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Show 136 – FutureBrand Super Sustainable Business Report

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Recorded to coincide with the launch of the new FutureBrand Super Sustainability Report, Russell Goldsmith was joined online by Jon Tipple, FutureBrand‘s Global Chief Strategy Officer, Rebecca Dibb-Simkin, Global Director of Product and Marketing, Octopus Energy Group and from Frankfurt in Germany, Axel Löber, Senior Vice President Global Brand and Marketing, E.ON.

Jon began by explaining that the concept of super sustainability is something they invented as a concept because they feel that the narrative around sustainability is stuck in pre pandemic times, 2019. Forbes released a study claiming that 2020 was going to be the year of sustainability, but other things happened that de-prioritized that. What’s happened since, is that the public has moved on. The concerns of the public have moved on driven by the pandemic. But the actual narratives in the behaviours around sustainability haven’t, particularly from corporations. Gina McCarthy, one of Joe Biden’s sustainability advisors, talked about racism and the new climate crisis, she began to conflate racism and climate. What they have noticed through the FutureBrand Index and other studies is that the public has become concerned through the pandemic, not just about climate, but concerns for health, personal health, public health, concerns for wealth, the ability to earn money, kids not going to school, concerns for our communities have all conflated by the intense and acute nature of 2020. So, sustainability is now a multifaceted concept, but it’s still being treated as something that somewhat standalone. If you look at the narratives around ESG, they’re still relatively set in some of the concepts of people, place, profit. It’s still relatively unsophisticated at a time when the public is very sophisticated. When you look at the FutureBrand Index this year, the companies that are doing the best are the companies that are able to not just deliver on sustainability concerns but deliver on a wide range of concerns and preoccupations that people have. For example, one of the big risers is Louis Vuitton. Louis Vuitton has grown hugely this year. It’s managed to hang on to things it always did like pleasure and big sustainable sourcing. But it’s also been able to deliver on things like its story, sense of mission, its sense of thought leadership. So, what FutureBrand are saying is to succeed in the future and deliver in this new super sustainability era, they will expect things like health care companies to think about how do we deliver pleasure. It’s not something they typically think about or technology companies, how do we bring out our personality? And how do we deliver on sustainability and how do we deliver all of these things in order to meet the new complicated concerns of the consumer and the public?

Super sustainability is being concerned for the totality of human well-being, not just wellbeing within the narrow constraints of environmental concerns, not to belittle or minimize that, but it’s a much broader suite of concerns that are going to drive human well-being. We won’t engage the public if we get to a sustainable future but it’s totally miserable getting there and people just won’t stick with it. So, we need to, as business leaders and as corporations and companies think about how we deliver on the totality of human wellbeing.

Rebecca reiterated that we don’t want the journey to sustainability to be miserable and we don’t want that end goal to look pretty unhappy as well, building on that, being unobtainable. She explained that Octopus was set up to bring cheaper, greener power to all and to prove that cheaper and greener can be accessible and no more expensive than anything else. Sustainability has always been seen as something ‘not for us’ and potentially a little bit more expensive and a bit more niche, Rebecca thinks that’s a risk after the pandemic. People are so focused and have bedded down again with basic worries about survival that does being sustainable and thinking about something wider than your immediate family become a little bit challenging for people? Octopus was set up to bring cheaper, green to power, but also it was set up to think really hard about how about humans and the wellbeing of humans. That starts with their teams as well as with the humans that they sell energy to. What they try and develop at Octopus is a very empowered culture where people enjoy coming to work and work is a very important part of life and not just something that you do nine to five. Rebecca added that, whilst she was there with her eight month old, they don’t expect their ladies to come back to work so soon after they’ve had babies. She said they hope that they deliver a working environment that people will come to work and want to be themselves. Octopus’ CEO, Greg, talks about developing an environment where you don’t have to hang your personality up at the door as you come in and you can totally be yourself because a happy person is a better person and is better able to drive the business.

