Purpose, Performance, Profit: A founder and investor lens to understanding the ESG imperative.

Purpose, Performance, Profit: A founder and investor lens to understanding the ESG imperative.

um yeah welcome i’m ian gardner i i am your host today uh this is a webinar uh on purpose performance and profit uh which is a founder and investor lends to understanding the environmental social and governments uh which is esg uh imperative so if you’re not sure what that is don’t worry because we’re going to get right into it i am one of the co-founders of innovation bay um and yeah let me uh let me jump into it i want to start by acknowledging the and paying my respects to the traditional owners of the lands in which we’re all gathered today uh i’m in bondi junction so this is part of gadigal land so um i would like to pay my respects to to their elders past present and emerging uh and ignore acknowledge all aboriginal and torres strait islanders who are here today a little bit about innovation bay so if you don’t know who we are um we are here to support and connect the startup community all across australia we’ve done a little bit work in new zealand too and hopefully more soon we’ve been doing this since 2003 which is a long time uh 18 and a bit years and we’re all about creating connections and communities between founders leaders and investors so if that is if you’re one of them you’re in the right place and uh thank you so much for joining i want to do a big call out to kpmg so kpmg’s high growth ventures um we are partnering with them on this event and we’re going to hear from a couple in their team uh so yeah the kpmg hardware adventures team we’ve been working with them they’ve been a partner and supporter of innovation bay for about five years now and they’re dedicated to helping startup founders achieve sustained high performance and support the whole australian startup ecosystem um okay a little bit housekeeping on what we’re going to do today i’m about to invite the the panel up to the stage and we’re going to start the the conversation uh we do want to hear questions from uh everyone out there as well so this i’d love this to be as interactive as possible i think we had about 150 registrations so hopefully there’s a few of you on the call here uh but yeah please do submit your questions in the q a uh which is a function on zoom i’m sure we’ve all done enough zoom to know how to operate uh q a uh it’s just down at the bottom of your screen uh and we’ll also get the the chat is running so you can just chat along tell us where you’re from and let’s just keep it sensible and and clean uh what are we discussing today so yeah we are discussing esg so let me actually just kill my screen share so we can um yeah and i might invite everyone up onto stage just while i’m doing this um yeah so esg uh welcome amanda you’re first jonathan uh he also got andrew uh yeah tim yeah and there’s two others so i’ll do the intros in a sec um yeah esg it’s one of the fastest moving market drivers for investors and companies uh and we’re going to explore today just how esg can help you what effect is going to happen you yeah your business your business performance how are you going to drive profit and how are you going to affect positive change you know so there are those are all great outcomes uh now i can’t have this i i’m self-confessed not an expert in this space so i’m actually pretty excited about hearing from the panel as well um so in no particular order we have jonathan hannam so welcome jonathan quick mic check you all right hello welcome hi good stuff it’s always good when the mics work uh jonathan you are a co-founder and also the managing director of the taronga group uh which is a venture capitalist um sorry the taronga group of companies but you are the managing partner of taronga ventures which is part of that and it’s yeah you have a real tech ventures fund uh more than 25 years experience in the real estate sector uh and that’s one of the leading drivers for for esg which uh i think we’ll we’ll talk about uh amanda uh you’ve got a very simple bio here i mean you’ve done a lot more than this but right now you’re ahead of my woman nonsense very complicated woman awesome woman uh yeah you’re the head of high growth ventures at kpmg australia uh emeric madus welcome along uh emeric you are the ceo and founder of lord of the trees which is an awesome name for a business and we’ll get into that but you are the the first commercial drone planting scheme for ecosystem restoration using robotics drones and ai so that is wonderful what you’re trying to do and i’m sure we’ll get into a little bit more about uh about that lord of the trees part of the solution to the um esg challenges that we’re facing um all right look that’s enough for me let’s uh let’s have a chat about this so uh look we should start with just the this a real high level here and maybe try and get a definition of what esg represents um so why don’t i throw to you first jonathan um and just see if you can set the scene for us around dsg as one of the leading proponents i suppose in the panel thanks ian so um for us so uh we’re investing into emerging technology companies that impact the built environment and the real estate sector more broadly and i guess for us the um over the last 12 months almost all of our investors have started to ask us more about what we’re doing with companies that can impact the environment that can have a greater impact on their social the social needs that we need to address and also that can help real estate groups with a better understanding of how they can govern their underlying portfolios so we’ve sort of we’ve hit on the key three easng but what this really means is is how can we i guess future proof our businesses the the real estate groups by having technology and innovation that can come in and help to support the change that we need to make across the entire sector so it is deliberately broad um and it is the real estate sector there’s not many people know but it’s one of the greatest polluters in this space so it’s one of the greatest carbon um but we also have huge challenges with um you know paid disparity with construction debts so there’s a lot of underlying issues within the real estate sector that can be addressed through a greater understanding of esg yeah emer let me let me throw it to you and maybe you could start your your answer just with a quick overview of your very cool lord of the trees company and what you’re trying to do and then maybe follow on by saying you know how esg is either