In this episode of the Circular Economy Show, Pippa speaks with JJ Freijo, Chief Sustainability and Product Innovation Officer at Brambles. JJ explains how the company rents, rather than sells, pallets, crates and containers, creating a continuous loop of reuse across global supply chains.
In this episode of the Circular Economy Show, Pippa speaks with JJ Freijo, Chief Sustainability and Product Innovation Officer at Brambles. JJ explains how the company rents, rather than sells, pallets, crates and containers, creating a continuous loop of reuse across global supply chains.
Having achieved 100% certified timber procurement across 64 countries, Brambles began asking a bolder question: what if supply chains could actively restore nature, rather than just reduce harm? JJ walks through their regenerative forestry project in Tabasco, Mexico, and makes the hard-nosed business case, from attracting top talent to deepening customer partnerships and opening doors with sustainability-focused investors.
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[00:00:00.000] - JJ Freijo
Frankly speaking, if you say, "Okay, would you love to work for a pallet company?" Probably, you will not attract the top talent from the top universities. Do you want to work for a company that is taking the next step for regeneration? Boom, suddenly you attract talent, suddenly you retain talent, and suddenly people are very proud.
[00:00:19.340] - Pippa
We know regenerative practice is good for the environment, but why is it also better for business? I'm Pippa, and today I'm joined by JJ Freijo, Chief Sustainability and Product Innovation Officer at Brambles, to hear why they're turning their circular ambitions to regenerative practices, and what that means for their team, their shareholders, and their customers. Welcome, JJ. Thank you for joining us on the Circular Economy Show. We're going to talk about regenerative business, but to begin with, can you describe a little bit about what Brambles actually does?
[00:00:53.720] - JJ Freijo
It's a pleasure to be here. You probably will like what Brambles does because the way I describe it, it is a company that it is dedicated to reduce waste. It is actually a circular economy company, and this is what we believe, at least. Let me describe what we do. We operate through different brands. The most important one is CHEP, and we provide packaging services. We don't sell any piece of packaging; we rent out packaging.
[00:01:23.080] - JJ Freijo
If someone in the supply chain wants to move their goods across along the whole supply chain, you have two options. You can buy a piece of packaging and probably dispose of it when you finish, or you can rent it from us, and then we will give it to you, you will put your products in it, it will move from manufacturers to distribution centre to retailer, and then we will collect it, repair it if needed, and make sure that another manufacturer maybe will use it. This is a circle. It is a continuous cycle of delivering pieces of packaging being used in the supply chain. Then we collect them, and then they are reused over and over again.
[00:02:03.220] - Pippa
When you talk about packaging, what kind of packaging do you offer?
[00:02:07.260] - JJ Freijo
It is pallets, crates, and containers. It is transport packaging or tertiary packaging. I would say that when it is described this way, it seems quite simple, but then you need to multiply this by some hundreds of millions of units that are moving today, as we speak, across the whole supply chain, and they will be reused tomorrow. This is why we believe we are a circular company. I think we are. We have been recognised by many different external organisations. Time magazine gave us the third most sustainable company in the world, and we are currently there in the top positions of Dow Jones, et cetera. This is who we are.
[00:02:49.720] - Pippa
I know you've been working with the Ellen MacArthur Foundation for many, many years. That's the circular economy side of it. Let's talk regenerative. You've started incorporating that into your business as part of the circular economy. Why is that?
[00:03:02.310] - JJ Freijo
For us, it was a natural next step in this journey of ambition that we had. Yes, we started with the circular business model, and we created a very strong sustainability program in 2010. For the first decade, we were dedicated to make our circular business model more circular. Every objective that you will see there, we contribute to that. What we were trying to do ultimately there is to reduce, reduce the environmental impact. If some waste is produced, we will try to reduce waste. If carbon emissions are produced, we will try to reduce those carbon emissions.
[00:03:42.520] - JJ Freijo
At some point around 2020, in some of our material areas, waste management, one of them, and forestry, very important, another one of them, then we discovered that we were very close, or we have reached already zero impact. For example, at the time we were procuring 100% of the timber that we buy across the world in 64 countries, certified, so producing zero deforestation. We have two options to say, Okay, this is what we achieve it, and then we relax, or continue with this ambition. When you reach zero impact in some of the areas, the natural next thing is to start regenerating.
