ESG in Action: Climate resilience in real terms

Wendy Whewell (00:03)

So I like to think reframing and saying that actually everybody who's in business, whether it's big or fmall, wants to be here for the future. They're building a business that's going to be resilient and going to be sustainable. And therefore looking at all areas of the business helps them think about what they need to do.

Alex Holsgrove Jones (00:34)

Welcome to ESG in Action. I’m Alex Holsgrove Jones, Knowledge partner and ESG lead for TLT, and we’re exploring how values-driven leadership, sustainable thinking and inclusive culture are transforming the business landscape. Each episode, I’m joined by a guest who drives ESG progress – from charity leaders to household brands – and they’ll be sharing the tangible impacts of ESG-led decision making.  

Today I'm joined by Wendy Whewell, Head of Sustainable Solutions and Financing Corporate and Commercial Banking at Santander. Santander UK is the leading financial services provider, offering a wide range of personal and commercial financial products and services with around 15 million customers across their retail and corporate businesses. Their purpose is to help people and businesses prosper. And today we're digging into what that looks like in practice. Wendy, thanks so much for joining us. It's great to have you with us.

Wendy Whewell (01:05)

Thank you for inviting me to join you on this amazing podcast.

Alex Holsgrove Jones (01:08)

So, let's start with a bit about you and your role heading up sustainable solutions in finance. Can you just tell our listeners a little bit about what that involves?

Wendy Whewell (01:19)

Yes, certainly. So my role is both internally focused and externally focused. So primarily internally, it's looking at how we manage our data, how we get the right data in place. And this is a challenge that's shared by many clients and prospects, so I have much empathy with them.

And the reason why we need that data is to enable us to measure our own finance permissions because if Santander is to get to net zero, then all of our clients that we lend money to need to also get to net zero. It's also looking at our credit risk and looking in everything that we do. And then most importantly, the outwardly focused part is how we support all of our relationship teams have really good quality conversations with our clients and our prospects in helping them think about the get to net zero and have sustainable businesses.

Alex Holsgrove Jones (02:17)

Yep, and I think it's such a wide-ranging role, the internal and the external focus. And lots of organisations do care about sustainability, but don't actually take any action. And that can be for a real range of reasons, can't it? Like struggling to engage their people, or sometimes the whole task just feels too big. In your experience, what helps to unlock action?

Wendy Whewell (02:43)

I think first of all, it's acknowledging those big challenges that all businesses are facing. So, if it's a large corporate, FTSE 100, really they are being governed by regulations, so they tend to be based right across the globe. So they will be impacted by what the EU is recommending and requesting, whether it’s the corporate sustainability reporting directive, the EU omnibus, all of those massive lexicons of all the things that we come across.  

And then you've got the SMEs and the micro businesses who over the last 10 or 15 years, depending on who you talk to, and probably since the financial crash, have been thinking just how do we manage our businesses. And therefore the challenges over the last few years, especially since Brexit, COVID, rising interest rates, rising inflation - you're asking them to start finally thinking about this word net zero, how do we get there with regards to climate change and what does that all mean to their business? So I like to think about sort of reframing and saying that actually everybody who's in business, whether it's big or small, wants to be here for the future. They're building a business that's going to be resilient and is going to be sustainable. And therefore, looking at all areas of the business, helps them think about what they need to do and therefore you can overlay the risks that we see from climate change into that and help them on that journey.

Alex Holsgrove Jones (04:13)

Yeah. And I think that's so important, isn't it? They're kind of looking at it holistically. It's not sustainability and net zero aren't something that sit in a bucket separate to the rest of the business. It's all about having that overall resilience and that longevity. And climate change and net zero are part of that package. They're part of that bundle. But we do see, don't we, that sometimes leaders don't act because sometimes the language can seem a little bit... abstract perhaps and translating that climate and nature risk into operating costs, margin protection, business interruption that boards immediately recognise can be a bit of a challenge, can't it? You mentioned briefly the language and I think that's a really key element of this.

Wendy Whewell (05:01)

Yeah, definitely I mean when I took on this role, there are two things about it. One, there is this amazing lexicon. We have so many acronyms. So it's a case of almost learning a new language, whether it's French or Spanish or Chinese. I think it felt for a good period of time that there was a new acronym coming out every day and you're thinking, well, what does this mean? How does this impact on me?  

