Ben Stansfield: OK we are starting to build up numbers now so and I am mindful of time. We have got a lot of really good stuff to get through so we are going to make a start so good morning everyone thank you so much for joining us. My name is Ben. I am a partner at Gowling. I have a particular focus on ESG and sustainability issues and although Gowling is an international law firm and we are hosting today, you will be delighted that I am the only lawyer on the panel. We have far more interesting people to speak to us today, but today's webinar follows from a report which Gowling published a couple of weeks ago called Tomorrow's World and that essentially summarised the views of about 1,000 Gen Z folk in relation to what they thought about ESG, what they thought about sustainability and business behaviours and essentially concluding that Gen Z has a real eye for ESG issues.
So we are going to talk about that a bit more today. We are going to discuss the importance of environmental and social responsibility to this generation, we are going to talk about their power to influence board decisions, investment decisions and particularly how organisations can learn to help sort of shape their own ESG strategies and prepare for tomorrow's world.
On my panel today I have three fantastic experts. We have got Rae Stanton-Smithson who is the retail earthcare comms lead at LUSH. We have got Dr Rosina Watson who is head of sustainability at Cranfield School of Management and finally, we have Amy Clamp who is the commercial director at insight and engagement agency Beatfreeks.
Google is your friend. Please look up their bios on Linked In and Google. I would spend half an hour describing how amazing each one of them is and that would put us over time so please take it as read that they are fantastic. I am really hyping them up here so don't let me down please.
So we are going to review the findings of Tomorrow's World. If you have not got a copy of that report please do go on the Gowling website and download it. It is absolutely fantastic written by some fantastic people. I had limited input you will be pleased to hear. But look we are going to review the report, we are going to have a chat amongst ourselves for about 40 minutes. There will be time for questions. Please do use the Q&A function at the bottom of Zoom. We will read those, the best questions will get read. If you want them read, please keep them short because I am of limited intellect so the longer the question, the less likely I will understand it and the session will be recorded and circulated afterwards so at the end, when you realise how fantastic and brilliant this is you can send a link to your colleagues and they too can share in the fun.
Right let's get started so let's sort of kick off and set the scene and Rosina I wonder if you can explain to us what ESG is, why businesses should care about it and what the big ESG challenges facing businesses at the moment?
Dr Rosina Watson: Thank you Ben. Good morning everybody. So from my perspective working in a business school to pitching executives about sustainability. Setting a sustainability strategy if you are an organisation which fully aligns and ideally drives your core business strategy is a must have in today's world. Environmental and social challenges present a real risk to businesses' ability to operate successfully into the future whether that is because of increased scarcity and cost of raw materials or energy as we are seeing today or the reputational risks of for example ethical issues in your supply chains and across the board we are seeing that stakeholders want to see more business engagement on society issues ranging from climate change to upskilling workforces and people's engagement businesses is increasingly driven by what their perception is of what your business stands for and whether it acts on that so the 2022 Edelman Trust Barometer for example found that in the UK, 52% of people now will buy or advocate for a brand based on what they think that company's values and beliefs are and 54% so over half of people to choose a place to work based on the values and beliefs of that organisation as they see them and 62% invest based on the values and beliefs so clearly responding to these stakeholder expectations and using the power, the resource, the capabilities of your business to solve social and environmental issues presents a huge opportunity so sustainability and ESG strategy is not just about mitigating risks, reputational risks, costs risks but it is also about grasping opportunities to respond to these changing expectations from stakeholders so in the words of Colin Mayer who is unfortunately at Said Business School at Oxford, businesses need to think about how they can profitably solve problems of people and planet rather than profit from casing them so thinking abo8ut businesses in that context I think is really useful. How can we use our resource, our manpower, our assets to profitably solve problems of people and plant and not profit from causing those problems but if you want to do that, you really need to understand have a deep understanding of what the issues are, what your stakeholders expect from you in terms of which issues they want to see action from you and also which issues your organisation is best equipped to tackle. We are not arguing or I'm not arguing that organisations individually have to solve all the problems of environment and society but each business needs to think about where they can drive action and for me ESG which stands for Environmental Social and Governance is the way that you then measure and communicate your progress against those key issues so your sustainability strategy is the big umbrella of how you think about this and how it aligns with your core business strategy, ESG is the part where you look at how you measure and report that whether that is internally to drive management information and change in internal management behaviour or externally so how you communicate and what is important and your progress against that to those external stakeholders.
Ben: Perfect thank you so business ignores this at its peril but Amy what about Gen Z have they got a particular focus on ESG? Why do they are about it so much?
