How Might We Increase Trust In What Businesses Say About Sustainability

On this episode we discuss How Might We Increase Trust In What Businesses Say About Sustainability. My guest is Hannah Keartland, Hannah helps bold purpose-led leaders build a sustainable business by showing where to start and what steps to take.

In this episode we discuss the rise of the sustainability agenda and the current lack of transparency and trust. Hannah brings some great thoughts and insights into focus and tips on how organisations can increase trust in their sustainability claims.

We’re at an exciting point in history. Some people are calling this ‘the sustainability revolution’. Markets are being shaken up – these are the times when great innovation happens! That can be scary. It’s also exciting.

Your business needs to be resilient to the risks and grab hold of opportunities. I'll help you do that. I can help you go faster than you can on your own.

 

 

Hannah's LinkedIn : https://www.linkedin.com/in/hannahkeartland/

Hannah's Website : https://keartland.co/

B Corp Website : https://www.bcorporation.net/en-us/

ORB Website : https://www.orbuk.org.uk/

 

Transcript-----------------------------------------------------------------------------

Scott: Hello, welcome to the latest edition of how might we, and on this episode, my guest is Anna Kirtland and we were talking about how might we increase trust in what businesses are saying about sustainability, which is an interesting subject and quite a topical because of what's happened recently. So, Hannah, would you like to introduce yourself, please?

Hannah: My Scott. Thank you. So I'm Hannah Kirtland. I help professional services, businesses know what steps to take to become more sustainable.

Scott: Okay.

Hannah: Short and concise. That's enough. That's enough

Scott: for an intro. This is me. That's it. Okay, so you talk about sustainability quite a lot and helping businesses be sustainable.

So why is it important to think that we, that, that the topic you talked about is about how do we trust them? What businesses say about sustainability?

Hannah: I think that there has been so much greenwashing that I think [00:01:00] we know that the public want to make sustainable choices. We're seeing increasing evidence of that.

But the moment it can be really hard for them to make those choices because without a huge amount of research, because there's so many businesses have been saying, here's my green, this my eco that we're going to be net zero by this stage, or this is a net zero product. And actually, if you start scratching beneath the surface, you can discover that there were loads of caveats.

And that makes it really hard to know which products and services out there genuinely. Helping the planet. There's also, there's a big difference between a product that's less bad than the competitors and one that's genuinely good. And there are very few products out there, but a genuine Nygard. And just because something is a little bit less bad than the competitor doesn't mean that it's the right thing that you should be buying.

So we need to be able to trust businesses because we can't. There are people out there who will do lots [00:02:00] of research into everything that they're buying, but most people don't have the time or the inclination or the knowledge to be able to keep doing research. You can't be walking down the supermarket with your phone out, checking every single claim and every single brand and every single product.

So we need to be able to trust what businesses are saying to us. Imagine if we, we knew were going around Tesco and we know that Tesco is screened all of its suppliers and is only stocking products that are. Created sustainably packaged sort of sustainably not causing deforestation et cetera, et cetera.

If we knew that we could walk around the supermarket trusting Tesco, knowing that we don't have to then think about that, but we are making sustainable consumption choices. But at the moment, we're in a stage where there are, there are the vast majority of brands. You cannot trust what they're saying. You need to be digging under the surface because there's no consistency around what net zero means or what, what people actually companies [00:03:00] actually mean when they're saying something is sustainable.

Scott: So, and that's an interesting thing, cause I do think we're actually in a crisis of trust in a lot of areas about how we communicate and what we say. But it's interesting that we talk about sustainability and you hear this word and this, the language around it, that zero and everything else. But if we don't have a consistent understanding of what that means.

Does that give organizations and to a degree, I suppose, governments some leeway in claiming how compliant they are with something, because there is no set standard or a acceptable what this actually means

Hannah: at the moment. Yes. And certainly historically, yes, that's changing. So there's more and more regulation coming in.

And since January, this year, we've had the green claims code in the UK, which has come in and we still that's all about businesses making environmental claims. So we saw only in the press, it was last week. They've had one of their adverts pulled because the [00:04:00] claims that they were making were not seem to be backed up by the right level of data.

So we are going to see more of that. So we've now got green claims code is a really interesting thing at the moment, keeping a watch out to sort of see whether it has. Which businesses get pulled up on that. But there that provides a lot more regulation around what businesses can and can't say, and their, their marketing and what claims they can make.

And if, for example, can you have a picture of a car driving against a nice wooded green background? Does that subconsciously give the consumer the impression that this car is good for the planet? You know, therefore is that not allowed anymore? These are all sort of questions that are being debated at the moment.

I think it will be really interesting. And then in terms of net zero transition plans, in terms of the financials, there is much more regulation coming down the line. Now that will start to give us more consistency and compatibility, but we're not there yet. Which means that one company's net zero can be totally different to another company's net [00:05:00] zero it's only when you start digging into their reports, into their website, into all the detail that.

I can understand exactly what it is they're talking about. And the reality is we can't expect people to do that.

Scott: No, it's interesting. You say that. So I think there's an opportunity for organizations. So if they could jump ahead before the, before they forced to, and actually have that transparency and say, this is what we're doing this, and we're working and that's what it is.

Then there's a potential opportunity for them to have that sort of jump on the competition when it arises.

Hannah: Yeah. I think it's really interesting. So at the moment, there are a lot of businesses making voluntary disclosures, and then there are equally lots of businesses that are waiting to be waiting for it, to be mandatory and to do what they're told to do.

I think it'd be interesting to see the way the market perceives that. So if you get ahead of the curve, You start disclosing being more transparent, being really honest about what it is you're doing, the impact that you're [00:06:00] having before you have to, does that start to build trust within your consumer base?

So I saw a really nice social media post yesterday from Tony's chocolate, Tony, and they were talking about the percentage of child labor in their supply chain. And they were then really honest. They said, you know, this is the amount, this is the percentage amount of child labor that we have within our supply chain.

And actually, you know, compare that then with the chocolate industry at large, the percentage they would have, the reason we have got this amount within our supply chain is cause we expanded supply over the last year. We've taken on some new suppliers we have now worked with them to understand where there is child labor.

