Reimagining Business Value

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Sara Gutterman: Welcome to The Valuation Metric, a podcast about the risks, rewards, roadblocks and revelations reshaping the way that we measure worth. I'm your host, Sara Gutman, CEO of Green Builder Media. For decades, the metrics that drive our economy have been remarkably narrow, focused on quarterly earnings, first costs, and short term returns. Those metrics have shaped how businesses operate and how markets behave.

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Sara Gutterman: But as the realities of climate risk, resource constraints, health concerns and economic instability come into sharper focus, a new question is emerging. What if we're measuring the wrong things? My guest today has spent his career exploring that question from inside one of the world's most influential climate technology companies. Scott, two, is the vice president of sustainability strategy at Train Technologies, where he also served as managing director of a company's center for Energy Efficiency and Sustainability.

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Sara Gutterman: In that role, he helps guide one of the most ambitious climate commitments in the private sector, including Trains Gigaton Challenge to reduce 1 billion metric tons of emissions from customer footprints. Scott has spent more than two decades helping organizations rethink how sustainability connects to business strategy, policy and economic value. Today, we're going to explore the evolution of sustainability from fringe idea to core business driver, and what that shift tells us about how we value things in our economy and our culture.

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Sara Gutterman: Scott, welcome to the valuation metric.

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Scott Tew: Thanks, Sara. It's great to be here with you.

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Sara Gutterman: Now, as I've said, you've been on the forefront of sustainability for more than two decades. The concept and the public perception of sustainability has evolved dramatically over that time. Early on, it was often viewed as environmental stewardship or corporate responsibility. How would you describe the transition we've seen over the last 20 years or so about sustainability, and how has that perception changed?

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Scott Tew: Yeah, it's a great opening question, Sara, because so much has changed in the last 10 to 15 years in particular. I mean, I've personally witnessed, as you have several eras of sustainability, as I like to call it, and we have moved away from the things you mentioned, which I call moral obligations, things like responsibility and stewarding to to really value creation.

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Scott Tew: So I think that sustainability has come into a place now that's in the crosshairs of company business priorities. And that's what we're seeing not just to train technologies, but we're seeing it at all great companies that truly have begun to think through what it means to create value in some unique ways.

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Sara Gutterman: From a business standpoint, sustainability used to be considered a compliance exercise or philanthropic philanthropic effort. As you just said, it was kind of nice to have or and really, it was a cost center that companies invested in when times were good. But today, it's increasingly viewed as a driver of growth, resilience and competitive advantage. And in practice, that means integrating sustainability into core operations rather than just bolting it on the edge.

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Sara Gutterman: So can you talk to us about the shift to the transactional nature of sustainability, where it directly affects the top and the bottom line for a company, and what's pushed sustainability from the margins to the center of decision making?

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Scott Tew: Yeah, I think the what's pushed us there is that the best companies have started to realize that sustainability is a catalyst for other things, that companies want more of. Innovation is a great one. If you're doing sustainability the right way, it's forcing you to rethink how you're solving problems for customers, which is innovation. And many times innovation is about future solutions.

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Scott Tew: Innovation is about driving new value innovations, about advantages in the marketplace. These are words and concepts businesses want to talk about. They want to know more about. They want to invest in. So no matter what we call it, I like to think of sustainability as that catalyst. It's it's the lens through which we do things. The business already says we want more of.

00:04:37:04 - 00:04:59:22
Scott Tew: We want to do this because we think it makes us better for customers, for market, for investors. That's the language that we now use to talk about sustainability. That's where I spend my day. I spend my day with business leaders talking about all those things. How is sustainability going to help us find a new material, raw material, instead of the ones we've always used?

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Scott Tew: How will sustainability help us extend the life of products beyond what they were in the past? How will sustainability help us think about innovation, or delivering a solution in a different way than we've delivered it in the past? All these things business leaders want to have discussions about, especially because sustainability, I believe, can be measured. We have ways of measuring the value.

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Scott Tew: Sustainability. Today, I wanted to say we have ways that we didn't have in the past. It's more that we weren't using these ways in the past. We weren't using the metrics that we use today, the language that we use today to talk about sustainability. But that's where we are today. We move way beyond, as I mentioned, sort of the moral responsibilities to business realities, to innovation, to things that truly create value.