Amy Clamp: Yeah and I guess just to say who Gen Z are as well as set up so their formatives of 97 and 2012 so they are around the ages of sort of 10 to 25 right now and obviously as we well know, they are the first generation to have grown up not knowing life without the internet so they are absolutely digital natives and they are really well informed because of this so it is topics around environmental, social and governance of a really prevalent and important to them even if they do not necessarily know what they that ESG term means and of course they are really important in this conversation because there are now but they are also our future employers, consumers and leaders so we really need to be thinking about what they are telling us about what the suture is going to look like and at the moment they are often not always part of the decision making so we know from kind of looking at our own boards but often they are not represented in kind of those senior decision making roles but they are really optimistic and often have really innovative ideas and because of the fact that they are kind of consuming so much content and so much information they are often quite well informed ideas as well so there is a real huge opportunity here to kind of tap into what they can offer in terms of solutions and ideas around ESG and we know from our research, Beatfreeks at 98% of Gen Z care about the problems that the world faces so there really is a kind of hopefulness and an eagerness to be part of these conversations.
Ben: Perfect. Thank you so Rae you are obviously at LUSH so I am guessing that Gen Z are, they are your customers, very important I guess for your business so can you tell us how organisations sort of fact on what Gen Z thinks? How so you sort of take that theory and put it into practice?
Rae Stanton-Smithson: Yeah. Well a lot of what I would say is just sort of echoing what Rosina and Amy have said about the fact that Gen Z's concerns and opinions are going to become increasingly more imperative and important as they take centre stage as like the workforce etc. but I mean at LUSH lots of under 25s make our workforce already as well like we have lots and lots of staff members that have LUSH as a part-time job as well as their study for example so we are probably in quite an advantageous position there where we also have over the last few years developed an employee benefit trust which the desire of that is to add a voice to the employees and so we do have an increasing and hopefully we are going to increase that even more like an increasing voice within the business that is quite a young voice in many ways as well and I think my comment on this from my personal professional perspective and from LUSH in general would be that much deeper than just thinking about Gen Z as a particular demographic and the fact that there are consumers or customers, our workforce and our critics and us in the end much deeper is like I think we really need to like consider what their voice is actually saying because the strong element as has been mentioned do better. Things need to be much better and challenging the status quo and their concerns are or should be everybody's concerns like whether we choose to internalise and realise this truth or not. I would argue that Gen Z's voice is imperative to us all, they are not just talking about what they want to see, what colours they want, what fashions they want, it is everything they are talking about and highlighting things that unfortunately should not necessarily happen to be highlighted by the youth so their concerns are all of our concerns and yeah I think we recognise that at LUSH and welcome it, that two way feedback, don't always get everything perfect straightaway but let's like open conversations to evolve.
Ben: Perfect. Thank you that is an amazing scene setter. So I have got a load of questions actually and some are going to relate to how business in ESG and then we will sort of move on to a conversation about how you engage with Gen Z and I am probably not going to fire questions I'll ask one of you to kick is off but I very much want it to be like a TV chat show were we are all sitting on a green sofa, ignore the cameras and we just have a conversation so if you have got other stuff to add then please do jump in but I wonder if maybe Rosina you can kick us off in terms of, should businesses and organisations and it is important I guess, I mustn't keep saying businesses because there are organisations, charities, public sector need to think about ESG. Are they sort of equally weighted in your experience, should they be a particular focus maybe I don't know?
Rosina: Well they absolutely not equally weighted most of the time in most businesses so that is the challenge is bringing in these other dimensions of performance and success alongside the traditional methods of success and performance that we have had for thousands of years in the business sector which around growth and profit and etc. so you can't forget about profit if you are a business. Profit is the engine of what you do but that I think it is more about seeing profit as a means to an end rather than the end in itself so this is where this whole concept of business purpose comes in. You know what do you stand for? What is your role in the world? An organisation is a group of people in the end, what are you working together as a group of people to achieve and profit at the engine to achieve that. That is very well and good in theory but that is what we grapple with a lot of the time is how as an organisation you can achieve that in a dominant pyridine where really profit comes first and the stakeholder has been king so there is a lot of ways you could think about answering this question but I think a part of it about trying to integrate the way that you think about the outside world where you think about society and people and planet into everything that you do, your core processes so thinking about integrating environment or risks climate change risks into your mis-governance for example thinking about how you to integrate reporting of things like carbon emissions diverse and inclusion into your annual report and your other key KPIs that are sat across your business thinking about how you bring those measures into personal KPIs and objectives for people so that they sit alongside the other things that they are striving for. It is also about organisation structure so very often you know ESG or sustainability teams are seen as the ones that are meant to deliver this on their own. Of course they cannot do that. ESG and sustainability touches every single area of the business, you know it will touch your procurement, it will touch marketing it will touch the way that you manage your human resources so finding a way to have wider accountability to say the ESG performance I think is really, really critical and the other way to do it is we will talk about this a bit later, Rae's already touched on it is having much more of an emphasis on listening and dialogue with your stakeholder so traditionally in the past marketing teams might have thought about customers are something they do things to. It needs to be more about customers are something you do things with particularly when we are talking about innovations as sustainability, you are expecting our customers to do things in a different way so return packaging at the end of its lifetime use refillables rent products that involves a much more deeper relationship with a customer than just flog them something and then just forget about it so customers obviously are really big stakeholder group to consider here so finding ways to make that the boundary of your organisation more porous is really critical so it is not us in the organisation and our customers are something outside and similarly with suppliers, you know I used to work at Argos, suppliers were basically people that we used to tell them to make something and ask them how much it was going to cost them, that was the kind of the end of the relationship, it is very transactional but if you really want to innovate the sustainability of that relationship with the suppliers need to be much more co-operative because you need to work with them to come up with solutions that you need to improve your sustainability performance so governance reporting, organisational structure but also the way you think about the way that you engage outside the organisation I think those are the key factors.
