Life Matters More
Your dose of thought-provoking insights into the world of sustainability with Philippa Hann.
Life Matters More
#10 Louisa Ziane on Food Waste, Net Zero, and Building a Business That Gives Its Profits Away
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Louisa Ziane is the co-founder and COO of Toast Brewing, the UK's first B Corp brewery, known for making beer from surplus bread that would otherwise go to waste. She trained as a management accountant, started her career at the Financial Conduct Authority, and then spent several years at the Carbon Trust working on carbon measurement and climate change mitigation with corporates and governments including the Mexican government. That background shapes everything about how Toast approaches sustainability: with rigour, honesty about trade-offs, and a clear-eyed view of where the impact actually sits.
In this special episode hosted by our Head of Impact, Steve Watters, he and Louisa explore what it really looks like to build a commercially credible business around a genuine environmental problem, and what responsible leadership means when the easy answers keep turning out to be wrong.
In this conversation, you'll hear about:
- How a skip full of crusts outside a sandwich factory and a meeting with a Brussels brewer gave birth to Toast, and why bread made sense as both a symbol of food waste and a genuinely valuable brewing ingredient
- What Louisa learned at the Carbon Trust that most CSR teams were still struggling to act on in 2008, and why the business case for emissions reduction was harder to make than it should have been
- Where the carbon footprint of beer actually sits, and why the answer is not the boiler, it is the barley and the packaging, with Toast's own measurements showing glass bottles running almost double the footprint of a can of the same beer
- The ownership structure Toast designed from day one, including 100% of distributable profits going to charity, the Equity for Good model they built to bring in investors without compromising that, and what Heineken's strategic involvement actually means for scaling the model
- Why Toast tried carbon offsetting, what made them stop, and how to think about the difference between genuine nature investment and buying a stamp for the pack
- The trade-off between bicycle couriers and operational reality, and why a combination of complexity, logistics failures, and the pressure COVID placed on a reduced team finally ended it
- What net zero actually requires versus what carbon neutral allows, and why the legislation on environmental claims has driven a wave of green hushing that Louisa thinks is misreading the public mood
- The Companion ingredients business still in R&D, the Jason Sourdough collaboration currently in Waitrose, and what it would mean if the work with Heineken reaches the scale it is aiming for
- Why over 80% of people care about climate and nature issues but most of them think they are in the minority, and what that means for businesses deciding how loudly to speak
Key takeaway
Toast was set up out of a charity, not as an act of generosity. That distinction matters. The ownership structure, the profit commitment, the offsetting decision, the switch from bottles to cans: every one of those choices was shaped by founding principles established before the business scaled. Louisa's argument is that sustainability done well is about designing the system, not retrofitting the story. If you want to change the world, she says, you have to throw a better party than those destroying it. Toast has been trying to do exactly that since the beginning.
This podcast is intended to be of a general nature, will not be suitable for everyone, and should not be treated as a specific recommendation. We recommend taking professional advice before entering into any obligation or transaction.
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I'm Philipper Hamm, CEO of Paradigm Norton, and this is Life Matters More, where we explore ESG, sustainability, and the future of business.
SPEAKER_00Hello, and welcome to today's episode of Life Matters More, the podcast where we explore how businesses can be successful, responsible, and genuinely aligned with the world we want to live in. I'm Steve Watters, Head of Impact at Paradigm Norton, and today I'm delighted to be joined by Louisa Zayan, the co-founder and chief operating officer of Toast Brewing, a leading UK bee cork company known for brewing great beer whilst using surplus bread that would otherwise go to waste. But toast is about much more than a clever product idea. It's about tackling food waste as one of the most practical and often overlooked ways to address climate change and biodiversity loss. And it's about showing that you can build a commercially credible business while staying deeply honest about your impact, your trade-offs, and what you haven't solved yet. Louisa brings a rare combination of experience to this work. She's a trained management accountant who started her career at the Financial Conduct Authority and before founding Toast spent time working in climate change mitigation and carbon measurement at the Carbon Trust. And her background really shows up in how Toast approaches sustainability. Toast Brewing has been recognized with many prestigious awards, including a Global Good Award for Best Eco-focused small enterprise and the Queen's Award for Enterprise. Louisa's work hints at sustainability isn't about perfection or virtue signalling, but designing better systems, making informed decisions, and bringing people with you along the way. So today we're going to talk about food waste, net zero, collaboration, and what running a more sustainable business really looks like in practice, especially when things get complicated. Louisa, it's great to have you here. Welcome to the podcast.
SPEAKER_01Thanks so much for having me. I'm really looking forward to diving into all things beer and sustainability.
SPEAKER_00Fantastic. Yes, me too. Well, let's start at the beginning then. Give us a flavour. When someone meets you for the first time and asks what you do, how do you usually explain what toast is really about beyond brewing beer with surplus bread?
SPEAKER_01Oh, beyond brewing beer. I think what we do is brew really great tasting beer, but doing it in a way that does good for society. So the bread story is always of interest to people. And when I'm I meet people, people always have a lot of questions about how that works. But as you say, it's more than just the product itself. We've set up the business to be purpose-led. We're facing a climate and nature crisis, and food waste is both a huge symbol of that problem, but also a really good opportunity for us to all be part of the solutions. So yeah, it's about using business in a way that can do good for society.
SPEAKER_00Yeah, fantastic. Well, I'm on board with that, and we'll come to talking about B Corps later. But I want to go back a bit first. Before you founded Toast, you first trained as an accountant and then worked in climate change mitigation and carbon measurement at the Carbon Trust. So you've come on quite a journey from working at the FCA initially to then running a brewing company today. But I'm interested in your work at the Carbon Trust. From that vantage point, what did you start to see at that stage in your career about where carbon emissions really sit?
