Second Crack — The Leadership Podcast

The Charms and Challenges of Leading Sustainability - with Anthony Watanabe

February 24, 2023 Anthony Watanabe, Gerrit Pelzer, Martin Aldergard Episode 19
Second Crack — The Leadership Podcast
The Charms and Challenges of Leading Sustainability - with Anthony Watanabe
Show Notes Transcript

In this episode, we interview Anthony Watanabe, Chief Sustainability Officer of Indorama Ventures, a 20-billion dollar chemical company with 140 manufacturing sites worldwide and 26,000 employees. Anthony shares his experience of leading sustainable transformation at scale, and as we will see, there are both charms & challenges to the job.

Key moments

[05:00] How Anthony “wonderfully accidentally” discovered sustainability and started his 20+ year career in the field.

[10:00] Charms and challenges of leading sustainability. Including the “mainstreaming” of sustainable transformation and the increasing demands on transparency, reporting and disclosure.

[14:20] Leading sustainability in your daily role. The importance of starting with yourself as a leader and how well you are aligned and show up authentic. Continuing with leading through influence in the role of the CSO.

[20:03] What leaders can do to drive sustainability in their organisations. Sustainability needs all of us. It needs everybody's talents around the table because it’s complex, because it’s a systems approach.

[27:05] Balancing the visible with the meaningful. Using both narrative and stories and data to balance communication on visible (easy to communicate) actions with meaningful (impactful) actions. Only stories without quantifiable information is not a recipe for success. Linking into sustainable reporting.

[31:45] The dilemma of continued consumption and growth AND  sustainability. Sharing examples of net positive impact and importance of circular economy.

[38:06] What drives sustainability to be “mainstream” on the corporate agenda? Examples are requirements of investors that are making ESG a priority, trends in technology around, e.g. renewable energy, electric vehicles, and social movements that bring diversity, equity and inclusion to the forefront.

 Reflection Questions: 

  • How do I connect my personal values and beliefs to the mission of sustainable change? How does this connection help my motivation? How does it guide me? How does it help me to stay authentic as a leader?
  • What can be new business models that look not only at financial performance? How can I use the collective intelligence of the people I work with? And who can be my guiding coalition to drive this?
  • What could I do that is a meaningful contribution? Is there something with larger leverage based on my network, my skills, or access that could contribute to solutions for climate change?


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Martin Aldergård
Gerrit Pelzer 

Second Crack – The Leadership Podcast

with guest Anthony Watanabe (Episode 19)

This transcript is AI-generated and may contain typos and errors.

[00:00:11] Gerrit: A warm welcome to Second Crack - The Leadership Podcast. In this show we explore everyday leadership dilemmas and paradoxes, and we invite you as our listener to self-reflect. Today I'm super excited because we have a very special guest, Anthony Watanabe, Chief Sustainability Officer of Indorama Ventures. That's a 20 billion dollar chemical company with about 26,000 employees, and I'm really curious to hear from him about the dilemmas and paradoxes that he encounters in what I believe is a very challenging role.

[00:00:46] But first of all, let me introduce myself, my name is Gerrit Pelzer. I'm an executive coach, and I help leaders create the conditions in which people can be their best. I'm joined as usual by my dear friend and business partner, Martin Aldergard. Martin is a leadership consultant who focuses on change and transformation in organizations. And what we both have in common is that we always put people at the center of our work. So, hi Martin and happy anniversary, Second Crack is one year old this month. 

[00:01:21] Martin: Yeah, that is a great milestone for us. And hello Gerrit, hello from Sweden. Nice to be recording with you again. In our previous episodes we have really deeply explored sustainability through the lens of the Inner Development Goals, basically the leadership qualities needed to drive sustainable transformation. And today is really exciting, like you say, to explore this topic through a different lens, through the lens of a corporate executive and CSO like Anthony. Yeah, so this going to be great. 

[00:01:58] Gerrit: Yeah, Anthony. So a warm welcome to you too. And thank you for being our guest today. 

[00:02:04] Anthony: Gerrit Martin. Thank you so much for having me on the podcast. And warm congratulations on the important milestone of one year. 

[00:02:11] Gerrit: Thank you. Thank you. So I mentioned already that you are the Chief Sustainability Officer of Indorama Ventures. Um, why don't you take a moment to introduce yourself to our listeners? 

