12. How to deliver social impact to drive more profit | Isabel Kelly, CEO of Profit with Purpose

Summary

Delivering Social Impact to Drive Profit: Insights from Isabel Kelly, CEO of Profit with Purpose

In the twelfth episode of "James Reed: All About Business," host James Reed engages in a profound discussion with Isabel Kelly, CEO of Profit with Purpose. This episode, titled "How to Deliver Social Impact to Drive More Profit," delves into the intricate relationship between social impact and business profitability. Kelly, with her rich background spanning from Amnesty International to Salesforce, shares invaluable insights on integrating meaningful social and environmental initiatives into core business strategies without compromising the bottom line.

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Origin Story: From Human Rights to Corporate Impact

Isabel Kelly's journey to founding Profit with Purpose is rooted in her extensive experience in both non-profit and corporate sectors. She recounts her 11-year tenure at Amnesty International, where she honed her understanding of human rights and social justice. Transitioning to Salesforce, Kelly took on the role of running the Salesforce Foundation for 12 years. During this time, she witnessed firsthand how integrating social and environmental impact into business operations could yield substantial benefits for both the company and society.

Isabel Kelly ([01:21]): "When I left Amnesty and joined Salesforce, I thought companies were ready to start thinking about human rights. I was way off. But Salesforce was integrating social impact and now environmental impact into the core of what they were doing."

This unique blend of non-profit passion and corporate strategy inspired Kelly to establish Profit with Purpose, aiming to help other organizations create meaningful brand impacts while maintaining profitability.

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Defining Purpose vs. ESG: Beyond Compliance

A central theme of the conversation is the distinction between a company's purpose and ESG (Environmental, Social, Governance) criteria. While ESG focuses on regulatory compliance and reporting, purpose encompasses a company's broader mission and aspirations beyond mere profit-making.

Isabel Kelly ([03:50]): "Purpose for me kind of sits above [ESG] as the, as you say, it's a company's core objective. It may not include anything to do with anything other than making profit for the company and shareholders..."

Kelly emphasizes that while ESG requirements are increasingly mandated by legislation, a genuine purpose-driven approach is more aspirational and intrinsic to a company’s identity. She argues that purpose should reflect a company's foundational goals, often rooted in addressing societal needs or environmental challenges.

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Authenticity in Purpose: Moving Beyond Box-Ticking

Authenticity is paramount when integrating purpose into business strategies. Kelly warns against companies approaching ESG as a mere box-ticking exercise, devoid of genuine commitment or strategic alignment.

Isabel Kelly ([06:00]): "Many companies have approached CSR, corporate responsibility, ESG from a kind of inconvenience, a box ticking... They're doing it to make something go away. If you work with us, we're going to challenge you."

By challenging companies to engage deeply with their purpose, Profit with Purpose ensures that social and environmental initiatives are not just superficial gestures but are embedded into the fabric of the organization's operations and culture.

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Navigating Resistance: Leveraging Legislative Drivers

Implementing ESG and purpose-driven initiatives often encounters resistance from within organizations, particularly from those focused solely on financial performance. Kelly highlights that new legislation acts as a powerful catalyst, compelling companies to adopt sustainable practices not out of choice but necessity.

Isabel Kelly ([11:00]): "The law is a massive lever for pushing along the companies that are reluctant or the people that are detractors."

In the UK context, where legislation is comprehensive and mandates stakeholder consideration beyond shareholders, companies are encouraged to align their operations with legal requirements. This shift from voluntary CSR to mandatory ESG compliance makes sustainability an integral aspect of modern business strategy.

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Embracing ESG as a New Business Regime

Kelly asserts that ESG is not a fleeting trend but a long-term framework essential for sustainable business operations. Embracing ESG means integrating environmental and social considerations into every aspect of the business, ensuring resilience and adaptability in a rapidly changing world.

Isabel Kelly ([12:20]): "It's a new regime in a way that's going to be around for a long time."

By adopting ESG principles, companies can enhance their reputations, attract socially conscious consumers and employees, and mitigate risks associated with environmental and social challenges.

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Aligning with the UN Sustainable Development Goals (SDGs)

To help businesses identify and focus on relevant social and environmental issues, Kelly introduces the use of the UN Sustainable Development Goals (SDGs) as a practical tool. This exercise directs business leaders to pinpoint which global goals align with their company's strengths and opportunities for impact.

Isabel Kelly ([16:57]): "We show the Sustainable Development Goals to boards and leaders, and we just ask them to look at the colored tiles... They think it kind of sits on the side... it provides some really good parameters."

By aligning business strategies with specific SDGs, companies can create targeted initiatives that drive both social impact and business growth.

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The Role of B Corporations: Certification and Credibility

A significant portion of the discussion revolves around B Corp certification. Kelly explains that while B Corp is not a necessity for being purpose-driven, it serves as a credible marker of a company's commitment to social and environmental standards.

Isabel Kelly ([24:12]): "You can do the things that are right for the environment, right for society, right for your business without getting that certification."

However, she warns of the pitfalls, such as the risk of losing certification if standards are not maintained, which can lead to reputational damage. Kelly underscores that authenticity in ESG practices is crucial, whether or not a company chooses to pursue B Corp certification.

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Practical Framework for Integrating Purpose and ESG

Kelly provides a pragmatic framework for companies beginning their journey towards integrating purpose and ESG into their operations:

1. Define Purpose: Establish clear business and environmental/social purpose statements.
2. Select Relevant SDGs: Identify which of the 17 UN SDGs align with the company's mission and capabilities.
3. Assess and Reduce Carbon Footprint: Evaluate current emissions and set targets for reduction.
4. Enhance Social Impact: Engage in community initiatives, promote diversity and inclusion, and improve employee well-being.
5. Integrate ESG Metrics into Business Scorecards: Regularly monitor and report on ESG performance alongside financial metrics.

Isabel Kelly ([51:12]): "Pick some headline objectives so that you can have an equal conversation about your ESG objectives."

This structured approach ensures that ESG initiatives are not isolated projects but are woven into the strategic objectives of the company, fostering accountability and continuous improvement.

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Overcoming Internal Pushback and Driving Change

Implementing ESG strategies can face internal pushback, especially from management tiers focused solely on revenue generation. Kelly advises that integrating purpose into recognition and reward systems can mitigate resistance by aligning incentives with ESG goals.

Isabel Kelly ([09:56]): "It's important to include in their recognition and reward, you know, performance reviews, that this is something which is important to the company, as important as the revenue."

By demonstrating the tangible benefits of ESG initiatives—such as cost savings from energy-efficient practices or enhanced employee satisfaction—companies can turn skeptics into advocates.

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Case Study: Salesforce’s ESG Journey

Kelly shares the transformative journey of Salesforce, where an internal activist sparked significant environmental initiatives. This proactive approach not only improved Salesforce's ESG standing but also attracted influential clients like Greenpeace.

Isabel Kelly ([33:05]): "We could answer them. And then Greenpeace helped Salesforce think about how it could even further improve the carbon footprint of its data centers."

