Episode 37:
Navigate - Saving the Planet, Smarter

Intro:
Hi, and welcome to another episode of Freight to the Point, a podcast by Zencargo. This week, we have a special episode as we featured a session from one of our Navigate events. This session is on Saving the Planet, Smarter, where Ian Powell, Zencargo’s head of solutions consulting is joined by Vivobarefoot and Pledge to discuss how businesses can track emissions in the supply chain, and how it is important to their wider business goals. We hope you enjoy this episode.

Helena Wood:
As we think about some of the potential applications of data in our supply chain, how could we possibly miss our ability to achieve sustainable outcomes and our ability to move towards a more sustainable supply chain, which is so frequently enabled by fantastic data. Really looking forward to this next session, Saving the Planet, Smarter. We all know that freight transportation is responsible for 30% of emissions from fuel combustion, and that means that supply chain leaders are all in a unique position where we’re really well-placed to help counter climate change. And not only is that something that so many of us want to do, but I’m imagining for many of you on this call, you’re finding it’s something in your roles that you need to do or you’re needing to make strides towards. So I’m really excited for this session, for us to be joined by David De Picciotto from Pledge, who’s the co-founder and CEO of the climate tech business, pledge.io. Really excited for your insight.

We also have Greg Bamford, the head of logistics and customer fulfillment at Vivobarefoot. Greg got over 20 years in logistics, working with major retailers from John Lewis, Amazon. He’s now at Vivo, and has been doing lots of work with Zencargo over the last couple of years. And we’ve also got facilitating this discussion, Ian Powell, who’s the head of solutions consulting at Zencargo. Ian’s probably one of the other incredibly brainy people I know who works at Zencargo, mapping supply chains and helping our customers find smarter solutions. So before we go into this session, learning about how we can save the planet smarter through supply chain, let’s ask one more poll question. So tell me, is sustainability part of your supply chain strategy, something you’ve not considered yet? Is it something that you’re already in plan or is it something you’re actively actioning right now? You tell us.

Such an interesting topic with sustainability, because there’s pressure from so many angles. Funnily enough, even when I speak to friends about working in the supply chain space, one of the first things they ask me about is sustainability. So, you tell us, is sustainability part of your supply chain strategy at the moment? And with the results coming in, first, there’s a really interesting mixed bag. Only 17% of respondents haven’t yet considered sustainability. But then when we look at whether or not people are in the planning phase or in the action phase, it looks like more of you are planning rather than actively working on sustainability strategies right now. And that makes sense, because this is something that’s very tough to do, and it’s something that I think takes a lot of work, data, and insights. So I’m really looking forward to handing over to Ian, Greg, and to David to tell us a little bit more about saving the planet smarter. Ian, over to you.

Ian Powell:
Thanks, Helena, for the introduction. Those results are quite telling, right? And I think part of the reason why we wanted to run this conversation, really, globalisation has created a growing independence of world economies, and it’s led to that expansion in freight and transportation services. And as a consequence of that, we’ve seen international trade really growing, and it’s estimated to represent currently around 30% of global transport emissions, and around 7% of total global emissions of carbon dioxide. So that means that, invariably, we as supply chain professionals’ in a really unique position to make significant impacts on the overall environmental health of our planet. I think as Helen depicted upon, it has been traditionally very difficult to measure the impact in the baseline in a timely manner. In this session, we’ll really walk you through some practical examples of how we’ve done that, how we’ve been able to connect data sources to monitor carbon emissions as accurately as possible. And I’m delighted to be joined by both Greg and David who I’d like to introduce themselves.

Vivobarefoot:
I’m Greg Bamford. As introduced, I’m head of logistics of Vivobarefoot. So I look after all our shipping, basically everything from the factory through to our warehouses, and so then to delivery to our customers, and we freight, look at shipping. We’ve manufacture in the far east out in Vietnam, in Africa, in Ethiopia, and also in Europe, in Portugal. So freight, and how we can better record, and look at the impact of our freight as a business is of keen interest to us is why we’ve been working with the guys at Zencargo and Pledge over the past few months to come up with this tool.

