Is Sustainability Off the Agenda, or More Commercially Important Than Ever?

Alex Thornton

Hello, hello, hello. Hi, welcome everybody. This is our, is sustainability off the agenda or more commercially important than ever?

LinkedIn Live with the fabulous Jon Wragg.

It's an absolute pleasure to have you here, Jon. Thank you so, so much for joining us. Before we dive into this fascinating conversation, where I'm just gonna shut up and let you talk, cause I just, I wanna know the answer to these questions.

So, as I said, I'm with the amazing Jonathan, Jon Wragg, from Ltt Group, co-founder. Let me let you introduce yourself here, cause that's much better than me doing that. So, Jon, welcome to the stage.

Jon Wragg

Yeah, thank you very much. First of all, thank you for having me. It's an absolute pleasure.

So, very briefly. So I am Jon Wragg. I am co-founder of Ltt Group.

You may not have heard of us. We've only been around for just over a year. And very simply, we are there to make people understand the commercial realities of sustainability as a business.

We're not there to really make you change your product line, do anything with products or anything like that. I mean, if you serve amazing products and services, it's about understanding how you come across as a sustainable business, whether that's through risk. And I'll talk more about that as I think Alex has got some questions.

But ultimately, we created this because we know what the problem is. Well, I've lived it. I've been a Chief Sustainability Officer, Global Sustainability Director.

I've been as part of commercial teams and tendering teams and bidding teams and purchasing teams, all my career, basically. And it's one of those things where people may assume it's going away. It's not.

There's a reason we've created our business and we're there to help. So ultimately, we're there to help. And hopefully today I'll answer some questions.

But if you've got anything else, please just feel free to contact me.

Alex Thornton

Love that. Okay, thank you so much. The chats that we've had, I found absolutely fascinating.

And I'm massively into kind of sustainability anyway. I did wonder, is it going away? Has the government or the world lost its momentum with it?

But before we dive into that, just in case people don't know who I am, hi everyone, I'm Alex Thornton. I am founder of Amethyst Consulting. And that is leadership development, exec coaching.

But my big thing is about helping people to move from that constant firefighting feeling into more strategic execution every single day. So I work with everyone from the board, senior leadership team, management level, but this is about making sure that what everybody in your organisation does every day is moving the strategy forward to meeting your vision. And it's not as complicated as you think.

But enough about me. Jon, right. So let's just dive straight into the big question then.

So businesses are under pressure. There's obviously a drive to reduce costs, but people wanna still grow and scale. Has sustainability genuinely moved off the agenda or is it more commercially important than ever?

Let's just dive straight into the question.

Jon Wragg

Okay, I think the first part of that is really important. I think has sustainability moved off the agenda? No, but what it has done has grown up.

It is very simply. So sustainability, the term itself means a hell of a lot to a lot of different people in different environments for starters. There's also a huge difference between personal sustainability feelings, how you politically vote, how you get home, how you shop, how you are, how things go, and sustainability within business.

And there's a lot of things that have happened. And let's get it right, let's get it right. Sustainability has been talked about for a very long time.

ESG's been around since 2006. Those letters that are everywhere. For those that don't know, ESG stands for environmental, social governance.

It's a framework. Not a lot of people have done that. People just think it's a buzz term or a buzzword and something you say in marketing.

But let's get it right. Since 2010, there's been a real ramp up. And the reason for that is Blue Planet came out.

When Blue Planet came out, it changed the world's view instantly. It changed consumers' view on everything from plastic to food waste to absolutely everything. Because for the first time ever, people were seeing things that only scientists or people who really wanted to know saw.

So whether that is plastic pollution, whatever. What became apparent is because the public all of a sudden wanted to know, then politics wanted to know because it became quite trendy in some circumstances and in some circles. And all of a sudden, there was huge pressure from the public to understand, well, what can we do about this?

