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The Sustainable Leading Edge: A Discussion with Volkert Engelsman


Join us for a discussion on sustainability with Volkert Engelsman, CEO of Eosta.

On this episode of The Sustainable Leading Edge podcast, FigBytes Head of Sustainability, Kate Cacciatore, sits down with Volkert Engelsman, Founder and CEO of Eosta to discuss his sustainability journey, how Eosta is innovating its operations for a more sustainable future and much more.

Each episode of The Sustainable Leading Edge podcast, we invite different business, sustainability, civil society and public sector leaders to share their experience on the leading edge of the sustainability transition.

Kate CacciatoreHello and welcome to the Sustainable Leading Edge. I’m Kate Cacciatore, Head of Sustainability at FigBytes, the Sustainability Data Management platform that connects data and purpose. Before I introduce you to my guest today, I’ll share a bit of context about the purpose and spirit of this podcast series and some of the questions and themes it sets out to explore.
Kate CacciatoreAs we find ourselves facing major global challenges, such as the effects of climate change, water shortages, biodiversity loss and the breakdown of natural ecosystems, in addition to social inequalities, conflict and threats to food security, there is growing awareness today across all stakeholder groups that business with its global clout has to do more than incrementally improve its sustainability performance.
Kate CacciatoreThe systemic changes that are needed to help us shift to a net positive, regenerative, inclusive economy and society are massive. They will require unprecedented collaborative efforts of the private and public sectors of civil society and citizens to find new business and consumption models, innovative products and services, groundbreaking policies, financing mechanisms and partnerships. This podcast invites business, sustainability, civil society and public sector leaders to share their experience on the leading edge of the sustainability transition.
Kate CacciatoreWhat motivates them? What is their vision and what have they managed to achieve so far? What have they learned about what works and what is holding us back? How do they stay strong and resilient when faced with adversity? What assumptions and beliefs do they think we need to adjust individually and collectively to bring about the changes we need and want to see in the world?
Kate CacciatoreThese are a few of the questions that we’ll be getting at in this podcast, and with that, it’s my great pleasure to introduce my first guest on this podcast series Volkert Engelsman, CEO of Eosta, which is an international distributor of Fresh Organic and fresh fruits and vegetables. Here’s an interesting fact about Aosta that will give you a flavor of the discussion we’ll be having today.
Kate CacciatoreNot only is the company a pioneer in the sustainability space seeking to have a positive impact through its business and to act as a catalyst to transform the agri business and food sector as a whole. But it combines this profile with being a small and medium sized enterprise. So Volkert, welcome and thank you for being my guest and for being willing to take the plunge and go with the flow with me on this first podcast episode.
Kate CacciatoreWelcome.
Volkert EngelsmanWonderful to be with you here Kate. Thank you for having me.
Kate CacciatoreIt’s a pleasure. So let’s jump in, shall we, with a few questions for you about your personal journey and what you’re doing in your stay today. Maybe we could start with you just telling us a bit more about Aosta and your role in the company. And obviously, we want to be hearing a bit more about what motivates you in the sense of purpose that you bring to your work.
Volkert EngelsmanThat’s a big question, but thank you very much for asking Kate. Eosta, please don’t have too high expectations. We’re just a straightforward fruit club in Waddington West, in the west of Holland. We have very good friends in the Southern Hemisphere, in the tropics who grow organic fruits for us. And we have a very good friends on the sales side throughout Europe and retail who we sell these wonderful, organically certified and often Fairtrade certified fruits too.
Volkert EngelsmanSo that’s in short, Eosta. And we believe that sustainability begins with transparency, which is why we introduced the nature more trace and tell system. What we do is we put a little sticker on each product with a QR code and the face of the grower. So the consumers can see where the product comes from and what the impact is on people and planet and and hence make an informed purchase decision because I think citizens are very concerned about their health and the health of the planet.
Volkert EngelsmanAt the same time as consumers, they are kept in the dark and there seems to be a sort of an abyss between the two. Whereas we are talking about the same person. So I think you can cast a vote as a consumer by buying the right products, and I think that’s important to trigger the change that so desperately needed.
Volkert EngelsmanWe can’t we simply can’t afford to talk about people and planet and have big conferences about it, but don’t change our own lifestyle and our behavior. So we are trying to encourage growers to go organic. We’re trying to encourage consumers to buy organic.
Kate CacciatoreRight. And I, I remember seeing on your website and being particularly struck by some of the stories that you bring about the growers. So as you said, you have the QR code that you can kind of scan and see who’s growing your fruit and vegetables and what that’s like. And you try and really tell the story to the consumer about what the realities are and what the impact of that element of fruit and vegetables is, is contributing.
Kate CacciatoreAnd I think that storytelling approach is particularly powerful, as you say, and perhaps brings in this dimension of wanting to make an emotional connection with the consumers and with others who are involved in making the whole system more positively impactful, if I can say that way.
Volkert EngelsmanWell, well summarized. Kate Absolutely. And often we, we talk about the triple bottom line and then we say people plan a profit. And if you say that quickly, then everybody believes it. But in a in a way, there is a big challenge behind these three piece. I mean, the problems with people on planet are obvious, but we seem to overlook the fact that is P for profit depends on your sense of purpose.
