Episode 395
The Corporate Conscience: When CEOs Get Political
EP 395 - Can big business actually change the world or is it all just PR?
Andy speaks to Lucy Parker, Senior Advisor at Brunswick and co-author of The Activist Leader, on why CEOs need to stop playing it safe and start thinking like activists.
From Gordon Brown’s task force to boardrooms at Maersk and Walmart, Lucy shares how companies can bridge the gap between profit and purpose, and why the future belongs to leaders with a backbone.
*For Apple Podcast chapters, access them from the menu in the bottom right corner of your player*
Spotify Video Chapters:
00:00 BWB with Lucy Parker
01:19 Andy's Intro
03:04 Quickfire - Get To Know Lucy
09:47 Lucy's Current Role at Brunswick
10:25 Big Business Addressing Societal Issues
14:27 Challenges and Misconceptions About Big Business
22:44 Big Businesses Making a Positive Impact
28:19 The Role of Regulation and Policy in Business
35:11 The Future of Business and Societal Change
44:51 Developing a Sustainable Mindset
45:35 The Role of Leadership in Sustainability
45:59 Challenges and Responsibilities of Modern Business
49:16 The Complexity of Global Issues
49:40 The Journey Towards Net Zero
51:02 Transparency and Accountability in Business
01:07:33 The Importance of Data in ESG
01:13:40 Activist Leadership in Business
01:23:18 The Power of Storytelling in Leadership
01:26:12 Wrap Up
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Transcript
I'd had these extraordinary years running the task force for Gordon Brown and it was an amazing privilege, an amazing moment.
Speaker A:But task force is Finnish.
Speaker A:So, okay, what do I want to do?
Speaker A:And I'd been a corporate advisor for years and I loved to do it, but I'd really learnt through the government role.
Speaker A:Oh, there is a chasm between policy making and government and businesses.
Speaker A:The destruction of value there is just awful.
Speaker A:I was a bit shocked actually about the fact that I thought, wow, you want growth in a country, we want prosperity in a country.
Speaker A:Wesington come from.
Speaker A:It's going to come from business.
Speaker A:It's not a value, just a fact.
Speaker B:But what I wonder is, is it big business has a problem?
Speaker B:Is it departmentalized, detached from their people?
Speaker A:It's a new demand.
Speaker A:Almost everybody at the top of business today is really good at delivering financial value.
Speaker A:That's how they got there.
Speaker A:And they do it really well, but they haven't thought about social value.
Speaker A:There's a lot of businesses now where people could be working 40 hours a week and they can't pay for their food at the end of the week.
Speaker A:Well, that's a business model.
Speaker A:That's not human, foreign.
Speaker B:Hi and welcome to Business Without Bullshit.
Speaker B:We're here to help the founders, entrepreneurs, business owners, anyone who wrestles with the job of being in charge.
Speaker B:And if you like what we do here, please rate and review us on Spotify and Apple and come say hi on YouTube if you fancy watching us in action.
Speaker B:Links are in the episode description or just search for WBLondon.
Speaker B:Why should CEOs act like protesters?
Speaker B:And what happens when they do?
Speaker B:In this gripping episode, Lucy, senior advisor at Brunswick and co author of the Activist Leader, takes us behind the curtain of big business, where she helps footsie giants and global CEOs wrestle with problems no one trained them for things like carbon emissions, poverty wages, plastic waste and toxic supply chains.
Speaker B:She begins with a revelation.
Speaker B:Governments and big business don't trust each other.
Speaker B:They actually even hate each other.
Speaker B:And Lucy's job is to get them to talk not just about policies or profits, but about how to fix the systems both sides depend on.
Speaker B:Lucy shares hard, fascinating stories like how Merce built the world's first green container ships to break a decade long industry deadlock.
Speaker B: How Walmart educated: Speaker B:And how intel transformed blood minerals into a supply chain badge of honor.
Speaker B:Lucy calls this pivot learning out loud.
Speaker B:This is what business sounds like when it grows a backbone.
Speaker B:Check it out.
Speaker B:I am Andy Orey and today we are joined by the lovelier Lucy Parker.
Speaker B:Lucy is a Senior Advisor at Brunswick Group and co author of the Activist Leader.
Speaker B:A pioneer in helping major companies navigate their role in society, Lucy co founded Brunswick's Sustainable Business Practice, advising global leadership teams on some of the most pressing environmental and social challenges of our time.
Speaker B:Lucy began her career making BBC documentaries before moving into strategic corporate communications, and even chaired the Prime Minister's Task Force on Talent and Enterprise.
Speaker B:Lucy, a warm welcome to the podcast.
Speaker A:Thank you.
Speaker A:It's a great pleasure to be here.
Speaker B:We start with something easy.
Speaker B:We're going to start with a bit of fun, Lucy, which is just to get to know you a bit better.
Speaker B:I'm going to ask you some very simple questions.
Speaker B:You should know the answers to them.
Speaker B:Answer as quickly as you can.
Speaker B:What was your first job, Lucy?
Speaker A:Running workshops for children in parks in South London during their summer holidays.
Speaker A:And I'm pretty much still doing something not far from that today, to be frank.
Speaker B:Yeah, lovely thing.
Speaker B:What if the sun's out?
Speaker B:What's your worst job?
Speaker A:I have a very clear memory of my worst job, but I do have to say that it actually wasn't the job that was the problem.
Speaker A:It was the problem.
Speaker A:It was probably me.
Speaker A:No, it was me.
Speaker A:I was a junior researcher on a BBC program that actually one of those news roundup programs after the proper news.
Speaker A:And we used to have to get there at 7 in the morning, not a problem.
Speaker A:And I was a junior with my coffee and no notebook.
Speaker A:And they would go around the table discussing what would be on the air in maybe 12 hours time.
Speaker A:And all the grownups at the table would say, I think we should cover Middle east or we should cover stress in the National Health Service.
Speaker A:And that's like decades ago, right?
Speaker A:And it's like, what would you cover today?
Speaker A:Middle east and National Health Service.
Speaker A:So that's really not hard.
Speaker A:But if you're me and you're very junior, you're sitting on the edge and they would say, can you look up?
Speaker A:We found a room.
Speaker A:Roller skating nun in Yorkshire, can you bring them in?
Speaker A:Or the one I really remember was there was a guy who'd worked out how to play the national anthem on his instruments from the garden.
Speaker A:Garden implements.
Speaker A:And I just hated it.
Speaker A:And I was rubbish at it.
Speaker A:And I was pulled up in front of the sort of queen bee boss who was the presenter.
Speaker A:Who wrote this script?
Speaker A:Who wrote this intro script?
Speaker A:Me, ma'.
Speaker A:Am.
Speaker A:Well, it's not funny.
Speaker A:And I'd go, well, I'm not very funny.
Speaker A:And after a bit they said, we don't think you're rightly good at this and you don't like it.
Speaker A:I went, no.
Speaker A:And then they moved me into other things I did like, but it was the worst.
Speaker B:You take life quite seriously then underneath.
Speaker A:Yeah, very.
Speaker A:I do.
Speaker A:That is a problem.
Speaker A:But I. I definitely know that it was a kind of lesson in.
Speaker A:It's not.
Speaker A:Wasn't the job.
Speaker A:It was the worst job for me at the worst time.
Speaker A:But.
Speaker A:But I'm a bit too serious.
Speaker B:It's the favorite subject at school.
Speaker A:My favorite subject at school was history, but it was because of the.
Speaker A:The why.
Speaker A:You know, it was a sort of classic story.
Speaker A:I had a great history teacher.
Speaker A:Teacher makes everything, everything.
Speaker A:And there was a marvelous moment of one illustrated where there was a marvelous moment carried right through my career, which is, I did history A level.
Speaker A:And we all came in first history class and we were like, ready to go and eager.
Speaker A:And she came in and said, I'd like you to read this book this week.
Speaker A:And it was called the Waning of the Middle Ages.
Speaker A:And it was by a Dutchman called Heitzinger.
Speaker A:And it was about exactly what it sounded like, the waning of the Middle Ages.
Speaker A:And we came in ready to talk about it the next week, and she said, we're not going to talk about it.
Speaker A:I'd like you to go away and read this book which was called the Age of Ambition by de Boullay, a Frenchman.
Speaker A:It was exactly the same period of time in exactly the same part of the world, and somebody was writing the, you know, the waning of the Middle Ages, and somebody else was writing the rise of the Renaissance.
Speaker A:I mean, wow.
Speaker A:And as a young girl, you know, listening and what is history all about?
Speaker A:It was the most brilliant exercise in.
Speaker A:It's all going on at the same time.
Speaker A:It's multiple layers.
Speaker A:And what case do you want to make?
Speaker A:You want.
Speaker A:They're both right, but it's all going on.
Speaker A:And how do you look at all of that and make the case you want to make?
Speaker A:It was such a sensationally good piece of teaching about.
Speaker A:This is actually about how you look at things and how you learn and how you make a case.
Speaker A:And it was a history lesson, but I was very lucky to have it.
Speaker B:That's a great answer.
Speaker B:What's your special skill, Lucy?
Speaker A:I've had to ask people this, right?
Speaker A:So talking about taking it seriously, what I do know how to do is to listen to somebody, to elicit what they mean.
Speaker A:So if you like, it's a kind of cut to the Chase thing.
Speaker A:Or put it another way, cut the.
Speaker A:What do you actually want to say?
Speaker A:What is the thing you're trying to get across and to help people explain why they want you to understand this, why it matters, and make their best case for what they believe you shouldn't understand.
Speaker A:You know, I make my living as an advisor now.
Speaker A:I was a documentary maker when I began.
Speaker A:And a lot of it is just listen and make the case, what am I hearing.
Speaker A:And.
Speaker A:And of course, everybody's upright, close against their own lives.
Speaker A:They can see all the details.
Speaker A:You know, I sometimes look at it like stars in the sky.
Speaker A:It's all the details.
Speaker A:But.
Speaker A:So what's the constellation we're going to paint?
Speaker A:We need that, that, that and that.
Speaker A:That makes a picture.
Speaker A:And out of that, you can help me understand something that matters to you.
Speaker A:And that's sort of what I do most of the day, every day.
Speaker B:Nice.
Speaker B:It's a nice skill.
Speaker B:It means you like listening, too.
Speaker B:What did you want to be when you grew up?
Speaker A:Ballerina.
Speaker A:Didn't last very long, but I did watch.
Speaker B:Your daughter wants to be a ballerina, does she?
Speaker A:I know.
Speaker B:She's only four.
Speaker A:I know, but you do.
Speaker A:And it's the pink tights and it's something, isn't it?
Speaker A:I wanted to be a ballerina, but it wasn't going to last.
Speaker B:I accidentally found this magazine of this little magazine that's come in a newspaper, something of wedding dresses.
Speaker B:So she's just like.
Speaker B:She's like, daddy, I want this one.
Speaker B:You know, And I mean, I've had to make a film of it because I'm just like, you know, it's just.
Speaker B:It's heartbreaking, you know.
Speaker B:What did your parents want you to be?
Speaker A:There was no expectation from my parents about what I would do or any kind of career path or anything.
Speaker A:Well, I think what there was really, really clear message was, what are you going to do that's going to be helpful?
Speaker A:I mean, the expectation was be useful.
Speaker A:And it's going to be something that you'll have to work hard at and get better at.
Speaker A:But be useful.
Speaker B:Yeah, right.
Speaker B:Do you ever do karaoke, Lucy?
Speaker A:Well, no.
Speaker A:My confession is I have.
Speaker A:I have never done a karaoke, and I hope I don't do karaoke.
Speaker A:I think maybe it's my special skill.
Speaker A:I've got to this point in my life and I've never done karaoke.
Speaker A:No, I don't.
Speaker B:If you had to sing a song, could you pick a song?
Speaker A:Yes, I would pick a song, actually.
Speaker A:Try a Little Tenderness is Probably one of my favorite songs of all time.
