Latest / Financial Planner Life Podcast / Sustainable Pensions - Charlotte O’Leary

Transcript

Sustainable Pensions - Charlotte O’Leary · Financial Planner Life Podcast

• 0:04
  SPEAKER_00: Hi, and welcome to the Financial Planner Life Podcast, where we talk to professionals at varying stages in their career about what it's like working in the wonderful world of financial planning and financial advice.
• 0:17
  SPEAKER_00: This podcast is proudly sponsored by Recruit UK, a recruitment consultancy specifically focused on the financial services.
• 0:25
  SPEAKER_00: They have a niche specialism, recruiting, within the financial planning industry.
• 0:29
  SPEAKER_00: So check out their website for the latest job opportunities, hints and tips, and blog articles.
• 0:38
  SPEAKER_03: Hello, Financial Planner Life.
• 0:40
  SPEAKER_03: It's me, Charlie, and wow, do I have an episode for you today?
• 0:44
  SPEAKER_03: It's a journey, really is.
• 0:46
  SPEAKER_03: I'm with the wonderful Charlotte O'Leary, and we talk about her career from fund analyst to CEO, where she currently resides at Pensions for Purpose, a B Court pending, and talks about the industry conversation, where the industry needs to catch up, and how human behaviour has such a role in our impact in this industry.
• 1:06
  SPEAKER_03: We also talk about pensions and retirement and how the importance of a financial education can be absolutely game-changing.
• 1:14
  SPEAKER_03: I hope you enjoy this one.
• 1:16
  SPEAKER_03: I know I left it feeling inspired and humbled by the information that Charlotte shared.
• 1:22
  SPEAKER_03: Keep your ears open for this one.
• 1:24
  SPEAKER_03: Good afternoon, financial planner life.
• 1:27
  SPEAKER_03: It's me, Charlie, and I'm actually back here today with a fellow Charlotte.
• 1:31
  SPEAKER_03: I've got Charlotte O'Leary from Pensions for Purpose, amongst so many other wonderful things that she's doing within the industry.
• 1:38
  SPEAKER_03: And we're here to talk about many things, many things that are important within the industry, relating to climate change, relating to the environment, relating to social, relating to impact.
• 1:49
  SPEAKER_01: Hi Charlotte, how are you?
• 1:51
  SPEAKER_01: I'm really well, thank you, Charlotte.
• 1:53
  SPEAKER_01: Lovely to be with a fellow Charlotte.
• 1:55
  SPEAKER_01: I don't often get the opportunity.
• 1:57
  SPEAKER_01: We are few and far between.
• 2:00
  SPEAKER_01: But no, it's brilliant.
• 2:01
  SPEAKER_01: It's brilliant to be able to talk about this and to talk about this in the context of people's personal finances, which is so prevalent now with everything that's going on around us.
• 2:10
  SPEAKER_01: So no, a great opportunity.
• 2:12
  SPEAKER_01: Thank you for having me.
• 2:13
  SPEAKER_03: No, no, welcome, welcome.
• 2:15
  SPEAKER_03: I think you know, you stand out in the industry for so many different reasons.
• 2:19
  SPEAKER_03: I know obviously pensions for purpose, um, it's B Corp pending, isn't it?
• 2:23
  SPEAKER_03: Yeah.
• 2:24
  SPEAKER_01: We've done the full B Corp B Corps assessment this year, and uh we've had um back and forth on communication around that, but to me it's so important.
• 2:35
  SPEAKER_01: I think B Corps gets to the heart of what good business is about.
• 2:39
  SPEAKER_01: Yeah, um, and we are supporters of the Better Business Act, which is about changing section 172 in the Companies Act to align um director responsibilities with people, planet, and profit rather than just profit.
• 2:55
  SPEAKER_01: And and that matters so much to me because we have to be tying um what we're doing as organizations to our environmental and social impact if we want to uh meet the sustainable transition that we need to see see in the economy.
• 3:09
  SPEAKER_03: Yeah, absolutely.
• 3:10
  SPEAKER_03: We we've submitted our application now, Recruit UK has, which is home of financial plan of life.
• 3:15
  SPEAKER_03: And gosh, it was it was a whole process.
• 3:18
  SPEAKER_03: Some of the questions I'm like, what does this mean?
• 3:20
  SPEAKER_03: But actually, you need to understand what that means.
• 3:23
  SPEAKER_03: And it's you think of things that you wouldn't even think have an impact, but actually, no, you do need to look at your breastfeeding policy and your whistleblowing policy and your bullying policy and the social, but also you do need to know how much we recycle and the waste and the toxic waste.
• 3:38
  SPEAKER_03: And I think in recruitment we've got quite a small supply chain, but there are big, big companies that go through the process and it's so necessary.
• 3:45
  SPEAKER_03: So I feel for the listeners today, I'd I'd like to take them on a bit of a journey of understanding who Charlotte O'Leary is and how you got to where you are today, and the mission that you are driving forwards with Pensions for Purpose.
• 3:59
  SPEAKER_03: So let's start at the beginning.
• 4:01
  SPEAKER_03: Where what was your entrance into financial services?
• 4:04
  SPEAKER_01: Oh, it's it's an interesting one, isn't it?
• 4:06
  SPEAKER_01: Because I think to start off with, finance can't be a natural um first step for anybody, not least because it doesn't sit in our national curriculum.
• 4:17
  SPEAKER_01: So I, you know, I was always I was always interested in finance, um, but recognized that we just don't embed it in our education system.
• 4:25
  SPEAKER_01: And I thought, this seems, you know, it's mad, isn't it?
• 4:28
  SPEAKER_01: That we learn about trigonometry and algebra, and we don't learn about how to manage a bank account or savings or pensions or compound interest and what that means and the ability to wait to receive things.
• 4:41
  SPEAKER_01: So, and then the other thing that I also noted from going into psychology later on is that we don't teach about um behavior and behavioural biases and why we make the decisions that we do.
• 4:53
  SPEAKER_01: So when you tie those two things together, the lack of financial education and a lack of understanding about why we have certain behavioural biases, you suddenly realize why we we struggle to be able to deal with things like credit cards, with debt, um, you know, with managing bills, you know, and managing a household.
• 5:14
  SPEAKER_01: Um, and then thinking about, you know, those things are really, really far away.
• 5:18
  SPEAKER_01: Pensions, you know, how on earth do we get our hands around that?
• 5:21
  SPEAKER_01: Well, we can't, they're not tangible, we can't see those things.
• 5:24
  SPEAKER_01: And so those things sort of struck me early on in life.
• 5:28
  SPEAKER_01: And I started working when I was about 14, actually, you know, so I was working cafes, all sorts of things, and I was very aware of saving money.
• 5:35
  SPEAKER_01: And I and I I remember feeling really proud of being financially independent.
• 5:40
  SPEAKER_01: Um, you know, I thought that was really, really important.
• 5:43
  SPEAKER_01: And but I actually always thought I would become a psychologist.
• 5:46
  SPEAKER_01: I wanted to help people, um, you know, I wanted to be able to help people who maybe had had a difficult start in life, maybe hadn't had the support that they needed.
• 5:55
  SPEAKER_01: Um, and I used finance as a way of helping support me to do my degree in psychology and to do my master's in forensic psychology, um, where I did like dialectical behavior therapy.
• 6:06
  SPEAKER_01: So I was, you know, really, really interested in behaviour, but I kept coming back to finance because ultimately, if you want to change some of these things that you see, whether it's mental health, whether it's housing, whether it's you know, the kind of food crisis, what you know, it requires systemic change.
• 6:25
  SPEAKER_01: And that really can only happen through looking at um economics.
• 6:29
  SPEAKER_01: Um, economics, politics, and society, you know, generally.
• 6:34
  SPEAKER_01: So you so I found that if you if you trace the money back, you recognize that there are some key players in the market that have a disproportionate amount of influence and power.
• 6:46
  SPEAKER_01: And how do you try and get those people to change their mindset and to be able to embed social and environmental factors?
