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In today's world, sustainability isn't just a lifestyle choice. It's a boardroom priority, a hiring strategy, and believe it or not, a competitive advantage. On this episode, we're diving into the evolving world of sustainable business practices, a sector that has been growing in recent decades in response to climate change and in some instances, more strict regulations. Some companies are still rethinking how they should operate, innovate, and stay relevant in a world that's alarmingly warmer every day. From factory floors to supermarket aisles, companies are waking up to the reality that being eco conscious isn't just a plus, it's a necessity. And they're calling in the experts to help get them there. It's business, it's climate, it's software. And yes, it's surprisingly cool. I'm senior tech correspondent Samantha Murphy Kelly and welcome to the next innovation. Let's start with the basics. What is corporate sustainability?
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Companies who are wanting to allow their businesses to move forward in a way that minimizes impacts on the environment, impacts on people, has strong governance and transparency in place.
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That's Josh Prigge, founder and senior sustainability consultant at Cestridge, a firm that helps companies design and achieve sustainable practices like zero waste and lowered emissions. They've worked for major brands and corporations like Levi's and BlackRock. Josh and other consultants advise businesses on how to become more environmentally and socially responsible. They analyze a company's current practices, assess their impact, and recommend strategies for improvement.
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I would say it slightly differs from other management consulting because it's a relatively new field, corporate sustainability and esg, and it's evolving quickly with new regulations that are popping up around the world, mostly in Europe and in California and some other states that are looking at climate related legislation.
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Regulations like required sustainability reporting and environmental impact transparency are forcing companies to act. But according to Josh, there are motivations for companies to do this too.
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There's a lot of great research out there that shows companies with a demonstrated commitment to sustainability are able to attract and retain employees and also increase the engagement and productivity of those employees.
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That connection between sustainability and talent retention isn't just backed by research. It's echoed by voices across the industry. Joan Michaelson is a contributor at Forbes and an ESG consultant. She's conducted hundreds of interviews about this exact trend.
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People across the board of every generation, but especially the generations that are making up the majority of the workforce right now, really want to align their values with their work. 70% of them said that they will only work for companies that have a significant sustainability profile and practice that they can truly believe in and like verify. I've had people on my show who have said, I get calls from people all the time saying, I want to recruit the so and so, but can they come and talk to you? Because they want to know about our sustainability profile before they'll commit to the company. I mean, it's a real thing, right? And we know that people in the generations that are coming up and people in their 20s and 30s today, really want to align their values with their work.
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And in other words, sustainability isn't just about doing the right thing. It's about staying relevant, competitive and ahead of risk. But how do companies actually get there? To effectively integrate these practices and reduce carbon footprint, companies enlist sustainability consultants to help them move toward their goals. That's where consulting firms like Climaction come in. I spoke with its CEO Paul Murphy about what he's seeing firsthand.
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If you think about the length of time that companies have to act between now and 2030, it's not a lot of time. So you really need to get moving as fast as possible.
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Climaction is a global company with offices in Europe and the US they help manufacturing companies decarbonize and focus on solutions first and building software second. It's about solving real specific problems and using digital tools to do it better and faster. Take their FAST program, an acronym that stands for Footprint, Audit, Strategy and Targets. It's a four step process that helps companies assess their entire carbon footprint and identify practical goals that improve environmental performance. Let's say a manufacturer wants to reduce the carbon footprint of their agricultural operation. Climaction will first measure their footprint across various levels of emissions, identifying key hotspots. Then they audit current practices and identify opportunities for improvement. Depending on their budget, those opportunities then become strategies and measurable targets.
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Within eight weeks they have a very clear picture of what they need to do, how much it's going to cost and any grants or funding that is available for it, who they need to work with and hopefully then after that they partner with us and we can start delivering action straight away.
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Paul told me Climaction splits their work across four traditional consulting, digital tools, project development and a hands on they call climate action as a service instead of the tedious spreadsheets and audits. Consultants work very closely with the team.
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To drive decarbonization, which be your old school knowledge base. Higher experts Experts come into a company, get to understand it and develop strategies and solutions for them. Simple example, if a company is considering doing solar, we can design the system from end to end. We can project, manage and deliver it. And we do that for most decarbonization technologies. We also then have another part to the business, which is climate action as a service, where we become integrated as part of their team to support them in delivering on their decarbonization strategy.