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Sara Gutterman: So I have a couple of questions. Basically said first. Sustainability obviously means a lot of different things. So what are you seeing that is kind of top of mind and trending as you're having these conversations with your colleagues, both at Train Technologies, but you're involved with organizations worldwide. So what are those trends? And then kind of as a second part to that question, how are business leaders connecting business strategy with specific climate goals today in a way that they have in the past?

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Scott Tew: I think a lot of the best businesses have moved away from short term thinking. That doesn't mean we're not focused on quarterly results, but the short termism leads to short term ism, and long term thinking leads to really long term value. And the best companies are focused on how how do they focus and deliver on long term value, whether we're talking about from the lens of investors or talking about customers, we're talking about employees.

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Scott Tew: I mean, the right approach to sustainability helps you address and answer all of those questions. It's long term ism. I like to think of it as durability. Sustainability is about durability. How do we make ourselves durable? You do that by thinking about what makes you more resilient. You also do that by thinking about what helps a customer be more resilient.

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Scott Tew: It goes back to some of the other things that I mentioned. Like how do our products last longer? How do we deliver it in a different way? How do you do it with less negative impacts on the environment? All these things help you become more resilient. So to answer your question about themes that I'm seeing, I'm seeing the themes of durability, themes of resiliency, things of long term nature.

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Scott Tew: I think it's just good business efficiency is about durability. I know it's not the sexiest term in a world of AI and high tech hyperscalers, but efficiency is still a value creator for companies. It's a bottom line impact. But so we're sort of other things making yourself more resilient as a company, more durable. That is also how you reduce risk.

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Scott Tew: And every business leader wants to reduce risk to the bottom line. And so sustainability sits at the intersection of all those things.

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Sara Gutterman: You know you've used the R-word a lot. Resiliency. We're seeing that word really resonate across the entire construction sector. But beyond, you know, as we talk with appraisers and insurers and lenders, resiliency, whether it's in terms of housing or communities or businesses, but resiliency as risk reduction, that seems to be a theme that is really resonating, kind of cross-sector throughout the economy.

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Sara Gutterman: It should. Yeah. Now, you also mentioned a little earlier that one of the most interesting changes in the last decade is that sustainability is now closely tied to innovation and that companies, including trading technologies, are discovering that solving for environmental challenges can often lead to entirely new markets and revenue streams. So from your perspective, how does sustainability actually create economic opportunity?

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Sara Gutterman: And, you know, you have some examples that you can share with us.

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Scott Tew: Well, I think number one is sustainability is also about solving something. It's about solving environmental issues. It's about solving some societal issues, whether we're talking climate change or energy transition, energy crisis, whatever the buzz word is, whatever the problem is, I think sustainability is how we go about solving it in the long term, not in the short term often, but it's certainly the long term lens for solving these big issues for companies and for society.

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Scott Tew: And so with that in mind, if you can leverage sustainability as a as I mentioned, as a, as a catalyst for innovation, meaning ask the right questions, turn it into a problem, a question that needs to be answered. It's more of the how can we where would we, how should we? These are questions that really get the right people in the room addressing.

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Scott Tew: And you're going to come up with some innovative solutions. I mean, you know, we've got we're way past the days of having a suggestion box in lobbies of companies, but there are thousands of things we've learned since then about engaging broad, diverse ideas across a broad, diverse set of employees and or companies or partners. I mean, until recently, companies weren't even asking their suppliers how to solve certain issues.

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Scott Tew: We were just saying, send us this. And that's, you know, those days are also behind us. That's not how we partner with suppliers anymore. And so it's also not how we partner best with our own employees. We engage a lot of our people all train technologies. Employees have one required objective on all of our annual objectives. I mean, you can do as many objectives if you want.

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Scott Tew: There's one required globally for all employees, and that's one that says, how will you help us deliver on our company's commitments and sustainability. And it forces the employee to think through personal actions. I believe that every person has a contribution to make personally towards our company's commitments. You mentioned one of our company's commitments. There are many others. This belief that one small step from one single employee in the aggregate can be huge, is really what helped us rethink how we go about solving the problems.

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Scott Tew: Scott will not solve the problems for future customers on his own, but if I get in a room with 100 200 other people and we work together on possible ways to solve the problem, I'm going to get one step and idea from this person. I'll get another step and an idea from this person. And collectively, we have created a new path to solving an issue that we couldn't solve in the past.

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Scott Tew: This is the most exciting area for sustainability because it is about making you a better company, about making you a better.