[00:04:25.460] - JJ Freijo
Zero is not enough. We want to take care of the harm that has been done. We came with this idea, with this vision, which is to create a regenerative supply chain, not just our activities, but the supply chain where we operate. The way I describe it is that historically, supply chains have been working, consuming natural resources, and producing waste, lots of waste. We want to turn it around. What we want to do is to design and operate the supply chain that will consume existing waste and will regenerate with natural resources.
[00:05:02.080] - Pippa
That's a fantastic ambition, but the transportation system is complicated. You've talked about wanting to transform the supply chain. What does that actually look like in practice?
[00:05:13.020] - JJ Freijo
Well, if you want to make this a reality, first of all, you need to take it seriously. In order to do that, what we need is to take our material areas, the one of our program, and apply this lens. Okay, what does it mean to be regenerative in different aspects? What does it mean to be regenerative in carbon emissions? We are very far from there. It is to become a carbon sink in the whole supply chain. This is one of the objectives where we have this long-term vision, but it is a long-term thing.
[00:05:44.060] - JJ Freijo
In other areas, such as waste, it's not enough not to produce waste to landfill. It's taking care of the existing waste, for example, plastic that is already there that we have not produced, but we will upcycle and build our plastic pallets out of that existing waste. That is for us. In the social part, how can you be regenerative or net positive? That sometimes it is, sometimes it is an interchangeable term, not always. It's not about just fixing things at home, it's to try to have an impact in the whole society. It was quite challenging and exciting to apply this regenerative lens to everything, from the forest to the social aspect.
[00:06:23.730] - JJ Freijo
Then I go now, probably the most clear example is the forestry activities. After having 100% certified timber, producing no deforestation, we said, "Okay, how is it that we can do to regenerate ecosystem and habitats?" To do it from a business perspective, because we are a business, and the beauty of the circular economy is that it brings together nature, planet, and business. This is what we started with this objective to enable the growth of two trees for every tree that we use.
[00:06:59.340] - JJ Freijo
We started with projects in areas that were deforested in the past, that suffered deforestation, by creating sources of timber, new forests, new sources, new timber farms, new sources of timber that, on the one hand, we could use for our purposes, and on the other hand, it will restore and regenerate the ecosystem. We have two fantastic examples, one in South Africa and another one in Mexico, that I would love to explain or to tell you about it, if that's okay.
[00:07:28.260] - Pippa
Oh, yes, please. This is in Tabasco, I believe.
[00:07:33.380] - JJ Freijo
Yeah. For example, let's just start with Tabasco. Tabasco is in Mexico, of course. Mexico is an area where we could not buy, we could not procure certified timber. For us, this is non-negotiable. The timber that we use in our products needs to be… So we had to bring it from other places, Brazil, and other places. Tabasco is a state that was in the past; it was a forestry state, but it was deforested for different reasons. We came together with a coalition. This is not just about us, and this is the beauty of it. It's a coalition of different players, the Tabasco State, the landowners, FSC, the Certification Authority, universities, and many more.
[00:08:14.500] - JJ Freijo
We came together to start this project of replanting trees there. We did it in a way that produced a lot of benefits. First of all, it produced benefits very clearly for us because we could procure timber there, and at a cheaper price, rather than bringing it from another country. Also, the economic activities in the region started to go up. They had a piece of land that could not be used, and suddenly it is productive. I remember talking with the landowners there and telling me, "What I love about this project is that my children, that now they are working in Mexico or in Ireland, they are coming back to take care of this."
[00:09:00.000] - JJ Freijo
It was created there together with the University of Tabasco, and the state created a centre for forestry, employing PhDs and master's degrees to continue with this project. It is a social part as well, and hundreds of jobs. Then, of course, it is the biodiversity, the planet part, the nature part. New trees are growing, new habitats are being recreated. We are recreating there together with all these partners.
