Transcript Summary
In the interview with Stefan Pagacik, he shared valuable insights on sustainability in the cosmetic and wellness industries, emphasizing its financial and environmental benefits. Key points from the discussion include:
- Sustainability as a Business Advantage: Stefan highlighted that sustainability is not only the right thing to do but can also improve a brand's bottom line. Consumers increasingly prefer brands that align with their ethical values, leading to stronger loyalty and market differentiation.
- Waste Reduction and Efficiency: He stressed the importance of reducing waste and improving operational efficiency, such as through better inventory management, eco-friendly packaging, and energy-efficient production. These practices not only benefit the environment but can lead to long-term cost savings.
- Support for Sustainable Practices: Stefan urged businesses to speak up and promote sustainable practices in their workplace. He also recommended getting involved with sustainability nonprofits, such as Habitat for Humanity or the American Sustainable Business Council, to gain practical experience and contribute to the cause.
- Plastic Waste: He discussed the alarming impact of plastic waste, particularly in marine life, and the potential health hazards associated with it. Reducing plastic waste is seen as one of the most pressing environmental issues of the 21st century.
- Engagement with Nonprofits: Stefan suggested that individuals interested in sustainability should explore nonprofit organizations and foundations focused on environmental initiatives. This could include volunteering, serving on committees, or supporting sustainability projects to build both experience and community impact.
Overall, the interview emphasized the need for businesses to embrace sustainability for both ethical and financial reasons, encouraging practical actions and involvement in wider sustainability efforts.
Stefan- 2024/11/20 13:51 EST - Transcript
Attendees
Rachel Baker, Stefan Pagacik
Transcript
Rachel Baker: All right. Hi, Stefan.
Stefan Pagacik: …
Rachel Baker: about who you are and…
Rachel Baker: what you do.
Stefan Pagacik: so my name is Stefan Pagotek. I'm the CEO and co-founder of Empressa. We're a financial engineering and data aggregation firm that monetizes what we call tangible and intangible data and contributions. specifically focusing on climate and human performance and human performance. within that sector, we look at gender balancing.
Stefan Pagacik: and we try and help companies and the financial markets build a bridge to understand what the financial implications are for investing in climate mitigation strategies or human performance strategies that create a gender balance and what that looks like for the company in terms of their operating performance and for financial markets to get a better ROI for their financial products that a market under the ESG umbrella.
Rachel Baker:
Rachel Baker: So what are the most common sustainability goals that cosmetic companies set when they first reach approach you for assistance? you were talking about how at one point you could help save L'Oreal a bunch of money.
Stefan Pagacik:
Rachel Baker: So maybe just start talking about what with respect to the cosmetics industry and sustainability
Stefan Pagacik: I have to reach back into my memory banks there,…
Stefan Pagacik: Rachel, to try and remember. But I think where L'Oreal, Esteee Lauder and a lot of brands can save money and this is happening by the way in the fashion industry as well is looking at their supply chain. In other words, what materials are being used currently to create cosmetics and are those materials and ingredients safe?
Stefan Pagacik: are there chemical compounds that potentially could be hazardous in some way either from an environmental perspective where you have waste and that goes into landfills. Are those materials safe to go into the landfills? that's a consideration. The other part of it is what their supply chain is doing about measuring sustainability. And that can include everything from the mix of ingredients and how they do it. their labor practices, their transportation and logistics to get the final product mix to Estee Lauder or to L'Oreal.
Stefan Pagacik: And I think that cosmetic companies really need to pay attention to this because this has a ripple effect throughout our environment and our society. And there are ways to track this to understand which suppliers are abusing this and which suppliers are actually practicing in a safe manner. ways of putting together new formulas for these cosmetic companies to utilize in developing new brands.
Rachel Baker: so a lot of what you do is related to the financial viability of these various ab sustainability initiatives. So, how something I hear over and over again sustainability is all well and good, but you can't realistically sell a product that retails for $300 very easily.
Rachel Baker: So, how should brands create and…
Stefan Pagacik:
Rachel Baker: design products that are sustainable and still marketable and will provide a good return on investment.
Stefan Pagacik: Interestingly enough,…
Stefan Pagacik: while initially the trend toward sustainability had a high cost factor and you're right, that cost factor would be passed along to consumers and there was some initial push back on that. What people are finding out is that sustainability is for the long term is a really good way to go whether you're the consumer or the producer. And from the consumer's perspective, a $300 price tag 10 years ago may have been untenable. You just would have looked at it and said, "I'll pass. I'll go to somebody else."