Ben: OK. Rare, from your sort of I guess your business commercial perspective, have you got a tension between making money and doing the right thing?
Rae: Um I hope that I'll answer that in sort of like commenting on and like building on following on from Rosina's comments really because I think the overview that I can offer from a LUSH perspective but just from a human on the planet at the moment perspective as well, it's more simple maybe but necessarily easy and I think that is when you ask about how and why should businesses ensure they balance, if I take the why first, I think it has got to be because it is impossible to separate human health and effective governance systems from wider ECO system health and behaving in a way that has like attempted to separate them had led us over the last few generations to amass disconnect on like what we actually are, who we are, what's going on on this planet and just like I'll term the term life to just mean everything, we are no longer seeing ourselves as part of one universal system where what is bad for one is bad for us all in the long run and that is exactly what Rosina has been saying about thinking about a certain demographic to flog them stuff, love that term. The only way that we can create truly thriving community which is what we mean and I am going to use thriving communities and systems rather than economic growth you know because that is a very silo very specific and redacted view of what the heck's going on. So the only way that we can create this thrival if that is even a word, I don't think it is is to like re-generate what we have lost and to reconnect to the reality that we are all connected so again like I said, simple mentally maybe a simple concept not necessarily easy for organisations to just do a complete u-turn in some ways in some of their practices. If a company is treating these issues in ESG environmental social and governance issues as silo focuses is completely missing the point and therefore missing the opportunity to evolve into the emerging world that we are experiencing and so I think that we sort of have that definitely from a LUSH perspective so hopefully that means that not that everything I perfect or there are no technical sort of tensions in that area but just being open to the fact that things aren't done the way that they would ideally be done at the moment opens you up to this sort of opportunity for creativity and then moving towards the how that was like the why. Simple by just spending some time which is what we have been doing for a long time and are doing and fully expect to continue to do because it is an evolution in progress is just spending a bit of time really appreciating the impact that this connection that we have been talking ab out and this silo approach has had on generations and the need to regenerate our thinking before we generate our practices of changing our practices like we have got to come from a different mind-set and so we may well touch on it a little bit later but the faith in nature video about discussing giving nature a vote in their business decisions is a really nice video and explains this disconnection really easily and eloquently and we simply need to just lose the ego a bit. Use our incredible human advancements and capabilities to realise that we have been going about things a bit wrong and we need to re-chart the course and for this outlook and world youth from this outlook and worldview things begin to become much clearer and are actions will then reflect this understanding so it is about working on ourselves a little bit first. We cannot do it all, we cannot do it right away. I'm certainly not sort of saying like why is she doing everything perfect, just do stuff like us and everything will be great but it is this reawakening as humans that come together in the organisation that is really the start that sets us on the exciting path of innovation so I think whilst that can throw up some tensions as you say Ben starting from that point is like that is back to the drawing board where can we go from here and it does spark excitement and creativity and some debates, lively debates and disagreements and different viewpoints coming up but yeah we have got to just be open to the conversation and have a bit more humility as humanity, that's a bit of a tongue twister.
Ben: No that makes sense. Amy you might remember a couple of weeks ago or maybe it was a couple of months ago now that Patagonia sort of said right we are going to totally restructure our business and they have got the most amazing sort of description on their Twitter handle, it says something like earth is now our only shareholder and it is a fantastic way of saying look we are prioritising the environment, does that kind of stuff chime really well with Gen Z, how did that land with them?
Amy: From what we can see very well. I think a big statement that is rooted in something genuine and real is really impactful and Gen Z I think really respect it and we are seeing more and more that this is becoming an expectation from Gen Z it is not just a kind of consumer need, it is an expectation that businesses and brands are tackling these issues that need to be tackled. I know Rosina you mentioned a little bit about not aligning with value but our research showed us that 87% of Gen Z say that they pay attention to a brand ethics before they buy from them which is huge and obviously that is claimed but equally that is an intention and this stands in the workplace as well so 64% of Gen Z consider it an important for employers to act on environmental issues and 59% would remain in a job longer with responsible employers so yeah I think just this kind of demand for big moves and genuine authentic moves I think is really clear from Gen Z and I think those big statements possibly are made are resonating really well.
