This interview has been edited for brevity and clarity. See the full interview below.
Xiao Du is a sustainability professional working in Switzerland. She is currently working as a sustainable investment analyst in an investment management firm. She has worked on corporate sustainability and sustainable business management in various industries including fashion, food, materials and consulting.
This interview was recorded on January 9, 2020.
Fiona Martin (FM): Okay. Welcome. We’re welcoming XD today to The Eco-Interviews. Xiao is a sustainability professional in Switzerland. She’s been working in sustainability for over 10 years now. She currently works as a sustainable investment analyst in an investment management firm and she’s worked on corporate sustainability and sustainable business management in various industries including fashion, food, materials and consulting. So welcome Xiao. Thanks for being with us.
Xiao Du (XD): Thank you for having me, Fiona.
FM: Yeah, I’m excited to speak to you because, just full disclosure Xiao is my sister-in-law. She is married to my brother and so I’ve known her for quite a few years, but I’ve never had the opportunity to really speak to her about what she does in the sustainability field. Xiao is very much in the industry aspect, so I’m really interested to learn about it, because I think it’s something that’s behind the scenes. It’s certainly not something that I understand how large organizations or corporations view sustainability. So I’m excited to get started on that. As someone who’s worked in sustainability for over a decade, how do you view environmental issues and sustainability?
XD: Sure. Let’s start to clarify these concepts. For environment, I think we have a better understanding. It’s air, water, land, natural resources, all these things around us in our life. Sustainability is more abstract I would say, and also very broad. It depends on who’s talking about it. So it could mean many things. For example, the United Nations set sustainable development goals and that’s for the world, for the countries, right? So countries wants to pursue sustainability for their nation, for their population. And when a company is talking about sustainability, they are talking about corporate sustainability. When investors talk about sustainability, they talk about sustainable investment. So these sustainability are all different. Some are bigger, broader. Some are more specific.
In general we would say sustainability is a big umbrella. It has three pillars, economic, social and environmental. So depending on your position and your scope, then you narrow down to more specific issues. Here are my personal thoughts on this. The environmental part is part of sustainability, because there are social issues or governance issues. Some problems are global, and some are local or smaller scale. They can be more known or unknown by different people while they all contribute to human health and life. Also issues are interlinked. And that’s why it’s also complicated when we try to tackle some issues, and we really have to think about the whole context and also think about a solution with the context and goals in mind.
FM: So I mean it sounds like to me the big, like if we zoom back, it’s just a very large, like you said, sustainability can mean things to many different people depending on who you’re talking about and what maybe the end goals are. You know, economic sustainability could be very different from environmental sustainability. Correct?
FM: And so if we look, if we zoom back, and again, even different industries have different levels of sustainability and what they consider sustainable. And you’ve worked in actually quite a few different industries like food and fashion, materials. Is there any particular industry that has more or less sustainable issues in terms of environmental sustainability? So in terms of the impact on our natural environment and the knock on effect of human health, and how do you approach that within these industries?
XD: Sure, if we talk about environmental issues, we often think of those companies or industries converting raw materials to products. They deal with natural resources, consume energy and they produce physical products. So those industries tend to have larger environmental impact. The environmental impact could be on water, on land use, on air quality or biodiversity.
But I also want to mention a lot of industries are indispensable. For example, steel industry. We need steel for our houses, our roads, our buildings, and our cars. So it’s hard to criticize them to create the environmental problem because we don’t really have an alternative. That’s only environmental issue. And nowadays we have more technology industries. And these companies also have sustainability issues. It might not be environmental, but it also falls under corporate sustainability, for example, human capital management, intellectual capital management, cybersecurity or product stewardship or ethics. So they also have problems to deal with. Maybe it’s not as obvious as environmental pollution, but it’s also crucial for human and our society.
FM: Okay. And is there a particular industry that you were… Like looking at that industry in particular, were you surprised at either the sustainability issues or is there an industry that we consider to be maybe a bad guy on the scene, but in reality it’s not as … Or they’ve moved further down the sustainability line. People, for example, we always we think about environmental sustainability and coal fired plants or carbon, fossil fuels. And we also think about fast fashion. That’s certainly got a lot of notoriety right now. Are there any industries that we consider to be big bad players, but they’re actually moving in the right direction? Or is there like an underlying industry like you mentioned the technology industry that we might not even think about?
