14. Mark Kardos on greenwashing and sustainability in tech

Audio Transcript:

Garr Punnett (00:07)

Hey, everybody, welcome back to the Multiusiverse Podcast. My name is Garr Punnett, Chief Strategy Officer here at Rheaply. Today we had the pleasure of talking to Mark Kardos, the Senior Manager and Sustainability Lead of IBM Consulting. It was an informative, jam packed conversation filled with where he started in his career with UL and talking about product certifications and especially a very interesting segment into really breaking down green washing. And then we quickly transfer that into a conversation around what he’s been working on now, which is mostly around really identifying what circularity means, how we can sort of speak to digital transformation, and what does that mean for our supply chains of the future? I hope you enjoy this. And please, if you have any questions, if you want to be a guest on the podcast, please reach out to podcast@rheaply.com. Hope to talk to you soon. Mark, thank you so much for joining us on the Multiusiverse podcast. Could you please introduce yourself to our audience and share a little bit more about why you got in the field of sustainability and circular economy.

Mark Kardos (01:17)

Thanks to its pleasure to be here. So I started off in sustainability about a dozen years ago, and I kind of fell into it, in all honesty. So really it started around Ontario and launched a feed and Terra program. And I was looking at a start up in any sort of fashion. Right. And I thought that would be just an amazing opportunity to explore. And ultimately that didn’t work out. Right. But it gave me the bug a little bit. And then as I started to explore the world of sustainability a little bit, I didn’t necessarily have a Keystone passion that there was a real specific issue. But one of the things that kind of kept hitting me over and over again is just how inefficiently and how badly we do things and how broken sometimes these systems are for really no reason. Right. It’s just sort of a distortion of incentives about where things are going and how things were set up. And it just kind of struck me that this is something that we need to get our heads around and do better. And one thing went to another. Here I am today.

Garr Punnett (02:29)

That’s how it works. Could you break down for us that feed in tariff system, something to language that I’m not actually as familiar with because we recognize too maybe that for others listening. We’re across different borders here. You’re based in Canada. Can you break that down for us?

Mark Kardos (02:48)

Yeah. So there’s been a number of areas in the world that have launched programs us, Canada. The place that kind of made it famous was Germany. So in the early 2000. And they launched what they call a peace and tear program, which basically what that looks like is they pay a preferential interest rate on electricity generated from renewable sources going back into the grid. So the Ontario program that they launched in the late 2000s, was really focused on micro solar on the rooftops. Right. So they were really trying to incentivize that they had some tiers that were more for, like your more traditional kind of fields of solar panels. But really they were trying to incentivize small scale solar deployment. So they were offering preferential interest rates, preferential fees and tariff rates, basically that were about eight to ten times what the market rate for electricity was to really incentivize the early adoption of some of those renewable technologies. Unfortunately, it’s a program that has since kind of gone away, but I think it really did help sort of kickstart movement in particularly this region around trying to deploy some renewables.

Garr Punnett (04:08)

So were you starting off in the renewable energy space? Is that where you were talking about the sort of entrepreneurship element that you were pursuing? What type of start up was that? What team were you working with? How did you get that kicked off? And really what I love about that is because this will feed into the next question, frankly, is a lot has changed, and in the past ten years and even the past five or four years, a lot of things have changed. And even where we thought circularity is being perceived differently, sustainability is being perceived differently. What was it like when you were doing some of those that early work on that start up front?

Mark Kardos (04:48)

Yeah. I mean, like I said, the initial sort of trigger in my brain was more financial rather than sustainability, totally. But I was looking at, obviously the disparity in terms of what the growing market rate was versus the feeding tariff rate. And then there was obviously a significant opportunity to try and have those deployments. Right. So I tried to kind of go out on my own at first. Ultimately, that didn’t work very well. I tried sort of a franchisee model as well to really try and do canvassing really of neighborhoods and just try and get people to sign up and we will deploy the solar on the rooftop of the installation and do all the applications and everything in the background to make sure they got the preferential rate. Ultimately, the real constraint that we ran up against was logistical from the government. Right. So it was quite an extensive process that was kind of difficult to get through a majority of the applications for never even process. I don’t remember what the exact numbers were, but I think towards the end of it, they were saying that they were maybe addressing 10% to 15% of the applications that were coming through.