Axel explained that E.ON is one of the largest energy companies in Europe and has undergone a tremendous transformation in the past year. They have spun off the entire production side and are focusing on grid business. They have one point six million kilometers of grid and 50 million customers. So, sustainability sits in the heart, soul and core of the company. There is this aspect of making sustainable energy democratic somehow by opening it up to all customers and affordability is an important aspect here. In E.ON’s case, 50 million customers includes the single mom in a very expensive capital somewhere in Europe. So, everyone needs to be able to afford that. He added that he liked what Jon said about this holistic view of super sustainability. There’s more to it than just the ecological aspect. Germany has just experienced some devastating floods in the western part of the country which means thousands of people were out of energy all of a sudden and a lot of Axel’s colleagues are heavily working on restoring the energy supply. This is something very basic, which you only feel in times of crisis or when the Covid crisis started, supply security was a very important aspect. For Axel, that’s also part of the sustainability. The reliability aspect. Can we afford it? Is it green? And do we have security of supply? Energy in E.ON’s case, is to a large extent an infrastructure business. They are serving entire cities, big companies, and it is important that they have the security, that people know the energy supply is stable over a long time and we very often take it for granted.

Jon added that it was really interesting hearing E.ON and Octopus talk as he believed that they were basically saying the same things in slightly different ways. He said that if he was a customer, he expects that from an energy company in the same way as he would smile when he sees packaged good companies patting themselves on the back because they finally decided that they’re going to reduce the cardboard in their packaging or source it from somewhere sustainable. As a customer and through FutureBrand’s research, that’s what people expect every company to be doing and you almost run the risk of opening up the question of why weren’t you doing it before? More positively though, when we get to a place where every company, whether you’re a multinational like E.ON or whether you’re a player like Octopus, which seems to Jon, to be a really compelling, specialist, focused business, there will be a point where you will offer the same. It’s sustainable. It’s reliable. So what else have you got? What’s going to make me choose? What’s going to make me gravitate towards you? That’s when you need to think about the totality of, how do you have an interesting and compelling story? How do you play on the experience you create as well as the purpose that you stand for?

Rebecca explained that Octopus is not a specialist company, they are an energy supplier. She thinks that was quite an interesting point because actually green shouldn’t be a specialist and having your energy supplied by a company where staff are empowered and enjoy coming to work shouldn’t be a specialist thing. That’s the norm. Octopus set up five years ago and they’ve got two and a half million customers in the UK. They’re now in eight countries around the world, they have got business in the USA, Japan, Germany, Spain, Australia and New Zealand. That’s not just supplying energy to customers, but they also have their own proprietary platform, their own software platform called Kraken, which is used by other energy supplies, E.ON being one of them, to help look after their customers and unlock green energy at a better price for them as well. Rebecca said that they would argue that what Octopus does is becoming mainstream and they work with energy suppliers around the world, having a big joint venture in Japan with Tokyo Gas, they work with Origin Energy Australia. So, they have got to two and a half million customers in the UK, 17 million customers globally licensed on the Kraken platform. They’re aiming to have 100 million by 2030. She said that Octopus is very much here to show that sustainability and super sustainability and in their industry cheaper, greener power. But also, the idea of a business being an enjoyable place for people to work and actually very integrated with the better society is something that is here to stay.

Axel wanted to also mention what he called E.ON and Octopus’ ‘baby’, E.ON Next in the UK, which was just recently launched to the wider public in the market, and from E.ON’s point of view, there is a second dimension. The question was raised, should it be a normal that everyone is getting cheaper, greener energy? From Axel’s point of view yes, of course, it involves a complete rebuild of the infrastructure. He said that we come from a world where you had a few power plants across the country, coal, gas, nuclear, and these problems were supplying entire countries. We are now entering a world where we come into a decentralized prosumer world, a lot of people have solar panels on their roofs, drive e-cars, there are windmills. It’s complicated system to generate the sustainable energy we need and this is a process which will take decades. So, you need to have the production side to take into the equation. You have to take into account the grid side, which is important, because if you think about it, in previous times, the grid was designed and this is copper cable. This is millions and billions of money running in infrastructure across countries. These grids were designed to distribute from centralized power plants into the homes of people, into factories. Now the system is becoming decentralized. So, you have to manage that, you have to visualize how you operate this and you have to make it more flexible. This is not to be done overnight. Axel added that there is a bit of difference between a company which is a new established one like Octopus, which has a bit of a greenfield approach here, and an incumbent which has a bit of a legacy. He has always advocated for making this distinction, the starting point is a different one. The objective of all of us is the same; to make this sustainable future for all of us possible. They are united with the same goal. He explained that people don’t give a damn about energy usually because it comes out of the socket. It’s there and it’s a commodity. And it’s very often associated with dirt, you have the pictures of the coal power plants or these kinds of things in front of your eyes. Nowadays, it’s also the key for a sustainable future on our continent, on the entire planet. We need to change the system while we are keeping it stable and running and affordable, which is a bit of a challenge here.