This example illustrates how genuine ESG commitment can enhance a company's reputation, foster strategic partnerships, and drive business growth.

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Actionable Steps for Businesses to Begin Their ESG Journey

For businesses seeking to embark on or enhance their ESG journey, Kelly offers the following actionable steps:

1. Assess Current Initiatives: Identify existing social and environmental practices that align with ESG criteria.
2. Set Clear Targets: Establish specific, measurable goals for ESG performance.
3. Integrate into Scorecards: Include ESG metrics alongside financial KPIs to ensure balanced performance evaluation.
4. Engage Leadership and Employees: Foster a culture where ESG is valued and integrated into daily operations.
5. Continuous Monitoring and Reporting: Regularly track progress and adjust strategies as needed to meet ESG objectives.

Isabel Kelly ([52:24]): "Set yourself a target. Be specific and then have what I like to see is, almost like a management account."

By embedding ESG into the core business strategy, companies can achieve sustainable growth while making meaningful contributions to society and the environment.

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Conclusion: Embracing a Purpose-Driven Future

Isabel Kelly's insights underscore the imperative for businesses to integrate social and environmental impact into their core strategies. Moving beyond compliance, a genuine purpose-driven approach not only enhances profitability but also builds resilient, reputation-rich organizations poised for long-term success.

Isabel Kelly ([55:02]): "I love what I do and the thought that through all the different bits of work that I do, somewhere along the line I'm helping to address issues of social justice and the reform of capitalism."

As businesses navigate the evolving landscape of ESG and purpose-driven operations, Kelly's guidance offers a roadmap for creating sustainable, impactful, and profitable enterprises.

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Notable Quotes

• Isabel Kelly ([01:21]): "Profit with Purpose was that the time was right that other companies might want to learn from the massive success that Salesforce have had..."

• Isabel Kelly ([03:50]): "Purpose for me kind of sits above [ESG]... it's a company's core objective."

• James Reed ([06:00]): "How do you differentiate a company that's authentic from one that isn't?"

• Isabel Kelly ([11:00]): "The law is a massive lever for pushing along the companies that are reluctant or the people that are detractors."

• Isabel Kelly ([16:57]): "We show the Sustainable Development Goals to boards and leaders... They think it kind of sits on the side."

• Isabel Kelly ([24:12]): "You can do the things that are right for the environment, right for society, right for your business without getting that certification."

• Isabel Kelly ([51:12]): "Pick some headline objectives so that you can have an equal conversation about your ESG objectives."

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For organizations and individuals seeking to deepen their understanding of integrating social impact with profitability, Profit with Purpose offers a wealth of expertise and strategic insights. To explore more about developing a meaningful purpose for your organization, visit profitwithpurpose.co.uk.

James Reed concludes the episode by encouraging listeners to subscribe for more actionable advice and insights to enhance their business and career strategies.

Transcript

[James Reed]

Welcome to All About Business with me, James Reed, the podcast that covers everything about business management and leadership. Every episode, I sit down with different guests who bootstrapped companies, masterminded investment models, or built a business empire. They're leaders in their field, and they're here to give you top insights and actionable advice so that you can apply their ideas to your own career or business venture. ESG 3 Letters. Every company is trying to get their heads around. But with new legislation speeding up the need for new strategies, how can you make sure your organization is sustainable without sacrificing your bottom line? Joining me today on All About Business is Isabel Kelly. Isabelle is the founder of Profit With Purpose, which helps organizations create meaningful brand impact while also remaining profitable. So, Isabelle, thanks so much for coming to see me today. You're the founder of Profit With Purpose, and you act as a consultancy helping companies surface and action their purpose. What made you start this organization? Why did you choose this line of work? Tell me the sort of origin story, if you like.

[Isabel Kelly]

Yeah, I mean, I think it was a long time coming and I have to look back in sort of retrospect to see how I got where I am now and the work that I do. But it's a balance of the work that I've done in my life. So I started working at Amnesty International. I worked there for 11 years. I then went to work at Salesforce. So, you know, both multibillion dollar company now. It was a startup then when I joined and I had the opportunity to run the Salesforce foundation for 12 years. And actually what I do now brings those two things together. So I thought when I left Amnesty and joined Salesforce that companies were ready to start thinking about human rights. I was way off. It was a long way off. But what Salesforce were doing was integrating social impact and now environmental impact into the core of what they were doing. And I had the opportunity to be the first person who to do that internationally at Salesforce. And I learned how does business approach social issues? How can it use its resources to address those issues? And how can it engage its people? But then also, what does that do for the company? How does that benefit the company in terms of reputation and in terms of goodwill and then people wanting to buy things from you, and so bringing all of that together, I thought Profit with Purpose was that the time was right that other companies might want to learn from the massive success that Salesforce have had, both as a company selling software, but also as a company known for its great treatment of people. And so I then Started consulting. I consulted with Sage, with Gucci, helping them to think about how they embed social impact into the core of what they do and how that drives benefit for their business, their people and their customers.

[James Reed]

There's a sense, I think every company has a purpose. They might not know it, they might not have given voice to it, they might not have made it clear to their customers what it is, but some of them could be acting on potentially bad purpose.

[Isabel Kelly]

Yeah, it's a really good point.

[James Reed]

Or making that up.

[Isabel Kelly]

Yes, it's a really good point. And actually that sort of. In the world that I work in, the terminology keeps shifting. So for a while people were talking about purpose as meaning social and environmental activity. People have talked about sustainability. We've had csr, corporate social responsibility in the past. We now have esg, environmental social governance. Purpose for me kind of sits above that as the, as you say, it's a company's core objective. It may not include anything to do with anything other than making profit for the company and shareholders or selling a thing. Increasingly, companies are the kind of looking back at perhaps if they're an older company, what their founding purpose was, what their CEO's founding purpose was, or what their founders purpose was. And quite often that is something beyond selling a thing or making money or maximizing profit. They set out to fix something, to address something, to deliver something that people of the world needs. So some companies have been looking back and thinking what is our purpose and is it broader than how we've defined it recently, which is to make money or sell something. Newer companies, when they're getting started are thinking purpose first. You know, next generation of entrepreneurs are thinking how do we fix environmental or social problems through the means of business? So they're more naturally bringing that in at the beginning. But for many companies it's just looking at your business through a different lens and then reapplying that. It makes you a more modern business and actually often makes you a more sustainable business.

[James Reed]

So the word authenticity is coming to mind for me. I mean that's often used in this space. Yeah, I mean you help, I believe companies to sort of find their authentic. Yeah, I mean how do you do that and what's it mean really? How do you differentiate a company that's authentic from one that isn't? Or is it just obvious?

[Isabel Kelly]

Yeah. So someone asked me of a few years ago, like what do you actually sell to a company? And I did say authenticity. I think it's so my business partner Joe comes from an academic environmental background. I come from A human rights background. We both see that we can help businesses to address those world issues. We're coming from that point of view, not activist or campaigning, but we really have a clear idea about what we want to see in the world. And many companies have approached csr, corporate responsibility, ESG from a kind of inconvenience, a box ticking. How do we fill this form in just to get away with it? You know, how do we satisfy our employees requests for what we're doing for the world? They're not doing it because they care or they see a benefit in it or an advantage for the company. They're doing it to make something go away. If you work with us, we're going to challenge you. We probably start working with a client with a really good idea in our head of what the ultimate work that they should be doing, you know, is. But we don't reveal that until later on, you know, when we've.