SPEAKER_01Yeah, so I was with the Carbon Trust in 2008. Um, and that was a really interesting experience for me because I guess it was in fairly early days for corporate sustainability. We had CSR teams, the um corporate uh sustainability teams that were looking at um sustainability, primarily, I would say, from a cost-saving perspective. Uh, we were very focused on energy, uh, energy efficiency, energy reduction measures, but then also I think business was at a stage of realizing the reality of the climate crisis or the reality of where we were heading with the climate crisis. And so feeling this sense of responsibility to, excuse me, a sense of responsibility to have to have a at least an understanding of uh what the impact of the business was. So a lot of the work in those days was about carbon footprinting, both the organization, but then the supply chain and anything that was happening at a customer level as well. Um and looking at how to then communicate that in an effective way. So, using, for example, standards that could be certified by the carbon trust to talk publicly about the carbon footprint of both the business and particular products as well. Um I think what I was seeing there was some of the challenges that those teams were also facing with investment to drive change, to reduce the carbon footprint. Um it needed investment both from a capital side to invest in new equipment, but also to invest in behavioural change measures and campaigns, um, for example, with their customers. And some of the times those CSR teams, those sustainability teams, were really struggling to make the business case for change. Um and I think that was part of my frustration at that time that I could see that we needed to be putting in place measures that would reduce carbon emissions now or then, um, uh, because they were only going to get more and more expensive as it became increasingly important to reduce emissions. Uh, so yeah, I think coming out of that experience, I just had this real um like motivation to make change myself, to do something that would deliver impact immediately, and to show that there was demand for the products, for a business that was taking sustainability seriously, and that it made commercial sense as well.
SPEAKER_00Yeah, fantastic. I remember 2008, and it was relatively early stages for many companies to be thinking about these sorts of things, wasn't it? I can imagine it may have been hard for some of them to make the case for investment at that point in time. But give us a bit more detail. You were consulting with a number of companies and even one or two governments, is that right?
SPEAKER_01Yeah, that's right. So the Carbon Trust uh was initially set up to help small businesses to move towards more energy efficient operations and towards renewable energy as well. I was working both with corporates. Um, some of those clients included BT or OpenReach, where we looked at the carbon footprint of an open reach box. Uh it included measuring uh the very tiny parts, understanding the very complex supply chains for each of those individual parts, and the bigger companies that were even involved in the supply chain of producing those all the way through to working with other governments. So the Carbon Trust was initially set up by the Labour government to support small businesses to move towards more energy efficient and lower energy models of working. And so there was an opportunity to take some of the learnings from the way the Carbon Trust was set up to other countries. And I was involved working, for example, with the Mexican government, looking at how to put government funding into small business towards energy efficiency.
SPEAKER_00Really interesting work. So I'm interested in how you move from that point to your next stage. What was it about your work you did then that pushed you towards food waste and specifically bread? And what does the way that bread is produced, sold, and wasted reveal about what's broken in our food system? Why is that such an important but overlooked climate and justice issue?
SPEAKER_01Yeah, so uh well, our food system is responsible for about a third of emissions, so it is a huge contributor to the climate emergency. Um, but it's food is also something that we all come into contact with three times a day. Um and so it's something that is very meaningful to many people, and we can engage people in some of the solutions as well. So from a climate perspective, from a carbon emissions perspective, it has a huge impact. But we're wasting a third of all the food that we're producing. So a third of those emissions were completely unnecessary. There is also beyond carbon, the food system has a huge impact. It's responsible for about 70% of fresh water use, 80% of deforestation and like pollution of the land, the air, uh, the water. So if we can reduce food waste, then we can take away all of that unnecessary pressure on the planet, on nature. Um, and as I say, because we all eat three times a day, um, we all have that opportunity to be part of the solution. And I think my experience at the Carbon Trust was that some of the projects we were doing were very technical, very specific, very um maybe didn't touch people's lives in the same way that something like food does. Uh so I saw the food system as uh you know a really good opportunity for us to um to engage people in the solutions. And bread is the most wasted food, so we can have a huge impact by focusing on one product. Bread in the UK is I think maybe second only to potatoes. Uh, about 44% of all of the bread that we produce in the UK ends up being wasted. So we can use bread as both a symbol of food waste and the simplicity of solving that problem. Uh, use it as a way of educating people about what is happening in the supply chain and those reasons why the why food is being wasted, but also bread for brewing is a brilliant source of carbohydrates. So we can use it as a valuable ingredient for brewing. Those carbohydrates are what we need in beer to create alcohol and carbon dioxide, the bubbles in our beers. So it's it is a valuable ingredient. All of the food that we produce is valuable, and we just need to demonstrate the value in the food that we would otherwise be wasted.
SPEAKER_00And was there a particular moment when the scale of bread waste really shocked you? Or tell me a bit more about the story of how this idea of brewing bread came about.
SPEAKER_01Yeah, uh, so it's actually we we set up toast through a charity called Feedback, who are now called Food Rise. They had worked for many years looking at the food system, the sources of food waste, and the causes of waste, both at the farm level, at retail, at hospitality, and then we're looking at some of those levers that we could move by changing policy at a government level or at an industry level, and by educating people and inspiring people to think differently about food that would otherwise be wasted. And uh, my co-founder Tristram Stewart went to visit the a sandwich manufacturer who was producing sandwiches for one of the major retailers and went out the back, and there was a skip full of the crust slices from a loaf of bread. So those N slices that are never used when you're purchasing packaged food. And he estimated about 13,000 slices were in that skip. That's just one skip from one sandwich factory on one day. Um, and when we looked into it, we saw that actually there is just so much bread. 20 million slices a day are wasted just in our homes. Um, and that doesn't even include all of the bread that's uh that's that's wasted, bakery level, the sandwich factories, and retailers, hospitality. Think how many times you encounter bread on a daily basis. So there is a colossal amount of bread that's wasted. Um, but then we met a brewer in Brussels who had used bread from a local bakery to produce a beer. They're called the Brussels Beer Project, and the beer is called Babylone, which is in recognition of our ancient relationship with bread and brewing. So the original recipe for beer from the ancient Mesopotamian people was about baking a grain, almost like baking a bread, and then using wild yeast to ferment it to create this divine drink that had added enjoyment benefits, but also it preserved those grains that it gave them a longer life than it would have been if it had been a grain to be consumed. And that just for us was a really brilliant example of how for so many years we have been doing things to preserve the like nature's precious gifts to us and the things that we've put human love and energy into creating and not letting it go to waste, and we've kind of over time just um lost that that value. So it for us putting those two things together, knowing the scale of bread waste, and then knowing that there was a solution, we drink a lot of beer in the UK and around the world, um, and and and seeing the opportunity there to both tackle bread waste by using surplus from bakeries to produce beer, um, but also then uh using the revenues, uh using the profits from that business model to fund some of the charitable work that was happening and creating this really engaging way of talking to people about food waste, um, you know, having a conversation over a pint at the pub is is a much nicer way of exploring issues and uh talking to each other about the things that we can all be part of.
