Good Governance:
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Corporate governance – part of the G in ESG – is now uppermost in the minds of company directors, both through government regulation and investor expectation. So, no pressure then on Ray Cahill, director of corporate governance for the Associated British Foods group of companies.
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Introduction: Adrian Clough
When I wrote my welcome message for the 2019 edition of Alumni Matters, I can have had no inkling of how subsequent events would unfold around the world, and that it would not prove possible to issue a 2020 edition. We are very pleased that Alumni Matters is now back in your inbox!
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A key goal of mine as Chair and Senior Partner is to further strengthen our sense of connection across our firm.
Plating up
Digging into the drivers of food industry innovation
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Persistant Pioneer
She may baulk at the suggestion of being a trail-blazer, but Helen Wright smashed ceilings at a time when others were still dreaming of the possibility. The former chair of Screen NSW had a stellar 22-year tenure at Herbert Smith Freehills when single mothers were a rarity in the profession.
HELEN WRIGHT
ESG ALUMNI
We were interested in how ESG is impacting our alumni, their sectors and professions – the results are in.
From the senior partner
Rochelle Eades - Pioneer at BET Vodka
A view from Minneapolis
Pro bono work is integral to Herbert Smith Freehills (HSF) services, and most of the firm’s lawyers gain considerable...
Working together for the greater good
What inspired Natacha to become a lawyer?
12 QUESTIONS WITH...NATACHA HEFFINCK
After a stint in Herbert Smith Freehill's Australian business, Khoa Pham found his perfect role in a Singapore start-up targeting Asia's booming micromobility sector.
Making City Life Beam
After working in Herbert Smith Freehills' Brisbane arm, Holli Sargeant is studying for a PhD at Cambridge on the intersection between AI, government and business.
The right to know
Herbert Smith Freehills' chief Justin D'Agostino sets out how a leading law firm can drive the ESG agenda forwards.
A Law Firm’s Role In Advancing ESG
While alumni events have been on hold during the pandemic, see a snapshot of new hobbies...
Eighteen months on…
We asked our four managing partners for their book or podcast recommendations.
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Positive Impacts
SURVEY 2021
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Aaron White and Lena Naris
WHY I CAME BACK
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There is no doubt that the global food industry is evolving at a rapid pace. This doesn’t simply refer to the remarkable rise of food delivery services in developed countries.
Lauren Lee and Paul Christensen have very different businesses – one selling Korean skincare products and the other providing a fintech solution to transform B2B payments. Their legal backgrounds have proved their worth time and time again as each seeks to reach global markets.
ESG has moved from corporate platitude to boardroom imperative in recent years.
Big issue, big business
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+ INTRODUCTION
ADRIAN CLOUGH
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+ PLATING UP
THE DRIVERS OF FOOD INDUSTRY INNOVATION
+ GOOD GOVERNANCE: POSITIVE IMPACTS
RAY CAHILL
+ FROM LAWYER TO FOUNDER
Lauren Lee and Paul Christensen
+ ESG ALUMNI SURVEY 2021
THE RESULTS ARE IN
Of course, Alumni Matters is not the only part of our programme to have been disrupted by the pandemic. One of the most noticeable things about this edition is the sad absence of photos from reunion events around the world. We have missed seeing you, and we hope that, at least in some parts of the network, it will be possible for us to recommence events before too much longer. Time will tell. In the meantime, I’m happy to say that the alumni team has been finding some creative ways to keep us all in touch virtually, from webinars showcasing the work of some of our amazing alumni to virtual social events, and happily the Alumni News emails have continued to appear both globally and regionally. The pandemic has also given us some useful thinking time to consider how we can continue to improve the value of the network for both alumni and those currently at the firm. The theme of this year’s magazine is Environmental, Social and Governance (ESG). As ESG has moved from corporate platitude to boardroom imperative in recent years, we are delighted to feature a hugely impressive range of Herbert Smith Freehills alumni, each of whom offers their own perspective on the significance of ESG issues for their business. Ray Cahill, our cover profile, describes the growing impact of regulation on corporate governance, and explains how it offers opportunities for better decision making. Helen Wright has overcome numerous professional barriers during her career, and demonstrates the importance of the firm’s focus on diversity and inclusion. Minimising harmful impact on the environment is key to the businesses of Rochelle Eades, distilling vodka in Minneapolis, Lauren Lee, making beauty products in Korea and Khoa Pham, encouraging people to get out of their cars into electric vehicles in Asia and increasingly elsewhere. Paul Christensen is at the forefront of new technology applications, in his case to help small business suppliers around the world get paid more quickly than is now the case for many of them. Elsewhere, we feature Holli Sargeant, who is researching the growing impact of artificial intelligence on decisions in the financial services sector. Natacha Heffinck explains how ESG is built into the investment decisions of the Global Fund, which invests US$4 billion a year to defeat HIV, TB and malaria. Finally, we welcome Aaron White and Lena Naris back to the Herbert Smith Freehills fold. We hope you enjoy reading our alumni stories. The positive way in which both current and former members of the firm have responded to their lives being turned upside down continually inspires us. Let us all hope that by the time I come to write next year’s welcome we are all in a much better place, and that we have returned to what the Alumni Network is best at, bringing the HSF family together ‘in real life’. In the meantime, we send our best wishes to you and your families for the year ahead.
Good governance:
Corporate governance – part of the G in ESG – is now uppermost in the minds of company directors, both through regulation and investor expectation. So, no pressure then on Ray Cahill, director of corporate governance for the Associated British Foods group of companies, which operates in 53 countries and includes more than 40 brands with revenues of around £14 billion.