• 6:54
  SPEAKER_01: And so that was the thing that helped flip me from thinking about wanting to help people on a one-to-one basis to how can I help a significant number of people within an industry that clearly needed to change and also could offer education.
• 7:10
  SPEAKER_01: You know, the finance industry, you know, is actually as much as it gets a really bad rap, and we know what you know what happened through the financial crisis, it has an amazing ability to be able to invest and empower people if it does that in the right way.
• 7:24
  SPEAKER_01: So that's that's what that was sort of my you know my journey along.
• 7:28
  SPEAKER_01: I then got into finance.
• 7:30
  SPEAKER_01: You know, I worked for asset managers, investment consultant, fiduciary manager, and you know, I recognize some of the same pitfalls that we see in every business, which is we get into a kind of herd mentality.
• 7:43
  SPEAKER_01: Um, we think that the most important thing is the return that we get, you know, the bonus we're paid, the amount of money that we're paid.
• 7:51
  SPEAKER_01: And you realize that we're missing the big picture, we're missing the systems, and we and it's very hard to change things internally.
• 8:00
  SPEAKER_01: So um I got an opportunity in 2020 during lockdown to change roles.
• 8:07
  SPEAKER_01: And I decided, no, I'm not going to go back into asset management.
• 8:10
  SPEAKER_01: I really wanted to work with Pent to the Purpose.
• 8:12
  SPEAKER_01: I actually reached out to Karen, um who's the founder of the business, and I said, I really think there's more that we can do with this.
• 8:20
  SPEAKER_01: And uh, for better or worse, and I definitely hope she'd say better, um, I got involved with the business.
• 8:26
  SPEAKER_01: There was no role at the time, so I, you know, kind of pitched myself.
• 8:29
  SPEAKER_01: And then uh by the end of the year, she'd asked me whether I would take on the CEO role, which was brilliant.
• 8:35
  SPEAKER_01: And we went from a nonprofit to a limited business and then a B Corps, you know, and it was really, really transformative.
• 8:42
  SPEAKER_01: But the reason why that's important, that story, is feeling empowered to be the person you are and to speak your mind, to be able to put forward your values is the most important thing.
• 8:56
  SPEAKER_01: I I've been able to do well in previous roles, but I've never been able to really succeed because I hadn't been able to fully bring me to the table.
• 9:07
  SPEAKER_01: This is the bit about belonging, feeling free to say what you think and have that aired and challenged, but not held back.
• 9:17
  SPEAKER_01: And I think that's really, really important.
• 9:20
  SPEAKER_01: So I absolutely love my role.
• 9:23
  SPEAKER_01: I absolutely love it.
• 9:24
  SPEAKER_01: I love the team, I love the people I work with.
• 9:27
  SPEAKER_01: And because we're inclusive and we create the sense of belonging, all the people we work with and that come to us, you know, they get that sense, you know, um, of feeling empowered and feeling like they can go away and they have the ability to change things, you know, in the world or in their finances, you know, at the very least.
• 9:44
  SPEAKER_01: And so, and that's that's an amazing thing to be able to do.
• 9:47
  SPEAKER_01: Um, so no, I I love it.
• 9:48
  SPEAKER_01: I get up every day and I think, wow, there are so many different challenges, but I'm doing it in the right place with the right team around me.
• 9:55
  SPEAKER_03: Yeah, I love that you just directly messaged Karen.
• 10:00
  SPEAKER_03: Like, I want to, I think there's more we can do.
• 10:02
  SPEAKER_03: Let me help you steer this shit.
• 10:04
  SPEAKER_03: That boldness.
• 10:06
  SPEAKER_03: And I think when you when you know you're doing something that aligns with your core values, that you live, breathe, you can speak about it forever, that type of action, there's probably no fear in that.
• 10:16
  SPEAKER_03: You're just you know that pushing that forward is exactly what you want to do.
• 10:20
  SPEAKER_03: And I think that's also a message saying, message those people and and get involved and say what you think you could add and how the value you can add to that.
• 10:27
  SPEAKER_03: Um, and no, I think that's amazing.
• 10:30
  SPEAKER_03: And it's when you said, you know, with the mission that you do and you're attracting people who resonate that, it is like a law of attraction almost, isn't it?
• 10:38
  SPEAKER_03: You know, working with good clients and having good impacts and recognizing that what you do can really empower people.
• 10:45
  SPEAKER_03: And so I think let's talk about pensions for purpose then.
• 10:48
  SPEAKER_03: How would you sum up pensions for purpose in a nutshell?
• 10:52
  SPEAKER_01: Oh, so we are a member network.
• 10:56
  SPEAKER_01: We're a member network of pension funds and other asset owners, investment consultants, legal firms, asset managers.
• 11:04
  SPEAKER_01: What does that really mean?
• 11:05
  SPEAKER_01: Well, what the reason why we bring lots of stakeholders together is what we've created is a really long, convoluted investment chain where you get the member, the trustee of a pension scheme, an in-house team.
• 11:16
  SPEAKER_01: We then have investment consultants, asset managers, legal advisors, a sponsoring employer, all you know, all these different things.
• 11:22
  SPEAKER_01: By the time you get to the end of that chain, when you've tried to put together objectives, whether they're investment or impact objectives, it becomes like Chinese whispers, you know, and um you've got all these different barriers and challenges.
• 11:35
  SPEAKER_01: So what we're trying to do is by bringing these stakeholders together, we're trying to create a common language on which we can talk about embedding impact, social and environmental impacts.
• 11:45
  SPEAKER_01: And when I say that, I do mean negative impacts and positive impacts.
• 11:49
  SPEAKER_01: We're not just looking at have positive impact over here and we'll forget what we're doing over here.
• 11:54
  SPEAKER_01: Um, and so what we're trying to do is we're trying to bring pension funds on a journey to understand the impact they're currently having and to be able to make better informed choices about the impact they have going forward.
• 12:08
  SPEAKER_01: And so that means we do a number of different things.
• 12:10
  SPEAKER_01: We have forums where people can share best practice in the industry, peers as well as um asset managers and investment consultants.
• 12:18
  SPEAKER_01: We do training workshops.
• 12:20
  SPEAKER_01: Um, so we facilitate training workshops with pension funds to help educate them across the spectrum of capital to understand about impact.
• 12:28
  SPEAKER_01: We promote the impact investing principles for pensions, so a good governance framework for actually implementing it.
• 12:34
  SPEAKER_01: And we've got pension schemes that are signed up to that now, so DC schemes, local government pension schemes, and also a large group of the investment consultant fiduciary managers like Schroeder's.
• 12:44
  SPEAKER_01: So I would always target like Schroeder's and Blackbook because they are the largest global asset managers.
• 12:48
  SPEAKER_01: If you want to change where capital's going, you try to change, change the world.
• 12:53
  SPEAKER_01: Yeah, so a lot of it is about collaboration, education, and development.
• 12:58
  SPEAKER_01: Um, and and and that's what we're working on.
• 13:00
  SPEAKER_01: And and what I would say is it's really when when impact is your focus, you realise that you can't be as structured.
• 13:10
  SPEAKER_01: And we're lucky, we're we're an organization where we are held by the founders and the management team who are uh majority female, um, and we don't have external investors.
• 13:22
  SPEAKER_01: And because of that, we can stay very, very true to the mission, but we're also independent.
• 13:26
  SPEAKER_01: We're independent of the asset managers, consultants, legal firms, which means that we have that legitimacy to be able to, you know, call out and question and challenge some of the frameworks in the industry and say, okay, I'm I think we probably could approach this in a different way.
• 13:41
  SPEAKER_01: That's much easier for us to do than if you're in the industry and you're incentivized to produce product in that way.
• 13:48
  SPEAKER_01: So I think we hold a really interesting position and it it's um it's a privilege, really.
• 13:53
  SPEAKER_01: You know, we're a sort of trusted organization that pension funds use to really think about how they embed impact in terms of their objectives, um, but also in terms of their stewardship, you know, their engagement and voting policies with companies and also their measurement.
