Marc Van Caeneghem: 0:02

The overarching piece which is how can I follow on a regular basis that I am on track or not? Compared to the different, let's say, scenario or milestone I have defined, this is going to be critical.

Tom Raftery: 0:19

Good morning, good afternoon or good evening wherever you are in the world. This is the climate 21 podcast, the number one podcast showcasing best practices and climate emissions reductions. And I'm your host, global Vice President for SAP. Tom Raftery. Climate 21 is the name of an initiative by SAP to allow our customers calculate, report and reduce their greenhouse gas emissions. In this climate 21 podcast, I will showcase best practices and thought leadership by SAP, by our customers, by our partners and by our competitors if their game in climate emissions reductions. Don't forget to subscribe to this podcast in your podcast app of choice to be sure you don't miss any episodes. Hi, everyone. Welcome to the climate 21 podcast. My name is Tom Raftery with SAP and with me on the show today I have my special guest, Mark. Mark, would you like to introduce yourself

Marc Van Caeneghem: 1:13

Yes, hi everyone. Hello, Hi, Tom, how are very nice to to be with you today. So I'm Marc Van Caeneghem, I lead the Climate and Sustainability practice at Deloitte. So I've been been with Deloitte for I don't want to count any more than 20 years now. And I've been building at one of our five businesses in the in France, which is called risk advisory. And for some years now within risk advisory with we've invested lots around climate and around system 80 teams. So it's 20 years now that we started invest investing on this on this on this topic, in order to drive system beauty services up clients. And obviously, not surprisingly, over the last few years, there has been a huge increase in demand not only in France, but more globally. So as it's something where the French team was a little bit more advanced, I was asked by hire our global executive last year to take over this global global responsibility for climate and system which he enjoyed very much. I like very much.

Tom Raftery: 2:26

Good and yeah, so why wait, why do you like it so much? And why is it Why is it important to you? And why is it important to deploy it?

Marc Van Caeneghem: 2:34

Let's see, I was you know, I Deloitte, we say we want to create to create an impact that matters. So I think that when you have to deal with sustainability, obviously, you address things where you you have, you have an impact that matters at clients. So that that's for that's for sure. To be very, just outside of sustainability. Within my footprint, I have all my pyramids, I have two topics, which on which more specifically created in fact, at mitre, one of them is cyber. So I do cyber, I have teams that do cyber services, all day long, all week long, all year long. And the other one is sustainability. And I believe that on those two topics, we can create an impact that matters, and especially on sustainability, because it's it's it's it's obviously strategic in terms of topic. But I think that you cannot add a strategy without really embedding sustainability at the core. So I think that cyber is some kind of service that you can deliver or along with strategy that does not that does not directly drives a strategy, whereas system it is truly embedded right from the start in the strategy. And I don't I don't believe that going forward, you can have a strategy that embrace the Sumi T, just as an aside, it's something which is within it. So that's what I like very much. Okay. And the other reason why I like it very much is that I really believe that it's something that that cannot, that is not only for your clients and for our clients, it's also for ourselves. Not not just because if you want to be critical in the market, we have to do it ourselves. But I think that we are also more committed to that, that we and I believe that if we want to well, we have to do what we say. And, and I think that for people for our business embeddings to meet you at the core of what we do is definitely key. No, that's that's reason why I like it to be very frank with you.

Tom Raftery: 4:45

Nice, nice and it's it's fascinating to me that sustainability in Deloitte has come out of risk assessment, because I'm not sure that I've come across any other organization Who have sustainability coming out of the risk management area? So can you talk a little bit about that?

