Season 2, Ep. 16 | Sustainable Thinking: A Conversation with Andrew Watterson Transcript
More Elephant Intro
[00:00:38] Jason Rudman: My guest today on the More Elephant Podcast founded his company, Blue CSR Strategies, in 2020 to serve the rapidly growing needs of business, government, and nonprofit organizations to accelerate progress towards creating positive environmental, societal and financial impacts. Blue CSR strategies is an ESG consulting firm.
And so, it's my delight to welcome Andrew Watterson to the More Elephant podcast.
[00:01:05] Andrew Watterson: Morning, Jason.
[00:01:06] Jason Rudman: I'm thrilled you're here. So environmental sustainability—a huge topic. I know there are some things that you're incredibly passionate about that we're going to talk about. I always start with is your origin story and so ultimately, what got you to where you are today, a series of more elephant moments where you take a moment, stand back and say, that's the path that I want to go down.
How would you describe what led you to founding Blue CSR?
[00:01:35] Andrew Watterson: Well, thank you. You know, origin story is kind of a big topic, right? I think my life and my career has been entirely focused on sustainability from its inception. And, thinking about both environmental as well as social impacts for organizations, a strong belief that you can do well and do good; that those aren't mutually exclusive and to help educate organizations about that pathway.
When I think about an origin story, I go back to two women in my life: one was my sixth grade science teacher and the other was my grandmother. Both of them had a strong passion for the environment and for social justice and really had a strong influence on my direction and course in life. So, I studied environmental policy and economics in undergrad and, in every career that I've had, I really focused on trying to help the organization or the community that I'm in have a more positive trajectory, without sacrificing values and exploiting both people or the environment.
I founded Blue CSR in 2020. In grad school, I had a 10 year career plan, and that career plan, at the end of the 10 years was to launch my own sustainability or environmental social governance consulting firm. So, I've been was laser focused on that throughout my stages from grad school to launching the business. I had roles like head of sustainability for Key Bank and led sustainability for GOJO Industries, the maker of Purell where I was right before I launched my business during the pandemic.
[00:03:09] Jason Rudman: So, you and I know each other from our tour of duty at KeyBank. What I'd love to dive into then is the move from education—studying—to working within a corporation and focused on sustainability?
You mentioned two parts there: one, working for KeyBank and then, in the height of the pandemic, working for the company that was producing Purell. So, would you take us through going internally into a company working on sustainability efforts for those companies and then, what that ultimately led to in terms of the pivot to Blue CSR.
[00:03:47] Andrew Watterson: Yeah, absolutely. So, even before that, the first role I had leading sustainability was chief of sustainability for the City of Cleveland. That was a really unique role for a government entity and seeing both the operations of the city and the impact of how a city can help transform a community. But I really did believe that.
The commonality of sustainability offices across a lot of different dimensions within organizations is that they're generally small operations within large organizations; they're resource constrained. We have a strong belief that sustainability drives long-term shareholder value for any organization but it's hard to translate that. And, oftentimes, you continually seen as a cost center of an organization and not the sales side.
As you mentioned, I had a couple different roles leading sustainability efforts within organizations. When I thought about wanting to have my own business, I felt that it was critical I understood what it was to be inside. I thought, and it's proven to be true that I'd be a higher value consultant and our organization would be able to provide better value for our clients by being able to know what it's like to be in their shoes within organizations.
So, some companies have leadership that strongly believe in this and others might be doing this because of outside pressure or customer pressure. You know, the role that I had and that we had at Key, and really enjoyed working with you there, we started off with the CEO's endorsement and support to focus on that value creation side of things.
So, where can we use sustainability as a business differentiator in the marketplace? Where can a bank have focus on sustainability to drive business value?
It eventually translated and we found success; we created new product lines, new opportunities to help our clients become more sustainable. We helped the organization move from not being recognized for its focus on sustainability to becoming one of the one hundred most sustainable companies in the world. A distinction which I'm really proud of and then looking at how does that translate both inside the organization and outside in the communities that we serve. Key Bank, and regional banks, [I] believe that they're focused on trying to help make sure that they're creating healthy communities where they operate.
