E132 - Jill Jackson from the Big Exchange

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Welcome back to the Green Element Podcast, where we feature business leaders and innovators transforming their operations to be more environmentally and socially sustainable. I'm your host, Will Richardson, and I can't wait to meet our guest today and help you on your journey of sustainability. Good morning, Jill. Thank you so much for joining us on our Green Element Podcast. Your name is Jill Jackson and you are from The Big Exchange. Can you tell us a bit about your business and what's your purpose and who you work with, please?

Morning, Will. How are you today? I'm Jill Jackson, Chief Executive Officer at The Big Exchange. Our business is a business that's been co-founded by The Big Issue Group. We are looking to democratize access to financial services and to make it a more inclusive industry. We provide access, support, and choice to various different financial services products. At the moment, we offer customers the opportunity to invest in ethical, sustainable impact investment funds, all with the aim that people's money is going towards creating a better societal future and creating a positive impact on the planet. We also just yesterday launched our app, which is free to download, and the app allows people— you don't need to be an investor to download the app. It uses open banking functionality to help people understand more about where they spend their money. So really, we want to overall be the place that people come to, to spend, save, and invest their money with impact and understand a bit more about what their money is doing and where it's going for us. As part of that, it's really important to be transparent and help people understand where their money's going, both the good and the bad of it, and understand that we're on a transition as a country to move to a more greener economy. And whilst it might not be perfectly green today, the aim is that we can get to that point where people really can be confident in terms of their spending and investing choices.

That sounds really good. And so trying to work out what that means to me, the listener, and what differentiates you between— because there are other places that you can invest money, aren't there, that are impactful? And how do you, as a user, Can I just put money in from my bank into a fund or do you advise on which ones or do you have different ones?

In terms of what differentiates us, first of all, we only offer those types of funds. We don't offer— it's not a whole of market proposition, so you won't find a regular FTSE 100 fund in there on our platform. And we independently assess every fund that comes on. So that, that's a really key thing for us. So whether it's ethical, an ethical fund, a sustainable fund, an impact fund, an ESG fund, we assess it all independently with the same methodology to make it easier for consumers to understand where their money's going and what it actually does. And the first thing that we do as part of that is look at the positive impact that's created by the investment, and then we flag to customers where there may be potential issues or controversies around those companies as well. So it's really helping people understand a bit more about where their money is going. I think for us it's really important. I'll come back to that transparency point. It's really important that people are able to see where their money's going because that's how we can create confidence that there's change happening. In terms of other people in the market, I mean, quite a lot of investment platforms now offer an ethical option, if you like. But for us, that's the only option that we would go for.

And how do you mark funds? How do you rate funds? What sort of things do you look for?

So we do a full bottom-up stock analysis. So we take every company and look at it. So the fund managers that have to submit essentially a due diligence, complete a due diligence process when they come onto the platform, It's a full stock analysis. And in addition to that, we also ask the fund manager to confirm the intention behind the purchase of the stock, which I think can't be underestimated how important it is, because that also helps drive out where a fund manager's intention is to fund transition. You know, we, we, there's lots of discussion in various press just now about whether funding the transition for traditional fossil fuel companies is the right or wrong thing to do. We choose to let consumers make that choice, but with the confidence that we've done the analysis for them and we understand that the intention behind that stock purchase is to fund the transition, which we all know realistically needs to happen. We need to fund the transition to a net zero world. It's not going to happen if we don't invest money in getting there. So yeah, for us it's really about that bottom-up stock analysis and it looks at a number of factors. It looks at Primarily, it looks at what UN Sustainable Development Goals it's positively contributing towards. So when you look at a company, what is it doing? Is it about diversity? Is it about poverty? Is it about climate? What SDG is it really addressing and how can we get some comfort around what it's doing? I mean, it's a really detailed process. It's pretty time-consuming. But it's well worth doing it. And hopefully over time, as the industry gets more data, reliable data that's a bit more mechanical and standard, that will become easier to do.

Okay. And you talked about the investors have to say why they chose that particular investment. Is that communicated to the person using Or investing in?