Volkert EngelsmanSo because is it purposeful, meaningful to make a profit at the expense of people and planet or do we say no, no, no, that’s morally not correct. Mm. Well of course we say no, no, no. Profit is okay, but we can’t afford the people and planet to lead to the to lose. But, you know, we also need to make a profit.
Volkert EngelsmanSo there’s a contradiction there. But I think that’s why we actually prefer to talk about this human dimension as well with within the company, but also with our stakeholders that we say, okay, if we want to leave a meaningful footprint on the planet, we must address the social the people related issue of a fair distribution of wealth and equality and equal opportunities, etc., etc. But that all starts with a be of purpose.
Kate CacciatoreRight. So it’s driven by purpose.
Volkert EngelsmanRight?
Kate CacciatoreMm hmm. And tell us a little bit Volkert about your journey. So Eosta was not created yesterday, right? It goes back to the 1990s. Tell us a little bit about how you got into this space. And was it something that you always dreamed of doing or did it happen by accident? What has been your path, whether a straight one or a winding one on their sustainability journey?
Volkert EngelsmanIt’s always a winding one. I believe I studied economics and business administration and then joined Cargill, a big commodity trading company in the US. And they sent me abroad for what they call a management traineeship so that started with survival camps in Canada, etc. So I love that idea. I had no idea what they were doing, but I thought, okay, it’s a good, good start.
Volkert EngelsmanAnd gradually I found out that if you commodify literally products and people have no idea where the product comes from, then people don’t care what the impact on people on planet is. So after six years, I thought, okay, together with friends and also suppliers who supplied Cargill, maybe we should investigate the organic option because many growers at that point in time said, I would love to go organic and individualized supply chains rather than commodified and anonymize supply chains, but there seems to be no market.
Volkert EngelsmanSo then I thought, okay, well, I think there must be a market, and if there is no market, then we’ll create one. And that was when we started Eosta.
Kate CacciatoreWhat a journey. And how did it how did it evolve? Was it something that was easy to get started? Did you start on a micro scale and then build up? Has it been something that’s taken time to get to a certain degree of scale and possibility, to have a bit of impact along the way?
Volkert EngelsmanYeah, you know, we have always been more doers than thinkers, so we became pretty professional improvisers building bridges while crossing them, sort of.
Kate CacciatoreIdea like that analogy.
Volkert EngelsmanAnd that means that you need to strongly believe in this concept where there is a will. There is a detour. This is never a straight line. Right. And so, yes, we started of course, you start on your own and and then we quickly gained momentum and grew. And then we started a banana farm in Costa Rica that failed.
Volkert EngelsmanBut in the meantime, we had also started an organic seed company that was very popular at the moment. So we were able to offset the loss of the bankruptcy in Costa Rica farm with the benefits from that seed company. And then we went into flowers and juices and deep frozen stuff and textiles. And when a good friend of mine said, Listen, Engelsman, you think that’s professional what you’re doing?
Volkert EngelsmanAnd I said, Yeah, listen, that’s simple, my friend. I studied economics. It’s called diversification. It’s spreading your risks. And then he said, Well, I haven’t studied, but to me that sounds like being a jack of all trades and a master in none what you’re doing. And I hated to admit, but he was obviously right. So gradually you get some more focus into what you’re doing.
Volkert EngelsmanAnd rather than being very entrepreneurial and doing and helping and no matter what consequence we thanks to many people who then joined me in the leadership team as well. We became more professional and today we are Europe’s market leader, mostly in fruits, southern hemisphere and tropical fruits. Organic, all organic with a few hundred million turnover and a few other people on board.
Kate CacciatoreWow. Okay. What a story. And so you talked there about a farm that you had. Had you started that farm yourselves because today your growers are, I guess, suppliers to you of fruit and vegetables. You don’t necessarily own the farms, is that right?
Volkert EngelsmanYeah, we we have hybrid system so models. So some we we rarely own a farm completely. We usually own farms together with a producer and joint ventures or they are suppliers, just straightforward suppliers. Or we invest in our packhouse or in processing facilities together with them. So you see the whole range of options there of backward integration.
Kate CacciatoreRight? And I think that the spirit of partnership and collaboration is a very important dimension of the work that you do with the growers, right. To sort of help them put in place organic methods if they don’t already have those. And you have actually achieved that across the board. And I’m guessing also that that partnership and collaboration will be all the more important for taking that further towards the process of becoming regenerative.
Kate CacciatorePerhaps you could talk a little bit more about this aspiration for regenerative agriculture and how it fits into the picture here.
Volkert EngelsmanYeah, thank you for asking. A little detour. Talking about diversity is vital.
Volkert EngelsmanWhich applies to farming. Which applies to the social sphere and but before we go there, you are so right. Collaboration and cooperation is very important. We call it dream dance, deliver. So if you want to deliver something and that can be impact or a company or a profit and what’s whatever sense, if you want to deliver change, you have to dance.
