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KP Unpacked
KP Unpacked explores the biggest ideas in AEC, AI, and innovation—unpacking the trends, technology, discussions, and strategies shaping the built environment and beyond.
KP Unpacked
Sustainability's New Business Frontier
In this episode of KP Unpacked, KP and Jeff explore a vital but often misunderstood role in today's C-suite: the Chief Sustainability Officer (CSO). As the corporate landscape evolves, sustainability leadership is increasingly becoming strategic rather than just regulatory. KP shares why today's CSOs must transcend traditional compliance roles, mastering cross-functional expertise from finance to marketing to operations if they want to drive real enterprise value—and perhaps one day, rise to the role of CEO.
Jeff and KP also reflect on the pressures CSOs face, the growing importance of business resiliency, and how sustainability intersects with corporate performance metrics. Plus, a sneak peek at future guests and exciting events on the horizon for KP Unpacked!
Tune in to understand how sustainability can shape the future of your business strategy.
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Welcome back to KP Unpacked. My name is Jeff Eccles, I'm a senior advisor at KP Ready Company and this is my opportunity. This is my weekly opportunity to sit with KP Ready, our CEO and founder, and say hey, kp, I saw what you posted on LinkedIn. What were you thinking when you posted that? What was the inspiration? Why are you stirring the pot like that? Why did you have that to say? I am joined, as always, by KP Reddy, like I said, our CEO and founder. We're going to get into it today. So, kp, welcome. Glad you're here today.
Speaker 2:The real answer of why I stir the pot is I don't have hobbies.
Speaker 1:Stirring the pot is your hobby.
Speaker 2:It is my hobby, yes.
Speaker 1:There you go, if I don't do it on LinkedIn.
Speaker 2:I'm doing it to my grown children, so you know they appreciate that I'm expending that energy on social media and not at them.
Speaker 1:For the listeners out there. Stay tuned because I'm going to bring KP's grown children on to an episode in the future and ask them about that comment right there the invitation. I'm typing it right now as we speak.
Speaker 2:Torture your kids. It's good for them.
Speaker 1:You heard it here first. That's going to come up in your presidential campaign, by the way. Yeah, sure, maybe you stir the pot to stay warm. How cold is it right now?
Speaker 2:in atlanta.
Speaker 1:It's like 12 degrees in atlanta, georgia okay for no reason yeah, as as we record this, it is very cold. Uh, I'm in indianapolis. It's colder here in indianapolis than it it is in Atlanta, but we won't get into that. It should be it's January. It should be cold here.
Speaker 2:You made that choice.
Speaker 1:I do make that choice every day, and it's snowed, or maybe still snowing, I don't know in Panama City.
Speaker 2:Florida, panama City, that's in Florida, the Gulf.
Speaker 1:Here we are it's snowpocalypse. I'm sure that's on the news somewhere down there.
Speaker 2:By the way, we renamed the Gulf of Mexico to Gulf of America. And then it gets snow. I'm just saying.
Speaker 1:That'll be another episode coming soon.
Speaker 2:That'll be on Twitter spaces.
Speaker 1:Follow us on TikTok. That's where you'll find that recording.
Speaker 2:That's where you'll find us?
Speaker 1:Yeah. So, as usual, we have selected one of your LinkedIn posts and this is a little bit of a preview for us and maybe we'll talk about that, maybe we won't, but I think this is a super interesting post. It's gotten a lot of reactions, it's definitely timely and it sort of sets the stage for some of the things that we're rolling out, but also, I mean, what we're seeing and what you're seeing across the AEC industry. So let me read it first and then, as usual, we'll go back and we'll unpack it and we'll see what was the inspiration behind this. So, as we're recording this, you posted this about a week ago, about five days ago. So if you're looking for it on KP's LinkedIn feed and, by the way, if you don't follow KP, you should on LinkedIn. It's just KP ready R-E-D-D-Y. You can find them there. So you must've posted this about, say, the 17th of January 2025. For those that are listening, in 2030, you can go back five years andTO CRO and so on. That's a whole lot of C's and O's.
Speaker 2:Yep, the C-suite's no longer a suite, it's an event.
Speaker 1:It is. It is an event.
Speaker 2:It is, it is an event.
Speaker 1:It's general admission. Don't tell them that I feel like I'd be playing Wordle at this point. You go on to say one of the roles that is purely strategic is the chief sustainability officer. The other C-suite positions can be judged on a quarterly basis. For the chief sustainability officer, their impact on the enterprise value of a business beyond compliance manifests itself as intangible value. The chief sustainability officer of the future has to build multifaceted competencies beyond what they have to deliver shareholder value. It's interesting times. All right, let's unpack that. So the chief sustainability officer is the only purely strategic C-suite or C-party or C-event, whatever it is we're calling it. Tell me about that.
