Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Jason Kelley. We're right here every day bringing you the
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Speaker 1: on Bloomberg Radio every weekday, or watch us on YouTube
Speaker 1: by searching Bloomberg Global News. Delighted to introduce Yes for Broden.
Speaker 1: He's the presidency of INCA Group. They are home to
Speaker 1: three businesses of course, all of those I Kea stores
Speaker 1: that are around the world. We're also talking about their
Speaker 1: shopping centers and then their investments arms. So a lot
Speaker 1: to talk about, and as I said, they are operating globally. Um, yes,
Speaker 1: for so nice to have you here with us. Um.
Speaker 1: I gotta ask you, first of all, you said as
Speaker 1: we were getting ready to set it up that before
Speaker 1: we get into what you guys have done in terms
Speaker 1: of sustainability at the store and the DNA. That is
Speaker 1: UM sustainability really within your company culture. You said to us,
Speaker 1: as is the first time you've traveled in six months
Speaker 1: that you've left Sweden and you're in the Netherlands. Just
Speaker 1: talk to us about how that feels. Talked to us
Speaker 1: about the last six months. You guys operate globally. UM.
Speaker 1: The virus has just impacted us, UM also, So just
Speaker 1: just tell us kind of how things are going well.
Speaker 1: You know that this year for us, like for everybody
Speaker 1: on this planet, we have been through a very special
Speaker 1: journey this year, and I must admit us I share
Speaker 1: with you too. To be traveling about again, I felt
Speaker 1: a bit like the old movie Castaway when coming back
Speaker 1: to the office seeing people UM and enjoying that also,
Speaker 1: I must say at the same time, obviously, UM, we
Speaker 1: just like everybody else, have figured out new ways of leading.
Speaker 1: We have figured out that we we didn't have a
Speaker 1: map for this situation, but we had a very strong compass.
Speaker 1: I think with the way we like to lead and
Speaker 1: our values that helped us. Actually, I think take many
Speaker 1: good decisions. But it's been a ride. It's been a ride,
Speaker 1: no doubt about it. It's interesting that you say that,
Speaker 1: and we're going to get into kind of your sustainability
Speaker 1: strategy that is so much the IKEA and corporate culture here.
Speaker 1: But I do wonder having so many of those measures
Speaker 1: in place, are there any specific anecdotes that you can
Speaker 1: tell us that help you guys get through this crisis
Speaker 1: because of those green initiatives or sustainable initiatives. Well, you
Speaker 1: can say, I think the it's all enter tangled, right,
Speaker 1: people plan at and business and you can't take out
Speaker 1: any of these from the equation. So what happened obviously
Speaker 1: to us was that we had periods of dramatic closures
Speaker 1: in our stores and we had to find ways to
Speaker 1: both protect ourselves or people are customers, uh. And then
Speaker 1: on the other hand, we had to make sure that
Speaker 1: we could save the jobs for the future. And the
Speaker 1: way what actually happened in the end of the day
Speaker 1: was that we were speeding up everything around multi channel
Speaker 1: and online and we went from a good year to
Speaker 1: a record loss forecast to actually coming back on half
Speaker 1: of our estimate the profit in the end of the day,
Speaker 1: and that was thanks to I think the entrepreneurship of
Speaker 1: getting things right quickly. Do you think we're through it?
Speaker 1: Do you are you guys getting ready for another wave? Well,
Speaker 1: you know, I think at a certain moment we were.
Speaker 1: We worked quite early on forecasting different scenarios, and the
Speaker 1: period that we have just entered we called the new normal,
Speaker 1: And I think it's a bit of a deceptive term
Speaker 1: in a way, because the way we see it is
Speaker 1: that for at least a year to come, we need
Speaker 1: to be very agile, very prepared for outbreaks. I think
Speaker 1: the term second wave could be misunderstood. So we like
Speaker 1: to plan for outbreaks and how to deal with that
Speaker 1: in the best possible way, both for jobs, for business,
Speaker 1: uh and for everything we do in society and contribute to.
Speaker 1: And obviously it's clear for all of us that you know,
Speaker 1: one year later again it's still going to be learning.
Speaker 1: There will be things that we will be, um, you know,
Speaker 1: doing differently, and that would be a lot of I
Speaker 1: think amazing things that we carry with us from this
Speaker 1: period as well, hopefully including the way we realize the
Speaker 1: importance of investment in sustainability and the opportunity of doing
Speaker 1: that right. Well, let's get to that, because despite this
Speaker 1: being a crazy year, a tumultuous year. You guys are
Speaker 1: on track, and forgive me, I'm gonna read from my
Speaker 1: notes because I want to get it right. You're a
Speaker 1: track to achieve and exceed a goal to produce as
Speaker 1: much energy from renewable sources as you consume. By you
Speaker 1: have made massive investments about two and a half billion
Speaker 1: euro in wind and solar power. You've set a twenty
Speaker 1: thirty goal to be climate positive, meaning you're going to
Speaker 1: reduce more gas emissions than you admit you are in
Speaker 1: you know, when it comes to electric add electric a
Speaker 1: hundred percent at the time, ahead of targets. When it
Speaker 1: comes to deliveries and Shanghai by e vs um you're
Speaker 1: doing that in Amsterdam, l A, New York, Paris. And
Speaker 1: here's something a goal for everyone who's listening. By you
Speaker 1: guys have said your ambition is to inspire and enable
Speaker 1: one billion people to live a better everyday life within
Speaker 1: the limits of the planet. It's really heavy stuff and
Speaker 1: it's impactful stuff. How tough has this been to do?