00:05:00
Stefan Pagacik: however, if the company positions the product in a way that says, "We took great care in finding the right mix of ingredients and materials to make this product." And we did it all the way through our supply chain so that the product you're getting is not only good for you, but it's good for the planet. It's sustainable. So, when you're finished with it, even when you dispose it, it's not going to hurt the planet. It's not going to hurt us as a society. And that's an important consideration 10 years ago it wasn't. Today it is. And so consumers are slowly coming over to the fact that I'm willing to pay $300 because the product is going to be better for me. It's probably going to last longer from a cosmetic standpoint.
Stefan Pagacik: it actually may have, a longer staying power, and two, it's going to be better for the environment. So, I'm doing good things by purchasing this product. Now, I'm not saying that every product should immediately jump to $300, per bottle. it might work better for perfumes than it does for mascara. I don't know. You're asking the wrong person there. but there certainly is greater acceptance from a company perspective. What they need to do is to work on their marketing and to make sure it's authentic. Here's the big problem that sustainability is having right now. There's a lot of greenwashing that's going on. So, a lot of claims that companies are making are not factually true and they're being called on the carpet for it.
Stefan Pagacik:
Stefan Pagacik: and they're being fined for it. So, there are regulations and compliance in place. Especially for multinational cosmetics companies that are working in Europe, they have very strict regulations that they have to adhere to. They can't get around it. so they must play by those rules. And while it may be expensive in the long term, it pays off because it gives them a marketing and PR angle that other companies don't have. And they can use that and…
Stefan Pagacik: if they leverage it wisely, they stand out from the crowd.
Rachel Baker: So I was actually going to ask you about…
Rachel Baker: how companies should deal with brainwashing. how do you deal with it?
Stefan Pagacik:
Rachel Baker: How do you think brands should and how do you think retailers should
Stefan Pagacik: …
Stefan Pagacik: from a consumer perspective, it's difficult to the best advice I give consumers is to check on government websites that have regulations that are targeted to specific industries. and see what the latest news is regarding any company that potentially is under investigation, whether it's here in the United States or in probably more so in Europe than in the United States from a company brand perspective.
Stefan Pagacik:
Stefan Pagacik: Go ahead.
Rachel Baker: So okay,…
Rachel Baker: where do you go what websites are available? what can you research as a consumer?
Stefan Pagacik: You can research the Food and Drug Administration. I would go there. You can go to the Department of Commerce website. you can go to the Securities and Exchange Commission, the SEC website. But I would start with both the Environmental Protection Agency, and the Food and Drug Administration because those two agencies work in tandem often when they have a company that's either a company, a food processor, a cosmetics company, any company that is making a consumer product out of materials that could be considered hazardous to the environment or hazardous to
Stefan Pagacik: consumer, if we're consuming the product, we're wearing the product, we're applying the product that may have some detrimental after effects, the FDA and the EPA get involved and they want to know, how the company is going through its testing phases to make sure that it has clearly met all of the guidelines and sustain Sustainability guidelines are being added every month as more and more data becomes available to both these government agencies and to the companies too. they have to look at it. And to complete the answer to your question from a company brand perspective, from a greenwashing, you just have to drill down. If you don't know the data, don't publish it.
00:10:00
Stefan Pagacik:
Stefan Pagacik: Don't go out there and say, "Yeah, we have removed these chemicals or we no longer source from this supplier." If in fact you're getting something from that supplier's supply chain, you've got to make sure that you have done your due diligence on this. And if you don't know, don't publish.
Stefan Pagacik: That's sort of what I tell companies all the time. Don't go out there and say something that you don't know for sure you can back up.
Rachel Baker: Right. Yeah,…
Rachel Baker: that's good. what do you think the effect of the Trump presidency will be on the EPA and various bodies in the US in particular? And should consumers and…
Stefan Pagacik:
Rachel Baker: retailers be looking more at regulatory bodies in the EU and Canada as opposed to the US?
Stefan Pagacik: to answer the first part of your question.
Stefan Pagacik: I think that depends on the role if President elect Trump is serious about having Elon Musk with this government efficiency agency and I have no idea whether it requires legal approval from Congress. I've heard some people say yes it does. Others have said no. There's a way that Trump can get around it.
Stefan Pagacik: regardless, I think it's a foregone conclusion that the Trump administration is going to roll back everything that the Biden administration has done with respect to environmental regulations and legislation. The EPA itself will be cut and programs and funding will be reduced. I think the same it will be true for the National Institutes of Health, these other agencies have adjunct sustainability responsibilities and reporting and scientific research and all of that I expect to be cut because I just think that the Trump administration is simply they are committed
Stefan Pagacik: to reversing this. and so whether it's Elon Musk who does it or President-elect Trump or one of his, appointees, who knows? But the United States is for a rocky four years in terms of, not having the kind of oversight that we need and not having the commitment to sustainability. And from a retailer and consumer perspective, I think for some retailers, they're breathing a sigh of relief. I think they're happy about it. For others, they're disappointed because they've adopted sustainability, as I mentioned, as a marketing and PR engine for them to attract very high-end customers who have disposable income to spend.