SPEAKER_00So I can hear the journey of getting passionate about the problem, but you went for it, you you launched a startup, there was a moment of opportunity, I think, to do that, a way of getting started, and I'd love to hear more about that. And that quite quickly led on to some recognition. So you won the Global Good Award for Best Eco-focused small enterprise just a matter of years after starting the business. So I'm interested in that early stage journey, and and what do you think the judges were really recognizing with that award about what you'd achieved already?
SPEAKER_01Yeah, uh well, so when we started Toast, it were it actually came about um from a relationship with Jamie Oliver. Uh so we'd worked with his team before at feedback to uh to tell the story through television of the supply chain for the food system, what was happening, some of the human stories behind the amount of waste at a farm level. Um, so we pitched in this idea of a beer to Jamie's team and they really enjoyed it. Uh, we pulled everything together really quickly to make it happen for the TV show Friday Night Feast, and then Jamie was actually one of the first people to taste the finished beer as part of that series. And we just had such a really great response to it that it felt there was something there that we needed to embrace. So I guess I was coming at the business from the perspective of sustainability and how we create a business model to solve a problem. Tristram had founded the charity Feedback as well and has been an environmentalist all his life. Um, we brought in another co-founder, Rob, who had led an organization called Ashoka, helping people who had really system-changing ideas to bring those to life. And yeah, we we just um set out to have a go and do it for ourselves. We were not brewers, um, so there was a lot to learn and a lot of people, a lot of relationships to build over that time. Um, but we at the very beginning set out some of those principles for us that all of our profits or distributable profits would go to charities, not to any shareholders. Um things like we didn't want to be exporting the beer because there are breweries all over the world and there is a bread waste problem all over the world. So we could instead build connections with those other breweries to solve a local problem and maybe support a local charity to them. Um, and that also avoids the environmental impact of transporting a heavy liquid around the world. Um, and yeah, so we we just designed this business model to do as much good as we could. Um, I think that's what the Global Good Award judges recognised that not only had we created a product that solved a problem, but we'd given so much thought to the entire business model, to considering any of the negative aspects as well that the business may have and what we were going to do about those. Um, and then that collaborative, open approach that we embodied from the very beginning about working with other breweries, but also open sourcing a recipe for home brewers to be able to use their own bread at home if they had you know a surplus crust at home, um, you know, uh and um and trying to really scale the solution to a problem through a different model.
SPEAKER_00Yeah, fantastic. I can imagine they'd have seen a great product that tasted really good, that had a real appeal to consumers, but which was also very thought through in terms of the systems change that it was aiming for and the education it was trying to hint at. But do you remember what changed after that? Getting that reward and recognition, was that something that propelled you forward at that moment in time?
SPEAKER_01Uh yeah, that was really important to us. That helped us to publicly talk about what we were doing and the impact it was having. But it I think when you put yourself out as a business that is trying to do good, you are judged very differently against a different set of standards to other companies, and those expectations are much higher. So that public accountability has always pushed us to do more, and I think one of the major developments after winning that award was for us to think about how we can really scale the model behind toast. Um, it was going to be really challenging for us as an SME then. We are still an SME, a very small company, but bread waste is huge. And as I say, we drink a lot of beer in the UK, so there must be a way that we can not just open source a recipe to get others to do it, but actually work with breweries to help them overcome some of those challenges. So we're working on an ingredients business called Companion, which is from the Latin compan with bread, someone that you would share a meal with. Um it's all about collaboration, but with that breadpun in there, because we love a good print, a good pun. And we opened up an investment round at that stage to bring uh funding into the business. We've subsequently done another investment round as well. That equity that we raised has helped us to scale, it's helped us to invest in RD. Some of the challenges of other breweries doing this is that it is more expensive to get going, there's knowledge that's needed, there's maybe changes to the recipes for the products. So we've looked at how can we create a product for other breweries that will help overcome some of those challenges. Brewers are used to buying grain from a monster, it arrives in a sack, it goes into the tank in a very simplistic way. Um, for them to find a local bakery, source the bread in a way that remains food safe, to have all the information on allergens, we dry the bread, turn it to a fine breadcrumb as well. So for them to then process that before it goes into the the into the brew house, into the mash tun is a lot to ask. And so it it hasn't happened just through um. Open sourcing an idea and the development of a product, I'm hoping, will do that. Um, we've taken on investment from Heineken in the second round and uh are working really closely with them. If we can achieve that with them, then that is the sort of scale where we start to see huge impact. So we're still working towards that, but the I think the recognition that we had on those in those early days that people loved what we were doing, they loved a different way of thinking about things and wanted to see more of it really pushed us to think how can we do more of this with those bigger partners that we need to do that.
SPEAKER_00Really interesting to hear that journey of how you started to scale not just your business but scale the process that you've used. And as you say, I can imagine that the impact could be huge if this RD work that you're doing on producing an ingredient that other breweries could use, could take off. I mean, goodness knows how many pints Heiner can brew each year, but that's really a serious impact, isn't it? So I mean we're getting into the practical side of brewing, which I'm interested in. Um making beer is is often described as energy intensive by nature. There's a lot of liquid to heat up. So when you started to learn about the brewing process, which as you say was new to you when you were starting, and particularly coming at it from a carbon lens from your background, what did you learn about where the impact actually sits with brewing and perhaps how people might misunderstand that? What did you learn?
