ESG, Sustainability, & the Future of Electronics w/ Tom Raftery

Explore the intersection of technology and sustainability with Tom Raftery, an independent consultant and host of the Climate Confident and Sustainable Supply Chain podcasts, on this episode of the OnTrack Podcast with Zach Peterson.

Dive deep into the evolving world of ESG (Environmental, Social, Governance), exploring how advancements in IoT, AI, and sustainable practices are reshaping supply chains and business strategies. Join Tom and Zach as they explore the critical role of transparency, auditability, and regulation in driving forward sustainable innovation and corporate responsibility.

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Key Highlights

• Tom Raftery's Introduction: Gain insights into Tom Raftery's expertise and perspective on sustainability.
• Corporate Concern: Explore the question of whether companies are genuinely demonstrating concern for sustainability.
• Procurement & Sourcing: Delve into the critical role of procurement and sourcing in sustainability efforts.
• Transparency Importance: Understand the significance of transparency in sustainable practices and corporate operations.
• Driving Forces of Sustainability: Explore the real motivations behind sustainability initiatives and their impact on businesses.

Resources

• Listen to the Climate Confident Podcast
• Learn More about Sustainable Supply Chain
• Tom Raftery’s website

Transcript

Zach Peterson: Yeah, the transparency and auditability part I think is pretty recent because people weren't talking about that so much until I think maybe the last five years or so, and now we have all the software solutions and hardware solutions to really enable that.

Tom Raftery: Yeah, yeah. And the cost of sensors is cratering all the time. Communications technologies are getting better all the time. I mean, it's not just, when I say communications technologies, now I'm talking about the likes of the Bluetooths, the wifis, wifi seven is coming out now You've got 5G, and when I say 5G, you've got 5G for our phones, but you've also got private 5G, which can work within buildings. And then you've got, there's a company called Wire Pass based out of Finland, and they have a version of 5G, which is non telco.

Zach Peterson: Hello everyone, and welcome to the Altium OnTrack podcast. I'm your host, Zach Peterson. Today I'm speaking with Tom Raftery. He is an independent technology and sustainability consultant. He's also host of the Climate Confident Podcast and the Sustainable Supply Chain podcast. I know that's a mouthful, but I'm going to have a lot of fun talking to him about some of these issues, and I hope you will too. Tom, thank you so much for joining us today.

Tom Raftery: Zach, thank you so much for the invite. I really appreciate it.

Zach Peterson: Yeah, absolutely. So you run two podcasts. That one's pretty self-explanatory as far as what you do, and I hope folks will tune in and they can find links in the show notes. But you're also an independent technology and sustainability consultant. That's a bit of a mouthful, but if you could just give us a brief introduction to what someone in that role does.

Tom Raftery: I do a number of things. I consult with companies on obviously the intersection of technology and sustainability, particularly where it intersects with supply chain and also with energy, because I have a strong background in the energy space as well. So I do that. And like I said, or like you said, I run the two podcasts. They're great. I publish one episode a week on both of them, the supply chain podcast. I've published over 380 episodes at this point, the Climate Podcast over 150. I think tomorrow's episode is 157. And what that does is a number of things. It allows me, it's great for my Rolodex. I have some really senior people on from some significant companies, and I get to chat with them and learn from them as well as also throwing ideas at them. It's also great for networking, not just for myself, but also for helping these companies with intros because 150 episodes of the Climate, 380 episodes of the Supply Chain one, I know a lot of people in the space.

And so very often I'll say to people at the end of the recording, oh, that's cool. Have you ever talked to Person X in a similar space? I imagine if you talk to them, you'd have some good synergies. So it's really handy for that kind of thing as well. And like I said, for learning, because I'm always learning the supply chain podcast, just to clarify on that, because it used to be called the Digital Supply Chain Podcast until the start of this year, and I decided then for a number of reasons to focus it in on just sustainability. So now, instead of being called the Digital Supply Chain podcast, it's called the Sustainable Supply Chain Podcast, where every episode talks about some aspect of sustainability in supply chain. I focused it in on that for a couple of reasons. One of them was sustainability has been a lifelong passion of mine.

