‘Business is best placed to deliver the changes we need to live sustainably’ Lord Deben on Sancroft in its 25th year
When Lord Deben founded Sancroft in 1997 his core belief was that business is best placed to deliver the changes we need to live sustainably. Ever since then, Sancroft has been the trusted adviser for business leaders and investors who want to build profitable, sustainable businesses.
Sancroft has grown from a small group of specialist consultants in a nascent sustainability industry to a leading sustainability consultancy. Today we apply our knowledge and insight learnt over 25 years to an international client base, ready to support every business who wants to understand how it can navigate the sustainability challenges which lie ahead.
In Sancroft’s 25th year of operation, Ailsa Dormon, a Consultant at Sancroft, interviews our Founder and Chairman, Lord Deben. Lord Deben shares what led him to set-up Sancroft, his ambitions for the company and what organisations can do to make their businesses more sustainable.
What first sparked your interest in sustainability?
Lord Deben: I was first introduced to the idea of stewardship being brought up in a family where we were taught that everything we had was entrusted to us and thus we had to look after it. Then, whilst I was at Cambridge University in the early 60s, I read Silent Spring by Rachel Carson which documented the impact the use of pesticides could have on our environment. This idea followed me into my first role in Government as Parliamentary Private Secretary (PPS) to the Minister of Agriculture in 1970, Jim Prior.
Afterwards, when I became the candidate for the Eye Division of Suffolk, I was introduced to the work of Lady Eve Balfour who had founded the Soil Association in one of the villages that I was later to represent. That reconfirmed the concept that we had been careless and un-stewardship-like with our treatment of soil. I then spent 7 years as Minister of State and then Minister of Agriculture and I was fortunate enough to be able to help lead the UK and the EU to a much more environmental attitude towards farming. This was a major resetting at the time, the impact of which carries on to this day.
Why do you believe that sustainability is so important for business and finance?
Lord Deben: When I was a minister so many businesses saw sustainability as an encumbrance; something that was going to cost them money and that was driven by reputational risk. So afterwards I set up Sancroft because I knew that sustainability could be a benefit to both business and finance:
- Sustainability means using less and reducing waste and that, in itself, improves the bottom line,
- Sustainability requires a proactive, forward looking, approach which means businesses will be ahead of and prepared for changing government regulation,
- And finally, having to think in a ‘sustainable’ way often encourages businesses to embrace new ideas and markets and ultimately become more profitable.
The identification of new business opportunities and the avoidance of cost and regulatory damage has always meant that sustainability is financially advantageous. Over the last few years, however, the investor community have begun to recognise that sustainability is central to future profit. Now, when investing in a company, investors will investigate its sustainability credentials because they know that expectations will grow, the issue of stranded assets will become more pressing, and resilience to the growing impact of climate change more important. We saw recently that the Coronavirus pandemic played a significant role in highlighting the vulnerabilities of supply chains. That too has led to businesses and investors having to be more mindful of modern slavery risks, political uncertainty, and all other issues which may come into play.
Sancroft works with both corporate organisations and financial services firms on their sustainability challenges. Why do you think this is important?
Lord Deben: At Sancroft we have always been keen to work with businesses at any stage in their sustainability journey. And the same applies in working with the financial sector as they prepare to take account of the shift to ESG throughout their investment approaches. In the past, very few in the financial sector thought seriously and systematically about sustainability. There were alternative investment strategies, for example, impact investing, but there wasn’t a common understanding that every investment had an impact.
Additionally, at Sancroft, we have always understood that investment is part of the supply chain and at the same time investors need to take account of the whole supply chain. Now, for example, if you think about Scope 3 emissions, you can only tackle such a topic if you have a good handle on your supply chain and a strong relationship with your suppliers. This is particularly important in the context of our modern world in which globalisation has made life much more complicated. It is now not just vital to know what is going on on your doorstep but also to know, for example, how to respond to China’s Covid-19 policies, or to the shifting politics of Brazil in relation to international treaties and agreements on deforestation.
What do you enjoy most about your role as Chairman at Sancroft?