Volkert EngelsmanYou have to find a coalition of the willing that are defined by something that is bigger than the sum of the parts, and which is precisely why we don’t believe in this sort of egocentric approach within supply chains, whereby everybody seeks to achieve the maximized profit and then the invisible hand will sort out the rest. We believe in the opposite.
Volkert EngelsmanWe believe in investing to the maximum into the other. And even if that is not in your own advantage, because our experience shows that if you do that, you can achieve something that is much more interesting than what you would have achieved on your own, and that that’s what we call dance. But that all starts with a shared dream.
Volkert EngelsmanAnd if you share an objective, a vision, a dream, then that can carry you through obstacles. And if you run into trouble with each other but you remember what you were doing it for, then it’s easier. So. So that that is that through. We call it three leadership dream dance deliver. And in fact, we apply that to our own company here internally as well.
Volkert EngelsmanSo we have frequent evaluations with people where we look at the KPIs, you know, what must be delivered. But then we look at one sort of intimacy level higher or deeper and look at the cooperation and the collaboration and the team. And where are the obstacles in that team and what can we do about it? And we spend time on that dream element.
Volkert EngelsmanWe call it becoming who you are. How can you become who you are, which is a sort of what does your journey look like? Question I think you two frequently ask each other, and that helps gradually revealing unleashing that dream. That doesn’t come overnight.
Kate CacciatoreRight.
Volkert EngelsmanSo yeah.
Kate CacciatoreNow we just can say it’s sort of taking care to mix and bring together both the sort of collective vision of what you’re trying to create together this dance aspect, and then connect that also with the individual purpose and what each person is bringing to the table, bringing to the dance. And it’s sort of a play between these two to keep you focused on where you’re heading.
Volkert EngelsmanRight. And it’s sort of matches with people, planet or planet, people purpose in a way. If you want to deliver a meaningful footprint on the planet, it makes sense to investigate the dance that is necessary to deliver that. A dance in a social sense, in a collaborative sense, within society, you know, how do you want to what would a society architecture look like that delivers a meaningful footprint?
Volkert EngelsmanSo that is related to people, but it all starts with a shared dream with that question Who are you really at that and what motivates you? What drives you? And that is purpose. So people planet purpose matches this dream dance deliver threefold ness and it has helped us navigate leadership challenges. But now we’re drifting away. From your question about returning farming.
Volkert EngelsmanI think a little bit.
Kate CacciatoreWell, we can come back to that perhaps. Let’s come back to that when we talk about the sector, because I think you have brought us into the territory that we did want to discuss first, which was the company. And so Eosta sustainability strategy, I think you call it your impact strategy actually. And we’re beginning to get into that in the discussion now.
Kate CacciatoreBut it would be interesting to know and you started out with a clear purpose and a sense of what you were trying to achieve in that vision. And then the dance did the sustainability strategy. Well, I should perhaps correct myself because I’m guessing that in your case it was embedded, wasn’t it, from the start in your whole project to create a business.
Kate CacciatoreSo perhaps you can take us through the process of the journey of Eosta, of figuring out, okay, how does sustainability or positive impact have to come together into the business strategy? What were the steps that you that you took to discover that and develop that?
Volkert EngelsmanIt’s a process of differentiation. I think you gradually you start with something intuitively as you want to do meaningful things and look after your soil or biodiversity or intercropping or cover crops or address the wealth gap. But it is not really differentiated in KPIs, etc. And then gradually you develop a framework, a template which we call the nature and more sustainability flower, which I’ll show you here.
Kate CacciatoreOh, lovely. Yes.
Volkert EngelsmanDirectly, but you can check there’s on the website whereby you you find the same threefold differentiation. So yes in use find petals that are related to planet to the planet. So we look at soil fertility, water, biodiversity and climate change. These are the four petals that are related to the planet. And under these we have obviously KPIs to measure that.
Volkert EngelsmanAnd then we have petals that are related to people whereby we nicked the the slogan of the French Revolution and then, you know, as a sort of template to talk about freedom and to talk about equality and to talk about fraternity or brother brotherhood or a fair distribution of wealth. So under the first petal, we look at the vocational training opportunities and unleashing the unique potential of people or cultural elements on a farm or throughout the supply chain.
Volkert EngelsmanAnd then under equality, we look at fair working conditions and no discrimination and equal opportunities. And under solidarity or fraternity, we look at a fair distribution of wealth so that is these are the petals, three petals. So four petals related to the planet, three petals red related to people. But it all starts with the purpose of that unique growth story.
Volkert EngelsmanSo that’s why we, like you, wonderfully summarized why we always that’s why we always start with that with a unique story of a grower. Always put that put the sort of human dimension first. And after all, people and planet is not something anonymous over there. It starts with an individual who he goes on a journey and who’s got questions that he would like to share with others and in the meantime, evolve and develop and so that’s why we always start with the growers story.
Volkert EngelsmanSo these three Ps are embedded in our nature. More sustainability, flower and we apply five M’s. Would you is this the right moment to talk about?