• 14:08
  SPEAKER_01: Um and I absolutely love it because I really feel for investors it's very easy for groups to turn around and say, you should be doing better, you should be um excluding tobacco, you should be divesting from fossil fuels, you should be doing, but often these teams have very tiny resources.
• 14:27
  SPEAKER_01: There may be one person that's focused on in you know on everything to do with ESG responsible investment impact.
• 14:33
  SPEAKER_01: And this is where we can come in, we can help bring our resource and our knowledge to the table to help them make informed choices.
• 14:40
  SPEAKER_03: Wow, yeah.
• 14:41
  SPEAKER_03: Goodness.
• 14:42
  SPEAKER_03: I think with asset classes, it's definitely an interesting conversation I've had recently of, you know, making sure everyone needs to be in that room regarding.
• 14:49
  SPEAKER_03: I know tobacco is is, you know, and oil and gas, but as much as you don't want to invest in something which has pretty much caused this mess, um, you know, they still need to be in the room because they still have a lot of capital they can invest into things that can really transform.
• 15:04
  SPEAKER_03: And I think it's it's definitely a conversation everyone needs to be involved in.
• 15:09
  SPEAKER_03: And I guess as you've been helping um different pension funds, in your journey as a time as C as CEO, what's the biggest challenge that you've overcome or the that you've faced that is sort of a common challenge in the pension funds?
• 15:23
  SPEAKER_01: It probably isn't the one that you would necessarily think.
• 15:26
  SPEAKER_01: It's it's governance, it is diversity of trustees on the board, diversity of people.
• 15:35
  SPEAKER_01: I mean, you know, if I'm talking about real estate and infrastructure, I'm probably one of the only women in that room.
• 15:40
  SPEAKER_03: Yeah.
• 15:40
  SPEAKER_01: Um, and and that's what we forget that often when we're making decisions about whether we pursue impact or we look at impact, it's often being done with with among people who maybe don't have a mandate to actually make that decision.
• 15:55
  SPEAKER_01: And so I think the governance is really, really important.
• 15:59
  SPEAKER_01: Do you represent the members of your scheme or in or in or fund or whatever?
• 16:04
  SPEAKER_01: And you know, can you can you legitimately hold your hand up and say that you do?
• 16:08
  SPEAKER_01: Because I think that's very important.
• 16:10
  SPEAKER_01: I mean, I would argue that many of the trustees that are on schemes probably are going to be retiring on defined benefit pension schemes.
• 16:18
  SPEAKER_01: Well, that's a very, very different set of um you know parameters for them than it is for people who are retiring on a defined contribution scheme.
• 16:27
  SPEAKER_01: And we need to make sure that members represent diversity in terms of cognitive diversity, but also age.
• 16:35
  SPEAKER_01: You know, it's very difficult to attract young trustees into the kind of investment space, pension fund market.
• 16:42
  SPEAKER_01: And you can understand the issue around that, you know, from a generational perspective, they'll have a different view on some of these things.
• 16:49
  SPEAKER_01: But if they're not at the table, they don't have a voice.
• 16:51
  SPEAKER_01: And that's really what this is what this is about.
• 16:54
  SPEAKER_01: So we we obviously also raise awareness in that area.
• 16:58
  SPEAKER_01: Um, you know, it's important to engage with members, also to understand that as a representative, you don't just represent the oldest members, you represent the youngest members as well.
• 17:08
  SPEAKER_01: Um, and so sometimes it's just highlighting the fact that you need to maybe have a different mindset.
• 17:14
  SPEAKER_01: You know, you need to think about things a different way.
• 17:16
  SPEAKER_01: And it's really hard.
• 17:17
  SPEAKER_01: What we're asking people to do when we talk about climate change is we're asking people to think about things they've never ever had to think about.
• 17:24
  SPEAKER_01: And just imagine going into, you know, you're going into Topshop and you're thinking, okay, I only have a certain amount of money, um, you know, and I can go and buy a five-pound t-shirt.
• 17:33
  SPEAKER_01: But in reality, is that is that helping?
• 17:36
  SPEAKER_01: You know, is that that that might be great for you for today?
• 17:39
  SPEAKER_01: But you know, what are the what are the working practices that have gone into that?
• 17:43
  SPEAKER_01: How sustainable is that product?
• 17:45
  SPEAKER_01: What is the longevity of it?
• 17:46
  SPEAKER_01: And cotton production, for example, uses water.
• 17:50
  SPEAKER_01: And we're seeing, you know, we're seeing, you know, um the effects of water usage right now.
• 17:56
  SPEAKER_01: So I think it's a but it's a really hard thing because we're marketed at all the time.
• 18:00
  SPEAKER_01: You know, you need this thing, you have to have it now, you know, and we've put fear into people.
• 18:06
  SPEAKER_01: And this is exactly the same in the investment world.
• 18:08
  SPEAKER_01: There's no, you know, there's no difference, really, which is you need a return.
• 18:12
  SPEAKER_01: The primary concern is you need a return, you need to mitigate risk, and impact for a long time was sort of thought out of as something concessionary.
• 18:22
  SPEAKER_01: Um, you know, you had to give up something.
• 18:24
  SPEAKER_01: Um, whereas now it's a bit like tobacco companies saying, no, we're going to externalize all our costs.
• 18:31
  SPEAKER_01: You can't externalise all your costs to society for building a product that contributes towards, you know, um uh cancer.
• 18:39
  SPEAKER_01: So the difference now is we have the data, there is transparency.
• 18:44
  SPEAKER_01: And once you've got transparency, companies can't say, well, don't look over here, don't look at these factors, don't, you know, look at look at Boohoo, for example.
• 18:52
  SPEAKER_01: You know, when we found out about their supply chains, you know, working practices, you know, their um, you know, sort of value fell through the floor.
• 19:00
  SPEAKER_01: And and that, and that's what happens.
• 19:02
  SPEAKER_01: So we so once there's transparency, you can't, as an investor, say, well, I'm just not willing to look at that.
• 19:09
  SPEAKER_01: Yeah.
• 19:09
  SPEAKER_01: You know, it's a bit like if I if if somebody comes to me now and says, well, I don't believe in climate change, my honest answer is that actually doesn't matter anymore.
• 19:18
  SPEAKER_01: It doesn't matter whether you believe it or not, because the market has decided that it matters.
• 19:25
  SPEAKER_01: And once it decides it matters, that value, that you know, those risks, those factors are built in.
• 19:31
  SPEAKER_01: So you have to think about it.
• 19:33
  SPEAKER_01: And so it's it's just it's a really, really interesting time.
• 19:36
  SPEAKER_01: But when you start to talk to people pragmatically, I think they start to see it in a different way.
• 19:40
  SPEAKER_01: And we we don't go along this road road of saying, well, to be part of our platform, you have to be meeting the absolute best standards.
• 19:47
  SPEAKER_01: We want people to come along who maybe aren't sure, they're not sure how to address this, whether an asset manager or um pension fund, and we want to help them on that journey.
• 19:56
  SPEAKER_01: I think if you start setting flaws and you start saying you can't join us, you can't be unless you meet a certain threshold, the difficulty is that you push those people out of the conversation.
• 20:06
  SPEAKER_01: It's a bit like a divestment argument, which is if you start divesting, those issues start going into private hands.
• 20:14
  SPEAKER_01: And once they go into private hands, it becomes less transparent, and you actually have less ability to change behaviour.
• 20:20
  SPEAKER_01: So there is a there's a balance with all of these things, I think.
• 20:24
  SPEAKER_01: Um, and it's changing all the time.
• 20:26
  SPEAKER_01: So working with um advisors who really understand the subject matter, um, I think is important, but also having that ability to challenge, you know, and think laterally is really important.
• 20:38
  SPEAKER_03: Yeah, definitely.
• 20:39
  SPEAKER_03: So I think with it's such a convoluted topic, isn't it?
