Tag: sustainability

Pooja Khosla

COP26: From “Blah Blah” to an “Aha!” Moment?

COP26 Net Zero

The UN Climate Change Conference, also known as COP26, which will soon commence in Glasgow, Scotland is the 26th UN Climate Change Conference. The time is getting closer to discuss the most important issue that the entire mankind on this planet is facing – “the existential risk issue”! 

According to the UN Climate Change report issued this August, the world is already certain to face further climate disruption for decades, if not centuries, to come. Our future is in jeopardy. Generation Z and Generation Alpha are very worried and demanding justice. 

The “Blah Blah Blah” Moment of Greta Thunberg

At the preparatory Youth4Climate event in Milan, Italy September 2021, Greta Thunberg (the Climate Activist of Fridays for Future) said: “They invite cherry-picked young people to meetings like this to pretend that they listen to us. But they clearly don’t listen to us. Our emissions are still rising. Science doesn’t lie.”

Throughout her speech she mocked the decision-makers absence of real actions, repeating the words: “Blah Blah Blah”. 

Generation Z represents people that are now 9-24 years old and accounts for 32% of the worldwide population. Generation Alpha is the generation born after 2010 that has a population of around 2.5 million worldwide. The problem here is that these two generations will be most impacted by climate change but are not heard because they are far from the power that is charged with delivering immediate action.

Young people can smell greenwashing 

Young people are not fools. They are objective, not subjective and they care more about facts and science than slogans.  They can smell greenwashing a mile away! 

So, let’s lay down some science and facts here. This is the reality:

  1. Fossil fuels still supply 84% of world energy
  2. Just 100 companies are responsible for 71% of global emissions 
  3. The world is set to exhaust its carbon budget in just 10 years

This bleak future is what we are currently offering to our future generations. The international scientific consensus is that, in order to prevent the worst climate damages, global net human-caused emissions of carbon dioxide (CO2) need to fall about 45% from 2010 levels by 2030.  Reaching net zero around 2050 goes into a black hole when this reality strikes. 

Is Net-Zero even possible?

On the face of it, there is progress. The UK and France are two examples of (a few) countries that have set legally binding targets on achieving net-zero greenhouse gas emissions (NZE). About one-fifth of the world’s 2000 largest public companies, representing sales of nearly $14 trillion, now have net-zero commitments. 

However, the reality is not so great. According to a report by the Race to Zero Campaign, the net-zero commitments vary hugely in their quality and only 20% of commitments meet the minimum set of robustness criteria, or ‘starting line’, as set out by the UN. 

The “Blah Blah” talk from Greta wasn’t the only moment from the youth COP that epitomized the lack of communication between the most powerful generations and the activists. The gap between what is real and what is promised is the real miscommunication here. 

From this communication gap, it is very clear that we need solutions for the looming climate crisis, but the  real issues here are:  

  • Activists without power 
  • Powerful decision-makers who are not active enough
  • How to prioritize the most urgent and achievable

Before we go any further, let’s state the problem correctly. 

The glass is 80% empty 

In a public conference, the International Energy Agency (IEA) presented their latest research on world energy. We can spot immediately a stark trend. Not even the pledges so far announced by 50 countries get us close to the Net Zero Emission target that we need (see the APS line below).

Net Zero 2050

Worse, the Stated Policies Scenario (STEPS) is where we are now, pre-any further announcements. Sadly, we still have no real plan of action from global stakeholders (including regulators) about how we will close any of these gaps to get us to NZE.

As Laura Cozzi, Chief Energy Modeller at the IEA stated during her presentation, “the Glasgow pledges for 2030 are covering only 20% of emission reductions gap to Net-Zero … we are actually going into the Glasgow negotiation (COP26) not with the glass-half-empty. It is actually 80% empty.”

This is why it is all Blah Blah Blah. 

Why COP26 might not be the right place

COP26 is a place where all Governments from countries of any size can talk about the Climate Crisis and its consequences. But the real polluters now are a much smaller group. The top 20 global economies (the G20) are in fact are responsible for 75% of the global CO2 emissions. (https://www.bbc.com/news/science-environment-58897805).

At a recent speech to Italian MPs, the recent Nobel Prize winner, Giorgio Parisi (awarded for his studies on complex systems) “observed again the warning that if the temperature of our planet increases by more than 2° then we enter a terra incognita in which there may also be other phenomena that we have not foreseen that can greatly worsen the situation.”

Here we are not talking about any regulatory, investment, business, or economic risk. This is pure existential risk. An existential risk is one that threatens the entire future of humanity.

More specifically, existential risks are those that threaten the extinction of Earth-originating intelligent life or drastic destruction of its potential for desirable future development.

Not sure if COP26 is the right place with the right representation to address this existential risk. Not sure if Climate Submit needs 25,000 people and more discussions and questions on the table. We can’t save the planet by consuming more and more energy and fuel to bring these 25,000 people together. Pandemic has taught us to solve a lot of issues efficiently and virtually. Where are the lessons from the pandemic?

Additionally, the climate change problem needs grass-root involvement from all the representations from OECD to the developing world, from millennials to generation alpha, from all sectors. Do we have all the voices in the mix? 

Climate Change: What can we do?

The macro policies required are actually well known at this point in time. These include investments in energy efficiency,  electrification, renewables, and new long-term green technologies (for example green steel and cement, carbon capture, green hydrogen). 

However, to push these policies forward into reality, we need to re-define the “7 Principles of Economics” (see below) and factor climate change into each of them.  COP26 is a great opportunity to do this. Doing so will help to build a robust global solution that will mitigate the global risk.  

Here are some drafts to help get the discussion going from “Blah Blah” to an “Aha” moment

 

  • Economic Principle 1: Scarcity Forces Trade-Off

Climate is the most scarce resource we possess at this time. You just need to check facts on carbon, carbon budgets, and the current utilization of fossil fuels. We are in a phase of existential risk, facing a huge trade-off between emissions budgets for the current generation and what we leave for future generations. What youth activists are asking is very important. If we translate what they are saying into climate finance language, it is the time where instead of discounting the future to compute NPV (Net Present Value) and IRR (Internal Rate of Return) we add a premium to set the expectations right. This will do justice to the future generations that deserve the planet they crave to live in. Let’s discount the present for carbon and not for the future. 

  • Economic Principle 2: Costs versus Benefits 

Welfare analysis is integral here and it is not just about value extraction now. Value creation should be central to all business and government activities and social accounting is getting more important than ever before. Moving forward, the rule book should factor in environmental and community externalities. We need tighter rules and participation from regulators and accounting professionals to get this right. This is not just about a discussion of accounting standards but more practically it means standardization,  applications, and mandatory reporting regulations across regions and sectors.

  • Economic Principle 3: Thinking at the Margin

We need to expand the definition of the margin from profits to welfare. We must include externalities in business decision-making when determining the margin for consumption and investment. We should have carbon labels on every product we consume, every penny we invest, and every choice we make. 

  • Economic Principle 4: Incentives Matter

Now it’s time to make the carbon tax real and very expensive. We need more and more global subsidies to promote alternative fuels, carbon-negative technologies, and energy efficiency. Electric Vehicles (EV’s) and solar power are not only for the rich. Let’s bring them into all communities, regions, and lifestyles. To make this real we need support and the right tax policies from regulators across the globe. We have observed over time that pressure creates performance. For example, the good news is that Cozzi also predicted that global oil consumption will peak around 2025 because of EV adoption. We need more regulatory pressures to take the necessary action on climate and provide the future that Generation Z and Generation Alpha deserve. 