Speaker 1: And what has been the business case for climate change
Speaker 1: for you all? Well? You know, I think, I think
Speaker 1: if you look at I K S history you can
Speaker 1: say we started out with the founder that was a
Speaker 1: very thrifty person, very smart around resources, and I think
Speaker 1: that's part of our story. So part of this you
Speaker 1: know that sustainability and being being smart about people and
Speaker 1: planet is part of our legacy. My own story started
Speaker 1: back in the company when I joined in hp ccific.
Speaker 1: At the time when we invested in I think what
Speaker 1: is still today an amazing code of conduct when it
Speaker 1: comes to production. Those days we had some discussions about
Speaker 1: can we afford it, will drive costs to do the
Speaker 1: right thing with working hours, salaries, etcetera. And in the
Speaker 1: end of the day, it turned out to be brilliant
Speaker 1: for business. We have the most efficient partners, happy coworkers
Speaker 1: along etcetera. So I think we already then we we
Speaker 1: saw some myths that were we needed to bust. And
Speaker 1: the same goes for for the climate the ghost that
Speaker 1: we have committed to where we we do not have
Speaker 1: all the answers yet, so we still have some gaps
Speaker 1: to be filled to coming years. But we are convinced
Speaker 1: that this is good business for three reasons, or you
Speaker 1: can say for two reasons. One is that I coworkers
Speaker 1: and our customers expect us to take the lead, so
Speaker 1: it would be I would say dangerous to not take
Speaker 1: that lead from um from your revenue side. But secondly,
Speaker 1: the business model we are bildy as the new low
Speaker 1: cost so sustainability shows in case by case to be
Speaker 1: there the way we will provide low price furniture in
Speaker 1: the future. You say, you know a couple of things.
Speaker 1: You said it was brilliant for the company, So I'm
Speaker 1: wondering if you can put some numbers on that in
Speaker 1: terms of the business case for doing all of this.
Speaker 1: But I also wonder you said myths to bus because
Speaker 1: I can only imagine some of the internal you know discussions.
Speaker 1: Yes for that, you folks had it said no, we
Speaker 1: can't do that. I know it's good for the environment,
Speaker 1: but you know it's going to cost too much or
Speaker 1: we can't recreate our supply chain. So give me a
Speaker 1: little bit of that that feel. But absolutely, I think
Speaker 1: the best number I can give you is that last
Speaker 1: year we're very happy and proud that we were able
Speaker 1: to grow with some six percent plus, which is a
Speaker 1: good decent back a year, and at the same time
Speaker 1: we reduced our absolute carbon footprint across the whole scope
Speaker 1: one two and three with more than four percent, so
Speaker 1: it was possible to show healthy growth and at the
Speaker 1: same time a decarbonize if you like. Obviously, we are
Speaker 1: very hum and respectful to the future to continue that
Speaker 1: journey with the plan. But that was I think the
Speaker 1: first year of proof for us. But then you can
Speaker 1: say to the myths. I think there are three myths
Speaker 1: that I see over and over again. One is that
Speaker 1: purpose and profit don't go hand in hand, which I
Speaker 1: think and we think is the opposite. And there is
Speaker 1: a very strong if that sustainability should come at the premium,
Speaker 1: which I think is very dangerous because then this is
Speaker 1: a mass movement that needs to involve everybody on this planet,
Speaker 1: so therefore it should be rather seen as the new
Speaker 1: low cost And and finally, there are a lot of
Speaker 1: myths around that consumption is all bad, and there is
Speaker 1: bad consumption, but there is also sustainable consumption. So these
Speaker 1: are the type of topics that sometimes lie in the
Speaker 1: way for taking the right type of action. Well, I
Speaker 1: do wonder too if things like supply chains, maybe when
Speaker 1: you guys set out, you know, in the beginning days
Speaker 1: of the company, or even five years ago, ten years ago,
Speaker 1: maybe there weren't as many suppliers or many folks that
Speaker 1: you could reach out to. But what I'm hearing today
Speaker 1: is a lot of them are out there already, so
Speaker 1: that if you want to have a greener business, a
Speaker 1: more sustainable business, you can find that in your supply chain.
Speaker 1: You just have to make those choices. Is that true?
Speaker 1: Is that fair? I would say so it comes down
Speaker 1: to I think from if you look at any type
Speaker 1: of industry, I think the entry ticket to anybody and
Speaker 1: it's special I would say companies of size that holds responsibility.
Speaker 1: So I think you need to start by committing and
Speaker 1: there is a bit of a leap of faith in
Speaker 1: that commitment to to paris um and you need to
Speaker 1: commit to e SD reporting and transparency as well. So
Speaker 1: I think these are the entry tickets for anyone. But
Speaker 1: then it all comes down to what is your category
Speaker 1: plan that you need to put in place. And I
Speaker 1: saw it as an introduction here. I saw ben at
Speaker 1: shell in in one of the most important industries I
Speaker 1: think to be part of the transformation, the fossil fuel industry,
Speaker 1: which we are we're part of, and I be um
Speaker 1: we we belong to the consumption industry home furnishing. So
Speaker 1: we have some different criterias maybe of things that we
Speaker 1: need to address. But the important thing is, as much
Speaker 1: as it can be inspiring to do the symbolic changes,
Speaker 1: we need to address where it's really impacts. Thereby we
Speaker 1: need to be able to submester around our activities against
Speaker 1: c or two footprint and see that it really makes
Speaker 1: sense in the totality. And there are a lot of people.
