Hello everyone. Welcome to the second episode of energy in transition, a weekly series of virtual fireside chats where we will be speaking with key movers and shakers in the clean energy sector to get their expert views on the future of the industry how we get to Net Zero and how things will be affected by the COVID-19 pandemic.
My name is Levent Gürdenli and I'm a renewable energy and sustainability lawyer at the leading national firm Weightmans. We are passionate about tackling climate change reaching Net Zero and facilitating the transition to a cleaner smarter more flexible energy system.
We have extensive experience advising across the lifecycle of all types of clean energy projects.
As you know, each week we'll be tackling a different topic and today we're going to be discussing energy management and sustainability strategies for organisations and I'm delighted to be joined by Cian Duggan, the Founder and CEO of Carbon Intelligence.
Carbon Intelligence helps clients position sustainability at the heart of business success. Using its six dimensions of carbon intelligence framework, it integrates strategy, reporting, data, AI behaviour change and energy optimisation to create company-wide sustainability programs with proven success.
Cian, thank you so much for joining me today and for being behind an actual fire! Before we start could you please introduce yourself and Carbon Intelligence a little bit more.
Yes, certainly. Thank you very much for inviting us to join your fireside chat. I'm Cian Duggan and I'm Founder and Chief Innovation Officer for Carbon Intelligence. We're a London-based company. We've got 70 or 80 people on Regent Street.
We work with globally complex clients who are on their own journeys towards Net Zero and we help them to, in a programmatic way, using multi-year programmes to move towards a Net Zero future.
Fantastic and so before we get into the real questions can you tell us a bit more about how your business has developed in the last 12 months and can you let us know about any recent achievements or developments you care to share with us?
Certainly, yes. It's been quite an interesting 12 to 18 months for us. So I suppose when we might have met first Lev, we were Carbon Credentials so we've had a big name change and a big brand refresh which all happened and kind of went public earlier this year January 2020 and the reason for that was that 10 plus years ago when I set up Carbon Credentials, our clients were looking to ensure that they were gathering data to comply with what were then quite new mandatory frameworks things like the carbon reduction commitment or ESOS around Europe or things like that.
But now in 2020 and as we're moving forward organisations are much more looking to embed sustainability or ESG environmental social governance or carbon agendas, really incorporate that within their business strategy itself. Because it's getting ever more necessary to have it really really tightly linked with what the business is doing at its core. So we changed to Carbon Intelligence.
Stephen Hawking talks about intelligence as being the ability to adapt to change and so that we see that we help our clients to have first of all an understanding and a desire to change and then to be able to. We give them the insights and the ability to make that change. So changing the name was a big one.
Secondly, I suppose our platform. We've got a big data platform called "Adapt" we hold quite a lot of data. Twenty-plus million rows of data flowing into that every day. We gather data from 45 odd thousand buildings globally and increasingly a lot of non-building data. So like travel data, scope three data as it's often called. Travel data, supply chain data, things like that. So our platform has very much grown and our development team has grown to suit that.
We've brought on a new CTO Howard Cato, who was a CTO of previous businesses including one that was a kind of a unicorn - over a billion value - so we've got a great team now.
On the technology and on the team side of things are people and that's been a major change as well. I think when we first met we might have been, I don't know, 30 or 40 people. We're nearly double that now and we've brought on a fantastic new chairman, Jonathan Sykes, from the world of media and a new operations director Chris Ronketti who's brought many years of experience in this specific sector and lots more junior and senior members of staff, all working for our clients.
We look to ensure that our clients are the heroes. So our clients within there are people we deal with in clients tend to be in the sustainability or property or ESG functions and the more that we can help them to shine, to help their businesses to move towards Net Zero and then we feel we've got a success. People has been third.
Fantastic and as you say I've certainly seen your business develop over the last few years to provide now what's much more a holistic offering I would say. With that why should organizations have a Net Zero or sustainability strategy beyond just for compliance reasons?
It's a good question and we've seen a major shift in this over the last few months. Obviously we've been doing this for quite a few years now and what we're really seeing is that there's a deeper understanding of the true value that sustainability can bring to a business.
The working definition that we have for sustainability is to do more with less. So organizations are... I mean for years we've known that buildings are generally running inefficiently for various different historical reasons and buildings, big commercial buildings, are complex but reducing costs is obviously a clear value. Reducing maintenance costs, reducing utility costs is great but then there are the two extra levels of value which are actually significantly more than that.
