Home Page
cover of Incorporating Social Impact into Business Operations
Incorporating Social Impact into Business Operations

Incorporating Social Impact into Business Operations

Matt Hawksley

0 followers

00:00-57:09

Nothing to say, yet

Podcastspeechinsidesmall roomsilenceclicking

Audio hosting, extended storage and much more

AI Mastering

Transcription

The speaker introduces himself and the guests for a discussion on the importance of social impact in business operations. They discuss the need for implementing sustainable practices and engaging with the community. The guests, Cedric Papilia and O.T. Dritt, share their backgrounds and expertise in bridging the gap between engineering and business, as well as embedding ESG factors in corporate sustainability and finance. They address common misconceptions, such as the belief that profitability and sustainability are mutually exclusive. They highlight the intersection between sustainability and profitability and the increasing popularity of ESG investments in Canada. Hello, everybody. Good afternoon. I am Matt Hawksley. I'm with the Center for Entrepreneurship, Innovation, and Social Impact at the Smith School of Business at Queen's University. Very, very excited today to have some special guests in our Innovation in Motion series. And really, what we're going to be talking about today is something very, very important. As we all know, there's an increasingly good role that social impact is playing with a lot of the different challenges that we face in the world today, whether that's through sustainable practices or engagement with the community, ethical governance, many different aspects. But impact is so critical, and it needs to be implemented into the core of our business operations. It's not something that we can just continue to talk about, but something that's a necessity for meaningful change. So today, we're going to talk about some of those strategies, some innovative approaches, and then also things that we can take away to make actionable steps forward. Before we jump into some of this great dialogue, I'd like to just welcome our two guests here today, Cedric Papilia, who is the Strategic Partnerships Coordinator at EnviroCenter, also the Energy Service Manager at Sustainable Kingston. And he's got a long list of other titles as well, but we're excited to have you, Cedric. Thanks so much. Thank you. Happy to be here. Great. O.T. Dritt, also the Associate Vice President, Americas, at ISS Corporate Solutions and focused on ESG solutions and sustainable finance. O.T., great to see you. Pleasure to be here, Matt, and looking forward to our conversation. Thanks so much. All right. So as we kind of get started, I think for the audience here, I'd love to let you guys have a little brief time to talk through yourselves and a little bit about your background, why you are those experts that we brought in here today to talk about how we can make these things happen. So, Cedric, why don't we start with you? Fantastic. Thank you. My background really started when I moved to Kingston in 2013, specifically to go to St. Lawrence College in the Energy Systems Engineering Technology program, where I basically learned all the kind of engineering, the technology aspects of it. And to me, when I kind of first signed up to that program, it was very kind of a selfish kind of approach where I was like, well, you know, I hate paying all these utility bills. Maybe I can learn about solar, put solar panels on my house and I don't have to pay utility bills. That was kind of my initial kind of very naive thought going into that program. And then what I really learned about this program and, you know, we hear about climate change and sustainability all the time and we always think, you know, some new breakthroughs, some engineers are going to come up with some new technological breakthrough. It's going to solve everything. But one thing that I really took away from that experience is that the technology is here. It exists. We have it. But it's just not being implemented at scale. And that really kind of caused me to kind of take a step back and really ask the question, why? Well, why are they not being implemented at scale? And the answer to that is very complex. And maybe we'll dive into that a little bit more during this webinar. But I think the the idea that really stuck with me is I felt there was a disconnect between kind of the engineering world and the business world. And I kind of set myself on a mission to essentially be that bridge and show the business community that, hey, the technology exists. Let's get to implementing it and figuring out kind of financial mechanisms on how to do that. And so that's really where my career has kind of ended up is really in in the what I call follow the money. Right. Without the funding to implement these solutions, nothing really moves forward. And we have to come up with kind of creative mechanisms to get these energy efficiency projects, these large renewable energy projects funded. And that's really what I've been focused on on in the last few years. Fantastic. Thanks so much, Cedric. OT, welcome. I know that we just heard from Cedric and being that bridge between the financial side as well and engineering. But love to hear a little bit of your story as well. Yeah, for sure. Thank you. And certainly impressive there, Cedric. Off Madrid. Currently, I am at ISS Corporate. I wear multiple hats here. One is geared toward corporate sustainability, which is basically working with, for the most part, companies that are publicly listed in terms of embedding ESG factors operationally, the strategy level, and basically strategize around these material factors and help them basically meet the expectations of the regulatory landscape and investors, the shareholders and whoever else is deemed as a material stakeholder. The other hat that I wear is sustainable finance, which is geared toward ESG-labeled financial transactions, if you want to put it that way, which is basically finance and some of these projects that Cedric just mentioned right now. It's not always related to renewable energy, but we have many other themes, biodiversity, circularity, and other topics that are related to the social topics such as DEI and so on and so forth. So I've been with ISS Corporate for about three years. And prior to joining this organization, I was on the investment management side of things with an ESG boutique asset manager called NEI Investments. I spent some time there on the investment