[00:00:00] Speaker A: One of the most surefire ways to mess up the way that your company handles sustainability and to make people think that, yeah, oh, no, this is greenwashing. This has nothing to do with sustainability. Is creating a sustainability capability in your organization and putting it in the marketing team. Like the marketing team are great. Don't get me wrong, marketing team is fantastic, but that's not where sustainability goes. The most successful sustainability capabilities in large organizations are directly reporting to the CFO. A lot of the stuff that you're doing from sustainability is heavy, heavy data. Heavy data that influences the way that your company runs and your company needs to focus on. So it's no brainer that it goes under the office of the CFO.
[00:00:44] Speaker B: This is KBCS.
[00:00:46] Speaker A: Are they completely silent?
[00:00:47] Speaker B: As a primary target for ransomware campaigns.
[00:00:50] Speaker A: Security and testing and performance risk and compliance, we can actually automate that, take.
[00:00:55] Speaker B: That data and user.
Joining me today is Luke Hargreaves, founder from Aquinas. And today we're discussing sustainable technology and what really matters. So, Luke, thanks for joining and welcome.
[00:01:08] Speaker A: Yeah, thanks. Yeah, really happy to be here.
[00:01:11] Speaker B: So I just want to caveat before we jump into the interview that you were the first person ever on the show, in 256 interviews, that is from North Queensland, so majority of people might not know this. I was not born in Sydney. I was born in Townsville. But you were born in Innisfail, which is a smaller town than Townsville. So I am very proud to say that you are my first guest in a very long time, if ever I've spoken to anyone in the field that is from Israel. So thank you for taking out that Nobel Prize.
[00:01:38] Speaker A: I am very, very proud. Proud of that. Little bit of nobility, a little bit of prize. Prize. There's no money, but, you know, growing up's its own reward, right?
[00:01:47] Speaker B: Exactly. So I found it interesting. I was making people all over the world on this show, so I just thought that was unique. I want to start right there. Now, I met you at the AWS summit here in Sydney, and that's how we obviously knew where you're from. But one of the things that's coming up a lot in the media, in our space, in the technology space, but just media in general, is the whole sustainability side of it. So maybe let's start there. Talk to me about sustainable technology and, like, what really matters and, like, why should people care about it?
[00:02:17] Speaker A: You start out with what sustainability is overall and what matters in it. I guess the biggest sort of change happened in 2016, where there was a conference, a global conference in Rio, and they needed to sort of ratify the UN, needed to ratify a framework for sustainability. Reason being is that a number of factors in the modern world, if we continue doing them the way we're doing them, then we won't be able to do them anymore. If you're doing something sustainably, then it meets the needs of the future generations without compromising your own, which basically means what you can do, you can keep doing it over and over and over again. It's not something that's a finite, like finite resources or a finite sort of plan to what you're doing in terms of tech. That's another. Another thing entirely, I would say, like, tech is an underlying enabler. We all know that. We know that tech can influence and help with a lot of different, I guess, businesses and a lot of different areas around the world in sustainability. There's a lot of ways they can do it. And how it applies to these sdgs, I suppose, is important, I should probably explain sdgs. Sdgs are the Un Sustainable Development Goals, and there were 17 of them ratified in 2016, all the way through from poverty, hunger, health. I did a bit of volunteer work with the UN before I joined Amazon, so I was able to see how those things happened in the field. And being able to map those into sort of a technical way is part of a lot of the work that I was doing towards the end of my sort of Amazon stint. There are 17 of them, but you can broadly break it down into three. I like threes. Like, threes are something that people can sort of get their head around. And so in this sense, I suppose what really matters is the three top three priorities, I would say, are obviously our energy transition. So transitioning to the things that actually power what we do, how we can use resources in a way where they don't run out, and how we can get the message and education out to everyone in the world equally, as opposed to having some. Some areas of the world more knowledgeable about this than others and giving them sort of an unfair advantage. Yeah. And a lot of the time I would go and talk to companies and, you know, executive suites around sustainability, and you get those sort of like, well, this is a nice to have, it's a nice to do. Do we really need to do this? What I ended up doing was reframing it as an economic argument. And what I would say is that half of all, like all assets in capital right now, have a sustainability aspect to them. That's $53 trillion worth of assets. Right.