ABF, or Associated British Foods plc to give the company its full title, operates several businesses, ranging from grocery food products (such as Kingsmill bread, Silver Spoon and Billington’s sugar, Ovaltine, Twinings tea, Jordans and Dorset Cereals, Ryvita, and Patak’s sauces and pastes), sugar manufacturing (with more than 25 plants around the world), retail (Primark, which now accounts for about half the group’s turnover), ingredients (yeast, bakery and specialty ingredients), and agriculture (animal feed and nutrition). What makes the company unusual is that, while Associated British Foods is a public company whose shares are traded on the London Stock Exchange, the majority shareholding is ultimately owned by a charitable foundation. Many of the dividends get redistributed to UK charities. That sits neatly with the company management’s desire to operate a sustainable businesses for the long term. As George Weston, the CEO, put it recently, “We don’t just plan ahead in years, we plan in decades.” For Ray Cahill, who joined ABF as senior legal counsel in 2012 and became director of corporate governance in December 2020, that long-term approach is what he most likes about working for the company. “The company’s culture is to do the right thing whilst fulfilling its purpose of providing safe, nutritious, affordable food and clothing that is great value for money. That makes it eminently satisfying and makes my job slightly easier.”
We don’t just plan ahead in years, we plan in decades.
Satisfying, but also, for someone heading up the group company secretariat with ultimate responsibility for how the group companies are governed, challenging, not least for having to guide them on making sure the wealth of corporate governance regulations in many jurisdictions are complied with. In the UK, these regulations include the all-important Section 172 statement, which imposes on directors an obligation to report on how regard has been had to stakeholders’ views in respect of decisions that have been taken in the interests of the company. The company’s stakeholders include employees, suppliers, customers/consumers, communities and the environment, shareholders and governments. Just as well the lawyer in him is not daunted by the thicket of regulations. Ray and his team take on the responsibility for helping the group companies comply with these governance regulations, but they also do seek outside advice – including from Herbert Smith Freehills – on some matters. These are often on questions of judgement on how to apply the regulations. As Ray says, “I do seek outside guidance to see whether what we do meets and is proportionate to the requirements of the regulations, and that is difficult because the regulations are not always clear. A lot of the legislation is highly technical.” Despite the complexities and challenges, Ray is in favour of having these types of regulations. “I don’t think that there’s any doubt that increased regulation in this area puts greater focus on the systems and processes in place. This isn’t necessarily a bad thing as it’s always good to look at how you can improve things and make them more efficient. But I also think it’s important that the regulatory requirements are clear. It does strike me, having only recently come into this field, that even just interpreting which rules apply to which companies feels unnecessarily technical and complex and the different requirements are not necessarily joined-up. It shouldn’t be regulation for regulation’s sake or a knee-jerk reaction to things that have gone wrong (especially where there are already enforcement mechanisms in place which could be used to address this). “The ‘comply or explain’ method of the UK Corporate Governance Code strikes me as quite a good model. The challenge for companies is making sure they don’t see the process as a ‘tick the box’ exercise, but rather as an opportunity to improve how they do things.”
Whatever the regulations, ABF strongly believes in good corporate governance as a matter of best business practice and in keeping with the group’s culture. The aim is to operate a sustainable business, delivering steady growth for investors over the long term while making a positive impact on the communities in which the businesses operate. As Ray describes it, “For quite a lot of what’s required you take a look and think – we do that already because it’s the right thing to do, we’re not doing it because it’s a governance requirement. For example, when our businesses talk to customers or suppliers and listen to their views, they’re not doing it because the legislation says directors need to have regard to stakeholders such as customers and suppliers, they’re doing it because it makes good business sense.” There are various examples of how the group maintains a strong social purpose. These include: the Twinings ‘Sourced with Care’ programme, which aims to improve quality of life in the communities from which it sources around the world, the Primark Sustainable Cotton Programme, which works directly with farmers to grow more sustainably farmed and traceable cotton, the ‘Primark Cares’ initiative, which reflects growing consumer demand for products made using more sustainable materials, and Primark’s in-store recycling scheme in the UK allowing customers to recycle preworn and used clothing, textiles, footwear and bags from any brand. The company was certainly tested during the pandemic. On the downside, all Primark shops were closed for a period of several months resulting in lost sales of approximately £650 million for every month that all stores were closed with knock-on impacts on stakeholders such as customers, suppliers and governments. Against that, the sudden interest to take up baking as people were confined to their homes led to soaring demand for flour and baking ingredients. So far as regulatory commitments were concerned, the group was under expectations to report on why certain decisions were taken and how stakeholder views were taken into account. For Ray and his team, another particular challenge resulting from lockdown was ensuring the smooth operation of board meetings and the compliant sign-off of all accounts (of which there are more than 100 in the UK alone) and company paperwork. He set up a system of e-signatures which enabled all that to happen. “We had been thinking of how we could use technology to make these processes more efficient, and the pandemic gave some extra impetus to actually put things into practice.” He is aiming to take the process a step further even as the pandemic eases and people return to work, with use of software filing of accounts and improving functionality and cost-effectiveness of the directors’ governance portal set up by his team.
Ray joined Herbert Smith Freehills as a trainee in 1997, having studied law with European law at university. As a German speaker, he was placed with a German lawyer during his first seat and spent his final seat in the firm’s Brussels office, which sparked his interest in competition law. Competition law, and competition law litigation, appealed to him because “I really liked the fact that you had to understand clients’ businesses, the business of their competitors and the market dynamics generally.” He qualified into the Competition, Regulation and Trade team in 1999. It was in this capacity that Ray first came into contact with ABF, a client of the firm. He advised on the merger control aspects on several acquisitions the group was making over several years, including the 2002 acquisition of Ovaltine from Novartis. Following a secondment to the group, Ray joined ABF full-time in 2012 with a focus on competition law. The more involved he became with the company, the more he realised that an in-house role would suit him well.
