Ep 7 - Ben Knight - Taking Your Customers on ESG Journey

Introduction: 

Hello, and welcome to ESG in VC, a podcast where I continue to interview top players in the ESG space and where we dive into ESG-related topics, exploring how investors, regulators, and founders try to build a more sustainable and inclusive society. 

Today we will hear from Ben Knight. Ben is the Head of Environmental Sustainability at the FinTech company, GoCardless. GoCardless is a global payment company with more than 70,000 customers. He's building a sustainability strategy, which not only aims to reduce the impact of business, but also utilizes the GoCardless platform to create a positive impact on people, society, and the natural environment.  

Before GoCardless, he worked at a space start-up, OneWeb, which included assessing the environmental impact of the space sector from rocket emissions to embodied carbon in satellites. So here we are from space to FinTech. Thanks for joining.

Oksana: 

Hi, Ben. Very good to have you with us. I noticed that you recently joined GoCardless as the Head of Environmental and Sustainability. Tell us a little bit about what your job entails and what are your key goals in the next 12 months? 

Ben:

Yeah, absolutely. And thanks for inviting me on Oksana. It’s lovely to join you and have a chance to have a conversation. Yes, so I joined GoCardless about seven months ago now. I guess for context, for those who might not know what GoCardless do, we’re a global FinTech.

We're based in the UK, but we've got offices in Melbourne, Paris, Munich, San Francisco, and New York as well. Essentially, we are a payment provider, so we move money for our customers. We've got around 80,000 customers at the moment, globally. Each year we move around 30 billion of payments for those customers. So very much focused on the tech side of finance. 

I joined back in July last year with very much a focus on leading our work specifically on climate and net zero, but then also looking at wider areas of sustainability as well. I guess, my role came as a result of us becoming co-founders of a coalition called tech zero and tech zero is a group of around 250 businesses, which was set up as part of the race to zero campaign with all these businesses committing to measure their greenhouse gas emissions, and actually show how they're going to reduce those and reach net zero. 

So that was kind of the initial focus. And I guess if I could sum up how I kind of see what I do in a really clear sentence is how as a business, can we reduce our impacts on the natural world and communities, but also then how do we then use what we do as a business or as a product to create positive change? So reduce what we're doing as a business, but then how do we bring about good? And I think that's a really important part of it. 

So over the last six months, we've looked at measuring our impact specifically on climate. Looking at our emissions across our whole value chain, we've developed a quite comprehensive sustainability strategy and net zero action plan, which we launched a couple of weeks ago, which sets out our science-based targets. Really importantly, everything we're doing on climate is going to be aligned with climate science and 1.5 degrees, which is a really important target for communities all across the planet. 

Then we also set out exactly how we're going to do that. So in the next six months, next 12 months, we're going to start actually acting upon those things. So we've done the measuring, we've done the targets and we've done how we’re going to do it.  The next step is actually launching those. So over the next couple of months, we're going to be launching some initiatives around homeworking, for example. So how we can help our employees decarbonize the homeworking, reduce their energy use at home, all the way through to launching a sustainable travel policy, because we’re global offices, that's one of the areas that we need to be looking at.

I guess, a really key focus for us is how do work, of course we have our employees, but also how do we work with our customers and our suppliers? Because without those groups also being sustainable by continuing to exist in 10 years, 20 years’ time, we won't be sustainable ourselves. So it's really important that we help those groups along with the journey.

So we're going to be developing tools and resources to help our customers because a lot of our customers are SMEs and a lot of SME struggle with getting started on their journey to climate action and wider sustainability, but then also working with our supply chains, because it wouldn't be particularly fair for us to go out to our suppliers and say, “Hey, we're doing this.We want you to do this, or we won't use you” because it's not very good for their economic sustainability or the wellbeing of their employees, for example. So we're going to make sure that we're quite collaborative. We're again, going to give them tools and resources, run workshops and things like that. So, so the next 12 months are going to be pretty busy for us. 

So there's lots going on, on both the customer side of the suppliers and then internally as well. We're running lots of workshops so that our employees can get involved. We're launching new engagement apps, training resources by teams to really, really try to embed sustainability across the business, which is a real key part of what we're trying to do.

Hopefully, that sums it up in a very short answer. 

Oksana: 

Yeah, it's a great answer. It seems like lots and lots of initiatives, which is great. And maybe my next question is a little bit simplistic, but I think it would be interesting to explore a little bit. When you were joining GoCardless and it is a FinTech company and for an average person to think that a FinTech company where everything is software-driven, that you can have an impact on E sort of feels very distant because it's quite easy to understand what you can do internally about S and G, but E is a little bit distant. How did you think about it when you consider the role? And obviously, you just mentioned quite a few initiatives, which addressed directly the E part, but any thoughts around that would be great.