• 20:43
  SPEAKER_03: When you start looking at the impact that you can have, because you know, some people, financial advisors, their clients might not, like you said, believe in climate change.
• 20:52
  SPEAKER_03: It might not be on the forefront of their minds.
• 20:54
  SPEAKER_03: They might be 10 years to retirement and they want their return.
• 20:57
  SPEAKER_03: And it is about bringing that into a conversation in an organic but also very matter-of-fact way that, you know, yes, you want a return on your investment, but actually think about they might have children, they might have grandchildren, the return on their investments is going to be heavily impacted by what we're already seeing in the world around us.
• 21:16
  SPEAKER_03: And I think with that said as well, how have you noticed the conversation in the industry change?
• 21:21
  SPEAKER_03: At what point did it click with you?
• 21:23
  SPEAKER_03: Okay, this is really going to change now.
• 21:26
  SPEAKER_03: I want to, I want to go with this ball that's running.
• 21:29
  SPEAKER_01: I think we've obviously seen a lot um going around in the press um and media about um, you know, ESG and greenwashing.
• 21:41
  SPEAKER_01: Yeah.
• 21:41
  SPEAKER_01: And I think there's there's always the risk of that.
• 21:44
  SPEAKER_01: When you start looking into a new area, um, there are always going to be those that say they're ahead of the curve and aren't.
• 21:51
  SPEAKER_01: There are always going to be those that are, you know, not pulling the wool over your eyes, but but maybe don't have all of the data.
• 21:57
  SPEAKER_01: There are going to be gaps, you know, and we have to accept that to a certain extent.
• 22:00
  SPEAKER_01: But I think the difficulty was that with ESG, yes, we were trying to understand risk, but we weren't really trying to understand the impact of the company on the world.
• 22:09
  SPEAKER_01: We were trying, we were trying to understand the risk of the world on the company.
• 22:14
  SPEAKER_01: And these are two very different things.
• 22:15
  SPEAKER_01: And people talk about double materiality.
• 22:18
  SPEAKER_01: Double materiality are exactly those two things.
• 22:20
  SPEAKER_01: So the only way you really make sense of ESG, you know, those different risks, whether it's climate risks or whether it's social risks, is if you actually have impact objectives.
• 22:32
  SPEAKER_01: So what is the impact you're trying to have?
• 22:34
  SPEAKER_01: And what is the impact you're trying to mitigate?
• 22:37
  SPEAKER_01: Do you do you want to be investing in companies that are producing products that limit people's lifespan, you know, and contribute to huge NHS bills, or you know, I mean how, you know, and what and also what is the long-term sustainability of a company with that with those sorts of products?
• 22:55
  SPEAKER_01: Um, and and those are the sorts of questions that you need to ask yourself, and then you know what the investment case is.
• 23:01
  SPEAKER_01: Because the thing is, it's all well and good looking at eBITDA, you know, price earnings ratios, but largely these are short-term um views of finances.
• 23:11
  SPEAKER_01: Whereas when we're thinking about impact, this is much longer term.
• 23:14
  SPEAKER_01: And when we think about things like climate change, much longer term, although you know it started to become um shorter term um with what we're seeing in the UK currently.
• 23:23
  SPEAKER_01: So we've needed to embed these factors in a different way, which doesn't fit with the typical one-year, three-year, five-year sort of returns that people tend to look at at on funds.
• 23:35
  SPEAKER_01: You know, we need to be looking at you know 10-year time horizons and really understanding um how we're investing, but also we need to be investing in private investments that have longer lockup periods, you know, um, because those are going to provide the technologies of the future.
• 23:54
  SPEAKER_01: Um, and typically everyone, particularly from a pension fund perspective, but institutional perspective, has has tried to go for risk mitigation.
• 24:02
  SPEAKER_01: So we don't want to get into you know risky areas where there could be the potential to lose money.
• 24:08
  SPEAKER_01: But at the same time, if you don't build up those industries, you don't have anything to challenge the big public companies and the practices that they employ.
• 24:17
  SPEAKER_01: So I think there is a big, there's a big difference now.
• 24:21
  SPEAKER_01: One of the biggest differences is regulation.
• 24:23
  SPEAKER_01: So we've got the mandation of uh climate-related financial disclosures.
• 24:28
  SPEAKER_01: That that's massive, you know.
• 24:29
  SPEAKER_01: So that's actually written in.
• 24:31
  SPEAKER_01: Trustees for pension funds and institutional investors need to be looking at climate change scenario analysis.
• 24:38
  SPEAKER_01: So, how how does their return profile, risk and return profile, look in the context of you know, a 1.5 degree, two degree, four-degree world, and what do they need to be doing within their portfolio and outside of that in order to try and mitigate it?
• 24:51
  SPEAKER_01: But what's good about net's, you know, net zero targets is it's not just focusing on mitigation, it is also focused on investing in positive solutions, and there hasn't been enough of a focus on that.
• 25:05
  SPEAKER_01: Yeah, um, you know, we we can do all of the challenge and all of the engagement with the big um companies in the FTSE or MSEI World Index, but that doesn't necessarily provide us with all of the answers that we need because they are in industries that have contributed to the climate change that we have seen.
• 25:23
  SPEAKER_01: So we do need um other up-and-coming and innovative companies to come along that potentially provide new technologies to those businesses, for example, in order to allow them to transform.
• 25:34
  SPEAKER_01: And so it again it comes back down to a mindset.
• 25:36
  SPEAKER_01: So, yes, the regulation which I mentioned, and we've now got the task force for nature-related financial disclosures, we've got um uh a government-backed um group looking at social factors as well for occupational pension schemes, which is great that we're going down that that track, but we do have to commit to something there to make that that tangible.
• 25:55
  SPEAKER_01: But I think I think we need to do more.
• 25:59
  SPEAKER_01: I think we've created a threshold, and it's great that we're talking about net zero, but we can't get to net zero with the amount of inequality that we have.
• 26:06
  SPEAKER_01: We have significant structural and spatial inequality in the UK compared to the rest of Europe.
• 26:14
  SPEAKER_01: You know, we're we're closer in terms of levels of inequality to the to Poland and Romania.
• 26:20
  SPEAKER_01: If you look at the different regions between London and um the Southeast and elsewhere, it really is that stark.
• 26:27
  SPEAKER_01: And the thing is, if you're telling somebody, well, you need to help in the transit transition to net zero, um, and you need to be making your house more resilient, and that means investing at a time where we're seeing significant inflation, um, not just in energy prices but food prices, that's pretty difficult to be able to deal with.
• 26:50
  SPEAKER_01: And so, therefore, we have to be dealing with wealth inequality as well.
• 26:53
  SPEAKER_01: And we haven't seen enough of a plan around that.
• 26:57
  SPEAKER_01: Um, and so when we're working with pension funds, we encourage them to look at all of the factors in the round, the extent that they can.
• 27:03
  SPEAKER_01: And we're very supportive of, for instance, there's a task force on inequality-related financial disclosures.
• 27:10
  SPEAKER_01: We think that's really, really important because businesses need to be understanding not just you know their carbon output, which is just one measure, but also you know, how they're treating employee employees, that's that's another measure, but also their community, yeah, you know, and other stakeholder supply chains.
• 27:27
  SPEAKER_01: Um, and and then also, you know, policy, you know, how are you collaborating with other businesses in order to change policy?
• 27:34
  SPEAKER_01: We talked right at the beginning about the Better Business Act.
• 27:37
  SPEAKER_01: If we wanted to transform the way that we operate, we would get all companies to embed these factors.
• 27:43
  SPEAKER_01: Um the big question is why does why is the government reluctant to do that?
• 27:48
  SPEAKER_01: Yeah.
• 27:49
  SPEAKER_01: Um, and and so you know, that's why ultimately my my sort of big, big ask, I think, of all of the people we work with is is if you haven't looked at B core, have a look at it.
• 28:02
  SPEAKER_01: Absolutely.