I look at governance across the businesses and see how it can be improved, especially through better use of technology, how we can mitigate risks and help the businesses to operate as efficiently as possible.
I was doing a lot of anti-bribery and corruption training for our businesses, including meeting suppliers in India and Bangladesh.
In 2014 an opportunity came up for Ray to go to Sydney to cover the group’s activities in Asia Pacific, both to advise on competition law but also on anti-bribery and corruption. That was an eye-opening experience for Ray, involving visiting factories and suppliers across the region to ensure that they operated to the highest standards. “That was when I first came across the Primark ethical trading team and all the work they do auditing and inspecting factories,” Ray says. “I was doing a lot of anti-bribery and corruption training for our businesses, including meeting suppliers in India and Bangladesh. There was no legal requirement for ABF to pay for a senior lawyer to go around Asia training people, but they did, which told me a lot about this company.” It also provided a career development step for Ray to move into the corporate governance role. So, why does Ray enjoy his current role? “I look at governance across the businesses and see how it can be improved, especially through better use of technology, how we can mitigate risks and help the businesses to operate as efficiently as possible. The lawyer in me takes pride in simplifying the myriad of requirements and guiding them on how to meet them. I also work very closely with a great group of people both from my own team and from other functions within ABF, including our group corporate responsibility team, audit team, finance and accounting team, and, of course, our legal team. “From a personal point of view, I am a firm advocate of good corporate governance, not just because it is the right thing to do but also because governance seeks to put in place processes to ensure that decisions are being taken by the right people on the basis of the best information available. That makes for better decision making from a business perspective and also provides protection for the decision makers.” When not working or spending time with his wife and two teenage daughters getting used to life back in London since moving back from Sydney in 2019, Ray focuses his attention on the strings of his guitar, as the guitarist in a band called St. Roller (they were called Stroller but had to change it when they discovered someone else was using that name). Readers are strongly advised to listen to their song, Medicine, available on all good streaming platforms!
Ray at a Vietnam yeast plant
The ABF 2020 Annual General Meeting in December 2020 needed to be “closed door” because of COVID restrictions so a set was built and the meeting broadcast to shareholders from the company’s offices
Ray Cahill - Alumnus of London and Brussels offices 1999 – 2012
ESG ALUMNI SURVEY 2021
Q1. WHICH ESG FACTOR POSES THE BIGGEST RISK TO YOUR BUSINESS?
Q2. HAVE ESG FACTORS INFLUENCED YOUR RELATIONSHIP WITH STAKEHOLDERS?
Q3. WHICH ESG-RELATED RISK TO YOUR ORGANISATION IS THE MOST SIGNIFICANT?
Q4. DOES YOUR ORGANISATION ROUTINELY MEASURE ESG-RELATED DATA?
Q5. HAS YOUR ORGANISATION MADE ANY PUBLIC COMMITMENTS TO ESG STANDARDS OR TARGETS? (FOR EXAMPLE, COMMITMENT TO NET ZERO, COMMITMENTS OR POLICIES RELATING TO HUMAN RIGHTS AND MODERN SLAVERY, PARTICIPATION IN THE UN GLOBAL COMPACT, ETC) IF YES, HOW DOES THIS MAKE YOU FEEL?
+ ARTICLES
+ FEATURES
FEATURES
ARTICLES
+ FROM THE SENIOR PARTNER
REBECCA maslen-stannage
+ A VIEW FROM MINNEAPOLIS
Rochelle Eades
+ WHY I CAME BACK
AaroN White and Lena Naris
+ WORKING TOGETHER FOR THE GREATER GOOD
+ BEAM: MAKING CITY LIFE
Khoa Pham
+ 12 QUESTIONS WITH...
NATACHA HEFFINCK
+ THE RIGHT TO KNOW
Holli Sargeant
+ A LAW FIRM’S ROLE IN ADVANCING ESG
JUSTIN D'AGOSTINO
+ EIGHTEEN MONTHS ON…
+ WHAT ARE YOU READING?
THE RESULTS ARE IN NATACHA HEFFINCK
+ BiG ISSUE, BIG BUSINESS
53%
Corporate culture and conduct
35%
Climate change
3%
Human rights
10%
Other
33%
Yes - a positive impact
No - stayed the same
Yes - a negative impact
6%
62%
66%
8%
5%
13%
Reputational damage
Regulatory sanctions
Share-price impact
Litigation risk
Definitely not
14%
Probably not
Might or might not
Probably yes
Definitely yes
12%
15%
19%
42%
Makes me feel more engaged and proud to work for a company that cares
They're just targets, we need to see real change
Neutral
23%
7%
Persistent pioneer
With a throaty chuckle, Helen Wright dismisses any idea of being a pioneer. But joining the legacy Freehill Hollingdale & Page in 1980 as a single mother of two was hardly the norm. Indeed, she says she picked the law firm as it was the only top one at the time to have a female partner and she had always assumed she would rise to the pinnacle of the profession. “I usually come out pretty much on top of whatever I do,” she says with another laugh and not a hint of false modesty. Her rise through the law firm included some significant milestones – a notable early one was working on the Darwin Sheraton alongside Bruce Cutler, prior to him becoming managing partner. She remembers the experience as being her first sight of integrity in a law firm, when Cutler responded to a proposal put to a meeting with the simple words “that would be a fraud on the revenue… we would not act”. She also remembers acting for Qantas when the airports were privatised and Sydney was bought by Macquarie Bank. “It was my first off-balance sheet financing, so a bit demanding,” she says. “Some years later the then executives called me to a meeting at Mascot and complained ‘the rent is too high’. I had to explain that it wasn’t just rent: they were repaying a $30 million loan and getting a deduction.