Speaker B:Oh, which version?
Speaker B:Who do you like?
Speaker B:What's the.
Speaker B:It's originally by.
Speaker B:Oh.
Speaker A:And I think that song just moves me hugely.
Speaker A:It's not the music.
Speaker A:I've got a problem too.
Speaker A:It's me being in karaoke that I. Yeah, great choice.
Speaker B:We always ask this.
Speaker B:Office dogs, business or business?
Speaker B:Very good.
Speaker B:And what's your vice, Lucy?
Speaker A:Tony Chocolone.
Speaker B:Oh, really?
Speaker B:Do you like the Tony Chocolone?
Speaker A:Well, I'm.
Speaker A:I love chocolate and I definitely feel to myself, I wish I didn't like chocolate so much.
Speaker B:So that's the end of the quick file.
Speaker B:That's just.
Speaker B:Just to get to know you a little better.
Speaker B:So give us an overview of what are you doing currently.
Speaker A:Well, I lead the team in Brunswick that is about the social value of business.
Speaker A:And what do I think I mean by that?
Speaker A:Big businesses are a very big engine in society.
Speaker A:They really matter in society.
Speaker A:And the last decades, the big businesses have got very, very big.
Speaker A:And these days, a lot of the big societal questions in the world are also big business questions.
Speaker A:And there is always this question, what is business in society?
Speaker A:And the fact of the matter is, on most of the big societal challenges today, we need business engaged and the social issues have become business issues.
Speaker A:So business needs to engage with them.
Speaker A:And my work and team, I work with, we're working with the leaders of big businesses to go.
Speaker A:How do you engage with these big societal questions in a constructive way, in a positive way, where you play your role at its best and it helps the business?
Speaker B:Do you find, just as a base point, you know, relatively speaking.
Speaker B:My understanding from the stats is that the UK has way more smaller businesses than big business.
Speaker B:I mean, we're.
Speaker B:What's the fact?
Speaker B:5.5 million businesses with less than 250 people and 7,000 or 8,000.
Speaker B:So big.
Speaker B:But you're talking big, so you're talking the 8,000.
Speaker A:Yeah, I'm talking some of the biggest businesses in the world.
Speaker A:And the biggest businesses in the country.
Speaker B:Do they have to be headquartered here or is it.
Speaker A:No, I work.
Speaker A:Work all over the year.
Speaker A:Well, to work with, you know, businesses in America and Singapore, Denmark and I.
Speaker B:Mean, Brunswick's a place.
Speaker B:What is the Brunswick.
Speaker B:Tell me what the history or what is Brunswick?
Speaker A:Oh, Brunswick is an.
Speaker A:Is an advisory firm that works with big businesses.
Speaker A:And it works particularly with.
Speaker A:I think of it as, how do you show up in the world?
Speaker A:And it began with, how do big businesses engage with the financial community?
Speaker A:Investors, financial media, analysts, the ecosystem around the capital markets.
Speaker A:That was 30, 40 years ago.
Speaker A:And over time it's grown and expanded.
Speaker A:It started around one table in London and it's now 27 offices around the world.
Speaker A:And it's doing businesses now, not only with the capital markets, but also the.
Speaker A:The big public affairs centers of the world.
Speaker A:So whether that's London or Brussels or D.C. or Berlin or Beijing, where are you working with policymakers?
Speaker A:And then the part of the business I found and lead is.
Speaker A:And what about civil society?
Speaker A:What about the big social stakeholders?
Speaker A:Where do you work with them?
Speaker A:And something maybe you would relate to is when I say it began round a table, you ask, what's the history?
Speaker A:My brother founded it.
Speaker B:Really.
Speaker B:The Bronze Group.
Speaker A:Yeah.
Speaker A:And it was my mum's kitchen table.
Speaker B:Really.
Speaker A:And he and I worked together really, really well.
Speaker A:I haven't been.
Speaker A:We've worked together very well since day one.
Speaker B:Is he still in the business?
Speaker A:Yeah, he leads.
Speaker A:He's the chair of the business and we work very, very closely together.
Speaker A:And after I finished the role in government, when I had a chance to do that, I stepped out.
Speaker A:And you very seldom get a moment in your life where you can go, I could turn this way or that way, you know, got quite a bit of experience.
Speaker A:Under your belt.
Speaker B:Man trapped in a family Business hasn't happened yet, but, yeah, I look forward.
Speaker A:But there was just that moment, you know, I'd had this.
Speaker A:I'd had these extraordinary years running the task force for Gordon Brown and it was an amazing privilege, an amazing moment.
Speaker A:But task forces finish.
Speaker A:So, okay, what do I want to do?
Speaker A:And I'd been a corporate advisor for years and I loved to do it, but I'd really learned through the government role.
Speaker A:Oh, there is a chasm between policy making and government and businesses, and I think the destruction of value there is just awful.
Speaker A:Well, I think I thought.
Speaker A:I think I thought that kind of.
Speaker A:You get them in the room and they talk to each other.
Speaker B:Big businesses.
Speaker A:Big businesses and big policymakers and.
Speaker B:Right.
Speaker B:Get them together.
Speaker B:So you're really talking civil servants in Britain.
Speaker B:Let's talk a British system.
Speaker B:It'd be top civil servants talking to, not politicians.
Speaker A:Civil servants, Civil servants, Policy makers.
Speaker A:Yeah.
Speaker B:I'm so ignorant.
Speaker B:I don't know what isn't the mp, the policymaker, and then the civil servant delivers it.
Speaker A:No, no, it's all a comp.
Speaker A:It's a complicated question.
Speaker A:I don't think I knew enough about it when I went into it, but it's a very good question.
Speaker A:But the civil service is.
Speaker A:Is sort of building policy and the politicians come in and do their stuff for a bit and the policy making goes on.
Speaker A:But I think, I felt, I know that there's always a talk about what's between government and business.
Speaker A:What's between government and business?
Speaker A:It's an ongoing question.
Speaker A:And I think because I'd been brought up in a world of business, I'd worked for decades as a business advisor, I sort of thought, well, surely, you know, that's the thing I can help do, is bring people together.
Speaker A:And I thought, wow, this isn't a little bit of interpretation.
Speaker A:This is different tribes, different value systems with oil and water, with a built.
Speaker A:Yes, oil and water built in hostility.
Speaker A:And I was a bit shocked, actually, about the fact that I thought, wow, if you want, you know, you want growth in a country, we want prosperity in a country, where's it going to come from?
Speaker A:It's going to come from business.
Speaker A:I mean, it's not a value, just a fact.
Speaker A:It's going to generate the wealth and it'll come from an ecosystem of the big businesses working with the little businesses and the suppliers, supply chains.
Speaker A:And politicians seem to know that in their minds, but they don't engage with business.
Speaker A:They try and sort of harness it, trap it, control it, and they can't understand the engine that it is.
Speaker A:Meanwhile, businesses spend their time saying, policymakers ought to get off our back and listen to it.
Speaker A:I mean, both of those things are nonsense.
Speaker A:And in fact, they do work together all the time, but there's a kind of legend that they don't work.
Speaker A:Anyway, I got out of the task force because that role finished, and I thought, I wonder which way to go?
Speaker A:And I was genuinely interested in what is this chasm and how could business and government, business and civil society work better?
Speaker A:And as I got closer to it, I thought, actually, one of the biggest questions is people don't really understand the role of business in society.
Speaker A:What is it actually doing?
Speaker A:I was trained as a teacher a very long time ago, and I was working a lot with Department of Education when I was in government and I did a huge amount in schools on this question.
Speaker A:And I really learned.
Speaker A:Every single teacher I came across assumed that business was bad.
Speaker A:And they brought their kids up in their classrooms to think that business was bad.
Speaker A:And I was like, wow, this is a shame, this is a missed trick.
Speaker A:And so I started to work in that space.
Speaker A:But then actually, what you realize is you think of the big questions in the world, you think of inequality, you think of climate, you think of the nature crisis, you think of the quality of the food we eat, these are all things that are actually on the agenda in business.
Speaker A:And it was going rapidly from the edge to the center.
Speaker A:And this now it's just, I mean, the most riveting question.
Speaker A:And when I began it, and began it with John, with whom I wrote the book We Chip up in a Business.
Speaker B:This is not your brother, this is.
Speaker A:No, no, different collaborator, creative partner, I really love working with.
Speaker A:And we would show up in a business and we'd talk about these ideas and some businessmen, very interesting idea.
Speaker A:I think there's somebody down the corridor who might be interested in this, you know, over there.
Speaker A:And there was sort of something, maybe the chairman's wife was interested in something charity or something.
Speaker A:I mean, I'm sending it up, but not very much, you know, and we were going, sorry, no, we're not talking about that.
Speaker A:We're talking about actually what do you actually do and is it working for society at large?
Speaker A:So take two or three very easy questions.
Speaker A:We're all exercised about climate change.
Speaker A:Well, it does actually come from the way we produce goods and services and the way we use energy.
Speaker A:All of that is business.
Speaker A:So what is your role?
Speaker A:If you're leading a business today, what is your role in that?
Speaker A:We're all very anxious about the quality of the food we eat.
Speaker A:Somebody's producing that food.
Speaker A:What is your role in that?
Speaker A:These questions are now business questions.
Speaker A:You have business leaders standing up quarterly at Results saying what a successful business they are and they're running maybe hundreds of thousands of people and some of them are working 40 hour weeks and more and they can't pay for their food at the end of the week.
Speaker A:That's not okay.
Speaker A:So how you run a business is the question.
Speaker A:And so we got interested and we've now done that virtually 15 years together.
Speaker A:And the reason we wrote Activist Leader is there was a high point a few years ago when you realized there were no big businesses not thinking about this thing.
Speaker A:Some have thought about it deeply, have done really fascinating things and business.
Speaker A:You could feel business leaders going, what is this thing?
Speaker A:I can see I need to engage with it, I need to talk about it, but I don't know how to do it.
Speaker A:And in our view, it's a new demand.
Speaker A:Almost everybody at the top of business today is really good at delivering financial value.
Speaker A:That's how they got there.
Speaker A:And they do it really well.
Speaker A:But they haven't thought about social value.
Speaker A:And they can see the pressure coming at them to have a way of engaging with that.
Speaker A:And they didn't know how.
Speaker A:And if you've been doing it for a decade plus, like we had, actually, you look at the people who do it well, it's a really clear pattern.
Speaker A:The picture of how to do it well is evident when you see it happen again and again and again.
Speaker A:And so given that literally every business leader I could see was asking the question how we wanted to distill what we know so far about how.
Speaker A:And that's what we were thinking about.
Speaker A:Does that make sense?
Speaker B:I mean.
Speaker B:Yeah, I love what you're saying.
Speaker B:I'm just sort of.
Speaker B:I've got.
Speaker B:Yeah.
Speaker B:Lots of thoughts in response.
Speaker B:I mean, first of all, out of interest, do you think.
Speaker B:So this business is bad?
Speaker B:I mean, you know, partly we sit here in this podcast because that is the experience that I get having worked in this job with entrepreneurs most of my life.
Speaker B:And meanwhile, my friends tend to all be in charities or musicians or very.
Speaker B:And there'd be this sort of just this tone of like businesses, you know, Thames Water thing happens.
Speaker B:Ah, there's evil people with.
Speaker B:And I'd be like, I'd always end up sort of, you know, and I'd almost get, you know, slammed myself.
Speaker B:But I'd be like, it's not like that.
Speaker B:But what I wonder is, is it.
Speaker B:Is it big business has a problem?
Speaker B:Is it departmentalized, detached from their people like small businesses?
Speaker B:Yeah, they care about that.
Speaker B:I mean that's, that's Susan and John and completely.
Speaker B:And you know, and I'm like, I'd be devastated.
Speaker B:You know, so my, that's my.
Speaker B:Where I come.
Speaker B:Because I deal with SMEs that they, they care far more about their people and what they're trying to do.