Stefan Pagacik:
Stefan Pagacik: And I think from a consumer standpoint, it's really disappointing. and so, …
Stefan Pagacik: who knows? we don't know, but it's pretty safe to assume that a lot of progress that we've made over the last three and a half years is going to be rolled back.
Rachel Baker: Yeah. Yeah.
Rachel Baker: So we touched a little bit about brand value for why companies should adopt sustainability initiatives. Are there other kinds of financial reasons for companies to want to adopt those programs?
Stefan Pagacik: we look at it from a financial engineering perspective looking at the initiatives. So, if you have initiatives in place, what we'll do is give you the financial impacts of those initiatives. And if they aren't returning what they should return to you, we can help you look at the initiative to see what's missing, what potentially could help you strengthen the initiative both internally for your company as well as externally for your customers and supply chain. So that's really where we play. the financial implications really rest more with Wall Street.
00:15:00
Stefan Pagacik:
Stefan Pagacik: And again with the incoming Trump administration, I think that Wall Street and they've clearly signaled that they're happy about the administration coming in…
Rachel Baker: Mhm.
Stefan Pagacik: because I think they're going to pay less attention to it unless major investors call them on the carpet and say, "No, we want you paying attention to sustainability. we want you accounting for it and we want to know exactly what the return is going to be if we invest with you and so that I think is a trigger.
Stefan Pagacik:
Stefan Pagacik: I think another trigger obviously is regulatory and compliance, but again with the Trump administration, it's highly unlikely that that's going to come down the pike. But in Europe and in Canada, I think both of those regions of the world can make a difference and I think they will continue to push on it.
Rachel Baker: yeah.
Stefan Pagacik: I know in Canada right now there is a very strong push believe it or not in the energy industry to become more sustainable. And I actually sat in on a conference call with one of the leaders of the energy association in Canada who laid out a plan which blew my mind as to how aggressive they're going to be.
Stefan Pagacik:
Stefan Pagacik: So I applaud Canada for taking these steps. I think it's great. I think they're going to be a market leader in this area. and I think they're going to show the way for the United States and other areas of the world. U particularly China, that still is reliant on coal fired plants. as well as the EU.
Rachel Baker:
Stefan Pagacik: and there in their regulations and compliance is far stricter than anything that's happening in North America. and they're going to go at their own and I applaud them for it. I think it's great.
Rachel Baker: Yeah. in a low regulatory environment. would you say that that ultimately increases the value of brands that using really good quality ingredients aren't using toxic ingredients and…
Stefan Pagacik:
Rachel Baker: are acting in a way that's sustainable? Does fewer regulations actually increase the value of that in the marketplace. Okay.
Stefan Pagacik: Nobody's asked me that question and…
Stefan Pagacik: it's a great question, Rachel. I'm glad you asked it. yes and no. Okay. So, we know that as I've mentioned, the Trump administration will roll back quite a few of the regulations. this will make companies here in the US that have adopted sustainability principles much more valuable overseas.
Stefan Pagacik: they will be able to export and sell their products overseas because of this, especially if they do the due diligence to make sure that their reporting is not greenwashed, and that it adheres to European standards and benchmarks. The no part comes in and if the Trump administration imposes tariffs. If that is going to be their strategy, which every economist has said will have a blowback effect on the US, it will raise prices here. it will cause inflation to skyrocket. It will also hurt domestic producers because foreign governments will hit our companies trying to sell in their countries if the Trump administration hits them with tariffs. it's tit for tat.
Stefan Pagacik: So, if you're trying to sell into China, forget If he hits China with tariffs, you can forget about entering. It's hard enough to enter that market as it is. But if he hits them with tariffs, forget it. Goodbye. You'll have no chance. Especially if you're a small to mediumsize cosmetics or beauty company that's trying to expand your footprint worldwide. it's unfortunate. It's sad. the administration just doesn't realize that taking this isolationist stance only hurts our economy by not being able to sell into different markets and they're going to realize this. They're going to see it. it's going to hit them in the face.
00:20:00
Stefan Pagacik:
Stefan Pagacik: And a number of these companies are probably then going to offshore and that's going to cost America jobs. So, we'll Fingers crossed that it doesn't happen, but I wouldn't hold your breath.