management side of things, basically speaking with Canadian investment advisors, educating them. Back then, ESG was very early. It's been around for a long time, but I suppose the Canadian landscape was getting acquainted with ESG in terms of it being embedded at the level of investment vehicle, mutual funds, ETFs, and also advisors having to have that conversation with their clients and investors. So it was pretty interesting times for sure. But all of a sudden, boom, it bloomed. So more than happy to get into that later on as well. But to your point, I also had the privilege to go to Queen's University for the MBA program and got to also get the certificate from the social impact center that you oversee. It was a great experience. And again, very happy to be here and share basically the knowledge and exchange thoughts and see how we can advance this very important agenda within Canada. Fantastic. Well, I appreciate both of you being here. And as you mentioned, it's an incredibly important initiative across Canada and across the globe, really. You both talked a little bit already about what kind of inspired you to get into this part of it. And so I won't go there yet. But really, right now, there's a lot of misconceptions about sustainability, about social impact, pretty much overall. What have you encountered with that? What are some of these common misconceptions that have maybe formed over the course of the time? Cedric, I don't know if you wanted to start. So I think from my perspective, being in the nonprofit space, having run Red Squirrel Conservation Services and having merged that with Sustainable Kingston, specifically so we could deliver the Better Homes Kingston energy efficiency financing program. What that really taught me, you know, and this is a bit misconception about nonprofits, is we do need to generate revenue, right? Nonprofits are not a charity. They're not just there to give out funds. We need to generate revenue so we can increase our impact. And I think that separation of having to choose whether you're driving revenue or you're creating impact is a big misconception. The best solutions are the ones that actually do both, right? You can be profitable and, you know, it can be economically viable and have a social impact. So that's a big misconception. People often think it's kind of one or the other, but we really want to build solutions that can last and be sustainable financially that also have a positive impact with regards to sustainability. So I think that's one of the big misconceptions of doing both at the same time is really important. Right. Yeah, no, I think that with the triple bottom line and everything, people hear that, but right, they're not necessarily living that and experiencing it. Some of those misconceptions about that part of it are never fully overcome. And Oti, what have you found as well, you know, other than that? Yeah. Yeah. Well, there is no shortage of misconceptions, if you will. A common one is, you know, there is profitability that comes to mind, especially from the corporate issue or the company's angle that they think that front-ending capital, you know, to address sustainability at many levels of the organization is going to shrink their profit margins, which is absolutely a big misconception, if you will. There is plenty of research and data that shows that sustainability intersects with profitability, you know, and we can get into some of the granular data on that. But you know, we have, for example, the Responsible Investment Association within Canada, which is the body that oversees the ESG-labeled investments and assets under that specific asset class. And we have pretty much within the Canadian assets under investments, 50% total assets are deemed as ESG investments or labeled as ESG or responsible investment, really whatever you want to call it. And about 80% of the advisors that allocate capital toward the specific asset class, they say that they do it because it helps them mitigate risk, identify what's financial material from a risk perspective, address that basically, you know, within their investment universe. You know, they have companies and they look at companies that are addressing specific environmental topics. And that itself is deemed as a financial material risk. And they can, again, initiate a conversation with the company, hey, what are you doing to address those risks, or basically look for other companies that are addressing that specific risk in a manner that meets their expectation. And within also that 80% pool of investors, it's not only the fact that ESG is helping them identify what's financially material or these risks, but also to help them boost the returns or identify companies that are going to help them at the portfolio level generate additional returns. So for a company, if it's addressing a certain risk, for example, water, biodiversity, or a company that's not emitting as many tons of carbon dioxide as similar company within that industry. So therefore, that company is going to be more relevant and resonate in the eyes of its end users, clients. And because of that, you know, it has pretty good, pretty good investability perspective from the point of view of the investor. There is also, you know, sustainability is nice to have, it's not a must have. Again, big misconception as, you know, again, just speaking at a very high level. This is not only Canadian focus, but it's a global trend that we're heading toward a low carbon economy. And as a business, if you're not able to find or establish yourself within that business ecosystem, well, the question is, are you going to be relevant, you know, 15-20 years from now. So it's not nice to have, it is absolutely a must have that needs to be embedded within the core strategy. And there are other things such as, you know, do we need to do things at the enterprise level? Do we also need to loop in our suppliers, vendors, and make sure that they adhere to the same environmental social standards that we do at the enterprise level? As I'm sure, you know, you probably saw, we keep seeing every now and then in the news that a certain supplier in XYZ country, a few hundred people died. I think textile industry comes to mind. In Bangladesh, without naming really any companies, I think there was a very unfortunate incident there. So again, these are all, I'm sure I'm leaving out a few other very credible misconceptions, but these are just a future name. Absolutely. No, thanks for that detailed explanation. I think