We are now working with them to eliminate that over the next year. So we will bring that percentage back down to zero. But they were being totally transparent that there is child labor in their supply chain. And that, that is an issue throughout the chocolate production industry. And they are, this is what they are now doing.

This is their target that they're trying to get to. This is the timeline they've [00:07:00] given themselves. This is the, this is the plan. They weren't trying to hide it. And that for me as a consumer, that builds trust because they're not trying to gloss over an issue. They're not trying to make out that they are perfect.

They're educating me at the same time, but they're the fact that they're sort of demonstrating that vulnerability makes me trust them more. They don't have to tell me that they didn't have to put out a social media post telling me that, but they did. And they, therefore, I trust them more because I know they do more than they have.

Scott: And I think that's an interesting point is around trust is I know what you have to do. And if you go that extra mile, I say voluntarily, build that, buy more trust with consumers. And I think sometimes that fear is what stops people, because if they have to start reporting this and have to lift the lid on their supply chains, they're going to go, we don't know what we're going to find, and it could be absolutely horrendous.

And then what are we

Hannah: going to do? [00:08:00] And the supply chain is such an interesting part of this because most businesses, even if they're manufacturers, most businesses, the vast majority of their carbon emissions are what's called scope three. So either within their supply chains or in the way their products are used and then disposed of by consumers and that's really hard to calculate, but we have to, because we can't just ignore that because then you're ignoring the full impact of the business.

But at the moment there isn't consistency around how people are measuring that and disclosing it and creating plans around it. So yesterday there was a report that came out an annual report called the corporate climate responsibility monitor and it was critiquing and ultimately criticizing a lot of large businesses zero plans.

And they had a question in there that is what has really stuck with me from that report, which essentially said, if everybody did what you're doing, then would we reach net zero? [00:09:00] Which I really liked because they were talking about the fact that businesses will they'll try and fudge the issue by maybe putting the most carbon intensive pieces of equipment that they own into a subsidiary.

And then not including that subsidiary within their reporting, or you might have. Remove those most polluting activities from your own supply chain, we, your own operations and then work with the supplier in another part of the world. So all of a sudden that's within your supply chain, it's not within your business, so not report on it.

And so they're externalizing the most polluting parts of their business. And the reality is if everyone did that and sort of fudge Dave written, he didn't and brushed it under the carpet, then we're not going to reach net zero. It's something for me, it was about, we need to stand back and look at the whole system and, and be really honest about how do we all need to behave in order to be [00:10:00]responsible businesses.

If we are going to together, do what we need to do. And the reality is if we all behave like that and sort of fudge it over and brush it under the carpet and on honest about what's actually going on and what the size of the problem is, we need to tackle that. We're not going to achieve what we need to do, but equally we're going to undermine trust in the whole system.

Scott: I mean, it's interesting to see that some of the clients around the motor industry and stuff we're already from, so it's bleeds you. I may well be wrong, but it was just something I read. I think it was one of the large car companies saying, oh, we're going to be fully electric or hybrid by some not 2030 or something.

And I thought, well, you're going to have to be there. You can't actually sell you. Won't be able to sell a petrol or diesel car pretty much in Europe, possibly. I don't know about the rules in America, but a huge chunk of your [00:11:00] market will disappear from you with these cars. So it's not, and it's not a big fanfare thing.

I think for them to announce, this is what we're going to do is you're going to have to do that because that's the new laws that are coming out with. You've got no choice. If you want to operate in that marketplace, there is not. And it's interesting. I was on a previous call podcast talking to a guy called guy, and he talks about generation generation said coming in.

And obviously there can be much more prevalent in sort of the numbers over the coming years. And he said, now their attitude is they can really, they can sniff through marketing BS and being sustainable will not be a badge of honor, but be expected.

Hannah: Yeah. And I think they'll ask tougher questions. And so in terms of the figures, so millennial and gen Z are going to be 72% of the workforce by the end of the decade.

And when they're inside, they're asking tougher questions already within the interview process. But equally [00:12:00] once they're inside a business, they're not, they're not just sitting there. Putting up with it. They're going to be activists within the business. They're expecting they're expecting a totally different way of doing business.

And I think that's, that's one of the things that is going to actually make businesses sit up and respond because they, they need people to work for them. And if you can't attract the best people, you are not going to remain competitive. And it's much harder. I think, to hide things from the people who are working with you every single day than it is from your consumers.

Scott: Well, I decided to consumers is that most people don't know who owns block. You've got a brand and you say, I'll buy this and it, but the same company owns both of them. Do they? Yeah. They rebranded, marketed, whatever it is. Cause they they're just pitched at different levels. So our understanding of the complexities of big, especially big businesses we've got no idea.

Where did that money go? How do they do it? And how these things work. So what [00:13:00] about, what's the opportunities then? So if you think about like the medium sized business or the business going into that sort of area, because quite often, like these reports and we talk about the global companies and I think sometimes that gives an opportunity for smaller businesses who are potentially more agile, but also can have that story and connect to their audience quicker and better than larger organizations.

Hannah: I think there's two different elements to it. There's the process element. And then there's the human element. And I think they're both really important. So from a sort of process, point of view, it's really important that they, they know the numbers. So they've got a really clear idea of what does the state, what does sustainability mean to them and how do they measure up against that at the moment?

And then where do they actually want to get to? And what does good look like in terms of really specific measurable targets and how do those pan out over a period of title? So it's not just saying we want to get to this point in [00:14:00] 30 years time, it's saying this is where we're aiming for in five years, 10 years, 15 years.

So they're mapping out that journey. They've got numbers against it that they can then be held accountable to and they could talk about, and then they've got a really clear plan for how are they going to hit all of those different numbers. And that, that plan is then available to the public so everybody can see it.

Everybody can interrogate it. It's all kind of complete. And in one place, you're not going to dig around the website in lots of different pieces to kind of piece it all together. It's got to be easy to understand. It's got to be really clear. What's in scope, what's out of scope how you're going to measure all of those metrics.

So that you've got those, you know, these are the assumptions we're making. This is the methodology we're using so that there's no fudging around at all. These are the numbers, this is what we're going to do. Put it out there, completely transparent, completely open so that there's, anybody could come along and then measure and get the [00:15:00] same result.