Speaker B:Often they're, you know, they're just.
Speaker B:I get really upset when people.
Speaker B:All business care about a shareholder value.
Speaker B:I'm like, I couldn't disagree more.
Speaker B:Most people I know don't even know their shareholders are.
Speaker B:You know.
Speaker B:But is it big business becomes detached, departmentalized and I've got, you know, you're talking about companies with thousands of employees, you know, and therefore I am run by the investors and the shareholders and that's if I'm listed delivering results so the market cap doesn't go down and it's sort of.
Speaker B:And then that interacts with the policymakers.
Speaker B:See that.
Speaker A:Yeah.
Speaker A:Only.
Speaker A:And they think and they see profits about things.
Speaker B:Yeah.
Speaker B:Well, there is a.
Speaker B:Well, our relationship with money is very funny, very complicated.
Speaker A:Yeah.
Speaker A:So I agree.
Speaker A:I think you.
Speaker A:I mean you wonderfully.
Speaker A:You're putting the whole damn question on the table.
Speaker A:So if we.
Speaker A:If one just took two or three ideas in.
Speaker A:In what you've said, I completely agree.
Speaker A:You know, small businesses, or SMEs, whatever the language for them, the heartbeat of business, and they're the human face of business, and it's almost impossible not to have an empathy for that.
Speaker A:And I think a lot of people who succeed in very big businesses, they care about shareholder value, by the way.
Speaker A:They're good at doing it.
Speaker A:Just like SMEs or entrepreneurs are good at making the money that keeps the business growing.
Speaker A:But I don't know many who are only motivated by the money.
Speaker A:They're actually motivated by the thing they're making and the huge skill and capability of making it.
Speaker A:And yes, they expect it to throw off a lot of money, and the money is in the capital market.
Speaker A:So it's a very complicated thing.
Speaker A:And I think scale is a lot of what we're talking about here.
Speaker A:The big businesses have got exponentially larger in the last few decades, Is that right?
Speaker B:The big have got bigger.
Speaker A:The big businesses have got bigger and bigger and bigger.
Speaker A:And that's a lot of the problem.
Speaker A:There's maybe half a dozen businesses, if that, that basically rule the global food system.
Speaker A:So SMEs are all over the place, feeding into these big businesses.
Speaker A:So they're like the sort of big beasts in the jungle, in a way.
Speaker A:Let me give you a couple of examples, and then maybe it comes alive a little bit.
Speaker A:Let's take a couple of businesses where their names are very clear.
Speaker A:Just helps to envisage it.
Speaker A:I used to work a lot with Rolls Royce many years ago.
Speaker A:You know, you can't.
Speaker A:The engines, the railway engines.
Speaker A:And, you know, I had amazing privilege being able to see how they were built and so on.
Speaker A:And you see the tens of thousands of people that build an airplane.
Speaker A:I mean, the exquisiteness and the engineering skill and the passion behind it and the imagination and the innovation and the scale of building one, that's a no mean feat.
Speaker A:People often talk about big businesses as a kind of concentration of skills and capabilities.
Speaker A:So they're motivated by that.
Speaker A:There are a lot of people at the top who have to be able to do that in a way that throws off profits, if you see what I mean.
Speaker A:But the thing they think they're doing is making this extraordinary thing, a jet engine.
Speaker A:And when you see what it takes to do it, you can't help but go, wow, that's astonishing.
Speaker A:And then you go and meet somebody who's actually making dresses, and you see the Dresses being made and you see the thread coming through and you go, wow.
Speaker A:I mean, these are huge, fascinating machines and they employ tens of thousands of people and they throw off the taxes that funds every other thing.
Speaker A:And then you get to this really fascinating and interesting thing about SMEs with Rolls Royce.
Speaker A:I remember mapping this all out, their ecosystem.
Speaker A:Two and a half thousand small businesses all over the place.
Speaker A:By the way, brilliantly expert engineering businesses, some of them in Chile, some of them in Australia, many of them Midlands in the uk.
Speaker A:And all of those little businesses are going, we've got fantastically good at making this widget and if we can sell it to Rolls Royce, we can send it anywhere in the world.
Speaker A:Now why am I saying all that?
Speaker A:Because a lot of people don't see businesses as this sort of engine, this organism, almost this organism of skill and resources and concentration all coming out towards an end.
Speaker A:Now, if it's somebody an SME, small business, I don't know, making dresses in Midland somewhere, we go, marvelous.
Speaker A:And they sold more dresses.
Speaker A:How fantastic.
Speaker A:And they got a bit more money and they made some, sold more dresses.
Speaker A:We're perfectly happy that that's the profit motive.
Speaker A:And it's got a human face.
Speaker A:This is like hundreds of thousands of times bigger and it loses its human face.
Speaker A:But the engine it is in society is exactly the same.
Speaker A:But the rough edges of what I call social value, or where businesses show up in society, a big piece of that is the how of the profits.
Speaker A:So I mentioned there's a lot of businesses now where people can be working 40 hours a week and they can't pay for their food at the end of the week.
Speaker A:Well, that's a business model, that's not human.
Speaker A:And yet the capital markets perpetuates it.
Speaker A:Or you take food.
Speaker A:We're all worried about the quality of our food.
Speaker A:We have cheap food in supermarkets, very good.
Speaker A:And they've worked very hard to give us cheap food.
Speaker A:We all know that.
Speaker A:Is it the chemicals in the food?
Speaker A:Is it the antibiotics in the food for the chickens?
Speaker A:Is it the way they look after the chickens, which they don't do.
Speaker A:They're in cages and it's really grim and if people saw it, we'd all be feel a bit worse.
Speaker A:Is it that there's.
Speaker A:How do you make your profits?
Speaker A:That's where the rub always is.
Speaker A:And so that's the question.
Speaker A:How do you look at the consequences of the, of how you make your profit?
Speaker B:If you take the.
Speaker B:The edgier bit of that is that there are people working 40 hours a week that can't, you know, afford their food.
Speaker B:I mean, my understanding of it, you know, thanks to friend of the show Andrew Craig, is that because we started printing money, like the, the real problem that's going on that I think, I think gets, you know, overlooked is because we started printing money quantitative easing effectively.
Speaker B: going on, I can't since like: Speaker B:America sort of decoupled from the gold exc or something and then they started doing it.
Speaker B:Just means salaries are becoming less valuable to stuff and it's been going on for ages.
Speaker B:You know, that's why a house is so much more expensive.
Speaker B:And that gets a bit lost, I think.
Speaker B:I think it's really interesting then, looking at, through the prism of sort of big business to say, you know, you've got people who aren't earning enough.
Speaker B:Because that was going to continue to get worse as long as we print money is my understanding of it, because we're basically devaluing the country the whole time and most countries are doing this.
Speaker B:But it's interesting to say because a big business would say, well, I can't afford to pay that role anymore.
Speaker B:I could move that role to a country where maybe that money could be valuable enough or, you know, so how much again, back to your policy thing.
Speaker B:It's like, how much is it on the business shoulders?
Speaker B:Because it's almost businesses need to say to the government, stop printing money.
Speaker B:But then they would say, well, we can't stop printing money because we've got all these guilts and bonds that we've issued because I'm only starting to get my head around this, that we can't afford to pay people.
Speaker B:So when you're sovereign and you have your own currency, you raise money through tax and you raise money through bonds, and then you have to pay 5% a year on these bonds.
Speaker B:We don't have enough money in the country.
Speaker B:So.
Speaker B:So if you go around in a big circle, you basically need a more successful economy, I think.
Speaker B:But I mean, I'm asking a different.
Speaker B:There is a vague question in there which is sort of, you know, is it.
Speaker B:Well, and also, do you feel that you should say to a business you have to work out how to pay that more or is it okay they then offshore it because they're like, well, we can't.
Speaker A:Marvelous question.
Speaker A:Because actually going back to the point I was making about the.
Speaker A:How you make profits and also how do you start to tackle these issues?
Speaker A:I don't pretend to get my head around the economic argument that you've just been extrapolating, we both follow it and that sort of thing.
Speaker A:But there's something almost more straightforward and simple to do with regulation.
Speaker A:So again, and I've heard you talk about this as a standoff, does regulation bad or is regulation good?
Speaker A:Good.
Speaker A:And bad is unuseful words.
Speaker A:Yeah, really unusual words.
Speaker B:Fair point.
Speaker A:But one of the things I'm seeing now, which is really of the moment and I think is super exciting and has a sort of creative possibility ahead of it, is that this sounds like I'm not answering your question, but I'm trying to, a few years ago, take something like carbon emissions, which are a huge, huge thing in the world, but also in business.
Speaker A:You used to hear businesses sort of say, well, I don't know why people coming to us.
Speaker A:Business leaders would literally look you in the eye and go, I don't know why they're coming to us with this sort of question.
Speaker A:Government needs to sort this.
Speaker A:Meaning you set the policy and we'll do what we're told, but please don't set the policy.
Speaker A:So, okay, it was a sort of standoff with, well, we're doing what we're doing.
Speaker A:We're making business.
Speaker A:They don't really understand us.
Speaker A:They should make the policy now, say five, six years later than that different thing happening altogether.
Speaker A:The leaders, in my view, what I would call activist leaders in business are actually turning to governments and saying, you need to regulate this.
Speaker A:And what you've seen in that five or six years is that the leading businesses are going, we saw the problem like you saw the problem of carbon emissions, however you want to put it, climate change.
Speaker A:And we set off to try and we're really working at it.
Speaker A:And you see really fascinating and inspiring and interesting things going on in business.
Speaker A:Costs money.
Speaker A:It's really hard to do.
Speaker A:Nobody on the planet's ever done anything like this before.
Speaker A:So you're having to make it up and innovate towards it as you go.
Speaker A:And the leading business is quite taking a hit and they're going, government.
Speaker A:If you were serious, if you're really saying your national policy is serious about this, you can't expect us as a business to take this on solo.
Speaker A:We've been proving how important it is.
Speaker A:We've been proving what's possible.
Speaker A:You've got to create the level playing field of regulation that makes everybody do it or we have to step back because we can't do it without you.
Speaker A:You said you were serious.
Speaker A:Get serious.
Speaker A:Make it happen for the whole industry.
Speaker B:But it's all global now.
Speaker B:So there's never a level playing field.
Speaker A:That's the problem.
Speaker B:Rolls Royce is not a British company.
Speaker B:I mean, it's a multinational, I'm sure, 100%.
Speaker A:100%.
Speaker A:So.
Speaker A:So that's the problem.
Speaker A:And arguably, you know, if you had somebody, I often say to myself, there's only one thing worse than the fact that we don't have anybody running the world is just imagine we had somebody running the world.
Speaker B:Yeah.
Speaker A:So what that actually, what that actually means is everything's kind of bumping up to each other all at the same time.
Speaker A:And you get one country that leads in regulation for a while, and then.
Speaker B:Others vote its economy and pushing people around.
Speaker A:Pushing people around.
Speaker A:And then so everybody's playing their part.
Speaker A:And what I mean by.
Speaker A:I think there's something quite interesting and inspiring going on in the leading businesses in the last few years is, I call it leadership model.
Speaker A:What you actually see is businesses going, okay, what can we do?
Speaker A:What can we do with the ecosystem around this issue?
Speaker A:And how do we advocate?
Speaker A:Which often means advocating towards government.
Speaker A:You regulate.
Speaker A:You regulate.
Speaker A:So we can all do it.
Speaker A:So let me give you an example, just because I think it's like, it's very hard to talk about these things in abstract.
Speaker B:Yeah, Examples are great.
Speaker A:Have you.
Speaker A:I don't know if you've come across a big shipping company called Maersk.
Speaker B:Yeah, of course.
Speaker B:With all the shipping containers.
Speaker A:Yeah, yeah.
Speaker A:I mean, what they've done on climate is, I mean, amazing, really.
Speaker B:They're Dutch, I presume, aren't they?
Speaker A:They're Scandinavian, actually.