The jump to Gojo was just by chance: my friend is now CEO of Gojo Industries—at the time she was COO—and it was just an offer that I couldn't refuse. And, long-term trajectory, I wanted to have some manufacturing experience under my belt and the portfolio I was leading was a broader role. I led corporate communications, philanthropy, community engagement, diversity, equity and inclusion and environmental sustainability.
I started there just before the pandemic started, and ultimately, they're small, a family-owned enterprise, and they didn't have any governmental affairs function and I pretty much spent my entire time there in a governmental affairs role and it was a pretty high stress environment. So quickly, I realized that this is not where I wanted to be and had a good conversation with the family and leadership there. They ended up being my first client—so, I was able to launch my business and financially be able to make that happen by having my former employer help me realize my dream.
[00:07:03] Jason Rudman: That's a great story.
So, a company comes to you and they suggest that there's an opportunity for them to think about sustainability, in ESG, in a much broader sense. How do companies find you? How does that engagement work? How do you start to frame the opportunity?
[00:07:22] Andrew Watterson: Yeah, so we don't market ourselves and we probably should market ourselves a little bit more. I started this company by myself. We now have five full-time employees, so the trajectory that I've been looking for to grow the business, we've been growing it organically.
The people find us mostly through referrals from our other clients. We also are a training partner of a platform called EcoVadis. EcoVadis is a tool that the largest companies in the world use to assess the sustainability of their supply chain across labor and human rights, environmental impacts, ethics, and procurement. We're on their website. Some companies find us because they saw us on their website or a customer of theirs told them to contact us to help them with that assessment. But largely, through referrals or you know, I've been working in this space for over 20 years, so I know a lot of folks.
Actually, when I was both at the City of Cleveland and KeyBank, I co-created learning networks of other sustainability practitioners. And, I believe learning networks are a really great way to help accelerate progress within organizations. So, through those connections, I've continued to help support businesses with their ESG or sustainability efforts.
I'll say that not every company that comes to us is a believer in this at all. They might be coming to this work because they're concerned about losing a major customer—most of our clients are B-to-B businesses and they might have a client that has set net zero targets, which is a commitment to not have any carbon emissions in some future state. And, whenever a company sets a net zero target that includes their entire supply chain, everyone that provides products or services to those organizations also have to make that same commitment.
So, sometimes a company will contact us and say, oh, hey, you know, some large company name—insert here Microsoft, Amazon, whoever it might be—it wants us to accelerate our environmental steward. And so, they're looking at us for that.
We're also a certified LGBT-owned enterprise by the National Gay and Lesbian Chamber of Commerce. And so, some companies that have supplier diversity goals hear about us through that network or certification process.
It is a rarity or a unicorn to have a sustainability firm also be certified as a diverse enterprise, and so they're curious on wanting to learn what our services are. So, that's a couple different ways that people find us and it's worked out so far.
[00:09:54] Jason Rudman: Let's just pull a thread on the diversity angle a bit. You said it's rare for an ESG consulting firm to also be self-declared as diverse. How has that reflected on the work that you've done and your approach?
[00:10:07] Andrew Watterson: I think, two ways. One is that it's impacted who we partner with. Another big channel or pathway that we get work is through other companies, either engineering firms, law firms, or communications firms that might have clients that are interested in this space, but they don't have their own expertise in this space.
Those firms usually are interested in partnering with diverse firms that helps with their supplier diversity goals—and hopefully they continue to have supplier diversity goals—so that's sort of one attribute that we focus on.
When we talk about sustainability, we are not solely an environmental sustainability firm. We do a lot of work around helping companies be more socially conscious, help them develop programs or processes to make sure that they're allowing their employees to bring their authentic selves to work. Helping companies to have better, stronger policies that will help them attract and retain talent.
We really try to make sure that companies are recognizing that they can do better financially and from security and reputational perspective by paying attention to their environmental and social impacts, developing good governance structures and policies and, probably most importantly, a culture that embraces and supports advancing those and supporting those impacts.
Yeah, I mean it's really fun. Sometimes, the folks that we interact with within companies, this is not their job. This is new to them; they might get it foundationally but they don't really understand where to start. And so, we're here to try to help them with that.
Most of these companies have very limited resources and so, a lot of what we try to do is figure out where should they be focusing their efforts, focusing their attention and advancing and supporting their environmental and social impacts.