[James Reed]

Till then.

[Isabel Kelly]

Well, yeah, until we've moved them along. Because if we start working with a company and we say, well, we think that your product is, you know, sucks and you should be totally doing it differently, that is not taking a company on a journey of discovery that's going to alienate them. Or if we say to them we think that your main issue you should be focusing on is modern slavery and looking down your supply chain as slaves. And they've never thought about that. That's a, a journey too far. So we start with asking them what they're already doing, what their ambition is, you know, what obstacles they might find or what they've observed in their supply chain, in their company, what they want to address.

[James Reed]

So sometimes I imagine when these, when you're making the case for these changes or for organizations to be more purposeful, you have potentially oppositioning companies or detractors, people who say, what's the point? Or seen it all before and it's just the latest fad, that sort of thing. What do you say to them or how do you deal with them?

[Isabel Kelly]

Yeah, so we quite enjoy working with them because they challenge us and they make whatever we're going to do more robust. In a way, it has to stand up to that level of scrutiny. We find that in larger companies, often senior management or middle management are really resistant because this just seems like another thing that they've got to do that they're not being given time or credit for. If it's back in the days when people used to go out to volunteer, the last thing a sales manager wants to see is all of his Sales team out of the office, volunteering. You have to really work with those people to help them understand the value of it. But it also helps if you include in their recognition reward, you know, performance reviews, that this is something which is important to the company, as important as the revenue. But if you've got an inconsistent message or reward system where the only thing that you're rewarded for is bringing in the revenue, but you're also tasked to do these other things which are the purpose things, you know, which people are going to do. So that's something else that we often talk about is helping people to think about how you're going to recognize and reward that activity, which is the purpose activity, not the profit activity.

[James Reed]

But do you find that you get sort of entrenched resistance to these changes?

[Isabel Kelly]

Sometimes you do what you do, then. Yeah, we talk to them and try and understand where that's coming from. And sometimes it's, you know, it can be an ideological resistance. You know, people that don't believe in climate change or, you know, people that don't think that the role of companies is to have any role in society or. I was talking about Salesforce, so they have some investors now that have published a letter, one of them that said, your job is not to use your company as a platform for social change. As you're registered in Delaware, your only responsibility is to maximize profit for shareholders. That is, in fact, true. But if you're delivering for what the shareholders need, there's no harm in. Also for delivering what the world needs, it's getting that balance.

[James Reed]

But if you're registered, as we are in the uk, you have to comply.

[Isabel Kelly]

With the UK with the laws and.

[James Reed]

Which cover these bases.

[Isabel Kelly]

They cover. Yes, they do. Stakeholders other than shareholders, which include community and. And the environment.

[James Reed]

And the employees.

[Isabel Kelly]

And employees, yeah.

[James Reed]

So in a way is. It's more straightforward in the UK because. Yeah, those are being had at a national political.

[Isabel Kelly]

Exactly. Yeah.

[James Reed]

Rules have been made.

[Isabel Kelly]

Yeah.

[James Reed]

Which means, really, you say to those people, we have to get on with it, we're here to help.

[Isabel Kelly]

Yeah. And so it's not that bad. Yeah. And for some of them, we then sort of bring in the full force of the law. It's like, you know, arguing about whether or not you want to pay tax. There isn't an argument there. So this is whole. This whole conversation has shifted from the time of corporate social responsibility, which was all about how much you cared, it's moved to compliance. So we have a slide in our debt that says you no longer have to care. You have to comply. Which then of course sends everyone off saying, oh, well, of course I care. But the. The law is a massive lever for pushing along the companies that are reluctant or the people that are detractors.

[James Reed]

And what I'm hearing from you is this is an. A new regime in a way that's going to be around for a long time.

[Isabel Kelly]

Totally.

[James Reed]

So it's better to embrace it.

[Isabel Kelly]

Yeah.

[James Reed]

Get a grip of it and make it work for you.

[Isabel Kelly]

Yeah, come to the.

[James Reed]

Discuss.

[Isabel Kelly]

Yeah, come to the.

[James Reed]

There's any point in it, really, because it's not going to change, it's going to be there.

[Isabel Kelly]

Yeah.

[James Reed]

Yeah. We're delighted that you're watching this episode. Please hit the subscribe button if you'd like to receive more insights and actionable advice that will help your business and or career. You mentioned esg.

[Isabel Kelly]

Yeah.

[James Reed]

Environment, social governance is a big thing at the moment. How should companies think about that? Because I understand you're. You sort of argue that they should settle on one of those more than all three. Is that right?

[Isabel Kelly]

No, I think you need to. Well, definitely all companies need to be doing governance.

[James Reed]

Yeah.

[Isabel Kelly]

So if you want.

[James Reed]

In terms of your purpose, though, what.

[Isabel Kelly]

What in.

[James Reed]

Is it good to emphasize one over the others? Or do you think. Do all three?

[Isabel Kelly]

Yeah, I mean, so the term ESG is what's being used increasingly for the legislation and the regulatory requirements that are coming through. So I think this is where there's a difference between purpose, which is perhaps more aspirational, more ambitious, more human. And ESG applies to a lot of the legislation. So there's a lot of environmental legislation that's been coming through for the last few years. There's a big new piece of legislation called the Corporate Sustainability Reporting Directive coming from the eu, which will apply to some UK companies, which also includes social impact and human rights. So those are things that are increasingly becoming the law. You have to report on those things, your carbon footprint, your scopes 1, 2 and 3, your reduction plan, how you're treating people in your supply chain. So those are reporting requirements, which is different to what your ambition is and what's going to inspire the people in your company that you are authentically thinking about communities and, you know, improving the world that we work in. So that's what we would say is like, when you're figuring out your purpose, you may already have your company purpose, but then adding to it with your social and environmental purpose, where have you got something that is really unique? Where can you apply resources to a particular social or environmental issue? Where uniquely Your company or your industry sector can really make a difference. And one of the things we do. I don't know if you're familiar with the UN Sustainable Development Goals. It's a really brilliant exercise. So most business leaders are not thinking about social and environmental impact every day like I do. And so we show the Sustainable Development Goals to boards and leaders, you know, C suite. And we just asked them to look at the colored tiles which say, no hunger, no poverty, good education, sustainable cities, and ask them to point. And you just see this big wave of relief come over people's faces because they've got some parameters there. Because often if you ask people what's relevant or salient social or environmental issues in your business, people don't know it's not.

[James Reed]

When you say you ask them to point, what do you mean?

[Isabel Kelly]

So they. The stgs have that set of colored kind of tiles.

[James Reed]

Yeah. Well, they pick one of them.

