We will cover:

• How to engage suppliers in your decarbonisation journey
• Best practice for collaboration
• How to leverage the business opportunity
• How to think about Scope 4 from a business perspective
• Key technological innovations to boost sustainability performance
• Overcoming sustainability data challenges
• Sustainability leadership - tips to driving internal buy-in

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Transcript

Saif Hameed:

This is Altruistiq where we speak with pioneers in the race to zero and unpack the lessons from their experience for you, our community of impact professionals. I'm your host, Saif Hameed, and in today's episode we're joined by Gabrielle Ginér, head of Environmental Sustainability at BT Group. Gabrielle is a leader in the world of green business, championing a bold and strategic sustainability agenda at BT Group for over a decade. To understand how the telecom giant is overcoming decarbonization of parallels empowering the UK's road to net zero, we'll call on Gabrielle's expertise to unpack the key levers business leaders can pull to accelerate corporate sustainability performance. Gabrielle, welcome and thank you so much for joining us.

Gabrielle Ginér:

Thank you so much for having me.

Saif Hameed:

Gabrielle, BT has been leading the way on climate action for the last 30 years. The firm has set its first carbon reduction target as far back as 1992 and has been one of the first companies to set a science-based target in 2017. This is really quite inspirational and I think for the UK business community really trailblazing. Could you tell us a little bit more about BT Group's climate action journey so far? The highlights, the milestones, the inspiration, and how it all got started? What are your strategic priorities in climate and so on. Could you just give us the overview just to get the ball rolling.

Gabrielle Ginér:

We've been on this journey for about 30 years. We started looking at how we can reduce our carbon emissions already back in 1992. As you mentioned, we set our first science-based target in 2008, and of course that was before people were even thinking about linking science and carbon reduction. And then we were the third company in the world to set a science-based target aligned to 1.5-degree pathway. So I think with that heritage, we've very much been at the forefront, and what we are now looking at to be net zero for our own operations by the end of March, 2031, and for our supply chain and customer emissions by the end of March, 2041. And that's just fits into our ethos which for BT Group is, to connect for good. We want to use our influence and our brand and our leadership journey to set an example to inspire other companies to join us in the race to zero.

Saif Hameed:

Thank you, Gabrielle. You mentioned supply chain decarbonization. This is a topic that's obviously of huge interest to all our customers at Altruistiq. We're a sustainability data management platform and a big part of the data challenge that our customers face is around engaging the supply chain, integrating their data and onboarding it. In the context of a retail business that's probably a logical journey that most of our consumers and listeners would understand. In the context of BT, it's not necessarily obvious as a telecoms player. Could you maybe talk a little bit more about why suppliers are so critical in this space, and why it's so important for BT to bring them along on this journey?

Gabrielle Ginér:

If we look at BT Group's end-to-end carbon emissions, only 6% of those come from our own operations. 70% are from our upstream supply chain and 23% from customers using our products and services. So we've been engaging with our suppliers for a long time and some of the things that we're doingare: we're using our purchasing power. 15% of our adjudication criteria is linked to human rights and sustainability. We've also introduced a contract clause with some of our key suppliers, which is around sustainability. Basically that contract clause that says that over the term of the contract with BT, you need to reduce your carbon emissions.

And I think what that has changed is that it's not only a sustainability discussion, it's actually a contract discussion which puts it onto a different level, and we've seen some great results from that. We also encourage our suppliers to disclose to CDP. I think just by disclosing what they're doing in terms of climate and carbon that makes them start thinking "Yes, this is something that a customer like BT is caring about, so we should think about it."

Saif Hameed:

That makes sense. And Gabrielle, we work with a lot of B2B companies, many of whom are seeing requests of the type that you've articulated where a premium customer, an important marquee customer of theirs, is asking them to make commitments and to go along the journey towards decarbonization. We're seeing two types of contractual obligation coming into play. One is where sustainability trajectories consider table stakes, and that's I think what you're describing. You have to be on this journey. You have to be somewhere, you have to do these things, otherwise at some point over the next few years you may find yourself locked out of tenders and being decreased in your priority as a supplier.