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Scott Tew: A better solution in the future. And it may be a better way of you even rethinking how we got ourselves into the problem we're in anyway. And so that helps you redesign products, helps you redesign how you go to market, helps you rethink how you do the processes that got you here, which all of those things. I have examples about all of those things that we've learned through the years.

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Sara Gutterman: I love that so much because as we've established, sustainability means so many different things to so many different people and ten people. What sustainability means, you'll get 13 different answers will, because I at least have like 2 or 3 myself. But I love what you're saying about it's kind of that concept of do what you love and the money will come, right?

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Sara Gutterman: But you do what you're passionate about. Talk about an act on what you're passionate about with respect to sustainability. And if everyone does that, then that collective response can really add up and create something very meaningful and impactful within a business, within our culture, within our economy, and just for the planet as a whole.

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Scott Tew: So yeah, we see it. We see it played out all the time.

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Sara Gutterman: Yeah, that's really nice. So, you know, that leads me to another question I have for you, which is all right. So sustainability is increasingly pivotal to long term growth. But realizing that potential really requires that not just sustainability leaders, but really everyone can speak a language that connects sustainability with business from balance sheets to return on investment investments.

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Sara Gutterman: So how has the language of sustainability really changed over time? You know, you've been a senior executive in sustainability for a long time. So what are the arguments that are resonating most today with executives and boards, but also just your your team members and your employees?

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Scott Tew: I think when I put it on a future lens on this, I mean, I like to think of it this way. I think that the future belongs to efficient, clean, resilient solutions. And we can talk around those things all day long. But that's what people want. Who doesn't want that? What homeowner, what employee? What company? I mean, what you want to work for a company that's focused on clean and efficient, resilient solutions.

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Scott Tew: You want to be an employee who's part of a company that's offering those things to the world. And on the customer side, on the other side, you want to choose those things. And so I think that focusing on that option to provide to the world, that's what gets my engine running. I mean, that's what gets me up every day, is how do we do everything that we do more efficient, more clean, more resilient than we did last year and certainly than we did five years ago, ten years ago.

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Scott Tew: That's the drive. And by the way, that is sustainability. I don't like to get caught up in the semantics. I actually argue with people all the time to trap me in a semantic. It's just not that's not what we should be. We should be talking about the things that people really care about.

00:15:03:26 - 00:15:34:23
Sara Gutterman: Yeah, well, what you said really resonates with the whole premise of this podcast, which is the transition from price per square foot, short term metrics to value per square foot, or metrics that really measure the efficiency, the resiliency, the durability, the quality, and the true value of what we as humans are really looking for, whether it's that's in our homes or our businesses, our work lives or our personal lives.

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Sara Gutterman: But I have to ask you this. So pretend for a minute that I am a business executive. Yes, that is still skeptical about climate change and sustainable business practices and the benefits to my business. What would you say to convince me that sustainability is this good business?

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Scott Tew: Well, first, I would not try to use climate science. I would talk about business opportunity, and depending on what type of business leader you are or the things you care about, we can talk about it that way. Maybe you care about reducing risk to the products that you currently have in the marketplace. We can talk about that. Maybe you want to talk about new market opportunities.

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Scott Tew: Maybe you want to talk about efficiency and wasting less money on maybe energy consumption. I'm going to talk to you about the things that are really important to you, but we're going to talk about the business impacts of those those levers that I believe that we can always improve on. So you want to you can come to me, I will not with a business leader start with climate science.

00:16:33:18 - 00:16:56:07
Scott Tew: That's not the right place to be. That's not where they spend their day, nor should it be where they spend their day. They should spend their day on how to make sure that their products are more efficient and cleaner, using less energy, more resilient that they're going to last a long time that they have. They've incorporated the very best raw materials that that are possible.

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Scott Tew: So those are the things that I'm going to talk to you about.

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Sara Gutterman: How do you frame the value in that scenario of things like things that are maybe a little less tangible, like emissions reductions or carbon targets or climate commitments?

00:17:13:18 - 00:17:36:22
Scott Tew: Okay. Well, there's a couple of things there. I think back to my earlier point. Things like climate commitments for companies like Trend Technologies, which we take very seriously, but we mainly take them seriously because we believe these long term, what I call North stars, these commitments that we've made, they they want us to the right future. They want us to like it's almost like, who do I want to be?