Rosina: Can I just add though that I think sometimes when I teach a huge variety of companies at different places on their sustainability journey and sometimes those examples of LUSH or Patagonia can actually be a bit scary because that is where it comes from a culture that has been born that way. It is really deeply embedded in DNA so it can be quite daunting because cultural change takes time and I think the encouragement is to remain authentic so I think greenwashing comes about when people make too big a leap, organisations make too big a leap they are not taking people with them, they are not thinking about what is that really is important to us but we can drive change around so I think it is important not to get demoralised by just thinking about the companies that are already brilliant because lots more companies are very much on a journey but I think some encouraging data that we have been working with an organisation called Contextus and we have been starting to look at data that supports this idea that actually a sense of purpose is understood and inactive by employees actually does drive business performance so it is kind of really worth it because it demonstrates that people as you say stay longer, choose the company, stay longer but they also are more creative as you were saying Rae evidence of their more creative, more innovative, happier in the workplace and therefore more productive so I think that sort of data helps companies see that it is worth investing in this, it is worth investing the time and the effort that it takes to really shift a culture in a particular direction so that is sort of the reason for optimism I think.
Ben: OK so I am going to ask you an unfair question now about the role of lawyers in all of this because I speak to a lot of in-house lawyers and I have had a quick peek at the attendees and I have seen some familiar names so there are lawyers listening even if there aren't many of us on the panel but lawyers are often asked to do particularly in-house a whole range of stuff that they might not be particularly experienced, expert, they might be a privacy lawyer and they said oh can you just do a commercial contract or can you help me on some employment stuff so they are considered to be jacks of all trade. Do you think that lawyer have got an important role to play in ESG strategy and ESG management within businesses and maybe Rosina that is one for you.
Rosina: So when I was at Argos and I was a first over head of sustainability at Argos I reported into our general counsel because it seemed to be a place where there was not too much bias on the board he was more of a neutral voice so it worked quite well because I wasn't kind of attached to a commercial director or the marketing director who would have pulled tried to potentially pull the sustainability agenda in a particular direction so for my experience that was helpful. I think the benefit of being a general counsel is that you know every part of the business really well so you are kind of connected into all different points at different functions in part of the organisation which I think is helpful because executing, developing and executing in a sustainability strategy is multi-functional. It needs all the parts of the business to work together. I suppose the downside is that historically there has been too much emphasis in the ESG spend that its focus was about compliance and making sure that your keeping up with changes in regulation whereas what I am advocating well I think what we are all advocating for is going beyond compliance and thinking about this as a both an opportunity but also a necessity in terms of long term thriving of your business as well as thriving of humanity so I think that you need to build coalitions within the organisation if you are going to deliver a successful ESG strategy so working out who has got the power, who has got the influence within your organisation and creating those allied-ships and it sounds like completely noddy to do so but I think as sustainability advocate you need to be able to talk in the language of the person that you are talking to and connect in with the problems that they are trying to solve as well so an example of my days at Argos is that we had a really big problem with product returns so we had a lot of product returns coming back to us that we could not send back to our suppliers because that was not part of the deal so those product returns were costing us a lot of money so we came up with a number of schemes across different categories to refurbish and re-sell those returns which is good from an environmental point of view because otherwise we would have had to dump them and it was good from a commercial point of view and it solved the business problem that we had so often there was a lot that can be done if you can engage with people in a way that in a language that they understand that helps address the problems that they are facing in their parts of the organisation. I don't know if that is a helpful answer.
Ben: I don't know if Amy or Rae want to jump in, maybe I'll just ask Rae a sort of follow up question and you can build on it but do you think so when we were putting our panel together oh wouldn't it be great to have a really sort of radical big business that is sort of at the cutting edge of this and LUSH came to mind. A few of us were like yeah we have got to have someone from LUSH, do you think you are radical or do you think actually you are not radical at all and everyone else is way too conservative?
Rae: Um wow what a good question. I think it is fair to say that LUSH's approach to anything is often perceived as radical. I would also agree to that we would probably see ourselves as doing things just around what we think should be done so it should not be radical but it is so yeah I think that that is definitely a bit of an agreement there. In the past we have certainly been radical fighting animal testing for example within the cosmetics industry. That is something that has come on leaps and bounds pardon the slight pun, it is still something that happens and that seems to have gone away from the public so much so we will still continue to actively fight and support alternatives to animal testing specifically in sometimes but that continues that was definitely seen as radical and the campaigns that we do are still seen as quite out there and sometimes a bit contentious and I suppose like maybe the most radical thing, we don't actually talk about CSRESG like internally we don't talk about that. Our team is called the earthcare team. That just does not exist in other organisations like to the same degree certainly not, if it does, it anybody out there knows of a team that is called the earthcare team please get in touch. It would be like a long lost doppelganger that would be great so yeah, yeah pretty radical but it is may be radical in its simplicity. Maybe that is what we need to be going for a little bit more.
Ben: Amy did Gen Z think rush and radical or do they favour radical businesses or how do they feel about it?
