5 Sustainability Myths Every Leader Must Stop Believing

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So welcome to sustainability
forward Carmine.

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My Co host is with me and my
name is Rishi, your host.

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So Carmine exciting episode on
our hands today.

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Today's episode is all about
challenging the the biggest

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misconceptions surrounding
corporate sustainability.

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Of course we come across.
Hey.

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We come across, you know,
buzzwords like ESG, Net 0 green

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products and many others.
But how much of what we believe

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about sustainability is actually
really true, right?

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And that's one of the questions
we are going to uncover today.

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And these myths that surround
sustainability do not just

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confuse the conversation.
They can quietly distort the

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sustainability agenda, corporate
priorities and and public

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perception about sustainability.
So why do these myths persist

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even among well-intentioned
leaders, right.

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That's one another question that
we are going to try and answer.

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And what can we learn when we
separate these stories from

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facts?
And to to help us answer these

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questions, we have a very, very
credible guest with us.

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Would you, Carmine, please tell
our audience more about our

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guests?
Yes, and thank you, Rishi.

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Looks like you're cooking a very
interesting episode today.

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And we brought to the show Julia
Binder.

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Julia Binder is a professor of
sustainable innovation and

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business transformation at IMD
is the school in Lausanne.

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She was named a World Economic
Forum young global leader 2025

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and featured on the thinkers 50
rather least in 2022.

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Julia is the co-author of the
circular business revolution and

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has spent over a decade helping
organization navigate the

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intersection of innovation and
sustainability to drive real

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world impact.
So, Julia, welcome to

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Sustainability for Wealth
podcast.

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Thank you so much for having me.
It's a pleasure to be here.

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By the way, for those who are
not aware of Thinkers 50, it is

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a very, very credible list.
So Julia, we are, we are very

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sure you're in very good
company.

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Some of my professors from my
Business School who made it to

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the list, I have a lot of
admiration for themselves.

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Congratulations to you for
being.

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Thank you so much.
So, Julia, as we said in the

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introduction today, we are going
to try and and and and bust some

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of the myths surrounding
sustainability, right?

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And one of the themes that comes
across very often in this is, is

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ESG equal to sustainability?
Right.

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So ESG metrics and ratings
sometimes become synonymous with

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sustainability.
We sometimes end up thinking

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that if a company scores very
high on these ESG metrics, it

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must be very, very sustained,
right?

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So first of all, maybe help us
understand why has ESG become so

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dominant in this, in this
corporate sustainability

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narrative?
Yeah, it's actually one of my

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favorite questions because I
think the majority of people

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that at least I engage with, and
they can be on all levels of the

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organization, actually more or
less think that ESG and

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sustainability are the same.
So the most common answer I get

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is usually that, yeah, look,
sustainability is the end goal

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and ESG is a way to
operationalize that on the

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company level, right?
This is one of the most common

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thinking around this actually.
Many companies had renamed their

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sustainability activities under
ESG.

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And actually it took me a while
to figure it out because we have

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been in the stability community
for quite a while.

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And then ESG suddenly pops up
and everybody gets overly

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excited.
And suddenly we managed to see

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something that we hadn't really
achieved with sustainability was

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that ESG was on all of the board
agendas and everybody's talking

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about this and we were
wondering, So what did we do

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wrong, right?
So what has changed looking at

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this and and really trying to
understand, OK, what is at stake

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here?
And I think what we're seeing is

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basically that it helped to make
this, let's say, and that sounds

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a bit demeaning, but the fluffy
concept of sustainability, which

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sounds like an end call, but you
don't really understand what to

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do in practice.
Now, it helped to really

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operationalize and gave it clear
dimensions, gave it clear

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measurable constructs.
And I think this is the reason

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why we saw this actually
entering the business world so

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quickly.
Now what is really at stake

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though, and I think this is the
most important thing, is that

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what we need to understand is
that from the beginning, ESG has

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never been the idea of measuring
positive impact of an

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organization on the world.
From the beginning, it really

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was all about how do potentially
environmental, social and

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governance factors impact the
financial bottom line of the

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firm.
So it really is a risk

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management and investment
framework.

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So I always say it's like you
look at sustainability.

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This was always about how do I
as a company with my products,

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my production, my processes, my
supply chains potentially affect

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people and planet.
So it's a people and planet

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centric framework and basically
use two turns to their own and

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say looking at all these factors
and seeing that some of these,

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whether we look at CO2 taxes or
evolving regulation or changing

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consumer demands or investor
demands actually could

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potentially pose a risk also for
the company.

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So I wouldn't say that they're
completely separate and there

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are some topics that overlap.
But usually what you will see is

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if you compare these topics is
that the the topics where the

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company potentially has an
impact are much broader.

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There are many more topics that
are relevant here.

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We're looking at a variety of
topics that really affect people

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and planet, not just the
financial value of the firm.

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And I think that is super
important to to understand the

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differentiation because it
really explains the confusion

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around some of these G ratings,
right?

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Because there were many people
that were super confused, OK,

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why does Tesla not get not make
it to the top ESG performer

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list, but Exxon Mobil, which is
an oil and gas company is a top

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ESG performer, right?
And many people were like, OK,

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so it is really all greenwashing
and no, it's not basically Exxon

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Mobil.
That's exactly what the

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framework is supposed to do.
It measures how well Exxon can

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actually manage the risks that
come from ESG factors, not how

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big their impact is.
Thank you.

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Now that's very, very clear on
understanding this.

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Now going back to the To the
East G framework, what do you

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think has been become so
dominant in the corporate

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sustainability narrative?
I mean, one of the reasons is

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that investors really put it on
the table, right?

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And if you have investor or
shareholder demand to put

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something on the board's agenda,
then obviously companies will

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follow.
And I think this was the reason

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why companies were waking up to
this.

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And, and I think it is
absolutely, rightfully so,

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right.
As a good business manager, you

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want to understand evolving
risks.

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It's part of your job as a board
member, but also as a business

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leader to understand what are
potential risks for governing

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your firm.
So that is the reason why I

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believe it made it so quickly on
the agenda for the first time.

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We're not talking about this.
Yeah, OK.