Speaker B:Of course they are.
Speaker B:Who's the blooming Scandinavians doing all the good stuff.
Speaker A:Yeah, I know.
Speaker A:Well, so there they are, big shipping company.
Speaker A:We know the world knows that the carbon emissions from shipping.
Speaker B:Terrible.
Speaker B:A very, very low per mile per kilo or something.
Speaker B:Pretty terrible.
Speaker B:Otherwise burning black oil.
Speaker A:Yes.
Speaker A:So wind the clock back a few years.
Speaker A:Maersk thought, hang on a sec.
Speaker A:The ships we put on the ocean are there for 30 years.
Speaker A: Here we are in, say,: Speaker A: e going to be on the ocean in: Speaker A: In: Speaker A:We've done nothing.
Speaker A:And the industry was at an absolute standoff.
Speaker A:So what you were seeing was that the ships are all driven on fossil fuels and they go, well, we have no alternative because there are no alternative fuels.
Speaker A:The supply chain was going, well, we can't make any fuels because there's no ships that run on anything except fossil fuels.
Speaker A:So this is a complete standoff.
Speaker A:And it had been standoff for about a decade and nothing happening.
Speaker A:And Maersk went, well, okay, we got to change this.
Speaker A:So they commissioned the first ever ships to be run on something other than fossil fuels, green methanol, as it happened now they invested in eight ships.
Speaker B:What do they run on?
Speaker A:Green methanol.
Speaker A:So they commissioned eight ships.
Speaker A:Not huge in context of their fleet, but it had never been done before.
Speaker A:They got them on the ocean in a very short period of time and as soon as they started to see the eight were working, they started making 13.
Speaker A:And now they also simultaneously had just made the largest shipping containers, sorry, shipping fleet ever, with the least carbon emissions.
Speaker A:By the way, they'd engineered the ships, right?
Speaker A:So they put these ships on the ocean, but in order to do that they had to invest in the supply chain of green methanol.
Speaker A:So they boosted the supply chain.
Speaker A:In other words, they did it in the business.
Speaker A:They worked with the ecosystem around the business.
Speaker A:And then they were advocating into the world's regulation system for carbon pricing that would drive this through the whole industry.
Speaker A:You wind that five years on, nobody in the industry had done that.
Speaker A:People are now beginning to experiment with these ships.
Speaker A:The industry is now starting to call for a carbon price and so forth.
Speaker A:And Maersk has written a five year strategy for Europe that goes, if you're serious about taking the carbon emissions out of ships, this is how you do it.
Speaker A:We've gone as far as we can go without policy.
Speaker A:But it's a really brilliant example of in the business, beyond the business and through advocacy.
Speaker B:Is this an advantage of these companies becoming so big now and so global that they are the global governments?
Speaker B:You know, I mean, you can say this about the tech giants and the power they have.
Speaker B:Maybe if they're not, you know, if, and, and, and I, you alluded to this and I think it's such an important point.
Speaker B:If we don't think in good and bad and we accept that everything is nuanced and everything is gray and no one's perfect in either direction, these businesses could be, you know, 80% trying to do the right thing, you know, and, and they have the, the scale and the power and the money now to not like we're, you know, taxes a bit, you know, tax is my subject.
Speaker B:It's a big problem.
Speaker B:A lot of people get very worked up about it, particularly in this country.
Speaker B:And everyone loves tax and it applies to them, but you know, it's not A national game.
Speaker B:And that's my frustration.
Speaker B:International tax advice.
Speaker B:They're like, yeah, more taxi.
Speaker B:It's like they will leave and you know, anyway you, it's like exactly.
Speaker B:But once you've got global multinational companies, that example, I mean they're on the sea, so that's sort of international law.
Speaker B:But they could look at all sides of it and say, let's do the right thing.
Speaker B:Yeah, we've got the money, we got the power.
Speaker B:And then they, as a result of being less of them and they're more powerful than they can turn to government.
Speaker B:I mean this is like, it's like a real one of those moments because this is also what scares the crap out of people, that they're like the evil companies are taking over the world, you know, and, and they're more powerful than governments and they don't care about anyone.
Speaker B:So it's like, well again, it's not new, it's nuanced.
Speaker B:It's just not as simple as that.
Speaker A:It's nuanced and it's forward facing.
Speaker A:I mean to me the question is, okay, so what do we do now?
Speaker A:I mean we're all guilty, we're all, the lights are on, we had the hot shower, we're going on.
Speaker A:Everybody's built into a fossil fuel system that doesn't carry on.
Speaker A:We're wearing the clothes that are made of these things.
Speaker A:So we're all part of the problem.
Speaker A:The big companies are a big part of the problem, but they're also probably the only source of the innovation.
Speaker A:Concentrated power scaling up of infrastructure.
Speaker B:By the way, we're not going to run out of oil anytime soon that keeps disappearing.
Speaker B:Peak oil, forget about it.
Speaker A:Yeah.
Speaker A:So it's actually about the invention of the alternative.
Speaker A:Well, that's business invention.
Speaker A:The NGOs can hang from the rafters and keep it on the front pages of the newspaper every so often if they get a chance.
Speaker A:The academics can analyze it and point at it.
Speaker A:The governments can create policy that frames the incentives.
Speaker A:But it's the companies that have to invent the technologies.
Speaker A:It's the companies that have to scale and.
Speaker A:Exactly.
Speaker B:I mean your example's great.
Speaker B:They're thinking 30 years.
Speaker A:Yeah, exactly.
Speaker B:Companies do tend to try and what depends on your business.
Speaker B:But you know, they tend.
Speaker B:Farmers think longer, but you have to think 10, 20 years.
Speaker A:I'll tell you, farming is another one.
Speaker A:I mean to tell you this story and let me just attach a name to it just because it's so obviously a kind of red included tooth and claw type capitalist this company, what Walmart's doing with farmers is nothing short of astonishing in my view.
Speaker A:And the work that I do, they're not a client, so I'm not holding it out in any way like that.
Speaker A:You just watch what they're doing and you go, we need that, we need more of that.
Speaker A:Now if you look at what's happening, climate is really the front edge of the problem, but coming right up behind it is nature put in vertex, Nature, biodiversity collapse, soil health, all of this.
Speaker A:I mean, it's really, really dangerous.
Speaker A:What's happening now is that the fault of the companies?
Speaker A:In part it is, it's mass scale farming is, is really terrifying and it's gone as far as it can go and some.
Speaker A:And it's also billions more people on the planet wanting higher standards of living and so on.
Speaker A:So again, it's whose fault is it?
Speaker A:We're complicated, don't worry whose fault it is.
Speaker A:We got a problem today and we've only just begun to really understand the scale of the problem.
Speaker A:The reason why, did I say Allmot's doing something astonishing, is they did what I think is the beginning of starting to solve things.
Speaker A:They got educated.
Speaker A:Their senior management team went and got educated by people who know about biodiversity, know about the bees, know about soil health, to actually describe to them what is the problem, what is the actual challenge we're facing.
Speaker B:Because Walmart doesn't want to stop selling food.
Speaker A:Exactly.
Speaker A:And it's a business that ends up in the soil.
Speaker A:So they got the problem, they created the problem, but they didn't create it alone.
Speaker A:We all created the problem.
Speaker A:And they got the problem anyway.
Speaker A:They went and got educated and they pulled together 2,000, that top 2,000 suppliers, and literally brought those educators who had educated them in front of the suppliers, their whole leadership team there, and they said, this is what we've learned about bees and the necessity of pollination and this kind of thing.
Speaker A:The people there educating them in the way they'd educated the senior leadership.
Speaker A:Okay, we need you over the next few years to change your practices, regenerative farming practices as it's called.
Speaker A:And by the way, they can't do that alone.
Speaker A:So how do you work with your supply chain to incentivize them to change their practices, to help them get over the hump of the change in practice, change in equipment, change in soil and so forth that you're looking for?
Speaker A:How do you keep the faith over the few years as they change?
Speaker A:Now if you're a big company like that and you push that through Your supply chain, you're pushing it into thousands of companies and raising the standard.
Speaker A:That's how the change is going to happen.
Speaker A:That's what I mean by the implementation of change.
Speaker A:Government can't do that.
Speaker A:It's not, well, government's no good.
Speaker A:It's not the job of government.
Speaker A:So that's what I mean by it's no doubt the big companies are part of the problem.
Speaker A:The question is, how do we help them be part of the solution?
Speaker A:And there are practical things to be done.
Speaker A:And so for me, this is one of the biggest questions for our society because we do default into a. Oh, but we like the SMEs or.
Speaker A:Well, artists are lovely and church is good.
Speaker A:So good is out there.
Speaker B:I find it hard to think big sometimes.
Speaker B:It's hard to understand these massive organisms.
Speaker A:Yes, exactly.
Speaker A:But they are throwing off profits and the question is, how do they make their profits and how can we help?
Speaker A:How can we help them understand the levers they can pull?
Speaker A:Then you can actually put a different light on it too, really.
Speaker A:In many ways, this is about externalities.
Speaker A:So the thing, when I was even used to get the question of, you know, would you like to go, Would you like to go down the corridor and see if there's somebody who's looking at doing good for me, a real sort of enemy.
Speaker B:So imagine that too.
Speaker A:It's so grim.
Speaker A:And.
Speaker A:And I laughingly but genuinely say to clients, I'm sorry, I don't want to talk about good and bad.
Speaker A:That's not the question.
Speaker A:So companies think you're asking us to do good and that's not the question.
Speaker A:The question is if you're a very big company.
Speaker A:I can think of a very big company I work with which has a very big fast food franchise.
Speaker A:The people's running.
Speaker A:The people running it.
Speaker A:Right.
Speaker A:What do you think they've been doing all their life?
Speaker A:They've been making fast food for decades.
Speaker A:And I don't know what your day looks like.
Speaker A:My day looks like, but you get up in the morning and you're working.
Speaker A:End of the day sleep.
Speaker A:So their day is full of running something which by the way, is getting bigger and bigger and more and more efficient and more and more people are eating more and more that kind of food.
Speaker A:Different problem again.
Speaker A:But guess what, they are also throwing out that amount of plastic.
Speaker B:Yeah.
Speaker A:Now they never thought about that.
Speaker A:The guys running those businesses didn't go, oh, we're throwing this plastic out.
Speaker A:And by the way, nobody's ever asked them to think about it.
Speaker A:And it's happened really fast.
Speaker A:So they know about the quality of the food and keeping the team going in the restaurant and keeping people coming in, but they've never thought plastic.
Speaker A:And then they go to you as they do.
Speaker A:I thought, weren't the local government supposed to pick up the plastic?
Speaker A:Yes, they were, but do they?
Speaker B:It's covered in gunk anyway.
Speaker A:Gunk is disgusting.
Speaker A:Exactly.
Speaker A:So who's going to do something about it now?
Speaker A:The answer is, nothing in their job description through any part of their career has ever asked them to think about that and now they have to think about it.
Speaker A:And the problem is, one country over here has a law against it.
Speaker A:This country over there doesn't.
Speaker A:This country wants it to look like that.
Speaker A:That country looks like this.
Speaker A:But they've got to go, are we going to do something about this?
Speaker B:Yeah.
Speaker B:And some of those problems are pretty difficult and some of them are okay.
Speaker A:And the plastics don't exist, the alternatives don't exist and they've got to be invented.
Speaker A:So who's going to do the inventing?
Speaker A:So you're asking business leaders today to do things they've never thought about.
Speaker A:The plastic thrown out of a successful company's operations is an externality society.
Speaker A:What that means is society has to pick up the cost, which is where.
Speaker B:They sort of want to change, isn't it?
Speaker B:If you take mud water out a river, you need to pay for it.
Speaker B:If you're dumping, if you.
Speaker B:If you.
Speaker B:If X fast food chain is.
Speaker B:God only knows, if you pick some of the big ones, how many billion tons they're chucking out a year.
