficiency for the user and the users, and how you could buy back time for other stuff. I think that as the market for tools in our space evolves, there's also a lot more you can do with them. And so a year or two ago, most of the tools that say, in the data management space environmentally were focused on just generating a scope, one, two and three carbon report. And it didn't seem like those tools would give you any incremental advantage beyond the reporting. You could do with a slightly worse scope, one, two and three carbon report.
Saif Hameed [00:33:07]:
Whereas now those tools are also evolving. And so there's much more that you could do. So, for instance, with altruistiq, you can start running cohort analysis, you can build interventions, you could do material deep dives in different products, you can re engineer the product, you could kind of eco design a particular SKU. And so these are things that interface then with a much wider team. And so the efficiency gain that you're adding back is a gain you're adding to many more people in the wider setup. And that, I think, makes it easier to make the case, hopefully, for tools like that.
Isobel Wild [00:33:38]:
Yeah, I agree, especially making sure that the dashboard that perhaps you're using is really easy to understand and clear to understand, customizable to your business functions, not just like a generic overview, but also having lots of seats available so people can actually, like. You're not limited to, you're not the kind of barrier for entry like anybody in the business could perhaps, like, join onto that platform to understand the things. The last point that I want to touch on, Seth, is that we've spoken in our last podcast about upskilling internal communications, upscaling the procurement team. I'd love to. Just like on the point of how to engage the whole company when perhaps you're not a unilever or a Patagonia or a lush cosmetics or a Tony's chocoloni that has their mission baked in, but you're actually a company who's trying to build their sustainability purpose around them as they go. Have you seen any cool engagement programs that companies have run in your time?
Saif Hameed [00:34:36]:
It's a good question. You know, I think there's a few different types of engagement programs that I'm seeing right now. One is the ones that you kind of indicated, you know, the patagonias of the world that I think are happy to put significant amounts of money on the table to drive change, and therefore, I think can achieve a certain depth that many other companies can't. And I think there are very few of those. I think the second category is a category that I see more and more large companies fit into, which is where they try and get the program design right, whether it's the cohorting, whether it's choosing which initiatives they want to focus on, whether it's choosing where they want to focus on data. So they're not necessarily putting money on the table, but they're getting the design right in terms of where they choose to spend their time and focus and energy. And they're large enough that they're an important account for all of their, for many of their suppliers, if not all of their suppliers. They're able to bring that force to bear, let's say, on a focused challenge within their supply chain.
Saif Hameed [00:35:40]:
I was on this panel the other day with booking.com and Mars, for instance, and both of them were taking the same approach, which is where they try and identify a small number of suppliers that can actually have the biggest impact on their environmental footprint, and then they try and actually work closely with those suppliers to drive change. I think that the third category is where most, most companies that are a bit newer to this are falling, which is that they're ending up making the mistake of thinking they need to engage with everyone and get a sort of percentage response rate from everyone. And I think that's just not going to work. And I think that that's probably going to change with the next couple of years and as people get more experienced, because the average business that we work with might have anywhere from 1000 to 30,000 suppliers. Very likely, most of those suppliers are not meaningful for your environmental footprint, and many of the ones that are meaningful also won't respond to you. One example that I think about is that Selfridges, for instance, the biggest contributor, like the biggest stakeholder, is LVMH, which is a large supplier responsible for a very large share of their scope. Three. But Selfridges is a lot smaller than LVMH, so they don't actually have that much ability to control the decisions LVMH makes.
Saif Hameed [00:36:53]:
And so there, it makes sense not to just pick the largest supplier or the most meaningful, but to pick the ones that are a good combination of meaningful and where you can actually drive change.
Isobel Wild [00:37:03]:
Yeah, definitely. And actually, in our last podcast, we referenced McCain's and their partnership with Pat Donald's on their regenerative farming initiatives. And actually, the benefit of that is also the amplification of the projects as well as well as the relationship strengthening. Seth, any final thoughts before we wrap up?
Saif Hameed [00:37:21]:
No, I think maybe just worth coming back a little to the regulatory side. I think that a number of environmentalists might feel like, with the watering down of the SEC and similar sort of noises on some of the european legislation as well, that we might be moving a step back personally and even on the corporate agenda, if you look at Unilever's reframing of its goals. But I actually think that we're kind of getting the fluff out of the system a little in that we're coalescing around the stuff that regulation is actually able to commit to for the next several years, rather than the stuff that is the result of passing mood, if you will, in the environment. And I think actually this is going to be big gains over the next several years. And I think these are gains we can build on. So I just want to sort of pass on a message of hope, maybe for anyone who is a bit deflated.
Isobel Wild [00:38:16]:
Seth, thank you so much for joining today. We covered some great things. Just to recap, we covered SEC, and whilst it's being diluted, there are reasons for optimism. How to make the business case for sustainability, how to actually set up your sustainability team to unlock resources, tips for improving company wide sustainability literacy. So Seth's three approaches, and then lastly, making the case with sustainability data. I think the resounding takeaway for me there was to anchor on what efficiencies you can make. Awesome. Seth, thank you so much and see you soon.
Saif Hameed [00:38:56]:
Thanks, everyone. Thanks, Izzy. Bye.