Transcript provided by Kensho.

Lindsey Hall: Hi. I'm Lindsey Hall, Head of Thought Leadership at S&P Global Sustainable1.

Esther Whieldon: And I'm Esther Whieldon, a Senior Writer on the Sustainable1 Thought Leadership team.

Lindsey Hall: Welcome to ESG Insider, an S&P Global podcast, where Esther and I take you inside the environmental, social and governance issues that are shaping the rapidly evolving sustainability landscape.

Esther, it's the opening day of the Summer Olympic Games. They kick off today in Paris, France and continue for about the next 2 weeks. And I have to say the Olympics are just so nostalgic for me. I spent my childhood ultimately dreaming of being a figure skater in the winter or a gymnast during the Summer Olympics. Me and my best friends made a balanced beam out of tape on the basement floor of my house to do our own routines during the '96 Summer Olympics, and that never came off the carpet. Sorry, mom and dad.

Esther Whieldon: Yes, there's a lot of nostalgia around the Olympics for me as well. I recently took up swimming again, and I have to say I have a lot of respect for the athletes because it takes me a long time to get from one end of my lane to the other end. And they just do it so fast. It's just really incredible.

Over the past few weeks, we've turned our attention at the podcast to the topic of sustainability in sports. And this is because, in addition to the Olympics, there are so many big sporting events happening this summer. Last week, we heard from the Head of Sustainability and Responsible Business at a professional soccer team based in Madrid, Spain. She explained how sustainability is a rising focus, thanks to pressure from many sources including spectators, investors, sponsors and even regulators.

Lindsey Hall: Today, we're talking to another professional sporting organization with a deep focus on sustainability. I'm talking about Formula E. You may have heard of Formula 1 race cars. Well, Formula E was launched a decade ago as a championship specifically for electric vehicles. In case you missed it, Formula E just finished its tenth season over the past weekend with the tense final in London.

Today, we're speaking with the leader from Formula E about how the sport is approaching sustainability and how electric vehicle technology is evolving. You'll hear her mention work Formula E does with DHL, that's the Global Logistics and Shipping Company. Okay. Let's turn to my interview.

Julia Palle: My name is Julia Palle. I'm VP of Sustainability at Formula E, which means my role is actually basically to bring the vision and the mission of Formula E, which is to accelerate sustainable human progress using the power of electric racing, to turn that into a reality within the championship and the series to make sure that we are basically the most sustainable sport in the world, not only because we are using electric vehicles and we're racing and powering these electric vehicles with renewable energy, but because we have a wider purpose, which is to inspire people to live sustainable lifestyles and to adopt not only electric driving, but also other forms of more sustainable everyday tips.

Lindsey Hall: For listeners who might not be familiar with Formula E, what should they know?

Julia Palle: So Formula E is the only all-electric racing series in the world. We were created 10 years ago to be able to promote and showcase electric vehicle technology. And really, Formula E is unique in the sense that we showcase the best of sports and motor sports, so super thrilling, exciting races. And we showcase that you can do all of that by being the most sustainable as possible.

So as I mentioned, the electric vehicles are charged by renewable energy. On our events, we basically try and basically get rid of any kind of forms of single-use plastics. We encourage people to use public transport coming to our events and so on. So we do all the fun, but on top of that, being sustainable and good for people in the planet.

Lindsey Hall: So you mentioned you've been around for 10 years. And what has changed in that decade?

Julia Palle: So over the last 10 years at Formula E, obviously, our own sustainability strategy has been evolving. We've really started initially focusing on the environmental aspects. So all the measurements, the carbon reductions of our series, so how we would like try and use a different approach to logistics, try and have a more clusterized approach to a calendar and so on.

We've been using recently some breakthrough innovations with DHL using sustainable aviation fuel to transport our freight. But also, we've been really ultimately ramping up to a more social impact of the series. 

One of the best examples is the Girls on Track programs that we are now running at every single event. It's a grassroot program designed to inspire young girls and empower them to work and embrace STEM careers. We take them at the track the day before the race at every single race location and they get a series of workshops. They get to drive electric cars, they get to meet with the teams and the drivers. And so we really are now harnessing the power of inspiring people to change their lifestyles, also to create positive social impact and long lasting legacies in the different places where we race.

Lindsey Hall: So when you talk about sustainability, it's not just that environmental aspect, it's also the social aspects. What data are you looking at to measure sustainability in sports whether it's environmental, social or otherwise?