And since at least 2006, I've been working at the intersection of technology and sustainability from 2016 to 2022. For example, I was a VP supply chain for SAP, and I was working there as well at the intersection of technology and sustainability. And I realized that the digital supply chain podcast was too broad in its focus. So for example, if you were warehouse manager and you were subscribed to the digital supply chain podcast, I might have an episode on warehousing once every four months. And the other, whatever it is, number of episodes between those four might be on planning or might be on manufacturing or something completely irrelevant to someone working in warehousing. And so the stickiness of the podcast wasn't great. People would unfollow now, it was doing well, it was getting 10,000 downloads a month kind of thing. But still, I felt I could do better. So I figured if I focused it in on an individual topic, that would make it more sticky. And the topic I went for was sustainability, A, because I'm interested in it, but B, because towards the end of last year and the last kind of six months of last year, I noticed a big uptick in the number of companies approaching me wanting to talk about sustainability. And also, of course, the increasing regulation in the space means that's one the companies are becoming more interested in anyway.

Zach Peterson: Yeah, that's interesting that you say companies approaching you wanting to talk about it. I'm just going to be honest here. I'm usually a little suspicious when companies want to start being more vocal about it. I pay more attention to actions rather than words, and I get suspicious that they're just trying to appear to care. Do you get the sense that companies are actually caring or that they just want to appear to care?

Tom Raftery: It's a good question. And I guess the way I would answer that is the companies that were approaching me to talk about it were solution providers, not so much companies who had rolled out a sustainability initiative. And so obviously the solution providers want to talk about it because they want to sell their sustainability solution and get the word out about it. I haven't had a lot of episodes where I featured companies talking about successful sustainability initiatives, but the companies, the solution providers who come on are usually happy to talk about customers that have had successful initiatives. So in that sense, I think I get your point. There's a lot of fear out there about greenwashing, but I think that's starting to become less of an issue for a couple of reasons. A, it's easier to be found out now if you are greenwashing. B, if you are found out greenwashing, it has significant brand risks for you. And the last thing is not just does it have brand risks for you with your customers, but also here in Europe at least, there's now regulations which say if you're found to be greenwashing, you're in breach of the law and you can suffer consequences for doing it. Consequences in terms of convictions and fines.

Zach Peterson: That's interesting. I didn't realize that at least in the eu, I think here in the us, we're known for being less strict and it kind of ebbs and flows depending on which political party is in office. But generally we're less strict than the eu.

Tom Raftery: I mean, it's something that's going to be, I think it's one of these things where a lot of these regulations start in the EU and then they kind of trickle out from there and they start to be enacted in other geos as well. We've seen it with other regulations, the kind of GDP or privacy regulation that has started to trickle out and be enacted in other regions as well, the forced labor regulations, similar kind of things trickling out as well. There's a lot of initiatives like that that start in the EU and go from there. So I pretty confidently predict that that'll happen. There'll be anti greenwashing legislation and other geos as well.

Zach Peterson: So since you talked to so many interesting folks on your podcasts, I'm sure you have some insight into this next question. What are companies telling you about their approach to sustainability, specifically in terms of sourcing and procurement? And maybe you can look at this from the other perspective as well. What are solution providers telling you that their customers are

Tom Raftery: Doing in terms of sourcing? And it's a huge one. It's a huge one because when you talk about an organization's emissions in particular, between 80 and 90% of their emissions come from their supply chain. So if I'm an organization,

Zach Peterson: If I could just clarify real quick, when you say come from the supply chain, you mean like upstream from one of their suppliers? So they aren't necessarily doing the emitting, but they're procuring from someone who is, and so kind of by proxy they're actually emitting.

Tom Raftery: Yeah, I mean, if you buy parts to make something like a car, for example, and those parts, let's say you're making an EV and you buy a battery from a battery provider, the emissions associated with the manufacturer of the battery for that car are now embedded in the car, and they're part of the carbon footprint of that car, the manufacturer of that car. So that's what I mean by that. And so like I say, for most organizations, 80 to 90% of their emissions come from their supply chain. So if you are an organization trying to reduce your carbon emissions and you're looking at the electricity you use, you're looking at the fuels that are used in your vehicles or in heating your buildings or whatever, and you try and switch them or whatever it is, all of these projects that you do, all these internal projects that you do can only by definition effect 10 to 20% of your emissions.

It's important to get them down, but you still have 80 to 90% there that you're not touching unless you start working with your suppliers, unless you start making it part of your procurement strategy. And there are, to address the second part of your question, there are procurement solution providers out there who now allow you to look down through your suppliers and to choose your suppliers based, not just on pricing, not just on availability, but also on the carbon footprint associated with the goods that you're purchasing. So that can now be a filter, and it's a very effective one because if you have two providers providing the same whatever it is, let's say as a battery, again, in this case battery for your EVs, you look at these two providers more or less similar price, more or less similar availability, but there's a big delta in the carbon footprint.