And then it's thinking about actually behavioural science because Alex, you and I, we're passionate about climate change, we're passionate about the environment, so we understand the challenges that we're talking about. But there'll be other people who actually are not so passionate about it, but they are passionate about the sustainability and the resilience of their business. So it's then thinking about what actions do we need them to take to be able to build that resilience in.

And one of the things that you'll hear banks talk a lot more about is that this has become a transversal risk. So how do we really play into that and think about, let's look at every standard of my business as to where there might be an impact on both the environmental side, the nature side, the climate side, and what do I need to do to build that resilience to make sure that I have a business that's fit for the future so that I can either sell it or it'll be providing an income for my pension, or I can actually then make sure it's still here for all the generations that I'm working with.

Alex Holsgrove Jones (06:28)

Yeah, those different motivations and those drivers that different people have are really the key to unlocking this, aren't they? Because that translational piece is so important, bringing the real risks into the real world. And it's so key to the business resilience. Because, you know, looking at it a really basic level, if your supplier can't make or transport your product, what are you going to do? You essentially have no business.

What does Santander look for if you're looking at business and you're wanting to know that you can be confident that they will cope with, you know, extreme climate events, for example? Do you have certain things that you look at as a key to their resilience?

Wendy Whewell (07:15)

Definitely. So we have built into the way that we are assessing businesses, looking at the client environmental risks and opportunities. So to go back to actually this started from the task force for climate related financial disclosures where it started talking about physical risk and whether that would be impacted by acute or chronic impacts in respect of climate change. So what do we mean by acute?

Acute is weather. We're seeing it this year, aren't we? Sadly, some parts of the up until last week had seen rainfall every single day of the year. I think poor Aberdeenshire, they went through a period of about 14 days without seeing the sun. That's pretty bad. But then chronic is what we're starting to hear from the various climate change committees to say that we are starting to see a rise in temperatures.

And therefore, this is going to be here for the future and is really impacting our business. So take that back to the physical risk. How does that impact my business? Well, everybody has premises, whether they actually own those premises or lease those premises. What do they need to do to protect them against flooding? Or what will they need to do to ensure that the workforce are not working in temperatures that are unsustainable and or whether they're actually a business that actually outsources their manufacturing. Perhaps they're a business that has garments made in India. You know, could those areas, those businesses, sustain rising temperatures? And we've seen some horrendous temperatures in the Far East with regards to it nearly hitting 50 degrees centigrade. It doesn't even bear thinking about. So that's why we're coming to the physical risk. And what we're asking is, has this been considered, and what actions can be taken?

And then looking at the transition, the application side of it, it's almost bringing in good old banking terminology, PESTLE. We're looking at what impact can politics have? What impact does it have economically? The insurance companies are telling us that the cost of flooding, the cost of droughts, et cetera, is creating millions of pounds worth of damage, especially from the drought where it creates forest fires, et cetera. What impact does it have socially? What's going to happen to people in all of this? Technology. Well, when we first started on this, we knew there was AI. My gosh. In the last two years, it's just sprung onto the market. So there's two areas with respect to AI. How we can use AI as a force for good for helping us think about adaptation, but also what impact does that have on energy usage and water, the environment that we've talked about, and then legally what's going to happen as well.  

What happens, and we're seeing things from a legal perspective in respect to green washing. So across those two areas, there's a lot that can be taken in, but we're not expecting everybody to go, you've got to go and do all of this all in one go and I need a plan straight away. It's a case of thinking about what's the biggest impact, and then looking also at what low hanging fruit is and finding a way to start on that journey.

Alex Holsgrove Jones (10:31)

Yeah, and that's such a good way to look at it. We talked about climate, Wendy, but obviously inextricably linked to climate is nature and businesses are really going to have to understand their dependency on nature. How do you think that's going to play out? I mean, lots of businesses are already thinking about climate, particularly in relation to flood and heat stress, but nature, I get the feeling is a little bit further behind.

Wendy Whewell (10:58)

Yeah. And it's how do we define nature? And the way that I look at it is thinking about, well using the word environment and nature, and then environment covers everything because you can think about biodiversity, you can think about the pollinators that are required for all our food that we need, but then you can also think about, well, what impact does that have on the land? So, we've just talked about whether it's flooded or whether it's suffering from drought. Also, water.  