Speaker A:Exactly.
Speaker B:Just.
Speaker B:And you see it everywhere, don't you?
Speaker B:And it's just the sort of waste that doesn't even end up in the bin most of the time.
Speaker A:I know.
Speaker A:And so their first instinct is.
Speaker A:But I thought that, I thought that local governments were going to sort that.
Speaker B:I mean, as someone who was born in the 70s and grew up in the 80s, I remember disposable.
Speaker B:I mean, that was sort of what happened in the 80s.
Speaker B:They were suddenly like, everything was suddenly single use disposable.
Speaker B:Isn't it great?
Speaker B:You know, it was magic, you know.
Speaker A:Yeah.
Speaker A:And so you've somehow got to take for granted.
Speaker B:You just haven't developed those.
Speaker A:You haven't developed it.
Speaker A:And honestly, you go back, that's what.
Speaker B:You'Re trying to help people do.
Speaker B:Develop that mindset.
Speaker A:Develop the mindset and the institutions and the skills that go, what are we going to do about that?
Speaker A:Think about it.
Speaker A:Put it on your to do list and it hasn't been on anybody's business.
Speaker B:I mean this is sustainability.
Speaker B:I mean, ultimately, yes.
Speaker B:I mean someone sort of said to me 100 Tim Ferguson, a good man that he is, said ESG is dead.
Speaker B:Andy.
Speaker B:Sustainability is alive and well.
Speaker B:Just sort of trying to illustrate that the sort of.
Speaker B:Some of the sort of reporting and sort of, oh, let's just sort of do reports and it's like, no, like it's a sort of deep skill, isn't it?
Speaker B:A deep profession of sort of trying.
Speaker A:To understand it's a different nature of leadership.
Speaker A:And the only.
Speaker A:Well, a big hopeful thing is one of the big jobs of a chair is to put in the next CEO or the CEO to put in the next leadership.
Speaker A:I think it would be pretty weird today to put in leadership that didn't have this question in their heads and that wasn't true even a decade ago.
Speaker B:And now a quick word from our sponsor Business Without Bullshit is brought to you by Ori Clark.
Speaker B: ancial and legal advice since: Speaker B:You can find us@oriclark.com Ori is spelled O U r Y Before we press on, just a quick reminder to come say hi on whatever social platform you like.
Speaker B:We're pretty much on all of them.
Speaker B:Just search for WB London.
Speaker B:Do you believe the.
Speaker B:I forget his surname.
Speaker B:You probably know him, he's a.
Speaker B:He's actually a barrister, Paul something.
Speaker B:Anyway, he came on the pod but he, he advocates that all big business should have someone on their board who represents nature basically to help.
Speaker B:Do you.
Speaker B:Do you think that works?
Speaker B:Have you seen that?
Speaker A:Yes, I have seen that.
Speaker A:It.
Speaker A:Not nearly enough of it happens and I, I agree in principle but if you were to take the job of.
Speaker A:It's a great point actually because if you were to take the job of a leader today, if I had to have one sort of flash of how grim it sometimes feels for the guys trying to make this work is, yes, you'd better have somebody for nature and you'd better have somebody for carbon.
Speaker A:Have you got anybody on methane?
Speaker A:Do you have anybody on inequality?
Speaker A:Do you have anybody on mental health?
Speaker A:Do you have anything on.
Speaker A:And the guys running these businesses, they didn't have any of this on the radar screen 10 years ago.
Speaker A:And the guy I was talking about from a vast major and said to me I had no idea that I had to have a view you on abortion as the CEO of this company.
Speaker B:Well, I live in SME land.
Speaker B:So when someone says to me what we're.
Speaker B:Have someone join our board meetings from Nature.
Speaker B:I mean the.
Speaker B:Okay, the problem is, is you know, you know what kind of person they're going to be.
Speaker B:They're not going to be a business person.
Speaker B:They're going to be so like, oh, I don't agree with that.
Speaker B:And you'll just spend your life going.
Speaker A:All right, yeah, completely.
Speaker B:Take them out the room while we get on with it.
Speaker B:Because, you know, it's not that.
Speaker B:And then that feeds into this narrative that we're all a bunch of.
Speaker B:But it's just like, yeah, look, if I had someone who was incredibly practical and innovative and could think through how to slowly solve these problems and didn't just sort of.
Speaker B:I mean, I go back to your original point.
Speaker B:I was scribbling it down a piece of paper.
Speaker B:Is there this division we feel.
Speaker B:I said I as a tax person can only really comment on tax.
Speaker B:But what I notice is there's some academic think tanks, Resolution Foundation, Institute for Fiscal Studies.
Speaker B:They're run by.
Speaker B:I'm sorry, if you're listening to this, as far as I can see from your website, it's all academics.
Speaker A:All.
Speaker B:No one's been in business.
Speaker B:They're very clever people.
Speaker B:They've come from university.
Speaker B:We really need some of their views.
Speaker B:But they then seem to drive the media a lot media report on their reports saying media is by.
Speaker B:I have friends who are jealous.
Speaker B:They're a very left wing group.
Speaker B:I mean they are.
Speaker B:I don't know whether, you know, I mean I'm sure there's some.
Speaker B:But again, I hate like you, good or bad, left or right.
Speaker B:I find the whole thing ridiculous.
Speaker B:But certainly, maybe we'll just say not the most pro business people.
Speaker B:They've been fed this stuff by academics.
Speaker B:Then you're telling me, well, teachers sort of teach you business is bad and you sort of end up, you know, I think, I think, I think it's slightly eating itself.
Speaker B:I talked to any, any, any of the entrepreneurs people I work with.
Speaker B:I chatted to a very successful one this morning saying, well, I think like most people, mate, I've given up reading the press, you know, ranting on every side.
Speaker B:You know, I'm following YouTube.
Speaker B:I'm just here to learn.
Speaker B:I just want to learn.
Speaker B:So I'll use YouTube and podcasts and whatever, you know.
Speaker A:Yeah, exactly.
Speaker A:And I actually think that right to the beginning of our conversation and your first thought, you know, are these guys who run these, are they bad people?
Speaker A:You know, well, there must be bad people around.
Speaker A:There's bad people around, but most people aren't bad people.
Speaker A:And these are Very, they're rare, they're.
Speaker B:Very rare to meet someone who's actually.
Speaker A:Trying to be malicious, you know what I mean?
Speaker A:And so they're well meaning people and they're running these.
Speaker A:And then people are coming up and going, what are you going to do about this?
Speaker A:Ah, I never thought about that.
Speaker A:And there are, we're not comfortable to.
Speaker B:Talk about it, are we?
Speaker B:Because we're scared to say the wrong thing.
Speaker B:It's the like abortion thing, like, and.
Speaker A:And also there aren't any answers.
Speaker A:I mean the interesting thing about this is a lot of these big societal questions.
Speaker A:Climate's the easy one to talk about, but it's not the only one.
Speaker A:There aren't answers.
Speaker A:We don't have an answer to what we're going to do about the victory of plastic.
Speaker A:We haven't ever tried to change the energy system on this scale, globally at all, let alone this fast.
Speaker A:So these are huge questions going into the future.
Speaker A:So I'm constantly meeting people who assume that businesses that made Net Zero commitments five years ago, for example, oh well, that was all just grandstanding and they were pretending to be virtue signaling.
Speaker A:They didn't know what they were doing.
Speaker A:That's not my experience of it.
Speaker A:What I think actually happened was they, like a lot of policymakers, by the way, kind of woke up and went, wow, this is serious.
Speaker A:I mean this is really serious in the world and in the business and the consequences.
Speaker A:So they were going, we agree, we've got to get over that.
Speaker A:No idea how to get there.
Speaker A:But we are going to publicly go, this matters enough that we're going to agree.
Speaker B:It's a start, isn't it?
Speaker A:It's a start.
Speaker B:I mean, we signed up to the Net Zero pledge, but as you say, you then say, what do you do?
Speaker B:There's not been much good advice about what I should be doing, but you are helping me with it.
Speaker B:It's effectively very complicated.
Speaker A:It's really complicated.
Speaker A:And you've got to allow for the fact that literally there are no answers and they've got to be invented.
Speaker A:So you're asking a bunch of people who've never thought about it to go to the moon.
Speaker A:To go to the moon, which by the way, very.
Speaker A:But now a few years on, we're beating them up for trying and not having worked it out yet.
Speaker A:So I live with a lot of business people who go, should we never have said that?
Speaker A:Should we not have done it?
Speaker A:And now I'm being accused of greenwashing for the fact that I haven't done it.
Speaker A:And what shall I do?
Speaker A:And actually the answer is very much your answer.
Speaker A:I suspect mine too about don't worry that you're seeing this from the left or that from the right or this from the top or that from the bottom.
Speaker A:What's your conviction on whether this is serious?
Speaker A:And actually I don't know many people who've been pretending the last five years they were serious then and they've been trying.
Speaker A:And now you go, okay, so does all this noise mean you shouldn't try or does it actually mean you'd better be very clear about why you thought you should and not because you were being good or doing something other than the business, but that you saw through the lens of the business, the seriousness of this and how it would impact of your business and importantly how the business you're running is impacting it.
Speaker B:Is it harder as a public company though?
Speaker B:You know that they've sort of got, you know, maybe private equity or family offices, maybe these are family offices are probably the more long term.
Speaker B:But you know, public markets always like, they've got to always show improvement as opposed to sort of saying just leave me alone for 10 years while I think about this and get some people to work on it.
Speaker A:I've got a slightly contrary view on that.
Speaker A:I think, I think that, I think that I hear that a lot and I don't disagree, disagree.
Speaker B:But you hear that public being a public company is tougher to make that it's tougher.
Speaker A:We know about quarterly reporting.
Speaker A:We know about the pressures from the capital markets to not dip profits and all that.
Speaker A:So take that as red for a moment.
Speaker A:I think there's quite a lot of romanticism about family companies.
Speaker A:And if I had to look at where I see a lot of the problems lie palm oil.
Speaker A:Let's take palm oil.
Speaker A:Deeply controversial, right.
Speaker A:And it's everywhere.
Speaker A:I mean it's in so much of what we eat and use.
Speaker A:And basically the business model of palm oil is chopped down the forest.
Speaker B:Yeah.
Speaker B:Grow it in the rainforest.
Speaker B:Yeah.
Speaker A:It will cut down what was rainforest and grow palm oil.
Speaker A:That is the business model of the industry.
Speaker A:And in the last few is growing, growing, growing pressure that that has to stop.
Speaker A:Why?
Speaker A:Because the world can actually see.
Speaker A:You can literally see eyes in the sky, satellites, forest coming down and people are beginning to calculate just how little of it.
Speaker B:Why did we we started growing palm oil as a replacement for oil or something?
Speaker A:Well, the thing is, it's in so much stuff, you can't believe how much stuff it's in.
Speaker A:It's in Your soap, it's in your shampoo, it's in your biscuits, it's in your chips, it's in and you know, rather disgusting word mouthfeel that comes into view.
Speaker A:That's usually palm oil.
Speaker A:Anyway, it's in everything and most people don't even know it's in everything.
Speaker A:Right.
Speaker A:And it's hugely successful and I've sat in Malaysia with people going but we've built the prosperity of our country on it.
Speaker A:And it's absolutely true.
Speaker A:And you can see the prosperity of the country go like that, the production of palm oil go like that and the destruction of the forests go like that.
Speaker A:So basically you've got an underlying problem because it is what's created prosperity, it is driving the economy and it is catastrophic in the context of the global climate system.
Speaker A:So why am I saying that?
Speaker A:That interestingly the companies that are driving change, truthfully in my experience, are the biggest companies.
Speaker A:Why?
Speaker A:Because they have to report, they have to have the data, they have to have the money they used to transport.
Speaker B:People don't like investing in things quite quickly that become unpopular.
Speaker A:And also they have to report and they take the pressures from the regulations on.
Speaker A:And where's the problem?
