Five Lifes to Fifty

In this episode, we dive into what happens when sustainability data flows through your organization as seamlessly as financial metrics. William Leperque from Schneider Electric shares how his team solved the massive challenge of scaling environmental impact calculations across 200,000+ products, transforming LCA from a time-consuming reporting exercise into a real-time design tool. 

In this episode of Five Lifes to Fifty, we sit down with Jenny Liu, Head of Sustainability for the Advanced Performance Materials business at Chemours. Jenny takes us inside the world of chemistry — not just as a science, but as a powerful enabler of sustainability, innovation, and everyday life. From electric vehicles to semiconductors and the hydrogen economy, we explore how advanced materials are quietly shaping the future, and how Chemours is leading the charge through bold sustainability goals and data-driven decision-making.

In this Episode 

Shelley:  I'm wondering if you could just tell us how you see it and tell us more about the advanced performance materials category that you work in. 

[00:59] Jenny: Thanks so much, Shelley. It's a great question. You know, Chemours is a global company and we provide trusted chemistry to make lives better and to, you know, really help communities thrive. 

[01:10] And I don't think that many people realize the role that chemistry plays in their everyday lives, our everyday lives. You know, more than 95% of all manufactured goods are touched by the business of chemistry. 

[01:24] So really, chemistry is essential for everything that we depend on in modern society. And I believe it's really essential for decarbonization as well. If you think about the computers that we're speaking into, your cell phones that you use for stay connected to the world, but all the semiconductors and advanced electronics that underlies that and enables that, 

[01:45] right? And then as again, as we head towards green economy, electric vehicles, batteries, hydrogen economy, you know, ultimately and you know, all the electrolyzers and fuel cells, so we make the membranes and the materials that underpins all of that and really brings that to life. 

[02:02] A little bit more about Chemours. You know, innovation really is at our core, so we're focused on how we can make our products and applications, how they can really enable sustainability, not only in terms of our own operations, but but also for our customers. 

[02:16] So we tend to have very high-performance materials that our customers use because they need them in the application, whether it's, you know, chemical resistant, temperature resistant for the electrical properties, inert. 

[02:26] So they'll use them to solve their problems, which are usually very high-performance application needs. But then also those are enabling things to make society better and to reduce environmental footprint. 

[02:38] So we have three businesses. We have a thermal solutions and refrigerant business so that's refrigerants, heat pumps, et cetera. We have our titanium dioxide pigments business. And so that's coatings and performance, coatings and materials and paints. 

[02:53] And then we have the advanced performance materials business for which I lead sustainability. You know, some of the brands you might know, you know, Teflon, Krytox, Nafion, these are high performance materials that go into critical medical applications, electronics, we talked about some of the consumer advanced electronics, clean energy, electric vehicle batteries. The hydrogen economy is a big growth area. And then a lot of areas of transportation. 

[03:18] So whether it's a safety feature on an airplane, for instance, or the space shuttle, or many, many valves and hoses and other sensor coatings and things that underpin automotive, you know, both a traditional combustion engine as well as a lot of materials in the EV space. Those are the types of materials that our products go into. 

[03:37] Shelley: Let's dive into the sustainability aspect of some of those products. So, I know from your experience you've been a product manager before, but right now your team intersects on the business side and on a daily basis maybe touches different areas including technology, R and D and product managers. 

[03:54] I also know that Chemours has some strong sustainability goals as well. Could you tell us about what is in place that makes sustainably successful right now for the products that you're delivering on? 

[04:05] Jenny: Absolutely. You know, sustainability really is kind of at the center of everything we do at Chemours from how we operate our facilities, how we innovate our products, and how we engage with our partners, our customers, stakeholders, colleagues and communities. 

[04:21] And so it's foundational to what we do and how we run our business. So we, as part of our corporate responsibility commitments, we announced 10 bold goals in 2018 under the pillars of environmental leadership, sustainable and innovative solutions, community impact, and the greatest place of work to all. And these are goals to be achieved by 2030. And we are well on track for almost all of these goals. 

[04:46] One of our goals around innovative and sustainable solutions was to ensure that 50% or more of our revenue comes from offerings that make a specific contribution to the UN Sustainable Development Goals. And I'll talk about that a little bit more. Our methodology and how we do that and what it means for our business and really excited we've achieved, you know, as of end of last year, 48%. So almost half of our revenue is coming from offerings that make that specific contribution to the UNSDGs. Another area is the area of environmental leadership and again, kind of driving all these product and application innovations while lowering our carbon footprint. 

[05:25] So on the climate front we committed to a 60% absolute reduction in scope 1 and scope 2 greenhouse gas emissions for operations by 2030 and to being kind of on a journey to being net zero by 2050. We also recently had our science based targets approved including a scope three goal. So that's upstream and downstream of Chemours to reduce our Scope 3 emissions by 25% per ton of production by 2030. 

[05:53] One other thing I want to mention because it connects to how we make our products. So and I think a very bold goal and innovative goal that we had given the space that we are in, right, in order to make our fluorinated chemistries responsibility, we have a very bold commitment to reduce our fluorinated organic chemical process emissions to air and water by 99% and more by 2030. We're the first and only company to make this commitment. And that's really important because it gets both at kind of a very material issue for us that is important for our privilege to operate, but it also helps us to decarbonize at the same time. And I think that's one of our more innovative and bold corporate responsibility goals. 

[06:36] Neil: Jenny, when most people think of end users, right? When I'm making a product, like you said, maybe I'm making a cell phone or I'm making a laptop and there's chemicals in there that are enablers of certain performance. You are the manufacturer of those chemicals. I think there is an easy case to be made. When I think of the carbon footprint or the environmental impact of my product, I want to make it more efficient, I want to dematerialize, I want to use better materials that have lower cradle to gate carbon impact or environment impact more generally. When you think of environmental impact of the products you make being an enabling chemical, you could affect the performance of downstream products significantly through dematerialization. 

[07:16] You need less of it. If you can have certain accelerants or certain catalysts or if you are lowering the temperature of operation for a particular product using certain chemical, if you extend the lifetime of particular product. How do you look at sustainability in these use cases? Because I can imagine this is incredibly difficult. And given that you say that you also have scope 3 targets of which downstream becomes quite a significant part of the environmental impact of the products you make. How do you go about doing this? How do you even think about this? 

[07:46] Jenny: That's a great question, Neil. And I'll give an example of how we put this kind of to use and then I'll talk about our sustainable offerings methodology that we call Evolve 2030 and how we put that to life in practice. 

[07:59] So one live example exactly of how again, not only are we addressing our own footprint, but we're really enabling through our customers and the value chain. Right? That's how we can really drive a lot of the sustainability improvements. Electrification of the transportation sector is projected to increase the demand for lithium ion batteries by five to 10 times in the next decade or so. To shorten the production times of EV batteries. All the major OEMs and battery manufacturers are looking at how do we do this? You know, by removing solvent from the process. So we were able to innovate using our Teflon PTFE fluoropolymers in the development of solvent free battery electrode manufacturing. 

[08:39] The physical footprint of these lines is 75% smaller. Just think about that. I mean a significant difference in just the physical footprint and energy usage. We eliminate the need of the solvent, which is a reproductive developmental toxin, NMP. So also better for women in the workplace, reduces the production cost and then the battery performance will be significantly better if this is used at scale. But this is an example of where we've done the innovation. 

[09:05] We even had to, we built a battery lab, you know, to do this testing at our central research facility in Newark, Delaware. But we also need partners, right? We have to work very closely with our partners, customers down the value chain to do all this testing and ultimately enable this at scale. So that's just one example of how we enable sustainability through our products and applications. Now let's talk about how we actually measure that and when we make these choices internally, how we inform them using a data driven, science-based approach. So we partnered with Anthesis, who, you know, Jim knows. Well, I have a lot of connects with Jim kind of through my, through my history both at Chemours and in other companies. 

[09:48] We partnered with anthesis to develop Evolve 2030 which is a methodology to look at our sustainable offerings. It's based on the World Business Council for Sustainable Development portfolio sustainability assessment framework for the chemical industry. So we started this journey, oh in 2018 or even earlier and we developed this framework and what it does is it looks at basically product application combinations. So you always have to look at the specific application. So I just gave you an example of a PTFE kind of high performance plastic fluoropolymer in a EV battery manufacturing. If you're looking at a tubing in a medical application or a hose in, you know, on a space shuttle or an automotive, it's going to be very different. 

[10:32] So you're looking at the product and the application combination. And then we developed this framework partnership with anthesis, how you're looking at the imprint. So the overall impact to the environment and society of, you know, now I think it's 11 different attributes, right? So we're looking at our environmental leadership goals. I didn't mention the one that was a 70% reduction to landfill, the reduction to the fluorinated organic chemical emissions, air and water. 

[10:59] The overall greenhouse gas and climate impact not only of our operations, but also in use impact to health, you know, and human health and the environment. And then we also look at the social impacts, both pros and cons. Right. And then what's the regulatory landscape? This is a very dynamic regulatory landscape in the chemical industry and particularly in our space. So not only what is regulated today, but what's to come. And another very important element is public sentiment.. So in the end, I like to say that science is necessary but not sufficient. 

[11:34] So we base a lot of our decisions. All of you know, they're all science based and data driven. But sometimes you have to factor in perception, risk and those as well. So we have that and then we recently we just updated it this summer to version two, recently added circularity. So circularity of our materials and then also the packaging. So for each product application combination, which you can imagine takes a very cross functional team across the organization. And then we have subject matter experts in the mix. So we're doing that very detailed scoring. 

[12:09] There's so much behind this. And then we look and see, you know, what is, is it a net positive or negative impact and then is it a measurable contribution to society and the environment? And is there a measurable contribution that we can quantify and justify to a specific UN sustainable development goal? So and if it's in the upper right quadrant, so it's that positive impact to society and environment and a specific measurable contribution to a specific SDG, then we can count that towards our 50% of revenue goal. But either way, regardless of whether it counts towards our goal or not, that information is informing our decisions. So what we first spent the last five years doing is really learning and applying that to our existing portfolio. 

[12:56] Right. So we've built this methodology in partnership with Anthesis. We had it externally assured by LRQA twice, once when we first piloted it and again this year when we added the circularity aspects. We've built a lot of kind of management systems for the data visualization tools. Because we want it to be replicable, repeatable, keep all that good work that's been done so that we can refresh it and be utilized broadly across the organization. And so we have a lot of systems and tools and training that we've built over the last few years behind that. 

[13:36] Our next phase is really to embed that into our new product development process as well as our product stewardship and assessment process. 

[13:45] Neil: Cool. Is Evolve 2030 useful for any other sector? So looking at people, I think one of the big challenges that they have is think of any product that you have the more upstream you are as a manufacturer, the more applications you typically have of your product. 

[14:03] Jenny: Right. 

[14:03] Neil: And evaluating these pairs of product and use case becomes very complicated. I mean, the more downstream you are even, even electronics, something where, hey, it's power use. But actually the thing is how you use these computing capacities, right? Whether it's a data center, whether it's a small mom and pop shop, or it's your home use or your kid is using it, you have very different profiles and actually end up with markedly different results for these product and use case pairs. So is Evolve 2030 something that others could learn from and who would most benefit from this methodology? 

[14:44] Jenny: I think that others can absolutely learn from the methodology. That's why we publish it on our website. So I think it can really be used broadly across industries. It's probably most applicable to manufacturers. And then what companies will want to do again is take what's most material we incorporated in the inference scores, our corporate responsibility commitment goals, our environmental goals. And then other things that we think are material and important to our customers and our stakeholders. So the methodology and the framework holds and it's based on the WBCSD methodology for the chemical industry more broadly. But then I think companies can certainly use it as a model for how they would look at this for their specific space. Like you said, every industry is different. 

[15:26] Neil: But in manufacturing, are there any specific industries where you'd say, hey, you know, you should look at this? 

[15:31] Jenny: Definitely, yes, any industrial manufacturer. But then you could take it downstream. I think there are other tools as well for maybe some more consumer facing companies. But I think the methodology really holds for any manufacturer. 

[15:45] Jim: Yeah, I was involved with a chemical company out of Germany for a long time ago and they had developed some of the earlier portfolio assessment methodologies. And then that was in part of the World Business Council. And then you all have done that. And what I like about it is that you look at the entire portfolio, not just looking at a few products and a few markets, and try to examine, you know, which ones are really good and can help you with your 50% goal, which ones may not be as good and which ones may not help you at all. And my question is, when you look at that range of products and how they respond, do you actually get to the point where the ones that help you meet that 50% goal are given a incentive or a greater commitment and the ones which are may not be as good or may be phased out or sold, or another level of effort is put to make them at a higher level? So talk about that dynamics about the range of products within a company as big and as diverse as Chemours. 

[16:48] Jenny: Yeah, it's a great question, Jim. And you know, how does this come about in practice? Of course, we were quantifying the revenue towards the goals. What you'd measure, right. If you don't measure, it's unlikely to drive as much work and priority in a company. So that's important. But then how are we making choices that we're making within the portfolio? So one is to identify those opportunities. So some will be opportunities, right? What we're enabling, for instance, in a downstream market in terms of environmental benefit, but then also the risks to either downstream or to us in, in through our manufacturing process and our, to our business at any given point. 

[17:26] You have so many choices of where you would invest as a business. We have very specialized chemists and engineers working on our products and processes. Right. So you have to make choices at all times of where you're going to spend that time. And then of course, there's capital investment, right? Where are you going to invest the capital? And then, you know, it's all other kinds of strategy development, decision making. Right. So you're overlaying kind of the societal trends of where you're going to put the big bets. But you know, we're constantly, as part of our strategy and the execution of that, saying, okay, we're gonna fund this new product development. So we have, you know, many NPD projects in the portfolio at any given time. 

[18:08] And by integrating the Evolve 2030 process into our decision making, then we're able to say, well, this as at, you know, we have it at all stages. Right. So it's a stage gate process as we develop our new products. Stage 0, 1, 2, 3, 4, 5, and if you're able to have information that might rule out something at an early stage or reinforce that it's a good opportunity, then you'll continue to work on that. But the reason we have a stage gate process is at any point you might say, okay, we're going to proceed or we're going to stop funding and stop resourcing this opportunity. 

[18:40] Neil: This is awesome. Right? So you've got a method to measure, you've got a process to develop products and you say we want to integrate this methodology at each step as a kind of part of the stage gate. One of the things that we find most often is awareness is training in how to use this and how to do this. How do you organize yourselves in terms of helping this stage gate process implement this practice of including Evolve 2030? 

[19:07] Jenny: That's a great question, Neil, because that training and awareness is so essential to actually embedding this and making it sustainable, no pun intended, within an organization. Like on the Evolve process, we have training throughout the organization because it's technology, it's marketing, it's the product managers, it's the sustainability team and the risk assessors. And you have finance involved to procurement from raw materials. Right. So it's very cross functional. So one is training them on the methodology, but then also embedding it in the right processes. 

[19:40] So there's a methodology for how we actually do that product application combination assessment and the overall imprint and scoring. So we did training on that. But then if you look at for instance like the new product development process, several years ago we took, at least within the advanced performance materials business, we took the new product development process and kind of embedded it in DevOps. Right. So we have it in a system where we can kind of real time pull up all the metrics and it's not on a spreadsheet or so it's like everyone's working on the same system and out of this you have kind of supports the Agile methodology and you have user stories and all the things that build to what creates all of the different elements in a new product development. Again, you have the technology assessment, you have the market assessment, and then you have the sustainability assessment. 

