Today, my guest is Tillman Vahle. Before Joining SYSTEMIQ, Tilmann worked with EY sustainability consulting and auditing - working for several globally leading corporations, smaller companies, and the German Government to support better transparency and trust in sustainability reporting.
Previously he worked at Volkswagen Corporate Foresight, where he developed a Master Thesis on autonomous mobility for his masters degree. He also had experiences with German Development Association GIZ supporting a review of national parks Management of the Philippines and the DESERTEC Foundation. He holds degrees with distinction from University College Maastricht and IIIEE, Lund University.
Welcome to Where Ideas Launch. Tillman.
Tilmann Vahle 1:28
Thank you, Katherine. Great to be here.
Katherine Ann Byam 1:30
Great to have you.
So tell us a little bit about systemic and what you guys are doing to help us redesign and decarbonize?
Tilmann Vahle 1:38
Yeah, so systemic was founded five years ago, after the Paris Accords, by the then leaders of the sustainability branch of McKinsey, Germany opened home and Martin stata and the original mission and still is, it's really to double down on environmental sustainability. And basically across the board, right, so we look really at high impact stuff. And across natural systems, the rain forest regeneration, for example, on materials management of the circular economy, through plastics, recycling, on our sustainable battery value chains, in the mobility system, and in the energy system as well, where we run especially work on harder to bed sectors.
So that is, you know, the foundational industries of our economy like chemicals, steel, concrete, aviation, shipping, the stuff that is very hard to decarbonize and more sustainable. And that's what systemics mission is, we work globally, we were now 300 peoples, and since we started 2015 16, and we work with, you know, governments, top corporates, innovators, banks, and you know, large organisations like the WWF, or the World Economic Forum to make that happen. Yeah, and that's, that's what we do.
We try to take assistance angles, not only advising one company, but we, when we advise work with companies, we want to look at how they can be part of a better future system? So the system is our client, if you will, and then we run a lot of consultant analytics to underpin these consults. Yeah. And then that is what where we think we are USP lies where you're putting the right players and the right brands together to really put the accelerate the decarbonisation fundamentally,
Katherine Ann Byam 3:25
How did you come to work in sustainability? And was it always in your role since you started working?
Tilmann Vahle 3:30
Yeah, so I mean, ever since starting studies, basically, I had the goal to look at the largest challenge, large challenges of our time and decarbonisation are climate, climate change and the loss of biodiversity they appear to me like the big existential crisis of humanity. And so, you know, with all the modesty of the young student went right into that.
And the way that I that what caught my attention in the beginning, and what brought me on my path that I'm on now is, I read an amazing book by the founders of the Rocky Mountain Institute, which is called Natural Capitalism, which is all about, if you look at systems from a fundamental angle, I could go back to the physical principles go back to like a proper, deep dive refurbishment of the system. And you can make dramatic improvements with actual cost savings.
You know, when I started there was this belief that sustainability is always more expensive, right? It's a trade off between our wealth to our well being. And that book basically just says, now that's just not true, right? If you do it right, actually, things improved dramatically in all directions, including for economics and for social welfare. And the more I'm in this space, the more you know, we find it's true, right?
Like nowadays, electric cars are cheaper over their lifetime and conventional renewables are cheaper than fossil fuels in almost every place in the world. And so, this is what kind of excites me and which has brought me along over the years. It's like, well, the decade now. And yeah, so it was always in sustainability that I worked. And I think it's a great, great path now, right, and a great journey, because it's really accelerating all around, but you start looking.
Katherine Ann Byam 5:16
Yeah, I don't know, if it's accelerating, you know, but it is definitely several years you worked with EY in sustainability, you know, what a thing.
What is the role of reporting to improve the whole corporate sustainability performance in your view?
Tilmann Vahle 5:31
And so it was kind of two sided. For one, I think it's important to, you know, it kept coming back to this adage, that you what you can't measure you can't manage. I mean, that's the foundation that, of course, you need data, you need the transparency about what happens in industry, what happens in companies actions. And so corporate reporting on ESG topics is super important, like reporting on their financial matters is super important. So like, you know, you can invest into them and have transparency in and can make investment decisions the same for all sustainability topics.