Speaker 2:Yeah. So I think if you look at some of these other new C-suite additions, right Like, let's just say, the chief innovation officer, the chief innovation has one hand in IT and creating operational efficiencies very measurable, very measurable KPI driven metrics, and then maybe they have some future. Look into here's new businesses we can build, here's some new ideas, but there's some anchoring around. No, we're creating value by creating process improvement et cetera. Chief strategy officer, they get their like KPI driven metrics around growth metrics, around acquisitions, like MA stuff, like that corporate development et cetera. So there is like a EBITDA impact, there's a growth impact to the business. So they all have their foot into something else.
Speaker 2:I think when you look at a chief sustainability officer, compliance isn't, you know, it's not a revenue opportunity, it's not even a process improvement opportunity. In a lot of cases, in most cases, it's really just, it's just regulatory right, it's just a defense mechanism. So you're quickly like in the overhead space, you're the GNA of the C-suite Sure, and so that's just a tough place to be. So when I look at great chief sustainability officers, not only do they understand some pretty deep technical aspects of sustainability. You know, if you're the CSO at Coca-Cola, you probably have some core competencies around water and water sustainability, because 90% of a bottle of Coke is water right, so you might have some deep competencies, technical competencies and plastic.
Speaker 2:And plastic, right, right, exactly Like you're probably studying microplastics and water. You know like that kind of thing, right, right, exactly Like you're probably studying microplastics and water. You know like that kind of thing, right. So I think you might have some deep expertise, but then you really have to build these other competencies. You really need to understand marketing and sales and finance and all the other functional areas of your fellow people in your C-suite in your C-suite, because if you have to let them understand you and sustainability and what the impact is, they'll just never get there, right? The CFO if you want the CFO to self-interpret the sustainability strategies and translate that into an income statement and a balance sheet, you're just going to be overhead. They're not going to understand it, they're not going to spend the time. So it's really incumbent on a CSO, a chief sustainability officer, to really understand. Hey, here's what my CFO does. Here's what our math is. As a business, if you're a public company, you better know the Ks and Qs better than anyone on the C-suite other than the CFO, maybe probably better than the CEO, because you're fighting for relevancy. So if you think about that, when you look at that and then you look at marketing, are you going to expect marketing to interpret what it is you're doing to support the messaging? Probably not. You know, if you're the chief marketing officer at IBM, do you know anything about the sustainability strategies? Probably not. Are you focused on that? Are you focused on brand awareness, lead generation and all the things that the CMO of IBM should be focused on, right?
Speaker 2:So I think what it really drives is the next, the leveling up of a chief sustainability officer to really understand the other functional aspects of the business really well and translate their work product into those areas. If you're a public company, when you're living quarter to quarter, how are you relevant in the quarterly reports and not just the annual reports, right? So what are the things that matter on a quarterly basis that you're reporting and communicating? Well? And I think that's just where I don't think you can say you know, in my world, every business should have some sustainability function, right? Even if you're, you know, using the little airline feature when you book tickets to track your carbon output or whatnot, or you know, just at a minor level, it may not be someone's job, it's definitely some level of awareness around it. And then I think, as you scale up and you actually need a chief sustainability officer. I think there has to be some strategy how it fits into the core business, and I think there's a huge gap there. I think it's a huge gap there.
Speaker 1:Yeah, yeah. As you know, I spend a lot of time, or am spending a lot of time right now, talking and working with David Rachelson, who was the chief sustainability officer at Rubicon. He teaches it at Georgia Tech. He advises a number of firms on sustainability and growth. In fact, I think David will probably be a guest on this podcast on a future episode here before too long.
Speaker 1:But one of the things that David talks a lot about is basically a new definition of sustainability. You know what is sustainability? He's focused on resiliency. He's focused on the business case. What is the business case?
Speaker 1:You talked about it a few minutes ago the regulatory, the compliance side, as you said. That's going to be overhead and David is pushing hard on the idea of changing that. One of the things that he said actually today, as we were talking, was we usually talk about carbon first, which speaks to the regulatory, the compliance piece of it. He says we need to talk about carbon last. Here's the business case, here's how we're going to do these things and how we're going to make our business better. And, by the way, the, the result of this is going to be the, the carbon. You know, the, the, the meeting, meeting the regulations and and complying as as we need to, as we're required to. So it'll be interesting as David and I unpack some more more things around this idea, but I think what you're saying is exactly right. You know he's talking about hey, we need to change this. You're saying we need to change this and giving us the historical perspective on how it's going to work. He's going to answer the call perhaps.