Lord Deben: Solving problems. I like taking difficult problems and turning them into a clear set of questions with pragmatic and actionable responses. Sancroft has been in operation for so long now that we have built up a bank of experience which we apply to solving these key sustainability issues.
We now also benefit from our long-standing clients, who see us as their confidant. This is a huge privilege because businesses trust us with their most sensitive challenges which often result in delivering the biggest impact. We are trusted to work with them to achieve their goals and enable them to take ownership of their progress, ultimately leading to sustained improvement.
I also recognise that Sancroft has grown into being an organisation that no longer depends on me. I know it could do perfectly well without me and I enjoy the challenge of now having to work much harder to make a contribution.
What are the projects that you are most proud that Sancroft has been able work on? And why?
Lord Deben: There are many projects I have enjoyed working on at Sancroft, for example:
- Changing the whole of the refrigeration world by helping the biggest purchaser of refrigeration at the time, Coca-Cola, move away from purchasing hydrofluorocarbon (HFCs),
- Helping ABF to establish a supply chain in the clothing industry with an ethical standard of which they are proud, and
- Helping Everton in their journey to build the most sustainable new Premier League football stadium for their fans.
However, it is the simple thing of knowing that there are now a lot of people out there who feel confident in their sustainability efforts because they know they can call on me, share their challenges, and be sure that we are there to help them in total confidence.
Where would you like Sancroft to be in another 25 years’ time?
Lord Deben: I think the world is moving much faster than it was when I first set up Sancroft. Today’s generation of business owners and managers is going to have to move much faster than their predecessors, especially because of the additional uncertainty which we now have internationally.
We had a degree of stability twenty-five years ago but now the geopolitical situation is much more volatile and will continue to be into the foreseeable future. Climate disruption will lead to more intense political upheaval driven by a shortage of resources such as food and water. Shortages and supply chain interruptions will feed an increasing pressure to do more with less and businesses will have to find ways of becoming more sustainable simply to exist. The first measure of sustainability is that a business will be here, successfully trading, in 10 years’ time. The dangers are becoming more and more acute and Sancroft is here to support businesses through this changing environment.
What do you believe is the biggest change that needs to happen to overcome global sustainability challenges?
Lord Deben: Managers will need to have a meticulous understanding of how sustainability plays a part in the process that enables them to sell a product or a service in the context of a changing world. They will no longer be able to take for granted the security of their supply chains, production technologies, or market expectations and will have to be alert to risks, changes, and opportunities in a way that businesses haven’t had to before.
Business which were slow to adapt used to be able to manage for a long time – even when they eventually failed. Businesses in today’s climate will either be on the front foot or they will collapse. For example, to tackle climate change, we are going wholly to change our energy system. Among the most powerful companies over the last 50 years have been energy and car companies. They will still exist, but only if they operate in an entirely different way. Those that don’t will find themselves with stranded assets and unable to compete. It is important, now more than ever, to invest in companies who understand they need to make the change.
What is your advice for business leaders in 2023 who want to make their organisations more sustainable?
Lord Deben: The first piece of advice I have for business leaders is to make it clear, both internally and externally, that sustainability is the direction in which they want to be heading and that sustainability is central to the success of the business.
Secondly, business leaders have to recognise that sustainability is an important part of profitability. Sustainability is not just a reputation builder but is central to the financial health of the business.
Finally, business leaders must see this as a continuously evolving journey. It is not possible to do everything at once. One has to determine priorities and ambitious but achievable goals. A business will always be on a journey to be more sustainable just as they are always on a journey to be more profitable.
And finally, if there were one thing you wanted people to remember from this interview what would it be?
Lord Deben: If today’s business is not socially, environmentally, and transparently sustainable – it won’t be a business for long.
For 25 years, Sancroft has been the trusted advisor for business leaders and investors that want to build profitable, sustainable businesses. Let us help you chart your sustainable path for the next 25 years and beyond.
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Lord Deben shared his experiences with Ailsa Dormon on 22nd December 2022 during Sancroft’s 25th year of operation.