• 28:03
  SPEAKER_01: And if you say you haven't got enough time to do it, I call you out on that because I did it myself, because I think as a as a CEO of a business, you should be the person to do it.
• 28:14
  SPEAKER_01: Um, and I think you should find the time.
• 28:17
  SPEAKER_01: And we have less than 10 people in our business.
• 28:19
  SPEAKER_01: So you you can, you can find the time to be able to do it.
• 28:22
  SPEAKER_01: And I think it's really, really important.
• 28:25
  SPEAKER_01: For us, what it means to me is I think about what dividends do we pay?
• 28:31
  SPEAKER_01: What how much do we reinvest in a business?
• 28:33
  SPEAKER_01: How much is that going to contribute to our mission and how we impact um, you know, other people?
• 28:38
  SPEAKER_01: Are we paying our employees enough?
• 28:41
  SPEAKER_01: Can we use our platform like this to tell people you need to be paying more in cot in employer contributions, you know, um towards pension schemes?
• 28:51
  SPEAKER_01: That's part of the social factor, you know, the social factors is actually the whole benefit package.
• 28:57
  SPEAKER_01: That that would be my big, my big kind of call to action for businesses would be if you're not a B-core, why?
• 29:04
  SPEAKER_01: And what and what's stopping you from being one?
• 29:06
  SPEAKER_01: And and to be honest, I don't think there is any good reason for any business not to be able to pursue it.
• 29:11
  SPEAKER_03: You can get so much help with it as well.
• 29:13
  SPEAKER_03: You've got people out there who can coach you through the process and help you go through the process.
• 29:18
  SPEAKER_03: You know, there is you can outsource everything these days, pretty much, and including that.
• 29:22
  SPEAKER_03: But a hundred percent agree because if you think about the sustainability of your business, and in my day job as a recruiter, when I'm, you know, asking people like, what questions are you going to say in the interview?
• 29:33
  SPEAKER_03: One that I asked when I was getting into recruitment is, what are you doing about sustainability?
• 29:38
  SPEAKER_03: But I wouldn't, I wouldn't define it.
• 29:40
  SPEAKER_03: I would leave it open-ended because I meant sustainability in every sense.
• 29:44
  SPEAKER_03: You know, you want to grow your company.
• 29:46
  SPEAKER_03: Okay, how are you going to ensure that everyone receives the right training, the right support, the right infrastructure to be able to hold that business?
• 29:53
  SPEAKER_03: And then, yes, let's get on to the environment.
• 29:55
  SPEAKER_03: It relates to everything.
• 29:57
  SPEAKER_03: And I think for people who don't want to do anything right now, there's going to come a time when absolutely everyone's going to have to do it.
• 30:04
  SPEAKER_03: And it's better to do it now than to do it in 20 years' time when we've got eight years until we're meant to be net zero.
• 30:10
  SPEAKER_03: It's about being proactive on this and having that call to action, like you said.
• 30:15
  SPEAKER_03: And I think you mentioned something when we spoke earlier about people who will be coming into retiring with defined uh contribution pensions.
• 30:24
  SPEAKER_03: And I think that's a really interesting conversation to bring into this about wealth inequality, because generationally, if people have got a more stable pension now compared to the people that will be retiring, that's going to come at a time when we need it to not be inequal.
• 30:38
  SPEAKER_03: We need it to be together and be leveled up on a platform together.
• 30:42
  SPEAKER_01: Yeah.
• 30:43
  SPEAKER_01: And I and it's my biggest concern is that auto-enrolment, which I think was obviously a brilliant thing, um, just didn't go far enough.
• 30:55
  SPEAKER_01: You know, an eight percent, an eight percent um indicative contribution is not enough, you know, to provide you with the type of retirement that you would need, not least because of longevity, that the length of time that people are living, and so therefore the length of time they will need to work, but also whether they then need care.
• 31:17
  SPEAKER_01: And if anyone knows anything about how much it costs um to get um care, and let's face it, those costs are only going to increase, it will be significant.
• 31:26
  SPEAKER_01: Yeah.
• 31:26
  SPEAKER_01: Um, you know, my own grandmother, who has a defined benefit pension scheme, struggles to be able to meet the um care costs around that.
• 31:37
  SPEAKER_01: And she's far better off than any of us will be.
• 31:41
  SPEAKER_01: Um, we're we're all saving far far too little, and and that, and that's really, really concerning.
• 31:46
  SPEAKER_01: And there are lots of, and you know, I'm not a financial advisor, so I cannot provide financial advice.
• 31:51
  SPEAKER_01: But what I would say to everybody is is look into your pension.
• 31:55
  SPEAKER_01: It is the best and most tax-efficient saving you can make.
• 32:00
  SPEAKER_01: Um, and you can start early.
• 32:01
  SPEAKER_01: And the most interesting thing about this, particularly when it comes to impact, is that your contributions, so starting early and investing more early on, has more of an impact than the investment itself.
• 32:14
  SPEAKER_01: Um, so you know, when when we're thinking, you know, when I even when I'm talking to asset management, you know, we get very, very focused in on the returns on a particular fund, but we're not spending our time and energy out there educating people on investing in their future.
• 32:29
  SPEAKER_01: And this is what it is.
• 32:30
  SPEAKER_01: We can, you know, I know people don't like um financial language, but what we're talking about is pension, a pension is investing in your future.
• 32:40
  SPEAKER_01: Um, and so it may be great to have that TV now, you know, or the clothes that you really wanted.
• 32:45
  SPEAKER_01: But what I would say is if you get an increase, you get a bonus, whatever it is that you get, instead of taking that straight away, before you've even had the opportunity, take a percentage of that and put it into your pension.
• 32:56
  SPEAKER_01: You can enroll for that, you know, through your um company, either by going to you know, an HR director or um a pension fund officer.
• 33:05
  SPEAKER_01: Um and I think that's really, really important.
• 33:07
  SPEAKER_01: But if you're an employer, even more so, you should be thinking you're not a sustainable employer if you are allowing your, if you are only contributing the bare minimum that will lead to your employees um retiring in poverty.
• 33:22
  SPEAKER_01: That's not that's not a sustainable business model in my mind.
• 33:26
  SPEAKER_01: And so when I think about the financials on an ongoing basis, I think to myself, well, we're not a financial business if we can't pay at a certain level, but we're not a sustainable business even, if we can't pay at a certain level, if we can't give benefits at a certain level.
• 33:39
  SPEAKER_01: And that's my you know, that's my holding the mirror up against myself and saying, What, you know, do I feel comfortable looking my employees in the eye and saying this is what we're offering you?
• 33:50
  SPEAKER_01: Um I think that's a really and it's a really hard conversation to have.
• 33:55
  SPEAKER_01: I've had it with you know, mums at the school gate, you know, talking about personal finances.
• 34:00
  SPEAKER_01: And genuinely, most people will say to you, I don't know where my pension fund is, not really sure how much I've contributed, I'm not really sure how much the overall pot is.
• 34:09
  SPEAKER_01: It's potentially split between different providers.
• 34:12
  SPEAKER_01: Um, and often they don't know what it's invested in.
• 34:15
  SPEAKER_01: Yeah.
• 34:16
  SPEAKER_01: Yet a lot of those people will be saying, Oh, yeah, but I really care.
• 34:20
  SPEAKER_01: So I've gone vegetarian, I'm using you know, bags for life and all these things, but your pension investment is 21 times more effective in reducing the effects of climate change than anything you do personally at home.
• 34:35
  SPEAKER_01: So actually, you might as well forget all of those things, forget the energy saving light bulb, forget all the stuff, and focus on your pension fund.
• 34:41
  SPEAKER_01: Wow, you'd have more of an impact.
• 34:43
  SPEAKER_01: And that that came from the Make My Money Matter campaign.
• 34:46
  SPEAKER_01: So I think that's that's so powerful.
• 34:49
  SPEAKER_01: And not only that, you're contributing to that outcome, which is something you want, but you're also then making sure that you can retire.