I used to say to my young female solicitor, ‘Stop saying sorry. The boys never say sorry...
“Had they asked me over the phone,” she adds, “I could have told them in five minutes for no charge, but now I had to charge for two taxis and an hour of my time.” A typical moment was the tenacity she showed when setting up ING Bank in Australia. ING would only accept deposits from existing bank accounts and would only pay out to the same, so Helen argued that the three-point check for establishing an account was unnecessary, as the accounts involved would have already passed the check. The client told her, “You are the only lawyer I have ever known who has said, ‘I’m right, they’re wrong, we will get you there’,” she recalls Now in her late seventies, Helen still shows every sign of that same indomitable spirit, dyed-in-the-wool pragmatism and healthy attitude to the vicissitudes of life. Currently, she’s as busy as ever, not just with her personal business affairs, but also as the only lawyer on the residents’ committee of the Paddington retirement village where she now lives. She had a good grounding for her approach to life, she says. Her father was invalided out of France during the Great War and was never the happiest of men after that. Even today Helen remembers him telling everyone at a family gathering, “You only have children to support you in your old age”. Fortunately, Helen had another role model to help form her character and backbone. “Our mother was just wonderful,” she says. “How she kept her sense of humour throughout that marriage I will never understand. Robert (three and a quarter years younger) and I laughed ‘til it hurt as children.”
She learned resilience at home, especially when a change in financial circumstances saw the family move from the Parkes hotel her father owned to a Coogee flat, where her mother had to learn to cook for the first time. This was compounded at the age of six, with her first unjustified belting at Belmore Catholic School in front of the whole class and the parish priest. Showing remarkable gumption, despite the public corporal punishment, young Helen still refused to admit to being the source of a comment that was later reported to the principal. “I had said it, but I was repeating it with amazement to another girl on the bench,” she recalls. Not all the nuns were horrors, and some of them are not only fondly remembered to this day, but also bestowed the odd great teaching moment. There was Sister Irenaeus who, instead of accepting Helen’s proffered return of the Good Conduct medal she’d been awarded in her first year of high school when it was discovered that she’d organised a midnight feast in the nuns’ chapel, simply said, “Keep it, and live up to it.” Talking to Helen now, it’s apparent she took this advice to heart. Her life and career have been characterised by a dedication to not just her legal career (true to form, it took her only five years to make partner) but to a wide range of boards and charities. She spent seven years on the board of the Australia Day Council of New South Wales, and the following four on the advisory board of the Little Company of Mary (Calvary Hospitals). There were also, among other things, 13 years on the board of a public listed company, and several statutory appointments, including 10 years as The Tribunal – SOORT – in which role she set the salaries of the NSW Supreme Court and judiciary, and the Senior Executive Service of NSW. She was also one of only two partners who used their sabbatical to attend the Harvard Business School Advanced Management Program. She says, “I think we learned more from each other than we did from the faculty. And several of us are still friends – I organised a reunion in Paris three years ago; about 20 of us came from all around the world, and we so much enjoyed seeing each other again.” Recalling her formative school years, she once acted pro bono for the nuns of Lewisham Hospital when they were privatising. “The nuns were personally liable because they had never incorporated,” she says. The proposal would have put all of the nuns’ assets into a company to make that liable, but it was Helen who realised the remaining nuns were being overlooked. When she recommended enough should be saved for the sisters to live out their lives comfortably, she was met with resistance and cries of ‘no, that looks bad’. But Helen dug in and the nuns were protected. “I had to fight for that…” she says. She didn’t always have the courage to stand up for her beliefs, however, and recalls an experience in 1973, listening to a priest in a North Sydney church “railing from the pulpit about women’s shelters breaking up marriages”. Heavily pregnant and with a one-year-old in tow, her blood boiled. “Had I been then what I am now, I would have stood up and said, ‘Father, I’m not listening to this any longer. Why don’t you speak to the men who are causing their wives and children to have to seek shelter and anybody, man or woman, who agrees with me should walk out now.’ I didn’t do it and I still regret it,” she says.
Happily, the story doesn’t end there. “Forty years later, that parish donated a magnificent property as a women’s shelter,” says Helen. The property is now Mary’s House, a charity she’s been very glad to support. Although she may not like to admit it, Helen has clearly been an integral part of the gains that women have made over the last few decades. She may not have been waving any flags, but she’s certainly led by example. A few months after she joined the Property and Development Group on her first rotation after a year in Commercial, she noticed she was being kept off ‘the big stuff’ and quickly queried this. "My supervising partner said, ‘But you’ve got children, you’ve got to go home’,” she recalls. Helen’s response? “You can forget that. I want to do whatever is available to be learned and done.” And that was that. The ‘big stuff’ came her way “I think they were ahead of their time,” she says now. “They seemed to be very upfront in diversity, not only gender diversity, but racial. A lot of the others were very white Anglo-Saxon and blokey.” She simply loved law right from the start. “I just thought, ‘this is about reasoning: this is what I want to do’. The kids were fine and I always made sure they had someone nice to look after them after school. And on weekends when I did not have to work, we sailed a 40-footer up the coast on Friday nights and spent the weekend – kids and dog – on the lovely waters of Pittwater.” With a love of reasoning, her areas of expertise included tax, equity and property law – the latter she describes as a mixture of very ancient English common law and overriding legislation. “It can take some serious reasoning to make the two come together,” she says. Her approach was to put her head down and “just get on with it”. The key was to know her stuff and, above all, believe in her own abilities. “I used to say to my young female solicitor, ‘Stop saying sorry. The boys never say sorry...”