Mark Kardos (05:56)

So ultimately it just lets you have a question Mark as to whether you could actually go through on the project. Sometimes we would have somebody sign up and we would be waiting basically for six months just to see whether the application went through or not. And a lot of times they would hit their quota for the year and they just wouldn’t approve any project. So ultimately, that’s why that venture didn’t work out. But in talking about that, that really kind of woke me up to some of the realities around sustainability.

Garr Punnett (06:27)

I think we all identify with that bug then where it really bites, and then you start looking into more and more systems change and then trying to figure out, okay, how are we more efficient? Where did that take you onto your next sort of big journey there? There was a little bit of consultancy, but then we start getting into Ul. How did that sort of track in terms of where you sort of found your niche and you’re sort of calling in that profession?

Mark Kardos (06:50)

Yeah. So I had a couple more false starts, but I did some stuff in locally sourced organic foods at first, which is fairly short lived. But then ultimately I met a gentleman who owned a company called Territories, and we just started chatting one day about sustainability and what the direction was, and he had actually just sold the company to you all. So I ended up coming on board. The company was called Terra Choice, right. As that acquisition was kind of going on and then shortly thereafter, ultimately purchased into you all. So that was kind of my pathway there now with terrific. They had a little bit of a different perspective. So you have to understand kind of where Ul plays as a space. Ul is a testing inspection certification company.

Garr Punnett (07:43)

Yeah. To break that down, Mark, real quickly, because I had to do so much research when we were starting to first get to know each other and we were talking to Ul and we’re starting to get to know each other, but really where I even realized it was for anybody listening, it’s the little stamp, it’s the little piece of the circle with the Ul in it on most of the things that might be in your home or things that you interact with on an everyday basis. That’s where if you can picture as Mark sort of goes into what you all does, you’ve seen the staff there on what you all sort of approve. I just wanted to paint that picture. Please continue.

Mark Kardos (08:17)

Yeah. So it’s kind of funny now that you bring it up. So you all have a stat that they like to talk about, where the average household room has something like 42 marks on different products and pieces of furniture and even the walls and the struts and everything, because they work a lot in like fire safety, electrical safety, but most of the time it goes unnoticed. The key difference I really want to highlight in terms of the scope of work that I did for the two companies coming from Territory into Ul is that Territory is very much a consulting organization. So we did a lot around environmental marketing, positioning, understanding trends, looking at green washing in particular, spent a lot of time looking into as I transitioned into that more Ul mindset, it was much more about auditing, demonstrating performance of sustainability attributes and products in particular, but then also at facility and organizational levels. So it was a familiar subject matter, but definitely a different spin to it.

Garr Punnett (09:20)

Can you talk a little bit more about that green washing component from Terra Choice? What did that mean to you all at the time in terms of investigating and looking more into sort of claims from products and how much do you kind of still see that today?

Mark Kardos (09:36)

Yeah. So I’ll answer that in reverse order to say that greenwashing is still incredibly prevalent. Right. So the term came about some discrepancies in the story as to where it came from. But most people kind of point to an article in the early 80s where they were talking about this new initiative that hotels started rolling out where they were saying, please save your towels, it’ll save water, et cetera. And really the way they defined it initially was that the resources spent on marketing the initiative versus implementing it. They were really just trying to put a spin on something. That’s really what the term green washing came to me.

Garr Punnett (10:21)

So an actual metric like kind of an actual metric behind green washing, which is like spending more than it’s actually impacting.

Mark Kardos (10:29)

Yeah. I don’t know if anybody actually used it that way, but in theory. Right. I mean, it was definitely like this indicative idea right now. Terra Choice is a company they managed Canada’s National ecological program, and that eventually got bought by Ul, as it can de nationalize. So there was definitely a product sustainability lens and trying to verify those claims. But territories in general spent a lot of time kind of evolving the thinking around what green washing is. And I spot it. So there was a popularization of sort of a framework called the Seven Sins of Greenwashing, and really what it did is it identified really specific types or methods that people use to greenwash. So you can kind of think of, for example, there’s this one that they call the sin of irrelevance. So they’ll make a green claim that there’s absolutely no relevant to the product. So you can kind of think of like a plastic or something being heavy metal free. It’s like, well, you wouldn’t expect a heavy metal to be in there. So to say it’s free of that, it’s kind of irrelevant. Right. But there’s lots of those. You can see it in terms of the relevance, how they position it all the way.

