Green Element Weekly Podcast Interview with Michiel Vos, Founder & CTO of Coco Pallet
Michiel Vos is the founder & CTO of Coco Pallet. He is a serial entrepreneur specialized in the Circular Economy and Bio Based products.
CocoPallets replace single-use one-way wooden export pallets; fewer trees need to be cut and shipped for these purposes. They buy the coconut husk from the farmers, creating extra income at the bottom of the pyramid. The farmers stop burning the coconut husks; which reduces the air pollution.
Highlights in this episode:
- Why a Linkedin post turned viral
- The problem with the current pellets market
- Coconut husks as waste
- Carbon footprint of travelling to Asia and transporting from pallets
- Keeping track of pellets
- What it means to be a circular economy business
- Building a pellet factory
- Being data driven
Will: Well, welcome to the podcast. Michael, thank you so much for coming on. I’ve came across your post on Linkedin as we were discussing before, as you say, 4 million plus viewers.
Michiel: It’s insane numbers indeed. Like we never expected this and we think like, oh, nobody’s interested in the pallets, you know, uh, maybe business people, few, but all the CEOs would talk to, they said like, we never ever thought about pallets. You know, it’s like cardboard box. You know, you don’t think about that. That’s people do think like, oh yeah, I like it. This is quite funny. I think people just like things with coconuts. Coconuts make you think of tropical beaches and make you feel happy.
Will: But do you not think it also ties into the sea of change the to which its hard probably for the two of us to understand a bit because we’re so involved in kind of the environmental and sustainability, um, sector. But I do feel that there’s more people asking me questions about my job. There’s more people asking questions about what it is that green element does, in my wider circle of friends than ever used to be like 15 years ago, I was, you know, you, you are in a dinner party and it was like, yeah, felt like a bit of a maverick. You felt like, oh yeah, he kind of, he’s doing something really worthwhile, but whatever. Anyway, we’re going to do this.
Michiel: Yeah. I recognize this very well, because I’ve always been like this and it’s like I must have purpose. You know, my parents always said the purpose of life is. yeah, yeah, yeah. And, but now I think, well, it’s in our DNA, our whole is like this. And uh, but I think that these years, this time we’re living in are so interesting. Everything is changing and everybody’s thinking that everybody wants to do the right thing, but didn’t ever want him to sacrifice for us and how people take. Hmm. It’s not that difficult to, to stop eating meat or as least skip a day and eat vegan food because it tastes great. So like this, the, uh, for, for change bringers makers like you and I, it’s not convincing. That’s a thing that is producing things. Oh, can you make somebody eat less hamburgers, making a burger that tastes even better then the meat burger that’s, Oh wow, this is great.
Michiel: I’m going to have one of that again. So that this change because also with our pellets. Yeah. I want to do a better pallets and not cut trees. Now I know that its a mega forrest being cut everyday we’re making pellets. But we make it easy cause we make them cheaper. So, um, so the art of seducing got a bad way of course, in a good way. Well if you use seduction for the goods, it works, it quite simple and people are more receptive for that then indeed 10, 15 years ago, everybody thinks that, yeah, we have to do something. Does everybody thinks yeah, this plastic in the ocean is not a good idea. Actually. I don’t want to be part of it, but also it doesn’t change my life. It should be easy. People are lazy.
Will: Yeah. How did you get into pallets, were you in feight? Or were you in that industry before and you recognize the problem or what brought you into? Um pallets.
Michiel: Well, see, I don’t have so many talents, but one of them is connecting dots. So just give me millions of dots. I have a great memory for like useless facts and I just can, can connect them all. So when I, the received again like a few containers of goods from China with pallets and they’re all this flimsy, they always break. They’re too low. It’s difficult to get the forklift underneath it. And how’s it like I was like, why? You know, it was almost like why can’t they make proper pellets? And I’ve been to China many times, it sounds like. Of course, I’ve never seen a tree in China, hardly any trees. And then that’s going to cut them was day they would is expensive. It’s scarce. And then I remembered I had like this old report from the university that said like from coconuts waste, you have to glue in the fiber. In one, it’s, it’s, it’s being burned because it has no value. You’ve got to make pallets
Michiel:And then two years long, everybody said like, yeah, that’s a great idea, but it’s never going to work because such as ABC, the technician said that the university set at this, you cannot get these three d shapes, you can make that, that’s difficult. It can be done. But 3D shapes forget! I was reading this report and again and again I thought like it must be possible. And then I went to you see some technicians is, no, the other people are right. It’s not possible. And so that’s when I started building the machines together with some technicians in the middle of nowhere in China because it was, bill was cheaper to build a whole big machine then during a lab scale in the first few years. If we do it one time right, you know, we ha we can sell these pellets. Of course it was a stupid idea. The first pellets we make now, it looked like a pellet, but still we had a lot of improvement. Uh, it’s, it’s like a, you know, learning by doing. Yeah.