Julia Palle: So data is always the starting point. That's almost the most important thing to get started and to have a good understanding of where you're standing. So we are measuring our carbon footprint. We use a methodology that is called Life Cycle Assessment, third-party certified, so validated by external and independent auditors. And with these, basically we have a good understanding of the carbon footprint of the series.

It's quite stable in terms of the impact. We know that 70% to 75% of the carbon footprint is linked to the freight that we transport around the world. You have to think about us like a traveling circus. And so we transport the race cars around the world and a few other things. And this is one of the basically key challenges and also key opportunities in terms of innovative technologies to continually reduce our carbon footprint that we use. That's why the partnership with DHL is so important to us and the newly tested technology around sustainable aviation fuel has been so important.

But we also use data in terms of the social impact. So just this year, if we take the example of Girls on Track, we will have doubled the impact that we created across all the race locations that we've been in, impacting over 2,000 girls across the season. And that's double the impact that we have created since we started the program back in 2019. So it's a very important point for us to be able to understand the impact that would create also from a social perspective.

Lindsey Hall: Okay. Great. So we've been doing a mini-series of this podcast looking at sustainability in sports. And what I've been hearing so far is that a lot of professional sports organizations are only in the early stages of even thinking about sustainability, which sounds like a very different place than where Formula E is since sustainability is sort of part of your mandate right from the get-go. Is that right?

Julia Palle: Absolutely, absolutely. We were founded with sustainability at the heart of the series.

Lindsey Hall: Okay. And so I wonder, do you have conversations with other sporting organizations, whether it's racing or other sports in general? And like what do you see in your peers outside of Formula E when it comes to how they're thinking about sustainability?

Julia Palle: Yes, it's very important for us to maintain a constant dialogue with other sports organizations. Because if there's one territory where, obviously sports is about competition, but there should not be competition, it's on sustainability. Because we have no time. The challenge is too big. So we need to support each other.

And so we are part of notably a series of organizations such as United Nations Sports for Climate Action that gathers, I would say, most of the main sports on the planet. And that basically enables all those sports to have a sort of like common place to be discussing challenges. And as you rightly pointed out, there are very different levels of maturity in the sports industries, some people that are just at the start thinking about it, some people that are more advanced, some that are really advanced.

But I think what is interesting is to talk about our common challenges because, obviously, it's interesting to share the success stories. But the common challenge is, I think, it's where we are actually stronger together. We were actually discussing recently some potential opportunities to get together to understand better our fans' perceptions, combining the global power of sports and understanding what moves the dial from a fan perspective or other like potential technical aspects around carbon measurements.

And I think this is very important. So we always make sure that as we push forward our sustainability and our leadership in sports around sustainability, it's our commitment to share and to give back so that everyone can be benefiting from this.

Lindsey Hall: And so we're having this conversation at a pretty pivotal time for Formula E. If I understand correctly, this coming weekend is the finals. What should our audience understand about the Formula E season and what's happening in just a couple of days here?

Julia Palle: The Formula E season is basically 6 months' worth of fully thrilling, exciting racing with the culmination point this week, actually this weekend, in London where we will crown our season winning driver and obviously our winning team. And that's very important to us. And it's not only about the sport. Obviously, everything is led by the excitement of the sport, but it's also how we've been integrating sustainability at the heart of every single event.

In London, it's going to be also a culmination of all the efforts we've had in terms of environmental impact, renewable energy being used, water fountains with reusable cups, introduction of an education-led activity in the kids area so that they can learn about sustainability in terms of what is renewable energy, what is climate change, what is diversity, equity and inclusion for under 10 years old.

Plus all the philanthropic aspects of our Better Futures Fund program that basically is supporting local charities in niche race locations that we have. And in the London-specific case, it's all about basically a charity that is going to be supporting with people suffering from basically not having access to food, and so in essence, how we are going to support family in having food access secured.

Lindsey Hall: Can you help me understand a little bit more about the different stakeholders that you work with? You mentioned your fans. Let's start there perhaps. How would you describe the Formula E fan base?

Julia Palle: Yes. So the Formula E fan base is quite unique. We have, first of all, a quite gender-balanced fan base which is quite unusual and, I would say, really fantastic for us as a young and, I would say, like disruptive sports in the positive sense. Also quite young, our demographic is mostly under 35 years old.

And then if you sort of like start categorizing the fans, then you've got those that are families and parents that are basically worried about the future of their children because they hear a very doom-and-gloom narrative or on climate change, which is why we are trying to be solution-driven and very positive.