00:17:36:23 - 00:17:54:25
Scott Tew: I like to think of it sometimes like a like a weight loss journey. You know, where you started and you know where you want to be. But it's a journey between those things. Sometimes for some people, it's a month, or maybe it's six months, maybe it's a year or two. But there's steps that have to happen to get you where you want to be.

00:17:54:25 - 00:18:16:03
Scott Tew: I think these commitments that companies like Train Technologies have committed to, it's it's the same thing. That's who we want to be in the future. There's a whole lot of steps that are going to get us there. Some of those will require us to adjust our product design. Some of those require us to maybe engage and maybe train our people to do things differently than they did in the past.

00:18:16:06 - 00:18:36:20
Scott Tew: Some things will require us to rethink how we go to market. Maybe we maybe there are new customers out there that we should market to some products that we have that we've not thought about before. Maybe there's a new way of actually maybe there's a new narrative about what's different. Maybe it's about long term value and this journey of steps.

00:18:36:20 - 00:18:54:10
Scott Tew: And so I hope that's answering the question. I think the backwards it was the second part of your question. I think the first part is just around is really the how we get there. And I think it does take all of those things. You cannot expect to just change overnight. Just like a weight loss journey. It doesn't happen overnight.

00:18:54:11 - 00:19:12:21
Scott Tew: Some people need to be retrained. Some raw materials need to be. They need to change. You know, we specify a lot of virgin metals, for instance, like copper that has to be extracted from the Earth. We are trying hard to get away from that. And how do you get away from that? You have to get a lot of smart people in a room.

00:19:12:23 - 00:19:40:24
Scott Tew: You have to say, is it even possible? And a lot of testing has to happen on alternative metals because you don't want to sacrifice efficiency. You don't want to sacrifice safety, you don't want to sacrifice durability of the product. So a lot of testing has to happen to keep you from doing negative trade offs. But you have to first get everyone in the room to say, what's it going to take for us to stop extracting so much of this from the earth and find an alternative that is better?

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Scott Tew: Those conversations can happen in a company that has a North Star that points to the sort of long term future.

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Sara Gutterman: Well, I think your category actually has already tackled such a huge example just in the refrigerants that you use. Solving for that and really doing. Great example, cataclysmic change because as we saw through like Project Drawdown, for example. Yes. You know, the refrigerants had one of the most impactful.

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Scott Tew: Number one.

00:20:12:08 - 00:20:35:04
Sara Gutterman: Number one, impact on carbon emissions and climate. And so your whole category said, okay, we're going to change this. So you've already proven from a category standpoint. And now it sounds like more and more so from a company standpoint that, you know, there there is the ability to put those smart minds together to solve for these massive problems.

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Sara Gutterman: Right. And get a better solution. Yeah.

00:20:38:06 - 00:20:39:07
Scott Tew: You can.

00:20:39:09 - 00:21:30:14
Sara Gutterman: So, you know, one of the central themes of this podcast is talking about the difference between value and values. And I think that historically, at least, companies have thought that sustainability was all about values, ethics, responsibility, whereas the single bottom line of profitability that really kind of embodied value. So talk a little bit about how value and values reinforce one another and how moving forward, as we are developing businesses, as you've established businesses that, again, really reinforce those two together to be synergistic and where 1 in 1 equals five.

00:21:30:16 - 00:21:42:11
Scott Tew: Yeah, that's a that's a pretty big, heavy question. My my first answer would be that values bill. Trust.

00:21:42:13 - 00:22:03:23
Scott Tew: Insular inside of a company employs may here executives and or the company's website say certain values but they always in the beginning we'll look at a sort of a sideways eye to find out if those values really have meaning inside the company. Like, are we investing like we say we are? Are we putting our money where our mouth is?

00:22:03:23 - 00:22:26:25
Scott Tew: Are we talking the talk and leading by example? I think once you've established that, then your values certainly build trust inside the company. I think that's when the markets begin seeing something different, because I think if values bill trust, trust can build a market. You give an example a few minutes ago about refrigerant transition. Refrigerants are bad. They've been it's a terrible negative impact.

00:22:26:26 - 00:22:47:08
Scott Tew: We use refrigerants for your listeners that may not know they are greenhouse gases. They're regulated greenhouse gases. We use them to deliver our solutions to cool and heat the world. And we we know that we need to transition away from all the bad ones. And so we could have just kept doing it the way it was done historically.