Helen Wright - Alumna of Sydney office 1986 – 2003
Happily, the story doesn’t end there. “Forty years later, that parish donated a magnificent property as a women’s shelter,” says Helen. The property is now Mary’s House, a charity she’s been very glad to support. Although she may not like to admit it, Helen has clearly been an integral part of the gains that women have made over the last few decades. She may not have been waving any flags, but she’s certainly led by example. A few months after she joined the Property and Development Group on her first rotation after a year in Commercial, she noticed she was being kept off ‘the big stuff’ and quickly queried this. “Peter Carney said, ‘But you’ve got children, you’ve got to go home’,” she recalls. Helen’s response? “You can forget that. I want to do whatever is available to be learned and done.” And that was that. The ‘big stuff’ came her way “I think they were ahead of their time,” she says now. “They seemed to be very upfront in diversity, not only gender diversity, but racial. A lot of the others were very white Anglo-Saxon and blokey.” She simply loved law right from the start. “I just thought, ‘this is about reasoning: this is what I want to do’. The kids were fine and I always made sure they had someone nice to look after them after school. And on weekends when I did not have to work, we sailed a 40-footer up the coast on Friday nights and spent the weekend – kids and dog – on the lovely waters of Pittwater.” With a love of reasoning, her areas of expertise included tax, equity and property law – the latter she describes as a mixture of very ancient English common law and overriding legislation. “It can take some serious reasoning to make the two come together,” she says. Her approach was to put her head down and “just get on with it”. The key was to know her stuff and, above all, believe in her own abilities. “I used to say to my young female solicitor, ‘Stop saying sorry. The boys never say sorry...”
Helen with Former Australian Prime Minister, Gough Whitlam
Plating UP
Because, while it’s true the way we access our food has changed, it’s the actual content of that food that has begun the most radical evolution, spurred on by innovation in the food industry. And there are many reasons for this. Over the last decade there has been a move towards sustainable proteins, a move driven fundamentally by climate change, but also by education, the food preferences of Millennials, animal rights, food safety concerns, evolving palates and, more recently, specific events like the coronavirus crisis, which is currently having an impact on perishable Australian food exports to China, but could have more serious ramifications in the future.
Essentially livestock is a really significant contributor to climate change; it’s one of the main drivers.
A huge driver, however, is climate change. Louise Kruger, senior associate at Herbert Smith Freehills, Brisbane, points to the findings of the Food and Agricultural Organisation (FAO) of the United Nations, which works to assist countries “improve policy coherence to achieve national agricultural objectives”. Over the last decade the FAO has expanded its climate change portfolio in response to growing demand, instigating over 300 programmes between 2009 and 2017 alone aimed at addressing problems caused by climate variability and extreme conditions in the various agriculture sectors. One such challenge is the inability to grow traditional crops, says Silke Goldberg, partner at Herbert Smith Freehills, London. Silke talks of a European sugar producer that is no longer able to source its traditional sugar cane. Drought in African and, conversely, increased rainfall in European areas have made the crop untenable. The producer has been forced to diversify their supply chain and try growing European sugar beet instead. This, naturally, has a flow-on effect on everything from taste to different price points. Louise believes that this is merely an indication of the way the industry is heading and that Western populations, at least, will have to adapt their diets. “At some point, it won’t be a choice, it’ll be something that’s pushed onto people,” she says. Addressing climate change means also addressing food production supply chains that contribute to it and this entails moving away from diets with a heavy reliance on meat. “Essentially livestock is a really significant contributor to climate change; it’s one of the main drivers,” says Louise. This is borne out by the FAO’s findings, which calculate a fifth of the world’s greenhouse gas emissions (GHG) are being generated by agriculture, including forestry, fisheries and livestock production. The FAO says it is imperative to reduce this by 2030 to achieve the target of limiting global warming to two degrees Celsius.
Linked to climate change is another environmental issue – sustainability. An important influence in changing food consumption patterns is increased awareness of the ongoing impact of the agricultural industry on the planet. This means greater consideration of food miles and an increased preference for locally sourced goods, says Silke. Reflecting on the sugarcane/sugar beet situation, she asks, “Is there an alternative that’s closer or an equivalent that can be sourced more sustainably? Customers are interested in this. We all know about fair trade, but sustainably traded food is becoming increasingly important in this context.” Louise prefers the term ‘alternative proteins’ to ‘sustainable proteins’ as “you can still have sustainable animal-based proteins,” she says, but notes that there is a generational influence at work here too. “A lot of commentary focuses on Millennials and their healthy plant-based eating that’s driving some of the change.” She also notes the rising awareness of food security concerns, with high-profile outbreaks of salmonella or alarm over antibiotic and growth hormone use in livestock prompting an aversion to mainstream agricultural practices. Raising livestock impacts the environment in other ways as it has such a high use of water – water that is ever more scarce in drought-plagued areas like much of inland Queensland and New South Wales in 2018 and beyond. Then there is the deforestation that results from land clearing for grazing.