If you're talking about economics, if you're not in sustainability if you're not producing a sustainability report, or if you're not, if that's not on your radar, you're very quickly going to fall out 95% of the top 250 companies in the world. I have very comprehensive sustainability reporting, and there's a reason for that. In a nutshell, I would say what matters most? Energy transition, management of resources, and the ability for everyone to know about it from an education perspective.
[00:05:11] Speaker B: Okay, I want to go back a step now. When you said the definition of, you know, sustainability or being sustainable would mean you can do things sort of over and over again. Do you think people haven't made that connection to the definition because I asked this? Because, again, there's a lot of people talking about sustainability, whether it's, I don't know, the coffee cup you reuse when you go down the shop or whatever it is. So it's like, is that what people think of sustainability?
[00:05:36] Speaker A: They think that sustainability is only climate based and only sort of like, you know, relating to the environment. And that's not the case at all. Sustainability is much broader. Yes, the environment's important, but the acronym, you know, ESG, environmental, social and governance, that sort of applies to sustainability. I put together a lot of the sustainable development goals together and worked out that most of them are indeed economic in relation to how we can do things over and over again. Like, if we take. Take one, for example, like the UN SDG, like, sustainable development goals, we can take, say, gender equality is in there. Hunger, hunger relief is in there, health is in there. Education is in there, addressing inequality. Smart cities, you know what I mean? Circular economies, those sorts of things, they're all in there. So it's not just environmental, even though. And actually, funnily, it's sort of a funny crossover. And you'll understand this because you grew up there as well. But, um, even though it's very, very visible to us, just for context, in the far north Queensland, there's an area called the Wet tropics, and it's a 180 million year old rainforest, the oldest, one of the oldest in the world. And it beats the Amazon rate by 10 million years, actually, which is a funny thing whenever I talk about it.
[00:06:46] Speaker B: Usually the Atherton table ends, aren't you?
[00:06:48] Speaker A: Exactly, yeah. So just south of. Yeah. So towards the coast and the Atherton table ends. And also there's this small matter of the Great Barrier Reef being there. Right. You know what I mean? We've seen it change from an economic perspective. We've seen it change like the coral bleaching events that are happening are happening more frequently because of the war. At the moment, that's just a climate thing. I mean, from an education thing like the, you know, there's a lot to be done to help people understand the, I guess, the scope of what sustainability is. But I don't, you know, when you expand it too much, it becomes a lot to take in. So I kind of like to make it a little bit simpler in that sense, trying to make it so that it's not just environmental, it's about being able to do the things that you do and indefinitely. Right. So whatever you're doing, you got to think about and think, is this something that, you know, will these resources run out? Can I keep doing this over and over and over again? And a good parallel to that, I guess, is, you know, energy is a good one, like understanding where your energy comes from and whether or not you are using finite resources to create that energy or whether you are able to harness resources that are, you know, for all intents and purposes, you know, I won't say infinite, but in our lifetime and in the lifetime of, in the generations of humans, the sun's probably not going to be an issue that like, it's never going to like, go out in our lifetime, let's put it that way. So being able to get energy from resources that are, for all intents and purposes, infinite is a really good example of that.
[00:08:14] Speaker B: Okay, I want to get into the economic argument that you mentioned, which you said was 53 trillion. So look, this is an executive podcast. So if I were to surmise what most people care about at that level is reducing risk, reducing costs and making money. So you said if people, as in companies, start implementing, you know, more of a sustainable approach and program, etcetera, they're actually going to be saving money. So talk to me a little bit more about that.
