A conversation with Schneider Electric’s Lloyd Lee — Avarni Carbon Accounting Expert Series

As part of our Carbon Accounting Expert Series, we’re excited to present an engaging conversation between Avarni Co-Founder and Co-CEO, Misha Cajic, and Lloyd, Sustainability (Climate) Strategy Lead at Schneider Electric Sustainability Business. In this interview, Lloyd shares his professional journey, the evolving landscape of sustainability strategy, and how companies are leveraging compliance frameworks to create competitive advantages. He also dives into the challenges and opportunities of supply chain decarbonization and highlights the role Avarni’s tools play in streamlining complex emissions data processes. Alongside the transcript, we’ve embedded the full video interview for an in-depth look at these critical topics.

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Below is the transcription of a conversation between Lloyd Lee and Misha Cajic, recorded in Melbourne on October 9, 2024.

Misha: Thanks Lloyd for coming in today and having a chat with me. Really keen to learn a little more about what got you into the role you're in today at Schneider Electric, and a little more about how you're helping clients with their supply chain decarbonization.

Lloyd: Thank you for the invitation, happy to be here.

Misha: So, could you share a little more about how you actually got into this space and the role you're in today?

Lloyd: Yeah, so I'm a mechanical engineer by trade as my background. So, I actually started off in the mining sector, and in process engineering and design engineering. Funny enough, actually working at the coalface, that gave me an exposure of what it was actually like working in these difficult and challenging environments.

And from there, I wanted to do the pivot switch to move into the building sector and that's where I moved into sustainable design and energy efficiency. So, that’s when I actually relocated to the UK. So, once I got my hands dirty, I actually got a sense that sustainability was the area that I really wanted to work in. I pursued a Masters in Sustainability Leadership there. From that, that really gave me some real challenging concepts to look at sustainability behavior change, even looking at macroeconomic modeling for carbon emissions.

And then, once I returned back to Australia, I actually worked in an in-house sustainability strategy role for a large integrated energy company. And that really gave me a sense of what corporate energy standards and business strategy was in terms of the upcoming climate challenges that we're seeing at the moment.

So, and that's where I've landed in this role at Schneider Electric as a sustainability consultant and really got a real diverse range of clients working with these different areas in sustainability strategy.

The advice I’d give to a lot of clients getting started is really, just get a ballpark image of where you stand. So what we usually advise is, do a Scope 3 screen. Usually that can start with a spend-based calculation methodology. This really gives you a materiality check on what your material Scope 3 emissions are. From that, you go through the data evolution and you refine it and you and you develop a more accurate picture.

Misha: So, you've been at Schneider for a couple of years now. In that time, we've seen a massive change in drivers for client need to get on top of their sustainability strategy. A couple of years ago, it felt like a lot of it was quite voluntary. And either voluntary or clients were doing it because they had investors that were trying to de-risk. Now, of course, with the legislation passing through the Australian Senate, and it's set in stone, companies now have to report the first group from 1st of Jan 2025. There's a lot more companies that are going to have to take this seriously. How have you seen the conversations shift over that time since you joined?

Lloyd: Yeah, it's definitely shifted in the last couple of years. As you just mentioned, it’s gone from a voluntary, nice to have to really, this is what we have to do as a BAU.

And really now it's about changing the solution to, “what is the business case, how do we get ahead of our competition and peers and actually turn this into harnessing the opportunities to actually build business strategy together by using the legislation as a sort of the framework to build it, but actually turn that into an actual opportunity and actually grow the business even further, while also solving a few other global challenges together.” So, the framework, or the discussion, has really changed from a nice to have to really, okay, this is in order to be compliant, but let's actually incorporate into our strategy to really leverage the opportunities there that are available on the table.

Misha: So you're working with multiple clients week on week that all have different needs. And ultimately, you're the expert, right? You need to go to them with the answers that they're looking for. How do you make sure that you're always staying one step ahead of regulation and news around the world that's going to affect them?

When you're comparing a multitude of open source databases, how do you start? Some of the databases can range from a few hundred to a few thousand emission factors. And how do you map that across their raw data set? So I actually did a new exercise using the Avarni tool and used the new capability to do the initial emission factor database matching. ...that saved hours of work, which is sometimes a very manual process, matching it line by line in the spreadsheet.

Lloyd: So most recently, probably in the last five years, I actually listen to a lot of podcasts ranging from business, technology, industry, climate related. I find that is a way of passive learning because I find in the very time sensitive-working world at the moment, trying to keep on top of all the latest trends and information with legislation is actually quite overwhelming sometimes. So I find listening to podcasts is a good way to just keep abreast on what the latest trends are. Apart from that, I still keep in touch with my networks when I was working in the UK and across Australia.

Misha: Now, Avarni and Schneider, we've been partnered for a few years now, and you've been using Avarni software in quite a few of your client engagements. How has it helped you day-to-day?

Lloyd: Yeah, that's a great question. Just recently, I helped a colleague where we're in the very early phases of recommending the recommended emission factor database. When you're comparing a multitude of open source databases, how do you start? Some of the databases can range from a few hundred to a few thousand emission factors. And how do you map that across their raw data set? So I actually did a new exercise using the Avarni tool and used the new capability to do the initial emission factor database matching. And through that, I compared two open source databases. And from that, I could find one database had over a hundred matches, but when I compared with another more granular database, it had over a thousand emission factor matches. So from that, that actually gave me the evidence to inform my colleague who therefore informed their client, that this database was the most appropriate based on the granularity of matched emission factors. So that saved hours of work, which is sometimes a very manual process, matching it line by line in the spreadsheet.

Misha: And getting to an outcome at that speed is super important. I think that goes back to a point which I was thinking about before, which is, you're gonna have a lot of clients that are going to be afraid of taking that first leap. Because they're afraid of doing it wrong.

Lloyd: So the advice I’d give to a lot of clients getting started is really, just get a ballpark image of where you stand. So what we usually advise is, do a Scope 3 screen. Usually that can start with a spend-based calculation methodology. This really gives you a materiality check on what your material Scope 3 emissions are. From that, you go through the data evolution and you refine it and you and you develop a more accurate picture. Because you don't want to get stuck on “oh, how are we going to look for the perfect solution?” Really, you just need to get started. As you evolve the solution then you get more granular information and you can be more accurate in your calculations from there.

Misha: I think we've seen that time and time again with a bunch of the projects that we've worked on together.

Lloyd: Yeah, and I find a lot of the challenge is getting a quick answer just to inform some initial decision making.

Misha: Exactly, you're starting from something rather than absolutely nothing.

Lloyd: Exactly.

Misha: Thanks for sitting down with me Lloyd, and for taking the time to share your insights and your expertise, I’ve really enjoyed it.

Lloyd: Thanks a lot, and thanks for the invitation.