Water is going to be so key in everything that we do. We've seen such damage from water at the moment, depending on which podcast, television or radio program you listen, they're saying that farmers that have had crops in the ground that have been submerged by water, whether it's 6 or 24 days, that crop will be destroyed. So then that has a massive impact on food prices, which will not just impact the suppliers, the producers, but all the way down to actually it has an impact on the cafes and restaurants. So it's time to find a way to encapsulate that all to say, climate has the impact, but the impact on nature is where it's really going to be felt, and combining the two together, we've talked about sustainability is not a silo. We cannot treat climate change as a silo either.

Alex Holsgrove Jones (12:21)

I mean, as you say, everything is linked, isn't it? The supply chain, the workers, the conditions, the transport. You know, for a business to be resilient, they need to be thinking about these things, not as something done by a sustainability team, but something that is everybody's job and everybody needs to consider all of the time in order to make a business more resilient. If one of our listeners, Wendy, wanted their business to be more resilient, but didn't know where to start on the kind of nature, the climate, and the wider piece? How would you suggest that they start out, know, if they were going to say maybe a list of five things to do in the next 90 days, where would you start?

Wendy Whewell (13:06)

I think it depends on the size of the business, and actually thinking about what's important to them. There's lots of support out there, but it's thinking about actually, let's look at where climate change impacts everywhere on my P&L and everywhere on my assets. So, if it's turnover, where could it be impacted? And as we mentioned earlier, the cost of goods sold.

One of the key areas for very small businesses is actually looking at where their business is actually challenged at the moment. And that's very much in utility costs. They will have seen rising energy costs. We know that water costs have been going up as well, even perhaps rent on there could be another key area. And therefore, looking at what ways could they do to actually reduce those costs. And at the same time, by reducing those costs, you can actually have a strong benefit with regards to carbon.  

We've mentioned already, and I have a great phrase that I picked up, that sustainability cannot be successful in a silo. So I would find across my business, no matter how big or small I am, everybody who's got an interest in this subject, because it's amazing how many views can be taken, and the quick wins that can be said, right, well, we've got rising energy costs, what could we do differently?  

And the shop floor, people who observe, who perhaps don't feel brave enough to speak up could say, well, do you know what? We don't need to have the lights on all the time. We could encourage everyone to turn off their computers, turn off at the wall, all of those small things. And I think one of the key messages is no matter how small it is, it does make a difference.

And I think that's really, really important. So I think, to quote Steve Jobs, know, great things in a business are never down to one person, they come about by working together as a team. And I think that teamwork is really important. And then also don't try and put it onto your suppliers or to your customers. Think about how you can take them with you on the journey.

One of the biggest concerns I have with regards to larger corporates is thinking about how they can take their supply chain with them. And it's not passing the responsibility onto the tier one supplier who then has got to deal with the rest of the supply chain. It's saying, let's get on the supply chain from the smallest component to the largest area together to work together, because collaboration is really, really important. And that's why podcasts like this, you know a banking firm and a solicitors firm talking about this, showing that it's not just one of us that’s impacted, it's all of us impacted. So I don't think I've given you five things, I think I've given you a lot. But there's lots of resources out there, whether it's looking at the B-Corp framework. I absolutely love the transition plan framework. You'll find it under the ISSD web pages. It is a brilliant business plan. Now I know bankers love business plans, but this business plan does not have to be 100 pages long. You can really look at it and it helps you think about what metrics do I need? What data do I need? What training do I need? And where do I start? And as my boss always says to me, perfection is the enemy of good. Find something and start on that journey. Celebrate the wins. Learn from things that don't go well and then move it forward.

Alex Holsgrove Jones (16:43)

Yeah, you've covered so much there, Wendy, but I think the key things are, you know, collective action, collaboration is absolutely key. And that's something that's come out from all of our guests in all of the episodes that we've done so far. Also, just thank you for flagging all those resources that are out there because that is part of the collaboration and the collective action, isn't it? Everybody's, you know, there's a lot being shared and so, that nobody has to start from a blank sheet of paper, which can be, you know, obviously very intimidating. And there's also, there's brilliant case studies and examples of where people have done things. Just, just looking at those success stories can really help people in sort of formulating where they might be able to start. And those little steps, you're so right - little steps, if everyone took them, can make a big impact. We mentioned briefly earlier, Wendy, and I just wanted to pick up on it again about communication and using the right language because there's a lot out there. There are lots of acronyms as you have highlighted. So it can lead to misconceptions, misunderstandings about what sustainability really means.  