[20:28] We put all the sustainability user stories, if you will, that support this sustainable offerings evolve 2030 assessment. And they're actually embedded into DevOps as user stories as part of our overall new product development process. So when you get to like stage zero, you're looking at different entry points. Marketing, sales, technology, regulatory, sustainability. There'll be certain user stories as part of our overall DevOps process that's tied to the sustainable offerings. 

[20:55] And then at stage one, you're kind of building out the market assessment further and you're looking at regulatory and sustainability considerations. Right. And then at each stage there's going to be user stories tied to this and that all goes into, there's a lot of training, you know, for the organization, but by bedding it into the managing process of how you're actually doing this work day to day, that's really critical. And then there's a lot of training and reinforcement that has to go. 

[21:22] Neil: But do you, do you have like a central function in sustainability or EHS that actually supports this, or have you embedded resources with this skill into the development teams themselves? Or is this a combination of both? 

[21:37] Jenny: It's, it's a hybrid model. So we have, in our corporate leverage team, we have subject matter experts who really are taking the lead on some of those assessments of the lifecycle assessment now we've added the circularity elements of packaging and the materials. So those true subject matter experts. And then we have product stewards that are embedded in the business. Right. So they know the products and the markets and the applications and they sit with the business on the same floor and, and work in those teams and they kind of own this process as it goes through. And then you have all the other, you know, technologists, marketing, procurement, everyone else who participates in the new product development process. 

[22:14] Jim: Right. 

[22:15] Jenny: And they own their own stories too. But this is sort of owned by say the product sustainability who's driving it. But they're both in kind of leverage functions as subject matter experts as well as sitting in the business. And we find that that is a best practice where you have product sustainability experts that are embedded in the business and know the business and the customers and the products because the technology is so different across our product lines. 

[22:42] And then you have kind of best practices, true subject matter experts who are leveraged across the businesses because they really have that subject matter expertise to kind of see trends across the different businesses and product lines. And they see more and more companies internally too. 

[22:57] Neil: Yeah, and I've seen more and more companies try to do this because I think the earlier days was you would have a separate function that is kind of the expert center of excellence approach. And this didn't really work out because they were too far away from the product itself. And then we saw a transition, or at least I saw a transition in the, in the noughties where they say, hey, you know, we need to put these people into product teams. But the Problem then is the standardization of methodologies and the evolution of those methodologies as a whole kind of fails. I think this thing of this hybrid approach is something that I've seen more and more pop up. It's great to see that you guys have. How long ago did you do this? Did you make this switch? 

[23:37] Jenny: Well, we've been working in a, I would say this hybrid methodology for many years and my role is really to lead the sustainability team within the advanced performance materials business. But I report to both the business president and sit on the business leadership team and, and I also report to our chief sustainability officer and part of kind of the corporate sustainability team. So we've tweaked it more recently, like even within the recent months. 

[24:03] Jim: A follow on question to that. When you think about sort of the end of life of not your product, but the chemical you sell to your customer, have you all developed sort of a collaboration with those end markets in terms of looking at how you do the innovation of the chemical to help them in their stage? 

[24:21] And then when their useful life of that product is over, are there a way that you can help them sort of go back and recover that the chemical? I mean, just thinking about that end of life dynamics is that. Could you describe a little bit? 

[24:33] Jenny: How that is done, the end of life? And let's say circularity is one of, I think the biggest challenges and really requires that partnership. Right. So that's something that gets me really energized. I know there's a lot of energy for it. Throughout our organization is we look at how do we ultimately scale some of these technologies and make them again sustainable, both from an environmental and a business sense. 

[24:56] So one example is our Nafion membranes are used in hydrogen fuel cells and electrolyzers, proton exchange membranes and water electrolysis. Right. So they're one membrane in the overall fuel cell or electrolyzer. And ultimately, if we want the hydrogen economy to succeed, there isn't enough supply in the world. Right. Of this membrane. So we need to find a way to recover and recycle and do this at scale. 

[25:24] But it has to be done in a technologically and cost effective way. It has to be feasible. So we're actually part of a consortium that's funded by the Department of Energy that's looking at end of life recovery and recycle for these membranes. But it's the whole gamut, if you will. To be honest, what's really driving this is you have these critical minerals, very expensive things like platinum, iridium that are part of these electrolyzers and fuel cells as well. 

[25:50] So we're interested in the ionomer that we make. Right. And there's not enough supply in the world, but it's not as valuable today, if you will, as the precious metals which people are working to recover. And the way they do today is they're recovering the precious metals and maybe discarding the rest. Right. And so we have to look at how do we actually develop the technology to take apart and disassemble these fuel cells and electrolyzers and then recover and recycle not only the catalyst, but the membrane, the ionomer. And the question is, do you take it back to the monomer? Do you take it back to carbon? You know, what is the most efficient way? 

[26:22] And through all of this, you also have, how do you exchange the information? Part of the grant is on digital passports, workforce training. How do you scale up not only to technology, but the knowledge? So we're doing a lot of work, that's just one example on circularity in our thermal solutions business. We're also working with partners to say, how do you recover and reclaim refrigerants? So in the end, it's ultimately, how do you use less material and then how do we also reduce. Reduce our waste and not generate it in the first place? 

[26:53] Jim: What I find exciting about that is that you have. You're identifying those are as an issue that you need to be aware of. And it's not like you ask the question, okay, what can I do? But who is the right team to collaborate with, to really come up with solutions? And maybe we don't have solutions today, but you're recognizing it's something that has to be dealt with and you're putting plans in place and putting teams in place and doing that collaboration. And coming out of that will come some excellent solutions, I'm sure. So that's good. That's very exciting. 

[27:27] Neil: Who's struggling, is this you or is it the product managers of these products? I'm trying to figure out, right, is this a sustainability thing or is this a product and business thing that's driving it? 

[27:38] Jenny: It's all. But it's very much driven by the business. So, you know, I told you, I returned to Gomorrah's earlier this year and I was really excited by the opportunity because of how integral sustainability is to the business. 

[27:51] And across the business, folks are thinking about circularity and these challenges, right? So we. They're in our goals of really part of the overall business strategy. And then I drive certain Things and some new product developments might have elevated because they're more driven by sustainability or regulatory considerations. So I might sponsor them. Right. And then others are sponsored by the business president or the general manager of the business. Some are more technology driven and we need innovative technologies, not only both analytically abatement technology, other technologies to recover and recycle. 

[28:27] So there's a lot of work being done on the technology front. So I collaborate very closely with the kind of business GM and the technology director and our teams do as well as again those leverage resources that are the subject matter experts. And then even, you know, if we have ventures that are focusing on semiconductors or hydrogen economy, we can collaborate. So it really is cross functional but very much embedded in the business and the business strategy. Cause I don't think it works otherwise. 

[28:55] Neil: I guess that's the advantage of having a way to measure what good looks like because then everybody can come up with their own ideas and ambitions about how to get there. Which I find very often. Some of the product managers I work with and have worked with in the past, they say, hey, you know, that's a sustainability team's job. 

[29:14] And it's primarily because, well, their goal is get a product market quickly that has the maximum value for the business and adds maximum value for the customer and do that in the cheapest possible way and all of those details. But this idea of hey, you know, I need to think about how my product will be used at the end of life. Yeah. Typically that sits in someone else's job description and I think it automatically falls into your own job description when the definition of what a good product looks like includes this and you have a way to measure it. 

[29:42] I think this is one of those take home messages for, for people, for listeners.. It's very hard to get the entire company to move in the same direction unless you have a way to measure progress towards that direction and set a goal of where you want to get to. 

[29:55] Jenny: Absolutely. And another important aspect I think is having it in the goals. So having it in the goals of the business and then it kind of flows down and then you have then resourced initiatives and projects that you then execute against. 

[30:09] Jim: You know what thing is interesting to me, I've been working with the chemical industry for I don't know, 20, 20 years or something and you know, 20 years ago we've had some of these conversations, but it didn't go anywhere. And now, I mean what you've done at Chemour's and some of the other chemical companies, they've really have embedded it into their operations. And what they've done is not make it a sustainability thing outside looking into the business. They've made it a collaborative team between the business with business goals and sustainability goals and they're working together. And each company is going to slightly do that differently. But that's the goal is to embed your sustainability metrics or green, you know, greener product metrics into the business decision making. 

[30:53] And you need expertise on the sustainability, environmental side as well as a business. And you can't have silos. You got to have a integrated team. And what you are doing in Chemours and some of the other chemical companies now were just like a pipe dream 20, 25 years ago. And now it's reality. And that's really exciting. 

[31:12] Jenny: It really is, Jim. You know, I was a product manager in another business I don't know, over a decade ago, right. And while I would say there's always been good consciousness and awareness of product stewardship and product sustainability, it really is much more embedded now and again, the ideas that people in the business bring and the opportunities they bring. Then we have resource projects that are sponsored by the business and circularity and other areas. It's really exciting. 

[31:40] Neil: But what was the 0 to 1? Because I think this is an amazing thing that you need to scale this kind of thinking, right? There was a day when it did not happen where it did not exist at Chemoris and then there was a day that it did. What was that day and what was the trigger moment, do you think? 

[31:56] Jenny: I think it's a journey. I don't think there is one trigger moment. I think it takes a lot of hard work. And I'm not. I mean, it's not perfect, right? I mean, this is hard. And how do you make it more efficient and how do you get the right expertise and attention? I'm not saying this is all roses every day. It's a journey. So it's a journey and it takes hard work and commitment. It takes leadership commitment as well. I mean, we have the commitment all the way up through our CEO and executive team. But part of it is culture, right? And so, you know, building the right culture is very important as well, but it's a journey. I don't think there's like one moment where a switch flips over the other. 

[32:34] Neil: I'm looking for the map of that journey, right? Something that we could standardize and we could say these are the things that you need to do to get to that step one, which is where there's buy into management. These are the things that you take to get to that next step, which is a methodology that you can use to evaluate what good looks like. This is what you need to do to get to that next stage, which is you embed it into the stage gate process. 

[32:56] I think there are leaders, I think sustainability, especially at this stage, where you're embedding it into the product development process, I think still resides with a very small group of companies. We call them the early adopters. But we need to get this mindset to the early majority. And I think for that we need to make it simpler. We need to learn from the experiences that you've had in the past, things that work, things that didn't work, and create that. What is the map to that state, that end state. And it's only when we can simplify it. And I think this is one of the goals of this podcast, trying to extract these kind of insights through experience and crystallize them for people who do not have 10, 15 years to invest in a process like this and need to get there faster. 

[33:38] Jim: Yeah, for me to speak the language of the receiver and if you're at the sustainability committee and you want to really get the product managers and the innovation, you really need to understand how the product managers and their terminology and language they use in the stage gate process and if you don't, you speak all this eco efficiency and things like this on sustainability and they don't understand it. And not that they're dumb, they're just different terminology, different language. And so part of what I think Chemours is successful is they're taking people from the, you know, environmental sustainability field and they're using the important impacts from sustainability, but they're converting it to the language of the decision makers on the business side. So that is to me is one of the earlier transformations that have to occur is be able to learn and speak the language of who you want to change to make better decisions. 

[34:33] Jenny: Absolutely. I couldn't agree more. Embedding it into existing processes. Rather than adding something separate and new is really critical. 

[34:42] Shelley: Jenny, I want to leave the final thought to you. What is something people in this space, product developers, product managers, what is something that you'd like to leave them with that could help them on their journey or is key right now for them to be thinking about? 

[34:58] Jenny: I. One of the most important things I know we really focus on is is focus, right? So focus on what is material for your company and for your industry. And that's why while these frameworks and tools can certainly be leveraged across industries, in the end you want to focus on what is most material for your business in terms of the impact the environment and society, as well as the opportunity for your company or business. 

[35:25] That's one parting thought.. Okay, I guess I'll leave with three things, right? Thing one and then two, right. Is what Neil said about needing to make it simple. 

[35:34] So and having to embed it, what Jim said into the existing system and process. So in order to make it simple, you have to embed it into something that's already being done, And then you need to educate people about what they need to learn and how they do. You have to do that over and over again and again. The last thing that I'll leave folks with is communicate, communicate, communicate. 

[35:55] So internally, it's celebrating those wins, those early successes, really lifting those up externally, right? It's educating on the details sometimes matter. The methodology matters, right? So ask your suppliers how they did this. Ask their assumptions behind their model. Sometimes the details do matter. It just takes so much communication to reinforce these messages, telling those stories over and over again. And have fun along the way, right? 

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Episode 14: Sustainable Mining & the Future of Copper

In this episode, we sit down with Andrea Vaccari from Freeport to explore the rising demand for copper and its crucial role in the clean energy transition. From electric vehicles to wind turbines, copper is everywhere—but how will we meet skyrocketing demand sustainably? We discuss challenges in mining, the shift toward responsible sourcing, and why designing for disassembly is key to a circular economy. Whether you're in product design, manufacturing, or just curious about the future of sustainable materials, this episode is packed with insights you won’t want to miss!