Mark Kardos (11:40)

Right. To help my mind, vagueness is one of the ones that’s really prevalent in the marketplace today and always has it. Right. So you have lots of these claims out there that are saying this is green or this is eco friendly. Right. But there’s no defined metrics as to what exactly that means or how they’re positioning it or why they’re even saying it about a given product process. So there was a big focus on that within territory to try and define exactly what green washing is and try and help people move away from it.

Garr Punnett (12:12)

How did that evolve into what you all was offering and pursuing in terms of that pursuit or breaking down sort of product claims in that way?

Mark Kardos (12:21)

Yeah. So that’s kind of the spin on it. Right. It’s really saying, okay, well, we have all these products out there that have various kind of eco friendly monikers to them, but they don’t really mean anything. So a lot of what you all did, especially initially, was to try and work collaboratively with other organizations, everything else, to start creating a set of standards around to really define what sustainability meant and have credible marks rabbits so that when the consumer goes out there, they know what they’re looking for and they can identify something that’s truly sustainable from something that’s just kind of greenwash sustainable. So that was really spoken area. And I think a lot of what used to be called Ul environment still focuses on that today is really looking at trying to define sustainability in different product categories to really show what exactly that means.

Garr Punnett (13:13)

Consumer love that. I think it’s something, too that we’re seeing more and more often as your point spoke to, which is claims and more and more claims around the relevance of sustainability. Nothing bothers me more these days when I’ll have friends that are like, oh, this is sustainable. And it’s like, I’m sure yes, of course, it’s great that again, I think that Certifying Agency is both out there, but then also that we need more of it always because we can’t keep up with the amount of consumer products that are being sort of levied in ecommerce these days at consumers. Well, speak to I would love to learn a little bit more about what it was like to sort of build that programming at Ul and to sort of develop that over the last couple of years, almost decade, where it was growing that sense of within Ul, because again, that doesn’t happen overnight. Can you help sort of again paint the picture for our listeners here on what does it take to get that sort of program support at the corporate level and move those programs and have that sort of evolve over time?

Mark Kardos (14:26)

So we were fortunate, I think, within Ul for a couple of different reasons. One is that initially they really looked at us as a venture business within the larger so Ul environment sort of had this very specific mandate to go out and promote sustainability, and there wasn’t a ring fence around how we had to do that. Right. So there is obviously some parallels and pathways to the more traditional way of your thinking, and that’s where the product focus came in. But as we continue to develop business, one of the things that became more and more apparent is that I almost hesitant to use this word. But sometimes looking at sustainability from a product lens can be a little bit myopic right, because you’re really talking about a Rheaply small segment of a company’s operations. So as that journey continues to evolve, new environments and at large Rheaply in society, I think there’s been a shift to really think of sustainability holistically for an organization. So it’s not necessarily about making a more eco friendly product. It’s about how the product is made. It’s about how that company is engaging with the people, the planet, society, everything else in it.

Mark Kardos (15:50)

That’s where it really starts to be more like ESG type of frameworks. And as that started to get popularized and that thinking has been really internalized, it’s really transition. So you need new tools. This is the bottom line, right? So as you all environment continue to expand, we focused on looking for what those new solutions were, whether they be digital or just new programs that are focused on different things. So one of the places that and this kind of lets my circular economy focus to answer questions earlier was that early on, one of the programs that I was managing was called our environmental claims program, UCB for short and a sub component that was called innovative claims. So basically it meant that anytime somebody wanted to go out and make an environmental claim about the product, they could come to us and we would help find a procedure so that they can go out there and say authentically with third party backing. And one of the first ones that really gained traction coming out of that was a zero waste landfill standard. We developed it for a building materials company called GAF that was trying to leave the space in zero waste.

Mark Kardos (17:02)

And they were seeing the claims out there and really seeing that there’s no consistency to it. So they want to build a standard around it. And that was one of the places where, no, it’s kind of like rocket fuel, right? The second we put that out there, people started saying, yes, we need to be more sustainable operations. There’s triple bottom line features to this where it’s not just sustainability aspect. This is about how we run our business. This is, I think, one of those early signs for me that people were starting to internalize sustainability into their operations and not just think about it as the sort of externality that they need to manage in addition to kind of managing.

