What’s Next?
“There were a lot of badges out there around sustainability and accreditations. People would work towards it, get the badge, and then the next day ask what do we do now? There wasn’t a plan going forward. What we do on a very pragmatic level is help businesses with What’s Next?”
Alexandra Smith and Mike Penrose of FuturePlus (part of The Sustainability Group), winners of the Better World Prize hosted by TBLI Group.
Most platforms are looking in the rear-view mirror of what you have done, not looking out the windshield at where you are going. Most focus on what’s easy to measure instead of what is valuable to measure. How are you going to be better in the future, not just what have you done in the past. FuturePlus is focused on continual improvement in the future. For our micro-podcast series Impact Stories.
Podcast Transcript
Jacob: [00:00:00] I am here with Mike and Alex with Future Plus, and they are the most recent recipients of the Better World Prize. And let me have you introduce yourselves.
Mike: Hi, I’m Mike Penrose. I’m the co-founder of Future Plus, with Alex. We founded Future Plus a little under two years ago now. But prior to doing so with Alex, we’ve worked together for about four years. I was the chief executive of UNICEF in the UK. I was the chief executive of ACTION CONTRE LA FAIM, one of France’s biggest, not-for-profits. I sat on the advisory committee of the FSE for Good, the London Stock Exchange, ESG Index, and I was part of the SDSN, the Sustainable Development Solutions Network that worked with the UN on helping to bring to life the UN sustainable development goals.
Alex: And yeah, Alex as Mike said we co-founded the Sustainability Group, the company that Future Plus sits within a little over three and a half, four years ago. Previous to that, I spent 10 years in the sports sector predominantly working in sailing, and then 10 years before that in the [00:01:00] hospitality sector, but with sustainability, running through. Being part of the Sustainable Restaurant Association it was very, very early days which was my first foray into really understanding how to look at an entire industry and how they measure and manage sustainability. And then moving into sports and using sports, as a mechanism around social environmental impact.
Jacob: In a nutshell what is Feature Plus all about?
Mike: Future Plus is a system that allows people to understand, measure, manage, and improve their ESG and sustainability. We place as much emphasis, if not more, on helping you understand and quantify your intention as we do your past actions. And this was the problem we really tried to fix in the system.
Nearly every other sustainability and ESG system in the world focuses on what people have done in the past, and we wanted to place far more emphasis on really quantifying what it is they want to do in the future, and gearing all of the incentives towards continuous improvement.
Jacob: Why do you think Future Plus rose to the top out of hundreds of, [00:02:00] applicants? Why do you think you won the Better World Prize?
Alex: Ooh, that, that’s a big question. I think as Mike said, we really focus on improvement. A lot of the problems that people had is the, what’s next? There were a lot of badges that existed out there around sustainability and accreditations, and people would work towards it, get the badge, and then the next day they’d go to work and someone would go what do we do now?
And there wasn’t a plan going forward. And I think part of what we do on a very pragmatic level is we help businesses with the ‘what’s next?’. We want people to be able to understand, as Mike said, where they are, but where they want to be, and then help them in every step that we can in making that improvement over a period of time.
But I think that hopefully could be seen when we spoke about it as part of the TBLI prize.
Jacob: Can you speak to any case studies or examples, and make this a little more concrete for an application where this actually helped improve things?
Mike: We have dozens, so we work with companies that are from the very smallest, our smallest company is a one-person startup up to some of the biggest companies, including some of the biggest in [00:03:00] Silicon Valley are now putting their data in. But I’d say a couple of examples where we helped one firm, it was a large hospitality firm, renegotiate hundreds of millions of pounds worth of debt refinancing. And because of the reporting that they needed to give upwards the debt refinancing company to all the people who were lending their money, they focused very much on improving companies. We were the only ones who could help the company actually demonstrate how they were going to be better in the future, not just what they’d done in the past. We actually ended up getting them a seven-figure reduction in the cost of the debt refinancing because they were able to really quantify, really get people to understand where it is they wanted to be. What it is they intended to do to get there. And we gave them the confidence because they were supported by our expert teams that the company had everything needed in place to do that. We had another one where we helped an IPO on the New York Stock Exchange, where the banks that we worked with used it within their listing and actually directly [00:04:00] attributed an uplift in shareholder value and in the multiples of EBITDA valuation of the company to the fact that they could quantify where it’s they wanted to be. Because market reporting and finance intelligence are all based on financial projections we couldn’t understand where ESG data is all based on historic action.