You also have, I mean, two categories of fans that are quite tech-driven and very focused on the innovations that we are putting forward at the center really of the sport and like really the innovations that are developed in our garages and that are going to be transferred into the cars that you and I are going to be driving in a year or in a couple of years.

And then there's also a very interesting segment, quite female-led, very focused on the social impact that we create as a sport, where they are really here to experience but are here to be part of a wider community that creates positive social impact.

Lindsey Hall: So you've mentioned some of those innovations. I'd love to know more about what do those look like? What are the innovations that Formula E is bringing to the table?

Julia Palle: So we've designed the championship so that we can get our manufacturers to maximize the opportunity to innovate in, I would say, almost ready-to-go, plug-and-play transferable innovations that will go into passenger cars. One of the best is Jaguar. So Jaguar has been racing with us almost since the beginning of the series.

And Jaguar, a couple of years ago, introduced a software update that came directly from the learnings that they had in the garages, so on their racing car, that enabled all their I-PACE SUV drivers to get an extra 10% battery life thanks to the better like, let's say, software technology. And so if you take that at the world level, like the thousands of users, this gives a substantial impact on the everyday life potential and technology transfer opportunities from what we call track to road.

Lindsey Hall: One thing that I have been reading about is this new fast-charging technology at Formula E. Is that something you can tell me more about? What should our listeners know about fast charging?

Julia Palle: Yes. So in essence, the way we design our racing cars is that we try and be basically ahead of the cycle mostly for 10 years. So we're trying to think about the cars that will be used on the streets and making sure that we tackle the challenges that the users on the street are facing and solve that in the racing cars so that the technology can be implemented in the passenger cars.

And so one of the things that we have identified after really pushing down in terms of the reliability and the battery life of the cars is very much about the infrastructure, the fact that the infrastructure is still not enough on the street, but also the fact that it's not fast enough in terms of time to charge.

And so that's why we've started to think about these ultra-fast charging solutions that we want to implement in the championship and showcase that for our cars, ultra-fast is a technology that existing, that is proving efficient. And that will be transferred on the short term in the streets that people driving electric vehicles will be able to use.

Lindsey Hall: Okay. So if I'm hearing you correctly, this fast-charging technology that's been rolled out at Formula E for race cars, you think is eventually going to make its way to road cars.

Julia Palle: Yes, absolutely. So we are working on rolling this out in the series because we know that it's going to be a game changer element to support the acceleration of EV adoption even more widely than it is at the moment. And so the idea is that by showcasing that we use that in the context of the series, which is obviously like high intensity, very demanding, showcasing ultra-fast charging, the transfer to the everyday users on the streets is going to be obviously facilitated and accelerated and also basically something that will enable everyday passenger drivers to project themselves as a technology they can use, hence, basically not seeing that as a barrier to adoption to drive an electric vehicle.

Lindsey Hall: Okay. I mean that makes sense because anecdotally, a lot of what I hear about why people aren't moving to electric vehicles is a lack of infrastructure and the time that it takes to charge an electric vehicle. When you talk about fast-charging technology, like how long are we talking?

Julia Palle: So the technology that we're looking at, I would say, between 10 and 30 seconds to charge roughly between 10% and 20% of the batteries.

Lindsey Hall: Okay. Wow. So yes, very fast. So we've talked about some of the fans. Talk to me about some of the other stakeholders that you engage with, whether it's sponsors or the car companies.

Julia Palle: Yes, of course. So some very important stakeholders for us are the car manufacturers and the customer teams. So in the championship, we have 11 teams that are either directly run by a car manufacturer, a big brand as Jaguar that we talked about or Porsche or McLaren and so on. Or you'll have customer teams that are basically Andretti, who won -- their driver won last year; or Envision that won as the team -- winning team last year. And so these people basically are building a team and raising as individual private owners of a racing team.

And that's very, very important to us to have both because you've got the car manufacturers that are here to develop and advance and transfer the technology into the road cars. But it's also very important to bring the thrill and the excitement of the private teams that normally come also from a very rich motorsport history or come from an adjacent industry to motorsport and electric vehicles, as the likes of Envision, where it's very important for us to showcase this sort of like wider ecosystem implication in the sort of like bigger transformation of our societies going to more environmental technological solutions.

Lindsey Hall: And then what about other sources of fresher or other stakeholders that you work with? One of the things that's come up in my previous interviews for this mini-series about sustainability and sports is the role of regulations. Is regulation at all driving your approach to sustainability?

