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The regenerative business

Welcome to Face the Facts – the new current affairs podcast from DNV Talks Energy, where the world’s leading energy experts share their insights on the most important global news stories about the energy transition.

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The regenerative business

Corporate action on climate change is steadily gathering pace, with global retailer PUMA recently committing to a 35 per cent reduction in its carbon emissions by 2030.

With all eyes on the climate crisis however, is this enough? What do businesses need to do to futureproof both their organization and the planet for the years to come?

In this episode, Juliet Davenport, Founder and CEO of Good Energy, looks at what it means to be a regenerative business, and what companies need to do to not only operate sustainably themselves, but to give back and support others in the fight against climate change.

In recent news, chief executives from the non-profit association Business Roundtable – which includes senior leadership from the likes of JPMorgan, Amazon and Apple – have pledged to look beyond shareholder value and redefine the role of business in society, including a need to protect the environment.

With this renewed sense of urgency, what should the next step be for companies? It’s time to face the facts.

Read the transcription of this episode here

Transcript:

NARRATOR 1 Welcome to the DNV Talks Energy podcast series. Electrification, rise of renewables and new technologies - supported by more data and IT systems, are transforming the power system. Join us each week as we discuss these changes with guests from around the industry.

Transcript:

NARRATOR 2 Hello, you’re listening to ‘Face the Facts’, the new current affairs podcast from DNV Talks Energy, where the world’s leading energy experts share their insights on the most important global news stories about the energy transition.

In recent news, global brand PUMA committed to a 35 per cent reduction in its carbon emissions by 2030, while chief executives from the non-profit association Business Roundtable – which includes senior leadership from the likes of JPMorgan, Amazon and Apple – have pledged to look beyond shareholder value and redefine the role of business in society, including a need to protect the environment.

In this episode, Juliet Davenport, Founder and CEO of Good Energy, looks at what it means to be a regenerative business, and what companies need to do to not only operate sustainably themselves, but to give back and support wider society in the fight against climate change.

Transcript:

JULIET DAVENPORT I’m here today to talk about what it means to be a regenerative business. So, a while ago, there was a book written by a woman called Kate Raworth called Doughnut Economics and this considered that the earth is finite. Something we probably all know, but quite often ignore when it comes to thinking about growth and the concept of business and the economy.

And what she did is basically draw a circle, which talks about how do you deliver to the needs of society within the boundaries of the planet and, in classical economics, we always talked about how do you internalize the externalities, but this is a kind of another level, this is another level of kind of visualization and that actually what happens when you start to think about the fact the planet is finite and how do you run a business in that concept? And that was where she came up with the idea of something called a regenerative business.

So, the regenerative business is a concept that is the opposite of a exploitive business. Exploitive business is where you dig something up or you take something, you create a product, you flog it and that’s it. There’s no kind of circulatory to it. The idea of regenerative business is actually when you give back, when you create something essentially. I’ll always remember listening to a program on Radio 4 where there were three economists and there was a call in from a lovely lady who said what is the point of growth? And it was fascinating because we always consider, in any narrative, we always say growth is good, growth is good, growth is good. But what we don’t actually think is, well let’s explore that. Is all growth good? And should we consider what happens if you just continue to grow forever? What happens to us as a planet, as us as a society?

What it feels like today is that we are seeing a complete shift across business. Business is now seeing its job in society as more than just maximizing return to shareholders. Over the years there’s always been this debate is, there is within the Companies Act, there states that you should be looking to your shareholders. It does also talk about other stakeholders including customers and employees, but generally business has been seen to be giving back to the person who owns them and that’s been their main piece. Obviously if you run a company, you don’t take into account your customers, you’re probably not going to be a great company anyhow, so I think that stakeholder has always been slightly looked after, but this concept that going beyond that actually, businesses having a responsibility in the communities that they exist, is I think fairly new and although it’s been talked about a lot, I think we’re now beginning to see moves where corporate governance is including that.

There was a declaration by the US roundtable which starts to talk about some of the biggest companies in the world actually how they change their behavior as organizations to operate in a future sustainable world, because if they continue to operate just maximizing to shareholder value, those shareholders potentially won’t have anywhere to spend that money in the future because the planet will not be able to sustain itself.

So, this kind of long-term thinking looks like it’s beginning to percolate through into the business sector because it recognizes that government can’t look after it completely. And, I think we’re seeing more and more companies go down this route. Big corporates, sort of worldwide, we’re seeing sort of big corporates make commitments to any of their manufacturing pieces. I think Ikea made a commitment, I think Puma have made a commitment, Coca Cola, Gap, that where they’re using power worldwide they’re going to try and switch it to renewables and whether that means they actually invest themselves or they work with partners to invest, this is a real shift that we’re going to be seeing.