Garr Punnett (17:40)

What was some of that early program process, like when it was sort of meeting with a client or understanding, frankly, an industry, you’re throwing a little bit into the fire there on understanding. Okay, what are the different types of products when it comes to deconstruction, construction, whatever it might take to live more of a net zero or zero waste type of mentality or certification. How did you all handle that? What’s that like when you’re dealing with all of sort of the market externalities and then trying to be more myopic into specific categories or at least open ended questions for that the company or the client might actually have in terms of determining a certain certification. How does that work?

Mark Kardos (18:22)

Well, I mean, for us, it was always the client first. Right. It’s coming to them, understanding what their needs were, what they were trying to communicate and understand how we could communicate their claim effectively. Now, from there is where we try to bring in the market perspective and try and build it around from that angle. Right. So really trying to understand what the comparisons were. Fortunately, we had a team of very smart people, lots of doctorates on the team that had lots of inside knowledge into the minutiae of a lot of these things about the chemistry, about renewable energy, things like that. So we relied on them a lot. But it comes down to lots of man hours on research, lots of investigating with clients and lots of refinement. The other element is that really is just stage one. Right. I mean, when you come out of that process, as much work as you put into it, it’s really just a first draft. Right. That’s something that you can go out there with confidence around. But really when it starts to take hold in the marketplace is when you get consensus. And that’s the process that you go out there and that can take years.

Mark Kardos (19:34)

Right. Because you’re going out there with stakeholder groups once again, bringing a lot more experts from industry, NGOs, consumers trying to represent as full of a picture as you can to get all of those insights into understanding what needs to be communicated, what level of detail and what supporting evidence do you really need to have to be able to show that what you’re saying is true and it’s not just more paperwork?

Garr Punnett (19:59)

Yeah, exactly. I recognize the vagueness of this question as I’m going to ask it. But how does one then apply that to circularity? What does Certifying circularity mean when it does involve the range of stakeholders that you just said, all of the voices that need to be involved. How do we even wrap our heads around what that means in terms of a circularity certification?

Mark Kardos (20:26)

Yeah. So that’s a great question. I’m happy to ask it. So when typically you’re talking about environmental certifications, there’s a whole body of kind of ISO standards govern exactly the types of claims and what they have to go into them. Circularity is interesting in that it doesn’t neatly fit into any of the buckets. Right. So it becomes one of these other scenarios. Now, the thing that I think that we had upon in Ul and I still very much believe to this day is that circularity is very much about the flow of materials. Right. So when we’re looking at Certifying circularity, you’re looking at flow and the other perspective that you need to bring into it is which aspect of an enterprise are you looking at? Are you looking at their business model? Are you looking at operations? Are you looking at specific product? But from there, while the specific KPIs will shift a little bit. Right. So if you’re talking about circularity at an organizational or let’s say a facility level, you’re talking about things like zero waste and sustainable purchasing policies. But at a product level, you’d be more looking at the design, is it meant to be recyclable?

Mark Kardos (21:47)

Can it be disassembled easily? Can the different parts come apart? And then from the sourcing perspective, you’re really looking at this concept of are you pulling from circular sources? So the recycled material is rapidly renewable and you can kind of break it down as this flow of inputs and outputs. Right. So you’re pulling from circular sources, are you pushing back out into them? And you can kind of look at that. Now, the other elements, particularly when you’re starting to kind of measure circularity and there’s different perspectives on how you do this. So there’s frameworks that are a little bit more qualitative, and they’re looking at do you do X activity? And they think that that X activity is going to lead to it. Now, those are great to get you started. I absolutely support a lot of those. Ellen MacArthur foundation has a fantastic framework that I highly recommend people check out. One of the ways that I really like to conceptualize the enterprise model is thinking about it as basically like a scalar. Right. So you have all these input output flows coming from your products and your operations, and then you can kind of think of your business model as to how well it feeds into that.