And that's a really good question. Well, it's not at the moment, but that's in our next iteration of our disclosures to customers. So at the moment, we were really keen to get something up and running really quickly. So at the moment, what we do is we flag potential issues to consumers, and even then they can be refined further. And we're looking at that just now. But the intention is that where there are potential issues, that we can then provide fund manager comments as to why that stock is there. And I think that that's really important for consumers. And we just need to get the mechanics right behind the scenes to automate that. And yeah, I do agree. I think that that's something that could be really important for consumers.

I guess the people that are going to be investing in it will have different— they'll have different viewpoints, but similar want similar outcomes. So therefore they'll probably be asking a bit different questions, but with a similar outcome to you and your investors. So therefore everyone wants the same, otherwise they wouldn't be using you.

Yeah.

Everyone wants the same outcome. They'll be like, oh, but what about this, this, and this? And I guess it's a really good way to almost change the market as well, because you'll be almost crowdsourcing reasons why and what people are looking for. within the markets?

Yeah, absolutely. I don't think you can underestimate— one of the things that we also do in our platform is we give consumers full look-through so they can see the full portfolio holdings. Now, albeit there is a time lag on that, so it's not, you know, as of that minute in the day, there is a time lag. But that again for us is something that's really important as well. And for me, one of the things that really helps consumers understand is the work that fund managers do on engagement. You know, so I think a lot of consumers don't necessarily understand the work that a fund manager can do when something happens in an organization that they don't like. You know, quite often they will be engaging with that company to say, you know, we want this outcome and ultimately they'll vote that way at, you know, AGMs or any EGMs. But for us, it's, we want to really build on that story and start to give consumers more information about, you know, yes, this is why the fund manager bought the stock. And this is also why recently they've voted this way for that company. And if they've given them, you know, 12 months to sort it out, and if they've not sorted it out, then ultimately they can sell down the stocks. And I think that that starts to really create an interesting story for consumers about the power that their money can have as well.

Yeah, yeah, absolutely. Oh, brilliant, brilliant. I'm certainly going to have a look at the app. We'll put a link up on our website. So you said you're a part of the Big Issue Group. Does, in the decision-making, and is it, I mean, are you all a part of the same kind of decision-making criteria. So I don't know, I guess the magazine we all know and read, will that influence things and what you do? I don't know.

Yeah, no, I know it's a really good question because it's quite unusual for a business like ours to be co-founded by a social enterprise, by the Big Issue Group. And I think that gives us a bit of a superpower there because we're very plugged into— through that relationship, we're very plugged into the fact that there are people on the margins of society that suffer as a result of us continuing to do the same thing and behave in the same way. Just to confirm that we're not part of the Big Issue Group. The Big Issue are one of our largest shareholders.

Oh, okay.

The actual group, we describe it as being part of the family. But for us, in terms of mission, there's— it's absolutely at the core of what we do. The big issue, you know, ethos is a hand up, not a handout. And we've tried to let that come into our business as well as how do we give people the information to allow them to make those decisions themselves and give them access. And it really does in terms of so Nigel Kershaw, who's the chair of our big issue, the big issue group is on our board. I mean, the big issue do whilst the magazine is absolutely I agree everybody knows it everybody it's a it's a real it's got a fantastic brand in the UK in terms of what it does for people but the big issue group do way more than that there's big issue invest that have got you know LP funds that invest in social enterprises and help businesses that are really trying to make a societal impact change. And that's really how The Big Exchange began, because somebody asked Nigel, why can't one of your average Big Issue readers invest in one of your Big Issue Invest funds? And obviously LP funds are for high net worth, sophisticated investors. And really that kind of got Nigel to thinking, how could we really get people access to funds that make a difference? And that was really the beginning of the idea for the Big Exchange.

And it's come at a really good time, hasn't it? Because— and I'm going to absolutely show my naivety in the financial market now, but did I not listen to the news fairly recently about the fact that people can now invest in companies that list on the FTSE 100 and average Joe can now start to invest independently themselves, whereas before it used to be only companies and, as you say, high net worth individuals. Is that right?