Ben: 

Yeah, absolutely. And I think you're right. It’s a brilliant question because a lot of the time people and businesses, whether we're talking about businesses or our own individual lives, we don't necessarily see the direct impact of a lot of things we do. So, yeah, for example, me at home today, I guess if I go out in my car, which isn't an EV yet, because it's an old car and I'm waiting for it to stop working, then I'll change it.

But yeah so if I go in my car, I can understand that there are emissions that come out of the car. That's a very easy thing to understand. So I guess when you have businesses who might be manufacturing products, you think of, I guess, steel companies or agriculture. They've got those real direct emissions. But I guess also when, for example, me working at home today, I'm using energy to run this school, to power my screens, my laptop, all of that requires energy that comes from somewhere and that energy has to be created and this the same way for every business.

So every business has an environmental impact of some sort. It's just how that's categorized and understood. In my previous role, I was working in the space sector before, so I was dealing with more physical things. So I was looking at satellites and rockets and things with products that are made. And so it's quite easy to understand if we're building a satellite, there's going to be a mission related to that.

Whereas you're right in the tech business, people go, well, where's the impact coming from these businesses? I guess for context, for us as GoCardless, our emissions last year were close to around 9,000 metric tons. The majority, so that's about 99.9. 5% of that, sits in what's called scope three, which is our indirect emissions. 

We don't have any cars or manufacturing plants, but a lot of our environmental impact sits within things like our home working, our travel, but then also our purchase of goods and services. The suppliers that we use to create our product and service. That's where that environmental impact comes from. I guess what is really interesting is that if we don't take action, then over the next 10 years, our emissions could be up to a million metric tons over that timeframe. It's really, really important that even though as a tech business is not that obvious that we take that action, it is a central focus of what we do. 

I guess the external side of that as well, is that the impact we can have elsewhere, so if we can use our products to put some funds into climate action or we help our 80,000 customers also reduce their emissions, then that's a massive impact that far outweighs what we're doing internally.  

If we think 80,000 customers having an average carbon footprint of say a hundred tons, you multiply that and we help them reduce as well. That's a really big impact. And that was one of the big things that really drew me into moving across the GoCardless was that external impact that we can have. But before we do that, it's really important that we get it right ourselves. So I hope that kind of makes sense. 

Oksana: 

Well, I think little steps. You start with little steps and eventually you get there. But have you already seen direct value from your sustainability efforts and were there any trade-offs you experienced once you started implementing some of the changes? 

Ben: 

Yeah, it's a great question, actually, I think because sometimes business asks you what's the cost of doing sustainability or doing ESG and that sort of thing. And I guess the wider context of it is that we all have to do it anyway. It’s that important. 

We currently as humanity, we consume 1.75 earths for our resources and to absorb our waste. That's clearly not sustainable. We need to bring that down. But I think, there are tangible things that we've seen already. I think internally the amount of engagement that we've got amongst our employee base has been absolutely brilliant.

We've got hundreds of people that are part of our slack channel dedicated to what we're doing on sustainability, but we've been also running things like workshops and environmental action days, where we're taking our teams out to get involved in and have a real positive impact on their local environments. 

I think certainly that internal engagement has been massive. The amount of people that have said to me, they're really proud to be working for a company that's taking it seriously is probably the most rewarding part of it so far. 

I think also additionally externally, although it wasn't really a main driver for doing it, I think last year we took part in around 30 round tables and webinars from Dublin Tech Summit to COP26. So I think that ability to get out and collaborate with people and talk about what we're doing and then help others has been really, really important. Of course, for our comms team, I think they enjoy the fact that we're getting some great PR as a result, but that's not really the reason for it. It's just happening organically. 

I think on the customer side also importantly, we're actually starting to see interest in us as a company via our sustainability efforts. I'll get people approach me and say, “oh hey, we see what you're doing on sustainability. This really aligns with our values. Can we use you to do our payments?” Which is great. And obviously, that wasn't the main aim, but I think by doing things well or doing things honestly and transparently, you're naturally going to get that interest from other companies that you align with their values. 

I think there's definitely been benefits straightway in the last six months and hopefully, that continues to improve.

Oh, and your other question was “Was there any trade-offs?” Probably for us, no, because I think one of our core values is to care deeply, which is a really important kind of value, especially when talking about sustainability. If you care about the well-being of others, which here is quite an important topic in the global context at the moment anyway, if you care about your neighbors or your family, or you care about your employees or your customers, you have to take action on climate change and wider social and economic issues. If you don't take action to have a positive impact, by doing nothing, you’re having a negative impact, so you're inadvertently creating harm as opposed to well-being.

I think for us, there's probably no trade-offs because it's so ingrained in our values is that idea of caring deeply, that doing environmental sustainability and other things like well-being and diversity and inclusion and things is part and parcel of the ethos of businesses. If that makes sense, so I would say no.

There's certainly been some challenging discussions that we've had or certain things that we've had to look at. I think overall there's everything to be seen in a very positive light. 

Oksana: 

That's good to hear. And this is slightly a side question. Did you have to make any changes within the sort of processes, organizational structure, or introduce new tools to deliver on your ESG goals?