And the long and short answer was not much because unless you're willing to change how you buy, unless people are willing to change what they sell, not a lot will change. Most waste comes from consumerism. Most climate change and most carbon in the atmosphere comes from the likes of transport, tourism, construction, everything that we need to grow and live as human beings.

So it's one of those things. Now, while I was growing up in my corporate career and while I was doing this and learning these things, and whether that is education or courses or whatever, all these things, actually what was really important and what I understood was if people don't realise how to sell this, they're going to left behind. And at the very early stages, it was all about the thing that you sold, the product.

And that's where greenwashing came in. So to answer your question straight away, is sustainability off the agenda? No, it's not off the agenda.

It's just asked better than it was before. It was no longer kind of, are you a sustainable business? Because honestly, Alex, I don't know what that means.

And I don't think anybody does. Nobody knows the definition of it. Everybody says something different.

Quite frankly, it's a lot of marketing spin. It's now a lot more, it's a lot more clever questions. So it hasn't moved.

You're just not getting asked what you were getting asked five, six years ago, because quite frankly, the world has matured, purchasing has matured, businesses have matured, legislation has matured. And actually all of these things have gone in the right direction. So sustainability is going nowhere.

Sustainability has changed massively. So what we call sustainability in business, but also it's now, and then to follow up with your second question, is it commercial? Yes, because it's now part of purchasing.

It's part of understanding. It's no longer just some sales boom, some spin, some whatever, you're actually getting asked questions. And more importantly, if you're getting asked a question nine times out of 10, you're also gonna be asked a really important one in sustainability, which is prove it.

Alex Thornton

Yeah.

Jon Wragg

That's the really important one.

Alex Thornton

Well, let's, I'm gonna go slightly off-piste, but what is sustainability then? I would love to know your definition of it in terms of what we're talking about. Is it how long your long-term kind of sustainability plan for your business?

Or is it actually how much carbon you're reducing or all of those, you know, how many, you know, electric light bulbs or, you know, or it's not any of those things. What is the proper definition that you're talking about that business leaders need to know?

Jon Wragg

Okay, I still don't think any of us in my world have come to a consensus of what a sustainable business is. What I can say when I speak of it, I talk about being better tomorrow than you were today. But you've got to understand what sustainability involves.

And not a lot of people really understand that unless you're a corporate. But actually, if you look at it from, let's look at ESG, the letters ESG, the framework ESG. I'm not gonna bore you in the legislation and the really complex framework behind it.

But let's just look at the three letters, E, environmental. So straight away, you can split that into a lot of categories. There are a lot of categories that come under environmental.

But let's look at what's really important. Let's look at what is really important to look at and how you can then prove it and how you can improve it as well. So carbon, that word is used so much.

Carbon, carbon, carbon. But let's look at what carbon is. Carbon is a gas.

It's not the only gas, okay? It is a gas that is emitted during everything, okay? So everything has a carbon footprint, okay?

In production of electric cars. Absolutely everything pretty much has a carbon footprint except you walking down the street. However, the clothes you're wearing, everything that you've bought has a carbon footprint.

So if you are a business and you are buying stuff and selling stuff, or you are making stuff and selling stuff, or you are offering something like a service and you have day-to-day activities, you will have a carbon footprint and you can continue and ignore it and ignore it and just go. What's expected of you now is to look at how you can be better at that. Now, nobody's asking you to instantly go and switch your electricity to 100% renewable if it's going to cost you an outrageous amount of capex.

But actually, if you look at carbon, carbon is about understanding your number, which is usually in tonnes of CO2e, that's how we calculate the number. Once you have that number, great, then what? Well, can we improve that number?

Yeah. But at the same time, as a business, you're expected to grow and continue to grow. So how can you grow as a business and reduce your carbon number?

Well, actually, yes, there's low-hanging fruit, switch to electric LEDs and stuff like that, which lots of businesses have done now. But actually, it's a little bit more than that. And that's where the carbon side of sustainability and sustainability, especially this really comes in, because it's about being more efficient.