And then, what resources do they need internally? what resources can they potentially outsource including us or other consultancies to maximize the utilization of their resources in a cost-effective manner?
We're not here to try to sell them everything under the sun. We're here to try to make sure that they're managing these impacts well, potentially seeing opportunity areas that they can advance as a differentiator as a company.
[00:12:23] Jason Rudman: Are there particular domains, swim lanes, that are of particular interest to you or where Blue CSR plays more deliberately based on your experience or the company that you built?
[00:12:37] Andrew Watterson: Yes. So not industry specific, we're industry agnostic. I would say that our swim lanes are predominantly working with companies that are working with the biggest companies in the world and companies that are early to mid-stage sustainability and ESG maturity level. We help them understand where their areas of impact might be and then helping develop management and governance to manage those impacts effectively.
And, we have clients that are leaders in this space. I certainly really enjoy working with them. It's stimulating to work with colleagues that have been working in this and really seeing that opportunity.
And then, we are not an engineering firm, a human resources firm, a law firm; some of what we do is put a different language to some of the work those firms are really focused on and support those types of organizations with having a broader lens on what their swim lane is. In this space, it's really important that you don't have blinders on and that you're really thinking about what's out there.
That gets back to the company name. So Blue CSR, people ask why did you choose that name? Besides blue being my favorite color, it's also rooted in ‘blue sky’ or ‘blue ocean’ strategy: thinking about where people are not and moving into that space as opportunities for success.. CSR stands for corporate social responsibility; really could have picked any different noun, the alphabet soup which sustainability has evolved over time. I talked about sustainability being ‘triple bottom line.’
We moved into corporate social responsibility or corporate responsibility and then, most recently, really in large part because of the adoption from the investor community of embracing the terminology, environmental, social governance has been the most recent iteration of that. In every interpretation of the phrase, there often, or has been historically, politicization and attacking the terms. Most recently, ESG has been attacked politically as a term and I'm a believer that whatever you call it, the underlying impacts still matter to companies and to individuals and to communities.
[00:14:50] Jason Rudman: Well, so you know, ‘triple bottom line’ probably wouldn't have been as appealing as a company name.
You mentioned we are into an uncertain political climate, at least at the federal level, and then certainly from a state perspective, with the new administration and their thoughts and views and approach to environment, fossil fuel, energy in general.
How do you reflect on opportunities and challenges for your practice and the companies that you work with?
[00:15:18] Andrew Watterson: Yeah, so we're certainly at entering some uncertain times. No doubt there.. So I've been reflecting on this since the election and you know, in reality, we noticed some sort of wait-and-see attitude of companies on where they be making investments. That time has passed and our phone is still ringing. I also was reflecting on that because there was a similar concern in twenty sixteen because the same rhetoric was happening and the Trump administration pulled out of the Paris Climate Accord after the election then. What happened then was that business community in fact doubled down on this and it wasn't that we retreated: maybe government leadership retreated, but business leadership did not.
Business leadership will likely continue. However, some companies start to scale back or retreat on some of their global commitments. We've seen that happen with some of the climate commitments. We've seen that happen with some of the plastic commitments of some large companies. The reality is that we are dealing with real issues and things that we have to address and there's a recognition, both in government as well as business, and quite frankly as human beings, that we have to tackle some of these significant challenges.
Part of that reality is decarbonizing . How we get there is less important than figuring out how to get there; I think, critically, getting more people to realize actions that we take individually as human beings on this planet, as parents and neighbors, are really important. Also, as business owners, we start to focus on how we decarbonize and really understand our business impacts in society. I strongly believe this in being good corporate citizens and that is critically important for success of your organization and protection and protecting your brand We're certainly in choppy waters and I'm a sailor, so a lot of my thinking is being on the water and setting my course you know, so to speak, but I truly believe that as happened in 2016, the biggest companies in the world will continue to focus on this.
[00:17:26] Jason Rudman: Yeah, so not a feeling of wind in our sails to use a sailing analogy.
[00:17:31] Andrew Watterson: No.
[00:17:31] Jason Rudman: You know, you're teeing everything up for me. So a couple of follow up questions.