I know, and this might not be what you’re talking about with, but part of the technology industry is the inclusion of preprogrammed obsolescence that we have to continue to get rid of our devices because they’re programmed to not be working. You know, we buy a laptop and we know that we’re going to have to buy a new laptop in two or three or five years, they don’t build it to sustain. So is there anything in there that you found interesting that maybe the general public like me wouldn’t even be aware of?
XD: Sure. I would give two examples. One is chemical industry. You might think of chemical production as polluting, energy intensive or material intensive, but chemical industry contributes to energy efficiency, contributes to more sustainable products, because we need these chemicals. For example, if you have solar panels, if you have wind turbines, you need that certain materials to function or to increase the energy efficiency. And that comes from the chemical industry.
So on one hand, the traditional chemical sector is very energy intensive. They are burning gas, coal, but they also produce products which contribute to better quality of life and also better environmental footprint. And the other example I would say is the technology sector. We might not think of, for example data center. Now we all use iCloud or data storage and companies have to build bigger and bigger facility. And these data centers actually consume a lot of energy. And they also emit a lot of carbon through energy consumption. This might be something we don’t think about when we need so many high resolution photos or videos. Another would be Amazon. Amazon is also in the technology sector. It deals with packages so it has a lot of footprint in shipping. That means trucks or even airplanes transporting these packages. And that’s also a lot of energy and carbon involved.
FM: Yeah, that’s interesting. So like the data centers, I imagine the energy cost in terms of warehouses full of servers that needs to be kept at 60 degrees or something ridiculous. I never even thought, see that’s so interesting. And that’s why I’m enjoying speaking to you, because it really is things we don’t think about. I have been aware of the Amazon issue because I think Amazon makes it so easy to buy something. But in reality you don’t know where it’s coming from. So it takes me two minutes to buy something very small that might be shipped from Malaysia and in reality could I have found that tiny thing in the store in my town, instead of something that’s so easy. So very interesting things to think about. So recently, or I mean in your professional experience, is there … How do companies usually approach sustainability? Tell me a little bit about that.
XD: Sure. I would say each company is different, but if you are in one industry, you certainly understand what is the concern of your industry. And the company usually define their priorities by themselves. They could do it just within the company. They could also do it with different stakeholders, including the external stakeholders. I mean, the idea is company cannot do everything. So they might define the top three, top five or top 10 priorities.
And they would link the sustainability priorities to their products or services where it’s valuable for them and where it’s urgent for them and what makes the company stay competitive. And what is the regulatory risk they face and their potential risk in the market. So all those issues would come down to a few priorities they want to tackle. That’s the first step.
And then they have to understand how they are doing now. And that means they have to collect data and information about their operation,their supply chain, and their products. For example, if it’s a fashion company, it has an actually quite complex supply chain and they have to understand where their raw materials come from and how the shipping is really working for the company. And then how their production is and also how their garment reach their customers. So if you want to understand energy, it’s a lot of time and efforts to understand the whole supply chain. And you do the same for water, for chemicals or for carbons.
Some can be measured. If you have your water bill, you know how much water you consume, but for carbon you have to estimate it. So the company has to understand their current status and then they would set some goals, find space where they can improve, try to optimize and improve their products and operations.
FM: You mentioned when they’re setting their priorities that something they have to take in mind are regulations and I know you’ve worked in multiple countries. Right now you work in Switzerland, that you’ve worked in the United States. Do you see the regulations that governments either internationally, like the UN or nationally like the U.S. or Switzerland as being a primary driver of business sustainability priorities?
XD: Yes. A lot of pressure is coming from regulations. For example, the EU is thinking about single use plastic directive. So that would ban a few kinds of single use plastics and also regulate companies to collect and recycle a certain amount of plastic packaging and also use a certain amount of recycled plastic in their products. So this is definitely something a company has to follow and yeah, different countries have different approaches and they also have their different priorities for what they really want themselves.
FM: Can you speak on Switzerland or maybe the EU and whether they are, let’s say strong in making environmental regulations, or weak? It seems from the U.S. that the EU is a little bit more motivated to put regulations on business than the U.S. is. But that is simply an outsider’s point of view. I’m not sure if that holds water or not.