Amy: Yeah I don't want to make too many assumptions here but my understanding would be that that is respected I think in the same way that I said about Patagonia. Responds I think making a bit statement and it being real and authentic and not just a statement because will it want to be seen in a certain way I think is really respected and I think that is one of the big reasons that LUSH is so popular as a brand. I think the more that we have got to know LUSH as an organisation and seen that actually even in a workings of an organisation that I would think a lot of young people wouldn't see or wouldn't be aware of makes it even more exciting but yeah I think that is appealing but I think it is the authenticity and the genuineness of it that makes it so appealing and I suppose also shining a light on if ever is possible to do things differently and still be a brand that is appealing and exciting as a product as well as in the way in the way that's its run so yeah it is quite layered I think.
Ben: OK. So when we were inking about questions and topics to talk about. I was talking to my parents who are now in their 70s about Gen Z and obviously they have got grandchildren now in Gen Z what were they thinking and I was saying you know, it is social media and they are quite forward thinking and vocal and what have you and my parents claimed that actually in the 60s they were quite cool and switched on too but obviously they are conservative and less radical so is there something around Gen Z being quite open minded, quite demanding change but actually this has always been the case does the optimism of youth give way to the cynicism of middle age or does this social media mean that this is different Amy?
Amy: Such a good question. I think naturally things change with age but I think something that will not change is how much kind of exposure we have to information like that is going in one direction now and the world has changed in the context of the world has changed since the 60s for example. The fact that yeah we are seeing so much more information, issues on the environment are not going to… the urgency that is there is to going to allow us to be able to suddenly be actually I'm not so interested in that or bothered about that anymore and I think although trends and kind of things like fashion cycles and stuff change quicker than they ever have that also shows that young people have got more of an ability to adapt and change and so I think actually in time I think we will find that people kind of get more specific about the issues that they are interested in but I don't think it will mean that they will stop caring about issues and I just don't think they are going to be able to either the world won't let us.
Rosina: I think digital platforms can also enable posturing around issues and/also supporting alternative business models so the whole pre-loved fashion upswing has very much been enabled by digital platforms because and there are amazing engines now if you are a brand like M&S for example you could get people to sell their M&S clothes from home online but it appears on your website M&S website as a second hand item so all this amazing technology which can mean that it does enable more circular business models around renting, re-use etc. but I also think the other interesting thing is that Gen Z money can follow organisations they want to invest in so not just through traditional investing which more Gen Z people are mobbing into obviously still a tiny proportion compared to institutional investors but things like crowd sourcing I think have amazing crowd sourcing and crowd funding sorry have an amazing impact for people who are entrepreneurs and they want to start something on a community level small scale level they can really attract funding from like-minded individuals through digital platforms crowd funding for example.
Ben: OK. Just talking about greenwashing for a bit so if you speak to one of my colleagues Dan Smith. He is out director of advertising. He will tell us that he does a 95/99% of his time is dealing with businesses looking at adverts because they put the word sustainable somewhere in there and they are really worried about greenwashing or else the regulators are banging them over the head. Is greenwashing, Rosina is that the biggest fear a business has and maybe once you have answered that maybe Amy or Rae can talk about how Gen Z feels about it. Is that the biggest crime out there?
Rosina: I don't think it is the biggest fear that they have got but I think it is a growing issue and there is that tension or that worry that you want to put your head above the parapet in some way but you are worried that you will get shot down if you do and that can hamper progress. I think it depends on what the intent is behind that effort. If the intent is genuine and you have just made a mistake or pushed it too far then that is something you can sort of learn from if you are doing it to look good but you actually know that you are not doing the right thing internally then that is crime for me.
Amy: And I think that point that you made earlier Rosina about that or maybe it was you Rae actually about separate teams and having kind of ESG and CSR teams that is where that risk then comes from because the marketing team is making the decision about how to talk about something that is happening over there that they don't necessarily know about and I think that is where the risk comes in that people are making statements that are not backed up on genuine action.
Rosina: Yeah and aligned to that it has to be about something that is front and central to your business. Otherwise it is a bit distracting so distracting with doing this good over here that is not really central to our core business I think that is where the danger is as well and as you say Amy that can come from the marketing team looking quite sort of genuinely for a good news story but if it is good news story about taking off glitter from your textiles where as you are still dumping 19 millions of end of life textiles on the other hand then that is where the problems is going to come.
Amy: What we are seeing as well from Gen Z is that they are going to go and check whether you are kind of for real. Our research said that 6% of young people are going to take what you say at face value and 64% are going to actually go on line and check. Again claimed behaviour but they have got access to a wealth of information and there are ways that young people can find out so…
Ben: 6%?
Amy: Yeah.
Ben: So I talk about the cynicism of middle age but actually it is the same [talking over each other 40:50:6]
Amy: Exactly
Ben: So Rae how do Lush communicate with its, well obviously not just its customers but also staff because you said that Gen Z makes up a significant proportion of both but how do they avoid or how do you avoid greenwashing?
Rae: Yeah, thank you, I mean I think just what has been touched on by Amy and Rosina is the key is that sort of humility again and being like offering as much transparency as you can. On being clear when you aren't quite there yet and also showing that not just saying oh we know this is bad and it's not ideal we would love to do better but then following that up with so currently these are the steps that we are taking, this is the end goal if we have one or if we don't know the end goal it's like, you know, we need, we want to do much more work on this, that and the other.