It's about operating better. It's about buying better. It's about selling better.

It's about moving better. It's about everything that you can do just to reduce that number and that impact. It's not as simple as switching a tariff.

It's not as simple as reducing your water usage. It's not as simple as one particular thing. It's lots and lots and lots of things.

And all of those things actually are commercial as well, because you often find that doing that stuff, most of the time will save you money if you do it right. But if you can't do it instantly, when can you do it? And if you don't know when you can do it, then you're not proper planning.

You're not strategically thinking about it. You're not strategically thinking about sustainability. And that's what carbon is really.

It's understanding where you are on your journey, understanding where you need to get to. Net zero is thrown around a lot. But actually how you're going to get there is the most important part of that, and how you're going to get there in a fashion that is also affordable, but doesn't die a death on its way and you don't end up cancelling the agreements.

And that's just one very small part of it. It's not all of it. It's one small part.

It doesn't include, are you damaging biodiversity? Are you polluting your local environment, your business environment? There's lots of things that come under the E, let alone the S and the G.

All right, and that's what people don't understand. Sustainability isn't one big thing. It's not one big headline.

But there are lots of things that you can break it into. What sustainability really is, is lots and lots and lots of projects that all need to be managed by a specialist. And actually that all those projects have different budgets, different timelines, different ways of working, different things that can be done.

But let's be honest, because of commerciality, your customers are gonna ask about certain things more than others. So that needs to be a priority for you as well. So you can continue to make it commercial.

Then there's an ROI from doing this work.

Alex Thornton

Yeah, that makes so much sense. Certainly from my world, this is not about having just, oh, well, they've got someone who's quite keen on sustainability in the organisation and we'll just make them the champion and they'll go and do it. And that's not sustainability.

Now I know I'm generalising here. And of course people will do that. But people do sort of just kind of, okay, it's one of those things that I can't really think about with all of the other things.

So I'm just gonna hand it over. But what you're saying and what I'm hearing and the work that I've been doing in terms of sustainability and leadership is this is about interlinking it into your actual strategy. So it's lived and breathed every single day by the people in the organisation.

So this is your choices and your decisions around what sustainable projects or whatever you're gonna do have to reflect the strategic goals that you have in the organisation. Otherwise, it's just an add-on and a nice to have that will never really be incentivised or measured. And that's what you said in the beginning.

We have to know where you are to start with. It's like anything in terms of leadership and strategy for me. Where are you now?

Where do you wanna go? And what's that? And this is what you do to help add that into and help those leadership decisions, isn't it?

Jon Wragg

But let's, yeah, that's what we do and what I do. And I'm not gonna do the big sell on what we do and what I do right now. So, yeah.

Alex Thornton

No, it makes so much sense to me like why I couldn't do it. I'm fascinated by, I'm really passionate about. It's one of my values, but I don't have the knowledge that you have and I would need a specialist to help on that.

So yeah, great to know you basically. So we sort of touched a little bit upon that sort of supply. So when businesses are supplying larger organisations and they're bidding for tenders and that sort of things, what are the changes in regulations that are coming up that are going to impact that?

Jon Wragg

Okay. So all of, straight away, there's a lot of factors going into play there, but let's just take a standard supply chain and let's kind of look at it from top down instead of bottom up. Yeah, yeah, yeah, there is.

So, yeah, I mean, you can always, even if it doesn't matter whether you take farming, whether you take construction, whether you take agriculture, whatever. It doesn't matter, NHS, whatever. There's always one thing at the end, okay?

And that's usually a really big corporation, okay? That's built into lots of limited companies and things like that. But what you've got to understand is legislation is also very top down.

And the reason that we tend to look at supply chains top down is because that actually is, it's not easier for legislation, but we know in the world of sustainability and everything else, that actually there's no point in just looking at me and you, Alex, as startup people and what we do. But also there's not even really that much point in looking at the 5 million SMEs in the UK if you're not going to look at the FTSE 50 first, because actually what you find is the 5 million SMEs take away the high street out of that. But actually they're the ones that tend to supply.