Alex: We have an auto-reporting feature as a function as part of what we do. So you can pull all of the data out and it takes 10 to 15 seconds. And what we found is that communication is really important, because it’s in real-time, it’s everything that you’ve done, it’s all your verified actions, but it’s also the roadmap that you’re gonna do and have pledged to do over a period of time.
And what we found for a lot of businesses is that when they’re going for RFPs, for tenders proposals, they’re being asked the question, what are your sustainability credentials? And previously a lot of our, some of our clients were spending an awful lot of time putting that together. What they had wasn’t comprehensive, it felt quite rushed, and it felt very top-level. And the amount of conversations we’ve had about not just the amount of questions around your sustainability credentials, but the weight that it holds within those tenders and [00:05:00] proposals is massively increasing. I spoke to a potential client the other day who missed out on a sustainability-linked loan because they couldn’t state what they were doing.
But we know that people have also missed out on potential sales because they can’t confidently communicate what they’re doing with any robustness that exists behind it. It’s becoming more and more of a business imperative because that squeeze is coming from so many different places, and I think that the reporting function is something that is highly, highly useful.
Mike: I think also, one of the biggest issues that we’re gonna be facing in the future is nearly all the systems that exist out there focus on the really big companies. We’ve made a very conscious effort to focus on the very big right the way down to the smallest. And, when you are an SMEA, a small to medium-sized enterprise. Which is somewhere between 87 and 89% of all developed economies in the EU, the UK, and the US, are small firms. If we can make it work for them and we can make it work for a large Silicon Valley firm, then all of a sudden you have a solution to national reporting, because [00:06:00] it’s scalable, it’s understandable, it’s comparable, and this was something we saw was a massive hole.
We help the smallest firms who haven’t done very much, ’cause they’ve just started to understand and report where they want to be in line with their financial projections in the same way that they do when they’re going out for finance. People don’t ask a startup what their past performance is, they just ask them what their future plans are and that we felt was the biggest gap in really making economy-size changes within sustainability in ESG.
Jacob: It seems like a lot of the other tools and platforms, and there are lots of great ones that have lots of merits, but perhaps a lot of them are focused on the rear view mirror and you’re looking out the front of the windshield.
Mike: Absolutely. It’s what we call the tyranny of the quantitative. My background in Alex is very well versed in this as well and is qualitative to quantitative data conversion. So many outcomes when it comes to sustainability and ESG are qualitative in nature. So especially the S in ESGA, [00:07:00] and how you understand it, value it, measure it, and then progress against those measurements is really hard. And within the finance sector, the majority of value is extracted by understanding quantitative deltas. And we really focused on how we could take qualitative outcomes and turn them into quantitative measures. And I think a lot of the existing systems, they do focus on rearview mirrors, but they also focus on not necessarily what’s valuable to measure, but sometimes what’s easy to measure.
Alex: The other problem we were trying to solve was there were some very good platforms that would look at carbon and there were some very good platforms that would look at social, but nobody was bringing all of it together. And we’ve actually worked with some really big organizations that have never brought all of their ESG. Data into a singular place. It’s been sporadically placed around a business, HR owns some of its operations own another section and et cetera. The way we look at it, we look at ESG, but we break that further down to climate, environment, social, economic, [00:08:00] and diversity and inclusion.
And what we’re trying again is to encourage and educate and increase the knowledge base around how that all connects and the interplay around it. And that sometimes there are decisions that will be made that are really good for you and will massively reduce your carbon footprint. And sometimes there’ll become decisions you make that will be massively useful for your social impact, but may have an effect on your carbon footprint.
And it’s about business understanding. And balancing up those decisions, rather than having a black and a white answer, or a good and a bad having the ability to actually make the decisions which are viable and suitable for their businesses and they’re commercially sensitive. But also fitting in with their values and where it is they want to go into the future as a responsible business.
Jacob: How does it actually work?
Mike: There is a very easy application that takes you through the evaluation. And we always talk about our initial evaluation being the beginning of the process, not the end. So it’s the very beginning. The evaluation is scaled according to your industry type, your size development. So when you sign up, we take into account how big you are. What industry you’re in. [00:09:00] So we’re not asking a firm of accountants about their chemical management policies. And it scales it to the right evaluation for you. Then you go through the evaluation and we ask you really easy-to-use questions.
