Interview: Danny Benima and Michel Scholte

‘We need to translate broad social value into financial terms, which is the language people and businesses understand’

Danny Benima, CFO of Stedin Group

What is your impact on people and the planet? This question is increasingly important for businesses. CFO Danny Benima talks to Michel Scholte, a director of True Price and Impact Institute, about sustainability, leadership and the question of how do you measure and value your impact as a public social enterprise.

Danny: “When I joined Stedin in 2019, I was really struggling with that question. How do you measure your performance as a public social enterprise? Because what matters to Stedin is not just making money. What really matters is the impact you have on society; realising the energy transition, the contribution to sustainability, your social face as an employer, employee satisfaction, and so on. Until now, I find that the most complex aspect of my job. How do you handle that?”

Michel: “We consider factors such as our contribution to the development, distribution and application of new methods for measuring impact. But we also check, for example, whether our salaries are gender-equal. We translate our impact into financial value, because when it’s measurable you can action to improve it. In fact, it’s the same as what you do at Stedin. And we publish these methods via the Impact Economy Foundation.”

‘I have chosen to remain CFO’

“Sustainability is an important theme for us,” says Danny. “That is why it’s one of the preconditions for our Construction, Utilisation and Management strategy. I therefore consider it an honour to have been voted one of the Chief Value Officers of the year in 2023.

‘How can we give shape to the energy grid in a way that accords with everyone’s views?’

Michel Scholte, co-founder and executive director of True Price

I hesitated for a moment whether I should also change my job title to that of Chief Value Officer (a director who focuses not only on the financial, but also on the social impact), but have chosen to remain CFO. We need to translate broad social value into financial terms, which is after all the language that people and businesses understand.”

Michel: “I totally agree. Financials, bankers, accountants: they sometimes have little connection to society. That is a risk. We are not prioritising in the right way.”

Danny: “If I apply that to Stedin: the system decisions we are making at policy level are critical to the success of the energy transition. Take the principle that the polluter pays. I think that this principle should be leading, but that is not always the case now. As things stand, the parties that build solar or wind farms don’t always pay for the social costs they cause. On the other hand, you could argue that they facilitate renewable energy generation and are of value that way. It’s a complex issue.”

“At Stedin, we facilitate the energy transition,” Danny continues. “If we expand our grid a year ahead of schedule, that helps to make the Netherlands more sustainable. That is where our greatest added value to society lies. That being the case, how important is it for that acceleration to feature transformer kiosks with a green roof? The greater good is served by putting up kiosks as fast as possible. That is how we try to prioritise. By weighing up how to maximise our social impact.”

“The same goes for our electricity cables. Our preferred option is to use recycled copper. It’s more expensive, but circular. But the drawback is that those cables have more resistance, so you lose more electricity; a complex dilemma, because which is better in the end?”

‘We are capable of restoring the balance’

Michel: “At this stage, people have exploited nearly the entire planet. That we affect the climate by doing so is accidental. We are sort of like parasites. But it doesn’t mean we cannot change that: we are also capable of restoring the balance. You can also look at the example of the cables with that in mind.”

“If new copper is the best alternative because it has the least energy loss, you can decide to give something back to the world in another way. For example, by improving the living conditions of miners or contributing to nature conservation to offset your impact. If you do that, you are doing the right thing in my view,” says Michel.

Danny: “Do you think we have a good insight into that at Stedin?”

Michel: “Compared to the average company, yes, but compared to what is needed, no. That is the hard truth. You have to look at the maximum you can achieve. Stedin really steps up in helping to create the new economy. That is leadership. I think it’s okay not to judge your own shortcomings too harshly, as long as you are aware that you have them.”

Danny: “We are doing all we can to keep our CO2impact low. Our offices have rooftop solar panels, our cars are electric where possible, and we help colleagues make their homes more sustainable through interest-free loans. Yet we know that our impact is mainly in scopes 2 and 3, for example in the procurement of materials and in the network losses that occur when electricity is transmitted. Any company that does not include scopes 2 and 3 in its ESG strategy has got its priorities wrong in my view.”

‘Broad public support will help the energy transition’

Michel: “Unfortunately, we see a reactionary populist movement emerging worldwide, of which climate issues and the energy transition are the victims. Whereas having broad public support really helps the energy transition. That is why I strongly believe in public participation. How can we give shape to the energy grid in a way that matches with everyone’s views? Everyone should have a say in that.”

Danny: “I agree. Having said that, those democratic processes are causing delays at a time when we desperately need to accelerate. Take district electricity stations, for example. Stedin would like these to be as standard as possible, so that they can be installed as soon as possible. But residents increasingly want them to be in keeping with the district in terms of design, or don’t want a station in their street at all. We are happy to discuss these kinds of issues, but it will slow things down.”

Michel: “You just mentioned ‘the polluter pays’, but why can’t it be ‘the beneficiary pays’? In that case, people might end up with an ‘ugly’ station, but they would also receive financial compensation to help green their district, for example.”

Danny: “Nice idea. We can do more with that. Stedin’s top priorities are security of supply and affordability of the energy transition. If we have to customise everything and our energy demand continues to rise, the transition will become unaffordable. At the moment, Dutch people believe they have an unlimited right to energy, 24/7. If that absolute right is in danger of being curtailed, society will be up in arms. But I don’t see why we shouldn’t question that right. A round-the-clock right to energy can be guaranteed, but that comes with a price tag. Politicians in The Hague have not put this issue up for debate yet. We are already seeing a sharp rise in costs, and this will continue for the foreseeable future. I have noticed that politicians are unfortunately not telling the real story.”

Michel: “That’s right. I hope that as a society we will develop a stronger sense of the importance of sharing costs and benefits. That we will start to distribute costs and benefits more fairly. This starts with a strong sense of connection between people. In that respect, Stedin is a gem of a business, because you connect all layers of society. We need to see more in the way of that by public authorities as well.”