So if you look at the manufacturing sector, especially where I live in Sheffield, South Yorkshire, there's a lot of businesses that make some incredible things there. But what they all do is supply bigger businesses with those things, whether that be local authorities, NHS, councils, MOD, you name it, it's supplied out of the likes of Sheffield, Hull, Doncaster, Rotherham, Liverpool, Manchester, wherever, not just South, the North, but also South as well. But look at the supply chain businesses.

Now you could ask all of those businesses to spend a lot of money to be net zero, reduce their carbon footprint, sell better, blah, blah, blah, do all these things. Well, actually that was tried. It was tried right at the beginning and it got nowhere.

It was too complicated. Each business is different. Nobody can afford it because it's seen as a bolt-on.

So actually as sustainability has grown up, as legislation has grown up, as the people who create the legislation, the EU Parliament, UK government, et cetera, what they've actually realised is actually if you create legislation from the top down, then the pressure comes because it becomes commercial. And what you've found is that as big businesses are forced to assess themselves over time and be better and hit certain things, then actually the more pressure they put on their supply chain further down. Now that can be done in a few ways.

It can be done because they want to reduce brand risk. They want to reduce environmental risk. They want to buy better products, but they're all aware that initially when people were selling green products, they were more expensive.

There was something called the green tax, which were a myth. But ultimately what you actually find is as this pressure comes down, sustainability is becoming a higher and higher scoring criteria in different things. And it's eking into different things.

So standard way of purchasing for every day since God were a lad is how much is your product and how long will it last? It's about price and quality. That's what it's always been, all right?

Well, actually then sustainability started to eke into it. And it used to be say 5% of the scoring criteria, but number one, how does your product price? And two, how long is it going to last and how's the quality?

Then number three, oh, can we buy a better alternative or can you do a recycle scheme? Or can you, if we break items, can you take it back? Or is there a warranty or whatever sustainability was then?

Well, actually that sustainability, what was 5%, well, I've seen a tender yesterday from a client of ours. Well, that's no longer 5%, it's 63%. And they're no longer asking how good the product is because the product isn't even in the discussion.

They're asking about, are you calculating carbon? Can you show me your calculations for two years? Do you have this certification, this certification, this certification, this certification?

And it's not come out of nowhere, just people haven't really been listening to what's coming and paying attention because quite frankly, small businesses don't come under the same legislation. So they've just kind of not listened to the signals, but big businesses have known this is coming for a while. They're looking at what's called their scope three, which to sum it up quite simply, scope three is what they buy.

And if they don't start to buy better from better businesses, then their emissions are going to go up, they're going to get fined, they're going to miss legislation. So it's really important that it actually is this trickle down, not trickle down economics, but trickle down sustainability push to see the commercial advantages. And that is why we started our business when we started it because we knew when it was coming, knew the pressures that were going to be there and also what happens when you miss them.

You can no longer ignore it and hope it goes away. We've got at least, well, we've now got three clients that have been kicked off certain very large supply chain portals because they're not calculating their carbon. Now they've been saying they're a sustainable business, all three of these businesses, they've been saying they're doing stuff in line with climate change, but at no point have they been asked to actually calculate their carbon and prove it.

And now they are, and they've been kicked off the supply chain portals of some major businesses because they haven't done it.

Alex Thornton

Simply because they can't prove it anymore.

Jon Wragg

Yeah.

Alex Thornton

Okay.

Jon Wragg

Well, before, look, I'm not going to name the companies, but before what they were saying, it's sort of greenwashing, I guess. They were doing some good stuff, but they weren't using tech to do it. It was Excel and it was somebody in the office who's, it was their third job as well of being head of another department and then in charge of something else.

Alex Thornton

Yeah. So they, yeah. And I understand that.

I understand that because we can't do everything. We, yeah. But this is now what you're saying here and what I'm hearing is, okay, we need to start genuinely properly doing this stuff.