[00:08:40] Speaker A: Well, three ways you could look at it in that sense, in terms of economic, I guess one way would be, let's say. So, for example, one part of sustainability is you saying, okay, I have a certain set of resources in my company. How can I use those resources more effectively so that I'm able to, you know, produce what I produce with less? You know what I mean? And so obviously that saves you money economically as well. If you start running out of resources, then you need to procure more. So it's actually in your best interest to understand your entire value chain and I guess convert that into a more circular value chain so that you can see, okay, this part of it's costing a lot. Why is it costing a lot? Because we need to buy these things. Okay. Optimizing that. That's the first one. The second one is brand awareness. So KPMG did a report about brand awareness and as the generations are coming through that they're more conscious of the, of the goods and services that they're buying. If given a choice, if they have to choose between a, you know, a more sustainable good or service or one that doesn't really think about it, the, the younger generations actually choose the more sustainable one. And that's kind of an understandable thing, right? If you, if you're going into a world where you, you know, your next phase of life is you're going to have to be the one that's using all these resources. You kind of want to be able to use these resources, right? So it's important for them to actually be using products, have a commitment to a longer term operation. So brand is massive in sustainability, showing your customers that you are thinking about these things and you do have that sort of interest at heart. The third one, which is, I don't like to use it because it's just a bit of a hammer, but it exists. And it has to be said is that there will be legislation coming in. Now, the EU already has this, already has this legislation in there, but it's about when you produce your yearly shareholder report, you need to include a sustainability section in that shareholder report. It needs to be there. And there are a certain level of requirements in your sustainability report that you need to focus on. If you don't have some sort of way of getting that data and you can't produce those reports, it's not a valid report for your shareholders. And there have been instances, I won't name the companies, but I've seen it specifically, there have been instances where the board has been held accountable by shareholders for the fact that they don't have a plan beyond 2035. Right. They don't have a plan beyond like how they're going to continue operations when certain resources run out. And that's massive. And there have been board changes I've seen in different companies, even in Australia here, specifically around the fact that they don't have a plan for how they're going to keep operating after a certain point in time. I'd say they're probably the three, three biggest ones the EU is leading in terms of these, you know, these legislations. So what I tend to do is I sort of have a look at what the EU is doing slowly. It will permeate throughout the rest of the world, and it has historically. So if you really want to think about what you're doing as a company, get yourself a little bit familiar with what's happening in the EU, and then you'll know what's coming and you'll have all the things in place to be able to, be able to deal with it when it does.
[00:11:41] Speaker B: Okay, so there's a couple of things in there. This is really interesting and really valuable, what you're saying. So going back to the brand awareness, look, I agree. One of the things, though, that I'm curious to hear from your side of it is the virtue signaling. So what I've seen companies do, again, not naming names and, oh, we're sustainable and ESG and reducing carbon footprint. But how true is that? Because anyone can get up there, you know, and say, wow, we're doing all these things, but who's holding these people accountable and check in if that's what they're doing?
[00:12:08] Speaker A: No, you're right. You're absolutely right. And that has, there's a term, it's called greenwashing. We're doing all this stuff. It's kind of like you're holding out one hand for people to look at and in your other hand you're doing all the things like you always did it right, which is, you know, obviously not cool. There are international bodies that are there that enable people to use frameworks to help, I guess, keep people honest in a sense. The only thing, the only problem with that is with the global nature of sustainability. You have to break it into jurisdictions. So each country has its own laws, each country has its own way of doing things. You know, the UN has some sort of global reach in that sense, you know what I mean? So when we talk about the UN, they have a thing called the United Nations Global Compact, which is basically a group of companies, their board or their CEO's, sorry, their executive suite have signed it, saying that they will do their best to abide by what the global compact defines as success or as good, because you can't make your own stuff up. And companies do make their own stuff up, unfortunately. And this kind of ties into the third piece, the education piece. If you know what the basics are in, like what a good sustainability report looks like, you will then be able to understand when someone's talking about, you know, for example, let's say there's a, there's a global tech company, and, you know, they get asked about sustainability and they say, well, you know, we're, you know, we've recycled heaps of coffee cups or something. You're like, well, it's not really what we want to hear. It's getting clearer and clearer and clearer. But I think going back very, very quickly to the economic part of it, the best sustainability reports that I have seen over the years of doing it are actually produced by financial services. So banks, insurance, hedge fund management, all those sort of things, they produce the best reports. And that sounds counterintuitive, right? It doesn't sound like, you know, you know, a financial services sort of company would, would care that much about it, but they know, they know better than we do what's coming. They know better than we do how to invest money and what's going to be, I guess, profitable in the, in the future. And they're the ones that are leading the charge on this. So if that doesn't tell you that sustainability is an economic argument, I don't know what else will. You know, if you don't want to listen to the banks around the world, to the, you know, the head fund managers, the insurance companies about money, which is their only thing that they do, then, you know, you might be, you might be closing yourself off a little bit there.
[00:14:27] Speaker B: Do you think people are listening to these people, though? Or do you think people are too busy just trying to keep their head above the water, keep the lights on, keep people happy, you know, make sure compliance is done? Do you think people are sitting back saying, oh, what's this hedge fund dude thinking in the EU? And what's his thoughts? Do you think people are doing that, though?