Speaker 2:Yeah, I think there's also something you know. In one of our previous topics we talked about ambition and if you look at the C-suite, there's only one CEO right If everyone in that C-suite. If everyone in that C-suite has the ambition to be the next CEO, right? You see them come from the CFO, right? If it's a business that's highly finance-oriented, like maybe a Bank of America, maybe the next CEO is the CFO, right? That's where they pull the next. If it's an operational business like a UPS, the COO might actually be the next CEO.
Speaker 2:If it's a marketing-driven organization like Red Bull or something it might be the CMO right. So you have to ask yourself like that If you have the ambition of a chief sustainability officer, your ambition is to be the CEO of your company or another company? What is that path right and what all do you need to know and what? How do you really communicate well and understand the math right? So this is where I understand when I say the chief sustainability officer of the future really needs to understand every functional group in the business and how they are relevant to it. That is the only way you go from chief sustainability officer to CEO is if you're able to really position and prioritize that. And I think you know David's a great example.
Speaker 2:You know Rubicon was a startup and so his role at that startup was probably way more critical than maybe the chief sustainability officer at Georgia Pacific right, because his strategy understanding that's what drove their business model.
Speaker 1:Right, yeah, that's a good point too. Yeah, that was their business model.
Speaker 2:Right, yeah, that's a good point too. Yeah, that was their business model Right right.
Speaker 2:He had to understand everything. He couldn't just say, oh, I'm going to sit here and go to conferences and hear about the latest sustainability stuff. He had to translate everything he was doing into how does this affect revenue, how does this better serve our customers, which is a unique place to be, you know, is this the chief sustainability pick on Coca-Cola. Is the chief sustainability officer of Coca-Cola saying how does this drive revenue and how does this impact create value for our customers? I don't know. Is their CMO doing that? Absolutely.
Speaker 1:Right, yeah, right, yeah, I. I mean my, my gut is no, they don't. But uh, I don't know how well informed my gut is on on that particular. You know I, they're, they're probably looking at the impacts of supply chain and and labor and things like that. Um, but I don't know, you know, I don't, I don't know how deep they they get into it. Um, you know to your point there. So if you, if you look into your crystal ball or your tea leaves or whatever it is that you use to predict things, I don't know I've never asked you that question on here here. Um, how long is it before the, the chief sustainability officers, the, the trend maybe in chief sustainability officers rises to? You know what you're saying I.
Speaker 2:So you know, if you read my, my posts, I'm not a political person. I am like I'm too little of a player to have a dog in the hunt, so to speak. You know around politics, right, I'm just more from this idea of like, oh, this is what the narrative is. We have to be ESG because that's what people are saying, the narrative in the market and you're seeing it with DEI, right it's. I'm just reporting the news, y'all. It's not I don't have a position per se, but I think ESG is going to fall under that realm of DEI where it's like why are we doing this? And so I think a lot of the chief sustainability officers, I think, are really at risk of existing at their company, right? In other words, oh, we did this because that's what we were told to do.
Speaker 2:You know, we do a lot of work for Microsoft, and maybe you're a consulting company, do a lot of work for Microsoft, and Microsoft is kind of virtually signaling out ESG, and so for us to do great business with Microsoft, we're going to have a chief sustainability officer so we can at least tell them we have one. We may not be able to tell them, like, what it is we're doing, but we're going to definitely tell them we have one to continue to do business with them. And then what happens? When Microsoft says I think it goes one or two directions right, they say, hey, it's not important anymore. I doubt Microsoft would say that my friend happens to be the chief sustainability officer of Microsoft, so I doubt Melanie would ever say that.
Speaker 2:But I do think there could be a digging into help us understand the key metrics. It's not good enough for you just to say we have a chief sustainability officer. Help us understand how that better serves us, better serves the community. So I think there's a digging in. It's not just going to be window dressing. So I think either some organizations will end up getting rid of these positions because their customers aren't mandating it anymore, or some of their customers are going to double down and say no, no, we need to actually understand better what you're doing. And so there's a doubling down that now you know the chief sustainability officer has to. I said you know, knuckle up, so to speak, be ready for the fight.
Speaker 1:But, but to the point it's, it's not gonna. It's not all going to be customer driven, isn't it Isn't part of it. You know, similar to what David is saying. You know it's going to be business driven. Right, it's focusing on resiliency in terms of climate, whatever you're producing, et cetera, but also resiliency in terms of the business.