when it comes down to, like you said, profitability, all these numerous aspects with risk, it can almost set up a wall or make it detrimental and harder to actually implement a lot of these things. And so Cedric, you know, what are maybe first steps a company can take, you know, when looking to do that? Because, you know, as you described, there's a lot of great things to get to that end goal. But there's probably a lot of steps that need to be taken in order to get there, you know, in the perfect world. So what do you think, Cedric, on some first steps? Yeah, so there's many, I would say first is really understanding the need, or we call this a needs assessment, right? I see too many, especially in the post-secondary kind of environment, a lot of people jumping to solutions without really understanding the need. So I always really focus on the need. That's something that I do through a lot of my businesses, we do assessments, energy audits, you know, we'll go through a building, identify some of the key areas to address, and really kind of put together a multi-year phased implementation plan. Also knowing kind of that ties to this phased approach, you know, not trying to, you know, bite the elephant or eat the elephant in one bite, right? Really take it step by step and look at incremental change, and make sure that you're capturing the right metrics in terms of, again, I said it earlier today, but what gets measured gets managed, one of my favorite phrases. You know, we really want to, you know, do our needs assessment, make sure we're collecting a good what we call baseline data so we can compare. The baseline data is really important, people try to jump to the solution immediately, which in some cases is a good approach. But I like to take a little bit more of a methodical approach to make sure that we're really understanding the need of our clients, of the indigenous communities we're working with, and then really kind of take our time to, you know, plan it out, look at the metrics we want to capture, make sure that we're capturing our baseline metrics. So for example, we're doing a lot of work in northern Canada for indoor air quality. So we need to set up measuring devices in these homes to measure the indoor air quality, as well as looking at utility bills and things like that, before we actually implement our intervention. Then actually, once we do implement our intervention, then we have something to compare our impact with. And that in turn allows us to get more funding and scale all of our initiatives. So that initial part of establishing our baseline is really, really important when you're looking at social impact. And a big part of that is also what are the influencing factors, right? I personally feel that a lot of issues in the world are based on a simple issue that people come to conclusions without having all the information about a given problem. And then before we come, you know, jump to conclusions, maybe implement a solution that's not really addressing all the influencing factors. So really having a deep understanding of the influencing factors, establishing a really deep baseline, and really starting your data collection in terms of metrics is kind of where I would start. Mm hmm. Fantastic. And Oti, what about you? Any other thoughts as well? And maybe even some examples of how that's worked? Yeah, for sure. I think Cedric touched on a lot of the things that need to be considered for companies that are looking to get started. And fortunately, or unfortunately, for these companies, you know, we have been seeing investors that have been saying, look, sustainability is great for profitability. And you know, you will generate a lot of traction, you know, with investors and potentially get a lot of interest. But now we're seeing conversions from the regulatory landscape, a lot of regulators in Canada, the CSA, the SEC, the EU, there are actually saying what the investors have been saying is going to be buying in for a lot of these corporate issues. And again, you know, yes, incremental steps and getting started, you know, doesn't have to be perfect. Perfection is the enemy of success, as they say. But, you know, we need to have, for example, internal buy-in from across the organization. Directors of the board, you know, that's something that they need to seriously look at, because there is actually data that shows that the directors, board directors, don't get as much support as they'd like to see when their profile does not have specific climate expertise, let's say, or sustainability. And again, this is definitely something that they need to be looking at, as there is a lot of accountability from the shareholders and investors. And of course, you know, it needs to trickle down to a senior management, mid-management, employees, obviously, they need to execute that strategy. There is also the identification of material issues that Cedric touched on. You know, there is an abundance of resources and tools, maybe you could do a materiality assessment to really identify what is relevant to your industry, to your business model, and, you know, establish that baseline. And there is setting goals and KPIs. You want to reduce whether it's your carbon footprint that you need to be addressing immediately to reduce your emissions, or PEI, diversity, equity, inclusion, and you want to start also tracking those metrics. At the board level, you want to see diversification, ethnic and gender cut across the organization. And, you know, more than happy to get into some of these frameworks that companies can look at, and then standards to help them identify these topics and how they can track and identify the relevant data. But these are just some of the things that companies need to consider in their sustainability journey. Yeah, fantastic. And you both touched on some of the key things of metrics. You know, we talked about how to measure. How to measure is one thing. What are you seeing in terms of what are those key metrics that, I'm not going to say universal, but some of these key metrics that an organization should really keep a focus on? Each industry may be different, each outcome or goal might be different. But what are some of those ones that, you know, we could let's start from? Cedric, if you wanted to? Yeah, so I'll start more on the kind of energy and carbon landscape, which is the one I'm more involved with. Basically, the official kind of structure to that is we have scopes of emissions. So scope one, scope two, and scope three. Scope