[00:14:43] Speaker A: There's a reason why 95% of the top 250 companies do do sustainability reports. I would say they are, but I don't think they're listening to them for the reasons you'd think. I think they're listening to them for a fear of being left behind. If they don't, then a lot of the capital, the sustainable based capital investment, sort of the investments in sustainable technology are going to be owned or a lot of that IP is going to be owned by these larger companies already. So if they don't keep up, that's on them. It's going to be a point where a lot of the resources or a lot of the expertise is going to be highly concentrated. Now, we've already, like in Australia, we have the top four consultancy firms. They're scrambling for this.
They want to be the consultancy firm where you get your sustainability framework from for producing your yearly reports. They're already scrambling for it. So, yeah, I think it's more of a case of they're a bit of afraid to be left behind rather than, you know, any other sort of. Sort of thing in terms of, like, virtue signaling. Like you were saying in the first place, I think people overall can see basics of it, but I do think that there are, there's definitely a lot of greenwashing going on out there. So I'm not going to say that it doesn't exist. It definitely exists. But in context, yeah, there's. We can go into, I think we might be going into later maybe, what the scopes are of sustainability. So it might be a better place to talk about it there. But, um, yeah, there's. There are ways that companies tend to get around reporting requirements, and there is a reason why there's no overarching sustainability reporting framework that's mandated in the US, for example. Right. So it's something where, you know, where a bit of catch up is needed.
[00:16:20] Speaker B: Okay, so just to press a little bit more. So you mentioned that companies aren't focusing on the sustainability side of it for the right reasons because of the fear or the FOMO of being left behind. So how do we get people to a point where they are looking at this for the right reasons?
[00:16:35] Speaker A: Education. So that's the third. Yeah, that's the third thing for sustainability. Right. So energy resources and education. I think. I think when people realize that it's not, it's not a political thing. Like, it's not about whether you believe in conservative or liberal politics. It has nothing to do with that. And for some reason, people are, you know, they do. They do. I don't know if conflate's the right word, confuse, maybe those two, those two topics. It's just a no brainer. Like, if you want to run a large business, if you want to run a global company, the way you run it sustainably is just part of that. It's not about do I believe in this or do I not believe? It's not ideological. It has nothing to do with that. Right. It's basically like, well, I need to run this in a way that it's going to keep going and keep generating stuff. Fortunately or unfortunately, there is this global indicator, which we call money, that gives people a way of, like, measuring or what they believe is success and what isn't successful. And so that's something that has spurred a lot of people on recently to be a little less skeptical about it. Whether that's the right reason or the wrong reason is up to the person. If people are saying, I want a successful company. If being a successful company for them means making a lot of money, that's their value of success. If being successful other companies are, you know, being able to make sure your customers are happy with what you do or, you know, operating in markets where you actually are filling a gap that is needed, then that's also part of it as well. It's all about creating a successful business or creating a successful enterprise and making that thing work. Part of the education piece is understanding that it's completely separate from whatever, whatever belief or political ideal you have. It has nothing to do with that.
[00:18:10] Speaker B: I want to get into greenwashing a little bit more now. And there's something that really gets me going and keeps me up at night is virtue signalling. People saying they're going to do something, never do it, no plan on doing it. Talk a big game, never play it. Maybe that's my North Queenslander thing coming out, but I'm seeing it a lot like, you know, are more people doing that what they should? Look, I get it. You know, they got to keep shareholders happy and they're trying to keep their big, cushy executive job. I get it. Right. But like, at the end of the day, doesn't set a good precedent for the brand of the company. And you are right. I'm even seeing a shift. New wave of CEO's coming through. Now your, you know, your millennial and friends and also your Gen Z is. Are coming through that are questioning this stuff a lot more. Not like it, how it used to be where, you know, you worked in the same company for 40 years, people don't have that brand loyalty anymore. And if you're not doing the right thing by saying, you know, we are doing all these sustainable things, which in fact you are not, people will discredit you.
[00:19:07] Speaker A: Oh, absolutely. Absolutely. And that's it. That's a real risk for your business. Actually, I kind of don't like using, you know, using those hammers of, you know, there's going to be legislation, it's a risk if you don't do this, blah, blah, blah, blah. But that's the fact of the matter is that it is. And in the world, like, if something say, you say something about what your company is doing, suddenly it's all over TikTok and people are commenting and saying, that's not true. I've seen this. That's not true, I've seen this. And this is more of a modern thing where. Where if you're saying that, you will immediately get called out by it, so you need to make sure that what you're saying is correct. The interesting thing is what I like about it, in one way, it is virtue signaling in a lot of ways. There is a lot of greenwashing, but it's getting more and more. It's happening more and more. People are being more and more educated about it, and they know a bit more about it. And I'd like to think that, that with that knowledge, they'll be able to just to innately tell, or that is, that is, yeah. Okay. It looks like they're doing something. I've seen that before. That's in this framework or that, you know, that's what I would expect a company to do when they're talking about sustainability. I think the one of the biggest things all the companies get wrong is that they don't understand it before they start talking about it. They will jump in and have a conversation about sustainability and just talk about their coffee cups. Right. Like exactly what you said.
