Designing Impactful Sustainability Programs
In this episode of Casual Conversations, Tim, co-founder of Alectro, explains why sustainability is crucial for businesses of all sizes. Without dedicated teams, many struggle to measure their carbon footprint and identify emission hotspots. Tim shares practical steps—like forming sustainability groups and organizing financial data—to drive real carbon reductions. He stresses the importance of transparency to avoid greenwashing and highlights how collective action can influence larger players. His one piece of advice? Start now.
Transcript
Hello everybody and welcome to another episode of Casual Conversations. Um, today we are talking with Tim from Alectro. He and his company are an incredible thought leader in the environmental and sustainability space. So we're really excited to talk to you, Tim, today and learn a little bit about what companies can do to kick off their sustainability journeys.
Some thanks for being on the call today as well. Um, as, uh, as mentioned, my name is Tim. I'm one of the co founders at Alectro. I guess the ultimate goal, um, what the tool does is it gives you your, um, emission footprint, uh, and your hotspots the most. And the tool is made for businesses that are under a thousand people, rather than being made for blue chip companies like Coca Cola or MasterCard, where they have 20 or 30, um, people in their sustainability teams. It's made for any company to pick up and allocate a percentage of a person's resources to this to get them started.
Honing in on that basic question of like, why is it important for every company, even small businesses that might feel like, well, I'm just a small business. I don't, I'm not a big polluter. I'm just trying to make my business and employ my people. Why is it important for even those folks to be measuring their carbon footprint? It actually comes down to the fact where a lot of people that have a lot of people work so in in the UK around um 80% of employees are employed bymes whereas only around 50% of the emissions come from the market so of course the big the big players are still uh getting half of the emissions but
most of the people um and that's the ones that we are interacted with still emit half of it and as a result these 80% of Workforce, they still want to contribute in terms of the fights against climate change. Um, and that's exactly the reason why everyone needs to pull their weight as well because of course there is that commonality problem where everyone thinks that they don't do anything, someone else will, um, and, uh, climate change is, is that specifically so as a result, everyone want to participate in it, and, uh, hopefully, Elektro can enable a lot more people to get involved in this journey, rather than them waiting for, I guess, governments or these blue chip companies to take action as well.
Definitely. It can kind of feel like a long, helpless waiting game to say, let the governments legislate, let countries come together, let those kind of big polluters take action and be responsible. We can all hope And Those are necessary levers that need to be pulled to make meaningful change, but nobody wants to feel helpless, nobody wants to feel like they can't do anything, and I think that idea of all coming together and banding together can really enact meaningful change. In that vein, what would be your message to maybe a small business owner that's watching this that's like, I want to get started, I don't know where to start. So from your perspective, what's the best first step for a small business to take on their sustainability journey?
So I think for very small businesses, what I think is very easy to do is to get more people involved in this journey, which shouldn't be a single person wearing the sustainability hat. Um, so I think that's the first step having a so called sustainability group is a very good first action to take to see if you can gather some momentum internally, because a single person can't just carry all of the weight as well. Then the second, um, what is actually will create some sort of return on investment to a business financial return of investment is, uh, making sure that you have the right data internally to do your measurement. So let's say you've been taking all of your financials and your IT asset lists and whatever you do just on Google sheets or an Excel spreadsheet. That makes it much more difficult for afterwards for someone to analyze your footprint. But of course, it will also affect your ability to analyze your financial situation at the time as well. So if you're a small business, being able to see your financial situation to a very granular level will allow you to make the right decisions to, you know, cut costs or to change suppliers in areas that you're paying more spending more money in. So I think that is steps or those are steps that any business can do right away, just to make your business more efficient as well before you've been jumping into the Sustainability bucket, um, itself.
Yeah, definitely. Um, you mentioned this a little bit earlier, but that over half of the UK's population works for small businesses. So, um, could you talk a little bit more on why you think it's important for businesses to be taking the lead rather than waiting, um, for legislation from government entities?