Well, boom, straight away, which one to go for. Now, the other thing that you need to do as a purchaser, you should use this as an opportunity to work with your suppliers and say, listen, we've, we've been working together for X number of years, we've got a good relationship, but I notice when I compare the goods I'm buying from you with these other suppliers, you have a much higher carbon footprint and this is a problem for me. So can we maybe work together? I've got a couple of ideas on how you can bring your emissions down and become a more attractive supplier to me. I know some organizations, for example, are actually supplying their suppliers with the software to help their suppliers figure out what their carbon footprint is. I've even heard of one or two suppliers who are sending consultants on site. So if there's one big theme park organization in the US who are now working with their suppliers and they're sending consultants to their suppliers at the theme park company's cost, they're paying for it, but they're making sure that their suppliers are reducing their carbon footprint and obviously helping them to estimate it before they can reduce it.

Zach Peterson: That's really interesting. I have a vision in my head of this really only working between developed countries and probably not working so well between a developed country customer and maybe an emerging market supplier. I say that because in the west or in developed nations more broadly, we have the resources and technology and robust regulation framework and all of this to really drive that and enable that. Whereas overseas in a developing market, they're probably competing solely on price, and that drives them to produce things in maybe a way that causes them to produce more emissions than their customers might like.

Tom Raftery: That's a possibility. I wouldn't say it's a probability, and it would depend very much from developing country to developing country. I mean, many of, if you want to call 'em developing countries in latam, Latin America, for example, have low emissions because they source a lot of the electricity from hydro and other countries in the region are shifting quickly to renewables. So it depends, is the answer there. And in a scenario where companies are working with their suppliers very often, as I mentioned earlier, they'll supply the software to these organizations so that they can measure their emissions and report on them. And there's all audits that are done as well to make sure, because you can't just lick your fingers, stick it up in the air and go, oh, 42 is my emissions. No, it has to be auditable. And so the amount of transparency that's entering into supply chains these days is increasing, I hate to use the word exponentially because it's an overused term, but it is increasing at an incredible pace, shall we say.

And so it's going to be harder and harder for organizations no matter where they are to be able to not report accurate data. The data they will be reporting will be increasingly accurate and auditable. A lot of it comes from the Alexa sensors. And if it's sensor related data right there, you can see where the data is coming from and you can test it. And that's right there. The other kind of thing is a lot of the companies who do the auditing or who are looking through their supplier base, for example, they'll have multiple suppliers. And if one supplier's data looks a bit different to everyone else, then that's going to raise suspicions. And then questions will be asked, and maybe it's fine, maybe there's a good reason for it, maybe, I don't know. Maybe they're in a country that is a high number of renewables, whatever it is. But at least if you're not in the right kind of area, if you're kind of an outlier, somehow flags will be raised.

Zach Peterson: The transparency and auditability part I think is pretty recent because people weren't talking about that so much until I think maybe the last five years or so. And now we have all the software solutions and hardware solutions to really enable that. Yeah,

Tom Raftery: Yeah. And the cost of sensors is cratering all the time. Communications technologies are getting better all the time. I mean, it's not just, when I say communications technologies, now I'm talking about the likes of the Bluetooth, the wifis, wifi seven is coming out now you've got 5G, and when I say 5G, you've got 5G for our phones, but you've also got private 5G, which can work within buildings. And then you've got, there's a company called Wire Pass based out of Finland, and they have a version of 5G, which is non telco. And for devices it, it's for sharing information between sensors. And they have a platform which allows thousands of sensors per square meter, and it's a peer-to-peer networking system, and it manages to transmit data without any collisions. It's very fault tolerant and low cost. So there's all these kinds of advancements happening in the iot space, which mean that more and more data is becoming available.