We assume no knowledge, we give you lots of information about what it is we’re asking you, and a whole resource hub of tools that help you understand it and also achieve the things that we’re asking you. But if you say yes and you are doing something, you have to upload evidence. We have one of the world’s largest evidence verification frameworks that are aligned with all major national, and international norms and standards. And we’ll evaluate it, we will with our system automatically, but with human verification, we’ll check that you are doing what it is you say you’re doing. So you can go out afterward and if you say yes, your third party is verified. If you say no, we don’t go away and ask you to do it. We just ask you to set an ambition, an objective, and how long you think it will take you to achieve that. And off the back of that, when you’ve set a timeframe, you get help from our advisors, [00:10:00] you have constant access to both human and a whole resource hub support that helps you recalibrate this and it turns it into a roadmap. That roadmap gives you everything you’ve pledged to do. Everything. It tells you how long you’ve said you’ll take. It tracks your progress against it. It sends you reminders and it gives you access to all of the tools and advice you need to achieve your objectives. And then when you do achieve them. Your score is automatically updated because along all the five themes Alex said, climate, environment, diversity and inclusion, economic and social, we give you a score of where you are and where you want to be, and it’s dynamic. All of these other badges and stamps of verification just tell the public that you might, may or may not be good. Ours doesn’t purport to tell you whether you are good, it just tells you where you are and where you want to be. And it allows people to understand it and make that choice. But to us, that again, drives the incentives towards continuous improvement.
Jacob: So what’s the biggest hurdle you face right now?
Mike: The first one is all the systems out there that tell you this is easy. The things that will say, I will scrape [00:11:00] your Spreadsheet and tell you what your carbon footprint is. And if I can be very blunt, they’re nonsense. They can’t. The truth is it’s not easy. Qualitative, and quantitative are difficult. Primary data requires effort to put in. But the end result, and harking back to what we said before, can be a seven-figure reduction in debt refinancing. It can be a multiple of the EBITDA uplift in the valuation of your company if you do it properly. So I would say the biggest problem is people understanding or expecting that sustainability is easy to do. We make it as easy as we can, but you have to be committed.
Alex: A lot of businesses you know, they’ll have a net zero goal for 2050, which is incredibly important, but just feels so removed from everybody. That’s, most people are not going to be working there in 2050. And so unless they have something that is tangible and close, we found it’s actually really critical. People want to know if we give them the tools and the ability to access that information, it’s amazing how quickly that they are able to improve, but also that they, want to work with [00:12:00] us, which means we have the ability to scale every piece of information that we have we put into a central pool and we in the best sort of sustainable language as a circular economy we feed it back out into the system so everybody has access to it. We wanna make it open-source sustainability intelligence, so to speak. We know this, so we think you should know this. There’s no sort of gatekeeping on that.
So I think that education piece, so we are constantly updating the assessment that we ask everyone to go through. So every three to six months, there are additional questions in there. Our scores are out of 500 and then each of the five themes is out of a hundred. We think it’s probably impossible to get 500. And if you get close, we’re gonna make it harder anyway. We’re gonna give you the hurdles. ’cause what we’re trying to get people to do is, you’ve done this, what can you do to improve? What’s the next step? How can you get better? There’s no sort of end goal, so to speak, other than we were here, and now we’re here and we know that we’ve improved with all this granular data that sits underneath.
So it keeps people on their toes. As well. Which some people love. Other people get a little bit unhappy that they’ve gotta go, [00:13:00] but it does them benefit and what, because we know how they’re growing, what they’re doing, we can also warn them for what’s in the future as well.
Jacob: What are you most looking for as an organization right now?
Mike: We are fundraising at the moment and we’re fundraising because we are now operational on every continent on earth except Antarctica. So we have clients all over the world. So the data we’re collecting is fantastic, but of course, to really scale that we’re gonna need more investment.
In terms of clients the more we get, the better the data. So it’s almost a self-fulfilling prophecy. The more people that sign up with us, the better we can help ’em because of the data we’re putting out. But we are also creating an entire ecosystem. We are working with loads of really good sustainability partners who provide very specific technical resources and offer their services through our platform.
Jacob: If someone in the community was interested in learning more, where should they go? How do they find you online?
Alex: We’ve got our website, which is Future-Plus.co.uk. And there’s plenty of information and resources there we’re pretty prolific in our LinkedIn posting as well.
Again, [00:14:00] it’s really important to talk about what our clients are doing, how they’re doing it, and what we see in the industry. So yeah, there’s the, there’s plenty of information there at the Future Plus LinkedIn page as well.
Jacob: Thank you so much for sharing your insights and about your organization and congratulations once again on winning the Better World Prize. And, looking forward to a brighter future with the good that you guys can do.
Alex: Fantastic. Thank You.
Mike: Thank you very much.
Learn more about ISSIMO Story Agency Here