So what can founders and MDs do now? I mean, so is this a frantic, everybody's going to go out and get their carbon number and then start doing stuff about it? Or is it, how can they change?

How can they convert this into a commercial advantage for themselves then?

Jon Wragg

I think, look, if you're not being asked already, you should be asked. Now, hindsight is an amazing thing in business. We all know that.

But a lot of people have been ignoring all of the signs because they don't agree with something politically or they don't want to agree with it. They, as far as they're concerned, they're amazing at their business. They've been manufacturing.

I'm just going to talk about manufacturing. They've manufactured a wonderful product for a long time. They've been very successful and they've been able to sell.

Now they can't understand this kind of new thing of wonder why do I need that certification or why do I need to prove that I'm saying it so therefore it's true? Well, no, the problem is, is that the large businesses that you're supplying, they can't just say it, they've got to prove it. That's what the legislation is.

And a lot of the legislations are levered with fines. And as soon as people start finding businesses for not telling the truth or being wrong or doing these wrong things, well, actually, the pressure's going to be on you. And that's where purchasing is right now.

What people have got to realise is that sustainability from a large purchasing point of view is a really good function of how good a business is. Not the products it sells specifically, but how good a company is. And there's amazing things that have come on leaps and bounds, the likes of EcoVadis, which is what it says, French accreditation.

But that's a really good way for purchasers to see how good their supply chain is in key areas that are key to legislation. There's amazing bits of tech out there. There's this one called the Sapiens, there's others out there that show large businesses how their supply chain looks, how their supply chain is compliant and how their supply chain currently is either high risk, medium risk or low risk to them as a business.

Now, there's large businesses using these guys. And if they're spending multi, multi millions to do this stuff, to look, I'm telling you now that if you can't prove it, you won't be on it. It's as simple as that.

Because the easiest way to reduce risk in the supply chain is just get rid of those that don't comply. It sounds harsh, but it's a really easy way and it's a really easy win for purchasing people who are KPI'd on these things to just get rid of businesses who don't comply. So I'd like to say that most of my clients are thinking ahead, they're not.

Most of our clients have lost. They've either lost a tender that they were incumbent for, they've been supplying for a while, they've been kicked off a portal, they've been kicked off a framework, a supply chain, they've been kicked off something and they don't know where to start because what they were doing was talking something, but they couldn't walk the walk. They were talking the talk, but couldn't walk the walk.

And we want to help them do that and do it right.

Alex Thornton

Yeah, is there, are there some sort of tools that are easy to understand that we could maybe link in some of these comments that maybe that might give the idea of how much carbon there is? I don't actually know. It's just something that you might be able to give out that might just start people on the journey and then they can come to you and well, I mean, I would recommend everybody on this call and everybody who watches this, please just speak to Jon.

I'm sure he will have a chat with you and not do a sales pitch. You know, I'm sorry if I'm just dumping you into this.

Jon Wragg

No, no, no, no, no, and I'm not just going to speak for me. Okay, if you had an accountancy problem and you had a letter off HMRC, you would contact an accountant. If you didn't have an accountant, you would contact an accountant.

You'd probably contact a chartered one, you'd probably contact one that's local because there are specialists in this thing, okay? There are a lot of sustainability specialists out there. There are a lot.

We are new, we're commercial, blah, blah, blah. It's very different, but there are a lot out there. But I can tell you now, being in that industry, we are genuinely there to help, okay?

So the likes of me, but I also know our closest competitors, but also our closest allies also all offer quick calls free of charge, guides on their website, blogs you can read. But also, let's be honest, you're going to be part of a trade association. They've definitely got this stuff.

You've just never read it before. You may be part of a local chamber of commerce. They've definitely got this stuff because they've been all over it for a long time.

You've just never read it before or accessed it. There's an amazing thing called the SME Climate Hub, which is available for all businesses up to 100 million turnover. That is a free tool run by the UK government in line.