We're then getting the likes of the AI solutions, which are coming out. We've all heard about large language models, but there are lots of other kinds of AI coming out as well, which help us to analyze that data because if you have 10,000 sensors in a building, you're not going to be able to look through the output of all of those individually, manually. No. It has to go into some kind of a data lake, and then you run analytics on it, use different AI solutions to flag any potential issues. You have thresholds higher at lower thresholds if it goes out of boundaries and thresholds on any particular sensor. You want to know these kinds of things, kick off work orders, whatever it is. So more and more and more, oops, knocked up my earpiece More and more and more these are happening. And so it means, to your point, yeah, we are getting more data, more accurate data, and so it's getting harder and harder to hide any kind of issues that make you look unfavorable as a supplier to an organization. So this is all good because it means there's a huge demand now for companies to be giving their emissions data out their whole ESG data really, but their emissions data in particular. And companies are looking more and more down through their suppliers to a supply base now and choosing suppliers based on their carbon footprint or if not at least flagging the suppliers who have high carbon footprint and saying, okay, we need to talk.

Zach Peterson: One thing I'm wondering about all of this, and it kind of reflects back on, I guess the history of the idea of sustainability, especially as it's kind of been discussed in the media and more broadly, is what's driving the momentum for all this. So do you find that the momentum for companies to implement these broad-based approaches is due to the existence of robust regulation? Or is this movement in this day and age more organic altruistic, voluntary sustainability, especially I think here in the US it really gets politicized and the people who complain about it always complain about regulation. But if people are just doing it because they care and they think it's important, the regulation is kind of secondary. So I'm wondering about that. And then are you seeing a difference between companies who serve the US market versus companies who serve the European market?

Tom Raftery: Again, good questions. There's not a lot of business out there who are altruistic. Let's be honest. It would be nice. It would be nice if there are a lot of businesses out there, a lot of the bigger businesses in particular who are doing best of breed in this space. But I would be slow to say it's for altruistic reasons. They might try and paint it as such. But really what it is, is it's about making sure that they're doing good business. And when I say good business, they want their organizations to be sustainable in the broader meaning of the word sustainable, financially sustainable, that the business will still be around in 20, 30 years. So they're taking a long view. Now, a lot of this has been kicked off by the 2015 Paris Climate Accord. I know it's nearly 10 years ago now, but that has had a slow ruling effect because companies as a, sorry, countries as a consequence have committed to reducing their emissions and companies work within countries and so are liable to those countries emissions targets.

If I give you an example, the EU has committed to reducing its emissions 55% by 2030. Now what does that mean? That feels really ambitious. It's incredibly ambitious. And just to give you an idea of how ambitious that is, because it could sound ambitious, but if you've nothing to compare it to, it's hard to say just how ambitious that is. But the 55% goal is against the 1990 baseline. And now since 1990, the EU has actually reduced its emissions 24%. So that leaves 31% to go in the next, just over five years, nearly six years. Yeah. Now, in 2020 when we shut down the global economy, the emissions in the EU dropped 7%. Then in 2021, when we started opening back up again, they went back up 5%. So between 2021 and 2022, we had a net reduction of 2%. In the next nearly six years, we have to drop another 31%.

So the scale of the ambition, but it's not ambition because this is a legally binding target on all 27 nations at the eu. So it's mandatory. So the scale of this project is enormous. Now it's achievable. It won't be easy. But we've seen, for example, in 2023, an enormous spurt in the growth of renewables in the eu in 2023, renewables accounted for 44% of the generation of electricity in the eu. That's huge. And that will keep growing. It has to something like the amount of renewable energy has to something like triple by 2030. That's the current goal for the eu, and that's just the eu. But there are other regions and geos with similar roles and aims, goals and aims. And so companies, as I said, operate within these spaces and are subject to the regulations of these region geos countries. And so they see the forward looking ones, see this coming, they know it's coming.

They know they're going to be mandated. So some of them are getting ahead of the game because if you wait until 2029, all the consultants out there will be incredibly busy, and you'll be lucky to snag one. And if you do snag one, you'll be charging. You'll be paying through the nose for it. Whereas if you start on this journey now, then you're ahead of the game. You don't have any reputational risk. And reputational risk is a big one. There's lots of stakeholders in this space. If you think, first of all, you have your customers, customers increasingly want to buy from companies that they think are sustainable, doing the right thing, not destroying the planet. Employees. Similarly, employees want to work for companies that are doing good. Nobody wants to work for Evil Corp. So there's that. If you are telling a good sustainability story and can show it and shore it up with data, if you have a good sustainability story, you will find it easier to attract and keep customers, and you will find it easier to attract and keep employees.