Mm hmm. Yeah. So, I think that's basically being told at the moment very much by some of those very Um, eco, um, eco champions of very large companies actually forcing a lot of their smaller suppliers to report their emissions as well because they want to take one step further, um, in terms of, um, being ahead of the government legislation in terms of getting smaller businesses to report as well. To your question, that story can be flipped upside down as well, meaning that If there's enough suppliers, let's say, let's say 10 suppliers have worked with a computer manufacturer, uh, who doesn't have any sustainability metrics. Um, they make a general monitor that it's very cheap. So a lot of small businesses use them because the cost is very cheap. But if let's say 10 of small suppliers that increasingly every year increased amount of monitors survive because they're growing quite rapidly in comparison to a large business that grows slowly, but steadily as well. If 10 people come to them and say that, Oh, they are considering or they, they have started their sustainability journey and they've seen that hardware specifically monitors are an area of high emission for them, and they need to, uh, align them monitors with their net zero journey, and they are considering changing suppliers because they haven't reported their emissions yet. This general, um, communal action from small businesses going to these large suppliers, because ultimately, as you were, you were saying small businesses can be seen as quite helpless because they don't have the purchasing power in comparison to very large businesses.So, I think it's enough. Small suppliers come to these manufacturers in this case, um, and ask them to do the same by measuring and figuring out how to be more sustainable. Action will be taken before government comes in and says, oh, if you don't this, you let fine and because again, it comes back down to the numbers. Uh, and a lot of, unfortunately in the common space, a lot of it does come back to financial incentives as well. And I'm sure we'll touch on this later on. And that's exactly why offsets, for example, this as well to create some sort of financial mechanism.
Yeah, let's talk about that actually. I think people hear the terms, carbon reduction and carbon offsets is just sort of, to get our definition straight. Reduction means that you are outputting a certain number of emissions and are meaningfully reducing that, um, and really cutting down your own emissions. Offsets, however, are doing other measures to counteract whatever emissions you're already outputting. So what's your view on offsets versus reduction? I think the science of all of this, you kind of read the literature over the years, offsets might have been well and good 20 years ago, but now we need meaningful reductions in addition to offsets. So. For maybe a small business that's entering this journey, feels confused by what the best practice is, what would you advise them?
Um, so there's various forms for offsets to exist in a business and why people should do them as well. Um, and of course, there's many terms, as you were saying, being thrown around as carbon neutral, net zero, carbon negative, carbon positive. What do all these mean? Um, I won't go into each one of them. I'll just touch on the two main ones, which is What does carbon neutral mean? What does net zero mean? So, for example, carbon neutral means that you measure your footprint and then, as you were saying, you do your meaningful actions to a greater extent to reduce your footprint. And then you have the ability to buy, um, carbon avoidance offsets. And a carbon avoidance offset, for example, is a, um, uh, an electric cook stove where you've been able to provide capital for a, uh, a family that previously used a coal cook stove and the capital allows them to basically use an electric cook stove and that shift from going from a coal to an electric cook stove has avoided a certain amount of emissions in the atmosphere. So from a chemical engineering perspective, that's great If you look at the world in that whole system, meaning that some carbon that would have gone out, hasn't gone out and you were the one that initiated that. That means that if you purchase enough carbon offsets that are Woden's projects, you will become a carbon neutral business. However, the goal is of course to be net zero, meaning that you can't just be a carbon neutral organization, um, because you ultimately will keep emitting more and more emissions yourself because you're not taking enough, or you may just not Do not action and you just keep buying that carbon avoidance projects. Net zero is a little bit different in a way that of course you do, you measure, and then you do everything you can to reduce your footprint again, meaningfully. Uh, but then rather than buying these, um, avoidance projects, you purchase these removal, um, uh, credits. And an example of a removal credit is, um, these large, um, large fans that they currently are building in Scandinavia, which are basically capable of extracting carbon dioxide out of thin air and it's called direct air capture, um, which you may imagine how much carbon dioxide is just in air. It's not very much, meaning that these fans are very large and the chemical process associated is Quite large and quite noble as well. Meaning it's very developed and it's of course. Uh, getting revamped as we speak the moment, but because it's so new, they are much more expensive in comparison to the avoidance projects that I was giving the example of before and the difference in price is nearly a magnitude different meaning if it's 10 pounds for an avoidance projects, 100 pounds for a removable one, meaning not every small business, of course, can afford to buy that. Meaning that, of course, as a small business, you have to make a decision. What is your end goal? Is it that you want to reduce your footprint? Which, of course, should be rather than this end label of saying that you are a net zero business straight away because only the big players in the market like Microsoft and Stripe are the ones buying the, the reduction offsets currently, uh, rather than the avoidance ones.
Um, so actually to talk a little bit more about like how Alectro's, uh, carbon emissions calculations work, can you describe that a little bit? Because when you and I talked initially, you were kind of describing that there's different scopes. There's like a carbon conversion factor. It's incredibly complicated. So can you give us a bird's eye view about, um, all of those intricacies?