one being basically your direct emissions, right? That's the fuel you use in your home, in your building. That's the, you know, gasoline you put in your vehicle. Those are the direct emissions. Two are kind of indirect, which is associated. So let's say like Queens University, all the staff driving to the site, that would be scope two. So somewhat indirect. And scope three is what they call a little bit of a rabbit hole, which is the embedded carbon, right? How much carbon was used to make, you know, this computer or this table, or all the materials that we use. This is, like I said, a bit of a rabbit hole to go down. But those are kind of the three levels. So those are very easily measurable and tracked to be tracked over time. Of course, there's a lot of influence and factors, especially when we talk about electricity, we talk about the grid, right, the composition of what energy generating sources are on our local grid. And this, of course, is very different in somewhere like Ontario, even comparing it to somewhere like Quebec, and then even more comparing it to, you know, somewhere like Iqaluit, where I've been, where they, you know, everything is diesel, all the electricity is made from diesel, all the heating is using diesel. So the intensities, the carbon intensities of these energy sources can differ quite a bit. And the solutions for those areas have to match. So again, this idea of a kind of a cookie cutter solution, or this one solution that might work in Kingston doesn't necessarily work up in Nunavut. So just being very aware of those and making sure that we're looking at those metrics that influence the solutions that we're looking at implementing. So I would really start there on a very technical side. The other one that I see is a major challenge to implementing this and is a key metric is the capacity of the team. So I work with a lot of small organizations, and they're trying to do, you know, 100 amazing things. And their bottleneck is capacity. So one thing that we try to build into any program that we do is make sure that we have capacity building. And capacity building is also something that can be measured and have metrics around it, right? How many people in our community or in our organization have the skills to implement these projects? Right? What are we doing for our training programs to make these projects sustainable over time? Yeah, it's great. We can plop down a solar farm and call it a day. But if we don't have local capacity to maintain and repair these systems as they break, then the financial and sustainable, you know, legacy of that program is at risk. So really building in those measures is really important. So obviously, there's the really, you know, data driven stuff like utility bills and fuel and electricity consumption, but the capacity building one is I think, one that often people overlook and having key metrics on what is your actual capacity to deliver on your project. Right. Well, thanks. I think that's set up well for OT, because I know your expertise as well. You've done a lot with ESG planning, kind of trying to find the metrics for some of those things like capacity that's maybe not as easy, you know, to identify and to measure. So, yeah, I hear from you as well, some of the metrics that you've maybe leveraged as well into some of the organizations you've worked with, and some of your methodologies on that too. Yeah, that's an excellent question. I would agree with a lot of things that Cedric mentioned there. But there is certainly no shortage of, again, you know, data standards, frameworks that companies that are actually tiered by industry and sectors that companies can utilize to identify materiality. Then once you have that, you can set a few KPIs on which you want to progress and so on and so forth. But the biggest question at the end of the day is bandwidth and capacity. You know, whether it's a good thing or not a good thing, but companies have, especially publicly listed companies of a certain size and a certain market cap, you know, for the sake of transparency. They need to start tracking and addressing these, especially now that the regulators, for example, within Canada, if you're following the news, there is what's called the Canadian Sustainability Standards Board, which is basically drawing a lot of influence from what was inaugurated last June or July 2023 by the International Sustainability Standards Board, ISSP. And this standard has basically two main components or pillars. There is the S1, which is general disclosures, S2, which is climate-related. And basically this framework is supposed to help because prior to this, we had a lot of siloed frameworks and standards. You have SASB for financial materiality, which is basically the Sustainability Accounting Standards Board. You had GRI, Global Reporting Initiative, basically, you know, that shifts away from the financial materiality to sort of look at, you know, impact materiality, both the impact that companies are generating socially and environmentally. You have, to Cedric's points, the Task Force on Climate-Related Financial Disclosures, which is climate-focused, and both on the disclosure side of things, you know, what your board, what your governance look like, what you're doing strategy-wise, and also at the metrics level and to what extent you're able to reduce your greenhouse gas emissions. And again, to Cedric's points, there are different tiers and different scopes. There's Scope 1, Scope 2, Scope 3. At least companies need to go after Scope 1 and 2 because it's attainable. You know, there are low-hanging fruits, if you will, and things that are a bit more capital-intensive, if you will, you know, green capex and opex. But at least what you have control of to a certain extent, such as your own internal combustions, your fleet of vehicles, that's Scope 1. You know, maybe you can start contemplating some goals there to reduce the greenhouse gas emission at that level. There's also Scope 2, which is the electricity that you're buying. You know, maybe you can start contemplating PTAs, purchase power agreements to source renewable energy, especially now that, you know, there's even – this leads us to another question. It's cheaper. You know, again, you know, there are nuances to this. But renewable energy costs less than fossil fuels. And over the long term, of course, we can discuss that. But yeah, these are just some of the standards, some of the frameworks that companies can sort of look at and get started immediately. This