Ben: 

In terms of structure, I guess the only thing that changed was that I was added to the organization. So that's probably it really. I mean, I have actually just created a volunteer group, so we have different volunteer groups who look after different topics. So we've got one which looks after diversity and inclusion or gender equality and things like that. We've actually got a group set up now on sustainability. 

My aim is to get this group, so we've got people from all different locations across all locations, globally and different sort of levels in the organization and different roles, which is really important. So with that, going to be trained up in environmental management, so that, I guess that's kind of an additional layer that's gone in straight away to really try and help embed the idea of sustainability.

I think in terms of tools, some of the tools that I used initially were things that I've just built myself over the last four or five years or so, but something we're actually looking at going forward is we're about to roll out an app, which is a sustainability engagement app. That's all about how do we help our employees improve their knowledge around sustainability, but then also how can they take action in their personal life, because that's a really important thing. So that’s something we’re developing at the moment. 

And probably going forward, we will start to use some sort of external tools on measuring so I'm not having to do all that the environmental, all the ESG monitoring manually. We're just use an assistant to do that going forward.

But I guess overall not really massive amounts in terms of, we haven't had to spend hundreds of thousands of new tools. A lot of it's just been things that we've been able to do relatively straightforwardly, even for a business with post-2000 employees. 

Oksana: 

Cool. Very interesting. And when you measure internally or think about it from a more macro perspective, is there someone out there that you think is really a pioneer in their efforts and set up, or is it even useful to compare one organization to another? Really an open-ended question. 

Ben: 

Yeah, it's a good question. I think, I guess sometimes in certain aspects, businesses tend to compare themselves to competitors or other businesses a lot.

Oksana: 

A favourite thing in finance is competitive benchmarking. 

Ben: 

Yeah, I guess in terms of what we're doing on sustainability, it's not really something that we looked at specifically on what our competitors are doing. I think probably because we take more of a collaborative approach, so when we work with the other companies in tech zero, for example, it's all about sharing ideas and best practices and things.

I guess it's kind of a more collaborative benchmarking. So we might say, “Oh, okay. This company has done X. That's a really good idea. Or this company have done X, which is great, but it doesn't apply it to what we're doing” sort of things. So, but that being said, there probably are some really good examples out there if I could remember them.

I think generally speaking, I think any company that's committed to take an action, that’s aligned with science is probably the really important thing for me because it is more difficult. I say, I guess for context, last year there was the science-based target standard, which was published specifically around corporate climate action, and that's a lot more rigorous, a lot more work on your reductions and things. I think any company that's signed up to that and going through that process then is definitely going to be up there in terms of the leaders on climate action. 

I think there's always really good examples on sustainability. I think one of the ones that people talk about is Unilever. There's a great example, and this could be a really strange example by the way, but Interface Carpets was one of the most innovative companies on the circular economy years ago when they realized that there was so much waste and that they could actually use waste as a resource.

Another prime example of that is Toast Ale, which is now my favorite bit. They actually make beer from bread that would otherwise go to waste. So they're using waste as a resource to make a product. So this really good examples on the environmental side. Some really good examples of companies doing great things on employee well-being and things like that.

So, then I guess, going back to the other part of your question is, “Is it useful to compare?” I think it can be, but sometimes it's difficult to compare when not everyone is measuring the same thing. Sometimes I think until we get better standardization. 

For example, our measurement of our environmental impact is very, very thorough. We measure absolutely everything. So if we put that out there as a climate report, and then someone might read that versus another company who has only measured, maybe scope 1 and 2, and they'll say “GoCardless, that’s awful”. But it's just because we've measured more. We've been more thorough in our measurement.

I think until there's more standardization of what you measure and what you report, then it's a little bit difficult to compare properly if that makes any sense. 

Oksana: 

Yeah, I think this is one of the most common themes from almost everyone is this need for standardization. And because it's such a complex and very all-encompassing issue or topic, I think it will take a while to arrive at standardization.

And my last question, sometimes I ask to my guests, is what surprised you recently? It could be EEG or non-ESG-related. 

Ben:

That's a very good question. I think I was going to reference some things that we've been doing internally at GoCardless, but actually thinking about it, I wasn't really surprised. I was going to say that the level of engagement that we've had from our team internally on sustainability, on diversity and inclusion and things. I was going to say that it surprised me, but actually it's not surprising because I guess linking back to my original point about the values of the company, the E and the S and the G are so interlinked and almost always come back to the idea of caring for others, that actually, when the majority of people join GoCardless they know what those values are so actually they have the values embedded, so therefore of course they are going to be interested. If not, they don't have to be as passionate as I am about it, but they need to care. 

So that actually doesn't really surprise me. So I've just completely not answered your question there, have I? 

Oksana: 

But it was a good answer. Very, very good to have you with us, Ben. Thanks so much. 

Ben: 

No worries. Thank you. Thank you for having me.

Oksana: 

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