Interviews with industry leaders

In this interview series we get a first-hand glimpse at the changes industry leaders are making and discover what they’re learning from other Heroes across multiple categories.

Gary Bramall Chief Marketing Officer, Zoopla

1. Can you tell us a bit about behaviour changes in the property industry?

It’s interesting to look at things that are getting press right now like virtual viewings - which are certainly growing during the pandemic and which might encourage people to view properties more efficiently and with lower climate impact. But ultimately, this is a trend that has not exploded at scale yet. If you actually look at the property market in total, less than 2% of the population are actively considering buying a home at any one point. So people interested in virtual viewings is a tiny subsection of that small percentage. For us, what’s really interesting is thinking about a more sustainable housing market - in the economic and ecological sense.

That’s because the main problem - and opportunity - in the UK property market is around supply. There’s a shortage of quality properties in the UK. The government has tried to introduce tax and partial ownership schemes to incentivise people to get into the property market and make it less attractive to own buy to let properties, but the problem persists that there’s just not enough places to go round. It’s partially because we’re a small island and geographically constrained, but also because housing reforms at scale take time. Having over 10 different housing ministers in as many years also slows down radical transformation. So we need more new affordable and sustainable homes.

2. What can be done to drive more sustainable choices?

In the last five or six years there’s been a real change in the architectural standards that builders have to abide by. This is definitely a move in the right direction. In Scotland, the government is consulting on potential legislation that before homes are sold they need to meet a so-called minimum energy standard. It’s their push to ensure the whole housing market plays its part towards moving the country to being a low carbon economy.

At the individual level, I think people are beginning to understand more about environmentally conscious buildings - the idea of conscious construction.

There’s so much information out there about the CO2 emissions from steel production, and heat from concrete. People are becoming more and more interested in the impact of their properties and the decisions they can make to improve the sustainability of build methods. The key is to get this sort of thinking working at scale across the property sector, rather than it being left up to enlightened individuals to put pressure on their builders. It’s something we think Zoopla can help with too in terms of celebrating and raising awareness.

3. How do you see the role of Zoopla in driving the change you’d like to see?

Zoopla can play a role in educating people on things that matter to them. In terms of education, we have a huge amount of data. We understand things like where the most demand is right now and the population’s travel patterns. We can predict with a huge amount of accuracy where the next ‘Shoreditch’ will be. We get lots of research around people and their weird behaviours in regards to their homes. Most people who are buying a home (84%) will buy within 10 miles of where they currently are, and 42% of buyers already know the road they want to live on. But people do think deeply about changing homes. Many do drive-bys of their dream house and will even knock on doors to speak to future neighbours. It’s crazy, but 40% of people who buy new homes were actually against buying them before they entered the property market. Given how deeply emotional - and heavily researched - choosing your home is, we can be a voice for more sustainable choices that benefit individuals and communities.

4. Who are other ‘Zero Heroes’ you admire?

It used to all be about company purpose. The thing is, purpose is great but it has to be about utility; what real actions you’re carrying out to improve the community. An example of a brand walking the talk is Levi’s. I hadn’t realised how water-intense the making of jeans was. Levis educated me on this. It’s great when brands can teach customers something new. Across their site they now score their jeans according to environmental impact, and provide information about how water is being consumed. Some jeans are zero water and they use laser technology to etch this information into the jeans. Brands that look at ways to slow the fashion cycles should also be celebrated. Depop is another interesting example - celebrating the curation of clothes as a mode of self expression. They support sellers to create and craft their identity, in a sustainable way.

Kate Weinberg & Sarah Booth Group Sustainability Director; Director of Retail Brand and Marketing, OVO

1. Do people still need lots of persuading to change their behaviours - and energy suppliers?

With respect to energy, the problem isn’t resistance to change, it’s more a lack of understanding around the impact of energy consumption - which is 26% of the average person’s carbon footprint.

If people understood that - and understood that the first step that they can take is to choose a greener energy supplier - that would have a huge impact on our carbon emissions.

Another challenge that we wrestle with is that energy marketing has collectively given people the impression that you just swap your energy supply and that’s it, you’re done! But actually, it’s the start of a journey. The more that people understand that, the more they’ll make the changes they need to and be more conscious. But nobody changes something they don’t know about.

2. On the ‘people don’t change what they don’t know about’ point, do you think that the framing of sustainable living is going to change post-pandemic? Or is it still going to be about carbon footprints and kilograms of carbon?

If brands don’t recognise the new context that people will be living in, they are going to look completely out of touch. So absolutely, there’s no question that we will all need to reorient how we communicate.

What’s also quite stark is that this isn’t a traditional recession, where there are parts of the population that aren’t too affected. Significant financial hardship is going to happen to parts of the population that haven’t really experienced that before, and that will fundamentally change how you need to market - especially when it comes to more premium offerings.