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There are some distant effects
that are difficult to measure,

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right?
We're talking about very

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immediate risks.
We're talking about potential

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costs.
And so this is the reason why

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from my perception at least, a
lot of companies, we're really

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looking after this quite, quite
strong.

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And I think this is still what
they're doing today.

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Despite all quote UN quote
backlash and disinterest in the

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topic.
Most companies have understood

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there are certain risks when it
comes to sustainability that

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actually we need to safeguard if
we want to continue making good

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money now.
You mentioned the word backlash.

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We use the word in one of our
previous episodes.

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In a subsequent episode, we were
corrected by our guest speaker

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to say it's a reset, right?
Whatever it might be, we know

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that there has been a shift
right now.

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What is your view of this?
Is this backlash slash reset

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around ESG?
Is it a risk to genuine

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sustainability efforts or has
the right thing actually

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happened in the sense that
people are now concentrating on

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the things that actually matter
to to get to this eventual

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vision of sustainability?
Yeah, it's not that easy, right?

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I think we're in the midst of
this, whatever you want to call

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it, backlash, burnout, reset.
And so we will not be able to

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100% tell whether it actually in
the end is positive or negative,

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right.
We're because we're just

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witnessing first hand and in
real time.

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So I think what we're seeing is
that the concept of ESG has been

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extremely politicized starting
in the US, starting mostly by by

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the Republicans who basically
deemed it as a vogue concept,

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which if you follow my previous
definition, there's nothing woke

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about ESG.
It's a risk management

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framework, right?
It's a good business management

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framework, but it was
politicized, it was high tracked

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if you want.
And so basically people evoke

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equated if with with being
vogue.

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And this is where we saw then a
lot of the backlash coming from

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now.
Is it healthy?

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I don't know.
I can just tell you that I think

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where we are coming from was a
bit of a feel good

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sustainability error, meaning
that everybody for whatever

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reason, because there was a lot
of buzz, because there was a lot

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of noise, a lot of push, push to
actually take a stance on these

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topics.
Everybody had met 0 targets.

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Everybody had something on
sustainability.

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We all congratulated ourselves
that we're looking at

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sustainability.
But actually, if you look at how

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the planet is doing, how how we
have actually progressed on many

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of these topics, the progress
was fairly limited.

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So in that sense, I think it is
an important wake up call.

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Will it go in the right
direction is to be seen?

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What I'm seeing personally is
that those companies that had

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skin in the game, they're still
in the game, but those that

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actually really just had it as a
nice tech line and because

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everybody was pressuring them to
also put sustainability

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somewhere, they're not out of
the game.

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So I think what we're really
seeing is those that were

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serious, they're still in there
and they're even doubling down.

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And that could be what you
talked, a healthy reset, right?

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Those that really just did it
for lip service, they're out,

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Yeah.
And so maybe it gives us more

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clarity.
Maybe that is the positive

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aspect in all this backlash.
Yeah, I see some parallels with

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the with the whole AI revolution
as well.

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Everyone needs to talk about AI
or the other, but at the end of

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the day, some will take
advantage of it, others will

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fall by the wayside.
Yeah, interest and we talk a lot

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about OK, there are a lot of
discussion about how to

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structure framework to solve the
problem as you said Julia, some

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of them that doubling down some
of their others, but the problem

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is still there, it's growing.
This is probably something we

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don't need to we cannot forget.
And actually that brings us to

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the to the second myth.
There is always the link,

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probably wrongly done, that
sustainability equals climate

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that is all about reducing
carbon emissions or achieving at

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0.
And we know this is a very

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narrow view of sustainability.
So what do you think climate has

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become a short end for
sustainability, Why it has been

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this kind of misconception?
And you can help us to have some

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clarity here.
Yeah.

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And again, this is one of the
questions that are asked very

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often in programs.
And this is what do you think

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when I say sustainability?
What comes to mind 1st?

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And for most, it's actually
climate or CO2 emissions or net

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0.
So it all relates to the whole,

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let's say carbon story and or
greenhouse gas emissions.

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I think some call it in the
literature, they call it climate

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myopia.
We have almost like a tunnel

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view on just climate.
And I think, hey, let's not

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underestimate.
Of course, climate is super

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important and there's a massive
challenge and it's a global

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challenge.
So we rightfully put a lot of

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attention on climate.
One of the things that I'm

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trying to say is climate is just
one of the many topics that we

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need to look at when we talk
about nature and environmental

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aspects of sustainability.
There are some that I say are at

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least equally important, if not
maybe more pressing at the

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moment.
So I think the idea here is just

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to say we need to understand
that the topic is much broader.

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Now to your question, why is
that the case?

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I think we have talked a lot
about climate.

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We have tried a lot with the
Paris climate agreement.

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We have started to really put a
strong focus on this politically

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from the corporate world,
investor pressure.

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So I think we rightfully put a
lot of attention on this and we

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have started many say one of the
reasons why we put so much

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attention is that we can now
really measure it.

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It has become much more
measurable, comparable.

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We have frameworks, we do have
regulation that pushes us to go

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more in that direction.
And I think all of these factors

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together with increasing
awareness by consumers and other

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00:13:58,840 --> 00:14:02,120
stakeholders has actually led to
put the topic on on the radar

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for many companies and and the
public as a as a whole, not just

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companies.
And I think one of the good

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framework that is up there to
sanity check this is the the the

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planetary boundaries, right?
And we just did.

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I refreshed the episode with
Ishi because now we have 7 out

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of nine, if I remember well,
that are outreached.

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The safe zone and climate, yes,
is one of those.

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But there are many, as you say,
that are impacting our life on

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the planet, the only planet we
have.

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Yeah.
And it's it's actually the same

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framework that I use all the
time, the planetary boundaries.

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And I think you mentioned 7 out
of nine.

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For me, one of the most worrying
is actually biodiversity because

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this is one of the ones that we
cannot easily reverse.

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Water is one of the ones that I
find extremely worrying.

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If you look at the trajectory in
just ten years, how much we

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pushed it out of the safe
operating zone, I think many

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think this is like 100 years
evolution, and we're really

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talking about 10-15 years here.
And maybe if we bring it back to

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the planetary boundaries, one of
the things that you can see is

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that why we look so much at
climate is if you look at all of

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these dimensions, and I
mentioned just a few, climate is

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almost like you put fuel in the
fire.

