Season 2, Episode 10 - Game Changers and Transition Makers: Helping shape the green business revolution

Lorraine Johnston:

Hello and welcome to ESG Matters at Ashurst. I'm Lorraine Johnston, a partner at Ashurst in London, specialising in ESG regulation. You're listening to the second season of Game Changers and Transition Makers. In this series, you make global entrepreneurs who are embracing disruption to boost business performance and drive the sustainability agenda. In today's episode, you'll hear my conversation with Roger McKerlie, founder of the Environmental Business Network (EBN) which was established to help businesses adapt to and benefit from the need for very different environmental future. And so without further ado, let's jump in and hear the discussion.

Roger, thank you so much for joining us. I wondered if we could just kick off ... Could you possibly tell us a little bit about yourself and a little bit about the Environmental Business Network?

Roger McKerlie:

Hi, Lorraine, and thanks for having me on here. Well, I've had quite an interesting career, which I split into thirds, really. So this is career 3.0 that I'm on now, which is the fun end of it. My background in a corporate environment was sales and marketing in a publishing environment. And then I went into the advertising industry and for 10 or so years had my own design and advertising business, which I then sold my stake to my business partner, thereby enabling me to escape to do what I wanted to do, hence career 3.0. So that's the structures of them. But basically, I guess I'm a sales and marketing professional with an entrepreneurial bent as well. And the EBN, or the Environmental Business Network as it's fully called, but is becoming known as the EBN is the latest, but I have to say most exciting thing that I've done in my career. I never thought as I headed to this later stages of my career, as in 3.0, that I would find something that really captivated me and interested me, stimulated me intellectually, but is also I think a really, really important business market.

Lorraine Johnston:

So you come from a sales and marketing background. What was it around the environmental needs of businesses that caught your attention and where did the idea come from?

Roger McKerlie:

Yeah. It's a very good question. So I was advising some businesses, two or three businesses back in the 2010s that were pure play environmental consultancy. So they dealt with what I would call traditional environmental issues like waste and pollution. One in particular was in the spill cleanup business sector, which fascinated me when I went to work with him that such an industry even existed. But it was all predicated on the insurance industry of cleaning up domestic on the whole fuel spills. And we wanted to break that into the commercial sector and offer the same service to large businesses that may have pollution spills in some way, shape or form. So we targeted the construction sector. Who knew, but there was a regular construction sector would probably say not very often, but probably more often than they'd like to admit. There were incidents of fuel oil spills on construction sites and our guys basically would go in and clean up and then remediate the situation. So I became quite fascinated. It's all brought out the A-level geographer in me again as I went walking through water courses, tracking oil fuel movements in farmer's fields.

So I was really quite fascinated by the sector. And then what we started to see was basically a change in who was looking at environmental issues from a business point of view. And this sounds disingenuous towards the people in question, but I don't mean it that way. They were great people. But I was working with environmental professionals in large corporate organisations, who on the whole, lived metaphorically so in the corporate basement. They were about regulation and telling the powers that be, you can't do that rather than that you can. So they were never the people who drove business decision making for, but they were absolute guardians of A) the environment and B) what their company could do.

And around 2017/18, I started to pick up on this concept of ESG and started hearing it being talked about more and more. And basically what I saw was that there was a transference of interest and significance of the environmental issues from professionals exclusively within organisations to the boardroom. And that piqued my interest in terms of how a market might start to operate. Through working with a couple of contacts and longstanding friends, we started to hit on the idea of creating a platform of some description for environmental people to come together to discuss the junction, if you like, of environmental issues on business issues. I didn't want to create something like a conference or an exhibition industry or anything like that. So that's where the idea of creating a network, which became the Environmental Business Network started. And we launched it rather bad timing wise in November 2019 at Ashurst offices in London. And then of course COVID came along and we parked it. So actually, it's a terrible thing to say that COVID was good from this point of view. Obviously it wasn't on the whole, but from my point of view, it enabled me to really learn and understand this whole industry. And then we came back again in the summer of 2021.

Lorraine Johnston:

Sounds amazing. I love that phrase, a corporate basement. Looking at your membership, it does sound as if actually many of your members are still those professionals that, as you mentioned, might sit in the corporate basement, but also that run right through organisations to the top and to the boardroom. Can you tell us a little bit more about your membership about some of the events that you hold and where that focus is?