Marc Van Caeneghem: 5:06

I don't know why it came out of it. I think that me Well, what I could what I could say is maybe that in the risk business that I lead, definitely system et is one services or set of services, which are very well identified with with team that, that basically have been well went to school to work on system et for forever. So really, we are we have a system committee level level. But when when when I decided to speed up sustainability at Deloitte, the first thing I did is that I said, it's not something that should that should only be owned by risk advisory. It's it's something where risk Advisory has to be strongly articulated with our other businesses, right, obviously, with consulting with the Strategy Team with a supply chain team, obviously, with audit as well, because, as you know, what is the future the performance of a company? Is it only the financial elements? Is it also non financial elements? How do you embrace those non financial issues? So Well, we have ability to articulate ourselves with tax and legal as well, because tax incentives are going to be very important if you want to embed those those changes as our clients. So I believe that it may be it comes from it came from risk advisory because we have teams that are ready and that we are for years now fully dedicated to that. But I think that where we make the difference is that when we articulate those teams, with the rest of the firm with our other businesses, because that that's, that's the leverage, we need them to be very, very physically efficient as clients, but also to make sure that in the way we deliver our services, our clients, obviously, we put sustainability and the court system within supply chain sustainability within within strategy, suitability within the finance function, right. I don't know whether you've seen that. But we were, some people tend to seem to think that the CFO will not be the CFO anymore, but that we it would become the CEO, the CEO, so the chief value officer, right. And just by saying that, I think it's very important, it means that you have to each time you talk to a CFO, you have to review totally, but basically its objectives, but also its overall operating model. And you see that if you in order to do that, if you only onboard people, larger systemic experience, that doesn't apply, it starts to fly if you are able to onboard all the finance transformation team, our details at Deloitte that know very well what to see, well, what has to be attested and not so this is this is what is very interesting, so long to make a long story shorter, I think, yeah, we started from the risk path practice, because that's where we have people that that have been trained for years around sustainability that have that, that that went to schools and studied that type of topics. But the power of what we do at Deloitte is articulating those people with the rest of the businesses and ways maybe that's something we can address later be detailed some industry specificities, because you know, that by heart, you you are having interviews every year, very frequently with different stakeholders. And depending on who you talk to, depending on the industry, well, what it means embedding system, VT, while differs significantly, if you discuss with a bank, a banker or an insurer, someone out of the TMT business or the consumer business, what that means is totally different. So obviously, if you if you if you try to address this topic, irrespective of the specificity of the industry, that doesn't work. Yeah,

Tom Raftery: 9:00

yeah. It's interesting to hear you say that the CFO role is changing to see the chief value officer role, because I had david Harris on two weeks ago on this podcast. And well, by the time I publish this podcast, it will be more than two weeks ago, but I had him on several weeks ago, shall we say? And he's the head of sustainable business for the London Stock Exchange group. And he was making the point very much that the sustainability role in organizations while in the past that might have been part of the marketing organization than the future, it's very much going to have to be part of the CFOs operation.

Marc Van Caeneghem: 9:38

I really I agree with I agree with that. I think that in the end, it's not something which is properly captured by the CFO. I think it's going to be really hard to see. Well, what we get out of it as a as a CEO, what the CEO or what the exco and what do you say the the investor get out of it if it's not properly explained and properly captured by CFO is going to be is going to be off in the long run.

Tom Raftery: 10:03

And his point as well was that it needs to be properly reported, so that the investment community can then scan the reports from companies and then make investment decisions based on the ESG reporting of companies,

Marc Van Caeneghem: 10:20

I think is totally right. And in that's where it starts to be very difficult because in theory that that's that's right. But what doesn't mean and what that what type of data have to be kept to the by by issue or banker and you you you invest or any an asset manager you invest in different industries, the data that you have to check to capture if you are you invest in, in the in the consumer client or in, you know, tech client or in an oil and gas clients are totally different. Yeah. And the ability to capture data, whether you invest in a big on large companies, or whether you invest in in an SME is also to the difference and and, and the difficulty that we face now is this ability to define the proper KPI and the taxonomy that that that maybe investor could use going forward in order to better better address this topic. And I think that that's one of the difficulty we're facing. But that's a challenge, which is very, very interesting. Yeah, for all of us.

Tom Raftery: 11:25

It's a big opportunity, too, because it needs to be solved.

Marc Van Caeneghem: 11:28

Exactly. Agree. Agree. But that's but that's also that also will support this some kind of an objective which which is important, which is maybe have a better a better definition of the value.

Tom Raftery: 11:43

Yep. Yeah.

Marc Van Caeneghem: 11:44

That, that this is, this is definitely some kind of a target or an aim we should we should all have in mind, in the end, what's the value you create? Very nice.

Tom Raftery: 11:57

Tell me a little bit about Deloitte's, world Climate Commitment, because you you have come up with a Climate Commitment. And it's it's Deloitte's, efforts to kind of walk the talk or, you know, demonstrate that you are not just enablers, but also that you are exemplars in this area.