So that's both sides of the equation. It gets your recruitment and retention costs down, and it gets your costs of customer attraction down as well and gets you money from the customers. So right there, several good reasons, but you also have the likes of the investment community shareholders, the activist investors, all these kinds of people looking as well. And so the boards of companies are getting a lot of pressure on them now to make sure that the companies are being sustainable. But it's even more than that. It's the likes of the banks and the insurance companies are getting involved in this because banks have sustainability goals, as do insurance companies. And so if banks are lending to companies for sustainability projects, it counts towards the bank's own sustainability goals. Whereas if you have a project that will increase your carbon footprint and you're trying to raise money from banks, the banks won't find it attractive.

And so what you're starting to find is the cost of capital for these kind of projects is increasing for less sustainable projects and is decreasing for sustainable projects. So it's easier to raise money for sustainability initiatives, easier and cheaper than it is for non-sustainable ones. And similarly with insurance, the insurance companies have similar goals. And so insurance companies are, it's easier and cheaper to get insurance for projects that are sustainable versus non. So there's all kinds of stakeholders involved in this. And then there's regulations. As I mentioned before, regulations are becoming more stringent. I mean, the SEC are even looking at it and have been for at least a year and a half, nearly two years at this point where they've been talking about rolling out regulations. California is doing it, the EU has done it. The EU has also rolled out what's called the carbon border adjustment mechanism, which is basically a tax on goods coming into the EU from places where there's a high carbon footprint to kind of level the playing pitch for EU companies, which are subject to EU regulations around carbon emissions.

There's the EU one. The more recent bits of legislation, slightly sideways of this is the EU de forestry regulation. I'm not sure if you're aware of that, but what that says is if you are bringing goods into the eu, you have to be able to show that those goods, maybe it's so maybe it's cook cacao coffee, maybe it's meat. You have to be able to show that your purchase of these goods did not cause deforestation from the place you sourced them, and they did not cause any deforestation anytime between December, 2020 and now. So it includes historical data. You can't have caused deforestation wherever you sourced your goods in the last four years. And this kind of legislation, similar to GDPR and other kinds of legislation has serious teeth. If you are found to have brought in goods that caused deforestation, you can be fined up to 5% of your annual revenue, not your profits, but your global reported revenue.

Zach Peterson: That kind of penalty would be unheard of here.

Tom Raftery: Well, not really. The US GTPR is similar.

Zach Peterson: No, I understand. I am not disputing that. It's not real. I'm just saying a US regulation would not have percentage of revenue fines ever listed.

Tom Raftery: Yeah, yeah, yeah. But like I said, GDVR is similar, and US companies are subject to that as well. So it's a good model in the GDPR space, it's worked very well, and I fully expect it to work very well for deforestation and for emissions regulations and et cetera, et cetera.

Zach Peterson: I think one of the big issues that some, maybe they're not in the corporate world, maybe they're more in the political world, but it is a complaint about these kinds of regulations is that it increased cost and then the cost gets passed on to customers. And now we're living in an environment now where inflation has become a buzzword. And I'm not minimizing it. I mean, it's a real thing. You see it every time you go to the grocery store. You go to buy whatever new electronic device off the shelf or whatever it is. So yeah, you do see it and experience it, but it's become much more front of mind. And I think people who might want to complain about these kinds of regulations will point to inflation as a boogeyman or as a real consequence. Which do you see it as? Do you see it as a boogeyman or do you see it as a real consequence of these types of regulations? Or does it depend?

Tom Raftery: Maybe none of the above. Okay. Does it really Cause inflation is the first thing I would dispute, because regulations when they are rolled out like this are across the board. So it's a level playing field for all suppliers. Maybe it does push up the price for everyone. And this is a conversation I had with Ellen Carey, and she's the chief, can't remember her title I'm afraid, but it was a podcast I had recently. We were talking about the digital product passport for electric. Well, yeah, for batteries for electric vehicles. This is legislation that's coming in as well, which requires manufacturers of electric vehicles to be able to show where the materials in batteries were mined and how they were mined the carbon footprint of them, whether it was forced labor, et cetera. You have to be able to show absolutely everything about every single mineral that's in every single battery in every single vehicle you produce.