Well, I think that what we've seen, there's been a real surge, particularly in the last year, actually during COVID I mean, when you look at online DIY, which is investment accounts that are opened with no advice given, which our platform doesn't give advice at all, The Big Exchange, it's a what's described in the industry as execution only. So the customer makes the choice themselves, and we give them information, they interpret it, and then make the choice. I think for us, in terms of what we've seen in the last year, there's been a big surge in, um, apps where you can buy direct companies. So somebody that's never invested before can go in and say, right, I like the look of that particular company and I'm going to buy it. And there's been some apps launched that have seen quite a big surge in activity. I think for me, if somebody's never invested before, for me, funds are the best way for them to start because you diversify your risk. You know, you're not putting your money into one company. So I would always advocate for that in the first instance. I think if you start to build up a, you know, a pot of money, I wouldn't disagree that some direct company exposure might be good. for you if you've done the research. But I think funds in the first instance for a beginner investor or indeed somebody that's more experienced helps diversify away from having that single stock exposure.

I guess I'm also just saying the market is changing, people's attitudes are changing, people are almost becoming more knowledgeable and technology is influencing That change and what you are doing is incredibly helpful and a part of that sea of change that we're seeing happening within the financial world, but also happening with what we're seeing happening in the cultural, within culture as well. I mean, we've seen such a shift in culture over the last 2, 3 years of impactful businesses, people wanting to buy off businesses that they believe in, that they think are actually more purpose-driven. And I think COVID has almost put it up a gear because I think so many people are buying online and going, I now realize why I don't want to buy online. I actually want to go to my local shop. I'm not able to. I still have to buy Valentine's gift for your loved one. I still have to buy a birthday present. But all of us are probably going to go, right, well, let's go to the local one next year. It'll be all local shops only, hopefully.

Yeah, I really want to believe that happens. Well, for my local community alone, I hope that That is the outcome. I do think that you're right. I think there's a heightened awareness, I think, amongst people around the impact that they are individually having on the world, right? So if the Amazon guy is never away from your door, you know, what does that mean? You know, what is happening in that whole process? And I think scenarios like Boohoo where, you know, it's in the mainstream media that that a company is not treating their supply chain and the people that they're employing are not being treated fairly, I think that that creates a wave of change in society as well, because that can be your son, daughter, sister, brother that's being treated like that. And that creates a solidarity amongst people that they think, hang on a minute, I don't want anyone that I know to be treated like that. Therefore, why would I buy something from them? And I think that that's, that's really interesting. But I also, I think in terms of younger people are just taught in a different way, like, like my kids at school, you know, packed lunch, plastic-free packed lunch, right? Go get— make that happen. I mean, their minds are starting to think about this at a younger age. I mean, and I think all of that creates real positive change amongst society. So, yeah, I think the way where you spend your money cannot be underestimated, the impact that that can have.

And I guess it's too early to see, but you guys will see that the change in companies and that purpose-driven aspect of companies and which ones do well and which ones don't firsthand and very quickly doing what you guys do. So it'll be really interesting to— I would imagine it's really interesting for your fund managers if they're only dealing with impactful businesses, because there's so much research that shows that purpose-driven businesses grow faster than non-purpose-driven businesses. I mean, it's kind of, it's a given now. And I think that's probably why so many more businesses are looking at B Corp. the B Corp business model.

Yeah, absolutely. And we're going through that application process just now, um, and it's, it's a tough process to go through, but it's rightly, it's tough. It makes you think about everything to do with your organization and how it's run. The Big Issue are already a B Corp, so we're familiar with the, the process in there, and we're walking through that application with them. And I think for us, because we've got that real mission and purpose at the core of what we do and it forms part of our decision-making, all of our decisions are made around that. You know, why, why are we making this decision? Does it deliver on the purpose and mission of the business? And if not, why are we doing it? You know, all of those types of integral decision-making. But B Corp makes you think about every aspect of your business and the impact that you're really having. And going through that application process, I think for a new business like ours is something that I would suggest to any new business because it sets you up for success in terms of the way that you run your business, what you offer customers, everything to do, every aspect of your business. And yeah, it's an interesting process to go through and we, you know, Really hope to be successful in the application.