Marc Van Caeneghem: 12:15

Yeah. Yeah, I think for for me, as you understood, so my, my objective is to really build on and keep on building the services that we offer to our clients, when it comes to climate and system between that, but definitely, we had some kind of a normal feeling that, well, if we want, well, in order to be able to sell that answer services, we really have to be to be best in class. So meaning that it's not because my mom that is only external that I should not focus on internal topics. And it's not only because I white unicorn, the possibility to be critical in the market, but also that because I believe that this is key for our people. So not not only just to, for it's also for our people going forward that we are best in class when it comes to those climate engagements. So that's why basically, I've been very much engaged with the with the Deloitte corporate team in order to build this world Climate Commitment that we that went to be kept actually, if I recall, when in September last year, right? Where we basically we did commit to become net zero by by by 2030, that that's some kind of unimportant commitment to a certain extent, to be to be very frank, I think that for a company like us, Deloitte, it's, well, it's easier than for Shell or for BP or for any chemical industry across the globe. But but but but nevertheless, I think it's an important, it's an important commitment. So it means that we will lead to a bright green that within the next few within the next few years. So Andy, and we are tracking that and making sure that we go we go that direction. So that's one thing. That's only one pillar of this, this world climates commitment. It's an important pillar, and maybe I have to mention that we've we've engaged discussion with Miss sbti on that in order to make sure that what we commit would be properly follow them and could be and we'd be done in a way which is I don't like the word scientifically. Good. But that's Yeah, we don't we really want to make it to make it well. So that's why we want to be we want to make sure that it follows these bti DSP requirements, right. Do the other elements of the world Climate Initiative there are two other pillars on top Have these needs to operate operate green, one of them is make sure that we, we empower our employees. So you know, we are more than three 300,000 people at Deloitte and really there is a there is we are starting to get stronger awareness and education sits session around climate change in particular in particular and what it means for them. So that it's not only when they when they work at Deloitte, but but but it's, it's more in the in the day to day life, that that they can take into or they can they can act in a direction, which is which, which support this, this, this Climate Commitment. And so that means that what is interesting is that, obviously, we do training we do we do, we do education session notes have that. And we've, we've had lots of lots of people that came up with, let's say, internal IDs in order to change the way they would operate also, when they when they work at clients. So for example, when I'm pulling for that, one, one of the system, it's the team, we have in inner geo realized that they were even though they were different, well, there was a VR system with the team, they had the they were the team that that traveled the most Crota globe, compared to the rest of the of the of the rest of the film. So decided to, to launch an initiative that we call the shift angle, whereby they, well, they, they totally switch the way they would operate in order to just to to move less, you know, they were they were traveling in China in in Canada, just to visit some industrial sites. And so we got to make sure that they were they were cleaning when it comes to social media commitments. So so they started to travel less, and to explain the client, why they would travel less. And what they realized, you know, after one year is that have you see their co2 emission as has been reduced significantly, but that the clients was very well very interested by the process. And it all it even became some kind of a marketing elements whereby they were far more impactful at clients, just because they switch the way they would if they were starting to operate. Right. And what was interesting is that the client then started also internally to do the site, the same same type of analysis on their own projects. So that that's, I think, something which is very interesting, Prager and the last pillar of the world Climate Initiative is, basically is investing with our clients on subtopics. Some topics that we think will help shape or change the society. In each of our job, for example, you, we work a lot with, with the West, for example. And one of the initiatives that we support very strongly is an institute which is called chapter zero, with purpose is basically to onboard boredom around climate change. And we, so we are founding partner of chapter zero, for example, in the UK, we have eight under the board members in the UK, that that are now part of the chapters road initiative. It's an initiative also that we support in France, it's been launched in November last year that we support in the Netherlands, and in some other geo. And so this is an illustration of the type of let's say, investment that we commit also to do in order to make sure that irrespective of the segments that we do, we we help and support the understanding of what climate change is and some initiative, which we believe we can have an impact in our risk into different view where we are operating.