benefiting you or how you think about it in a day-to-day life sure sure um so it’s great to be here thanks for having me today um so a lot of the trees um we’re just about to celebrate our three year anniversary we are a company that restores ecosystems so we do full ecosystem restoration using mainly drones robotics artificial intelligence science and the knowledge of indigenous communities as well we mainly focus at replanting ecosystems after bushfires for example when the mine is closing so we do mining rehabilitation and we’re just starting to talk as well to farmers mainly work here in australia but we do have projects happening overseas as well at the moment so when it comes to esg um as we’ve all seen over the last uh couple of years the world is changing at an exponential rate and the vsg movement has been gaining momentum since its conception and at lord of the trees we are constantly raising money to grow our business and we realize very quickly uh from talking to investors that the need for investing in sustainable practices will only grow as these changes continue to occur which is what ian just said and it’s very important to incorporate esg factors when growing your business we we think as well that esg puts a lot of heavy emphasis on risk management because the monitoring and mitigating risks across all three dimensions which is environmental social and governments should be an important priority for any company no matter how big or small and at the end it really affects the long-term value of an asset or a business and uh it can have a significant impact on society when you consider all stakeholders that are involved so is it fair to say that you you’ve had inbound more inbound inquiries as a result of your ability to to be an esg you know is that is that a thing like are you esg sanctioned or i mean what does that actually mean and why does that mean you get more inquiries from people no it’s not necessarily it’s more like in terms of transparency and what we’re trying to communicate that is a line it’s it’s the ethos of our business uh especially since we are in um you know i mean especially in our line of business when we’re trying to um you know fix the ecosystem and repair the planet so it’s it’s very important that we uh we breathe uh esg and everything that we do yeah amanda let me throw it to you i mean like you’ve been working in startups for almost as long as i have so we’ve been around for a while uh but the esg has definitely you know i think if you did a google search from five years ago it didn’t exist and then two years ago a little bit more last year a lot more and now it’s just it seems to be everywhere so i mean why has it become so relevant and maybe you could sort of cascade in to you know what it means for kpmg sure um well we’re going to take you on a bit of a history listening but it has been around issues actually very i i think it actually started i will hazard a guess in around 2005 because we started to see and hear a little bit more when i was in the u i lived in the u.s in around the gfc around 2008 and it was starting to sort of be discussed then and i think um yeah i i just remember hearing about it so it’s sort of you know it was getting and i i can imagine it sort of steadily started to sort of increase from there and then around sort of 2013 2014 um you saw another sort of this acceleration the growth of sg investing because studies were starting to be published that showed that good corporate sustainability performance was associated with good financial results so and then again over the last couple of years we saw a real increase in the urgency of the esg investment and i think you know one of the key drivers for that was climate change um and more recently there was a global climate report which i’m sure a lot of people are familiar with on the call that um i always get the name i think it’s ar6 ao6 yeah probably is that right yeah anyway we really found that um one thing was that global global climate is changing and it’s changing rapidly and two there’s a need to earn the need to act is now is actually urgent to avoid catastrophic um climate impacts so um i think this may become this sort of made the capital markets take notice because it was really saying that climate change is no longer a distant threat on the horizon but it’s one that’s here and now um it’ll have really a multi-billion dollar economic consequences if we don’t start doing something about it so i think for me it’s been this sort of long journey that’s starting to accelerate and i think that’s really important for this conversation because you know where you know this is not going away you know and it and startups and it is really relevant to startups because they’re you know they will be asked to start to measure things and this is already happening in other parts of the world it’s just not here yet um i think the reason that it’s it’s super important to kpmg i mean we’ve identified it as a key globally as a key mega trend we know it’s going to impact all of our clients it’s a space that we have and we’ll continue to invest really heavily in it um we’ve got a global platform called impact you know network helps clients achieve the esg imperative we’ve got an awesome sustainability team here so yeah we’re in it we’re in we’re right in the thick of it as well and working uh with many of our clients now here and in australia and also many of our startup clients as well all right now that was great context from from everyone so we would dig into some of the specifics so um yeah jonathan let’s throw to you as the investor on the panel uh and ask you i mean how do we phrase this like what esg lens do you bring um when you are doing your job and you know what are the risks what are the opportunities just tell us about the uh how you’re viewing the world through that esg lens i think the major lens that we bring is that um our sort of mandate to invest is is the function of all of the investors that are supporting us so um we have groups like texas and vicinity in australia and some of the you know more global ones would be groups like pga and real estate um so they’re massive owners of real estate and they are all looking at ways that they can differentiate their own portfolios and so when that field is down to us as the investor that’s representing them we actively search for global technologies that can actually directly impact their portfolios so um if we think of some of the investments that we’ve made and it’s probably good to hear some sort of examples so um we last year we