Roger McKerlie:

So factually, the EBN is a movement, as we call it of 1,800 businesses at the moment and rising. And collectively, they come together because they all understand that we face a very different environmental and therefore economic future, and that at some stage business needs to change. So they are at different stages of their journeys. The way I express it is that if the EBN was an education system, you'd have a number of people at PhD and master's level, but the vast majority is still in preschool. And that's where we are from that point of view.

In terms of the people that are in them, it was very much predicated on environmental professionals and enabling them to come together to better understand the demands, challenges, and opportunities of business relative to environmental issues. Because my feeling ... And it wasn't just my feeling, but the sense was that there was this big disconnect between environmental professionals and the commercial end of an organisation. So we were trying to bridge that gap. But the EBN has morphed to an extent now. And yes, we have a huge number of environmental and sustainability now is more and more becoming called professionals in the network.

But where we are really starting to become most useful, if you like, is in helping the mid-market and larger SMEs to transition their behaviour to become lower carbon and nature positive. This is where we think we can do most good. So we're actually now talking to environmental professionals, but also entrepreneurs, business leaders and the C-suite in those organisations. And one of the reasons for that is that we very much see those organisations and that sector coming under pressure from corporate clients potentially under scope three to change their behaviour. And it's bewildering and somewhat scary for those organisations who are still just trying to be profitable and successful businesses that now have to account for ESG related issues.

Lorraine Johnston:

And so just to play that back slightly, it sounds as if that journey that you've been on with your members has morphed from what was originally perhaps a more reactionary function to environmental risks that affect businesses to a pro-action, i.e looking forward and looking at what sustainability, a transition to net-zero carbon economy looks like for them, and where that's heading from both a business and also a policy perspective. Is that a fair reflection on where that journey has been and where it's going?

Roger McKerlie:

Yeah. I think it's a really good summary of that. I suppose we would say that the environmental issue sustainability has gone from being tactical to strategic in that space of time, which obviously has captured the attention of the board. And increasingly what we're finding is the interest of the chief financial officer in organisations, especially as organisations look at their carbon commitments and whether that actually has some impact on business issues like share price. But yeah, it's definitely gone from being a specialist function, if you like, where you'd get organisations looking at what impact a business had on watercourses and on tree preservation orders and things like that. Very, very clear environmental issues to becoming much more about how a business functions and it's social license to operate, if you like.

Lorraine Johnston:

And what do you see as some of the successes of your members being able to navigate those challenges that are presenting to their businesses?

Roger McKerlie:

Yeah. I think that that's a really, really important part. A fundamental piece of what the EBN is about is finding and storytelling about commercial success stories from organisations that are on the journey to transition and change their behaviour. Because I speak to literally hundreds of business leaders in a year, and the way I describe it is quite often you will get somebody who is a business leader maybe having lunch with their family on a Sunday, who would say, "I worry about the future of the planet for my grandchildren's point of view," and then take a very different action on a Monday. And what we're trying to do is a network is to harmonise those two issues so that they can worry about ... Not worry about the planet, but concern about it can translate into taking different business decisions. So we're very focused on promoting organisations that have bitten the bullet, as it were, and have changed what they do, and it's actually turned out successfully for them from a commercial point of view.

And one of the things that I find with this, Lorraine, is that if you talk to business leaders ... And this is corporates right away down to the smallest of micro businesses. That when you talk about the climate crisis, it can be so overwhelming that people just hide under a blanket really. The easiest thing is to go "Oh, oh look, it wasn't a great success. How is this my problem?" And we come at it looking at it from a different lens, which is to say, change some of your behaviour activities in how you operate as an organisation. And if you can prove that that's going to be good for your business in terms of winning more clients, retaining clients, recruiting better people, et cetera, et cetera, then that's where you should focus. And if we can get ... What? There are six million SMEs in the UK. If we can get them all to make two or three changes, then we move the dial.

Lorraine Johnston:

And that leads me really nicely into what was going to be my next question for you, and that is what does success look like to you? What does success for the EBN look like?

Roger McKerlie:

It's interesting. There is a commercial angle to it, but that's by the buy. If we get the business right, then the commercials will follow. That's a nice byproduct of success. Success to me is that where we've got to now, which is that we've got a bridgehead into this marketplace, if you like. And I noticed that because I asked to speak on more things like this or to go to conferences and people are interested in what we do. But to me, the big next step has to go from 1,800 to 5,000 to 10,000. And to be clear on this, that's a free to join membership. So we're not saying to people it's going to cost you money to be in it. As we say, it's a movement. But if we can get to that point, then we will have a plethora of success stories that we can share, which then moves everything on and more people will embark upon the journey. And ultimately we will make some sort of a difference to reverse in the climate crisis. But really it's about encouraging people to get on board and get on the journey. So numbers growth and then a wider footprint is what success looks like, and then commercially, it'll be what it'll be basically.

