Hemanth Setty - Product Manager Connecting Profit and Planet

[00:00:00] Adam: Hello. Welcome to another episode of Green Champions.

[00:00:12] Dominique: Thanks for joining us in a conversation with real people, making real environmental change in the work that they do. I'm here with Adam, the social enterprise extraordinaire,

[00:00:21] Adam: And I am so glad to be here alongside Dominique, the sustainability expert. We bring you guests who see the potential for impact in their job or community and have done something about it.

[00:00:28] Dominique: From entrepreneurs to artists, scientists, to activists. This podcast is a platform for green champions to share their stories and plant some new ideas.

[00:00:38] Adam: Today, Dominique and I are joined by Hemanth Setty, founder of Zero Circle, a B2B green finance marketplace that simplifies access to green capital. Previous, Hemanth was Chief Product Officer at Dun & Bradstreet, where he oversaw the development of their ESG and sustainable practices. So today we're chatting with Hemanth to explore how his career in technology supply chain and compliance developed into sustainability.

So thanks for joining us, Hemanth.

[00:00:59] Hemanth: Pleasure to meet you both. I'm looking forward to this conversation.

[00:01:02] Adam: I'd love to start off and just ask if you've always been interested in sustainability. 

[00:01:06] Hemanth: Yeah. In a sense I actually, I was not, right? That was not my kind of career progression. It was not really where I started off with my career. But it basically ended up with where I am right now. I think, and part of it is I think where we are in our broader ecosystem. Climate change is everywhere, whether you like it or not.

And you can't have a meaningful conversation without anybody thinking about things happening around the world, whether it's affecting you directly or indirectly. I've had situations happen to some of my colleagues and friends and even my team members that have been impacted by climate change. And this has been going on for many years and this started to become much more aggressive, if you will, in the last couple of years with various kinds of weather patterns and changes in, in issues in climate and all that. And I think eventually it led to that and I firmly believe that over the next 10, 20 years, every job is going to be a climate change job, if you will.

Because if you don't incorporate sustainability and climate change practices into your business, you can't really have a long-term business and meet the potential of what you know, what we are on, on this earth today because the resources are finite. But businesses need to thrive. So that is kind of the, those are how we started.

But I didn't really get into sustainability early on, and some of it was with my background in my previous job that kind of led me to this direction and basically start, made me kind of think about it much more much more actively and much more directly in terms of how we can address solutions in sustainability using what background knowledge we have in this space.

[00:02:33] Dominique: I think your background and product is just really interesting and I know how stressful the world of product is. Can you share just like what drove you to being interested in working in product? Even prior to seeing its impact with the environment?

[00:02:46] Hemanth: That's an interesting question, right? Because I kind of was interested in the product management role. Before that it was mainstream. I didn't really didn't know what to call it back then. This was many years ago. And only companies like maybe Facebook had the concept of a product manager, but many other companies really didn't know what that role meant.

So I remember actually the first time I was in a consulting firm and it was for a financial institution. And they basically hired me as a product manager. And I was like, I don't exactly know what it is and do you guys know what exactly what it is? But, but we said we are gonna figure it out along the way, right. 

 But basically the concept of it is you as an individual own a particular product whatever that kind of product is, software, hardware, solutions, whatever the element of product is, and you make it successful, right? Some people call it that you're a CEO of that product if you will, right? You run the, the ship for that particular product and that microcosm of an environment. But the idea is that it's up to you to decide. How do you sell it? How do you build it? How do you operationalize it? How do you make the cost model work, right? There's a number of factors that are involved and different products have different focus area. 

Some are really focused on 'let's grow, grow, grow I don't care what the cost is, we'll get money behind investors and things like that to drive it'. Right? But others are much more operational, like how do you make it operationally effective?

How do you kind of manage, a large team of people for a product that is focused on actually scaling and actually building up tens of thousands of customers, right? So there's different focus areas for different products and that always intrigued me. Because most of my career, I was in a consulting background, I worked in various forms, financial services was a big part of my career. But a part of the problem with consulting was it was used to work with clients and used to help them. And it was always fruitful, but you never really owned it. You never really managed it, right? It was not my own. It was like I was recommending, "Oh, this is what we should do and, we would help on their journey." But at the end of the day, we didn't have skin in the game, right? And so, I always wanted to kind of get into that role. And that's kind of how, when I moved away from consulting and into product management.

And started off as basically owning the one of the first products at Dun & Bradstreet. And then eventually, graduating there over the last 10 years. So, that's kind of how I got excited about it. And product management is inherently entrepreneurial because you kind of have to play a lot of hats in terms of what you do and what your role is.