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It makes all of the other
dimensions worse, right?

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I can lose species that say fish
because I overfish or I build

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dams, which is human activity,
but I can also lose it because

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of we heat up rivers, lakes and
oceans with climate change.

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So I think they're important
interdependencies.

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And This is why climate
obviously super important, but

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depending on which country you
are and depending on which

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supply chain or industry you
are, some of the other

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dimensions, the global food
value chain, for instance, soil

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health, biodiversity of water,
all of these are extremely

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important.
Yeah.

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And and so there is a lot to
cover beyond climate.

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I mean, these episodes on the 9
planetary boundaries are some of

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00:15:59,160 --> 00:16:01,600
our most downloaded episodes.
So certainly there is the

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00:16:01,600 --> 00:16:04,320
recognition of the fact that
there's a lot to do beyond

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beyond just climate change or
carbon now because there is so

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00:16:08,680 --> 00:16:12,480
much to do.
One of the questions or myths

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that seems to come across is
that it is definitely going to

285
00:16:15,840 --> 00:16:19,480
be expensive, right?
So equating sustainability with

286
00:16:19,480 --> 00:16:22,360
cost.
And the the myth that we can

287
00:16:22,360 --> 00:16:26,520
summarize is that sustainability
is going to be very expensive.

288
00:16:26,520 --> 00:16:32,600
It is either a compliance burden
or sort of a luxury item that

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00:16:32,600 --> 00:16:34,960
eats into profitability of
corporations.

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00:16:35,960 --> 00:16:40,040
Would you help us understand why
the first of all is it, is it

291
00:16:40,040 --> 00:16:43,760
even a myth?
And then secondly, you know why

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00:16:43,760 --> 00:16:46,880
does this myth persist?
Yeah.

293
00:16:46,880 --> 00:16:49,880
For me, it's 100% a myth because
I mean what we see and this is

294
00:16:49,880 --> 00:16:52,680
what all studies show, the cost
of inaction will be much higher

295
00:16:52,680 --> 00:16:55,440
as the cost of action.
And so that is the important

296
00:16:55,440 --> 00:16:57,840
one.
But I think let's let's cut the

297
00:16:57,840 --> 00:17:00,400
level through the noise.
Why do we see and always equate

298
00:17:00,400 --> 00:17:03,400
sustainability as a cost?
Again, goes back a little bit

299
00:17:03,400 --> 00:17:06,520
for me to the, let's say
sustainability 1.0.

300
00:17:06,520 --> 00:17:09,119
We are putting sustainability on
the radar, but how is

301
00:17:09,119 --> 00:17:11,640
sustainability actually
approached by business at the

302
00:17:11,640 --> 00:17:14,119
beginning?
And I'm talking like 20-30 years

303
00:17:14,119 --> 00:17:18,319
back more as CSR activity,
meaning I do business as usual

304
00:17:18,319 --> 00:17:22,599
and then I need to plant some
trees in Madagascar or open some

305
00:17:22,599 --> 00:17:26,839
other help schemes or whatever
that cost me money because the I

306
00:17:26,920 --> 00:17:29,840
have have absolutely nothing to
do with my core business, right?

307
00:17:29,840 --> 00:17:32,880
And of course, then it becomes a
cost because it is not

308
00:17:32,960 --> 00:17:35,720
integrated into my core
activities, but it's basically a

309
00:17:35,720 --> 00:17:38,480
side activity.
And this is, I think where a lot

310
00:17:38,480 --> 00:17:41,840
of this idea comes from that
sustainability only costs US

311
00:17:41,840 --> 00:17:44,080
money.
But even nowadays, if you look

312
00:17:44,080 --> 00:17:48,880
at this, for most companies that
I've seen, sustainability is

313
00:17:48,880 --> 00:17:52,720
still the least strategic topic.
Meaning what we oftentimes do is

314
00:17:52,720 --> 00:17:54,760
we'll do a lot of sustainability
initiatives.

315
00:17:55,560 --> 00:17:57,400
These initiatives, they keep us
busy.

316
00:17:57,400 --> 00:18:00,720
They are nice in our
sustainability reports, but

317
00:18:00,720 --> 00:18:02,840
usually they are under resourced
and understaffed.

318
00:18:03,280 --> 00:18:06,000
And basically they never really
get traction or escape.

319
00:18:06,920 --> 00:18:09,840
And this means that basically I
have to put money on the table

320
00:18:09,840 --> 00:18:14,040
without these initiatives ever
really becoming a course of the

321
00:18:14,040 --> 00:18:15,840
business and really playing out
their strength.

322
00:18:16,640 --> 00:18:21,560
And one of the things that I
always equated with is if I'm in

323
00:18:21,560 --> 00:18:24,600
a session and there's a session
AI and a session on

324
00:18:24,600 --> 00:18:28,680
sustainability, when we talk
about AI, we always talk about

325
00:18:28,680 --> 00:18:30,600
an investment.
When we talk about

326
00:18:30,600 --> 00:18:32,520
sustainability, we always talk
about a cost.

327
00:18:32,880 --> 00:18:34,280
And I'm like, that is
surprising, right?

328
00:18:34,280 --> 00:18:37,080
Because if you look at all the
studies, most actually say that

329
00:18:37,080 --> 00:18:41,040
when we look at AI quote, UN
quote, investments actually 80%

330
00:18:41,040 --> 00:18:43,760
fail.
So it is in large part for

331
00:18:43,760 --> 00:18:47,040
companies also a cost.
But for one reason or the other,

332
00:18:47,040 --> 00:18:49,760
as soon as we're in the virtual
realm, we talk about investment.

333
00:18:49,760 --> 00:18:51,680
And as soon as we're in
sustainability, we talk about

334
00:18:51,680 --> 00:18:53,800
cost.
And I think this is also where

335
00:18:53,800 --> 00:18:56,800
we as a sustainability, let's
say community or professionals

336
00:18:57,160 --> 00:19:00,720
need to help companies
understand if you actually

337
00:19:00,720 --> 00:19:03,360
manage to align it to the core
of your business in many ways,

338
00:19:03,360 --> 00:19:06,040
there are directly indirect
benefits from sustainability.