  • Economic Principle 5: Trade Makes People Better Off

We need the OECD countries to lead by example. This means accelerating the development and trading of carbon-negative technology and energy efficiency technology.  We should use the principles of comparative advantage and free trade to disperse such technologies in order to speed up global healing of the planet. After all, who will care about the balance of payments if there is no humanity? We must learn, lead and share.

  • Economic Principle 6: Markets Coordinate Trade

Trade not the carbon. Carbon credits are corrupting the system and must be dissolved. Instead of trading carbon,  companies and countries should own it and reduce it. We need markets to coordinate and trade more of the technologies that can reduce carbon.  In the equation of comparative advantage (David Ricardo’s basis of trade), we need carbon cost factored in. 

  • Economic Principle 7: Future Consequences Count

Getting our heads around the idea that we have limited resources is key today! We have to re-learn to live with limited resources as consumers. This means that carbon responsibility metrics should be added to all consumer goods. Only then can consumers  account for the true future cost of their current consumption. For every product we eat, wear, use, or consume, the opportunity cost of future environmental consequences needs to be factored in and adjusted. This also means we need to revise the Capital Asset Pricing Model  from its traditional definition to a more sustainable Carbon Adjusted Pricing Model.

Conclusion

We don’t need any more Blah Blah Blah. We need to better integrate carbon counting today with the existential climate risk of tomorrow.  Doing this will help to redefine the global economic system and gives us a real “Aha!” moment. This is what we need at COP26.

With thanks to Giorgio Burlini and Edmund Bradford for additional writing.

Pooja Khosla

Climate Crisis: from Measuring to Managing

Climate Crisis ESG Sustainability
Climate Crisis

And From ESG Theory to Sustainability Reality

A little less conversation and a little more action, please!

Financial stakeholders are eager to redirect their investments into sustainability-related ventures, and since 2018 the momentum of this capital migration has been accelerating at full speed. As of the end of 2020, the UN-backed Principles for Responsible Investment (PRI) reported Assets Under Management of more than $103.4 trillion and 3,300 corporate signatories. This is a signal of the growth of the responsible investment.

We are observing a constant increase in regulations and investor consciousness about societal, environmental, and governance (ESG) matters, and the urgency of climate change. Indeed, climate change is on the top of the list. There is also a lot of urgencies demanded by regulators and capital markets to bend the temperature curve to 1.5°C (above pre-industrial level temperatures) and plan a more sustainable and livable future for the planet.

The spirits are high and the concerns are high. However, what is missing is the definition of sustainability and more.

  1. How can regulators and capital markets define sustainability?
  2. What are the right measurement criteria for sustainability?
  3. What is the taxonomy for sustainability?

These questions are still unanswered.

However, the important point that I want to make here is that world has started moving in somewhat the right direction. We are observing leaps of innovation in the renewable space with the scalability of batteries, electrolyzing hydrogen, and progress on methane. Every change counts.

The IPCC latest report on Climate Change: the risk of Climate Crisis

I totally get it that we are 10 years late for these changes to achieve the desired IPCC (International Panel on Climate Change) climate scenario of 1.5°C. The 1.5°C target relies on negative carbon emissions that are enhanced uptake.  The enhanced uptake here refers to the greenhouse effect based on human activities that are adding to the warming of the atmosphere, this includes gases that increase the atmosphere’s retention of the heat energy of the sun. You can explore an IPCC interactive version as well.

IPCC Climate Change Scenario

First, this assumes some combination of increased land and ocean uptake, when science suggests that overall uptake, especially on land, is decreasing. Increasing overall land uptake by more than baseline assumptions in models is challenging, with background sinks (A carbon sink is anything that absorbs more carbon from the atmosphere than it releases – for example, plants, the ocean, and soil. In contrast, a carbon source is anything that releases more carbon into the atmosphere than it absorbs – for example, the burning of fossil fuels or volcanic eruptions.) declining and some even changing to sources.

Second, “net-zero” and 1.5°C assume some form of industrial sequestration, for example, BioEnergy with carbon capture storage. However, these are new, expensive and unproven technologies.

We still have hope that we can still reach under 2.0°C with the power of regulations, innovations, and capital markets. However, we do not have 10 more years to solve this puzzle of defining the sustainability taxonomy.

What we have now is a power of choice. Financial markets process complex information each and every day. The impact of climate change is no exception. The concerns of squaring out the taxonomy should not stop innovation. Instead, we should empower the innovators to build diverse workable solutions throughout the regions and sectors. We are out of time in a climate emergency and code red is upon us. We cannot wait for the perfect solution.

What we need is a series of imperfect solutions that can make our planetary future perfect for us all. The real focus should be on avoiding the climate pitfall. This can be done with real live performance rather than commitments and promises.

Tackling Climate Crisis: some simple suggestions

– We do not need any more false promises from investors and companies. We need understatements and overperformance. Keep the targets real and achievable. We cannot afford any missed emission targets in accountable global emissions So keep the targets real.

– Frame future plans rather than goals. We need more action-based plans. Keep the future closer to today 10 -50 years is too long. We need quarterly and yearly quantified, measurable standards to monitor climate progress.

– We need to crack the climate puzzle from both a macro-level, top-down validation approach and from a micro-level bottom-up approach. The bottom-up approach has self-reported data on emissions reductions, both expected and achieved, which is more important than just carbon accounting. The carbon trajectory is more important than just the carbon footprint.

– We need more power and clarity on scope, reach, and measuring progress towards climate targets. This may vary across sectors, regions, and investment strategies.

–

Let us get to terms with this, but let us not forget that it is crucial for companies and investors to achieve their definition of sustainability. Show what you can promise and promise what you can show. It is high time that we changed our approach. We need more action and reality and less conversation and theory to drive sustainability!

Edmund Bradford

From ESG to ESDG: why to add a “D” and why ESDG Matters for Sustainable Brands

ESG Sustainability
ESG Digital

Transcript for ESG to ESDG: Why Add a “D” and why ESDG Matters for Sustainable Brands

Hello, everyone. I’m Edmund Bradford. And in this video, we’re going to be talking about the hot and tricky subject of ESG.

And to help me with that, we have Yelena Novikova, who is a G20 young global changer and an independent expert on ESG and sustainability.

So thank you very much, Yelena, and welcome.

Thanks for having me. It’s a pleasure, Edmund.

Now, one thing that you told me about, which I thought was very interesting, is that you and some of your colleagues, I’ve actually changed ESG and you’ve added D into it.  So you are often referred to it as ESDG. Do you want to explain what that D is all about on ESDG?

D is for digital. And I would say that we didn’t change the ESG. We just gave more importance and attention to the very important D factors that were always there but were becoming more apparent because of the work that we started doing on Public Value Principles for which this ESDG term is kind of very central front and center would say.

It started right during the time when we were all globally. Pretty much all the countries went into lockdown.

And as we know, even right now, one in four Americans are working from home, 16% of companies globally are fully remote, and 62% of people are reporting that they still work from home at least some of the time.