is my recommendation because these things are becoming binding and the regulators are not going to wait. And also the investors definitely are going to engage companies that are outperforming on this front. Yeah. No, fantastic. And you guys have simplified it quite well. Here are the different scopes. Here's how to move it forward. And obviously the why is quite compelling, as we've heard already. But why aren't businesses able to make those things happen? You know, what are some of those biggest challenges that these businesses are facing now to do just what you guys talked about? Cedric, yeah, I'll turn it to you. Yeah. So one of the challenges I always like to say is time. These things take time. Convincing people takes time. Getting approval takes time. All of these things kind of add up. And a lot of people, they just assume that because we've done it this way, we know how long it will take and we know we can implement it in this, say, status quo direction because we know exactly how much time it's going to take, we know how much money it's going to take. When you start getting into some of the more, quote unquote, unknown areas in terms of doing something different than the status quo, that's when people generally will take the easy road or the known path instead of the unknown path. And that's something as a consultant where I provide support to organizations on being more sustainable and implementing their projects is to start looking at that differently and looking at it kind of incrementally over time. And as much as we love to have this huge planned approach and actually from a funding perspective, that is also really important. And what I mean by that is a lot of organizations that I speak to, again, mainly small Indigenous communities, one of the assumptions that are made is that a smaller project is easier to fund. And therefore, we'll do like, let's just do a little building here and then apply for funding, get some grants and get some funding and do that project. And the next year, we're going to start again, we're going to come up with another little project and try to get that funded. So I think that's where a lot of people struggle. They're kind of in this kind of reoccurring cycle of doing little bits at a time. And my advice to them is very simply, it's actually do a big project, do a 10 year project. Especially I work a lot in how to fund these projects and talking to VCs, venture capital, all these different entities, and they basically will not look at a project if it's 10 million or less, it's not even worth their time. So what I really encourage organizations to do is, you know, think of this kind of large, big project over multiple years. And then of course, you can phase it and kind of get the ball rolling with small implementation over time. But from a funding perspective, think big, think big impact, think long term. And then kind of put that into motion through a phased approach. I think that kind of alleviates that challenge of that time of where we're trying to build these projects. It's too long to build, you know, a 10 year housing program. But, you know, let's start somewhere, but have that bigger vision at the same time. So there's an interesting balance there that I think is a big challenge. And this, again, goes back to that capacity piece. And if you have more capacity, then you can do more stuff in less time. So anyway, it all kind of intertwines itself. So yeah, that would be the challenge there. Right. No, no. Obviously, big picture thinking, and I think that that's the right way to do it. And Noti, what have you seen in some of the projects you've been on, and as well, some of the customers? Yeah, I would say cost is definitely, well, you know, there is things that need to be addressed immediately. There's that short term strategy. Like I said, CSA is not going to wait around on corporate issues to enhance their disclosures. So companies need to at least, like we said earlier, identify what's material, maybe do a materiality assessment, establish that baseline, disclose against these standards that are about to become binding. The Canadian Sustainability Standards Board, for those companies that have been iterating on their sustainability strategy for a while, it might not be as difficult. But for somebody who's starting from basically nothing, again, you need to get started as soon as possible. And so that's one disclosure piece and the transparency component of it. And of course, there is the long term aspect of things such as cost. You know, the cost that comes associated with your sustainability strategy. Even the disclosure component of it has a cost because companies need to upscale. You need to hire internally sustainability analysts that are going to look at what's relevant, start embedding these factors at the strategy level. You know, look at these standards and frameworks that we talked about to report against what's material, help you build your disclosures that touch on environmental social aspects of things, human rights policies, human capital management, environmental risks and opportunities. And like we said, both at the enterprise level and the value chain. And there is the capital aspect of things where you're, you know, if you're a utility company, then you need to start thinking of, okay, well, we need to phase out the coal plants, the fossil fuel generation, and we need to build renewable capacity per se. And that's going to cost a lot of money. But again, markets are willing, market participants in terms of the investors. If you have a credible story, if you did a lot of legwork to get to basically identify what's material and state some goals. We're looking to reduce our emission, greenhouse gas emissions by 30% come 2030. And being at zero or carbon negative by 2050, here's what we need to do. Now we're coming to the market to seek some green financing, issuing a bond or whatever the case may be. And that's going to come across as credible, you know, without greenwashing to it. And you will certainly see some success there, whether if we're talking about a bond or a subscription, or whatever the case may be. So yeah, but again, it probably would cost a lot less to address these things right now, as opposed to trying to sort of address whatever damage has been caused 20 years from now. And, you know, that's definitely a lot more challenging. There is a complexity of the implementation, like we said, you know, it also has some costs associated to it, you need to hire internally. If