David de Picciotto:
And on my side, hi, everyone. My name is David. I’m the co-founder and CEO of Pledge. In a few words, Pledge is a software platform helping logistics companies and retailers understand and manage their greenhouse gas emissions, as well as supporting them with supply-chain-related emissions. We’re London-based, and I’m proud to be working with Zencargo and Vivo as some of our first customers.

Ian Powell:
Great. Thanks for those introductions, Greg and David. So I think we’ll get straight into the questions. I think, interestingly, we can look at this through a number of lenses. So we’ve got, obviously, a lens from Zencargo’s perspective, a lens from your perspective, David, working with a broad spectrum of customers. And then obviously, you, Greg, specific to Vivobarefoot being able to give your perspective. So maybe let’s start off with what are the motivating factors for companies to reduce and offset their carbon emissions? And Greg, maybe if I can go to you on that one?

Vivobarefoot:
Yeah, sure. So, Vivobarefoot is on a journey to become a regenerative business, which means we, overall, want to have a net positive impacts on the planet, whether that’s defined by people, communities, and also the environment. And to do that, we’ve registered and become a B Corp, which is for those who want to wear a certified business for a B Corp, which is an industry standard of how you record all your environmental credentials from such things as through your whole value chain of how you make the shoes, your manufacturers, your tiers through to do. What kind of water supply you use in the office, the air quality in your office. But part of that is your emissions and your scope, and how you monitor, and your policies, and how you look to actively reduce those emissions.

Ian Powell:
Thank you.

David de Picciotto:
Maybe to complement what Greg shared. So as we see, sustainability is becoming an integral part of business, and in addition to greater collective awareness amongst both businesses but also consumers, as well as increasing pressures from regulators, notably for public-listed companies to report on their climate impact. We are also seeing additional pressures coming, for example, from investors. We’re increasingly pushing it across both public and private markets, further portfolio companies to get a better grasp of their ESG, and specifically, environmental KPIs. And then specifically, if we think about consumer-facing companies, we’ve seen over the past few months to year amongst virus studies that sustainability can actually also drive sales and customer engagement with, for example, the few percentage point increase in cart conversion rates, or for example, leverage order values. So these are a few additional perspectives.

Ian Powell:
I think, essentially, there’s a number of different reasons that motivate companies to do this. But on a general level, David, then what do you see as those typical barriers that companies are facing when setting out to go measure their carbon footprint and their emissions?

David de Picciotto:
Sure. So when we think about the challenges of a sustainability journey, maybe I’ll just take a step back and explain the three key steps of such a journey. It’s obviously starts with understanding or measuring your emissions, then once you understand the good holistic view of your emissions, you want to reduce them. And the final step is you may want to offset your unavoidable or residual emissions as part of a sustainability goal or net zero journey. I think the first and foremost, maybe something we tend to forget, is that as a company you need to get the buy-in probably at a strategic level, at the board or executive team level, to embark on such a journey, because it obviously takes a lot of time and resources from the business. And the next step after that, which is critical, is obviously having a sufficient and transparent amount of data to start understanding and computing remissions.

So there’s the entire data collection process, which can be fairly tedious. And once you have all that data, it’s about understanding which calculation methodology to apply, to compute the footprint of a business activity across all your operations. And after you have visibility over the hotspots of emissions across your business, it’s about devising reduction strategy. So we see all these steps along the journey. We finally also… Across offsetting, we’re given also the nascency of the markets, and sometimes the fairly opaque markets. We see challenges such as businesses asking themselves, “What project shall I buy? Can I trust this project? Am I at the risk of greenwashing? How do I access them, purchase them,” and so on. And so this is why we exist and try to streamline this process to make it as easy and trust-Orpheus as possible through software.

Ian Powell:
Cool, thank you. So Greg, evidently, it’s Vivobarefoot. You clearly have that buy-in from the strategic board level as a B Corp. What’s typically been your challenges then, and barriers to measuring your CO2 footprint, and really driving this forward?

Vivobarefoot:
Yeah. So historically, we’ve tried to measure it annually at the end of our financial year. And the way we’ve done that is we’ve gone onto a carrier’s website, trying to find all, just doing, basically, a Google Search to try and find a tool to download a CO2 emissions calculator that we’ve then played around with, then trying to work out the data from various sources of what actually that would look like and split between an air shipping and sea shipping. But it’s been at a very, very basic level, very high level, not getting in then down into the granular level of what that CO2 looks like. And as a brand, we look at doing air freight and sea freight.