When a company gets it right, you mentioned you've got a couple of companies that you work with that are, I would argue, progressive forward thinking, future thinking, right? Blue being aspirational blue sky.
When you work with a company that gets it right, an example of what they are doing that connects to everything that you said is the progress that we need to ensure that we're operating in a healthy planet with healthy air, healthy water. How would you describe the best of the best that you've worked with in terms of their approach?
[00:18:10] Andrew Watterson: So, my favorite moment with a client is always that aha moment when they get it. When we're no longer have headwinds anymore, and all of a sudden we have tailwinds and we're the winds in our sails, so to speak and they understand that, oh my gosh, this can help us attract employees. This can help us attract business, retain business. We are seen as helping our customers accelerate their goals.
And it's that moment, that moment in time, whether it's the CEO or the leadership team or their board, that really understands not only that this is important but that it's achievable. And, thinking through okay, now we can move past this is a mountain to climb. We can now think about, how do we actually accelerate this progress? What opportunities are out there that we can invest in to decarbonize, to advance renewable energy? What are the opportunities out there that we can think about our products differently? And so, the best of the best move from thinking about this as a burden to an opportunity.
And that's really where the moment of it can accelerate and it's very expansive. Some companies approach this as they're risk averse and they're seeing it as mitigating risk and managing risk and that's more of the ESG side of things. Then, being able to move from that to the sustainability side which is much more expansive opportunity-oriented and where can we really accelerate progress. That's where we find the sweet spot and help and get excited about those clients.
[00:19:43] Jason Rudman: You mentioned a couple of things. that have persistently, and I would say even more so in recent years, become focal points in terms of our use of plastics, disposing of plastics or lack thereof and then, if you travel, you've now got an opportunity at a very, very low level to offset your carbon.
Could you take each one of those individually? So, let's start with plastics. How are you involved in that from a consultancy perspective? Could you give the audience a sense of, from your seat, what's being worked on in terms of renewables or using less of, or reconstituting as it relates to plastics?
[00:20:25] Andrew Watterson: Yeah. Well, okay. So both of these are really, really broad topics.
[00:20:28] Jason Rudman: Yeah. Go really big, Andrew. That's what I want to do. Like, let's pick a really broad one and have you wax poetic for five minutes on that.
[00:20:34] Andrew Watterson: So, they're huge problems. And there is decades of misinformation and decades of bad behavior that has caused both of these problems.
The plastic recycling rate in the United States is incredibly low. There is a tremendous amount of focus, and has been over many years, that it's the consumer's responsibility to recycle plastic. But then, there's a ton of inconsistent information across jurisdictions on how to recycle plastic. What type of plastics are recyclable which just makes it worse and worse and worse, right?
And so, people think they're doing a good thing by throwing everything; if there is recycling available in your community [that] by throwing everything in a bin when in all probability, it's a much narrower set of plastic that can be recycled. Then we talk about microplastics and plastics being in our water and plastics being everywhere and forever chemicals connected to plastics and other products out there that are causing a lot of environmental and ecological harm and harm to us biologically.
So the plastic problem is a big one. The solutions that a lot of companies are starting to focus on, which I certainly do endorse, is producer responsibility of plastic recycling. This is taking it back to the manufacturer and how are we making these products to begin with and how can we take responsibility for the end of life of them, get put back into the production so that they can be used again. A lot of plastics can be recycled if they're handled appropriately and they can be reused in the same products that they were produced depending on the types of plastics they are.
They can be produced and reused as long as we keep that into that closed loop system; I've seen some remarkable innovation. A company in Columbus is taking plastic milk jugs, one dedicated waste stream that they're focused on and making really high-quality plastics again. So that's a hundred percent post-consumer recycled plastic. That's where a lot of companies have set targets for transitioning to a hundred percent post-consumer recycled plastics which will help keep plastics out of the environment.
And, by educating the public and other businesses about where can they send the plastics and which plastics can be recycled—this also just goes back to you know, learning about don't litter and recycle, like you’ve got to recycle and don't litter. We have to keep these products out of the ecosystem because plastics do break down, and they become microplastics and we are consuming them in our water, in the environment.