XD: I guess it really depends on the industry. It also depends on the countries. Even the EU has an idea or they want to implement a certain directive. It’s also up to each member country how they want to implement it. And also I would say each country has its own demographic or geographic, how do you say? Set up, so it’s hard to say which one is better. For recycling it is more efficient in Europe in general, because you have higher population density, but in the U.S. with a larger state, with just two, three million people, it’s hard to make it work. You have to think that the energy you spend or the fuel you spend for the trucks to collect these recyclables might not be worth really the reduction of impact.
FM: Yeah. So would you consider Switzerland progressive in their energy targets, whereas in the U.S. right now, what we’re seeing happening behind the scenes is the rollback of regulations. They’re stripping the powers of the Clean Air Act. They’re stripping the Clean Water Act. So we’re like regressing in that sense.
Is Switzerland following that same trajectory or are they being more progressive? I was just sent an article that said that they switched off one of the nuclear power plants in Switzerland. It seems like there’s an anti-nuclear movement that’s happening and that Switzerland might be going no nuclear by 2030 I believe. Is that the case?
XD: I’ve heard some voting or debates on nuclear also carbon neutral discussion in Switzerland. There are different voices. I think I saw, I’m not 100% sure, Austria is going carbon neutral by 2040, but Switzerland is not sure on that. But I will say Switzerland is quite strict on environmental pollution in terms of discharge or emissions and all this stuff. And Switzerland is a very small country and it’s quite homogeneous in terms of population and economic development. In general the environmental development is quite high.
FM: Yeah. It’s certainly very clean. When we were there it was beautiful clean streets and we enjoyed swimming in the beautiful lakes, very like incredibly clean, just amazing. But you are, in terms of industry and sustainability, you are currently working in investment and this seems to be something that I hear about more and more is sustainable investing. Can you explain what that is, and whatever you feel is appropriate to share in regards to that industry?
XD: Sure. Sustainable investing, it’s an investment philosophy I will say. It has different approaches. For example, we often talk about three types of sustainable investment. One is exclusion, one is integration and one is impact investment. So exclusion means that you don’t invest in certain industries or companies, for example, tobacco or weapons or alcohol. It depends on what investors’ value is.
And integration means when investment firms make investment decisions, they integrate the sustainability criteria to evaluate companies. In investment we call it ESG criteria, environmental, social and governance criteria. And the methodology can vary depending on the investment firms. Some do ESG rating or other ESG rating agencies do ESG rating for companies and investment firms could just use the rating to invest or investment firms do their own research on companies and looking at how the companies perform in sustainability issues. And then they invest in a company they believe which have good sustainability performance.
And impact investment basically means investment to create some kind of environmental or social impact, specifically combating some problems. For example, gender issues or climate change or energy issue. It’s a term which includes many things depending on how the investment professionals practice in this area.
FM: It’s very interesting. In the last Eco-Interview I did with Mel Smith from England, she was talking about the Divest Parliament Campaign in the UK where people are asking the Parliament to divest pension funds from fossil fuels. So we’re seeing, that to me sounds like a certain strain of sustainable investing. I’ve also heard that individuals can change their investment portfolio away from fossil fuels or other things that you mentioned that are sustainable, like gender issues or LGTBQ issues could likely be involved in that as well. People who don’t want to invest in businesses that have a poor reputation when it comes to human rights or whatever it may be. Do you think that this change in investment is driven by grassroots, the people’s demand? Or is the investment industry seeing this trend and being progressive in it? Or I mean, it might be a mixture of both, I’m not sure.
XD: I would say it’s a mixture of both. Some investors holds certain values so they believe they shouldn’t invest in certain areas. On the other hand, investment professionals also believe that company who can do well in sustainability are more competitive in the long term so they can be more financially successful as well, because they are more competitive in terms of their product, service or operations.
FM: Do you see the investment industry as being maybe a silent driver to promote sustainable products and energy production and everything that can go into it? You know, as I’m thinking, like say in the early 1900s the fossil fuel industry benefited off of subsidies from the government, which they still receive today. And so how is that a competitive field if sustainable energy doesn’t get the same leg up? Would private investment or investment of public funds be a way to combat that?
XD: Yes, definitely. I think the investment industry decides where the money goes. So if you send the money to the company who can solve the problem, that certainly helps with progress and also creates more pressure on companies who are falling behind. I think it’s also a way to ask company to communicate their efforts and their strategy on how they want to contribute to the sustainable development.