One that we're hearing a lot from clients at the moment is the value of attracting and retaining staff and attracting and retaining investors and shareholder stakeholders. Because a good sustainability story helps staff to be more engaged. We know that Millennials are going to be more than 50% of the working population next year and they very much care about this.
So there's a significant value of having sustainability beyond compliance to help you attract or retain staff and then the third area of value, which is probably higher again, is around the brand value or the reputational value. We're really seeing this again with the drive within the commercial real estate, things like reporting to GRESB, the global real estate sustainability benchmark.
Larry Fink's letter earlier this year talking about the requirement for businesses to have a plan, to have a sustainability or ESG plan because they'll be looking at it and where Blackrock lead most others follow - they're the largest kind of asset owners in the world. So yeah it's gone way beyond just a nice green thing to have on the side of a business to being essential, to have right at the heart of the business and in these COVID-19 times we are seeing the businesses who rank highly on sustainability or ESG ratings are also doing better at holding up share prices, being more resilient now in these rather unusual times.
I mean that's really interesting and I certainly agree that some kind of a shift or pattern that I've seen where sustainability rather than being, as you say just a nice to have on on the side of your core business, that's really been elevated to the board to become a core, I think strategic priority and focus for all businesses for the reasons that you set out.
I'm interested you mentioned earlier your data platform for example. How are technology and data being used to create a more sustainable future?
Well, a lot! It's used in many different ways and of course technology is always improving and getting better so our platform, for example, in order to report in kind of corporate annual reporting or a quarterly reporting or even daily, daily exception reporting, it all starts with the kind of as easy as possible or gathering data in as easy a way as possible, number one.
Verifying that data and kind of capturing the outliers as they're flowing into a data warehouse and then finding those nuggets of actionable insights that then can go back to whoever can make a difference, whoever can do something.
So I suppose historically sustainability data was nearly all what we call scope one and two, so the gas that you use in your buildings or the petrol or diesel that goes into your cars or the electricity that you use from the grid. That was...that's been the majority of reporting for the last 10 plus years but it's changing now as more organizations A) set science-based targets and B) are setting Net Zero strategies and plans and the requirement to go way beyond just your buildings and into your wider travel. You know like even your flights etc... to go into your procurement.
You know how your supply chain is providing you with information. Commercial real estate need to look at embodied carbon. They need to look at tenant data and tenant emissions so the data types are expanding rapidly and technology helps immeasurably with that. We're working very hard to make it ever easier, making it a bit of fun to gather this data. It's hard historically and there you know Howard our CTO, I think this is what keeps him awake at night, is how can we make it ever easier, more enjoyable, more valuable to gather the data that's needed at the source and make it valuable, as you said Lev, all the way up to the board so that the CEOs, CFOs of all these large companies can make ever better decisions quickly.
As you know speed of decision-making is what will separate the winners from the also-ran.
Absolutely. Data, from my experience working on energy management and energy efficiency projects, is always key and I guess you're absolutely right.
If you have that data as well it can really help to get top-level buy-in to these sorts of programmes and schemes which historically has been a challenge.
It probably is changing now - but I certainly agree with those sentiments.
You mentioned as well and one of the other areas that you work on is around reporting and setting science-based targets to organisations that maybe haven't done it yet or are thinking about it, how important do you think is reporting your emissions and, again, why should organisations take up the mantle and do it? How important is it?
I suppose to go back to that over a century old adage: what you measure, you can manage and so what goes into a company's annual report is scrutinized. You know it's scrutinized by shareholders, it'd be scrutinized by the more enlightened staff and so if numbers from anything get into an annual report like in an official annual report then they ought to have weight. And so annual reporting and we've seen various different ways that this has happened over the years, from separate sustainability reports to kind of combined reports all in one.
Our outgoing, well actually has gone there, Governor of the Bank of England, you know really, really driving the task force for TCFD - for climate-related financial disclosures so really embedding all of these non-financial reporting frameworks into more easy-to-understand summaries for investors, for staff or for clients. You know that there are good benchmarking frameworks out there, GRESB for example in commercial real estate global real estate sustainability benchmark, CDP the world's largest voluntary database of carbon emissions - carbon disclosure project as was - all of these are there and are finding ever-increasing numbers of audiences to look into, to delve into those, so yeah I mean it's gone beyond kind of a nice to have to pretty much table stakes.
I think sustainability reporting, when Blackrock - we're really really blessed to work with clients like Blackrock - and Larry Fink when he said earlier this year that climate risk is investment risk. And just that statement alone "climate risk is investment risk" and when the world's largest asset owner is talking about climate in that way then we know something has to change.