invested into a business called carbon cure which is a canadian business that has a quite a cool technology that they actually inject carbon dioxide into cement and it actually creates a stronger product so you can actually have um you can embed the carbon dioxide into the anchor of the building the industry that we’re all in that this anchor product can then actually be a positive so we’re turning carbon dioxide into a positive building material and that business is now expanding to australia into new zealand into singapore and japan so as an example of a business that’s the one that when we present it it gets the most interest because we know that real estate is a big polluter and if we can start the value chain with a cleaner product we actually have a chance to deliver some of the overall goals for each of these corporates so i think that the lens we bring is that it needs to be impactful and it needs to be able to be measured and so when we can actually measure the difference the business um can make to a big corporate um that makes it a more interesting investment for us yeah and the good thing in that uh jonathan is it’s not just uh um better i mean it’s a good investment too i mean like the product as a result or you know as well as pulling carbon dioxide out there is for from what you just said creating a better product so there is a profit imperative there too yeah yeah so it’s quite interesting so so many of the corpora they they would like to see um technology companies that are either at cost at the same cost as the existing so it makes it much easier for them to make a switch to a new new project product so in this case it is actually it’s cost neutral so it’s a it’s a similar cost to to have a greener cleaner cement which um is making it very attractive and in that one we we co-invested with microsoft and amazon some amazing investors who have all committed to actually use the product so i think it as that grows it will actually become really useful for many of the developers in in this region yeah oh that’s great that’s great story so i appreciate that we’ll jump back to it and there’s a question actually in the in the chat panel which is linked to that but i won’t ask it now i’ll come back to it so uh america you’re the founder in here um and i’m interested a bit more around your you know again we’ve touched on this before but just a bit more granularity and what your your esg priorities are and if you’ve got any you know to those who are listening trying to work out you know should i change my focus or actually start a focus on on esg any practical tips for about to them as to how to embed esg and and what they’re doing sure so for us at a lot of the trees the more obvious um the three more obvious um that that we target are number 13 14 and 15. so obviously climate action uh life below water and life on land uh that are directly linked to um our um to what we do but there are things as well so i always see it almost as an iceberg there is things that you see at the top and then there are things that you don’t really see underneath and the the three items that we target are number five uh gender equality so we want to achieve gender equality and empower you know women in in our business number eight which is decent work and economic growth which is about promoting sustainable inclusive and sustainable economic growth all throughout the projects and the last one is number 12 which is responsible consumption and production and at the beginning when when we started the business three years ago it felt like it was a big mammoth off of uh almost like a whale to to digest and to be like okay what are we gonna do and what are the priorities and i know there are about 50 founders uh that are listening to us now on the call and uh i think my advice to to those funders would be don’t try to start and and do everything at once because it it’s just not gonna work it’s not gonna work and and it’s it’s a pharah unique it would be a pharonic things to want to do everything all at once just pick one uh go with the low-hanging fruits so for us it was we started with gender equality and if you know that and in building the team and then go for things have a plan do a mapping and say you know what in one year two years or three years this is where i want to this is what the goals and then work your way uh backwards that’s how it starts all right let’s thank you let’s keep rolling along um amanda any from your side any favorite success story you know either from anyone you’ve worked with or those that you’ve met or heard about founder investor success story oh well not really no i just i think that the thing is it’s successful well i suppose what we have done with startups is we there’s a an offering we’ve got called true value and what it does is it actually helps um it helps it’s sort of what merrick was saying it really gets in there and actually helps you understand what you need to measure but it doesn’t make it huge and i think the success in this is actually being able to start pick a number of things that you can measure that you can actually find and have access to the data that will help you actually you know measure this ongoingly as well but we’ve run you know we’ve run companies a couple of starts through that i don’t think i’d like to say an expert as well i don’t think they’ll mind me mentioning that so you know they’re at their whole one of their missions is you know reducing they have a sugar-free soft drink so where they want to see what impact it has in the world if you know more people drink their soft drink and so we were actually we’ve been able to help them look at how do we actually measure that like how do we measure the impact of that in the world in a way that is that is credible um and and they can use that with investors and now they’re using those numbers with global investors and also how do we do it in a way that’s not just a snapshot of one day and time it’s ongoingly measured so these are the sort of things we’ve worked so to me that’s a real success story that if we’re putting startups in the world that can go out there and talk now globally and use these measurements i think that’s that’s pretty good yeah no that’s awesome all right look maybe we’ll take some questions there’s some great questions coming in so thank you and if you have a question just stick it in the q a box uh this is from vishkan um what and i’ll just read it out so vishkhan says what is needed and this is for you jonathan so what is needed from a policy perspective to encourage more australian