Taking the first steps in a sustainability journey.

Hello everyone. My name is Steve Tongish and I'm the Chief Marketing Officer at IQGeo. And welcome to this edition of Network IQ. Today, I'm really pleased to have two very experienced guests with me today. And that's Jeff Cavanaugh, and he's the head of the Infosys Knowledge Institute, and Corey Glickman, and he's the Vice President of Sustainability at Infosys. So welcome, gentlemen. Hi, Steve. Thank you very much for inviting us to be part of this. Great to see you again, Steve. Thanks for having me. It is good to see you both again, because as Jeff suggested, if you were lucky enough to be at our Denver meetup recently, Jeff and Corey were keynote speakers on the subject of business sustainability. And that's an incredibly important topic, one that's important to organizations large and small. And so let's kind of start at 36,000 feet with the questioning here. And let's talk about this big, wicked challenge of sustainability. And what are some of the imperatives that organizations are facing when it comes to sustainability? So, Steve, it's an excellent question. The big, wicked challenge, I think, when it really comes down to it is, I believe that everybody believes that we need to address climate change, particularly greenhouse gases. But we also have to address the S and the G, which is social and governance through here. And the big question is, how quickly can companies, the economy, policy and government can make this happen with also the ability that along with doing the right thing, people, prosperity and planet. Also, it has to be economically viable in order for this to work out. And the challenge is that we have regulatory coming down from organizations, from the UN, from SEC, from bodies in Europe and so forth, that are requiring regulatory changes around climate risk. We also have agendas by individual industry sectors and companies and governments that are also defining what are those challenges and how do we meet those KPIs in order to do this. And really, where do we start and how do we all get on the same page? I think that's the big challenge. Thanks, Correll. I'll add to that. It's interesting because on the one hand, it is this absurdly wicked complex challenge, systems of systems, all kinds of complexity, even to measure it. On the other hand, the North Star comes down to prosperity because even the people, the regulatory, everything ultimately is trying to serve this purpose that humans can prosper. That means well-being, not just financial, but also society. And that challenge is balancing the long term and the short term, because how do you deal with something that's over the horizon just a bit, and yet you have other pressing matters in the short term? That's what makes it so difficult. And lastly, the idea that it's a problem that exceeds any one company, any one nation sphere of influence. And so with all those factors, you've got one of the more complex challenges. So we call it a wicked challenge. Well, I think that's really fascinating the way you put it, Jeff, because you were kind of dancing around a word which has come up quite a lot, and that's practical. And quite literally, you and Corey wrote the book on practical sustainability. I have the book, the signed copy that I have from the meetup. Thank you very much. And so to put this in context, this big challenge in context, let's talk a little bit about what you mean when you say practical sustainability and how you begin to eat this elephant. Sure. So the concept behind the book and the idea of practical sustainability is, I think, fairly simple at a high level, but it's the simple things that can quickly become complex. So we really looked at how do we simplify the corporate understanding and ability to enable ESG in a practical way that would allow for true impact to take place. So let me expand further on this. We've all seen many, many goals and commitments for companies in 2040, 2050 to get together and to achieve, whether it's carbon neutrality or carbon zero, not just for their own internal scopes, ones and twos, but also down their value chain. Now, we come from a company and a culture as part of Emphasis, where we've achieved carbon neutrality through net carbon zero path that really focused in three areas within 10 years. And this means that by 2020, we had already achieved these goals. And by 2023, we've actually achieved our scope threes also. And we've done this without purchasing any credits. We've done this through CSR programs and through technology and through policies properly, specifically looking at what were our most carbon intensive assets, in which case it was facilities and buildings, travel, many digital asset components, datas and services. We secondly looked at the energy signatures of whether we could create our own renewables or do power purchase agreements components. And then on the CSR level, what could we do in the community levels in order to build the economies around there to really reach that balance? And we asked ourselves a simple question. If we could do this by 2020, making a commitment, actually, that we started in 2010 that said, take 10 percent of our carbon out of everything we do year over year, and we could achieve that based off the technologies back then. We were saying there has to be a lot of processes and a lot of technologies out there that are already usable in order to help other organizations achieve a similar goal. And what could we do to shorten their timeline and to also create the momentum that's needed at the board level and at the investment level to hit ESG goals? And as we crafted the book, we decided to make it a narrative with scientific backing behind it. So it gives the stories, it gives the use cases, it gives over 60 frameworks that actually are implementable today. And it also explains how to do responsible R&D of the future. And I'll actually ask Jeff to elaborate that in a minute or so. So what we realized and what was verified through the book and through the response of the book, which we had