339
00:19:06,040 --> 00:19:10,040
It could be that you get better
the ability right traceability

340
00:19:10,040 --> 00:19:15,360
that you invest in, how do I
reduce in energy usage, water

341
00:19:15,360 --> 00:19:18,080
usage, All of these are cost
drivers as well.

342
00:19:18,080 --> 00:19:22,120
So I think a lot of this is
about if we manage to integrate

343
00:19:22,120 --> 00:19:25,120
sustainability in the core of
our production, our processes,

344
00:19:25,120 --> 00:19:27,680
our products, then actually it's
an investment.

345
00:19:28,160 --> 00:19:31,360
If we really do it as a side
activity, if we do it small to

346
00:19:31,360 --> 00:19:34,800
small with no scale, it will
always remain a cost burden.

347
00:19:35,640 --> 00:19:38,240
Yeah.
I also notice in some of these

348
00:19:38,240 --> 00:19:43,840
conversations that talking about
sustainability as a cost is also

349
00:19:43,840 --> 00:19:49,200
a good excuse to not talk about
it or to divert away from the

350
00:19:49,200 --> 00:19:51,440
topic.
And this comes across with many

351
00:19:51,440 --> 00:19:52,600
companies.
Yeah.

352
00:19:52,600 --> 00:19:55,840
And again, but I think what is
so important is one of the

353
00:19:55,840 --> 00:19:59,560
reasons why we have this as a
problem, I think is that we're

354
00:19:59,560 --> 00:20:01,480
just managing on different time
horizons.

355
00:20:01,760 --> 00:20:04,240
If we're really just only
looking at the quarterly

356
00:20:04,240 --> 00:20:06,240
reports, it may come up as a
cost.

357
00:20:06,880 --> 00:20:12,520
Oftentimes sustainability
advantages require some time

358
00:20:13,200 --> 00:20:14,840
until they play out their
strength.

359
00:20:14,840 --> 00:20:19,400
So it means that I may need to
invest now, but I think it's a

360
00:20:19,800 --> 00:20:22,840
midterm investment, right?
Oftentimes it's not the direct

361
00:20:23,160 --> 00:20:25,440
payoff.
But it basically means over

362
00:20:25,440 --> 00:20:27,560
time, actually, we'll do us and
serve us better.

363
00:20:27,560 --> 00:20:31,200
And if you think about it, just
as an example, I mean, look at

364
00:20:31,200 --> 00:20:32,880
coffee and chocolate at the
moment.

365
00:20:32,880 --> 00:20:34,360
Prices are going through the
roof.

366
00:20:34,800 --> 00:20:37,760
People would have told me 5-10
years ago, regenerative

367
00:20:37,760 --> 00:20:39,360
agriculture never pays off,
right?

368
00:20:39,360 --> 00:20:43,400
It's just a cost right now,
those that have invested word by

369
00:20:43,400 --> 00:20:46,600
word are the ones that better
weather the storms and climate

370
00:20:46,600 --> 00:20:51,600
change and all of these.
So it actually does pay off, but

371
00:20:51,600 --> 00:20:54,840
again, it oftentimes shows at a
different time frame and this is

372
00:20:54,840 --> 00:20:58,240
what our economic framework is
not really well organized for.

373
00:21:00,800 --> 00:21:04,120
And it's interesting what you
say because it's where there is

374
00:21:04,120 --> 00:21:08,840
no link to the risk reception
and to to endurance to really

375
00:21:08,840 --> 00:21:14,960
inject some antibodies in the in
the in the corporate framework

376
00:21:15,040 --> 00:21:18,520
to be ready for these changes
then you will not be ready.

377
00:21:18,520 --> 00:21:21,840
So the kind of effort has to be
linked as you said, it cannot be

378
00:21:21,840 --> 00:21:24,960
just something you do on the
side, but something linked to

379
00:21:24,960 --> 00:21:29,320
your operations, to your good
market, to your supply chain

380
00:21:29,320 --> 00:21:32,080
and.
Not just risk coming, but also

381
00:21:32,080 --> 00:21:34,280
opportunity, right?
So one of the things I really

382
00:21:34,280 --> 00:21:37,760
try to instill is just thinking
that we used to approach

383
00:21:37,760 --> 00:21:41,120
sustainability solely from a
risk lens and ESG has reinforced

384
00:21:41,120 --> 00:21:43,480
and doubled down on this.
But there are also big

385
00:21:43,480 --> 00:21:45,920
opportunities for
differentiation, for increasing

386
00:21:45,920 --> 00:21:49,160
the return on your investments,
for making your supply chains

387
00:21:49,160 --> 00:21:51,280
more resilient.
All of these I would frame not

388
00:21:51,280 --> 00:21:54,560
just as a risk but or de
risking, but actually also as an

389
00:21:54,560 --> 00:21:58,560
opportunity to gain some
important direct and indirect

390
00:21:58,600 --> 00:22:02,880
business benefits.
This bring us actually to the to

391
00:22:02,880 --> 00:22:05,280
the next meet.
So with the previous one was

392
00:22:05,280 --> 00:22:09,400
probably the the CFCFO meet also
stability as a cost.

393
00:22:09,840 --> 00:22:13,840
Let's go to the to our Chief
Marketing officer meet about

394
00:22:13,840 --> 00:22:15,720
sustainability products don't
sell.

395
00:22:16,920 --> 00:22:23,240
So probably and me to say the
customers say the consumers say

396
00:22:23,240 --> 00:22:27,280
they care about sustainability,
but we don't pay for it, don't

397
00:22:27,280 --> 00:22:31,760
pay a premium for it.
Is that really true?

398
00:22:33,160 --> 00:22:37,320
What really can make sustainable
products more successful?

399
00:22:38,400 --> 00:22:42,240
It's a push from the company or
support from the customers.

400
00:22:42,240 --> 00:22:45,920
So how do you see that?
Yeah.