vcs to ingest to invest in esg startups how do you address the debate on sustainability versus profits especially when traditional metrics are focused on returns for investors it’s a great question and i think it actually the market’s shifted dramatically so because global capital is now demanding a greater focus on sustainability it means that the underlying let’s say if you think of um a very straightforward example is in the real estate space you can have a building that is targeting a certain level of neighbor’s rating or a green star and could you justify increasing that and have a tenant pay the difference that was the big debate so in the past we could never prove that a tenant would pay more to move to a greener building but now we’re starting to see that and we’re seeing it it’s actually measurable so we’ve got a great example in the us in new york mit has actually done a study of every transaction in new york city from something like 2011 to 2017 and they actually showed that the green clean connected building delivered a higher capital return and had a higher rental and it had a higher rental from a better quality tenant so it’s the first time we can actually prove that sustainability has actually delivered delivered an out performance at that level so um when you start to get those sort of numbers coming through then capital will actually flow into that space because it is actually delivering a greater profit so i think so from you know the question sort of dropped off but for many of the key investors in this space they recognize that um there actually are fantastic financial returns from being at the forefront of sustainability and that’s exactly where we’re we’re pushing our business oh yeah yeah sorry you’re good amanda by ask jonathan we’ve worked with a couple of uh the vcs around this already just just because it’s also not a it’s an easy thing for vcs to put in places well it’s actually really it’s like because i at the beginning i was like why doesn’t every vc just have that got so slack but it’s actually um yeah it’s quite a it’s a it can be a bit of a slippery slope too what are you measuring how are you measuring it again do you have access to all the data you know once you then you know if you’re out there with those esg measurements then the companies are investing in how do you they need to have those sort of measurements as well and so i just wondered from your side like you must have implemented it like was it is it hard thing to do or what was it like for you guys to put it in place so even um maybe back even when i was at murbach so in 2014 mervac’s policy we have announcement this changes everything which was actually the first of the big real estate groups to come out with a plan to reach um a carbon neutral position um and that was in 2014 it was pretty early yeah and even internally at the executive the board there was a leap of faith where we had no no real understanding of how we would go the last you know five years to get there but it was a directional positioning of the business that this was important right and so the ceo wanted it the executive team wanted it the board demanded it and that drove an incredible change through the business so you could actually then start to test and and even potentially have some of those tests fail which is something that’s quite you know in the australian corporate world failures are not really accepted in many cases so that was quite a shift and we then started to see all of the roots came up with their plans and we can say that some of them are a little bit later than others but um you know there is now a clear shift that every group needs to have a clear understanding of the date that they’ll get to carbon neutral and you know some are even moving to carbon positive positive but it requires a level of internal commitment that’s that’s actually the big the biggest first step yeah i mean there’s some um some comments coming in the the chat room uh one from louis and one from jeff um yeah and louie’s comment is around blackrock i mean blackrock is i think the world’s biggest asset manager 10 trillion dollars and uh larry fink i think it’s 10 trillion but the chairman larry fink came out and he was saying fundament yeah the reshaping finance and putting sustainability right at the center of it so i don’t think you’re seeing them or they’re divesting all their investments in oil and gas and a few other things is that right that’s right so at the moment there’s um there’s something called the net zero asset managers initiative and there’s about 43 trillion dollars of fund managers including groups like blackrock vanguard ubs all the big groups have all committed to this and it’s it’s basically two steps one is a net zero by 2050 at the latest and also one and a half degrees reduction temperature and so you know that sort of you know the big groups are moving in that space and that will filter through i i actually let me follow up with jeff’s question so jeff as well as uh being articulate in the chat has put a question in so thank you jeff and uh good to see you in the call uh let me just read out in a recent afr article it was stated that the asx 200 have trebled uh i guess in terms of number of companies that are doing this and talking about esg but there’s still 80 of more than yeah 80 of them have yet to adopt a net zero target um so yeah jonathan i don’t want to uh you know outstay our welcome with you but um i’ll start with you and then maybe get the other panelists to go but what are the top drivers to get businesses to adopt this net zero um target so we sort of focus on the groups that are investing into those top no asx 200 so those groups are all demanding it and um you know i can sort of speak no more directly on the real estate trusts or the listed property groups um they all have strategies in place so um i think it might be some of the mining and you know there’s there’s other groups the the heavy industry groups that might struggle in this space but even in the past weeks we’ve seen bhp make incredible commitments and actually complete shifts of their entire business model because they realize that they actually need to change and that will require them to divest some parts of their business um you know so that’s it is happening and it i think we need to it also takes time right so this this is a process that is actually quite difficult to implement um and it takes so it takes commitment at the highest and senior level but then it also takes time to implement yeah hey eric let me let me ask you that question