Hey everyone, welcome. We've had some tech difficulties with the last few iterations of this, and so we're hoping we get this right this time. We have a lot of cameras and mics and things that we're setting up to make this work smoothly, so it's always a bit of a stab in the dark almost.

I'm trusting that this one works fine. If you have any issues with the audio or video quality, just let us know. This is a learning and iterative process. We're super excited for this Ask Me Anything session. We typically gather questions ahead of time from companies, users, and individuals within the sustainability data space. We also consider current trends and topics that are relevant to our audience.

**Market Observation: How Amazon is turning supplier engagement into a billion-dollar revenue stream**.

One of the significant recent developments is Amazon's push to bring the supply chain on board. They recently published an ESG report for the full Amazon group, including **[amazon.com](http://amazon.com/)** and AWS, where they discuss their policy intervention to engage all suppliers in their sustainability journey. This involves requiring suppliers to share emissions data and targets, which has sparked discussions.

Some people are wondering if Amazon is fully committed to this approach, making it a game-changer, given their influence as one of the world's largest retailers. Others are considering whether this is a clever business strategy, as Amazon has excelled at turning cost centers into profit centers before. They think about providing best-in-class solutions, engaging their ecosystem, and creating new revenue streams.

I read through the ESG report and noticed that while the details about supply chain engagement were somewhat light, a few aspects kept coming up. They mentioned sharing data and targets, helping suppliers transition to carbon-free electricity, selecting partners for decarbonisation business opportunities, and offering products and tools to support supplier decarbonisation. This follows the typical Amazon playbook.

I find it interesting to observe how this will impact supplier behavior, how it will strengthen Amazon's ecosystem and increase its stickiness, and what new billion-dollar revenue streams might emerge. Amazon has also been exploring emissions data management within their operations, adding more excitement to this space.

Now, let me introduce Izzy, who is joining us on camera for the first time. She has been instrumental in orchestrating our sessions behind the scenes. Izzy will read out some of the questions, and we'll do our best to answer them. Please feel free to ask your questions in the live chat as well.

**Our head of sustainability doesn't report directly to the CEO. Do you think this is a problem?**

This is an excellent question. Whether it's a problem depends on the specific context of the organization and the individual's reporting structure. If the organisation is undergoing a massive sustainability transformation, it's essential for the head of sustainability to have the support of their reporting line. Understanding the importance and requirements of the sustainability journey is crucial for the person they report to. This support ensures the head of sustainability can make difficult decisions and maintain momentum.

On the other hand, if the sustainability focus is on incremental changes and less about a radical shift, reporting to a different executive might work well. In this case, the head of sustainability can focus on internal alignment and coordination, while the executive they report to takes on the external-facing role. Ultimately, a successful partnership depends on how well the roles complement each other and how much support the reporting executive provides to drive sustainability initiatives effectively.

That isn't dovetailing nicely with their own KPIs. As a COO, they'll have their own KPIs. If they see, actually, all this procurement stuff or supply chain stuff is kind of unrelated to me, that can sometimes be a big letdown for ahead of sustainability. So what I'd look for is can you get the combination of things right across these two people, and then it's perfectly fine.

Sometimes, it can actually be a really good way to have a stepping stone where you have a head of sustainability and the right person in that role. That person can use this to build momentum and credibility within the organisation and experience. They can lean into some operational aspects of that role with the support of, let's say, a COO, or lean into the financial and reporting aspects and the data validity and the quality control by working with a CFO. It can be a really nice set of training wheels for a head of sustainability before moving up to something more senior.

So, it depends on the nature of the individuals involved. I think the most effective sustainability teams are those who have the WIN team behind them. For sure.

**Q.1 I'm currently looking for an impact software solution, and I'm in conversations with a variety of solution types. How would you compare an ESG-wide platform versus a carbon-specific platform?**

Onto the second question from Emma. She says, "I'm currently looking for an impact software solution, and I'm in conversations with a variety of solution types. How would you compare an ESG-wide platform versus a carbon-specific platform?"