An example is like there is vast amounts of work being done behind the scenes that many of our staff, certainly say retail staff and manufacturing staff might not need to or care about at the moment. Behind the scenes with regards to like higher up our supply chain and the impact of our supply chain right and like carbon foot printing your business, you know, it's no easy task and I have got, it's not myself, its incredible members of my team and like multi-disciplinary teams within Lush doing that. Because we know that we don't have all the information we don't have the transparency ourselves yet necessarily or we are getting there to be able to communicate that further on so it is saying, you know, this is something that we know we need and we are working on it and then as the main stories, as the bits of interesting information come through for our customers and things that we can share with our teams then we do and that sort of comes in and we have a weekly newsletter that goes to all staff members and to every staff member has like their own lush email address. Whether they check it or not is totally up to them but they have got, you know, business information can come to them through there.
So we try to filter through the juicy topics and the things that aren't going to necessarily overwhelm everyone but it is very very hard because when there is, you are talking about whole value chain impact not even just supply chain then it is just like dumping all of this info on people but yeah I think being, being transparent and really doing the work to look at your value chain and pick out the areas that are going to be the most impactful and not focussing on, for example, there is this tendency, a bit like Rosina was saying about the picking, maybe like the low hanging fruit, which is still worth doing. So for example packaging, right, for Lush packaging is around 2% of our overall impact but it is very customer facing, its very staff facing. I think it is something that people can get on board with and we have our bring it back scheme where people can bring back their plastic empties for either a free face mask or some money off their shopping. And that, we are not saying we shouldn't be doing that but that is the bare minimum right, that is 2% of our overall impact and so by communicating that and saying this is just the minimum we need to be doing, this is the minimum every business needs to be doing, we are not stopping there. That is the greenwash, that would be the greenwash if it was like look at we are amazing, you can now bring our packaging back to us, that is our sustainability strategy, that's it, done! You know like there is a whole like iceberg underneath that isn't being seen there. So yeah being transparent about it is the main thing to try to avoid the greenwash. And just knowing, knowing yourself, you know like, how much of an impact is that actually having and being honest with the business leaders and being like this is great, that is the next thing to tackle, what can we get out teeth stuck into.
Ben: Fabulous, thank you. So we are starting to get some questions coming through so if you are sitting there and you have got a burning question please do type it up and I think, well there is clearly an option to be anonymous if you are feeling super shy. So, no, please send a question through because now is the time. I have got more questions but I would like to open it up.
So first of all Amelia asked if we can share a link to the video that Rae mentioned? Yes we will send it to you, we will send everyone an email with that link as a follow up because it is really good.
Someone has asked us about I suppose, well a question about is there evidence to support that people still buy products and make service choices based on sustainability and in the light of the cost of living crisis, you know, is that going to continue?
I don't know who best to go to that one so whoever wants that one can go off mute, Rosina, you are off mute, Amy you are off mute, Rosina you go first and then Amy you can jump in.
Rosina: I'm just off mute because otherwise I have yet to put myself back on mute! Amy you go first.
Amy: Yeah, I think this is something that we talk a lot about from a Gen Z and from a young people's perspective because we work with sort of 16-35 so young millennials as well but I think ultimately cost is always going to play a factor and now more than ever – I think again I guess I made the point about this being cloned behaviour, there is an intention and there is a want from young people to be able to make decisions that are based on ethics and their values but ultimately in a capitalist world it is really hard to do that and also with the cost of living crisis I think that is made harder so I think, yeah, organisations have a responsibility to mean that as you say Rae that they are at least doing the bare minimum so that people can know that whatever choices they need to make they know that we are all kind of pushing towards the same goal but, yeah, ultimately I think there is only so much that ethics can guide those decisions.
Rae: My view is that it shouldn't be more expensive to make the right decisions and often new business models, for example, pre loved clothing again it's cheaper to buy pre loved clothing so a lot of young people are doing that because it is cool, it's cheaper, and it's the better choice for the planet. So I don't think, I think in the past we, you know, had this idea that we were trying to appeal to a green segment of the market who would pay a green premium for the more sustainable products, that is just not the case anymore. We need to make these more sustainable products accessible to everybody without a price premium. The problem is that might initially require more investment but as you achieve scale and as you achieve system change across sectors then that should not be the case anymore.
Rosina: It ties in well to the thought of can profit ever truly be, go hand in hand with sort of doing the right thing and the answer is it has to, there is no choice, we are in that transition period currently but if we ever want to rid ourselves of the stress, the discontent, the ill health that we know is taking an ever increasing grip on us as humans, as our natural systems we have got to find ways to be creative, throughout the rule book, redistribute wealth and carve that new future. And I think that, we have got to also, we need to reconsider and restructure what we view as profit as well, you know. Like we can't just keep
Rae: I like the word value, I think value is a better word.
