Winnow’s insights: The link between finance and sustainability

Posted by Liv Lemos / 9-Apr-2018

Finance and sustainability

In just four years Winnow has grown to work with hundreds of kitchens of all shapes and sizes across 29 countries and counting. We aim to inspire chefs to come together and reduce food waste in their kitchens. With Winnow’s help they are now saving 26 meals every minute.

Today we speak to Michael Wilks, Winnow’s Financial Controller. Based at our headquarters in London, Michael looks after our financial operations to make sure we are running as efficiently as possible while doing the right thing for the environment. He tells us that there is no conflict between the need to run a profitable business and the desire to run it sustainably.

  • How did you end up at Winnow and what were you doing before?

At the heart of Winnow is a really clever idea, and that attracted me. Finding efficiency where nobody had seen it before and creating a product that saves companies massive amounts of money while creating a seriously positive CSR outcome - it was too good to pass up.

I was also keen on returning to a young and dynamic company after a few years at Deloitte. I’d previously worked for an SME in Yemen and enjoyed the atmosphere. The Big 4 experience teaches you a lot, but your ability to make any sort of difference to anything is curtailed pretty severely in that environment. It was time to get my hands dirty again.

  • What’s the best part of your job?

Michael WilksEvery day will contain some sort of surprise, welcome or otherwise. No day is the same, and that’s pretty rare for a finance role. And a lot of what I do will be the first time Winnow has ever done it - I get to start from first principles, problem solving as I go and building leading-edge processes from scratch.

What’s really fun, though, is being at the interface between the tech startup world and long-established multinational businesses. We’re walking up to these giants of the hospitality industry and showing them something new - that’s quite a buzz.

  • Is the tension between profits and principles a myth?

Definitely a myth. When a business identifies a profitable model for solving one of the world’s major issues, people invest in it, scale it up, and solve the problem in a meaningful way. When you can make a profit from solving an issue like food waste, the solution to the problem will be applied on a global basis.

If we were a charity, we would be helping a couple of ethical restaurants in London throw less quinoa away. Because we are a profit-making business, however, we are live in thirty countries and working with thousands of chefs to make a tangible difference on a global scale.

And the principles, they feed the profits. There is a reason why purpose-led businesses are all the rage at the moment – it makes it far easier to attract and retain the best talent. When the whole team buys into the company’s mission and works together to achieve it the productivity of the business goes through the roof.

  • What role does the finance function play regarding sustainability and ethics?

The finance function sets the tone for the entire business – it’s the engine room, after all. It is very easy for sustainability and ethics to be trumpeted by a company’s marketing department in a shallow effort to build the brand, but this is seen for what it is by increasingly savvy employees and clients. If the finance function buys into sustainable and ethical values and lives by them, however, everyone feels that the values are for real. They start, perhaps even unconsciously, to follow suit.

This can be driven by honesty, transparency and helpfulness, but even on a mechanical level you can make a big difference. Paying suppliers on time is a straightforward example. Then there is how you select your suppliers and structure your agreements with them. The 120-day payment terms offered by Carillion to its suppliers were a good example of unethical practice and see where it got them.

The finance team can also be instrumental in shifting the focus from the next quarter’s results to a longer-term view that will automatically encourage a more sustainable and ethical approach across the business. The data you choose to present and how you choose to present it can raise everyone’s eyes from short-term profit, and in selecting what stories to tell with the data you can introduce ethics into the conversation.

Download the case study to learn how Fairmont The Palm is adjusting their  buffets and reducing food waste by 61%.

  • The stereotype is that cutting corners and costs saves you money, and doing things ethically is expensive. Is this really the case?

There a number of examples of how to cut costs ethically – just looking around me I can see that most of our furniture is second-hand and reconditioned. Energy efficiency is another example – our Plumen bulbs give the same effect as incandescent bulbs but with a fraction of the electricity usage - and we prefer public transport to Uber.

But ethics can have a more fundamental impact. Our people are our greatest asset, but they’re also our greatest expense. One of the most significant things we can do to improve our bottom line, therefore, is to get more out of our people and to attract the best without having to pay them bankers’ salaries. Study after study has shown that people are happier and more productive in ethical, purpose-led businesses. Staff retention is greatly improved, and recruitment is easier and therefore cheaper. This gives your bottom line a tremendous boost, and more than makes up for any extra expenses you might pick up in driving ethical change within the business.

  • So there is a financial incentive to sustainability?

Winnow System_7-1There is absolutely a financial incentive to sustainability. Winnow was founded on that principle. We deal specifically with food waste in the hospitality industry - the UN estimates that this sector wastes $100bn of food each year - and we work with large global companies like Compass Group, IKEA and Accor Hotels. These are well-run, cost-conscious businesses that don’t want to be throwing food away. Their reasoning doesn’t need to have anything to do with sustainability at all, although it often does. They’ve paid good money for this food, and they want it to be earning revenue rather than going in the bin.

Companies are throwing food away because they don’t know how to stop doing it – they don’t know what they’re throwing away and why. They lack the information to be able to take the appropriate measures to reduce food waste, and Winnow provides them with this information through the waste monitoring devices we put in their kitchens.

Our clients are throwing away a total of 5,000 tonnes less food per year than they were before they started working with us. This saves the equivalent of 20,000 tonnes of carbon dioxide from being emitted.

This is an impressive environmental outcome, but it is a substantial boost to their bottom line as well. These 5,000 tonnes of food, after all, cost £12.5m. The catering industry in particular is well-known for its low margins, and by halving their food waste our clients can reduce their food costs by 2-8%. This can double their margins. I would call that a very strong financial incentive.

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Photo credit: Chang Qing via Unsplash

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