Another good question, Emma, and again, somewhat context-specific based on the organisation you're in and what you're looking to solve for. I would orient around primary expectations. If your primary expectation of the software is a digital wallet, something that can store all the numbers for reporting requirements, and have consistency across the organisation, an all-in-one ESG solution can be the right fit. The risk is expanding the number of KPIs reported and losing focus. For many companies, an ESG all-in-one can work.

If your primary expectation is deep insights and analytics on emissions and related metrics, a carbon specialised platform might be better. The risk here is that other ESG metrics may be neglected. Consider the nature of your organisation and what you need most.

Anecdotally, we see two types of companies going for all-in-one ESG software. First, small or medium enterprises with limited budgets and simpler operations. Second, larger companies with simple environmental profiles. Avoid all-in-one solutions if you have a lot of operational complexity.

**Q3. We have multiple teams set up to cover different sustainability topics (Scope one and two, supply chain product LCAs). What is the best way to help these teams work well together? ~ Esther**

This is an interesting topic for me. Companies with multiple teams often have been working on sustainability for a long time, and they have different fragments of approach. Divide sustainability into data and reporting (infrastructure) and implementation and budgets. For data and reporting, think in a central, joined-up, strategic way to unify and leverage data. For implementation and budgets, devolve ownership of action to the frontline, create healthy competition between teams, and make change happen where it matters most.

Tom's question is about their first manual carbon baseline. They have data gaps and use generalised assumptions, making them apprehensive about making big investments on potentially incorrect hotspots. Do you have a rule of thumb on data maturity and when to act?

It's unlikely that decent interventions will turn out to be wrong ideas for your business. But beware of interventions that might be made redundant later (e.g., energy efficiency when shifting to renewable energy). Also, consider the common problem, where other stakeholders may address certain issues. Focus on getting the right data for infrastructure planning, but when making change happen, devolve ownership to the appropriate teams that isn't dovetailing nicely with their own KPIs. And as a COO, they'll have their own KPIs. And if they see, actually, look, all this procurement stuff or supply chain stuff is kind of unrelated to me, that can then sometimes be a big letdown for a head of sustainability. So what I'd look for is, can you get the combination of things right across these two people, and then it's perfectly fine.

In fact, sometimes, I think it can actually be a really good way to have a stepping stone where you have a head of sustainability and you have the right person in that role, and that person is able to use this to build momentum and credibility within the organisation and experience. Actually, maybe even lean into some, for example, the operational aspects of that role with the support of, let's say, a COO, or lead into like lean into like the financial, the reporting aspects, and the data validity and the quality control by working with a CFO. It can be a really nice set of training wheels for a head of sustainability before moving up to something more senior.

So, it depends a little on the nature of the individuals involved. Yeah, I think the most effective sustainability teams are those who have the whole team behind them.

**Q3.** **I'm currently looking for an impact software solution, and I'm in conversations with a variety of solution types. How would you compare an ESG-wide platform versus a carbon-specific platform?**

For sure, for sure. Yeah. But, okay, so I'm conscious of time. So, onto the second question from Emma. She says, I'm currently looking for an impact software solution, and I'm in conversations with a variety of solution types.How would you compare an ESG-wide platform versus a carbon-specific platform?

Another good question, Emma, and again, somewhat context-specific based on the organisation that you're in and what you're looking to solve for. I would really orient around primary expectations. If your primary expectation of the software is that you're looking for a digital wallet, basically, you're looking for something that can store all the numbers.

Whenever you need the numbers for any reporting requirements, they're there, they're available, they're curated, and you're going to have to fill in a lot of surveys on the backend to get to those KPIs. But you also want that digital wallet to function as the repository of all the surveys, and again, have consistency across the organisation.

In that case, I think an all-in-one ESG solution can be the right fit. The risk with these sometimes is that there's almost like an inertia or a momentum or tendency to maximise the number of KPIs you're reporting against and have as many KPIs within the same platform. And then, you know, maybe you have like dozens of different KPIs that you're trying to manage for. I think that's just a risk that you need to be mindful of, that you don't have this ESG KPI creep almost where it just keeps expanding.