So like you would get with your set of accounts, but because there isn't the same rigor at the moment around all of this, as there is around a set of accounts, it's about being really transparent about these are the, this is the way we're measuring it. This is the plan we've got. And then it's about, as you go on that journey things, aren't going to work out exactly how you thought they were going to work out, but being completely transparent about that, continuing to report on it, continuing to measure, as you said, you would, and then go back out and say, okay, we said, we were going to get to this point by the end of this year, we haven't actually, we've missed it by this amount.

This is why we've missed it by this amount. This is what we've learned. This is what we're doing to get back on track. Not trying to budget, they admit mistakes, they share learnings. They recognize that this is a journey that it's really complicated, that nobody knows the answers. They don't pretend to be perfect because nobody's perfect.

None of us know how to do this and that sort of humidity and vulnerability and [00:16:00] honesty. They're okay with that rather than trying to present this perfect image

Scott: I got. So it goes back to that fear of failure. Doesn't it. And trusting that, you know what we are in my experience, if something goes wrong with a company, with a person or an individual, whatever it is, if somebody actually else ends up saying, I'm really sorry, I made a mistake, but generally quite forgiving that people were saying, okay, that makes sense.

I can understand what you're doing. And as I said, that authenticity and what they're saying, as you say, and this is why this is what we're planning to do about it. This is where we're moving in the future. Yeah, I believe that's the way forward. If that's where you want to go as a business. Cause you'll never attract people who want to get involved in that because you're totally open and transparent.

So a quote, I can't even begin who said it. I love quotes. I can never remember who tells me where I read them from a very few stick, like the names he said there's a war on talent and talent one. So the war [00:17:00] on talent is talent, talent as well. We're in this case of the world changing so fast and the skills necessary to move companies forward.

And then there's the gen ed and the millennials coming into the workplace and working in. And then I suppose having more senior positions in organizations as well, may help in that transition to that more transparent reporting obsess.

Hannah: And I think the reality is while the external context has changed.

So a lot of people who are maybe close to retirement now earlier on in their career, It was just more stable, whereas it, it just isn't anymore. It's, we're in a very rapidly changing external environment and therefore we need to manage and lead in very different ways. And so that, and it's, it's complex and you have to do tests in there and you have to experiment, you can't create a strategy and then deliver it because [00:18:00] you don't know what's going to happen when the strategy hits the market.

And actually as the market then evolves and you suddenly have COVID or a massive new technology comes online, there's a banking collapse or whatever it is, these things are happening and you have to respond to those, the strategy we're not in a stable marketplace. And so it comes back to that vulnerability piece again, I think, you know, especially in terms of environmental sustainability claims.

Nobody knows how to do this. Nobody's done it. You know, there are some businesses that are far more advanced, but you know, it was that interface have done brilliant knee in the world of carpet manufacturing. Well, unless you're a carpet manufacturer that operates in exactly the same places, you can't copy what they did, you can learn from it.

But all of us are going to be sort of muddling through trying to work it out as we go along and testing stuff out, seeing what works and what doesn't work. And that [00:19:00] requires a very different sort of leadership to the maybe more command and control leadership that might have been okay. 20, 30 years ago.

Scott: Okay. So to build trust, we need to change the way we lead it to say that except we are going to make mistakes. And it's about the opportunity to learn from those.

Hannah: I think so. Because I don't think any of us are going to get this right. But I think having the humility to go out and recognize that this is a journey.

So for example, speaking to lots of businesses that have become B Corp's the thing that they consistently say is it's a journey. It's not about getting the, you know, going through the process, ticking the boxes, getting the certification, sticking it on your website. It's about a journey. And actually now we've started on the journey.

We suddenly see how much more we need to do. And the journey of now we've got the certification. The journey is only just beginning [00:20:00] and transparency is a huge part of the B Corp. But I think that's really interesting, you know, and I'm finding, you know, the more, you know, I've been working in sustainability for years, but less so in environmental sustainability.

And the more I learn, the more I realize that I don't know. And I, you know, I. I think that humidity is really important because we've got to collaborate on this. We've got to pull in other people who are experts because none of us can be experts in absolutely everything. It's such a sort of complex ever-evolving space.

It's about collaboration, experimenting learning, which is a very different type of leadership to knowing exactly what you have to do and then implementing it.

Scott: Okay. And just to, for those who might not know, can you explain what B Corp is?

Hannah: Yes. So it is a certification that a business can get that, so shows that they are signed up to a sort of better way of doing [00:21:00] business, that they adhere to various principles in terms of environmental principles in terms of How they engage with their community in terms of how they treat their staff in terms of their governance.

And you can apply for certification and you go through quite a rigorous audit process. And if you become a B Corp, then you're some part of that wider community. And you can say that you're a B Corp on you know, on your recruitment materials, on your multiple materials. And that, that can really help to engage a certain type of consumer or a certain type of employee.

Scott: Okay. So that could be some ways that organizations say, how can I help prove, will build trust in I'm doing the right things. I know I am, I'm trying. And instead of just saying, I'm doing it like, cause I I'm certified that these are the principles of which I'm following. So that could be a way that certain organizations can demonstrate that sort of, and to build that.

Hannah: Yeah. And even if, if people weren't ready to sort of commit to that [00:22:00] journey, they've got an assessment that you can do for free the B impact assessment. You can go into their website, access that for free, and it goes through all of the questions you'd have to answer. And already that can start to give you an idea of where you might have gaps, what you might want to work on.

So that can be quite if you're doing that kind of baseline measurement of where are we, what might we want to improve? That can be quite a nice place to start. And you could still even talk about that. You don't have to be going through the whole process, but even sharing that you've gone through that questionnaire.

You've used it as a way of identifying opportunities to improve sharing that with your employees could be hugely powerful.

Scott: So that could actually open people's eyes and just say, cause sustainability, if you talk about what is sustainability and all this jargon, that's around it because it seems wherever we do something, we create a whole new language around stuff, and it's not an area or a field I work in.