And for sure, for sure. Um, I guess how the product works and as I was describing at the beginning in terms of a company can integrate their financial accounting system, where typically if you, let's say you expense something to the business, let's say what you expense to the business was a Coca Cola can, and it would say Seneca bought a Coke can on Monday the 26th of June. Uh, it was one can for $4. I'm not sure how much Coke cans cost in the U. S., but maybe that's a bit expensive. Of course, that gives you a financial perspective of what you purchase. It'd be insubstantial, for example, in your accounting system. To convert that into a carbon dioxide equivalent, um, our program, or if left Or if you did it manually, you would have to go through every single line item that you've purchased, product or service, and say what It is very plainly for this 'cause you would may have written in your expense code, code can at client y for lunch, for example. Um, for dollars, the program. Or if you did it manually, you would, you would have to just take out the single Coke can and find big ment impact that single Coke can. And that's a good question where to find that. So a lot of, um, companies publish their, um, emission factors online. So the really big companies out there, like for example, they're very good at publishing the so called life cycle assessments or in plain English, this conversion factor of any single product. And for example, Coke could have published a life cycle assessment on a single Coke can in the U S if they're very specific or just a general Coke can in the world. That we can then use to convert that single four dollars into equivalent, um, carbon dioxide emissions by multiplying, knowing that it's just a single coke can by the conversion factor to get to your carbon dioxide and value for that single line item for whole business load, you will have to do that calculation for every single line item that you have.
And then sum them up at the very end and of course, there's some categorization going on as well to give you guys a, uh, layman view of where your emission hotspots are as well.
Absolutely. I think that the complexity of it is obviously very deep and very broad and one of the things that your platform does well is just make it accessible for everybody to get involved, which is really great. Um, to zoom out a little bit, I think there's this interesting narrative that you can kind of trace back over the last, maybe 30 years about who's, Responsibility is it to make changes in the climate crisis, and I think a lot of consumers can kind of think about narratives about like, Oh, you should turn off your lights when you leave a room, you should recycle, you should do all of these things to live your life sustainably, but then if you go read the headlines today, sort of saying, You don't make an iota of a difference if you try to live your life sustainably as an individual, and that the onus is really on governments and businesses. What's your view on on that? Like, is it? Is it, uh, hopeless for the individual consumer to sort of, like, live their life as sustainably as possible? Or is it purely on business and governments to kind of band together and enact meaningful change?
Correct. Um, I, I think, I think it's, of course, both, both, um, but from an, I'll start off with an individual's perspective first to see what they um can do and why it's important that they act on this as well. Um, let's say any business that's a b2c business um where they directly are Trying to appeal to the general consumer that purchases their product service again. Um, if that is a so called sustainably conscious person, It becomes very important that the businesses are adapting very far ahead of the game because otherwise They're going to lose these, uh, sustainably conscious consumers, um, from a B2B side as well, I guess it's quite similar to the, um, supply problem that we had before people will move away if people don't align with their own net zero strategy, if they haven't implemented anything yet as well. But let's, let's stick back to the, the, just to consumer side first, um, in terms of what actions can they do, uh, in comparison to the business footprint as well. Of course, even though we spend five out of seven days at work, uh, the overall footprint as an individual isn't really dominated that much by what we do at work, unless you work in manufacturing or, um, you travel extensively through your work as well. Um, And as a result, a lot of your emissions going into the atmosphere and looking at the planet as a whole do occur in your private time. So it's the meals that you have in the morning and the evening outside of work and the holidays that we travel on and the water and electricity use at home, which often are much more less efficient than in an office block because You're there with a lot of people and offices weren't designed for a lot of people rather than you being at home by yourself heating a room just for yourself. Very radical. So, um, the narrative about an individual taking action is equally as important as a business taking forward this action as well. But the question that we Our lecture you're trying to answer is, if you work for a business that's taking sustainable actions, we hope that the so-called hand print of not your footprint, but a hand print of a business basically diffuses into individual lives as well and the learning that a person can make a work, let's say that they realize that A, um, what the difference between a normal meal is in comparison to a vegetarian meal, maybe. I shouldn't label it like that because the vegetarian meal is a novel one, but of course, um, if you learn what the difference is in terms of numbering or in terms of footprint, people take that home, they tell their family about it, and even if only 10 percent of these people that learn about it, Take action from it, this so called handprint basically propagates change across society where, of course, from an individual's perspective, more of their missions actually do arrive from the job.