401
00:22:46,120 --> 00:22:50,800
So I hear that quite often,
companies calling me up and

402
00:22:50,800 --> 00:22:52,600
saying, look, we have a
sustainable product, but it

403
00:22:52,600 --> 00:22:55,360
doesn't sell.
And then I always say, OK, let's

404
00:22:55,360 --> 00:22:58,400
pause here and let's try to
understand what have we tried,

405
00:22:58,400 --> 00:23:00,120
how is this product position and
so on.

406
00:23:00,120 --> 00:23:04,520
I think generally I see three
big problems or let's say

407
00:23:05,120 --> 00:23:08,440
trade-offs.
I call it the performance trade

408
00:23:08,440 --> 00:23:10,320
off, the price trade off and the
sales trade off.

409
00:23:10,880 --> 00:23:13,480
The performance trade off is
basically to say, look, I have a

410
00:23:13,480 --> 00:23:17,280
sustainability product, but the
quality is not as good as with

411
00:23:17,280 --> 00:23:19,320
the conventional one, but it's
OK because you wanted a

412
00:23:19,320 --> 00:23:22,320
sustainable product, right?
So you will be willing to forego

413
00:23:22,320 --> 00:23:25,200
some personal benefits and the
quality of the product because

414
00:23:25,200 --> 00:23:28,680
you get a sustainable. 1A great
example here that I really love

415
00:23:28,680 --> 00:23:31,880
is you may remember the Nike
show, the trash talk.

416
00:23:32,240 --> 00:23:35,040
If you look at the Nike trash
talk shoe, it actually looked

417
00:23:35,040 --> 00:23:37,400
like trash.
I don't want to be mean, but it

418
00:23:37,400 --> 00:23:39,040
looked like really you put it
out of the trash.

419
00:23:39,040 --> 00:23:42,400
It looked like an old shoe.
And basically you said, OK, dear

420
00:23:42,400 --> 00:23:44,840
sustainable consumer, because
you want a sustained product

421
00:23:45,080 --> 00:23:47,320
here, you get a product that
really doesn't look like a

422
00:23:47,320 --> 00:23:49,920
normal night performance.
So it doesn't perform like a

423
00:23:49,920 --> 00:23:52,720
night performance.
So it actually was one of those

424
00:23:52,720 --> 00:23:55,920
that that really didn't perform,
it didn't meet the expectations.

425
00:23:56,280 --> 00:23:58,840
And then they basically says the
sustainable products fail.

426
00:23:59,360 --> 00:24:02,960
Now, I think this is one of the
biggest problems that I see is

427
00:24:02,960 --> 00:24:05,480
that you think that they don't
have to perform as well.

428
00:24:05,480 --> 00:24:09,560
And what you've seen is that
Nike then actually really

429
00:24:09,720 --> 00:24:13,400
understood the mistakes made and
they then basically developed

430
00:24:13,400 --> 00:24:17,440
the Nike's line it and Nike's
line It was the idea OK, 60%

431
00:24:17,440 --> 00:24:22,080
less is super lightweight, super
durable, high performing and

432
00:24:22,360 --> 00:24:25,480
actually made just with one
single niche, right.

433
00:24:25,480 --> 00:24:29,080
So reducing the waste by this,
but actually it became like one

434
00:24:29,080 --> 00:24:32,200
of Nike's best selling shoes and
why?

435
00:24:32,200 --> 00:24:37,320
Because actually it, it not just
met customer expectations, it

436
00:24:37,320 --> 00:24:39,320
even exceeded customer
expectations.

437
00:24:39,600 --> 00:24:42,280
And I think often times we're in
this mindset to say, yeah,

438
00:24:42,280 --> 00:24:45,240
because you're buying sustained
product, you should forego some

439
00:24:45,240 --> 00:24:47,960
of the performance or, or
quality efforts.

440
00:24:47,960 --> 00:24:52,080
And I think that is wrong.
Most of the time if you ask

441
00:24:52,080 --> 00:24:56,200
customers to switch, if they, if
they switch to a sustainable

442
00:24:56,200 --> 00:24:58,040
product, they have switching
costs.

443
00:24:58,520 --> 00:25:01,560
So this means you need to
positively surprise them.

444
00:25:01,560 --> 00:25:05,240
Actually the product needs to
outperform, not just actually

445
00:25:05,400 --> 00:25:07,080
meet the performance or
underperform.

446
00:25:07,360 --> 00:25:09,400
So that is 1 super important
trade off.

447
00:25:09,840 --> 00:25:12,640
And the other one may be the
most common one is the price

448
00:25:12,640 --> 00:25:14,520
trade off.
And this is basically the idea

449
00:25:14,520 --> 00:25:17,840
to say, yeah, yeah, you are all
asking for sustainable products.

450
00:25:17,840 --> 00:25:20,160
So you should be willing to pay
about 40% more for that.

451
00:25:21,200 --> 00:25:23,360
And I don't think that this is
the right approach.

452
00:25:23,360 --> 00:25:27,800
I mean, why should all the costs
incurred go over to the

453
00:25:27,800 --> 00:25:29,640
customer, right?
So I think this is one of the

454
00:25:29,640 --> 00:25:32,320
things where basically the
company says we offer you the

455
00:25:32,320 --> 00:25:34,360
sustained product because
apparently you're a sustainable

456
00:25:34,360 --> 00:25:36,840
consumer.
We are not willing to forego

457
00:25:36,880 --> 00:25:40,120
even a 5% reduction in our
earnings.

458
00:25:40,120 --> 00:25:43,320
So you should pay everything
that we put on top.

459
00:25:44,000 --> 00:25:47,800
A lot of this actually has to do
with we need to still scale

460
00:25:47,800 --> 00:25:49,160
certain sustainability
solutions.

461
00:25:49,160 --> 00:25:51,720
So it's not that by default
these products cost more.

462
00:25:52,040 --> 00:25:56,640
But of course, if I want to pay
fair trade prices, if I want to

463
00:25:56,640 --> 00:25:59,920
have more qualitative durable
products, it may actually be an

464
00:25:59,920 --> 00:26:02,600
investment here.
But I think we need to be very

465
00:26:02,960 --> 00:26:06,160
careful that we're not thinking
that just because a consumer is

466
00:26:06,160 --> 00:26:08,880
interested in sustainable
solutions that they're willing

467
00:26:08,880 --> 00:26:12,760
to pay 40% extra for it.
Many can't afford it and others

468
00:26:13,120 --> 00:26:16,200
actually don't want to because
they actually really feel that

469
00:26:16,200 --> 00:26:18,120
they're being fought by the
company, that they're the only

470
00:26:18,120 --> 00:26:20,040
ones that now take over all
these costs.