And equally, like the data that you see, or the info that you get from corporates, in the sustainability reports, for example, they, we need to be looking out carefully for what's audited, and what is driving, I think that's, for me, the key takeaway from my time at EY auditing is so crucial. So you can trust the data that you get, right. At the same time, the ESG reports, you know, they have they came from ESG papers from a marketing. And so they aren't a reflection of the strategy of the company, right? So we need to also like, be careful on how to interpret them, and exactly is what you read is what you get.
But it doesn't change the impact of the company fundamentally, right? So there's a limit to what you get out of it. And it doesn't reflect the relative size of the impact to the problem, right? Like, if X amount of co2 is emitted by a company, what does that mean? It doesn't give you a rating, like a framing of it. And so what you need to do is using the data you need to go read and requesting the strategies and the business models fundamentally, like an oil company can never be fully sustainable, like, inherently. And so going back and going to the fundamentals goes way beyond reporting.
And that's where I'm so excited to work at systemic where, you know, we use reporting, but we go through and beyond it, to help these companies improve more and more fundamentally.
Katherine Ann Byam 7:31
So you also worked for Volkswagen, can you share your thoughts and how that company has recovered from the diesel scandal and how it performs now, in terms of facing climate targets?
Tilmann Vahle 7:43
Yeah, when I was at Fox learn, and it was in 2012, and 14 for say, one and a half years or so it was an interesting timing, because it was around the time of the IPO of Tesla. And back in the day, when I talked about Tesla and electric mobility, even with a relatively senior management, it was all Miami, they refurbish these, you know, small convertibles, but know that you could never scale.
This is not for volume, you know, who cares, basically. And I mean, of course, many people had realised that it's fundamentally luminous to where to go, but they didn't see a path for volume manufacture for autos, to actually go there. And so this has changed. So fundamentally, and so the diesel crisis in 2015, I think, was a catalytic event in a way, right, because for one focus on was was sentence in the US, for example, to invest heavily into electric charging infrastructure, which is now coming back as a boon to them, where they're rolling out electric cars, right, because now there's charges where you can actually use them. And so, for one, I think it's helped tilt the perspective and also, of course, unveil the corruption that had happened.
Yeah. And I mean, I'm, I don't want to talk more about that. I mean, it's all in the press and all that. But what's the fact is that folks that are in right now are the largest investor in electric mobility globally. It's like, I think half or something of all the investments that go it's like way beyond 100 billion euros that invest in electric and smart mobility. And so that's a huge, huge drive. And so after Tesla, they're probably runner up in that transition, and of course, being this huge, huge corporation, they have a huge leverage, also, right.
And so they're that strategy, I think right now is probably the most ambitious in the entire Old automotive industry, which is very plausible. It's going to be a hard one, but I think it's quite amazing what they do, and they have a very good comprehensive view. And so it's, it's good to see that, you know, even large incumbent companies can turn around and become really frontrunners in these kinds of talks.
Katherine Ann Byam 9:52
Yeah, no, that's a positive story and I think I had not realised how big they were in that space at this moment. So thank you for sharing that. Sustainability by nature is complex. And there are many angles to examine before we can read something as sustainable. And for example, there has been a report showing that shared Micro Mobility solutions are not nearly as sustainable as we think. So can you share why that is? And what can we do?
Tilmann Vahle 10:19
Yeah, that is a tricky topic, right? I mean, on the one hand, I'm, I'm all for moving away from like, a pure car based mobility system. I mean, it's quite well known, right? That cars have been, I mean, combustion cars particularly have a terrible environmental footprint, not only in the co2, right, I mean, also just a really, waste of space in a crowded city, right? And you move around like several tonnes of material to generally just move one person on average. And that's it.
I mean, we're gonna always use cars to an extent, right, and so electrifying, and I think that's to start off with, like, moving to electric cars is so so important. It must happen very, very fast. Yeah, they're a lot better and the only decarbonization option really on in the mobility system that we have. So that said, like, for cities, cars aren't really in most cities, not that not really the optimal solution, right. And so how to, to have an alternative is, of course, other modes of transport, like the so-called modal shift, moving away from cars to other modes.
And public transport is something that is very institutional and takes a long time to build, to operate, it also tends to have to be subsidised. And, and so there's always going to be gaps that can't be filled with conventional traditional public transit. And so there is this hope that micro mobility, like the scooters, and scooter, shares, and rentals can fill that gap. And so therefore, help people move away from cars to other modes, yeah, and get around cities without that. And so that's great.