00:22:47:09 - 00:23:09:08
Scott Tew: Like it takes like 12 years to come up with a new one. But we've we've now more than half that. We're at transition times that are much smaller requires a lot of research, a lot of development. The market builds though on companies like train technology that say we can transition faster and we'll invest in the right ways to do it better, and we won't stop either.

00:23:09:09 - 00:23:29:23
Scott Tew: We're going to speed the next one up even more, and we'll keep bringing it until we get to zero impacts. And so that's sort of a North Star. And so your employees are watching it happen. They see the investments. The markets start seeing that, oh you actually can shift so fast that, you know, it's we want to be with a company that actually can get us into next generation.

00:23:29:23 - 00:23:59:24
Scott Tew: Who wants to buy the old model. You want to buy something that's next. Next generation is about new value as well. And I think loan value. And so sustainability is part of this equation. I think that sustainability can be priced into risk reduction for instance. And when it risk is priced correctly, sustainability provides a competitive advantage. Unfortunately, we don't talk a lot about risk being priced into quarterly results a lot of times.

00:23:59:27 - 00:24:23:01
Scott Tew: And if I could wave a magic wand, I would say that's what we would change. We would actually we would get the markets to start catching up on what creates true long term value. And I think sustainability helps companies have a competitive advantage because it's all about who we want to be, both from a risk perspective and in the value creation perspective.

00:24:23:04 - 00:24:48:05
Sara Gutterman: That's so interesting. And, you know, I think about what's happening just as an example of that in a little bit of a different way. But in the housing sector, with insurance companies pulling out of markets and, you know, they are evaluating the enhanced climate risk associated with certain markets. So climate events like wildfires and super storms and flooding.

00:24:48:05 - 00:25:11:02
Sara Gutterman: And these insurance companies are just simply saying, look, we can't insure homes and communities or any kind of structures in these markets because they're actually incorporating that, the enhanced risk reduction. But you're right, it doesn't seem like the market is doing that from a business standpoint yet. So what do you think the lever is there to actually make that happen?

00:25:11:05 - 00:25:36:25
Scott Tew: Well, I mean, change the metrics. You change the outcomes. We know that. And so we need some additional metrics placed on companies that help us understand what I, what I mentioned. I mean, I think we need some metrics that help us help the markets catch up to long term value, not just short term value. We all know how to do that one, but we should enhance the metrics so that companies can express of their readiness for the future.

00:25:36:25 - 00:25:43:26
Scott Tew: And I think that would help. I think that would help us all think differently about where future value lies.

00:25:43:29 - 00:26:14:22
Sara Gutterman: Scott, do you think that scope one, two and three emissions might be some of those new metrics that are entering into the market that help kind of reframe this conversation? And first, can you, for our listeners, explain what scope one, two and three emissions are and then just talk about why, you know, they may be the thing that changes the valuation metrics, but also why they're a challenge and an opportunity for companies.

00:26:14:24 - 00:26:43:02
Scott Tew: Yeah, sure. So quickly, primer for your listeners is that we do think about emissions in several buckets or categories. Scope. One of the things that we directly control and the company is responsible for. And then scope two is the energy a company consumes. Just because we have to have energy to run our offices and factories. Scope one will be all those all those other things that are direct result of our operations within scope three is where it gets a little tricky.

00:26:43:04 - 00:27:02:17
Scott Tew: Scope three are all those indirect emissions. That would be the emissions that are come from your suppliers, sort of upstream of the company. It would also be the emissions that come from your products once you've put them into the marketplace, sort of downstream of the company. And your question about is this going to become the new language? I don't think we'll be using the language of scopes in the future.

00:27:02:17 - 00:27:27:15
Scott Tew: I think we sort of the climate or sustainability nerds understand it. However, I do think that scope three, when we think about how we solve the big problems, the big problems with emissions are typically in the area that the company doesn't have full control over things like suppliers and the suppliers that we choose. I mean, you can you have some control with suppliers, but not all.

00:27:27:15 - 00:27:51:25
Scott Tew: You don't control how they run their factories. You don't control where they have their locations. You don't control the energy grid that they that they leverage. And so it's somewhat distant control and influence. And certainly with customers, I mean, we don't know what happens. We sell a lot of equipment to buildings around the world, or one of the largest cooling and heating companies in the world.

00:27:51:25 - 00:28:13:02
Scott Tew: So we have a lot of technology and buildings helping people live comfortably. The issue with that is once we've installed it at your home place of business, where you live or work, play. Many times we walk away and then, you know, hand you the key. And we don't know. We don't know what we don't know. We don't know how you maintain it so that it's efficient.