Our challenge is to understand how things are changing in people’s minds and what their priorities are, so that we can communicate in a way that feels right to them.

And we know that people are open to living more sustainably. Google just released an interesting stat which is that in the last 90 days, the search for ‘how to lead a sustainable lifestyle’ has increased by 4500%. So there is definitely a willingness from people to put less pressure on the system and to understand the impact of what they’re doing, which is very encouraging to see.

When you think about this changing context, you’d have to be crazy to just go ‘OK, we’ll turn our marketing back on, same thing as before’. People will just be like ‘where were you?’ So we need to think about how to reintroduce narratives we see as important around decarbonisation, whilst being mindful of what people are ready to hear about.

This break in economic activity has driven people to ask ‘what are we going to do differently now?’ - in everything from policy planning, to messaging, to values. I think it gives us a real chance to build back better. There’s also a hashtag #BuildBackBetter that’s gaining traction - challenging us all to develop systems, economies and policies that can help us all withstand crises and be more resilient.

3. How do you believe your brand can help people to do things better?

OVO launched in 2009 to make energy cheaper, greener, and simpler. We now have nearly 5m customers, we’ve planted well over a million trees, and we’ve set our sights on driving progress to net zero carbon living .

Last year we defined our strategy for the next ten years. It’s called Plan Zero. It sets out how we will transform the business to achieve our net zero carbon targets, how we’ll use our voice to change what the government and the sector are doing, and finally, how we’ll change member behaviour. It’s very much about trying to lead by example and take our members with us.

And at the end of last year we launched a new product: OVO Beyond. OVO Beyond is built on the idea that easy, small liveable actions can add up together to make a big difference to our impact. We think of it as a decarbonisation programme for the home. It nudges you through little actions along a pathway to a long-term decrease in your carbon footprint. We have aspirations to grow it and make it more engaging and interesting - just as other functional industries have done - where people get interested in things that they’d historically not be bothered with, like banking and Monzo. That starts to mobilise people.

It’s a very good example of our overall approach to things, which is to bring our members with us. We want to give them understanding through education. We want to help them see their impact and feel like they’re part of something that’s greater than themselves. And then there’s the action piece, and that’s where our products and services come in - to give people actionable, practical things to do.

4. Who else do you see as a ‘zero hero’ that other brands can learn from?

Sustainability has always been very ‘left field’ so I always admire the brands that make it not only desirable and cool, like Tesla, but who actually make it normal. A cult brand will only get you so far. But Burger King making vegan burgers normal? That’s not an environmental thing, it’s an offering. It’s mainstream. Or Greggs with their vegan sausage roll. It’s very different from your green ecowarrior brands - with potentially much bigger impact. It’s exciting to see all sorts of brands getting involved with really powerful changes that can infiltrate the heart of culture, not just the edges.

Ulrike Decoene Group Head of Communication, Brand and Corporate Responsibility, AXA

1. What are the negative consumer behaviors that exist within the insurance and asset management sector? What could AXA do to nudge positive behaviour?

First it’s important to say that when we look at negative consumer behaviour in our sector there is actually no such thing as ‘bad behavior’ - because the sector itself does not have a negative externality. We don’t pollute a lot and we’re not draining the resources of the planet, so it’s more about us being able to influence behaviors that aren’t directly linked to the purchase of our service.

Where we’ve had the most impact in nudging more positive and virtuous behaviours has been in the health insurance sector. We found that one of the ways to stay aligned with the interests of our customers was to really engage them with ways for them to have a healthier lifestyle, which then aligns with our own interests because we’d have less claims to pay. One red line we would not cross was to link this more positive behavior to payment premiums. I think there are very few markets where something like that would be found to be socially acceptable. Let’s say for example, if you quit smoking and are going to reduce your premium, that’s something that is socially very risky. So we focus less on premiums and more on other mechanisms to encourage people with advice, insightful expertise, and maybe some additional benefits such as access to gyms or nutritionists.

We have explored how to nudge positive behaviours on climate change and the environment especially on the insurance retail side. At AXA we’ve looked at tying premiums to, for example, car usage, fuel consumption, etc. These are things that have been tested and experimented with which we could further explore. However, the issue for us is that there has been no correlation so far, that demonstrated the link between local consumption and insurance risk. So for example, SUV drivers don’t have more claims or more accidents than a driver of a hybrid car. And so this is an initiative we could take, but there is no rationale that would make it a global rule for the sector.

So, to your question, across our industry, I would not say the majority of companies are practicing this and trying to nudge consumer behaviour.

However, partnering with the government, NGOs and larger commercial customers we’ve really seen that the decisions that we’ve taken in the past on underwriting restrictions linked to climate change and coal production have really had an impact. Applying the twin pressures that we can exercise through underwriting and investment restrictions, we have clear proof that this is really encouraging an increasing number of clients to move away from that sort of production.