The other trajectory that we're hearing about, but not necessarily seeing strong evidence of yet, is a green premium of some sort baked into the price of the product that the company sells onto its customer. For example, whether it's aluminum can sheet or base materials or finished products, the idea that if this is lower carbon that should somehow be reflected in the price. Do you see one or the other of these being the dominant mode in which companies like BT can influence the supply chain?

Gabrielle Ginér:

Why do we do this and why is this important to us? I think you're right -  it's a lot around winning new business and customers because customers are increasingly asking us as BT about it as well. It's around attracting the best talent. People now want to work for a company with sustainability credentials. We've saved money through energy efficiency. It drives innovation as well. It gets the company to think about, "How are we going to meet these targets? How can we innovate?" And I think it's a positive way of engaging with suppliers because we're not saying, "This is how you must  be doing on quality."

Instead, we want to be on a journey with them and try to engage them on upskilling them and how to get to net zero. So I think one big part of this is around collaboration and how we've tried to work with other companies to show best practice. So we set something up called the 1.5 Supply Chain Leaders together with Ericsson, Telia, Unilever, and IKEA because we wanted to show, how do you get on that 1.5-degree journey? What do you need to do? What is a carbon footprint? Where do you start?  We provided a guidance on that - the1.5-degree playbook for businesses. We also worked to set up the SME Climate Hub because we need to engage with smaller businesses on this and to try and give some information to them around where to start.

Saif Hameed:

Gabrielle, you spoke of innovation and using sustainability as a springboard to innovate, but also to drive down costs and to get more efficient, ultimately. This avenue of deriving commercial benefit from sustainability is something that we consider to be hugely important because this is what makes it stick for business. Are there any other examples you can share of either a competitive or a proprietary edge that BT has gained through its focus on sustainability in the context of its business? Or just more about the cost reductions, the ROI, the financial and commercial benefit that sustainability brings? That's always hugely inspirational for our listeners.

Gabrielle Ginér:

I think if we look at ourselves we're in the tech sector, but if we look at the products and services that we offer that help customers avoid carbon emissions, so by what we are doing here today, right? We are not meeting (physically). We're talking on a video call. In terms of our revenues, those carbon-avoiding products are worth 25% of our revenues, or £5.5 billion. And looking forward, what can we do with the technology to help make other businesses more efficient? I think there's definitely a business opportunity there. We have seen energy efficiency savings in the region of over £350 million (for BT Group), but that's because we obviously use a lot of energy in our networks and data centers, and all the buildings that we have.

Saif Hameed:

It's a super interesting point that actually the less we travel and the less we commute, the more we're using telecommunications and technology. Do you see the Telco sector as a net beneficiary in some ways of a sustainability trajectory where actually it's going to benefit from the tailwinds here?

Gabrielle Ginér:

Yes, definitely. But I also think that society is going to benefit. I don't think we're going to get to net zero without digital technologies. Things that we didn't think about before, like transport apps and knowing where things are and driving efficiencies in manufacturing, for example, them understanding how they're using energy, understanding how they can become more effective in the whole supply chain, those things are through technology. It's through using data and understanding data.

Saif Hameed:

That's super interesting. And, Gabrielle, another thing that you mentioned was, which I found to be quite astonishing, is the 25% of revenues derived from low carbon or carbon-avoidant products and services. Would love to just hear a bit more about what some of those look like, what you're referring to. And also maybe a very different question. We're hearing increasing talk of Scope 4 as a way to account for carbon avoided on the third party front. I don't know if you have any observations on that, but I imagine that some portion of that 25% is also focused on actually helping consumers or third parties reduce their emissions, and would love to just see if Scope 4 is a topic within BT and if it's something you're thinking about.