Rachel Baker: … so shifting gears a little bit. how do you keep track of progress on sustainability goals? How do you measure sustainability goals? Okay.
Rachel Baker:
Stefan Pagacik: It depends on what goals you're trying to measure. So, if you're trying to measure your carbon footprint, there's a set of metrics that we have internally that we use. and basically we do it we measure them in two ways. Now, we actually measure them in one way, but we have two different silos.
Stefan Pagacik: So we have a silo of energy metrics utilizing fossil fuel and dirty fuels and we have a silo of metrics that utilize and measure and monitor green energy and sustainable renewable energy. And what we look at is the transition from dirty to green and we track the financial implications and outcomes of what that means.
Stefan Pagacik: so that's in the energy space that's just using scope one and scope two. there are other things like water usage. So the way to do that is to look at your water bills but also or to look for facilities that have lowflow water components. it's hard to find here in the States. It's easier to find overseas, but that's another way to look at it. Also, you can look at food and food consumption. So, if you're a company, you're looking at, what do you do with food waste?
Stefan Pagacik: how many of your employees eat out during the day if they're on site versus if they're at home and they're eating and what are they doing for food waste. So there are all of these different sustainability issues. There's gender balance, equal pay, equal responsibilities, gender performance program internal programming to ensure that minorities and diverse employees are given the same opportunities that their white counterparts are being given.
Stefan Pagacik: there are all of these different measures and you have to put a system in place to track the data. And like I said earlier, if you can't track it, if there's not a way to do it reliably and with assurance, don't do it until you figure out that way to do it. but sustainability data encompasses a wide range. it encompasses transportation. It encompasses heating and heating and cooling. if you have a data center and you are buying time in a data center that has to be accounted for because you're contributing to the use of fossil fuels and water for cooling. So part of that's your responsibility.
Stefan Pagacik:
Stefan Pagacik: And this gets complicated.
Stefan Pagacik: This gets complex and it gets difficult and there are ways to simplify it. but it really depends on the commitment that you're willing to make both from a resources perspective and a time perspective.
Rachel Baker: right? …
Rachel Baker: there's a lot of different KPIs that you can choose from. where do you usually start?
Stefan Pagacik: I usually start with asking, each department. I do it on a department level, Rachel, because I think there you can get a really good picture of how each department is functioning within the company. And then from there, you go out and look at the supply chain.
00:25:00
Stefan Pagacik: You look at what your supply chain is doing hopefully on a scope three basis but you set KPIs from everything from energy water usage, waste, pay scales, hiring practices for gender balance, human rights violations. It depends again on where you are in what country you operate in building decarbonization transportation how many of your employees use public transportation veus working from home versus coming into the office that of course has changed dramatically since the pandemic I like to break it down department by department so from marketing to sales to IT
Stefan Pagacik: to human resources because They all are, different. And then you use an overall, building functionality, cuz it doesn't necessarily come into each unit, but you can break it down by unit and see, how the consumption is going and in what areas are different units using green sustainable solutions versus, dirty solutions as I call them.
Rachel Baker: Okay. …
Stefan Pagacik:
Rachel Baker: are there critical sustainability KPIs that cosmetic companies should track?
Stefan Pagacik: And I think the first one is …
Stefan Pagacik: Pro product disposal packaging is a big one. What types of materials do you use for size of packaging, how do you distribute to the retailers? Do you have a transportation footprint? do you understand what that is?
Stefan Pagacik:
Stefan Pagacik: And if any of the ingredients could potentially be hazardous and could make its way into water systems or…
Rachel Baker: Right. so…
Stefan Pagacik: soil, and affect any kind of growth with whether you're in a big city or you're in urb or you're out in rural country. Wow. I could really visit a spa right about now.
Rachel Baker: what about pas? are there particular KPIs that spas should track maybe even easy things that they can do to help with their sustainability? mean there's reduction of or…
Stefan Pagacik: I'll tell you that.
Rachel Baker: or elimination of single-use products were available. there's looking at ingredient lists and…
Stefan Pagacik:
Rachel Baker: making sure that the products are biodegradable. There's also various organizations that can help as well. yeah.
Stefan Pagacik: …
Stefan Pagacik: the big issue that is the washing and cleanliness of sheets, pillowcases, things like that. reuse of materials in the actual performance of spa treatments. Right? So, I'm not speaking specifically of cosmetic spa treatments,…
Stefan Pagacik: but there might be some there. Again, I can't speak to that as a man. I'm sorry. that part I can't do. But for massage therapy, yeah, it's like do you dispose of half-used oils?