471
00:26:20,040 --> 00:26:23,760
And I think this is where it is
also a marketing topic, but it's

472
00:26:23,760 --> 00:26:25,440
also a value based pricing
topic.

473
00:26:26,040 --> 00:26:27,720
And the last one that I
mentioned was the sales

474
00:26:27,720 --> 00:26:30,600
trade-offs.
And here what I'm seeing is that

475
00:26:30,600 --> 00:26:35,640
basically sales, the sales team
in a sense is if you want in

476
00:26:35,640 --> 00:26:37,960
most companies to gatekeeper,
meaning they're the ones if

477
00:26:37,960 --> 00:26:40,520
you're particularly B2B, you're
going to decline.

478
00:26:40,520 --> 00:26:44,360
You offer certain products.
And oftentimes the sales team is

479
00:26:44,440 --> 00:26:47,320
either not incentivized or not
confident enough to sell the

480
00:26:47,320 --> 00:26:51,200
sustainable alternative because
suddenly they need to talk about

481
00:26:51,560 --> 00:26:53,600
sustainability.
They don't feel like they can go

482
00:26:53,600 --> 00:26:56,800
into conversations about CO2 and
greenhouse gases and

483
00:26:56,800 --> 00:26:59,400
biodiversity and all of this.
So they're not trained or they

484
00:26:59,400 --> 00:27:01,200
don't feel comfortable in these
conversations.

485
00:27:01,920 --> 00:27:05,840
And basically oftentimes it's
also that they're incentivized

486
00:27:05,840 --> 00:27:08,400
by unit sales.
And if they have a product that

487
00:27:08,400 --> 00:27:11,440
may require more explanation, a
bit more risk on their side,

488
00:27:11,800 --> 00:27:14,440
they actually don't have any
incentive to offer it.

489
00:27:14,920 --> 00:27:18,040
So again, it requires really
understanding where in the

490
00:27:18,040 --> 00:27:23,320
organization is it that that
basically the sustained product

491
00:27:23,320 --> 00:27:25,080
fails.
And usually it's one of the

492
00:27:25,080 --> 00:27:26,480
three.
There might be other reasons,

493
00:27:26,480 --> 00:27:28,880
but these are usually one of the
three that I'm seeing and I

494
00:27:28,880 --> 00:27:32,720
think there are easy fixes for
most of them, right.

495
00:27:32,720 --> 00:27:35,640
So price is a difficult one.
But I think there's also

496
00:27:35,640 --> 00:27:39,040
question if we are serious about
bringing that product to the

497
00:27:39,040 --> 00:27:42,320
market, we need to actually look
at ways to offer it at a

498
00:27:42,320 --> 00:27:45,600
compelling price point and not
just say, OK, here's

499
00:27:45,600 --> 00:27:47,520
sustainability and still pay 40%
more.

500
00:27:49,560 --> 00:27:52,280
You know, Julia, I was just
looking at your LinkedIn

501
00:27:52,280 --> 00:27:54,880
profile.
It says Master of Science and

502
00:27:54,880 --> 00:27:58,560
Marketing and then PhD in
entrepreneurial studies.

503
00:27:58,560 --> 00:28:01,320
So I can clearly see this
passion coming across.

504
00:28:03,760 --> 00:28:08,560
Now it's time to move to the,
the, the last myth and we saved

505
00:28:08,560 --> 00:28:12,840
the best one for the last right?
And it then it goes, is it game

506
00:28:12,840 --> 00:28:16,400
over for sustainability?
You know, just like we said on

507
00:28:16,400 --> 00:28:20,360
the 9 planetary boundaries, it
seems like we are past the

508
00:28:20,360 --> 00:28:22,240
tipping point on many of these
things, right?

509
00:28:22,240 --> 00:28:24,000
Whether planetary, social or
political.

510
00:28:25,240 --> 00:28:29,640
And so maybe it's too little too
late to to redo all these things

511
00:28:29,640 --> 00:28:34,520
around sustainability.
Maybe let's look at it from a

512
00:28:34,920 --> 00:28:38,760
from a solution oriented angle.
How do we fight this

513
00:28:38,760 --> 00:28:43,120
sustainability fatigue that
organizations and society seem

514
00:28:43,120 --> 00:28:48,600
to be grappling with today?
It brings us a bit full circle

515
00:28:48,600 --> 00:28:50,600
to what we started off the
conversation, right?

516
00:28:50,600 --> 00:28:54,200
And I think so a is it game
over?

517
00:28:54,200 --> 00:28:56,320
No, actually the problems are
just starting right.

518
00:28:56,320 --> 00:28:58,600
If you look at the planetary
boundaries and others, problems

519
00:28:58,600 --> 00:29:00,920
are getting worse.
So it's not getting over.

520
00:29:00,920 --> 00:29:04,960
It's actually just really at a
tipping point of really guarding

521
00:29:04,960 --> 00:29:08,600
much worse.
So now what is game over, and I

522
00:29:08,600 --> 00:29:10,880
think I mentioned in the
beginning is this feel good era

523
00:29:10,880 --> 00:29:13,320
of sustainability.
And maybe in the end of the day,

524
00:29:13,320 --> 00:29:16,280
we will all realize that this is
a very important awakening point

525
00:29:16,920 --> 00:29:18,880
because it forces us all to
mature.

526
00:29:19,080 --> 00:29:23,200
It forces us to approach a topic
much more strategically.

527
00:29:23,880 --> 00:29:27,680
I don't think it served us well
to be in a time where, yeah, we

528
00:29:27,680 --> 00:29:33,400
actually took some money aside
to pay for some sustainability

529
00:29:33,400 --> 00:29:36,120
activities that were completely
outside the purview of the firm,

530
00:29:36,560 --> 00:29:39,560
where basically we did it so
that we had nice and shiny

531
00:29:39,560 --> 00:29:43,000
sustainability reports, but
actually nothing changed.