• 34:57
  SPEAKER_01: And and if at any point, you know, you died, well, you you have more of a benefit to pass on to your spouse or to your children.
• 35:06
  SPEAKER_01: So those are, and and this is why we need to be having open, honest conversations about this in a non-threatening and non-judgmental way.
• 35:16
  SPEAKER_01: Um, because I think there's a lot of, you know, there's a lot of pride, you know, around talking about personal finance.
• 35:22
  SPEAKER_01: And you'll know from the recruitment industry, people don't talk about salaries.
• 35:25
  SPEAKER_01: They don't, you know, really talk about it.
• 35:28
  SPEAKER_01: But actually, I don't think that's helped.
• 35:30
  SPEAKER_01: You know, I think we should be more transparent about it and about um benefits.
• 35:36
  SPEAKER_01: I think we even need to think about some kind of different mechanism.
• 35:40
  SPEAKER_01: Do we give a greater percentage, you know, of pension contribution to those on lower salaries?
• 35:46
  SPEAKER_01: Because ultimately the proportion that they will then be saving will be much less than those on bigger salaries.
• 35:53
  SPEAKER_01: Um, you know, those are the sorts of things I think we need to be looking at.
• 35:56
  SPEAKER_01: And that, and those, you know, the B core impact assessment, those sort of things are great nudges to get you to really think about the type of business that you want to be.
• 36:05
  SPEAKER_01: Yeah and also to what extent are you needed?
• 36:08
  SPEAKER_01: You know, are you actually producing products and services that that people need, that the planet needs, or are you actually just doing it to produce a profit?
• 36:17
  SPEAKER_03: Yeah.
• 36:18
  SPEAKER_03: And that won't last in the future.
• 36:20
  SPEAKER_03: That's not there's not really a space for that moving forward.
• 36:23
  SPEAKER_03: It needs to be full circle, doesn't it?
• 36:26
  SPEAKER_03: You know, it needs to come back and serve a purpose in so many different ways.
• 36:29
  SPEAKER_03: And an interesting point you said there about talking to fellow mums at the school gate and them saying, Oh, I don't know where my pension is.
• 36:36
  SPEAKER_03: I know I've got about three different nest pensions.
• 36:39
  SPEAKER_03: They're just all there.
• 36:41
  SPEAKER_03: And I don't know, I've tried to get them all together.
• 36:42
  SPEAKER_03: And it is that thing, you just know they're somewhere, don't you?
• 36:45
  SPEAKER_03: And I think my mum and my dad have always said, make sure you get a pension when you're 18, just put everything into it.
• 36:51
  SPEAKER_03: And my dad's quite lucky because he was in the forces and he's retired now, he's 63, he's got a great, you know, pension from the forces.
• 36:58
  SPEAKER_03: But when I look at you know what my mum has, it's very different and it does cause concern.
• 37:03
  SPEAKER_03: And it also brings it back about being financially literate and being taught that in schools.
• 37:08
  SPEAKER_03: And I actually did a poll on LinkedIn recently where I asked people, because I could count on, I could count on both my hands 20 times, probably the number of times I was sat in a classroom at school learning maths, and we're like, Miss, why are you teaching us about this?
• 37:22
  SPEAKER_03: Teach us about taxes, teach us about practical life things that we need to know to understand money.
• 37:28
  SPEAKER_03: And the poll on LinkedIn came back, nobody, nobody, and it's no shock got taught how to manage money at school.
• 37:35
  SPEAKER_03: There were some people who had their parents teach them about money, some people who wished they'd been taught about money, and others that took it upon themselves.
• 37:42
  SPEAKER_03: And it was probably about a 30, 40 percent split between the people who taught themselves and who wished they wanted to learn about money, and then the people who had parents.
• 37:50
  SPEAKER_03: And I think it just goes to show the power of a financial education.
• 37:55
  SPEAKER_03: And I think that's something which I know is very you're very passionate about, isn't it?
• 37:59
  SPEAKER_03: Bringing that to schools because it would it would transform my life if I'd have had a financial education at school, I would have understood more about the interest rate on my student loan and the effects of going to uni for six years and understanding what an overdraft is and all of those things which I had to learn the hard way.
• 38:18
  SPEAKER_03: And it could, you know, in terms of a generational thing, generational wealth being passed down, if you haven't got that generational wealth to be passed down, you don't, you're not gonna have someone who's gonna understand how to handle money, and you're just not gonna, it's gonna take you a lot longer to get equal up in terms of the equality as well.
• 38:37
  SPEAKER_01: I think that's you know, that's where we've got these two strands come and come together, which is a knowledge economy and and then the kind of you know financial economy, if you like.
• 38:47
  SPEAKER_01: And and it's the same with sort of disparity, you know, wealth disparity.
• 38:53
  SPEAKER_01: I would imagine, and I don't know the figures on this, would almost match knowledge disparity.
• 39:00
  SPEAKER_01: So, you know, those on um lower incomes um and and those maybe who are from deprived backgrounds are less likely to have access to people who have financial knowledge, and so therefore you perpetuate a cycle that reinforces itself.
• 39:16
  SPEAKER_01: Um, and the other thing is is that trickle-down economics we we know doesn't hasn't worked, and um and and for a number of different reasons, but but but largely because we have, you know, we talk about diversity and inclusion in businesses.
• 39:33
  SPEAKER_01: Uh, it it is like the big topic now.
• 39:36
  SPEAKER_01: I mean, it's it's more prevalent in the US and and they implement it probably better than we do.
• 39:40
  SPEAKER_01: But um, but the reality is in schools we still segregate.
• 39:45
  SPEAKER_01: We segregate on the basis of um parents' um financial background and where they can afford to buy, we segregate on the basis of religion.
• 39:53
  SPEAKER_01: Um, and and yet we are expecting those children to go into a world where we say it's meritocratic, it doesn't matter which background you come from, and yet they're being brought up thinking that it does matter.
• 40:06
  SPEAKER_01: And that's what why what I don't understand.
• 40:10
  SPEAKER_01: I don't understand how we've created a an adult environment where we absolutely understand these factors and dynamics and disparities, and yet we are perpetuating them still, you know, at school.
• 40:22
  SPEAKER_01: And it makes me wring my hands because it's all part of the same um issue, which is if we can't talk about and break down barriers, we will never be able to resolve these issues.
• 40:35
  SPEAKER_01: Um, and so you need um to be able to bring people together, and you need to be able to start putting into um classrooms, you know, understanding of behavior and psychology and and finance, and stripping back some of these other subjects, which yes have a history, but just aren't relevant in today's dynamic um, you know, society.
• 41:01
  SPEAKER_01: And I think that's what we need to go back to the drawing board on.
• 41:04
  SPEAKER_01: And I realize that's incredibly politically difficult, but just because something is difficult doesn't mean we don't do it.
• 41:11
  SPEAKER_01: Absolutely.
• 41:12
  SPEAKER_01: I love that quote.
• 41:13
  SPEAKER_03: And I think I remember a couple of years ago they were campaigning to put conservation and welfare into the GCSE system to bring awareness about that and be able to educate children about that.
• 41:24
  SPEAKER_03: And it goes hand in hand as well.
• 41:26
  SPEAKER_03: You know, I'll quote my dad again, I think I quoted him last episode.
• 41:29
  SPEAKER_03: He's always said to me, Charlotte, if you want to make a difference, go to the top, go where the money is, and to be able to understand that system instead of seeing it as this corporate evil that does, you know, controls everything with you know puppet strings, actually, you can work in cohesion with them.
• 41:47
  SPEAKER_03: You can work really collaboratively and create such a change on that.
• 41:50
  SPEAKER_03: Um, and I think, you know, I see advisors going to schools and educating children.
• 41:55
  SPEAKER_03: And I was very lucky actually, um, recently Recruit UK sent around an email a couple of weeks ago now, it was, and they said every single person in the business wanted to receive a two grand pay rise and that we would also start receiving financial education.