Speaker 2:A hundred percent Right. But that you know, if you think what is resiliency, as you know, if you think about the intersection, what's the Venn diagram, you have chief sustainability officer, right, and then you have what the COO, the intersection of those two, that Venn diagram, is resiliency, right.
Speaker 1:So it's like, what are we going to?
Speaker 2:do when shit happens? Right, it's kind of a deal. And you know, I've I've been very vocal. I'm doing some stuff in southern california right now where it's like, hey, we've got a plan better from it. You know, civil engineering brain kicks in. I'm like, hey, how are we designing things this way? Like, are we going to rebuild stuff in southern california the same way they were built in the first place? Because this is not the last fire. Everyone, right, we know this is the ongoing continuum of what we're living with. So, to your point is well, there were businesses that were impacted 100%. Right, there were businesses. There was economies impacted. They're talking about the unemployment going up because a lot of these businesses aren't going to come back, right, right. So I do think that if you think about the intersection of chief sustainability, you know the chiefs, the CSO and the COO, that's resiliency, that's, that's that intersection they have have Right yeah, yeah and yes, and one inform in the other certainly.
Speaker 2:Right, but if you don't as this chief sustainability officer, if you don't understand the operations, almost as good as the COO.
Speaker 1:You're irrelevant, right, right, yeah, because the decisions that you make around sustainability you know the way that we operate the materials, you know, etc. Etc. That's, that's an extra really tied to the operation side. You can't, you can't have a wall between those two, absolutely not. You can't have a wall between those two, absolutely not. Okay.
Speaker 1:So the LinkedIn post that KP and I have been unpacking again, if you're listening to this in the year 2030 and you're looking back five years, look around January 17th or so for this post 2025. The C-suite has expanded from CEO, cfo, coo to roles like CIO, cmo, cso, cto, cro and so on. One of the roles that is purely strategic is chief sustainability officer. The other C-suite positions can be judged on a quarterly basis. For the chief sustainability officer, their impact on the enterprise value of a business beyond compliance manifests itself as intangible value. The chief sustainability officer of the future has to build multifaceted competencies beyond what they have to deliver shareholder value.
Speaker 1:It's interesting times, All right. Kp and I have been unpacking this. We do this once a week. We come together. We've thrown out a few things here and there. You are going to start to hear from some more future guests and things. I've got to get with our producer, ethan, to understand that schedule a little bit better in terms of the, the publishing, but but keep your ear to the ground. We're going to have more topics, we're going to have more discussions, we're going to have more guests, but they're all always going to be around unpacking these posts from kp and and really I mean selfishly, this is my special time to sit down with kp and say what were you thinking? We unpack these. So until next week. Thank you for joining us.
Speaker 1:In the meantime, we have a few things coming up. We have a depending on when you're listening to this, in February we have a one one day in-person mastermind event coming up where our mastermind members we have masterminds, mastermind groups for um innovation leaders, which you know some of them are on that list the chief innovation officers, director of innovation. Our uh construction technology leaders. Also our early and mid-career AEC professionals group. They'll all be there. Some of the folks that are focusing with us on startups and investing will be there. Some of the folks that are focusing with us on sustainability will be there. Phoenix, february 25th you can go to kpreadyco slash events to find a link to learn more about that event coming up, so keep an eye out for that, and always check the show notes for things that KP and I have talked about.
Speaker 1:You can find links to those, and also our producer, ethan, has started to produce publications for each of these episodes, so you can find sort of a companion article. I'll call it.
Speaker 1:I'll probably I think we're also on the youtube, right, so people can do comments we are on the youtube, so you find us over there and uh, and yeah, you can, you can comment. You can, you can agree, you can disagree, you can do whatever you want over there in the comments. It's social media. So it's still the wild, wild West 20 years later. Yeah, find us on YouTube. You can find short versions, you can find longer versions, but that's a great way to to to find more content that we produce. And, of course, on LinkedIn, follow KP. Kp ready R-E-D-D-Y. Connect with on LinkedIn. Follow KP K-P-E-R-E-D-D-Y. Connect with him. Connect with me and love to have you as part of the conversation and our ecosystem here focused on the future of the built environment.
Speaker 1:So, thanks for joining us today. We'll be back again next week. Who knows what we're going to unpack next week? You're just going to have to show up and find out. Maybe it's a new party, maybe it's something different. So, kp, thanks for joining me today. As always, it's great to have this conversation. I'll see you again next week.
Speaker 2:All right, thanks, jeff All right, Thanks everybody.