But the fifth highest ranked company in the upcoming FutureBrand Index is NextEra Energy, number one in the energy space. It hasn’t grown on head stuff, it’s grown on heart stuff. It’s grown on its experience, on its story, on people’s beliefs about the quality of the people who work there. Jon said that where these companies have really shot up is in being able to communicate a sense of well-being, being able to be an inspiration. These are things he doesn’t usually associate with energy companies. So, people do increasingly give a damn about energy. But it’s just not in the way that the energy industry tends to talk, which tends to be slightly rational about reliability and ‘look how sustainable we are’. Jon thinks that what that may be a sign of is the sophistication of consumers; on the one hand that they get it and expect it, but also the sense that where they’re going to spend time and money and with whom they’re going to spend their time and their money are companies that deliver on a whole host of needs that they have. Yes, he cares about his environment and the environment he lives in and the future of his family, but also today, Jon explained he wants to have pleasure, he wants to have experience. He wants to give his money to a company where he believes that people are treated well. This is what’s at stake now, because increasingly there’ll be an expectation of that. If you’re dealing as a business leader, a marketing leader or brand leader, you’ve got so much to deal with now. You’ve got to think about the business in so many different lenses and so many different contexts, if you don’t look at it through the lens of the brand, which to FutureBrand is about behaviour, then Jon said he doesn’t know how else you do it. Every company had struggles with things like this. But if you look at Boeing, Wells Fargo, Enron, for example, if employees at that company had a greater sense of what their brand was about, some of the things that happened there might not have happened. But the ability to look at the totality of the business, how it behaves in every context is what’s at stake.

Rebecca responded saying that Jon is understandably coming at this with a lot of scepticism around about the industry. Octopus was set up to do energy differently with that in mind. Rebecca joined Octopus when there were 50000 customers and 30 people in office and now they’re at the size that was mentioned earlier. She added that she doesn’t worry, think or get stressed about lots of different lenses that she has to look at. The business in her job is to take a decent product, a good product, fairer, cheaper power with exceptional customer service that is green as well. But it’s not something they hero on, because it should be something they deliver a standard. Rebecca asks how does she take that message to people and make sure that they have a great experience with Octopus and a great experience with Octopus is when they talk to someone on the phone who can deal with that problem. They have a 95% first time fix, their systems and training means that when you speak someone on the phone, they will be able to answer anything that they need to answer, you don’t get passed off to other people, someone will look after you from end to end. So, the way that Octopus manage their customer service teams, operations teams as they call them, every customer is assigned to a particular team of around eight to 10 people and those eight to 10 people will always look after that customer. So even with three and a half million customers, you could always speak to the same person if you want to, unless they were off for the day. Rebecca thinks that building a business from that way round, you cover some of the different issues you talk about. She said that Axel is totally right, it’s harder for legacy companies because they have a lot of stuff that they have to deal with. E.ON’s a fabulous example of using Octopus’ software, their own ability to implement that, to create an entirely new business in E.ON Next in only a few months is actually operating in the way that they have designed it for this conversation, a very super sustainable way. After watching the TV ad, Rebecca thought they created a new competitor. But that is what they want to do. Rebecca wants to change the world, she wants to leave the world a better place. She contributes something to society, which is a better energy industry. She is delighted that they can work with businesses like E.ON to do that and to make to make that change.