Kate CacciatoreYes, absolutely. I was going to ask you about those. And I just before we go into that, I just like to underline, I think what’s what comes out for me is something very striking about your strategy and your approach, which is the emphasis on intention. And I mean, purpose covers that to some extent because you’re saying we always have to come back to what our purposes and be thinking about that purpose in order the decisions that we take and everything that we’re setting out to do.
Kate CacciatoreBut but it does seem that there is a clear intention there to bring about certain positive impacts which are embedded in the sustainability flower and the indicators that are behind it. So I just thought that might be worth pointing out.
Volkert EngelsmanNo. Thank you very much for adding that. And it’s it’s like a scope on the one side. If you only focus on intentions, then it can be sort of stay thin air.
Kate CacciatoreYeah.
Volkert EngelsmanThat’s the respect. On the other side of the scope. If you only focus on KPIs and, you know, figures and quantifiable results, then you kill the intention. It becomes compliance.
Kate CacciatoreYeah.
Volkert EngelsmanSo you need the best of two worlds. You obviously want to communicate in a way that allows communication and hard deliverables and KPIs on the set. At the same time, you want to acknowledge the idea that sustainability is nothing finite. It’s a journey that starts with the intention not just of stakeholders, but also of the individual. If you can’t connect to the unique powers and unleash those unique powers of the individual, we won’t be getting anywhere with sustainability.
Volkert EngelsmanIt will be simply comply with.
Kate CacciatoreThat’s a great point. Yes. And I think that before we get onto the five ends, just one other thought, because I guess the the purpose and intention also help to prioritize which KPIs to focus on. Right. So there are lots of KPIs that a company can focus on and is often solicited to provide by whether it’s investors or other stakeholders.
Kate CacciatoreBut I think I remember reading somewhere in the content on your website about the focus on 20% of the indicators that are responsible for 80% of the impact. And would you say that that plays into that whole process as well?
Volkert EngelsmanAbsolutely, Kate. In fact, that’s part of the first team, which is a materiality analysis. So animal welfare, for instance, on the mango farm is relevant but not that relevant. Mhm. Whereas on a, on a mixed farm with cows it is very relevant. So you define the met reality by focusing on those KPIs that define 80% of the impact.
Kate CacciatoreRight.
Volkert EngelsmanAnd then that 20/80 rule keeps coming back by the way. But the second term is on the basis of that materiality analysis you start measuring. So and then you do that on the basis of the KPIs that underlie our nature more sustainability flower. But obviously they have been harmonized with the KPIs that are set by GRI or by BCI or smarter or global gap or global grasp or any other abbreviation for compliance checks that retailers demand from us.
Volkert EngelsmanYou know, you need that kind of license to operate, otherwise you can’t supply them. But what you want want to avoid is that the grower has to pay €10,000 per abbreviation and obviously the retailer will never pay for that. So the grower, you shift all the assessment burden to the grower. That’s the usual approach and the nice benefit, collateral benefit of our nature.
Volkert EngelsmanMore sustainability flowers that we can limit those assessment to a one stop shop, to a one stop assessment that yields various compliance schemes. So you have a scope there. Again, on the one side you want to comply, on the other side you you can be turned completely nuts by all these compliance schemes. Yeah. And entrepreneurs often struggle with that and say, listen, if I talk to a, I hear abbreviation X, if I talk to B, I hear abbreviation Y.
Volkert EngelsmanAnd by the time I’ve done the alphabet, I’ve lost the overview. I have no idea what sustainability, where I should start. So then it helps to have your own navigation tool like we have with the nature more sustainable flower. But then you want to match the KPIs with the existing KPI. So I can strongly encourage other enterprises or anybody who would like to embark on that sustainability journey and who doesn’t to develop your own navigation.
Kate CacciatoreRight. So yes, it to tie it back to what is important from your perspective as you put these things into practice and implement.
Volkert EngelsmanYeah. Yeah. And it makes it easier to enter it in a dialog with the other sustainability compliance schemes that are around in your sector that you know, that differ from sector to sector anyway. Then you start measuring, that’s the second term and then you agree on a management plan, that’s the third. And so with your stakeholders, you, you select basically projects and that can be soil fertility or a living wage program or it can be, you know, building a school or a medical service center or invest in intercropping to contribute to biodiversity or green cover crops to sequester carbon from the atmosphere and soil organic carbon, or in in green mass.
Volkert EngelsmanIt can be anything. And, and if you realize that there’s sort of you can do this ad infinitum, but so it makes sense to select a few things and focus on these.
Kate CacciatoreRight? So those are the programs that you’ll be focusing on to implement the objectives that you’ve set out that are within the framework of what’s material then. And we’re talking. So you mentioned just to go back over them. So determining materiality, measuring the impacts and managing the practices, those are the three we’ve covered so far. Yeah. And for materiality, obviously today, it’s, it’s, it’s both the material impact on your company and the risks and opportunities that the sustainability issues might have on your company.
Kate CacciatoreBut equally and very importantly, it’s the impacts that the company is going to have on the planet through the.
Volkert EngelsmanInward and outward.