Obviously, there are considerations around just like, you know, how to get the data in there, but I think that for many companies, where you're just looking for that wallet, an ESG all-in-one can work. If your primary expectation, by contrast, is to provide you with deep insights and analytics on emissions and potentially two or three other related metrics, for example, water, let's say land use or deforestation, stuff that dovetails nicely with the emissions problem, you want to really go deep into that side of the problem and you want to understand initiatives, interventions, cost of intervention, who needs to be involved. You really want to go quite deep.

Then you'll probably get more use out of a carbon-specialised or carbon-focused or environmentally focused platform or digital product. The risk with that is you go super deep and you build this super strong muscle on one or two or three of the metrics that you're thinking about. Where, and you end up having a very analog process for a lot of the other ESG metrics.

I am obviously quite biased in favour of the environmental metrics. That's the space that I know and work in predominantly. But at the same time, there are other metrics that are important, right? And we can debate more or less important. There are other metrics that are important. And so what you don't want is that those all become kind of the forgotten children of the process.

Anecdotally, you typically see two types of companies going for the ESG all-in-one software. The first is small or medium enterprises, for example, with less than a hundred million dollars of revenue across any sector. These sorts of organisations typically have a limited budget, as every organisation has. But they also kind of don't have that much complexity necessarily, and they're happy to lean in on things like the data gathering and getting the data into the system, and they can kind of almost wrap their arms around the whole organisation and they know how it moves and how it ticks.

And they know what they need to do intuitively to move things. They often have very few products that they deliver or produce. And so in these organisations, that all-in-one digital wallet can be a really, really good move. And then, the need for granularity and accuracy is a bit lower. So it works just fine for investors, banks, etc. Other people who might want these KPIs, works well for internal momentum also. And then whatever budget is left over, they can deploy that to actual change.

The software should be the very, very small fraction of the budget. As much budget as you have available should go towards actual change and galvanising momentum, rather than on data, for instance. The other example of organisations that we see looking for ESG all-in-one tools are larger companies with very simple environmental profiles.

So think about a software business. Think about a professional services business. Usually, you have the absence of lots of material inputs, the absence of lots of manufacturing processes and stuff like that. And in these organisations, emissions calculations should not be a very hard thing. It should be an easy, easy-ish thing.

Therefore, actually, you know, you, you shouldn't need specialised software to get this done. And so again, having an all-in-one solution can make sense. The particular companies where we'd suggest avoiding going for an all-in-one solution is where there's a lot of operational complexity. So think about a lot of business units. There's manufacturing, there's some agricultural activity. There's a lot of, let's say, products or skews also involved.

In some cases, you're doing value addition and some you're not. There's like a lot of complexity there. And in these cases, the savings that you might make from an all-in-one solution, which are often cheaper than specialised solutions, the savings may well be eaten up by lots of internal work

So if you kind of almost think of what the ratio is, often the external spend has a one-to-two ratio with the internal spend. And so for every dollar you're spending externally, you might end up spending like $2 internally. And that can actually go up quite considerably if you just think of all the people you'll need to be able to manage the assumptions and all of the data gathering involved with that.

That's just a few thoughts on how to think about that question. Well, it's a conundrum that I feel like we faced with quite a lot, so it's good to unpack it. Onto the next one, which is coming from Esther. So Esther mentioned that we have multiple teams set up in our company to cover different sustainability topics.

So Scope one and two, supply chain product LCAs. What is the best way to help these teams work well together? Another good question. We're getting a lot of good ones I know today, so this is super interesting, and I find this one interesting for me because often the companies that have set up multiple teams to focus on different aspects of sustainability data and change are the ones that have been working on this for the longest.

And the reason for that is, you know, if you flashback 8, 9, 10 years ago, then you know, maybe they started thinking about Scope one and two, really only that part. And they started thinking about renewable energy transition, operational efficiency, waste, and a lot of other stuff. And so they just started with a small internal team to focus on those things and then gradually they think, okay, well actually the Scope three aspect is now becoming more important.

We need to start engaging the supply chain. We already have this process running for our internal data. Let's set up another team that's going to go out to the supply chain and engage that side of the business. Then, you know, more recently they start thinking, well actually product breakdowns and product labeling and all that is becoming more important. We've got a team for Scope one and two, we've got a team for Scope three.