[00:02:23] Anthony: Sure. With pleasure. Thank you. Um, first and foremost, I am a husband. Uh, this year we'll be celebrating 25 wonderful years of marriage to Rose, uh, and a father of, um, two incredible human beings. My sons Emil, uh, who's 19 in Canada, and Felix, who is 17 here in Bangkok. Um, if you ask me about me, that's those, those are the, the parameters that define me first and foremost. Um, I'm also a proud Canadian citizen. I've been away from Canada for, uh, what will be 10 years this year. It's hard to believe, but what I've learned is that, um, uh, once you leave your, your, your, your country of origin, in fact your national pride intensifies, uh, and, uh, and it's been a kind of a lovely discovery as well, of course, learning from many expats like yourselves in my travels around the world.

[00:03:11] Um, And then, yes, today I'm, uh, responsible for sustainability for Indorama Rama Ventures, uh, Public Company Limited. And, uh, it's a very exciting journey and a very exciting time to be working in this field when we've had, uh, quite a mainstreaming of sustainability issues. And I'm really looking forward to diving into the conversation with you both about what those mean and, and, and how we, how we try to lead, uh, in, in these, uh, you know, somewhat tumultuous times, uh, full of challenge, but also full of hope and potential. 

[00:03:44] Gerrit: Beautiful. And, and contri, congratulations to you and Rose to your 25th wedding anniversary, I think that is a much bigger accomplishment, than one year podcast. And, uh, one more thing. You said Canadian citizen now in Thailand. Watanbe though does not sound very Canadian, does it?

[00:04:03] Anthony: Yes. I guess, you know, Canada is such a, a unique place, right? Uh, my father is of Japanese, uh, ethnicity. Uh, he was born in Canada, but my paternal grandparents are from Hiroshima. Um, and my mother is Greek. And so this is how I grew up. Very bicultural, uh, you know, in a, in a wonderfully schizophrenic way. Uh, and in some ways, uh, in some ways I think that is indeed very Canadian. Um, and as, as you know, for the most part, all are welcome, um, in Canada, and diversity is indeed, uh, a strength of, of, of our, of our country. 

[00:04:41] Gerrit: Nice, nice. Very nice. And so, you know, I wanted to ask, tell us a bit more about your journey. What got you to where you are today? So you shared a bit of us of that already, so, um, maybe you can highlight a few more stages because you haven't been that long in that Chief Sustainability Officer role, have you?

[00:05:02] Anthony: Correct, correct. This was, uh, I was appointed in September of 2022, and I had been with Indorama for about eight months at that point. So definitely, I think in many ways a dream job in a 20 year journey of driving sustainability in business on in different countries and on different continents. So happy to, uh, kind of unpack that a bit for you.

[00:05:25] Um, but as I was thinking about our conversation today, I realize, you know, I'm not sure if it's the same for you gentlemen, but many of the best things in my life have happened by accident . Of course, we always have these plans and these designs, and some of them play out as you intend, and those are wonderful. But, um, many things like my discovery of sustainability were really accidental, wonderfully accidental, but it's interesting to reflect back. So, um, I was, um, completing a PhD in Canada and narrowly missed an opportunity to join a US University. And, uh, had to abide my time a bit as the next round of academic postings came out. And so, um, I had no experience in business, no experience in sustainability. What did I know how to do? I knew how to research. So I joined a think tank, um, and producing all kinds of reports and various business and policy themes. And, uh, got assigned to a project on sustainable development. This would be back in 2001, and, uh, ended up, uh, working on a report and associated conference on partnering for sustainability in 2002 in Canada, which was positioned as Canada's preparation for the world summit on sustainable development in 2002 in Johannesburg, South Africa. So that was about a one year journey, quite by accident, uh, where there were essentially three parallel epiphanies in that short period. Uh, the first was that this thing called sustainable development, which I had never heard of before, resonated with values that kind of, in fact gave birth to a sense of, of values that I didn't know I had, found it very exciting. Um, business I found terribly exciting, frankly, the sense of partnership of creating value through different means. Um, understanding the complexities and the, both the people side, the technology side, the financial elements. Again, I was really, really new and, uh, uninformed, but I just found it to be so compelling. And the third one was interesting because this think tank was being run by a Harvard MBA, London School of Economics, and on paper was just, you know, kind of a brilliant person. But in practice was not, not a leader I would want to emulate. And so sort of through reverse inspiration, I thought if he can run a business, why can't I run a business, and, uh, launched my consultancy, um, about a year later. And of course made all the mistakes one can imagine, you know, in the early years and fewer and fewer in the later years. Um, Had a, a very nice run for about 11 or 12 years, um, working with some of Canada's leading corporations, uh, on sustainability strategy, um, marketing of sustainable products, um, technology development in the case of water. And then also in the later years working with the Canadian government to help build capacity in, uh, low carbon technologies, low carbon building and so on in, um, in Latin America. So, um, cutting through many aspects, but that was a fantastic training ground for, uh, what was at the time, you know, not mainstream, not yet in the eyes of investors, um, and really in its early nascent years. This would be 2002 to say 2013. 