Rachel Baker: Okay.
Stefan Pagacik: if you use it on one client, do you dispose of it? That's not good. you've got to be able to find a way to set up a system where you can balance your ordering and usage so that you don't run out, but that you don't wind up throwing away a lot of the material, a lot of the oils and treatments that you're going to use. But I think a big part is water usage and making sure that all of the materials that you use, sheets, pillowcases, blankets, anything that takes up water and that has to be done every day, sometimes several times a day. that uses a lot of water. So for me, the number one KPI for spas, how much water are you using? Is there a way to use recyclable water?
00:30:00
Stefan Pagacik: especially if there are spas in places like Vermont or in Canada I'm sure I know of one in B okay that is near Lake Louise and you don't want to pollute that area it's gorgeous it's beautiful it's pristine so I think water usage from everything from jacuzzi's to rainwater showers and everything, they need to figure out a recyclable way to use the water because there's got to be a lot of water usage there. And I don't think it justifies the spy usage per client. I think there's an unequal balance there.
Stefan Pagacik: I can't prove it, but I just notice it myself when I've gone in to have a massage. I've seen that water usage is an issue. Exactly.
Rachel Baker: Yeah. yeah,…
Rachel Baker: with I mean the hot tubs and various so how do companies help make their supply chain more transparent and…
Stefan Pagacik:
Rachel Baker: and know is this ingredient going ethically sourced, right?
Stefan Pagacik: Yeah, this is the biggest problem right now,…
Stefan Pagacik: Rachel, for every company, cosmetics industry included. It's extremely difficult to find out and understand how the supply chain is sourcing these materials and these ingredients. there just hasn't been one standalone solution that does it because everybody's got a different dashboard. Everybody's got a different IT structure. And this has been the number one complaint I've heard from executives. It's like, we just don't know what's going on inside the supply chain. We can't get them to report.
Stefan Pagacik: The questions we're asking them are different than the questions that they're answering from their own reporting tools. We can't merge the two. We can't get validity and assurance on the data. All of these issues are still plaguing scope 3 and supply chain data analytics and reporting. And we're looking at it, we're trying to push it from a financial engineering perspective because we think that if we could show the financial implications of this, it will help the cosmetic companies and the retailers say, "Hey, wait a minute. I can't follow how you're sourcing this material, right?
Stefan Pagacik: it's incomplete and also it seems like it's really expensive compared to what these other two companies are doing. Why is that? So it basically opens up questions that forces these companies and these retailers to start paying attention to it and they start looking at it and they go okay there's an issue here there's a problem we need more clarification and more assurance and if we can provide that for them by stimulating a financial discussion and a financial impact we believe that will push the retailers and the companies
Stefan Pagacik:
Stefan Pagacik: to take action.
Rachel Baker: Yeah, cool.
Rachel Baker: So what role do third party certifications play in tracking sustainability?
Stefan Pagacik: You mean like GRRi and…
Stefan Pagacik: SASBY and those folks.
Rachel Baker: I was thinking Leaping Buddy Bunny or…
Rachel Baker: Fair Trade. Leaping Bunny is pretty common in the cosmetics industry.
Stefan Pagacik: I'm not familiar with Leaping Bunny, so I'll plead ignorance there. I am familiar with Fair Trade.
Rachel Baker: right.
Stefan Pagacik: I think that fair trade can be a contributor and a benchmark, but ultimately it has to come from somebody like SASBY, which is the sustainability accounting God, I forgot the last two something sustainability accounting standards board, which is Michael Bloomberg's baby GRRI or TCFD or any of the others. I mean, it's a whole alphabet soup of different benchmarks and standards. So far, no one standard has taken the lead. There just isn't one, it's like FINRA, you can't get around FINRA.
00:35:00
Stefan Pagacik: FINRA is the absolute arbiter of financial regulation for financial adviserss, wealth managers, they all have to comply. they're out. They lose their certification, then they can't provide financial advice or financial direction. We need that same kind of governing body. We need a government body to govern this. It's not going to happen in the next four years, but hopefully it will and they will take all of the different standards and figure out that a way to create that one standard. I know Europe is moving in that direction. and I hope someday that Canada does.
Stefan Pagacik:
Stefan Pagacik: I mean that the US does as well as Canada that we can all agree.
Rachel Baker: Yeah. I mean,…
Rachel Baker: we're about a tenth the size of the US, so I mean, it's kind of inconsequential. So,
Stefan Pagacik: But know what I disagree with that. I'd say we all need to join together big or small because look, it falls on all of us to do this. This is such a massive issue that we're dealing with and we've seen already in the last few months the consequences of what climate change is doing to us and it has a ripple effect through agriculture through housing.