issued to businesses, to governments and to universities, was that 50 percent of what are the key ESG agenda items that people have set for 2040 and 2050 could actually be addressed within five years and have a return on investment of one to three years by simply going through practical processes that exist and knowledge. And that, yes, we still have to solve for these other 50 percent. But this is where R&D comes in through here and knowledge and culture. So I'm going to hand this over to you, Jeff, to kind of expand on this a bit. For us, practical sustainability is about impact. The best way to signal virtue or goodness is to deliver something that moves the needle, especially given that we're coming from a business context. One clear way is emissions. Can we lower carbon emissions? And can we be better with water? We looked at the three biggest areas that contribute a lot of waste and emissions. Energy is obviously a big one. You've also got supply chains, a.k.a. the scope three in carbon emissions and that ripple effect. And then also people don't realize this, but buildings. We spend 90 percent of our time in buildings as humans. And 40 percent of all greenhouse gas emissions come from the construction operation or demolition of buildings. So that's the area we looked at. There are some other areas as well. Agriculture is a big area. But these are the three, especially in a corporate context. And the fact that it's science based and there's a lot that could be done today. Corey alluded to that 50 percent. We think 50 percent of the sustainability challenge can be addressed now because, well, our company did it. With technology that was 10 years old. And we believe that the next five years, much more is happening. Corey and I are both part of some initiatives where a lot of the entrepreneurial spirit is being unleashed. People may not realize that there's a Manhattan project that's already out there, our next one. And it's in this area of sustainability. Trillions of dollars is being directed. And hopefully it's effectively spent, invested and then translated. That's what we think practice sustainability is. It isn't just about meetings and PowerPoints. It's about technology. It's about innovation and science. And it's about measuring and learning and pulling these targets in because we believe these things can be done much, much sooner than 2050. It's a fascinating topic. And what you've done is given us some context. You've given us some definitions. This is a really good place to start. But you've been on this adventure, as you said. Infosys has made some amazing progress. And what does this journey look like? Let's drill down just a little further and explore what the journey looks like for somebody beginning the process. And what are some of the things that catch organizations out? Where do they fail? Where do they struggle? Once again, it's a great question. And it's probably the question that's on top of everybody's minds for these organizations. We've found that organizations are motivated both through regulatory compulsory needs, right? As we see new regulations and laws and policies that are being enacted and really being taken seriously with penalties insured if compliance doesn't take place. And then more importantly, we've seen organizations that have now made that switch to saying it's also the new economy. It is also the future of business and the future of supply chain and value chains coming across here. So therefore, much like digital transformation, there is no going back. It is part of who we are. And we need to figure out how to have the prosperity and the good economic values along with the ability to whether it's changing technologies, product life cycles, supply chain and so forth. So that's a very challenging aspect, right? It's taking that ocean liner that's on that cruise and saying, however that performance is has to now be adjusted and it still has to keep moving across there. So what companies realize is that it's not enough to just have a good policy at a C level and also say a direction from an ESG board component. But how does that get translated down to the actual business itself and implementation across there? And we know that the pattern that we consistently see for this really consists of four areas. The first is in data. So what data should I be aiming to collect? What data is relevant? We all have so much data that's out there. And which data ultimately will I act upon? And in this case, report on for audits. So data and so forth is the first step. The second step has to deal with the idea of sustainable financing. And what we mean by that is not just the mechanism where financing comes from, but the aspect of good financial plans that will ensure health of the business moving forward. And there are lots of mechanisms that exist today that didn't exist a couple of years ago, whether that be green bonds, whether those are B Corp, whether that's private equity, now a huge amount of government funding that comes across there. So understanding how that works. But what comes with that is the recognition that auditing now takes place. So as I mentioned, I think earlier, was that the SEC now insists on climate risk as part of the report out or there are penalties to get associated with this. But that second part of understanding the carbon economy and how financing, which there's plenty of money out there. It's really a matter of how do you access it and how do you understand how to use it properly and create that economy. The third level has to do with technologies. The materialistic technologies, especially when it comes to environment, are more easily understood. I think digital is understood. We're seeing new up and rising areas with quantum and generative AI, which is like all the buzz. And what does that mean? Those will have major impacts. And they really vary from industry to industry and even from within the industry, from company, government and organization across there. And the last but not least, most important is really the fact of culture. So how do you drive