too i mean you must have this discussion with companies all the time um maybe uh i mean just around this net zero and or or pouring stakes in the ground uh as a corporate with a strategy as to how to to drive better outcomes so like how are you seeing that yeah look i think the intent um more and so we get approached more and more by companies want it to be you know carbon neutral and um the easiest way for them is um or they think that the easiest way is to actually plant trees and that’s why they get in touch with us and in that regards there’s a mix of um as jonathan just said you know from a commitment from the top down but there’s also a mix of pressures from their clients you know wanting them to be carbon neutral um in regards to the big corporations um you know i think 2050 is is um is a long normal way i i we work more i mean for us we have targets that are more at around you know 20 30 and and these are the targets that we’d like to work with with clients um one thing as well which we are very mindful of is green washing so we’ve been approached i’ve got it i’ve got a perfect example we were approached fair recently by a company um who makes um food products and their process they wanted us to plant some trees to offset some of their you know emissions to be carbon neutral and when we asked them what was the you know we wanted to find out what were the reasons uh behind what they wanted to do because they were very insisting on uh for us to plant trees in india to protect the tigers or something to do with chimpanzees and wrong turns and i couldn’t understand we just couldn’t i couldn’t grasp why why they were so insistent on us uh going into the landscape and it’s simply because on two of their products um they had a drawing of a tiger um and then a drawing of a chimpanzee and what we did is we actually send them a questionnaire that we do with all of our clients and asking them a bit more information you know just to really check their credentials and we didn’t hear back from them so it’s the perfect example of a story where uh we try to prevent green washing you know we don’t want them to be i mean for us it’s a brand thing as well we don’t want companies to approach us um just for the sake of planting trees and and using that as an example when um as jonathan and amanda clearly said earlier one thing which is really important when you when you take that route hey it takes time and the reason why it takes time especially with your carbon emission is you have to do an audit right so there’s no point of wanting to do esg’s uh if it’s to continue and do business as usual where and and think you’re doing the right thing simply but because you’re planting trees so you have to look at what you’re doing first and how you can improve that before trying to look for solutions such as planting trees amanda what about you i mean like you’re talking to clients all the time and i’m sure a lot of your team are too i mean how are you talking to them about setting targets and trying to drive to um you know this net zero yeah well to be honest i think this whole you know we’re just focused on startups and i still i think there’s startups in certain areas like americ that are further ahead but generally what we’re finding is you know we’re not really there yet there seems to be you know there’s still that the reason i did sort of go on that bit of a rant around because she’s been here for a while because we do get asked a lot is it new and and we’re like no it’s it’s this is a force and it’s coming and and you’ve got to be prepared for it and so i suppose we’re not so much really i don’t feel or even having those conversations yet it’s more around really trying to get people get started to understand the importance of it and what it would be like to measure it and you know we’re sort of we’re lucky we’re at a time where i think you know technology you know our ability to gather and process data is becoming easier and cheaper so we can actually get the data often we can get we can get more data now than we could before to help some um to support the the metrics if you like so there’s opportunities to do this in easier ways than there has been um and i think our conversations are mainly around are you thinking about it can we help you with it you know we’ve done some great work with um taronga i think you know one of the things we’ve we’re a partnership with strong inventions as well for many years and you know one of the things we love about it is they work with our sustainability team for their um when they run their programs their acceleration programs for sort of later stages later stage sort of companies really are in the prop tech space predominantly and they run them through all of them through esg workshops that we run for them and i think that’s you know we where i suppose we’re operating more at that space we’re really trying to get the education out and work with different partners to do that so we can reach as many startups as possible yep no that’s great um all right let me let me there’s another great question just coming from vishken so let me just jump to that and then we’ll jump back to some of the other ones so um this is for you jonathan um to achieve net zero targets and improve esg credentials should companies i guess investors is saying divest from heavy emitters or continue investing in them to support the transition well i guess this might be for companies that have set a target and you know kind of want to do that should you support them or just say not your your bad news where i i think that transition period has to be addressed so um and that that’s if you can address the transition then the political i guess um the lack of political will to motivate change in this space could also be addressed um so if you think of you know closing coal mines or um closing some of the industries that are heavy polluted um i think we we have to have that lens of you know how do we transition this um and make sure that the workforce that is working that space can actually be retooled and reskilled so um i think the capital that’s backing these businesses understands that there is going to be that transitional period and um but it is a you know this isn’t th there’s a financial imperative here but i’m sorry my brother’s actually the um sydney morning herald carbon editor and we were telling on the weekend and we’re still talking about you know we’re in this copic bubble at the moment everybody’s talking about covert but we’ve just had some of the worst reports regarding our climate that we