Will: I remember a friend of mine, he was a senior partner at his law firm and he said to me that they had a new client, it was one of the big pallet companies in the world and they were being bought out. He was in mergers and acquisitions and they’ve bought out by another company and they were doing the P&L and going through all the crossing t’s and dotting i’s and they found that a third or half of that pallet that you didn’t even know where they were because they had disappeared around the world, which was a huge part of that stock, which meant that their valuation was way over valued and how, how do you tackle that or does that come into your equation or like?
Michiel: oh yeah, totally see for pellets, companies that have a firewall business model because you know you make good pellets that are being used many times and you own this and you rent it actually out to the customers, super supermarkets, et cetera. Standard sizes. They have to be strong. They can be repairable and they’re strong and they are nice. People like to keep them for the storage. And so the ownership’s also a bit fake. It’s clear who owns it. But it also people thinking like Ah, it doesn’t mind if I use it 10 years in my warehouse, nobody knows. It’s called called a change though. You know, cause from boots we’re going to first strong plastic pellets. That’s good idea. If it’s used on hundreds of 10 and you can put like a chip in, it was like an RFID chip or an order because this is so accessible and cheap now. So you know where your pallets are. So your business model can change. So you can say like, oh well you used the spell it for the strip because so much and if you want to keep them for like storage, that’s fine. I sent you an invoice every month.
Michiel: The payment is based on the use is not possible if you can and don’t know where they are, how are you going to keep track of them. But then that’s another, um, a line of businesses like about 2 billion pallets a year is like exports. If you export these never come back. So the only thing they have to be compliance for, for exports, free of harmful insects, it must be just strong enough to carry the load, no matter if you could 500 kilos or 2000 kilos on it. These are different pallets on a strong one is not strong. And uh, and they have to be cheap because you know, every time you spent on this pallets goes off your, your, your profit margin. So it reduces your profit margin. So two things. So compliance, cheap, strong, just strong enough. And that’s the markets we were in because it, you need like about, uh, one tree to make 10 pellets. So if we sell 10 couple pellets, average, then we save a tree. So you’re going to build factories that make like 5 million pounds a year each, depending on the sourcing. So that’s like 500,000 trees not being caught for and shipped from like New Zealand’s to China or ban and making pallets. You know, that makes sense. But, um, but the, the, the, the brilliant thing about the coconut pellets is, is that because we only use the coconut husks is fully biobased. There’s no synthetic resin in it. There’s no, there are a lot of things like MDF particle board and even pallets that are made like that wood chips, which is that have synthetic resin. They say like, oh sustainable cause we using reused wood.
Michiel: It’s like 15 to 20% synthetic resin. So it’s like, um, it’s like a half truth and half true and my world is lie. You’re not telling the whole thing, you know, oh we’re so sustainable and there’s blah blah blah. And but our paletts is truly 100% biobased. So one of the derives, like in a warehouse with a big importer, they just stack them up and the cold, the, the, the, the bolts oil company or a farm around, okay, Hey, I’ve got a truckload of, of these cocoa pellets while does that a certain weight and it has value, can be a fight between two and $400 a ton because cocoa materials important for soil improvement to replace peat. If you want to make your soil a little bit airy, you put peet in it. But we want to protect our peat land and it’s very important. And the copper material, it’s very strong fiber.