532
00:29:43,680 --> 00:29:46,720
So I think what it forces us to
do is now if we approach

533
00:29:46,720 --> 00:29:50,000
sustainability, it will actually
be much more strategic.

534
00:29:50,160 --> 00:29:53,360
It means that we really need to
see where does it make business

535
00:29:53,360 --> 00:29:55,280
sense.
And I think is that a good

536
00:29:55,280 --> 00:29:57,080
thing?
Yes, because it will help us to

537
00:29:57,080 --> 00:30:00,800
make sustainability much more
integral part of of business

538
00:30:00,800 --> 00:30:02,360
organization.
And I think this is where we

539
00:30:02,360 --> 00:30:05,440
need to go.
We need to go away from this, an

540
00:30:05,440 --> 00:30:08,120
externalized view where I do
business as usual and then I do

541
00:30:08,120 --> 00:30:11,680
a little bit good on the side.
So I think it's an important

542
00:30:11,680 --> 00:30:13,400
wake up call.
I told you, I mean, we're in the

543
00:30:13,400 --> 00:30:15,840
midst of this, so I don't know
whether we'll come out stronger.

544
00:30:15,840 --> 00:30:18,080
It's my hope.
I think what we will see.

545
00:30:18,080 --> 00:30:20,840
And I think you mentioned my
master in marketing and I think

546
00:30:20,840 --> 00:30:22,280
maybe I'm coming from that
angle.

547
00:30:22,280 --> 00:30:26,200
I think we we basically told
everyone the same story whether

548
00:30:26,200 --> 00:30:28,120
they liked it.
And we said, you need to do

549
00:30:28,120 --> 00:30:29,840
something because we need to
save the planet.

550
00:30:30,520 --> 00:30:33,240
And then you had a lot of people
that said, yeah, could be

551
00:30:33,240 --> 00:30:35,600
important.
But actually my role right now,

552
00:30:36,000 --> 00:30:38,680
I don't feel like this is on top
of my agenda, right?

553
00:30:39,000 --> 00:30:41,160
I have cost pressure.
I have a lot of other issues.

554
00:30:41,680 --> 00:30:45,560
This might be important.
And yes, I actually recycle my

555
00:30:45,560 --> 00:30:46,920
waste.
So I'm doing my part.

556
00:30:46,920 --> 00:30:48,920
But I don't look at this in the
business world.

557
00:30:49,240 --> 00:30:53,600
So I think we need to start
reframing the topic so that it

558
00:30:53,600 --> 00:30:56,800
addresses the, the, the lenses
of the people we're trying to

559
00:30:56,800 --> 00:30:58,920
reach, right?
So if we're talking to ACEO, we

560
00:30:58,920 --> 00:31:02,480
need to talk about how does it
help you to de risk supply

561
00:31:02,480 --> 00:31:04,120
chains?
How does it help you to address

562
00:31:04,680 --> 00:31:06,520
your pain points?
How does it help you to achieve

563
00:31:06,520 --> 00:31:09,600
your goals and so on, right.
So instead of coming with this

564
00:31:09,600 --> 00:31:12,440
one-size-fits-all solution,
meaning that you should all be

565
00:31:12,440 --> 00:31:14,640
interested in saving the planet.
And if you're not, you're a bad

566
00:31:14,640 --> 00:31:18,200
citizen, right?
So we appealed always sense of

567
00:31:18,200 --> 00:31:22,000
urgency, sense of guilt, all of
these and it failed.

568
00:31:22,000 --> 00:31:25,280
It didn't served as well.
I think we need to start looking

569
00:31:25,280 --> 00:31:27,560
at this from a sense of
opportunity.

570
00:31:27,560 --> 00:31:29,960
What's in for you?
How can we make this topic

571
00:31:29,960 --> 00:31:33,280
relevant so that it actually
helps you to address some of the

572
00:31:34,160 --> 00:31:36,760
some of the key strategic
aspects of your organization?

573
00:31:36,760 --> 00:31:38,800
So a lot of this is reframing,
right?

574
00:31:38,800 --> 00:31:41,680
So you see a lot of my
colleagues, including myself, at

575
00:31:41,680 --> 00:31:44,280
times, we reframe the topic.
We're not speaking about

576
00:31:44,280 --> 00:31:46,680
sustainability, but we talk
about resilience or future

577
00:31:46,680 --> 00:31:49,840
readiness because it's at the
core, it is what it is, right?

578
00:31:49,840 --> 00:31:53,320
So, and I think we just need to
do a much better job to make

579
00:31:53,320 --> 00:31:58,560
this topic actionable, relevant,
and strategic for organizations

580
00:31:58,560 --> 00:32:02,960
as well.
And Julia in this in this

581
00:32:02,960 --> 00:32:09,280
environment personally, what
keeps you positive optimist in

582
00:32:10,400 --> 00:32:16,720
even though we are 7 out of nine
beaches that are surpassed in

583
00:32:16,720 --> 00:32:18,080
the planetary boundaries, for
example?

584
00:32:19,360 --> 00:32:22,280
And I'm not positive every
single minute of the day.

585
00:32:22,280 --> 00:32:25,480
And I have my downs and I look
at this data and I'm wondering

586
00:32:25,840 --> 00:32:28,000
what my kids will still
experience, right.

587
00:32:28,000 --> 00:32:32,360
So it's not that I'm, I'm a
relentless optimist that doesn't

588
00:32:32,360 --> 00:32:34,880
see the reality.
So, but I think what keeps me

589
00:32:34,880 --> 00:32:38,600
optimistic and all the mess that
we're in is actually most of the

590
00:32:38,600 --> 00:32:40,720
solutions are there.
That is 1 big thing.

