How NOT to greenwash your startup

Descriptive transcript

Dave: Hi, just before you do, I've got to do a quick little intro. I first met Dr Alex a couple of years ago, I think in 2018, when the Deep Green Biotech Hub had a bit of a launch party. I went for the beers and left completely inspired by the power of algae. And I was like, I don't know what algae is, I don't really know what it has to do with innovation, but after seeing that presentation I was absolutely hooked. Dr Alex is doing incredible things at UTS particularly, but broadly in the ecosystem with making sure that founders who are looking to leverage the power of algae and the facilities here at UTS are able to do that. She supports startups, she runs the Deep Green Biotech Hub, and the Green Light Accelerator Program. She's pretty much the go-to for me when it comes to anything sustainability, and we're so, so lucky that she's friends with us and helps us along the way. So I'd love you all to clap react, send a little love heart, whatever it is, for Alex Thomson as she tells us how not to greenwash your startup.

Alex: That was an introduction and a half, Dave! [Laughter] I have a couple of slides prepared, but I'm happy to just do a bit of Q&A with you all, whatever suits. I don't know how long people have been on the line here, waiting for stuff, so whatever suits you guys. But I'll pop a couple of slides up.

Dave: Yeah, for sure. We'll watch for questions and get interrupted if we need to.

Alex: Okay. So, hi, my name is Alex Thomson. I manage the Deep Green Biotech Hub at the University of Technology Sydney. I also have a background in environmental science and marine science. I have a PhD in marine ecology, so when it comes to sustainability, it's something that I am super passionate about. I have quite a bit of science background in that space, particularly with climate and carbon science. So if you ever want to talk about carbon capture, carbon emissions, all that sort of stuff, I am your go-to person.

So we're going to talk about sustainability, we're going to talk about greenwashing, but first a little bit of a shout out for Deep Green. So we sit inside the Faculty of Science, inside a research institute called the Climate Change Cluster, and we're really all about driving innovation, supporting startups to develop new products with algae. I'm going to talk a little bit about algae today, but it's not all about algae. We are here to talk about sustainability, greenwashing, all that sort of stuff.

So first of all, why sustainability? Why is this such a thing that we need to address? I don't think that this would be new to many of you guys that there is a lot of issues around sustainability and why we are trying to drive more sustainable practice. When I talk about sustainability, by and large, we're talking about environmental sustainability. Obviously, there's a lot of sustainability surrounding ethics, treatment of workers, education, public health, all that sort of stuff, and that definitely does fall into the sustainability category. But specifically today, we're going to talk about environmental sustainability, because that's what greenwashing really is all about.

So when we're talking about environmental sustainability, there is a massive suite of issues that people are trying to address by making their business or their organisation more sustainable. They can be things like making sure that we have access to fresh water. By the end of 2020, we're going to need 50% more fresh water, 70% more food, 50% more fuel—by 2050, sorry. So when we're looking at our globe and we're looking at environmental issues, if we are just wanting to continue as a species living on this planet, there are some requirements we need to meet, which also mean that we need to reduce our consumption and reliance on a whole bunch of things, so that we can continue to kind of exist the way that we've been existing.

This is also going to require 80% reduction in carbon dioxide, and I actually can't see my little number under there—there you go! Because we are going to see a 30% increase in our global population by 2050. So you might have seen some stats out there—by 2050, we need somewhere between three and five earths' worth of resources to sustain our growing population. Obviously, we kind of get that there are some significant issues in terms of our need for resources, and just the fact that our planet is getting bigger; we've got more people on it, we've got more things that we need to feed them with, we've got more carbon being emitted. So how do we kind of address all these things? And it's by being more sustainable.

When we think about businesses, I think this is an important point to draw because I think there's a couple of drivers for businesses to be more sustainable. And when I did a bit of a deep dive for this presentation—because for me, sustainability is really a no-brainer—but for a lot of people, sustainability, there's some different motivations for people to be more sustainable. Certainly, when they did a survey—a McKinsey survey, I think it was about 10 years ago—why people were driven to be more sustainable in their business, and also what aspects of sustainability were cause for concern. And there's some common themes in terms of energy use and waste, you know, how much emissions they're putting out, their water use, developing sustainable products. Obviously, there's a whole bunch of different things, but what it kind of boils down to is—and I've gone too far—sustainability is at this make or break point.