SPEAKER_01Yeah, so I brought what I'd obviously been doing at the Carbon Trust uh on carbon fretprinting into the business. So from the early days, we had a basic understanding of the emission sources for the business, and then over time we've developed those, um, improved the data sources and the amount of coverage of the footprint. Um, but what became clear to us in the very early days was um that which I think we knew it was part of the reason for doing this, but barley has such a huge impact on beer, the the carbon footprint of barley. So uh you there are emissions involved in the production of the barley on the farming side, um, a lot of it to do with the um the chemical additions used in farming, and then the barley is transported to a maltster where a lot of energy is used to malt the grain. Essentially, you're starting the germination process of the seed using water and heat to crack the seed open and make those sugars inside accessible. So, barley, I think for most people, you would think of beer and barley as a really good natural ingredient, which of course it is, but you don't really think of it as having a carbon footprint. And so when you think of the carbon footprint of beer, you're not really thinking about barley, that's you know the rolling hills of fields growing and nature um thriving within those fields, which often often isn't obviously with um with huge monocultures, but um but yeah, it has a a huge uh a huge carbon footprint. So taking out a third of that barley, which is what we do by replacing it with surplus bread, means we can significantly reduce that, but we'll always need barley. Barley has um it has an enzyme that breaks down the carbohydrates that helps those sugars become accessible for brewing, and it also has these beautiful flavours that it adds to the beer, those malted notes. Um so we we need to be looking at how we can reduce the footprint of barley, and a lot of the musters are doing that both from their own emissions, but for them upstream, working with farmers, looking at more regenerative practices that are helping to lock down more carbon into the soil. The other really big impact of beer is the packaging. Um, and this became super clear to us a couple of years ago when I then looked at producing a carbon footprint for each of our products and comparing the same amount of liquid in a glass that you would buy at the bar compared to a can and a bottle, um, and discovering that the bottle of beer is almost double the carbon footprint of a can of beer with the same amount of liquid, the same beer that's gone in, um, but because glass is so much heavier and the recycling rate of glass in the UK is lower, that there is a what we call an embodied footprint in the material. So, the the for glass bottles, the emissions that are involved in producing that glass are much higher than involved in the production of a can. It's a systemic issue because it involves recycling rates, recovery rates that are at an industry level. Um, but where we are at the moment, that that is the situation. And then a pint is much lower again than than both of those. Uh, for the pints, we produce beer in kegs. They're steel reusable kegs that have a very long life. We data get delivered to a pub and then collected to be cleaned and reused again. So the most sustainable option for beer from a carbon perspective is to go down your local, support your pub, and have a pint. Um, but if you want package, then I would choose cans over glass. For a business, it's really challenging though, because we we struggle to get access to the pubs. A lot of those lines are tied up. The pubs might be owned by a big brewery or have an agreement with a with a brewer. Um, so getting the beer onto the bar is difficult. It's much easier with packaged products. Um, and then we we did look at whether we should eliminate bottles altogether, knowing that that difference in footprint. It was something that we did gradually through our online shop. So we first of all told people about the difference, and we saw a maybe a tiny change, not huge. Uh, we adjusted the price, so we made the cans cheaper, and then we did see a little bit more of a shift, but there was still people that wanted to buy the bottles, and we just we couldn't really justify it. We also were struggling with breakages as well, so um, like that also adds you know to the to the problem. So we just took the bottles off the website. Um, with hospitality, though, a lot of companies want bottles, they just uh um I think that experience of drinking out of a bottle is preferred by many people, even though you should always drink out of a glass because you taste with your nose as well. The the aroma is really part of the experience of enjoying a beer. So I think we've got a lot of work still to do on the like changing the perception of the packaging, but also like how do we access markets? How how do we make sure also people keep going to the pub and keep supporting pubs? Um, so yeah, those were I guess the big two areas for me. Uh, from a carbon perspective, there are also other environmental impacts to consider, uh, water being a really big one for the brewing industry in particular.
SPEAKER_00Well, it's probably music to all of our ears to hear that going to the pub might be the more sustainable thing to do. That's a great encouragement to everyone, I think. But there's so much I find interesting in what you said there, and partly that for many businesses, discovering where the real impact is might be surprising and might not be what we first thought. I I might have guessed that boiling the water to make the beer would have been the most significant thing. So it's interesting to hear that all the other impacts that are going on during the process might be more significant.
SPEAKER_01Yeah, and that of course is when you're looking at a full uh life cycle carbon footprint. So it's including your scope three emissions, which are those emissions associated with your supply chain or with your customers. If you're just looking at scope one and two, so those emission sources that are owned or controlled by your business, then heating the water, heating the liquor for brewing is a huge source of emissions. And it's one that's really difficult for us to act on as smaller brewers. Um so from an electrical perspective, the government has set targets uh to uh decarbonize the grid, and that will obviously feed through to businesses in reducing the electrical emissions, but for businesses that are reliant on gas and other other fuels, it's really difficult to um it will require a lot of investment to invest, for example, um in heat pumps and other technologies that will electrify the operations and and then to benefit from the national decarbonisation strategy.
SPEAKER_00Yeah, and and scope three emissions for most businesses probably maybe the most significant thing, but they're the hardest to grapple with, aren't they? The hardest to measure and get data on. So I'm interested in how you dealt with that because I know you started by contract brewing as you didn't have your own brewery, and the nature of scope three emissions is it's not something under your direct control, but you're you're dealing with suppliers, so you haven't got control, you've got only limited influence over those carbon emissions. So I'm interested in how Toast approached that.
SPEAKER_01Yeah, absolutely. So because we contract brew, actually, or we sorry, because we used to contract brew, um, then pretty much all of our emissions are scope three. We don't own any facilities. Um there was a little bit from our own office. We're now actually in a co-working space, so we're pretty much all of our emissions are scope three, which means we have no control in theory over those emission sources. What we can do though is work collaboratively with our suppliers, um, not necessarily to change what they're doing because you know often it will require investments that maybe they just it's not affordable to their business, and we are very small as a customer to them. Um, but having an understanding of the challenges that they're facing in the supply chain helps us to see systemic problems for the industry, it helps us then to collaborate on broader uh campaigns that might look at how we get more funding into small businesses to invest in technologies such as uh, for example, carbon capture has been one that's been looked at uh over the past four or five years by smaller breweries. Um and how do we support our suppliers or our partners to um to gain to push through for policy changes? Um there is also an option of like how do we can we fund some of those changes? So uh like if we were going to use regeneratively grown barley, uh can we pay the premium that would cover that additional cost uh for our supplier? So there's there is always going to be that financial barrier that will make it difficult, and we're just not at the size where we can have the influence to make the investment sort of mandatory uh for our suppliers. But I think it's that sort of understanding. We and then we we can make choices about who we work with and what products we're using that can influence the carbon footprint. And then on the downstream side where we're working with customers, so for example, on the packaging that we're wanting to where we wanted to reduce the emissions on packaging, we can use behavioural change campaigns to influence the format of the packaging that people are choosing. Can we support recycling campaigns that will improve that recycling rate for aluminium cans that then has that added impact of reducing our footprint? So I think I think the word influence that you use is is really important. We can't force any changes with just not being enough. But we can understand, we can communicate, and we can influence others to make those changes.