Speaker 1: I think we're still looking for the way how to
Speaker 1: do that, But there are many plans around and I
Speaker 1: think i Kes plan, which we are happy to share
Speaker 1: with the world, is just one of many good examples
Speaker 1: or not to do it. Government has to have a
Speaker 1: bigger role in this. I mean, you know, here's so
Speaker 1: what's so interesting is that in order to get all
Speaker 1: this done right at a time when we're pushing back
Speaker 1: against globalization, when we're pushing back against cooperation, we've never
Speaker 1: needed it, you know, more than ever before, whether it's
Speaker 1: on the health pandemic or whether it's on you know,
Speaker 1: the climate impact. And yet what's holding that up or
Speaker 1: where have you seen progress? What's holding it up? In
Speaker 1: your view? Mm hmm, yeah, I think now I must
Speaker 1: have it as I belong to the optimists of the world.
Speaker 1: So maybe I'm wrong, but I believe we are at
Speaker 1: the tipping point right now and you can sense it.
Speaker 1: Um that there is of course people who struggle with
Speaker 1: admitting the issues, and I do believe that we and
Speaker 1: most of us should spend less time on that. We
Speaker 1: need to look into the people who are ready to
Speaker 1: take a leap here and and contribute to the to
Speaker 1: the movement. Because it's also you know, the clock is
Speaker 1: thinking and we've probably have vent at what is the
Speaker 1: most important decade in the history of human kind. So
Speaker 1: we need to get moving with with actions. And thereby
Speaker 1: it's not so much about discussing the problem that is needed,
Speaker 1: it's about discussing the actions that needs to be taken
Speaker 1: to mitigate the situation. You know, what's interesting and people
Speaker 1: are I feel like if you're not necessarily someone who
Speaker 1: you know buys into or believes that we're having climate change,
Speaker 1: you know, you guys, get into the science and what
Speaker 1: the impact will be. In your sustainability report, you talk
Speaker 1: about you know, if we see um, you know, four
Speaker 1: degree census increase in terms of the heating of earth.
Speaker 1: You right, in this report, our ability to mitigate the
Speaker 1: risk is very limited and the cost for the business
Speaker 1: are far higher and worth damaging. I mean, we're talking
Speaker 1: about the bigger impact we have on our environment. You know,
Speaker 1: your access to resources, the cost of resources, um, the
Speaker 1: impact of flooding or fires like, all of this starts
Speaker 1: to add up right on the cost of doing business.
Speaker 1: And also it's it's not as healthy environment for people
Speaker 1: to live in to work with it. Well, you can
Speaker 1: say that to your point, we we have we have
Speaker 1: seence money as past the point where climate threat is
Speaker 1: a theory, it's a it's a it's it's in our
Speaker 1: p mls already and thereby I think it gives us
Speaker 1: more motivation you can say on them. On the challenging
Speaker 1: side of this from a human perspective is, of course,
Speaker 1: if we do everything right from now now on we stay,
Speaker 1: we will have to pay for the depth that we
Speaker 1: have the last a hundred years or or so. Um.
Speaker 1: So we are inherited to turn the trend, obviously, and
Speaker 1: we will need to brace ourselves a little bit for
Speaker 1: the issues that we have ahead of us. In spite
Speaker 1: of that. But I think it's uh, it's a time
Speaker 1: for the world to come together and it's time for leadership,
Speaker 1: and I actually do see that if I compare six months,
Speaker 1: twelve months, twenty four months back, there is a different
Speaker 1: story right now, Industry after industry, and I think in
Speaker 1: particular in the corporate circus, there is uh industry leaders
Speaker 1: in every category stepping forward. I have the pleasure to
Speaker 1: be part of the Economic Forums Climate Alliance, and that's
Speaker 1: a group of very important companies in different categories that
Speaker 1: have moved from agreeing on the issue to actually committing
Speaker 1: and taking actions. So we see this in in area
Speaker 1: after area, and I think to your point, as of course,
Speaker 1: this is a collaboration where we need to be very
Speaker 1: close to the political leaders of the world because it's
Speaker 1: an important collaboration where I think politicians can help to
Speaker 1: incentivize and actually catalyze change much much faster if we
Speaker 1: work together. So it is an opportunity in particularly now
Speaker 1: after COVID has a lot of wise people have mentioned
Speaker 1: to build back better, So that's what we need to do. Well,
Speaker 1: you know, talk to me about geography. I'm sure that
Speaker 1: there are parts of the world where it's tougher for
Speaker 1: you guys, where you operate to kind of make the
Speaker 1: business case for climate action. Um. There's also parts of
Speaker 1: the world that maybe don't embrace you know, um, some
Speaker 1: of what's in your DNA, your corporate DNA. UM, whether
Speaker 1: it's China on one hand, or Russia, you know, so
Speaker 1: what do you do? What's your thoughts about operating there?
Speaker 1: Even if you don't agree with all of their initiatives,
Speaker 1: maybe they're not as sustainable as a company or country.