I would say, what's the difference between net zero and carbon and this and that? I don't know. So if they use something like the B-Corp and say, this [00:23:00] will give us an idea of what good could look like, all the areas we could look at to sort of embrace the sustainable approach to business.

Hannah: Yes and no.

So B Corp is,

is one set of measurements and one way of looking at a business if you want to look at sustainability in its broadest sense, then why I think one of the best places to start is the sustainable development goals developed by the UN. There are 17 of those and they are pretty comprehensive in terms of all the different things that might fall under sustainability.

So you've got things in there around equality, diversity biodiversity water. Climate and carbon. Whew. How, how does industry work? We've got huge range of different things that could fall under the sort of broad title of sustainability. And one of the ways that I would always start with the businesses to sort of have a really honest conversation with the leadership to say, [00:24:00] what do you actually want to achieve?

So at the moment, a lot of the talk and a lot of the regulation is around net zero net zero. And that's where a lot of businesses are feeling pressure at the moment to remove to reduce that impact in terms of greenhouse gas emissions. That may be all they want to work on at the moment in terms of sustainability.

And that's okay, but let's admit that up front also to have a really honest conversation around why are you doing this? Are you doing this because you want to tick a box and you want to be compliant, or are you doing this before? You genuinely think it's the right business thing to do, or are you doing this because you want to have a much broader impact beyond making a profit and you want it to be genuinely integrating impact into your entire business and operating model.

Let's be really honest about that up front, because that's going to impact your entire approach because if actually it's about being compliant, we're not going to [00:25:00] push this as far as we might, if you want to transform your whole business model and genuinely try and tackle some of those big, sustainable development goals.

And I think that that level of honesty upfront is really helpful as well. That's why,

Scott: as I put it, the scope is narrow. So it's, this is what we're actually doing it for. And then once we understand that and we, if we say to people we're doing it because we have. And I don't think many businesses will actually put that in the literature.

Probably not. We are compliant. Give it, give us a clap. Is it? No, I don't think so. You're doing over and beyond, but what they see in the vision of what they're working towards. Cause we talk about that, that we mission and vision of organization is, and they could do it. So they could actually do that around that sustainability thing as, as where do they see themselves as contributing to this, this area of business or society?

And where does that? Cause I was working with a company in America. I was fortunate to be invited along to help co-facilitate some work and they're very much around their sustainability. They see about one how they do business with their people, but also how they connect to the community. [00:26:00]Yeah. And that was the two parts of them.

It was about how we treat our people and, and how we, how we pay back to the communities in which we are. And they, they put an awful lot of emphasis around those two aspects of their business.

Hannah: Yeah. I mean, going back to what you said about B-corps, there are two big aspects of B Corp. There are questions around those and to become a B Corp, you don't have to tick every single box.

And it may be that there will be businesses that focus much more on their people in their community, but maybe don't score so well on environment. That doesn't mean that they won't become a B Corp. It might mean that there are gaps there, and that's an area they want to work on afterwards. But with all of this, I think there, there is something about businesses recognizing upfront, where they want their focus to be, because we can't all do everything.

We can't all be tackling all of those 17 sustainable development goals. It's about having an honest conversation about what sort of business do we want to be, where do we want our focus to be? And then building a plan around that [00:27:00]

Scott: because there's something called the organization for responsible business in the UK, which is aimed at SMEs, who haven't got the sort of the budget to look at.

Some of those things just to give them guidance about, okay, these are the things to. There is a rent. So cause again, a lot of people might think, well, is that response? Is that something for me? And I do believe like I run my company from a spare room, cause obviously a lot, what I can do is mobile and virtual, but you still take some of those responsibilities.

Like where do I get my stuff from? How do I, how do I dispose of stuff I don't use anymore? How do I engage with my stakeholders and the people I work with in a, in a more ethical way. I still think there's principles of sustainability can be applied across from a business of one person. So we just say these big multinationals that were in the news the other day, the report that you mentioned, Australia enough, I sent you, I sent you an email about it just as you were sending me an email about it.

So I was in there. It was quicker because obviously my big focus is on trust and about how we build trust and relationships with people. [00:28:00] Yours is more around sustainability and trust in a very clear aspect. So, if you were to say to a company you want to build sustainability, you want to build trust.

What sort of tips would you give them? I know we've sort of covered some what sort of things you think would be interesting for them to look at?

Hannah: I'm worried I'm going to end up repeating myself, but I, I think they need data. So there's so much, if you look at you start sort of focusing in on what businesses are saying about sustainability. So much of it is generalizations and wishy-washy being really specific and having the data that starts to build trust as it to say, okay, we're in a drill down into your data, you know?

Okay, we've got these emissions, but what are they actually coming from? What are the different activities that we're doing? Where are they, where are those emissions coming from? Break it down really granular and say, This is how we're going to tackle each of those. These are the targets in each of those areas, and we [00:29:00] will report back to you in a year and show you the impact we've had.

So you're not hiding it in generalizations, but you're, you're getting into the sort of hard data, which, and reporting in a consistent way that really, really helps. So data on all of this is really important and being really consistent on what your assumptions and methodologies are, and being really transparent about what those are.

Some of the, no, this is more for larger businesses, but some of the best ones will be then sharing that data in a downloadable format so that other people can take it away and interrogate it and do their own testing on it. So a lot of this is slightly different, but a lot of the sort of leaders in the fashion space, you can now download a database of all of them.

Factories where their clothes are produced. You can download that from their website and then you can interrogate that, so that, that can then [00:30:00] be run through various systems. You know, if you've got reporting of human rights issues in factories, in Southeast Asia, that can be run against that report.

And you can find out which of the businesses that are setting garments made in those factories. So it's that sort of transparency and that data and that granularity is really key, but equally in the way you communicate that data, making it understandable to the general public. So you were talking about jock and there is so much jargon in this space.

So how do you make sure that you communicate it in a way that people can understand? So, yes, it needs to be consistent. It needs to have data, but don't try and kind of bamboozle them and hide it. Jargon and complexity because it's very easy with sustainability to get very technical very quickly. And so there's a huge role for communications people here in terms of how do you communicate it in a really accessible way.