Speaker A:The problem is probably not in the first tier supplies.
Speaker A:It may not even be in the second tier supplies, but it is in the third tier supplies.
Speaker A:You can't see them, they don't have to report.
Speaker A:Now does that mean that that little tier at the top are doing everything absolutely immaculately?
Speaker A:No, it doesn't.
Speaker A:But it is interesting that the drivers of the change are the big listed companies.
Speaker A:And it's partly because a lot of them are really disciplined at what improvement looks like and improving your system, looking very clearly at the data and ramping up change.
Speaker A:You have to put stuff into the capital markets that says what you're doing.
Speaker A:Capital markets are beginning to wake up to where the big long term risks are.
Speaker A:So the dialogue is visible in a way that it isn't, it isn't perfect and there's lots of stresses and strains, but you look one and a half, two layers down in the supply chains.
Speaker A:That's where the problems start and its lack of visibility and it's family companies.
Speaker A:So I think we can get a bit romantic about the idea that small companies, I guess some small, some big.
Speaker B:Why family?
Speaker A:Well, you were just making the point about family enterprises and long term enterprises.
Speaker B:Yeah.
Speaker B:Oh, okay.
Speaker A:Do you see what I mean?
Speaker B:I was thinking of family.
Speaker B:Me, Sorry.
Speaker B:Yeah, yeah, I was mixing up, you know, family of office investors.
Speaker A:Yes, family office I love your point.
Speaker B:I think it's really.
Speaker B:I mean, it shows the sort of complexity, isn't it, that the, the ones who, who are really in the toughest place are the public companies.
Speaker B:And, you know, it's hardest for them to get away from, you know, this sort of constant requirement report.
Speaker B:The regulation is so much stricter on them.
Speaker B:They're more controlled.
Speaker B:They're sort of.
Speaker B:The government is able to sort of pull the levers with them, but then they have the power to affect the whole thing.
Speaker B:Food chain, you know.
Speaker B:Yeah, I think you make a great argument.
Speaker B:Persuade me back.
Speaker B:I mean, it's unfortunate in this country we haven't been looking after our public companies, you know, for various reasons.
Speaker A:Yes, exactly.
Speaker B:And they're all not doing very well as a result.
Speaker B:And, you know, I think they're trying to work out what to do, but I don't.
Speaker A:There's a very interesting example about how long it takes, actually, which, which you put me in mind of.
Speaker A:There was an extraordinary campaign produced by intel some years back which was called In Pursuit of Conflict Minerals.
Speaker A:I don't know if you've come across the conflict minerals story at all.
Speaker B:Conflict minerals would be like blood diamonds.
Speaker B:Yeah.
Speaker A:So minerals that in one form or another, they basically drive wars, you know, like drug wars almost, in a sense.
Speaker A:And they, and they are a source of crime and, and worse.
Speaker B:I mean, arguably all sort of raw materials.
Speaker B:Do it then.
Speaker A:Yeah, yeah.
Speaker A:But, but big minerals really, really do.
Speaker A:And there was a period when intel was being got at by NGOs.
Speaker A:This particular NGO for.
Speaker A:Do you realize that your business is driving death, basically?
Speaker A:And of course, their first instinct was, whoa, no, we're not.
Speaker A:And it came out of Democratic Republic of Congo, and the stories came out there and it was really, really bad.
Speaker A:And there was a marvelous story that the CEO at the time told, and he said, I first wanted to go, okay, well, let's just get out of Congo.
Speaker A:This is ridiculous.
Speaker A:Of course we don't want to be doing that as a business.
Speaker A:And it was his corporate affairs team and his teams around him said, no, that's not going to help.
Speaker A:We should find out what's actually happening on the ground, see if we can do something about it.
Speaker A:So they put, I think it was like 20 people or something on the ground to go and look at their smelters because they suddenly realized they didn't actually know what was going on in their smelters.
Speaker A:The other side of the world and deep down on the ground somewhere in Athens.
Speaker A:Yeah, exactly.
Speaker A:Do you know what I mean, it's like somewhere down there.
Speaker A:So they put the people on the ground and they realized that they had no idea what was going on there.
Speaker A:And sure enough, a lot of the problems are artisanal.
Speaker A:People come in at night and take a piece here and they try and make small little family businesses out of grabbing scraps, you know, so it's all going on on the ground somewhere.
Speaker A:You know, back to the history lesson.
Speaker A:It's all going on somewhere.
Speaker A:And they went, well, we've got to sharpen their act up.
Speaker A:So they started to audit their smell.
Speaker A:Well, of course, everybody fails the audit.
Speaker A:I don't know what they're doing.
Speaker A:So actually they go, wait a second, we're going to have to go a bit more slowly at this.
Speaker A:So they start sort of grade, well, can you get this far?
Speaker A:Can you get that far?
Speaker A:Can you get this far?
Speaker A:And over time can you kind of go up and we can mark you better.
Speaker A:And by the way, we won't throw you out if you fail because then we haven't got smelters.
Speaker A:But also you're failing and it's all a disaster.
Speaker A:So that took years.
Speaker A:But they set themselves a goal that the three most challenging minerals, that their supply chain would be conflict free in four years or whatever it was.
Speaker A:And they made it.
Speaker A:And then their CEO came out on tech platforms and said, we're conflict free in these areas.
Speaker A:They started to put it onto the laptops that people were buying.
Speaker A:Intel is conflict free.
Speaker A:It was a brilliant title in pursuit of conflict free.
Speaker A:Now that's years and you've got to take the heat for the fact that it's not perfect and you're being transparent about it not being perfect, which is the point I make.
Speaker A:You're reporting, you're telling people it's not there, this, it's not as good as we wanted.
Speaker A:We've got to get it to this level.
Speaker A:So you've got to have a lot of conviction that that's worth doing.
Speaker A:And then you tell your consumers you've done it, but you were got at by an NGO and now they're doing that in other countries and with other minerals and stuff like that.
Speaker A:But that's a long journey and it takes a lot of conviction from a leadership team.
Speaker B:People are, I mean, on one level telling people we're not perfect, we've got all these problems.
Speaker B:That feels like the most natural way for me for building trust.
Speaker B:You know, some honesty about it.
Speaker B:Yeah, and you beg for it from the politicians sometimes, you know, can't they just say oh, we've bucket it all up.
Speaker B:Email is absolute, total mess made of the whole thing.
Speaker B:You know, we'll start again.
Speaker B:Sorry about that.
Speaker B:But they're not.
Speaker B:The moment they say that they're fired.
Speaker B:I mean, can a Big companies get a bit more grace than politicians?
Speaker B:I guess, I guess maybe they got the financial clout to sort of, rather than greenwashing, saying, these are all our problems, we've got all because.
Speaker B:Because some of it, like, you know, the bribery act, they can't say, you know the bribery act if you're not aware of it.
Speaker B:Very strong British law, you can't be involved in any bribery globally.
Speaker B:Well, it's a bit hard operating in countries that effectively exist on bribes.
Speaker A:Completely.
Speaker A:Completely.
Speaker B:You know, you can't really go, okay, we're a multinational company.
Speaker B:We recognize in these 30 countries they're very corrupt because you just insulted those countries.
Speaker B:Kicks off.
Speaker A:Exactly.
Speaker B:It's like, like, I mean, I guess, I guess a good PR person can always find the language that it's like, we recognize we're not perfect and we're working on it.
Speaker A:I suppose the thing we advise is what we call learning out loud.
Speaker A:In other words, you've seen the problem now.
Speaker A:And of course it's a natural instinct.
Speaker A:It would be a natural instinct in an individual, but it's certainly a natural instinct in a corporate.
Speaker A:I don't know what you mean.
Speaker A:I mean, it's fine.
Speaker A:And you're defending yourself.
Speaker B:Yeah.
Speaker B:You react.
Speaker A:People do that.
Speaker A:That.
Speaker A:Yeah.
Speaker A:And our, our advice is always.
Speaker A:And when I'm saying there's a sort of.
Speaker A:There's a leadership gang, what do the leaders do at that point?
Speaker A:They actually lean into the problem.
Speaker A:They suddenly go, we call it literally pivoting towards the problem.
Speaker A:You go, oh, you're right.
Speaker A:You're right about that.
Speaker A:That is a problem and it's not great.
Speaker B:Do you see great leaders when you go to these big companies?
Speaker B:Are you quite impressed by some of the people around the table?
Speaker B:We're very mixed or it's mixed.
Speaker A:It's like people, isn't it?
Speaker A:It's like people, people.
Speaker A:I think what I feel really excited by is when you see leaders who want to engage with this stuff, they grow the whole thing because just getting up and I work for the money.
Speaker A:I work for the money.
Speaker A:Most of the leaders of big companies, I mean, they make a shed load of money.
Speaker A:So we're not making special pleading for them.
Speaker A:But what I mean is they got their hands on the reins of a big beast here.
Speaker A:They want to come up the other end going, that was worth it.
Speaker A:I did good.
Speaker A:And if you can show a way that goes.
Speaker A:If you did it this way, do you see the path you're on that actually is constructive?
Speaker A:And suddenly you've got.
Speaker A:I've seen leaders start to say, do you understand the story on nature?
Speaker A:They didn't have that script two or three years ago.
Speaker A:They start to understand what they could be.
Speaker A:They start to ask the question and then they get confident enough to go, there is a question here.
Speaker A:And we always say, can you honestly say, can you look back at what you're doing and effectively look somebody in the eye and go, does that help?
Speaker B:I think for me, too, it's the.
Speaker B:If we're all too negative and dystopian about it, well, you become more like, well, it's all going to go wrong anyway, so I'm just going to stockpile this money or I'm going to just like, you know, what do I care?
Speaker B:I'll just try and protect my family and get a fortress and I'll go to the top of a mountain.
Speaker B:It's like, like, well, if that's where we end up, by the way, money's probably not going to be worth anything, which will be interesting, you know.
Speaker A:Yeah.
Speaker B:That old.
Speaker B:But the other side of it is that there needs to be.
Speaker B:Again, back to this good or bad narrative.
Speaker B:But there needs to be a general acceptance of nuance, but also of optimism.
Speaker A:Yes.
Speaker B:Sort of like, look, we've muddled through for thousands of years.
Speaker B:We can work this out.
Speaker A:Let's work it out.
Speaker B:Let's work it out.
Speaker A:Let's work it out.
Speaker B:People are going to die, things are going to go wrong.
Speaker B:I mean, you know, my old man always says this.
Speaker B:After Covid, it really hit that we've become so afraid of death that, you know, you can't accept it at all.
Speaker B:It's sort of like, well, there's one death over here.
Speaker B:And I know that's an extreme example, but it's like we're talking about the planet here.
Speaker B:We're talking about really heavy stuff, you know.
Speaker B:Yeah.
Speaker B:There will be natural events.
Speaker B:Yeah.
Speaker B:I might try and do something and it might go very wrong and things.
Speaker B:Someone might die.
Speaker B:But we've got to, I don't know, we've got to not get in this mindset that it's all.
Speaker B:It's all, you know, going down the drain.
Speaker B:Because then.
Speaker B:Then it's a defensive mindset.
Speaker A:It's a defensive mindset.
Speaker A:And also, how many people do you know, if you turn around to them, and say you're really, really bad, in what way is that helping them do anything different?
Speaker B:So it's not that people need encouragement.
Speaker A:People need encouragement, but it's not.
Speaker A:People will sometimes say to me, oh, so you're optimistic as opposed to pessimistic.
Speaker A:And I'm going, nah, I'm looking at the situation and going, what can be done with where we are and who has some levers to pull and why do I do that?
Speaker A:The work I do?
Speaker A:Because when you look at the situation and the things that need doing, people in business have some louvers to pull.
Speaker A:And most people feel helpless.
Speaker A:They kind of go, I look at this, I don't see what I am to any of these questions.
Speaker A:But actually, if you're in a big business, you do have levers to pull, in which case, if you can start to see what those are and you run them in the core of the business.
