The Business Case for Climate Action
Podcast episode 59
Can an environmentalist be a finance executive’s best friend? According to Jean Benoît Besset, VP for IT and Strategy at Orange France, they can as they both want to reduce waste. He sees addressing climate change as an opportunity, not a burden.
Below is a transcript of this podcast. Some parts have been edited for clarity
Michael Hainsworth: Jean-Benoît Besset believes an environmentalist is a finance executive's best friend. They both want to reduce waste. The VP for IT and Strategy at Orange France sees addressing climate change as an opportunity, not a burden. But a culture of environmental responsibility is required, and while it doesn't have to come from the top, it should. He's established four key pillars to boost operational efficiency as a means of reducing a company's carbon footprint and established a long-term perspective that fosters open innovation. We begin by defining corporate environmental responsibility in the first place.
Jean-Benoît Besset: To me, corporate environmental responsibility is the ability of a company to understand its environmental footprint, which means the impact that its own activity has on the environment, but as well also those activities it induces amongst its supplier, its subcontractors, its customers. And I mean by impact, greenhouse gas emission, consumption of abiotic resources, pollution, biodiversity. And not only must the company understand its footprint, but also it must command and control it in order to fit with a trajectory compatible with the planetary issues described for example in the Paris Climate Agreement or in the UN Sustainable Development objectives. Let's remember that the corporate environmental responsibility is taking all its meaning in the current context of global warming and destruction of biodiversity.
To develop a sustainable economy, limit climate change, maintain biodiversity, and develop inclusion are certainly main challenges for the whole society and for companies small or big. The society has changed regarding the global warming. Customers, shareholders, employees, civil society organizations, partners, governments require organization to become more and more environmentally and socially responsible. This means organization have to carry out their activities in a sustainable way. We all, employees, colleague, partners, ourselves are faced with these challenges, and these challenges require that we change the way we act in our daily lives, the way we work, the way we understand problems. And to me, on the business perspective, this is an opportunity and not a burden.
MH: Tell me about describing climate change as an opportunity and not a burden. How is it one?
JBB: Environmental challenges require that we develop a culture of environmental accountability. And to me, that's a very good news for both, all sorts of living spaces on earth, but also for operational efficiency. And why so? Because by setting up such a culture to face those new challenges, we will develop four key pillars that are boosters for operational efficiency. Improvement of cost structure by decreasing waste of resources. And the second one, life cycle management and DevOps. The third one, transversality in anorganization. And the fourth, common goods and long-term perspective that will foster open innovation.
MH: That common good aspect to this. How much of that is pressure from outside of the organization in the form of customers making demands, versus an internal recognition of ESG principles?
JBB: In fact, it's both. It's an opportunity because customers are requiring companies like ours to be environmentally friendly. And today, they are choosing the company on the price perspective, or for the quality of service perspective, or for the image perspective. And I'm totally confident that in the near future, your ability to demonstrate that you are improving and diminishing your carbon footprint and your environmental footprint will be a key asset for your trademark. And then, that means that if you want to address the majority of customer tomorrow, you have to show that you are engaged in this environmental transformation. And on the reverse, inside your company, the more you are engaging in this type of transformation, as I told you and I will show you, the more you are able to improve your operational efficiency.
MH: So then, how do we develop that culture of environmental responsibility? Is this something that has to come from the top?
JBB: Obviously, everyone must act and think with new plans in mind. Everyone. Elsewise, we are not talking about cultural change. To develop a new culture, translate into new behaviors that at the end everyone endorses. Everyone has a role to play. Everyone can be a force of proposal. And as far as environmental responsibility is concerned, we all note a strong appetite, a strong desire of the employees. Many of them want that the company change its behavior in favor of environmental responsibility. So then, what could be the role of the top management? To me, the top management should put in place the condition that allow this culture to emerge and to be translated into effective behavior. And it also should lead by example. This engagement of the top management is key. In fact, it's maybe not so important to know if the top management is at the origin of the culture change or not. What is important is that it supports it concretely through its own behavior and posture and through its ability to remove barriers and change mentalities that prevent the transformation of the culture.
MH: Tell me about those four key pillars you've established to boost operational efficiency. Let's start with the improvement of cost structure by decreasing waste of resources. How do we build that into corporate culture?
JBB: In fact, we have an objective alliance between finance and environment. I used to say that the financial controller's best ally is an environmentalist. Why so? Because both hate wasting resources. Most of the time, when you have a program to decrease your environmental footprint, especially your carbon footprint, you decrease costs. Indeed, to decrease your footprint, you will seek and launch initiatives that make a more efficient usage of resources. Let's take some example. Let's take energy consumption. Energy consumption is a source of CO2 emission. If you want to develop better energy efficiency and stop this wasting of resources, it could be done thanks to the technology improvement like for example, green features that we have in the network. It could be done also thanks to the decommissioning of legacy services that are highly energy consuming. It could be done thanks to simple and common transactions like resizing your air-conditioning in network facilities.