Kate CacciatoreInward and out. Right. Right, exactly. And I guess the managing the practices part will reflect that. It will be a natural.
Volkert EngelsmanOutcome of these reality checks.
Kate CacciatoreYeah. Yes, exactly. Yeah. Fantastic.
Volkert EngelsmanAnd it’s not just rational. It’s also if you run into a grower who’s very excited about all his cover crops, that you go with the flow, you encourage him and say, well, if that’s where your energy is, then let’s do that.
Kate CacciatoreOkay. They’re leaving space for things to emerge. Yeah, that may not have come about. If you had focused in a very rigid way.
Volkert EngelsmanExactly. Or you run into a retailer who says, I would love I had the prime minister of Ghana for a visit. I would love to do something in Ghana. Do you have any idea? It must be social. But then you don’t say, no, no, hang on, let’s first do the first in. No, no, you don’t do that. You go with the flow.
Volkert EngelsmanYou say, Yeah, sure. Let’s have a look at the sustainability flora of all the growers in Ghana.
Kate CacciatoreThis is interesting because what you’re describing here is then you’ve got this framework, but it’s kind of organic and flexible, so that always something comes up. Then you are willing to explore it and see how does this fit in and what can this offer us? While not wanting to get sidetracked and taken off on a complete tangent, which might be a possibility, and you might have to put a few guardrails in there, but that’s interesting to kind of not not keep it to a structured and rigid.
Volkert EngelsmanAbsolutely. And think it’s all about, you know, momentum as well. So you you want to use the momentum if there’s momentum on the farm or momentum with your retailer, then use it.
Kate CacciatoreGreat point. That’s another but it’s not one of the official ends, right?
Volkert EngelsmanIt’s a good one, Kate.
Kate CacciatoreBut I’ve come up with another M.
Volkert EngelsmanYeah, yeah.
Kate CacciatoreI like that one. And the next one is then marketing.
Volkert EngelsmanMarketing, right, right. Right. And it’s actually related to the M to the momentum because often growers then say, well, how can I be green if my figures are red? Hmm. You know, you want me to invest in soil, yet you only pay me for you pack time. You want me to do good for future generations, yet you want me to increase you per hectare because that’s that’s what I what you pay for.
Volkert EngelsmanSo you need to be creative. We need to start rewarding growers for their ecosystem services. Yeah.
Kate CacciatoreAnd that’s a big one.
Volkert EngelsmanYeah, it’s a big one because we still operate in an unlevel playing field in the market. Mm hmm. Where the polluter gets away with a competitive advantage. Yeah. So if you exploit soil by putting a lot of mineral fertilizer in it, you boost your yields short term at the expense of future soil fertility. But who cares? As a result, you can be more competitive than your then your competitor who’s actually investing in soil biodiversity.
Kate CacciatoreSo in an artificial way, right? I mean, that’s absolutely competitiveness is cheaper.
Volkert EngelsmanYou can be more competitive because he or she is external, rising costs to society, costs of damage to soil fertility or whatever, the capacity of biodiversity or climate. So yeah, how do you tackle that in an unlevel playing field? Obviously we ultimately all want a more level playing field where the public sector sort of guides us with fiscal incentives that penalize those who extract value and that support those who add value in in sustainability sense.
Volkert EngelsmanYeah. And we’re working on that as well. We’ll, I’m sure we’ll come back to that on that. But back to the marketing. And so what we we, we will look both ways on the one side. We, we look backwards and wants to develop carbon credits and setting credits like we discussed at the business at the launch of the Business Alliance for Regenerative Agriculture that you joined and you so brilliantly summarized.
Volkert EngelsmanThank you very much for that. Again.
Kate CacciatoreMy pleasure.
Volkert EngelsmanYes, I can recommend everybody to read what you wrote.
Kate CacciatoreIt’s very kind of them.
Volkert EngelsmanSo you need laboratories of change, you need prototypes, you need coalitions of the willing to develop these tools that start rewarding growers not just for the yield per hectare, but also for the other ecosystem services or for the social or community service or health services. We’ve talked enough about people on planet. Now we need to sort of descend this into the financial reality of rewarding growers for their positive externalities.
Volkert EngelsmanSo that’s one one thing we’re trying to do by means of developing compost credits, which we sell to our retailers or developing in setting credits together with agri carbon in South Africa, which I’m sure you’ve heard of. And these credits are not just about carbon farming. There are also that about collateral or sort of collateral benefits related to water holding capacity or to contribute to biodiversity or to community services.
Volkert EngelsmanAfter all, if McGraw invests into soil fertility, usually his irrigation bill comes down okay, because better water retention and usually is pest and disease pressure comes down as well because biodiversity is vitality. And if you invest in soil fertility with millions, trillions of microbes, then you create this microbiome, so to speak, in the soil that provides health.
Volkert EngelsmanSo it has and and it and it sequesters carbon from the atmosphere in deep soil organic carbon. So it has a multiple of positive externalities and soils seems to be a portal sort of gateway towards all these other externalities. So that’s why a while ago teamed up with World Bank in a project called Working for Water because in the river deltas in South Africa, for instance, the water stopped flowing because all the nitrogen fertilizer that was used in the farms that were located in these deltas, usually they are leaked into the groundwater and provided a very fertile atmosphere in these rivers.