Then you also have people. From Greta Thunberg, to extinction rebellion, to the UK government's committee for climate change committing to Net Zero by 2050 etc.... It's now more existential to have, at the very least, the start of a story and to be communicating that you understand that it's a journey that you need to progress on.
It's a multi-year journey to get towards Net Zero or to get towards being a sustainable organisation and reporting is an essential part of that.
Fantastic. And as you say, that sort of momentum is ever-present and I guess the other element is the more and more that organisations report then it gathers peer pressure that builds on others and those that don't won't be looked favourably upon and there's all sorts of other kinds of macroeconomic reasons that you set out as well.
Back to technology, maybe some crystal ball gazing to an extent. Are there any kind of particular technologies that you are personally excited about to work with in the future or seeing coming down the track?
Yeah, I mean I love living in this day and age. The ability to kind of build prototypes now for technology is, it's way faster, it's way easier. We're working with a lot of our clients from people like Irish Life over in Ireland to Grosvenor estates and PwC and Hermes here in the UK and OBT and we're working with these clients to understand from their point of view how can technology help them and so how can, back to the pointer and data gathering, gathering data easily or as easy as possible is probably the holy grail of sustainability and reporting.
And it's not easy. It has not been easy historically. It is not easy now but the ability that technology has to make that easier and a little bit more fun game of life things. Where possible you know feedback fairly instant insights for those who are inputting data so it's valuable for them. These are all things that we're working on, really excited by that so the data that comes in and it has to be gathered easily, it has to be auditable.
So the thing that I'm really excited about as well now is the ability for big data and AI to pick out the outliers. So, in fact, we had an internal company presentation virtually just earlier. So in COVID-19 times we have nearly 80 people on a Zoom meeting and then our tech team, we're showing some of the new tools including some wonderful outlier AI and technology and all of that helps to make sure that when it gets to the point of an audit set at the end and for years we've had our audits for our clients signed off by KPMG, PWC and any of the big four etc. and the technology now allows us to do that so much better and easier. And that enables confidence because so much of this is about confidence. Confidence of data.
But when we're running a multi-year program and the conversation moves from "show me the proof that what you're telling me is right" to "I now totally believe that what they're telling me is right, what are we going to do about it" when that shift happens it's a beautiful moment. And that's what I love that technology can do it. It can enable us to get from the 'really don't believe you', from kind of data and insights to "ah this makes my life better this makes my programme more effective" - that's wonderful.
I guess the more data that you're able to gather in that way, the more reference points you have, the more that you're able to develop standardisation. You're able to value energy savings and things like that in a much more consistent manner which can only unlock things like investments into these sorts of projects from funding from external funders for example. So data, I absolutely agree with you has to be at the forefront here. And we've spoken a lot about technology, we've spoken a lot about data.
How is important is behavioural change to improve the energy performance of your organisation or the building and what can we do drive efficiency there?
Ultimately businesses are full of people. Data and technology and AI and insights are all wonderful but if people then don't do something different, it's not quite pointless, but you know it's ineffective. So back to that kind of second layer of value of sustainability - the people they're you know engagement. In fact, in our six dimensions of carbon intelligence, engagement is one of those six dimensions because it is absolutely critical. After you've set the right direction and you have your strategic goals in mind, you have your science-based target or Net Zero target etc... after you've agreed governance, who's doing what and you have the data. That's the first three - direction governance and data.
The next one then on our dimensions, six dimensions is engagement. So that's about engaging internally with staff and people who could make a difference and telling stories externally to your stakeholders. Your own clients? Sorry, yeah, your own clients and beyond. So engagement is essential. In fact, I mean we've worked with some of our clients on engagement programmes, the likes of BT, Village Hotels, Vodafone. We did a great little campaign with Vodafone called "Red loves Green" and we did this for their global, tens of thousands of their employees globally. We ran a webinar actually on it earlier this week. Very interesting; and we were talking also about how important it is to continue engaging effectively during COVID-19 times as people are kind of working disparately. So yes, engagement is essential. I mean we've had programmatic successes: the likes of Village Hotels - hotels being a sector that are really hard hit at the moment under COVID-19 - from engaging with all of their staff across all their kind of 30 plus UK buildings, we've saved them coming on to £1 million a year from their buildings. It's significant and that wouldn't happen without engaging at the different levels. Engaging from boiler room to boardroom and everything in between essentially.
You mentioned COVID-19 there and, I wonder, it's presented plenty of challenges for us all across all businesses, all sectors. But from your perspective, from an energy management and sustainability perspective, are there opportunities here for organisations, particularly I guess during periods of low occupancy?