Julia Palle: Of course. We do operate -- obviously to deliver our events, we have a series of laws and regulations that are very important for us not only to be we aware, but also to make sure that we comply with. In terms of sustainability, obviously, our philosophy is to always go above and beyond. So there are some certifications that we have to basically always make sure that we maintained ourselves at the highest level possible and available in our industry.

So just to give you an example, we've been certified against the International Standard for sustainability in events, which roughly mostly it's the Olympic Games that adhere to this level of recognition. It's an ISO standard. So it's been 8 years that we are certified against this standard. We were the first sport in the world to achieve net zero carbon since inception, in line with the 2020 definitions of Science Based Targets and so on and so forth.

So this is very, very important for us to be always at the forefront of those regulatory frameworks, whether they are imposed to us or done on a voluntary basis out of, again, best practice and leadership.

Lindsey Hall: You talked about the UN Sports for Climate Action initiative. Can you tell me a little bit more about Formula E's involvement in this initiative and what you've gleaned from that?

Julia Palle: Yes, of course. So we contributed to actually create the first framework back in 2018. So we were around the table with the United Nations and a couple of other sports when basically United Nations decided to use and gather the collective power of sports not as an industry that was generating huge impact in terms of environmental CO2 emissions, but as a fantastic industry that could really like gather billions of people and inspire them through the power of sport to adopt more sustainable practices in their everyday life.

First of all, by putting their own houses in order and then by showcasing to their spectators that there are some everyday tips, as I was mentioning, that can be taken to live a more sustainable lifestyle without feeling that it's necessarily a constraint.

Lindsey Hall: Okay. And so what are some of the common challenges or opportunities that you have seen arise out of this framework?

Julia Palle: So one of the common challenges that we've identified is the fact that most sports are struggling with the transportation aspects. I think I've mentioned that 75% of the carbon footprint of Formula E is basically due to the fact that we travel around the world. And so it's a common problem that we're facing. But ultimately, this is something that most sports, and Formula E in particular, have no direct control on.

We are obviously relying on the reality of the freight industry that is not necessarily like the most advanced industry at the moment. But again, the beauty is that there are some most advanced players in this industry. We're lucky to work with DHL, which is our logistics partner. And DHL is enabling us to potentially test and trial new technologies. We've been using for a couple of seasons already biofuels for all the sea freight and the road freight. We just recently tested the sustainable aviation fuel for airfreight.

And this is something that, with the rest of the sport, we're actually discussing how we could come together and basically use or sort of collective bargaining power almost as a lobby, a voice in front of the rest of the travel and freight industry, saying that we're ready basically to go from more sustainable solutions but they need to be made available to us.

Lindsey Hall: So you've talked about traveling all over the world for your events. And I wonder, how does the interest in or enthusiasm for Formula E and also sustainability more broadly, how does that differ from geography to geography?

Julia Palle: So what is very interesting is that we see that the fans that we have in more mature countries are very switched on the social aspects of our sustainability strategy. And so they are much more tuned on the Girls on Track, the philanthropic approach that we have, all the community engagement measures and so on and so forth. Because I think in more mature market, there's a bit of environmental fatigue based on like the access to media and so on and so forth.

Whereas in emerging markets, so those economies that are really like super dynamic and completely in their like booming phase from the economic perspective, they are very switched on the environmental side of sustainability. So very interested in how we can improve air quality through the EV transformation, how we can support by utilizing more renewable energy. And that's how basically we decided to choose our carbon credits selection. As part of our net zero carbon strategy, we only purchase renewable energy carbon certificates because we want to make sure that we support the increased use of renewable energy in the different grids in the world and so on.

So it's quite interesting to see that based on the different growth phase of the different geographies where we race, fans and people are sensitive to different aspects, which is great for us because, obviously, our own sustainability strategy is holistic.

Lindsey Hall: What is, from your perspective, the big hurdle or challenge in greater uptake of these kinds of strategies by other organizations? Like why isn't everyone not taking these same steps?

Julia Palle: I think it's probably more difficult when you're a company that, unlike us, were born without a purpose. We were born with sustainability at the heart of everything that we do with. It's a reason to be.

Whereas if you've been existing for tens of years and you're trying basically to retrofit, in essence, a purpose to your organization and then justify that you're going to invest resources, even if it makes sense from a moral perspective, the business is not set up in such a way where potentially they see that is going to help positively impact the triple bottom line. So I think that's why you see some businesses and particularly some sports are maybe struggling to get started.

Lindsey Hall: Okay. You raised an important point there, which is that sports is often thought of as entertainment, but it also has this really important business component. Can you talk to me more about what's the role of investors in Formula E and what you're hearing from your investment community?

