Sustainability as a Competitive Advantage - Introduction KeyNote - PricingForThePlanet Annual Summit

[00:00:00] Well good morning everybody a huge thank you for being here this year is very special because [00:00:21] we are at Schneider Electric so again a huge thank you for for hosting us [00:00:27] and Schneider Electric is not alone we have multiple sponsors and partners [00:00:35] we have PPS and thank you so much for being here Kevin thank you we have Synchron [00:00:43] Andrea, Surat, Kevin a huge thank you oh you are the bad students you know you are in the [00:00:48] back of the room don't try to hide you want to have fun coming here and of course [00:00:55] we have BCG so again thank you i hope you all grabbed your book we have a bunch of books outside [00:01:02] so feel free to use it again huge thank you for for all those copies i've read the book i i'm a good [00:01:09] student and it's an amazing book so really i really suggest that you grab you grab the book [00:01:16] kevin do you want to kick off the 2024 annual summit absolutely thank you so much fabian and a very [00:01:23] special thank you to our hosts from Schneider Electric to Paula and her teams here and also a special [00:01:31] congratulations to fabian crow from google here in france and stefan liozu who's a citizen of [00:01:39] of earth and all surrounding planets and for me this is a very special event because first of all [00:01:46] last year at this event we had a wonderful kickoff and i'm very excited to see the growth in the event [00:01:53] here so very nicely done to stefan to fabian and to all of us here for joining but also i think that we [00:02:01] as pricing people are uniquely qualified as having this discussion with a few people earlier today we [00:02:07] are uniquely qualified to address the overlap between esg sustainability uh ventures that are good for [00:02:16] the planet but also ways to also be good business people as well so very excited about the day's events [00:02:23] today and we are going to have a uh a wonderful day so fabian and stefan and paula and teams thank you [00:02:30] very much thank you all right so we wanted to to start with one number who knows what this number is [00:02:38] i'm sorry i'm not starting with a great news just spoiler alert anyone in the room minus 21 percent no [00:02:48] well that's actually the decline of the secondary material consumed which is actually the the decline [00:02:55] of the circular economy globally and it's minus 20 21 for the past five years so there is a lot of [00:03:06] explanation behind that especially new countries emerging so of course they are extracting a lot of raw [00:03:13] materials but even if there is an explanation i think we need to do something because there is urgency [00:03:20] i continue with sorry with the bad news there is just making sure you will pay attention [00:03:31] no but 2023 was the warmest year ever you can i mean we have clear [00:03:41] example of that i mean we we took a map of france we could pick any country in the world and i think [00:03:47] every continent got huge fire this year so again the message is we need to do something [00:03:53] collectively we have a responsibility for the next generation and that's why we're here but [00:04:00] what we believe with stefan is and we share that with with a bunch of uh of businesses and [00:04:06] an organization it's like sustainability is a big business opportunity and not just being a business [00:04:13] opportunity if we want to scale sustainability the best way and the fastest way will be actually to [00:04:20] mix business with sustainability if we believe that we do we will do that through charity it will take [00:04:26] way too long to make a difference we have actually a very nice diagram from bcg as well explaining that [00:04:34] same concept yes you can you know continue to do csr but i think what will make a difference will be [00:04:40] really to integrate sustainability into your core business and that's where we will scale sustainability [00:04:46] we will create new value pockets and new revenue for companies so we can create this virtual circle [00:04:54] around sustainability [00:04:57] and it's it's already started and we have a nice study from n1u stern saying they they studied cpg and [00:05:05] actually they they have a very nice number it's one third of the growth is coming from sustainable products [00:05:12] even if the market share of those products is roughly one-fifth one-fifth of the market so again if you [00:05:19] are not convinced by the first slide be convinced by this slide there is a business opportunity for sure [00:05:27] and that's why we are here today to really explain how we can mix business with sustainability and how [00:05:34] we can create economical growth for companies through sustainability in case you don't know us yet so [00:05:43] i'm fabian i'm wearing two caps i co-founded with stefan pricing for the planet and because i have a lot [00:05:50] of free time i'm also working at google on all the data and ai topics for manufacturing [00:05:58] you want to introduce me we have the wonderful stefan and i i think you pay attention to his red shoes [00:06:05] because that's important this is a distraction if you you know if i don't do a good job then you can [00:06:09] just like stare at my clown shoes uh but yeah happy to be here i you know i i pretty much live and [00:06:16] breathe for value-based pricing i have all the hobbies but uh and really i i started paying attention to [00:06:24] sustainability when i i met uh fabian a couple years ago and say well you know