you cannot afford that, maybe you need to hire externally consultants. And of course, you know, there are a lot of entities that do that. And there's a short termism that a lot of companies, unfortunately, sort of don't want to walk away from, you know, they're just looking at things quarterly, yearly, as opposed to, hey, 20 years from now, what's going to be, how are we going to look? Are we able to resonate with our end users, especially now that we know a lot of customers try to, you know, identify or align their values with the dollar spent. So, you know, there are all these components that go into it. And these are certainly some of the challenges that companies are better off addressing now, as opposed to later on. Fantastic. And getting the buy-in is huge within the organization. So it's kind of like one of those different things that's really going to be that catalyst to drive it forward. So what strategies can some of these organizations use? Because some organizations, let's just be honest, are a little bit less sustainable than others based on their industry. So how can they kind of harness and engage their employees and their customers, the stakeholders, even the community, to then also be a part of driving these initiatives? And I know, Cedric, you've done a good amount of this right there and kind of alluded to some of that, too. So, yeah, why don't you kick it off for that part, too? Yeah, I think it comes down to a communication piece, in my mind. From a very personal level, like if I tell you, hey, you need to use less energy, you're going to feel offended. You're going to feel like I'm trying to take away from your quality of life. And you're going to feel, you know, some resistance, some pushback to that comment, a critical comment. However, if we kind of rephrase that and say, you know, I can actually help you waste less energy, that kind of difference, it's the same outcome, is really important to me. And especially when we work in like heavy industry, working with manufacturing and things like that, this concept of what I call waste heat or heat recovery or a lot of energy is actually just literally wasted. We burn it and then we waste it. We're doing some work with diesel power plants in the far north, looking at how to extract heat from those power plants and redistribute it into the system, therefore massively reducing the amount of diesel that's consumed. And again, this integration, right, I do a lot of greenhouses in the far north. And someone's asking, right, if you could build a $10 million greenhouse, how would you build it? I was like, well, no, I wouldn't just build a greenhouse, I'd build a school with a greenhouse. And the synergy between those two is really important. So when I really think about how this can be implemented and how that approach, it's a change of mindset, right, not thinking that being sustainable will be less or, you know, it's finding ways and assessing the waste that we produce in our companies or in our manufacturing processes or even in the oil and gas industry. All of these things have a lot of waste associated with them. So identifying those areas of waste and then showing these, this is a cost that you are losing. And if you can leverage the heat waste, the literal material waste from your processes and make that into a value, that's extremely profitable. It's good for business. And it's, again, taking this waste stream that was not addressed in the past. So that is kind of a methodology and a communication approach that I always employ, is not to use less, is to waste less. And I think there's a really important difference. And once people kind of connect with that thought process, the whole thing becomes a lot easier. Where are we wasting energy? Oh, here, here, here. And then we can address those. Right. Key is mindset, right? Absolutely. Now you phrase it, a prompt in our AI type of methodology there. Oti, what are your thoughts on that as well? Yeah, like we said, it is crucial to get internal buy-in from the internal stakeholders. But again, companies need to also realize that they need to adapt and adopt, because especially if they're looking to remain in today's or tomorrow's economy. Like we said, in terms of the governance component of it, whether we're talking about the board of director, senior management, come the AGM or the annual meeting, some of these directors will either get removed or they will get adequate support level to remain within their positions. And there is a lot of data that actually shows a direct correlation between, for example, if you take the TCFT, which is one of the frameworks that a lot of companies use to address climate disclosures. And one of the pillars has the governance strategy, risk management, and metrics pillars. The governance pillar actually, it shows direct correlation between the profile of the director that sits at the board and their expertise vis-a-vis climate and the support level that that person gets in the AGM. So again, buy-in is necessary. It's a must for corporate issuers. And this is, of course, in addition to that, I believe that Canada, I think two years ago, they revised their NDC, which stands for National Determined Contributions, which is basically their ability to map our economy to United Nations Sustainable Development. And at the core of that, there is greenhouse gas emissions. So we revised our goals here in Canada to actually become more ambitious and by 2040, reduce our greenhouse gas emissions by 45%, if I'm not mistaken, 40% or 45%, and the baseline is 2005. So there is that context for you as a manager, as a leader within corporate Canada. There are the various laws on the source component of things, which we shouldn't forget. There is the Modern Slavery Act, Bill S-211, if I remember correctly. There is also the methane standard that Canada introduced recently. Also, Canada is looking for various ways to cap greenhouse gas emissions within the energy industry. So there is that context, there is a regulatory context, which enforces the disclosure of all these things. And of course, there is the Canadian taxonomy, which I believe Queen's University is participating, is one of the leading participants on that front. So basically, a taxonomy is a classification system that identifies what activities within our economy are deemed as green. And with that comes a lot of incentives, a lot of tax incentives, for example, green tech and hydrogen, carbon capture and sequestration, all these things that the government is