Rosina: Exactly, it is about creating value and not making profit, I meant that would be ridiculous we are all, well I'm certainly in a, you know, working for a profit making company. But that is just one of the capitals, right, and the element of community and building capital, financial monetary profit becomes like one of the pay-outs or one of the results of doing the right thing as well as things like community and creating experiences and creating just an existing and vibrant environment.
Ben: Perfect, which actually leads on to, there is a legal question and with your acceptance I am happy to take that one. So somebody has asked us whether so the memorandum and article of associations are the internal rules, governance rules of a business, may say that shareholder wealth maximisation i.e. making profit for shareholders is the primary role of the company, do directors land themselves in trouble by making more sustainable and expensive investment choices. And I think that is fairly obviously no in the sense that we now have section 172 in the Companies Act which says that directors have really got to think about the impact of business decisions on the environment and they have to report on that and they have to tell the world how they are thinking about environmental and planet issues when making their decisions and actually I think it is the opposite now that if you are not thinking about environmental and social issues when you are making decisions as a senior manager or officer, director in the business you are likely to be in breach of your fiduciary duties to shareholders and wider so actually I think, you know, the conversation we have round climate litigation and reporting and all this kind of stuff is that people are looking now, I think, at reports and saying have those senior leaders within the business thought about climate when they are making their decision and if they haven't then we will bring an action again them. So actually I think it is a good result. You know, we are now thinking quite the opposite of that. If others have got something to add to that great, if not I'm happy to move to the next one.
Rosina: I would just like to say Ben that so many people have this misconception that that is fiduciary duty is so every course I teach with every [unclear 50:36.7] it kind of you have to go back and unpick that and say actually no that is not the case and I think that is where companies are thinking about B Corporation accreditation because that really helps them get across that point and that no actually we have amended our association to make it even more clear that shareholder value is not the only thing that we are working towards.
Ben: Brilliant. We had a really really good question about, sort of, communication with Gen Z and pointing to a study I am not familiar with, saying are Gen Z intolerant of other points of view? You know, does that hamper businesses ability to have a really transparent conversation, authentic conversation with them so that I can see that Gen Z customers might want to hear from Lush but do they want to hear from the oil majors for example? Amy, that might be a question for you in terms of how, did Gen Z really want to hear from business, do they really think they are going to be listened?
Amy: I think it is a great question and I think part of it is whether they are being talked at or in part of the conversation. And I think part of an antidote, particularly to sort of the greenwashing point and those kinds of conversations I think is how do we bring young people into this conversation so they can be part of helping to form the strategies and make the decisions and I think once they feel like they are part of the conversation I think it is going to look very different so yeah I think that is my, my first thought on that and I think in terms of wanting to hear other people's views we, I haven't got the stat to hand right now but I would be able to share our report afterwards but one of our recent reports, kind of, asked young people about how much they follow platforms that don't necessarily, kind of, have the same views as theirs and it was significantly higher than you would imagine and I think we have this idea that young people are only interested in people that have views that align with their own but that is not the, that is not what our data is showing us so I think there is an openness to hear other perspectives but I suppose if they feel like they are being spoken at then that might feel a little bit different.
Ben: Yeah.
Rosina: I think that companies that have been used to doing that find it quite difficult to change that tone of voice and that method of engagement.
Ben: Yep. Rae, Matt has asked us about, I suppose Matt's point is about businesses being reactive to customers, to gender, rather than being sort of proactive and leading debates. What is the Lust position? Are you very responsive to your customers and your stakeholders or are you trying to sort of lead the charge and take them with you?
Rae: Oh yeah great one. I think the simple answer is both, in the sense that we realise that we only exist because of our customers, because of our fans, because of the people that choose to work with us. You know that is what our organisation is made up of individuals and there is very much a desire to have this feedback loop and we do, when it comes to products, for example, if our customers tell us that the most recent one was a reformulation of our solid henna blocks so they are natural hair colour and people were like no we don't like these they are not as good as the old ones so it was like ok, took then back off and they will be reformulated again and then presented again so from a product point of view and what people actually are saying about the things that we make and what people think about, you know, we do encourage people to comment on google and things about our business although we have come off like Meta social media platforms, so we do encourage that sort of two way communication and conversation and then at the same time we have so much, so many partnerships or relationships with some fantastic grassroots groups and influential people or people that really sort of see very deeply into specific issues around the world that maybe the public aren't as aware of then our campaigns, for example, in our windows will often lend our platform to said grass roots groups, to bring an issue to the forefront so all sorts of things have been done on human rights, animal protection, environmental protection across the whole lifespan of Lush since 1995. And so in that we are trying to direct the conversation within the public sphere a little bit about an issue that we care about that we know many other people will care about they just don't necessarily know about. When it comes to things like the packaging and stuff like that or anything that our business is doing with regards to ingredients buying and supply chain and supporting the development of permaculture farms around the world to get our natural ingredients, obviously we use lots of plants and fruits and vegetables in our products, that is all open source ideas basically, you know, we want other businesses, we want to shout about what we are doing in a way that inspires people to think actually that is the way that things should be done so we are definitely trying to influence the market as well as the public perception and public's desire for certain things. We want other businesses to be like well if Lush can do it surely you know that is a good idea we can do it as well. So yeah, definitely a solid bit of both, half and half and I think that, hopefully that is the right way right, there is loads of people, we are a bit community within Lush that know really great work that is going on so we want to highlight that as well as hearing what people think about what we are already doing so that we can evolve.