how do we not repeat [00:06:31] what happened in digital transformations and spend all these billions and trillions of dollars with [00:06:36] very little impact at the end uh you know or calculated impact and how do we make this a mainstream [00:06:45] subject so that we speak the language of the cfos i mean let's be very clear because the cfos have the purse [00:06:53] and if we manage to speak the language speak the language of business and maybe there is going to [00:06:58] be a better chance for us to uh make a difference and scale faster without spending the trillions [00:07:04] that may not lead to uh um to a great impact so uh happy to be here this is our second year [00:07:12] and uh the crowd is growing but it this is more of a movement than you know try us trying to [00:07:18] commercialize anything which is you know we need to kind of uh get everybody excited about this [00:07:22] 100 people at the time so welcome and a couple of good news because we we want to only bad news a huge [00:07:32] thank you for for everybody here and everybody who helped us grow in 2023 we just wanted to kind of [00:07:38] celebrate we became a a b corp we created our books we sold roughly 300 books so we are far from you know [00:07:48] john and bcg but we are making progress it's huge and i promise it's not 250 to talis [00:07:57] usually my number one customers for book [00:08:02] we also and as stefan mentioned i think we are all about you know education and conveying messages [00:08:08] so we created a podcast we created a youtube channel uh we created a tick tock account so you know you can [00:08:14] follow us we have our bi-weekly digest as well which is a newsletter so again a huge thank you for helping [00:08:21] us a huge thank you for supporting us in this journey so just a message on the the digest [00:08:28] every day you probably have two dozen papers that come out it's a hot topic right now what we do is we [00:08:35] gather all these papers around the connection between business and sustainability and we put that in the [00:08:40] digest so you don't have to search for them or you don't have to miss them so subscribe to it because [00:08:46] we're really provide some you know the essential papers that you need to read us you know if you [00:08:53] are the intersection of business and sustainability is quite a good resource to have [00:09:01] and for 2024 we have multiple projects so i think i will let you talk about the books because [00:09:08] yes so we're going to do a follow-up to the first book it's going to be more on the business side of [00:09:12] sustainability around competitive advantage strategy still pricing but and value but a little bit more [00:09:19] generic and as you know these these are not our book if you want to write something for us [00:09:24] you know do a contribution a case study or some ideas send them in because again you know it's it's a [00:09:32] project it's a movement so uh and that was the case last year already this is a collection of papers [00:09:37] from academia from practitioners or michelin participated with a conjoined project we have a [00:09:44] paper on uh 10 distance models you need to know about in sustainability so and then john [00:09:49] is going to join us on the next one he doesn't know yet but he knows now [00:09:56] yeah and the next big milestone will be the pricing for the planet week so it will come after the summer [00:10:02] and same concept so it's a collaborative effort so if you want to join the idea is to have for a full [00:10:08] week every day webinars events discussion about you know money monetizing sustainability [00:10:16] so again feel free to reach out again after the summer and the goal is to continue this this journey [00:10:22] uh collectively that will be a virtual right digital around the world we're going to try to do uh linkedin [00:10:28] live local panels try to kind of stimulate and hopefully a lot of disruptive uh topics so uh make it [00:10:36] interesting so if you want to join us you want to do something with us please raise your hand and we'll [00:10:41] work with you and our latest kind of big project is the launch and and today it's actually the launch of [00:10:49] our learning platform the pricing for the planet learning platform that's kind of like a summary [00:10:55] of what we discovered with stefan through those past two and three years so we said you know there [00:11:00] is way too much going on we wanted to kind of summarize what's happening we wanted to give you the [00:11:06] opportunity to learn from all the work that we are doing all the people that we are meeting [00:11:12] so it will be a mix of like online courses podcasts i know we'll do a podcast with pierre soon [00:11:18] so you will see we'll have a lot of like guest speakers we did a podcast with kevin so the idea [00:11:23] is to really combine everything into one platform so it's easy for you to access information to learn [00:11:28] what we call the 21st century concept what we've seen for the past two years we are still using a lot [00:11:34] of 19th century concept like for example markup cost plus pricing and we are discovering a lot of 21st [00:11:42] century concept like rosy like a shared value for example so we are collecting documenting all those [00:11:49] 21st century concepts and of course we are i was obliged to put ai into this platform sorry about that [00:12:00] so we are actually quite happy because at the end of every module you have what we call a pricing for [00:12:06] the planet ai tutor so it's a machine that will help you actually really write and put you in