SPEAKER_00Yeah, so even SMEs and small businesses can make these differences, perhaps in your case, by bringing expertise to the table and looking at the system in a way that a supplier may not have done and bringing new insights. So you've spoken about some of the trade-offs that can be involved. I think you talked earlier about the challenges in brewing with a different process. So I'm interested in that. Can you talk a bit about the ways that you've thought about those trade-offs and when a decision had a potential commercial or operational trade-off in the decision, how you decided what to do?
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SPEAKER_01Yes, good question. Um I guess there's been a couple of examples. The first one that I can remember that was a really difficult decision was about the our distribution methods in London. So we used to work with a bicycle courier company. All of our online sales in London were delivered by them. It was a little bit more expensive, but I think it was part of the experience for our customers. Uh, it you know, told the story of what we were trying to do all the way to our customers' doorstep, but it became really complicated from an operations perspective, to you know, even just separating out those orders to understand which ones were London-based, which ones are outside, and having to use a different company for those that were outside London, that reduced any um scale benefits that we had in terms of cost savings on on um you know, based on the number of orders we were putting through. It we then also yeah, just it just had a lot of challenges, were uh yeah, the the deliveries didn't happen and we didn't have the same um like documentation as we might have had uh with with a courier company. Uh it but it was so it felt so important to that customer journey that we we kept on with it for a really long time. And then actually what broke us was um that we went into COVID and we were a reduced team because a lot of the team had to be furloughed during that period, and the operational challenges for the team that were remaining became so great that I think it put undue stress on the team, and we could see the mental health impact of this work. So it when we're making these decisions, it's yes, it's the environment is really key, but the people side of the business was really important too. Um, and we had a really frank conversation with the person looking after it, and we just turned it off immediately. It was just, I think we spent such a long time weighing up like the finances, the sustainability story, but the and kind of forgotten the people side of that story as well. So that was a big change that we made really quickly. Um, and then the second was the I guess the one I mentioned around taking bottles off the the website. Though we lost custom. There were people that wanted to buy bottles, bottled beer, and they didn't want to switch to cans, and so we our sales did drop online. Our online sales were not a huge part of um our revenue. We had the support of retailers, we were in you know, Waitros, co-op, a cardo, independent retailers, and so although it was we were losing sales, we felt that that was the right thing to do, and it wasn't going to have such a material impact on the overall business that it would have stopped us from doing that. But it's always difficult, you know, to stop doing something that takes money out of the business. Um in hindsight, it actually simplified things for us. We didn't have to deal with the courier firm breaking parcels and us having to re-deliver to that customer. Um, but it yeah, at the time it felt quite difficult.
SPEAKER_00Such an interesting journey of trying to navigate these challenges, and these are the day-to-day decisions in business, aren't they? I think toast are an interesting case study because you're very high conviction, so there's that added momentum for some decisions, but nonetheless the commercial realities apply. So I'm interested to talk a bit more about carbon footprints. Toast have published a carbon footprint looking at your full value chain and have been very open about what you have done, but also what you haven't solved yet and some of the challenges that remain. Why should companies estimate their emissions at all and how could they start?
SPEAKER_01I think it's just a really useful insight into your business into the impact that you have as an organization. Um and it you can do it on a really basic level just to give you a heat map to say these are where the main emission sources are, and that's where I'm going to focus and really work on what can be done in those areas. Um, I think there's a tendency to think that it's really complicated, that you need to pay for a consultancy or invest in software. Um, and yes, if your business is larger and really complex, then that probably is the route to take. But to begin with, particularly for small businesses, it really doesn't have to be difficult. Uh, it you know, it's a matter of mapping out your your basic processes, and I'm coming at this from the perspective of a product business, so it's slightly different if you're services, but you're essentially looking at what are the inputs into your business, so ingredients, uh, materials, packaging, and what are the outputs, which will be your product and any waste, and then what are you doing in the middle? What's your process in the middle to convert those inputs into outputs? Just even just mapping that out is quite a helpful process, and then it's about gathering data on what we call the activity data, so how much ingredients or materials are you using, what's the weight of that material, um uh, like what's the measure of the process, and that can be energy that you can take from an energy bill, what's the output, and remembering that the inputs become outputs, so um, yeah, kind of what is the the weight of the packaging that you're putting back on the market, um, and many of us are now having to measure that anyway as part of the extended producer responsibilities. Um, and when you have that data, you basically need for each of those steps, you need to have a way of converting your activity data, so your weight or your kilowatt hours into carbon emissions, and what so what is that multiplication factor? Uh, for a lot of the sources, there's government data that's available that's updated every year. You can find out the conversion rate for kilowatt hour into carbon emissions for your electricity, your gas, etc. Um, for your ingredients, some of that data is out there. It uh some of it might be a little bit more difficult to find. I think probably with AI now, you know, that there are sources of data that we can all access. And it might be that you can get that data from your supplier as well. Um, and then that will then just doing your activity data multiplied by your emission factor gives you your carbon emissions. Add those all up, that's your carbon footprint. That in like simplistic terms for the business is what's in involved.
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SPEAKER_01And then over time, you can, as I say, like we did, you can improve the sources that are included, you can break those down further if you want to be able to investigate at a more granular level, you can look at those emission factors and whether actually is there a more specific factor for the ingredient that I'm using. That is tends to be important where you're looking at switching. So, you know, if if you might move, for example, from traditional traditionally grown barley to a um regenerative barley, then you want to be able to see the difference in those factors. Um, but yeah, having that initial picture of this is my business process, these are my hotspots, this will then help me to focus with limited um money to invest in reducing emissions, but the you know, hopefully there will be a payback to those, particularly if you're looking at any any inputs that have a cost, uh, so you know, energy efficiency measure measures, for example. And just yeah, it it helps us to focus financially, but also the energy that we have to work on these things when they're perhaps additional to the everyday operational challenges of the company.
