Sustainable Advantage: Lee Stewart on Outpacing Competitors with Purpose

Freddy D: 00:01:41

Hey Superfan superstar Freddie D.

Here in this episode 98 we're joined by Lee Stewart, a best selling author, visionary sustainability leader and the founding director and CEO of ESG Strategy.

With over two decades of global experience across Australia, New Zealand, the UK and Japan, Lee has been at the forefront of transformative initiatives from cutting edge AI driven sustainability projects to shaping climate policy and modern slavery reporting.

Formerly the head of sustainability at Fujitsu and Fonterra, Lee now advises top tier boards and even the Tongan government, all while championing the next generation of sustainability leaders. Get ready for an insightful conversation on embedding sustainability and business strategy and driving meaningful impact across the globe.

Welcome Lee to the Business Superfans podcast.

Lee Stewart: 00:02:48

Thank you. Great to be here.

Freddy D: 00:02:49

So Lee, tell us a little bit about your backstory. Where did you come from, how did you get to where you're at and come up with this book called how to Build Sustainable Business Strategy.

Lee Stewart: 00:02:59

I was very fortunate to grow up in New Zealand, so I had a great appreciation of the environment outdoors as part of growing up as a kid, bare feet, school tramping, just a great appreciation for the outdoors. When I got to travel overseas, how privileged I was. Growing up in New Zealand. You start to see beaches with lots of rubbish on them around Asia.

Just what we're doing to the world got me really focused on how can still have a good career in business but try and do good and help impact the world. I didn't really fall into it.

I crafted my way through into sustainability from startups to becoming head of sustainability at Fujitsu, to running consulting teams and then head of sustainability at Fonterra New Zealand.

I helped manage to get weave into those things through startups experience and going to all these conferences, learning great people and my first cut at corporate sustainability at Fujitsu which was a great experience of 8 years traveling around the world as well. Big data centers, e waste and a lot of energy efficiency work going on there.

So I feel very privileged to have had that grounding in New Zealand and to actually know what really great pristine environments look like. And then the exposure of travel made me think hey, there's a better way we could be doing things. So that's a core driver for me.

Freddy D: 00:04:13

Yeah, before we started recording I was mentioning that I had just recently been to New Zealand and it's an incredibly beautiful country from what I've seen.

It's my third time there every time I'm in awe of the places I see and how things have been well planned to maintain the natural beauty that the country has what you're doing is really important in the business world and in an environment world, so that we can be around here for another couple thousand years.

Lee Stewart: 00:04:43

Yes.

Freddy D: 00:04:45

So let's go deeper into what is it that actually you're doing with these companies? How is it that you're transforming them to maintain sustainability, both business wise and environmentally wise?

Because they've got to both go hand in hand.

Lee Stewart: 00:04:59

So what I do is I help businesses leaders cut through the noise.

There's a lot of ambiguity around this and I help them create a clear, impactful sustainability strategy, turn what they might see as a compliance burden into a competitive advantage. We first look at what you do as a business, so you look inwardly. I follow a methodology of working with people.

You've got to build confidence, know what global issues, such as maybe climate change, modern slavery, waste, diversity, inclusion, what do they all really mean and how does it impact your business? How does that show up? Then we moved into commitments. So what are you actually going to stand for?

How are you going to look at some of your backyard issues, maybe reduce waste or emissions?

And then the final bit is the consistency, the governance around it, where a lot of people fall over, where they don't think about how they're going to maintain that.

Now, all along that process, I'm usually either interviewing internally, but ideally I'm also interviewing their key customers and understanding what matters most to your market, to your key stakeholders externally. So how can that reflect back on what you deliver to those clients as well? So a really good example was in my early career.

I was working with Qantas, major airline in Australia. They had a climate target and we were supplying all their IT equipment.

What they didn't realize is that when we were trying to bid and win more work, they moved all their equipment, upgraded them. There was a carbon savings, there was an energy savings of moving to our data centers as well.

I managed to call out that difference in working with us and help them align that towards meeting their targets.

Bringing the Chief Technology officer, Qantas and the head of Environment together to say, here's our solution, here's how it's helped meet your targets. Connecting those dots is really important.

Freddy D: 00:06:39

Yeah.

Because what you're doing there is you are helping them with the environment aspect, but you're also saving them money from the energy consumption aspect. When I was selling manufacturing software, I was asked to speak at the Mold Makers Association. I couldn't talk about my product.

You had to actually provide value. So I'm thinking, what am I going to talk about?