[00:08:52] Gerrit: Wow. What, what a story. That's quite amazing. And I learned a new expression now, reverse inspiration. I, I need to remember that. Uh, Anthony, for, for our discussion today, I think there are two key dimensions we wanna look at. So on the one hand, obviously sustainability, uh, is a global challenge. It's a societal challenge all over the world. I think everybody is now, at least when it comes to climate change, everybody seems to be, maybe not everybody, but the majority of people seem to be understanding what's going on there. And then on the other hand, we're obviously having here a leadership podcast. Um, we are also curious about the personal aspects of being a leader involved in this, um, sustainability transformation, if you wish. Um, I, I wonder if you have an area where, where you would like to start. 

[00:09:55] Anthony: Um, for sure today sustainability and ESG have reached a level of, you know, kind of mind share and, uh, awareness, um, that is unprecedented. And we're seeing that play out in policy, we're seeing that play out in consumer preference, uh, we're seeing that play out in the minds and the demands of customers, investors, and so on. So that's, that's wonderful for somebody who cares about progress on climate change and on sustainable innovation, um, seeing the issues rise to this level of importance is very satisfying. It of course, creates, uh, an increasingly complex landscape in terms of, um, responding to the demands of these different stakeholder groups, uh, customers, government, investors, employees of course. But those are wonderful challenges that, um, any responsible business should be taking on in, in meaningful ways. So that's definitely, I think, um, a big part of the, the charm of where we sit.

[00:10:54] Um, the challenges are many. Um, the Paris Agreement states that we must, uh, keep temperature rise to below 1.5 degrees Celsius. And there was a report, uh, published in October of last year that showed between the America's, Europe and Asia, what, what are the trajectories in fact. And, uh, Europe is on a trajectory of 2.4 degrees increase, uh, the America's 2.5 and here in Asia 3.0 degrees. So, um, we're way off track. This is a big part of the challenge. Um, with the conflict in the Ukraine, um, and some of the energy, uh, challenges, um, that that has triggered, we're seeing, uh, a lot of reversion to coal. Um, and that is, that is part of, you know, one aspect of the said macro challenges around, um, uh, keeping that temperature rise to 1.5 degrees encouraging, uh, energy transition, and so. At the same time, of course, we've had, uh, lots of uptake and adoption of renewables, um, and, um, even things like electric vehicles and even things like electric vehicles powered by, by renewables. So there's lots of market transformation happening that's encouraging, and I, I'm, I'm hopeful that even though the war in the Ukraine, it looks like it's gonna continue for a year or two or perhaps more, um, that, um, we can carry on with the ambitious energy transition that's required. So that's part of the challenge, I would say.

[00:12:24] Um, I think, uh, it's a good part of the challenging landscape that the demands are increasing because now, for example, say for instance, something that's important to any company, um, of our size is transparency, reporting, disclosure. And in order to do that, you need data. And today the consumers of those data are many, in fact, um. Of course we produce an annual report, we produce a sustainability report, we respond to, uh, questionnaires of various agencies like the Carbon Disclosure Project, the Dow Jones Sustainability Index, and we're consistently receiving, um, favorable evaluations of the level of, uh, uh, and vigor of our reporting and disclosure. Customers are asking for these data, product sustainability data, process sustainability data, um, and, and as we discuss, increasingly investors as well. And so, as I said earlier that's all a good thing in many ways in terms of the maturation of the market and the mainstreaming of sustainability, that will hopefully bring more companies into the fold and, and more policy, enabling policies, and drive more progress in terms of mitigating climate change. Uh, and it at the same time makes for a, you know, wonderfully complex body of work, uh, in order to properly respond, uh, to these various requests and be able to, um, uh, satisfy first ourselves as the very important internal stakeholders and decision makers, and then next are, uh, these various groups that I reference.

[00:13:54] Martin: What I take away from this, the, there is a huge urgency of course, because we are really not on target to meet the 1.5 degrees. And the positive side that I'm taking away here is the increasing transparency. This is brought to the surface and you mentioned the, the mainstreaming of sustainability in the, in the corporate environment. How, how do you bring this now into your, your leadership, more on the daily leadership towards your internal stakeholders? 