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But that's one of the biggest challenges among companies. It's a difficult process of reducing carbon emissions. So what are the most budget friendly ways to do so? Which technologies offer maximum results? Could it hurt productivity?
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If you look at industrial companies, the primary energy use is through gas or fossil fuels.
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And for heating, whether that's switching to renewable energy, electrifying heating systems, or rethinking supply chains, decarbonization requires strategic vision and practical on the ground execution. And that last part, the supply chain, that's where things get even more complicated.
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So scope 3 emissions is the one that most people forget about, which is the supply chain, the raw materials, the things that you buy, how your employees get to work, business travel, things like that. In Ireland, for example, the dairy sector, there's 18,000 dairy farmers in Ireland and you need to get all those people moving in the same direction in an accelerated way to be able to decarbonise your supply chain. So how do you do that?
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Some companies prioritize choosing eco friendly materials. Others explore green transportation options and renewable energy sources. And from the Irish farms to the powerful American corporations, decarbonizing the supply chain is a global concern. In fact, it's slowly becoming a requirement. Now more American companies are looking to their supplier sustainability efforts to better understand their own environmental impact.
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The big companies, the leading companies, are really now asking their suppliers to set their own science based targets because they know that's gonna be needed for them to achieve their own net zero targets that they have.
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This kind of proactive thinking is crucial in adapting to the evolving global landscape of sustainability efforts.
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I'd say we've always been behind Europe in regards to sustainability and I'm sure we will continue to be behind Europe. They've always taken big steps ahead of the U.S. i think it's the corporate world that has really been keeping America going related to sustainability because the government and the policies haven't been there. But I think the corporate world and the asset managers who are investing all this money in businesses again understand the risk of not, of not doing this. They understand the need. I think the corporations will continue to probably lead the way for the country for the foreseeable future.
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In the U.S. while Democrats tend to prioritize green solutions, Republicans are more fiscally Concerned with the costs of sustainability measures. That disconnect isn't just financial. It reflects a deeper divide in how the US and Europe approach climate action. European lawmakers have taken bolder regulatory action. By 2050, the European Union plans to become the world's first climate neutral continent and is already surpassing the United Nations 2030 sustainability agenda.
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Europe is ahead of the United States in many ways. There are very few people that I understand in Europe who doubt the existence of climate change. It's a given again, they take these climate issues much more seriously and they look for solutions. The European Union in particular has been way ahead of the United States. They put in place the taxonomy and the CSRD Corporate Sustainability Reporting Directive.
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The CSRD is one of the most consequential regulations on the horizon. It requires companies to disclose their environmental impacts and how tailored strategies affect their business. It also aims to enhance transparency, accountability and comparability in corporate sustainability practices. And it's not just about the rules. On paper, it's a fundamentally different mindset.
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Europe by nature has a longer term view of the United States. The United States tends to be very, you know, boom, boom, boom, instant gratification, you know, and they of course have a more a culture that's more work to live, whereas the United States seems more live to work.
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Joan has seen a difference show up at major events too. Before our conversation, she hosted a corporate climate event at south by Southwest London.
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Nobody was questioning what was responsible for climate, you know, the role of fossil fuels. They were looking at solutions and how do we deal with it, including government officials. I mean, we had the UK Climate envoy, they had King Charles himself has been talking about climate change for decades. Really.
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But regardless of geography, one thing remains clear. True sustainability goes far beyond internal operations. For many industries, the biggest environmental impact happens upstream in their supply chains and in sections like agriculture. Reducing supply chain emissions gets even harder.
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I think food and beverage as well has really been doing a lot over the past five, 10 years. Kind of the previous way that that we were managing agriculture is, you know, very unsustainable. So I think a lot of these companies that are setting net zero targets and want to understand how the practices in their vineyards or their agricultural fields impact their overall scope. 1, 2 and 3 greenhouse gas emissions.
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So some of our customers are some of the world's largest food and beverage customers and they have a particular challenge at the moment where they need to gather data from their supply chain to understand the sustainability of their supply chains.