in the [00:12:13] shoes of something realistic so for example here you have to pitch sustainability to exxon mobile or the [00:12:19] equivalent of exxon mobile yeah so it's a big task it's a big task but i think it will oblige you to [00:12:26] kind of like really think through what you've learned put you in a in a real situation and the [00:12:32] machine actually will give you constructive feedback will explain what works what what what's not working [00:12:38] how to be better and that way with the machine you will be able to accelerate even faster your learning [00:12:44] paths that's where you go [00:12:52] so again a huge thank you you can join us we will share the slide so we we prepare like a special coupon [00:12:59] for for you to join if you're interested if you want to share that with anyone you know you know [00:13:04] please feel free to to do so and this yeah you have to explain this we had an argument here because [00:13:10] he wanted to put the american we need you right but there is actually a french superhero called [00:13:15] super du pont right if you don't know about support du pont you have to buy the comics but [00:13:21] we need you the french way right so we're in france so please join us in the uh in the community [00:13:27] this is how i dress up every year in halloween i dress up as super du pont with my citroën [00:13:32] de chevaux you know go around phoenix arizona and creating trouble [00:13:40] all right that's me all right cool you are all right big task of kicking that off thank you [00:13:45] thank you kevin thank you so much nope not this one all right so one year later uh last year i showed [00:13:52] that slide already and uh you know it's we're we're still struggling a little bit with that hype effect [00:14:01] right and you see especially that in the us right now which is a very complicated situation [00:14:06] where uh lots of states lots of politicians you know call that a hype right the shiny object of [00:14:12] of uh the decade you know we went from data to digital transformation now sustainability there's [00:14:19] going to be something else so don't invest in it right actually you could argue they have a point right [00:14:26] because we go through these hype cycles and uh right now with the money went a little bit away from [00:14:31] digital transformation to sustainability transformation not because not only because it's a business [00:14:36] opportunity because there is regulation and you have to play the game and you have to be in the game [00:14:42] with uh compliance so i go back to this for me is what did we learn from the last wave of you know huge [00:14:51] investment 10 years ago we started all you know looking at digital transformation as a next big frontier [00:15:00] but at the end of the day not everything worked in the uh in the air you know the realm of uh [00:15:06] digital transformation and what did we learn is really again culture eats strategy for breakfast [00:15:12] you could do all you want but at the end it's a cultural transformation first of all it's always going [00:15:17] to be a cultural transformation so when we do esg and sustainability transformation it's the same if [00:15:23] you don't you know attack the culture in a way get under the the skin of people convince them to do the [00:15:30] work it's going to be the check the mark type of uh activity and as soon as the next wave comes in [00:15:36] then we'll move to something else it will not be embedded in the dna of firms and the other uh very [00:15:44] connected topic is it's also a business transformation and that's a big issue right now so i do quite a bit [00:15:51] of writing in industry week and the decarbonization network where i try to put these topics of it's [00:15:57] first and foremost a business transformation it has to be now obviously there are huge components of [00:16:04] technology and cost reductions and waste reduction and all that stuff it's part of the uh the process but [00:16:11] if you look at the big categories of benefits besides compliance and internal benefits there is also [00:16:19] an opportunity for competitive advantage for differentiation for customer value besides [00:16:25] stakeholder value and shareholder value what are we doing today that will bring value to the customer [00:16:31] in the area of sustainability right so we are applying in essence the same concepts [00:16:40] of value-based pricing of pricing optimization of you know customer value propositions to the area of [00:16:47] sustainability so it's not new as far as methodology and process and you know the toolbox is almost the [00:16:53] the same so other topic obviously do we embed sustainability do we have a separate organization [00:17:01] for sustainability with a cso or do like we are the cdo right you know right now the fastest growing [00:17:08] function is sustainability and the cso most of the fortune 500 as a chief sustainability officer [00:17:16] do we need a cso it's a big topic right or should the chief marketing officer be in charge of [00:17:23] sustainability from the business side now it's always going to be obviously the technical the [00:17:28] operations manufacturing side but where do you put sustainability is a topic because that it was a [00:17:34] huge topic in digital transformation where these companies had these incubators and these divisions [00:17:39] like the ge digital which didn't work the best and was fighting with the core business for turf [00:17:48] for resources you know and these separate divisions told the core business what to do and obviously the [00:17:54] core business