Speaker A:This is not about doing charity on the edge of the business.
Speaker A:This is how you run your business of humans too.
Speaker B:I mean, I mean, it's a bit like the whole, there won't be jobs with AI and robots.
Speaker B:You know, there's so much we need to do and give human space to be creative.
Speaker B:I mean, the stuff we can come up with is incredible, stunning.
Speaker B:I mean, like your example of the Rolls Royce jet engine.
Speaker B:I mean, I stare at those tall buildings or every time a jumbo takes off, I challenge any human.
Speaker B:I don't know how old you are, even if you work at Rolls Royce, to not stand there gobsmacked.
Speaker B:It's this 400 ton thing full of people just takes off like it's nothing.
Speaker A:And if you looked at some of the things that are actually happening around climate and you read the newspapers, you'd think, honestly, you'd think, well, you know, when you read the newspapers, oh, disaster.
Speaker A:And everyone, yeah, yeah, yeah.
Speaker A:And people tend to go, well, there's nothing happening about climate.
Speaker A:It's absolutely not true.
Speaker A:I mean, if you looked at the investment in renewable energy, clean energy, it's, you know, 2/3 of the money invested last year in energy was in clean energy.
Speaker A:I remember being in the Middle east less than 10 years ago with people talking about energy and saying, well, of course it would never, never be feasible to have solar.
Speaker A:It'll never be price parity.
Speaker A:Bang, it's price parity.
Speaker A:So, I mean, the speed with which things are happening.
Speaker B:I was in the newspapers today about all the wind farms and why British electricity?
Speaker B:Why is British power so expensive?
Speaker B:Because we built the wind farms, we have to subsidize.
Speaker B:But I was sitting there reading the newspapers, said, all right, well, that's the next problem.
Speaker A:Problem.
Speaker A:What's the next problem?
Speaker B:We'll store it.
Speaker B:Yeah, it's all up in Scotland and in the, between Ireland and England.
Speaker B:It's miles away from London, but let's think about it.
Speaker A:And I think that the reason I find it so fascinating is we're now on the brink of a generation of business leaders where this is on the to do list.
Speaker A:One of the reasons we haven't looked at these things before is they haven't been on the to do list.
Speaker A:And I remember when we, when we wrote activist leader and I asked several people, how do you make this happen?
Speaker A:And Quincy said to me, the guy who runs kirkcat, he said, you've just got to put it on the list of the other strategic priorities you have and you've got to expect your leadership teams to report to you on how they're doing it.
Speaker A:And I know that the debate, I mean, ESG is an interesting one because it polarizes people.
Speaker A:And the easy and quick thing to say, it's all disaster, it's all nonsense, it's all greenwashing, it's all a disaster.
Speaker A:Well, clearly it's not fit for purpose.
Speaker A:End of story.
Speaker B:Is that where you feel?
Speaker B:Yeah.
Speaker B:Where do you feel the SG is and where it's going not fit for purpose?
Speaker A:Well, I think there's a sort of back history to it and a future history to it, and most people are answering in the present tense.
Speaker A:So once upon a time people used to think, shouldn't we be thinking about these things?
Speaker A:And they sort of of bundled them all together.
Speaker A:They were very little things, you know, some E things and some S things and some governance things and companies kind of did it a bit.
Speaker A:And about once a year they would take out of the cupboard this little bundle of things, you know, and then go in solemnly and talk to the social responsibility investors, the sri, and then they kind of go, done that, pop it back in the cupboard, you know, and now this stuff is center stage and going up the corporate agenda like, whoosh.
Speaker A:So you.
Speaker A:That they've taken it out the cupboard, they put it on the table and they've opened up the package and they've gone, oh, Lord, that's not going to do it.
Speaker A:And of course you can't bundle E and S, and of course you can't bundle E and S and G. And of course you can't come up with a single number that does it.
Speaker A:And of course the data doesn't work today.
Speaker A:We know that like we didn't have financial reporting once and it's literally only in the last few years that we've looked at it.
Speaker A:And one of the classic questions is but we don't have the data.
Speaker A:In the world I live in you can separate people almost instantly.
Speaker A:Some people go well of course we can't do this, it doesn't work.
Speaker A:I mean the data's rubbish and anyway you can't bundle these things.
Speaker A:And other people go I know it's really, I wonder if we could get the data from, what would it do to get the data better?
Speaker A:And by the way, business leaders are constantly making decisions on imperfect data.
Speaker A:So you can literally see some business leaders lean in methane.
Speaker A:Let's get the eyes in the sky and get the satellites to track the methane.
Speaker A:If that's going to give us continuous monitoring, let's do continuous monitoring.
Speaker A:Other people go well the data's not good on methane.
Speaker A:You've got to start somewhere.
Speaker A:Who's starting?
Speaker A:Who's doing it.
Speaker A:So I think that you wind the clock forward.
Speaker A:We won't need what we call ESG today but we will need tracking of performance against these big societal questions.
Speaker A:So of course something like gender pay gap is totally inadequate today but it's made people look at gender pay and people start to go well that doesn't work.
Speaker A:And of course, well of course, well it matters.
Speaker A:What are they doing?
Speaker A:Part time jobs or less senior, all of that.
Speaker A:But you don't even ask the question till you've got the data.
Speaker A:When Quincy went plastics into Coca Cola and they're the worst plastic polluter in the world, he said well we've got to have every market tell us what the plastic waste is.
Speaker A:In that market nobody ever looked.
Speaker A:Yeah, no operational headed look.
Speaker A:And now they have the data and of course the data's imperfect but they didn't have it before.
Speaker A:And so it starts to work and then you, you we're literally going to have visual of deforestation down to the tree.
Speaker B:I guess we're all getting more educated and I guess even though, and that's an interesting point, even though I think, I gotta be honest, I think almost all the press is sort of worthless now.
Speaker B:It's just sort of react, it's just selling newspapers.
Speaker B:I mean I'm almost going to give up my FD subscription even, you know, because I only get the FT because it's like well just give me some facts and what's going on.
Speaker B:But not to completely knock all that industry.
Speaker B:I'm really sorry.
Speaker B:But I should be also happy that YouTube exists, the podcast exists and, and it's like the silent majority.
Speaker B:It's like people are educating the crap out of each other and people, yeah, you know, sure, people are in their bubbles and blah, blah, blah.
Speaker B:But I think a lot of us are trying not to be in our bubble.
Speaker B:A lot of us are really trying to understand the sub and look around, you know, please explain.
Speaker B:You know, I want to, I don't want to be too.
Speaker B:Again, back to the silent majority.
Speaker B:I think the silent majority, you know, aren't judgmental, don't want to have a chip on their shoulder.
Speaker B:You know, the people with anger are kind of at the fringes, shouting, you know, and you know, I don't know, there's sort of we, you know, a bit like how we would rate a burger on how well it tastes and we would have thought that McDonald's is the best burger in the world when we were, you know, in the 80s.
Speaker B:And now it's like, no, no, that's not a good burger.
Speaker B:This is a good burger.
Speaker B:It's a bit like that with companies.
Speaker B:It's like their problems are complex.
Speaker B:Looking at a ESG report or everything will become more sophisticated in how we judge what they're doing.
Speaker A:And they're getting more sophisticated all the time.
Speaker B:Methane for that company.
Speaker A:Yeah.
Speaker B:And this is what they're doing to deal with it, you know, and really.
Speaker A:This is about soil health or really this is about deforestation.
Speaker A:And we'll have the data for it and investors will get the data directly on the issues.
Speaker B:We'll be able to look it up ourselves on Google Maps next time, isn't it, you know, it gets updated.
Speaker A:So I think the underlying question is do we need companies to be clear what they're doing?
Speaker A:Do we need them to put it into the way they run the company?
Speaker A:It's going to have to have data.
Speaker A:ESG is a kind of primitive first sketch that's came away from history and now it's center stage.
Speaker A:Now it's top of the corporate priority list.
Speaker A:And so we need it.
Speaker A:So what shape will it take is an open question.
Speaker A:But it's going to be to do with data and it's going to be created by the people who are trying to help create it as opposed to folding their arms and going, well, this is all nonsense.
Speaker B:What do you think of B Corps?
Speaker A:I think B Corps are another version of having of an early version of surely we can do this better.
Speaker A:And I think that they look less fleet footed than the world needs right now, today.
Speaker A:And I think that there was a vocabulary that was very much about making money and doing good, good.
Speaker A:And I think we're past that.
Speaker A:I don't think it's about.
Speaker B:I think you're illustrating it now.
Speaker B:I think a business has to work out how, you know, to run it.
Speaker B:And if you go to any business, and I deal with lots, they all have different KPI, different things that matter to them, you know, and it's.
Speaker B:You can't just sort of try and summarize any business.
Speaker B:They've got to think deeply about it and deeply about what resource they have.
Speaker B:I mean, this is an interesting question because your book is the Activist Leader.
Speaker B:I mean, and I love everything you said, so, you know, just slightly changing attack, but, you know, brilliant thoughts.
Speaker B:Why frame business leadership in terms of activism, especially when leaders would reject that instinctively, I assume.
Speaker A:Yes, they do.
Speaker A:Yeah, they really do.
Speaker A:And, you know, they mostly go, oh, my God, NGOs.
Speaker B:Another one of these bloody activists.
Speaker A:The door.
Speaker B:And that's how you get rid of them.
Speaker A:Yeah, and they're painting, painting the doors red and that kind of thing.
Speaker A:Bloody activists.
Speaker A:And.
Speaker A:And quite often, I remember a call of about 18 months ago, a particular company, and they were being really, really challenged by activists.
Speaker A:And I was, you know, these days, so many meetings are on teams or zoom, and they were in another country, and we had two or three of us on the team in other countries, and it would be attacked by an activist.
Speaker A:And we said, well, how can we help?
Speaker A:What's the question?
Speaker A:Well, they're saying, we're very, very bad at this thing.
Speaker A:We're very, very bad, number one.
Speaker A:They're saying, we're number one bad.
Speaker A:And we said, well, what's the actual situation?
Speaker A:What's happening?
Speaker A:Well, we're not number one.
Speaker A:And we went, well, so what are you.
Speaker A:What's happening?
Speaker A:We're number three by our number.
Speaker A:And I said, if we're going to help you, I think you better have higher aspirations than proving you're number three.
Speaker A:It's not a good place to be, is it really?
Speaker A:But their question was, well, should we sue them?
Speaker A:And on the team, we kind of lent into the screen, no, no, no.
Speaker A:It's not a good look.
Speaker A:You're a very big company, and this is an NGO trying to point out that you're not doing everything you could be doing on this subject.
Speaker A:Right.
Speaker A:So let's talk about what you could be doing.
Speaker B:I think you studied that very well, that ultimately you're dealing with humans, and humans are very Defensive.
Speaker B:I mean, we just.
Speaker A:They're saying we're bad, we're not sad.
Speaker B:Anyone come along and starts criticizing my job, I can't help myself.
Speaker A:Yeah, exactly.
Speaker A:And by the way, they've got a place in the world.
Speaker A:Because if you say to them, well, why are you doing this?
Speaker A:Sometimes they go, well, the NGOs will attack us if we don't.
Speaker A:And you go, thumbs up, you know, but if the regulation means we have to, great, get on with the regulation.
Speaker A:So the pressures on them are real and thumbs up because, you know, they don't tend to do it all on their own without the pressure.
Speaker A:So.
Speaker B:And probably they wouldn't have a meeting with the ngo.
Speaker B:I mean, the NGO didn't need to dump it in the press, but the NGO could have come to see them and say, look, we were just doing this thing, and you're really crap at this.
Speaker A:So the point is, they go, now why do we say, well, you should be.
Speaker A:You need to be activist.
Speaker A:Is that actually, certainly to do this in a company is to override the way companies have been run for a very long time.
Speaker A:And ever since we've had a Friedman kind of proposition of the business of business is business, and the only thing that matters is profit.