Volkert EngelsmanSo all of a sudden the water was sucked up by green mass willows and reeds and God knows what I say.
Kate CacciatoreSo it was actually taking the water out.
Volkert EngelsmanIt was taking the water out. So whilst the farms were depleting their soils and the soil structure was no longer able to capture that nitrogen fertilizer, it leaked into the groundwater and provided a very fertile atmosphere was in in the rivers. So after a while the rivers were no longer there. Oh, wow. So then World Bank moved in, providing jobs for those who were cutting, cutting down all this agreement.
Volkert EngelsmanSo they provided work at water. And then we noticed that this all this green mass was landfilled and creating enormous amounts of methane gas emissions as a result of anaerobic composting processes, decomposition processes on these landfills. So we said, okay, how about together with the growers in this river delta, we said, how about if we use that green material and turn it into compost as an alternative for minimal fertilizer?
Kate CacciatoreOh, okay. So wow. So the it’s almost like, well, it’s a circular economy type of thing in a way that the the outcome of this supposedly well was a bit of a negative impact. There could be a transformed and used is something that would stop that from happening in the first place.
Volkert EngelsmanExactly. So people growers started sort of bringing down their mineral fertilizer, using it as compost, replacing it by compost, building a soil structure again and water like nitrogen decay and and the river stopped.
Kate CacciatoreWhat a great story.
Volkert EngelsmanYeah, yeah, but it did it. It, it goes on. Okay. Because then we went to IPCC and said, listen, this is your stuff from voting saying, calling, you know who we are.
Kate CacciatoreRight?
Volkert EngelsmanAnd we would like carbon credits on composting practices and then they said, with all respect, we only deal with governments. And anyway, to cut a long story short, we went through two Senate certification processes and developing metrics and all that and finally achieve to get carbon credits. So all of a sudden all composting practices for methane gas avoidance, nitrogen, nitrogen, not nitrous oxide avoidance that comes with mineral fertilizer.
Volkert EngelsmanAnd so we were able to not only help our growers built their soils again, increase the water retention, decrease pests and diseases pressure and contribute to mitigating climate change. But we were also able to them with secondary income streams by selling their carbon credits to our retailers.
Kate CacciatoreWow. That’s that’s quite an amazing story because it doesn’t it yeah. It just shows you were thinking on your feet and having to be quite agile there in terms of how do we deal with the situation and and have a positive outcome from it. Yeah.
Volkert EngelsmanSo then we and that’s a bridge to the other side of the marketing. M Yeah. So on the grower side, that’s what you can do. Continue to look for means to improve the or find financial incentives for growers to contribute to more regenerative practices and carbon credits. So instead and credits are a tool to achieve that.
Kate CacciatoreSo that.
Volkert EngelsmanBut then we said, okay, let’s celebrate soil. So we organized a huge event not just with we called it save our soils. Yeah. Because the soil is a limit, not the sky. And maybe organic is not the only, but for the time being a very good soil ocean solution. Yep. And then we said, you dear customer, you, you can become a soil.
Volkert EngelsmanYou’re more a soil, mate.
Kate CacciatoreOrdinary. Okay. I love the invention of terms here.
Volkert EngelsmanSo we then packed that I think it was vine tomatoes, avocados, mangoes in a little retail pack, but we provided a bit of compost with it. That was a tomatoes. We added a basil basil seeds. Mm.
Kate CacciatoreGosh, this is nice. So I’m really getting the picture of how these marketing practices are aimed at also bringing the consumer back into that loop exactly. As well. Right.
Volkert EngelsmanSo we said, listen, my friend, dear consumer, these are not vine tomatoes, these are soil mates. And you become you can become a soil made, in fact, by by the way, for instance, if you dig up a little pavement stone or you put in the compost and the basil seeds and you start a little guerrilla farm, that was sort of where the momentum was.
Volkert EngelsmanEverybody was talking about guerrilla farming. This was 2016, I think seven, seven years ago and six years ago. And rooftop gardening became hot. And so we said, if you can start a little guerrilla farm with the become a salt, you can become a soulmate. And if you do do that, ideally at an illegal spot whilst the police is trying to stop you and you YouTube this, you can win a prize.
Kate CacciatoreLike it sounds like a kind of Patagonia type exercise.
Volkert EngelsmanThis one, it was total guerilla marketing and it didn’t cost anything. But everybody joined. And not just everybody, but the Dalai Lama did it. Desmond Tutu, Julia Roberts joined in. Jose Graziano da Silva. At the time, the general secretary of the FCO joined us, the Prince of Wales at the time. Still Prince joined us. So we had all of a sudden a whole group of celebrities who joined us in this Save Our Soils campaign.
Volkert EngelsmanAnd nobody everybody was talking about climate change, but nobody talked about soil.
Kate CacciatoreYeah, that that’s a great way to put it back into the picture. And with it really illustrates that momentum again doesn’t it. Like yeah that, that is such a key to bringing about the sustainability transition because it’s like those grass roots and getting people involved and feeling good about contributing in this way. It’s a really good illustration of that.