Gabrielle Ginér:

If we're looking at what we've done in the past, carbon-avoiding emissions have very much been around broadband, video conferencing, and transport applications. But looking forward, we set a new target that we launched as part of our manifesto on the 1st of December last year, which is to help customers avoid 60 million tonnes of carbon by 2030. But we didn't want to look backwards at what we've done already. We wanted to look forward. So what are those new technologies like 5G and FTTP, and how can they make these different changes that we might want to see.

In terms of Scope 4 I think it's important to recognize, that we are not saying that we are going to offset any carbon savings by what we are doing on actually reducing our emissions. To us, those are two completely different things, and I think maybe sometimes people think that it's a scale and you can weigh those, but we are very much on a decarbonization journey. So we're not going to say because we save customers this amount of emissions, we don't need to decarbonise. When we look at how we're going to get to net zero for our own operations, that's very much around what we do on renewable electricity, so we use 100% rewnewable electricity worldwide and we need to continue doing that.

We need to decarbonise how we heat our buildings. And thirdly, the biggest challenge for us is around decarbonizing our fleet. BT together with Openreach, we have around 33,000 vehicles in the UK -  how are we going to decarbonise those to get to net zero? And that's very much around having the policy environment that will enable us to do that.  Supply of vehicles, having the charging infrastructure, having cost-effective solutions for those vehicles. We joined forces with the Climate Group and we set up something called the UK Electric Fleets Coalition. We now have around 30 member companies because this is advocating for what we need in terms of government policy to  decarbonize commercial fleets in the UK.

Saif Hameed:

And when it comes to a few of those technologies, Gabrielle, I mean you mentioned three or four important intervention slices or categories across the decarbonization of heating or the shift to renewables more broadly, the electrification of transport. Are there any one, two or three specific technologies that you think about as being quite critical or pivotal, whether it's from a national innovation agenda where the UK potentially just as a country needs to really push the envelope on some of these technologies? Or whether it's something that's maybe much more nascent, much more early stage, and you'd love to see this come a lot further. What are the one, two, or three technologies that you really think of as being unlocks here?

Gabrielle Ginér:

I think on electric vehicles, definitely. People think about electric vehicles, they think about your personal cars, but obviously for us, that's not what we need. We need big vans. If you can imagine our Openreach engineers, they're carrying fiber cables around, they have ladders. It's very big vans, and we don't have that technology at the moment. So how can we encourage UK manufacturing on that?

And on renewables, I think in the UK, fantastic around renewables, but of course there's more to do. There's also more to do around the world, which brings me back to supply chain because we want our suppliers to go to net zero. And one of the easiest ways to do that is through buying renewable electricity. Companies starting to call for renewable electricity all around some challenging markets around the world, for example, in Asia, that for us drives down our footprint, but of course that's also good for everybody else.

Saif Hameed:

Gabrielle, just coming back, like you, to the supply chain topic, many of our customers have supply chains based in Asia and emerging markets, and some of our customers are actually now in those markets as well as operating companies. Data is always challenging regardless of which side of the fence you're on. If your supply chain is in, let's say, a low data environment, or if you're operating business in manufacturing sites, it's always a difficulty. For BT, how have you managed to get around that? Do you typically work closely with individual suppliers to help them, for example, generate a baseline or product level emissions? Do you provide standards and frameworks? Would love to get a bit of a sense of how that works operationally when it comes to just the data aspect of this problem.

Gabrielle Ginér:

It's a mix of two. Yes, we do definitely work with suppliers on a one-to-one basis in sharing our experience, but I think that's also where CDP comes in if we can get suppliers to report into CDP as a standardized framework around what they're doing. We use CDP data when we calculate our supply chain carbon footprint. A lot of companies and us as well, we use economic input-output models. And  we look at economic factors, but the more data that we get people to submit, the more accurate we can be in terms of understanding what is actually happening in supply chain and driving that transparency on data.