And so any air freight, we will then basically not offset. Because as a brand, we have a fund and we actually call it insetting any difference in cost for CO2 between air freight and sea freight. We then insert into various funds that we have as a business through a fund, which just things like around the world, things like people who live in landfills, to help people get out of living on landfills through to re-algin the sea, and things about beaver dams, and stuff. But these stuff [inaudible 00:11:08] has been hard to get at measure on how actually that can be calculated, and that we’ve found it has been the biggest barrier over the past couple of years when we’ve tried to look at it.

Ian Powell:
Cool. No, great. And I think that leads quite nicely into the next section where we’re looking at, essentially, how the initiative came about, and how we with three organisations really worked collaboratively to deliver the solution that’s been developed. So I think from a pilot point of view, if we’re looking at, ultimately, with Zencargo, we wanted to develop capability to enable supply chain leaders in our customer organisations to essentially enable some of that strategic and environmental sustainability objectify, help enable that they can deliver those. I think in short, from a summary point of view, Greg, you were very instrumental in allowing us to really drive that agenda as a customer. You were very supportive in terms of helping us to build the right solution and make it compatible to what your business needed.

And invariably, it links very much into our commitment at Zencargo right now. We want to support our customers to aid their sustainability journey. And that really links back into a lot of what David says. It’s about, firstly, allowing our customers to have that measurement and that reporting, allowing us to position opportunities with our customers that they can reduce, and then invariably, at the end of it, provide a capability where they can offset residual or non-avoidable emissions. So framing it, that was our goal, Greg. But what was your goal from the pilot, because you were very keen to support us on it, what were the goals that you wanted to achieve after this?

Vivobarefoot:
Yeah. So the first one, obviously, was to calculate actually the end to end. So overall, as a business, we want to calculate our carbon from the moment the shoes are starting to be made or even before that when the components are coming from tier suppliers all the way through the supply chain, through getting delivered, and then even outbound to consumers. And then when they return, it’s obviously part of that, which is what we’re talking about here, is that freight part when it leaves the factory and gets into our warehouses. And we want to calculate that at every step in the journey.

So that is the collection from the factory to delivery to port, to the shipping from port to port, or flying by air from airport to airport, and then the final delivery, and then into our warehouses. So working, obviously, with Pledge and Zencargo. We’ve been working on getting that up and running for everything to enable us to do, and also being able to calculate it not just for shipments now, once it’s in place, also to have retrospective calculations going back, since basically, we’ve started with Zencargo, which for us has been a number of years.

So that’s the goal one. The second one is, as we say, we are a B Corp, and you don’t just get B Corp and that’s it for life. You have to go and re-certify every three years. It is. And as a brand, we actually do many internal audits every year so we can check our score and re-certify this tool. Helps us do that, and we can also then see trends, and see how we’re going, see if the CO2 is improving, decreasing, in a very easy format to calculate and view. And then that leads on to the fact that the team are not having to spend as much time on doing it and calculating it, and trying to work out on tools. They can go in and run a report, and it’s there, and then spend the time, actually, doing the analysis which is a lot more beneficial than having to go and pull down tools, and do the work.

Ian Powell:
Perfect. Great. So, David, then I think just to maybe give a bit of context to our audience, could you maybe just walk through what each party is doing and how that data then flows between our organisations?

David de Picciotto:
Yes. Essentially, in very simple terms, Zencargo is providing us with the mandatory data. So, shipment level data for us to run computations. We ingest that data into our environment, run calculations in adherence with the relevant methodologies for which we’ve been accredited by The Gold Standard of freight logistics emission calculation called GLEC, which has been developed by the Smart Freight Centre. And we then returned the output to Zencargo, which they can then use to surface analytics and other insights into their dashboards for the benefit of their customers. And there’s, essentially, a couple of ways to integrate with Pledge. We are obviously an API-oriented platform, so this is one option. And there’s also another option which is a simple file data exchange between both parties, but really, the goal is to make it as convenient and automated as possible to maximise time to value for our customers.

