“Nobody’s doing enough. Businesses aren’t doing enough, but the government isn’t doing enough either. Even if you take all the pledges from Paris and Glasgow, we’re still off target”
Business Leader sat down for a chat with Martin Chilcott. Martin has founded the largest sustainable business community in the world. He’s devoted much of his career to helping businesses develop efficient and sustainable practices. He is now the Founder and CEO of his own carbon reduction platform, Manufacture 2030.
Sustainability is a big part of your life. Does your drive to contribute to sustainability come from your younger years?
Like a lot of people, I was brought up on David Attenborough and I spent an awful lot of time in the countryside and wilderness, so I developed an affinity for nature. When I finished university, I was living in Oxford and I had friends at the Environmental Change Institute, which is part of the university there. They said: “Martin you’re an entrepreneur, you like to get stuck into things and try to make change happen, come and learn about this thing called ‘climate change’.”
This was the end of the 1990s/the beginning of the 2000s. The truth is, I knew very little about climate change. I mean, it was in the news a bit but the lecturers just made it clear to me that we were about to enter an extraordinary period of change and if we did not embrace and make the most of it and drive out a positive and optimistic outcome at the end of it, then civilisation itself was in threat.
What was the sustainability space like at that time? Was it intimidating going into the industry at a time when people didn’t really understand what climate change was?
Most people thought it was a peripheral exercise and the science around climate change was very heavily contested at this time. Whereas now, it’s absolutely accepted. I mean, even then, scientists were pretty certain that this was very serious, they were pretty sure that this was anthropogenic, and that it was heading to something disastrous. But they hadn’t built consensus in business, government, politics, or amongst the citizenry at large.
The kinds of people involved at this time were also specialists. They tended to be bearded and tree-hugging and sandal-wearing. Whereas now, I think people involved in sustainability and sustainable business are mainstream business professionals – they very often come from a procurement background or a finance background, or a marketing background, and they just recognise that this is the issue of the day. This is the challenge of our generation. Back in the early noughties, that wasn’t the case, the only people involved were the kind of environmental business visionaries.
When was the point that you realised Two Degrees was going to be a successful business?
We had built a social platform and were thinking of it as the LinkedIn for sustainable businesses. You could create communities within it and encourage suppliers to share knowledge and highlight those businesses that were making breakthroughs. My favourite was a company called APS Salads, which put a double Biodigester into their site in Cheshire, where they were growing tomatoes under glass. Not only did it generate electricity for them, but it also removed a waste product which is the green bits of the tomato plant. It produced gas from this, which was then burned to produce electricity, but it also produced a very nitrogen-rich fertiliser.
They supplied fuel for those Tesco trucks that said ‘powered by tomatoes’ on the side. So, people like that were real pioneers and did some very exciting things. We were able to share those as case studies, and get those particular champions to explain what they were doing, why they were doing it, and how it was beneficial for their business to do so. We knew there was an appetite for education and after this case, we realised it was going to work.
So, what exactly does Manufacture 2030 do? And why do you feel like it is necessary at this point?
We wanted to set up a software-as-a-service (SaaS) platform that could capture data and build relationships with suppliers on a large scale and provide those suppliers with the know-how to make a change. Then if we could do that, in partnership with big supply chain owners like Honda, Toyota, General Motors, Asda and Co-op, and GlaxoSmithKline, we could use their influence within global value chains to accelerate change.
The suppliers have their own challenges. They’re not specialists at this. They’re good at getting high-quality products out of the door on time, at a competitive price. But they haven’t invested in sustainability or capacity for this kind of change, so they lack the know-how and don’t see it traditionally as a priority – they lack access to low-cost capital to technologies especially if they are small and medium-sized.
There is an issue where a lot of businesses do want to be sustainable, and do want to make their supply chains more sustainable and efficient, but lack the know-how and awareness of this.
If this is the case, how important is education within this process?
It’s very important. I can’t imagine there’s a business out there that knowingly wants to damage the global environment. So, the vast majority of businesses would like to be sustainable. The challenge they have first and foremost is that they operate in a highly competitive market, probably on pretty thin margins and they are not convinced that them being sustainable and investing in their sustainability is a priority for their customers.