SPEAKER_00Yeah, so it doesn't have to be super complicated. I I guess it depends upon which way you're coming at it, whether you need as a business to report to others about your carbon emissions, or if you're simply trying to work out your most significant impacts, in which case, often just starting with a few things that are your major impacts, maybe the way. And often clearly, if you're spending a significant amount of money on something, then that's a clue to look at whether there may be carbon being emitted as a result.
SPEAKER_01Yeah, absolutely. So that is also another way of doing it. You know, your activity data, um, you could use financial data instead and then have a different conversion factor to switch that over. But I'd say for those companies that are not already doing it, then you probably are not having to do it. Um most small uh small businesses are probably not having to do it. I think the I think it's about 15% of SMEs actually measure their carbon footprint. It's really low. So yeah, just getting started and doing it in a way that gives you that information is where the value will be. Um, if you're then required to report externally, then you know, then you need we probably need a little bit more rigo. We are asked by our customers for data, but they will send us a template that they want us to complete, and often they're asking us for the activity data rather than the carbon emissions. Um, so yeah, I appreciate companies have uh you know have a lot of demands on them for data, particularly if you're working with bigger customers. Um, and so you may already have some of this, and you may just have not been pulled together for your own carbon footprint yet. But yeah, I would encourage like everybody to just start the journey and just um get yourself that basic information to begin with.
SPEAKER_00Okay, so I want to switch to ownership because I'm really interested in this. I think we can all agree that ownership of a business really shapes priorities within the organization. So I want to hear more. You already mentioned a little about this. Why was it so important to you to design toasts ownership structure differently from the start?
SPEAKER_01Yeah, definitely. Uh so yeah, when we did our first investment raise, we we needed to bring capital into the business to help us to scale. We actually did a crowdfunder before we did an equity raise, um, which was a brilliant way of building a community, uh, you know, having people that cared about what we were doing, that were able to enjoy the proceeds of their investment as beer. Um but uh it became like increasingly difficult to crowdfund, and we didn't really want to do that from an equity basis. So we went out and spoke to a lot of private investors, um, uh including companies like the National Geographic, for example, was one of our earliest investors, but we were also wanted to do that differently. So we already had within our articles of association this commitment that all of our profits would go to charity, and we didn't want to change that. It wasn't like we were we'd set up to be you know kind and generous and give to the charity, we're actually set up out of a charity, so it was really fundamental to what we were doing, and we needed to think about like how we can raise capital but not give dividends essentially, um, which influenced the sort of organizations we were talking to. But we brought together a model called Equity for Good, which essentially requires investors to make a pledge that they'll reinvest any net capital gains into environmental projects, if it's a corporate investor, or into other businesses that have an environmental mission. So we're not limiting what they can do with the with those capital profits, but we're just saying that we have created this additional value by doing good through toast. We don't really want to see that extra value going and you know being invested in oil and gas, for example, you know, in fossil fuels. Um so it was our way of putting a um a little like security around that capital so that it could go on and do good for someone else. And then we'd hoped that actually maybe other companies will adopt a similar model so we can gradually create this like equity for good economy, um, was an aspiration at the time. Um and it would then help fund other startup businesses like Toast or other scaling businesses like Toast that were building a business model that was different. Um, and then the second round of investment, we brought Heineken in as an investor. That was a strategic partnership as well, because they could become a customer for the bread supply for us and then and work with us on an RD basis to make sure that the formulation of the product that we were developing would work in a small microbrewery like we had, um, or it would work with one of the macro beer companies in the huge facilities, so it could really then enable us to create something that could shift impact. And Heineken had their own net zero targets. Um as I said, barley is a huge part of the beer's footprint, and so they were already looking at regenerative agriculture, they're looking at other projects, but this was an additional sort of RD type investment for them to see how the circular economy could also be part of their strategy.
SPEAKER_00And really bold, both to set out with 100% of profits going to charity and also then to ask investors to make this pledge as well. I'd love to hear any stories about the impact of that, perhaps the ways that you've supported charities, but also any other ways that you think the ownership structure has changed some of the decisions that you've made along the way or how things have played out.
SPEAKER_01Yeah, so uh well, so in supporting charities, uh we set up out of what's now Food Rise and worked with them for the first few years. The challenge I think that we had was in communicating that to beer drinkers. People are asking, what is a food waste charity? What do they do? Um, and we also realized that what people really cared about was the nature around them, the nature that they're experiencing in their local parks, their gardens, the you know, weekend trips to the countryside, and the fact that the UK is the most nature-depleted country in the world was really alarming to people. Um, and the food system having such an impact on nature meant that by tackling food waste we can do something about that. But we wanted to look at can we use our profit-giving model to support nature in a way that we can't directly as a business. So we've worked with lots of different organizations in that space, um, Plant Life, who run the No Mo May campaign, Rainforest Trust UK, and you know, organizations that are looking at how we preserve the wonderful nature that we have and we really value around us. Um I think from then the equity perspective, having that model, uh both the business model and the equity for good principles that we had shaped who invested in the business. There were people and organizations that did, you know, that we spoke to in the early days, but it didn't tick all the boxes for them, largely from a financial uh earnings perspective. But for others, uh it it was a way of giving, I guess, like in a sort of philanthropic way, but with profits to gain at the end of it. So uh I think as a result, we ended up with investors, shareholders who really care about the mission and are super supportive of what we're doing. Uh, as I said, the National Geographic uh foundation are one of our biggest investors alongside Heineken. And that gives us the permission to do things differently. We're not beholden to quarterly impact. Uh, sorry, we're not beholden to quarterly uh profit reports, you know, we're not having to make decisions that are all about the profitability of the business because we don't have shareholder primacy. Uh we don't anyway, because we're a B Corp, but those investors are motivated by the impact that we have as a business because that's what they signed up for in the beginning.