Saif Hameed:

And, Gabrielle, what you're describing, not just in terms of the supply chain engagement and the intensity of it, but also the innovation agenda and the commercial agenda that BT has put in place to boost its sustainability performance. This is undoubtedly a big lift that requires a lot of buy-in, a lot of stakeholder navigation, I'm sure not just externally, but also internally. We'd love to hear a bit more about the leadership involved in this and how you as someone who's really at the center of that journey and that stage, how you really help bring together everyone in the organization around this agenda. Could you just share a bit more about that internal stakeholder buy-in and journey?

Gabrielle Ginér:

I think for us, it's been helpful that we've been on this journey for so long, so it's quite challenging to say we want to step back from that because this, for us, is a leadership position. As part of our strategy going forward, we are looking to lead the way to a bright sustainable future. That is also part of our ethos as is connecting for good. This comes from the top, and I think a couple of years ago, we introduced a new bonus measure.  All BT managers' bonuses, 5% of those are linked to how we're doing on our carbon reduction pathway. And I think that was a change within our company because I started getting phone calls saying, "Oh, I've seen this is now in my bonus. What can I do to help?"

I think really incentivizing and targeting the business towards getting to net zero is very important. And another part is being public about your targets because if we stand up and we say, "This is our net zero target. We're public about this, we tell our customers, we tell our investors," et cetera, then that becomes something that the company really cares about. It's not something that we said to ourselves, "This is what we're going to do." We actually said it to the public, "Yes, this is what we're committed to," and we report on progress every year. We report publicly, and I think that is also so important in companies becoming more transparent and in showing how they're doing on progress.

Saif Hameed:

That makes a lot of sense, Gabrielle. When I hear you refer to the incentive program and the bonus scheme, that's something that we're certainly seeing more and more of. I was actually at a workshop this morning with Unilever and one of the business associations that it's part of, and we were talking there as well about the four or five steps or levers or components that each business is bringing in. And you won't be surprised by this, but there's always something around incentives and financing as well. How does this actually get financed within the business and from the balance sheet or otherwise?

There's always something around knowledge sharing and stakeholder engagement and how do you cascade and facilitate the spread of information outside a core sustainability team and more towards buying teams and commercial leaders and otherwise. There's always something around data systems and data management to make this easy and smooth and repeatable. There's always something around reporting and compliance as well. Are there any core building blocks that you think I've missed or any that you particularly think needs to be doubled down on as your message to, let's say, your peers who are in companies coming to this table much later than BT? Those who are maybe 10 years behind you on this journey, what are the one or two building blocks that you'd really encourage them to focus on?

Gabrielle Ginér:

I think linking your targets to science really helped. It really helped me. I could say, "Oh, BT is going to be reducing carbon emissions by X percent by X date, and it used to be like 20% by 2020," or whatever. Something that kind of rhymed and sounded good. Going to the board, it's not Gabrielle had an idea and she thought this was a great target. It's actually about what the science is telling us that we need to do as part of our contribution. To me that was really helpful. I think the whole collaboration with other companies, whatever sector you're in, who are the others out there? What are they trying to do? How can you collaborate? How can you work together to find solutions to reach into the supply chain?

Saif Hameed:

Thank you, Gabrielle. As you said working with the science really helped you. I thought I saw a certain personal element to that, that it was an important part of your journey on this space as well. For me, I've been in the sustainability space now for well over a decade and I know you have as well, and I think that there's a certain amount of scar tissue that you build up along that journey because it meant that you were focusing on sustainability before it became fashionable and before it became cool.

And at the time when probably you were one of a few voices and there would always have been voices, even I'm sure in a company as progressive on this topic as BT, there were fights to be had six years ago that you wouldn't necessarily have to fight as hard for today. Could you maybe just share a bit about your personal journey along this route? The reason I'm asking is that many of our listeners are earlier on in their sustainability journey, have degrees in environmental science or management or LCA courses and so on, and are just getting started. What would be your advice and how would you think about that journey now over the next several years?