Rachel Baker:
Stefan Pagacik: I mean so many different industries are taking a beating because of this.
Rachel Baker: Mhm.
Stefan Pagacik: So we really can't afford because you're going to have suppliers from Canada who are going to be affected by what happens here in the states.
Stefan Pagacik:
Stefan Pagacik: you just are, you won't get away from it.
Rachel Baker: Yeah. Yeah.
Stefan Pagacik: And so I say we all have to draw together. That's just me.
Rachel Baker: So circling back to some ideas that you were talking about, how you're talking about the need for a PR and marketing around the sustainability initiatives that a company is doing.
Rachel Baker: What does that look like? and how can companies do that marketing work effectively? are there good examples you want to share or
Stefan Pagacik: …
Stefan Pagacik: I think Stonyfield Farms which is here in Vermont in the States, does a great job, and the way they do it is they label their products and they show you exactly where it came from and how it was sourced.
Stefan Pagacik: forced. So I think if more companies did that, they would gain the trust and the traction that they're seeking in terms of customers and getting customers who will stick with them because that kind of brand loyalty doesn't go away. People truly appreciate it when a company is transparent in that way and I think Stonyfield Farms has done just a bangup job with that. another company that's done a really good job is Interface. They're a carpet making company. they use entirely sustainably sourced materials. Everything that they do from sourcing to manufacturing is sustainable and they've worked on this for 25 years doing this. and it's really a tribute to their CEO and visionary, Ray Anderson, that he saw this before anybody else even thought about it.
Stefan Pagacik:
Stefan Pagacik: and despite the crash in 2008, they have never had a losing quarter. They've always been profitable and it's because people know that they're quality,…
Rachel Baker: Mhm.
Stefan Pagacik: they're sustainable, their materials last. if anything happens, they replace it. So, I think from a marketing perspective, you it's about what you do and you do it. and showing people from a Be transparent about how Show them who's involved. You don't have to go into a long story. You can put it on ice. Look, if Sony Field could put it on an ice cream carton, you could put it on an Amazon, you can put it on a shoe box. You could put it on, anything to show people this is how we do it. Apple's doing it.
00:40:00
Stefan Pagacik:
Stefan Pagacik: Apple's, another company that's doing it. They're trying to source materials and make them as sustainable as possible. So, Toms of Maine,…
Rachel Baker: Yeah. Yeah.
Rachel Baker: And people will pay a premium for products that are good quality. yeah. Mhm.
Stefan Pagacik: Toms of Maine is a tremendous example of and their whole push is anything you put in your body or on your body from us is going to be healthy for BS bees, another one. So, it's very possible to be both sustainable and profitable and to run a thriving business. the argument that you' both doesn't exist anyway.
Stefan Pagacik: It just has no legs to stand on.
Rachel Baker: Yeah. Yeah.
Rachel Baker: And I think on that note Let me this is a good question. Sorry. how do you assist companies in creating long-term sustainability road maps that align with future regulations and market demands?
Stefan Pagacik: It's a little tricky to do in terms of regulations because you don't know what's coming down the pike.
Stefan Pagacik: Fortunately, I have a relationship with a company in New York called Regalytics that maps every single regulation from every part of the world, including the 50 states here in the United States so that at any one time if a regulation is being updated, removed, whatever, or if a new regulation is coming down and what its implication is for your industry.
Stefan Pagacik: from a sustainability roadmap perspective, I would first look at every single aspect of your business where it sits in your corporate headquarters, any satellite locations, your suppliers. I would just inventory Everything that you do, every product that you create, all the materials that you source, you have to create that inventory first. And then you've got to map where and how it's all interconnected. So there has to be a workflow process, a systemic process. And then who are the decision makers? Who are Who are the stakeholders in each connection until it gets to the customer. You've got to map all that.
Stefan Pagacik:
Stefan Pagacik: And then you have to start to dig into, what are the sustainability metrics that I need to pay attention to? are we being currently reulated? Where could we be regulated? And then from a consumer's perspective, think about everything that you can do to sustainability to sustainably support the consumer from packaging to ingredients to waste to disposal everything to…
Rachel Baker: Mhm.
Stefan Pagacik: where can they buy it? How did that product get to the shelf?
Stefan Pagacik: All of that needs to be mapped and only then can you start to figure out how am I going to collect the data from all of this. Where does the data reside? Are my internal systems built to handle all of this data? Do we have a common dashboard? Do we have a common language framework to understand each metric and each measurement that we're going after? Who's responsible for overseeing the data and upkeep of that data? Who's responsible for informing the consumer?