could ever have expected um in 10 years time are we going to be looking back at this period and thinking we miss the opportunity and you know in his position it’s it’s clear um we have to be doing much more in this space i think institutional capital is now backing that transition and um when we see it we actually see it as a massive opportunity for australian australian founders um we can actually we should be at the forefront of the space yeah and there is now capital that can support this and there are you know huge hugely competitive global industries that could support this change so yeah and i think the responsibilities on on ours as investors and as startups and as you know the private sector i mean the government especially the our current government and they’re just so tied up in their internal wrangling and this love for fossil fuels and coal that they’re just unable to do anything and i think we just go accept that and try and get on with it as a as a community ourselves um and i think that’s why most of us are here um all right let’s keep going with the questions there’s some good ones coming in we’ve got uh you know our 15 minutes or so before we have to start wrapping so uh one for you um emeric uh from pierre again so where do regulatory process is uh sit in this big picture so i guess it is throwing back to government um and then yeah same for ethics and same for b corpse yeah so like yeah it’s very interesting because we’re actually going so we’re going through this process to be um certified with bcop and you really have two things you have and and pierre i don’t know which industry you work in but you do have um mandatory um processes right in each industry that are so it’s part of the regular regulatory process and on the other hand you have voluntary reporting um such as the one that we do when you engage with be corp um so it’s really the commitment as a founder it’s how much commitment or how committed are you um and and where do you want to position your company uh in that regards and and what are you trying to achieve by doing that so far it’s about uh two things it’s mainly it’s about transparency uh it’s about the health of the planet obviously but the the the um the ecosystem of our employees and the stakeholders that that we deal with uh every day all right great thanks and thanks pierre for for that question and look keep the questions coming in um um yeah let’s as something slightly different so i mean esg is the is the topic uh and i think we’ve focused mostly on the e the environmental side of the the s g but we probably should talk about the s g so that uh yeah i mean let me throw that to to you jonathan um to answer that so yeah social and governmental um what what more should we be thinking about i think um in this state where there’s sort of social governance aspects of this so um we see incredible benefits in the digitalization of you know construction and data and information regarding assets that can actually leads to a much greater control of governance so it’s that reporting element that has actually been missing um so if we think about tools we have been actively looking for businesses that can provide us with the tools to help with that reporting because many of these real estate groups they spend a lot of time actually you know asset by assets trying to deliver a sensible report and i think one of the messages in the chat was you know how do we should this be audited how do we actually get an independent measure in this space um and that’s the focus for many groups is on that sort of sustainability to begin with but then as they progress and as they mature they actually move more into the social and governance aspects so um that is actually from a deal sort of point of view we see a lot of companies that are now targeting that space and so founders that are potentially you know they’ve been working in these these sectors and they realize that the reporting is a bit of a nightmare if they can create a tool that can help that or a system it can actually lead to quite an interesting investable company yeah and amanda do you want to touch on the the tracking and the tools to to do all this stuff i mean i think there are some initiatives at kpmg on there yeah um so there is i mean again you know we’re all said it can be tricky and and all that sort of stuff but i i think you know actually it was i think it was like two years ago eventually which is the innovation bay day for of weekend away i would have for the vcs and it and that’s when it really they started to talk about how difficult it was for vcs and companies to measure esg um and then last year this year was the issue this year it happened again and the same conversation came up and we’d started to think about oh it is really hard and how how what how what could we do to actually help startups like measure it easily i saw her in the chat there i think from jeff saying that you know companies i speak with for esg advisory is expensive and and yeah i think it has it has been and it is in some cases but so we’re like well what if we were to put a tool in for or develop a tool for startups that and and also be able to help them identify the what they should be measuring because that’s part of the problem as well and so we sort of put that out as a bit of a challenge for us we have worked with a company australian startup is which is awesome called social suite we sort of what we’ve done is combine our advisory with the tool and so and we’ve this is sort of an initiative that we’re we’re running at the moment um it basically what what i think someone’s going to send out maybe clear in the chat there’s a page that you can register if you’re interested in it and what it is is we set you up on the tool and then we have two workshops with our sustainability group and they help the founders actually identify what they should be measuring how they can measure it and so it’s a it’s a minimal cost something we’ve invested in to cover it with there is limited numbers i think it’s like 60 or something like that i don’t know what it is actually but i know it’s not endless but we’re doing it and it’s again we’re just trying to do it to see if we can provide this as an opportunity for just more founders to get in the space and start taking those steps towards esg management so i think we’re going to send something to everyone that was on here anyway but yeah there’s gonna be a link that will be sent out but all you have to do is go to the page just put your name in and then kpg will contact you and sort of talk to