Michiel: It thinks about 20 years to decompose. It’s excellent for soil improvement. They can put soil on things. If you Google for its couple of material for agriculture purposes, it’s amazing that you can do with it. Well, if the coco palettes are in states or in UK or in Holland for example, the shipping has already paid for it because it goes under the goods. It’s sterile because it’s has been heat treated in the process cause we use heat and pressure to make these pellets and you just have to millets and use it. So it’s fully circular. Of course it has caloric value. You can burn it as well as I can do you have a cement factory, but not, that’s one of the users that the circular reuse makes sense. But if you receive like flimsy wooden pallets with nails in it and it cannot be reused because it’s just too flimsy due to send to your customers.
Michiel: You have to dispose of it. The customer money, they’re lucky if somebody picks it up just for scrapping and that’s it. But mostly it’s cost your money. So also the import is half a big benefit by using a coco pallet . But you know, it’s not the one size fits all. If you want to put four or 5,000 kilos on, you put it in the rain on user. If, if like a big group be a brewery and they call us often sent those meals like, oh, we love your pellet. No, don’t use our appellate because one size fit all we know if the market is 2 billion pellets or accessible markets, maybe to 400 million pallets, still a lot. And the guy’s still competes very, uh, very well in certain markets. But if we have a request for like, one from Sweden for a container full coco pallets, we think that now we said we’re not going to sell to you because it doesn’t make sense.
Michiel: You have lots of wood. Sweden doesn’t export that much in pallets and the big demand is in Asia. And if I have to ship with all the way from Asia to here, that’s the Sweden has, it doesn’t have coconuts. Um, you know, the carbon footprint, the extra costs, they don’t make the math.
Will: So you built sustainability into your business model then?
Michiel: Well, they call it the circular economy with, to be honest, we never heard of the term circular economy when we started. It just makes sense. If you have a circular project. Okay, what kind of waste, what problem would they want to solve? What ways do I have? But if you use waste to solve not a problem, for example, we use the coconut waste that’s otherwise burnt at least some massive air pollution in Asia. This is like in Asia, like maybe 40, 45 billion coconuts than not as being used to make like food products that the husk, the farmers, they burn it.
Michiel: This is just lives in a way that there’s no value. And so we take this, we pay the farmers, they make a pallet for us so we place trees. You can treat the trees to make furniture or construction. That’s important. Important cause he so lasting things. And so we solving the air pollution problem, it could be adding value for the farmers. It makes sense. Um, the woods, the trees are not being cut for one way pallets and at the end it’s going to use this environment. So we actually solving like four or five problems in the same time. That’s typical for the circular economy. If you don’t think like that, you may be solve like two or one problem. Same if you have to cradle to cradle and with this knowledge and this way of thinking, you make it a completely different product than if you do not have this way of thinking.
Michiel: So when you start to signing a company or product, it helps if you look at like, hmm, does it make sense? How can we reduce the carbon footprint? Okay, what’s the the end of the value of the chain? What’s happening with my product then? So if you have all these things in mind, you connect all these dots, you come up with solution. That really makes sense because if I don’t care, if we don’t think about what you use happens with the pallets, one arrives at the end destination. I’m making a different product and maybe I think like maybe I make my life so much easier. I just add like maybe a few percent of synthetic resin. And we always refused it because it looks compromised. The biobased character of the material. And so it helps you if you know where you’re going to, it helps you to take the right positions. And these are often not easy decisions. It goes, oh, our life would have been so much easier if we would have cheated here and there. Lesson one for us was like never cheat.
Will: That is totally true. And you get found out in the end one won’t you?
Michiel: Yeah. The, the, the truth will always come out.
Will: I think more and more so because of social media, because of, because of that, because of how transparent we all have to be. It’s actually really nice. But it does mean that if you make a mistake, you made a mistake. Sorry.
Michiel: Yeah. But that’s of course, that’s of course in theory and, and, and, and in practice things are different. So yeah. So that’s the funny thing at there’s a certain President somewhere. And he is lying every day and everybody knows it and people still fall for him. And the born again, Christians are still backing him. It’s like why?
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Michiel: Look at there’s a certain president somewhere and he is lying every day and everybody knows it and people still fall for him. And the born again, Christians are still backing him, and why? Doesn’t make sense. And so, you know, human behaviors is a bit silly. Uh, so yes in theory we are right in practise we’re not. So we have to look what happened. What’s happening in the real world.
Will: So you, you’re based in and Holland and or are you based in China?