[00:14:26] Anthony: Yes. Great question, Martin. Thank you. Um, and you know, it's something I think about regularly, right? Because, um, of course leadership takes on so many dimensions as we know, and, um, If I can harken back to a previous episode of Second Crack, where you talked about the Inner Development Goals. And this is, this is a, an episode that really resonated with me. Uh, one of the conclusions was that, you know, we're, we're, we're catapulted into a leadership position and we start reading books about managing people, and building teams, and creating psychological safety and, and so on. And all of those are very important things, very valid, valid things and, and leaders should be looking to, to improve in that way. But what you had said in that episode was: the best leaders first work on themselves and they understand their strengths, their weaknesses, their preferences, perhaps even some of their blind spots. Um, and um, that really, really resonated with me. And, and if I think about my career, both within big corporations and before, uh, as a leader of a boutique consultancy, I've seen many examples, both of the positive and the negative of that. And now looking back, I can see clearly there is a clear demarcation between those people who were spending time on, uh, and this type of reflection, this type of self-development, mindfulness, and those who were not. And man, that just like really jumped out in a very clear way. So in my case, I've been working with a coach, uh, for the last almost six years. And, um, uh, that's been such a profound set of exercises, um, to help drive the reflection. Uh, at the same time, in that period, in an unrelated way, I've begun meditating. That's a regular practice of mine. Um, and then of course, you know, just being a husband and a father and a brother and a son, and all the wonderful complexities of life, um, you know, I think bringing all that into focus and how you show up at the office as a leader, um, that's been a, a really rich set of discoveries. So that episode really resonated. I, I, without even sort of blinking, I can see a, you know, here's a group in one camp and a group in the other camp of people I've worked with. And, um, and I think that's a really, really strong message, um, that I bring to the office, you know, every day. Mm-hmm.

[00:16:49] Um, maybe a, a related sort of parenthetical note is that we, uh, here at Indorama, diversity, equity, inclusion is, is a, is a, is a new and important, uh, portfolio that's under me in sustain. And, um, we recently ran our first ever global training on this for a select group of leaders. It was, uh, um, inclusive leadership and unconscious bias. And, you know, in thinking about that, that it was a wonderful day of, of learning and reflection and sharing. And it, it's so important that, um, as individuals, as leaders, we are, there's alignment. There's alignment between who we are when we leave the door and who we are when we step into the office. Uh, and, and I feel, you know, comfortable that the guy speaking to you today is the same guy going home to have dinner with his wife tonight. And the same guy that will, you know, take his son out to a, a movie on the weekend. Absolutely the same person. Um, and, and I think that's so important that we can all feel that level of comfort and alignment, and that shows up in how we interact with others in, in our leadership as well. 

[00:17:54] Um, the, I think part of the, the challenge around leading in sustainability is, um, sort of leading by influence. Mm-hmm. , right? So of course there are some parameters like in any organization, some parameters where I have decision making power, but there are many, many areas where I don't have the decision making power. So I must show the data, I must show the consequence, you know, be very, a very active listen. Um, uh, work within the context of the business priorities. And so all of this is kind of, you know, leading by influence. And I think that takes every day a lot of, um, you know, um, tact, a lot of, uh, as I say, active listening, a lot of, um, uh, empathy, even I might say. And, um, definitely something that keeps me on my toes. And I think that's probably the case for any leader in any role, uh, and, and company around the world not even related to sustainability. I think that's increasingly the case. 

[00:18:54] it links so nicely what we discussed, and actually it was the previous episode we had with Paul Lawrence who talks a lot about systems and still today, many people think that they can be in control of things. They can control results. But one of Paul's key messages was, was exactly what you just said. We can't necessarily control the results, even if we have what we might call formal authority. Um, but uh, what what we can do is, is influence. And I could imagine there are people, I like so much what you said before, you know, you were passionate about sustainability before you got into this role, and I can imagine there are other leaders out there who also want to contribute to a better world, to a better society, but maybe the organization is not that advanced yet. And I wonder if you have any suggestions, any advice, uh, what people can do, individual leaders, um, you know, to push it a little bit. So to drive the, the sustainability transformation in their organizations. 