doing. And so with this in mind, companies cannot afford to, you know, buy-in becomes a must-have at the organizational level, because like we said, there is investor components of things. Investors are embedding ESG factors within their investment processes to mitigate risk and identify companies that can help them boost returns at the portfolio level. And so if you're not really addressing these environmental and social issues to distinguish yourself as a leader within your industry, then chances are you're not really doing a good job or living up to your fiduciary commitment. You know, in terms of meeting the expectations of your shareholders. So these are just a few things that companies need to seriously consider. Great insights and fantastic content from both of you guys. I'm really appreciative. And really kind of taking away some things, too, with thinking big, obviously taking small incremental steps, but having that grand vision, aligning, you know, your organization, the community behind that common goal, but having a framework and measurements to be able to continue to track and be able to display the progress, whether that's for, you know, your internal means or even like what you're doing now. What he was saying, too, a lot of other investors and the shareholders that might be involved. Who has kind of just laid that out there? Have you seen some organizations or companies that have done that well? Maybe an example that, you know, maybe was kind of that the leader in the charge and laid out a pretty good kind of example of how to do it. So we'll do that and then kind of talk about some of our wrap up questions there. So, Cedric, we'll start with you here. Yeah, I think a good example, well, I can think of a few. I'll just stick to Kingston here. So I think the Better Homes Kingston program, which I will just explain quickly, is basically a mechanism that is funded through the Federation of Canadian Municipalities. The City of Kingston received $15.4 million and that funding is then distributed to homeowners and landlords throughout Kingston in order to improve the energy efficiency of their homes through grants and zero interest loans. So these mechanisms and when we designed this program, we took a look at all the other programs. So I think one key takeaway here is, you know, you're not alone. There's a lot of people working on these big problems and, you know, sometimes you don't have to reinvent the wheel. You don't have to work in your little silo, go out there, go to conferences, try to join as many working groups on your, you know, specific topics and really implement those things. So that's something that we've done and maybe it's a little bit different in the private sector compared to the public sector. But again, I sit on this community of practice through the Federation of Canadian Municipalities and we have roughly 80 municipalities on those calls, you know, every few months. And there's constant sharing of not just knowledge but of documents, of RFPs, of all of these documents and we're really trying to say, oh, that was a nice feature that you guys did in BC. How can we implement that here in Ontario? So a lot of that kind of sharing of knowledge, I think, is really accelerating this world. And I think a big mistake a lot of people do, it's like, oh no, it's a bit of a pride thing. You know, they want to develop it on their own. We want to prove to ourselves that we can do it on our own, which again, there's some merit and some value in that. But sometimes taking that step back and looking at that bigger picture. So I think that group, the community of energy efficiency, community of practice for community energy financing, I think is a really good example of how, you know, all these different municipalities are kind of banding together, sharing best practices in order to really scale their impact. And I assume there's many of other, you know, similar examples in other industries. Definitely there's some in the renewable energy industries, definitely with utility companies, which is a whole other conversation. I do work a lot with utility companies and they have some big challenges ahead. And I think a way to address those challenges is very similar. It's banding together, reaching out to, you know, other organizations that are maybe a little bit further along that journey and kind of taking their lessons learned. And in my experience as someone who does a lot of stakeholder engagement and, you know, talking to a lot of these other organizations and kind of learning best practices, is everyone's been really open and willing to share. They've gone through it, right. I've talked to the Toronto energy loan program. They've been doing it the longest. They've been doing it for 10 years and we had some really interesting insights from what they've learned. And we've been able to take those insights and implement them here in Kingston. So I think that aspect of this is a huge problem. There's so many people working on it. And, you know, don't close yourself off in your little bubble. Go out there, talk to these other groups. And I think you'll be able to learn a lot and really improve on your program. Great. Yeah, we can always go further together than we can alone, right. So I think that that's a great lesson there. Yeah. Thanks, Cedric. OT, what about you? Yeah, I certainly there is no shortage of good case studies, companies in various industries from which a lot of Canadian companies can draw a lot of influence or use to benchmark against. There is one company or a few companies actually that come to mind. Not sure if the team here is familiar. There is a company by the name of Orsted, O-R-S-T-E-D, which is basically a Danish. And the reason I'm bringing this example up here is because it's very relevant to or it makes sense given our economy here in Canada that it's resource rich. So maybe I can bring it up in this context. It's a Danish renewable company right now. But the reason I'm saying it's a good case study is because it used to be a fossil fuel company that focused on natural gas exploration production back in the 70s and the 80s. And it made a complete shift toward renewables, precisely offshore wind, and completely divested from oil and gas production facilities as well as coal power plants. So it's a phenomenal story that I keep coming across in quite a few books or case studies that perhaps energy companies here in Canada can sort of draw some influence from. There is also another company that I think a lot of