Speaker 1: Excuse me, Yeah, now, I think to start, I think
Speaker 1: we the the business idea and division of i K
Speaker 1: is to be where the many people are, to serve
Speaker 1: people within the wallets with great term furnishing. And thereby
Speaker 1: you can say we are slow and long term in
Speaker 1: a way, so we don't enter a market and step
Speaker 1: out over night. But we progress with investments, with our
Speaker 1: physical investments, with our digital investments, and our long term
Speaker 1: goal is obviously to try to be where there are people.
Speaker 1: So therefore we're happy to be in Russia and China
Speaker 1: and us in India we have just recently started as well.
Speaker 1: Then obviously politically changed tends to come with a shorter
Speaker 1: cycles sometimes um. And there you know, we have little
Speaker 1: opportunity to to do others than to adapt to realities.
Speaker 1: We have had decades of open trade and now we
Speaker 1: have had recently a period where this has been more difficult.
Speaker 1: With all the respect for the situation in the world,
Speaker 1: I think so far in our way of viewing it,
Speaker 1: collaboration of the borders tend to both be good long
Speaker 1: term for both jobs and for for consumers. So sometimes
Speaker 1: this this can be a struggle. But at the same time,
Speaker 1: I think we are at the place where we try
Speaker 1: to reach out and try to see how we can
Speaker 1: influence in a positive way in the society where we
Speaker 1: where we act. I do wonder too if you think, um,
Speaker 1: it's easier for you guys to be sustainable because it's
Speaker 1: a foundation that owns the company, right, and there's it's
Speaker 1: a different court. It's not a corporate structure, a publicly
Speaker 1: health company where every quarterly or every half year you
Speaker 1: guys are reporting your financial Does that give you a
Speaker 1: leg up in doing all of this? I think so.
Speaker 1: To be honest, I think some of my fellow colleagues
Speaker 1: CEOs who are on the stock market, for example, where
Speaker 1: can we quarterly UH targets have a different situations that
Speaker 1: maybe that we have an eye have being long term,
Speaker 1: foundation based and also a foundation that works with in
Speaker 1: the end of the day's charity for people and planet.
Speaker 1: So I think definitely so. And at the same time,
Speaker 1: we can still serve as an example because the investments
Speaker 1: we make are not about charity. They are they are
Speaker 1: fundamental transformations into a better business. So in a way,
Speaker 1: I think it's okay that we can serve as an
Speaker 1: example for that. And then then I think it takes
Speaker 1: a lot of carriage today to be a leader because
Speaker 1: at the end of the day you have stakeholder capitalism
Speaker 1: to care for. But at the end of the day,
Speaker 1: I think you need to also face your own family,
Speaker 1: your your your friends, yourself and at the at this
Speaker 1: time there is an opportunity for each one of us
Speaker 1: to do what we believe is right. And in some
Speaker 1: cases that can be easier said than done. But if
Speaker 1: we are a critical massive companies that move in this direction,
Speaker 1: we will basically reshift competitive landscape. And that's what actually
Speaker 1: is happening as we speak, including what how cons respond
Speaker 1: to brands. Well, that's I think a really significant part
Speaker 1: of it. You know, I think about my co host
Speaker 1: on our radio shop, Bloomberg Business Week. We both have kids,
Speaker 1: you know, and kids who are turning around looking about
Speaker 1: you know, what are the ingredients and something, or looking
Speaker 1: at we are company manufacturers, what's the climate and you
Speaker 1: know how much water is wasted in manufacturing? How significant
Speaker 1: is that in terms of again supporting the business case
Speaker 1: for being sustainable, for being green and what you do?
Speaker 1: I mean we talk about it so much, yes, for
Speaker 1: um and I know it's important to me, But I
Speaker 1: do wonder is that becoming much more significant? Do you
Speaker 1: guys talk about it in like a boardroom? Do board
Speaker 1: you know, our boards having these discussions because they understand
Speaker 1: it's important. I think so. To be honest, a few
Speaker 1: years ago, I think it was more difficult to bring
Speaker 1: in those personal abuse but also the the many parts
Speaker 1: of the equation here. So again back to the myth
Speaker 1: that profit, profit and purpose were two different words, and
Speaker 1: I think we belong to the lack of ones in
Speaker 1: that case. We have the very good discussions and we
Speaker 1: are challenged by our board to do a better job
Speaker 1: when it comes to sustainability, including communicating it. So but
Speaker 1: again I think we are at the tipping point where
Speaker 1: this is becoming the new reality. And you know how
Speaker 1: it works when when you create a momentum saddly, it
Speaker 1: becomes very lonely on the other side. UM. And from
Speaker 1: a customer perspective, what we see is dramatic and there
Speaker 1: is no difference in the world if we go from
Speaker 1: market the market, if you go from China to U
Speaker 1: as the sweder and the concerns are up in the
Speaker 1: eighties nineties. Of all the people we interview, and we
Speaker 1: interview a lot of people on this topic, they are
Speaker 1: concerned typically and they also typically struggle with understanding how
Speaker 1: they can impact. And of course consumers can impact to
Speaker 1: start with by shooting what brands to I from? And
Speaker 1: this is getting more and more clear. And in particular,
Speaker 1: I think when you go down to the younger generations
Speaker 1: of the consumers, they are more picky, they are better
Speaker 1: in researching, and they're very demanding. And so I think
Speaker 1: in a way the consumer trends are helping us to
Speaker 1: to take some decisions. Hey, one thing I want to
Speaker 1: ask you, because you just got about five minutes left. Um.