• 42:10
  SPEAKER_03: They would bring somebody in to coach us about how to handle your money, which yes, in recruitment is good because we do get commission and we do have bonuses.
• 42:18
  SPEAKER_03: But also, I was just astounded that A, I had an employee who thought like that.
• 42:24
  SPEAKER_03: B, they understood that the Bristol housing market where we're based is pretty, you know, it's pretty intense right now.
• 42:29
  SPEAKER_03: It's really hard to get somewhere.
• 42:31
  SPEAKER_03: People are asked for sort of six months deposits up front, which I've heard is actually illegal.
• 42:36
  SPEAKER_03: And, you know, to be able to have that environment where it's like, right, we want you to build a life for yourself and be stable.
• 42:42
  SPEAKER_03: So let's let's start this by raising everyone.
• 42:45
  SPEAKER_03: And it didn't matter your salary, didn't matter across the business, it was inclusive of everyone.
• 42:50
  SPEAKER_03: And that's something which I'm so excited to start getting more of a financial education because I think everyone needs it really, just the basics.
• 42:58
  SPEAKER_03: Yeah, exactly.
• 42:59
  SPEAKER_01: Exactly.
• 42:59
  SPEAKER_01: We we also need, you know, business leaders to be willing to try um, you know, different methods for you know remunerating and incentivizing individuals and not to be afraid just because just because it's what's done and has been done before doesn't mean it's what you should do going forward.
• 43:19
  SPEAKER_01: And I've seen there's um a really interesting um uh business founder and CEO in the US who basically worked out that everybody needed about 70,000, this is dollars, US dollars to live on.
• 43:36
  SPEAKER_01: Um below that, um, it's incredibly difficult to be able to manage everything you need in terms of healthcare, childcare, everything else.
• 43:45
  SPEAKER_01: Um, above that, it's just you start to try and sort of add on things that you don't necessarily need.
• 43:51
  SPEAKER_01: And so actually you overburden yourself with financial commitment.
• 43:55
  SPEAKER_01: But he basically just leveled everybody's salary.
• 43:58
  SPEAKER_01: Wow, I think I heard about him on the news.
• 44:00
  SPEAKER_01: Actually, I suppose.
• 44:01
  SPEAKER_01: So, yeah, so 70,000.
• 44:03
  SPEAKER_01: And um, and you know, we can have all different views about this, and you know, different companies have come out with you know unlimited holiday.
• 44:10
  SPEAKER_01: So they've put the power with you know the individuals to make the decision about how they use their time rather than the company continually dictating.
• 44:18
  SPEAKER_01: And I think we need to do more of that.
• 44:20
  SPEAKER_01: I I think of my role now less as a CEO and more as a as a like a chief stakeholder officer.
• 44:27
  SPEAKER_01: You know, I'm accountable to my employees, to the board, to you know, our members and stakeholders.
• 44:35
  SPEAKER_01: And that's how I think everybody who runs a business should be thinking.
• 44:39
  SPEAKER_01: I don't think you should be thinking, my responsibility is to the board and to shareholders, and that's it.
• 44:44
  SPEAKER_01: That's where it starts and finishes.
• 44:45
  SPEAKER_01: It absolutely doesn't.
• 44:47
  SPEAKER_01: Um, you're only a viable business if you can look through.
• 44:50
  SPEAKER_01: And and so we I started to institute after our quarterly board meetings, I present our financials to the whole team.
• 44:58
  SPEAKER_01: So I don't, you know, so they see what the board sees.
• 45:01
  SPEAKER_01: There's no difference in my view, and you know, it's it's much easier for them to come on the journey with you and to feel incentivized if they understand what you're building towards and what it means.
• 45:12
  SPEAKER_01: And also by doing that, you're also then um actually educating them on financials because you're showing them you know profit and loss accounts, you know, and balance um sheets, you know, and eBIT DAR values, and suddenly you can start putting everything together.
• 45:28
  SPEAKER_01: I think you know, businesses should feel proud, you know, being able to do that for their employees.
• 45:33
  SPEAKER_01: Um so yeah, you know, there is so much more that we can do as businesses that is beyond the sort of financial management of the company.
• 45:43
  SPEAKER_03: Yeah, definitely.
• 45:44
  SPEAKER_03: And would you say, obviously, coming from sort of a psychological psychology academic background, that must influence your perspective on people's behaviours in terms of their money so much.
• 45:56
  SPEAKER_03: And I think I know when we spoke last time, you mentioned humans think in the short term.
• 46:01
  SPEAKER_03: And with managing money, you've got to think in the long term.
• 46:05
  SPEAKER_03: And it's about combating how we probably have to all admit on some level, we need to alter our behavior on this, we need to really look at how we're behaving around money and what we want in life and our values to see if it actually aligns in the direction that is needed to create you know systemic change in our society.
• 46:23
  SPEAKER_01: Yeah, I we've we've I suppose what we've lost.
• 46:28
  SPEAKER_01: I started off by doing archaeology actually at Stanford University, and um it was absolutely fascinating.
• 46:35
  SPEAKER_01: So um, you know, I did anthropology as part of that, field archaeology.
• 46:40
  SPEAKER_01: I had to actually go on a trip to learn how to hunt a deer.
• 46:45
  SPEAKER_01: Now the deer was dead at the time, so at least anyone who's we didn't go and actually kill something that's alive and kicking, but we had to learn how to um spear a deer, how to skin it, how to um cut, you know, and I know this would horrify some people, but the reality is if we are going to eat meat, we need to understand where it comes from.
• 47:06
  SPEAKER_01: And you'll understand the the link to finances in a minute.
• 47:10
  SPEAKER_01: But you know, then we had to cook it in a pit and eat it.
• 47:13
  SPEAKER_01: And like the waiting time for that and that process versus going into a shop, buying it off the shelf, putting it into the oven, you know, is an entirely different thing.
• 47:22
  SPEAKER_01: And I think that's the difficulty.
• 47:24
  SPEAKER_01: We've made it too easy for people to just go, well, I want that and I want that thing, and I don't need to wait.
• 47:30
  SPEAKER_01: I don't need to spend any time waiting for anything, and that plays to quite an addictive um quality that we have.
• 47:37
  SPEAKER_01: There's a reason why we, you know, get addicted to tobacco in the way.
• 47:42
  SPEAKER_01: I know we talk about addictive substances, but we are wired that way.
• 47:45
  SPEAKER_01: You know, we we have neural pathways in the brain um that are stimulated by certain substances and by certain types of behaviours, and we want to repeat those behaviours and create, and this is why marketing works so well, because we plug into behavior, we know how people are going to behave certain things.
• 48:05
  SPEAKER_01: So you make people fear that they're not beautiful enough.
• 48:09
  SPEAKER_01: So then you know, they have to change the way they look and buy lots of things to make them.
• 48:13
  SPEAKER_01: We don't need any, we don't need anything, we don't need to have makeup, we don't need vegetable products.
• 48:18
  SPEAKER_01: In reality, we probably just need soap.
• 48:20
  SPEAKER_01: Um, but but you know, that doesn't, you know, that doesn't make a company, and you can't make revenue out of that.
• 48:26
  SPEAKER_01: We don't need to drink Coca-Cola, you know, there's nothing um of any value in it.
• 48:30
  SPEAKER_01: Um, you know, we can all live on water, but it's it's trying to unwind what has been put in place for a significant period of time, a drip, drip.
• 48:41
  SPEAKER_01: And and what interests me about it is yes, I studied psychology and behaviour.
• 48:45
  SPEAKER_01: And so I look you look into how we stimulate the brain and the kind of reward pathways in the brain, and that dopamine hit that people look for.
• 48:56
  SPEAKER_01: Um, you know, and for some people it's spending money, you know, for for some people it's um, you know, going out and drinking, whatever, what you know, whatever it is.
• 49:05
  SPEAKER_01: But the interesting thing is if you spend time and energy, if you do things like mindfulness or you know, and you take that time out, you can re-engage with yourself in a different way, you can change the neural pathways in your brain.