There is no doubt that the global food industry is evolving at a rapid pace. This doesn’t simply refer to the remarkable rise of food delivery services in developed countries across the world and how in cities across the developed world it’s almost impossible to cross the road without dodging a swathe of cyclists branded with the logos of companies like Deliveroo, Menulog, UberEats and their ilk. Nor is this about the noticeable upsurge in readymade meals lining supermarket shelves to also service the time-poor and/or those unable or unwilling to cook for themselves.
The result is a move to the mainstream for vegetarian and veganbased products. While the take-up may not be so widespread yet, Louise points to the number of household brands that have dipped their toes in the water as evidence of the growing trend. “It’s mainstream in the sense that major players like Nestlé now have a whole vegan range,” she says, while adding the caveat that there remains some scepticism. “People are uncertain about any health benefits. There’s the idea that you have to have red meat.” She also believes that the big names in the fast food industry have been forced to address concerns over where and how they source their food. “They have a real reputational risk if they don’t move to more sustainable farming,” she says. Louise warns of the ‘Blackfish effect’, citing the 2013 documentary about a Seaworld orca, which led to a controversy regarding captive killer whales and a subsequent $15.9 million loss for Seaworld, which was in part attributed to ticket prices and other reasons by the company’s CEO, Jim Atchinson. And alongside Blackfish, there have been documentaries like Netflix’s Seaspiracy, an alarming exposé of global fishing practices and the disturbing links between some ‘sustainably fished’ labels and the big corporations responsible for some of the most egregious practices. “ There have been some damning inquiries,” says Louise, “that have seemingly resulted in, if not a reduction, at least more information on where companies like McDonald’s source their meat from.”
Perhaps the most extraordinary outcome to date of public awareness of climate change and its impact on food supply chains was in December 2019, when the Dutch Supreme Court upheld the decisions of the Urgenda Climate Case and ordered the Dutch State to reduce Dutch GHG emissions by 25 per cent by the end of 2020 “on account of the risk of dangerous climate change that could also have a serious impact on the rights to life and wellbeing of residents of the Netherlands”. “The same government estimated that in 2018, when they had a really hot summer with a lot of drought, the Dutch agriculture sector lost nearly two billion euros,” says Silke. “So climate change has also had a financial impact on agriculture and therefore the food sector. “It all points to companies needing to look really carefully at where it is sustainably possible to source our food from in the long term,” she concludes.
“Why don’t you do this as a business?” That was the suggestion by one of Lauren Lee’s colleagues at Herbert Smith Freehills. The thought hadn’t occurred to her and, in any event, she had always carried the notion that lawyers don’t make good businesspeople – although, of course, many of their skills are useful in a business context. But, as she thought about it, she realised she could turn her hobby into a business, and that is exactly what she did in 2014. Seven years later, she can look back on a good decision although, as she says, with a laugh, “I hadn’t realised how forensic you need to be in business!” For Paul Christensen, starting up a business was not such a remote idea. As someone who had long been interested in fintech – both as a lawyer and in business – the step to starting a fintech business that would help suppliers (and especially small businesses) to get paid more quickly was a natural one. Previse (which means ‘predicting the future’) began life in 2016. Lauren’s business owes its existence to chance. She only found herself in Korea almost by accident when she was a student. As someone who was keen to do exchanges, and learn languages, she was hoping to go to Hong Kong, having already done student exchanges in Italy and Singapore, but she was turned down in favour of someone else. She then researched another opportunity in Seoul to study law and took up the challenge in 2011. “I didn’t speak a word of Korean and the limit of my knowledge about Korea was a Korean restaurant in Brisbane!” Lauren recalls, “but I relished the challenge.” While in Seoul, Lauren was surprised and interested to see the many shops that sold skincare products and that many of these products had English, as well as Korean, packaging. They also offered samples. Lauren tried them out for herself (“I must have tried hundreds of products”) and was delighted with the results, so much so that she scooped up armfuls and took them back to give to friends and family as Christmas presents. Lauren joined Herbert Smith Freehills in January 2012, but, as a favour to friends and colleagues, continued to order Korean cosmetics from Korea for them. She then decided to order in bulk and try selling the skincare products at a market stall. She chose the name Style Story, because she also sold clothes and jewellery, the idea being that people could develop their own style through these three products. She also arranged parties with various products on display – a bit like Tupperware parties, only for skincare – to sell to others. Clearly, she felt, there was a demand for Korean skincare products among Australians. Fun though it was to have a market stall and sell at parties, Lauren realised she needed to be more ambitious. She commissioned someone (the sister of a colleague) to design and build a website to start selling online and set up an Instagram page. Towards the end of 2014, the investment paid off. The orders came flooding in as people started making bulk orders. Another inspired move was to send the products to bloggers, who then reviewed them. “I am not a natural seller,” Lauren confesses, “but I always believed in what I was selling. I knew that skincare is very personal and I think my recognising that really helped the business to take off.” In 2016, Lauren found herself back in Seoul, this time for Herbert Smith Freehills, as a junior associate working on dispute resolution. “By then, I had developed a bridge with Korea,” she explains. “My interest got deeper, I developed a love for the food, became more interested in the culture and fell in love with it.”
By then, I had developed a bridge with Korea. My interest got deeper, I developed a love for the food, became more interested in the culture and fell in love with it.