So that kind of also led me to know I did design work, I did cost management, I did financial modeling, I did revenue models, right? There's a lot of things you you're gonna have to do. and if you are the kind of person that likes to play multiple hats, product management is a great fit for anybody that's trying to do that.

[00:05:23] Adam: Now, just for the audience, we have a wide audience here. 

If they haven't heard of Dun & Bradstreet. How would you describe them as a company?

[00:05:29] Hemanth: So they've been around for, I, God, how many hundred plus years? I don't even know how long, but they've been around many, many years. There's actually a joke abraham Lincoln actually worked in Dun & Bradstreet, so it was one of the things we get in our orientation we learn about that.

 They were the company that actually first created the concept of a credit agency where if you are doing business with somebody, as I want to, make sure that I'm doing business with a, a, a, a good business owner or a good individual. Dun & Bradstreet used to provide the credit worthiness of that business, right? That's kind of how they started. And since then, obviously they've grown into multiple areas. They do a lot of other kind of analysis and risk management and financial practices, and a lot of companies use Dun and Bradstreet's analytical capabilities to make decisions about how they want to do business, and that business could be I'm working with my suppliers. I'm trying to figure out if this is a good customer that I want to engage with. Do they have any red flags? 

Can they pay their bills on time? So there's a lot of different things that businesses have to do as part of their business operations, and they use Dun and Bradstreet's data to make those decision making easier, using outside intelligence as part of their business process.

[00:06:40] Adam: Wonderful and with that, you mentioned a little bit about analyzing the companies in your supply chain, and so that was a big part of your role at Dun and Bradstreet, correct?

[00:06:48] Hemanth: Correct. That's right. So when I first joined, I started off as a product manager in their supply chain group. We had a product called Supplier Risk Solutions, which essentially allowed companies, large enterprises to understand their riskiness of the third counterparties and the suppliers that they're actually engaged with, right? And suppliers are global in nature. 

So, it could be a local supplier or, in my backyard, or it could be somebody in, in the Asia Pacific region that's supplying different types of products and services. So, at some point you plant as a business and, really have the scale or the capacity to understand every company you engage with.

So there is definitely a risk element. And then there's a compliance element too, right? You want to know whether you are working within the rule of law with these suppliers in various parts of the world. Right?" And it could be various types of compliance, right?

Do they have, what do you call red flags in their operations? Like factory conditions or working conditions kind of thing? Or do they have compliance issues in terms of something called FCPA? Financial Corruptions Practices Act. Do they have corrupt individuals running their cooperation?

If you are an enterprise, you are trying to run your business, you don't want to go and dig into the details of all of that. And so they work with companies like us that has a lot of data analytics on many of these corporations and individuals and try to put together an assessment of these companies.

Wh

[00:08:07] Dominique: en you're in a role thinking about moving things towards being more sustainable or being really mindful of using parts of that process ethically and responsibly. Yeah. Where do you look for inspiration? For guidelines? What are some things that have been like helpful for you when you're developing these things to think about? Like what good should look like? 

[00:08:28] Hemanth: That's a big part of why I started Zero Circle, right? Because, the definition of sustainability is still fairly undefined, right? 

Nobody knows what to call green yet.

[00:08:37] Dominique: Hence making a podcast all about it, 

[00:08:39] Hemanth: Yeah, exactly. Explain green to me, right? And it is a problem, right? It is a big problem and there are companies that are trying to address it at kind of the national scale, at the international scale as well. But basically the basic challenges we are still in kind of a territory where people want to create sustainable products.

They want to work in an ethical source, but there's a lack of transparency and there's a lack of data, right? So it's a combination of both and some of it can be addressed, But there's a lot of things, it's hard to address that, like lack of transparency, unethical companies are not going to tell you they're ethical, right? Or unethical. They're just not gonna tell you. So you kind of have to figure out through other signals and other ways of understanding these companies. And that's kind of where data analytics and technology can play a very strong role in expanding your analysis or assessment on a company.

Now, to that point, part of the reason why started Zero Circle was there still is not a good way to understand the ESG or sustainability posture of many companies, nationally and internationally. It's still very difficult and some of it is because data doesn't exist. Many of these companies don't even report on this kind of information. People are comfortable with like financial statements and profit and loss statements, right? That's a fairly normal thing. And if you wanna do business, that's basically baked into the business, right? 

But very few companies are reporting on their sustainability measurements. Things like, what's my carbon footprint? How am I sourcing products? How much recycling am I doing? What kind of waste management practices? Those practices are not fully baked into the DNA of many companies, right? 