I'm sure you will. The Better Business Act was launched yesterday, and what was interesting was the people, the businesses at the launch. There are a lot of larger businesses behind the Better Business Act, of which many of them were not B Corps. And it was really refreshing to see because I, like many, don't believe that B Corp is necessarily the only way. We just want every business to be ethical and purpose-driven and to be thinking about everything around you. And it was great. It was great to see that. And I know that sounds funny coming from a B Corp that's been a B Corp for 6 years, but we all want the same thing, don't we? We just want purpose-driven businesses.

Yeah, absolutely. And I think, I think the Better Business Act in those larger businesses, um, it's, it's way harder for a larger business to become a B Corp, right? Because they have to unpack things, um, to do it, and that can be quite difficult. So I think the Better Business Act demonstrates a way that they can still create that impact. I, I would like to see some larger organizations becoming B Corps. I think that that would be really, you know, a real signal to the industry that it's possible. And whereas I think at the moment it tends to be smaller businesses or newer businesses that are going through that process. So whilst I do welcome any change, like you say, that creates the same outcome, back to that point we were talking at the start, is that everybody's got a slightly different view. But as long as the outcome's the same, then, you know, by hook or by crook, we'll get there. I would, I would love to see a larger organization go through that B Corp process and be successful, because I think it could be a real signal to the rest of the industry that it's possible to behave in that way and get, get those outcomes.

So what's your background to, you know, to— you founded The Big Exchange.

Yeah, so well, not, not personally, no. So there was the Big Issue Group and a number of other individuals came together just before I joined actually to found the Big Exchange. And when they were looking for somebody to take the CEO position, they approached me. And my background is that prior to this, I worked at Aberdeen Standard Investments and I was head of the UK retail area of the business at that point. My background is asset management. I've always worked in asset management over the years and always, always had a really keen interest in ethical, sustainable investment. Ethical was the only option like 20-odd years ago, right? That was the only way that you could invest in any way that felt like it was in line with your values. And I was always really interested in that. And I can remember when we launched the funds the first ethical funds. The company was called Britannic at the time, and that was— I was delighted to see that in terms of a step change, but it was still seen as a bit odd at that point. Right. And very much like if you invest in that way, you're giving up returns.

Hmm.

That was the absolute sentiment. And I've been delighted over the years to see that progress and change as different funds have come out that have been aligned to values and You know, it's great that we're seeing data now that, you know, supports that purpose-driven business, you know, creating better outcomes, but also on a pure financial basis, on a chart that you can create the same, if not better, returns financially through these businesses. But yeah, I've always, I've always worked in asset management, but I've always been fascinated by the fact that even if it was a large segregated mandate that the asset manager was awarded, it was a real person's money. It was somebody's pension money. It was, you know, but if you look around, if you want to, I don't know, say a company wins a pension fund for a fire— for a firefighter in, in a scheme. I know that, um, one of the companies I worked for won it for one of the American firefighter schemes, and I was really passionate about we can't lose sight of the fact that these are firefighters' pensions that we've got. Yeah, it might be this big, huge segregated mandate, but it's a real person's money. So ultimately the asset management industry is a retail business, but sometimes it doesn't feel like that. And for me, I was always very passionate about let's not lose sight of the fact that these are— everything's retail at the end of it. It's all somebody's money somewhere, right?

That's really nice to hear because you hear such horror stories and I guess Hollywood's quite good at perpetuating those horror stories as well. Because it wouldn't make good— it's not great Hollywood stories, is it? I'm thinking about you, by the way.

Yeah. And I think that the industry has got a reputation or has built up a reputation for being quite opaque. And I do think that there's great signs that it's trying to unwind that and become more transparent. And I think that the combination of fintech disrupting the market, Asset managers understanding that consumers have got different expectations now. So it's a real— and then regulation coming from the top down. So I think it's, it's all of these things together that create almost a perfect storm for the change. Okay.

And so how do you— when it comes to running an ethical and sustainable business, what's the biggest struggle you've had so far and how have you overcome it? How have you overcome it?