didn't take it very well and that led to what we know right this is obviously a topic [00:18:02] where you know we need to productize and monetize from the get-go that's why we're here so right now it's a [00:18:07] good time good time to look at the you know at the foundation of sustainability can we put some [00:18:13] components of monetization and productization can we turn these external programs into something we can [00:18:19] sell whether we justify a premium whether we bundle it with a product or a system or whether we sell it [00:18:27] as a standalone offers to our price buyers because as you know the price buyers never want to pay for anything [00:18:34] so now they can buy some you know sustainability consulting some you know training and ai in engine [00:18:44] some carbon calculator tools etc etc if you have deep expertise in sustainability and your customer [00:18:52] need it because frankly today a lot of companies need help especially the laggards the companies that just got [00:18:59] started and you supplying to them and you do things very well there is a chance to differentiate yourself [00:19:07] and the point is if you can monetize it and get some something out of it [00:19:14] so it's a it's a marathon and then obviously we can't boil the ocean you know you may have today 200 400 [00:19:22] sustainability initiatives and you got to go through the prioritization process and finding the one that [00:19:28] are external bring value and are monetizable which in essence might be five or ten out of 400 [00:19:37] but it doesn't matter because what we want to do is to work on the five or ten very well productize [00:19:44] monetize commercialize train the salespeople and the rest might be uh maybe uh 70 percent might be internal [00:19:51] cost reduction great we need those as well so a lot to learn from the last 10 years if you look [00:19:58] at the idc numbers we're talking double digit trillions invested in digital transformation we'll only [00:20:05] take 10 percent of that right for sustainability but can we do it in a way that we speak the language of the cfo [00:20:11] we show impact in roi and we go out in the market with brochures value calculator carbon calculators [00:20:19] that the customers look at this wow this is great i'm going to buy them or i'm going to accept paying [00:20:24] a premium for you that's a whole philosophy of what we're doing so the same size last year what what [00:20:33] drives sustainability for your company or for you in general well it could be compliance and internal [00:20:38] benefits but can that be a competitive advantage that's why we we named this year the theme of this [00:20:46] event is competitive advantage turning that into differentiation and there are more and more [00:20:53] papers discussing this topic today so uh i encourage you to uh find them if you need them we have them [00:20:59] because we download everything but we uh we're here really to uh design our programs so it's embedded [00:21:09] it's not something separate it's in the strategy right so you look at be a glass where is uh nuno is [00:21:16] director of sustainability for uh be a glass it's in the strategy not outside something that we work on an [00:21:22] initiative it's everywhere and you read about this company on the on the web on social media everything [00:21:29] you talk about is sustainable glass being a great provider of uh glass versus paper versus plastic [00:21:36] it's in their dna which is man that means it's a structuring dimension of your strategy [00:21:42] it's not enough of afterthought it's something that's structuring across your division across your corporate [00:21:48] initiatives and i you know i argue that then when you go fight for funds or attention or r&d resources [00:22:00] it should be part of the innovation pipeline and it should be you should be able to justify your [00:22:04] sustainability investment the same as you would justify a cloud investment or product development [00:22:11] investment or new technology investment you fight on your own merit and when you do this [00:22:18] then you're in the corporate process and you are respected because you fight against quote-unquote fight [00:22:23] for funds and resources and you they don't see you as you know well here is sustainability again [00:22:29] they're going to take a lion's share of the the funds and i cannot get funds for xyz so it's part of [00:22:35] the corporate process for innovation obviously it's a team sport right so sustainability council should have [00:22:44] representative representative from sales bd marketing product development right and not just operation [00:22:52] supply chain technical stuff hse it should be a corporate council that really brings the two sides [00:22:59] the esg and the go-to-market so we're what we're doing here is we're the bridge of these two blocks [00:23:08] pricing teams will be doing it if you're in charge of pricing marketing professionals but what about [00:23:14] sales leaders leaders there is a great study from implement consulting group that showed that about [00:23:22] 50 percent of sales people never got trained on sustainability they don't know how to sell it [00:23:27] so you do all you want at the corporate level at the end of the day they're in front of customers [00:23:32] making chinese shadows oh look we're green we have labels right we have product they don't know where [00:23:37] and if you're in front of a very technical buyer someone who's very sophisticated you're going to be [00:23:42] uh in trouble so some of the you know yesterday i got in trouble for