If your business isn't specifically addressing sustainability, if it doesn't have a sustainability pledge, if there isn't something in its value statement or things like that, or your business is found to be not sustainable, it is a big issue—not just for your business as a whole, but in terms of it's becoming a big marketing issue. So for a scientist, that is a little bit distressing to me, but when we're kind of looking at these companies who have been found to be less than sustainable, bigger corporations, we know that they have a severe impact on their reputation. So businesses are trying to be more sustainable. Sometimes it's for a marketing perspective, sometimes a reputational thing, sometimes it's actually a core part of their business. Whatever the reason, it is a big reason, and more and more businesses are wanting to engage in this space.

I've mixed up the slides a little bit here, so I'm going to go a little bit further. I think we first need to understand what environmental sustainability is before we take a deep dive into greenwashing, and what you can actually do to be on the right track for sustainability. So, there are a lot of different metrics for sustainability. To be completely honest, it's a little bit like the Wild West. People are kind of calling different things sustainable that may not necessarily be environmentally sustainable. They may have been environmentally sustainable 10 years ago, but they're now no longer considered environmentally sustainable. They may actually forego a certain metric to take advantage of another one. It is completely the Wild West, I'm going to be completely honest with you.

But if you want a general benchmark for what we should be aiming for in terms of general sustainability, including environmental and social sustainability, the UN Sustainable Development Goals are your go-to. If you want to understand what it means to be sustainable, what we as a global population should be working towards, this is your benchmark. If you haven't heard of this before, these are essentially 17 goals that have been formulated by the United Nations, which is essentially a blueprint for our planet to work towards—not just for environmental sustainability, but also reducing poverty, increasing education, decreasing injustice, and addressing climate change and environmental degradation. So there's all sorts of things in there—I'm not going to go through them all because they're pretty big—but if you're wanting a general go-to, sustainability is confusing you, you don't know what is sustainable, what isn't sustainable, this is the best place to go.

There are some that specifically address climate change and environmental sustainability, and they are things like responsible consumption, affordable and clean energy, climate action, addressing our oceans, life on land, and clean water and sanitation. So if we're looking at the benchmark for environmental sustainability and addressing climate change, they're your goals, there's some amazing resources on there. But if we're just wanting to kind of work out what are the benchmark things, that's definitely the place to go.

Before you kind of dive into this issue of sustainability, I think it's really critically important to remember that sustainability for different people and in different businesses looks different. And I think that anyone who is trying to go on a sustainability journey with their business should be applauded, because it's pretty confusing, and as I said, it's a bit of a Wild West. Understanding what you should and shouldn't do is really confusing, and what may be sustainable one year may no longer be sustainable the next year.

So there's a couple of things that I would recommend that any business does when they're wanting to embark on being sustainable. First of all, ask yourself what is feasible within the realms of your business, your budget, and what does achievement look like for you? Have a think about what is important for you in terms of sustainability. Do you live in a place that is drought-stricken like Australia, and is implementing a product that uses a lot of water sustainable? Probably not. Do you live in a place where there's lots of water, and so using the same amount of water is okay? Then that's probably not a key issue for you. Are you living in a place that you may need to clear land to develop a product? Probably not sustainable. So it's going to look different for you.

The next thing is, what does sustainability look like for your business? If you're working in the tech sector, that may mean addressing your energy usage and your usage of cloud storage. If you're working in food manufacturing, that may mean looking at your carbon emissions and your wastewater emissions, but looking at your energy may not be as high of a concern. So it's about looking at your industry and the practices that you implement as well.

Having a look at standards, and this is something with sustainability that is really wild—there's not a lot of standards out there, and the standards are different for different countries. So it is all well and good for a company to say we're carbon negative, but what does that mean? Have you actually assessed the life cycle of your product? Have you got certified? Do you know you need to get recertified every couple of years for that? And with recertification, you actually need to show how you're offsetting your carbon as well.