I think in terms of running an ethical and sustainable business, it, it can become tricky for 2 main reasons for us. One, the products we offer, right? Because we're offering people ethical, sustainable impact type products and making sure that we've done all the groundwork and the impact assessment that I talked about. That can be as tight, as time-consuming time well spent, but time consuming and really important to do. And I would love to see more automation around that in the future. And that's difficult at the moment because different fund managers refer to the same thing with different words and it makes it hard to kind of automate it in certain ways. So I would love that. That's one of our challenges is how can we reduce that time spent but still get the same quality of output in terms of the assessment? In terms of running the business ourselves, I think I find that pleasantly easy. I would say, well, we're a small business. There's not a huge amount of staff. We've got the big issue as our founder, and they're very— we're always very clear as a board as well of what it is that we're trying to achieve. So I've found that relatively easy. I think in terms of the practicalities of where we work from, you know, the impact of the energy that we use as individuals, the impact of any travel we do. That's harder to do, particularly at the minute during these unusual times where people are at home and not in the office. And that can be— that's something that we are kind of wrestling with just now is how do we, as part of our B Corp application, you know, really capture those Scope 1, 2, 3 emissions? What assumptions are we making around that in a changing world? And I would say that that can be quite a challenge for us at the moment. And we're going through that now as we speak in terms of how we quantify that.

I don't know whether I should be saying it because I'm not here to sell our services, but Compare Your Footprint will help you with your homeworking and they can do the carbon reporting on it.

Yes, that would be great because it isn't the easiest thing to do. And some, for example, one of my colleagues lives in a really rural setting, right? And is there and the energy, it's not easy to get green energy without spending a huge amount of money. And so how do we, how do we find ways to improve that? And particularly if we're going to be potentially at home for longer. So So I think that there's lots of work that we've got to do as an organization to really understand that and where there are scenarios that will take longer to change, how can we offset that in the meantime? And as you know, you know better than I do, there's various ways that we can do that.

It's an interesting one, isn't it? As we work from home more, and I don't know what your aspirations are as an organization coming out of this. But I know that many of our clients are very much going, actually, it's not going to be 5 days a week in the office going forwards. It will be a mixture depending on the industry and depending on the company and the culture within that company. But with that will come the ramifications of working from home And we know that 20% of the emissions within the UK come from homes. So therefore, businesses, some businesses try and make the fabric of their buildings more environmental because they want to be reducing that energy use. Those same businesses will probably be saving money by not paying for the fabric of their businesses. I wonder, and I honestly don't know, but I wonder if businesses will start to help their colleagues make their homes more green because we're seeing a trend of trying to help, trying to get to a better, more environmental future. And yeah, it'd be interesting, wouldn't it?

Yeah, I think there's a few things I think about that. One, I agree with you. I think in terms of saving that, you know, big institutions will make in terms of their outgoings. I think the point that you made at the start there about whether it will be a 5-day-a-week model or not, we've taken a really— I mean, we've— because we're a new business and we're growing, We've recruited people during lockdown that will be permanent working from home people.

Right.

And that's because they don't live anywhere near London. And why would we get them to come to London if there's no added benefit? Right. So, and also from a societal point of view, you're employing people from around the UK, not condensed into one area. And I think that that's another positive impact of that. I do think that some of us will have a blended model in terms of office or attending meetings or working from home. I've always worked a blended model of working from home and being in the office. I've done it for years and I've been really pleasantly surprised as how my colleagues have transitioned to that. But in terms of making their homes greener, I completely agree with you. And that's kind of some of the challenges that I'm wrestling with just now is If we don't have outgoings for an office 5 days a week, then what can we reasonably do to make that, you know, insulate that person's home better, you know, try and make sure that they're using a green energy supplier. You know, all of those things I think become increasingly important. And yeah, I mean, I've gone through personally like a transition process of like, who do I use for my energy provider? all of that stuff. And it's been nice to have the time to spend to really look under the bonnet of that. But I think as an organization, we've got some work to do around how we make sure that everybody's got, you know, the opportunity to make their homes greener because that's got an even more lasting impact, right?

Yeah.

Like, that's like permanent change for that individual that even if you move on from your organization, lasts forever. It's like a permanent change that's made, which is really attractive to me in terms of the impact that we can have as an organization.