SPEAKER_00Yeah, such a massive impact, what the priorities of shareholders and owners of a business are in terms of influencing the key decisions. Plus, as you say, to be a B Corp as well, where you've written into the foundation of your business a commitment to balance commercial realities and the need to make profit alongside other factors and stakeholders really sets you up to think differently and act differently. So let's talk about net zero. Um, net zero has become a headline claim for many businesses, but also a source of confusion and mistrust at times. What do business leaders most misunderstand about um what net zero actually means?
SPEAKER_01Oh um I would say most business leaders understand net zero. Um maybe not at the smaller business level because we don't have the same requirements. But yeah, I I think in the business community, particularly those that work in on sustainability, it will be understood. Um I think some of the confusion was that um it was it between net zero um and carbon neutral to begin with. So net zero essentially requires you to reduce your emissions like as far as possible. So you're looking at sort of a 90% reduction against your baseline, and then you can use carbon credits to offset the residual emissions that are just really going to be hard or impossible to remove. Um, whereas with um with carbon neutral, you can measure your carbon footprint and then buy offsets to the equivalent and just offset it. So there's a big difference between those two. Net zero, I think, is really important because it's prioritizing the action to reduce your footprint and not just you know a little bit, it's like a significant reduction that you're having to make. So um, yeah, I kind of on the offsetting side, I have views about the role of offsets um and like how businesses should use them and talk about them. Uh, I think the focus needs to be on reduction.
SPEAKER_00Well, let's hear those views because I know that Toast looked at offsetting and ultimately um chose not to go down that route. So um, how did you think about that and and how did you publicly talk about carbon in a way that's honest without overwhelming people or undermining trust?
SPEAKER_01Yeah, so we actually did offset for I can't remember which year it was, maybe 2020. There was like growing pressure on businesses to be talking about sustainability, and we saw a lot of our competitors saying they were carbon neutral, and then our customers talking about toast compared to another beer brand from an environmental perspective, saying, Well, they're carbon neutral and you're not. So we were actually at a disadvantage by not being able to use that, use that credit. Um, so I worked with an organization called Climate Partner to verify the carbon model that I built for toast and make sure that that was as up-to-date as possible, that we had industry standard emission factors, that I wasn't marking my own homework. And then we worked with them to look at offsets and what we could do that would have an impact and be aligned with what we were trying to do anyway. And we did find there were two projects that we funded, one was in the lake district and one was in the Amazon, that were around, I think the Lake District one was afforestation, so planting trees, and the Amazonian one was about protecting the existing um biodiverse ancient rainforests. And it was a cost for the business, but it was essentially a cost to compete and to keep toast at the forefront of being seen as sustainable from our customers. We were still obviously doing all of those other things that we'd set the business up to do, uh, primarily using surplus bread to significantly reduce the footprint of our beer because we weren't using malt and that bread wasn't being wasted. Um, and then I spent some time looking into it and I just felt that it was so difficult for me to know that those trees had been planted, that that forest had been protected. There were stories being told about other offset schemes where that it just hadn't happened or it hadn't happened to the scale that companies had bought the offset, so they were not delivering the carbon reductions. Um and there was a there were a lot of other questions around additionality, which is would it have happened anyway? Um, and then the whole point, the whole issue of the claims and what it meant, and are we just confusing consumers?
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SPEAKER_01And then around uh that would have been 2023, I think, there was new standards that were launched around how companies were able to communicate their environmental credentials that meant if you claimed carbon neutrality, you had to explain that you'd measured your footprint, that you'd purchased offsets, credits, um, and then explain what they were. So you go from having a little symbol that sits on a can to quite a large piece of text that you're not able to put on there. And and then there were also uh implications for getting this wrong. So a lot of companies started to pull back from it anyway, and Climate Partner removed their certification scheme for carbon neutrality. So we'd already put some money into these nature-based schemes, but it just felt like it didn't really align with what we were trying to do as an organization because we'd committed to invest profits into net profits into charities that were working in nature in the nature space anyway. And we also said that that would be one a minimum of one percent of revenue. So in those years when profits were low, um, it would guarantee that money was going to these organizations, and we were essentially taking that money away by creating another expense in the business that gave me a certificate. Whereas the projects that we were investing in were ones where we had like a direct relationship with the people that were delivering the impact. We did a project a couple of years ago with another B Corp called Action Funder, where we put money into a pot and then ran a campaign to select community gardens around London who were all working to bring back nature and tackle food waste. So it might have been, for example, putting in a composter in a garden or creating meals for people that would otherwise be wasted. And we got to go and visit those gardens to meet those people that were impacted and to tell their stories as well. So it for me it just felt much more important that I was able to see that impact and not be distracted from the reduction work that we were doing. And I think that you know that was part of the problem that people were buying these offsets and not doing any of the work to reduce their emissions. It was much easier and simpler to just purchase credit. So yeah, it's a again, this is another one where it's a different story if you're a large company, um, you know, and you're part of um emission schemes. But for small businesses, it was a huge expense. Um, and though let me just also say the there are projects that would not happen otherwise without or would not have happened otherwise without some of this investment going in. But to then claim your carbon neutral because you're investing in those, I think, was were the problems that so yeah, by all means, please do invest in nature restoration. Um, you will be bringing life back to the planet, you will be, you know, rewarding your teams by showing that you're having that impact as well. Um, but don't do it just to have a carbon neutral stamp on the pack.
SPEAKER_00Yeah, very interesting. I I love the integrity of the approach that you've taken. And I guess the lesson for all of us is really thinking these things through and asking the harder questions and the deeper questions. I know that offsets can be a real minefield and need um deep thought and attention to navigate it well. So um, we've talked a little bit about the wider impact that Toast has had and some of the collaborations that you've made, but I know that you've also been involved in some campaigns as well, and you've touched on how policy and regulation uh are such key things that influence businesses, sustainability and impact. Can you tell us anything about those campaigns and the impact they achieved that you couldn't have made happen on your own?