Who can help you? So this isn't a journey that you should undertake alone. Ask for people, see experts. There's companies that specialise in this stuff, you can absolutely ask for help. And how can you make sure that you are reviewing and checking what you're saying?

Finally, the biggest thing with sustainability, and a big issue that I've seen with a lot of companies that claim to be sustainable, is to make sure that you are transparent about what you're saying. If you are saying that your product is carbon neutral, put it out there. Have you calculated it? Have you checked it? How are you offsetting your carbon? This stuff is really, really important because if you're not transparent with your sustainability claims, people will come for you. [Laughter] And with that, it's about also building engagement. So building engagement in your company, building engagement with your staff and your employees, as well as your board and your stakeholders as well.

So, we know kind of where we should be going with sustainability—water, carbon emissions, how much wastewater you've got, there's a whole bunch of different things, it's going to depend on the industry that you're in. But what sort of certifications and accreditations can you be looking for? If you're wanting to go out there and say something like "our product is carbon neutral", "our product is sustainable", "our product uses renewable energy", they're not actually statements you can just put out there in the universe and hope that no one's going to check. Because there are certifications and accreditations that you can get, that will mean that you can actually back that up.

So a lot of the companies out there will be a certified B Corp. You can have a look whether that's the right fit for you—there's a different set of criteria and a ranking system to become a certified B Corp. A lot of them do address environmental performance, effect on climate change, that sort of thing, so that may be a right fit for your business.

Within Australia, we have a certification called Climate Active, which will actually assess from the growth stage of your product to the disposal stage of your product, what your carbon emissions are, and how you are offsetting that or maybe not offsetting that depending on what your product is, but you actually get a proper certification for that.

So I see all the time companies claiming that they're now carbon neutral, and I kind of go, where's the independent analysis to do this for you? How much carbon are you emitting? How are you offsetting that? No, buying a paddock in western New South Wales does not now mean you're carbon neutral! Because we actually need to understand the complete life cycle of your product to work out how much carbon you're emitting, and therefore how much you need to offset if that's how you're choosing to become carbon neutral.

And there's also some certifications for energy as well, so a bunch of different Australian government schemes looking at your use of renewables versus your energy reduction can help with those certification processes as well.

The other thing I think, particularly with startups, that's important—there's a whole bunch of research out there on how people adopt different principles, particularly with sustainability. And I think that we're in this stage now where businesses are kind of being almost forced to adopt some part of sustainability in their business. People will talk about this in terms of, are you defensive? Are you just claiming you didn't know that your product wasn't sustainable? Or are you being civil? Are you actually being innovative in this field?

I think for startups, the more appropriate terminology would be reactive, proactive, and disruptive. So reactive is companies that, "Hey, we didn't know that there was single-use plastic used in this product that we've been shipping around the world. Our bad, we'll try and fix it." Then there is proactive: "Hey, we have gone out by ourselves, we've worked out a way that we can manufacture, ship, and sell this product without any single-use plastic, and anything else that we have is compostable. Good for us." And then there is the disruptive, which I think with startups is just an amazing space to be: "We've actually gone out and developed a whole new compostable single-use plastic. You plant it in your garden, it degrades by itself, there's no emissions. We are the disruptors in this space making this whole area more sustainable."

So I think when you are asking those questions of yourself, it's important to ask, am I being reactive? Am I just implementing these practices in this business because I have to and it looks bad if I don't? Am I being proactive? Am I trying to figure out a way to make these processes that I'm doing that are part of my business more sustainable in a couple of different ways or one different way? What's my focus? Or are you being disruptive? Are you actually coming up with a whole new product, a whole new process, a whole new way of things that addresses a lot of these issues within your ecosystem, and actually makes a way of doing something a whole lot more sustainable?

To kind of look at how we can address this, I've put together a little bit of a case study, and this has to do with the food industry in Australia. If you didn't know, the food industry in Australia, encompassing agriculture and farming, makes up 20% of our carbon emissions, and 29% of that is just packaging. So if we're looking at how this industry is sustainable, we first need to understand where their emissions are, what their focus is for sustainability. Carbon emissions for this particular industry is a key issue, as well as waste and packaging.