Julia Palle: Yes. So our investors are absolutely crucial. Because Formula E, if you think about it, is just 10 years old. So we are still a very young business that needs to be supported in terms of, what we say, capital and confidence. So we need people that are seeing the huge potential that we have and that are basically ready to support us financially to get there.

And I think, I mean, we've had recently a fantastic news with Liberty Global taking majority ownership within Formula E, which is a testament of basically them seeing us as basically like a trailblazer in the sports industry and really seeing the potential for us to become a major not only entertainment brand, but holistic brand in terms of sports.

So the sport is good, it's exciting. But they're also recognizing the unique place and role that we play in terms of inspiring like the rest of the industries to be more sustainable and as we were just discussing before, this being a key business driver in terms of like the financial health of our business, and ultimately, inspiring others to do so.

Lindsey Hall: Okay. Julia, I always like to ask our guests about their personal path. How did you get into this role leading sustainability at Formula E?

Julia Palle: So I'm an economist initially by training and I became a sustainability expert when studying in business and management school. And then by luck or chance or whatever you want to call that, I happened to find my first role which I wanted to be in an industrial environment in motorsports. So I started working for Michelin, the French tire manufacturer, almost 15 years ago now.

And in my role, I instantly understood that motorsport was a fantastic industry with untapped opportunities in terms of sustainability and major potential emissions in terms of carbon emissions, but also a huge potential in terms of creating impact and inspiring people. And so I've had all my career in motorsports. And I'm now celebrating my 10 years at Formula E. So I've been really part of shaping the business and very proud of what we've achieved and where we are going, really.

Lindsey Hall: So as we heard from Julia today, a lot of evolution happening in this sport. She talked about how Formula E has been focused on sustainability since its launch 10 years ago and how this, in some ways, makes its path more straightforward than legacy sports that are trying to retrofit sustainability into their business model.

Julia talked about the role that bodies like the UN Sports for Climate Action Initiative can play in using sports to achieve global climate change goals. This group has come up in multiple of my interviews for the series, by the way, and we've heard throughout the series about the importance of sharing best practices across sports and teams.

Esther Whieldon: Julia also said that for Formula E, data is always a starting point. And she talked about the crucial role that investors play in the sporting world. This is a theme that we've heard throughout the series, how sports aren't just entertainment, they're also big business. And as Julia mentioned, in June 2024, Liberty Global announced plans to acquire additional shares of Formula E, giving it a controlling interest in the motorsport.

There is so much more to tell in the sustainability in sports story. We hope you've enjoyed the snapshot we brought you in these last 3 episodes and that you continue to tune in as we explore how a range of actors are getting to grips with this evolving sustainability landscape.

Lindsey Hall: Thanks so much for listening to this episode of ESG Insider. If you like what you heard today, please subscribe, share and leave us a review wherever you get your podcast.

Esther Whieldon: And a special thanks to our agency partner, The 199. See you next time.

Copyright ©2024 by S&P Global  

This piece was published by S&P Global Sustainable1, a part of S&P Global.     

DISCLAIMER  

By accessing this Podcast, I acknowledge that S&P GLOBAL makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in this Podcast. The information, opinions, and recommendations presented in this Podcast are for general information only and any reliance on the information provided in this Podcast is done at your own risk. This Podcast should not be considered professional advice. Unless specifically stated otherwise, S&P GLOBAL does not endorse, approve, recommend, or certify any information, product, process, service, or organization presented or mentioned in this Podcast, and information from this Podcast should not be referenced in any way to imply such approval or endorsement. The third party materials or content of any third party site referenced in this Podcast do not necessarily reflect the opinions, standards or policies of S&P GLOBAL. S&P GLOBAL assumes no responsibility or liability for the accuracy or completeness of the content contained in third party materials or on third party sites referenced in this Podcast or the compliance with applicable laws of such materials and/or links referenced herein. Moreover, S&P GLOBAL makes no warranty that this Podcast, or the server that makes it available, is free of viruses, worms, or other elements or codes that manifest contaminating or destructive properties.  

S&P GLOBAL EXPRESSLY DISCLAIMS ANY AND ALL LIABILITY OR RESPONSIBILITY FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR OTHER DAMAGES ARISING OUT OF ANY INDIVIDUAL'S USE OF, REFERENCE TO, RELIANCE ON, OR INABILITY TO USE, THIS PODCAST OR THE INFORMATION PRESENTED IN THIS PODCAST.