[00:20:24] Speaker B: Like, when AI started to emerge and machine learning, you know, all that came in and everyone just started saying it.
[00:20:30] Speaker A: Yeah.
[00:20:30] Speaker B: And they did a study. In fact, a lot of these vendors didn't do any level of machine learning. They claimed it.
[00:20:35] Speaker A: No, exactly. Actually, that was really funny. We, um. When, and there's a few parallels here, but when that came out, it was so interesting. This is the same thing with sustainable. It was so interesting to see a lot of the companies scrambling to de brand it. So if you remember when, when Google first came out, it's kind of like the worst or best thing. The best thing that can happen for your company is that your company's brand becomes a verb. So when a person says, I'll google it, instead of saying, I'll search for it online, right now, people are starting to say, I'll chat TPT it right now. That freaked a lot of people out in the industry. They just thought, oh, my goodness, we can't have people saying they're going to chat cheap. Your tear. We need to get in here before that becomes a verb. So, okay, what do we call it? Okay, we'll call it generative AI. Right? And so all these conferences you go to, and you'll see this for the next few years, you'll see this term generative AI. What that is is. Yeah, that's kind of what it is. But it's also a deliberate attempt to debrand a company. And there are parallels in sustainability as well. Like, you'll see a number of companies making good progress and then others just going, yeah, we've been doing that for years because we, I don't know, have a recycling bin in our office.
[00:21:45] Speaker B: But this is the part that gets me, though. This is the part where it's like people want to be like, sort of, you know, patted on the back for doing something so rudimentary and making these claims, swanning around like they're the big dog. So this is the part where I wanted to really get into this with you because I'm starting to see more of this content be presented on our platform. You're the first person ever on this show that I've spoken about sustainability with. I've spoken about ESG previously, but more in a security context, but not to what you're saying. So now I'm starting to see more of an emergence in the market. And that's why I wanted to sort of demystify. What does this really mean for people?
[00:22:24] Speaker A: I had to sort of put it in a nutshell. I just say if you have a business, you need to look pretty long and hard at your business to see if it's going to be able to continually operate. If you're thinking, okay, I'm going to do a cash grab, right, I'm going to jump in, I know this isn't finite, but I'm going to go and make as much as I can and then leave, okay, but that's not, you know, there's a limit to what you're going to be able to do with that. If you want to have a successful company that runs, that has shareholders, that has a brand, that has something that people trust, that, that grows incrementally every year, you can't avoid talking about things like where you're getting your energy from or what resources you're consuming and how you're putting those resources back. Like how so you. That you can consume them again yourself. Not necessarily as a selfless thing, but in the sense where there's only a certain amount of, I don't know, the lithium, for example, to create the batteries that you need to make. Right? When that runs out, then what, you know, when you've dug up all this, then what. What's the plan? You know what I mean? And that's. And I think with sustainability overall, like I said, it's. It's sort of a cross section of all these factors if you really want to know about it. I think reading about the un sustainable development goals is a good, good start. But there are 17 of them, so it can be quite, quite daunting, which I tried, which is why I kind of break it down into the three right. Energy production, resource utilization and management and education about it.
[00:23:47] Speaker B: So you just mentioned before, if you're thinking about your business, is it sustainable? And then you go, well, then what? Well, what happens when you get to the then what part? And then you figure out actually it's not sustainable. What do you do then?
[00:23:57] Speaker A: Well, that should ideally be in your report, right? That's part of a transparency thing. And this is why these reporting standards are going to be mandated, because this whole smash and grab mentality, that's not good for shareholders, not good at all. And if you want to get investment from people, they want to know that there's going to be a return on it and they don't want you to immediately fold.