[00:31:00] So that's all the data bit and having a really clear plan, what you're going to do against it. And then it's, then it's this honesty. It's, it's being transparent with people about what have you done? What's worked what hasn't worked, what are you going to do next? How are you going to make that doable? Why, why do you think that's realistic?

Because there's equally there's, there's plans out there at the moment where you couldn't look at it and think, how are they actually going to make that happen? Is that actually realistic? And so it's putting something out there that. The peop the general public can look at and say, yes, I understand that.

And I actually think that is genuinely achievable, but equally something that's ambitious. So not doing what you said in terms of promising that you're going to phase out producing petrol and diesel cars when that's something you've legally got to do. But how are you going to push yourself further?

Another thing, which is a whole minefield in itself is around offsetting. So if you've got carbon emissions all you becoming net [00:32:00] zero by just paying to offset all of those, or are you becoming a zero because you are fundamentally changing your business and driving down your emissions. And that's an area which I think we're going to get much more scrutiny off because you know, if you're planting trees, but then the trees don't start capturing carbon for 20 years, but equally the whole forest might burn down.

Then it's. Just a bit of a fudge and, and there are better ways of doing carbon offsetting and there are less good ways of doing it, but it's, I mean, an example, we haven't talked about BrewDog yet. I thought they might have come up earlier,

Scott: but that was another issue.

Hannah: I mean, there there's a lot of contention there lost forest up in Scotland where they haven't actually planted any trees yet when they do plant the trees, it's going to take a while for them to actually be doing anything useful.

And even the plans to develop the forest, I've got loads of questions around them in terms of how are they actually going to do it in a, in a way that is [00:33:00] best for carbon capture for biodiversity, et cetera, et cetera. They bring in experts who know how to actually do this properly. And so then the question, I mean, obviously looking at that in parallel with everything else, that's come coming out about BrewDog and all the stuff that hasn't come out yet.

Is it just a marketing tool? Are they just doing that? Like so many of the other things that appear to have just been marketing to. Is that loss for us, just a marketing tool and it then undermines the whole, the whole piece.

Scott: I mean, I think you can say there is another example of an organization that says every time they sign up a new customer, they're going to plant a tree and they may well plant a tree and they unbelieve.

They do. And I think there is that you can see in the marketing, there is a shift in marketing towards at being attractive to people who are concerned about sustainability and the, and the planet. So you've got, I definitely think in marketing, you can actually see this sort of shift from more consumers driven.

So, or that sustainability approach again, is how much would that impact on an organization? The [00:34:00] sales, I think, I think it's utility warehouse. So every new customer, they will plant a tree.

Hannah: Th there are calculations that have been done as to how many trees we would have to plant. We can't plant enough trees to deal with the amount of carbon we're pumping out. Like there's just not enough space in the world to do that. And then it

Scott: will be better for them to say, what we're doing is every day we signed people up, then we should, they report how much of their energy renewable, how much of their energy comes from gas, how much energy that they sell to us.

And I don't know if that's doable because of that thing, but again, that's about that transparency, isn't it? And it could be that we aim to so big company, can they invest in renewable energies, sources, and bits and pieces, or give people instead of planting a tree that might cost 50 quid? Are they going to say, right?

You can get a discount on making your house more, use less energy, which if they sell energy, that might not be a good plan because it might reduce that. But there again, it's that [00:35:00] there are just, as you say, there's so many different ways to approach this. I think sometimes th th th the tree thing seems to be flavored with.

Hannah: But I think what you've said there is really interesting around would they want to help people reduce their energy bill, because actually what they're doing is sending energy. And that is one of the biggest challenges of this whole thing is that yep. There are huge opportunities for businesses to do really well.

There are huge opportunities for whole new business areas. Equally. There are business models that are not going to do so well in the you know, when we moved to a more sustainable world businesses are going to have to innovate. They're going to have to change and there will be service lines that will not be able to exist in the way that they have.

And so you have businesses that are grappling with things like, well, actually what we do is we sell energy. So why would we want to help people reduce their energy? And yet a company such as octopus. They have been [00:36:00] running a campaign for the last month or so helping giving tips and helping a lot of their customers to reduce their winter gas usage by X percent, giving them tips every week, doing competitions who can, you know, who can reduce their gas bill the most versus their normal usage.

And so that, to me, that then builds up my trust in octopus because actually it's not all about them and just making a profit and Patagonia at the same where they, they do a lot of marketing, which is saying, you know, do not buy our products, you know, mend them or recycled them. And they recognize that they're part of the problem.

And they are then trying to tackle that and that they're transparent about it. And they basically say everything you buy in terms of clothing is bad. We can't pretend that there is not a good thing to buy everything you buy is bad. We'd rather you bought something that was going to last and that you then mend it.

And then when it's finished, you [00:37:00] can send it back to us and we will recycle it, make it part of the circular economy. But this is one of those things that we have to grapple with. And we have to come up with new business models because because it doesn't, it doesn't there. Isn't a neat answer to all of these questions.

And there are things that companies didn't have to strategically grapple with and work out well, how we can operate differently. How does our business model need to change in order for us to remain competitive? But when you then get a business like Patagonia, like octopus that do something that looks like from a financial point of view, it's the wrong decision.

That to me, that massively builds my trust in them because what they're doing is totally aligned with what they're saying around. Sustainability.

Scott: And I think that's, I mean, I talk about trust and you talk about the owner state, which is, which is so important, but it's the consistency, the consistency in actions and the message that they both S they, they, they, they just support each other or the way that every decision because the [00:38:00]businesses, how does this feed into our sustainability?

How does this feed into our messaging? Is it a good decision to make? And I think management asking those questions, leaders and organizations may change some of their decisions based on that. And a simple thing to look at is look at someone like BrewDog, and they set themselves up on these high values and principles, and then we're going to change the industry, et cetera, et cetera.

And they've gone through the mill over the last year. It's been about a year of drip feeding, negative content stuff that come out in Fairplay. The guy runs through dogs come out, so they'll have to learn more. But then the next thing came and I said, I have to learn more. And I have to learn more now that, that apology and I'll have to learn more is only going to take them so far until people want to see.

