Robert Costelloe: Great to have you on our series Hanna. First up, you started with SGDS at the end of last year. What are your priorities day to day and what momentum are you building in the business?

Hanna Hallin: So SGDS consists of five different companies, each of which have a pretty long heritage in the market. Together we’re the largest B2B distributor in Sweden with 180 locations in the country and turnover of around 2 billion euros. We distribute materials to construction and civil engineering projects. What this means is the majority of our customers are either local carpenters, local plumbers or contractors to large projects across Sweden. We provide anything you need to build a home, a school or an airport. And for me personally, that is why we are such an essential business. It’s not very consumption driven. We are providing the essentials to a functioning society. And that’s why the Saint-Gobain purpose – Making the world a better home – really guides us here in Sweden.

What we’ve done is set a business vision which is to be the leading enabler of sustainable construction in Sweden. To take that position, there are a lot of things we need to do and deliver on. For me, this means a lot of time spent with my colleagues, learning about their challenges, increasing sustainability knowledge and together defining the right targets. We get a lot of questions from customers today in terms of sustainability and what we can offer. There’s also a lot of engagement with the supply chain. And that’s what I find motivating. To succeed in becoming the leading enabler of sustainable construction, we need to work with our suppliers, find innovative suppliers and we need to be able to sell this vision to our customers. We want to help customers lower their carbon footprint and understand what they should demand to push the entire construction industry towards lowering our impact on the planet, the climate and biodiversity.

RC: When 40% of global carbon emissions come from the building sector, an organisation like SGDS can have a big influence in this area. Was that what drew you to the firm?

HH: I’d say it really motivates me to be where the difference needs to be done. It’s no secret that the construction industry has a huge carbon impact. Over the years I’ve been on stage maybe talking about the impact of a T-shirt and people are very concerned about these consumer products. But the construction sector has gone a little under the public radar until recently. Its value chain is more complicated, with less sustainability awareness and accountability. Ultimately no questions are asked by individual end consumers.

When I was working at H&M, at that time there was a lot of focus on influencing people’s lifestyles and values around consumption. In the construction industry, the impact is so tangible and defined. It’s fun to have difficult jobs. You wouldn’t work in sustainability if you were looking for a walk in the park. It’s a lot more rewarding when you have to roll up your sleeves, get your hands a bit dirty, look at conflicts of interest both politically and internally, and how the whole industry operates. There are a lot of things there that were motivating to me personally. And with a company like Saint-Gobain which has such a clear commitment to sustainability, you can be more courageous in looking for new solutions.

Saint-Gobain has Science Based Targets. We are part of making a difference in terms of the climate footprint of Saint-Gobain. And that is a big footprint, considering the range of products we’re selling. We have around 1.5 million products in our portfolio. Many of which can be replaced with a better option or can be made from recycled materials for example so there is a lot to look into.

RC: You can take Danfoss in Denmark, SGDS in Sweden, Stora Enso in Finland as evidence of firms that are leading the sustainability agenda in the construction industry in the Scandinavian region. What sense do you have of the differing perceptions around sustainability be it North America, versus APAC, versus Europe?

HH: Looking at the construction sector globally, it’s immature in terms of sustainability awareness or alignment. And that goes for many B2B industries as well. With industrial sectors that are more consumer facing, like the automotive industry, they’re a little bit more ahead. The difference here is what the European Union is making with its Green Deal and clear commitments on greening the industry. And this is translated into directives that need to be implemented at the local level of all the member states. This definitely puts a lot of expectations on the market.

It can be directives on deforestation, incentives to produce carbon neutral industries, and one of the more significant changes is expectations on sustainability reporting. The CSR reporting directive from the EU will echo throughout the valuation of all industries. It’s a very subtle way of bringing a huge amount of change to the system. They say it’s only the top, largest corporations that need to report on this – so around 50,000 companies - but they need to report on the performance of their supply chains. So really the request for verified data and traceability is both upstream and downstream, covering all firms. So I see that as a big differentiator in which market you’re operating in.

RC: So as we look at all this change that’s happening, which areas are exciting you the most?