Ian Powell:
And then I think as you pointed out then, Greg, you have access to, essentially, that reporting analytics that you can consume in your business and essentially use that for reporting purposes. So, David, then in terms of the outcome that have been achieved for each organisation, I think we’ve all benefited extremely positively from this pilot, and then going forward also from the continuous rollout that we’ll do across the Zencargo customer base. But can you give us some insights as to what value this has driven for you and what outcomes have been achieved for Pledge?

David de Picciotto:
So as we embark on our journey last year, and being one of our first customers, this has clearly demonstrated the value-add of what we’ve been spending so much time on, and what the team has been spending so much time on over the past few months. And essentially, helping Vivo unveil critical pain points on their sustainability and emission reduction journey to support their company goals with, for example, this B Corp certification. So in essence, yeah, we’ve been happy to see that we’re able to make it as easy as possible to launch a high impact, high quality climate program for customers like yourselves and Vivo.

Ian Powell:
Greg, and from your side?

Vivobarefoot:
Yeah. So working with yourselves on the pilot and the dashboard that has been created enables us to analyse CO2, as we said, in different parts of the supply chain, in greater depth than we have before. And we can analyse individual shipments, individual journeys from source to destination, and see how that’s impacted. But it’s also able to be presented in a very easily digestible form which makes business decisions on if we have to air freight something as a business, which we avoid. But there are times, given COVID, lockdowns shipping issues, and stuff where it’s unavoidable using the data in the dashboard. We can quickly see the impact, and that can form part of our business decision-making, the dashboard, we’re now trying to integrate outputs of that into our board report each month, so that our directors can see exactly what that impact is going on and we can then forecast that out as a business.

Ian Powell:
That’s great. I think, really, just to close off from us at Zencargo, ultimately, it’s allowed us to… Should we say expand that overall value proposition to our customers. And we’ve obviously launched this new service on the backend of the pilot which, Greg, we were able to use you to support. I think, equally, it’s given us a real… Should we say a real foundation to build on the solution offering that we’ve got. There are a number of iterations that we’re running, a number of areas of expansion that we’re looking at supported by Pledge as well.

And I think, invariably, it allows us to enhance that overall service offering to our customers and aid our customers to make… Should we say more data-driven decisions in their supply chain, and having that data to really… Should we say base some factual decisions on. So it’s been a critical thing for us. We’ve hope we framed it pretty well for the audience. And I hope there’s quite a lot of questions on this topic or I hope there’s some Q&As to address from the participants. Couple of anonymous things that have come up, Greg, one for you, if you wouldn’t mind, please. How much time do you think that you’ve saved by having this reporting available in the platform?

Greg Bamford:
Yeah. So I think, before, it would probably have taken somebody to do it probably three, four hours. It’s probably half a day, a month out of somebody’s workload. It’s saved in doing that, whereas now they can go, the report takes 30 seconds to run. You can run it between daytime, you can run it for the whole period, you can wait it for a year, and you can run it for all your historical shipments. So the time saving is it’s like half a day of a person’s work, probably, per month.

Ian Powell:
Yeah. Excellent. So, David, one for you, if you wouldn’t mind. You picked up on a little bit in the conversation around the GLX standards. The question is specifically around what’s the benefit of having GLX standard calculations over more broad estimates?

David de Picciotto:
So what we’ve seen is that… I mean, calculation accuracy matters. And I think more than just the accuracy, it’s a demonstration of trust. They essentially… I think a lot of what we see and a lot of the risks with embarking with sustainability journey that we hear from customers is that they don’t want to end up doing greenwashing. And I think that one way to demonstrate trust is through standards and through accreditation. And this is specific to the logistics and freight industry. So this is something that we’ve seen actually customers and prospects ask for, and as a result, I’ve embarked on this journey. Now overall, if you think about emissions, accuracy matters up to a point. What really matters is observing emissions over time, because the absolute number, it’s important to know, but you’d rather want to see over time, “Am I doing better? Am I doing worse?”

Ian Powell:
I think maybe another important point to that question as well, David, is that, invariably, there are going to be changes to the standards as well. And the technology that we’ve used to enable this, invariably, they are adapted to those standards. So we will see those standards being adhere to continuously over time as well. Greg, more directed at you. Well, I think we can take it generically across the panel, but what kind of decisions or changes are you making as a result of having this level of information?