And it’s now when many countries are already getting vaccines. So right at the time when we studied this work, it was even more apparent digital kind of took over our life.

And even before that, laymen would think about digital factors because

they are given data to digital platforms like Facebook or even like regular

sites that ask you to give permission for cookies, for example. But as we went into the pandemic, it kind of became more apparent that it’s much more a nuanced topic of companies, our digital data, and us and how we communicate through digital means.

For example, one example I would give is productivity software because a lot of companies started to install productivity software on laptops for working from home employees. And no one actually knows how much data a certain software might receive.

There is a known kind of concept of mission creep the developers are talking about. So right now, for example, this software is used for productivity software strictly. But no one is to say if the company may be less responsible and they might use it for extracting more data about the place and stuff like that.

So it’s a big topic right now where some companies want to use this productivity software, others maybe don’t want to use this productivity software. And then there are other companies that say we might use it, but we will have a strict mandate what we are using this for.

Malcolm Mcdonald

Are shareholders only interested in short-term profits?

Good Growth Marketing
Shareholder short-term

A key challenge for any company wishing to achieve long-term, sustainable, Good Growth is dealing with shareholder demands for short-term profits. But to what extent is this a real or a perceived problem?  In this interview, Professor Malcolm McDonald discusses:

  • The alignment between profits and long-term success
  • The reality of sustainable consumer behavior
  • The future trend towards sustainable corporate behavior

 

Transcript: Are shareholders only interested in short-term profits?

[00:00:06 –> 00:01:19] Edmund : Hello, everyone. I’m Edmund Bradford. In this short series of videos, we’re going to be talking about a very important subject, which is shareholder value and how it links with marketing and just being a good company. And to help us with that particular topic, I’m delighted (and I mean that from the bottom of my heart) I’m delighted to have my good friend and colleague, Professor Malcolm McDonald with us. Now, I could do a very long introduction, Malcolm, but I will keep it short. I think the only thing people need to know really, is that you’ve been in this business “for 600 years” as you would say, and you’ve written over 50 books on the subject of marketing and finance, etc, etc. You’ve got a very good book – and I don’t mind giving it a plug – called “Marketing and Finance, Creating Shareholder Value” now in its Second Edition. So if anybody wants to know more about the subject, please go and check out that book. And so you’re one of the best people. I think we could have to talk about the subject. So Hello, Malcolm.
[00:01:19 –> 00:01:21] Malcolm: Good morning. Good afternoon. Good day.
[00:01:21 –> 00:01:37] Edmund: Should we start with this simple question of what is a shareholder and are shareholders only interested in short-term profits?
[00:01:38 –> 00:06:18] Malcolm: Wow, Ed, you are a colleague and a friend, but you do ask very difficult questions. So let me think about the answer. First of all, there are many categories of shareholders, as you will know, from the individual to those who belong to things like mutual funds. For example, I’m an individual shareholder in a bank, but I also get to draw pensions from organizations like the University superannuation scheme which they invest on our behalf. And I don’t know how many of us pay attention to where they invest, but we assume that they’re decent human beings and don’t invest in organizations that are not good for our planet and society. But secondly, and I think this is most important, we know that there undoubtedly are shareholders who are not interested only in short term profits. But there’s really no conflict in this because, as I’ll show later, I hope I’ll spell out that most environmentally friendly companies also tend to be the most profitable. So there’s no conflict there. However, let me put one big “definite maybe” in here about all this, as often I perceive a big gap between what people say they’re going to do, what sounds good when being interviewed, and what they actually do. And let me give you an example. I mean, for example, more than 60% of younger consumers, according to Accenture, consider a firm’s ethical values before buying its products. The problem with that is if you look at Boohoo, for example, when it was revealed that they were paying their factory workers less than the minimum wage, did it affect them? Well, sales revenue is up by 41%. Profits increased by 37% to March 2021. And if you look at Amazon, you know, regularly criticized for their harsh employment conditions and aggressive tax avoidance measures. Yet customers spent more than £272 Billion with the company last year. And we’ll give you one last example: Volkswagen. They were found to have cheated on diesel emission tests. And yet, you know, five years later, the group achieved its highest market share ever, 22.1%. The reason, I think, is (perhaps it’s obvious or maybe it’s not obvious) that is if you ask someone, “Do you want brands to be ethical?” Nobody in their right mind is going to say, “No.” But the answer, of course, is that this social purpose will come very low on the list. Perhaps when money is involved and they get their wallets out, they get their purses out. Now, my personal view on this is that shareholders are very similar, but the consequences are grave indeed and just cannot go on. We have to change and we are changing and we will change. For example, the old Take,  Make, Waste model for the past 250 years is no longer sustainable. We just don’t have resources such as land, forest, water, metals, and mineral fuels to keep up with demand. In fact, according to Accenture, we’ll consume three planets’ worth of resources every year by 2050. And this will translate into trillion-dollar losses for companies and countries that remain tied to using these natural resources. And one last point, which I will conclude on this first question, let me say that we’re just one small step away from one lucky person, owning more wealth than the bottom half of the world’s population. Currently, it’s 62 people. Now that cannot go on. There will be legislation, if nothing else, to change that. The world cannot go on in that mode. So maybe I haven’t answered your question Ed, but they’re my rambling thoughts on the question of,  “Are shareholders only being interested in short-term profits?”
[00:06:18 –> 00:07:13] Edmund : I think that was excellent, Malcolm. I just wondered, because of course, you get different types of shareholder. Not all shareholders are created equal. And what some companies are finding is that, of course, some shareholders are actually more receptive to thinking about the long-term view, thinking about sustainability and ethics, for example. Do you think that actually, you could almost segment the shareholder market into different types of shareholders and almost in a way, they look for a balanced portfolio of products? You could also look for a balanced portfolio of shareholders with some that are more interested in the long term and some which are more interested in the short term. Can you borrow some thinking for marketing to do that?
[00:07:14 –> 00:08:11] Malcolm: Possibly that is a possibility, Ed. But all I would say is that by definition, the people who are shareholders tend to be better off people in the main, and they’re probably in the higher echelons of intelligence as well. It occurred to me that there is a change taking place, and increasingly there is a realization that it is those organizations who are good to the planet, who are also the most profitable. And I think that that will begin to come into play increasingly over the next five to ten years. So there is hope for us. And I think this endemic of short-termism is, in my perception, reducing slowly but surely.
[00:08:11 –> 00:08:29] Edmund: Thank you very much, Malcolm. That’s excellent. And in the next video, we’re going to be talking a little bit, and going to go down a little bit into a bit more detail, and talk about what we mean by ‘Shareholder Value Added.’ So for the moment, thank you very much for that Malcolm and I’m sure that has been very helpful to a lot of people.
Edmund Bradford

Sustainable SAM: Are You Ready for The New Reality?

Sales Management Sustainability
SAM sustainable strategy

Sustainable SAM in Brief:

  • We have passed the tipping point of interest in sustainability
  • Sustainability and other good behavior metrics now need to be reported
  • That means your strategic accounts will no longer be satisfied with bland statements of intent from your company
  • Sustainable SAM will be a key differentiator soon

Background to Sustainable SAM

I was interviewing the Head of Sustainability at a global hospitality company recently when she told me an incredible fact: “In the past 12 months, for the first time, more investor funds have gone into proven sustainable companies than into non-sustainable companies.”  So, if you are working in a company that has not proved itself sustainable to investors, you are in the wrong half of where the investor money is going. 