Changes that are tangible to the general public. I think Facebook is another example of how many times did they apologize for what they do, how they do, how they operate as a business ethically. And then saying, yes, we've learned we've made mistakes. We've made mistakes, but you need to do something different so slightly off topic there, but still ish is about that trust.

And the sustainable model [00:39:00] is we have, I don't think

Hannah: it is off topic though, because I think they're examples as well. So I mean, Coke is an example where they've come out and made a set targets around reducing plastic waste and there's big bold claims. And then they haven't got anywhere near to them. And so they sort of moved the goalposts.

There's not a, and then they start talking about something else from a sustainability point of view, rather than I think really leaning into it and owning it and recognizing the problem is. It starts to feel that like a marketing thing, rather than a goodness, we genuinely recognize this is a massive problem.

And we are part of it. We need to be part of the solution which is an organization like Patagonia, the, all of the work that they've done within the fashion [00:40:00] industry and collaborating with competitors to really try and change. The whole industry shows much greater leadership than I think we see with Coke.

Scott: Another thing. And also interesting enough. No, we talked about the energy. It was an octopus. You said, if you think about it, what they actually might be doing is creating a more sustainable business in the way that energy prices in the UK have gone through the roof. So what's the chances of some of their customers down not being able to afford energy and therefore they can't shut them off.

So that puts a strain on their income. Whereas if they can get people to reduce their energy bills, less customers are actually. Default, therefore they might be securing a cashflow better by doing so they do two things, one secure classified, but also as you say, massively build trust because they're saying, you know, we're helping you and helping you pay, and there's the cost of living crisis and we're doing our part to help you.

We're supplying one of the products, especially at very much more expensive. It used to be, and we can help you reduce your need for it. [00:41:00]

Hannah: And then also, I mean, I think in that industry, there is such a lack of trust in the big oil and gas giants, octopus will capture market share. And so their growth will come that way rather than through each, you know overcharging each individual customer.

They can reduce the bill at each one, but they will then attract more and more of them.

Scott: So, yeah. So although it sounds counter-intuitive, as you think about it as a longer-term strategy, it's probably we're positioning ourselves and we are doing enough to create metrics. At the beginning, we talked about this opportunities exist in this crisis of trust.

I think there is in there in institutions and big business there. I think there's a massive crisis of trust and there's enough stories. You can talk about BrewDog. We talk about, say what Koch said and Coca-Cola, you can tell whether the report that came out yesterday, we can talk about VW diesel game. We can talk about the financial crash of 2009.

And some of the actions company's been taken to court and found guilty of all [00:42:00] sorts of things they shouldn't be doing. And it's just littered of big corporate breaches of that trust. And I think there is there opportunities for somebody to stand up and just say, do something that's stands out so much that you will be you're in a space.

You're talking about these companies and I'm talking about them. So they get in free public. Because we're saying, we're basically saying we support what they do. Look at this. Great. Isn't it? What they're doing is fantastic. And they may not even be customer, not be customers of theirs, but we're going to be talking about them in a positive way.

Hannah: I think what you said there that was really relevant is around it being long-term because sustainability in its broadest sense, it means doing something that means that you can continue for the long term. And there is a financial element of that. So it's about sustainable in terms of the environment.

So you're not kind of messing things up for future generations. So you're operating in a way [00:43:00]that you can keep going forever and ever, and ever it's sustainable in terms of people. So in terms of the relationships you've got, whether those are with your employees, whether they're with your suppliers, whether you're with the community, with your consumers, you are engaging with them in a way that they will want to continue to engage with you for the long-term.

And that trust comes into that passively. And then you've got to be financially sustainable because if you've not got a business model that's financially sustainable and you're not making enough profit that you can be investing in innovation and then reinventing the business, then you're not going to be here for the long term.

So sustainability is about that long-term piece across people and planet and profit, and too often businesses. Aren't thinking about all three of those, you know, whether that's the environment and operating in a way that's not learning long-term sustainable for the environment, but [00:44:00]equally people, there are so many examples of businesses acting in a very short term as way, and burning bridges and damaging trust, and that is going to harm their brand and their reputation and their ability to be here in the long-term.

Whereas these businesses that we've been talking about are playing a much longer term.

Scott: I can never get the word rights. So please it's been stress ambidextrous. So ambidextrous, so business ambidextrous, falsity. Is that a word?

Hannah: Oh goodness. Which is

Scott: about, yeah, we've got a business model that can operate today, but also be sustainable for the future. And is that about having, having your eye on both?

Hannah: Yeah. And that's, that's what we talk about a lot in the innovation space in terms of having an ambidextrous business model. So you've got sort of dual strategy. You've got the business today, but you're always got an eye on the future and reinventing yourself [00:45:00] and spotting what the next opportunity is.

And it's not all focused on the here and the now,

Scott: because I think you've talked about something that's interesting, the game back, and some of you said about how we change it. Please correct me if I'm wrong at the moment, organizations have got a responsibility to do well for their shareholders, I believe.

And it's sooner than they're going to change it. They've got to do well for all stakeholders.

Hannah: There's an old at the moment that they already do have that responsibility. But there is there is a campaign going on at the moment for the better business act to officially change it in law. So section 1 72, if the company's act changed that so that there is an official responsibility to all stakeholders

Scott: and that would, that could force a total change in focus of organizations.

Hannah: Yes, because they would be legally. So if it's applied, it would be applied retrospectively toward existing companies. So every single [00:46:00] company overnight with suddenly have a responsibility to all stakeholders, not just to their shareholders.

Scott: Which is probably the next legal argument that would come from that. And it would definitely broaden our thing about impact. Because obviously I work in lot of the space of people I've worked with as is that leadership role about it was about how do we treat people in the workplace and build that trust.

And it's not. So my sustainability, although they say I'm in the field, I'm more about that people sustainability and the sort of thinking about that side of it, but it's not hug a tree.

Hannah: You know, I think this is really hard to tree anymore, to be honest.

Scott: But I think there isn't a lot, not, this is all about hugging softly, softly, and be nice to people who are fluffy, fluffy, but we're hard business people.

But I think as you said, well, sustainability is about creating a business that is sustainable.