In this Episode 

Shelley: One of the things I think is interesting and I think would be great to have you introduce to the listeners is the role of copper in the clean energy transition, because I don't think everyone appreciates how much metal is going to be needed to make that work. And it's also great context for those listening who might use copper or metal in their products. [00:44] 

Andrea: That's right. Copper and molybdenum especially are really, really critical for the energy transition. When you think about all of our low carbon or zero carbon forms of energy. So we think about solar, when we think about wind, when we think about hydrothermal, even just thinking about LNG and how LNG actually provides power to a grid, copper's in all of that. In wind turbines, offshore wind turbines need lots of copper. I think actually a few tons of copper per wind turbine to be able to not only power the wind turbine, but then the deep sea cables that connect them and that connect them back to the grid. We think about solar power and it’s not just a solar cell; there are batteries involved. And how do you tie a battery storage device to infrastructure and to the Internet? That's copper. [01:02] 

The simplest things, like developing nations, as they come along in the energy transition in a just way and we improve their grids, those are full of copper. Transformers, cabling in houses, as we improve green buildings, it's just everywhere. It really is. And then molybdenum is used in stainless steel and it's used in a number of other applications, but stainless steel especially and we know how much that's used in building and construction, bridges, all kinds of different applications for the energy transition. [02:07] 

Shelley: Is it possible to give us any numbers for that, like forecasting 5, 10, 30 years, like how much is needed? [02:36] 

Andrea: Right now the total refined copper market annually is in between 25 to 30 million tons a year and we expect that to double by 2050. Now you hear all kinds of different things. So, you hear people talk about doubling, tripling, quadrupling. I don't know, the way that I look at it is whatever number we come up with, we're always going to have the wrong number. But I think there's general consensus that it is at least twice. Just take like an electric car. So, if you take an internal combustion engine vehicle and then you take a fully battery electric car like a Tesla or a Mercedes, you're talking about three to four times the amount of copper per vehicle. And then you've got charging stations which are full of copper. [02:44] 

Neil:. Some of these models don't even consider the development that you see in countries which are not electrified yet. So, India for the largest part isn't really electrified and in the next 10 years we will see a huge part of that also taking shape. So, I think you're right. Some of the numbers that I have in my mind, more short term where we'll be needing 50% more copper than what we have right now in the next 10 years. And that's a crazy amount of growth that's needed. It's not 30 years from now or 25 years from now, it's, it's 10 years and to increase by 50% is crazy. [03:36] 

Andrea: It's massive. I think between the 1980s until 2020 ish, I think we basically almost doubled the refined market and then it's set to double again. That requires a lot of growth. It requires both primary and secondary. What are you going to do? Pull the copper out of the building so you can recycle it? Copper has such a long life and so you have a limited amount that you can make up from recycling. It's a huge opportunity for the mining industry. But we don't have two times as much water, we don't have two times as much natural resources to make each ton of copper. So, Freeport's view is we have to do that responsibly. We're accelerating the future responsibly, but that's going to require a huge amount of innovation by all primary producers. [04:14] 

Neil: What are the biggest barriers to us getting there? Let's take a short-term perspective. I think long term we can create lots of fantasies, but I have engineers and we're trying to help them build better products. They're not going to build them without copper and assuming that they'll need 50% more in the next 10 years than what they have access to right now, what are the big barriers to producing that much more and where will we get it from in current planning? [05:04] 

Andrea: I'll start with where it will come from. One of the big dynamics that we've seen in the last few years is that the amount of copper coming from developing nations is higher; that sort of shift is happening. Chile remains the largest copper producer in the world. It's around 30% of the world's copper. Peru used to be number two. Now the DRC (Democratic Republic of Congo) there's been a ton of investment and there's lots of relatively high-grade copper there. Multiple mines have come online there in the last 10, 15 years. We had one of them, which we sold called Tenke Fungurume to a Chinese company, and so there's a huge amount of investment that's happened there. Peru has had some unrest in the last few years politically so it's kind of fallen behind a little bit in investment.  But we have a have a huge mine in Peru called Cerro Verde, which is crucial for the Peruvian economy and the second largest city there, Arequipa. But what we see is those developing nations starting to have mines developed because in developed nations we have great difficulty with permitting. In can take in the United States and other developed nations a huge amount of time to go from the initial drill holes to a productive mine. It can take 20, 25 years. It's not just a permitting issue, but it certainly is a significant issue. It's an issue in Chile as well. The Chilean government is working on permitting reforms. The US government is trying to figure out how to do that better as well. But then also free prior and informed consent of indigenous peoples is an issue as well. So ensuring that you're working really, really closely with local communities and indigenous peoples from the very beginning of drilling, even just exploration stage, which is different than it used to be. So learning how to do that, learning how to do that well, and it's not easy, right? I mean the copper price basically needs to be above $4 a pound for companies like ours - we're a large Fortune 500 mining company - for companies like ours to invest in a 20-to-30-year time frame. [05:32] 

Andrea: That's like 20 years before you start making any money and boards of directors are highly critical of where we actually put our resources. So what's happened now? Like I said you have this shift that's happening: DRC used to be like 5% of the world's copper and now it's increasing and increasing and increasing. And there's some geopolitical power shifts happening. You've got prices that need to remain around $4 for us to stick in there for 20, 25 years, and then now you have the expectation of free prior and informed consent for any large project, which also takes a lot of work and a lot of time. [07:43] 

Shelley: I was going to ask, how does sustainability fit into this? I know you've had some involvement in the Copper Mark, maybe let us know about that and what sustainable copper and metals looks like these days. [08:22] 

Andrea: Like I was saying before, we don't have two times the water, we don't have two times the energy, we don't have two times the resources or people even to work at these mines to develop all that extra volume. And what we look at is really being a responsible producer and the whole copper industry. This is a great opportunity but it's also a huge challenge for us all. When I was working for the International Copper Association, I was there from 2016 to 2019, we created something called The Copper mark. The Copper Mark is essentially a responsible production validation process. It's 33 criteria that range everything from corruption and bribery to business integrity, compliance, human rights, indigenous peoples, as I was speaking before, environmental management, tailings management, everything you could think of when you think of what are the main, quote unquote, potential sustainability impacts of a mine. Essentially that whole framework or those 33 criteria have to be validated by a third party, basically audited, just to use plain language, it has to be audited every three years by a third party and every four or five years the criteria get tougher. For example, we just had our Cerro Verde mine, which is one of the world's largest copper mines in Arequipa, Peru. I was there last week, we just had it audited last week. The audit's actually more like a six-month process, but we had the on-site visit and one of the key pieces of it is that the auditors actually independently interview employees, third parties, external stakeholders, contractors with the offer of anonymity to basically provide feedback to the auditors on how the mine's performing across those criteria. For us we see it as, I don't want to use a hokey word, but it's kind of the promise. So we say, every single one of our sites globally is going to be assured against the Copper Mark and now the molybdenum mark and there's also now a zinc mark and a nickel mark, and we're going to keep that going over time. And that's our commitment to customers, stakeholders, local communities that we're going to keep trying to produce responsibly and we're going to keep finding new ways to produce more responsibly as the bar gets higher and higher and higher, if you will. [08:32] 

Neil: What is the kind of adoption for the Copper Mark? Because I could imagine, you just told us that the dynamic is going to shift where production will need to move to other places than what was done before. And these kinds of criteria, these kinds of certifications become even more important in places that we have not operated in before. Imagine I'm designing the next phone and of course we're buying copper directly, indirectly for our designs and we'd be looking for this mark. What is the percentage of copper that we can buy that has this mark versus not and is this really picking up? Is this something that we could say is the future of sustainable copper? [10:55] 

Andrea: That's a great question. The Copper Mark spun off and became an independent organization in 2019 and now has a multi stakeholder board, et cetera. We launched it in the March of COVID, and now have almost 40% of the world's mined copper is now Copper Mark. Newmont just had one of their mines in Australia certified yesterday. There are mines in the DRC. The mine that we used to own, Tenke Fungurume, is now part of the certification program. Glencore signed up their two mines in DRC. The whole idea of Copper Mark was to have it be a continual improvement framework so you could come in and you don't have to be perfect, you have to at least partially meets across the 33 criteria to achieve it. And then within 24 months you have to be fully meets. So you have two years to close those gaps. And the idea of that was that it's not about perfection, it's about progress. We want to raise all boats. The whole industry will do better if the whole industry is doing better and that was really the premise of the Copper Mark from the start. [11:32] 

Neil: So for engineers, people who are looking at purchasing and buyers or thinking of purchasing products that are made of copper with this mark, directly or indirectly, what are the other things that you would want to tell them, keeping in mind when they're designing products, potentially about how they use copper, what they think about in terms of how products should be recyclable or disassembleable? What are the things that engineers should keep in mind when putting copper into their products? Which I'm assuming almost everyone has to eventually do that, right? [12:48] 

Andrea: Yeah, I would say design for disassembly is probably the most crucial piece. Why? Because the challenge is when you mix metals with plastics, you have to get rid of the plastics before you can make that metal again. Perfect example, we have this new addition to our Atlantic Copper smelter in Huelva, Spain, where we've added a new, basically what we would call like a secondary smelter, so where we take end of life cables. Okay, so we take power cables from vehicles, from various applications, various different products, and we have to burn off the plastic. There's no other way to get the plastic off the cable. And that takes energy. How do we design these cables? When you think about a copper cable, it's got like a sheath around it and you have the wires in the middle and surround them in rubber or plastic. And so that's just a challenge. So thinking about the disassembly, are there new innovations that we can come up with that don't require them to be burned off, that enable physical separation as opposed to chemical separation, where you're basically just burning them. That's something really to be thinking about. But I think the best thing we can do is design products to last a long time. And the reason I say that is because copper doesn't degrade over time. You still have copper in some buildings that were built 200, 300 years ago, whether it's just little bits of copper for turning on lights from 150 years ago, whether it's old cables, whatever it is, copper can last in a building for its life. So that's something that I think about a lot. If we think about the biggest uses of copper, they really are to electrify our homes, to electrify our grid, and then also, of course, to provide power, to generate power. So when I think about that, I think about longevity. When we look at cell phones, or we look at cars, and if we're going to be putting four times as much copper into an electric vehicle, what are we doing to make sure we can get it back? Because it's infinitely recyclable. So design for disassembly, especially for the short life products like phones. [13:18] 

Neil: There are regulations that actually force companies to think of this: to repair. I think there's been disassembly regulations in the automotive space for now almost 15 years. I think this is where. But I think with Esper, there's a regulatory aspect that I think has not been as prevalent as it was before. With ESPR, which is the European Sustainable Product Regulation, the digital Product passport, so to speak, and one of those criteria that come in there is about disassembly, is about end of life and how to treat these products at the end of life. I think there is a mindfulness that comes in. And if you think of large companies, and if you're an engineer working for a billion-dollar company, you don't think I'm only going to make this product and sell it in the US or in India or in China. [15:37] 

Andrea: No, you design for the world. [16:30] 

Neil: And I think these are things that must influence design decisions early on. How can we make products where we can extract these precious materials much easier than we do today? [16:32] 

Andrea: When we think about innovations and how much has changed in our lifetimes, we're certainly not going to be designing the same way in 10, 15 years that we are today as we sort of cruise into the energy transition. And I think a lot of that innovation is going to come from European countries because of those regulations that really force that forethought. And we've seen it impact vehicle design right from the End-of-Life Vehicle Directive. [16:44] 

Andrea: When I first started working for Jim and Five Winds International in 1999 that was the work we were doing - was design for recyclability, design for disassembly for automotive vehicles. So when we think about things like cell phones and we think about the urban mine. What is that? It's this concept of how do you go to where these discarded cell phones are or discarded waste is and mine it and get it back. We know that so many of these do not go back, they end up in the landfill because people don't have easy ways to dispose of them or don't seek those ways out. So I think that's a key question, how are we going to safely urban mine to get materials back? But I also think about innovation. If you think about the challenge that we're faced with in mining, that permitting is getting harder, that gaining agreements is difficult, new mines are just a huge challenge, right? What we're trying to figure out is how do we get more of what we already have. So how do we take existing mines and go to old stockpiles which used to be below cutoff grade and find ways to get that copper out? And I think about those exact same things when I think about the urban mine and when I think about products in general, like how do we change our mindset about whether something is done and how to get it in life and keep it in life from the mine all the way to the end of life disassembler. We need to be thinking about innovation and how we just do things differently. And so at Freeport we're doing a huge piece of work on that and really for us, trying to figure out how to no longer have to concentrate and smelt. So there's a, there's a whole route of mining called SX-EW which is essentially solvent extraction and electrowinning versus traditional fire refining where you think of a big copper smelter. We're trying to figure out how to take ores that used to only be able to go through that process. How can we not do that? Which would have a massive impact from a carbon perspective. And so when I think about the product designer, I think about what is the impossible. If you had a conversation 10 years ago with any miner, they would say to you, oh, there's no way that you could ever take a sulfide bearing copper ore and not smelt it. But now we're all putting millions of dollars towards figuring that out and so I think the same thing about product design, like how do we just challenge ourselves and do things differently? Well, we have to cover the cables in rubber. Do we? That sounds very easy to say that, but I think it's what we have to do. [17:23] 

Jim: It's easier said than done, obviously. But I wanted to follow up on the procurement from the government. We talked about business to business and the products and governments buy products. But have you seen a major pull from the governments for the Copper Mark going forward? Do you see that entering into the picture at all? [20:11] 

Andrea: We do. We see that growing significantly. In fact, Copper Mark and the Mining Association of Canada and their program towards sustainable mining are working on basically a process of coming together in a single standard along with ICMM (International Council on Mining and Metals) and World Gold Council. And what we've seen is that governments around the world, mining governments around the world, want to adopt these frameworks and they really want to bring them in. And whether they make some part of regulation or legislation or not, or they just encourage it or will only allow certain incentives for mines that are certified. We do certainly see that the challenges still exist though for new mines. But I think we're starting to see that the Inflation Reduction Act has certainly led to a lot of conversations. The Minerals Security Partnership in the US is really trying to bring together Europe. [20:35] 

Neil: I think very often we underestimate the value of creating transparency or forcing transparency in supply chains. You don't want to find bad stuff in these supply chains and while you may not need to regulate and say you need to follow this standard; you will need to tell us that you don't. I used to tell our team, and we tell this to our customers as well, it's good you create your reports this year, next year, as the regulation stipulates it and then you do the year after that and then you'll do it the year after that. And then people will ask, not have you done your report or not, but why hasn't it changed and why isn't it improved? And I think that's this thing that in the next three to five years, as you said, we will not just change the products that we make, we will have to change how we make them and the kind of choices that we make in the materials that we put into them. [21:27] 

Andrea: Yep. There's no doubt and I think the battery passport is going to be a really interesting, to see how that evolves. One of the things about commodities is that the way in which they're sold can lead to a lot of opacity in the market. And there's this famous story, I don't know if it's a mythology, true or false, in our industry, that a very large European automotive OEM tried to trace their copper or at least get some transparency to their copper. This is about four or five years ago, and they studied it for 10 months and gave up. [22:23] 

Neil: Yes, that's not fiction, that's true. [22:58] 

Andrea: So it's also incumbent upon us and really the idea with the Copper Mark was, right now we certify the sites, we have a chain of custody certification that's just sort of burgeoning. So there is a chain of custody certification. Freeport has that now with two of our customers where we send them data on a routine basis with their deliveries - we send chain of custody data for cathodes. And now those semi fabricators are becoming validated or certified by the Copper Mark. Right. So the idea is that eventually the OEM or let's say the utility or whoever should be able to say, okay, X percent of the metals in my [product] are responsibly produced. But the challenge is we have all these OEMs that want all of these things, right? So we have Apple, we have Microsoft, we have Google, we have Daimler, we have BMW, we have Ford, we have all of these OEMs wanting things. But the middle of the chain where even less of the money is made, not very much money is made, is not passing through those demands. And part of the reason for that is that this side, the OEM side, doesn't want to pay any more money for it if it's responsibly produced. And so that's something I worry about a little bit. And I don't know what role the product designer can play in that other than just demanding more responsibly produced materials. But I will say that the automotive sector in particular is infamous for not paying any more for something that is produced better. Jim, we worked on that for for years and years at Five Winds. Right now we're trying to push it through the middle, and the middle's kind of like, this is a lot of work and a lot of money and then the OEMs are coming directly to us and they're just skipping the middle of the chain. And so somehow we have to fix this piece and that's where the opacity will get solved because if you can trace it obviously or create a digital passport or a token or whatever it is, that information can get through. And I think that's something where product designers can just keep demanding it and demanding it and the companies that produce products can keep demanding it, we'll get there eventually. But right now, for us, that middle of the chain needs work. [23:02] 

Jim: I want to follow up with the competition among the mining industry or the metals industry. With all the demand that's there for copper, 50% growth that we are talking about. Are the companies collaborating? Because there's so much copper that's being required that you're really going to have to solve some of these problems together as opposed to working in isolation. Could you just talk a little bit about that, that dynamic? Is that a positive thing, is it a negative? And where might it be positive? [25:40] 