If you want to see an example of this transition, consider Blackrock, one of the world’s largest investors with $8.68trillion in assets under management at the end of December 2020.  In his 2021 letter to CEOs, Blackrock’s CEO, Larry Fink, talked about the fact that the pandemic had, accelerated the tectonic shift to sustainable investing with a near doubling of its investments in this area compared to 2019.

Why is this?  

Investors recognize that climate change is investment risk. They understand that companies serious about dealing with climate change are a better bet than companies that do not.  Moreover, there is increasing evidence that companies like Pepsi and Unilever provide better returns on top of the sustainability agenda. So, it is not because investors have suddenly become environmentalists but because sustainability makes hard business sense. 

The rise of the Greta Thunberg generation is also focusing minds. It is estimated that “about $68trillion of wealth will change hands in the next twenty-five years as the baby boomers die” (Reimagining Capitalism by Rebecca Henderson, page 147)  

Finally, the dramatic increase around the world in Government intervention in sustainability is also a key factor.  For example, the UK Government has committed itself to legally binding targets in its 2008 Climate Change Act. It will showcase its efforts at the COP26 UN Climate Change Conference in Glasgow, Scotland this November. In December 2020, the European Union agreed on a EUR 1.82trillion Green Deal to support a green recovery. In February 2021, U.S. President Joe Biden announced a $2trillion Green New Deal.  

These combined forces from investors, customers, and governments have created a perfect storm of sustainability change heading our way. 

Understanding what we are talking about

Before we consider how sustainability affects the demands from your strategic accounts, it is worth considering what we are talking about. The world of sustainability is a large and complex area with many different views and measurement systems.

Fortunately, there have been two significant steps forward in this arena.  Firstly, much work has been done on Environmental, Social, and Governance (ESG) metrics. Secondly, in September 2020, the World Economic Forum and the world’s biggest accounting firms agreed on a common approach to ESG and, therefore, a common way to measure sustainability (Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation).   They agreed on four areas (or “pillars”) of measurement based on Principles of Governance, Planet, People, and Prosperity.  Note that this goes far beyond just the green agenda of helping the environment. 

In addition to this, many experts like Professor Steve Kempster, co-author of “Good Dividends: Responsible Leadership of Business Purpose,” claim that you cannot become a sustainable company without having Purposeful Leadership at the top. 

That leadership will have to strike the right balance between short-term profits and long-term sustainable growth. 

Therefore, we have created a 6P Model that we find helpful in explaining sustainability to our clients (see below).  Sustainability is not just about being “greener.” It is a comprehensive approach aimed at challenging companies to grow in a good way that enhances the planet and delivers broader prosperity, happier employees, and more sustainable profits.  We call this Good Growth, and our view is that the best firms should aspire to be a Good Growth Company.  

The 6P Good Growth Model

6 P's Model - for SAM

 

The rise of sustainability in your strategic accounts

As I write this, I am aware of several initiatives underway to assess suppliers’ sustainability better. The United Nations is sponsoring an initiative to develop a common supplier framework in the health industry. Procurement functions in different companies are looking at how to apply ESG metrics to their key suppliers. The UK’s Chartered Institute of Purchasing & Supply encourages its members to conduct ethical and sustainable procurement. Individual companies, like Unilever, have warned their suppliers that supplying a sustainability plan will no longer be enough. As part of the tendering process, suppliers need to demonstrate real commitments to hard targets, which will be tracked. 

This is happening because their investors and their customers are asking the leadership teams of your strategic accounts about what real actions they are taking to improve their supply chain. Indeed, if they are reporting on broader measures of greenhouse gas emissions, they will need to know the emissions of their suppliers to complete the report.

Broader measures could be ‘Scope 2’ reporting of greenhouse gas emissions from energy purchased; and ‘Scope 3’ reporting of greenhouse gas emissions from the whole upstream and downstream value chain.

These reports will be scrutinized for signs of progress or regress, with significant ramifications on customer demand, brand valuation, and the share price.

How these changes will affect how they buy from you

Strategic accounts will be looking for the following items from their key suppliers:

  1. Plans
  2. Commitment
  3. Metrics
  4. Proof-of-Progress

If it has not happened already, expect to see more of these issues written into RFPs. You should also expect the minimum (order qualifying) criteria to rise as well. Vague answers to specific questions like, “When will your organization achieve Scope 1 Net Zero GHG emissions?” will not be acceptable. Suppliers that do not pass the minimum tests will not make it to the final selection. 

Your Response: Developing Sustainable SAM

These emerging trends mean that sustainability needs to migrate from something on your radar to an integral part of your business and your account development process. 

You will need to have: 

  • Well-thought-out plans, with specific targets and timescales, for how you will improve the sustainability of your whole organization and your supply chain in the future.  This should include innovative ideas to collaborate with the account to reduce the environmental impact of your joint relationship. This may include the redesign of products, services, and account support to reduce carbon emissions. These organization-wide (enterprise-level) plans should be integrated with individual account plans.
  • Evidence that there is a real commitment from the top to deliver these plans. This should include details about who has responsibility for sustainability in the company, who that person reports to, and how the account manager reports to them.  Ideally, this should be a full-time position reporting directly to the CEO, whom the account manager can call for expert guidance and support. 
  • A detailed set of metrics that you will use to measure progress.  These metrics should be defined, explained, and justified (e.g., based on independently approved measurement standards like The Sustainability Accounting Standards Board) and applied at an account level. 
  • Robust procedures and systems are in place to track progress using the metrics. Ideally, this should collaborate with an independent auditor (e.g., one of the big four accounting firms).  The auditor must be able to inspect individual account relationships upon request. 

To get all this done, sustainability needs to be coded into your SAM blueprint.  The dirtiest accounts need to be de-prioritized in your strategic account selection process. The goals, objectives, and strategies for individual accounts need to be re-appraised. The account plans need to be revised.  The IT systems need to be re-engineered to gather new data. The account managers need to be trained in sustainability. The account review system needs to be re-wired with different auditors. And more. This will not be easy, but those that succeed in achieving Sustainable SAM will gain a big advantage over those that flounder. 

Let’s look at water, surely a commodity if ever there was one. Corporate buyers in the hospitality industry are susceptible to the unit cost of buying water.  High volumes and bulk discounts have been the norm for decades. However, a small British firm called Life Water is growing nicely without being forced to cut costs. It packages its water in an innovative can that is 100% recyclable and contains zero plastic, unlike some of its competitors’ single-use plastic water bottles. In addition, it also acts to improve access to clean water.  For every unit sold, it contributes to clean water projects around the world. It was voted Best Sustainable Beverage Brand in 2019, and a corporate buyer I was interviewing was very impressed with them. He is responsible for an annual spend of around £1billion and is moving more spend their way.  

So, with a focus on sustainability, the actual cost of the product is less important than the value of the relationship to the buyer.  From the supplier’s point of view, that means more revenue from the account. For both sides of the relationship, it means a better long-term collaborative partnership. 

Indeed, if you already have good collaborative relationships with the accounts, then you can leverage them in new ways to discuss how you can collectively improve the sustainability of your whole supply chain and the entire industry. There is broad recognition that the only way to reduce global warming is to take broad collaborative action. Therefore, Good Strategic Account Management has a crucial role in driving real cross-enterprise sustainable change. 