Vivobarefoot:
Yeah. So from us, it’s used definitely for, “Do we air freight, do we not air freight?” So that is a big one. The difference in air freighting and sea freighting, I think, is about 20, 30 times more to air freight than sea freight based on what we’ve been doing. So that makes a big decision in that checkboxing when we are making the call on should we air freight or not. I think in the future, we will then use it also to analyse upcoming shipments.

So we can see, for example, when we get quotes back saying you’ve got three options, you’ve got a boat that’s going direct, you’ve got a boat that’s going calling at ports, you’ve got an LCL, you could do air freight, and all that. And we could then see that CO2 impact, so we could then make a decision on, actually, are we prepared to wait a few extra days if the CO2 is lower because that stock is not as urgent as something we might want to fly. So it’s got future uses also, as well as just doing the post delivery analysis. It will help with upcoming decisions on what freight routes we choose.

Ian Powell:
Cool, great. And I think for us at Zencargo, the key thing here is it exposes the baselines of our customer’s CO2 footprint. It gives us the opportunity to essentially look at that data and identify where we have areas of opportunity that we can present to our customers. And ultimately, that helps to avoid CO2. And arguably, as we start to aggregate data across more customer bases, we can look at trends, we can look at how we can position better solutions for our customers. So for us, there’s definitely some value that will allow us to position better solutions. David, on your side, is there anything specific for, obviously, Pledge?

David de Picciotto:
Yeah, to close off on that question. I think for us, it’s been valuable to have feedback from both of your organisation to inform our product roadmap and product development. I think what Greg mentioned is very valid and useful tool, essentially embedding shipment level footprinting at the quoting stage to inform decision. And this can be a first step into a reduction journey as well once you have that information.

Ian Powell:
And that segues nicely into our last question which is, what are the next steps on the joint journey together? If I take it from a Zencargo perspective, we have an MVP, we are now rolling that out broadly across our customer base. We have a number of initiatives that we are looking at developing with Pledge, and coincidentally, we have an extended workshop next week. It is a number of things we’re looking at, it’s a case of assessing how feasible those things are and what the effort is required to go into them, to make them realistic.

I think Greg’s touched on the few points there. It’s about looking at how we can dynamically forecast out emissions earlier in the process. It’s about how we can do more real-time reporting from an earlier point. So a provisional estimate of what emissions might be based on an original booking versus what they are once that shipment’s been delivered and fully executed. So there are a number of things. All these ideas will further grow our overall service offering to our customers. David, if you want to add anything to that as well, please feel free.

David de Picciotto:
I think a final step is also then progress on an offsetting pilot, where we then want to pair the measurement and insights we provide. We have also an offsetting capability for customers who would like to reach these type of products.

Ian Powell:
Well, that’s the final question of the session. David, Greg, really appreciate you taking the time to join us. Hopefully, it’s given a lot of insights to the audience, and hopefully we’ll get to speak to you again in the near future. And Helena, I’ll hand back to you.

Helena Wood:
Thank you so much Ian and Greg. David, thank you so much. It’s a really interesting topic. And I feel, actually, we’ve almost barely scratched the surface on sustainability. But what’s really nice is actually just this partnership of Vivobarefoot. Greg, you guys have been working with us for a long time, and I think we’ve just so appreciated the opportunity to join you on your sustainability journey. You definitely are light-years ahead of us, but being able to bring in Pledge and David to partner with you and your team, and to see some of the measurable impacts that that’s having.

And I know you’re talking about your roadmap and the way that you’re thinking about things. And as we begin to roll out this pilot more broadly to other businesses that want to make changes. IAnd even if it’s improving beavers and dams or making other positive offsetting decisions, there’s great work to be done. And for all of us working in the supply chain space, we can be change-makers, which is really exciting. Greg, David, Ian, thank you so much. I’m really pleased we’ve had this conversation, and I’m looking forward to continuing to discuss sustainability with all of you guys, and with our audience.

Thank you for listening to another episode of Freight to the Point. We hope you enjoyed it. If you have any feedback on this episode, please do get in contact with us and don’t forget to like and subscribe. But until next time, goodbye.