In your experience, what language actually works with busy teams? Is it things like Net Zero or is it more a case of keeping the doors open, keeping the costs down, having a resilient business? Are there any phrases that you've found really impactful?

Wendy Whewell (18:12)

I think it's the resilience points that really has, especially in the environment that we're working at, thinking about bandwidth owners of businesses have, management teams have, how they can make that difference. And then you can weave in because it means a sustainable business. And actually, this is just good business. I'm really moving that forward. So...

One of my colleagues actually, I reached out to him and he said, we never know the worth of water till the well is dry. And I think that's actually, you know, look at everything that's within your business and think about how important it is to the business and what would happen if it's not there. And just going back, Alex, I just remember something from in respect to that nature. There amazing speech that was done in New Zealand and the lady who was talking wanted to get over the importance of nature, but she didn't want to use the word nature in discussion. But she talked about the most important part of the supply chain and what action would you take if you were no longer have that most important part of your supply chain? What happened if it went, if you didn't treat it well? And therefore, we don't have to use climate change, nature, all of that.

We can just look at what happens to our business if we're impacted by the flood or by the drought or whatever and take it back. And I think there is no such thing as a stupid question, there's no such thing as a stupid idea. They’re blue sky. You know, we're talking in February, 2026. February, 2020, we were talking about COVID. Who would have thought about COVID?

Who would have thought that suddenly we would have that massive shutdown, nobody was allowed to go to their offices, et cetera. We need to learn from all of that and say these things can happen, whether it's a Black Swan event, which was the financial crisis, or whatever. It can happen. So let's not dismiss anything. And one thing that I always say to everybody, there is really no such thing as a stupid question. Some of the most simplest things that businesses can do, are the ones that are overlooked because we're trying to create it into something more complex and it doesn't need to be complex.

Alex Holsgrove Jones (20:34)

Yeah. think that's such an important point. What are the key priorities for your business and what are the key risks? You don't need to put it in a bucket of climate change, nature or whatever. For a business selling clothes, one of the key risks will be that cotton can't be grown because of a climate event, it doesn't matter what the cause is. The effect is that you don't have a product at the end of the day.  

So yes, I think looking at it holistically and seeing it as a resilience point rather than a bucket of climate change, nature, or whatever else under the sustainability banner, is a much useful way of looking at things. Wendy, I'm conscious of your time and I'd really like to leave our listeners with a tangible action to take away and hopefully put into practice. So, if you could ask every business leader listening to do one thing to make their business more resilient, what would it be?

Wendy Whewell (21:37)

Oh, I'm going to throw an acronym out It's a business acronym. It's GROW. Goals, reality, I call it opportunities, oblique risks, and the way ahead. So, the goals is where, you know, if we think about what we've signed up to as a government in respect of getting to net zero by 2050, but what are the goals of the business? Where are they on that? And therefore, how are they impacted? And then that brings you to the reality. What's the reality? Where are we going to be impacted on there?  

Then I identified the risks to the business and instead of saying, what are these? Think about them as to, I can mitigate them by creating them into an opportunity. I'm moving it forward on there. And then that way ahead is setting ahead that plan. What needs to be done? Who's going to do it and by when?

And not setting out big things, really building them into small and then start to grow big, because success always rewards behaviours, you know, that really helps people think about how, look, we've got a good win. Look, our clients like this, you know, this makes a big difference. And then that makes changes. And then don't be frightened of failure. Think about, actually, what can we learn from this, and how can we move forward and what we can do differently? But I think having a small model can really help you move forward.

Alex Holsgrove Jones (23:10)

I love that GROW, that’s splendid and also the snowball effect of those small actions, they really do  spur people on, don't they, to make bigger changes. And if everybody took a small action and then it grew, we'd be leaping forward. Wendy, thank you so much for joining us today. What stands out from today is really that sustainability is a key part of resilience. It's not a nice to have because resilience is really critical to the longevity of the business. So thank you so much for your time.

Wendy Whewell (23:44)

You're most welcome. Thank you, Alex.

Alex Holsgrove Jones (23:47)

And thank you to our listeners for tuning in. If you enjoyed this episode, don't forget to subscribe and share. And until next time, keep driving positive change and putting ESG into action.

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