The challenges empirically, that's not really what happens. But these scooters and micro mobility options, they tend to be used by people that don't have a car anyway, and would have taken the tram or something. And so it's not really shifting, yeah, it's just changing from a normal car mode to another mode. And that becomes problematic, because these micro scooters, I mean, they've not been around for variables. And they don't, you know, they're not perfect products. Yeah, so they don't last very long.
And I think one data point that I read from one of the large consultancies was that these kick scooters last on average two to three months. And so that's two months, and then you scrap them. And so you have a few kilometres that you take, and then you scrap them. And so that's a lot of battery materials, a lot of steel that you just like, they don't have a lot of use for a long time. And so all that footprint that you had in production, is just wasted after a very short time.
So that is bad. Secondly, to put them in a city, you know, they offer their suppliers and need to drive around and basically relocate, right, and sometimes you see them with a van coming, picking them up and charging them and putting them back out. And these vans around diesel, and you need quite a lot of these to drive around. And so right now, because they are not electrified, there's actually a massive co2 footprint attached to these just from making the system work. And so it's gonna take a while until they improve and actually become a sustainable quote-unquote, mobility option.
Katherine Ann Byam 13:24
I want to challenge you and something, please. You said that we got to use cars, we have to use guys that have to move to electric cars. But do we really need cars?
Tilmann Vahle 13:37
Very good. depends on the location where you're at. Right? Right now 70% of people in Europe live in cities. If you've tried to look at the definition of a city, it's very tricky, like what constitutes a city? Because it's basically always just a matter of local demarcation. Yeah, like what is the city boundary, there's, there's, like a city can just draw a boundary wherever they want, you know, historically.
And so that could be that, you know, a city contains regions where there's really just, you know, the odd dispersed house somewhere where it's really far distances, where you don't have a Buddhist connection. We don't have a tram, let alone a metro. Were really other options. But individual mobility doesn't work. Yeah. And then of course, if you have to say, I want to live in the city flat and generally bike everywhere, but if I need to go to IKEA, whatever, and buy a bookshelf, you know, I do need a car.
I can't put it on my bike. So there will have to be cars. Of course, we will have citizen urban centres, particularly right now. Our use of cars in the western world is obscene and like providing mobility in other parts of the world, like say, India or capital cities and an African in many African countries would just not be feasible. The amount of people putting them in cars like you would probably grow the city tenfold. So that wouldn't work. So yeah, we can use a lot of fewer cars in many, many locations.
And the great thing is that the EU has just passed a legislative package, where they will ask the top 450 cities in the EU to create sustainable urban mobility plans. So basically plans how they can improve their mobility. So everybody will have to reflect Okay, country, you know, improve road infrastructure, bike infrastructure, trams, and Reno improves the options to move away.
That said, we will still have cars all over the place, ultimately for in the long run. So yeah, electrification is priority number one, because you know, what happens now, but ultimately, it's, you know, think President Obama said, former President Obama is like, you know, isn't all of the above options like, yeah, we need to do everything at the same time. So that's not an either or.
Katherine Ann Byam 15:55
So I interviewed Yanis production IQ earlier in this podcast, and one of the things he was talking about is that the minute you purchase a car, you have already spent, I don't know, roughly two thirds of the carbon outlay, just by purchasing it, because of the resources it takes to make it I know, electric cars will be slightly different, because they probably made in electric factories. So it's a little bit less in terms of the carbon way, but it's still extraction of resources.
And that's still a problem. I guess why I'm pushing this is that it's really about, we should be embracing what's happened with the pandemic, and really encouraging less people going to work, which is already creating big savings and teams. I mean, I've used my car probably, I don't know, 12 times for the year 2021?
I don't know, it's not. Right. And I think that there's a real argument here for us to make our next transition. One that is, you know, really using more public transport, it could include things like Ubers, right, because they're just as efficient or, you know, other providers, it's just as efficient as having your own car, because you get them within two minutes, they take you where you want to go, you potentially have the entire coffee yourself. And it's, it's a solution, that means that the car isn't parked up, you know, just sitting around waiting for you. Right, which is one of the biggest problems that we have. So that's why I'm pushing it. I mean, what are your thoughts?