Stefan Pagacik: Presumably, it's marketing but who are they turning to make sure that their pronouncements aren't greenwashed, that it's been scrubbed and verified? And finally, you got to involve And your general counsel, if you're a big enough company, your outside law firm, should have somebody on board who is sustainability first. If they're not, go find another firm. It is super important that your general counsel know and understand what sustainability means for your company and for your industry. If he or she does not, go find a law firm or a general counsel who does.
00:45:00
Stefan Pagacik:
Stefan Pagacik: It is one of the single most important hires that you will make because if you are in a regulated industry, I promise you something's going to come up at some point and you really don't want to be caught not having somebody who can get out in front of it and…
Stefan Pagacik: deal with the regulators and know and understand what needs to be done internally. So there's a lot more to it than that, but that's kind of how I begin.
Rachel Baker: That's a lot of work right there I think for a lot of Yeah.
Stefan Pagacik: It is a lot of work. Fortunately, I've done this enough times where it's almost becoming second nature to me.
Rachel Baker: Excellent. That's good. what trends in sustainability do you see coming out in the next 5 to 10 years or…
Stefan Pagacik:
Rachel Baker: what major changes do you see happening
Stefan Pagacik: Again,…
Stefan Pagacik: we've talked a lot about different regions of the world and so I think it depends on where you are. I think Europe and Apac are going to see increasing regulatory and compliance.
Stefan Pagacik:
Stefan Pagacik: I think and I'm already seeing through project interventions that I'm currently associated with internationally where there is a very focused attempt to align different stakeholders especially with indigenous people and…
Stefan Pagacik: I think indigenous people are going to have a voice in this. They're going to have a say in this. It's going to involve land use.
Rachel Baker: What does that…
Rachel Baker: what does that look like in involving indigenous people and in what areas?
Stefan Pagacik: It's going to involve land use. It's going to involve things like logging, which is a big problem right now, as we know, in the Amazon, but it's also happening in other parts of the world. Heavy logging.
Stefan Pagacik: I mean, I'm talking 50,000 hectares of land, lots and lots of land use being logged. And there is now a push to reverse these concessions and take back this land for these indigenous people because they don't want to move into the 21st century. And we need to respect where they've come from, because they know the land better than we do, and they know how to protect the land. and keep it to where it's safe. But we need to work with them and make them aware of the fact that all of this is being is happening on the outside world and it will affect them someday in a manner that they're not going to like. So what we have to do and what's going to happen in the next 5 to 10 years is we are going to be taking a serious look at flood mitigation.
Stefan Pagacik:
Stefan Pagacik: We're going to be taking a serious look at our landfills and how we use our land. because we are running out of arable soil. We have less than 45 years of soil with…
Rachel Baker: Mhm. Yeah.
Stefan Pagacik: which to grow food if we don't figure out some way of regenerating the soil. We won't be able to plant and feed our human population. And that is going to be a real problem. especially for Gen Z. that's really going to be a problem for them and for future generations. so all of these are really serious issues. they're very serious issues.
Stefan Pagacik:
Stefan Pagacik: we're increasing our data aggregation capacity to a point where there's going to come a tipping point in terms of electricity usage and water usage and we're going to reach a breaking point if we don't do something to change that mix. We've got to find a different way to build these data centers…
Rachel Baker:
Stefan Pagacik: because data acquisition is only going to increase. It's not going to slow down. So, we got to do something about finding that balance and using other means of building these data centers so they can function without straining our energy and water resources.
00:50:00
Stefan Pagacik:
Rachel Baker: What are your thoughts?
Rachel Baker: on increased usage of nuclear power.
Stefan Pagacik: I'm not for it in part…
Stefan Pagacik: because I lived not too far from a nuclear facility a while ago and I've seen the damage that it inflicts on our marine life because these facilities need constant water flow going through. So, it affects our waterways and it's not good because the waste that they put back is radioactive and it hurts Our marine ecosystem is suffering from an overabundance of plastic waste which is making its way into human beings at an alarming rate.
Stefan Pagacik:
Stefan Pagacik: And if we don't do something about reducing plastic soon,…
Rachel Baker:
Stefan Pagacik: we are going to find this to be one of the greatest health hazards of the 21st century. it's accelerating and people don't even know about it. But it's showing up in fish. It's showing up, in people's bodies. And if we don't do something, it will become the greatest health hazard of the 21st century.
Rachel Baker: Mhm. Yeah.
Rachel Baker: I think that's all the questions I have for you. is there anything you would like to share before I stop recording?