Michiel: We’re, we’re, or we’re based in Amsterdam. This is where I live, but I travel a lot to the Philippines and Indonesia, soon also to South India, where the coconuts are. You have to produce the are where there’s a massive amount of coconut processing industry. Its like a few factories possessing the food products and drinks and stuff. It’s where we have to be like a supply chain. There’s like the roads to the boats and everything to collect the waste material. Okay. So it will be mainly an Asian operation, like the, the sourcing, the production and the sales.
Will: And this might sound like a really stupid question, but with so much travel happening and with the separate or disparate markets around the world, the, is that pulled into your calculations for environmental managements?
Michiel: Yeah. We’re very data driven. It’s actually not a stupid question is a good question because the traveling flying at such a high carbon footprint, um, so also the shipping of the pellets, but also of our travel expenses. How can you do it best? And yes, I have to get in the plane so it once in a while to do these things. I cannot do everything by video call or mail and of course let them be frank about it. I also love to go through strop local places and meet with all these people. My task is to, to build the teams to find the right people to do this. So I need to travel for them and I can come out. I have no state like, uh, shame for flying. No, I’m not like, I’m, I’m pretty shameless. Uh, so, uh, I have to do what I have to do. I like what I do if somebody says like, Oh, you cannot do this. I smile and think of myself, fuck you. It’s very simple, uh, because you know, who are you to tell me what I have to do? And because you don’t have all the dots, you don’t know. And so I don’t spend time on people judging me what I should do and I do what I do and I think that we doing the right thing and we learning if we can come see what we do, compensates millions of flights and going to that.
Will: I was wondering because it would make complete.
Michiel: Yes, of course you have to think about that. And also I never go on holidays. I don’t care about, I travel a lot. And um, maybe if I go like a fairy far holiday destination just for pleasure, that makes sense. But that’s a choice that everybody has to make for themselves. Uh, but the for example, like the coconuts, right? Data driven, but my, uh, I am too. So for example, like I stopped eating meat like 15 years ago because it didn’t make sense. Not only the cruelty but also the health thing, but also the inefficiency of meat. And this is after talking to one of my best friends, he was like a monk in the south of India. Great conversations. But after all this discussions and I thought that, oh wow, we can feed so many more people if we stopped eating meat. So then it was not like a decision like, oh, I’m going to be vegetarian, you know.
Michiel: But yeah, I found that, hey, last three months I didn’t eat meat. I lost my interest, does this mathematical thing. Uh, and don’t get me wrong. Sometimes if somebody makes a meal and there’s meat in it, I find that more important to appreciate what’s given to me. Thankfulness. So I eat it with joy and also respect and I’ll eat every bit of meats out of respect for this animal. And sometimes I go hunting with a friend of mine and the south of Germany for wild boar with this over population. That makes sense. But also me not eating meat, you know, drive a hummer if I want to. Aye. Aye. Aye.
Will: Aye. Aye. I’m not doing that. But you know,
Michiel: My carbon footprint is much lower than somebody who’s knocking a hamburger. Yeah. So there’s also data. So I’m not green washing myself and of course I’m trying to do my best. I’m religious in separating like plastics from glass and paper in my households. These things help. I think that all small bits help. Okay. We’re working on a big game changing project and it will involve thousands of people, but if somebody going through the supermarkets and make the choices you make. And supermarkets also very important. You spent your money on the right thing or do the bad thing. Well, what do you give an incentive to? So small things are important. Every felt important, every decision you consumption is important and everybody has power with their spending, their spending power.
Will: What would you say the hardest challenges setting up, um, your pallet business. Had there been certain aspects of it that you’ve really gone wow, that was actually really hard because I’ve got hot to tie up the ethical sustainability with the business or has it been really easy and you’ve just got, actually this has been quite an easy process because it’s all made complete sense.
Michiel: No, it was not easy. It took much longer than expected. So it’s really a struggle. So you really need to have grit, but in a miraculous way. There are a few moments that we hit rock bottom, how can we continue this, we have to, but how and then some way, like you pulled it off the ground and you build a new machine, you finance this thing and with gas in your car and you’ve got it done. So it was also a leap of faith. Oh, there were so many desperate moments and things exploded or, and the Chinese that we worked with, the very friendly technicians and they, they were like panicking like, wow, this thing is going to explode. Or this thing is so glued stuck, we can never open it again because we were, we were chasing some parameters and adding more of the glue component of the coconut and couldn’t open the press for example. And then you can panic. But you know, there, there, there are a few things I learned in the army and one of the things us is don’t panic.