Andrea: Yeah, it is the era of collaboration. We are involved in so many collaborations. I'll give you a couple. I mean Copper Mark is a great example. We have a number of climate related collaborations where we're trying to figure out how we electrify the mine. And so there's a number of those collaborations happening. There are hydrogen hubs, we're trying to figure out how to use hydrogen in our smelters, we're trying to figure out how to use hydrogen in our mines. I would say tailings is a huge area trying to solve or crack the nut of dry stack tailings. You can do dry stack tailing or filtered tails. Which I won't get into it. It's very technical. But you can't do it at scale yet. And the big miners need to be able to do it at scale so figuring out those precompetitive technologies is together is crucial. Look at ICMM, the International Council for Mining and Metals which we were a founder of, that is what we do there. We think about things like dpm, diesel particulate matter in underground mines. There's been huge leaps and bounds on that by working together and then working with the supply chain. Our own Supply chain, working with Caterpillar, Epiroc, Komatsu, any of those big producers that supply us with part, working on scope three reductions. I mean all of that has to be done through collaborations because we don't all of a sudden magically have more money. I think precompetitive technology discovery and then working together with our supply chains to help them innovate and deliver more sustainable products to us is crucial. For us we really see collaboration as something that is the only way that we're going to succeed successfully. Ultimately, right now, I would say the energy transition for us is the era of collaboration, precompetitive collaboration. [26:17] 

Jim: Dealing with some of the tailings issue, that's really a specific kind of a problem and there are going to be people located all over. So the collaboration is going to be fairly complex and not necessarily these normal meetings like we used to have and you could go face to face for two days kind of thing. How do you really make collaboration work? I mean I'm fully supportive. I mean in terms of what I've done in my career, collaboration is critical but when you think about the mining and the dilemma, how do you get that collaboration done in a way where you can really accomplish something? [28:16] 

Andrea: Well, and you can't do everything right. You know there's hundreds of collaboration forums for the energy transition and mining. There's hundreds of collaboration forums for electrifying mines and you really have to pick the ones that you feel are going to make the biggest difference, which is what we've done. But you know, when we think about tailings, that's an interesting one. They just had a forum down in Peru and you know you have GISTM, the global international standard for tailings management that was developed within the ICMM and external stakeholders just coming together, talking about the implementation, talking about new technologies, sharing ideas and thoughts can spark a lot of things to happen within companies. And so those are not huge commitments. Right. It's a huge commitment to implement the GISTM but it's not a huge commitment to get together virtually and have these good discussions and then a few times a year get face to face. Where the rubber really hits the road or maybe the copper is smelted. I don't know if there's a new way of saying that is ultimately where you get multiple funding sources together to focus on a totally new technology. And I think that's where we're looking at new tailings technologies, where we're looking at mine electrification and really honestly leaching. So looking at these new ways to avoid having to concentrate and smelt sulfide bearing ores, that'll benefit the whole industry. And we do those in forums and some work, some don't. But being able to do this work virtually now, Covid really helped with that. You know, mining is a very conservative industry. Like you're not actually working if you're not at a mine or you're not in an office building. Covid totally changed that and I think that's really helped us on the collaboration front. [29:00] 

Shelley: Mining is a really interesting sector because it's in everything, it's everywhere, but not everyone knows about it. So, Andrea, I really appreciate some of the insight you've brought for our listeners today on the copper mark and this idea of designing for disassembly. I really want to leave the final comment to you. A final thought you would like to leave our listeners with today. [30:42] 

Andrea: This is something that the mining industry is working so hard on, is opening up its doors. The general norm or view or belief of a mine is that it's a dirty, terrible place where stuff comes out of the ground and it's unsustainable. But what we're seeing more and more and more is that mines are becoming much more part of the fabric of their communities. They stick around for 100, 200 years. They are a huge investment on the part of a community. And I think helping just everyone, whether it's a product designer, whether it's somebody three communities away, whether it's high school kids, junior high kids, helping everybody understand how crucial mining's role is and how much it can get better and be better, I think is really what we see as crucial for the future. We can't not mine or we won't have these products. And so rather than turning a blind eye or saying, well, I'm not going to buy from that country or this country, instead lifting the veil and having those hard conversations about where is my product coming from, is that okay? Is that not okay? How do I change it? I think that's really, really important. And I really appreciate you guys doing this great podcast to really help explore that and I think the more product designers can do to sort of educate themselves on what is in their products, the better off we'll all be. [31:00] 

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Merck's Jeffrey Whitford joins the team for episode 13 of Five Lifes to Fifty. Jeffrey is Vice President of Sustainability & Social Business Innovation at Merck (known as MilliporeSigma in the US and Canada since Merck's acquisition of Sigma-Aldrich in 2015), and has a deep background in education, communication, advertising, marketing and strategy. He uses those skills to develop and execute compelling platforms to showcase his organization's efforts in Corporate Social Responsibility.

Today, Merck/MilliporeSigma offers a range of more than 300,000 products to support the life science, biomanufacturing, and biotechnology sectors. These products have applications in biotechnological manufacturing and development, laboratory research, and pharmaceutical drug therapies.

Shelley: Merck is a global life science company. Tell us more about the field you're in and the sustainability culture at Merck. 

Jeffrey: Yeah, absolutely. So, we are one of the places that most all scientists know of. If you're not in science, you may not have heard of us, but basically we are the one stop shop for scientists to get all of the materials they need to do discovery R&D and then manufacturing for things like pharmaceuticals, drugs, therapies, treatments. But also, certainly if you're in academics, you're doing academic research, we're a place that you're going to go to. But we also do other things like testing. So, if you need a standard to look at the quality of something like what clean dirt is, well, we're the people who make clean dirt that you actually measure against. So, we have such a wide array of things that we're involved in. Like I said, you may not know about us, but we're probably interacting with you in one way or another throughout the day and hopefully helping you make your world a little bit better. [00:40] 

Shelley: And I understand that sustainability is deeply embedded into your process. Tell us about how sustainably gets embedded into your product development process. [01:33] 

Jeffrey: One of the things that I was given as an instruction, in terms of our ambition regarding sustainability was we don't want this to be just a showcase product here or there. We want this to be something that is systematic within the organization. So that was the guiding light - I was told you need to make it systematic. So, because of that, we looked at the different ways we could go in and address systems, because that is the key to change. So, we try to find where that lever point is in each of our different processes, and that's where we go in. So, for product development for us, we use our product development process. We have a system called accolade, where everything is tracked and driven through. That was the point really where we identified to say if we can get sustainability embedded there, we're going to start to make the change or the transformation to a product portfolio. We have 300,000 products, so it's a big challenge in front of us to think about sustainability across the board. But ultimately that's the place where it starts when we think about the products themselves. I think for us, that's really what we've been thinking about is where are those key lever points that you've got the ability to then take more control into the process and give people guidance about what we're looking to do and the changes that we need to make. [01:43] 

Neil: Jeffrey, 300,000 products, how do you start? [03:00] 

Jeffrey: I cry a lot. No, this is the hard part when you think about the volume of products that we're talking about, is that we don't have one big thing that you could address and so that creates for us a challenge to say where do you start to focus? And one of the things that I think we've learned over time is you start where people are willing to start. When you've got people who are willing to go, that's where you start making these inroads and then you build and you learn. One of the things that we found out was if you look at something like solvents - this is a commonly used product, so if you're not familiar with that term, if you think about acetone or nail polish remove is a great example of a solvent, there are a lot of cleaners, so it is a relatively common material. But those materials are typically made from fossil fuels. And with the statement of fossil fuels, you know that there's going to be CO2 related to that. So, we've been looking at the ways that we can integrate bio based materials into that. But the bigger factor is that equates to about 10% of our scope 3.1, and scope 3.1 is purchased goods and services. So if we think about where impact lies, more than 60% of our footprint sits in scope 3.1. So, when you get 10% of that portion, and I apologize for all the percentages of breaking things down further, but that's one of the biggest pieces of the pie that you can actually get at. So, Neil, that's one of the things that we start to then look at is where can we have as big of an impact? And I say that with limited relevance. But where can we have big impact and then focus in these kind of bigger strategic moves of the changes that would need to happen and then start working our way out to see what kind of knock on benefits exist. [03:05] 

Neil: You said something very interesting. You said we start where people want to start. What's the drivers that make them want to start? [04:47] 

Jeffrey: Yeah. With 28,000 people you get a range. You get people who are eager and who sustainability really matters to. It may not be their core job, but it's something that they're interested in and they realize, they make that connection that they can have an impact and they just need the guidance and the understanding of what actually can they do. So, part of our work is to encourage people because even though as much messaging as we send out into the organization, people are like, is it okay for me to proactively work on sustainability? Yes. But then it is really helping those people with how do you quantify? How do you think about the right areas to make changes of your product lines? Where are the hotspots and what are the things that we're trying to accomplish? So, we identify those people. They kind of self identify themselves; they reach out and they're like, hey, I do this and I would love to figure this out. So, you grab those people early on because they are your flag bearers who then go out and then become the people who, if they haven't had a successful experience, we convert them and then they become the messengers to their colleagues in those areas to say, hey, this actually wasn't that bad. We think a lot about like the customer service aspect of this because we can't control, we can't tell people this is what you're going to do. But what we can do is we can influence. And so we're very effective influencers and we build those relationships, our jobs get a lot easier and then we also see those results expand. So I think it's really about the experience, Neil, that we give that R&D scientist to try to make it a really welcoming, interesting environment that they can succeed in because that's going to create a return and expansion. [04:55] 

Jim: What are the roles of these people? Are they the product managers or are they procurement or they're the marketing? Could you talk a little bit about the roles of those people? [06:34] 

Jeffrey: So, one of the first people, and my team really reminds me because I certainly focus on the R&D scientist, but it's really important because it is a complete ecosystem of people. But mostly I think the focus here becomes the R&D and the product manager. So those two people become the key elements there and what we're doing with procurement, because they become a factor of this. But what are the things that we're looking for them when we do new material, innovation, sourcing? What are the things we're looking for? How do we start building a wider bench? So, I'm not going to say not important, but a lesser, slightly different role. But the R&D scientist - you are the person who really is responsible for developing and technically making this work. So, in my viewpoint, that lens, that's still a really critical person or people to make this move. But then the product manager has to figure out the positioning in the market, really reinforcing a voice of customer, and making sure we're feeding in information about why this matters. What we find, and it's very interesting, is the individual scientists, so our customer, while they may care about the environment, and I think we would say that from a persona standpoint, you see this interesting shift start to happen when it comes to them executing their work. Because if you add another layer of complexity into the completion, wait a minute, now you're messing with the scientific process and they've got these established methodologies or processes that they follow, and those work exactly how they were lined out centuries ago, a decade ago, whatever it was, two decades ago. And this was a really important thing. So your customer, your bench scientist, for instance, may not be voicing that specific desire for sustainability, but if you go then to that person's colleague who is in procurement for the customer, they're going to be saying, we need you to figure out how to fix this and change this and reduce the impact. So it's making sure that our product manager is getting a wider range of perspectives and hearing all of these things to understand that we need to balance and figure out the efficacy of the product, but also the sustainability as a component of it as well. [06:42] 

Neil: This costs money though. This costs time. Right? If someone has a good idea and says, hey, you now want to pursue this, you say, yes, let's do that. But there are always competing priorities. What is the driver for those to be prioritized within your organization? Is it customers? Is it regulations? What is it? Is it access to market? [08:49] 

Jeffrey: I would say it's always customer and I think we also would look and say it's competitive advantage. It’s my belief, and I have a very different view if you talk about regulations, I think a lot of people started off in this space and there's still a lot of people who work in a risk based mindset or a risk based approach. And I just, I don't take that view. My view is literally the opposite, as far as you can get part of the spectrum where it's really opportunity or entrepreneurial based viewpoint. And the reason why that matters is because all of those regulatory things will be taken care of because you are not just trying to go to the lowest minimum to meet whatever's being set. You're saying we can set the threshold over here and then guess what, we're going to comply with and we're not going to have to worry about the regulatory aspects because we're thinking about how you do this differently. But then, Neil, the important part that you brought up, which is cost, right, and I would probably be your least likely candidate. If you go back to some of my teachers in high school and college, they would be like, there's no way that guy's doing numbers and business cases. But I am now just a huge advocate and proponent for really having a clear business case. And I think what we have found is that there's a tremendously remarkable business case for sustainability when you actually start and do those calculations, because you look at the competitive lift that can happen from a sales standpoint. You look at reductions of manufacturing cost or material selection cost and some things, right? There are trade offs of course; I'm not going to sit here and say everything is going to be a win. But we really operate from a debits and credits mindset where we're creating a ton of credits in the system in terms of savings from energy efficiency, other things that when we come back and say, okay, we need to use a debit over here, it's not going to be huge, but we want to make an investment because that's going to be a strategic advantage to move X, Y or Z. And I think that piece always comes back to there are always trade offs, there are some things that are just going to be more of an investment, but there's other things that you're going to find savings. So, in the worst case, you come out at a wash. And I would say in a lot of cases you probably come out on a plus side where sustainability is contributing back to the business in a meaningful fashion. [09:08] 

Neil: Do you have any examples of that, any success story that you could share? Because I think a lot of, a lot of product managers that we've spoken with, they're in the process of getting to that final result, winning the gold medal for creating a successful story. And there are not so many, right? There are few. But it's always an inspiration to see if someone has actually done it and made a success out of it. [11:24] 

Jeffrey: We started a program and this was at least a decade ago, in very early days, and it still continues to this day because of the business case that surrounded it. We have a reengineering program, so we look at our products and we look and say, could we do a synthesis, could we do a manufacturing process differently? Because when you look at that backend of it and you can take a product like beta amylase. So, beta amylase is a specialty biochemical that uses sweet potato as its raw material. We were able to change the manufacturing process of that material and eliminate two thirds of the raw material. So, we used to use 6000 pounds of sweet potatoes. We now use 2000 pounds of sweet potatoes. We used to use around 1800 gallons of acetone in the manufacturing process. It's now an aqueous based process. So we eliminated that as well. And then we eliminated the need for increased energy or electricity to raise the temperature and the pressure to make the reaction occur. So, because of this, there's definitely savings and time savings on the manufacturing side that we bring to that. And as I said, 300,000 products. So this is, you know, relatively small if you look at it, it's not a huge product, but still it provides benefit back to the business. It opens up manufacturing capacity because it doesn't take as long. All of those things have benefit, but those are the quantifications we put around them to showcase, hey, here's how we're doing this differently and by the way, here's the sustainability benefit as well, because you've eliminated this, you've made that aspect more efficient. Oh, by the way, I forgot to say the product is actually 15% more pure than it was before, so it's even a better product. I don't just have that one example. We've got a lot of these and I have a complete belief that pretty much anything is possible if we put our minds to it and look at these things in different fashions. And I think that's just a great example that we use kind of time and again. But we're coming across things left, right and center about these types of things that they're remarkable stories and that gives me a lot of great fodder to be able to share. [11:46] 

Neil: Are these all serendipitous innovations or has this been integrated int the stage gate process that you typically see in manufacturing companies? [13:55] 