In a word, yes. There are opportunities. So some of our sectors, we work across multiple sectors, commercial real estate, retail manufacturing, hotels, leisure and variety of others. Some have been hit more than others, the hotel and leisure sector had pretty much a drop off a cliff edge from business so we're looking at, we got a large data set. We've got twenty million plus rows of data flowing in a day to our data warehouse so we're able to see and then we did a big analysis actually and we picked some larger buildings which you would hope would have been well managed and there and so we were looking at the buildings and seeing the difference between the weeks post lockdown and the weeks pre lockdown.
In fact, we did a webinar on this with one of our clients, Aviva, a week ago. Simple headlines: on average buildings are only reduced, have only reduced energy, by 16%. The worst buildings have only reduced energy by 3%, with the best buildings by 54%. So that's a rather wide range. Yeah and a variety of reasons that we've uncovered from kind of going back and talking to clients about this and trying to help them to become the 54% or over 50% savings.
But the opportunity to see from buildings point of view? How can you reduce energy from a travel point of view? How can you reduce travel from a supply chain point of view? How can you make your supply chain more efficient? All of these are real clear and obvious examples of the opportunity that can be, it can be looked at because things are different now and COVID-19, for sure and we're definitely seeing that I mean the other thing that we're seeing now as an opportunity is, and this was kind of happening anyway as landlords and tenants again can look at buildings. Landlords and tenants are both setting science-based targets. Were working with both landlords and tenants to do exactly this. From Tesco to be the first one globally to set a science-based target of one and a half degrees to various others and that is requiring a level of engagement in collaboration like never before.
Because those historic for decades has been a challenge to get tenants and landlords and managing agents all to kind of talk to for the benefit of energy efficiency. Generally, that hasn't happened but now there's an extra level of drive and again in these COVID-19 times where buildings should be used a lot less, it's really shining a light on those organisations who've got that process down well versus those that haven't.
We've actually had a few articles published in this last week. I mean a visible sign our buildings with lights left on but actually that's a relatively small amount of energy. The much bigger energy is the heating, ventilation, air conditioning so that's where there are numerous opportunities around this.
Well glad to hear that there could be some positives from it all.
So we're going to be asking everybody in this series the following three questions. You know the back to COVID-19. Do you see it, just generally not necessarily just in your space, and we mentioned the momentum behind getting to a sustainable future, Net Zero, that the pressures from corporations, the pressures from government, the pressures from Millennials, do you see COVID-19 slowing down our progress in achieving Net Zero, or is it more of a temporary glitch?
I certainly see it slowing down things in the short term. When businesses have to focus on the existential threat of not having enough sales, not having enough products being sold, not having enough profit ultimately because you can't sustain. If you're not in profit and cash flow, cash flow being the thing that kills most business, if in its absence that has to be a focus for all businesses. Now again sustainable businesses are doing better in this. So that's something that that I hope will become a real call to all businesses to look at sustainability in a slightly different light, and much more business value focused light, but it will slow down.
I mean we were seeing really increased numbers of conversations at senior board levels around sustainability, around ESG, around carbon before this. I expect that that will slow in the short term. I would hope that in the more medium term again those lessons of more sustainable supply chains, more sustainable buildings, more sustainable staff and working practices, will mean that in the medium term this may have a bit of a boost. But I expect in the short term it'll have to go down the priority list. But we will see hopefully, and I am absolutely an optimist at heart, I hope that we will bounce back from this both in the UK and globally and we will see a positive benefit in the not-too-distant future.
Speaking on that positive benefit, after this period has expired, whenever that may be, do you think we'll go back to business as usual as it was or do you think there's going to be a real paradigm shift here in the way that businesses and organisations run their operations?
Actually that question - 'is it going to be the same or is it going to be different?' - is a question that we're having with a lot of our clients. In the mode we're now in, we're both in the make things as good as they can be now, but also we're very much looking to when business-as-usual returns and what does that mean?
I think it will be different that there are the costs will be definitely more, there'll be more focus on costs for the next number of years as there always is post a recession blip. Some businesses will do much better. I wish I'd bought shares in Zoom before as I'm sure most of us do. So there always will be winners and losers and we will see it will not be back to business as usual.
I think only time will tell what or how we can do this better. I think that there's a reasonable amount of conversations, there are even a number of conversations happening about, this is nice from kind of dolphins swimming in Venice, to cleaner air which we can see to know all of that. These things are good and if that can help and also working practices people not having long commutes etc., not having to spend time and money on travel and doing more remotely. All of this will change, so you know will it be revolutionary? I don't think so I think, it'll just be evolutionary. Things that were probably going to happen might happen faster I think.