[00:20:13] Anthony: Thanks Gerrit, that's another excellent question that makes me think of, you know, many sort of examples, uh, from the past. Uh, you know, just to maybe preface this, I remember, this would've been around maybe 2010. Um, was we were at a very high point of our consultancy work in Canada. Very, um, you know, working with wonderful, uh, clients, quite high profile. And I would have people coming to me early career, mid-career, even later career. Anthony, I'm an HR professional, what can I do around sustainability? Anthony, I'm in marketing, what can I do? Anthony, I'm a finance guy, but I want to get into, what can I do? And my answer then is the same as today. Sustainability, it needs all of us. Frankly even more so today because of the mainstreaming and the increasing demands that I, um, mentioned earlier. It needs everybody's talents around the table. Um, because it is complex, because it is a systems approach. In fact, it's not only one thing that's gonna, that's gonna solve the issues. It takes, um, you know, it's a little bit of a domino effect or a balloon, if you push down on one end, then problems arise on the other. So you really need this plurality of perspective actually to drive long lasting change. Um, so that's the first thing I would say. Um, second, you know, um, maybe in terms of leading up, leading horizontally and leading down, we might think leading down is the easiest, right? Because, uh, those are our direct reports and we just say it and then it has to happen. And I would completely reject that theory, and I see that play out in, you know, in some of my, my own team who are incredibly smart, intelligent, and, you know, people working with conviction. Yeah. I don't wanna just tell them what to do. They do not want to be just told what to do. They have ideas, they have passion, they have, um, innovation in them. So it's really, again, leading by influence. And influence can sometimes take on a negative connotation. Maybe it's, you know, building rapport. It's, it's empathy, it's active listen. And then trying to find, you know, ways of working, projects and so on, um, that resonate with those values and those ways of working. So it's very, very much leading by influence in, in the most positive sense of the term. And, and frankly, why would we do it any other way? Right? Because if you think of the, the natural tendency of people for self-actualization, how do we better drive and encourage self-actualization than through, you know, finding intrinsic motivation levers and then drawing on those, right. That is really the art and science of leadership, frankly, at any level. 

[00:22:45] Martin: Yeah. I, I, you, you mentioned before about, uh, providing transparency, and I'm guessing this is one way that we can influence leading upwards. Providing data, providing decision support to executives, to the board. Can you expand on this a little bit?

[00:23:07] Anthony: You're absolutely right. Um, so when we talk about data disclosure, transparency, it's very much linked to the external world, but first to the internal stakeholders and decision makers. Absolutely agree Martin. Um, and, and that's so important because if, you know, say for instance, uh, in the case of Indorama, we've made an absolutely unwavering commitment to phase out coal by 2030. So we do have some plants still powered by coal here in Asia. Uh, 2030 is the hard cutoff. Our job within sustainability is to help the leaders see what's the sequence based on, um, uh, say infrastructure for energy transition, alternative, uh, fuel. Um, based on different financial metrics. So that kind of data to work with them is, is really key. Is really key. So we have a, a commitment that's gonna happen, but the phasing and the sequencing of those decisions then, um, becomes a, an exercise where we can really also play a role.

[00:24:06] I, I realize, Martin your earlier question I didn't quite answer about, you know, if a company's not fully on board, but leaders want to drive it, what can they do? And I'll, I'll give you an example from a former company I worked with. There was not any sustainability, um, strategy or, or, or issue and I, I really thought we could, we could start something. So it's a question of meeting people where they are. So we, um, and built a basically, um, something that was in my remit was around, uh, transformation work. So we actually built a transformation team of volunteer ambassadors, and the first mandate we gave was, let's run an energy efficiency competition in the building floor by floor. And this is because I had seen that, um, at Christmas time, there was a, you know, a competition friendly competition for who could have the best Christmas decorations. This is here in Thailand, right, so where, which is a Buddhist country where Christmas is, is, is not a religious, um, uh, holiday, but still there was a really robust competition of who could win the, the, the floor with the best Christmas, uh, decoration. So leveraging that, we built a competition around energy saving. And, uh, this, this needed data Martin. This needed transparency. It wasn't easy to get, it probably wasn't perfect to be honest. Um, this needed, uh, communication and engagement of people at all the floors from this transformation team, this kind of group of ambassadors. And this was a way to kickstart, um, uh, an awareness and a sensibility around sustainability at an office level. Uh, and it was, it was pretty successful. Um, you know, did it save a lot of energy? Mm. If I'm honest. Uh, it was okay. But did it mobilize hearts and minds into this and then, you know, parlay that into more. Yes, absolutely. So there's ways to, maybe gamify is the word, obviously engage, um, and make something, uh, meaningful and also fun as a way to, um, get into the.

[00:26:03] Martin: But this is, this is also such an interesting example because there is also a fine line between doing something that is really meaningful, involving and getting everybody on board versus also really producing real outcome, right? Because there is also a lot of companies that has done a lot of activities in the past. They are good on one sense. But in the bigger picture of meeting the 1.5 degrees climate goals, they, they might not contribute much. So what I think is interesting here, when, when you're seeing the stepping stones from starting to involve everybody in the organization looking at that as a goal in itself. So then also linking this up then with the, with the much bolder and bigger business strategies, and the goals that you have, that will make a real dent in, for instance, use of fossil fuels and, and carbon neutralization, et cetera. How, how do you see this balance? 