[00:24:17] Speaker B: Well, what if you don't declare it, though? So what if you figure it out and you go, oh my gosh, our business is not sustainable at all. We've got like less than five years to go before the resources have run out and we've completely depleted the whole entire earth. No one's going to want to come forward, luke, and go, you know what, guys? I've just burnt all your investor money and we're not sustainable. Like, what happens then?
[00:24:36] Speaker A: What happens right now? I think there's a history of companies getting themselves into those, into the. Even before sustainability became a thing, right? There's a history of companies getting themselves into those problems and not seeing around the corner and then just completely folding and dying. And people lose money, people lose money, people lose trust, people lose livelihoods, they lose jobs, they lose, I don't know, a future for all their families. They lose a lot more than just what sustainability is. I know we're kind of getting to a larger, you know, a larger problem here, which is the responsibility of companies to operate in this way and not just for like being a good corporate citizen. None of that stuff. It's more of a case of you have, you have people relying on you or you have shareholders relying on you. It's completely irresponsible. Completely irresponsible. There's examples of this everywhere, right? Selling, selling, I don't know, bonds, like stack bonds in 2008 leading to global financial crisis. Right? One of the sustainable development goals, I think it's number eight or something, has to do with like responsible use of economic money and financial institutions. Right? Now, in the end, we all know what happened there, that the banks were too big to fail and so the government, you know, bailed them out with tax money. But that's not cool. That can't happen. Basically saying we're going to be completely irresponsible, and then when it hits the wall, we're just going to go and hide until the average taxpayer pays us off and then we'll reemerge. Again, very, very uncool. And that's, and that's a very sort of large part of like, being open and transparent about what you're doing. Now, I'm not going to say that this is like a silver bullet. Sustainability is not a silver bullet at all, not in any way. But it's another way of keeping people a little bit more transparent and understanding, like the consequences of their actions and when they do it.
[00:26:23] Speaker B: So do you think with your experience, we are going to see more companies, you know, burning through investor cash because they didn't figure it out, or more companies folding because they're not sustainable? Or are we going to start to see more of that? Because even most startups fail in the first year, most never get to five years. So there's that element of it of just a startup in general. But now you're sort of saying, well, businesses, startups, etcetera, if they're not sustainable, they could go under. So are we going to see more of that happening now?
[00:26:51] Speaker A: What I can say to that is that, yes, these apply across verticals and across different sectors. They do tend to apply in different ways. Like, what's important sustainability wise to a startup is different to what's important to an established global enterprise. Like, definitely. And this is where you kind of need to pick and choose the frameworks that you use at the right point in your business journey. Are we going to see more of them from a sustainability, from a resource and sustainability point of view? I mean, we've all heard the term, like, you know, I'm coming at this from a technical angle, right? I mean, there'd be a lot of people from finance or from, you know, business who would be able to elaborate a lot more on that. But in, in the, in the tech industry, we have, uh, you know, a term called vaporware where people will sell a dream and, you know, and I'm sure you'll come across that they'll sell a dream. We've got this product that does this when it doesn't actually really exist. Sustainability is one of the ways that you can surface, you know, how thorough they've been in the way that they've approached this problem. Right. Because when people kind of think, oh, yeah, it's a nice to have, it's a nice to have, well, it shows me, like, if I read your sustainability report. I can see where your planned resources are going to be coming from. Like, we plan to get this from here, we plan to get this from here, we plan to get this from here. It's going to be, we're going to be able to maintain that because it costs this much. And the resources, they have a good backing, they have a good supply chain. Right. This is what the concept of a circular economy is built on, is being able to be, be very deliberate in where you get all the resources from, but in a way where it's something that can continue like they're being replaced or they're being replenished, you know, in a rate that it's, you know, that makes it so that we can consume it more. So I have a lot of conversations about say, let's take energy for example. They'll say, you know, so like, is it more important to conserve your energy or is it more important to investigate new technologies so that we can just have infinite energy? You know what I mean? And so that means I can just use as much as I want. So in that case, why would I bother conserving it? And so that's where people coming from those two different angles, I'm banking on the fact that there's going to be infinite energy in the future. So I'm just going to do that or, wow. Yeah, I really need to look at what my energy consumption is because this is costing me. This is costing me. And that's where I study into where you're getting your energy from, who's providing it, how they're creating it, what the market looks like, what, how they charge based on their, based on their energy mix in their grid, what their charging models have been previously. You can go down a rabbit hole with this sort of stuff. But yes, I guess in answer to your question, there will be companies that come and go because they haven't sorted this out 100%.