Speaker A:The idea that you would seriously put this into the heart of how you run the company is to change how companies are run.
Speaker A:And you'd better have the conviction and you'd better be prepared to override the norm to do it.
Speaker A:And actually, when people do, do takes a spirit and a picture of where you're trying to get to that is the activist spirit.
Speaker A:And if you look at the pure thing, what is an activist to me is somebody who looks at a very, very complicated situation, sees the very complicated situation in all its starkness.
Speaker A:And, you know, where most people go, well, somebody better do something about that.
Speaker A:Know, they go, I think I could do something about that.
Speaker B:Oh, wow.
Speaker A:And every.
Speaker A:Every activist you've ever come across, that's what's happened.
Speaker A:Now, not everybody's activist about everything, but as you said earlier, it's about the thing that speaks, that hits you.
Speaker A:And it's kind of.
Speaker A:I think I'm something to that.
Speaker A:And, you know, you're not the whole answer, but you can mobilize resources of all kinds, including other people's support for it, to change the things.
Speaker A:Business leaders are brilliantly placed to do that.
Speaker A:And in fact, that's what they know how to do, mobilize resources towards an end.
Speaker B:You're almost telling them, become your own activists.
Speaker A:That's what we're saying, become your own activist.
Speaker A:Why are they taking the agenda from you?
Speaker A:You can see it needs to happen.
Speaker A:Why aren't you taking the agenda?
Speaker A:And everybody I've had the privilege of working with or have seen who've done stunning work, who I wish I was working with, that's what they're doing.
Speaker A:And they're doing it out of conviction that they, that in this complicated scenario things do need to change and they're a bit of what's going to make it change.
Speaker A:And they know how to mobilize resources towards it.
Speaker A:And business needs that kind of leaders and society needs that kind of business leader.
Speaker A:And when they get the hang of it and they get that and they get, oh, I see, it's addictive and it becomes part of addicted activist.
Speaker A:Yeah, cool.
Speaker B:Yeah.
Speaker B:You know what's interesting too is Daniel Priestley, who we had on just recently, he was making this point about people used to go to a company to buy a product that had people behind it.
Speaker B:Now they see a person, you know, a CEO, an Elon Musk or whatever, and then they look at a product, you know, and then they buy something, you know, it's like it's all backwards.
Speaker B:And businesses these days all need to have leaders who are above, who are, they're more important than the brand.
Speaker B:So this fits in with that is in how do I become a leader?
Speaker B:That's not just who, you know, name the CEO of bp.
Speaker B:Name the CEO of Rolls Royce.
Speaker B:I don't imagine anyone could do it.
Speaker B:I mean, I, I couldn't tell you any of them, but I'm sorry.
Speaker A:And also, you could bring it home too, which is be the leader you want to be.
Speaker B:Yeah.
Speaker B:Try and be the human you want to be.
Speaker A:Try and be the human you want to be.
Speaker B:Going to the gym, isn't it?
Speaker B:Being a good husband or whatever it's like.
Speaker A:And it's interesting because I was lucky enough before I was doing this work and before I, I, I was coached to a lot of people as they took on senior roles and, and it's very exciting.
Speaker A:Any senior role you get, whatever kind of senior role, it isn't just the CEO.
Speaker A:You want to go for it, you know, and you want to do it to your best and you don't want to be reduced to everybody being angry with you for the profit margin.
Speaker A:That's boring.
Speaker A:It's rubbish.
Speaker A:But actually, people do have an aspiration of who they want to be when they get an exciting job like this.
Speaker A:And it truthfully is what kind of A leader do you want to be?
Speaker A:And if we are all, as we know, in a multi crisis world, really poly crisis, all fancy language for it is these days, if you run a big business in any one of the major roles, capacities in the business, you know, your business is actually integral to that issue.
Speaker A:It's both part of the problem and part of the solution.
Speaker A:So you're going to take it off the radar screen.
Speaker A:What kind of a leader takes it off the radar screen today?
Speaker A:So it's about what kind of a leader did you think you were going to be with your hands on the reins at this time?
Speaker A:You're going to walk out the other end not having thought about this.
Speaker A:When there are patterns of how to actually do it, of course you should do it.
Speaker A:And when they get the hang of it, they go, it's better.
Speaker A:So it's hard.
Speaker B:No, I, I think you put that beautifully there and I think that's a great place to pause.
Speaker B:You know, I just, Yeah, I think good on you, like trying to, you know, work with these companies.
Speaker B:And I guess this is sort of part of what the Brunswick group's doing generally, is it?
Speaker B:And you're the author, you co authored this with, who was it?
Speaker A:John Miller.
Speaker A:He and I started this work in Brunswick together.
Speaker A:Together.
Speaker A:And, and it was, you know, it was funny because I don't know that we knew the adventure we were on, but it's very, you know, it's never a boring day and it's hugely exciting.
Speaker B:Very inspiring, you know, and it, and it is exciting.
Speaker A:You know, I find it exciting when I literally find it exciting day by day, because it is an unfolding story and you feel you've got your hands on the reins of something that needs answering and always you're just going, well, did this help?
Speaker A:I mean, you know, you can't do the whole thing.
Speaker A:But as I said earlier, most people do feel very helpless in the face of these things.
Speaker A:And so to be able to be positively engaged in helping mobilize solutions, just being part of the mix of people mobilizing solutions to some of these big questions, it's genuinely interesting.
Speaker A:You know, I feel super lucky because I get every morning, morning questions where I go, I don't know if I, I don't know, I don't know an answer to that, but that's an interesting place to be.
Speaker B:Do you think the academics of the world, you can engage with them as well and sort of bring them into.
Speaker B:Because we need their minds, surely to solve these problems.
Speaker A:We need all of it.
Speaker A:I mean, it's very interesting.
Speaker A:Back to the NGO question.
Speaker A:I think it's another reason why I.
Speaker A:To me the question isn't is business big?
Speaker A:We need all of it.
Speaker A:We need absolutely all of it.
Speaker A:And so a lot of our lives are how do you bring the academics in to make the case on that or can they analyze something for you?
Speaker A:You need the NGOs because they're pointing at the problems and they'll pour their passion into the question.
Speaker A:We need the policymakers because they do need to create the incentives and the level playing field.
Speaker A:You need the little businesses because they feed into the storyline of the big business.
Speaker A:We need it all and people have different parts of the solution.
Speaker A:And I was lucky enough in my early career to do a lot of theater direction and it really does show you that the whole thing works when the whole cast is working and at the forefront these days, the businesses that are absolutely doing the leading edge work are driving for systemic change.
Speaker A:And systemic change means being able to work with all the different parts.
Speaker A:Parts of the issue and play your part but help others contribute to the.
Speaker B:Interesting this sort of.
Speaker B:And is that maybe, maybe sort of.
Speaker B:My final.
Speaker B:Is that.
Speaker B:Where does this come from?
Speaker B:Are you.
Speaker B:Because you've had quite a.
Speaker B:Sort of.
Speaker B:Quite business minded in a way but you know.
Speaker B:Yeah.
Speaker B:You've had a career more in media, I guess.
Speaker B:Is it.
Speaker B:Well, how can you class your career in any industry or not really.
Speaker A:I don't really know.
Speaker A:I think I was a documentary maker to begin with and a theater director and you know, one of the great things you get to do in either of the.
Speaker A:Well, in the work I did in theatre anyway.
Speaker A:But certainly in documentary making you're always looking at very big complicated issues and trying to make sense of them in a way that is communicable, communicative power of it.
Speaker A:And the way you are doing that is you're stitching.
Speaker A:You have to learn to stitch together the plot line and then make it credible.
Speaker B:Also with documentaries it's.
Speaker B:It's where storytelling isn't it struggle.
Speaker B:But we need a.
Speaker B:You know, I can imagine with the big companies it's a bit like here's the struggle, here's the obstacles.
Speaker A:Do you know you've absolutely hit on it.
Speaker A:Because that's such a powerful point.
Speaker A:Because when earlier I was saying the thing that what differentiates the leaders is they'll pivot towards the problem.
Speaker A:What you've just said is absolutely the essence of that thought.
Speaker A:Because if you took, you know, corporate speak, which is pretty grim at a.
Speaker A:It's worse than there's a lot of it or it's just ghastly.
Speaker A:No, it's all.
Speaker A:Nothing to see here.
Speaker A:It's all fine.
Speaker A:It's all under control.
Speaker A:And by the way, we're very good.
Speaker A:You know, we've got great values, and it's all good.
Speaker A:The leaders in this kind of work, they literally turn towards the problem and they go, you're right, that's a problem.
Speaker A:And so what we mean by you need to learn out loud is you need to point at the jeopardy.
Speaker A:There is no plot without a jeopardy.
Speaker B:No.
Speaker A:And so what is dangerous here?
Speaker A:I remember saying to a client very early on, you know, you don't have a St. George without the dragon, so if you want to be St. George, you better identify the dragon.
Speaker B:Great point.
Speaker A:So you're looking for the jeopardy.
Speaker B:Yeah.
Speaker B:You actually.
Speaker B:A lot of things are forged.
Speaker B:You know, you can have a friendship that's superficial, and then you really have some crap together and.
Speaker A:Yeah.
Speaker A:And if you can get.
Speaker A:So actually, when business leaders go, conflict minerals or oh, wow, there's the enemy.
Speaker A:How do I earn my heroism?
Speaker A:By going, you're right.
Speaker A:That is a really difficult challenge.
Speaker A:And it's not okay for the world, and it's not okay for us.
Speaker A:Yeah, truly.
Speaker A:But if you know stories, you know that it's the jeopardy at the heart of the story.
Speaker A:And literally, a lot of my working days today are going, it's all right that it's dangerous.
Speaker A:It's all right that you don't have an answer.
Speaker A:If you can show people the journey, they'll make you a hero.
Speaker A:But you have to share why it's dangerous.
Speaker A:You have to share why it's difficult.
Speaker A:And we have to worry for you when it's hard.
Speaker A:So all I mean is if you can get into the groove of going, this is hard.
Speaker A:This is what we're trying to achieve.
Speaker A:Show us that you're really.
Speaker A:Prove to me that you're earnest about it.
Speaker B:And also, don't try and show progress if you haven't made any progress.
Speaker A:Yeah.
Speaker A:And explain you've been trying.
Speaker A:Explain it's a problem, because we've all got the problem.
Speaker A:But this is a mindset that isn't the way leaders are taught.
Speaker A:And it is much more naked.
Speaker A:So you've got to be careful.
Speaker B:Lucy, it has been an absolute pleasure.
Speaker B:I feel your name.
Speaker B:Lucy Parker.
Speaker B:You should be a detective or something.
Speaker B:It sounds like, you know, but you've been brilliant.
Speaker B:Thank you so much.
Speaker B:I mean, if people want to learn more, find out more.
Speaker A:Where do they go, well, I guess we wrote Activist Leader because it was the how of this.
Speaker A:It is.
Speaker A:Go check out the book.
Speaker B:You'd recommend it?
Speaker B:Well, anyone, I guess, to read it?
Speaker A:Well, I would, actually.
Speaker A:I mean, we wrote it for people interested in business and people who work in business, but people interested in these subjects, which at some level, as everybody.
Speaker A:But I think for me, the critical thing about that is people are seeing why they're even seeing.
Speaker A:What we were trying to write about is how.
Speaker A:And so if you're saying, well, if you wanted to follow up, then I would follow up with the how.
Speaker A:And that's what we were trying to write about.
Speaker A:The patterns of how are actually getting very clear.
Speaker B:Thank you so much.
Speaker B:Thank you, Sim in Dee's chair today.
Speaker B:Thank you, Romeo lying on the ground somewhere.
Speaker B:It's been a real pleasure and learned a lot.
Speaker B:And that has been this week's episode of Business Without Bullshit.
Speaker B:And we'll be back next Wednesday.
Speaker A:And until then, it's ciao, Sam.
