Hiten Patel: Thank you for joining us today. This is Hiten Patel, Oliver Wyman’s global head of financial infrastructure technology and services. And I'm delighted to be joined today by Catherine Long, who is the co-founder of a company called Trace. Thank you for joining us, Cat.
Cat Long: Thanks. It's great to be here.
Hiten: So just start by brief introduction to the company. It'd be great to hear about what you guys do.
Cat: Absolutely. So Trace is a climate tech platform launched in 2020, were actually headquartered in Sydney, Australia, but have a global presence. Trace is a software company which is helping small to medium enterprise on the journey to net zero emissions. So really what our goal is, is to help companies that are getting pressure not usually from their employees or from their clients or from their investors to start having an active climate or environmental plan. And our technology makes it easy for them to measure, manage, offset their carbon emissions, and engage their staff on the journey.
Hiten: And when you say small to medium size, like make it real for me, how many people this is this isn't unique. Claire on the high street, right? This is this is probably. Give us give us an idea, right? Yeah.
Cat: Correct. Although it's amazing how broad it is. I think we started off probably our average employee size of the customers in our first year would maybe be sub-50. I'd say now it's closer to between a hundred and two hundred because we do have some large retailers on the platform. So really what defined is the fact that it's small to medium is, it's not normally a revenue target, it's like a headcount target if they're a service based industry or it's to do with the kind of infrastructure they have internally to manage sustainability and depending on what industry they're in, that can actually mean that they're quite large in terms of headcount, but they just haven't invested internal capability to look after climate and sustainability and trying to really fill that gap.
Hiten: Interesting, interesting. And look and forgive me, we're hearing about this left front and center, right. There's obviously lots of focus rightly in this space. How hard of a pitch or a sell is it when you're approaching these companies? Do they understand the need and are looking for solutions? Talk to me a little bit around how that that journey can.
Cat: Yes, it's a great question. I think it depends where the need comes from. So I mentioned at the start as normally three reasons a small to medium enterprises taking interest and realizing they need to start having a climate plan. And I'd say in the last two years the biggest pull for most of our clients has actually been their employees going, you know, I want to work for a company that's aligned to my values.
Environment is often a really big one in that space and it's kind of a cultural fix as well as an actual climate fix. But in the last six months or so in the space is moving so quickly, you've seen kind of standards be released by the ISSB a lot of countries starting to adopt some of that regulation into their reporting requirements, which has meant that large companies are requiring their supply chains or their investee companies to start reporting on climate.
So it's becoming an easier sell because I think that the why is becoming a lot more urgent. The education is still not there. We spend a lot of time educating customers about what net zero really means, why they should, why they should start measuring them today, and what the opportunities that they have for decarbonization.
Hiten: What does it practically mean? Say I am a CFO or a chief sustainable officer at one of these companies that I've picked up the phone to you, however, I'll get in touch with you and I start to explore using Trace. Like what does that look like?
Cat: Yeah, I think what's it what's interesting is the person we are normally speaking to is a kind of side of desk sustainability officer. That's what's the common thread across all of our company are our customers. So it might be a CFO, it might be a head of ops, it might be a business manager, it might be the founder who just wants to do the right thing by the company. These people have really time poor. And they don't normally have an environmental background of kind of degree or anything like that. We have to just as quickly as possible and as efficiently as possible, educate them about what carbon emissions are and why they matter and then how they can measure that. Our technology platform is designed to really try and remove the barriers in terms of complexity of measuring emissions.
And for those that don't know it, the data can come from all over the place. You know what some staff surveys, what are your staff doing to get to work? Travel management companies telling you how many flights you're taking, your procurement platform saying where you're spending money, and then of course, your utility providers. So it's quite a disaggregated data environment.
And what we've done is spend three years really trying to make the process of inputting that data as seamless as possible and also catering to very different tech stacks within different organizations.
Hiten: As also as also, I guess I've heard you use word measuring and the data and the info in the space. What happens when people start to measure? I guess that paints the picture of what's going on. How does that translate into behavioral change? What have you noticed when kind of customers use the platforms in years one and two, like describe some of that journey for us.
Cat: Yeah. Great question. So once you've been through the process of getting your carbon assessment, you basically got a pie chart, right, that says, you know, your company has a footprint of 200 tons, and here's the profile of that emissions and there's always some surprises in that. You know, anyone that reads up in the space won't be surprised that most emissions generally come from your supply chain.
But I think those that are less educated don't necessarily realize that actually what they're spending in the services and goods that they're buying is actually driving a large carbon footprint. So having that penny drop moment to realize that creating sustainability within your procurement cycle is a very important step to decarbonization is one that I hear a lot.