We have no one thinking about LCAs, for example, at any kind of scale or scalability. Let's find a process and maybe tooling and external support and consultants also for that. And so you can kind of see how an organisation can just evolve to have these different, sometimes silos and sometimes not, but just these different fragments of approach.

Um, and the way that I think about this is you need to divide the sustainability topic in these organisations into two parts. One is that you need to think about the data and reporting. And so let's call that almost like the infrastructure aspects, the nuts and bolts of what you need to enable change.

So the data and reporting. Let's think about the second piece as implementation and budgets. How do you actually now use the infrastructure that you've set up and got in place to again, drive, change, deploy capital, pilot initiatives, scale them, etc. And if you think about infrastructure and data and reporting, you want to do those in a centrally planned and strategic way because the more that you invest in making that scalable, the lower the cost per unit going forward, the more you'll be able to use it and leverage it and build on it going forward, the more other people will be able to use it within the organisation.

And so doing this kind of in a tied-up, joined-up way has lots of benefits. One is, for example, you know, if you think about your greenhouse gas inventory and targets, you are going to need to unify this data anyway. You're going to need to bring it together because you are going to be looking at your targets in a joint way.

So you have to sort of start bringing this data together. The second is abatement planning, where you're looking at comparing different interventions against each other and you're, you are contrasting them, let's say by marginal abatement, marginal abatement cost for instance. And so, again, you sort of need to try and bring your Scope one and two and three all together.

Ideally even start looking at it through a product lens already to start saying, well, we can shave the emissions of this product by 15% or 30% or 40% by doing these five things. And I think that narrative power of that is quite compelling and you don't want to miss out on that by not having the joint data to make that easier.

And the third is again, going to like product emissions and labeling and product redesign. You are going to need to use the activity data that you're using for your greenhouse gas inventory in a different way, which means that you need to have access to that activity data to be able to combine it in a product context.

So if you think of all these three different sorts of use cases, these are all reasons why you would want to start devolving that aspect of actually making change happen. And so again, the rule of thumb is when you're doing infrastructure planning, like for data and reporting, then it's best to think in a central joined-up, strategic way. When you're trying to make change happen, then it's best that this has devolved at the level of the people who have the right context to really move it forward.

Yeah. And it definitely helps with buy-in. You're sharing the cost. Exactly, exactly. Right. Like it helps to actually spread the load across different teams. Yeah. When it comes to change, because you can again tap into multiple budgets as well, a win-win, definitely a win-win. I think we have time for just one more.

**Q.4 We have just done our first manual carbon baseline. However, I'm aware that we have many data gaps and use very generalised assumptions, and as such, we're a bit apprehensive to make big investments on potentially incorrect hotspots. Do you have a rule of thumb on data maturity and when to act? ~ Tom**

Thanks, Tom. It's another good question. We've been getting this question a lot last year, uh, not so much this year, but certainly for organisations that have been at an early stage of setting up systems. And again, you know, everyone is, frankly, at an early stage of data maturity.

One of the things you want to think about is how much should I focus on getting the right data in place versus just getting going and driving change. And, you know, I think about this in a few ways. One is that it's very unlikely that a decent intervention turns out to be the wrong idea for you to do for your business.

Most likely, most interventions that you're going to be making are the right things to be done, right? There are a few exceptions to this or a few just caveats to bear in mind. One is where reduction intervention turns out to have been made redundant by another intervention that you make later on. A good example of this, which is sort of a sad and unfortunate example is a lot of the great work that many teams are doing on energy efficiency from a simple carbon accounting perspective might be made redundant by a shift to renewable energy later on.

So you're kind of doing all these things to save power, you know, you're putting off the lights when you leave the room, etc., etc., right? The list goes on can obviously become much, much more complicated, but then you shift to renewable energy and suddenly these numbers all change anyway. So your work has sort of been made somewhat redundant.

Obviously there are mitigating factors there and sometimes cost savings, but you know, a lot of the work that you go put into planning that might be spent better on just planning to shift your power source, for instance. A second example is where there's a commons problem, a problem of the commons of others as well involved in your ecosystem.