[00:23:09] Jason Rudman: I subscribe to that. As you know, we have two kids and I think part of the beauty of living in California is there's a lot of ocean cleanup. Well, I don't love that. Actually, let's take a step back. That's not a great thing that living in California, the fact that we have to clean up the oceans but what I do appreciate is both the kids understand the impact that plastics can have on birds and turtles and whales and they've seen pictures of dead sea life.
I find it interesting, we've got a big blue tub outside this window right here where I'm recording and the recycling tub has largely become this dumping ground for anything that's plastics, right?
We've gotten into this malaise of, well, if it's plastic it must be recyclable. and we're actually doing half of the job as consumers recycling our plastic. So..
[00:24:06] Andrew Watterson: You remember the saying reduce, reuse, recycle? Being a conscious consumer is important. for individuals and businesses, so thinking about where your waste streams are, why is there waste anyways? and where can you reduce that waste and then what items can you reuse?
That's a lot of the excitement for business innovation, you know, take back programs or reusing or building products that are durable and are reusable, and recycling what can be recycled is that last resort. I think one of the things though that really is important, and I want to connect to both climate change and plastics that helps people care about this more is the connection to health.
So, with these huge and significant environmental challenges, the fact that this is impacting our health, not just the planet, but the health of us individually and the health of the potential for our future is, helps people understand the importance of it. One of the things that I had difficulty when I was chief of sustainability of the City of Cleveland, there was a lot of interest around keeping plastic out of the environment but when I'm talking to citizens of the city that can't put food on the table, that's a bigger priority for them.
Ultimately, once you have a full belly, you can talk about other things and have a conversation. Connecting these environmental challenges to health and the ability to put food on the table really helped us bridge the gap and make the connection to Cleveland residents. And I'm really proud that there's a huge amount of people that care about this in this Midwestern city and in Ohio because we really helped to connect the basics of sustainability to individual.
What matters to people is their ability to have a livelihood and ability to live; that's been one attribute of trying to help people understand the connection of some of these environmental issues to their own physical health.
[00:25:56] Jason Rudman: Now that it's a real-life impact, right? I think sometimes we feel the topic we're talking about, ESG, can be so out there and esoteric and how do I actually bring that down to the impact that it's having in my daily life?
I'm around the environment all the time. I'm not going to see the incremental degradation of the environment due to pollution but I certainly can when it starts to impact my health. Very similar to other aspects whether that be our financial health, our environmental health, it all starts with being able to live well as a human and having dignity as a human. The challenge is if we haven't solved those basic issues, to your point, it can be really, really hard to then take the next leg of the journey and start living better as a planet.
And the other, carbon: we've been talking about carbon offset for a long time. We've talked about the warming of the earth. I think the past year was the warmest on record where temperatures rose more than one and a half degrees celsius across the globe. A lot of that is connected to carbon and the ozone, and again, we've been talking about the ozone layer and the impacts of human behavior on the ozone layer, seems like decades.
Where would you guide us in terms of the narrative on carbon, carbon offset generally and what you're seeing in terms of companies and strategies to try to reduce that?
[00:27:15] Andrew Watterson: Yeah, so carbon emissions and greenhouse gas emissions more broadly are warming the planet, right? And that's principally in large part due to human impact
So, trying to understand where we are today. I mean, I'm not going to sugarcoat it. We're in a really bad state. The trajectory that we're on is very uncertain. It's not looking good. The models that climate scientists have projected—we're blowing every model out of the water. And we're warming faster than people have predicted.
And, a couple other things are going into play, which are going to have us make some hard decisions going forward. One is that the we've been using less energy for many, many years through efficiency and now with electrification, which we have to do in order to decarbonize and the use of the massive energy consumption required by data center; AI is rapidly increasing the demand of energy.
So we're in this conundrum where we have dramatically more energy consumption happening and that's why you're seeing companies like Google, Amazon and Microsoft— Microsoft is repowering and buying all the power from Three Mile Island. Nuclear power is coming back into play in the United States. It has been a power preference in Europe and in other parts of the world. It's been more broadly accepted in other countries than in the US and we're pretty far behind in the use of nuclear energy as a carbon free power supply.
All that said, we have to figure out individually how to use less energy, how to make sure that our power is coming from renewable or non-carbon use energy and do this as quickly as possible. So, those are the solutions are relatively quote unquote easy to identify. It's very difficult then to get there. We're going to continue to make mistakes; the important thing is to learn from those mistakes and learn quickly and adapt. And really importantly, government and society, we need to be quick and move quickly to decarbonize.