It's called the digital product passport, and it follows the battery from the digging the ore out of the ground through to the manufacturer of the battery, through to the end of the life of the battery. And I raised this with Ellen because she works for a company whose name escapes me. She works for a company and they provide software to the manufacturers to be able to produce this information, this digital product passport. And she said, look, Tom, yes, it does raise the cost of the vehicle about roughly three to $4 per vehicle, but it means that these vehicles, A, it means that they're now able to show this information, which makes them, in many cases, more able to apply for grants. Because some grants that are given to manufacturers or to dealers to sell the cars are based on them being able to show that the battery is produced sustainably. And in that scenario, it opens up grants, which can mean a reduction in 500 or a thousand dollars per vehicle or more. So some of these subventions that vehicles get are based on being able to show this data. So if it costs $3 per car, if it pushes up the price $3, but means the car is now able to grab a subvention of a thousand dollars anyway, if it's three, $3 increase on a $20,000 vehicle, who's going to see that

Zach Peterson: 300% ROI

Tom Raftery: And the other? Of course, the flip side of it is the real issue is this is making sure that we're costing in externalities, which up until now have been ignored in order charging for pollution. That can be, or we're making sure that pollution isn't taking place in the manufacturer of these devices, which would otherwise cause these externalities like polluting areas, hospitalizing people driving up healthcare costs, et cetera, et cetera. So the extra money that may go into the manufacturer of something because of these regulations is saving a lot more money in other places.

Zach Peterson: Yeah, that's interesting because I could imagine that tracking all of that data if it were done manually, would cost quite a bit, and of course gets passed on to the consumer, but as soon as you create those requirements, you almost invent a market for a technology solution to come in and streamline all of it and really make it a drop in the bucket cost like you in the example that you just brought up. Exactly.

Tom Raftery: So

Zach Peterson: Then it really does become an opportunity for other businesses to come in and create a solution that, yeah, they got to charge for it. But if they're spreading that software solution across the cost of let's say millions of electric vehicles, then it gets down to the three or $4 impact that no one's really going to care about.

Tom Raftery: Yeah, exactly. In fact, I mean that example with Ellen I gave, there is a perfect example of that. Another one that I came across was a company called EO Live, that's the letters EO and then the word live. And the EO stands for Earth Observatory. And what they do is they use satellite photography photographic data, and they had this solution in place, which they still do, where they were working with the likes of utility companies to manage power lines, make sure that there was no trees too close to them, so they were keeping them safe similarly with railroad tracks and things like that. Great, really interesting stuff. But when the EU forestry regulation legislation came up, they went, oh, we could do this. And so they've built onto their platform because they have historic satellite data. So the requirement to show that there's been no forestry caused back to December, 2020, they can show that they literally have the satellite data for the world going back previous even to December, 2020. So they can say, where are you getting it from? Oh yeah, here's what it looked like for the last three years. And so similar kind of thing, it created the regulations that the Dior regulations created this new market for, this new platform for companies to be able to say, yes, look, there are the pictures absolutely no deforestation, or, oh, maybe we better do something about this. It looks like we cause a bit of deforestation. We need to report that. We need to work around it, do whatever else is required.

Zach Peterson: That's interesting. Extremely interesting. So one of the big issues in the electronics industry, specifically around sustainability and environmental regulations, et cetera, is PFAS restrictions. So for those who listen to one of our podcast episodes with Kelly Scanlon from I-P-C-P-F-A-S is Forever Chemicals, and they're used in the manufacturer of electronics and all sorts of other products, and probably some of the other components go into your favorite electronic devices. So what I'm wondering is, are companies talking to you about this and are there parallel development of PFAS regulations in Europe versus the us?

Tom Raftery: Yes and no. So I was waiting to see if you're going to try and tell me what the PFAS is actually short for

Zach Peterson: Google IT folks.

Tom Raftery: If I remember correctly, it's par and poly fluro. No,

Zach Peterson: It's per and Polyflor alcohol Substances.

Tom Raftery: There you go. Okay, I got most of the way good on you. So there is not as much surprisingly legislation in Europe around the PFAS chemicals as there is in the us. In fact, it's coming. But the US is actually ahead of us in this one, which is interesting, and it's great to hear. It's concerning to me that the US is ahead of us. It's not that it's a race, but we should be at least equal to the US in terms of where we are with that legislation from memory. The US has put a limit, for example, on the amount of PFAS, I guess we call it in drinking water. And that limit is at something like 50 parts per trillion PFAS.