And it's gonna be an evolution for changing companies where they are to date, for companies to put a financial structure as well as sustainability structure into their business. And that's where I see a lot of potential. 

So when I first started Zero Circle, we didn't really see a lot of companies, focused on the sustainability dimension of their reporting structure. So that was kind of how we started the company. Like how can we simplify and enable companies to start doing this kind of reporting. Some of it has to be through regulatory pressures like companies and, governments and agencies trying to, mandate, "Okay, you've gotta do these kinds of reporting." And it's happening in, in bits and pieces around the world. Europe is at the forefront of a lot of this. US is still kind of catching up to a lot of those kind of regulatory pushes. But it is, I see the writing on the wall like over the next five to 10 years. Everybody's going to have to do both their ESG reporting as well as their financial reporting.

And every decision is going to be going to have some component of financial element as well as an ESG element. And that's where I thought, "Okay, this is how, the world is going to move there whether we like it or not." And climate change is going to drive that transition. It's just a matter of when, if not if right. And that's kind of what we are waiting for. Like how can these, all these pieces come together for us to kind of make a true impact in the corporate evolution of sustainability.

[00:11:33] Dominique: It's a cool intersection of like, very exciting, a lot of things to be done, a lot of things to consider, and like a lot of path unpaved. I'm excited that our next episode we'll get to dive deeper into like that Zero Circle journey. But you touched on ESG, and I know you were a part of the ESG development at Dun and Bradstreet. Was the experience at that organization when you were bringing in these ESG concepts, was it similar to what you just described or if not, like how is it different?

[00:11:58] Hemanth: Yeah, no, that was the foundation of where we are today, right? More and more companies were looking at essentially a 360 degree view of their partners they're working with. When I was at Dun & Bradstreet, we had a number of different factors. We were doing assessments on financial factors, risk factors, compliance factors, but more and more companies were asking about ESG factors, like, "Okay, how do I measure a company's performance based on their ESG criteria?" And that basically, internally, as I said, that's part of the product management role to see what customers are asking for and try to figure out what solutions we can provide, whether we do it on our own or we partner, and we have to go through our own process of build by partner discussions with various companies. And that's kind of what we did. We created an internal business case to say, "Okay. We need to do something on ESG, right? We don't have an ESG product. We don't have an ESG solution. We need to do something here and customers asking for it."

[00:12:48] Dominique: Was that customer demand, the real heart of what first drove you to kind of create these sustainability spaces at Dun & Bradstreet? 

[00:12:55] Hemanth: Basically, yeah, that's basically is. It kind of goes back to product management. We kind of have to see what customers are asking from us. And some of them could be a small feature, right? Just want a new button or want a new kind of enhancement.

And that's how we do the product development. But some of them could be like a big thing, like I just mentioned, the ESG side, like we don't even have a product and they're asking for a new type of product. We're seeing patterns that more customers are asking for it, and then inherently us as product people, we have to go and look at the industry and like, "Okay, yeah, this is what industry is going towards."

[00:13:23] Dominique: I mean, that's so cool. We have so many people come on and like share their passion behind why this matters. And then we talk about why else it's good for business. I think it's cool and really motivating to hear that like the heart and soul of incorporating sustainable practices was because it will sell. Because it is good business. I think that's awesome. 

[00:13:44] Hemanth: That's exactly right. And part of the reason why Zero Circle is focused on financial services in a sense, is also that sustainability on its own is really hard to sell.

Because, unless you are a corporate, I'm not saying not everybody's a good corporate citizen, but it has to have a business case for it, right? If you don't have a true business case for it, it's hard to sell a new type of reporting that nobody's asking me to do or very few people are asking me to do, right?

So we have to think about it as a business case approach where yeah it makes good business sense to engage with this. And the way we approached Zero Circle was, yes, it's, it is good business practice to do this. And if you are trying to incorporate sustainability in your business practices, we can provide access to funding and financing for those business practices that you're doing.

And we can provide them at a better cost with various funding programs that already access green funding programs that exist that is hard to get qualified today. So we are trying to streamline and simplify this process and essentially become an accelerant to businesses to meet their net zero objectives.

[00:14:42] Adam: Neat. I know we're gonna dive into the green financing in the next episode. Previously you mentioned regulation as being a big incentive. 

It sounds like this is another incentive, like what are the different incentives that companies have to actually pursue changes?

[00:14:55] Hemanth: So it's a combination. There's no one solid way for driving engagement with companies on this. The sticks are regulations. If you don't do this, you'll get fined or you're not going to get government support and certain things, and you have to meet certain things to do business in a particular geography, right?