Michiel: The shit hits the fan if really everything falls apart. You stay calm, you assess what’s happening, what’s going on, what’s needed to be done. And yeah, so no, it was no easy route, but it’s so worthwhile walking is road. It’s fun. You meet to invest in people. And I think one of the greatest things of being an entrepreneur that you can choose who to work with. And sometimes when you make mistake, I made some mess ups because I listened too much, to my head. Like, oh, it doesn’t really make sense to hire this guy. And then at the end we thought that was a very bad decision. But then when you know, you know, you have to stop it. He said, hey guys, this is not the kind of work it’s on me because I took the position to argue you to work with you. So never the blame game and it’s, you know, it’s always on me. Everything that’s fails, it’s my responsibility. If things go very well, everybody has done it. Yeah.
Will: MMM. Going forward, how do you think you’re going to be able to influence change and influence? Um, what kind of, what sort of things do you, would you like to try and achieve through that?
Michiel: Well, it was basically walking your talk. So we’re, we’re building the factory now. It would be much more interesting. We have the factory and we believe in the second and the third. So we show like, hey guys, and really works. It’s not theory, it’s practice. And then people think, oh wow, it makes using waste and make a product from it. It does make sense to pay a fair price for the farmers. Cause that’s the one in the community. We telling the people that we work with like hey, we have to make the supply chain as strong as possible, in as short as possible. So some people who have like traders and things that manipulate and protect the position, we understand that, but they don’t add value to the chain. So by just we have to terrorists and then we have to put in practice and then we can show and maybe go on the podcast the one day and say like, Hey, this is how we do it, and it makes sense.
Michiel: And part of my job is to inspire other people, young people, all people experienced people like, oh yeah, this is great. And if these guys can make it balance, I can make this or that. So I can make car competence or I can make building materials because we also want to build building materials. But we know that’s, we never know how long it’s going to take. You never can make big margins because you want to make cheap, affordable building materials. So we’re building the cash caw and the cash cow was called Copa Pellets. You can scale it. We can make a margin. It makes sense. And why did I chose the pellet to make from the technique that we, uh, we have because nobody cares what it looks like. Brown, blue, red, pink. As long as it achieves compliant and just strong enough.
Will: And I love the, the fact it’s not treated because I’ve, I’m a member of a number of tiny home Facebook pages and ban, you know, living in van, um, sites. And one of the things that comes up quite a lot is don’t use wooden pallets because you actually don’t know if what they’ve been treated with. And so therefore there’s this underlying, actually maybe you shouldn’t reuse wooden pallets.
Michiel: It depends on the Lexus belt. You, she like HT, which is called a heat treatment or MB metal bromide. Don’t use those ones. Toxic gas that kills the nervous system off of insects. Also when you get it in your system, like guys who work like in the forklift and in ports, they are exposed to as methyl bromide every day. It’s getting less because you know it’s being banned in many places but it adds up and it attackes your nerve system. So, so if you use balance for interior use, just look, it was like an HD or MB and don’t use the MB. It’s not good for you and it was outside. You know, it doesn’t really make it make a big different indoors, pallets are not really made for indoors.
Will: But people want to reuse though. People love to reuse stuff.
Michiel: Oh we support reuse, don’t we, don’t kill yourself.
Will: Can we get you back in a year’s time to see where you are, what you’ve achieved.
Michiel: I have a better idea. You know when we open the factory, you should come to the Philippines and interviewer us there.
Will: That’d be amazing.
Michiel: And you talk with some farmers and some people who work in the factory. And they say like is this is really true. The good thing about our industry is that, the coconut tree likes warm and it like salt. So it likes the beach. He likes to be close to the coast. So all the factories will be very close to tropical beaches. So, uh, I’m sure that every journalists will find a great excuse to visit out factories.
Will: Well you’ve got some really good kite surfing in the Philippines today.
Michiel: Yeah. It would also wave surfing. There’s some great wave surfing spots and I’ve of course I looked at factory locations but also where is the nearest surf spot.
Will: Love it. Brilliant.