[00:29:27] Speaker B: So now I want to sort of switch gears and go into your previous role because again, I want to sort of get into more specifics and examples. Now for people who didn't know you previously were the head of Amazon's cloud sustainability capability. So maybe shed a little bit of light on what you were doing there to give people some examples because again, its more than just copycats. So again, its a security podcast for a technology show. So really keen to hear your thoughts on that.
[00:29:53] Speaker A: Yeah. Okay. So yeah, for a bit of context, I was in Seattle for the last few years building up AWS sustainability team and capability. That was a global team. So I was across Seattle, Singapore, London, Sydney, in Germany as well. So it was a global team that was sort of focused on the different geos, AWS. Amazon Web Services is obviously a cloud, Amazon's cloud arm. So it was to have a specific plan, sustainability wise, for Amazon Web services and to have people that have training in this sort of thing to help customers themselves. In the end, what we ended up coming up with were two sort of major things, I would say is the way that you approach sustainability, and the way that we looked at it was being sustainability of the cloud. So the cloud itself, like all the data centers and all the networking and the energy that goes to make up the cloud that you consume. And then there's sustainability on the cloud, which is, if you're a customer that is using these cloud resources, how you can use them the most effectively. And then there was sustainability through the cloud. And that means using these resources in a responsible way. You're creating new products and new services that address sustainability, sustainability issues. So those are the three sort of pillars we kind of like looked for within the of the cloud sort of thing. Obviously, we look at what our data centers are running, getting clear and measured reports about what the data centers were using and how much of that is powered by renewables and how much isn't water usage like overall land reinvestment into communities, investment into renewable energy proposals. So, for example, in Australia, we had three agreements around where we're going to be getting our energy. We set a target for AWS to be running on 100% overall renewable energy by 2025. So getting to 100% and working backwards from there, because that's very much an Amazon thing, is working backwards. So those sorts of things were of the cloud, on the cloud. We created a framework that sort of delves into how users can use the cloud for their own projects in a sustainable way.
Before I was doing the sustainability in Seattle, I was a solutions architect, and I was very much a techie with a propeller hat sort of thing, trying to help people design their cloud infrastructure. And so the way that we had, we had a set of best practices, I don't like to say like the word best practices, good practices of which security is one of the largest pillars, by the way, about how to best use the cloud to be secure, to be cost effective, to be resilient, to be quick, those sorts of things. And we sort of had a hunch that sustainability was missing in those five pillars. So we added a 6th pillar to give information to people about how to use it. Now, that information covers things from understanding the users of your. Let's say you're building an app online. Let's say you're building a cloud based app. From a sustainability point of view, you've got to understand where your users are, what they're doing.
If your users are from a particular geo and you're using a global cloud, you can be using compute from, say, another part of the world where the sun's gone down already. You know what I mean? Or you can be using compute from a part of the world where it is being powered directly by solar at the moment. You can make those global choices depending on what your users are. The other thing is software. You can write software. That is, I guess so when people can write really bad software, right? This is a, it's a bit of a bugbear for me. You can write software any way you want. It's kind of like a little bit of art mixed with maths, but you can write a really terrible program that basically go burns through compute cycles to do a very simple function, or you can write a function that immediately resolves the problem that you need. Now, obviously, burning compute cycles means you're burning energy. And so looking at the way that you've written your software, and maybe suggesting better software patterns can have a drastic effect on how much compute you're using. And because of the way that the cloud works, you're essentially paying per use. Like it's, you're renting the cloud, essentially. So you becoming more efficient in that way actually helps you save money on the cloud as well, which was a nice little parallel into the economic discussion we had before. Also, the use of the hardware in the cloud, like using the right, the right compute instances for the right job, you're like, you're not going to be using a massive GPU powered like, AI model generator to host a website. You just don't need that. If you want to host a website, you run it off a web server. It's small, it's simple, and there were a number of arm based processes that could do that really, really well and use 30% of the energy that the larger processes did. So switching over to those hardware point of view works how you're storing your data. The more data you store, the more energy consume. So if you can go through your data and go, look, I don't need that, I do need that, I don't need that, I do need that. Or if there's heaps of double ups in your data, like getting rid of the double ups, it makes a huge difference to your. Not only to the energy consumed, but to, to your bill and then the way you deploy it. Like I said, you can deploy it in multiple different ways across the world. And just being able to understand, like some regions are already 100% renewable, right. So if you can afford to run your, you can afford to run your website, say, or your app from, say, North Virginia or something, then you're running on 100% renewable energy overall. And you can then getting to, you can then market and say, we do use 100% renewable energy. And that's not greenwashing, that's just the truth. So having, having this knowledge and knowing that these options are available can significantly help you, I don't know, release, but also give you real data and real credibility for what you're doing and not just making it up, saying, yeah, we, you know, like you said, the coffee cup thing. No, we're actually, we've been very specific. We're putting our, by putting our app in North Virginia because that is run by 100% renewable energy. So we want that there. And then on your side, you can say, this app is powered by renewable energy, 100%.