[Isabel Kelly]

We just say point at the ones that you think are relevant to your business, where you personally think you can make a difference, or where you have a personal interest. And we do it as a board exercise or as a C suite exercise. And really often people in the same company choose the same ones. So say you've got, you know, you're a ship broker, where can you have the biggest influence? It's probably on oceans, looking at new fuels for shipping and your supply chain. So choosing Sustainable Development Goals that are relevant to your business are probably the thing. If you're a food manufacturer, no Hunger would perhaps be one where you think that you can really have an influence. And a lot of technology companies, like I was saying, are thinking about the jobs of the future.

[James Reed]

So how many of these UN goals are there?

[Isabel Kelly]

There are 17.

[James Reed]

So we should all have a look. No, no, I'll ask you to recite, but I am thinking I should go and have a look at them. And I think other people listening might think, well, I quite like to have a look at them. Maybe point my finger.

[Isabel Kelly]

Exactly.

[James Reed]

It's a really easy and helpful exercise.

[Isabel Kelly]

Yeah.

[James Reed]

That you can do at home or in the office whenever you.

[Isabel Kelly]

Totally. Because I realized that asking business leaders who are not thinking about these things every day, what do you care about what's relevant to your company? And people really don't know what the answer is. Is it education? Is it elephants? You know, how do we. What are my parameters? So it provides some really good parameters.

[James Reed]

But if you take someone through that scenario, that exercise, they. They might point at several of these. Yes, there are 17.

[Isabel Kelly]

Yeah.

[James Reed]

Is that reconcilable or do you then have to decide as a group?

[Isabel Kelly]

Yeah, we know elephants.

[James Reed]

Are we going to focus on education?

[Isabel Kelly]

So that's then part of the exercise that we do with a company, thinking through sense, then sort of spreading that out across the company for other input. Some of those you might move forward to be your purpose, others you might move into sort of business as usual. So, for example, if you've chosen gender equality, most of the actions that you need to do around that are in the core of your company. So how your HR team is sort of thinking about recruitment, promotion, gender pay gap, reporting on salaries, a lot of those are business as usual things. So it might be that you choose that, that sits at a company level rather than a kind of the outward articulation of your ambition for your company. And there'll be others that rise to the top and that become your, you know, your kind of rallying cry for your employees and your external stakeholders that they really associate your company with doing that thing.

[James Reed]

So that's. That feels quite different to the sort of ESG requirement required by law. And you mentioned earlier that some people feel this is a burden that's been imposed on them, which, I mean, in a sense it is.

[Isabel Kelly]

Yeah.

[James Reed]

And they sort of tick the boxes. But I mean, is there a better way for them to do that? I mean, should they think about it a bit more positively and creatively? Yeah, sure, we've got to do this. But there is some upside here if we get it right.

[Isabel Kelly]

Yeah. And if so, how?

[James Reed]

What is that? Because it can seem daunting.

[Isabel Kelly]

It can seem really daunting. But actually, early on in those conversations, when we, we work with a framework which helps companies think about, you know, the waterfall from their purpose, through their sustainable development goals, through the. Their activities, the things that they're currently doing through to reporting and metrics, that's sort of our framework. When you start talking to a company and trying to, you know, assemble what they're already doing, they're probably already doing quite a lot of things. They're just not putting it in that framework. They're not calling it esg. And so for many companies, that's a moment of relief. It's like, oh, phew, you know, we're actually not starting from scratch where we thought we were starting from. And then we've also had it said, when companies, you know, look at the framework, they go, oh, it's those things we didn't know. Why would you know what is incorporated in esg? You know, if you talk to your average Person in the street. What, what does corporate governance mean? They're not going to know that either. And so, yeah, there's some relief and then there's some rationalization and then you kind of look at what you need to start reporting against and what are the frameworks that you need to use. So probably not start with the reporting, start with the ambition and then figure out the activities that you need to do and then think about, well, what is it that we need to report and have we got that data?

[James Reed]

There is pushback here, isn't there?

[Isabel Kelly]

There's pushback, yeah.

[James Reed]

Necessary. It's getting in the way of looking after our customers.

[Isabel Kelly]

Yeah, I don't know.

[James Reed]

Distracting management time.

[Isabel Kelly]

I was talking to someone the other day, I was saying it's kind of like we're in a process now with the legislation where there are all these different frameworks and three letter acronyms and that is a burden. But it's a new system of accounting. And actually how long did the account, you know, finance accounting system take to emerge? I'm sure it wasn't perfect the first time it was done.

[James Reed]

I see, so you're saying this is a new system, it's bedding in, it's going to be there for ages. So get your head around it.

[Isabel Kelly]

Yeah. And there are huge advantages to it. You can save money by, you know, you can work from a more environmentally friendly office. It's very appealing to younger people coming into the workplace as well as many older people that, you know, they want to work for a company that matches their own values. So you can hire people more easily. Yeah. You can deliver cost savings to your clients. If you're a tech company and you're delivering climate smart solutions that can save them money. If you're looking down your supply chain and also you're looking ahead of what people really want. If you're a packaging company, there's new legislation coming in that bans certain types of packaging. There's no point in carrying on making the same packaging that you were making if no one can buy that anymore. So being ahead of that, being ready, having your company ready, but what change is coming makes you a leaner sort of company? And there is. There's a guy who works at the London Business School called Yanis Yanu who started to do that research on does this actually have a beneficial effect on your bottom line to be sort of ESG compliant and friendly? It's also increased.

[James Reed]

What's he found?

[Isabel Kelly]

He's. It looks positive.

[James Reed]

I'm going to get him in the studio.

[Isabel Kelly]

I think you should.

[James Reed]

I think I should. I want to know the answer to this question.

[Isabel Kelly]

Yeah, a lot of people would want.

[James Reed]

To know this question.

[Isabel Kelly]

He's definitely the guy.

[James Reed]

Yeah. Well, I mean, it's interesting, you know, so. Well, hopefully that is the case. It's well executed. It helps the company improve and prosper.

[Isabel Kelly]

Yes. And you look at. It's kind of like a point of. No, there's no point in resisting anymore. That what we're seeing is that whilst the legislation that's coming applies to larger companies, they're pushing it down their supply chain. So even if you're a smaller company that doesn't have to respond to the legislation, you can no longer win contracts, you can no longer be in the supply chain of large companies that. That have to report on their esg.

[James Reed]

Yeah.

[Isabel Kelly]

So embrace it.

[James Reed]

So everyone should. Everyone should embrace it. Okay, so. So we're talking about becoming purpose driven, profit with purpose.

[Isabel Kelly]

Yeah.

[James Reed]

Some people think that to do that, the first step is to become a B core, as it's called now. You know about B cores? I know this.

[Isabel Kelly]

Yeah.

[James Reed]

Could you just tell us what a B Cor. B Corp is and then whether it's necessary to become one to sort of embark on this journey?