Michiel: And the seat I lived for three years in this, in the islands, the islands of St Martins in the Caribbean. That’s West indies and very close to the Virgin Islands. And no, there were not many waves there. I went streaming every morning and I, when I look back, it really made me happy. Six o’clock in the morning, put your goggles on, swim for 15 minutes, run back and then its the start of the day and think, wow, life is so simple and what else you need. I has a simple apartment on the beach and like, what do you need some water, clean water, family, friendship and some good foods. See, we don’t have to be greedy. We just have to take like what makes me happy and how do I take care of the people around me. Yeah. And then, but definitely in a year, maybe year and a half come in and then look us up. You can do a video call of course.
Michiel: Where can we find out more about you? You know, have you got websites? Well, see I, I’m not so much, I don’t have Facebook, Instagram, Linkedin. But sometimes I think, oh I should just delete it. because it takes so much of my time. And um, we have a website, we tell just a bit about what we do, new science that there are completely based on bio mimicry. I mentioned before, nobody cares what a pallet looks like, but the new pellets are based on biomimicry. So we copied the nerve, the veins, the, the, the structure of leaves, leaves are flexible that just drunk enough but they’re not thick everywhere. No they have this, this, this, this structure. So we tried to copy that, learned from that and they called biomimicry and we made new to science and we put it in the computer animations.
Michiel: And we thought, wow, these are stronger than once we hit before we have only curves because of those have only curves. It looks very natural. And of course it’s still has nine legs. You can use it with a forklift and everything’s all these things at the same but they look amazingly beautiful also. And that’s by learning my nature’s own nature has almost 4 billion years of experience. Everything that didn’t work as obsolete is gone. And the things that we see and how, for example, or bone structure is made is so smart. It’s light strong, strong enough, don’t have to withhold 10,000 kilos. No, it was just strong enough with daily use. And um, so nature is so smart in designing things. Not the only like structures, but also surfaces the surface of a blend that doesn’t, or like insulation value of, of like Coco for some animals.
Michiel: And so in our philosophy thing, okay, what’s a promo I’m trying to solve? How does nature self with an animal or the shape of a bird or fish? And that’s this fantastic website. It’s called biomimicry.org, or an institute based in Montana. And I had the privilege of going there last September. And just by listening to these people, how they learned from that, it’s just, it really makes you happy. You think. Oh wow. It makes sense. Hmm. And it’s not the only smart, it saves energy because nature does things very efficient energy, resources, recycling. It was nature doesn’t do stupid things. And uh, so we can learn, just called back and say, Oh, I’ll do we do things. How does a cow to digest things? Can we copy a cow? So we put grass in a machine an take milk out for example, but what happens in the cow? Um, kind of things like that. And so we use that in our, uh, processing, but also in our designs.
Will: Brilliant. Well thank you so much for talking to me today. It’s been really, really interesting listening to you and your insights and what it is you’re up to. I can’t wait to hear more as well.
Michiel: Yeah, we’re super excited to go and build with the local team and it’s got to be an hour and we know we’re going to have several problems to fix. And things exploding, falling apart and we just want to be, everyone can be safe and get it done. Uh, but yeah, the, the moment that we start getting their first batch of pellets out of those machines that we build there, I really look forward to do that so much. So yeah, keep it.
Will: You’re solving such a problem that no one knows even exists. That’s what I love is the fact that people actually don’t realize what is going on behind the scenes of a, you aren’t solving such a good problem. Well,
Michiel: Imagine if we have 10 factories making 50 million pallets, that’s 5 million trees not being cut every year that’s like a massive amounts of coconuts not being burned. You can measure the difference that this is massive. And then, and then it’s just the beginning. But every time you start again and then, okay, now we’ve got to make building materials. We’re going to make a low cost sustainable building materials from Fiji. I served with the Fiji Regiment in the Gulf War long time ago, 1991 and I’m still friends with these guys. One of the guys became a general and I was promising to visit him. So I will definitely use this project to go to Fiji and start something there and cause if we can make like local units to make local building materials so they don’t let, don’t let the important they can support the local economy. And that’s fun. I will never retire. Retiring is dull. I want to uh, work for the last day with joy on projects like this and surf. Of course. Yeah. Well take your kite surf if you come to the Philipines.
Michiel: Alright welcome. Nice to be in the show.
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