Tom Raftery: 19:00

Okay. Okay. And that's the, as I mentioned, the kind of exemplary side of things. And what about the enabler? You know, where you're helping your customers? What kind of services are you offering them in their journey to become more sustainable? So

Marc Van Caeneghem: 19:18

I think there are there are two, two dimensions. One of them is the think it depends a little bit and strongly about the industry. The client is operating. Sure, so that irrespective of the industry, I think that the type of services we deliver are similar. Obviously, the solutions are different, but the type of services have similar. I think we we obviously we still work a lot. If there is some kind of let's call it a value chain. We still work a lot around education, awareness and strategy. I think strategy being really The key the key element where we are working deeply with our clients. So, basically what it means is working with cxos on what climate change means, in practice for them and and in basically what are they, how they can embrace it, and see that either as the risk that they have to mitigate or as an opportunity that they can seize. And basically supporting our client client defining strategies, defining synergies is a very, very big roll of the work that we are conducting. It's what is interesting is that these requests are requests that come to us either because basically, you we are very well very close to tcfd. So, this is the type of topics which are required when it comes to how you want to report on climate risk. So, they say with some kind of an auditor, this is the type of request we have, but with with our consultant ads, obviously, this is also the type of request we have, it's basically what what are the possible future for us, whether we are that industry or this industry, for example, we are working for some months now with the association in Europe, which embraces all the chemical industry. So, the question is what is going to be the netzero strategy of the chemical industry in Europe within the next 40 years, right. So, this is the type of work that we are doing with with clients and what what we see is that 18 months ago Have you see Have you see there was there were less commitment from clients in from industry or from from companies towards net zero now, they are you the amount of commitment, but it does not mean that the strategy are properly set and that the milestones are properly defined. So, what is important is that the strategy piece in my view is is a piece which has increased drastically over the last 18 to 24 months and which is still going to be a huge type of services within the next few years. Then, there is another path to have a type of services that we deliver, which are very much depending on the code that differs significantly depending on which which industry you're talking about basically, which is implementing the strategy, what does it mean for my for my operations to be net zero within the next 10 1520 3040 years? What does it mean in practice? So, it means basically, how do I basically how do I change my my operating model? How do we change my supply chain, if I want to bring the to operate green? So, it can be if I am a banker or an asset manager, Oh am I able to embed ESG criteria in a way which is similar to the way I have embedded in my operating in my operating model or in my operations, financial criteria. So, you see that that's that's definitely very complex. And if I am in another industry of GST the topic will be will be different for example, we are we are putting some consumer people on waste management. So around Circular Economy The the amount that that some some specific products are going to be recycled in the near future that we are as they are not now. So it means that we have to create the with our clients all the ecosystem that supports this region this circular iconomy process in order to be able for example to recycle a coffee or coffee cups EULA that you use from time to time. So and depending on the type of capsule you have, depending on where you are look at the ecosystem, you have to beat my defense a little bit. So you see that. So being big present or being having an impact in the operations, that obviously differs drastically depending on the industry you are you are playing and that that's what what is very, very important. And that's also why I think that a Deloitte we can have an impact is because we have really deep industry expertise. So being able to embed sustainability within our different businesses within our different research industry team, that that I think is well can can make can help us make the leverage. And this leverage i think is important for our clients because this is the only way for all of us. To move sufficiently fast, okay. And then there is maybe a last topic. Once we have worked on the operations, let's go in this way, which relates more on let's on reporting and communication. So basically, what does that mean? When am I the client to communicate on the way you have embraced me to climate impacts in the way I report on either the risk or the value I have created. And then you on that you you you can imagine that either Deloitte, we are that said your details. So we means that we need to be best in class when it comes to the current regulation, but also the future regulations. So I can, I can see you that it's moving in all right in all directions. So being able to navigate across those, that those, those dimensions are absolutely key. And I guess that we are very well positioned when it comes to supporting our clients understanding where the regulation is going on. And the certain type of services, where we are also very present is, it's one thing to know how the regulation is driving us how the market what the market expect from from from us or from from our clients, as CFO, it's another thing to help and build the operating model that support the finance function. And that's also a set of services that we deliver. So basically, what we are we are active all along this value change from awareness and education and strategy and strategy, to operations and to communication and reporting to a certain extent. And the way we approach that is that we tend to have people who are very much focusing on specific industry. So being able to say, well, well, you we don't have a well as a sustainable finance experts that we delivered services at, at Shell or BP, we were being able to embed sustainability in all our industry specific was well, teens is definitely key. I don't know whether I answered your question.

Tom Raftery: 27:15

Quite comprehensively. Thank you. And what about, you know, the fact that Deloitte and sap have a very strong partnership? Do you think that works in the sustainability field to the benefit of our mutual clients?