[00:27:05] Anthony: You guys have clearly done your homework for this episode because that's an excellent question and really a real dilemma. Let, let me start with an anecdote. Um, years ago I was, um, on a panel with the, the global Vice President of Environment for Starbucks. And he was talking about all the work they had done on the mechanical systems in their cafes. So heating and cooling systems and, and also lighting and, you know, talking about very significant 30-35% energy savings and GHG reduction. But he said, but the consumer just wants to know what are we doing with this cup right after people use it. And he said the cup and the waste, of course it's an issue, but it pales in comparison to the GHG impact of changing our mechanical systems. But to the consumer that's invisible, so there was this balancing act between the visible and the meaningful. Exactly what you're citing now Martin. So, um, one of the ways around that I will circle back to transparency and data, right. So of course we all like to hear stories we're built on, you know, a narrative and so on, and I think they have a role in the sustainability journey of companies. But only stories without quantifiable information is, is not a recipe for success. And I think what you're maybe alluding to is the sort of risk of green washing, which, um, you know, has been around for a long time. And every time there's sort of a spike in the interest in sustainability, you get the, an increased risk of greenwashing. And Indorama as a company actually does more than we talk about. And it's something I'm trying to change here, is to, you know, talk more about what we're doing in, in the right, um, ways and in the right context. But we've maybe, um, you know, balanced it the other way. But there are risks for sure to, um, um, you know, focusing on the visible at the expense of the meaningful. And because of, uh, the Paris agreement and the progress, uh, um, you know, or lack thereof. Yes, the urgency is, uh, has intensified for sure. Mm-hmm.

[00:29:14] um, you know, For us, uh, as I say, um, we're a petrochemical company, heavy manufacturing, 140 sites around the world. So we have, we have to be focused on decarbonizing and it's, uh, our, our, our, our executives, our own, our family owners are demanding it, our customers are asking for it, our sustainability stakeholders are watching, and so it's, it's, uh, it's really, um, uh, a non-negotiable. Um, and, uh, how we communicate and talk about it is, of course, yes, something we have to be mindful of. Um, but certainly if you look at the history of sustainability reporting and disclosure for Indorama, it's a completely upward trajectory. Ever increasing, uh, robust data, uh, recognized by, you know, various groups like, um, uh, various, uh, chemical publications, the Dow Jones Sustainability Index, EcoVadis, and so, um, for the rigor, uh, of our, of our sustainability disclosure. Doesn't mean we're gonna rest on our laurels and we're gonna be complacent, we have many, many initiatives around ramping up our data, uh, provision and our reporting mechanisms, but traditionally we've, it's been an area of strength. 

[00:30:28] Gerrit: I, I really love this, uh, Starbucks example. And it also highlights, again, the importance of, uh, communication, right? Uh, communication is vitally important for leadership and it's vitally important in, in, in these areas. And you, you started out by saying, well, that's a real dilemma, and, I think it's time for me to, uh, put my most challenging question on the table. There's, there's a dilemma that has been bothering me now for at least a year. And I, you know, I, I'd surprised if you now come up with a quick answer, but I would like to at least hear your take on it. So, we live in a society, and especially when we look at businesses, everything is always about growth. Yeah. And the moment the the economy goes down, whole nations, if not the whole world will panic. And at the same time, I think the, the ultimate answer to climate change and sustainability is simply we have to consume less as a global society. And so one of the big questions for me is how can companies continue to grow and make profit, right, at the end of the day, they have to make profit otherwise how can they exist, uh, when basically the answer to it all is less consumption. And I, I wonder if you have any thoughts on that? 