HH: Distribution opens up a lot of opportunities in terms of looking differently at what value and services we are delivering to our customers. So they are buying products, buying materials in order to build or renovate something. And we see now that data can be a differentiator. In parts of our product portfolio, we have developed a climate calculation that is sent along with the price quotation. As our customers come under the requirements of new regulations, they need to adapt not just to a financial budget, but also to a carbon budget for a specific project. We’re including that carbon calculation as a way to educate the customer.

This is where we can strengthen our role. We have a huge supply chain with many corporations. Some are huge, like Saint-Gobain who have carbon neutral targets for their products, but others are tiny - a local factory in Sweden with a couple of headcount. This type of firm can be innovative and start to introduce renewable resources into their products, but the level of data maturity will be very different. We can build that data maturity for them which enables our customers to see the full scope 3 (suppliers) climate footprint of the entire product basket they’re buying from us. We can help our customers compare products and find better options that drive change and help to scale more innovative products in the market. This can be a challenge as the innovative products may not be price competitive. But if a customer is operating under a carbon budget for a project, they need to meet those carbon targets, not just price targets.

So this is super exciting as well as when we look at circularity. There’s a lot of potential disruption to distributors of newly produced materials if there’s an increased demand for reused building materials. Those have zero carbon footprint and can be very attractive to put into a project that has a carbon budget. Already today you have easier access to investment or loans if you have responsible carbon management of a project. Circularity can have a huge role – collecting used materials to feed back into the supply chain and produce new goods. And the distributor can be essential in this future landscape because we have the logistics, we’re present and we’re delivering to each building site. We have the range of suppliers and are an easy focal point for the customer to speak to. This is an important place to be and the time is right.

RC: There’s tremendous potential from a customer perspective, but what about from an employee perspective? How are you aiming to make sustainability real and tangible for people at SGDS?

HH: Our colleagues are the key enablers of our strategic work. Be it sustainability or any other part of our business, the aim is to have our people mobilised, engaged and understanding of where they are and how they can contribute to our vision. That journey is on-going. The first building block is the direction. We need to define a story that is true to us in terms of where we are going and our role as a company in that future – the role we can play in the transition of society towards sustainability. So that direction starts to make everyone feel and see what the reality looks like of SGDS as the leading enabler of sustainable construction.

The second is knowledge – to feel confident to talk about these issues and feel empowered by that knowledge, whether it’s in discussion with a client, a supplier or in your team, regardless of where you operate in the company. You have a role to play in the bigger picture and must understand and connect knowledge to your everyday work.

Thirdly, it’s to have opportunities to actively contribute – to have influence. We have a lot of tools within the global Saint-Gobain portfolio where you can get involved in driving the sustainability agenda forward. We have an online role-play training for example, where an employee acts as the CEO of a company and needs to make the right decisions on carbon, employee satisfaction and budget. We’re also currently rolling out a workshop in partnership with French NGO Climate Fresk on the conclusions in the latest UN IPCC Report, to ensure all our colleagues have an understanding of the causes and consequences of climate change. We also have internal campaigns and have set up what we call a carbon fund. We asked everyone at the firm “How can we become more sustainable?” and we have now allocated capital to help implement the ideas that came up. A lot of feedback we got was just to do it. Some of these initiatives don’t cost a lot of money. It’s more about behaviour changes or filling a knowledge gap.

Doing these things regularly you get a better sense of where we are internally. Sometimes you can hear these great words about being sustainable, but if you can’t even sort the waste in your own office then there’s a real disconnect. Why would you believe in our purpose if you haven’t solved these tangible issues in your everyday workplace? So it’s really important that we are constantly checking, that we’re doing the right things, that we’re walking the talk together.

RC: And what does success look like for you, as a business but also personally?

HH: I think having our colleagues motivated and engaged towards our purpose is key. Sustainability can never be a one-person show. I would go even further to say that success for me is when we don’t need a sustainability manager anymore – where our business and operations have sustainability at their core.

We won’t be there by the end of this year, so a fantastic starting point is empowering our colleagues with the knowledge and the tools for understanding our business offer and what this means to customers in terms of sustainability. This will help us reach further and deepen the dialogue around change with our customers and really position us as the best partner in this transition towards sustainable construction.