All these actions will end up in decreasing your OpEx energy, which is quite a subject nowadays, as we all know that energy will become more and more expensive. Another example is CO2 emission related to the fabrication of an equipment. To decrease your CO2 footprint, we'll want to develop circular economy, expand the services' life of your equipment, reuse internally from one affiliate to another your equipment, buy second hand equipment. All this action will end up in decreasing your CapEx. It's quite obvious that looking for decreasing of resources conception leads to cost compression. What we have to do is to make this link between control of the environmental impact and cost savings understood by showing through concrete example. Often, people think that the ecological transformation is an additional cost factor when in fact it's more of a saving factor.
MH: What role does lifecycle management and developer operations play in an environmentally responsible company?
JBB: In fact, I will reverse the question. How does environmental accountability help to develop a DevOps and lifecycle management approach?
When you take an environmental approach on a subject, you try to understand the impact of your action and decision, end to end. You cannot, for example, only consider the impact of the fabrication of a product. But you have also to consider the impact of its usage and the impact of its end of life. When you build a product, a service, you take at the very beginning in consideration the run phase and you try to optimize both steps. To do this, you have to sit the people of the builder with the people of the run. In fact, you are in a DevOps process.
Product life cycle management is iterant in the environmental approach. One of the key concepts of this approach is LCA, which stands for life cycle assessment. LCA calculates the impact on CO2, mineral, water, and so on for the entire life of a product from conception and fabrication to end of life and recycling. To improve the LCA of a product, you must take into account the operation from the very start of the design and development phases. People who have this culture of LCA of lifecycle management are naturally more inclined to enter a DevOps process. They immediately see the benefits.
MH: You mentioned something earlier. What does transversality in organizations mean?
JBB: By transversality in organization, I mean the ability to cooperate in a flat and seamless way across the organization to tackle problems and build solutions. And to me, environment accountability develops transversality. Indeed, to tackle environmental issues, not only do you need to develop an end-to-end approach, as we mentioned previously, but also you need to take a systemic approach. It means that you understand that you are part of a bigger system with many partners who you are in interaction with. You realize that in the interdependency is the rule. You rely on others. Others rely on you. It seems obvious, but it can be a big change of mentality for teams. Traditionally, teams want to develop autonomy, which they translate into, "I don't want to depend on anybody else for my day to day action." And which in fact turn into silos in the organization. Environmental accountability breaks the silos.
Let's take an example. If you want to diminish the energy consumption in a data center, the good but silo-oriented idea is to work on cooling system improvement to decrease the famous PUE, power usage efficiency. A systemic point of view will encourage you to work with IT developers and infrastructure managers together to define application requiring less preservation of resource, able to work with CPU using evolved sleep mode, able to wait for availability of renewable energy, for example. In fact, if you're taking a silo approach initiative, you will try to cool a heater that you have put in the data centers. If you take a systemic approach, you will try to have less heaters as you can.
MH: That sounds like the biggest cultural evolution that any company, particularly within the CSP community, but any company would have to go through is breaking down those silos where we've got generations of people who are accustomed to fighting for their own little world much to the exclusion of everything else.
JBB: Yes, definitely. And maybe, environment is a chance for us because as the problem is so big, as everybody is concerned, you cannot say, "Well, I'm not concerned by the climate change." Wherever you live, whatever you do, you are concerned by the climate change. So maybe, it's a good opportunity for people to understand that they have to find their freedom in interdependency instead of trying to find their freedom by being isolated from the rest of the world.
MH: Companies often focus on short-term goals, thanks to the nature of the stock market and shareholders. How do you establish a long-term perspective that fosters open innovation?
JBB: By putting emphasis on the notion of common good and long-term perspective and have environmental accountability develops open innovation. Sharing common goods is at the heart of the environmental approach in fact. Long-term is the time scale for environmental issues. We all share the same planet, the same atmosphere, the same resources, and our children will live on the very same planet we are living now. Everybody knows that. Every company understands, or will soon understand if it's not the case right now, that they have an impact on these common goods. And they must work together just for the sake of keeping a market for their products.
And just because they understand the problem is a systemic problem, no company can pretend to solve environmental issues alone. No company can pretend to solve environmental issues by focusing on short-term solution, whatever their impact on the long run, unless to take the risk of being named and shamed as a “greenwasher”. Taking this into account will strengthen relations between stakeholders focused on a common goal, together find a solution to achieve net-zero carbon, for example, or together find solution to develop resilience for a product or service on course with now certain climate changes. And this together, this common goal, this long term perspective, this will develop open innovation, especially in our telco business, where we have the opportunity to show how digital technology can be a leader for taking care of this big, huge, common goal that is our environment.
MH: If there's one key takeaway you'd want listeners to leave with, what is it?
JBB: I tried to highlight why an organization that develops or provides environmental responsibility and a culture of environmental accountability will improve its operational efficiency. Not wasting time and resources, relying on developed practices, promoting transversality, and engaging in open innovation definitely boost performances. All these four initiatives are deeply embedded in the environmental accountability culture. The more the culture is developed in the company, the more these four initiatives can be engaged, the more the company will improve its operational efficiency. Of course, environmental accountability is not the monopoly of developing DevOps. My point is not at all to say that this is the ultimate and only level for operational efficiency, but simply mention that the environmental transformation we all must engage in is not a burden, but an opportunity for companies.
MH: There is no planet B.
JBB: There is no planet B, and there should not be a company B.