The other one is that you often see within offices people really prioritizing waste reduction, which is great. And I'm certainly not here to say, you know, don't try and recycle at all, but generally for most service based organizations, you know, we're not talking manufacturing companies here, we're talking consultancies or financial services. They're not creating a huge amount of waste, but they're spending a lot of time on it.
And I think that's because it's quite tangible and it's something that most employees can kind of get behind and feel like they're making a genuine contribution. So when they then see their pie chart and realize that waste probably only makes up 1% of their emissions, they think, wow, are we really focusing on the right things? And it's usually when they realize that their employees actually have a much larger role to play in terms of their travel behaviors, commuting behaviors and crucially the electricity they use at home, particularly if they're hybrid or remote.
Hiten: Very interesting, very interesting. I must admit I spend too many minutes, stood in front of the waste bins at our offices trying to understand which goes in which recycling. Yeah, I don't know what that says about me or how complex the system is that's there.
Cat: The waste movement has worked. People care. Now we need to shift our attention to energy and then travel, I think.
Hiten: And talk to me a little bit about, I guess, greenwashing, the term that's out there. I guess there are some challenges around the role and the value of the data in this space. Given you sit at the heart of it as a practitioner, kind of give us your perspectives on some of that noise that's out there around that.
Cat: You described it well, it is noise, but a lot of it is justified. I think there has been some examples of greenwashing that has come from a bad place. You know, companies really saying that they're much more environmentally friendly than they truly are just to win clients. But unfortunately, it's been a few bad players that has actually tarnished the rest of the industry because I think the majority of companies that are talking about their impact are actually doing so genuinely and transparently, and that's a new term.
Now, I don't know if you've heard it called green hushing whereby companies are actually investing in impact and decarbonization, and sustainability and then they're saying nothing about it for fear of being accused of greenwashing, which to me I think is a bigger risk than a few bad players saying the wrong thing. But the underlying problem here with all of this is a lack of transparency and data and, you know, awareness of how to actually talk about this correctly.
So, you know, offsetting is obviously something that's come under scrutiny a lot, again, is because there's a few bad players out there, a few projects that, you know, have been fraudulent or not created the impact that they claim, too. Unfortunately, that doesn't mean that every other carbon project isn't delivering incredible value. So I think it all comes down to giving people the tools to talk openly and transparently about what they're doing.
Hiten: Interesting. Interesting. You always find the journey through some of these changes are rarely linear, I think ever knows there's a stoplight point and everyone knows there needs to be change and there's often bumps along the way as, as, as people react and optimise to whatever task goals are put in front of them. But it'd be good to get your sense around rolling that clock forward if we were in three five years time.
People are using Trace or other types of providers and measuring these types of things like what does the world look like at that stage around this, around this space?
Cat: Yeah, I don't know if I'm idealistic, but I like to think that in that you just like people can choose companies they work for based on their Google review or testimonials. I hope that there will be such availability of carbon emissions data on every company that you can make a choice about everything you buy as a business or as a consumer based on their environmental impact, you know, be a five star review.
And this company has a, you know, a low carbon score or a high carbon score that will then allow people to really put money where, you know, align to their values and align to what matters to them, hopefully climate being one of them. But to do that means that we need mass adoption of carbon measurement. And I think regulation is accelerating that certainly in those kind of large enterprise end of town and the listed companies.
But I wonder how long it will actually take for that to filter down to supply chains. That's obviously something we're trying to do every single day and it's moving fast, but it's certainly not moving fast enough.
Hiten: And if you had a magic wand like what do you think that single change or thing that needs to kind of be better understood, kind of maximize the likelihood of getting to that utopia you describe? It does sound like a credible end goal.
Cat: Yeah, I mean, the magic wand would be Trace just really taking off. Obviously have I mean regulation and standardization will help because at the moment the problem is there's a lot of data out there, but it's all completely unreadable by companies. You know, if you're an investor or an asset manager and you're trying to find out somebody's net zero targets or carbon emissions, you've got to filter through pages and pages of reports.
And it's all in different formats. So nothing's like for like so creating standards, just like the ISSB has released, will really help that. But it's not as perfect as a magic wand because obviously it takes a long time for that to actually be adopted into legislation and then used and take effect. I'm afraid I don’t have anything that's really going to solve that other than education of the masses so that people start voluntarily disclosing carbon before they actually have to based on legislation.
Hiten: That makes sense, keep maintaining is a headline issue and maintaining engagement. Right? Sounds like it's key to make sure people remain emotionally invested in this as a priority cause I'm going to switch you, switch gears slightly and rewind the tape. I guess. Once upon a time you were a consultant at Oliver Wyman, and now you're a founder of an exciting business.