Paul’s route to becoming a businessman started on the track and field and in the pool – as a pentathlete, a sport in which he represented Australia (alongside another Herbert Smith Freehills alumni, Cecile Wake). When he narrowly missed the Atlanta Olympics, law became his chosen profession, joining Herbert Smith Freehills in September 1996. He got his first taste of business when in 2000 he was part of the founding team of a new fintech business, Volbroker, an electronic trading platform for foreign exchange options, before joining first Deutsche Bank and then Goldman Sachs, where he led the strategic investments team. After banking, Paul was CEO for Green Key Technologies, the voice-as-a-service collaboration platform for financial markets. The idea behind Previse is to tackle what Paul and his co-founders saw as a profound global problem: the fact that every B2B payment in the world is dependent on an approval from the buyer, a process which takes weeks or months. Given the technology tools now available, this is an anachronism, and the Previse team set out to solve it. A particular problem is slow and late payments to millions of small suppliers by big corporate buyers. They found that typical payment terms ranged from 30 to 120 days, with smaller suppliers often being paid later than their larger peers. To cover the cashflow shortfall this causes, suppliers are forced to take out expensive financing and spend hours chasing invoices – and many go bankrupt as a result. Previse uses machine learning to analyse data from the systems of large corporate buyers to ascertain which invoices are historically reliable and therefore merit early payment and which ones are a greater risk. The process then involves a third party funder – usually a bank – paying suppliers the moment an invoice is received. The buyer settles with the funder on normal payment terms. Suppliers are given the option, on payment of a small commission (typically 0.5 per cent for every 30 days an invoice is paid before it becomes due), to receive payment immediately. As Paul explains it: “We realised the answer to the problem lay in the huge amounts of historical data sitting in large buyers’ ERP systems which nobody was looking at. By applying machine learning to mine this data, we knew we would be able to predict which invoices are unlikely to get paid, so the rest could be paid instantly. We then tested our algorithms on a huge data set to see if this was possible, which took around six months and came up trumps.” As Paul says, this is a classic win-win: suppliers know they will be paid instantly on day one, and buyers can count on contented and reliable suppliers at no cost to themselves. “Helping suppliers helps buyers. If your suppliers are struggling that is going to hurt you. The key is changing the way that buyers have traditionally paid their suppliers. We’re on a mission to ensure 5 million small sellers worldwide get paid instantly by 2024, and to take the first steps towards a world where business data makes commerce efficient and fair, unlocking trillions of dollars of growth.”
We realised early on that the success or failure to translate K-Beauty in Australia would come down to our ability to connect with our community and successfully communicate the concepts and philosophies behind Korean skincare.
Lauren Lee and Paul Christensen have very different businesses – one selling Korean skincare products and the other providing a fintech solution to transform B2B payments. Their legal background and skills have proved their worth time and time again, as each seeks to reach potentially global markets.
We want to be at the forefront of embedded finance so that every supplier in the world can get paid at the touch of a button.
Both Lauren and Paul have been building their businesses and fending off various challenges. In Lauren’s case, she is facing greater competition as others have come to see the value of Korean cosmetics – known as K-Beauty products in the trade. She has first mover advantage, combined with her on-the-ground presence, which enables her to stay ahead of the competition. She has recently launched her own brand, Jelly Ko. For Paul, the biggest challenge is inertia among large-scale buyers, but his message is getting through. He now has many big buyers on-board, such as Mastercard and Bupa. As with most other businesses, the pandemic has led to some of their plans being put on hold. “The pandemic has been a distraction and, of course, it has been harder to get people’s attention while there is so much else going on, but, in the longer term, the disruption should work to our advantage, especially with the recognition of the need to promote sustainable business,” Paul says. “The pandemic has thrown up a lot of issues which we solve – cash flow, supply chain resiliency, and so on. These things have highlighted a bunch of problems that we fix.” This year, Previse led a new initiative, together with the Federation of Small Businesses, called Good Business Pays, which is pushing for a better, smarter way of doing business, through advances in technology and the availability of data to engage corporates and small businesses to get suppliers paid sooner. All of the main industry bodies have signed up, which indicates that Previse’s time might have come. Previse has ambitious plans to be an enabler for the B2B payments industry, and the key idea here is embedded finance. For example, when you take an Uber, payments and other features are “embedded” in the transaction, so you don’t need a separate financial transaction to pay. Previse will have its solutions available on invoices, with a clickable “Pay me now” button that enables the supplier to receive instant payment should they wish as they submit their invoice to the buyer. “We want to be at the forefront of embedded finance so that every supplier in the world can get paid at the touch of a button,” Paul says. Lauren’s hopes of moving offline have also taken something of a back seat as a result of the pandemic, but she is now moving forward with those plans. She also has plans to open in retail outlets in other markets, particularly in the US.
Both Lauren and Paul are driven by the wider context and have ESG considerations uppermost in their businesses. Lauren says: “The ESG dimensions are very important to our business. The beauty industry has historically had a poor reputation for caring for the environment due to concerns around single-use products and over-packaging and also so far as animal testing is concerned. Korea and Australia have now outlawed animal testing of cosmetics, which means that we are able to be really selective about the brands we choose to partner with. The ability to shop cruelty-free is incredibly important to our customers and we now have an entire section of our website dedicated to cruelty-free products.” Style Story has also completely changed the way it packages orders, using cardboard boxes and paper filling while eliminating plastic, wrappers, glitter, sequins, food, ribbons and frills in the boxes to keep the products safe, clean and intact on their journey to the customer. The company ships by sea rather than air wherever possible to minimise its carbon footprint. Community is also a key part of the business, as Lauren explains. “We realised early on that the success or failure to translate K-Beauty in Australia would come down to our ability to connect with our community and successfully communicate the concepts and philosophies behind Korean skincare. In order to facilitate that, we held meetups around the country where our community would come and try the products in person, listen to demonstrations about how and why to use them and get to know others interested in exploring the world of K-Beauty as well.” When Covid-19 put a stop to in-person gatherings, Style Story moved the “meetup” online and started a podcast, The Korean Beauty Show, which is now listened to in some 140 countries. For Paul, as his business is totally tech-focused, there is less concern about environmental impact and, by its very nature, he is aiming to assist the whole small business community. His focus in ESG is the S – social value. There is a growing awareness of the need to build back better, and to the best way to help small businesses is to pay them faster.