Ben: Perfect.
Rosina: Can I just add to that sort of my research was partnerships and collaborations for sustainability and one thing that we haven't mentioned is collaborations between competitors which is not, you weren't talking about collaborations Rae but this sharing of best practice and also the idea of working together with someone who might be a fierce competitor because you are trying to solve a more systemic problem or you are trying to pool your R&D resources to do it better and quicker together and I think a really interesting example is Allbirds and Adidas who are clearly competitors but they are working together on trying to develop the least carbon footprint shoe so it is a jointly branded shoe so they have put together their R&D resources across the two organisations to do that so this idea of being able to work with competitors, recognising what you do compete on and obviously from a legal perspective thinking about how you make sure you aren't uncompetitive but realising that there are things around you know, the mechanisms of manufacture, packaging solutions etc that you can work together on so that you get a broader impact across the sector, across your partnership but I think that is a very different mind-set, particularly for retailers who are just really competitive all the time, not Lush maybe, but that is moving from that purely competitive to a collaborative mind-set and that is something that Unilever, for example, are even talking about how they train their people to have this kind of balance between competitive and collaborative mind-set, whether that is with other companies or with communities or other stakeholder groups that they work with.
Ben: And actually we just that kind of leads nicely and we can deal with this, I think, quite quickly in terms of the last question we have had in terms of ESG and the supply chain and you have talked about, sort of, businesses working with each other to improve, I guess, environmental and social outcomes and I guess is your research or is your understanding that, you know, it also involves, you know, if you are taking ESG seriously you have to think about the impacts ESG have for supply chains, I think the example used is if you were to close a manufacturing facility overseas that would have pretty catastrophic consequences so it is a responsible business is about thinking about your value chain as well as you, your shareholders and your customer?
Rae: Yeah, and I don't know where the assumption came from in the question that that would be a primary response to close down a facility. Not in my experience you know we definitely did not make that decision very often to onshore for a particular reason, it was more about, you know, going from a situation which we definitely had in textile supply chain, the hard goods supply chains where you didn't even know where your product was coming from because your supplier was outsourcing, they were outsourcing to someone else so human disasters like the Rana Plaza disaster were caused because there was a total disconnect between the ultimate brand that was buying products and the working conditions and the voice of the people working in those factories so, you know, I think it is more about having real transparency and more information about social ethical practices and also environmental practices because we are all trying to start to map to scope three emissions down our supply chains and you can only do that if you are really clear who you are working with and how they are working. So I think it is much, the push is much more to be working with supply chain partners to drive improvements rather than to necessarily close down or dump supplies but I guess there does have to be that balance between encouraging better performance through your supply chain through working with suppliers but then I guess at some point that there has to be the teeth in the equation but that if as a supplier you can't, you don't improve your performance then you might get less business or be d-listed as a supplier and that is where potentially that problem would come in in terms of that area then losing employment.
Ben: Perfect
Rae: Sorry I don't know if you got
Ben: No I think given time I might well have to call it a day which is a real shame because it was always going to be ambitious to get through this topic in an hour and I think we have, I think we could keep going but people will want their lunch. But I would love to just thank you Amy, Rae, Rosina, for that conversation I think it is, I have kept an eye on the attendee numbers, I think we have lost two people in the whole hour which is quite phenomenal for a webinar. Your insights had people glued to their laptops. So thank you all for that. I have a note that I am supposed to do a brief summary of that but I don't think I can do any of that justice so I am not even going to try but I suppose the one thing I have taken away from it, you know, and if we have in-house lawyers on the line is that, is to be bold and I think Rae you talked about sort of go beyond compliance, push colleagues to do more and that this isn't going away and that people are going to be more and more demanding and that is quite encouraging, I'm quite excited by that. So be bold.
Rosina: From the perspective of an educator, you know, we are, as Cramfield and other Universalities are offering a lot more in the way of training, either as a sort of quick dip in, we will be doing that with some other law firms, or a full MSD Sustainability that you can study part time so there is lots of options out there for upskilling in this area, I think this is almost like a language that everyone is going to need to know regardless of whether your role is, you know, purely sustainability or not it is almost going to be like, you know, accountancy, it's something that everybody is going to need to know and understand and be able to work with so I think upskilling where you can is really important so hence why you are at the webinar today.
Ben: Perfect, absolutely great. So thank you all once again and thank you to those listening and for your brilliant questions, they were fabulous, really appreciate that. As I said that the start we are going, we have recorded this so we will perhaps edit out some of my uming and ahing but ultimately this will be on our website, it will be in your inboxes, please share it with your colleagues, it is really important that they watch it and enjoy it as you have. So yeah, thank you all very much and goodbye.