Speaker 1: In addition to being climate positive by twenty you are
Speaker 1: committed to being circular by then as well, which is
Speaker 1: fascinating to me. It's changing waste into resources across your operations,
Speaker 1: enable people at home to do so as well. This
Speaker 1: is basically how you get rid of waste. It's massive, um,
Speaker 1: how do you do that? Well? It's like like many
Speaker 1: things in sustainability, there's not like one silver bullets, I
Speaker 1: would say. So I think every company is to look
Speaker 1: at their their footprint. It also materials, should say. But
Speaker 1: then again, when you start to pick them in the
Speaker 1: right order, you find a lot of opportunities. So in
Speaker 1: our case to recycled paper and recyite a plastic for example,
Speaker 1: it's a business benefit, it's not a problem m And
Speaker 1: then then you can go all the way to some
Speaker 1: of the material equations that we have not yet found
Speaker 1: a good solution for. So it's like case by case,
Speaker 1: you work your way. But if you if you look
Speaker 1: at it placed the investments we did in the Netherlands
Speaker 1: for a model that is being scaled out to more markets,
Speaker 1: is how do you bring back matrices and how do
Speaker 1: you actually make you matrices are of the same. It's
Speaker 1: it's not only a good business case, it's a good
Speaker 1: investment and down the line there will be taxes and
Speaker 1: malus systems put on the wrong way of doing this.
Speaker 1: So in a way here I think again governments and
Speaker 1: companies are and should more go hand in hand, and
Speaker 1: how to stimulate it. Circularity is not it's not the
Speaker 1: end goal. It's one way to achieve sustainability, and it's
Speaker 1: it's a very attractive one of most of them, you know.
Speaker 1: Kind of in line with this, we have an audience
Speaker 1: member asking about product or ability and life cycle the
Speaker 1: trade off between affordability and durability. What are your thoughts
Speaker 1: on that. Yeah, it's it's I think it's a very
Speaker 1: good question because also that I would say it's a
Speaker 1: bit in the landscape of the myths. But a few
Speaker 1: years ago we took a big address within the company
Speaker 1: to actually review everything equality and everything that wasn't durable.
Speaker 1: We challenged and moved our targets on them. So I
Speaker 1: think it's one of the steps to achieve sustainabilities. Obviously
Speaker 1: to make sure that you have longivity on on everything
Speaker 1: you do. Um and uh. And then you can say
Speaker 1: one of the dangerous myths there was it is also
Speaker 1: that you have to pay for quality or that you
Speaker 1: have to pay for sustainability. UM. That's not the way
Speaker 1: we see it. We think by scaling things, we can
Speaker 1: building quality and sustainability into our industries, and there's a
Speaker 1: lot of an abundance of amazing examples on how that works.
Speaker 1: So I think also there you can say mass production
Speaker 1: is actually a friend of just say inability, because that's
Speaker 1: how you scale change. If you had one piece of
Speaker 1: advice to I think our audience here and for leaders
Speaker 1: that they could take that would significantly impact their company
Speaker 1: and make them more sustainable, what would it be. I
Speaker 1: think what has helped us was to fundamentally agree on
Speaker 1: what the reason to why this is important. Second, I
Speaker 1: think that there needs to be some sort of leap
Speaker 1: of faith and commitment, meaning that giving yourself maybe hopefully
Speaker 1: not to and fifty, but you should also I think
Speaker 1: I have some confidence that some of the answers lie
Speaker 1: by exploring the journey ahead of us. And then I
Speaker 1: think the third would be to study some of the leaders,
Speaker 1: study some of the plans that exist, because I think
Speaker 1: there's a lot of things that we can replicate in
Speaker 1: different industries, and by working together, I think we can
Speaker 1: move this againa faster and we will. If we don't,
Speaker 1: we will make it happen. We have to make it happen,
Speaker 1: and we will. I'm sure. Well that's what I gonna say,
Speaker 1: I mean, if we don't get this right, what's your fear? Now?
Speaker 1: If if we don't get this right, we will get
Speaker 1: it right because the consequences will be tremendous for us.
Speaker 1: So I think I think we we tend to spend
Speaker 1: less time again on doubting the change and less about
Speaker 1: the fear. We had much more of that a few
Speaker 1: years ago. Right now we'll be seeing the actions we're
Speaker 1: working in Scope one to three. We're addressing some low
Speaker 1: hanging fruits and some very difficult challenges. So I think
Speaker 1: it's just to get is how to do it? Well? Yes,
Speaker 1: for Broaden, Like I as I read through all that
Speaker 1: you guys are doing, you really are the poster child
Speaker 1: and really had the playbook in terms of how to
Speaker 1: be a sustainable company and so many different methods. So
Speaker 1: I suggest everybody really check out your website because you
Speaker 1: really are doing it in so many different areas. Yes,
Speaker 1: but thank you so much. I really appreciate it. I
Speaker 1: think I think next time we do that, we do
Speaker 1: this on a sale. You're a sailor, I'm a sailor,
Speaker 1: so I think we should be doing it this way.