Mark Kardos (22:55)

So that’s where you start to get things like product as a service. Right. Or sharing platforms which are now taking a product that is kind of circular and then turbocharging by giving those extra reuse cycles. Right. And obviously, that’s for you and I, we had a chance to meet yourself as well as your co founder Garry, and talk about your platform and how it fits into that model. That’s one of those great areas where you can really show where you can not just look at the products or an operation. You have these other mechanisms that can kind of turbulence.

Garr Punnett (23:37)

Yeah. I think that’s always what as much as we get pulled into creating different products and features, and we’re always looking at how we can better fit enterprise models, it’s always about, well, once we understand material flows, then how do we take action on them? How do we better understand, I think you so eloquently put like the upstream and downstream sort of ramifications. How do we loop those back in on one another through different types of business models, through different types of program innovation. So thank you for explaining that. How does this all relate to the work that you might be doing today and your new journey with IBM. I recognize that there’s a lot of new stuff that IBM is working on, and maybe not all of it can be shared, but where does that sort of fit into sort of what you’re working on these days?

Mark Kardos (24:29)

Yeah. So this comes back to that point where I started talking about when I was at Ul Environment. We were looking to kind of expand the scale and the ways that we were engaging. So one of the things that IBM does well is it creates answers. Right. And not just answers in terms of you should be doing things. It’s a tangible answer, not just this is what you should do. This is how you do it. Right. So you look at some of the technology spaces that IBM leads. It whether that be Blockchain or data platforms coming into the cloud and stuff. So you have these digital technologies that once again, I come back to that idea of kind of like turbocharging the transformation. Right. So I’m a firm believer that the winners in this century are going to be the companies that can evolve digitally and engage in sustainability. If you can do those two things, you’re going to be in a good position to succeed no matter what your specific industry sector is. And I think that’s what drew me to IBM is that some of these challenges that we have around sustainability require new solutions, new ways of thinking, and it’s not enough to strategize.

Mark Kardos (25:51)

You really do have to start thinking about how do you architect a solution for it. And I cannot tell you the amount of sustainability challenges that come back to supply chain traceability. Absolutely. So having technology like Blockchain really is for the first time kind of a web three decentralized platform that gives you that traceability and insight. And it’s configurable to give you the exact metrics and data you need is nothing short of a game changer, in my opinion. So I think as we are able to continue to build out some of those ecosystems to really then create the value proposition for it, you’re going to see the way people engage in sustainability fundamentally shift, because now they’re going to have access to all new types of data that before we’re just not possible. Right. And that’s going to change the way they engage.

Garr Punnett (26:44)

I love that we usually round out our podcast here with some sort of call to action. What sort of has inspired you most about anything you’ve read lately or what you want to be involved in further, or what can other people start to focus on? I think you may even mentioned start getting more involved in sustainability and supply chains. But what does that mean in terms of what sort of call to action could you give out into our listeners in the universe here on what needs to be done next?

Mark Kardos (27:19)

If you read the news and you kind of follow some of these sustainability things. You’re probably not surprised that I’m going to point to a lot of the stuff that have come out of the UN lately. Right. And some of it is very dire, some of it’s very positive. Right. So on the dire side, there’s news articles coming out just today talking about how based on our current emissions commitments and everything else, we’re really not going in the right direction.

Garr Punnett (27:45)

Right.

Mark Kardos (27:45)

So this is something that absolutely has to be addressed. Now. The other end of it is that we’re starting to see engagement on these issues in ways that we haven’t been before. So one of the other announcements I saw coming out of the UN recently is they’re looking to try and create sort of a global plastics treaty and in terms of how we’re treating plastics and really create some of those infrastructure drivers to really incentivize people to engage in circularity and sustainability at large. Really for the first time, I think that’s been a piece that’s been traditionally missing and difficult for companies to rally around because where there’s uncertainty it’s always difficult to come up with your strategy. Right. So I think this is creating that certainty and I think that it’s all positive for all of us.

Garr Punnett (28:35)

So we all need to keep being more involved and keep talking to others and keep sort of building coalitions and support and initiatives around again, moving the inches forward to our goal here. So, Mark, thanks so much for taking the time today. This was extremely helpful. Thanks for really breaking down some, frankly, really complicated and unique issues that you’ve been tackling when it comes to certifications and working you’ve done on the product level. I look forward to our next conversation.

Mark Kardos (29:05)

Start shouting at the gun.