Jeffrey: There are certain things that are serendipitous. And I think when we started off early on, and it's kind of like I said, you work with anyone who will work with you. At that point, definitely more serendipity. And now we're getting to the point where we've gone from serendipity to systematic and we're just kind of working our way through, and that reengineering process that I mentioned is something that we're now working at how we institutionalize. That one is less process driven because once the product moves from R&D into the manufacturing systems, it's a whole different world. Certain aspects of that are not as systematic as like the R&D process because then at that point it's kind of you just manufacturing a product. We don't have a system to go back and say every four years or every five years, we're going to go back and look at these processes to say, has technology changed? Because we just have so many of those manufacturing processes, it would be a little unwieldy. But I think that's the thing, is the serendipity educates me. The education for me gives me then hints of the clues of the directions to go and what to push for. And so not just me, but the team as a whole, we've got about 40 people that are working on this, but we've become really attuned to taking those cues and those messages and then figuring out is it stable, is it relevant, is it repeatable? And if it is, then we take those and figure out how do we push them into the business to then scale and expand it so that we can make it systematic. [14:05] 

Jim: I want to follow up on a comment you made a second ago, Jeffrey. The regulatory will just take care of itself and then we're going to deal with customers and competitive advantage. And right now, out of the EU and the US and others, there's a lot of new regulatory requirements that are on companies related to products. And I go back in my career, the regulatory was the first thing that needed to be done. It wasn't the ultimate positioning in a sustainability perspective, but it was a minimum that would be an expectation. [15:31] 

Neil: You don't get a medal if you don't kill people. [16:03] 

Jim: I strongly believe regulatory - it's going to happen. But the real competitive advantage is going to be in the market. It's going to be in your product sustainability from a business value, business case perspective. Is that the culture of Merck? That the regulatory is going to happen and we got teams in place to make sure that happens. And your role is really to take it and the people you deal with to take it to that competitive advantage to dealing with customer. Is that a correct interpretation? [16:07] 

Jeffrey: Yeah, Jim, you're absolutely correct. We have a really remarkable regulatory team. Got an amazing colleague who sits in Germany and his team do such a good job and it's tough. Let's not kid ourselves. It is tough when you're looking at the volume of products and of course the regulatory spread across different markets. It's not that we’re dealing with a consistent set of information and that makes this tougher. But you know, my joke about that is he and his team have the really tough job because they're the people that are telling you no all the time and they're doing it to protect the business. It's the right thing and that's what we've got to do, and thank goodness we've got such a remarkable and strong team doing that. I get to come in with the rainbows and the sprinkles and the confetti cannons and do the fun stuff of going from here and up. But I think we're really trying to work together even more effectively to pair those elements together so we've got an even better and more attuned view on where regulatory is going, where are people driving? And it's an ever-shifting shaping environment. But then when we're able to say, okay, we're going to try to look at something very specific and if you look at maybe Reach regulations and material restrictions or phase outs, how do we solve for and then use that requirement of what we know regulatory, what those restrictions are looking at, so that when we design or bring new materials, we're looking at a broader set of information and data. Because what we absolutely do not want and want to do is have a regrettable substitution and think oh, we solved it. And this is an ever-evolving data cycle. New data is always coming out and things that have been around for so many for so long, that risk always is there. And so we try to be mindful to think about those types of frames and what people are looking at and all the different things to then guide the decisions we make about the investments to understand so we don't get ourselves in a situation 20 years from now where we're digging out of a hole that we created. It's not going to be perfect. I think there's always going to be an issue with something that we make as humans. But for us it's really thinking about how do we have a stronger set of kind of commitment from us as a business to do what's good for people and make people centered choices that don't put people at risk in the future. [16:40] 

Neil: This approach kind of jives really well. You take an approach that is beyond regulation because regulation is based on what we knew, what we found out until now. Twenty years from now, I think that's the average lifetime of your product. It could be as long as 20 years that a product is on the shelf and changing that is extremely expensive to get residual and stuff like that. So by actually being better than what the minimum requirement is, you're actually defending that future potential, that future risk of a product not being viable to sell anymore. [18:56] 

Jeffrey: I think what you said, Neil, is really great because that's where I am. I'm the future forward looking part and I look in the rear-view mirror to learn lessons, to sponge up information, to understand what we did before and think about the ways that we do it different in the future. And I think that's one of the great things, but also the challenging things because usually when I show up on people's door, they're like, dang it, because they know different is coming. And you know, people don't like change as humans. We're not overly fond of it. But I think that's one of the great things about my skillset and one of the things I've learned about myself is I am at my best when I'm creating things. That's when you get the best out of me that has the most impact for our organization. And so that creation and ability, I would say our secret sauce, and certainly the secret sauce of mine is the combination of innovation and execution. Sometimes people may have a lot of innovative ideas, but they can't execute. Or they're really good at execution, but don't necessarily have the pipeline. I don't know what's smiling down on us, but I think that's where we really have been able to pull this together is we see this broad array of things and I think we have such an Interesting seat within the organization. We sit in strategy for the organization. So I report to our chief strategy and transformation officer. So that gives us broad access across the entirety of the business; we're not over here in one little corner. But because we have that broad access to the business we're seeing, I'm not going to say everything, but we see a lot of things. And by seeing a lot of things, you then understand the places you can plug in and where you can have an impact and effect. And when you got the support of your senior leaders to do what you do, and because we've established a track record, I think we've backed up what we said with facts and deliverables and outcomes, people are more willing to take the time to have the conversation to think about the ways that they can make changes, because the framing that we've put on it and the results that we've showed show that it's going to be additive to their business. And that's the powerful component is when you've got reasons and compelling examples of why change is going to be beneficial for them, it lowers the hurdle. Maybe not as much of the displeasure or discomfort with it, but it does lower the hurdle of people's willingness to go through that. [19:32] 

Neil: To build on that, you mentioned innovation and execution and the balance of both, I think R&D is innovation, so that's always happening. But the focus on execution, are there things that you've learned from all the struggles and probably successes that you've had that you could tell others to pay attention to, that will help them be successful with that second part of it - of the execution. [22:00] 

Jeffrey: My best takeaway from this and this, you can age me a little bit. But if you think back to the infographic craze of the late aughts and the early kind of teens of the 2000s, and so I have a bachelor's in journalism in advertising, so not exactly what you would think of as a person who leads sustainability for a science organization. But this is where I think my storytelling capability comes into play because the infographic gave me a way to tell a story, but to use numbers. There we go again, my discomfort with the numbers component, but used in an element that I'm more comfortable with is storytelling. So, pairing these two things together. But that helped build credibility because when I was able to have clear accountability and transparency and I was the person, I'll be honest, I was hell bent because I saw this happen in our organization of not being the flavour of the month. Because you heard about these things and then they would go away and then you'd hear about a new thing and it would go away, right? [22:25] 

Neil: All the time. All the time. [23:26] 

Jeffrey: But if you were coming back and reporting out what you did and the success that you had, you started to create accountability and then that created this reinforcing circle. And now literally, I guess at this point three weeks ago, we had our mid-year team meeting. Our team meets monthly as a group globally and we went through our half year update on our commitments that we had set out at the beginning of the year. And literally it was an hour and ten minutes of our teams going through each section, had one to two slides on it. That slide had the commitments that we committed to. It's all numbers, of course, with the story below it of how we're doing these different things. But the sheer volume of tracking that we have, and I don't mean like useless weigh you down tracking, but the key indicators that drive us to say are we setting out and achieving the objective that we have? I think that speaks to what we have done in a way that people see that we're very clear and transparent about how we're progressing and that gives other people a sense of accountability to the numbers. When you give people that shared collective accountability, it's transformative. It gives people a sense of they're contributing to something bigger. This isn't just 40 people driving sustainability. I think our goal this year is like 404 new products coming out of our design for sustainability system. And there's seven kind of business segments underneath our business units that contribute to this. But I think that's really where we succeed is it's not a command control, but it is just an awareness that gets people to say I'm committed to that, I'm contributing to that and I help make that happen. Our credibility is really helped significantly by that. [23:28] 

Jim: Jeffrey, when you think about all those successes and sounds like advancements you're doing, what do you see as the biggest opportunity? Say you're beginning to do planning for 2025, where do you see your biggest opportunity for driving business value with sustainable product? [25:18] 

Jeffrey: Now, Jim, we're moving to this crossover of connection between having developed the products and commercializing the products. So now because we have such a broad array of products, it's hard for our commercial team members. They're not going in and selling a product. It's really our customers who are driving like, I need this, I need this, and they've got a laundry list. But what we're really trying to do is think about the tools that start to prioritize these types of products into our customers workflows. So, we're not just creating something and it is sitting on the shelf and like, well that was great, we created that but nobody's buying it or it's got slow uptake. We're now trying to push that into the portfolio for our commercial team members because we have a focus on new product introduction and a success metric on the uplift of sales of those products, and these products count as that. So you've got an additional incentive if they're aware of it. And so we're using tools that we've created to then start to - we have not done this yet, but we just had a call about this yesterday -was that they get notified when these new things come into the portfolio and the applications they can be used for. And oh by the way, your customer was purchasing either an old version or something that's similar. So this could be a replacement for that. So you know exactly where to go, who to talk to to start, then making the switch or the conversion. So I think that's really one of the big focuses is now that we've got the portfolio shift happening – not done, but it's moving now - we have to move to the next stage of how do you move it from the ideation creation to moving it off the shelves, and into users laps. [25:37] 

Neil: At scale, right? Because you mentioned that typically you have your customer asking for certain things and then you give it to them. But then the question is what about the others? [27:15] 

Shelley: I'd like to go back to this intersection where you were talking about how you're thinking about the future. And I want to look at the teams that were involved, particularly in those successful stories you shared with us about their sustainability journey. So the R&D teams, the product managers, what do you see the evolution being for what they are thinking about? What kind of questions are they asking themselves about in terms of addressing sustainability? [27:24] 

Jeffrey: Yeah, Shelley, we look at the progression. The start was why do I have to do this? Why? And you're like, okay, fine, fair. We get some of those people through that and then the how. And as we go through the how you're talking about, we've kind of grouped our approach into seven different categories and that can be things like materials, suppliers, energy, a variety of topics and those things then are… the system has 47 criteria that it quantitatively assesses on. So bless everyone who has to get involved with it. But then that starts to shine the light on the big issue. And this is, I think where we continue to evolve is the data. What's the data related to this? That is going to help them make quicker decisions. And so this is what we're trying to work. I think we all know data within the practice of sustainability is tough because you're looking and it's evolving and you're getting more specific information and ideally you think about a business like ours, we started at a spend based assessment, we're moving to weight based and hopefully moving deeper into primary. But the likelihood of us getting primary data from all 30,000 suppliers is kind of not realistic, let's be honest. But that becomes this key element to help give a sliver of certainty for the R&D scientist because that is really what they're looking for, is to have the information that helps them make a more informed decision, that helps them feel confident in the work that they're doing. So I would say that's the progression: is you started with why do I have to do this? You move into like understanding the basics and then you get them the data. And I think this next phase is really where it gets fun and interesting, once we get past that more data coming into the system then you really get to opportunities where you're unlocking more transformative opportunities where people are just thinking differently because they're not questioning, have I made the right decisions? Do I have all the information? I think as a company who works in science have a huge bias to wanting perfect information. I long ago let go of working with perfect information. I'm not trying for it anymore but I appreciate those people who are still, that's where they are. It is a precise thing that we do. But that element of getting more data so they can make different and feel more informed about the decisions really gets us to that next phase. So I look at that once again, future looking. But I look at that future of what I think is yet to come and like I say it often, but buckle up, it's about to get even more fun. [27:47] 

Neil: When we said what is the secret to success? And I think you missed this one part which I noticed now, it is the optimism that you exude in such conversations. It draws people. I love that. It's very often in the field of sustainability, experts have this doom and gloom. I've seen this so often. It's like, oh, nothing is changing and it's not changing fast enough. I think this optimism is what motivates people, not pessimism. So I think that's super important. [30:28] 

Jeffrey: I appreciate that because I think one of the things, and I'm talking with our customers, I'm talking with our teams all the time and I think one of the things that comes through, and I appreciate the feedback because it's also kind of like, am I doing my job? Which is if I hear the feedback about being passionate about the topic, great, because I am. I wouldn't necessarily have ever said, oh, I'm an environmentalist. I wouldn't have claimed that for myself. But I also really believe it's important. But I also see the role that we play and I think it may be harder for some people who are working in sustainability in areas where you're trying to sell people more of something that we don't necessarily need. I look at what we do and it is really important to think about the ways that we can eliminate substances that shouldn't be into things. But the here and now about, about treatments and therapies for people who are struggling with diseases and illnesses. We contribute to making that better. And so I have the uplift of working at a place where I know we're contributing to hopefully the betterment of society. But I also am working at a place where I have got an impact on the future and certainly on something that's much broader than I would have ever had individually, which is fantastic. [30:56] 

Shelley: Well, you certainly conveyed the entrepreneurial opportunity and optimism that sustainability brings. Jeffrey, final thought to you. The last thought you'd like to leave our listeners with today. [32:12] 

Jeffrey: I think one of the things that is just constantly on my mind and I think, Neil, what you just said about the positivity, I often find that we limit ourselves. And I think that final thought is we are all capable way more than we think. And it is so easy for us to take you the negativity around us, the kind of depressing sights and sounds and news and all the things, and it can weigh you down really quickly. But one of the things that I really try to think about is a reminder and our team going back to that half yearly kind-of-review. It takes a while in our system for people to recognize that when we set these commitments they're not hard and fast, right? Like, they are not set in stone. And it's not like if you don't achieve them, we're going to punish you. That's not how we work. We set really ambitious, bold, probably unrealistic goals, and more often than not, we're achieving them. It's not by having a culture that works you to the bone, because I don't believe in that, but it is once again, just believing that we are capable of driving a lot more than what we think. [32:22] 

Jim: Well said. Thank you. 

Neil: Amazing. Thank you. I feel so energized. I'm going to go run through a wall right now. 

Shelley: Great final thought. We're all more capable than we think. Thanks, Jeffrey.  [33:43] 

To read about who you are listening to, visit https://five-lifes-to-fifty.castos.com/ and click on our bios. 

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In episode 12, we welcome Ethan Soloviev, Chief Innovation Officer at HowGood, to Five Lifes to Fifty. Ethan is also an owner of High Falls Farm, and is the author of "Levels of Regenerative Agriculture" and "Regenerative Enterprise: Optimizing for Multi-Capital Abundance."

Ethan is an international expert on regenerative agriculture, regenerative business, and innovation, with experience in 34 countries. He is the founder of the Regenerative Enterprise Institute, an Associate of the Carol Sanford Institute, and a member of the Regenerative Business Alliance. Ethan holds a B.S. from Haverford College and an M.S. in Eco-Social Design from Gaia University.

At HowGood, Ethan's focus is on driving product sustainability and business model innovation for Fortune 500 Retail and CPG companies. HowGood is an independent research company and SaaS data platform with the world's largest database on food product sustainability.