When you have a look at how to work out how to become more sustainable, it's also important to understand your pinch points. So with the food industry, it's that nearly 40% of all food that's produced in Australia is wasted. A whole bunch of our carbon emissions are actually from the food industry. So how do we actually work out how to make this industry more sustainable? You do something called a life cycle analysis. This can be as complex or as simple as you like, but it means really scrutinising your supply chains, where you're getting stuff from, and trying to identify the points at which you can make things more sustainable.

So for something like food, this means looking at how it was farmed, looking at the water security that's involved, looking at if food is going to change in availability—is this actually suitable to be grown or is this not sustainable? How it's being packaged, if we're being complete and proper it's the nutritional aspect as well, and then how that food waste is also being disposed of.

So it's a lot, and I feel like I haven't really given anyone any answers to be completely honest. [Laughter] I want to get back to this idea of greenwashing, and greenwashing is really making sustainability claims that you're not being transparent about and that you can't back up. So if you are worried that you are greenwashing, it's about going back, checking what you're saying is actually true, making that information transparent, and really being open to scrutiny and wanting to do better.

I would say there's a couple of things that you can do if you're wanting to start your sustainability journey. This is actually proper published research in terms of helping corporations become more sustainable. Making sure, as I said, you're aligning what you can do with your sustainability, making sure above all that you are safe, changing your reaction from being reactive to proactive, and even disruptive if you want to as well, looking at how it's affecting your business, being transparent, and also engaging people.

My kind of go-to with this, and I think transparency with sustainability is probably one of the most important things in all of this, and I kind of sum this up by saying "shade's good for the planet, it's not good for your startup." Because that is what's going to happen if you're not transparent about sustainability claims you make. It's just all out bad, and I've seen this happen to companies—companies that say they have a sustainable product, and then people pry into it and they want to understand more about that product, and it's not sustainable at all in any way, shape or form, and the reputational damage to that company is far worse than if they just hadn't made that claim to begin with.

So just some take-home messages: any steps that you take to be more sustainable is good—we should be applauding any business that is trying to make steps to make their business more sustainable. Be aware that sustainability is going to change and that your direction, your business that you're going in, it's going to change, and just be kind of fluid and sort of roll with it a little bit. Research what you're doing, review it and ask for help. Check your supply chains, check what you're saying and review it regularly. Check if there are any standards that you can get certified, because that's a really easy way to be a lot more transparent and to engage with people, and to make sure that what you're doing is actually accurate. And also just being transparent and being engaged.

That's kind of all that I had to say, but I'm really interested to hear people's questions. I mean, sustainability is such a hot topic, and I think it really stems from that—sometimes people don't really know the best way to go, and what is sustainable, what isn't sustainable. Yeah, throw them at me!

Dave: Well, firstly, thank you so much for that presentation. That was incredible. What my first question is, are we allowed to have the slide deck as the recording?

Alex: Yeah, that's fine! [Laughter]

Dave: Just because Lourdes wants my "shade's good for the planet, not good for your startup".

Alex: [Laughter]

Kat: Anyway, great people on this chat. So opening it up for questions. We've got probably a few minutes here where we could get Dr Alex to shine a light on your particular situation, your questions. I've got a few questions written down, so if we don't have any here...

Kat: Before the questions, I just wanted to say, Alex, that was an awesome presentation. And the part that I think is most interesting, or is such an important takeaway, is that idea of sustainability being a constant journey and it needs to be built into your company. It's not, "great, we've set this up, tick, we're sustainable and we're just going to run with what we do now". Like, it is that constant checking in and that constant accountability for what your startup is doing, which is, yeah, I guess is essential to what greenwashing is.

Alex: It's so much about accountability too. It was so interesting, when I was doing this, I looked to see what some corporations claiming to be sustainable had implemented. And there was one big corporation whose name I won't mention, that their claim to being sustainable is that they reduced printing in their offices. That was it. They had massive global supply chains, they were using plastic, they were land clearing, and their claim was that they were reducing printing, and that was their sustainability claim. And really, it goes back to accountability.