Canadians would be familiar with. There's Patagonia. It's a clothing retailer that has a very good story as well, given its environmental stewardship, what they do at the research and development level regarding products, such as putting a lot of emphasis on the circular economy and the circularity of their business model and recycled materials. And the company enjoys a significant amount of financial success. A lot of stickiness when it comes to their clients and customers, repeat customers, because of that business model like we said earlier. There is that very important component that companies need to think of, which is customers are looking to align their values with how they spend their money. So these are two examples that I can think of. In terms of just generally speaking, there are also some very good success stories from European banks, without naming any names, that don't really invest or allocate any capital to fossil fuels for obvious reasons. I believe there was some data by the International Energy Agency in one of their last reports that shows the ratio of financing, the ratio of fossil fuels and renewables. I think it's $1 to 1.7. So for every dollar that goes to fossil fuel, 1.7 or $1.70 goes to renewables. And it needs to be at least 3% the amount of the money allocated to fossil fuels or conventional energy for us to start moving the needle in a substantial way and decarbonizing across the globe. And of course, again, as far as financial institutions go, there is the decarbonization of your lending book of business, which enforces you or forces you to start contemplating KPIs on greenhouse gas reduction for agriculture or retail, whatever the case may be. There is a real estate side of things addressing topics such as energy efficiency, green buildings, food products, addressing topics such as biodiversity, water, carbon sinks. So there are a lot of good stories, but we need to have a lot more of these good stories in order for us to start shifting toward the right direction. Right, absolutely. More and more success stories to continue the charge. All right, guys. Well, I'm going to give you each the final word here. So as I mentioned before, we're going to be posting this in our portal for all of our certificate students so that they can watch. And I wanted to have you each be able to talk a little on just what you would leave with the audience. What are some advice or what's something, an important takeaway that you would want them to have about how to leverage sustainability and impact into the operational world? So, Cedric? Yeah, I would probably say just start. Just do it. That's probably number one. You're going to figure things out. Again, there's a balance here between planning and starting. We don't want to get into what we call an industry study coma. I've seen this with many clients of mine where they're just doing study after study trying to figure out what they want to do and nothing moves forward. But really starting, right? Asking the questions, going out there in the community, talking to various groups. That's really a good starting point to kind of really understand the needs within your industry, within your sector. Really just start going out there, start the conversations, start having these discussions, maybe start looking at data, start collecting data, start your baselines. And then think of a bigger project, but really think about it in small steps. And really start those steps as soon as you can. That's probably my big takeaway for all of you. And one other thing I just want to add, especially as students, right? You're graduating. You're trying to see if I'm going to get a job or start my own business. And that's really a tough decision. And what I usually tell people, a lot of students, I'm also a teacher at St. Lawrence College, is it's not actually one or the other. You can do both. And that's how I started my business. I actually worked for school boards right out of school just to get some cash flow out of school and to gain some experience. But at the same time, I always had my consulting business on the side. And the way I describe it, it's more like a dimmer switch. It's not like an on-off switch, right? You have your full-time job with your employer where you're gaining experience and becoming financially sustainable on a personal level. But then you're also kind of slowly building your business. And you hear this in business all the time. It takes five, five years plus to become profitable. And that very much was the case in my experience. And having that kind of concept of a dimmer switch where I'm still having my job and I'm doing my side job. And at one point, they will balance out. And I end up reducing my full-time job to a part-time job because now my business is picking up. And then that can, you know, to a certain point where, OK, I have so much business through my personal business that I can't continue even a part-time job and then transition fully. So I know a lot of students are struggling with that decision on which direction to go, but just think it's not one or the other. It could be one and the other. Great. Thanks. Yeah, similar to what Cedric just mentioned right now, start and start immediately. You know, it's sustainability. It doesn't need to be siloed away from your corporate strategy. It needs to be at the core because I believe companies are, again, we see them planning quarterly, yearly. But certainly, it needs to be long-term. There is an abundance of data. There is an abundance of frameworks and standards that companies can utilize and to identify these topics that they need to start addressing, collecting metrics and data on to disclose and report. And don't drag your feet. Start immediately. The budget does not have to be, you know, a very large one, but you can incremental steps. But the key message is, yes, start immediately. Well, I just want to thank you both. Fantastic information, insights, feedback. I personally learned a lot, and I know the audience will as well. And for everyone, as you've just heard, you know, get started. Don't wait anymore. No procrastination when it comes to implementing it. Sustainability, social impact into your organizations, but then also even driving positive change in your life. Hope you all enjoyed. Thank you so much for coming. And Cedric, OT, I just want to thank you again for your time with us here today. Pleasure. Happy to be here. Yeah. Talk to you soon. Take care. Thanks so much, everybody. Bye.

Listen Next

Other Creators