[00:35:32] Speaker B: I love that. I think that's incredible. I genuinely think, because I would, you know, I'm speaking to people all over the globe about all different sorts of things. I don't really think people know much about this from my perspective at all. That's why it was important to bring you on, to actually talk about it, especially like, you know, the whole, the branding thing and like you said, definitely not greenwashing like that is. That's massive. Especially, like you said, the up and coming generation, like they're going to be looking to companies, hey, we're running this whole thing on renewable energy. Right? So do you think these things are sort of hard to get started, though? Because again, like, all these things sound amazing, but going back to my earlier point, like, people are just struggling to just do what they have to do. How do you get to that stage as an executive to be like, you know what, what that, Luke, I was talking about. I've got to get onto that. It does make sense. But some of these projects and things, what you're saying make sense. It's going to help reduce money, but it's getting people there in terms of their headspace and priorities. How do you get people there from your experience?
[00:36:29] Speaker A: They have to want to do it. You can't just walk in and say, because it's a nice thing to do. Right. That doesn't work for people, particularly when you're talking in board meetings or executive meetings of larger companies, saying it's a nice thing to do puts it basically at the bottom of the list. So what I tend to, I tend to focus on, like we say, the economic part. But if any of these execs sort of go off and they do a search about sustainability, they're going to get overwhelmed by the amount of information that's there. Right. They need a practical place to start, and I think if you can, if you can give them that practical place. So I would say there are two very, very good frameworks, and if you focus on them to start with, they are the ones that will eventually become a global standard, in my belief. And even if they don't, they contain enough depth and structure to them to mean that you can produce a fairly thorough and good report for your shareholders at the end of financial year. Now, those frameworks are grI, the global reporting initiative and SASB, sustainability accounting standards. Those, those two frameworks, if you do nothing else as an exec, or if you, you know, if you want to understand, just look at those and have a quick glance over those. You don't need to go in depth. One of the most surefire ways to mess up the way that your company handles sustainability and to make people think that, yeah, oh, no, this is greenwashing. This has nothing to do with sustainability. Is, is creating a sustainability capability in your organization and putting it in the marketing team, like the marketing team are great. Don't get me wrong, marketing team is fantastic, but that's not where sustainability goes. The most successful sustainability capabilities in larger organizations are directly reporting to the CFO, which is weird, right? But when you think about it, that's not weird at all, because a lot of the stuff that you're doing from sustainability is heavy, heavy data. Heavy data that influences the way that your company runs and your company needs to focus on. So it's no brainer that it goes under the office of the CFO if you do that. So two things. Put your sustainability capability under the office of the CFO. Just focus on two basic frameworks. Don't get bogged down by a whole heap of stuff that doesn't really matter at the moment. And I think you're on the right path. From a company point of view, that at least means that you'll have some sort of credibility. And if you're talking about it in that way, that's really, really important. We all know the legislation, but like I said, I don't like using those hammers, but they are there. You need to get it sorted before the legislation comes in, because it will.
[00:38:59] Speaker B: So, Luke, do you have any sort of final thoughts and closing comments? I only know that we only got through probably half of what I wanted to get through, so maybe we'll have to bring you back for a part two, because, again, this is something that I haven't discussed at length on this show before. So is there anything specific you'd like to leave our audience with today?
[00:39:17] Speaker A: Yeah, I think probably the best anecdote I can say is that a lot of the talk around sustainability, the year 2040 is a big year, and it's when a lot of things come to their tipping points in terms of resources. Now, what I want people to remember is that now the year 2040 is closer than the year 2000. And when I think about it in that perspective, we've only got 16 years, and that's not a long time. So a lot of the tipping points for companies, a lot of the tipping points for, you know, global resource allocation, education, they've been targeted around 2040, and that's closer than the year 2000 is now, which scared me, and that's one of the reasons why I got into it.
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