Dave: Yeah, I mean, when I think about this stuff and hear you talk about this, I guess the whole triple bottom line thing comes up—I'm a business student, so you know, hearing about how to—I've learned how to make a profit, like I've learned how to, you know, people can mentor you, people can, you know, here at UTS Startups we spend time helping people connect with those who've gone before to show us how to make profitable businesses happen. And if we're going to talk about environmental outcomes being profitable in that way, can you think of any sort of, I guess, mentor type or businesses that you would look up to and say, like, "hey, have a look at..." I mean, you mentioned a case study there, but "have a look at some of these businesses, follow their journey and maybe draw some inspiration from that"? Do you have any of those sorts of...?

Alex: Yeah, so I think one of the big ones at the moment, and particularly close to probably UTS Startups home, is v2food. So that company is really doing amazing things in the alt-meat market, but they're also building sustainability into the core of their business. And, you know, if we're talking about startup scale, investment, and just bottom line, that is a company who have done all of that, while also one of their core pillars of their business is being environmentally sustainable.

Dave: Well, yeah, 18 million investment, wasn't it? In their latest, something like that...

Alex: Yeah. You know, there's the guys out of 2B that came out of one of the Atlassian accelerator programs, who've developed that renewable energy—the solar panels that roll out in regional Australia after the bushfires. Massive, you know, in terms of scale up and again profitability, they're addressing renewable energy at a really easy, you know, relatively—look at, in terms of innovation, completely amazing. So if we're thinking about products, you know, companies that are what I'm coining as "disruptive", so actually making their whole industry completely more sustainable—two examples of companies that have been so amazing. And also, like, Mike Cannon-Brookes—if anyone is wanting, you know, in terms of big global companies that are trying to do the right thing in terms of environmental sustainability and climate change, Atlassian is an amazing example of a company that is really a part of their core business, and he's so outspoken about that as well.

Dave: Yeah, absolutely. And just a really quick question here. Nick has written something in—I'm struggling to read it without my glasses.

Kat: Do you want me to read it?

Dave: Yes, Kat, thank you. [Laughter]

Kat: If you're disrupting a supply chain that's not sustainable but they claim that they are, how do you ensure they're not greenwashing on what they're saying? Like, how do you fact check a claim?

Alex: That's—I mean, it goes back to a little bit about what I said about the Wild West, right? Is that sustainability is, for the most part, fairly unregulated, and there's not a lot of fact checking and there's not a lot of people that can go and—you know, that certification, when you're digging, there's not a lot of things that people can kind of stamp on their product and say that "we're climate neutral" or whatever. People do it, but it's not actually climate neutral. So I think there's two things there, and it's going to depend on your investment in that situation. Do you actually want to make sure that your supply chains are sustainable? And that's going to take a lot of work. Are you going to go in there, are you going to check things, are you going to audit it yourself? Because there's no one that's doing this stuff. Or are you going to trust what they say, work with those suppliers, maybe help them to become a better business in the process? And I think that's really down to you and your investment as well.

Dave: Fantastic. Hey Dr Alex, we appreciate you so much. I'm going to try and stick to time because you have. How can people reach you or find out more about the Deep Green Biotech Hub?

Alex: So they can go to our website, just look up Deep Green Biotech Hub at UTS, lots of information there. They can email me: alexandra.thomson@uts.edu.au They can add me at Twitter: @drat_science on Twitter. Really, just go for it, however best you find me, I will respond to you.

Dave: I can attest that you do answer emails very quickly. It surprises me, but I love it.

Hey, thank you so, so, so much Dr Alex. All of the things that you do to support UTS Startups, to support all of us, all of the times you come and have drinks with us after work when we need to complain about our lives. Basically all of the stuff that you do is so appreciated. We appreciate you and what you're doing for STEM and science and all of it. So again, a big thanks. Everyone hit that clap react and we'll let Dr Alex go and finish her lunch, or whatever she's doing because—

Alex: I'm on holiday.

Dave: I can't believe you're on holidays and you just did that! Thank you again... aww!

Kat: We appreciate you!

Dave: That's so nice, enjoy your holidays.

Alex: It’s worth it for sustainability, it's always worth it!

Dave: Hopefully the weather stays good for you. Cool.