Conclusion

Is achieving Sustainable SAM an easy path? No. Is it a risky path? Yes. 

However, the risk of not changing is even greater. Investors are encouraging change because they see the journey to sustainability as reducing the financial risks of climate change. 

As a strategic account manager, account director, or program leader, you need to learn about this subject. You need to become competent in it. That does not mean you need to go off and do a master’s in sustainability.  You do not need to be the expert in the room. It would help if you were confident in conversations about this subject.  Those conversations will become more frequent and more important over the next few years. 

The good news is that you should also already be a good change agent.  You will be well-used to using all forms of legitimate and illegitimate power to influence others to move business relationships in the right direction. It would help if you now upgraded to change leadership.  If you have not already done so, read Leading Change by John P Kotter and practice the art. You will then be well-equipped to make a real difference.  

As someone already working across functional, organizational, and geographic boundaries, let’s be frank about this, you can make a significant difference. 

Help to change the future and enjoy helping to save the world. 

First published in “Velocity” Volume 23, Issue 2, 2021 by the Strategic Account Management Association.

Pooja Khosla

Why should marketers care about “ESG”?

ESG Marketing
Marketing and ESG

Interview Abstract: Marketers and ESG

Edmund Bradford says they want to relate the subject of ESG to the marketing profession. Pooja Khosla says that marketing people will be like the captain of the ship because they have to find out product ideas, that bring sustainability. Edmund and Pooja say that science has to meet business to create good growth. Edmund says that marketing has a huge impact because they are talking to customers continuously. Pooja and Edmund discuss the power of marketing to spread the message that sustainability is in everybody’s interest. Edmund says good marketers are multi-skilled and cross-organizational. Pooja says they need an agreement from the executive team to start the mission of sustainability. Pooja says marketers will look into how to add sustainability venturing into new markets.

Transcript of Why should marketers care about ESG

[00:00:09 –> 00:00:38] Edmund: Hello, everyone. I’m Edmund Branford, director of the Good Growth Academy. And in these short videos, we’re talking about the subject of ESG. And now in this video, I want to relate it a bit to the marketing profession where we have a lot of contacts and a lot of viewers. And I’m delighted to have with me Dr. Pooja Khosla, who’s Vice President of Client Development at Entelligent, good morning.
[00:00:38 –> 00:00:40] Pooja: Good morning Ed.
[00:00:40 –> 00:01:04] Edmund: Thanks for joining us again. And Yes, I know you’re not a marketer yourself Pooja, So you’re talking about this issue from outside the marketing profession, but why should marketers stand up and pay attention to this horrible acronym called ESG? Why does it matter to them?
[00:01:05 –> 00:02:51] Pooja: So I would say that you’re right. I’m not a marketing person by training, but definitely, I am learning marketing every day to learn and to spread knowledge of ESG more and more. Because if we talk about the ship of sustainability in an organization, I believe marketing people will be the captain of this ship. The marketing team will be the sailors on the ship to ensure that the ship is moving towards good growth because they have to find out product ideas, not only product ideas that bring revenues, but product ideas that bring sustainability. They have to be inventors of not just the product use, but consumer satisfaction also. That’s okay if I buy this product, how I am contributing to the environment, or what I am not extracting from the environment. To be very honest, I live in a really interesting town, Boulder (Colorado) where people do not look at price tags. Rather, they look into how much emissions have been produced using or getting that product to them. They are very aware and I know that this is going to spread. This is going to spread more and more as we sail towards sustainability. And now it’s time when marketers have to think like a scientist.
[00:02:53 –> 00:02:55] Edmund: That’s a very dangerous concept (ironic)
[00:02:56 –> 00:03:41] Pooja: So that’s right now they have to think like scientists in a way to innovate, messaging product future pathway of a company where they are not only increasing this revenue of the sales, but they are also bringing into concepts where people feel proud to possess those products because it is not only to satisfy a need, but it is also minimum impact on the planet. It is also a contribution towards management. So I think now it’s time where science has to meet business to create good growth.
[00:03:41 –> 00:05:21] Edmund: Actually, I think that’s a wonderful, wonderful idea. So I think many marketers maybe come in with a Master of Art background on a Bachelor of Arts background. And of course, through digital marketing, there’s far more science getting into marketing as well. So some of them are far more quantitative than they used to be. We know that understanding financials, it’s very important for markets as well. And I think from a wide perspective, there’s a huge impact that marketers can have in this area because they are talking to customers or should be talking to customers continuously. They need to be kind of helping to change the behavior of customers, nudging them more towards green options, maybe in the B2B area, you know, deprioritizing dirtier clients and prioritizing greener clients. And I would guess the more they can point their ship towards these better customers, the more it sends the right demand signals right through the supply chain, doesn’t it? People pay more for better products, higher-value products, more sustainably sourced, et cetera. That makes it easier. There’s enough for the supply chain guys to execute what needs to be done. So I think in my own saying that marketing has actually got a very big role to play here and making this happen.
[00:05:22 –> 00:06:35] Pooja: Absolutely. If we have to bend the temperature curve towards Paris goals (1,5-degree Celsius), if we really want to accelerate the speed of sustainability and we will need behavioral changes, we will need a new definition of value. And who can do that better than a person In marketing? They have the power to influence. They have the power to change how people think they have the power to create the demand for the product, even if the demand doesn’t exist yet. So I think they have to use their superpowers now to change it from inside the behavior to spread the message that sustainability is inside everybody. It is just like they have to look deep inside them and find ways how they can contribute. And I think that will come from our captains that are the people associated with marketing, people who have the power to change.
[00:06:36 –> 00:07:40] Edmund: I suppose if you’re taking your analogy of the ship as well. I mean, if the CEO is the captain of the ship, you say then maybe the marketer should be the Navigator, the kind of chief Navigator, and in your early video, you’re talking about ESG being the GPS of sustainability. The nice thing I think about good marketers is that they are multi-skilled. They’re used to working across functions with product development, finance, sales, operations. They are cross-organizational. So they used to deal with customer organizations, distributors, wholesalers, third party relationships, and actually, all those skills of dealing across the whole organization and between organizations can be applied here to try to turn this to your own company around and make it point it and help it to move to better greener water, better value market waters, as you would say.
[00:07:40 –> 00:08:47] Pooja: That is absolutely correct Ed because definitely, you are right. We need an agreement of the executive team to start with, but then this mission of sustainability value mix navigators, navigators, not only looking into where a company will progress often be the new products are who will be the new consumer targets, but navigators which will look into how we can add the sustainability venturing into new markets, how we can develop new products that we can associate closely with the change towards sustainability. So this navigation is very important, and it will become very critical to the organization moving forward.
[00:08:48 –> 00:09:02] Edmund: That’s an excellent Puja. Thank you very much. We’re trying to keep these videos short, so that’s all we’ve got time for now. And thank you again. Push for your time has been extremely helpful for anybody that wants to know more about this stuff.
[00:09:02 –> 00:09:02] Pooja: Done.
[00:09:02 –> 00:09:05] Edmund: Just look at the Growth Academy website. Thank you.
Stephen Mangham

The CMO and Sustainability Leadership

Branding Sustainability
CMO and Sustainability

Abstract: Can the CMO become a Sustainability Leader?