Europe is a little ahead of us in terms of the regulation approach. They are basically taking the lead globally around creating a global framework that many companies can follow from a regulatory standpoint. And I believe the timing is all like plus or minus because it keeps changing.

But before the end of the decade, every financing decision within the European Union is going to be based both on the financial performance of a company as well as the sustainable performance of the company. They're also planning to include like a carbon tax, like if you wanna import goods into European Union and based on the carbon footprint you are going to get taxed based on how much footprint you create and bring into the European Union.

But I like to take an incentive based approach, which is if you truly want to focus on sustainability and improve your performance around, energy deduction net zero objectives, et cetera, you can get bigger, better customers because there are large enterprises that are looking purchase goods and services from sustainable companies. That trend is not going away, right? It's slowly, slowly getting more and more progressive. And some of it's technology, some of it is process, some of it is, how do I even figure this out, right? But companies are trying to get, "I want to source from better suppliers that are more sustainable in nature."

So that's one big incentive, right? If I'm a supplier and I want to sell my products and I'm not sustainable, I can't sell to the big players like Apple, Google, Schneider, either the big companies that are looking at the same suppliers. I might have a hard time selling to that. And secondly, with financial structures, there's a number of different funding initiatives, both tax incentives, reduced interest rate , grants. Different types of equity programs and nonprofit programs that can fund your business to have a reduced capital structure. 

So you don't need to get expensive capital to be able to actually meet these objectives. And if you want to take advantage of that, you kind of have to go through a couple of extra hoops. But if you go through hoops, you actually can get the right incentives, be on the wishlist for many many large corporates as well as become sustainable. Meet your net zero objectives and overall be a good corporate citizen and do your small part to solve climate change. Right. It's a win, win, win win situation across the the board. 

[00:17:09] Dominique: Yeah. I almost am visualizing what you're saying as your organization is kind of like this dot connected with other dots in this ecosystem. And like right now we're all okay with those like lines and dots being multicolor. But at some point, regulation is gonna mean that, "Hey, my dot can only touch like other green lines, things that have been approved." Exactly. And it's almost like if your dot isn't green, you're gonna like lose out on those like revenue streams basically. 

[00:17:36] Hemanth: That already happens today in like the financial structures. Like, when we were at D&B some of our customers used our data to essentially create gates for suppliers to even engage with them. So they, and this was on the financial side, like if you don't have a certain level of finance performance, you can't do business with us, right? They already do that today. They do that for compliance, they do that for financial. The sustainable side hasn't happened yet, and that's going to happen over time. But it is coming. Like you said, if you're not a certain characteristic, whether it's some kind of performance or some kind of goals that you've set from a sustainable angle, you can't do business with us anymore. Those are coming and some companies are pretty strict about it today already.

[00:18:12] Dominique: I have a question for you about this topic 'cause I think we hear about this more day to day as like the consumer. So we're kind of getting out of that like big B2B ecosystem just 'cause of our listeners. And because sometimes simplifying it like that I think is helpful.

But whether you are actually looking at it from the customer end as a business or just an individual, there's this fun word of greenwashing, so like, yes, the push for sustainability is there because you can sell more, because those avenues do open up. So we know that that's positive 'cause people are abusing it. But can you give us some tips maybe for like how you think with a critical eye around greenwashing or anything you think about just in your own personal life or from your business role experience?

[00:18:54] Hemanth: Got it. So there's a number of ways to do, and that's a big problem across the industry. This is not a simple problem to solve. There is a lot of institutions and even government agencies that are trying to address greenwashing in various forms. And it, it happens across their life cycle, right because, some of it is just the quantification mechanism is not even easy to quantify. 

It kind of goes back to the definition. I don't know what, I'm following all the rules. Why am I greenwashing? Right? It is hard to know. And there's actually a funny code about it too is ExxonMobil has a higher ESG rating than Tesla.

Because ExxonMobil does all the right checks and balances from a reporting standpoint. they check, they do all the right necessary reporting that is required as part of quantifying by these ratings agencies, and they got a high reporting. Tesla is a little bit of a odd duck. They just don't want to do it. So they just never did the reporting because they are saying, " We are solving, technology in a different way. We are going to solve battery and energy in a very different problem and we know we are solving the world, but I don't want to report all these things that these agencies are looking for."

So it's a reporting problem now, right? The data from Testa is not even making it to these agencies. So that's why they have a lower rating compared to somebody like Exxon that's actually done all the reporting. Now is that greenwashing? I don't exactly know. I can't even, I can't even explain it. But my point is for, as a consumer, if you want to look at something like greenwashing, there's a couple of things, I think you should start to look at. 