What I came up with was not sustainability, but it was still in a similar aspect, and that was compute time. When you're doing a lot of mathematical equations to generate toolpaths for milling machines, it takes time to put in the parameters and let it run.

It may take 10, 15 minutes for it to generate the toolpath. And when it's not exactly right, you have to tweak it and start over. While that's computing, what's the engineer doing?

He's twiddling his thumbs waiting for it to calculate.

If you consider 15 minutes per hour is spent on compute time, per day, per week, per month, and if you just would have spent a few thousand dollars to buy a better, faster machine, you would collapse that compute time and you would actually improve your profitability. And they didn't even think of it from that perspective. And so that's what you're doing, you're making them think of it from a different perspective.

And all of a sudden everybody went, oh, man, we need to really relook at that and pay attention to that. Because that was money that they were leaving on the table.

Lee Stewart: 00:08:13

Yeah, exactly.

And then I find in most businesses, especially manufacturing, there's energy efficiency opportunities everywhere that haven't been relentlessly pursued. And we all know that energy prices are going up and generally with energy, there's a carbon element to it, emissions element as well.

So, yeah, a huge savings there.

Freddy D: 00:08:31

Yeah. And more important, time savings.

Lee Stewart: 00:08:34

Yeah, absolutely. I'm sure these engineers aren't cheap, right?

Freddy D: 00:08:37

No.

And it was all of a sudden I had everybody coming up to me and asking me more stuff and I ended up selling them software without selling them software, not talking about it. So it was kind of fun.

So let's go further into, you know, let's share a story of how you walked into a situation, you shared a little bit with Qantas. But let's go deeper into what it is that you do and how that evolved into you writing the book.

Lee Stewart: 00:09:01

Yeah.

Throughout my career, I've been in large multinationals, 15 plus years, and you see a lot of waste, a lot of time wasting a lot of confusion around the topic of sustainability. It's very political as well. You can just run down three rabbit holes.

I've been to so many conferences where this guy got on stage and spoke for one or two hours. They could have said what they said in five minutes. Let's cut to the chase. Conferences now are just clapping committees of their own.

Echo chambers in the boardrooms as well. Executives. Sustainability is new to them. In most cases, there's a Lot of noise. Just pick up the newspaper.

You can get a point of view or an opinion piece. I just said, it's time to cut through all that crap. It's a business advantage.

There's very few books out there that talk about sustainability, business advantage, and I haven't really found one. So I said, there's a gap here in the marketplace.

I was working with a couple of COOs at the time who suddenly had sustainably jumped on their lap and said, you've got to now run this. And they were like, oh, I don't really know what this all means, Lee, come and work with me and help me sort this out.

So I wrote the book as I was working with a couple of clients at the time and understanding what do they really need to know? There's a lot out there. You can go away and do PhDs in climate science or sustainability and stuff. What do business leaders need to know?

How do they make sense of that and how do they focus on what matters the most?

You see so many sustainability programs where they're going after end poverty or hunger, when they probably just need to focus on energy efficiency first and some other things they could do quickly and they try and save the whole world. It's just not going to happen.

Linking it to business outcomes, a sustainability program that lasts and has impact is something that would resonate with your customers or where your money comes in. That's the missing link with sustainability. And part of.

You know, I've been a part of this problem in the past where you run off too altruistic and you go far ahead and you say, we should be doing all this where it's actually the business isn't ready yet, the costs aren't going to happen and the program's going to die in a few months. Guess what? We've got a credit crunch. We've got to consolidate and save costs. Every business goes through that cycle.

So how do you make it sticky and stay. It's because you're sustainably. Program is a competitive advantage. It helps you win revenue, improve profit. That's really where I'm going at here.

And I think that altruism is really nice in businesses, but it only goes so far.

Freddy D: 00:11:18

Well, yeah, you're playing the long game, but in that long game, there's some real quick wins that start happening. And that's the differentiator in your approach with working the businesses. I've never heard of anybody looking at it from that perspective.

So great to have you on the show and share some of that knowledge because I think a lot of people need to get out of the noise. Things have become too opinionated versus the facts. And the guy used to say, ma' am, just the facts, ma' am, just the facts.

Keep your opinion to yourself because nobody cares.

Lee Stewart: 00:11:54

Yes. Could have used that line on many board meetings.

Freddy D: 00:11:57

But yes, I'm sure that was an adventure in itself. So share a little bit about how you transform.

We talked a little bit about some of the companies but I'd like to get more of a specific story where they became what I would call a super fan that in turn promoted you to other businesses for the services that you provide.