  • Edmund  Bradford says they are delighted to be joined by Stephen Mangham, a branding expert at Master of Scale international. Edmund says they will get down to more of the human level and talk about the person at the center of this, the Chief Marketing Officer (CMO).
  • Stephen says the CMO must define the sustainability conversation in terms of the customer and the brand in terms of its inherent usefulness. Stephen says the CMO must have an organizing idea that inspires and guides the brand behavior and the brand action.
  • Edmund and Stephen discuss the key challenges they will face, including getting educated about the subject.
  • Stephen says consumers prefer products with a social purpose agenda, and that doing good is good for business. Edmund says the risk of doing nothing is more dangerous than the risk of doing something.
  • Stephen says brand growth depends on memorability and relevance.

 

Transcript How can the CMO become a sustainability leader?

[00:00:09 –> 00:01:51] Edmund: I’m Edmund Bradford. I’m a director of the Good Growth Academy and in this series of short videos on marketing and sustainability, I’m delighted as ever, to be joined by Stephen Mangham, who’s a branding expert, much more of a brand expert than I will ever be, and also a Master at Masters of Scale International. Now, in the previous video, we’ve talked about sustainability and how it fits into the broad concept of good growth. We also talked about how it can be a real differentiator in the marketplace. But in this particular one, we’re going to get down to more of the human level and talk about the poor person at the center of this (from my perspective in many ways) which is the Chief Marketing Officer. So I think what’s interesting is that I’ve been in marketing for 25, 30 years or something, and I’m fairly new to sustainability in comparison. And I think what I found interesting is how very little in most companies, marketing seems to be involved in the whole sustainability conversation. They just don’t seem to be at the party. They’re sometimes at the end doing the brochures and the messaging about all the changes that the company is doing. But they seem to be like an add-on at the end rather than central to the whole journey. So, I’d be interested from your perspective, Stephen, how can a CMO, (a chief marketing officer), how can they get involved and how can they start driving and leading some of this change, if they can at all?
[00:01:51 –> 00:04:27] Stephen:  Good to be on-again, I think it does start with – if you like – with the Board, the C suite, they need to have defined the sustainability conversation in terms of the customer, and that’s when the CMO can help. So if their sustainability agenda is inherently customer focussed, customer-centric: “What is the purpose of our business, our brand, what is its usefulness?” That has to be a customer-facing conversation. If you start there, then the CMO has a chance of success and the CMO is engaged. What the CMO themselves have to do is, there’s a number of things, but perhaps the three most important things: First of all, I think it’s important that the CMO need to define the brand in terms of the brand’s usefulness or inherent usefulness. So they need to – as I mentioned in an earlier video -they need to put sustainability at the heart of the brand strategy. And to do that, they may need to look up various disruptive approaches where they look to re-frame the business they’re in or their role in it. So, for example, Tesla famously says, they’re not in the car business, they’re in the renewable energy business. They just happen to be…. cars are the particular way which they can make a contribution to that agenda. So number one is they need to re-frame the brand in terms of its inherent usefulness to consumers. What is its social purpose? Secondly, I think it’s important, then that there’s an organizing concept or organizing idea that inspires and guides the brand behavior and the brand action so that the integrated marketing communications is consistent with that. And then I guess the third thing is, is that they should have a plan. They should have a plan that says, “Okay, measurable objectives, and what’s our plan of action to get there?”. So I’d say that that’s what CMOs can do, from their perspective, to drive good growth.
[00:04:27 –> 00:04:59] Edmund: And I think we just pick up maybe one or two of the key challenges that they’re going to face. For me, an obvious one is their understanding of the subject. We don’t expect the CMO’s to be sustainability experts. So what do you think could be the first steps that they take in just getting their heads around the subject, getting educated in this area? Any thoughts on that?
[00:05:07 –> 00:05:40] Stephen: Well, listen and learn. There’s a lot of expertise out there. There’s a lot of informed opinions. I recently read a book (I am not looking to plug it particularly) called Greener Marketing, which is a fantastic place to start in terms of helping someone reassess the role of marketing in promoting the sustainability agenda and creating that good growth.
[00:05:41 –> 00:07:05] Edmund: Excellent. And if we’re doing book plugs, I think the one I really like is Rethinking Capitalism by Rebecca Henderson. It’s not about marketing, but it’s a very good business book. I completely agree, Stephen. I think what we should do as marketers – in a way – is just get educated a little bit about the subject and picking up a good book and getting better and looking for short courses and attending events. I’ll give a little plug for some of them: the Economist runs really good events. There are some really good speakers, like Unilever by the way that we mentioned, who talk at some of these events. So without much of an outlay and without committing yourself to a whole year of a Master’s on sustainability, you can actually get yourself up to speed with some of the key concepts. So there’s definitely an education challenge, I think, but they don’t need to become experts. They just need to know the basics. I would say. The other challenge, I suppose, Stephen, what about, let’s say some of the real challenges where you’ve got maybe a Board that isn’t that receptive to the green agenda. Any thoughts about how marketing or the Chief Marketing Officer (or the marketing official) can use the power of the customer?
[00:07:05 –> 00:07:57] Stephen: I think the answer lies in your question, the power of the customer. If I was a CMO, I’d be showing, as I said in an earlier video, there’s a wealth of evidence out there that consumers prefer products that have an articulated social purpose agenda. So there’s some very strong business arguments to be made to the Board to say, “We can grow our business, we can protect our business by pursuing this agenda.” So it’s not simply a nice to have or some form of do-gooding CSR exercise. It can be very hard-headed. Doing good is good for the business agenda.
[00:07:57 –> 00:08:24] Edmund: Yeah. Absolutely. I think it’s one thing I like about the examples of Rebecca Henderson talked about is that actually what we get to the point of doing is saying, actually, the risk of doing nothing is more dangerous than the risk of doing something. And the status quo, the “do nothing” option is no longer on the table. These changes are happening and we need to respond to them. 
[00:08:24 –> 00:08:43] Stephen: Absolutely. I mean, it’s an old saying: if you don’t stand for something, you stand for nothing. And there are plenty of disruptors in business today who will eat your lunch if you take the soft approach and do nothing.
[00:08:43 –> 00:09:11] Edmund: Yeah. So, of course, that’s a whole area, isn’t it, of competitiveness? I mean, we talked about the power of the customer, but the other area the CMO should be very attuned with is the competitor activity, and there’s a danger in any industry I think that the organization that’s the least is left behind in the marketplace. And it suffers accordingly.
[00:09:11 –> 00:09:25] Stephen: I mean, brands grow or don’t on memorability and relevance. And if you’re not memorable because you’ve got nothing particularly strong to save, you’re not relevant. You’re going to wither on the vine.
[00:09:26 –> 00:09:48] Edmund: That’s excellent, Stephen. That’s all we have time for now but in the final little video in this series, we’re going to just pick up on this subject a little bit more and talk about the tricky issue of implementation. So thank you very again, Stephen, for your support on this and I look forward to our next video together.
[00:09:48 –> 00:09:48] Stephen: My pleasure.
Pooja Khosla

How “ESG” and Good Growth fits together

ESG Good Growth
ESG and Good Growth

Environment Social Governance and Good Growth companies Abstract

  • Pooja Khosla and Edmund Bradford discuss the concept of good growth and how it fits into the concept of being a good company.
  • Pooja says that ESG is designed to provide standardized metrics to measure how an organization impacts all the creatures that live on the planet, including  human beings.
  • Edmund says that investors are stepping up to utilize this knowledge to support Good Growth which is beyond and better than regular growth.