Talk to me a little bit about the journey that got you into this space and founding your own company. And you seem to have landed in the cloud space a little bit ahead of the curve, from my own reckoning and seeing what's going on will be great to just hear from you about that that that transition and yeah.
Cat: I think everyone's got the benefit of hindsight and they can have a great compelling narrative based on looking back, I think I could do that, but I'll just be a bit more frank with it being slightly kind of serendipity. I think having come out of management consulting at Oliver Wyman, I decided to stay in financial services, but I wanted to relocate and just find a new life in a sunny location.
So I landed at Macquarie Bank, which is the largest investment bank in Australia and actually the largest renewable energy infrastructure asset manager in the world as well. So by working for Macquarie, I, I was exposed to renewable energy and basically clean tech without really realizing at the time that that's what it was, you know, five years ago there was no such word as climate tech.
It was, I guess, renewable energy, it was just the term for it. But I loved it and I found it really fascinating because you could apply what I've learned in finance to, you know, actually solving a big world problem. So that was kind of going on at work. And then on the side, I had always had this inkling and desire to build something myself.
My co-founder and I had had a bit of a side hustle, loved doing it, and eventually decided it was time to pull the plug. So I think combining what I'd learned and seeing that that was something that I was really passionate about and excited to solve on climate side with my desire to, to actually build a company with my co-founder.
The two came together. It was, you know, it took a while to get off the ground and actually find something that was a legitimate business model. But by kind of mid 2020, we managed to get Trace launched and revenue generating.
Hiten: Amazing. We've got a whole range of founders on this show from those who've been going at it since the nineties to those a bit more recent and it always, it's always been so it's a little bit of a gamble, a little bit of a leap, and then as you say, it's always easy to retrospectively tell a story and all kind of comes together.
The question I ask most of them of put to you as well, like start to be a little bit around some of the most pressing challenge or interesting challenge you faced on this journey. How did you navigate it? So a little bit of inspiration for those out there earlier on in that journey, trying to pick their way through some of this stuff.
Cat: I guess it is always kind of depends what month you catch me and what's the biggest challenge at the time. But I think the common thread throughout the whole journey has been knowing what skills you need, when and where to invest in your team. Like in terms of how many people at what time. When you're a venture backed company like Trace, you're always working to a finite amount of cash.
And because we're very unlikely to be cash flow positive for a long time, that's just not the current business model. So you're always juggling like where to invest that money and what skills to bring in, or should you be putting it into marketing? Should you be putting it into the software development or should it be into, you know, salespeople or product people?
And that that challenge has been very common throughout, but looks very different probably every quarter because, you know, we've uncovered new clients or new opportunities and new things we want to build, which means we suddenly find ourselves with gaps in the team. And so that's definitely the biggest challenge as a founder, is trying to navigate that and knowing where to place your bets in terms of hiring.
Hiten: Not uncommon challenge, even as you even as you scale. I think there's a lot of bet placing and judgement that that needs, as you go on these journeys. Shifting gears again, I guess one of the other things you'd like to do is just try to shine a little bit of a light outside of just the day job and it'd be great to get from you a little bit of visibility, what you do outside of the day job or the professional sphere, any interesting hobbies and how they fit in, kind of enabling you to be a successful leader of your own company.
Cat: Yes, I suspect my hobbies have taken a bit of a backseat in the last three years. I used to be a triathlete. I used to run, cycle and swim all the time. I moved to Sydney in order to be on a beach so I could surf more. And I haven't done much of the above for in the last few years, you know, not aided by having a baby, which, you know, throws another spanner in the works.
But I do like to keep fit and that's very important for mental health. So I do just find small windows of opportunities to keep fit. But I think I'm also just somebody that is very sociable and likes to hang out with friends and have a relaxing time. And I actually think that really does play into how I lead and manage people.
And I'd say I'm very kind of friendly and approachable as a leader and well, as I'm finding I'm having to kind of learn at the moment is where to find that balance of sometimes you have to be a bit tough, right? You've got goals to achieve. Things aren't always going the way that you want as a business and trying to strike that balance between building a great culture and environment and being friends with everyone on the team first is actually, you know, putting a bit of fire underneath them is something that I'm constantly navigating and probably not my strength.
And I think that comes from the fact that outside of work, you know, I'm a I'm a friendly and outgoing person, but I've got to kind of take that discipline, I think, or create some discipline in the workplace.
Hiten: It's really interesting to hear you say that. I guess there was always this perception that some of the earlier stage companies there's not was this fun loving tribe and it's kind of on that that journey. But it's interesting to hear you point to some of the burn and steel you need to put in to make sure that there's also the right focus and discipline around that.
Cat: Yeah, I think it's just, you know, just holding people accountable and making sure they're very aware of what your expectations of them are, which does not need to be in conflict, to having a great time and having building that great, fun culture. But it does mean you have to have tough conversations. And that's not enough in my nature to do that, sadly.