you about what can be done in that sort of thing yeah and we’re always like where the team and i actually just space that everyone’s you know super passionate about so we’re always keen to talk to anyone about and see if we can help in any way um there’s a link question from that looks like from one of your colleagues amanda anastasia um and she’s asking like is he are esg metrics going to be audited in the future in the same way like one of my colleagues because they wouldn’t have asked such a hard question um it will it be ordered i would think i mean i can’t i’m not an auditor as you know but uh i i future career i i think that yeah i mean look the regulations we want to avoid this sort of green washing and i think that you know we have to find a way of regulating the numbers and making them credible and all that sort of stuff so i would assume that’s where we’re going with it it makes sense to me that’s where we’d be going but yeah again i wouldn’t take my word for it it needs to be standardized because then you can compare across not just across countries but so there are tools that you there’s global benchmarks that people must line up to and and they do deliver that level of sort of standardized reporting but who’s going to standardize it are a bunch of accountants going to get together or is it the esg investors i mean who’s going to fix this um there is certainly some of the groups that are doing the benchmarks are not for profit and some there’s quite a few that are for profit so there is a you know there’s a navigation there um but there is a proliferation of companies and i think you mentioned you were looking i mean you know social city is the one we looked and we we decided to go sort of with that one but i think you mentioned that you were looking into a few others as well so there’s obviously other tools yeah yeah the they’re different tools so we looked at uh one called uh fitch uh there’s another one called system analytics proof of impact dgnx um yeah so we’re looking at all of this at the moment in terms of budget um as a founder it’s something you’re gonna have to account for like um but i don’t see that as a cost i really see it as an investment and uh to answer um there’s a question in the chat now from mark um who’s asking um for startups um if uh that will add a premium on their valuations my feeling uh and it’s only coming from a founder’s side of you i would say yes and this is why we’re investing uh in in tools like that you know to make it happen um just because we know that on the other side of the fence we have you know people and companies like ian and jonathan that are looking for uh you know to invest in companies that are doing the right thing yeah all right let’s keep going we’ve got time for probably two or three more so um yeah let’s take another question from jeff so jeff you’re on fire with the questions in chat so thank you and this is uh for you america and you know if you could just touch on the carbon offset so carbon pricing uh whether it’s a barrier and where you think that’s gonna go yeah well the price of carbon is only going to go up so um at lord of the tree we only really work with two uh two carbon markets uh mainly um the first one is gold standard the second one is vera the price of carbon two years sorry two weeks ago was twenty one dollars a ton last week on friday it was twenty two dollars a ton and um it’s expected to um tip over thirty five dollars a ton by the end of this decade so it’s only going to go up and as a startup if you want to do the you know if you want to decarbonize and look into carbon credits as i said earlier you don’t have to do it all at once you just one side of your business or or one department and you just start like this start little you don’t have to decarbonize the entire company um right from the beginning and i’m going to ask a selfish question because you know we’ve seen a few startups coming in um around that carbon pricing piece like where’s the best place to learn because i don’t know much about it and just how the whole global carbon pricing model works like can you give me a reference all a reference point for that yeah google would be the best place it’s very uh so the in when it comes to carbon and carbon credits we have our own uh experts in the team uh and you realize as soon as you start talking carbon that it is um you’re opening pandora’s box and it’s a never-ending um you know rabbit pole and you can go as deep as you want and it can get very complex as well but um i would recommend uh looking at uh especially here in australia the gold standard that have a very good um very good resource library that explains um you know hot carbon credit yeah all right awesome uh well time for a couple more uh let me throw them on this this one to you jonathan it’s from mark um are you seeing esg focused startups uh running at any premium in their valuation so you know a company like america for example like do you pay more as an investor for someone with uh esg credentials um yeah it’s a great question i think the um it’s probably not that we get a higher valuation going into it i think it just makes it more attractive to become an investment um and so we’re not an impact fund but we have the majority of our investments in that sort of esg space but it does make it more likely that it would process to go through the process of having investment if it does address or have some impact on esg um and that in time will mean that there will be obviously valuation uplifts because there’ll be more there’ll be it’ll be more attractive to more investors so i think at this stage it’s maybe it just makes it more attractive and then in the next sort of couple of years um maybe to america’s point as well so europe is way ahead on this you know if you think of some of the in july we have the carbon border adjusted adjustment mechanism the sea bam come in and that’s got in its documentation carbon pricing of 44 euros and then up to 88 euros per tonne so it’s a mechanism to basically if you’re coming in from a country that doesn’t have a clear um policy then it’s basically an additional cost for operating in europe that is imposed so um back to the question i think it is it will make it more attractive in time yeah all right i’ll leave time for a few more the good thing is um there were some a bunch of questions came in uh during the registration so i might jump to one of them uh let me take this one from tom pascarella hey tom how are you mate um is there a list of about esg investment funds so if someone wants to invest in