Speaker 1: All right. Well, I wish I wish you well. Thank
Speaker 1: you so much. Of course. That's yes for Brown Presidency,
Speaker 1: INCA group joining us here for the Bloomberg Live Bloomberg
Speaker 1: Green Festival. You're listening to Bloomberg Business Week with Carol
Speaker 1: Mazer and Jason Kelly on Bloomberg Radio. All right, let's
Speaker 1: do a little Bloomberg Business Week economics. Now, we have
Speaker 1: covered a lot of ground in the first hour, so
Speaker 1: let's stick into the economy if we can, Carol, because
Speaker 1: it is hard to get your arms around. We've been
Speaker 1: talking about this sort of all these cross currents in
Speaker 1: many ways, be at a climate crisis, be at UH
Speaker 1: a broader economic crisis. We turned to Adam osamackis chief
Speaker 1: economists for Upwork. He joins us on the phone from
Speaker 1: Lovely Lancaster, p A. So amid all of this, Adam,
Speaker 1: the workforce has continued to change pretty radically. Even going
Speaker 1: into the pandemic. We saw a gig economy that was
Speaker 1: still a little bit uncertain and uneven and exacerbating some
Speaker 1: issues out there. You guys have done a recent study
Speaker 1: about the independent workforce. Talk to us about what you found. Sure,
Speaker 1: so um, you know, talking about what's going on in
Speaker 1: the gig economy is is often um, you know, difficult
Speaker 1: because it's such a huge amount of variety. So when
Speaker 1: we talked about what was happening before the pandemic, that
Speaker 1: really is, you know, a huge range of activities that
Speaker 1: count as freelancing. This range is from selling things online
Speaker 1: to um you know, working in the transportation street and
Speaker 1: short term gig worrian stuff, but it also includes uh,
Speaker 1: really skilled work. There's a lot of programmers and writers
Speaker 1: and marketers you know, working full time professional skilled jobs here.
Speaker 1: So it's really important to understand that contact before we
Speaker 1: dig in that you know, freelancing is extremely varied and
Speaker 1: it's not just um short term low skilled gigs. I know,
Speaker 1: I was a freelance reporter on air at a major
Speaker 1: network and I was freelance for a couple of years.
Speaker 1: Like it's just amazing, like that what what you know
Speaker 1: what falls into the freelance category, Adam, Yeah, no, free,
Speaker 1: it's it's everywhere. I mean, freelancing is across age groups
Speaker 1: and it's across UM skill levels. And you know, what
Speaker 1: we really found this year is that the flexibility of
Speaker 1: freelancing and the value that that provides UM has really
Speaker 1: been on display I mean, the pandemic has been incredibly
Speaker 1: challenging both two businesses and individuals obviously, and there's been
Speaker 1: a real serious need for quick adaptation and we see
Speaker 1: that in our reports. So what we found is that
Speaker 1: a lot of people have actually started freelancing this year
Speaker 1: for the first time, So twelve percent of the workforce
Speaker 1: started freelancing after COVID. And at the same time, we've
Speaker 1: had a large percent of the work first who was
Speaker 1: freelancing and they've paused. So you have a lot of
Speaker 1: people who have started and a lot of people have paused,
Speaker 1: and it really just shows the flexibility and that you know,
Speaker 1: there are parts of the economy that you know, are
Speaker 1: really put on hold during the pandemic, and that's where
Speaker 1: the pause freelancers come in. And then there are parts
Speaker 1: of the economy that really faced fast business adaptation challenges
Speaker 1: and companies needed to respond quickly to the um you know, uh,
Speaker 1: needing to adapt to the pandemic, needing to go remote
Speaker 1: very quickly, you know, things like spinning up e commerce
Speaker 1: operations and logistical challenges and changing marketing plans, and freelancers
Speaker 1: have been really important part of that for those companies.
Speaker 1: And so you know, one of the questions we ask
Speaker 1: in the midst of this pandemic, especially Adam and I
Speaker 1: wonder if you were able to get to this in
Speaker 1: your work, is sort of the what sticks and what's
Speaker 1: temporary as we sort of get to whatever this next
Speaker 1: normal is going to be, because a lot of the
Speaker 1: things you're describing, you know, have been underway. The pandemic
Speaker 1: has been in many cases and accelerant. So what does
Speaker 1: this look like as people return to the office, as
Speaker 1: the economy starts to right itself. Is this something that continues,
Speaker 1: Does the move towards freelance accelerate? What what happens in
Speaker 1: your estimation? You know, it's a really fascinating question because
Speaker 1: when we do this survey, like if you would have
Speaker 1: asked me last year, what I would have told you
Speaker 1: is that there's always a lot of freelancing, and it's
Speaker 1: not necessarily growing or shrinking part of the economy. It's
Speaker 1: just something that has always been with us and sort
Speaker 1: of this idea, there's this idea out there that you know,
Speaker 1: everyone's going to be a freelancer, and I don't really
Speaker 1: agree with that. I think that freelancing is extremely valuable
Speaker 1: to the people who work that way, and it's extremely
Speaker 1: valuable to the businesses who hire that way. Um, but
Speaker 1: it's sort of always been with us. This year, I
Speaker 1: actually do think there is good reasons to think that
Speaker 1: we're going to see some you know, permanent increase in
Speaker 1: the freelancing share of the workforce going forward. That's because
Speaker 1: a lot of the new francers who are doing it