Transcript How does ESG fits into Good Growth

[00:00:08 –> 00:01:11] Edmund: Hello, everyone. My name is Edmund Bradford. I’m director of the Good Growth Academy. And in these little videos, we’re looking at the subject of, ESG   which is a major term used commonly when talking about sustainability, especially by the investor community. Today we’re going to be thinking about how ESG fits into the concept of good growth. And to help you with that, I’m very pleased to welcome Dr Pooja Khosla, who’s vice president of client development at Entelligent. Good morning Pooja thank you for joining us. So we talked to the last video about what ESG is, how it’s different from sustainability, and why it’s important. What is it designed to do and how does it fit into the kind of concept of being a good company?
[00:01:13 –> 00:02:11] Pooja: So Ed I would say that ESG is designed to measure to standardize for metrics of part of which is just sustainability. Pretty much why do we need accounting? Accounting, make sure that the financial goal of an organization was achieved. ESG is the accounting of environmental, social, and governance causes of the organization. When we talk about growth, growth alone is an incomplete concept. Growth needs a partner, a partner where the growth is beyond the financial fact sheet, where the organization can show growth from inside out in their systems, in their governance, in their contribution to the society, to the planet.
[00:02:12 –> 00:02:25] Edmund: It’s not just about this is a thing that I found interesting when delving into ESG, that it actually is not just about looking at an organization’s impact on the planet. Is it’s far more than that?
[00:02:26 –> 00:03:59] Pooja: It is far more than that. It is also looking at organization impact on the creatures that live on the planet, including as human beings. So it’s beyond environmental, how an organization takes its employees, how the organization takes its consumers, how it basically sets and grows the trust of the community that supports that organization. So it is much beyond just contributing to the planet. It is contributing to the people on the planet as well as to the other creatures. Like, look at the impact on biodiversity. So it contributes to everyone, every creature that lives on the planet. So in order to make sure that we achieve good growth, it is time when we think beyond financial returns. I know financial returns are the fiduciary responsibility of everybody, but we have to consider environmental returns, social returns, governance returns pretty much on par with financial returns. If we have to focus on good growth and good growth is the best way to grow, it is to grow with trust. It is to grow with confidence. It is to grow with the value creations of all stakeholders rather than just value extraction.
[00:04:00 –> 00:04:39] Edmund: From your work with the investor community. Have they suddenly all become angels now, the investor community? As I said, well, we’re doing this because actually, we all want to be good investors, et cetera. Or is there just some really hard business cases out there and evidence and research that suggests that having a company with really good leadership, I’m thinking about companies like, Unilever than really trying to become a good company? Is there more and more evidence now that investors are seeing that most of the companies or actually give them better returns?
[00:04:39 –> 00:05:57] Pooja: So and I would not say angels and demons over here, rather, I would be scientific being a scientist, it’s about information. Like even when we talk about efficient market hypothesis, perfect information is very important. Before today, before the ESG, there were a lot of blind spots. But today, because of a lot of forms, a lot of data and research companies jumping in to measure the impact of the organization on the environment, social, and governance with respect to recent technology, Artificial Intelligence, and big data. With respect to regulatory push on reporting, more companies are reporting than ever before. There is a lot of information now with this rich information. Investors have more knowledge, more guidance than they used to have before. And investors are stepping up to utilize this knowledge, this guidance to support good growth that is beyond growth and better than growth.
[00:05:57 –> 00:06:36] Edmund: Thank you, Pooja. That’s excellent. That’s very helpful. I feel like we should talk about this all day, but I think that’s really been helpful so far. In the next video, we’re going to be talking about one specific area of business with which we were involved, which is marketing, and why ESG is particularly impactful for the marketing profession. But until then, thank you very much. Put of your time. Very helpful as ever. And I look forward to our next video. 
Edmund Bradford

What is “ESG” and why we should care about it?

ESG Good Growth
ESG

An interview with Dr Pooja Khosla

When discussing sustainability, “ESG” often comes up. What is it and why should we care about it?

To help answer these questions, I interviewed Dr Pooja Khosla, Vice President of Client Development at Entelligent.

Her thoughts can be summarized in three key points:

  1. “ESG” is about measuring how the actions of companies, consumers, investors and all stakeholders impact broader society.
  2. Before the industrial revolution, companies were focused on value creation. After the industrial revolution, the focus shifted to measurements of financial results and therefore value extraction.
  3. If “sustainability” is the destination that stakeholders want to reach, then “ESG”  is the measurement of progress towards that destination.

Transcript

The timings are shown to help you jump in to the video at the right point if needed.

[00:00:09 –> 00:00:48] Edmund: Well, Hello. I’m Edmund Bradford. I’m a director at the Good Growth Academy and in these short videos, we hope to help give people an understanding of some of the key areas around sustainability. In this little video, we’re going to talk about a term that you hear quite a lot when people are talking about sustainability, which is “ESG.” To help me with that, I’m delighted to welcome Dr Pooja Khosla, who is Vice President of Client Development at Entelligent. Good morning to you.
[00:00:48 –> 00:00:50] Pooja: Good morning, Edmund.
[00:00:50 –> 00:01:17] Edmund: Welcome to this little video. ESG is something that we hear all the time, and it’s a big abbreviation. It’s used a lot by a lot of people. Would you like to just give our viewers some background as to what it is and why, if you haven’t heard of it, why you should take ESG seriously?
[00:01:17 –> 00:03:17] Pooja: So, Edmund, I feel that when we started trading, when we started development, when we started to learn about business, ESG was always there because of all business. Initially, I’m talking about the Greeks. I’m talking about the era before the Industrial Revolution. All businesses were created for the purpose of value creation. There was always an exchange of value and how value can impact society, how value can improve or develop our state of living, or can add to our current living standards. But after the Industrial Revolution, there was a lot of focus on profits, the balance sheet indicators. The financial back sheet got more attention than the sustainability and development back sheets. Then there was a switch. Instead of value creation, people started believing in value extraction. That is what we see was happening earlier. Lots of value extraction . That is why we have to go through the climate emergency issues, exploitation, labor exploitation issues, lack of governance issues. I believe now it is time to take a U-turn. It is time to go back to the original concept that is value creation, because that is a pathway of sustainability, and we have to do it soon. We have to do it fast. We have to make a U-turn today and not wait for tomorrow.
[00:03:18 –> 00:03:47] Edmund: That’s very interesting Pooja.  By the way.  I have spent the last 25 years of my life working with companies and students trying to help them understand the importance of value. Value is such an important term in marketing as well as in shareholder value, etcetera. So I think it’s absolutely a very good point. And so what does ESG mean to start with and where does that fit into value creation?
[00:03:47 –> 00:04:16] Pooja: So ESG means Environmental, Social, and Governance. That it is much broader than the full form of this acronym. It is how actions of corporations, companies, consumers, investors and all stakeholders impact the broader society. A lot of people confuse ESG with sustainability, but they are very two different concepts. Sustainability is the destination that we want to reach by our actions. ESG is a pathway, a GPS, to this destination.
[00:04:45 –> 00:05:17] Edmund: And by the way, you’ve done a very good article on that whole point, I know, for us. So on that very point, Yes, people, please do read this article, which is on our Good Growth Academy blog. You were helpful in helping me understand this. So would you say that ESG is kind of the measurement of our progress to that destination? Is that what ESG is trying to do?
[00:05:18 –> 00:05:51] Pooja: Absolutely. ESG is how we can measure how we can look into that RV on the trajectory that we intend to be on our sustainability course, to set metrics, to set measurement, to set standardization, to set compliances. And we all know that what can be measured can be managed. So ESG is the first step to manage sustainability.
[00:05:52 –> 00:06:17] Edmund: Absolutely. And I think from my point of view, looking at it fairly new, I think, in comparison to you Pooja in the sustainability area, it seems to me that not only has there been an explosion in interest in sustainability, but of course,  also the whole metrics around how you measure sustainability has also exploded hasn’t it? Which is why we hear ESG mentioned so often, especially by investors, for example.
[00:06:19 –> 00:07:37] Pooja: That is so true. That right now, especially during the Covid era and two years before that, the interest in sustainability has exponentially increased. To be very honest, I am in this field when this field was called development economics, and then we graduated into fancy acronyms like ESG, SDGs, SRI, PRI, and all but the hard nice in development economics, how we can make our economy, business and finance revolve around real development. Development is very different from growth. Growth can be measured because it’s a  monetary term. It’s the financial faction: growth accompanied by contribution and improvement and standard of living,  lifestyles, betterment of humanity, betterment of the environment, betterment of governance. That is development. So absolutely, we need to look into ESG from “transparency towards development,” which is growth! Growth is a part of it.
[00:07:38 –> 00:08:07] Edmund: That’s excellent. Thank you, Pooja. And that’s been a really useful conversation for me as well. We will pick up on this subject of growth in our next video. So hopefully that has helped people understand ESG, why it’s important and how it’s different from sustainability. We’ll look at how it links to good growth in our next video. So thank you, Pooja and I look forward to connecting with you again soon.
[00:08:08 –> 00:08:11] Pooja: Thanks. It was a pleasure being here with you today.
Stephen Mangham