They’ve made some bold commitments on their emissions and what’s really interesting about working with business is the process of change is a lot quicker and once they make a commitment, they then have to figure a way of doing it. And, I think that’s where we’ve seen some great leadership coming out of large business who see the future, they see the risk related to the climate crisis and the impact it could have, either from an economic point of view, from reducing the world economic sort of capability, or from just a sustainability point of view, as where are they going to get their products from in the future and are they still going to exist if the climate crisis really hits.

But being regenerative is kind of more than just that. It’s also setting a target beyond. So, what we believe is – we think it’s fantastic that companies have moved to a kind of net zero position. If you want to be really regenerative and we’re hearing this debate kind of amongst people who are designing properties, or new houses, is you call it carbon negative, or we think it’s more positive to say regenerative, which means that actually you put back more than you use, so that you can support people who can’t do it, because not every household has a roof. If you’ve got a block of flats and you live in the middle flat, you haven’t got a roof, but if the person who owns the roof can put more power on then they need, they can be regenerative and support you and that’s really what we think’s really interesting is where organizations can go above and beyond and really start to give back to society as part of that. And that doesn’t mean it doesn’t have to be economic, they can work that out, but it’s just a slightly different mindset from the just making it net zero and that’s why we work with kind of partners who are trying to go on some of those journeys.

Blenheim Palace is a wonderful example. They’ve really tried to think about everything on that site, how they can reduce, but also how they can educate anybody who comes to that site and how they can start to give back. That site – they make plans, I love organizations like that because they make plans for like a hundred, two, three hundred years. They want to be around still at that point and that’s when you have to have this kind of really long-term thinking and exploitative doesn’t work in that context. You have to be positive and give back to society otherwise society will struggle.

So, we think the future is really interesting and we’re moving at a pace towards it. The concept of business being an integral part of society, and doing good for society, we think is gaining traction. We’re seeing that across – whether that’s in energy or whether that’s in IT or whether that’s in any sort of area, people are recognizing that if we carry on with the status quo the economy might do great but the planet won’t, so that’s got to change.

And I think as part of that moving awareness, we’re seeing that companies are more aware of their role in the climate crisis themselves. So, what can they do that, either on a primary basis i.e. what is the energy they’re using themselves, or upstream and downstream, where do they buy their product and how do they deliver their product and then also their employees, so people are looking at the kind of whole chain piece of what that might look like.

What’s been quite exciting is some of the innovation we’ve done with our staff, our employees, in terms of figuring out how do they get to our office? What does that look like? How do we help them? And how do we incentivize them to reduce their carbon footprint on their travel? And we introduced last year something called the green travel allowance, which you can get if you walk, you bicycle, or you have an electric vehicle, or you come by public transport. And that tries to say, reward if nothing else, it’s quite difficult for somebody to change overnight but at least it rewards those people who make the effort to travel in a different way to work. And that’s gone down really well and that basically includes them as part of our solution, part of the organization, it doesn’t just start when somebody walks out the door and then goes home. It’s a continual journey across that and I think that’s what businesses recognize that employees are a fundamental part of them. A business is not just an office. It’s everything – all the people who make up that office.

I guess on the corporate to do list, when we consider what does it mean to be a regenerative business, the bottom part where you start is to do nothing and obviously we don’t see that, I don’t think any company’s seeing do nothing today is an option. I think the next step up is do what pays now and that is a step in the right direction but obviously it doesn’t necessarily, if you’re just looking again for a financial return, you’re not looking to zero out your actual carbon position. It’s not enough and we know that. Do your fair share is good. It’s a good kind of step up again from that but there are companies who kind of need to lead more, they’ve got more capability and we’re beginning to see those commit to a do mission zero and that’s fantastic, that means they’re really pushing the marketplace out there stating that they want to go zero carbon.

So, what we think’s really exciting is to move to the next step, which is about being generous. This is about giving back to society, making sure we’re all there for the long-term and I think we’re beginning to see elements of that come through and that is really exciting from large organizations recognizing that by being generous they really secure their future.

Transcript:

NARRATOR 2 Thank you Juliet for sharing such valuable insights. Today we heard three new unforgettable facts;

Corporate action on climate change is gathering pace, with global brands including Coca-Cola and IKEA taking action to recognize their role in creating a sustainable world.

To be a truly regenerative business however, organizations must look beyond achieving ‘net-zero’ status and think about how they can give back what they use.

And, being generous is the key next step for businesses wanting to futureproof – which means finding a way to support customers with their own sustainability goals to help make change at all levels of society.

To hear more facts and opinions responding to the latest news from the global energy transition, listen again next week to DNV Talks Energy: Face the Facts.

Transcript:

NARRATOR 1 Thank you for listening to this DNV Talks Energy podcast.

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To hear more podcasts in the series, please visit dnvgl.com/talksenergy.