Interviewing Danny Willems:
Championing ESG and Ethics at PayPal

Director and Business Ethics Officer at PayPal
Linkedin

Rohan Agarwal (16 Dec 2023)

1. Could you tell me a bit about yourself and what is your role as a business ethics officer at PayPal Singapore?

My role as a business ethics officer is a volunteering job on top of my day job. However, the business ethics officer (BDO) is part of the ethics program for the enterprise, so it is a global-wide program. The BDO is there to support local employees on anything that relates to or questions that they have regarding the ethics program. Mainly we have a program called Speak Up, where employees can raise questions or submit requests regarding things that are being supported by me locally, such as hospitality and gift guidelines, or any requests that they have in relationship building or meetings with government officials. We then separate them out from US government officials versus international government officials, as we are a US-based company. We are the ambassadors to really do a bit of PR around the program and make sure that employees are aware that they have the right channels and that they have access to ticket channels and phone calls. If we get into HR-type related items, such as when there are employees being bullied or when there are other mental wellness issues or difficulties, then we bring in the specialists. So we are essentially the ambassadors to make sure that the program is known locally and then we support any global initiatives as well.

2. What ethical framework or principles kind of guide your decision-making process when addressing ethical issues within the company?

We do have our internal ethics policy that embraces everything from conflict of interest to anti-bribery and corruption to our annual statements around child labor and how we approach these situations as a company, as well as how we ensure that we publicly also bring a statement out. As part of our company, we have a broad framework with people whose main job is lobbying governments in Europe and the Us in places such as Brussels and Washington. Those members of PayPal are really looking at how we as a company ensure that we have the right values, the right ethics, and the right approach to some of the difficulties that kind of happen on a day-to-day basis all across the world. This means having internal guidance on how to behave ethically and responsibly and how we do this in accordance with our mission values and our leadership principles, which basically means that we have a set of 12 different guidelines for all employees to help us as an employer to make the right decisions based on good judgment. Those are written across everybody’s background and cultures and help to have an ethical compass to guide us as an employer.

3. How do you essentially stay informed about these changes in maybe environment and regulatory environment and their potential impact on business ethics?

That’s a good question. The systems always evolve, right? The regulatory space is never green. It means there’s always new grassroots coming up. Everybody has a similar theme of what they want to achieve, but everybody has a different path to get there. So how do we ensure that we stay on top of that? We work with external service providers and with other companies. Think about the big three in consultancy: Deloitte, McKenzie, and PwC. They would support and provide us with changes in the regulatory space, and then PayPal would react to the details. And breaking it down, there’s a system that we utilize which does online websites, scrubbing, web crawling, as it’s well known for, and it goes through anything that is published online that has a sense of changes in regulatory guidance on ethics or where there is media coverage on ethics or on any potential regulatory change. That is then fed into a tool which essentially prioritizes or classifies everything. Then, based on those classifications, it gets archived. There’s a repository, all the way up to critical or important, and that is then fed into a specific team within PayPal that does the first gatekeeping of those regulations. If they believe that there is action needed, then they send it to the appropriate team. If there’s anything on ethics, it’ll come to the ethics team, and then they then do your basic depth analysis, what was before, what is new, what do we need to change, or any gaps, and how we mediate them.

4. What are some of the biggest challenges that you see that are facing the green business industry today?

That’s a very good question, I like that question. My primary role at PayPal is outsourcing, so I look after the outsourcing governance programs. We do rely a lot on other companies to provide us a service. As a FinTech company there’s a lot of data going on, so I’ll talk a little bit about my views about the green keys in that outsourcing space. If we look at where data is stored, the one thing that PayPal is very good at is keeping all data. I think we have every bit of data since 1998 since the company was established, which means we have a lot of data at our fingertips. But on the other hand, if you think about the ESG aspect of it, you need a lot of power to make sure that you have this data somewhere. If it’s in the cloud, you need to use the data. If you need to build layers of security around it, it needs data. That’s why we use data centers and other companies to help us with safeguarding that data, so we do have a certain aim to be carbon neutral. I think our aim is 2030 as a company, which is achievable. But the other thing is with the usage of other companies, you need to help them to get to that piece as well. What is the most difficult thing about being green? How do you have your own path against it, and how do you help your providers, your vendors, and your suppliers to do the same? Because the companies may be in different industries, think about data centers, and how you make a data center green, because it uses so much energy itself. If you think about logistics, how do you make them green? Hardware, and software, there are different challenges. To summarize and answer, what is the most difficult part of it? To make sure that you have a broad spectrum of solutions and roadmaps and major deliverables and milestones to ensure that you and everybody who supports your business embarks at the same speed, and then the destination is the same, and hopefully everybody gets to the destination at the same time. The time management around this is probably a difficult piece.