[Isabel Kelly]

Sure. So B Corp is B stands for benefit Corporation. And it was. It's a form of company structure that was initially invented in the US in I guess early to mid 2000s. It's become a global movement and actually here in the UK there are more B courts per capital head of business than anywhere else in the world. So it's obviously caught on here. You don't need to be a B Corp. You can do the things that are right for the environment, right for society, right for your business without getting that certification. Some people find it a useful framework. So to become a B Corp, you go through a rigorous certification process across eight different areas, including environment, social workers rights, you know, all kinds of areas. And then bcort will certify you or not. And you know that you have to pay them. You have to pay them.

[James Reed]

Yeah. Literally an investment.

[Isabel Kelly]

It literally is an investment.

[James Reed]

Well, then they give you a stamp of approval.

[Isabel Kelly]

You get a stamp. You get to use that mark. You might have seen it on, I don't know.

[James Reed]

I've seen it.

[Isabel Kelly]

Yeah. Popcorn and cook. And also.

[James Reed]

So would you recommend people did this or.

[Isabel Kelly]

It's one way. It's one way. You kind of need to be doing the stuff that I've talked about already. You kind of need to know your purpose. You need to know what Your carbon footprint is. You need to know how you're treating your workers and what your social impact could be in order to answer the questions in order to pass the certification. So that's sort of like the cherry on the cake. You need not do that process. You can still carry on doing the things that you choose to do to be a environmentally and socially conscious company without getting that. I think it's got increasing traction. There are some larger companies. So I sit on the board of TPX Impact which is one of only a handful of listed companies. It's a technology company that are a B corp and we know that it, the thing that kind of got us over the line was that it enshrined what we were already doing. But it was really attractive to our employees. Many of our employees really were attracted to work for a B corp and we deliver quite a lot of that work through our client work as well. We work with non profits and government.

[James Reed]

So it's a good way of attracting.

[Isabel Kelly]

Good way. Yeah, really good way of attracting good staff and values aligned clients. So working with the UK government and non profits it kind of shows that you're a company that shares there values.

[James Reed]

What are the downsides?

[Isabel Kelly]

You can get into trouble if you don't do it right. You can lose your B Corp certification. So there's one. I won't mention it, but a brewing company that had a. Were accused of not treating their employees very well. So that became fairly public. There's a publicity, an ad company, a publicity company that took on a. An oil company as a customer. So they lost their B court certification.

[James Reed]

Oh, they couldn't have an oil company as a customer.

[Isabel Kelly]

No. So not an oil company. That is a unrepentant oil company that's not addressing.

[James Reed]

Well, no company produces what they need to say.

[Isabel Kelly]

Yes. It's within the rules of E core. Yeah.

[James Reed]

Okay. So the people you can't do business with.

[Isabel Kelly]

And that's made very clear to you what the, what the caveats are, what your client is, could or should be.

[James Reed]

But you're saying Isabelle, that that's not necessary to become a purpose, authentic, purpose driven company.

[Isabel Kelly]

No, you can totally be an authentic purpose driven company without getting that stamp.

[James Reed]

But there are pitfalls for companies that are purpose driven, that aren't B cause as well, you know, to get it wrong.

[Isabel Kelly]

Yeah, getting it wrong can be reputationally quite.

[James Reed]

What examples have you seen of that? How can things go wrong?

[Isabel Kelly]

So I mean with all the new legislation there's something called the EU taxonomy which is the words that can be used around environmental, you know, substance. So there's a travel company that actually is a V corp that put out an advertisement that I think said something like you can, you're. It's greener or it's more environmental traveling with us. So the Advertising Standards authority say, okay, you've used that word, the word greener. Greener, whatever word it was. And that has a definition. So can you show us the data that proves that your claim is true? And they couldn't. And I think it was because they hadn't included the, the footprint, the carbon footprint of the flight in there in their calculations, which is quite an important part of the trip.

[James Reed]

Yeah.

[Isabel Kelly]

So they had to pull that advert.

[James Reed]

That's a little embarrassing. Did they lose their B course?

[Isabel Kelly]

They did not, no. But it's just, it's a sign of what's happening.

[James Reed]

A yellow card first maybe.

[Isabel Kelly]

Probably. Yeah, yeah.

[James Reed]

It's obviously important, isn't it, if you, if you've got that status.

[Isabel Kelly]

Yeah.

[James Reed]

Not to lose it or to, you know, because that's in itself. That's going to get more attention.

[Isabel Kelly]

That's going to get more attention.

[James Reed]

Going to get more attention in a way than if you've got it in the first place.

[Isabel Kelly]

Exactly. There are some companies who've recently kind of said, oh, we were offered it but we turned it down.

[James Reed]

Have they? Yeah, well, because they're concerned about that.

[Isabel Kelly]

I think some of them, because they were concerned about their client list, that they would have to start working with certain clients. Yeah, right. It's all a balancing act, you know, that's the profit with purpose. That there are legitimate ways of making profit that don't perhaps meet the B Corp standards.

[James Reed]

So there are, you know, you can take this purpose thing quite a long way though, can't you, really? Beyond your normal day to day business. I think you would talk about an airline to me earlier that.

[Isabel Kelly]

Yeah, that's an example of pandemic. Yeah, yeah. Of sort of self interest that.

[James Reed]

Yeah. What do we think about.

[Isabel Kelly]

For the world.

[James Reed]

Yeah, tell me, tell me that.

[Isabel Kelly]

Yeah. So during the pandemic I did a bit of work with the World Health Organization foundation helping them find companies that would put money in to buy vaccines for the rest of the world that didn't have them.

[James Reed]

Couldn't afford them.

[Isabel Kelly]

Couldn't afford them. Weren't at the top of the list. Yeah. Weren't manufacturing them. And so we thought around different industry sectors. You know, where are they? Companies with vested interests. Airlines, of course, you know, they were struggling terribly during the Pandemic. And so we actually received a lot of money to buy vaccines from the airline industry and some of the industry bodies because it helped them get their business back on track, back on its feet. Getting people traveling again, getting the world opened again. It was a really clearly aligned objective.

[James Reed]

That's interesting because you wouldn't immediately think an airline would be financing vaccines.

[Isabel Kelly]

No, no.

[James Reed]

But I can see why, because it did mean that the whole travel economy opened up.

[Isabel Kelly]

Exactly.

[James Reed]

Sooner than it would have done.

[Isabel Kelly]

Exactly.

[James Reed]

Without them.

[Isabel Kelly]

Yeah. Yeah.

[James Reed]

Well, what should you be thinking about if you're sort of in an organization that you feel where the management aren't taking this as serious you seriously as you'd like? You know, maybe, you know, you're an employee in a large company and you want them to think about it more and be more purpose driven and more focused on the environment or social issues. How can you flag that or surface that as an agenda item in the. In a way that's likely to succeed rather than just be a nuisance.

[Isabel Kelly]

Yeah, I was going to say first being just be a nuisance, like keep bringing it up in many ways. Yeah. I just remember so back in the day, a really long time ago, when I was at at Salesforce, an employee stood up at a company meeting, an all company meeting, and just asked the CEO Mark Benioff, what are you doing about the environment? And he said, I don't know, but that's now your job.

[James Reed]

No, that's a good answer. So that person then went off.