Hiten: And look, being candid, we don't have enough female co-founders or founders on this show. And you did mention recent motherhood and congratulations on all of that. Thanks also is a little bit around how you've navigated and juggled being an entrepreneur, leading your own company, balancing some of those aspects of the personal life, whatever you're open to sharing about that.
Cat: Yeah, I mean, I literally feel like I'm sitting in the more traditional male seat and I hate to polarize and kind of still stereotype the male in the female role, but you know, ten years ago it normally would have been the male goes back to work quicker, the female that stays at home. But in my family, it's been the complete opposite.
And I've been very lucky to have a husband that has been able to take time off work and spend the first six months with looking after him so that I could return to work because, you know, a CEO taking maternity leave is quite tricky. You don’t have a replacement and you can't afford to bring someone in to lead the business.
So certainly having the family structure that allowed me to do that was incredibly important. And this was without that family support either in terms of my immediate family, because I live on the other side of the world. So, you know, you really do lean into who you have around you. And the other thing and, you know, if anyone's in my boat, whether a father or mother, having an amazing co-founder that you can rely on and trust that you know, that they will be able to hold the fort while you're gone and do so gladly is a privilege.
I feel so grateful that my co-founder was able to kind of hold the fort while I was gone, and I had complete faith in her doing so. I feel privileged that I'm going to be able to return the favor later this year to her, which is a godsend. Yeah, if it was just me if it was if I was a single founder, I honestly have absolutely no idea how I would have done it.
So yeah, if anyone's considering starting a business on their own with the potential for starting a family at the same time, I would caution against doing it on their own.
Hiten: It's just interesting that I mean, lots of people are trying to wrestle with, but any reflections from your perspective on what are some of the changes out there that need to happen to kind of make sure there is an improved gender balance around some of the co-founders, founders, people leading driving these businesses at this stage?
Cat: Yeah, I think I mean, one of the kind of big leap of actually leaving your job and starting a company, I don't that's a hard one to solve. I think just more role models and examples of women that have done it will hopefully inspire more females to do the same. But I think the bigger hurdle is not just making the decision to go and start a business, but actually then being able to secure the funding to keep doing that.
And I still believe there's a big gap in terms of funding that go to two women and I do think that comes from two things. One, probably some unconscious bias on this on the side of the investors. And I think it's getting better. But you only have to look at the numbers to see that most of the money would go to men and that male founded businesses often get higher valuations.
So there's something going on there. But I think then there's also like the lack of confidence or slash realism that I think women tend to have. And I'll give you an example. If somebody says to me, you know, how much how big is your company going to be? I could say an enormous number and say I'm going to be a unicorn within five years.
But the reality is I'll probably be a bit tempered in that estimation, whereas traditionally speaking, there might be men out there that would just be more bullish. I think that just is a is a nature thing and that needs to be recognized and it's not the kind of thing other people from other countries, other cultures or just the personality type.
I think investors need to recognize that somebody’s communication is not necessarily a reflection of the potential of that business or that founder and that will hopefully help level the playing field a little bit.
Hiten: Really interesting. Really interesting. And thank you for sharing. There's clearly a long way to go on that. But yeah, starting to unpack it and lay that out definitely, definitely helps. Final thing for me we like to do on the show is to kind of throw the spotlight and invite you to call out an individual or a company. Probably not your own, that's impressing you right now that you that you think of you should pay attention to. All look up in and around this community. So would be great to get your thoughts on that one.
Cat: Yeah. I think for me a company I'm sure many of your listeners have heard of and based in the UK is Octopus energy. So you know it's probably not introducing something completely new here but Octopus Energy is a company I've been watching for some time because not only have they completely disrupted the energy space for, you know, in the retail market through renewable energy but they've also now got an electric vehicle offering for staff.
That means you can salary sacrifice electric vehicles. They've got a venture capital fund that are actually like taking some of that profit and putting it back up into the Start-Up community. And whenever I've talked to anyone from that team, I've just always been super impressed by the level of innovation that they have with which they think I'm incredibly approachable and I just can see from their growth in their acquisitions already that they're going so fast.
So that's one that I just, I aspire to be like them. I love their branding, I love what they're doing and that mission. So it's a company I'm definitely following and hoping we can tap into the skills of.
Hiten: Well, look, thank you for the whistle stop tour all through kind of hearing what's going on the front line of climate data from the transitioning from consultant to banking to co-founder and and juggling all that as a as a female co-founder and mother thank you for being so generous for your time and your thoughts and for coming on the show.
Cat: Thanks for having us. This is good fun.
This transcript has been edited for clarity.