Speaker 1: for the first time, they say they want to continue
Speaker 1: doing it, and a lot of the freelancers who have
Speaker 1: paused they say they want to do it in the
Speaker 1: future too, and so on the on the sort of
Speaker 1: labor supply side, I think that makes for a good
Speaker 1: case that there are going to be lots of skilled
Speaker 1: people who want to keep working like this. They enjoy
Speaker 1: the flexibility, um, they enjoy the lifestyle, and you know,
Speaker 1: a lot of them needed you know, they're freelancers, are
Speaker 1: disproportionately both caregivers, and they live in households with a
Speaker 1: disabled person or are disabled themselves. So I think because
Speaker 1: they value that flexibility, that's going to make people want
Speaker 1: to freelance a little bit more than they used to
Speaker 1: do in the past. But does it make it a
Speaker 1: more you know, the vulnerable part of our population does
Speaker 1: that help make it UM increase because I sometimes think
Speaker 1: so many freelancers don't have many of the benefits that
Speaker 1: we all you know, in full time great ups like
Speaker 1: those of us where I work at Bloomberg, you know
Speaker 1: you've got great health care, great programs. Does that create
Speaker 1: you know, making UM a larger part of our population
Speaker 1: more vulnerable. Well, there's a couple of ways to look
Speaker 1: at that. So one thing is that obviously, uh, lack
Speaker 1: of health insurance is a problem for significant share of
Speaker 1: this country, and that's true for a lot of workers,
Speaker 1: both in and out of freelancing. So that's not necessarily
Speaker 1: a freelancing specific thing, and that's a policy issue that
Speaker 1: we need to do something for for everybody, is to
Speaker 1: make health care more affordable. The other thing is that,
Speaker 1: you know, a lot of freelancers, this is not just
Speaker 1: the way they prefer to work, but the way that
Speaker 1: they have to work. So you know, in past surveys,
Speaker 1: we've asked about people who are either for reasons of
Speaker 1: disability or because their caretakers, you know, whether they could
Speaker 1: take a traditional job, and what we find is that
Speaker 1: a lot of freelancers couldn't do a traditional job. So
Speaker 1: if you you know, went to the people who hire
Speaker 1: freelancers and said, no, you need to you absolutely must
Speaker 1: hire only you know, nine to five traditional employment. We
Speaker 1: think that a lot of these people they wouldn't be
Speaker 1: able to do those jobs. They need the flexibility, They
Speaker 1: value the flexibility, and that's, you know, from the freelancers side.
Speaker 1: Obviously from the employer's side, there's a lot of benefits too.
Speaker 1: So I really think that it's important that we don't
Speaker 1: view these jobs as just taking the place of traditional employment,
Speaker 1: but truly being additive to the economy. This is work
Speaker 1: that was not otherwise have been done. All right, We're
Speaker 1: gonna leave it on that note. Hey, Adam, good to
Speaker 1: check in with you. Adam as A. Mc key's a
Speaker 1: chief economist at the online talent recruitment website Upward, joining
Speaker 1: us on the phone from Lancaster, Pennsylvania. Brother the journal. Yeah,
Speaker 1: but you let me drive. Oh no, no, no no, no,
Speaker 1: all right, please, I'll do the right revel I want
Speaker 1: to drive. Just drive by question. This is the drive
Speaker 1: to the Globe Community. Thanks, we'll drying us to dawn
Speaker 1: on Bloomberg Radio. All right, everybody, it is time for
Speaker 1: the drive to the close. Jeff Crumpleman is with us
Speaker 1: the chief investments dragist, head of equities at Mariner Wealth Advisors,
Speaker 1: Jeff joining us once again on the phone from Cincinnati,
Speaker 1: which is where they are based. Hey, Jeff, it's so
Speaker 1: nice to have you here with us. How are you
Speaker 1: doing great? Doing great? You know, summer is coming to
Speaker 1: an end, start going in the favorite part of the season.
Speaker 1: Maybe not for the market, uh, you know, otherwise we're
Speaker 1: doing good here in Cincinnati. Well, what are you anticipating
Speaker 1: for the market When you say that, I know, seasonally, um,
Speaker 1: September October, we all get a little pinky uh. And
Speaker 1: maybe this year is kind of even more interesting because
Speaker 1: it's coming right ahead of the elections. But how do
Speaker 1: you see it playing out? Well, I think you hit
Speaker 1: the operative word there. Seasonally, it does tend to be
Speaker 1: a period where thanks stall and then it picks back
Speaker 1: up at the end of the year going through the
Speaker 1: first part of the new year. And the election certainly
Speaker 1: makes it even that much more. Um wiggy if you will, um.
Speaker 1: And I think the wall of war items that are
Speaker 1: out there are number one. The market has gone so hard,
Speaker 1: so fast, the fastest recovery off the decline that we've
Speaker 1: seen and normal profit taking would you know not be unusual?
Speaker 1: And then the angst of an election where you get
Speaker 1: major change in control, perhaps a sweep. And I think
Speaker 1: that you see COVID, you know, while it is thankfully
Speaker 1: finally declining, still thirty five thousand or so new cases
Speaker 1: a day, well down from a couple of weeks ago,
Speaker 1: but still out there, um increasing in Europe. Um. You know,
Speaker 1: we don't have a vaccine yet. I think that there's
Speaker 1: enough in the psychological wall of war camp to keep
Speaker 1: us cautious near term. But I've got to tell you
Speaker 1: that we remain positive to on the next twelve months.