[00:09:30.430] - JJ Freijo
Again, I repeat, this is not about us. It's a common effect, a common project for many different players. These biodiversity corridors are being recreated, and animal species that were not there for decades are coming back. When you think about this, and economic benefits as well, when you think about this, it ticks all the boxes of what a regenerative project should be within a regenerative supply chain. For us, it is like a strong proof of concept that things can be done differently. Now, we will try to expand this idea to other parts of the world.
[00:10:07.340] - Pippa
That's fantastic. I think the other thing you haven't mentioned there is the pride that it must instil in everybody that's worked in the project, which must be really motivating for you and your team as well.
[00:10:17.860] - JJ Freijo
It is absolutely motivating for us, for the team. This is one of the things that create a lot of engagement within our people. People want to work for… They want to have good professional careers, but also they want to work for companies who are doing the right thing. It has a lot of benefits in terms of engagement of our own people. Frankly speaking, if you say, "Okay, would you love to work for a pallet company?" Probably, you will not attract the top talent from the top universities. Do you want to work for a company that is regenerating, that has a super good, almost perfect, I would say, circular business model? Allow me to be hyperbolic here. Also, it's taking the next step for regeneration.
[00:11:04.020] - JJ Freijo
Boom, suddenly you attract talent, suddenly you retain talent, and suddenly people are very proud. Not only that, as you were saying, it also creates for us a lot of opportunities to interact with different stakeholders across the whole supply chain, the governments, the suppliers, the landowners, the certifications. You have different customers, of course. You have different kinds of conversations with them. For us, the experience brought... It is complex, but it brought nothing but benefits.
[00:11:34.600] - Pippa
Let's talk about some of the business benefits of that because you've talked about the benefits to nature, to the local economy, to team morale. What are you seeing at the business end from this work?
[00:11:46.300] - JJ Freijo
I think when you build a good sustainability program, you really need to keep in mind what is the business benefit? Obviously, you need to do what is right for the planet and for the society. To my team, I always say, "Okay, but how do we make our business stronger with that?" That is a very valid question. You need to bring… That is the beauty of the circular economy concept. It's not just wishful thinking; it is reality, and it's bringing those things together.
[00:12:12.990] - JJ Freijo
For us, if you take our typical three stakeholder groups, shareholders, for example, or investors. There are many, many funds out there that are looking for companies that are financially viable, but also that they excel in the sustainability space. We have lots of conversations with analysts, with investors, with funds that have us in their portfolio because of our unique sustainability credentials and our regenerative ambition. We are part of the circular economy portfolio of some investors, or even regenerative in nature, from some investors. That is always, of course, as you can imagine, that makes the board and the CEO very happy.
[00:12:52.220] - JJ Freijo
Then we talk about employees, and I will repeat it. For me here, the secret recipe is to make it relevant for every employee, and every employee can live and breathe this, but also every employee can contribute from, obviously, procurement, as I described, with timber, etc. Even treasury, finance. How could you… Well, in finance, there are instruments like a green bond or sustainability-linked loan that can take benefits of this. They also put pressure on us to be more sustainable. What we have done is to try to create that space. The vision is that we are not there, but we are trying to do that, that ultimately every employee can contribute actively to our sustainability program.
[00:13:41.860] - JJ Freijo
Finally, I would say customers. Customers have their own sustainability programs, and they want their suppliers to do the right thing, to bring no risk into their supply chains, but also to make them more sustainable. If they have objectives on sustainable timber, voilà, we're here with sustainable materials. If they have objectives on carbon emissions reductions, we reduce our own emissions, and we can give them a certificate that they can use for their own measurements. Again, it is very important. For us, this value creation question is not something that happens at the end of the thought process. It's something that happens at the very beginning when we are creating the program, the material areas, and the specific targets.
[00:14:26.500] - Pippa
What do you hear from those customers when you're putting all this work at the back-end, and then they come to you? What conversations are you having around that?
[00:14:34.460] - JJ Freijo
Suddenly, you have very different conversations. Obviously, you will always have conversations on cost and quality, et cetera. If you want to be a partner, and I think today every supplier wants to be a partner, if they are smart enough, of their customers, probably you want to have a different conversation. You move from being just a transactional supplier to be a partner in something that is important for them as well. Then you can start collaboration projects. Then our customers come to us and say, "Hey, I have all this plastic waste. I don't know what to do with it. Can you maybe use it for the platforms that then I will reuse in a closed-loop thing?"