Lorraine Johnston:

Love that. And it sounds as if you're well underway to achieving that. And I guess we've spoken very much about the EBN and your professional activities. What is your own personal commitment to net-zero in the next 12 months?

Roger McKerlie:

Firstly, going back to that original point about career 3.0. I don't have a huge infrastructure around me. So I'm not an employer of heaps of people, and I don't have offices and things like that. So my own footprint from that point of view is really quite small. There's a number of things ... Well, me personally, when we are looking at moving and we're going to do everything we can to make sure that our electricity is renewable when we get there. I don't drive an EV, an electric vehicle, so I should declare that at the moment. But at the beginning of lockdown, I had a grotesquely huge diesel Land Rover, which I must apologise for. I got rid of that. And then I realised that all I needed to get around was a little petrol Polo that sits on my driveway, which does an absolute ton of miles to the gallon. So the idea basically from a car point of view, I'm not a hundred percent convinced about EV being the solution, by the way. So the car I drive is very small. It's not about it being a luxurious business sedan or anything like that. So that's important to me.

And I'm trying to cut down on how much red meat I have. But the one thing that I'm really, really, really keen on is clothes. Not fashion. I've probably gone beyond worrying about fashion. But I'm reading a brilliant book at the moment called Unraveled by Maxine Bedat and it's about the fashion industry. And we ran an event on fashion and it captivated me. And I set everyone who came to that event, which was at Ashurst, a challenge, which was, you can come along to our EBN live show, as we call it, but you must wear clothing that is at least 10 years old or has been pre-loved. The rebranding as a marketing man, I love that. The rebranding of the charity sector is pre-loved clothing. And I've become quite obsessed by that. So my wife and I, wherever we go, we're headed down to Cornwall at some stage, and we will be up and down the high streets there looking in the pre-loved shops for second-hand clothing basically. So I will buy as much second-hand clothing as I possibly can and give it that second or third life. And that's really important to me actually.

Lorraine Johnston:

These are fantastic takeaways and certainly ones that we could all use in our day-to-day life. If there was any one action, and it could be from your own commitments that you've just shared with us, but if there was any one action that you could provide to your listeners today, what would that be?

Roger McKerlie:

Well, go to pre-loved charity shops. My prediction here is that you'll see a rise in that in terms of typical retail like merchandising skills and things like that, as they all suddenly realise they've got a very, very big market and that they need to compete with each other. But that's just a watch this space thing. I think from a business point of view, my essential takeaway to the mid-market and larger SME space particularly is begin your journey and don't be overawed by the bigger challenge and look of reversing climate crisis.

Just focus on your behaviour and what you can do differently and make sure that you do communicate that to your stakeholders. And that would be my final point on that Lorraine. Which is a bigger thing really, which is if we could somehow rather begin the journey to reverse Milton Friedman's belief about corporates only having one purpose in terms of making profit and to move from shareholder primacy to stakeholder primacy, if we can find a way of getting back to that, that I think would be outstanding and I think would make a massive difference to our future. It might impact corporate profits in the short term, but if we can get back to some degree of stakeholder primacy rather than just shareholder primacy, that would be great.

Lorraine Johnston:

And I guess that is a lovely way to wrap up this conversation, because the final takeaway is probably to visit the Environmental Business Network web pages and look at the movement that you have established and see how that could help them at whatever part of the journey they may be on. Roger, it's been an absolute pleasure. Thank you so much for being with us today and sharing your insights.

Roger McKerlie:

Thanks for having me on Lorraine. It's been a pleasure.

Lorraine Johnston:

Thank you for listening to this episode of ESG Matters at Ashurst. I hope you found the episode engaging and inspiring. To subscribe for future episodes of Game Changers and Transition Makers, and to hear previous episodes, click on the link in the show notes. Or search for ESG Matters at Ashurst on Apple Podcasts, Spotify, or wherever you get your podcasts. And while you're there, please feel free to leave a rating or a review. And finally, to learn more about all Ashurst podcasts, visit ashurst.com/podcasts. Thanks again for listening, and goodbye for now.