this slide you know some people [00:23:51] argue well is ikea really a top uh you know so chat gpt gave me the answer who are the champions here they are [00:23:57] right don't argue with me it's you know i trust your gpt gemini i mean you know these names schneider is [00:24:06] here for so within their categories they are leaders right so the glass is third year in a row glass is [00:24:14] the most sustainable company in the glass industry i mean the same as patagonia for sure not right it's [00:24:20] a different business the same as ikea you could argue ikea blah blah blah but at the end of the day [00:24:26] you look at the annual report of and sustainability report at ikea they are phenomenal right in their [00:24:32] space they're leaders and size doesn't matter right whether you're small medium large consulting or not [00:24:39] you could become a b corp you could do things no you're gonna have to spend a little money fabian and i [00:24:46] the person who developed the b core business model is awesome right rich rich yeah so then we designed this [00:24:54] matrix where you have the sustainability maturity and the monetization maturity right obviously here [00:25:01] is not a good uh place to be especially if you're in europe and you have a certain size from the u.s [00:25:07] selling into europe right so you don't want to be here the greenwashing where you do all that fancy [00:25:12] marketing green premium but you're really not doing much in sustainability really you're just creating a story [00:25:19] and right now by the way the lawsuits are popping right and left companies are getting sued [00:25:24] shareholders customer groups consumer groups you name it banks airlines nike everybody's getting their [00:25:32] share of love right now so here's the place to be and slowly being a leader moving into hey now we're [00:25:40] monetizing monetizing monetizing is not just pricing monetizing is extracting revenue and profit from an [00:25:46] asset which means you need to know the assets you're working on what are my sustainability assets [00:25:53] training programs calculators carbon uh consulting all that stuff scope 3 support for customers because [00:26:01] frankly uh frankly uh we're just starting scottery so you have your programs and out of these 400 you find [00:26:10] a 10 or 20 you can monetize and the sequence is i tangible eyes prioritize monetize are commercialized [00:26:20] the big topic is the big topic is tangibilizing great word tangibilization that's a mouthful how do i make [00:26:27] sure it's very concrete for my customer what i do is not fuzzy right they receive a brochure they have [00:26:34] online they have you know online they have something they can download they receive a calculator so it's actually [00:26:40] very concrete so obviously we developed an assessment and i would like to send it to you and if you can [00:26:52] take it so you have it for your information you could plot yourself on the uh so it's 25 questions on each [00:26:57] side one to four scale if you want it and take it i'd like to be able to get a general assessment and [00:27:03] publish a paper on it we like to publish the more we published out there the better we uh we promote the [00:27:09] message overall about the need for monetization so you know where to find us we can see the excel [00:27:16] eventually we're going to put it on our website but that's a techie guy that's that does this i'm [00:27:21] too old for that stuff so we rely on for that so then think about maturity right and now we're adding [00:27:30] the creation of value on top so we were discussing yesterday with pierre so here we have let's that's you [00:27:37] know design and execution so obviously you don't want to be here you know some maybe in the us some states [00:27:43] are actually suing companies for reporting esg which is unique i would say you have to be here you [00:27:50] have no choice europe california some big countries in the nordics you know and maybe some Asian countries [00:27:58] so and you move up here and as you move up you start looking at internal benefits right i'm going to save [00:28:05] money through better waste management through resource management but also hiring and retaining people [00:28:13] big savings there if you look at the publications um and then that's where it gets complicated [00:28:20] right in the maturity curve this is where we're moving into where the champions are creating value [00:28:26] capturing value value for everyone customers stakeholders employees so you'll see many companies [00:28:34] in there claiming that they're in there the difference here is i've been executing it i've been good at it [00:28:41] so we could claim all you want but are you actually executing things for your employees your customers [00:28:47] your stakeholders that takes a while this is why it's called maturity model and that's why it's a journey [00:28:56] and that's it for me that was my introduction um i hope you get it i i hope you can help us [00:29:02] you know send a message out there there's great paper now in hbr being published and one of them is called [00:29:09] you need to learn how to speak the language of your cfo when it comes to sustainability these are the people [00:29:15] we need to convince and the way to do this is impact roi benefits all that stuff right premium you know [00:29:21] better funding right access to green funding so um thank you for the attention and i'm calling [00:29:30] you know all right you know all right you know all right you know all right you know all right you know all right [00:29:47] Thank you.