In this Episode 

Shelley: This is the first time we've had a guest from a technology company on the podcast. Could you tell us a bit about what HowGood is and who it serves? [00:33] 

Ethan: HowGood, as you mentioned, has the world's largest database on food, product and ingredient sustainability. We're a non-traditional startup in that we're 17 years old right now. So, we've really spent the better part of two decades building out a massive picture of what global supply chains look like and what are the impacts that happen in three key areas: carbon, nature and human rights. From that massive amount of data that we've gathered for 33,000 ingredients, we've built up the capability to, automatically, using AI, calculate the impact of any food ingredient or product in the world. We've built it all into a software platform that is, I think, fun and easy to use and we have six of the ten largest food companies in the world using the platform to understand their impacts and to automate reduction strategies. We have major retailers around the world, from Ahold Delhaize in the USA to Carrefour in the Middle East, and we even have ingredient suppliers like Ingredion and the Kerry Group, who use the platform to understand their impacts and communicate downstream to their consumers. So overall, you can think of HowGood as a social network for impact data on food and agriculture. It’s the place where the industry comes together, whether you're a formulator or a procurement specialist, or someone in marketing and sales or a sustainability team needing to do reporting; everyone comes to us for a single source of sustainability data truth, so that they can coordinate, collaborate, network, engage with suppliers to transform the impacts of their products. [00:41] 

Shelley: Thinking about the broader picture, you're bringing all these groups together, what do you think the role technology does play? Because it sounds like you're playing a role already, but what role do you think it plays for these food formulators and food companies? And what is it doing for them to achieve sustainability? [02:27] 

Ethan: I'll just tell a little story that is part of how we got to where we're at now to answer that question. This was a number of years ago in San Francisco, it was at a co-lab, a sort of weeklong sprint event and I met somebody from Danone who said, look, I have 1000 product formulators globally at Danone and every day they are innovating and they are renovating new yogurts, new plant based beverages and those people, many of them really care about sustainability, but many of them weren't trained in it. They are food scientists. They are formulators. They are making delicious, beautiful food. But they don't necessarily have the information and the data to create a circular food product or create a regenerative food product. They have a desire to and more and more, we're being asked from a corporate level to improve or to make every new renovation have a lower carbon footprint or even to know the carbon footprint of our products. But I can't send every single one of these formulators through a master's or a PhD in sustainability. How can we help them more quickly? And I said, well, I think we have all the data for that, so if we could use technology to put it at their fingertips, even before going to the bench, that should be able to speed everything up. That was the inception. That was the idea that launched lattice, which is the HowGood software platform, basically to use technology to put the data at everybody's fingertips, in the same way that you would look at the different physical qualities, the different taste qualities of an individual ingredient, the same way you might think about, well, what's the price differential going to be if I swap from this one to that one? Just like, you know, and have information on those factors, we thought, let's just put the carbon footprint, the water footprint, the biodiversity impact, the labor risk, the processing energy use, the animal welfare. Let's just have clear quantitative data in that format right at formulators fingertips. Because I think formulators are at a very potent and powerful place to change the food system, much more so than I think are often given credit to them. What formulators do and how they create products is such a huge, potent spot to change upstream impacts because of where impacts actually come from, which I think we'll talk a bit more about as we go. [02:41] 

Neil: I think you've mentioned two very interesting words. One was circular food products and regenerative food products. Could you tell us what those mean? [05:09] 

Ethan: If you look at the definition of a circular economy, most of the time for food, they’re pointing to regenerative and regenerative agriculture as one of the main routes to create a circular economy of food. There are aspects of design, there are aspects of packaging, but really most impacts in food happen not in the manufacturing plant, not in the packaging, not in the transportation, but they happen upstream, they happen where food is grown and that's where regenerative agriculture plays a huge role. So, to focus on regeneration, the key concept there is for a long time, at least 100 years, probably 1000, but really the last hundred years, the production of food has had a massive negative impact on the world. Emitted lots of carbon, destroyed soil, deforested landscape, killed different species, poisoned people, poisoned waterways, and in many ways still does. It still does have those deleterious effects. We still have a dead zone in the Gulf of Mexico. We still have significant loss of species. Food emits 33% of the carbon emissions in the world, the greenhouse gas emissions, but it's responsible for a much larger percentage, like 80% of all freshwater use and a huge percent of the biodiversity loss that's happening is from food and agriculture. So that's, you could call business as usual agriculture or degenerative agriculture. And that's most of what's out there. [05:19] 

Ethan: So, there's been some good focus in the last two decades to try to move away from that and towards a sustainable agriculture. A sustainable agriculture would be kind of like a net zero impact, but really, who just wants to sustain? If somebody asks you about your relationship with your sweetheart or your spouse, and they said, how's the relationship? And you said, it's sustainable, is that really what we're going for? Or if you're on your deathbed and somebody says, what impact did you have in this world, in your life? And you said about net zero. That's not really enough, and regeneration steps beyond that. The idea with regeneration is we go to net positive. We're not just doing no harm, we're uplifting people who are growing food, we're enhancing biodiversity, we're capturing carbon in the soil and fighting against climate change. Regeneration generates new potential and doesn't just get us to sort of like a midpoint of sustainability. It's actually possible in food in a way that it isn't in other industries. So, like transportation or buildings, you can reduce harm, you can reduce impact, you can get towards like a zero point, but it's really hard to do positive. Somehow, you got to build the vehicle and drive it around or build the ship and sail it around. You can get to zero, but you can't quite get positive. Food and agriculture is this incredible opportunity where you can do good, you can add more carbon to the soil than you take out, you can have more life in a place, you can have richer, more delicious recipes and meals and food products coming up than was there before. You can heal degraded land while growing food. So that's why I focus on regeneration. That's why HowGood says, let's set spectrums where you can track your progress towards that regenerative impact in the world. [06:47] 

Neil: Is there a framework you have for what are the different aspects of regenerative food production and kind of recipes, so to speak? Imagine people who are creating both: The ones who are growing food, I think, is one aspect, but the ones who are using them in recipes, what should they be looking for as indicators for what a regenerative food ingredient would be like? [08:40] 

Ethan: You asked two questions there; both are really good questions. One is like, is there a framework or playbook to work with to get you there? And to that I would say, yes. I've written a couple papers that will lay out sort of a big picture framework of how to think about and move from degeneration to regeneration. And then in terms of food product creation, one of the places that popped to mind when you said framework is I did a webinar earlier this year on artificial intelligence on AI for food, and in that I followed the course of a food product right from the ideation phase, through piloting, prototyping, through the scale up, through the procurement that's needed all the way to the end, the marketing. And in that case, I was talking about, here's the artificial intelligence tools you could use at each of those steps. But really what I was going towards is how do you transform the food system through each one of those individual steps? And so ill just say that webinar is freely available; we can put it in the show notes, so you can sort of see that particular framework, which is like basically how to use AI to regenerate food production from a formulator's point of view. But then it gets to your second question of what’s the indicator of a regenerative ingredient? Which is such a cool question. And the first thing I would say is there is not a lot out there. Its not like 10% of the proverbial formulator’s supermarket shelf or of the materials you can procure from many of your suppliers, its not even 1% of global supply of food ingredients that I would say are achieving a regenerative impact. There are some out there. There are some certifications you can look to of varying levels of depth. There's a regenerative organic certification, there's a certification for animal products that's called land to market. Those are great to look for, but certifications alone aren't going to be sufficient because there's just, again, there's not enough supply in any which way or form, especially to of just switch to a regenerative product. So really what it means to find a regenerative ingredient is you actually have to think beyond the way that you currently think about just finding the ingredient that solves your problem. Instead, you have to start looking at and collaborating with your whole company internally, and then a whole network externally. You are going to have to help generate the supply of regenerative ingredients for the types of products that you are working with. And that takes a broader collaboration, but it takes a more fun, creative thinking that I think formulators have, but maybe haven't always been empowered with data to do. So, the path to find regenerative ingredients is you must help generate regenerative ingredients out in the world through broader cooperation. [09:03] 

Jim: Ethan, is there collaboration? I mean, do folks in that regenerative supply chain, they say, let's get together in a precompetitive space and collaborate and come up with solutions that drive a more net positive regeneration system? Do those kinds of things exist? [12:07] 

Ethan: I pick out one thing you just said that I think is cool and important. You said regenerative supply chain, and then a little later, regenerative system. There is no such thing as a regenerative supply chain. In fact, there's no such thing as supply chains in general. We use the term supply chain because we think like machines, and we think everything is a machine around us. We say, we're hardwired to do this or hardwired to do that. Humans don't have wires. We're not computers, we're not machines and nature doesn't have any chains in it. There are webs, there are networks, there are systems. But part of the reason that we still say supply chain, and this is difficult in a lot of ways to hear, is because we used to chain people up in order to produce the goods that created our products. And so, there's still this mechanistic (from the chain) and colonial concept that we are pulling things with the chain up from supply. And even though you didn't mean any of that when you said it, and nobody does when they say supply chain, we are unconsciously creating and keeping that chain intact, which is going to make it hard to regenerate. [12:26] 

Neil: But could you explain why? For me, a supply chain is a sequence of steps that get to an outcome. That's why you call it a chain of events. And of course, you could have many supply chains that are sort of a web, actually. It's almost like a fishbone diagram; different parts that come together to get to where you want to get to. But why do you say that thinking in terms of supply chains is what is holding us back from thinking about regenerative products? [13:43] 

Ethan: I mean, you just said part of it, which is oh wait, it's not a chain, it's a web. And that is a more accurate representation of how supply systems are. It is a complex, interconnected network that has many nodes that all are communicating and talking to each other in the context of a market and prices. It is a network, and if we just treat it as a chain, if we think of it as a chain, we tend to oversimplify. We tend to think one to one connections: I buy from this person, who buys from this person, who buys from this person, and that makes it harder to do that pre competitive collaboration that Jim was talking about, where it's not just about how do I chain up and get my farmers to grow in a certain way. We need to collaborate in the supply shed in the region where all of those growers are growing and help them as a whole enhance and transform their agricultural practices, because then we can lift everybody up, and many companies are going to source from that, and many farmers are going to benefit from it, and many community members benefit from it. And that all happens in a network, not as a one to one-to-one connection. [14:10] 

Ethan: So yes, there are many great precompetitive collaborations out there. One is called the Sustainable Markets Initiative; this is one that HowGood is part of. You can see a couple of great reports we put out for COP over the last few years on scaling regenerative farming. Another is the WBCSD, the World Business Council for Sustainable Development, which especially recently at COP 28 in Dubai, I got to be there as they launched the Action Agenda for regenerative landscapes which is something that was put forward by the UAE presidency in collaboration with WBCSD and set targets for the many millions of acres that were going to go into regenerative agriculture. We also see some really great work coming out of the One Planet business for Biodiversity Coalition, as well as some good thinking recently on financing the transition from the Rockefeller foundation. So there’s a bunch happening and we need more. We have leading companies who are part of it. We have got Danone, we have Unilever, we have Nestle, we have General Mills all stepping up and pushing it forward. But we need every company, we need every brand. It’s got to be a massive collaboration on a scale that we have not seen before and it also has to go outside of just the brands and manufacturers. It has to be the ingredient suppliers. We need the ABCDs, we need the traders on board, and some of them are stepping in this direction. We also need the banks. We also need government support. So, we basically need a big, blended network of coordinated action if we're going to move anything close to fast enough to prevent the really rugged stuff coming from climate change. [15:18] 

Jim: I know a lot of the greener products is that the purchaser, the big company who designs a product but also who purchases it like a Walmart or in the US, the US Government, is going to be buying sustainable products and that drives the whole market; and you mentioned that just a minute ago. But we have found in the EU and North America, there's the government making decision to buy greener products. So, if the government makes a decision to buy regenerative foods, that would be a pull for all these brands to do more. Do you see that as a path forward? [16:55] 

Ethan: Yes, I definitely see that. I would love government procurement to specify in the United States they should go with what the USDA calls movement in this direction, which is climate smart commodities or climate smart agriculture. I actually don’t care too much what it’s called but that would be a huge step if the government would say we’re only going to buy food that come out of our climate smart commodities program. The US Government just put $2 billion into innovation at the farm level to be moving more in this direction. That's important. I don't think it's as important as the first thing you said, which is the retailers, and not just Walmart but what all of the retailers choose to do. And I think we're starting to see it. There are some really interesting collaborations, for example, Ahold Delhaize USA has a collaboration they're doing now with Kellanova, with a very iconic product of theirs, and really engaging a full supply system, right down to the individual growers, up through the mills, the manufacturing, right into the stores and the storytelling. [17:31] 

Ethan: In my role as chief innovation officer, I both geek out in regenerative agriculture, the realm that we're in right now, and on product design and data. But then I also help manage our presence and collaboration with these global coalitions we're talking about - that also means at events like the climate COP or the biodiversity COP in Colombia, we're going to, or at climate week in New York coming up at the end of September. We have a house, a sort of a venue, it's called Regen House. You won't be surprised hearing that from me now. So, Regen House is in New York City in Climate Week, and one of the evening sessions we're going to do is really focused on this iconic product from Kellanova, but it's in collaboration with the retailer to kind of tell the story and really make the full supply system visible and present so we can see how that collaboration is necessary to move us forward. When retailers head in this direction, that creates a massive mark. [18:41]. 

Neil: Absolutely, absolutely. I think there's two ways to look at this. One is you regulate to create a minimum criteria that everybody needs to follow: Don't pollute water, don't put poison into the soil. So you create a regulation around that and so there's some things you can do there. But I think the bigger power is, at least outside of the food industry, it's in differentiating, it's how do I position my product as being better than others? And in this context, you said there's not so many certifications out there. If you look at other products, there's tons. I think in Europe there was a survey that was done - 500 certifications or labels that you have out here. What is in it for the product manager to look at regenerative ingredients in their product? What is needed for them to pay more attention to it? Or, I think that's a wrong. Two different questions; I think what is needed? I think there's a different thing. Ideally, customers loving it, but customers don't even know what regenerative products mean. So how do you solve that problem? [19:38] 

Ethan: I don't think we have to only have regenerative product. Regenerative products are great. It's an idea. We should strive for it. It's fun. We want to go in that direction, for sure. But it's not the only path and it's more like the guiding star to head towards and along the way, there's a lot of great things we can find. So, I agree, there's too many certifications out there. They're all well intentioned, many of them have great value to them, and many of them now do show an uptick in sales. If you have a certified organic product, that's still a very quickly growing category. But I think part of what's happening from the consumer perspective and the retail perspective is it's a little much, 500 different certifications to pay attention to and know what they all mean and know how to differentiate between. You know, if you're in the egg aisle: cage free, free range, organic, non GMO, pasture…; it's a lot to figure out. [20:35] 

Ethan: So HowGood has for a long time been a proponent of a simpler, more unified, very holistic system that takes into account all of environmental and social impacts but simplifies it down to something that's much quicker to understand. You could put this in the realm of eco labeling, whereas opposed to many different certifications, there's one unified system that happens throughout an entire grocery store. Europe is taking some strides in this, but actually in the US, a number of retailers, like Ahold Delhaize who I've mentioned a few times, they have taken the lead and they have used a system that Haugen developed that is very simple. For products it says good, great and best just for the top 25% or top 15% or top 5% of products that are out there. That's a combined impact of carbon, water, biodiversity, labour risk, animal welfare – a very holistic look. But it simplifies it to something that I'm looking at six cheddar cheeses, one of them says, “great”, I'm gonna grab that one. Or we also have some little attributes, some labels that are very simple. They say, ‘climate friendly’, or they say ‘water smart’, really simple things. And wherever we've done trials with these and done good, hard science against controls, putting simple, clear, unified communication across the whole store lifts sales. And this is going to your question, Neil, of why should a product manager pay attention to this? Why should they care? Sustainability sells. More sustainable products, products that are further towards regeneration, products that have an attribute that says climate friendly on them - they'll jump in sales. We did a trial in the UK - this is published, there's a press release out there about this - sales jumped 25% to 45% for these different attributes. [21:27] 

Neil: Hey, the fastest growing sector of all in Germany right now is organic food. And this is organic food. Nobody knows what that means, but it's organic. And there's organic stores all over the place. It's growing faster than any other commodity out here. [23:15] 

 
Ethan: And NYU and the sustainability index that they do... 