What is a Sustainable Brand?

Marketing Sustainability
Sustainable brand

An interview with Stephen Mangham

The marketing function is often seen as the greenwasher of sustainability. Some would say that the other functions do all the hard work of making real progress and the marketers simply share the stories!

Yet, marketing and sustainability actually have a strong connection.   In this interview, we explore the subject of sustainable brands with Stephen Mangham.

Transcript

The timings are there to help you dive into the video at the right point if needed.

[00:00:05 –> 00:01:02] Edmund: Hello, everyone. I’m Edmund Bradford. I’m a Director of the Good Growth Academy and today we’re going to be talking about sustainability and marketing, which I think is a really interesting area.  I’m delighted to have with me Stephen Mangham, who is a branding expert and also a Master at Masters of Scale International. You and I, Steven, have chatted a little bit in the past about branding, sustainability and another concept that we’re kicking around called “good growth.” It’d be really interesting to get your thoughts on what we mean by Good Growth, a good growth brand, and how that is different to other brands that are out there. So any thoughts are very well received!
[00:01:02 –> 00:01:29] Stephen: Okay. Thanks. Well, the purpose of marketing has always been to produce growth. So in today’s world, I’d argue that the role of CMOs is to produce good growth, where sustainability is a strategic imperative at the core of their brand strategy.
[00:01:31 –> 00:01:40] Edmund: When we talk about good growth, do we mean sustainability? Is that something different to sustainability?
[00:01:40 –> 00:02:29] Stephen: We do mean sustainability. But I’d say two things about it. First of all, that it is where sustainability is at the core of the brand strategy. It’s defining the brand in terms of its social purpose rather than being an add-on or an addendum or a part of the brand, it’s core to the brand. Arguably, it goes further than simple damage limitation or mitigation. It’s about the idea of being that good that you put in more than you take out.  When you define a brand in terms of its social purpose, ultimately it’s putting more into the ecosystem than it takes out.
[00:02:29 –> 00:03:02] Edmund: That reminds me of something that I saw a couple of weeks ago from Professor Steve Kempster, who’s a Professor at Lancaster University. He was telling me about the fact that we now talk about a regenerative company as being a higher goal. You’re thinking there about being “net good”. Is that a higher goal than just being sustainable? 
[00:03:02 –> 00:04:12] Stephen: Yes, I think it is. Net-zero is a very laudable target, don’t get me wrong. But it’s about a different way of looking at your business as your brand. It’s about the idea that it isn’t looking at sustainability in terms of damage limitation or defining it in terms of mitigation or what steps can we take to mitigate the impact we have on our world. It’s looking at it in terms of what is the inherent usefulness of our brand or our business? Where is it actually a promoter of good things in some way? And it’s about looking in terms of the brand as saying, on balance, that it has a strong social purpose that is inherently useful to society in some way. It’s taking all the right steps in terms of its impact on our world, both in positive terms as well as negative terms. But at the end of the day, it’s actually about being net good.
[00:04:13 –> 00:04:24] Edmund:  Which companies would you put down as at least attempting to do this in a proper fashion?
[00:04:24 –> 00:05:00] Stephen: There are so many companies that are doing that at the moment, and obviously, there are some companies that were created from scratch with a sense of social purpose. Who Gives a Crap, for example? But actually, there’s also a large number of the larger companies who are taking significant steps. So if you think of Unilever, for example, Alan Jope has famously gone on record as saying that if a brand in their stable of brands doesn’t have a social purpose that they can define, they’ll sell it.
[00:05:01 –> 00:05:04] Edmund: Yes, that’s right.
[00:05:05 –> 00:05:19] Stephen: They’re taking major steps in terms of giving all of their brands a defined social purpose and measuring the impact and the success – or otherwise – of that purpose.
[00:05:20 –> 00:05:38] Edmund: Excellent. And I think when we’re talking about a kind of good growth brand, it’s a brand that can be applied at a company level or could be applied at a product or service level. Do you see that? Or is it only a corporate level where this works?
[00:05:38 –> 00:06:52] Stephen: It can work at a corporate level. Of course, it can. It must because you have to look at the way you do business as an organization. But I guess what we’re talking about here more specifically, is defining your brands in these terms. By doing that, you are looking at your brands. At the end of the day, you define your brand in terms of consumer appeal, and a brand lives or dies. Of course, in terms of how strongly it resonates with customers and how it persuades more consumers to buy it more often. So when you’re looking at sustainable brands as opposed to sustainable companies, you’re defining it in customer-facing terms. How is the brand inherently useful for its customers and defining it in terms of social purpose? How will a brand, as a result, be more relevant to consumers, drive talk-ability, even protect its price elasticity, for example? So with brands, we’re talking about a customer orientated centric conversation.
[00:06:53 –> 00:07:06] Edmund: Excellent. And that, by the way, is a great teeing up for our next video, which is going to be all about differentiation. So many thanks, Steven. And I look forward to another conversation with you shortly.
[00:07:06 –> 00:07:08] Stephen: Thank you very much. Great to talk to you. Ed.
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