A very, very sage way of looking at it. It's almost forced the digital transformation for some organisations, or forced a lot of companies' hands that might have been thinking about it, but have now been forced to do it.
Actually, on that point, on the kind of digital transformation, something we saw that in that dataset that we looked at where best buildings over 50%, worst buildings hardly any change, the big difference was those buildings that had become smart and also had installed... so for Aviva who were on our webinar who presented. Over the last few years we've installed smart building gateways and all the buildings they've got visibility and control now. So that they can sit anywhere in the world and see what's going on with their buildings and make changes.
That has enabled rapid iterations and rapid changes when needed. So they're that the digital transformation of buildings, the digital transformation of the carbon supply chains. All of that has already demonstrably helped for those who have done it and has harmed those who haven't.
So, yes, I expect to see that kind of, that the smart building narrative to increase in validity and the requirement for kind of sustainability to increase in validity.
So finally we come to two short questions; and again we're asking everybody this.
First of all please can you give me three words for you that represent getting to Net Zero?
Good question. I think the first word will have to be "collaboration". This has to happen across various teams and everything. So collaboration number one.
Number two I think "intelligence". Back to that kind of definition of intelligence
: the ability to adapt to change. We're going to need that to get to a Net Zero. We have to adapt, so "intelligence" number two.
And the third one... that's "fun": I think it has to be fun. We have to enjoy it. Doing this ought to be an enjoyable activity. So 'collaboration', 'intelligence' and 'fun'.
Very nice! I like that last position.
That's good and then on the other side, can you give me three words that to you could prevent us from achieving Net Zero?
Yeah that's harder actually. The first one will be "silos". So it's almost the opposite of collaborations with silos. Net Zero requires a shift in thinking across a whole business. It requires looking at your strategic needs as a business and seeing where sustainability or Net Zero can fit in with that. If you're working in silos that will not be successful. So 'silos' would be one.
The second I suppose would be that would stop us achieving it might be "hair shirts". Actually maybe that's two words. But you know the whole "we're gonna have to go back to a time where we weren't doing blah blah blah where there are fewer people in the world". That kind of negative view of humanity almost and a desire to be not doing or not having all the wonderful things that human ingenuity has created over the years. So I would say that that could stop that narrative over "oh no we can't have all of this if we're going to be Net Zero". I don't believe that. I fully believe that humans are full of ingenuity and in fact, we have most of the solutions for this technologically already created. Some will still need to be created but the vast majority of solutions are already there.
Then the third thing that might stop might be just fear. So as a word 'fear', fear of the unknown, fear of change. We've seen this in the utility companies who wouldn't change their business model versus those that did. Some of the German utilities who kind of separated out old generation to new generation and you gotta be brave. Looking at people like BP and companies how the fossil fuel industry has enabled us to raise billions of people out of poverty.
The accessibility for energy has enabled huge amounts of growth and wonderful things and yet it has its dark side too. So seeing companies like Shell or BP talk about their move towards Net Zero and they don't seem to have as much of a fear out loud at the moment of change. We need to see that same level I think of kind of a desire to change and a lack of fear of change because otherwise, I think it will be less likely to happen.
So what were those three? So "silos", "hair shirts" and "fear".
Thank you very much Cian. Thank you so much for joining me today that that's, unfortunately, all we have time for but some really really interesting insights there about the real need for organisations to put sustainability at the core of their business if they want to be successful in the future.
Also really interesting to hear about you know just the importance of data and how that will really unlock things in the future - the "Holy Grail" you even called it; and then you know the need to be collaborative. I like that, in particular, that this requires a shift in mindset across all ranges of society, across all parts of the organisation. So yes, okay thank you so much for joining us today.
Thank you very much thank you. If anyone is interested in implementing their own sustainability strategies or thinking about it or just want to find out more. Obviously, it goes without saying that you should check out Carbon Intelligence on their website which is at carbon.ci.
They are also on Twitter at @CarbonIntel and I'm sure you can follow them on LinkedIn as well. As for this particular interview, it will be on our website - that's weightmans.com - as well as our social media channels including LinkedIn and Twitter.
So all that remains to be said is that I hope you enjoyed today's interview everybody. We will be back next week with a new guest to get further expert opinion and insights. Until then it is goodbye from me. And it's goodbye from me - thank you very much for inviting us to join you. Thank you so much guys take care and bye bye.