[Isabel Kelly]

That person then went off.

[James Reed]

So you've got a motivated activist.

[Isabel Kelly]

Yeah.

[James Reed]

And then come up with what we're going to do about the environment.

[Isabel Kelly]

And I mean, often, I don't know if you think this, but often it's good to have the activists on the inside rather than on.

[James Reed]

Sure, sure. And especially if they're motivated and energetic.

[Isabel Kelly]

Yeah, yeah. And so, I mean, so then what happened after that?

[James Reed]

So this person went off. That was their new job.

[Isabel Kelly]

Yeah. So they figured out like it was really early. It's before we had all the frameworks and legislation that we have now. But I'd say, you know, now Salesforce has a really good ESG strategy, a very good approach to that. And actually, when I was still working there, the approach to the environment helped us win clients. So Greenpeace were coming, you know, becoming interested in being one of our nonprofit foundation clients. They asked us difficult questions about our data centers and their carbon footprint. Because we had that person doing that job, we could answer them. And, you know, then I think Greenpeace helped Salesforce think about how it could even further improve the carbon footprint of its data centers. So it's sort of about being. Not trying to push it away, but trying to bring it in, bring it.

[James Reed]

On, and use it in a way that can be very good for the business. Imagine carbon footprint is reduced. Your costs are also reduced.

[Isabel Kelly]

Your costs are reduced. Yes. It makes you more attractive to many employers. And I think. And you talked about controversy, and some of that controversy about ESG has been about ESG investing, not so much about ESG being done in companies per se. You know, there are some workplaces where people feel it's gone too far. So I think the ESG sort of. Larry Fink, the CEO of BlackRock, has stopped using that term because he said it's become weaponized.

[James Reed]

Esg.

[Isabel Kelly]

ESG is a term. So he stop using that. Not doing the thing and not applying that lens to the. Their investment portfolio, but using that term because of its politicization in the US Particularly. So, so what do they do instead? The kind of. It's much more neutered. You know, it's much more quiet.

[James Reed]

But they don't apply it to their investments or. They do.

[Isabel Kelly]

They. They don't anymore.

[James Reed]

Right.

[Isabel Kelly]

I think in some corners. But, you know, some of the ESG investing was. It started off very badly where they'd got companies that they really weren't ESG worthy in a. In an investment portfolio. Yes. But I think that for many US Companies, they're just. They're just trying to keep things kind of vanilla, of like, let's not put our head above the parapet and say that we're on a net zero pathway. Let's do the thing. We'll do the right thing, but will just not shout about it because it's not the environment in which they can do it. So here, the fact that we have legislation that says you have to report on this makes it a more neutral activity. You can huff and puff about it and say, I don't think this is right, or I don't believe in climate change, but it's just a thing that you have to do. It's like, you know, paying your taxes. Companies may not like doing that, they may not want to do it, but it's just. It becomes a neutral activity.

[James Reed]

Yeah, but in that case, you know, if it's a new. If it's an activity, it's just a requirement.

[Isabel Kelly]

Yeah.

[James Reed]

You have to meet certain obligations and report in certain way. I mean, what I think you're talking about with purpose, though, is Lifting it beyond that.

[Isabel Kelly]

Yeah, exactly.

[James Reed]

Actually. Much more interesting.

[Isabel Kelly]

Much more interesting. Much more kind of flavorful, characterful, you know, which brings out the character of your company and your leadership and your CEO and, you know, you could maybe talk about how you do that.

[James Reed]

Well, we have a clear purpose, which is improving lives through work. Just four words.

[Isabel Kelly]

Yeah. And how you inspire people to be part of that.

[James Reed]

Well, I like it because it's. It's so simple and it's actionable by everybody. You know, every day someone. We can all do something.

[Isabel Kelly]

Yeah.

[James Reed]

That would improve someone's life in some small way.

[Isabel Kelly]

Exactly.

[James Reed]

It's just making them smile or laugh or give them a cup of tea. I mean.

[Isabel Kelly]

Yeah.

[James Reed]

We can all do something. Something. And, you know, I think that's a good message to share because.

[Isabel Kelly]

Exactly.

[James Reed]

It's easy for us to embrace and do. But then it's also strategic because if it was a business investment that didn't do that, I wouldn't want to pursue it. Yeah. I wouldn't want to go. I'm not opposed to gambling, but I wouldn't want to run a gambling business.

[Isabel Kelly]

Yeah.

[James Reed]

Because I don't think it improves, like, work.

[Isabel Kelly]

Yeah, exactly.

[James Reed]

It might give fun to some people on a good day, not another. So, you know, so that for me, isn't in that. In our sort of space, but let's not say I wouldn't. If a gambling company asked me to find them a new accountant, I would.

[Isabel Kelly]

Yeah. Because people have free will.

[James Reed]

Well, yeah, but to work for a gambling company about.

[Isabel Kelly]

Yeah.

[James Reed]

So they're uncomfortable about people you can and can't do. Do business with and. And every. So many decisions being selected around that, you know, if they're lawfully operating in the UK and they want to be our customer, then that's okay with me.

[Isabel Kelly]

Yes. I can tell you on the board, it was a robust conversation about, well, who is it that determines our client base for the company? I'm talking about, you know, the client base is government and nonprofit. So it was a fairly, you know, not that difficult a decision, but for many other companies, that would be. Yeah, it would be problematic. And so not every company can or should or want to be a B corp. No. But they can.

[James Reed]

So you'll talk about here, the company that's the B core.

[Isabel Kelly]

Yeah.

[James Reed]

That has to be selective about who they're.

[Isabel Kelly]

Yeah.

[James Reed]

That's a whole nother level, isn't it? Of. Of. It's kind of political, too, I think. Yeah. I like you, but not you.

[Isabel Kelly]

So. Yeah. Yeah. I mean, in some ways it's kind of activist.

[James Reed]

Yeah, it is, yeah. And that's. That's a decision for. Yeah. The shareholders ultimately, I suppose if it's.

[Isabel Kelly]

A publicly listed company or the. Yeah. The board or the owners. The CEO.

[James Reed]

Yeah. The owners feel that's what they want.

[Isabel Kelly]

Yeah.

[James Reed]

Well and good.

[Isabel Kelly]

Yeah, exactly. And I think in a, you know, non listed company that's perhaps a. It's an easier pivot to make. You've got. You don't have to bring your shareholders along with you. But for a listed company, we had to change our memorandum and articles which we had to take to the agm, you know, convince your shareholders.

[James Reed]

Had to vote on that.

[Isabel Kelly]

Yeah.

[James Reed]

This was to become a B corp. Yeah. Right.

[Isabel Kelly]

Yeah.

[James Reed]

So it's a series of majority.

[Isabel Kelly]

Well, yeah, it was a majority.

[James Reed]

Was it a big one or was. It just scraped over.

[Isabel Kelly]

Do you know what?

[James Reed]

I don't know clearly was a majority.

[Isabel Kelly]

Yeah.

[James Reed]

That's very good.

[Isabel Kelly]

Yeah. But I'm not sure that any.