 
Neil: Yeah, the Stern school, right?  

 
Ethan: That shows 3X category growth, Nielsen, something similar, and showed the same growth. So why should managers care? Forget about regeneration. Do you want to make more money? Would you like a better top line revenue? Cool. This is the way to go. This is what millennials want. This is what Gen Z wants.  

Neil: And 70% of buyers in ten years are going to be those guys. 

Ethan: And then Gen A, right? I got to go to the IFT conference recently, which was really excellent - the Institute of Food Technologists, where maybe many of your listeners were - and I heard a panel there on Gen A, who's coming up, and they really care about sustainability even more. Forget all the things about climate change and uplifting species, just think about the money, and we're going to be heading in a good direction here. [23:59] 

Jim: We've been talking about the upstream, but when I hear a podcast or some news, all I hear about is food waste. Food waste a major problem. Where does that fall in this spectrum of sustainable food? [24:26] 

Ethan: I don't know. I'm sometimes controversial in this realm. I think that some of the downstream things like packaging and food waste, they're a bit of a red herring in terms of where many in the food industry can have potent impact. We should prioritize our efforts and we should allocate resources to change based on the percent of impact that something has in a product's life. So packaging: 3 to 7% of the impact usually comes from packaging. That's about the amount of time, attention, and resources, if we're trying to make a sustainable product, that we should put into packaging. Food loss and waste in the design of a product and a product life cycle, it's not usually that significant. [24:46] 

Neil: No, no, but that's downstream, right? So, there's a statistic that says 70% of food that is produced never gets eaten. That's a pretty big number. So, farm to fork waste. I think that's what Jim mentions. Is there something in terms of product design that allows one to consider this and minimize this? [25:38] 

Ethan: Not really. From a formulator's point of view, that's not where you have the power to make change. Like you can use upcycled ingredients. Sure, upcycled ingredients are great. Take what would otherwise be a waste stream and turn them into something. Yes, useful, good thing to do, no problem there. But using a bit of an upcycled ingredient is meaningless if what you also have in your product is palm oil and cocoa. That's where the impact is. 90% of the impact of any food product is in the ingredients and it's at the growing and production of the ingredients. The fastest thing you can do is change ingredients, or change sourcing locations, or change ingredient suppliers, or change some of the practices of how the food is grown. Those are the biggest levers, and many of those are in the hands of formulators. Switching from palm oil to some other vegetable oils can have a significant positive impact. Switching the location that the palm oil is coming from or the certifications that are with it, you can have a significant impact. There are many colors in the palette of how do you improve the impact of a product. But we should not go with the thing we hear about most or the thing that is marketed the most. We should go based on real hard data of where the impact is in our products. And that's the way to figure out, where do I focus my creativity as a formulator and how do I make this product better? There are some products. If you have a bottled water, packaging is important because water doesn't have a big footprint, so the packaging is really important. If you're making bottled waters or essence waters or anything like that. Yeah. Pay more attention to packaging because there it's 30% to 40% of your impact. But for pretty much all other categories, your biggest bang for your buck is not going to be in the packaging or it's not going to be in trying to solve food waste. [25:58] 

Jim: I think that's the point. When I go back, early on in product sustainability, there was a producer responsibility and product responsibility. There was a big debate. Europe had more of a producer responsibility. The US was more of a product responsibility. But I think it's evolved towards the producer responsibility; producer has responsibility, not only through design, but all the way through the entire lifecycle. I think what you're arguing here is that from a formulator, it's really the product. I've got responsibility there, but it's a shared responsibility with others, and I think that's part of the conversation. This goes back to collaboration on the regeneration, but there's also collaboration and partnership on the food waste and the use and end of life of that product. Of the food, in this case. [27:47] 

Ethan: Exactly. I don't want to denigrate all the incredible work that's happening on food waste, and I don't want to say it's not important. But I do want to say that for a product formulator, it might not be the place to focus all your energy and effort and to your point, yes, let's collaborate with the larger ecosystem to make some motion on that also. Another thing to kind of speak to this food loss and wasting is I'm a farmer. I have a 30-acre apple orchard, do grass fed sheep and lamb grazing in a kind of agroforestry silvopasture way underneath the apple trees we have shiitake mushrooms. Our farm has multiple other farmers growing vegetables between rows of chestnut trees. They're raising chickens that are rotating through and fertilizing the soil. We have a small integrated, hoping for aiming towards regenerative agriculture farm. Food waste happens on farms. Food waste isn't all evil. Yes, there's food that gets produced that does not get eaten on a farm. You know what happens to it? It feeds the chickens or goes into the compost and that feeds the soil for the next year. So, it's like there's a certain degree to which food waste has been vilified. It puts the problem somewhere else, in somebody else's hands instead of grasping changes, big changes that we can make ourselves with what's right in front of us. [28:36] 

Neil: Except for one thing that food formulators could keep in mind - this idea of best before versus used by, which is about the longevity. So how long can you preserve the food product on the shelf? And this has to do with what ingredients you put in there, how you package it, because there's certain packaging that will actually... I mean, we had this huge thing in Germany, where we used to package cucumber. Every cucumber packaged in plastic. And so we had this huge movement that says, hey, we do not want plastic and that same cucumber, instead of lasting for seven to eight days on the shelf, now lasts two days. This is where I think you may do the best, and I think this is not an ingredient, this is not a food product per se, but it's the same thing with biscuits and bread and stuff like that, where by thinking about how you package, thinking about packaging itself may not be the most significant impact, but it can influence how much of your food overall actually gets wasted at the end. So, I think that is a thing that I worked on, I think probably 15 years ago when we were doing work with some of the big retailers and looking at where is the biggest bang for the buck. And yes, one of them is ingredients, and I think the other is in reducing the amount that actually falls out of this supply web, as you call it. [29:59] 

Ethan: Yeah, I think it's interesting, and then also to speak to this point of collaboration we've been hitting on: another realm that helps with that cucumber that only lasts two days, this brings it back to regenerative agriculture. We're farming in a more regenerative way, and there's a higher nutrient density in the foods, which is like, this is a big unlock for the food industry. Like regenerative farming actually produces food that is healthier, that is more nutritious, that has some of the nutrients back in the vegetables and the fruits and the wheat that has degraded over the last 50 years. That will also lead to helping your vegetables last longer. My cucumbers don't last for two days, they last for two weeks, sitting out because of the richness of the soil and what they're coming out of. So, we can do both and what you're saying definitely makes sense in our situations when you look at the data where that packaging is really important. And I think the whole idea here is that we're looking for a polyculture of solutions instead of a monoculture. In agriculture, there's only one thing growing, it's just corn or it's just soy, it's just cucumbers. Whatever it is, that's a monoculture which brings in all of these challenges. It's that same monoculture mind that we were talking about with the chain, where there's just one to one to one. Instead of a monoculture, we need a polyculture of solutions, all working in a coordinated way together. [31:24] 

Neil: Great. 

Jim: I like that a lot. One we haven't talked about is social - the workers and child labour and slave labour. I'm assuming that's part of the ecosystem of food sustainability. 

Ethan: Yeah, it's part of the ecosocial system. It's a big part of what HowGood looks at and thinks about, and there is the danger sometimes if you're only looking at carbon footprint or you're only looking at water, you get that single topic tunnel vision. There is then the possibility of unintended consequences and doing more harm just focusing on greenhouse gas emissions or carbon. This is part of why HowGood has always from the beginning built into its system, the ability to track carbon right alongside human rights and labour risk, right alongside animal welfare. We think this is really essential. We think it's one of the gaps. You see a lot of stuff out there that's like a carbon management platform or carbon accounting, which are good. Don't get me wrong. I like all of them. I want more and more of them. But if you're using AI to just focus on a particular thing that's carbon, you get this thing where you can over optimize. Just like if you over optimize for price, then you're going to hit all of the environmental, social aspects. If you over optimize for carbon, you might leave out the labour risk. This is a really important thing that we pay attention to and track in the database and want available to everybody. It's also even more difficult than agriculture thing to work on and to create positive change in. But it's really worth looking at, understanding and making choices on and towards labour situations that uplift people as opposed to oppress them. [32:57] 

Jim: Yeah, I think that's right. I mean, if you really highlighted the importance of taking a life cycle approach, multiple impacts, not just single impacts. So, I fully support that. [34:23] 

Shelley: Ethan, as we come to a close on this, what's a final thought to leave our listeners with? [34:35] 

Ethan: It's so fun to work in here, right? You can tell in this conversation we're having there is great purpose in moving positively for the world instead of a single bottom line focus. Here I go again, monoculture to polyculture. We shouldn't just be focusing on that single thing even in our own careers and I find formulators to be so creative. You’re designers. Your listeners, really design the future of what we're going to eat. And so there's a huge amount of power in your hands. Can't be done alone, again, you got to collaborate to do it. But let's go, get access to some good data and make your products better. Go find and make some regenerative ingredients. And I'd be happy and honored to be with you and have our data with you and just come think and play with you on it as much as I can along the way. [34:41] 

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In episode 11, we welcome Bob Mitchell, CEO of the Global Electronics Council (GEC), to Five Lifes to Fifty. Before beginning his tenure at the GEC in 2023, Bob worked at the Responsible Business Alliance (RBA) where he served as Vice President, Human Rights and Environment from 2016. He also has previous experience with Hewlett-Packard (HP) and Hewlett Packard Enterprises (HPE).

The GEC is is a mission-driven nonprofit that leverages the power of purchasers to create a world where only sustainable technology is bought and sold. GEC manages the EPEAT ecolabel, a free resource for procurement professionals to identify and select more sustainable products. In addition, the EPEAT ecolabel is a resource for manufacturers to demonstrate that their products conform to the highest sustainability standards. Since its launch in 2006, procurement professionals have reported purchases of over 2.7 billion EPEAT products, generating cost savings exceeding $30 billion USD and a reduction of over 30 million metric tonnes of greenhouse gas emissions.

In this episode 

Shelley - With your deep experience with supply chain, I thought we could start with how product sustainability changes in a company that has a fully outsourced supply chain compared to one that might have a more vertically integrated supply chain. 

Jim - From your experience, has the differences and the frequency of your first leverage versus the second leverage changed over time? I’m curious about it I’m a procurement officer, which ones do I have to pay more attention to? [05:08] 

Neil - I think if you look at what's happening in the automotive sector right now, the chemical sector, fashion sector, I think this is where that voluntary aspect comes into play, where you have tier one suppliers in the automotive supply chain running for their money, trying to adapt to or respond to the requests from the OEMs. I'm particularly interested in regulation. In the former category where regulations are a driver - because I think it has taken a very long time - if you look at what happened with REACH and RoHS, and I would even say EP dread in the early days, it took regulation to make the industry move. Do you still see this being a requirement going forward? [07:32] 

Neil - This is a very interesting point. I want to split this - If you think about it, it never makes economic sense to abolish slavery. Cheapest way to make stuff. There are certain things that don't make business sense, and that's what regulations are for. Where they say, we agree this is not a way to do business anymore. We can't pollute rivers anymore. It used to make economic sense in the past. Whether you do this on a carrot or a stick is irrelevant. But you need a regulation, as you say, to move an entire industry away from something that is inherently harmful, versus voluntary standards, where there is always a business value that you need to create and justify to your customer as a consequence of it. As we move further along, I think we're bridging this gap of all of the bad things that don't make any sense to change, but we need to change. But as you see with energy in the past, energy used to be more expensive. Green energy used to be more expensive and now we're making it cheaper. In fact, right now it's cheaper than common fossil fuels in many cases. Do you see this trend accelerating as we move forward? [11:17] 

Jim - When I go back in my history in the environmental field, the regulations initially were key. But once they got in there, my senior managers just said, you take care of it, it's not relevant to me anymore. But I think that's changed. What we're finding is that now, because of the movement that you've been talking about, it's not only the regulatory that provides a foundation, but there's more than that. The senior managers and the businesspeople are really on top of it, all the way through the supply chain and the government. So, I think it's a major transformation that's occurring and it's exciting. I really see what you guys are doing at GEC is laying the foundation for not only the regulatory piece but making the regulatory piece a part of day-to-day business. So my question is, where do you see this moving over the next 5-10 years? [14:20] 

Jim - Bob, could you describe a little bit about GEC's role in developing type one ecolabeling? And how does that relate to or different than ISO? In my earlier background, when we sort of put a stake in the ground of what LCA is, we did it through the International Organization for Standardization. How does ISO compare to what GEC is doing? [22:14] 

Neil - Wouldn't you define the ISO standard as the rules versus EPEAT as defining what the finish line looks like? [25:11] 

Jim - To follow up on that, when we did the work with GEC a couple years ago on the ultra low carbon solar, we had an elaborate multi-stakeholder group very much engaged in the process, which created many hours of conversation and a lot of work behind the scenes. Could you articulate the process and what you're doing to establish the credibility of the GEC EPEAT label? I think that would be helpful to our listeners. [26:13] 

Neil - That's very helpful, because out here in Germany, this can take five years to get to a certification body. I want to switch back into the company, because at the end of the day, this is about what can companies do? And if you were to ask, how does a company implement the pursuit of such a standard? There are typically two paradigms for this. Either you have an expert function that sits at corporate and drives this, or you embed this into the individual functions of procurement and product engineering. Do you have any experience from your past, what works better and why? [28:39] 

Shelley - It's similar to Neil's question, but a little bit different in that whoever's deciding to pursue a voluntary standard or a label, what might you tell them to look for? Considering the evolution in voluntary standards we've been talking about, and that it's, I would say, almost compulsory now in the marketplace to consider voluntary standards, not just from regulations. If you were to break it down for someone to look for a quality voluntary standard or something that's going to meet the future needs of expectations, what might you suggest someone look for? [31:32] 

Shelley - Bob, we can end with a final thought or comment to leave our listeners with, given your experience with global supply chain responsibility and voluntary standards. [34:31] 

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In episode 10, we welcome special guest Connie Hensler, Global Director of Environmental Management and Product Stewardship at global flooring manufacturer Interface. A long-term and passionate advocate of a more sustainable approach to design and manufacturing, Connie joins Neil, Jim and Shelley to discuss how to break traditional product development thinking with moonshot goals, all while achieving financial - and sustainable - success.