Volkert EngelsmanYeah, Yeah.
Kate CacciatoreI was going to say like before we talk about other things, maybe we can just finish off on the the last and that the monetizing impacts because this is something which I think is on the radar of quite a lot of companies today. A few, perhaps, I should say, in terms of true cost accounting and actually putting a monetary value to the positive and negative impacts that a company has as part of its integrated financial accounts.
Kate CacciatoreAnd so I just would love to hear a bit more about that because this is something which I think today still perhaps a little bit out of reach for a lot of companies. But it would be nice to know more about how does it how does it work and how many companies today could try this.
Volkert EngelsmanYeah, I think you summed it up pretty well. We briefly say organic is not too expensive, conventional is too cheap. If you externalize costs of damage, of negative impact. So then we run into a study by the FCO that basically said the externalized costs of our global food production system equals the total turnover in food trade globally. Wow.
Volkert EngelsmanSo so I think that was 7 billion, a lot of zeros. Yeah. You would actually you create environmental and social damage for a similar amount of money. Mm. And curing is more expensive than preventing. So if you would prevent all that damage by not externalizing soil loss to future generations, but you would do it right from the beginning, then it would only be 15 to 20% more expensive.
Volkert EngelsmanI say so. So if you want to be pennywise pound foolish, keep going, keep going. If you want to reverse that, it’s easier to prevent and it’s a lot cheaper to prevent this. So we did do we then looked at these templates, these monetization templates. How did they establish costs? We realized that the planet is losing the equivalent of 30 soccer fields of fertile soil per minute, according to the same file which accumulates to 12 million hectares a year.
Volkert EngelsmanAnd since we only got one planet, you don’t need to be clairvoyant that this is finite. So at some point we’ll have to farm in deserts. And that, you know, is quite challenging. Mm hmm. So maybe we should look after our healthy soils. Yeah, but that costs money. Okay. Can we establish how much money that would cost? The damage would cost to repair that you can’t value or put a monetary value on nature on our soil.
Volkert EngelsmanBut what you can’t put a monetary value on is the cost you would have to make to repair that.
Kate CacciatoreGot it.
Volkert EngelsmanYep. So that’s what we then did. And to cut a long story short, we run into, oh, when it comes to soil fertility, water, biodiversity, we move to the Water Footprint Network who define green, gray and blue water categories. They have monetization tools for that. We went to the W.H.O. with regards to health. They have this these daily calculations, the disability adjusted life year calculations, also with monetization templates under underneath.
Volkert EngelsmanAnd then we joined up the economics of ecosystems and biodiversity, which is a think tank of scientists, U.N. officials, mostly who did important ground work, chaired by Pavan Sukhdev, I’m sure you know him and Alex Miller and Klaus Tupper at the time. He was the Minister of Environmental Affairs in Germany. And Alex Miller was U.N. DPI or U.N. EPA General Secretary.
Volkert EngelsmanSo a group of experts. And then we handed the case to EY one of these financial auditors and said, can you identify the true cost of supply chain, avocado, mango, pineapple? I think it was. And come up with a sort of calculation and they did. Right. And at the beginning, this is obviously complicated stuff, but after a while it becomes a routine.
Volkert EngelsmanMm. And now these templates are available if you knock on the doors of KPMG, TWC or any of these big four or five financial auditors, they can instantly develop that for you and identify what the true cost of your supply chain is. So we started doing this a while ago and now we do it for all our products on an annual basis and so our whole governance scheme is also geared towards human, social and environmental capital.
Volkert EngelsmanYou know, in the background you see planners purpose and purpose, people, planet again, human, social, natural capital. So Also in the governance model of this company, we are moving into a complete new direction by not only looking at financial capital, but also at these human social and environmental capitals, which obviously assumes that you can that you have transparency.
Volkert EngelsmanYou can do that for all your products throughout the supply chain.
Kate CacciatoreRight. And clearly, that is quite a challenge. But I think what I’m hearing you say is that it is possible and there are resources out there for companies that want to start looking into this in more detail and that there’s no harm in experimenting. Right. And and beginning to explore how to monetize these impacts or put a monetary value on them so that you can have a more coherent picture that integrate those externalities that are currently shoved out of the picture.
Volkert EngelsmanAbsolutely. And you know, again, where there is a will, there’s a detour. So so usually complexity is used as a as a reason not to do something. But if you just start, you know, then it’s perfectly doable. And you can, for instance, start with your LCA, your carbon footprint.
Kate CacciatoreRight. Good point.
Volkert EngelsmanI just monetized that one just once.
Kate CacciatoreYes. That’s a great place to start. And now I realize that we could probably talk all day about all of these things.
Volkert EngelsmanCan I add one more thing? Yes, please. Because well, first of all, thank you very much for asking about these five M’s, which are, you know, behind every. And there’s a whole universe of opportunities and possibilities. And on the one side, this sounds very nice and encouraging, but it can also. But I must say, if you’re realistic as an entrepreneur, you better prepare for this because it will be soon be a legal requirement because of the Corporate Sustainability Reporting Directive and usually such things start with directives and then turn into frameworks and then it becomes legislation.