Hannah: The reality is as well as the more and more that we learned about climate change, but businesses are [00:47:00] not going to be able to operate in the sorts of scenarios that we might be looking at. So suddenly that makes it onto a risk look like that's, you know, we're in proper business territory. This is like, this is a risk that you're going to need to suddenly start looking at your financials and devaluing assets on the balance sheet and putting in massive provisions or finding ourselves in a world where it's uninsurable or your insurance premiums are sky high, but that we're talking, we're not talking tree hugging, then we're talking proper business numbers you know, supply chains that decimated because of floods or fires or displaced people, or, you know, whatever it is.

You know, those are sort of cold-hearted business conversations and we

Scott: just need to have a look at where the supply chains are at the moment and what we've happened and the impact of the, sort of the impact that's having on business models, how we operate. And are we going to be moving from that just in time scenario to a more localized business model?

Is that sustainable in the future? So I think there are some [00:48:00] really hard questions for companies to.

Hannah: And I think that's the challenge with all of this is they're hard questions. It's really difficult. There aren't clear answers and it comes back to that vulnerability piece. Again, of leaders being comfortable to say, I don't know the answer.

I'm working with my team around me. We're all, you know, I need a multidisciplinary team. We'll come up with the best possible thing that we think we need to do next. It might not work, but if it doesn't work, we'll then work out what we're going to do afterwards. But they're not pretending that they've got all the answers and they're going to be perfect.

And they're okay with that. And they're okay with being completely transparent about that

Scott: humble inquiry, the book in which you are reading, I do breathe. That is, I think one of the greatest untapped untapped resources with organizations is what's between the ears of its staff.

Hannah: It just takes such a completely.[00:49:00]

They talk about in humble inquiry within they're coming at it from the perspective of the U S culture. But the UK culture is not a million miles away from that. The culture has defined how we are within business and this need to be right or wrong, black or white. That makes it very, very hard to do a lot of this stuff because it's not in bred within our culture to not know the answers, to make mistakes, to then stand up and say, you've made a mistake.

And we're seeing that we do not want to go to politics, but you know, we see that within, we see that within politics. Don't we get this inability to stand up and say, I'm really sorry. I messed up.

Scott: Well, I think, and maybe go into that. But I think also the, the I don't think the media helps because they tried to set politicians up and then say, oh, you said this you've had a U-turn and they do a big thing about it and make a commitment for the next five years.

So we're asking politicians to make commitments when really actually in reality is nigh on impossible to [00:50:00] make those. But I, I'm definitely not going to, but I mean, it's, it's an interesting place for both of us to watch because of what we say about the sustainability and that transparency and that sort of trust and having it and looking at how politicians are leading and saying, well, they're not setting a great example.

So again, I was talking to Jeff Hudson. So, and when he says is that there was such a distrust, there was a trust research that goes on every few years. I can remember the company. He does it again, knowing something, but not knowing the resource. So I do apologize. And the level of trust in the big institution.

Is seriously been eroded and COVID, hasn't helped that that's even worse. So people are now expecting businesses to step up and fill that trust void.

Hannah: So the Edelman, the Edelman trust barometer,

Scott: and that's what missing there's businesses that people are actually saying to businesses, please step up and fill this gap that exists in our trust because we [00:51:00] want to believe in what people are telling us.

Hannah: Yeah. No, and I think the businesses are going to play a huge part in all of this. I think so

you're right. That people are saying that they expect businesses to play a big role in terms of sustainability tackling climate change, et cetera. I also think from what I'm hearing that that's, we need that when we can't sit here and wait for. Everyone's got a role to play and businesses are going to play a huge role and therefore we need to be able to trust what they're doing or there's something I, so I get, cause I notice it comes back to that Tesco example.

The beginning, if we want to achieve mass behavior change, we need to make it really easy for people. We need it to be the default option. So if you're, I don't know, you're investing your pension. It default goes into a sustainable investment fund, which it doesn't at the moment. If you are [00:52:00] buying food in the supermarket, it defaults to sustainable options, et cetera, et cetera.

And so you have to make a conscious decision to want to make the non-sustainable choice. Whereas at the moment, the sustainable choice is not the default, the vast majority of the time. Whereas if we want to achieve mass behavior change in the whole population, we've got to make the default. The sustainable choice, because most, but you can't expect the vast majority of people to be doing all the research and the thinking or paying premiums, et cetera.

And that's where business comes in because businesses are the ones who have the ability to decide what the default options are most of the time, because they're the ones who were selling the products and the services.

Scott: And they're also very good at influencing buyer behavior.

Hannah: Yes, exactly. But if they could influence it in the right way, then that's how we, I think we will achieve mass behavior change, whereas trying to change millions of people's behavior.

Billions, if you look worldwide, that's very hard. Whereas actually there are far fewer [00:53:00]companies if we change companies' behavior. And actually one of the things I think we're going to see is that the procurement policies of the NHS and other public sector organizations have big corporates, they are starting to change.

And if they start demanding of their suppliers, But they have to change as well, and they need to hit certain sustainability targets, certain standards, and that their suppliers need to, it's going to, that's going to trickle all around the world that I think is going to be one of the things that's going to be one of the biggest drivers of all of this.

Scott: Well, that's interesting, but how we choose. So it's talking to somebody a while back about sustainability. He said, and he was talking about ESG and it was talking about the same things you would at the beginning about that lack of clear understanding of what this actually looks like, how do we measure it?

What are the metrics we can use? Whereas we've got accountancy, we know those rules. That's how we calculate. That's the figure. And if you look at it, you can pretty much work out what it looks like. But one of the things that you said in this can be driven by investors [00:54:00] and purchases. So it's basically where does the money come from from businesses?

And if the money is much more driven towards that choice about how we're choosing to invest. So go to the investment companies and say, why you invest in this? And they changed their ethos about who and how they invest them. Look at angel investors and saying, do you know what? I'm not, I don't want a company that's going to become a unicorn.

So it's not about, don't give me a strategy about how you're gonna grow in sell. Give me a strategy about how you're going to grow to sustain. Then I'll invest in you. Then that changes the whole ethos about how we set companies up, because that's the only way we're going to attract the money to build what we want.