Their customers have to really communicate why sustainability is a priority and convince them that it is. Many businesses don’t know where to begin, so there’s definitely a need for education.
Can you think of any businesses that have demonstrated best practices in making their supply chains more sustainable?
Here in the UK, we do a lot of work with grocers. We’ve been working in Manufacture 2030 for the last three years or so with Asda and Co-op. These two have engaged pretty much all of their tier-one food and drink manufacturers and some of their other suppliers as well. You can see that we’ve been able to track the suppliers developing these action plans and implementing these action plans, and reporting annually on the reductions that they’re making.
We’ve seen 80,000 metric tonnes of carbon being pulled out of that supply chain. This is the equivalent of if you were to take about 17,000 cars off the road – so it’s a large chunk of carbon. Additionally, huge amounts of education have been promoted by Co-op with its 800 or so suppliers. I think there have been about 1500 webinars sharing best practices and knowledge only in 2021 and I think over a slightly longer period, we’re close to £50 million of cost being taken out of that food and drink supply chain. So, you can see tangible numbers from what Asda and Co-op are doing.
2030 has gained quite a lot of significance. A lot of businesses are aiming to achieve net-zero by this year. What does net-zero mean, and what can businesses do to make an effort towards being net-zero?
We really do need everybody to be aiming for a net-zero goal. So, a net-zero goal simply means that across your entire value chain – from your suppliers through to your operations, to how your consumers are consuming, heating, cooking, and washing your product – you’re able to net off the carbon you’re emitting with carbon that you’re saving.
The only way you could do that, at scale across an entire global economy is to reduce the carbon you’re emitting as much as possible. For some businesses, there will always be some carbon emitted, which then needs to be offset, but the offset bit needs to be the last piece in the jigsaw.
But 2030 is an incredibly important day not just because the sustainable development goals are set for that date, but also because the latest work from the International Panel on Climate Change clearly shows us that we have got to have cut emissions by 50% by that point.
Do you feel optimistic about reaching this goal?
I do. It’s really important to be optimistic because if you’re not optimistic about humankind’s ability to organise itself and make change happen, you will never motivate yourself enough to make a change.
So, that’s a kind of psychological thing. But more importantly, we have reason to be optimistic because we have seen mankind and modern society making significant changes in the past very quickly.
The financial markets, particularly long-term investors, have woken up to the reality and threat of climate change. Investors in an enterprise, venture capitalists, and others have woken up to the size of the opportunity. Governments have their part to play, they’ve got to allow us to have a level playing field, they’ve got to put in place regulation, they’ve got to enable low carbon cost economies to not undermine other economies.
So, governments have their role to play. But I think the leadership is now coming from financial markets, entrepreneurs and investors. And the fact that we’ve done this before should make us optimistic that this is doable, but we do have to get our skates on. This is not a time to sit around and theorise: it’s time for action.
Do you feel like governments are putting enough pressure on businesses to adopt sustainable practices?
Nobody’s doing enough. Businesses aren’t doing enough, but the government isn’t doing enough either. Even if you take all the pledges from Paris and Glasgow, we’re still off target.
Now, like all these changes, there is going to be a ramp-up effect. But we don’t want to leave that ramp up to be too steep too late. It gets expensive, and it gets disruptive, and it gets difficult. We want to make that ramp as flat as we possibly can.
Governments need to seize these opportunities. There are times when change is going to have to happen when consumers and citizens recognise change and the need for change. So, the government needs to step up to the plate and turn crisis into opportunity, and it’s not doing that at the moment.
We’re coming out of the pandemic and the war in Ukraine is happening. How might this affect supply chains and the ability of businesses to become more efficient? What impact might this have on sustainability?
In the short term, supply chains are massively disrupted. We are experiencing a cost of living crisis and supply crisis currently, some of which are obviously to do with energy. But a lot of it is also just to do with disruptions in the supply chain. In particular, key areas like China and Shanghai at the moment. That is hopefully a short-term pain for businesses and consumers.
But it also highlights to businesses the importance of supply chain resilience, and I think businesses have got rather used to the flexibility inherent in the idea of a global supply chain and the global economy – the ability to move things around relatively easily. Well, there’s a lot of inherent risk in having that, and we need to build much more resilience.