a fund for example and they want this focus where would they go jonathan um i haven’t seen a list of the funds but i think um yeah i think you could look in australia a number of the esbclp so the registered early stage venture capital limited partnerships which is what we are um there is a website on the innovation australia um website that has the list of companies and what they’re investing into um and globally i guess it’s yeah xamarin it’s probably google but um i haven’t seen a dedicated list of funds yeah uh all right there’s another question from wendell uh from title so uh hey wendell um this is probably for you emeric uh you know i’m look you can go back to your experience just as you’ve grown up as a business uh have your needs in the way you’ve thought about esg different differed as you’ve grown so like when you’re tiny you know just the idea versus when you add you know just you and a handful of staff versus where you are now versus what you think you’re going to be as you’re getting bigger yeah absolutely so we started with things that are um i’m going to say free and don’t cost money such as you know gender equality for example in the workforce you know things like that that are easy to implement um and then we moved on to things that require a bit more um hands-on and in that regard especially when it comes to [Music] our environmental impact we are uh creating a new post a new role uh within the business which is going to be an impact manager that will just look after that so um the role of this person will be to look at every single aspect of our business and see how it creates a positive or negative impact record it and then act accordingly moving forward so you just have to do it uh step by step yeah that’s what i would suggest all right now that’s great um all right well look i think we’re a natural pause in the question so i might say thank you to the audience for all those questions i do have one last one which i’d love a quick response from from each of the panelists on um and that you know it’s really what’s next uh i mean we talked about how esg has i know it’s been around for a long time amanda but it’s definitely more front of mind for everyone now uh but you know where are we going in the next five ten years uh let’s let’s go jonathan emerick and then amanda can have the last word okay perhaps what’s next i mean for us we we announced in june a complete refocusing of our business to be um to focus on esg impact as an investing sort of strategy um and i think a little bit when we began our business we had a sort of philosophy about what we wanted to do and how we wanted to you know change the world and actually create a better built environment um and we see that the esg component of that is is just an absolute driver um and i think we we are not waiting for government we’re just getting on with it and we’re going to be investing you know hopefully many hundreds of millions of dollars in this space so um if you have a you know founders that are out there if you have a business that is in the es orgy we’d be delighted to talk to you and and to work with you on your journey i think that’s probably good for me yeah that’s great uh where is it going yeah well look uh as a founder i think more and more will hear or you know esg is going to be part of and you know delhi talks for any founder and it’s going to be a more important component to anyone’s journey um from a personal point of view i think that globally um it’s better to have millions of companies that are doing their bit even if it’s not perfect as opposed to just a few thousand companies that are doing the esg perfectly so just have a go just try it’s not you know it’s uh you know how do you eat an elephant just one bite at the time and i think that’s that’s uh what i would like to say uh amanda last word with you like where where do you think this is going as i mean i just think as i said before i think it’s just getting the awareness will build there’ll be a greater push for people to um sort of implement these gene measures which is great and i think i just think in its simplest form like it’s so important because all businesses startups they have an impact on the environment on society and to me that means we have a responsibility to ensure that the impact is doing more good than bad so it’s really around you know businesses have to do good and they have to be good and i think is if it’s seen that way and just simply and that’s what the esg measurements that are really helping us to understand to make sure that that that what the way that you’re turning up in the world and running your teams and running your business is actually doing more more good than harm and i think where i see it for us is that we want to help as many startups as we can get these in place and make it as easy and as inexpensive as they can um and i think yeah i i think that’s sort of the big push and so you know again just to sort of plug our initiative um it is a great opportunity just for founders just to get on there it’s not a we’re not this is not a revenue generating exercise from us we genuinely want to get some farmers started and see what we can do if we get so 60 plus on this platform and get moving i think that’s a really great start so and a really good start for australian founders and i think we’ve all said it’s a little bit on the call that we feel maybe there’s a it’s not complacency i just don’t think we’re sort of getting the sense of urgency around this and so our agendas so push the awareness and urgency yeah and amanda i think you know i wanted to look i think we are at time here but i did want to throw it to you to talk about the opportunities is that the same one amanda or was that something else yeah so they’ll say yeah we’ll send out a link to everyone that’s on the ground yeah and you just write it up well it sounds terrific and i’m very worthwhile um all right well look uh we are going to finish uh on time uh which i always pride myself on doing but uh i really enjoyed that i learned a lot from that so um jonathan amanda hey marik uh well done with everything you’re doing uh and and thanks for the support of us uh and thank you everyone for for coming along i thought the uh the chat and the questions were awesome so thanks for uh for participating and yeah we’ll see you next time but well done uh well done you
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Purpose, Performance, Profit: A founder and investor lens to understanding the ESG imperative.

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