Axel explained that they thought a lot about the question, what is more there than reliability and what is what are you standing for beyond? What do they want to stand for? What is what is really the core of everything? If you look at the core issue that they want to tackle, which is doing something against climate change, doing something for a more sustainable planet, because that sits in the heart and soul, that is a challenge for mankind. That is not a challenge for any county and any country. It’s big. It’s massive. He said they believe that all of us need to work together and do our bit. Everyone can do a bit, it can be small. You can make your contribution with a sustainable energy contract, you can drive an electric vehicle, you will most likely drive one in the future because the car industry is changing now, you can have a super sustainable home and so on and so forth. But the collective effort is the importance of connecting lots of people to this mission and partnerships like the one E.ON have now with Octopus. Axel said he loves it because whilst they obviously they are competing for the same market, at the same time, they have the same objective and are working together. So, it’s getting more and more fluid and bound together by this one objective. We see it every day. There might be people who deny it, but Axel is convinced that if we don’t do something right now, and talk only about this, then we will be not in a very good place going forward.

The truth is, you can imagine the type of companies that are in the top 100 in general, they’re not doing so well. There is a degree of muted response towards those businesses across the board. The one Jon would call out, is Saudi Aramco, which is surprising. He thinks Saudi Aramco is a really high riser on FutureBrand’s index from a very low position. But in the last 12 months or so, Saudi Aramco have improved on perceptions that go way beyond sustainability. Saudi Aramco is performing across the board and particularly on things you perhaps don’t expect. For example pleasure, well-being, authenticity, innovation, the story, its back story. In some ways we’re talking about energy, but we’re making a broad point about businesses and how they can rise in the eyes of the public these days and the rise of consumers. It’s by thinking beyond their sector. Often sectors behave along certain expected lines, for example health care businesses tend to operate along the lines of well-being and respect and energy businesses tend to think about the world in terms of concerns around environmental and sustainability. But what we’re seeing is the companies that are performing exponentially right now are thinking beyond the norms of their sector, and they’re winning in spaces where they don’t traditionally play in terms of how they come across to people. At FutureBrand, they believe that is because the public and the people they have spoken to, who are not just people in the street, they’re a professional audience of informed consumers, they’re reacting to a whole bunch of concerns that they have and they’re assessing businesses and brands on a whole plethora of concerns that affects people’s health, their beliefs about their wealth and status moving forward, their communities, as well as the environment. The businesses and companies that seem to be operating across those contexts are the ones that are standing out right now post pandemic, because people’s concerns have been conflated and escalated, we think about things in a much more nuanced way.

The number one company FutureBrand have got this year, which may surprise some people, is not Apple, it’s ASML, a Dutch tech company, it’s playing in a category perceived to be, alongside a whole bunch of companies, building the infrastructure and foundations of the future. In this case, the future of tech in the Web and where they are performing highly is in categories you perhaps wouldn’t associate them with, giving a sense of individuality. So, they’re very distinctive. Those who know them feel them as different and distinctive. They have a really strong personality, where they’ve really punched out on things like bringing and giving people pleasure. These are not things you usually associate with tech businesses and businesses that are building the infrastructure of the Internet. That’s what super sustainability in companies that really purport to want to be super sustainable need to start thinking about. They do fine on things like resource management, which is how they assess sustainability, but it’s on the broader things that the battle ground now seems to be, because the public are more sophisticated in how they’re assessing companies and where they want to spend their time and money.