SPEAKER_01Oh, yeah. Oh, we've done so many collaborations with other breweries, with other food companies. We've got one currently running with Jason Sourdough, which is a really fun one. Um, that uh yeah, is it in Waitrose stores at the moment? That one was a really interesting one because Jason's actually don't waste very much bread at all, but they had built a new production facility. And when there's a new product or a new production method, then the bakery has to fully test that out to the level of the product being packed, but never ending up on a shelf. So we worked with them to take that surplus bread from. From a test production run, we dried it to a crumb, gave it long life, and then have been able to use it in the beers that we're creating with them. It's been really fun because not only have we solved a problem with them, and it was a problem that I think even we'd not really appreciated, uh, happens. You know, we thought about different sources of bread waste, but this was a slightly different um reason for it. Um, but then it gets it onto the shelf. We're talking to not just the beer category, but the Jason sourdough uh customers, and they are very passionate about Jason sourdough. Uh, if people like it, they love it. So we're able to then talk about food waste and the positive impact we can all have with a totally different market. So that's a kind of joyful consumer campaign, I guess, that's going on. And then, yeah, we we join other campaigns around policy change where it aligns with Toast. There are a number that were involved with uh the Better Business Act. Um, it came out of B Corp. Essentially, as a B Corp, you change your legal constitution so that you're not just prioritizing profits for shareholders, you're making decisions that are good for people and nature as well. And the the Better Business Act is about removing shareholder primacy uh in the UK's Company Act, so that all companies should be thinking about all of those stakeholders. Um, and we did that, we did that because we've been a B Corp for a very long time. We were the first uh brewery in the UK to certify, and with a highest scoring at the moment, um, and we've kind of tried to be very involved in the like the B Corp world, the movement, the community, because we believe in the aims of it. It has not been without challenges, but we believe in uh the direction that we need to take, all businesses. And then other campaigns that are maybe more grassroots around legislation. There's one uh called the Climate and Nature Bill that's run by zero hour, that's about uh limiting warming to 1.5 degrees and um reversing nature loss by 2030, and um an ecoside law as well, bringing in basically a law against harming uh the ecosystem. And so our involvement in those projects varies. Uh, we have done protests with the teams behind them, we've been on like climate marches with them, um, we've held events, fundraising events for them, or events where they're able to talk more about their missions and um and generally try to bring much more awareness to the issues with people that might not be really necessarily engaged in some of these worlds. You know, the we've got a lot of people that drink beer in the UK who won't go on a climate march but can learn a little bit about food waste and um and then you know learn about some of the wider systemic problems, but also have hope because there are so many people in different formats changing different levers to try to tackle all of these things.
SPEAKER_00Really interesting and so important for government to hear the voices of businesses and particularly those who are really thinking deeply about sustainability as policy is being formulated. So, for people listening who are running a business or sitting on a board, um, are there any assumptions about sustainability that you'd really encourage them to challenge and look at, or anything else you'd like to throw out for them to think about?
SPEAKER_01Yes. Um I think the main thing I would want to challenge is what seems to have been this growing idea that people don't care anymore about sustainability. I think there was a real push, as I say, like around 2020, 2021, we had COP26 happening in Glasgow. So for the UK it became um a very kind of local internal the international scale scale scale became very local, and everybody was talking about sustainability, lots of brands um were yeah, kind of leading communications, um and it felt so positive, it felt really hopeful, there's a lot happening, and then gradually it's quietened down a lot, and you can interpret that as people don't care or they don't care anymore. Um, and I think it it probably is true that in terms of people's priorities, we it may have fallen down to this decision-making tree, but that doesn't mean that people don't care, and there was a study done by it was a German university that looked at how much people cared and how much they were prepared to contribute to action on climate, and also how much they thought other people cared, and it showed that I think it was over 80%, around 80% of people really care about climate issues and nature issues, but they think that most people don't. So there's this silent majority where we don't want to talk too outwardly about what we believe and what we think needs to happen, because we don't think everybody else wants to hear that, and we don't think everybody else is going to agree with us, um, and actually mostly they do. So we've ended up, I think, from a citizen perspective, not talking about these issues as much. And from a business perspective, then there's been a bit of a green hushing that's been a mix of not thinking that people care and then re-prioritizing our marketing messages. And then also there was, you know, the legislation on the claims we can make has made companies a bit wary about making claims. So you've ended up with green hushing, as they call it. Um and then I think then you end up with this perception at a leadership level that people don't care anymore, let's deprioritize funding on sustainability work, uh, and let's talk about it less in our in our marketing. So I would just challenge that and say that people do care, and we also have a responsibility to keep the conversation alive. It doesn't have to be that we're talking about sustainability all the time in our marketing, for example, and actually often the some of the most sustainable brands don't talk about it as their headline message. You will always have you know the project performance, the product taste, the product look and feel coming as the priority in your marketing. But then when people look under the bonnet, then they see what the company is doing, and they are they will be asking questions about sustainability and they will be noticing those companies that are taking action. So I think anyway, we've got a responsibility to keep investing and to keep delivering on change. We well, we have a responsibility, but we also need to because from a future resiliency perspective, we need to be prepared for a different world. But we just need to also embrace the fact that we we can talk about climate in a joyful way and engage people and people want to be there. We've got a motto at Toast that's if you want to change the world, you have to throw a better party than those destroying it. So we've got to make it feel like a party and we've got to invite people along to that party.
SPEAKER_00Yeah, well, I love what you've done there, making beer that tastes really good, um, but setting up to do that in a way that also addresses these issues. So yeah, let's throw that party for the silent majority out there. Hopefully, the the listeners to this will continue to speak up and make the changes they think are needed within their businesses and organizations, because there really is a constituency out there for that. Um, but also because these issues are coming down the line, aren't they, and will ultimately affect profit sooner or later.
SPEAKER_01Yeah, absolutely. And full circle, you know, to the carbon trust learnings. The earlier we make these changes, the cheaper it will be, and the bigger the impact that we will have long term. So yeah, don't delay, just party.
SPEAKER_00What a way to finish. Louisa, thank you so much for joining us today. It's been so interesting to talk about food waste as a climate issue, about the measurement and the trade-offs, and about what it really takes to run a business with integrity when the answers aren't simple. I I love the way you've been involved in this work, not just brewing great beer, but but using it as a way to ask bigger questions about systems and responsibility and collaboration. Uh, and that's what this podcast is all about. As always, um, let's all keep asking these better questions, these harder questions about where the impact really sits and what we can do practically to change it. Thanks so much to everyone for listening. Do join us next time. And if you found this useful or interesting, please do like and subscribe to the podcast. It will help other people to find these conversations. Thank you very much.
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