Marc Van Caeneghem: 27:30

I think i think i think so to be very frank with you, actually, we are. So by the time this webcast is it will be will be public, you were the event that you will organize tomorrow, and the day after tomorrow will be will be behind us. But we will be on stage with you obviously, in order to address some of these climate topics. But I believe Yes, definitely. You Well, many times I mentioned the finance function many times I mentioned the operations, and this ability to embed sustainability in the operation and in the finance function is absolutely it's a must have otherwise, that will never fly. And obviously says to me, it was SAP is is for Deloi te a strategic partner e work we work all the time ith you guys on most of our pro ects. So no, I guess that that or you in SAP, being able to embed sustainability in t e operation is is is is underst nd as well, so So I believe tha we have started, but that w need to keep on moving fast on those topics, because tha's the only way for all of us t be able to embrace sustainabil ty and treat that not as basical y the cherry on the cake. But th t's something which whi h is part where it's more tha part of the solution, it's the olution to that would be the c re of the cake. It's fundamen al Yeah, it should be within th cake not on the top of the cake And yes, and we have we have we actually we work with SAP on there for different different topics on topics which relate to which are more in the in he field of the CFO, how do we o embedded system meeting the ay I report on top of financial, and also where I think we we have strong comparative complem ntarities and when it comes t helping our clients, not so muc, so that could be another wa of basically making su e that during the supply c ain, you are the clients but als the suppliers. Sorry, t e suppliers are best in class. bviously we can add on that but I think we're where where I think we need to faster is h w can we help or articulate asically the scenario that we de ined in order to follow the transition pass with SAP, what we see now is that we are clie ts defining strategies, definin scenario defining milestones But that will be a long jour ey. And being able to prope ly track whether you are on rack or not, is going to be very important. And I guess that on that, if we want to be efficien, the ability to to artic late all that with, with thi technology solution, and SAP, n my view could play a strong role in that, that would be very fuel efficient. Obviousl, we think about SAP when it c mes to financials when it omes to suppliers when it c mes to operations. But I t ink that more than that, the overarching piece, which is how can I follow on a regular basis hat I am on track or not? Compa ed to the different, let's sa, scenario or milestone I defi e? This is going to be critica.

Tom Raftery: 31:06

Very good. Mark, we are coming towards the end of the podcast. And now Is there anything that I have not asked you that you kind of wish I had? Or is there any topic that we've not addressed that you think it's important for people to be aware of?

Marc Van Caeneghem: 31:22

No, I think we've we've we've we've covered most of most of what I thought you would ask me. I don't think there is there is any things which are definitely missing. No, no, no, it's as I think that what is important for me is really to to realize that we have more than 1000 people working currently on system bt at work every day of their life. So meaning they are they are released this deep system at experts. And those 1000 system 1000 people are basically across the globe in most of the geo and an hour. And my role is to articulate to grow those people and articulate them with the rest of the firm. And so I think that what is important for me is that for our clients is to be able to want to know that they can look at our dausa irrespective of the image that they can have from Deloitte, maybe no other details in some job or consultants in some others, because I think we are very well positioned to add them basically navigate along this journey. So not only because we have security experts, but But more than that, because we are able to articulate with the Industry Skills and with the different businesses we have at Deloitte. Sure, sure.

Tom Raftery: 32:47

Yeah. Great. Okay, Mark, if people want to know more about yourself or about Deloitte, or about your sustainability practice, or anything that we talked about in the podcast today, where would you have me direct them?

Marc Van Caeneghem: 33:02

Well, I guess so I'm, we're usually I'm very reactive either via my email or Deloitte or through LinkedIn. But otherwise, they can also navigate on our website, climate insisted et and Lloyd on comm whereby they should find and they should be able to find, let's say, lots of information. And if they don't have the information, so again, my email my LinkedIn, no problem. I'm usually very reactive and will be able either to answer directly or to connect them with the wild the pop up people, either on subtopic on some Geo Data active in their space. Super,

Tom Raftery: 33:43

super. Mario, that's been really great. Thanks a million for coming on the podcast today.

Marc Van Caeneghem: 33:48

Thank you very much for your time, Tom, and thanks a lot. Okay, we've

Tom Raftery: 33:52

come to the end of the show. Thanks, everyone for listening. If you'd like to know more about climate 21, feel free to drop me an email to Tom raftery@sap.com or connect with me on LinkedIn or Twitter. If you'd like to show please don't forget to subscribe to it in your podcast application of choice to get new episodes as soon as they're published. Also, please don't forget to rate and review the podcast. It really does help new people to find the show. Thanks. Catch you all next time.