00:28:13:02 - 00:28:30:02
Scott Tew: We don't know if you treat it well and if you upgrade it when it needs to be upgrade. We don't know if you overwork it or work it like it was designed. There are lots of things out of our control and all of those things just like we're here. Vehicle. You know, the little thing that blinks on your dashboard that says time to change your voice?

00:28:30:03 - 00:28:59:17
Scott Tew: You can ignore that if you want to. You'll ignore it at your own peril. You're the life of your car is going to pay the price, probably, but you can ignore it. And of course, we're in the same situation. So the opportunity, Sara, back to the question are going to be and how companies are working much in a much better ways to influence what happens with suppliers and help their suppliers be better suppliers and be better and stewards of how they run their own facilities become more efficient.

00:28:59:17 - 00:29:26:11
Scott Tew: And I think that that, plus what you're doing as a company equals something greater as a whole. The same the other way, us doing something and designing great products, highly efficient, low environmental impact, working with our customers to make sure that the things are being service correctly. Maybe we're incorporating some new technology that we have technologies today that help a system actually diagnose excels when it starts getting sick, sort of like your car.

00:29:26:13 - 00:29:43:23
Scott Tew: It sort of figures out that there is something I need here, and I and we have we're using AI now to help us not only just diagnose the systems, but they can preorder parts so it can have it self fixed. These things are all possible now, but this is where the future is going. The story and the future is going to be.

00:29:43:23 - 00:29:58:22
Scott Tew: How are you working with your suppliers to help the system be better? How are you working with customers so that they know that it's it's like an ecosystem impact. And I think that comprehensive view, this is where great new opportunities lie.

00:29:58:25 - 00:30:19:16
Sara Gutterman: So that dovetails nicely into my next question, which is about cloud computing, AI, digital twins and and all these enabling technologies. How are they not just helping companies move faster and use resources more efficiently, but how are they really kind of changing the sustainability landscape.

00:30:19:18 - 00:30:41:21
Scott Tew: The huge changes? And I know all of your listeners have their own AI stories, but here's what we're seeing related to sustainability, especially in the place of of the built environment where I spend a lot of my time thinking about AI and the new technology tools that we have are bringing 2 or 3 things to us. One is they're bringing visibility in areas we've not had before.

00:30:41:22 - 00:31:06:10
Scott Tew: I just mentioned one, which is AI has this ability to work within systems, inside buildings to understand how the building is truly operating in the exact location it's operating. And it can do predictions based on a history of the building, based on the equipment that's in the building, based on the people that are working in the building or living in the building, we get new insights like we've never had before.

00:31:06:11 - 00:31:45:18
Scott Tew: And so the visibility of data that preciseness of helping us gauge how to make something work better, how to make the building work better, we've never had this level of insight before. And then thirdly, what we're seeing, because AI is able to work so fast, we're seeing speed at scale that we've never seen before. The ability for us to have these insights and then to act on them with enabled AI, we've just never we've never been in a place where we didn't have to wait around on sensors and then someone else downloading data, someone else sifting through the data to try to come up with insights.

00:31:45:18 - 00:32:02:20
Scott Tew: It's it's simultaneous now. It's immediate. It's real time. So I think that's where we're living today. I mean, we've moved from this annual report mentality to real time dashboards and real time actions that it's a game changer for how buildings will operate in the future.

00:32:02:22 - 00:32:17:03
Sara Gutterman: Yeah. So if business and governments were able to truly adopt these broader metrics measuring resilience, human wellbeing, environmental impact, how might our economy look different than it does say.

00:32:17:05 - 00:32:40:27
Scott Tew: Well, first I'll say we don't need to replace capitalism. I think what we do need to do, though, is we need to measure what creates prosperity. And prosperity, I think is built on long term thinking. It's built on doing all the things that we know we should be doing to operate society a company, a building, a person's own life.

00:32:40:28 - 00:33:04:14
Scott Tew: We all want prosperity because prosperity is all encompassing concept that's around doing it the right way the first time. And so I think that we can marry the two there. You can make money and and have prosperity. And so I don't apologize for the the capitalism side of all of this of making money while doing good. I think you can have both.