First of all, always look at what the business you're buying from or the product you're buying from has some kind of certification that they pitch within their website or their emails or offerings. Usually, will see that on the website because many companies are engaged with this. They're proud about it, and they want to showcase that they're taking a, doing good job. There's things like carbon neutral certification, B Corp certification.

So you wanna find companies then and do business with companies that have those kinds of sustainability information on their website or products. It's always a good practice to do that. Even Amazon, for example, if you buy something from Amazon, there's something called carbon neutral products.

I think some products have that. And now you can know that these products are being certified by various third party agencies saying, "Okay, they are taking steps towards carbon neutrality and Amazon is wearing them before they publish them." So there's, those are good checks and balances.

You as a consumer to know that, " Okay, yeah, I'm buying a good source of products and reduce my chances of greenwashing. That, that's one good thing. Secondly, you also want to look at the company's history in this and take Patagonia for example.

They've built a brand around this, right? You know that you're buying stuff from Patagonia. You, you know that, whether I even look at certifications or I even care about it. You're buying high quality, sustainable products and they're good stewards of the environment, right?

So there are certain brands that you want to kind of focus your attention on and try to make sure you are working or buying purchasing goods from those brands directly so that way you don't have to you can kind of reduce your chances of green washing in that front as well. In addition to that, many companies, even companies that don't have a published process think large companies like, H&M or Forever 21, right? These are large brands. They have massive, massive footprints and it's hard for them to say every product is going to be a green product, but you can support them in the sense that they are taking a lot of steps towards it. So, some of the things you can do is look at some of the things that they're trying to do around how they're working with their partners and suppliers internationally. What kind of practices they're doing, seeing if they're again as a consumer, it's hard to do all this, but this is the research, you wanna do to make sure you are buying from the right sources and how will they improved over time? And many of, many of these companies publish this in their sustainable reports. You wanna look at how they've improved over time. And so it's a journey, right? This can't be a once and done effort. This is going to take years to kind of transform somebody like an H&M to become completely carbon neutral. And so as long as they're going the right direction, you may want to kind of support them along the way as well. These are some of the things as consumers we can do.

In addition to that, you also want to support various projects that can kinda offset your own footprint if you will, right? Let's say you are buying an airline ticket. And some of the airlines provide you a way to say, spending 200,000 kilo carbon CO2 emissions, of what we call carbon footprint in the atmosphere.

Maybe I can buy some carbon offsets to offset that. So that's, if consumers want that people can kind of approach that as well. So all of these things are happening at the corporate scale as well. But for consumers, it's a slightly different approach because now you as an individual have to do a little bit more insight and research into these kinds of practices, and it's hard to know because there's so much information out there and once you get into the flow, it gets a little better over time.

[00:23:19] Adam: Man, we've covered a lot today. So it's been fun kind of hearing your journey in product and supply chain and how that led to ESG and Zero Circle. So thanks for walking us through that. 

But also talking about how people who are listening can just be more aware advocates. I really appreciate that. How can people find out about Zero Circle and support the work that you're doing?

[00:23:40] Hemanth: Yeah. Awesome. So we are fairly active on LinkedIN. So, that's kind of our primary source of getting connected with us. zerocircle.eco is our website. And yeah, reach out if there's any questions. Happy to kind of chat further and discuss our journey and the space. And we are actively engaged in a lot of different avenues around access to funding and getting companies compliant on their sustainability journey. So if there's any need for that, yeah, we can definitely go deeper into any of those conversations.

[00:24:08] Dominique: Thank you. Thank you for being so knowledgeable in your space. For managing to pivot some of that into some tangible tips for the average human to incorporate into their own life. And you've made me properly scared about the idea that like measurement is good. This Exxon Tesla example, sitting with me of like, the measurement strategies are important to have, but we can't stop thinking about why those measurements are there and we can't like put the active critical thinking sides of our brains aside at any point in this process. Thank you for sharing all of that and for joining us today.

[00:24:38] Hemanth: Thank you for your time today as well.

[00:24:39] Dominique: As always, our guests have found a unique way to champion sustainability. We're here to put real names and stories like Hemanth's behind the idea that no matter your background, career or interests, you really can contribute in the fight against climate 

[00:24:52] Adam: You can find our episodes at thegreenchampions.com .At If you wanna stay in the loop, give us a review or follow us on your favorite podcast platform. If you have questions about climate change or sustainability, you can reach us on our website, thegreenchampions.com. Our music is by Zane Dweik. Thanks for listening to Green Champions, and we'll dig into another sustainability success story in our next 

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