591
00:32:40,720 --> 00:32:43,440
Most of the solutions we have,
whether these are technological

592
00:32:43,440 --> 00:32:49,320
or business models or community
based solutions, the solutions

593
00:32:49,320 --> 00:32:51,480
are there.
A lot of what is not there is

594
00:32:51,480 --> 00:32:55,360
the business case for these or
how do we scale them or how do

595
00:32:55,360 --> 00:32:58,720
we really now make them
competitive visa V what is

596
00:32:58,720 --> 00:33:02,120
already out there.
Well, oftentimes the economic

597
00:33:02,120 --> 00:33:04,760
framework condition actively
hindered the success of these

598
00:33:04,760 --> 00:33:07,000
solutions.
But what makes me optimistic, we

599
00:33:07,000 --> 00:33:09,120
do have the solutions.
We're an extremely creative

600
00:33:09,120 --> 00:33:12,720
species, right?
So I mean humans and now put AI

601
00:33:12,720 --> 00:33:15,840
on top of this.
We actually have everything we

602
00:33:15,840 --> 00:33:18,080
need.
It's more of a willingness and a

603
00:33:18,080 --> 00:33:23,080
framework to now really get us
adopting those to scale those

604
00:33:23,600 --> 00:33:27,560
and to to turn the wheel around.
And I think so we have

605
00:33:27,560 --> 00:33:29,800
everything we need at our
disposal.

606
00:33:30,000 --> 00:33:33,320
It's it's really just an
implementation question right

607
00:33:33,320 --> 00:33:36,120
now.
And if you ask for what keeps me

608
00:33:36,120 --> 00:33:39,200
optimistic, I mean, I work with
a lot of entrepreneurs with a

609
00:33:39,200 --> 00:33:42,400
lot of companies that are still
in there, multinational

610
00:33:42,400 --> 00:33:45,600
companies that are not just
saying we're still in there, but

611
00:33:45,600 --> 00:33:47,080
they're saying actually we're
doubling down.

612
00:33:47,200 --> 00:33:51,320
It's not really part our CEO and
CFO now really adopted this and

613
00:33:51,320 --> 00:33:55,600
I think these are where you can
see those that have understood

614
00:33:55,600 --> 00:33:59,560
the strategic value of this,
they're actually really now

615
00:33:59,560 --> 00:34:04,880
driving this topic big times.
Thank you, Julian, very

616
00:34:04,880 --> 00:34:08,800
inspiring and for our listener
where they can, before we close,

617
00:34:08,800 --> 00:34:12,440
where they can find more of your
work or your research or they

618
00:34:12,440 --> 00:34:14,480
can reach out to you.
Yeah.

619
00:34:14,480 --> 00:34:17,560
So most of this I share on
LinkedIn, but actually you can

620
00:34:17,560 --> 00:34:21,400
also look at I buy IMD, which is
Imd's journal.

621
00:34:21,400 --> 00:34:26,440
And so both magazine and then
online articles where we share a

622
00:34:26,440 --> 00:34:29,600
lot of the, let's say, very
timely ongoing thinking around

623
00:34:29,600 --> 00:34:32,679
these topics.
I remember that is 1 recent

624
00:34:32,679 --> 00:34:34,320
episode was all around
sustainability.

625
00:34:34,320 --> 00:34:37,920
Extremely well done.
Yeah.

626
00:34:37,920 --> 00:34:40,480
We had also a serious around
sustained business

627
00:34:40,480 --> 00:34:43,040
transformation where we have
some best cases where basically

628
00:34:43,040 --> 00:34:46,120
you can learn from those that
have started to embark on this

629
00:34:46,120 --> 00:34:47,719
journey.
Again from a strategic lens,

630
00:34:47,719 --> 00:34:49,480
what is it that you could take
away from that?

631
00:34:50,320 --> 00:34:54,199
So yeah, we do have a
sustainability tap still at Ivy

632
00:34:54,199 --> 00:34:56,239
MD.
So we are actually still having

633
00:34:56,239 --> 00:35:01,840
skin in the game.
Well, that brings us to the end

634
00:35:01,840 --> 00:35:04,120
of today's episode of
Sustainability Forward.

635
00:35:04,520 --> 00:35:07,960
We've clearly unpacked a lot,
some of the biggest myths

636
00:35:07,960 --> 00:35:11,960
shaping how leaders and indeed
all of us think about

637
00:35:11,960 --> 00:35:16,920
sustainability, whether it's ESG
and climate, we talked about

638
00:35:16,920 --> 00:35:19,520
cost, consumers and, and even
hope, right?

639
00:35:19,520 --> 00:35:23,080
How do we stay optimistic?
It's clear that sustainability

640
00:35:23,560 --> 00:35:27,440
is neither just a checklist nor
is it just, you know, a set of

641
00:35:27,440 --> 00:35:30,560
ratings.
It's actually a mindset shift.

642
00:35:30,600 --> 00:35:34,480
So as Julia said, we've got the
tools, the technologies, So it

643
00:35:34,480 --> 00:35:39,200
needs this execution focus
mindset shift, you know, that's

644
00:35:39,200 --> 00:35:42,320
challenges how businesses define
success.

645
00:35:42,840 --> 00:35:47,240
So big thank you to our guest,
Professor Julia Binder of Julia

646
00:35:47,240 --> 00:35:50,320
Binder.
Sorry, from IMD.

647
00:35:50,320 --> 00:35:52,960
Julia, thank you so much for for
joining us on this episode.

648
00:35:53,920 --> 00:35:55,520
Thank you so much for having me,
it was a pleasure.

649
00:35:56,440 --> 00:36:00,160
And to our audience, if you
enjoyed this conversation, make

650
00:36:00,160 --> 00:36:03,960
sure to follow us or subscribe
to our podcast, Sustainability

651
00:36:03,960 --> 00:36:07,080
Forward on your favorite podcast
platform.

652
00:36:07,720 --> 00:36:10,920
And if you think someone in your
network might benefit from this,

653
00:36:11,480 --> 00:36:14,560
definitely share it.
You can also find more insights

654
00:36:14,560 --> 00:36:18,000
from the podcast and updates on
LinkedIn by following us there.

655
00:36:18,640 --> 00:36:20,360
Carmen, thank you for joining
me.

656
00:36:20,360 --> 00:36:23,920
As always, thanks for thanks to
our audience for listening.

657
00:36:23,920 --> 00:36:25,880
And let's look forward to the
next episode.

658
00:36:27,200 --> 00:36:28,280
Thank you Rishika the episode.