[00:32:01] Anthony: This could definitely be, uh, you know, a question every five years for the next 50 or 75 years. I, I fear, uh, uh, Gerrit for sure. No, it's, uh, absolutely on point. You know, when I was, I was born in the late sixties and in, in grade school in Canada, I learned the mantra, reduce, reuse, recycle. Right, so that would've been sometime in the seventies, let's say. And that still holds today as simple as it is. And that sequence also holds. Right. Um, so there's definitely, um, uh, a longevity in the validity of that reduced, reuse, recycle. That said, there are many areas where absolutely, you know, over consumption, leading to waste, uh, is a, is a rampant problem. In some sectors though, and it happens to be sectors I've worked in, it's the reverse. So let me give you the case for example of rail. Rail is the most sustainable form of motorized transportation. And of course you guys are hailing from Europe where there is vast infrastructure, very, very efficient, uh, scheduling, uh, generally speaking. I see you shaking your head Gerrit. Um, but certainly more than say here in Bangkok or uh, even in many Canadian cities. And so a real manufacturer or a signaling company that grows, that is that they have a larger installed base in the world, that's a net environmental, benefit because it's actually giving passengers a safe, reliable, and affordable alternative to individual cars. Even all the hype around autonomous vehicles, which is a cool thing, and I've been following it. . Um, and, and even there, I say around electric vehicles, if you think of rail, mass transit and what it's meant to be, that growth has a net environmental benefit. Doesn't mean it doesn't have impacts because you, if it's intercity, you're clearing land, you might be disrupting ecosystems, you must be mindful of that. There's energy, there are materials associated with that, of course. Um, so they're all, there is an impact. But, uh, when you look at the, especially the long life cycle of rail systems, a hundred years typically for the, uh, rail infrastructure, up to 30 years for the cars, the, the vehicles. Um, it's not a, uh, it's not a ephemeral, uh, piece of infrastructure. Um, closer to home today would be something like recycled PET, for example. So, you know, I did a lot of work in, uh, water technology in Canada and in Latin America and, um, in places like Canada, of course in, in most parts of Canada you have potable water coming from the taps. So the need for say at least water in bottles is reduced, because everywhere you go you have potable water. I did some work in Mexico with the Canadian government on water infrastructure and while some plants in Mexico treat the water to a potable state, so they leave that plant as potable water, the pipes, the transmission pipes are so corroded that by the time they reach the home, reaches the homeowner, it is not potable anymore. So it, you know, and there are many complex reasons, uh, in different developing countries. I mean, it's also the case here in Thailand, right? We're not drinking the water from the tap as is without a filter. So, so the, I guess my point here is that the need for something like, uh, bottled water in recycled PET, it's gonna be around for a long time. Mm-hmm. , you think of how many developing countries and where recycled, even virgin PET, has a lower carbon footprint than it's equivalent in glass and aluminum. And this is based on independent life cycle assessments. Um, we can get into the details, but, um, it's been, um, empirically proven. When you add recycled PET, something like 10, 15, 20, 25% or more, it has a, uh, dramatically lower carbon footprint. So if we accept, if we accept that delivering something like potable water in plastic bottles is gonna be necessary for decades to come, particularly in developing countries, then we have to say, alright, something like recycled PET has a very significant social and environmental benefit to society. Because the, the infrastructure just doesn't exist and it's not going to exist for years to come for many complex reasons. Uh, we can get into it at another level. So I agree with you for sure, you know, fashion, food, uh, uh, construction, uh, technology. There are so many areas where, um, we have to be mindful of consumption and I stand by reduce, reuse, recycle. That said, there are certain areas where growth actually equals net environmental benefit. And the last thing I'll end with, cuz this is an emerging trend, it's nowhere near scale, but you know, a number of years ago I gave a TEDx talk called the Regeneration and that was focused on, um, sort of net positive environmental benefit. What can companies do to actually, not just reduce their damage on the environment, but actually restore, regenerate, replenish ecosystems. And it was, yeah, it, it, it's now coming to a bit more, uh, familiarity around regenerative agriculture and so on. But there is an emerging movement. There is even an, a venture capital fund focused exclusively on companies that actually have a net positive environmental benefit. So we're gonna see more and more of this, I believe. Um, it's still a niche area, but will continue to scale. So complex issue not going away, I think Gerrit for any time soon. Um, but we do see some, um, uh, positive signs and I think we need to identify, you know, keep in view, um, the, the, the, the, the solutions that actually hit many of the, you know, three pillars of, of sustainability: economic, social, and environmental benefit.

[00:37:56] Martin: Yeah. Anthony, you spoke before about that sustainability is really becoming mainstream of the corporate agenda. So can you share like what has been the main drivers of this development? 

[00:38:11] Anthony: Well, it's a good question. Martin, I think actually it comes, the answer comes in many different forms. Um, so for instance, there was something, uh, a framework created not too long ago called the Task Force for Climate Related Disclosure. And this was really targeted at institutional investors, that they can have a common language to understand how portfolio companies, companies that they invest in, um, are understanding and managing climate risk. So this is a big shift because it's getting to the heart of business, right, which is finance, shareholder value, and so on. Um, and this follows on, uh, uh, a kind of a step change from BlackRock, which is the largest asset manager in the world. Uh, Larry Fink is the CEO, and every year he writes two letters. One letter is to the, um, investors, that invest in his funds. And the other one is to the CEOs of the companies that he invests in on behalf of his investors. And it was 2018 or 2019 when he changed his tone and he said, climate risk is financial risk. And we are gonna be making investment decisions based on how companies are managing their climate change risk. So these things coming together were a step change in institutionalizing ESG. And uh, what's happening today is many of the, um, investment houses they used to go to different sources for their ESG data on, on portfolio companies. Now they're building their own ESG in-house capacity. And so for example, listed companies are having to respond now to many questionnaires and investors rather than a couple of say, sustainability focused, uh, uh, surveys that the in institutional investors used to go to. That's a whole set of, I think, sweeping change.