The other part about this that it's really unfortunate a lot of this has been politicized because this is not politics. This is reality that we have to decarbonize and there's a lot of opportunity out there to accelerate. Right now, you can see that a lot of the business communities are a little concerned on the politics of it because we may get left behind. You know, what happened from twenty sixteen to twenty twenty is that even though rhetoric might have been from other countries that they weren't embracing the concept of climate change, the reality is that they invested significantly in renewable energy, battery technology, electrification and electric cars and all of that.
So, as the business community I think can continue to accelerate and I hope that we continue to have a leadership role in being innovators and being progressive in how we move forward with addressing some of these existential problems that we have on a global level.
[00:30:05] Jason Rudman: So we can't end on existential crisis. With all of that, what's getting you excited? What keeps you hopeful? What are you seeing that you would point to as a path forward across any part of the landscape, not necessarily to do with carbon or plastics that we just talked about.
[00:30:23] Andrew Watterson: Right. Well you know, I am an optimist and I'm really hopeful for the future. I think what gets me excited about the solutions or us moving forward with a lot of these efforts from a society is that businesses are seizing the opportunity to be leaders and to innovate. There is a tremendous amount of business opportunity and money to be made by some of these challenges. And that's what gives me hope and keeps me engaged in the space is that we have a lot of business innovation and some of the biggest companies in the world are making huge investments in this space. And so as long as the top companies in the world are really focused on this, the machines of capitalism, the machines of economic innovation are going to continue.
I actually like to hear from my clients that are sort of being dragged to the table. You know, it's like, why do we have to do this? And I'm like, because don't you want to do business with these companies? And they're like, yeah, well of course we do. Well, they represent thirty percent of your revenue so you know, come to the table and let's move forward.
[00:31:34] Jason Rudman: One final question. What's your favorite innovation at the moment that's either got you reading up more about oh, I didn't know that that was possible and let me find out more or something that you're working on with a client that really [is] peaking your interest as a solution for the future.
[00:31:51] Andrew Watterson: That's an interesting question and I don't know what the best answer is for it.
I guess one of the things that I've been really skeptical of in the past and now I'm starting to become more interested in learning more about business of that business is tackling things like climate change. So that is sort of where I'm very interested in learning more about now.
It'll really be interesting to see, and I say interesting in quotes, because a lot of those businesses are dependent on having a price of carbon and having carbon being a commodity that you're paying for and trading and trying to reduce. There's a lot of interesting innovation happening, a lot of capital being spent and invested in creating everything from the geo-engineering technology of how we create carbon sinks and the importance of biodiversity, and creating and preserving large swaths of natural areas as important carbon sinks and putting a price on that. To me, it's very exciting because it's part of the solution, it's part of the pathway to decarbonizing, we can create renewable energy, we can reduce our energy consumption, we can have carbon free energy but we still have to find places for it…to sink some carbon.
So that's probably where I'm most interested in kind of seeing, and I think that there's still a long runway for these solutions to be viable or cost effective. But the capital that's going into those investments from all different parts of the world is exciting. And, I think that human innovation is boundless and that's gonna where you have this kind of get excited about it because a hundred years ago, we never thought we could get to the moon. And we did. And so that's really where I just have to save this planet.
[00:33:35] Jason Rudman: Allegedly we're going to Mars, my friend. That's what I'm at, that's the latest. So, how do people learn more about you, your practice than what Blue CSR is up to?
[00:33:44] Andrew Watterson: Sure. You can find me on LinkedIn or you can go to our website. It's bluecsr.com and I'll be happy to talk with you a little bit about advancing your own sustainability efforts.
[00:33:55] Jason Rudman: Excellent. Thank you for your time today. Really, really appreciate Andrew, and we're in safe hands because you're thinking and giving so much time to this. And to your point, it does feel existential. There is work for us to do and it starts with us taking some really, really simple steps as individuals to protect the planet that we're on.
[00:34:14] Andrew Watterson: Absolutely. Thank you.
[00:34:15] Jason Rudman: Appreciate your time.
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