Stefan Pagacik: the thing that I tell people when I do these interviews in wrapping up is basically to get involved. if you work for a company and you see processes that are wasteful or that could be engineered as sustainable, speak up about it. you're doing your company a favor, you're doing your colleagues and team members a favor, and you're doing society and the planet a big favor. So get involved, find ways to learn about sustainability because It's going to stay with us.
Stefan Pagacik:
Stefan Pagacik: it's going to increase in terms of its importance and…
Stefan Pagacik: new technologies are going to be coming online that are going to demand that you understand this. So the earlier you can get involved the better off …
Rachel Baker: What are So you sort of touched on…
Rachel Baker: if in your workplace there's sustainability initiatives to help contribute to them but how can people got involved. If maybe their workplace isn't manufacturing has a big ecological footprint
Stefan Pagacik: I mean, there are plenty of wonderful NOS's and nonprofits. Habitat for Humanity is a great one.
Stefan Pagacik: you can check with the American Sustainable Business Council to find out, what NOS's and nonprofits they work with. you can call your local foundation. there are foundations everywhere in every city. some of them focus on sustainability initiatives and they're always looking for people to help them out to serve on committees and to do volunteer projects. and it's really a great way to build your resume if this is something that you have interest in. So, I would check out foundations the American Sustainable business council as ASBC.org is their website, habitat for humanity.
Rachel Baker: Excellent. Okay.
Stefan Pagacik:
Stefan Pagacik: just Google sustainability nonprofits and NOS's and you'll come up with a list and I'm sure there'll be some in your area of the world that will welcome you with open arms …
Rachel Baker: Thank you so much. and I'm going to end the recording right now. All right. Thank you. do you have any questions for me?
Stefan Pagacik: no I don't. look forward to the clips. Thank you so much for inviting me to do this.
Rachel Baker: Yeah, thank you. is there any …
Stefan Pagacik: Great questions, by the way.
Rachel Baker: thanks. I'm getting better at interviewing.
Stefan Pagacik: Yeah.
00:55:00
Rachel Baker: Is there anyone that you think I should interview? A while back you introduced me to a woman who has a PhD in environment and cosmetics. do you remember her name? It's okay if you don't. I can look it up on LinkedIn.
Stefan Pagacik:
Stefan Pagacik: Shoot. Who's I thinking of,…
Rachel Baker: Okay. Sorry.
Stefan Pagacik: Rachel. Who's I thinking of? I wonder. it'll probably come to me at 6:00 tonight, but Okay.
Rachel Baker: If there's anyone that you think would be a good fit for me to interview that you think has something interesting to say I'd really appreciate the referral. because of when I reach out to people they think I'm trying to sell them something.
Stefan Pagacik: Yeah. …
Rachel Baker: It's really difficult to get people in the industry to want to talk to me.
Stefan Pagacik: that's terrible. That's terrible.
Stefan Pagacik:
Stefan Pagacik: No I think who would it have been? I mean the name should jump out at me because I know so few people in the cosmetics industry. all right. I will see…
Stefan Pagacik: I know who has both a sustainability but also a cosmetics, angle. Could be good for you to talk to and I'll introduce the two of you and see what happens. Great.
Rachel Baker: Okay, that sounds good.
Rachel Baker: Thank you so much. have a lovely rest of your day and I will follow up with the clips.
Stefan Pagacik:
Stefan Pagacik: Happy holidays.
Rachel Baker: Yeah, because Thanksgiving's coming up, right? I'm in Canada.
Stefan Pagacik: That's right. You're in Canada. You don't do things.
Rachel Baker: We have normal Thanksgiving. You have weird Thanksgiving.
Stefan Pagacik: That's right. Thank you for that, Rachel. …
Rachel Baker: Happy Thanksgiving.
Stefan Pagacik: I'm probably one of the few Americans who have in one calendar year I celebrated both Thanksgiving in Canada and…
Stefan Pagacik: Thanksgiving in the US.
Rachel Baker: I used to do that when I was living at home with my parents when I was a kid cuz we have family in the US. but it was kind of exhausting because it's about a seven 7h hour drive to see them and I would only have a weekend as opposed to the long weekend off.
Stefan Pagacik:
Rachel Baker: But yeah, happy Thanksgiving. enjoy your time off and time with family. Yeah, sure.
Stefan Pagacik: I will I will and…
Stefan Pagacik: I will be back in touch as soon as I find this person or someone else that I think would be really great.
Rachel Baker: Thank you so much and…
Rachel Baker: have a great day. Bye.
Stefan Pagacik: Thank you.
Meeting ended after 00:58:39 👋
This editable transcript was computer generated and might contain errors. People can also change the text after it was created.