Lee Stewart: 00:12:17

Yeah, there's many examples. One is a large retailer in New Zealand called Brisco Group. I've been working with them for the last two and a half years.

They're from not saying anything in their annual report to now having about a dozen pages on sustainability in their report. We've helped them set their first net zero climate targets.

Now working on a circular economy strategy and being a large retailer, there's a lot of end of life products I need to look at.

Working with other partners around modern slavery across all their factories, many of them in China, Southeast Asia and around the world, vetting them for making sure their labour practices are okay. It's been a comprehensive program as part of a materiality assessment. We ask key customers and suppliers.

Through that process I've picked up other work in their supply chain.

They've encouraged me to work with their key suppliers and it's introduced me to numerous opportunities saying we're all in this together, we haven't set our climate targets. I suggest you have a chat to Lee as well. He can probably help you out.

Sort of have that sort of contact in has been really, really makes that sort of sales process or introductions as like gold.

Freddy D: 00:13:22

It collapses the sales cycle. I mean there is no sales cycle.

Lee Stewart: 00:13:25

Totally. Really, it's a conversation.

Freddy D: 00:13:27

It's a conversation. There is no sales cycle. You need to talk to Lee and that's it, it's done. What do we got to do to get this thing going?

The conversation is no longer about whether you're the right person. The conversation is what do we need to do to start it's a done deal right off the bat by creating super fans of the people that you're dealing with.

That's your salesforce. You can't buy that kind of cr.

Lee Stewart: 00:13:52

Yeah, exactly. Another great example I've got is where I've picked up a client I've known for 20 odd years.

He's at A large investment firm and they've bought this new business. It's a billion dollar business and they need a sustainability strategy. He just said, give Lee a call.

Normally you'd write a proposal, say, oh, it could be six weeks, eight weeks. It was a very collapse. It was a week. It's a conversation. Lee told to talk to you. Can you come in and help us out?

Freddy D: 00:14:18

That's it. Yeah. It's fun because I remember selling manufacturing software and my customers were my referral sources.

I would get phone calls saying, hey, Jack said, I need to get this stuff. What's it going to cost me? How fast can you get it in here? And that was the conversation.

I spent more time putting together the configuration of the technology that they were going to get than anything else.

Lee Stewart: 00:14:41

Perfect.

Freddy D: 00:14:42

And those are fun scenarios because like you just said, it's completely collapsed.

Lee Stewart: 00:14:48

Yeah, yeah.

Freddy D: 00:14:49

So let's go deeper into the book. What does the book talk about and how does that help guide businesses to manage their sustainability as a competitive advantage?

Lee Stewart: 00:15:01

Yeah. So the book has three significant components, three parts.

There's the confidence piece, understanding the basic foundations of what are these global macro issues and what do they mean to your business. So that's really important.

of the Rana plaza incident in: 2013

The real guts of that book is the commitment phase and what you stand for and make sure that's meaningful. I think a lot of companies let themselves down as they set a target without asking people what they want from us.

This is a real opportunity where you get to engage with your customers. Most customers collaborate on sustainability with you.

If you're a medium sized enterprise supplying a large customer a published sustainability report, you will see their targets and what they're trying to achieve and you're part of that supply chain. There's the opportunity here where you can reach out and say, we're designing our new sustainability strategy.

We'd love to have a chat about what you'd like to see from us. And it's not a sales call, just a conversation. I went out for clients, I bring the client with me to listen on a call and it's just gold.

You get insights into your products and what you service. But if you could do Tweak this and this. Or you could give us assurances around the carbon element. You'd become a preferred supplier.

You know, these are questions that come out. So that's the real gold there. And then you can go back and design your sustainability strategy with your customer in mind, which is really key.

You can ask your people, do surveys across all your staff. It's a very simple survey that could go out and you can get some good ideas from the factory floor and others around that.

The part where people let themselves down is the consistency piece. And it's the setting up of a governance model and making sure that doesn't rely on one person in the organization.

It's across multiple teams that's brought together. And if you have a board, try to make sustainably a standard board agenda item so it keeps the focus on. And that's it in a nutshell.

I designed the book.

You can read it in the weekend, ask questions on a Monday, Tuesday on your business, and maybe by Friday you've actually done something to make an impact. Just encourage you to get started.

Freddy D: 00:17:13

Well, you said an important thing there. And that's a couple of things. One is I want to recap, make sure I understand it, maybe clarify for listeners.