5. So one point that you mentioned was how PayPal has a relatively larger, more maturity in the sense that they are able to store more data, like having a longer backlog of data that maybe not a lot of other fintech startup companies have. Do you think that aspect, coupled with maybe the scale and the structure of these larger companies versus these startups, influenced the integration and impact of ESG initiatives?

Yes, I think you’re absolutely right. If you think about banks, for example, they are required to keep the data on their customers or transactions by certain years. That’s the standard, which gives them a limit on what they need to keep and when to keep it. Startups, again, it depends on where they sit now. The situation now versus 20 years ago on data collection is really different. Now everybody has GDPR in Europe, there are five rules. Nobody can just keep all the data. When you go online, you have to allow cookies, everybody has their own settings. Whereas in the past, that wasn’t the case. Thus, the size of data versus 20 years ago versus what it is now, there is a difference on how everybody is using it and what the impact is as well as ESG.

6. Regarding PayPal specifically and its partners, how does PayPal encourage its partners to perhaps or does PayPal encourage its partners to adopt and adhere to sustainable and ethical practices?

If we think about outsourcing management, before we engage a vendor, we do a very extensive risk assessment to the vendor. And part of that as well is ESG. So we check them on their ethics, you know, do they have a history? So there’s a lot of companies out there that are collecting data on all companies. So if we engage with vendor A, for instance, supplier A, we have a database which asks essential questions such as: what are the standards of this company or vendor supplier A against ESG? Do they have an ESG policy? Have they been involved in anything that goes against PayPal’s ESG standards? How much green, quote unquote, green is this company at its core? To make a strong ESG proposition, you need to start at the top. As long as the senior leaders are signed in to the ESG structures, then you have a winning team. But if only, let’s say, the core of the company is trying to do that but the executives are not signed in, it’s very hard to change that culture because, again, it starts at the top and then has to go all through. So we look at when we engage vendors by seeing their ESG score and then making a decision of whether we want to do business with them.

Then the second piece is our child labor statement and how we approach ESG as a company ourselves. We do partner with the big four, we do our annual survey internally and externally with those partners on how PayPal stands in the light of particular use against ESG, as well as how PayPal stands in the light externally of ESG as well. That’s the second piece. We partner across the business; then, of course, we do a lot of testing. I was recently involved in a carbon neutral exercise. We had to explore what our aims are and how quickly we can get carbon neutral. We also looked at what we need to do to accomplish this within five years, or ten years, or how we accomplish this by 2050. We then did a tabletop exercise on what is the best scenario, worst scenario, and what we do as a company to approach this as well.

To summarize it, we do testing, we partner internally and externally, and we do ensure whoever we engage to do business with us, that they go through a risk assessment, put controls in place that have the right due diligence done before we sign a contract. Those are the other three ones that are tangible. And as I mentioned earlier, you know, we have lobbyists who work with people in Washington, Brussels, and Singapore and who try to influence how future governments approach ESG. Because we know it’s a fine line, right? Having a better country’s revenue or saving a tree, it’s a very fine line, unfortunately. But that is where we try to put a foot in the door as well and make some influencing comments to hopefully support the globe as well. And that’s part of our mission statement. That’s it.

7. Does PayPal’s ESG performance, is it isolated from its partners or are they all, like, looking at the just the big four, kind of group them together in terms of their ESG performance since they are partnering companies?

No, we have our own ESG standing. We partner across the globe to have a unified approach. But we do make our own annual statements regarding ESG and child labor statements, which I think in Europe and Australia is a requirement. But we do a standalone look at it. We are part of the database I mentioned earlier, where we can look at potential suppliers, and what their ESG standards are. For instance, if Google or Microsoft or Amazon wants to do business with PayPal, they look at the same list and see where we are standing. I know we’re pretty high up on the list, but we’re in pretty good standings across our ESG accomplishments.