[James Reed]

This is helpful for people listening to understand the sort of nuances of.

[Isabel Kelly]

Yeah.

[James Reed]

What's. What. What it involves or how it. And things to think about. Because I didn't necessarily know that.

[Isabel Kelly]

No. And I think a lot of companies think, oh, we'll get that stamp that's becoming a. You know, the B Corp stamp becomes a. It's becoming quite more recognized and it took us three years and there's a.

[James Reed]

Lot around workers rights, isn't there as well?

[Isabel Kelly]

Yeah. So employment, you know, how you employ people, you know, salaries, gender pay, salaries, all sorts of things. But most of those things are already in UK corporate governance, UK legislation. And with the new legislation coming, it exists anyway. You don't have to. You use someone else's framework.

[James Reed]

Yeah.

[Isabel Kelly]

That's sort of a badge of recognition of what you. It should be a badge of recognition of what you're doing anyway and what you've embedded in your company.

[James Reed]

So if you're. If you're coming to meet me for the first time and you're coming to be a consultant and profit with purpose and you look at our business, how would you begin and what would your sort of approach be? I suppose I'm trying to get some free consulting for my business here.

[Isabel Kelly]

Yeah. I'll give you the bit I do for free.

[James Reed]

Yeah. Yeah. So what would that work?

[Isabel Kelly]

So these days I ask what, why. Why are you asking me to consult with you about your esg, if that's what you're calling it? Because that is massively revealing of the drivers. So if you're a little company in A big company supply chain and they're asking you or sending you a four page questionnaire about your ESG work and you can't answer it and that means you can't win their work anymore. That is a really important driver. If the, you know, whoever I'm speaking to says, because I have a passion for climate change or I have a passion for human rights in our, our supply chain, that's a totally different starting point for the conversation. So it kind of determines what your ambition is.

[James Reed]

Does it tend to be one or the other?

[Isabel Kelly]

It really varies. At the moment it's people being driven by legislation. Really interesting.

[James Reed]

My big customers are all asking me for these things and I need some help.

[Isabel Kelly]

Yep.

[James Reed]

Yeah. All right, so I need some help. What next? How are you going to help me?

[Isabel Kelly]

Yeah, what's your ambition? I'd ask you what is.

[James Reed]

I want to keep my customers.

[Isabel Kelly]

Okay.

[James Reed]

I don't want to lose customers because they're asking me.

[Isabel Kelly]

Employees.

[James Reed]

Yeah, yeah. They're very important too.

[Isabel Kelly]

Yeah. Have you got a product or a service? You know, service. It's service.

[James Reed]

So. Yeah. But I'm thinking, you know, I'm selling to Tesco, say. Yeah, well, it could be a recruitment service or it could be putty pois peas.

[Isabel Kelly]

It makes a difference. There's a massive difference.

[James Reed]

But they're saying you need to comply with resg. One might be more on the social side, one might be on the environment, but you then sort of look under the bonnet, do you? And help.

[Isabel Kelly]

Yeah. And have a really good. And actually, companies that we work with often really surprised that our lens of social and environmental impact, they think it kind of sits on the side. It actually crosses a huge amount of your business. So it's looking at how you're hiring people, looking at your, you know, culture, looking at how people are treated within your organization, looking at your gender parity, looking at your sort of training programs, your hiring practice, all of that has those elements of esg and then also some of those tie into something which is adjacent to ESG, but not actually kind of in esg, I think, which is your DEI work. So are you promoting diversity, equity, inclusion? Are you promoting women? You know, have you got a gender pay gap? Are you recruiting people of color, people who are neurodiverse? You know, have you got a workforce which is representative of the place in which you function? Because that's your best bet for being a successful company these days.

[James Reed]

So you do all that. I mean, that could lead to a sort of a lot of suggestions. Is that what comes Out. I mean, do you have a. Do you end up presenting a big thick.

[Isabel Kelly]

Yeah, so.

[James Reed]

Well, we have a framework you should do.

[Isabel Kelly]

No, we definitely don't. Snowboard will read.

[James Reed]

No, I'm wondering about that.

[Isabel Kelly]

Yeah, no, so that's why we developed the framework that we use, which if it really has to, it fits on one page.

[James Reed]

Yeah.

[Isabel Kelly]

Because we.

[James Reed]

So go on, just summarize it.

[Isabel Kelly]

So it's your. Your purpose, including, so both your business purpose and your environmental and social purpose. That might be one statement. That might be two. It might be that you've got a very clearly branded existing purpose statement. Like you've said about Reid. Yours can be applied actually to an environmental and social lens. Some companies, you can't do that. So you kind of write, you know, another purpose statement for what you want to achieve environmentally, socially, and then you look at, you know, put what your chosen STGs are. What's your focus? Is it oceans? Is it elephants? Is it stgs are the Sustainable Development Goals.

[James Reed]

A lot of acronyms.

[Isabel Kelly]

I know. It's every three letter acronym that you can imagine.

[James Reed]

Esgd.

[Isabel Kelly]

And that's without going on the legislation.

[James Reed]

No, no, I'm getting there.

[Isabel Kelly]

All right. Yeah. So look at your sustainable Development goals. Which of those have you picked?

[James Reed]

Yeah.

[Isabel Kelly]

What's your focus? And then building those out. What are your environmental activities, your scope, 1, 2 and 3, carbon footprint, your net zero plan, the things that you have to do in order to get there. Your social impact. Have you looked at what the salient social impact issues are around you? What communities are you in? Who are you hiring from? Are there more things that you could do to reach out into your communities, to engage in a positive way through offering employment training or, you know, if you're working in a further flung place, you know, access to water, access to healthcare, access to those kinds of things. Are there things that you can do for your communities? And then how are you looking at diversity, inclusion? What have you got in place to ensure that you really are representing the communities that you work in? And, and you're making the most of the talent that, you know, not just saying our doors are open, but reaching out to pull in the talent that may not be. Be confident enough to come in. And then on the governance side, there are elements, like looking at the makeup of your board. Is your board all middle aged white men? That is quite a traditional. No, I wasn't asking it specifically. Thank you.

[James Reed]

Supporting you on that one. So how could they be better prepared? Boards of the future for new issues.

[Isabel Kelly]

Yeah. Have actual diversity so that's what you're saying. I'm a middle aged, middle class woman currently. I'm diversity on a board. That's not right. So I think that you know my personal objective, what you're saying, you're saying.

[James Reed]

You get, you're appointed just to make the board a bit.

[Isabel Kelly]

No, I'm not there just to be.

[James Reed]

What do you mean?

[Isabel Kelly]

The fact that I represent diversity.

[James Reed]

Well, there's no one else.

[Isabel Kelly]

It's not right. Like I'm not very diverse. That's my point.

[James Reed]

Well, I don't know what very diverse means. I mean, we're all different.

[Isabel Kelly]

We are all different. We are different. But. But yeah.

[James Reed]

You think? Yeah.

[Isabel Kelly]

If the board is never you on the board. No, but if the board is mainly middle class white men and then you bring in a middle class white woman.