both that internal culture, the investor culture, your partners of your value chain culture in order to align and to sync that system of systems approach through there? So the challenges are not small, but it's our experience that if you ground it in science based fact of what you should be targeting, you break the problems into use cases that can be addressed. Things can instantly show some return on investment very quickly. And the idea that this is not going to go away, right? So it has to be solved. And it's been my experience that usually the larger the problem, the better the solution, right? We rise to challenges. We're all smart. We are get that burning platform in place. And just like we saw with COVID, when you have to solve it at a level, it needs to take place. So it's not going to be an easy journey, but it will define us as a society. Well, since Corey covered the journey part of the question, I'll cover the other part. What can go wrong? How can people get stalled on this journey? I think it comes down to a sense of false ultimatum. As a corporate citizen or as a leader, people often think, is there some massive top-down transformation led by senior executive, maybe the CEO? Or is it a guerrilla, agile, bottoms-up startup kind of approach? And the sad part about it is they're both required. So I think our experience has found that going either direction is not enough. You need a North Star. You need bold goals, carbon neutral, net zero, some element that relates to your industry, like, for example, in fiber. I'm sorry, in the networks. Some aspect of clean energy, some aspect of enabling the sustainable future through your industry and utilities. It's a fantastic North Star. The challenge is that it appears to be something that's great but down the road, hence the 2050 goals. You also need this multiple agile teams making positive progress, even small progress, within your companies. For our company, as an example, at Infosys, when Corey was thinking about this, knew that one unit wasn't enough. So identified a network of champions, over 60, call them sustainability champions in a network. And they were in client-facing or sales roles, delivery roles, production, legal, PR, you name it, HR. And as a result, each of these teams could contextualize what sustainability meant for their business, for their unit. And they could also be a local champion. And so I think the way to overcome that false ultimatum or dichotomy is do both and work through a network of champions. Because if you do that, you have multiple points of failure. You won't get everything right initially. There will be some early successes. Some folks will stall out. As a whole, though, a lot of progress. Remember, positive reinforcement leads to more of that. And lastly, the learnings from 20, 30, 40, 50, 60 different champions all working together and feeding back. That's much more powerful than a single leader trying to push an agenda. Well, thank you, Jeff, for referencing the industries that we deal with. And what's really nice about you and Corey joining us here is that you've spoken to our customers, the organizations that we've been fortunate enough to deal with, those people who are deploying broadband, those electrical utilities that are really changing the face of the industry. And it seems to me that, as you say, every industry is a little bit different, but some of the principles apply. So I know it's an impossible question, but if you were to give a bit of advice to these organizations, where would you suggest they begin? And what do you think are some of the elements that are critical path for them? So I think that there is a common path, which is a good thing, right, that I'll lay out here. It really starts with understanding what is that sustainability plan that would be specific for the level of maturity of where an organization is starting out with and then what that value chain would be addressing. Secondly is matching it to your growth plan. They're not unique anymore, right? They have to be intertwined together because we have realized, and I think it's obvious in today's economy, that programs and initiatives that don't make economic sense of right now are going to be very difficult to go forward, at least in the short term here. So that's extremely important and responsible. Then it's understanding both the digital and the physical assets that exist and knowing what you have and what you need to gather and what is built in an ecosystem. And if you take care of those first three out of what I'm going to name six, you will start to address your internal scope ones and scope twos of your own operations across there and start to understand the next stage, which is really how will you be impacting the supply chain, right, in both directions, both upstream and downstream. And having a plan, and this is where some of the challenges can take place of sharing data and information, understanding the other levels of maturity. But that really is the next phase. And that will start you being able to address your scope threes coming across here, which is the big question of the day. And everybody is, what do I do about scope threes? And then coming up with an offset strategy is the next stage. How will I deal with the offsets? Because no one can truly ever become carbon negative or zero without having some kind of mechanism that says I can only do so much to reduce carbon, whether it's how I deal with my energy, it's how I deal with my production, everything we do somehow deals with carbon. And we're not going to escape that, but having offsets, whether that is through CSR programs or purchasing offsets by setting prices or creating bond issues, those are got to be part of your strategy in order to get where we're going. And they're all very healthy components. And then the idea of that culture, of the education, of the involvement, of that connection between board to C-suite goals, to actually implementation down to actually every individual across there. And one of the key mechanisms that we all work towards is the KPIs, the