Lauren Lee Alumna of Seoul office 2012 – 2018
Paul Christensen Alumnus of Sydney office 1996 – 1998
GREATER GOOD
Working Together for the
I am active in its corporate governance and fundraising, as well as contributing at least 100 hours a year on pro bono work
Claire: I joined the strategic litigation team at Child Poverty Action Group (CPAG) as a solicitor. I was aware of previous test case challenges which CPAG had brought and so when I saw the role come up, I applied. Sanjay: After working at KPMG and Ernst & Young as a partner, I have had a portfolio career as an independent board member, advisor and charity trustee. I came to my current role in Kick It Out after being a member of the Premier League’s Equality Standard Independent Panel for four years. Michelle: I moved in-house from Herbert Smith Freehills in 2015 and after a few career moves am now vice-president of ethics & compliance for Asia for LVMH, the luxury group. My work experience at Herbert Smith Freehills directly gave me a path to working in compliance. I am also on the board of the NGO Justice Without Borders, a charitable organisation registered in the US and Hong Kong, which does work across Asia relating to migrant workers, primarily focused on Hong Kong, Singapore, Indonesia and the Philippines. Hannah: As part of my training contract, I spent six months on secondment to AIRE (Advice on Individual Rights in Europe) Centre, which I loved and made several friends who I kept in contact with. When an opportunity to work at AIRE as a solicitor came up, it was one I felt I could not turn down. Emma: I joined another law firm before moving to an in-house role. After that, I took up my current role as a solicitor at Kingsford Legal Centre, where I had already done a secondment when I was with Herbert Smith Freehills. That secondment really opened my eyes to the importance of the work done by community legal centres and inspired me to want to continue doing that type of work.
Linked to climate change is another environmental issue – sustainability. An important influence in changing food consumption patterns is increased awareness of the ongoing impact of the agricultural industry on the planet. This means greater consideration of food miles and an increased preference for locally sourced goods, says Silke. Reflecting on the sugarcane/sugar beet situation, she asks, “Is there an alternative that’s closer or an equivalent that can be sourced more sustainably? Customers are interested in this. We all know about fair trade, but sustainably traded food is becoming increasingly important in this context.” Louise prefers the term ‘alternative proteins’ to ‘sustainable proteins’ as “you can still have sustainable animal-based proteins,” she says, but notes that there is a generational influence at work here too. “A lot of commentary focuses on Millennials and their healthy plant-based eating that’s driving some of the change.” She also notes the rising awareness of food security concerns, with high-profile outbreaks of salmonella or alarm over antibiotic and growth hormone use in livestock prompting an aversion to mainstream agricultural practices. Raising livestock impacts the environment in other ways as it has such a high use of water – water that is ever more scarce in drought plagued areas like much of inland Queensland and New South Wales in 2018 and beyond. Then there is the deforestation that results from land clearing for grazing.
The result is a move to the mainstream for vegetarian and veganbased products. While the take-up may not be so widespread yet, Louise points to the number of household brands that have dipped their toes in the water as evidence of the growing trend. “It’s mainstream in the sense that major players like Nestlé now have a whole vegan range,” she says, while adding the caveat that there remains some scepticism. “People are uncertain about any health benefits. There’s the idea that you have to have red meat.” She also believes that the big names in the fast food industry have been forced to address concerns over where and how they source their food. “They have a real reputational risk if they don’t move to more sustainable farming,” she says. Louise warns of the ‘Blackfish effect’, citing the 2013 documentary about a Seaworld orca, which led to a controversy regarding captive killer whales and a subsequent $15.9 million loss for Seaworld, which was in part attributed to ticket prices and other reasons by the company’s CEO, Jim Atchinson. And alongside Blackfish, there have been documentaries like Netflix’s Seaspiracy, an alarming exposé of global fishing practices and the disturbing links between some ‘sustainably fished’ labels and the big corporations responsible for some of the most egregious practices. “There have been some damning inquiries,” says Louise, “that have seemingly resulted in, if not a reduction, at least more information on where companies like McDonald’s source their meat from.”
Perhaps the most extraordinary outcome to date of public awareness of climate change and its impact on food supply chains was in December 2019, when the Dutch Supreme Court upheld the decisions of the Urgenda Climate Case and ordered the Dutch State to reduce Dutch GHG emissions by 25 percent by the end of 2020 “on account of the risk of dangerous climate change that could also have a serious impact on the rights to life and well-being of residents of the Netherlands”. “The same government estimated that in 2018, when they had a really hot summer with a lot of drought, the Dutch agriculture sector lost nearly two billion euros,” says Silke. “So climate change has also had a financial impact on agriculture and therefore the food sector. “It all points to companies needing to look really carefully at where it is sustainably possible to source our food from in the long term,” she concludes.
Pro bono work is integral to Herbert Smith Freehills (HSF) services, and most of the firm’s lawyers gain considerable experience in pro bono work for the benefit of a wide range of charities and community organisations. Quite a few go on to work for these types of organisations. We caught up with five of them, Claire Hall, Sanjay Bhandari, Michelle Yu, Hannah Smith and Emma Anderson, to find out what they are doing and how their experience at the firm has helped them in their current role.
Michelle