Volkert EngelsmanYeah. So you can either hide as a company, as a or God, you know, challenging times, not now. But the other way is to be proactive and say, listen, I will start on the basis of these five M’s, for instance, and just select one product and one KPI, if that’s what I can afford. But it can teach you a lot about the rest.
Volkert EngelsmanSo you are prepared once to see a corporate sustainability reporting directive hits you. And if you’re a small, medium enterprise, that’s only in two years from now. Yeah, but if you’re a bigger size corporate, then it will hit you by January 1st next year. I believe that you probably know more about really fast.
Kate CacciatoreYeah, yeah, it’s true.
Volkert EngelsmanAnd finally, the financial sector is looking it is is already performing climate stress tests on your business case. So you may look very profitable in this. You carbon footprint is too big. It will be sort of implemented in your red rocks in your risk adjusted return on capital. So there are many legal and financial reasons to engage in this.
Volkert EngelsmanAnd rather than being pressed by outside factors, it always makes good business sense to anticipate on this and be proactive. And anyone who’s listening to this quickly call fake bites.
Kate CacciatoreNo, thanks for the plug. I wasn’t going to do that. But you did that for me.
Volkert EngelsmanThat’s why I’m doing it.
Kate CacciatoreOh, that’s so sweet. Thank you very much. No, I mean, I think this is a good point. I was going to have asked you, but you got there first in terms of, you know, what would you what advice would you give to companies who are either starting out? I mean, I think these days most companies are not just starting out because it’s been clear for a while that this is something, as you said, nobody can avoid.
Kate CacciatoreBut how to make a positive difference. So I think you’ve given a few good points there. And maybe before we finish, it would be nice to come back and do that full circle. You know, we started out with your your personal journey and the beginning of your stays journey through all of this. What is today, your vision for the future?
Kate CacciatoreAnd what is the dream, that dream that you talked about at the beginning? Perhaps you could just share in a nutshell of some of the ingredients that you are hoping for, and that helps you to also deal with some of those moments of adversity which we’re all experiencing right now. Many companies are experiencing. And perhaps a few words on that before we end up.
Volkert EngelsmanNever mind my camera. It’s going nuts. It doesn’t.
Kate CacciatoreI like that. I don’t know what perspective I’m thinking.
Volkert EngelsmanWell, you know the office here. Yeah. Yes, still are.
Kate CacciatoreOkay.
Volkert EngelsmanYeah. Thank you for asking. I think we’re all concerned about inflation and recession and energy crisis and etc.. It’s not over yet. And. And the issue’s coming and the list is going. And I mean, behind all of this, you see a climate crisis and a social crisis unfolding in slow motion. And my hope is that people and entrepreneurs will have the courage and the vision to also anticipate on this much bigger crisis and actually use the present crisis of inflation, etc., as a an opportunity to fundamentally rethink business because it is so perfectly okay to manage your carbon footprint, do a few social projects here or there and that that’s okay.
Volkert EngelsmanBut ultimately my I hope and that’s what I’m working for that is that we see these crises as opportunities and also as mirrors in which we see the limitations of our own thinking. And I think sustainability starts between the ears and is it has all to do with a mind shift. If we want to encourage systems change it starts with mind shifts might shifting we are not going to solve the problems with the kind of thinking that created created them as Einstein said.
Volkert EngelsmanAnd so we need new thinking and I realize this is not for the followers, this is for the leaders. And the leadership always comes from a trendsetting minority who and never from a following majority. So it depends on your business proposition whether you want to belong to the followers or to the leaders. If you agree, I want to be part of the solution and join a coalition of the willing, even if that’s a minority.
Volkert EngelsmanI think there are great opportunities because sooner or later these bigger crises that are unfolding in slow motion will present much bigger disruptions than the ones we are facing now and then. We need prototypes that can be scaled up. So tomorrow’s and tomorrow’s entrepreneurship is about the courage and the vision and the ability to dream, dance and deliver and I think in all modesty, with this small green grocer in … West, we are privileged to be part of a coalition of the willing, that you also belong to Kate and your organization, and we need all the brainpower and creative powers and willpower, us to contribute to the new normal in which the polluter no longer
Volkert Engelsmangets away with a competitive advantage.
Kate CacciatoreRight. Well said. Well said, Volkert And I think what you’ve expressed really is in a lot of people’s minds at the moment, and ultimately it is a question of choice and intention to be part of this. So I can’t thank you enough, but a wonderful conversation and a great way to start this podcast series. I’ve learned so much.
Volkert EngelsmanYou said thank you.
Kate CacciatoreThis is just the beginning, so.
Volkert EngelsmanI feel honored.
Kate CacciatoreIt’s been great. Thank you very much. And you know, we’ll continue the journey, all of us.
Volkert EngelsmanI hope so.
Kate CacciatoreThank you very much.
Volkert EngelsmanAll right. Bye.
Kate CacciatoreThank you. Bye.