Yeah. And I think what I'm noticing now, running a much larger business than a one-man band, £2,000 is easier to spend in a business than it is at home. But £2,000 in your home can actually do an awful lot.

Yeah.

And so if you have that mindset, then I don't know, rather than being frivolous with money within the business and just buying that, I don't know, that stupid coffee machine that you really didn't need, you could have saved yourself a load of money. You could actually put that money into new windows. or new front windows in someone's house that's triple-glazed and stuff. So I guess it's going to be fun to think like that as business.

Yeah, absolutely. And I think the benefit for organizations our size is that we can make those decisions without— you know, we can say, do you know what? We'll try that out and see, you know, how well it goes, what the impact is. But again, it's the permanent nature of that solution that's really attractive to me. That is the change. The money that you've invested is there for a significant amount of time. And that's— it's way easier than renting space in a building that's not necessarily that eco. And, you know, trying to backpedal and offset. If you can do that in somebody's home.

Yeah.

But that's not to say that I do think there's value in us all getting together and seeing each other. Totally.

It's so interesting to hear you talk about you're employing people around the UK because we've been employing people and we're based in Edinburgh and London and I've been kind of, right, we're still going to be employing people in London and still employing people in Edinburgh and I've opened it up to either Edinburgh or London. And the last time, the last person we were recruiting for, I did have a conversation with the team going, is this not ridiculous? Why don't we just employ people from all over the UK and then we could actually pay people to come and stay in a hotel 2 nights a month in either Edinburgh or London? Because wherever you are in the UK, you'll be. So therefore, because I do think that's— Working with people face to face is actually really important. And I don't want to have 30 people based in Edinburgh and London and one person based in Wales, and they would feel ostracized because those people would be getting together. And so it's that dynamics, and I don't know, it's just really hard. It's just really hard. Then you start going, well, if we're UK, why can't it be international? Does it really matter? And that was where my brain just went, oh my word, I've just got overload now.

No, But listen, I know, and it's a really interesting point, and I think that there's some roles that you can have in your organization that can actually work quite well remotely. And it really depends on the individual as well. If that individual actually, the value for them is that they want to work from home, that's the value exchange for them, is that that's a— then they will work super hard for you because for them personally, that working from home thing is really important.

Yeah.

So I think it's quite nuanced in terms of how it works. And it's the one thing that I'm trying to steer away from is going for that one-size-fits-all approach because it can actually work. And the other thing that I want to make sure is that our organization reflects the customers that we have. And our customers are from all over the UK. And I think that it's important that our organization reflects that.

Yeah, that's so true. That's so true. Is there any advice that you can give our listeners on, you know, with what it is that you do? And, you know, you've been growing your business and organization. You've come across some things that you've grappled with and you found hard to do. Is there any advice that you could give people?

Yeah, I mean, I think the best advice that somebody gave me at the start of this is that We were trying to do something that's pretty groundbreaking in terms of the impact methodology and all of the various things around the Big Exchange. And I think if you look at it at the highest level, it can be quite daunting. You think we're never going to be able to wrestle all these fund managers into the shape to do this, to unite around this one methodology and be able to take different shades of green funds and apply the same methodology. And I think for me, The biggest lesson around that is do it one step at a time. You know, don't look at it and think, crikey, that's absolutely overwhelming. How the hell are we going to do that? Look at all this data, look at all this information. I think just get it into bite-sized chunks. I think the way it was put to me is don't eat the elephant whole. And this was the way that somebody put it to me. I'm not sure if that's that great a way to put it, but that, that probably explains it quite well and visually.

Brilliant advice. Thank you. Well, Jill, thank you so much for being on today. It's been really, really interesting talking to you and understanding more about The Big Exchange and what it is that you're trying to do. Thank you.

You're very welcome. It was lovely to talk to you as well, Will. Thanks for listening to our Sustainable Business Podcast. If you want to learn more about sustainable business and talk to other like-minded professionals, Apply to join our online community at sustainabilitysolved.org. Join now and find a space for you to collaborate, learn, and inspire others to become more environmental. If you enjoyed this podcast, don't forget to follow Green Element on LinkedIn, Twitter, and Instagram.