key performance indicators, right, that we're assigned. And no one has really assigned carbon impact KPIs yet, I think, to the value chain and to individual groups. And that is something we're starting to pilot right now to see teams that are actually going out into the field and that are interacting in the supply chain. If they have KPIs that are associated with what is their carbon impact, what is the difference that they can make in certain measurable areas, if that becomes a requirement just as strict as financial obligations or productivity obligations, and put those in your enterprise accountability reports, then you have some movement that's taking place across there. I think for your particular industry, because of the types of activities, 5G is a super powerful influencer, right, of change of what's taking place for so many different areas and the idea of the fiber laying and the utilities. But we know this comes with a price. As things get more advanced, it uses more computing power. It uses more infrastructure needs. So you're increasing the level of activity through here. But the good news is, is that there are things you can do, such as renewable energy sources and data services, perhaps moving fleets to more renewable fuels versus fossil fuels, you know, at some level, understanding the ideas of energy harvesting. And there are several other strategies across there. So you will have a challenge because as things become more advanced in technology, they tend to, first indication is it uses more data, it uses more energy and so forth. But there are more options now that actually can make that part of the solution also through here. Building on what Corey said, if you think about the unique characteristics of communication service providers, utilities, I've been fortunate and honored to serve many of them in the past as clients. I think there's a way to take what Corey said, which is a bit of a liability, heavy consumption of data, heavy consumption of power, and of course, generating emissions and actually flip it because these two industries or these sectors touch every other industry and can become a catalyst. And if that's the way the industry can think, how can we help you help other industry sectors and industries be better? How can you work with them and become in effect this scope three with them? And I didn't get to get out ahead of it because a lot of industries are still struggling with it. And the fact that communication and data, energy, energy transition, these are all top of mind, of course, 5G. So I think leaders, by taking that position, one, it's a bit of a North Star for your own companies. It's something that transcends day-to-day operations and your internal goals for sustainability. It actually helps you make a difference for the industry. And it will spill over positively to your branding efforts, your marketing efforts, ways to engage with other companies, even indirectly in commercial relationships. We found that those kind of discussions, even with our own company, lead to a lot of doors that open, productive discussions, and ultimately an impact. Because when you live in the tactical, it's efficient, but not always as effective. And I think the strategic with the tactical, that combination, using utilities and communications, a unique role in the industry as an enabler, that is a way to make this effective going forward. Well, I think you make a really good point, both of you, about culture and about how it affects these organizations. I mean, me personally, I think that the telecommunications and the utility companies are in a way very well suited to be able to handle these big projects, because that's what they do. They do big projects and they make them work. And so there is a track record. So I think it's a great opportunity for them as well. But one final question and a quick answer. If you were to give one piece of advice to these organizations on how to stay focused on sustainability, what would that piece of advice be? With all the obvious platitudes or recommendations, I think it comes down to people. Inspire your people. Give them reason to lean into this and to pursue it. Because if you do that, then all the unknowns will bubble up and you'll be able to deal with them. And a lot of good will happen. Inspire your people. Give them reason. Early wins and efficiency. Maybe energy reduction, waste reduction. That gives people early feedback that it isn't just a good thing to do. It's the right thing and an effective thing and good for business. Because ultimately, this cannot be something off in the corner. It's got to be integrated with the main part of the business. Otherwise, it will be a project and not a new way of working. Well, I think that's a great way to end the session. Thank you so much for your insights and observations. It always comes back to people. And we saw this in some of the other conversations that we had with Network IQ, how important that element is. And really embracing the change through the organization and through the individuals. So thank you so much for that. I know that Infosys recently also published your digital radar report, which is about the state of digitalization in the industry. So that's something we'll provide a link for everyone to take a look at. Thanks, Steve, for the reference on digital radar report. For those of you who are interested, it's a report nearly 3,000 leaders were surveyed. Many interviews were done on three themes. How net zero, innovation, and the human experience translate to digital mastery or the next level of applying technology to business excellence. And what's interesting is not just these three on their own, but how experience, innovation all play into net zero and sustainability. So if you're interested in that, I highly recommend it. And I believe Steve will include that in the show notes. Absolutely. We'll provide that link for the latest edition of the report, the 2023 version. So thank you again, Jeff and Corey. And I hope to see you all again sometime on the next edition of Network IQ. Bye-bye.