[00:15:13.680] - JJ Freijo
That is a fascinating conversation or how we can collaborate in transportation. I send goods in one direction, and sometimes you move your pallets in the opposite direction. Why don't we do it together? We reduce costs because we eliminate empty lanes and also we both reduce our carbon emissions. Ultimately, what they love and like is that we can bring factual data for them to demonstrate that by using us with our partnerships, they are being more sustainable, and they are achieving their own sustainability targets.
[00:15:49.760] - Pippa
You've painted this utopia of the circular economy and regenerative business practices. I wonder what challenges you came up along the way because it must have been complicated. There must have been some things you had to overcome.
[00:16:02.500] - JJ Freijo
I think there's a few things, and this is part of our story, but also I think this is our recommendation for everyone who's trying to start a world-class sustainability program. First of all, you need to bring everyone on board. You need to bring the whole organisation on board. If you have the right vision, if you have the right utopia, this utopian vision and mission, probably everyone will know, but you need to demonstrate business value to make sustainability sustainable. Everyone is dedicating time and effort. No company today has infinite resources, so you want to dedicate your resources to sustainability.
[00:16:48.200] - JJ Freijo
Again, the business value is something, and when we started to demonstrate that, then the whole organisation immediately followed at all levels. If you are taking the brave or innovative or pioneering steps in some of these areas, such as the circular economy in the past and now regeneration, well, sometimes you don't have many other companies, or you don't have any other methodologies to get inspired. That is the reality because no one is doing that. Sometimes, even when we started with regeneration, there is not a clear definition of what regeneration is in practice. There is not a clear definition.
[00:17:26.960] - JJ Freijo
I mentioned before how you apply the concept of regeneration to different aspects, but this is something that we did it ourselves, checking with different experts. We didn't have a handbook of regeneration. That is still not written in the way a company needs. Even the measurement systems. The measurement systems are not available. We are creating measurement systems for these things. For example, we thought at the beginning that to measure regeneration, two trees for every tree that we use was a good KPI. Then we said, "This is not about the tree. It's more complex than that. It is the tree, it is the plant, it is the different ecosystems, it is the communities."
[00:18:09.360] - JJ Freijo
We moved from trees, for example, to measure hectares in a way that we can demonstrate and it's consistent. Measurement systems every company will tell you today that measuring carbon emissions is a bit of a nightmare, scope three still. We've been measuring carbon emissions for 30 years or 35 years. We are starting here. That is the challenge. The last one that I would say, this is quite complex, but also the price is very big, is that if you want to do something that really matters, if you want to do something that is really regenerative, you cannot do it alone.
[00:18:49.630] - JJ Freijo
You need to do it in collaboration across a big portion of the supply chain. I was mentioning Tabasco before, for example, and that is complex. That is complex because you need to bring together different groups with different interests, and build that community of action. That is challenging, but at the same time, it's very rewarding.
[00:19:11.180] - Pippa
It sounds like it. It's a bit like the tree. You can't stand alone. You need the rest of the ecosystem to come along with you. You have done so much already, but I wonder, just to finish off, what do you want to do next? What's happening with Brambles and CHEP?
[00:19:25.200] - JJ Freijo
We just started the journey to regeneration. I want to be very clear. This concept of a regenerative supply chain, it is a vision. I will not claim today that we have a regenerative supply chain. We are building the proof of concepts and the pilots and the initiatives that will eventually produce this regenerative supply chain in operation. For us, the path is very clear. Continue making this vision a reality. Hopefully, we will do it soon in the next decade. For me, it will be great if also along the way, we inspire other people to also take this regenerative vision and make it a reality as well. If we do that, we will be extremely happy.
[00:20:14.660] - Pippa
JJ, I'm excited to see what happens and to see what happens with the regeneration as well. Thank you so much for joining us today and for sharing your story. Thanks for listening to this episode of the Circular Economy Show from the Ellen MacArthur Foundation. If you enjoyed it, why not share it with a colleague? If you have a story about how you're incorporating regenerative practices into your own business, tell us about it in the comments on YouTube or Spotify. We'll see you next time.