Tilmann Vahle 17:24
Um, yes, no, I work closely with Ganesh and all behind the analyses and messages of the UN International resource panel, right, like half of global co2 emissions come from extraction and manufacturing of materials, and 90% of the biodiversity impacts, it's like immensely important that we lower our resource consumption, right. Doesn't matter if we decarbonize or not, we need to go down with our consumption.
So yeah, 100% and there's also a great opportunity in reducing our travel through I mean, you know, we're on a what is it zoom call now. And that means that the work world has changed fundamentally and permanently, because three years ago, barely a company was using Zoom, and all these hassles, who was allowed to use what and all that, and that's changed, and it's here for good. And so we don't need to travel quite as much anymore, we won't have to fly to work with clients so much anymore. And I mean, systemic has been operating virtually for, for the pandemic, of course, as so many have, and it's been going great.
We do need more people to contact, right. I mean, mentally, like for mental well being. And that's a huge, huge challenge everybody's having. And so we will have to see each other a little bit more right, again, but of course, it's a good change to travel less.
That said, there's these fun rebounds, like, well, then we're all sitting at home, right? And so basically, in the long run, We'll all meet in another room. Additionally, in our flats we have a home office, right? And then you have kids, maybe and your partner's also working.
So you need larger flats. So how do you do that? And then, like, is it really more sustainable, like generally looking at needing to be somewhere you need to heat your place and you have lighting and eating and I don't know, for myself, my heating bill has gone up by a third, just because I'm so much at home. And so I don't know whether that is in the long run really more sustainable that you know, it's going to have to be analysed. But that said, it's great to have better utilisation of spaces and have officers on our vehicles and we definitely need to go there.
Katherine Ann Byam 19:32
Yeah, I mean, I mean, what we can do is instead of working wherever your offices you go down to the neighbourhood office that's now weekend and you use that as a co-working space but I'm gonna let you off the hook on this one I know a lot more analysis than we have time to do on this podcast but
Tilmann Vahle 19:48
but I love by that point let me just jump in what I love that idea Katherine like the decentralised you know, co working spaces. And we have a bunch of colleagues that do this. You know that that works in And then permanently and you know, we just meet occasionally. It's great to decentralise it that way. Yeah, very good.
Katherine Ann Byam 20:05
It's a great solution that I think we need to be thinking more broadly about. But as you say, You guys are the ones doing the analytics. So looking forward to hearing your summaries, what are the current projects you're working on? And what impact are they likely to have on decarbonisation? This year? 2022?
Tilmann Vahle 20:22
Yeah, so one of the large ones that we are currently developing and that will go live in April, hopefully, is the battery passport. That's something that the EU has put in regulation. Last year, that every battery every large battery, so not the, you know, the mobile phone batteries, but like stop storage batteries and car batteries that come onto the market starting 2026 We'll have to have a better passport, basically a little database, and that you could access online, that tells you that so the consumer but also b2b manufacturers and to government, what's the co2 footprint?
Where's the material from? So if there is critical cobalt in it, for example, what share of it is recycled? what chemicals are in there, so you can recycle them better? What's the state of health of the battery? So you can use it for a second life application, for example, after it's not good enough for the car anymore? So very important information for both business and sustainability. And the thing is, it doesn't exist yet. And so the question is, which data in what form? How do you get it there?
So there's a lot of questions that still need to be debated by industry and politics, technically, but also content wise. And so we've put together a consortium of like a dozen leading automotive companies, material companies and science institutes with the Fraunhofer Institute like top researchers, and the World Economic Forum to answer some of these questions and contribute to that.
That's one of the big projects that we're starting. But we're also working with an economic forum on a study on circular economy policy between the EU and China. That's going to come up mid-year and hopefully start a great discussion. And working with a bunch of corporates also on Yeah, taking their perspective on living in that future urban mobility world and improving the full lifecycle impact.
So it's going to be a very, very, very exciting year and wait, yeah, we're growing very fast. We're doubling our team this year. So looking forward to applications as well, we're looking for colleagues.
Katherine Ann Byam 22:20
Right. I'm going to talk to you about that as soon as we finish this. So what are your thoughts on how the battery materials and rare crisis can be resolved? Because I think that this is the growing concern.
