EXCLUSIVE: Hexo CEO Urges Consumers To Demand Carbon Neutrality From Companies As Cannabis Giant Commits To This Initiative

“Be the change that you wish to see in the world," Mahatma Gandhi said.

While many are aware of these and other inspirational ideas, stories and examples, few really act on them. Fortunately, there are those who live their lives with a strong sense of social and corporate responsibility. One of them is Sebastien St-Louis, the head of Canadian cannabis giant HEXO Corp HEXOHEXO. 

The Ottawa-based cannabis producer recently announced its commitment to become a 100% carbon neutral business, by offsetting the company’s operational carbon emissions and even the personal emissions of all of its 1200 employees. The company aims to achieve this goal by September 2021. To do so, Hexo has teamed up with Offsetters, a leading provider of sustainability and carbon-management solutions that helps organizations and individuals understand, reduce and offset their environmental impacts.

Hexo has already undertaken an effort to reduce the amount of plastic it uses in its product packaging in coordination with its supplier Dymapak and its partnership with Plastic Bank. Hexo has offset 63,000 kilograms of plastic so far this year. That amount equals more than 3.15 million plastic bottles. 

Benzinga was interested in learning more about Hexo's plan to reach carbon neutrality and its other eco-friendly initiatives, so we spoke with CEO Sebastien St-Louis. 

Innovation - Adding Employees To The Equation 

When Hexo obtained a third-party validation from Offsetters, it was inspired to go one step further and decided to calculate the carbon produced by each and every one of its employees, which was quite innovative, St-Louis told Benzinga. 

After that, they added the figures and were surprised to find that becoming completely carbon neutral with 1200 employees was easily achievable. 

“We are very happy to be contributing to the plant in that way and not to be contributing to climate change anymore,” St-Louis said. 

How did the idea to go in this eco-friendly direction come about? What was the inspiration? 

Holocaust Museum As The Trigger 

As it turns out, the inspiration for these positive initiatives came from something extremely negative. St-Louis came up with the idea several years ago after a trip to Israel where he'd visited the Holocaust Museum. 

 “I was thinking a lot about impact and how nasty human beings can be to each other. And then on the back of that, I was thinking - well, are there things that I do in my life that negatively impact other people?”

It was at that moment that St-Louis became aware of the fact that although Hexo was helping a lot of people with its products, as a large company it was also polluting the environment. The truth is - whenever you produce anything, you pollute the planet, explained St-Louis. 

That led to thinking about Hexo’s employees and their carbon emissions as well. He wondered, “what would it look like if we actually took responsibility? I was tired of waiting for the politicians to fix it. We've been waiting since the 80s, and it's only getting worse.”  

The Power To Do Good 

Being the number one cannabis brand in Canada by market share, which reaches 17%, there’s no doubt Hexo is a powerful company. 

“So, I’ve always believed that with power comes the ability to cause change. And if you have the power and do nothing, that’s essentially evil,” St-Louis pointed out, adding they wanted to be on the good side of the equation. 

The math on the national level revealed the following: if the top 100 companies were to undertake the same actions, they would be able to plant an area the size of Saskatchewan (251,700 sq mi), which would largely contribute to the resolution of climate change from a Canadian perspective. 

Amazingly, these initiatives are not as expensive as people assume. Hexo calculates the initiative would cost less than $1,000 per employee per year. 

Realizing all this, and the fact that the goal is indeed attainable, Hexo wanted to step out as a cannabis sales leader to become a leader on the environmental front, St-Louis said. 

Individual Demand At The Root Of The Problem 

“It's not the individual contributors that are the big problem, it's really the corporations that are responding to individual demand,” he explained. 

He believes that these initiatives will make a huge difference for Hexo’s consumers as well. Because, he said, while corporations have to be “self-interested by nature” they should realize it’s not a “zero-sum game.” 

“When you treat the planet well, consumers will buy more of your products. I think it's very important for consumers to demand that from the companies from which they buy products to demand carbon neutrality, to demand plastic neutrality.”

Ultimately, consumers have the power to change things as they vote with their pocketbooks. Corporations are obliged to change their behavior if consumers pressure them, St-Louis believes. 

In addition to urging consumers to demand these things from companies, St-Louis is also encouraging investors to choose the stocks of companies that have put these programs in place, that operate in line with their (investors’) values. 

“I challenge investors as well to really ask the hard questions around environmental, social governance and sustainability.”

Hexo could make “a good investment case from both a social perspective and environmental perspective but also from a net return,” St-Louis added. 

The company recently expanded its operations through the acquisition of a family-owned Canadian cannabis producer Redecan for $925 million in cash and stock. Now, Hexo has plans to integrate its environmental and social programs in Redecan as well as all the other companies it has acquired. 

A Win-Win Game 

A question that naturally comes to mind when discussing eco-friendly initiatives and changing operational habits is how these actions will affect the companies' products. 

By reducing plastic production through the implementation of plastic pouches instead of jars, Hexo’s products have already changed, St-Louis pointed out. “Yes, the look of the product changes. But what’s cool is that the product is actually improved.”

St-Loius said that with the new packaging they were able to reduce the air that reaches the product, to increase freshness and moisture content while keeping the product safe. Quality is something they cannot compromise on, he stressed. 

Hexo’s newest initiatives seem to be better for everyone – for the planet, for the company in the long run, for consumers as well. In spite of a win-win and noble game, it still remains to be seen if it will succeed in inspiring others to do the same. We certainly hope so. 

Photo of Sebastien St-Louis, Courtesy Hexo