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That's why Climaction is developing a unique AI Video platform. It's called vsag and users can upload photos or videos that describe a concern. Then the app gives general feedback from a chatbot like tool.
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For example, if we were looking at a dairy farm in Ireland, we might be looking at solar feasibility. For us to understand the feasibility of solar for a dairy farm in Ireland now we would have to send engineers out there, we'd have to go out and visit them, we'd have to survey their electrical infrastructure, we'd have to look at their roofs. We could just ask the farmer to take a photo of this, that then we can review it remotely as well so they ask questions to get a response from it. And they'll have the feeling that they're speaking to a consultant when really they're actually speaking to a pre programmed AI or pre trained AI tool.
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But that's just the first step. After connecting with the AI bot Climaction can put you in touch with an in house consultant to help tailor your strategy and see it through. You can ask follow up questions about anything from budget restraints to implementation strategies.
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It's much more engaging where there's actually someone talking to you in your own language that understands your industry and is asking you questions and guiding you through the survey.
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We've talked a lot about how the process of manufacturing and production can be sustainable. But what about everyday consumer choices? If companies help consumers make the right choices, like buying plastic free packaging or more plant based alternatives, the impact could drive business sustainability forward.
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I started Carbon Track straight out of university 10 months ago and we're on a mission to cut UK emissions by 5% by 2030, at least through the power of small sustainable actions. Because we believe when people come together to take even the smallest of actions, they can contribute to a massive difference.
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Yasmin Abdou is the founder of Carbon Track, a software company backed by the United Nations, Samsung and other global organizations. It helps supermarkets and customers identify smarter, more climate friendly options.
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And then one day I discovered that food contributes to 34% of world emissions. And so I decided to make better choices for myself and for the planet, of course. But then when I tried, immediately I realized how difficult it actually was to make those sustainable choices. There's packaging, there's transport, there's a type of transportation, transport, growing methods, fertilizer, etc. So that's where Carbon Truck came about.
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Her company's technology works directly with supermarkets to make sustainable shopping simpler and rewarding.
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So your shopping experience is the same. You go, you scan your loyalty card and then based on that, we Provide personalized suggestions for greener alternatives in the form of, like, one click swaps.
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Carbon Track translates those choices into something tangible. Not just a number, but a story.
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It's not just that, because when people start making these sustainable choices and adopting them, then we can actually tell you how much of an impact you have by translating it into something that you can understand. So something like, well, your choices have saved two penguins or three turtles because of the packaging. It hits you different when you realize the choices you make are actually making a difference.
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Whether it's consumers, consultants, or corporations. Experts agree this is where the shift is headed.
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You know, there's also research out there that shows companies who are more likely to be leaders in sustainability are also more likely to be leaders in innovation, innovating new products, innovating new management styles and processes internally while using a sustainability lens in everything that they do.
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There's different ways to look at this. There's technologies to look for over the years and decarbonization. Agriculture is a big one. But there's also reporting and there's also how companies navigate this moment that we're in right now, where there's so many competing pressures. I think authenticity is a critical thing. People really want to work for leaders that they believe in and believe are authentic and walk the talk and live their values whether they agree with those values or not.
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While technology plays a critical role in what the future may look like, mindset may be the greatest tool of all. Companies like Climaction and Carbon Track are changing the way the corporate world approaches climate solutions.
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One of the drivers of innovation is constraint, right? So the constraint of how do I use less energy, how do I use less water, and how can I do it for less money? And in a simpler way, those things can actually drive creative people to come up with another solution. What these companies need to do is kind of look at the constraints as motivation.
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The tools are here, the consultants are ready, and the clock is ticking.
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There isn't that many people in the world that can walk into a factory in two days, figure it out and understand it end to end and. But we can do that.
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Thanks for listening to the Next Innovation. This series was produced by Situation Room Studios and powered by Enterprise Ireland. Investing in the next wave of innovation. Our executive producer is Christine Barata and our senior producer is Sharon Barrero. Emily Beeman and Leila Sharoui are our associate producers. A special thanks to Yasmeen Abdou, Joan Michaelson, Paul Murphy and Josh Prigge. I'm your host, Samantha Murphy. Kelly, until next time.