The legislation in Europe is at 500 parts per trillion. So as I say, your drinking water there in the US is 10 times safer than ours for these forever chemicals. But it's one of these things that a matter of time, it will be regulated here too. And because it hasn't been regulated as much here, maybe that's why I've not heard as much about it on the podcast to date. I haven't heard people talking about it yet, but obviously it is one that is coming up and needs to be talked about because the health implications of these forever chemicals are pretty nasty. And so yeah, we want to be making sure to try and make, stop them being forever chemicals essentially, because they are everywhere now. They're in water, they're in soil, they're in animals, they're in our blood, et cetera, et cetera, and we want to get the concentrations down and get them out

Zach Peterson: Maybe a few days less than forever. Chemicals find a good replacement.

Tom Raftery: Yeah, yeah. Literally a good replacement because so many times you hear legislation talking about this particular chemical is bad, we've got to find a replacement, and then they find a replacement, and it turns out that replacement is worse than the original one. So we got to watch carefully see whatever we're replacing it with.

Zach Peterson: So you brought up something interesting here, which was that companies aren't really talking to you about it because as you mentioned, the regulation in the EU is not necessarily advanced as far as maybe it has in the us. So I guess this just brings up a good summarizing opportunity here. Where does all this sustainability drive and compliance really begin in the supply chain? Is it always upstream at the producer level once you start to get robust regulation? Or is the better driver customer demand? People want to know that what they're buying won't create major health problems for them or their children or their families or whoever else.

Tom Raftery: It's both really, isn't it? It's not an either or. It's both. So regulation is important, and we do need more of it, not less to make sure that we are requiring companies to report on all these things. Otherwise they'll get away with what they can get away with. And that's never good. And also, I mean, we are seeing a rise, particularly in younger people of awareness around these issues, and therefore people are starting to become very, they're starting vote with their wallet. They're starting to say, okay, no, not going to buy that one because their reputation isn't great for sustainability. Whereas this other competitor I've heard, they're good. Now, a lot of this is still in the realms of what I just said. I've heard they're good. What we also need regulations around is labeling. So here in the eu, and I think it's similar in the us, you have labeling on food for nutritional value.

So you can see on any food, you can compare the amount of carbohydrate, the amount of salt, the amount of fiber, protein, fat, et cetera. And they're all per 100 grams here in the eu, probably similar in the us. So you can look down through the packets and compare side by side. There's going to be something similar happen for sustainability. So you will, in the not too distant future, be able to pick up two items, not just food items of whatever, and say, okay, this one has a carbon footprint of X, its competitor has a carbon footprint of two x right there. I know which one I'm going for. So that is going to happen. They're already initiatives in place around voluntary reporting of that. I know for example, I use oat milk in my coffee. In fact, I use oat milk for everything. I don't use dairy milk.

And on the cartons of oat milk, I get it's from a company called Oatley. It says on the carton it says, this carton caused the production of 45 grams of CO2, so it's 45 grams CO2 per liter of oat milk. Now, the issue for me about that is that it's great that they say it, but I can pick up a similar liter of cow milk and it doesn't say anywhere on it what the emissions associated with it are. So I have no frame or reference. I don't know if that 45 grams, CO2 per liter of oat milk is fantastic or it's horrific, but

Zach Peterson: Well, here's another point to that, right? If the next one says 90 is 90, okay too, right? They can both be really low and double. Nothing is still nothing.

Tom Raftery: Yeah, yeah. No, true, true. It's until everyone is mandated to report that and you can cross compare, then you'll be able to make informed decisions. And that's coming too

Zach Peterson: Well as all of this develops, we'd love to have someone like yourself who is in touch with all these issues back on the podcast to discuss this because this is just, I think one of those other areas of supply chain and manufacturing that I've tried to make a commitment to learn more about. And I hope our listeners will as

Tom Raftery: Well. I know a good podcast you could listen to find out.

Zach Peterson: Well, like I said, we'll link to it in the show notes, and we hope some folks will come over and check out both the Climate Confident Podcast and the Sustainable Supply Chain podcast.

Tom Raftery: Zach, thank you so much.

Zach Peterson: Thank you so much to everyone that's out there listening. We've been talking with Tom Rry. He's an independent technology and sustainability consultant and host of two podcasts, the Climate Confident Podcast, and the Sustainable Supply Chain podcast. If you're watching on YouTube, make sure to hit the subscribe button and you'll be able to keep up with all of our podcast episodes and tutorials as they come out. And last but not least, make sure to check out the show notes and don't stop learning. Stay on track, and we'll see you next time. Thanks everybody.