Speaker 1: And do you think that you know, we're up from
Speaker 1: here and we've got a target of thirty five hundred
Speaker 1: that we're biased to want to increase if we can
Speaker 1: push through some of these short term issues, which I
Speaker 1: would anticipate. But we're still kind of hold your ground
Speaker 1: right now, um with our allocation, not not increasing exposure equity,
Speaker 1: maintaining the healthy exposure that we have. And so Jeff
Speaker 1: talked to us about some of the names you like,
Speaker 1: uh in this era and in this period, you know,
Speaker 1: one that I believe we've talked to you about before
Speaker 1: that we love talking about on this show is Lulu
Speaker 1: Lemon Um. You know, we saw some results from them,
Speaker 1: and what do you make of sort of where they sit.
Speaker 1: They've made some acquisitions, are a big acquisition when it
Speaker 1: comes to to Mirror, where do they fit into your portfolio? Now? Yeah,
Speaker 1: I don't think the thesis has changed there at all.
Speaker 1: And as the stock is sold off a little bit
Speaker 1: on the quarter, UM, I thought the quarters actually very good.
Speaker 1: You know, they beat UM. The guidance was a little
Speaker 1: bit soft, but you've got you know, main category in
Speaker 1: women's fans and continuing to you know, capture the men.
Speaker 1: I think I told you that I spent something like
Speaker 1: seven on Lulu Woman at Lulu Woman UM not too
Speaker 1: long ago going into COVID, and I've loved every minute
Speaker 1: of wearing what I can wear as we work from
Speaker 1: our homes. It's just a wonderful product. So I think
Speaker 1: that you continue to have UM square footage growth penetration internationally,
Speaker 1: categories and ath leisure that are growing very handsomely and
Speaker 1: they are just UM, a wonderful product and very close
Speaker 1: to the consumer. Uh. The Mirror acquisition I think is
Speaker 1: interesting and there there is some synergy with you know,
Speaker 1: brand development, UM, with ath Leisure associated with it. But
Speaker 1: you know that I didn't think that was a knock
Speaker 1: your socks off kind of transaction or transformational transaction any sense.
Speaker 1: I just think they are executing. It's an execution story,
Speaker 1: and UM I would on fullback, you know, UM be
Speaker 1: very happy and adding to positions we've had, we've undered.
Speaker 1: We've entered into the stock originally somewhere around one nineties,
Speaker 1: so we've got you know, very nice gains in it,
Speaker 1: relatively more to order and and it's those types of
Speaker 1: COVID oriented stocks. To answer your original kind of question
Speaker 1: that we've been focusing on, you know, we've upgraded. It's
Speaker 1: not like we've just sat still. We've upgraded into stocks
Speaker 1: that we think are beneficiaries of or UM. You know,
Speaker 1: those that can be stable through COVID, including like a Starbucks. Well,
Speaker 1: Starbucks would be an example. You know, we we divided
Speaker 1: the universe kind of into those that would take advantage
Speaker 1: of it, those that could manage through it and spit
Speaker 1: in the wind. Stocks Uh that you're just saying they
Speaker 1: are so cheap that they've been overly punished and we
Speaker 1: have not come into those. Those would be the airlines,
Speaker 1: the cruise lines, UM, hotels and gaming and those kinds
Speaker 1: of we moved away from those. Those are we're spitting
Speaker 1: to win the nature Starbucks that we kind of put in,
Speaker 1: they can manage through it very well, and they are
Speaker 1: at a good point of curve. We've not owned that one. Lulu,
Speaker 1: we've owned for a while. Starbucks is more recent purchased,
Speaker 1: and we did that because of China recovery. China's two
Speaker 1: lets ahead of us. That's a thick story over there.
Speaker 1: So we think that that's a cyclical recovery of secular
Speaker 1: gross box with some sick cyclical improvement. UM. Now that
Speaker 1: we're pushing through covid um a little further into curve,
Speaker 1: certainly internationally, we're gonna hear from FedEx after the closed, Jeff,
Speaker 1: how do you sort of see them? Where do they
Speaker 1: fit into the to this larger thesis? Well, that's that
Speaker 1: is one that we've owned a little bit longer. Um,
Speaker 1: And I think the thesis is simply e commerce. And
Speaker 1: you've actually seen transports that are non consumer airlines oriented
Speaker 1: do quite well. So we own a night Swift, a
Speaker 1: trucking comp any, you know as you go to online,
Speaker 1: you gotta ship this stuff, and FedEx is right there.
Speaker 1: They spent boodles of money on upgrading their fleet, becoming
Speaker 1: more efficient. They made a very troubled acquisition in Europe
Speaker 1: that they're finally kind of working through, and we see
Speaker 1: them as uber cheap um and just a beneficiary now
Speaker 1: going forward to some of the hard work they did
Speaker 1: early on, and they'll benefit from e commerce and certainly
Speaker 1: over the last couple of quarters, that's what you've seen
Speaker 1: with a sock. Finally, after just getting thrashed. Um, we're
Speaker 1: back up over two hundred and and it's down still
Speaker 1: down from you know the peak. So UM, I think
Speaker 1: that this is a time to own it. All right,
Speaker 1: We're gonna leave it on that note. Jeff Crumpleman, thank
Speaker 1: you so much. Good to hear your voice, Chief investment Strategists,
Speaker 1: head of Equities at mare No Wealth Advisors on the
Speaker 1: phone from Cincinnati. Thanks so much for listening to Blueberg
Speaker 1: Business Week. Download the podcast on iTunes, south Cloud, Blueberg
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