Jon added that he thinks that fundamentally brands are built inside out, and they live first and foremost in the employee. So, the story of Octopus is compelling because it sounds like it’s been built intuitively from that perspective and making sure that it radiates through. And Axel is doing something similar at E.ON. So first and foremost, Brand comes from the inside out. If your employees are delivering it, it radiates beyond. The second thing arguably is more fundamental. One of the big misunderstandings about brand is it often gets confused with branding. Brand is behaviours, brand is how your company, your people, your products, your services turn up in the world. Whether that’s a product on a shelf or a service on a screen that’s brand. All branding is the trappings, the assets, the little logos and reminders that establish and maintain and remind people of that behaviour. So, if you think about brand behaviour and how your people behave and how your company behaves and how your services and products behave, the new agenda is to behave in ways that you didn’t have to worry about before. If an energy company only had to worry about communicating a cheap price and ticking a sustainability box, that worked before the pandemic. There’s a great opportunity for companies like energy companies to make people care about energy, to become engaged in it, to be able to track it, to be able to understand their contribution, to demonstrate how energy companies make for a wealthier, better society to manage health, to help with all sorts of things that originally people wouldn’t necessarily want to engage with their energy company on. That’s true of every sector. So, when you’re having to operate with that, using the brand as your blueprint, using the behaviours, how do we behave in this context? How should we behave in that context? How should we behave when we’re talking about something that’s outside of our comfort zone is really interesting. For example, one of the brands Jon really loves is Hermes. Hermes obviously, deliver on what you’d expect them to deliver on, things like luxury and quality. Where Hermes is unique is it’s so fun.  It’s really transformed the way people engage with luxury brands because spend five minutes on their Instagram page and you realise what a rich personality, it almost feels down to earth, company it is. And yet it’s still maintained a high-end Parisian business. Another great example, Jon thinks, is Transfer Wise now Wise, which is disrupting banking in some ways, or certainly the way we think about money and moving it around the world. It delivers what people expect it to deliver in terms of what you’d expect from a financial institution, trust and credibility. But the experience, engagement and for example, it just recently did its IPO in a very unique way which was interesting. Without a clear sense that those founders understand what their brand is all about, they wouldn’t have done it in that way intuitively. It would have been done in more traditional terms and therefore would have been less distinctive and less stand out. If you want to engage the new, post pandemic consumer, you need some sort of blueprint to give you the confidence to go outside of your traditional comfort zones and to behave in a new and interesting ways, because that’s what people are looking for.

The Bezos quote about your brand is you when you’re not in the room, what he means is it’s me when I’m not in the room. Being able to trust and empower your people to make smart decisions every day comes down to them understanding what the brand is all about and what is the right way for us to behave in this context.

Axel added that if you try to boil it down, it could come to a very simple question, the brand can help you. He once did a very exhaustive rebranding process where they put a lot of emphasis on the strategy part. It came down to the question, ‘who are we and who do we want to be?’ Then to make the litmus test ‘who we don’t want to be’. If you have an answer to that question, and from Axel’s experience, it can bring a lot of interesting follow up questions in the strategy process. If you come up with that question from a brand point of view, then you are at the very core. Sometimes in their profession, they try to make things a bit more complicated than they need to be with brand personalities and brand course and brand positioning. They all need that, but in the end, it’s that one question, ‘who are we?’ ‘What is the business for in its core?’ It’s not always easy to find that out. At least if you are working in a legacy where they have some sort of a history that comes with it.

Talking about the brand is who you are when you’re not in the room. When Rebecca was off for a few weeks, a couple of months ago, having her baby, a new head of marketing for Octopus’ Japanese business joined, Yoko, who is spending a few months with the team in London and then will go back to Tokyo. Rebecca’s baby arrived a little bit early, so she had to go a little bit unexpectedly. So, Yoko arrived, and Rebecca wasn’t there. It was a bit of an interesting onboarding for her, but Rebecca’s team, she knew would be absolutely fabulous. Yoko said when Rebecca came back, ‘it was amazing because everyone I spoke to said exactly the same things about this business, it was like they kind of learned it’. How what they are and what they do; focus on growth, empowerment, enjoying yourself at work, supporting each other, all the key values which people just completely understood. Rebecca said that Yoko couldn’t believe anyone she spoke to, not even within Rebecca’s team, within marketing or product development, but actually across operations, across everything, people got what their North Star was, which Rebecca was incredibly proud of. She mentioned their North Star, cheaper, greener power for all and they also talk about embarrassingly good customer service delivered by empowered grown-ups. That’s a very simple message for the team who work at Octopus and translates to customers as well. They don’t have a rigorous and obsessive sign-off process. For example, Rebecca used to work for another big energy supplier and when she used to produce a piece of creative for customers, it used to get signed off by legal, regs, data protection, ops, PR, and everybody used to take a nice piece of creative and then carve off a little bit and you used to end up at the end with something that really didn’t mean much to anyone, but yes, wouldn’t get you into any trouble. Within marketing now, Rebecca expects that if her team produced creative, she will have a look at stuff, but actually they all have read the energy supply regulations, they know what’s legally right and decent and if they put something out the door, they have accountability for making sure that it’s right, they’re not looking for anyone else to sign off. They take that personal responsibility, and it means that not only can you move much quicker in doing things, but actually what you produce is much better as well. Rebecca thinks that also extends out of marketing to the operations team that they give a lot of flexibility to make their own decisions when dealing with customers and what’s the right thing to do and how to look after them. Each customer is looked after by a team of eight to ten people, and each of those teams has a team leader and they are really empowered to run their own PnL. They have around fifty thousand customers that they look after and they are responsible for deciding how they’re going to manage the team structure, how many people are they going to put on the phone, how people are going to go on emails, are they going to have a specialist in the team who looks after all the building side, how they work it, completely empowered for how they think it should be done rather than it being a top down process. This is the process that you might follow for everyone because employees are different, customers are different. It’s important to give people that complete empowerment to do the best thing for them and for customers as well. It seems to work so far. She would hope that very soon Octopus would appear on the on the FutureBrand index, which is market cap.