Gabrielle Ginér:

No, you're absolutely right. It becomes very personal. I think for me, part of my personal journey was, I was fortunate enough to attend my first COP in Paris in 2015. I've been to all of them since, but it was just like, "Wow, what happened here? What have I witnessed?" And I was coming back on the Eurostar and I thought, "Oh, okay. So what they said was aim for 1.5-degrees, so as a leader on climate action, BT should set a science-based target aligned to 1.5-degrees." Isn't that what we should do? But no one had really thought about it before. I went to the Science Based Targets initiative, and I said, "Oh, we got 1.5-degree target."

I went to other people and they're like, "Really?" There wasn't a model at the time, so I worked with the Carbon Trust to come up with a model of what a 1.5-degree pathway looked like because it didn't exist. And for me, this was my personal thing. I wanted to get this through. It was so important to me because it made so much sense. I think that whole thing around resilience and continuing to believe and doing what you think is right, but, yeah, there are times when it's very challenging to do so.

I think finding friends, people to talk to, not necessarily in your own company, but maybe other people who are facing the same challenges. We talk about some of our sustainability get-togethers, they're like a therapy session. We all have the scars, we all have the wounds, we have to go through this. And it's finding those people when things are very challenging to pick up the fountain and say, "Oh, I'm really struggling with this at the moment. What do you think? Can you give me some encouragement?"

Saif Hameed:

I really hear you, Gabrielle. I remember I was in sustainability before joining McKinsey, and then I was at McKinsey for eight years doing sustainability. And I remember the first sustainability conference I attended at McKinsey was in 2013 or 2014, and there were maybe 60 or 70 of us globally across an organization with 10, 15,000 people at the time. And it was really like a little therapy session. It was, you are sharing insights, you're also sharing pains and pressures and troubles. And obviously McKinsey as a consultancy is quite different to an organization like BT.

But for us it was actually about, how do you make this career journey viable at that time? And I imagine that a lot of sustainability professionals in the corporate space were going through a similar journey. I think it does end up being quite formative.

When you think about the sustainability challenges ahead, would love to get your sense of, what is one element, innovation, policy, whatever it may be that gives you a huge level of hope? And what is one, let's say, headwind that you think has the potential to be a big stumbling block? Would love one of each, the opportunity and the risk, almost.

Gabrielle Ginér:

I guess my hope is around innovation and I think how, me obviously being a corporate, how corporates coming together can send demand signals and we can change markets. We changed the renewable energy market by saying we will only purchase renewable energy. I'm hoping that we're going see the same on EVs, whether they're personal cars or fleets. Going out there saying, This is what we want, okay?" The market is going to change. I think one of the challenges that we still have is around scale. And, yes, I know we've got 5,000 or so companies involved in the race to zero, but that's really not enough.

You look at the millions of companies out there, why are they not setting net zero targets? Why are they not coming on board on this journey? How can we reach out to SMEs in a better way? And I think just getting to that tipping point of more and more companies becoming involved and not having a net zero target being not really acceptable, this is where we need to go as a world. And I think another point is around the importance of transparency and sharing challenges.

I've been very clear about the challenge that BT is facing, which is around electric vehicles, and that's our challenge to get to net zero. The other one is around supply chain. What are other companies' challenges and how are they going to get there? So again, I think if they don't share this, if we are not open about our progress in how we're going to get there, we can't solve these things together. I think the one thing that I've learned and that I've seen since Paris is really around collaboration, the progress that we can make if people just come together.

Saif Hameed:

I think, Gabrielle, that's a fantastic note for us to end on. Thank you so much for joining us. Thank you so much for sharing your insights with us. This was a hugely fascinating discussion. Thanks also to our listeners for joining us for today's episode of This Is Altruistic. We encourage you to get in touch with us if you're on a journey towards understanding your business's environmental impact. The notes from this episode are available in the show notes below and you can find more episodes of This is Altruistic on Spotify, Apple podcasts and Google podcasts. Thank you all.

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