Absolutely. It's kind of that domino effect of, you know, a little bit of knowledge can yield a lot of change. So, um, kind of thinking about it from a business perspective as well. Um, obviously being sustainably minded is just the right thing to do in this day and age as a good citizen, as a good global citizen. But why would you say sustainability is simply good business?
There's lots of statistics around this as well in terms of, uh, the, the amount of profit you can make in terms of if you had a twin business, for example, and they don't go sustainable, for example, uh, or the fact that clients will stick with you for longer because you're a sustainable business. Um, but of course it's not easy to trace that back, um, to saying what's the benefit of a business going sustainable, unless you. are very good at surveying and you end up asking all the right questions with all the people that you interact with. And of course, a small business doesn't have the resources to dive so deeply as well, but at least with the information that, uh, we have very, very much found is, um, there's high risk if you work with very large clients that they could leave you if you don't align with their net zero goals, for example, meaning even though there's no legislation out there, and even though you may not make the environment a better place because you have a small impact, that loss of business is very significant to you, and as a result, becoming sustainable early on and pre empting the so called change coming from your big clients will of course save you some monetary benefit as well. But from a, um, I guess from more from an individual's perspective as well, um, what we've seen is universities are taking very much the lead in this space. By, um, I think Oxford University in, in the UK is asking if companies, do you have a net zero strategy in place if they want to come to, uh, their recruitment event, meaning that any student that wants to get a job and you've applied as a business and it says, just says the big red no next to a company evil, of course eliminate a large talent pool of specifically millennials who take very much more responsibility for the future of the planet. And so as a result, from a recruitment perspective as well, you can't chase it back. Exactly from a monetary perspective saying all because we did this, this talent has come in, but, or rather than use paying for a recruiter, for example, you got this better talent due to the fact that you've demonstrated your environmental stewardship. Um, but of course the marketing element of sustainability is very prominent in today's age as well. And people want to show that they are net zero. They want to show that they're carbon neutral because it's so new, it definitely creates, uh, those elements of greenwashing and, uh, where it could actually hurt your business if you don't do it properly either.
Yeah, exactly. Let's talk about greenwashing for a, for a minute. I think a lot of companies are really, really keen to just jump out there and say, we're doing everything we can without kind of doing the research to back it up. So what would be in your mind a, like the right balance of really backing up your claims to make sure that you're really being thorough and making meaningful change, but also being able to talk about it and to give to your marketing department and say, Hey, we've done this, Please communicate it in a way that is not greenwashing.
I think it's the element we're in today's age where transparency is better than just being completely opaque about what you've done to get to that final stage. Um, and it's often a question that we get asked by first year businesses that we work with when we do the measurement and they get a value for their business. Absolute value and of course a per person value as well. And then maybe the managing director comes to us and says, Tim, what does it mean? Is this, is this a good value? And, ah, do you think we should omit some things or have we omitted anything? For example, in the. The answers to that is, the good part of this is not the bad, the number at the end, which people are very fixated on, because of course we are numerically oriented and running businesses. Um, but it's about the transparency behind what you've done and why to include the certain things or how you did the calculation behind something as well. In Alectro, we're very transparent in terms of all the calculation we do and how the calculation is performed because that will make you a better business in comparison to a business that knowingly emitted certain areas of emissions just to make sure that they have a lower value or the cost of offsets are much lower. So I think. Um, from a business perspective, what's the most ethical way to take it forward is to be transparent and have accountability and say what actions you're taking forward rather than being hung up about this carbon value that everyone seems to think that they need to benchmark themselves against other businesses in the, in the market as well.
Absolutely. Um, and then lastly, what's your one piece of advice for a business looking to start their sustainability journey?
That they should start That they should start as soon as they can. Um, I think I think people are very afraid of starting their sustainability journey because of the associated costs or time resources that are required of course, um We often see it as a an employee perk as well And as with many other employee perks if you're in management You can't strip away the gym or the fruit bowl or the ping pong table because people get very upset if you do that so I think having a long term vision on your sustainability journey as well is very important. It's not an overnight change that you can make to become the most sustainable business in the world. Uh, but it's a long term journey and ultimately it's quite fun as well. Um, I think it's one of the elements that you can work on and you can feel very proud in terms of the actions that you've taken. So, um, I think just from that perspective, any businesses should just start, uh, if they do want to make an impact and have a good feeling about it at the end as well.
Absolutely. Well, Tim, thank you so much for the informative discussion, um, really lots of wonderful advice that I think people can take away from this and hopefully inspire some people to start their sustainability mission.
Awesome. Thanks for having me.
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