FM: Nice. Are you optimistic, with having worked in the investment industry, that it’s going in the right direction in terms of promoting sustainable businesses and products?
XD: In general, yes. I think people are trying to improve methodology, to collect more valuable data and also to make more valuable decisions, investment decisions. But on the other hand, since the area is booming, so it’s also attractive to people who just want to use the term sustainable investing as their marketing strategy. So definitely it’s difficult at the moment to understand what an individual firm is doing. So for the public, when you buy a product or you invest on your own, you should learn as much as you can and always try to be critical on the decision.
FM: That’s a very interesting point. Something that I see as well that sometimes is called green-washing, where you slap a green label on something, and you, as a sustainable professional who has been brought into businesses to actually look at their supply chain, so you are certainly an expert in understanding it. It is very much harder for an individual to maybe look behind the curtain but even understand the full implications of the supply chain. So in terms of green-washing, let’s see, how would you advise an individual, like what would be the main things to look for in order to understand if a company’s intentions are true or if they’re just slapping a label on something?
XD: I think if you are interested or concerned about a certain issue or topic you should definitely get educated. Where and how you gather your information and knowledge is important. I would suggest to go on a few official websites like U.S. EPA, U.S. DOE, FDA, U.S. DA. There are lots of information on certain issues, for example chemical safety or plastic waste or energy consumption, climate change, carbon, all these things.
They have easy to understand information and it’s better than reading random news articles, because you learn patchy things. And also some articles might not be good either. I would say rely on some information that you can trust and then also ask questions. For example, when a company says, “Oh, we have this new packaging, it’s recyclable.” You can just look at your town or your county’s waste collection website and see, can you really just put it in the bin? Are they really going to be recycled? Often the case is no. So I think you have to be critical and not blindly just follow what they say. But it is difficult and I think it takes time to really understand more and more.
FM: Excellent. Well that is interesting. I just watched an episode of Rotten on Netflix, which is a documentary series, and it was exactly about recycling and spoke about how, at least in the U.S. they label the recycling 1-6 and people assume that you can recycle all types of plastic. In reality, there’s only two that can be recycled and there’s no guarantee that even if you properly put it in the recycling bin that it will be recycled. And I agree that it’s something that consumers have to educate themselves about and be aware that there are lots of sneaky ways to confuse us and that is intentional, unfortunately. So final question, and maybe this all ties together. In your opinion, what would and what can an individual do to improve the environment or promote sustainability in their life?
XD: Sure. I think we’ve talked about, the first thing is to get yourself educated. I mentioned relying on some trustworthy source for different issues. The second thing is you can always check your town and your state website. For example, California also has a very clear rule how companies can label their products. Like biodegradable is not allowed in California. No company can put biodegradable packaging on their products, because there’s just nowhere you can really degrade them. Because either they go to landfill, they cannot degrade or they go to incineration plant, they just get burned, right? So check with your town. You can always ask them questions, “Where is my waste going? What waste is accepted, what is not?” This is about waste, but if you are concerned about water or air, you can always ask them. And that’s the first thing. Get yourself educated.
I think a lot of things are related to our life and it is good for you to know them too. And second I would say to consume less. When you want to buy something, just think about whether you already have something you can use. It’s not there are a million things there and you have to have. When we think about let’s say 10, 20 years ago we didn’t have this and that and life wasn’t so different, right?
I would say the third thing is to influence others. If you are a conscious person and you want to make larger impact, then try to educate or help others. If you can recycle, then you can help other people recycle. If you can consume less, you can also help other people consume less. Those are the simple things yeah I can think of now.
FM: Those are great. Those are definitely three action points that I think everyone can do and I appreciate that and I very much appreciate you taking the time and giving us like an insight into industry and sustainability and how large it is. I know this has been a huge part of your life and I think sharing these things with people opens minds and also creates conversations about things that we never even thought about. I know that 10 years ago I wasn’t thinking about the way I consume and the packaging and all of that. And so as I grow and educate myself, it opens new doors and for us to all be more mindful and to do our little bit, hopefully to help save the habitat that we’re in and help save people and longevity. So I appreciate it Xiao.
FM: Well, I’m going to let you go and you know, best of luck with everything in Switzerland. We’ll be keeping an eye and maybe we’ll check in later and see how things are going in the sustainability industry. If there’s been any major changes, we’d love to check back in with you. So thank you.
XD: Thank you too.