In this Episode

Shelley - For the sake of our listeners who may not know much about Interface, can you describe what Interface manufactures and its history with sustainability, because it's got a bit of a unique history. [00:34]

Neil - Do you remember how big of a company you were back in 1994? [01:54]

Neil - So how did it start? [03:21]

Jim - A lot of the interaction we've had with companies in the past is top down. Even the employees are 100% behind it. There's often like a middle manager that begins to stand in the way. Did you have the same belief in action by the middle managers as you did from the top down? And the factory floor? [04:19]

Neil - Sustainability has been around for a while; the good part of about 40 years. But when I talk to product managers and engineers, many of them do not know what it is. And these are highly educated people that are focusing on creating products that are typically very technical that require trade off analysis and stuff like that. How did you end up translating the ambitions of being more sustainable to the entry level or the shop floor employees and what they had to do on a daily basis? [05:05]

Neil - If I'm reading you correctly, you translated, or someone translated that we want to reduce waste. This is something easy compared to the steps to translating reducing carbon impact to the shop floor. If you just had a waste impact and you said, reduce the weight of the bag of scrap, at the end of the day, this is much easier. So how low did you have to go to operationalize this? [06:41]

Neil - Was there any epiphany that came out of using lifecycle assessments that you did not have before? [08:14]

Shelley - There's this other aspect of mission zero that I think would be interesting to look at, and I've heard you mention before that traditional solutions tend to be incremental, and Interface didn't do that. Instead, it set a target to eliminate its environmental impact and called that mission zero. How did not choosing an incremental target change the problem you were trying to solve? [09:12]

Jim - When you think about the defined net positive kind of thing, how do you look at ten years down the road and the carpet being replaced or remodeled or things like that? Do you establish partners that will come in and do the recovery reuse, or do you do that yourself? How do you handle the end of life in the design portion of your project? [10:34]

Jim - With the Green Building council and LEED initiative that's been around for decades, is LEED still a major player in your market? [13:23]

Neil - Just to open up that question a bit more, what is driving consumers or your customers to buy your product as opposed to anyone else?

Neil - Why do people still love your product as opposed to anyone else? [14:17]

Neil - But wouldn't they need to pay more for it? Connie, how do they react to that? [14:44]

Neil - Connie, does that restrict the jumps you can make? Typically, when you look at efficiency as the prime driver of reducing impact, you’ll make 10%, 20%, 30% improvements. And you do this iteratively, but at some point there’s the law of diminishing returns and then you need to change the game once again, which takes investments a lot of times. Think of the investments that you make in thinking about how to use recycled materials in your product for setting up these relationships for reuse so that the entire portfolio reduces its environmental impact. The question is do you think product managers should consider or leave their options open to potentially having a more costly product, but with a dramatically different outcome, or do you think that it doesn't need to be that way at all? [15:59]

Neil - Is that something that you could use? In Europe, for example, there is tremendous amounts of money for those kind of capital investments. I think that can significantly alter the outcome of the impact of the product. There are even loans that one can get now which are ESG based loans that have better interest rates to fund exactly these kinds of initiatives. Were these helpful to you as a company? Is this something that other product managers should look into as relevant, or do you think this wasn't necessary for your growth path? [17:21]

Neil - Speaking of this, at the end of the day, do we have the means to get to the outcome we're looking to do?  Getting to zero was mission zero, as you called it. That's the goal that you set. And the parameters that you set were cost parity, performance parity, and then reduced impact. You mentioned that there were compensation plans that were tied to this. Was there anything else that the company needed to start? The place that I come from is for product managers where this is new, and there are still tons of them where this hasn't been implemented more than, I'd say, experiments. You do a bit of investigation to know what your hotspots are. There's very few, half a billion-dollar companies and up that have never investigated this. I think there's a large portion of 100 million to $5 billion revenue companies that have done something in this space. But for those that have not only done anything significant in terms of investigating what the opportunities are and whether it makes business sense, how to get them to take that first step. [18:43]

Jim - When you go back through the corporate goal of net zero, and that transferred down to individual products. Every product manager in the design has a goal that they can contribute and link back to that overall goal. Could you talk a little bit about how that happens? [20:51]

Neil - This is very interesting. Typically, when, when I talk to product managers, they will look at a product that is not a big cash cow. So, if they change it and something goes wrong, it doesn't affect the business a lot. Don't change something that's working. What you just said is fundamentally opposite and it's true. If you work with a product and create even a perfect innovation and take it to zero, it may not have an impact because it was never a big portion of your business to begin with. Was there a mind shift that needed to happen for you to start considering the big chunks? Because that's a huge risk to affect products that are currently your biggest sellers and probably the most profitable products that you have. [22:49]

Jim - We've been working a couple with companies about doing portfolio assessments and you mentioned the portfolio a minute ago. Do you have a portfolio assessment approach? Or is it more on a product-by-product basis? [24:22]

Jim - When I first met Ray Anderson, I participated in the president's council sustainable development back in the early nineties and Ray Anderson was there and Sam Johnson with SC Johnson too; major players in the whole scalability market. And to see Interface - from the early nineties continually through multiple leaders and multiple management structures - still have that same vision that Ray put in place is a testimony to Interface and what you have done and are still doing. [26:06]

Shelley - That's a great story and you've shared some great learnings for our listeners from Interfaces’ success like building sustainability into core products, not to be afraid of picking a really ambitious goal like mission zero and to measure it, and not be afraid of setting your own constraints to achieve those things. You've really showed how some of those ideas have not only moved your company towards sustainability, but you've been successful too. Connie, I'd love to end with a final thought from you for our listeners, something that you might like them to think about and take away from today. [27:11]

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In episode 9, the latest in our ongoing series of guest-centric features, we’re pleased to welcome Al Iannuzzi to the podcast. Al is Vice President of Sustainability at Esteé Lauder Companies.

Al has made his career as an Environmental, Health, Safety and Sustainability Executive and author, and has over 30 years of experience as a subject matter expert in the EHS&S field. His 2017 book ‘Greener Products’ is a must-read – insightful, engaging and a fitting accumulation of the wealth of knowledge Al has picked up in his career.

In this episode, Al, Neil and Jim discuss what product managers should be paying attention to right now, how they can cut through the noise and get to the route of the matter at hand – and what the true goal of ‘greener’ products should be.

In this Episode

Shelley: Al, as you know, our listeners are product managers and others who have a role developing sustainable products. You're active in this space; you teach, you write, and you work in this space. Right now, what do you think is the most relevant thing for our listeners to know? [01:00]

Neil: Al, I think the idea of a greener product, it resonates with me. At the end of the day, even when you design new products, it's always an iteration. There are very few products that are just fundamentally new. What is the goal? Is the goal the continuous improvement in your view and in the context of this future - the demographics where we will have to do a lot more with less - do you think that's the equation to use? Which is if we keep cutting out inefficiencies in the process of how we take raw materials and make products out of it, we will hopefully, maybe not decouple, but increase our ability to serve this broader mass with the limited resources that we have or the decreasing availability of resources that we have. [04:58]

Neil: The challenge we have is as sustainability experts, we have all of these ideas; and you talked about circularity, biomimicry, dematerialization. But for product managers that are, I don't know, building the next laptop, what would you ask them to use as primary design parameters? Because there could be secondary things that you want to look at to make sure you're not creating harm. But is there something that you see, given the market today, given the environment today, given the societal apprehension to a lot of, I think the anti ESG wave that you've seen recently could be simplified for product managers and say, pick these three things and they will be a great primary design parameters when you're designing new products. [07:34]

Jim: I want to follow up on something you'd said earlier: you got the customer, and you got the consumer, you've got corporate policy, and you've got the conversation you had about the increase in the middle-income folks, and you've got all the standards and regulations coming out. What kind of guidance do you give to a product manager? How do they decipher all that? [14:02]

Jim: Thank you for that, because that's my number one golden rule. There's no such thing as green products, only greener products. So, I appreciate your willingness to share that. I'm wondering if companies are responding to the regulations and I don't need to do anything more because I don't really care whether it's greener or not. If I meet a regulation, it's green, and that's all I have to do. I wondered if you could speak to that. I mean, are these government requirements actually creating a barrier for really this greener perspective? It's a more sustainable perspective on products. [16:43]

Neil: Al, there are so many reasons for companies to invest in a more sustainable way of doing business. But have you seen product managers who still have this apprehension? And more importantly, have you seen product managers that have overcome it? And what I'm trying to figure out is, what was that switch that you might have noticed that we could identify, or at least product managers that are listening to this podcast could identify and say, hey, this is my time. This is what I would use to be able to create the case, to doing business differently, to creating new products differently. [25:11]

Shelley: And this is a good segue into how we often like to end this podcast, which is how do we translate what we've been talking about with these market trends, increased regulations around sustainability and being in a glass house? How do we translate that down to the product manager and bring it down to something that they might be able to implement next week, on Monday morning, and do something differently? What would you like to suggest or recommend a product manager think differently about next week? [27:54]

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In episode 8, we’re pleased to welcome another guest to the podcast – Stanley Black & Decker’s Product Sustainability Senior Director Dan Fitzgerald.

If you don't know about Stanley Black & Decker, it is the largest tool company in the world with over 100 manufacturing facilities worldwide. In his role, Dan leads the ‘innovate with purpose’ pillar under the corporate social responsibility strategy, which includes goals focusing on addressing unmet societal needs, circular design, and sustainable supply chain.

In this episode, Dan, Neil and Jim discuss the problems product managers have in embedding sustainability into products, recycling quotas and design requirements and the growing demand for a ‘greener’ approach.

In this episode

Shelley - Dan, could you start by telling us what you think is hindering product managers from embedding sustainability into products? [01:09]

Neil - Dan, could you clarify that a bit? Because I think that's unique to the other conversations we've had. You have two customers, and I think that's not obvious to everyone. [03:03]

Dan - We maybe even have more behind the contractor. The person that hires the contractor could also have requirements. I think this idea of the expanding end user and seeing it more of a worldview about everything you have to hit to get a product out the door, that's when sustainability starts making it into the doc. [03:11]

Neil - I'm curious about that very example that you mentioned. Let's say there's a law that says you need to hit a 10% recycling quota. Somehow this needs to be plugged into the development process. Whether it's now 15 or 50 or 100%, it would have already been in the development process. The same thing with you should not shock people. There's no obvious requirement that says please don't shock people. So, I'm very curious about how these kinds of non explicit requirements make their way into the design requirements. [07:07]

Jim - Dan, I saw you post recently on LinkedIn - I'm not sure I got the exact wording - but your feeling is that companies are going to have to embed sustainability innovation because the customers or the end users are demanding it or regulations will require it. And I thought that was right on, and the issue that has to be dealt with is what has to happen to enable the customer and the end user to reach a level that the product managers are all responding (or the regulations have reached a level) and it's a must in every innovation. There's a timing kind of thing that I wonder if you could speak to on how to accelerate that; what your vision is of what you articulated. [08:30]

Shelley - Dan, you talk about the end users who are already expecting the company to embed sustainability, or there's this zone beyond the regulation where a company can decide how much they want to volunteer taking on sustainable practices. What have you seen that's worked well in this space, and how have you seen that work well for product managers to address that? [11:21]

Neil - That's super interesting. And that was a success, wasn't it? [15:46]

Neil - That's a maturity curve. Companies have started doing that. I think there was a brand that killed their sustainability portfolio. They said all our products now fit that same requirement, and we need to redefine what sustainability would mean if all our baseline products have those same features. I've seen this repeatedly in the automotive space. You'll never go and change the entire product line. First you try and launch something which is unique in a small kind of test environment. Probably this is a new product line. Maybe this is a new feature within an existing product line, and then you see, does it work? If it does, you map that to the broader portfolio and try and bring the whole portfolio to another level. As a consequence. I think that's as successful as it gets. [16:40]

Neil - I read something around how you view products where sustainability is the primary, versus products where the product is the primary. Could you tell us a little bit about that? [17:29]

Jim - We had a conversation with a product manager, and his comment for his category, he said that two things have to happen. One, the senior manager had to be behind it, and the other is what happens at the end of life. I'm wondering, had both of those come front and center with the Stanley Black & Decker products? Are those issues critical to your senior managers? [19:37]

Jim - Sounds like you've got wonderful successes. What I like about that is that you've taken what could be in some series of ad hoc activities and put them into two pillars. So you know you're on sustainability primary or product primary, and then that can be used to communicate and use that as a way to leverage and communicate across the whole organization as well as with customers. How have you rolled that out across the entire enterprise of the whole range of products that Stanley, Black & Decker has? [21:58]

Neil - Is that because you just came up with the idea or is it hard to do? [23:40]

Shelley - Something we like to do on this podcast, as we come to the end, is ask something practical that a product manager could implement next week. Dan, what would your suggestion be to product managers about something they could start as early as next week on how to do this better? [25:31]

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In our latest episode, Jim, Neil and Shelley welcome special guest Bruce Uhlman. As Senior Manager, Applied Sustainability at BASF, Bruce leads their applied sustainability team in North America. BASF is the largest chemical producer in the world.

Bruce discusses the reasons why product managers need to be embedding sustainability into their products, the difficulties of accurately defining what 'sustainability' truly means, and BASF's portfolio steering framework (among a variety of other topics).

In this Episode

Shelley: This podcast is about enabling product managers to improve their ability to embed sustainability into their products. Bruce, with your experience, what are some of the reasons product managers are embedding sustainability into products? [01:15]

Neil: Have you seen any examples of where product managers have done this and seen success like the way you have at BASF? [02:42]

Jim: In my experience with BASF, there's been things that you've done ahead of other companies. What was the process the company went through to move from thinking about it, to BASF becoming a leader? [04:39]

Jim: If I understand, with SSS you can classify your product into one of five categories and I think Pioneer is the number one, and I think Challenge is the bottom. It seemed to me that that became an internal driver for change. But if I'm a product manager and my product falls into the Accelerator/Pioneer category, I'm going to get more investment money and looking better in the company. If I'm product manager on a Challenge product down at the bottom, what does that mean to me? Is that a catalyst to change? Am I more likely to change because of that? [07:03]

Neil: Bruce, could you describe for our listeners what this portfolio framework is just so our listeners know what we’re talking about? Because we talked about challenged product categories and leader product categories. [09:39]

Neil: This is so cool - as a product manager, if you're looking at portfolios - the ability to say what does my portfolio look like? Is it good? Is it bad? What is also interesting is that it takes into account where that product is used, in which industry, in which geography (the use case) because where it is used also plays a crucial role. This is something we covered often in our podcast, that when product managers design their products, if you're looking at a car, for example, the same model will lead a completely different life depending on where you sold it. Driving a car in Germany will be very different than driving it in Norway, which is very different than driving it in Texas. Looking at your product portfolio from this perspective - where will my product be used? Not just what it took to make it – is a repeating theme with examples we've taken from the real world. [11:37]

Shelley: There does seem to be an overwhelming scope that the product managers need to consider to manage sustainability at the product level. From your experience, what initial actions should a product manager take, for example, on Monday morning to further embed sustainability into the innovation and stage gate process? [15:55]

Neil: Bruce, I have one question. The environment right now is very different from a decade ago - there's a lot more regulation, more demand, and more willingness to pay for sustainable products, and more intolerance for products that are considered unsustainable. If you saw a product that said child labour was used in creating this product, you would obviously not buy it, whatever the price, and this is becoming more and more transparent. In the past, you didn't need to say that and now you do with new regulations. Is there a price to pay for product managers not taking action on Monday morning? [21:30]

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