Jon said that what the pandemic did is it forced a degree of expediency that perhaps wasn’t there before. Governments, companies, and people were forced to work faster and in new ways, the speed to market of the vaccine being a good example of that. But also, you think about the way so many companies switched production to create hand sanitizer or PPE. So that was the immediate effect of what happened in 2020. He thinks the lasting impact of that could potentially be a reassessment of how businesses work, how companies work, how work gets done, how products and services are created, and ultimately our attitude to profits. There’s a really interesting example, that comes out of India, FutureBrand have been doing a lot of work in that part of the world recently. Their view of the world is that you create products and services that are foundational to life, that allow people to progress, to trade, to learn, to develop and you take a fee for doing that. It’s much more of a partnership model, a collaboration model of working. It’s designed to be a scaled business. So, it’s less parochial, it’s less profit driven. Companies, such as Reliance Industries or Tata Consulting, both firms rising, and in the case of Reliance in the top 10 and has been for the last two years, if you operate with an Anglo, US centric mindset, which a lot of people still do, you don’t realise these companies are already operating in ways that are akin to the way that we were exposed to because of the pandemic. Jon thinks that might be here to stay. Where you think about what people need at scale, you provide it for them, and you take a small cut to doing it. So, when he thinks about the way older companies and markets tend to operate, it’s ‘how much profit do we need to make?’ ‘How much shareholder value do we need to create?’ ‘Therefore, how do we get that out of people?’ There’s a long-term flipping of that type of thinking that may be one of the longer-term legacies. The pandemic certainly exposed us to that way of thinking.

Let’s see what the long-lasting effects will be, Axel states. When the pandemic started, there was a bit of a debate in the media around, is the topic of sustainability now a bit off the radar, because we have different priorities as a society? He thinks that has changed again. These effects might be less severe than we might think, we have to observe it. You see these longer guardrails which are here to stay, like sustainability and how we as a society can manage that. As households, as people at home, as individuals, but up to the levels of societies. And these big questions, from Axel’s point of view, have a bit of a longer lifetime. If we are talking about sustainable energy for everyone, then there’s one question behind ‘where does it come from?’ At the moment, it’s just not possible to have fully sustainable energy for everyone because it’s just not there in terms of production. So, the question is, how do we change as a society? Because this is a deep question. This would cost money. This will be a big societal effort. And no country will be able to do it alone. How do we do that in the next 10, 20, 30, 40 years? Brands might be able to help guide this conversation or at least play a substantial role here. Axel had the feeling when we had the first wave of covid beginning of last year, that was a bit of a litmus test for many brand purposes, which is really relevant for these long-lasting things when it comes to health and how we collaborate with each other. So, the importance of telecommunications was prevalent. Energy was playing an important role here that worked out in the health sector, which is sometimes a bit complicated. If we talk about regulations and lawyers, if you’re working in healthcare, this is a different kind of a game. But these questions are so fundamental. He believes that will be important for brands to have an answer. There is a bit of a distinction between what is really relevant and what maybe has a perceived relevance, but not real relevance.

You can access the Super Sustainability Report on futurebrand.com.