• 49:20
  SPEAKER_01: And I think that's really, really interesting, particularly in an investing context, because we think we're thinking logically, you know, and rationally when it comes to finances, because it's all quantifiable.
• 49:31
  SPEAKER_01: We want everything, but it isn't, it's all based on behavior.
• 49:34
  SPEAKER_01: You know, um, we even talk about um an investor psychology cycle that you go through and the way that investors um react when suddenly share price dies.
• 49:47
  SPEAKER_01: You know, we we know that the best thing to do is actually to hold on to that stock, but often that fight or flight mentality will mean that people will sell at the worst possible time.
• 49:58
  SPEAKER_01: That's got nothing to do with um, you know, being rational or um understanding the track record or anything like that.
• 50:06
  SPEAKER_01: That is just behaviour.
• 50:08
  SPEAKER_01: Um, and when I got back after doing my um masters, it was interesting because a lot of people in the industry said to me, Well, how is psychology relevant to what we do?
• 50:16
  SPEAKER_01: And I think that underpins why we struggle because we don't understand our own behaviour and our own biases.
• 50:25
  SPEAKER_01: Um and they do, and there are some brilliant books.
• 50:28
  SPEAKER_01: So Daniel Kahnman and Carlos Tversky um wrote a really, really good book called Thinking Fast, Thinking Slow, which talks exactly about this, which is about risk and reward behaviour, and about the ability for people to wait to receive a greater amount of money in the future versus a smaller amount of money now.
• 50:47
  SPEAKER_01: And most people would would want would um like them would want the money now rather than waiting.
• 50:53
  SPEAKER_01: And and it speaks to you know um basically flaws, you know, it's flaws in the in in the you know human psychology that we need to understand in order to overcome, and that's why I've come back to it's another thing I think we should have in our education system because you need those two things together.
• 51:14
  SPEAKER_01: Um, it's it's really useful to understand terminology around finance, it's really useful to understand how you open an account, you know, what it means in terms of having a mortgage, but you also need to understand your own behavioural biases so that you can make the right decisions about whether you take an interest-free credit card or you do a balance transfer or whatever else.
• 51:35
  SPEAKER_01: You need to understand that to know whether you're doing your acting rationally or whether you're acting, you know, actually acting irrationally.
• 51:43
  SPEAKER_01: Um, and we don't talk about it enough.
• 51:45
  SPEAKER_03: Definitely not.
• 51:46
  SPEAKER_03: I think it's it's almost like everyone needs to take a bit of an inwards reflection, like a deep dive.
• 51:52
  SPEAKER_03: And I think even as you were talking about it, and people would take the short-term money over the long-term money, it comes back to the fact that some people, that is what they need.
• 52:01
  SPEAKER_03: They need that short-term money because they need to put food on the table, they need to get new school shoes for the kids, they need to fix the car, pay the council tax.
• 52:08
  SPEAKER_03: That's because they've got so many things pressing on them that are so short-term and immediate.
• 52:14
  SPEAKER_03: And it comes back to that inequality and really pushing to use your company, like you said, as a business owner, invest your energy in the local community, give back where you can.
• 52:25
  SPEAKER_03: I think here at Recruit UK, we get five hours a month paid to go volunteer and do what we want.
• 52:30
  SPEAKER_03: And you know, I think the other day there were some of the girls cooking lasagna for kids at the school, and that's that's taking that pressure off someone.
• 52:37
  SPEAKER_03: And it goes, you know, it goes right up to the biggest things in life, but also taking a step back and looking at what you can do on those small menial tasks and your own behaviours.
• 52:47
  SPEAKER_03: I think everyone listening will definitely be looking at their behaviours a little bit more after listening to that.
• 52:53
  SPEAKER_03: And so I guess you know, to finish up, what would be your advice to individuals listening who want to step into the industry and have this type of impact, you know, do good with every day they have in the industry, like you do at Pensions for Purpose.
• 53:09
  SPEAKER_03: What would your advice be on that front?
• 53:12
  SPEAKER_03: Message, Karen.
• 53:14
  SPEAKER_01: Yeah, I I think, yeah, I think reach out to, you know, two independent businesses like ours to empower yourself with the education and the knowledge, you know, before you get into working for an individual firm, because the culture of a firm is so important.
• 53:33
  SPEAKER_01: You know, the type of organization that they are is really important.
• 53:37
  SPEAKER_01: And and if you are going into a firm, make sure that their values align with yours.
• 53:41
  SPEAKER_02: Oh, yeah.
• 53:42
  SPEAKER_01: You know, I think often we look at a job description, don't we?
• 53:45
  SPEAKER_01: And we think, right, well, I meet certain criteria, you know, I mean, we we operate in such an arbitrary way, and and yet really it's about stories.
• 53:53
  SPEAKER_01: You know, I would encourage employers to ask for stories from candidates, and I would encourage people to go in with their own individual stories.
• 54:03
  SPEAKER_01: You know, nobody is just a set of qualifications or a set of line items and experiences.
• 54:09
  SPEAKER_01: There are things that have happened in between that, and there is probably adversity that they've been through that tells you 10 times more about whether that person's going to thrive in that environment than anything else on that CV.
• 54:21
  SPEAKER_01: And I would just say that that's the most important thing is the value alignment and education.
• 54:27
  SPEAKER_01: Just empower yourself and don't never be afraid to reach out to somebody because they have a certain title or certain level of seniority.
• 54:34
  SPEAKER_01: You know what?
• 54:35
  SPEAKER_01: You should be able to ask any question to any person.
• 54:38
  SPEAKER_01: And I'm always really pleased when I get people um coming to me saying, I'm look, I'm just really interested in what you do.
• 54:44
  SPEAKER_01: I don't fully understand it, but I'd love to learn more.
• 54:46
  SPEAKER_01: And that is really encouraging for me.
• 54:48
  SPEAKER_01: Um I will always make time for people that reach out to me.
• 54:52
  SPEAKER_03: Thank you.
• 54:53
  SPEAKER_03: I feel like I've just had a nice pep talk.
• 54:55
  SPEAKER_03: That advice is good.
• 54:57
  SPEAKER_03: And I as a recruiter, I always say to people, okay, there might be a C, you know, a C V gap, which some people see as this awful thing, but nine times out of ten, there is a story behind it, and there is a human behind it with real life human experiences like the rest of us.
• 55:13
  SPEAKER_03: And it is a two-way street.
• 55:14
  SPEAKER_03: I say it to candidates every time and we're doing interview prep.
• 55:17
  SPEAKER_03: Yes, you're going in there, they're going to see if you're the right fit for their company, but it's a two-way street.
• 55:23
  SPEAKER_03: Do they align with your values as well?
• 55:25
  SPEAKER_03: And I think that is really important because culture on the bad days trumps everything.
• 55:30
  SPEAKER_03: It makes a difference if you can lean on the people around you.
• 55:33
  SPEAKER_03: But yeah, wow.
• 55:35
  SPEAKER_03: Thank you so much for joining, Charlotte.
• 55:37
  SPEAKER_03: Honestly, my lovely so much food for thought.
• 55:41
  SPEAKER_03: Um, I just can't wait to see where Pensions for Purpose goes and can't wait to see it all blossom really and continue going on the trajectory it is.
• 55:48
  SPEAKER_03: And yeah, thank you so much.
• 55:50
  SPEAKER_01: Thank you very much.
• 55:51
  SPEAKER_01: Lovely, lovely to spend this time talking with you.
• 55:53
  SPEAKER_01: And if at some point we can launch a campaign around financial education, I'm very interested in uh seeing what you've done.
• 56:00
  SPEAKER_01: I'm a girl.
• 56:01
  SPEAKER_03: We'll have to do something about that 100%.
• 56:04
  SPEAKER_03: But yeah, thank you very much, Financial Canal Life.
• 56:07
  SPEAKER_03: I hope you enjoyed this episode and speak soon.