[James Reed]

Yeah. You're not, you're not being that adventurous far enough.

[Isabel Kelly]

But if you're bringing in, you should be much more people from different ethnic backgrounds.

[James Reed]

Representative of the community.

[Isabel Kelly]

Representative of the community. People. Yeah. Of all kinds of diversities that haven't previously had access to a board and the same.

[James Reed]

Because you'll make better decisions and it'll be faster to respond to situations that.

[Isabel Kelly]

Are new, expected, totally. Or you won't be, you know, blindsided by them. Yeah, yeah.

[James Reed]

Actually that's a, that's an important thing to emphasize because it's sometimes the things that blindside you that sink you.

[Isabel Kelly]

Yeah.

[James Reed]

It's not necessarily the day to day.

[Isabel Kelly]

Yeah, yeah. I mean, who saw the pandemic coming.

[James Reed]

And you know, it was interesting how government struggled to respond to that.

[Isabel Kelly]

Yeah.

[James Reed]

We didn't have enough scientists involved anymore.

[Isabel Kelly]

Probably not. We don't believe them anymore. Yeah. Yeah. So that's the thing. It's like, just because you, I don't know, because you don't look like a board member doesn't mean you shouldn't be one.

[James Reed]

But also, but, but there is a sort of other side. The boards shouldn't be too big. No, I don't think.

[Isabel Kelly]

No, no.

[James Reed]

Otherwise it becomes like wieldy.

[Isabel Kelly]

Yeah.

[James Reed]

So, you know, we were talking about this earlier, I was in a board meeting earlier today and, and we wanted to make the board more diverse and it's 50, 50 men and women, but it's not sufficiently ethnically diverse.

[Isabel Kelly]

Yeah.

[James Reed]

And we, we want to address that over time and ensure that our sort of inclusion and belonging program.

[Isabel Kelly]

Great.

[James Reed]

Make that happen. But it's not straightforward.

[Isabel Kelly]

No.

[James Reed]

You've got a board of eight, 10 people. You know, vacancies only arise every now and again. And.

[Isabel Kelly]

Yeah.

[James Reed]

And you want to make sure the best people are appointed, of course. So it's. I think you need to be strategic about it. Really.

[Isabel Kelly]

You do. Although some things I think you kind of need to, in a way, you almost need to overcorrect to start with. And then what does that mean? Maybe you do need to hire too many people just to even it out and then it will sort of come back to balance in the first place. Yes.

[James Reed]

Okay, I haven't thought of that. That's an interesting strategy.

[Isabel Kelly]

All right. If you want. If there's someone that's coming up to.

[James Reed]

Retirement, that's interesting strategy. Yeah, yeah, that's what you mean.

[Isabel Kelly]

Or it might hasten that.

[James Reed]

I'm sure they'll all be watching, isn't it? Okay. Is there anything I should have asked you on this subject, which is fascinating that you feel I've missed?

[Isabel Kelly]

I think the bit at the bottom of our framework is the metrics.

[James Reed]

Oh, yes.

[Isabel Kelly]

So data and metrics are increasingly important.

[James Reed]

You can be reporting and measuring, reporting.

[Isabel Kelly]

And measuring, but setting yourself some targets. So you could be doing all the greatest stuff in the world. And what does that amount to? In order to showcase and, you know, really show progress against your environmental and social and governance objectives, you kind of need to set yourself a target. There are some targets which are set for you, like the environmental, the net zero targets. There are others that you can make for yourself. So say for your community action work, if you are training young people for jobs of the future, how many by when, how much? What does that equate to? So be specific, be specific and then have. You know, what I like to see is, is almost like a management account. So you're very familiar with what you're reporting on your financial inputs as a company. Pick some headline objectives so that you can have an equal conversation about your ESG objectives.

[James Reed]

Yeah, we have a scorecard for our business.

[Isabel Kelly]

Exactly.

[James Reed]

And some of these measures, you're saying, should be part of that scorecard.

[Isabel Kelly]

Should be part of that scorecard. Because otherwise it's not an equivalent conversation. You're having the numbers based financial conversation and then you're having a narrative conversation about going volunteering or something. They're not equivalent conversations. And with the legislation and the reporting requirements, they kind of need to be. And with the thing that's coming called double materiality.

[James Reed]

That sounds frightening. What's that?

[Isabel Kelly]

Yeah, which is. So that is not only accounting for what your company's impact on the environment and society is, but looking from the outward in what is the impact of climate change and societal change on your company. There are a lot of risks to that. If you're a travel company and people no longer want to travel because of climate change or it's too hot in Europe in the summer, that has a massive impact on your business. So you're now being asked to account for that out outside as well.

[James Reed]

Well, that makes sense. I mean a good business will be looking at risk. Should be doing that anyway.

[Isabel Kelly]

Yeah, but many of them aren't. They're looking at the quarterly number, right?

[James Reed]

No, I mean those are long term changes, especially around technology are huge.

[Isabel Kelly]

Yeah, yeah. So you need to then integrate that into your sort of risk, into your financial reporting and into your future look at.

[James Reed]

So if you, if you have a scorecard, which we have. Yeah, I'm sort of sold on this idea.

[Isabel Kelly]

We should be updating it to include show in progress.

[James Reed]

So, so sort of three measures that might be fitting for what your carbon.

[Isabel Kelly]

Emission or carbon emissions. Definitely. And then you know, your pay gaps. So that could be your gender and your ethnicity pay gap, you know, how are you doing on that? And then if you've set yourself a target around training a certain number of people into jobs of the future, how many, how much by when did they stay in those jobs? Was that a successful target program, that kind of activity?

[James Reed]

So that's very tangible and that's very helpful.

[Isabel Kelly]

Yeah. And then your board can have that regular cadence of conversation where they understand that was the baseline. That's where we're going and this is where we are along that journey.

[James Reed]

Isabelle, thank you very much. That's very helpful. I've learned a lot.

[Isabel Kelly]

Free consulting.

[James Reed]

I knew I'd get some value. Thank you. What gets you up on a Monday morning?

[Isabel Kelly]

Well, I love what I do and the thought that through all the different bits of work that I do, somewhere along the line I'm helping to address issues of social justice and the reform of capitalism. That sounds very grand, but I think it helps me to sort of pick and choose the work that I do, organizations that I work with, the volunteering work that I do, if it's all aligned to that, to kind of using the resources of business to deliver what the world needs.

[James Reed]

Very good, thank you. And my, my last question is, it's one from my interview book. It's a classic. One of the fateful 15 is where do you see yourself in five years time?

[Isabel Kelly]

I'd love to be sitting on more company boards because I think that's where at the moment I can personally affect more change.

[James Reed]

Fantastic. Thank you very much. Thank you to Isabel for joining me on All About Business. If you'd like to find out more about developing a meaningful purpose for your organization, Visit profit with purpose.co.uk I'm your host, James Reid, chairman and CEO of Reid, a family run recruitment and philanthropy company. If you'd like to find out more about Reid's purpose of improving lives through work, please visit our website. The link is in the show notes. See you next time.