[00:40:02] Then you have other things like say, the Tesla effect around electric vehicles and the kind of cult that's also around Elon Musk. This has also, I think, built a lot of, um, uh, mindshare, uh, in the masses around electric mobility and, and, and solar energy and so on. Even people who weren't interested or aware before now that it's hard to avoid because Elon Musk is such a, a well-known character and, and Tesla of course we know has spurred on many of the traditional automakers to, um, really get into the electric vehicle game.

[00:40:35] Um, another thing I would say is maybe more on the social side, because sustainability is about environment, social, um, and financial. And that would be something like the Black Lives Matter movement or even the Me Too movement, which is really kind of bringing to the fore issues around diversity, equity, and inclusion. And that is also, um, uh, sometimes can come under sustainability, sometimes a, a sort of a division on its own, but also really driven a lot of awareness around gender equity, around racial, um, uh, inequality in different places. And many companies, uh, including ours, are really now looking at DEI as a serious driver. And, um, I think when you put all of those things together, they did not all happen in parallel, different times, different geographies. But all sort of converging on, um, uh, this, um, label of ESG or sustainability and has really helped to embed the, the risks, the rewards, um, and the considerations into the mindshare of business.

[00:41:40] Martin: Mm-hmm, those are three great perspectives and, and it really helps me to see the potential when we see sustainable as being good business. Where it, perhaps in the past it might have been a contradiction between, uh, sustainability and good business, so to say. So this is really, uh, great three perspectives that I take away from today.

[00:42:05] Gerrit: Yeah. And what, what I'm taking away is just reviewing this, this session. I think my, my energy level, my mood, my optimism changed throughout listening to you, Anthony. Initially when you spoke about that, uh, the trajectory indicates that America's, Europe, Asia are all missing their, um, what is it called, not climate targets, but the, the 1.5 degree target., I felt very pessimistic. But when I hear your story and your energy and your enthusiasm, I think we are able to, to turn things around. If we all use our influence.

[00:42:46] Well, I think it's time to wrap up and we usually do that by providing to our listeners some reflection questions. And Anthony, we give you some, some time to think about, uh, one or two questions. Martin, would, would you like to make a start? 

[00:43:03] Martin: Yeah, I'm, I'm thinking, uh, back to the beginning almost of our conversation today, and based on what Anthony said about leading this sustainability change is, is, is a, is a leading a complex change, and it requires a lot of authenticity and therefore it starts, this change starts, with each leader by him or herself. And with that perspective, my reflection question is like: How do I connect my personal values and my beliefs to, to the mission of sustainable change, right? How, how does this connection between my beliefs and this mission help me to be motivated? How does it give, how does it guides me? And, and how does me, how does it help me to stay authentic as a leader?

[00:43:50] Gerrit: That's extremely powerful. My question is, today less on self-reflection. And it is also a very big question, I would say, and that is: What can be new business models that look not only at financial performance, I'm thinking about models like, uh, the Gross National Happiness product instead of gross domestic product. Um, Tho Ha Vinh has written a wonderful book, A Culture of Happiness where he talks about, other parameters, uh, that go beyond, beyond just material and financial aspects. Aspects like psychological wellbeing, health, education, et cetera. And, um, of course this is nothing individuals can do. It comes back to influence. How can I use the collective intelligence of the people I work with? How can I drive this as a leader? And, then who can be my guiding coalition to drive this? Anthony, any reflection questions from your side? 

[00:45:00] Anthony: Yes. You know, first of all, I just wanna, um, comment. This is a really nice feature to end your podcast, guys. This is a really nice touch that you've come up with a reflection question. It's really, uh, a lovely, I think, gesture to invite people to think, um, on something that's linked to the themes of the discussion.

[00:45:17] So for me, I would like to, um, draw on our discussion earlier about the visible versus the meaningful. Today I think many people, regardless of their, their age or their um, uh, or their job, they want to participate in some way, they want to be part of the solution. And I think that's a wonderful thing. Uh, and I would just invite people to step back and give it some consideration. What are they doing that's visible and what could they be doing that is maybe more meaningful in terms of, uh, fighting climate change and, and, um, contributing to solutions? So case in point would be, you know, refusing a straw at a restaurant or bringing a shopping bag to the grocery store. Those are wonderful gestures, sort of daily habits, they are good, and, and, and they are, and they're worthy. Um, at the same time, is there something at a higher leverage level based on your network, based on your skills, based on your access, that you could do actually to contribute to solutions for climate change? That would be my reflection question.

[00:46:19] Gerrit: That's absolutely fantastic, I love this. Anthony, thank you so much for being on the show today. Really appreciate it, was a pleasure.

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