Hannah: And we are starting to see shifts. So there's more and more funding funds that are screening for what's called ESG environmental, social, and governance. We're seeing more and more in the procurement space. So I'm speaking to an increasing number of people who are saying that they're being asked about this within their tenders, the NHS in a few years time, every single [00:55:00]organization that works with them will have to have a sustainability plan and we'll have to be regularly reporting progress against that.

And that includes, you know, one person coaches working with the NHS is going to be absolutely. And that's just, that's going to, I think that's going to have a big domino effect. Wait,

Scott: who doesn't supply to the NHS of somebody who supplies the end. I mean, they're enormous organization now, if they actually then, and I think this could be a good an area where there could then become some sort of understanding and standardization of what sustainable it looks like.

Cause they would have, they might say, what's your sustainability plan. And they might then put against key areas, which will then drive that sort of, okay, this is what it's going to start to look like. And it gives us sort of standardization of language

Hannah: and there is, I mean, there's a lot more regulation coming down the line as well.

So there, you know, there are, there is a lot of work I got on there. So I think it will all be happening in parallel because it's partly driven by the investor community. They [00:56:00] need to be able to compare apples with apples and at the moment they can't see. There's. I mean, there's some new financial regulations that are coming on in just a couple of months, time for large companies in the UK, so that there is more and more of this coming down the line.

I think it's all going to be happening in parallel. What we can't have, we haven't got the time for is to be waiting for government and regulation to change. And then everybody else following in line it's it needs to be a bit of a sort of messy transition where we're all doing bits and bobs in parallel.

And we need to be comfortable with that messiness, which I think again, we're not always comfortable with, and it has to be a messy transition rather than a really neat ordered one because otherwise that's going to take far too long.

Scott: I don't think I've had a seismic change in anything has been orderly

if you look back on it. So when, when we changed, when we changed industries and Wednesday, but that's normally been forced by technological advancements or stuff people have had to, this [00:57:00]is a choice, isn't it about. There's a, there's a change is necessary, but we can't see, it's not driven by the here and now we're still by the short term, ism is driven by what is coming down the line and we're getting to the point of no return, which people kind of know, but there's a, and I think about people's behaviors and motivations who was sitting and go well, what's coming is probably known the impact is not a hundred percent known, but it's a long-term in the future.

Whereas I make decisions now the impact is going to hit me now and be impacting to me now. And it could be positive and it could be positive, a possible negative.

Hannah: And that's the whole bias thing. Isn't it around.

Scott: And it's about how we, how, how do we then have a community? How do we commute? I think I wrote in a blog is I, how do we communicate the impact of or what we're trying to do within this in a way that's going to map into that type of understanding of what motivates behavior, rather than we all kind of know we've got.

It's like, you might say somebody, I kind of know I'm overweight and I know it needs. And when I'm in my sixties and [00:58:00] seventies, that will impact on my health potentially, but that knowledge very rarely will change my behavior today.

Hannah: I think it's, I think it's going to be a mix of there's going to be drivers.

There's going to be things forcing it. You know, whether that's the war on talent, whether that is the regulations changing, whether that's your investors or your customers telling you need to change. So there's all those kinds of push factors forcing you. I also think there are a huge number of opportunities.

So we're going to be creating various people say, you know, this is one of the biggest opportunities for the economy that we've seen in ages. It's going to be whole new sectors, developing whole new needs for skill. I mean, if you go out now and you know, there's lots of free training available on this, you can upskill yourself and you could probably go and get a job they're recruiting like crazy into this sector.

There's jobs being advertised every day. And there's not enough people to fill them. So probably you can get into a job without being as qualified as you might need [00:59:00] to be in other sectors. And it's a hugely growing area. So there's, there's a lot of opportunities for businesses to create whole new products and services that are meeting this need.

And it's about seeing those and recognizing where your assets and capabilities can deliver new streams of value rather than hanging on to what you're doing now. But that again takes a type of leadership that is willing to make that shift and willing to is that Ambetter ambidextrous organization?

Yes. You've got the business model. Now that's paying the bills, but what's it going to look like in 10 years time, if you're in a fast fashion business, that's not likely to exist in 10 years time. So how do you take your assets and your capabilities to do something completely different, but which will have huge amounts of value in a zero

Scott: carbon.

And I think there are, let's say there's some industries that are going to be absolutely decile. The industry model, the fashions. One of them may be transportation, how that operates and functions like logistics, [01:00:00] automobiles, definitely because of what's happening. I think not just the R and D in about how we're changing, how we look at transportation and how we transport ourselves.

And even the business models. If you think about cars, their business model is built on. They don't make a lot of money in selling a car. They make a lot of money in servicing and looking after a car because they basically inherently go wrong. Cause there's so many moving parts, so many less moving parts in electric vehicles.

So the whole thing's about servicing and all that, that, that type of industry what's going to happen to that you think, well, that's in trouble, but then you say, well, what skills we got knowledge of cars. And third, could we then turn into, as you say, what do we know and where, where can that skill sets or that knowledge we have, or that capabilities capacities?

How can that service this, these new potential. Interesting questions for companies to ask themselves. I think Margaret weeklies said the question is isn't your glass half full or half empty it's what's in your glass who needs it and how can you get it to them?[01:01:00]

Hannah: And that's where the long-term thinking comes in.

Scott: And you can say that to people we are transitioning from, yes, we're involved in this and we are transitioning to this area. Again, it comes back to that honesty and that trust and believe in what these companies are actually telling us and doing it because there is such an opportunity for them.

Cause we have this crisis and these opportunities for them. And if they were just honest, it would be nice. Wouldn't it? So as a kind of, as I said, that's not a bad wrap up really? Is it, is there anything we'd like to finish with them as a result? How can we increase the businesses?

Hannah: I think, I think you sort of wrapped it up there.

I think we've talked about, I think we've talked.

Scott: Okay. Well, I'd just like to say thank you very much for your time. It's been an absolute pleasure. It's been nice to get you on here. I've been asking you for bags is quite nice for you to actually come up. Thank you very much for sharing your thoughts and your ideas around it, and [01:02:00] all the details for you will be in the comments below.

So thank you very much.

Hannah:

Thanks Scott. You're welcome