2. And is there anything you think that your sector could do with larger SMEs to nudge them to change their consumer behaviour?

Fundamentally decisions we take must be rational. The decision we took not to underwrite coal anymore, and not to invest in it, was a rational decision because on top of being harmful, those assets are going to be stranded and the businesses are going to incur the federal backlash difficulties. So obviously, we don’t want to be associated with that. We need that clear correlation between risk and environmental impact. For larger SMEs, we do have prevention services that we call risk consulting - advising SMEs on avoiding certain risks that are tied to wrong behaviors when it comes to pollution or environmental impact. But as I said, this is not inherent to insurance underwriting, as this is additional risk consulting and prevention we offer.

3. Do you have any plans in your asset management division to extend nudging behaviours - beyond your coal and tobacco divestments - say like into less-dairy or vegan eating?

On the asset management side it has been more straightforward for us to nudge our clients. After having divested from coal and tobacco, we did start talking about sugar. The percentage of people dying from this is significant, because they have diabetes or because they’re suffering from obesity, and really underlines how harmful sugar is, and how important it is to tackle. But the balance is you don’t want to end up in a place where you harm the economy, jobs etcetera. So we have to think: How can we continue driving change, but in a way that is still sustainable for employment, for growth? Seeing the social crisis we’ve gone through lately, it makes you think about all the daily struggles of low income workers in society, and this is not something you want to exacerbate. So we are focusing less on additional sectors which could make for more exclusion, and instead looking into conditioning some of our funding to invest in companies that are really going to transform the business model into a more sustainable one. We haven’t planned to start with food services but are focussed more on the industrial side and transportation.

4. Beyond consumption, are you looking to do anything with respect to climate change exposure, such as flood risk?

Yes, we have all our risk consulting teams who are advising large corporates on their exposure to any sort of natural disaster, and how to mitigate their risks. In several countries, we also work with governments to define a prevention scheme to better protect some areas and incentivize people to create the right settings in their homes or even factories. This is directly linked to the level of risk which means you’re going to see more insurance companies do it as a general practice and not only as things to do for reputation.

5. Who do you see as a Zero Hero? Who is pushing the envelope and trying to nudge behavior?

Yes, there are plenty. One thing that makes things more complicated is over the past 12 months, there has been a huge amount of companies committing to all sorts of targets and goals.This means we don’t know what is what anymore. We shouldn’t be impressed at a big bank commiting to reducing their carbon. For me this should just be standard. We need to fight against this indiscriminate commitment, which could end up in a lack of credibility of the private sector.

To keep this credibility, governments, the media and NGO’s probably need to work together to really discriminate what is a strong commitment. What is a game changing commitment that is really going to drive profound change, probably force the whole sector to follow. So, for example, when we divested from coal, the pride we had was not about being the first ones to do this, it was the fact that we managed to really drive that change in the industry. It was the fact that a few years later, we saw that this was a general trend of the insurance sector, therefore our impact was much bigger.

So for me, the brands that are Zero Heroes are the ones that are having impact on business models in a sustainable and profound way, not just something that you can do on the side. When I look at that, there are two brands that have been really amazing. So firstly, Microsoft, who announced it’s not only making a commitment for the next 30 years, It’s also cleaning up what it’s done for the past 30 years. I think that’s extremely interesting, coming from a brand that is an organization that is at the core of one new concern, the carbon footprint of digital and data.

I also think some brands in the oil and gas industry could be Zero Heroes. Like Shell, for example, who are taking really incredible commitment in terms of decarbonizing energy production in a way that is extremely serious, robust and systematic. So, for me, I would nominate these two as Zero Heroes, for different reasons. But I think in both cases it’s something that is really embedded in their vision and so it can really drive a change in their business and operating models.

6. Given the current crisis with Covid - when do you think climate change is going to go back on the agenda of organisations?

I think there’s definitely a risk of seeing the momentum slow down. I mean, everybody’s really suffering right now and so it’s somehow understandable that governments are pouring money into the economy and are looking at very short term solutions.

What I think should give us more confidence is the fact that this will not distract companies. I see an overwhelming majority of leaders from the corporate sector raising their voices and reminding us not to forget our climate agenda. So this for me, proves that this agenda is now really very, very embedded in the thinking of many business leaders, which is good news.

But I also think that the way this pandemic has hit the world has really shown the reality or the world’s unpreparedness and lack of coordination. Just look at how one unexpected threat can really knock down economies and societies on their knees. I think there’s a lot that unconsciously links to what could happen with climate change, the threat has become very tangible based on this [Covid] crisis. So I think the emergency that arises from the economic crisis will surely distract some stakeholders, and so it’s up to us in the private sector to make sure we don’t lose track of that agenda.