00:33:04:16 - 00:33:27:17
Scott Tew: And I think that's the most exciting thing about sustainability. I think there was a time years ago where we thought maybe you couldn't have both. I mean, I've had debates with, you know, university professors who thought it was not possible. And I love a good philosophical debate. But what I have seen in real life is that the the real life shows that you can have both.

00:33:27:17 - 00:33:42:10
Scott Tew: You can make money while doing it better than you did it in the past. And what's better than that? And I think also, as I mentioned earlier, companies thinking for the long term and long term value, I mean, I think that's where prosperity really happens.

00:33:42:12 - 00:33:46:24
Sara Gutterman: Indeed, I agree entirely. I think it has to be an end proposition. There.

00:33:47:00 - 00:33:48:06
Scott Tew: It is an end proposition.

00:33:48:12 - 00:33:51:29
Sara Gutterman: It has to be multiple.

00:33:52:01 - 00:34:08:17
Sara Gutterman: Factors that motivate people and businesses agree. So let me ask you two final questions, which are that I ask all of my podcast guests. First, when you hear the term value per square foot, what does that mean to you?

00:34:08:20 - 00:34:33:20
Scott Tew: Well, that means performance to me. I like to think about I like to think about buildings, not with the old metrics, but with new metrics around performance, house and building performing. We used to think about building on its greatest day in the past was the day it was commissioned, the day you cut the ribbon because that's the day that the building was closest to the architect stream.

00:34:33:25 - 00:34:58:01
Scott Tew: The the the builders greatest ideas and concepts for the building and for companies like ours. The day that their their equipment work the best typically sort of like the car when you pick it up at the dealership and the showroom floor, it's the best it's going to be because the moment you drive it down the highway, you know you're going to hit a pothole and something's going to happen.

00:34:58:03 - 00:35:21:04
Scott Tew: Everything goes south. But that's just thinking about design, really. If you think about it that way, and design is not reality and we all know that. So I would rather think about value per square foot in terms of performance. How is the building performing over time today, tomorrow, next year? How did it perform last year? So thinking about the value comes from how it's performing.

00:35:21:04 - 00:35:40:08
Scott Tew: Is it performing as we designed it or the people being as productive as possible inside? Is it performing in a healthy way, meaning both healthy for people and health of the building itself? These are things now that we know how to measure. And so I would rather think about how to measure the performance of a building than anything else.

00:35:40:11 - 00:35:49:24
Sara Gutterman: Fantastic. And what's one tip for our listeners? Something specific that they can do that would change how they think about value?

00:35:49:26 - 00:36:12:12
Scott Tew: Oh, well, we have to broaden the time horizon. I mean, we can't we can't keep short termism just gives us short term answers. And who wants a short term answer? We use phrases like the climate emergency or the climate crisis. We use phrases like the energy crisis, the energy transition. Look, we have to broaden our time horizon to come up with the right solutions.

00:36:12:12 - 00:36:30:09
Scott Tew: We have to stop this willy nilly fix for today, in this week, because that's not what the future is built on. If we build it right, it's built on a longer time horizon where we think about what's it going to take for us to go from A to B and all of the steps in between, and it could be a lot.

00:36:30:17 - 00:36:52:22
Scott Tew: You know, I think if you and I were both heading out from the East Coast where I am today, to the West Coast, where maybe you are, and we were starting in Charlotte, North Carolina, and one of us would take a route, maybe to the north and over to the west. One of us might go south and to the west we both would get there, right, but our journeys would be very different.

00:36:52:22 - 00:37:11:07
Scott Tew: But the point is, is that it's a long journey, and there are different steps to take to get to a destination. And I like to think about the best way to think about all of this is that way, is that we have to broaden this time horizon of thinking beyond short term actions.

00:37:11:09 - 00:37:41:16
Sara Gutterman: Scott, thank you so much. This has been such a fascinating conversation. As always, when I talk with you. What you've shown us today is that when companies measure the wrong things, they optimize for the wrong outcomes. But when we align our metrics with what people actually value, whether that's resiliency or long term ism or health and wellness or stability, long term impact or profitability, which is of paramount importance as well, we can unlock a very different future.

00:37:41:16 - 00:38:02:25
Sara Gutterman: So, Scott, thank you for helping us explore what that future might look like and probably will look like. And to our listeners, thank you for joining for another episode of The Valuation Metric. Until next time, I'm Sara Gutman, reminding you that when we measure what matters, we build a world that actually has value.

00:38:02:27 - 00:38:14:06
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