Tilmann Vahle 22:33
Yeah. No, and thanks for pointing that out. Right. Because it is definitely and to be honest, it's a matter that isn't only relevant to electric cars but to the whole decarbonisation well pathway overall, right. I mean, if you move from coal power plants to distributed solar, for example, we need a lot more IT infrastructure, a lot more electric motors and a lot more chips everywhere.
And so that's where the wires come in. Right? And just for the foundations that it's often misconceived that electric cars have reversed and the batteries have reversed and it's not really the case like rare earth are in electronics and in electric motors. Yeah. And so they're, like in very small amounts, you have them in very crucial batteries. You have cobalt, nickel, lithium, manganese sometimes depending on the chemistry. And none of these is rare. So like also chemically part of the rare earth group but they're also not chemically rare.
The challenge is that they have sustainability issues. And they're not there's not enough around right now. No, cobalt, infamously comes a lot from Congo and child lemons human rights concerns, lithium comes partly from southern America with concerns about water use. And nickel is really expanding. For example, in Indonesia, where there are some impacts on or dramatic impacts on rainforest and oceans. And so that needs to be fixed.
Thing is, right now we like what we're looking at right now. The batteries right now. They're basically what engines were, like 80 90 100 years ago. Yeah, so very primitive, if you will, and right now the innovation is oh, so fast that every like three months, there's new announcements of new chemicals, new new ways of manufacturing, and that we need less and less material to get the same performance.
And, they're getting less and less harmful. And so for example, Tesla's announced that for the big things like the module, model, three, the volume model, they're moving to lithium iron phosphate batteries altogether. And that's important because we talk about cobalt and nickel as the key problem materials. Well, you know, Tesla's already moving away from them, half of the batteries in the cars in China this year already, like 2021.
We already have lithium iron phosphate batteries that don't have any cobalt and nickel in them. So that's a challenge that is real, but it's also that for one limited cost, and for another, not going to be a problem for cars, predominantly in the long run. Yeah, and so it shouldn't be something that blocks this innovation. It's something that we should manage as well as we can. But in the medium term, you know, clean that up and limit and recycle everything that we have. But it's not a fundamental challenge to electrifying cars. So that's very important to keep in mind.
Katherine Ann Byam 25:19
For someone interested in a career in sustainability, what advice would you give them?
Tilmann Vahle 25:23
That is a great question. And to be honest, as I've looked back many times, I am now looking forward. Also, what could I do? What can I do? What can I apply myself to, but the thing is, at least since 2018, with the new IPCC report on the 1.5 degree goal, I think everybody's realised that climate change is real, it's happening, we need to act super fast. I also mentioned, technology has changed so much, like you know, solar is now cheaper than fossil electric cars basically, in two, three years time.
If you can't buy an electric car, that's your problem. But you want to buy one right this way here. So now it's shifted right? In the past, it was a lot about convincing people that we need to act, then it was a lot about okay, convincing people that it's possible to act now. It's really a question of okay, getting it done. And so if you want to move into sustainability, well, yeah, definitely educate, take a systems perspective, and you know, ask twice, like, what rebound effects? What's the complex value chain behind things? And who really has the power to change the system?
Fundamentally, is it me eating a little bit less meat, or, or using a bit less plastic bags? Or is it really, you know, the heating system where I don't have an impact on - Half of our emissions are basically from heating and lighting our homes. So whether you use a plastic bag or not, in the grand scheme of things, is really not important. Sorry to say. So I like learning to look through what are really the big challenges.
And then actually, you know, learn the skills that you need to grow businesses to legislate to contact and reach out to people to communicate, like basically business skills, normal still like to change stuff. You need to have the skills to change stuff not to be smart on sustainability. So I think that that's changed. Yeah. And so going to strategic consultancy, to bank to invest into politics, that's all opportunities to make a change, wherever in which whatever position you are.
Katherine Ann Byam 27:26
And that's great. How can my listeners get involved and support your work as well as possibly join systemic?
Tilmann Vahle 27:33
Yeah, I mean, we're, our goal this year is to grow by 50%, from 300 to over 400. And in all our locations, that's London, Amsterdam, Paris, Brussels, Jakarta, Jo Paulo, Paris. So yeah, please do apply, reach out, I mean, through LinkedIn, right, we are easy to find. I'm looking at our website, I think people will find a lot of interesting projects. So that's systemic dot earth and have a look there.
Katherine Ann Byam 28:06
Perfect. Thank you so much for joining the show today.