That's got everything. It's free educational suites. You can sign up, you can get these things and start your journey.

Honestly, it's about educating yourself on what this stuff is. Now, I'm not going to say that after a 90-minute call, you're not going to get a quote from me on for me to do that work because you are, right? But obviously, that's what's going to happen.

But ultimately, some of the things that we say, you may turn around and go, yeah, I had no idea about that. And actually, it's far more complicated than you think. Great, so then we can help.

But some of it, I mean, we had one two weeks ago who reached out and we had a 90-minute call. Quite frankly, they were doing some amazing stuff. They just didn't know how to talk about it.

So we did a call with their marketing team. We did call with their financing. They don't need us.

They don't need us right now because they're not supplying the right people that we can help them get. Where they, it's part of their journey and they'll come to us in a couple of years or they'll hire somebody. But now they've got the advice, they've got the trajectory, they've got the plan.

That's great.

Alex Thornton

Brilliant, love that. Thank you for that. That's really, really useful.

So please, everybody on the call, just go to Jon and just have a chat. Or go to someone or at least go to these hubs. That's brilliant.

I didn't know about the SME hubs. That's amazing.

Is there one final thing that you'd like people to know? And I'm sort of putting you on the spot here.

Other than, please just start the journey.

Jon Wragg

That's it. Is there something I would like to know? Yeah.

Alex Thornton

Well, yeah, I'd like them to know.

Jon Wragg

Yeah, because I actually get asked this question a lot. And the question I get asked a lot is, is sustainability here to stay or is it just a fad? Well, I can tell you now that the way that large businesses are run, the way that shares are sold, the way the bodies that they are part of, whether it's London Stock Exchange, New York Stock Exchange, the legislations that they're part of, not only is it not going anywhere, the scrutiny is going to get stronger because quite simply, it has to.

And without getting political and talking about climate change or anything else, if the world doesn't change what we do and how we do it, things are going to get worse. And big businesses are very aware of this. All big businesses have a risk index and they are all assessing risk around climate change.

I can tell you now they all are. And there are lots of big businesses now that have been around for 50 or 100 years, in some cases, many centuries, and they are now looking at things in a different light because they know that they can't continue to supply things as they have done. So what do they need to do and change?

Because those businesses don't want to go bust. They're not going to go anywhere. They are going to change how they do and how they buy.

So if you supply those people, genuinely, you're going to have to get on that journey or you won't be part of that journey. It's as simple as that. And things like carbon reduction, understanding how you prove that you're a sustainable business, that you're a well-run business by accreditations is how you keep these people at bay and you can keep supplying them.

Now, longer term, there are things I'm more than happy to discuss, but I don't think that's where SMEs are. I think they're three to six months. I think they are really struggling right now because it's a competitive market.

I don't see sustainability as a nice to have or a bolt on, obviously, but more important than that, there's not a single business that I've worked with that hasn't dramatically saved money or we've opened doors to grant funding to be more sustainable. Nobody's saying you have to fund all this. There's lots of things available.

You just have to know the world. I have an accountant because I don't know finance. I have a marketing team because I'm quite rubbish at marketing.

Sustainability is what we do for businesses, commercial.

Alex Thornton

I love that. Absolutely. Just such a pleasure talking with you always.

And thank you. One thing I would say is you just are able to make this vast and quite complex subject really easy to understand. You keep it layman's terms for me and I'm quite into this.

You keep it simple. You keep it clear. You keep it right.

This is what you genuinely need to do. This is the priority. Let's not waste time or money or anything.

Let's just get you what you really need. So it's just a pleasure. Thank you so much.

I could talk to you for hours as always.

But Jon, pleasure.

Thank you so much.

Jon Wragg

It's been a pleasure. Thank you.

Alex Thornton

It's a pleasure. Right.

But thank you everyone for watching. I really appreciate it.

But if you've got any questions for me or Jon, just let me know, message us. And thank you so much.