You're really talking to all the stakeholders, involving all the stakeholders into the equation. And by doing that, everybody's got ownership in it. And so that's really the big difference.

It's not just management pushing it down, it's pulling it from the team up to management. So now it's a collaborative conversation. And now everybody's got an ownership into it. So now everybody is on the same page.

You know, a racing, rowing boat, you got the eight people in the boat, but you got to get everybody in the synchronization. Otherwise you ain't going too far too fast.

But you get everybody in that sync, then all of a sudden, that boat's flying down the water, it's almost airborne. When they get that, it's magical. What you're doing is very important because you're the coordinator, you're the quarterback.

Lee Stewart: 00:18:11

Yeah. And you've got to coordinate that traffic and bring them together.

But ideally, when I work with organizations, I would go in there for three months, train that person up to run it, and then step back, see about building capability. It's not about throwing a consulting report at your client. You develop it with them. The strategy.

For my previous customers at Briscoe Group, I used to sit in and drive the sustainability working group meetings. Now I'm hardly saying anything. I'm Just observing as it's running itself, which is great. And they've got, they've started, they're on.

Freddy D: 00:18:40

Their way, they got ownership. When I was selling manufacturing software, a lot of times I would sit down and work with the engineering manufacturing manager.

We would put the strategy together and the return on investment and all that stuff. But it was them doing it, they owned it. I was just a coach when they went and presented it.

Because a lot of times from a sales perspective, if I share with somebody and then they try to tell it to somebody else, the message gets diluted. Yeah, but if they have complete ownership because it's them that put it together, the message isn't diluted.

You've just helped enhance their message and then they carry it forward. And that's why you're able to, you know, like you just said, you step back and now you're just part of the meeting.

They're running the meeting and you may pop in for a couple questions and stuff like that, but otherwise it's theirs. They own it.

Lee Stewart: 00:19:35

Yep.

And that ownership structure, governance structure, nothing gets people more focused to say, next month it's your turn to do the board report on your section of area. So you've got the environment, so you're up to give the update.

So that it's not the sustainability person or the one person managing it, it's the team collective.

Freddy D: 00:19:52

And that's really the big difference is it's a collective effort and so everybody's part of it and everybody's helping everybody else to accomplish the goals. Very cool. So where can people find the book?

Lee Stewart: 00:20:06

Yeah, it's on Amazon. How to Build Sustainability Business Strategy and authors Lee Stewart L E E S T E W A R T Can Find it on Amazon.

That was the bestseller for a while in that category.

Freddy D: 00:20:18

And see, before we talked, you mentioned that you've been to different countries working with them. Where have you found the biggest welcome for what you're doing? What country? Just curious.

Lee Stewart: 00:20:28

Oh yeah, Japan has been some really good conversations. When I was head of sustainability at Fujitsu for this region, going to Japan, I found the Japanese way of doing business is long term thinking.

They have a target a hundred years in the future. So sustainability is ingrained in what they do.

n they built a Factory in the: 1930

We think about Quarterly reports or annual and stuff. Where they're thinking about 5, 10 year, 50 year in the future is not a big ask for them.

Where I think it's some of the conversation I have here locally. It's quite hard for people to conceptualize that.

Freddy D: 00:21:11

I completely agree and I can back that up because I've dealt with the Japanese in my days on the global stage and you're absolutely correct, they play the long game and they're very focused on that.

It's very important and that's why you see things going on for such a long time and very successful because they're not after the short win, they're after the long play completely.

It's also very important about relationships with that culture because I was trying to make a sale there to get a master distributor for one of my products and I was going no place with them. I mean we talked about the technology, the marketing and everything else and you know, they were all nice, we like it. But we never passed go.

And I was down with my reseller in Australia and we were at DY beach having dinner and I'm going, what am I doing wrong? He goes, what are you talking about? He says, well, I'm talking about the business opportunity, the contract, the product and everything else.

He goes, shut up about that stuff. Start asking them about things, about their culture and their things.

And yeah, so when I went back, I changed the whole conversation to tell me a little bit more about Japan.

And then when they came to the States to meet with us, we had a two hour meeting and then I spent time driving around all over the valley in Arizona and about two months later I got a $200,000 order. They signed the agreement and everything else because it was all about building a relationship, building that trust.

And I think that when you're dealing on an international stage, that's very important.

Lee Stewart: 00:22:50

Definitely.

Freddy D: 00:22:52

Unfortunately, there's a lot of businesses today that have a transactional mindset versus building that long term relationships. I'm glad you brought that up because the transactions for the moment, but it doesn't buy you anything afterward.

