Having worked in ESG (Environmental, Social, and Governance) for various organisations throughout her career, Nancy Hobhouse was recently appointed Head of ESG at Hermes UK.
Nancy began her professional life in the Not-For-Profit sector, but quickly realised that she could personally make the most difference in corporates.
A move to Barclays saw her carrying out environmental and social risk assessments on credit, and contribute to setting up the firm’s operational ESG strategy. Nancy subsequently joined the John Lewis Partnership where she led the John Lewis sustainability strategy programme.
In her spare time Nancy’s interests lie in oceanic conservation; she is also a keen scuba diver with over 250 dives.
Great British Businesswoman spoke with Nancy recently to learn more about her exciting new role, and her journey so far as a woman in business.
Tell us about your new role at Hermes UK
My role at Hermes is a newly created position. I am responsible for spearheading several key initiatives and developing an ambitious and robust ESG strategy. My remit covers every aspect of the business from product development to operational changes around key touch points, including alternative fuel usage, industry knowledge sharing and people-centric initiatives. I will also lead the company’s reporting on ESG including our newly set Net Zero by 2035 target.
As a woman in business, do you feel there are any hurdles that you have faced/overcome thus far?
At the start of my career almost 20 years ago, I felt there were hurdles because of my gender. Whether this was due to the industries I was in or because gender issues were not being actively as addressed then, I do not know.
I was paid less than my male counterparts and my assertiveness would often be described as emotional or abrasive. It took me a while to understand that this was an issue with the culture and not with myself. As I have got more mature in my career, I now would not accept this inequality and will only work for organisations who value diversity of thought.
Have you ever had a mentor(s) that has supported you and your career goals? If so, how has this helped you?
I have had both formal and informal mentors in my career. These have been exceptionally critical to my success. Having someone to be able to help you gain objectivity, both with your career path and when facing challenges, has been invaluable.
Two mentors who have made a massive difference in my life are my old JL Retail Director, Naomi Gillies, and my aunt and Chair of Fortnum and Mason’s, Kate Hobhouse. I have been exceptionally fortunate to have these strong and successful women in my life.
Do you feel there are opportunities for women within your chosen field?
Luckily sustainability and ethics is a very equal field when it comes to gender. As it is a newer career, the historical societal issues are not as prevalent. There are still issues with diversity of thought, but this is limited within the gender characteristic. This means there are many opportunities for women to be successful.
How did you start your career journey within ESG?
Fate brought me to ESG. When I was choosing my university, I could not get into my first choice of course which was biomechanics. However, I was fortunate to be offered a place on Ocean and Earth System Science at Liverpool.
I planned to do this for a year but then changed back to my first choice. In the end, I fell massively in love with the topic and eventually went on to get two degrees in it at Southampton and then completed a post grad at Kings College London. I knew after that first year at Liverpool that I would dedicate my life to Climate Change and Inequality.
In 2022, how important a consideration is ESG for most businesses compared to five years ago?
ESG is not a “nice to have” any more in business; it is now essential to operating a business. For example, it is now the top three reasons why an employee chooses a firm to work for; it is cited in most client tenders and can affect the share price or interest rate of loans. To not be focused on ESG is now detrimental to the talent you have within the business and your bottom line.
This is a stark change to five years ago when most companies were looking at ESG purely for philanthropy and reputational reasons. At Hermes, a new team has been created, which I’m leading. We’ve set goals with dedicated teams of people working to reach them. We’ll be publishing a carbon report for the first time this year and now the board of directors has incentivised targets linked to ESG goals.
Do you think Covid-19 has changed how companies are approaching ESG?
I think that Covid-19 has changed how companies understand ESG. There has been a great awakening to how resource scarcity and global societal issues can have massively negatively impact on business’s ability to operate. During the pandemic, rather ESG than taking a back burner, which historically it could do during a crisis, it was a key element to being more in tune with both the company employees and the community.
How can ESG help drive a company’s growth?
Over the last five years there has been a notable societal change towards a more inclusive world with a real focus on reducing the negative impacts of climate change. As a consequence, there is movement towards ethical and sustainable companies with products and services. In additional to driving sales, there is cost saving at focusing on consumption reduction, such as energy, and also with lower rates with employees.
This is illustrated by an Oxford University study that revealed that 88% companies with solid sustainability practices have better cash flow. Hermes has already been on a path of change over the last few years, although it’s within those last five years that retailers have been pushing for enhancements to ESG strategies from of all their suppliers. Our teams at Hermes understand the importance of ESG to retailers and have ambitious development plans to ensure Hermes continues to be a leader in the field.
How important is ESG in the global context of the fight against climate change?
ESG within organisations is critical to the fight against climate change. Corporations produce just about everything we buy, use, and throw away and play an outsized role in driving global climate change.
Without the focus from companies to reducing their total impact as part of their ESG strategy, the imperative to keep global warming under 1.5C would be in jeopardy. It is important to remember thought that corporations are not sentient beings.
They are market driven, usually with the purpose for shareholder return. Therefore, to accelerate the move to a low carbon economy, it is critical that there is increased demand on services, products and companies with strong carbon credentials. To do this, businesses have to start demanding more from their supply chains; consumers from their shops, and the government from their national industries.
Do you think we’ll see governments widely mandating ESG reporting in the future? How might this look?
We have already started seeing the UK government requirements on reporting whether this is modern slavery, gender pay gaps, carbon emissions, net zero roadmap or climate risk on larger companies. In my opinion, legislation will increase in scope over the coming years, whether this is the inclusion of different protect characteristics in the pay gap reporting, or wider inclusion of companies required to report their carbon emissions.
What are the main ESG challenges for a company like Hermes?
As a parcel delivery business, we are very conscious of the impact our vehicles and the vehicles of our drivers have on the climate. This is the main reason behind our setting of a net zero target for our operations and value chain by 2035. This is ambitious and we are the first of the parcel companies to do so, however, we understand that we need to be a low carbon carrier in order to thrive. We are also working on alternative delivery methods such as our extensive ParcelShop network. Due to the delivery method and the reduction of cars on the road, parcels delivered via this method can be up to 90% more carbon friendly than courier deliveries.
We also realised that we need to be a fair and equitable company to work for both with our employees and the contractors that drive for us. We are working very closely with the trade union organisation to offer enhanced benefits beyond the holiday, sick and insurance that our SE+ offering already has.
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