And you've tried to solve for that and it was later solved for by other stakeholders. An interesting example that I think will become a bit more real over the next one or two years is a lot of companies in the e-commerce space and, you know, using Last Mile Logistics are now thinking about how to electrify the Last Mile Logistics play, or also how to work with suppliers or couriers that have that last Mile logistics play, electrified in some shape or form.

And, you know, in many cases, there's going to be some element of cost to it, and there's going to be other interventions that they look at to try and optimise fuel use. And there's again, a lot of thinking that's going to go into that. Whereas a number of cities, a number of cities are now exploring relatively ambitious, relatively fast-paced plans to decarbonise within the city areas.

And you know, London is a good example. It's a fairly ambitious electrification of transport plan and at some point, that's probably going to make redundant a lot of the stuff that individual companies are trying to do to make that last mile lower emissions. So I think that's kind of another thing to just be aware of.

I am obviously ideologically in favour of everyone doing everything that they can to move the emissions challenge forward. At the same time, we all have scarce resources, and so if there's something that is going to be enabled or subsidised or facilitated or done by other stakeholders, it doesn't really make sense for you to preempt that.

Go and focus the scarce resources on something that no one else is going to change for you. The third example that I think about is any reduction that you deploy where there was a substantially cheaper reduction that you could have made. That would've had the same effect. This one is probably the hardest for you to actually understand.

And this is the one where it really starts to help to have good data systems in place. So if I think about the three examples, right? One is where an intervention has been made redundant because there's another intervention you did that nullified it almost. The second is where an intervention has been made redundant because someone else solves the problem for you, maybe just after or around the same time.

And then the third is where you did the intervention, but there was something else much more cost-effective that you could have done. And so the rule of thumb that I would look at is if there's an intervention that after appropriate interrogation will always look like the right thing to do, then just go ahead and do that.

A good example is shifting to renewable power. In an environment where there is cost parity with the grid power, for example, or the conventional power, just go for it. You're unlikely to regret it, you're unlikely to be wrong. May as well do it. The second is an intervention that makes money. Whether it's revenue upside or cost reduction, again, may as well just go for it. Unlikely to regret it. Good examples are manufacturing optimisation, packaging, waste reduction. These sorts of things are probably always gonna feel like the right thing to do because they often also save money. For the rest, I would look to accelerate getting good data systems in place that can help you make those trade-offs much more effectively.

On the basis of some sort of marginal abatement cost logic, which I think is the best way to look at these. What I mean by that is what is the lowest cost of the next best intervention that you could be deploying to make a given emissions reduction. Awesome. Um, well, I just want to shout that if anybody wants to add any questions, Slide into Seth's DMs.

Um, and we'll be definitely happy to answer them in our next AMA, which happens every Wednesday of the first month. Um, first week of the month. And I think we're at about time, so I don't know whether we want to wrap up now. Yeah, I mean, I think let's wrap it up. Apologies for running a little over time.

I think those were some super exciting questions. So, thanks. What we had Luke, we had Emma, we had Esther as well. And we had Tom, right? So I think a lot of good stuff to cover. Um, I think this is an evolving and an exciting space, and so I'm also interested in seeing how some of these questions start to look thematic across different organisations.

I'm also super interested just in understanding whether there are sector-specific nuances that you're experiencing. So this would be great if anyone has, you know, would love to hear them in, you know, the message me or put something in the comments, but I'd love to see any sector-specific nuances that you're experiencing in the food and cosmetics and apparel and related spaces.

Obviously, flag and land use change and land management are big ones, but, but of course, there will be many, many others as well. Um, and then, again, very excited to see what the news brings, right? Like every additional announcement changes the landscape a bit when it comes to engaging supply chain, setting targets, and so on.

I think that organisations are going to start to build on what their peers are doing in more and more creative ways. So that's going to be quite cool to see as well. And hopefully that brings some positive news to the forefront rather than just the negative. Exactly. Especially given the heatwaves we're all experiencing right now.

I think we could all use a lot of positive news at this point. Um, but thank you so much for joining us. Thank you, Izzy. Thank you. Thank you, Saif. Fantastic. Excellent. See you next time. See you next time.