Lee Stewart: 00:23:06

Correct.

Freddy D: 00:23:09

So let's go into looking at what type of businesses can really benefit from looking at their sustainability strategy. Besides manufacturing companies.

Lee Stewart: 00:23:20

Yeah, I suppose think about home improvement.

Freddy D: 00:23:24

Or some of the small to mid sized businesses, not necessarily the big conglomerate guys.

Lee Stewart: 00:23:29

Yeah, I think the key drivers for people wanting my help, they supply a larger company and they've asked them for information. What's your embodied carbon? Do you have a climate roadmap? What's your waste life Cycle. Do you have a modern slavery statement?

The bigger guys are forced to look in their supply chain. Some climate targets and targets around modern slavery that involve the suppliers coming on board, working in that area has come on.

I've won a couple of new clients recently going after capital funding or access to capital and they've got what's known as a green bond or sustainability linked loan. So part of their debt facility is to have a sustainability strategy and targets and that enables them to get lower cost of capital.

Even when I was working at the largest business in New Zealand, Fonterra, they got a sustainable finance framework, not because they needed capital, but a future insurance policy to make sure if they did need capital, they could access some of these other loans or debt facilities that had sustainably linked attributes. So that's two of the main ones that come through.

The key one is when a customer asked and it could take you by surprise and you know the answer to it.

I've done this working for larger companies, had to send out a survey to all the suppliers and we're measuring you on your ability to set a climate target in the next couple of years that supports my customers climate target.

So instantly you're identifying who are your likely future partners of choice in the coming years who are going to get there quicker, who are going to need a hand, who are probably never going to get there. So you might want to think about the big companies now.

Think about, well, am I going to have to move that contract or move that supplier on if they can't help me with these other targets? So these are some of the questions going on now. Those are the main issues that I'm facing at the moment.

Freddy D: 00:25:12

So, okay, so you're really talking about some of the suppliers to larger companies and for them to really get themselves in a position to become a preferred.

Lee Stewart: 00:25:24

Supplier or even keep them as a supplier in some cases, because that decisions are going to be made in the future. Definitely.

Freddy D: 00:25:31

Right.

Especially with some of the different governments and their goals, like you just mentioned, that's going to become an important aspect because otherwise they're not meeting it, they're not going to be part of the equation and they may be out of business.

Lee Stewart: 00:25:46

Yeah.

And on the flip side, if you got a new product that has more environmental attributes than your competitors, you could win that market share in the future because you'll help them hit their targets and so forth. So there's the opportunity there.

Freddy D: 00:26:03

Right. That goes back to the Japanese playing the long game.

Lee Stewart: 00:26:06

Yeah, great.

Freddy D: 00:26:08

Well, Lee's been coming towards the end of the show. How can people find you?

Lee Stewart: 00:26:13

Yeah. So LeeStewart.com L E S T E W A R T.com is the website for the book. Feel free to lob a question or look at on LinkedIn as well.

You can order the book from there if you're interested or on Amazon. I look forward to having a conversation with any of your listeners. Happy to keep it going. Okay.

Freddy D: 00:26:32

If they're looking for your services, LinkedIn would be the best place.

Lee Stewart: 00:26:35

LinkedIn's the best place. The other website I'd have is esgstrategy.com you can find me on LinkedIn as well.

Freddy D: 00:26:42

Okay. So we'll make sure all that's in the show notes for our listeners.

Lee Stewart: 00:26:44

Yeah.

Freddy D: 00:26:45

Lee's been a pleasure. Great insight, great conversation about sustainability.

I think everybody needs to take a deep look at it and we look forward to having you on the show down the road and continuing the conversation.

Lee Stewart: 00:26:58

Yeah, absolutely. It's been a pleasure. Thanks so much.

Freddy D: 00:27:00

Thanks. Hey, superfan superstar Freddie D.

Here before we wrap, here's your three a playbook power move to attract ideal clients, turn them into advocates and accelerate your business success. Here's your top insight from today's episode. Sustainability isn't the compliance checkbox.

It's your hidden lever for competitive advantage, strong client loyalty and superfan referrals. Here's your business growth action step. Schedule 5 Customer Interviews this week to ask what sustainability practices matter most to them.

Then align your strategy to become the preferred value aligned supplier.

If today's conversation sparked an idea for you or you know of a fellow business leader who could benefit, share it with them and grab the full breakdown in the show notes. Let's accelerate together and start creating superfans who champion your brand.