# The Road to COP28 - Aligning Expectations with Actions

Data: 11-01-2025 21:40:23

## Lista de Vídeos

1. [think ahead: Welcome from the Dean](https://www.youtube.com/watch?v=oljHIw2qnG8)
2. [think ahead: Introduction from the Vice Dean](https://www.youtube.com/watch?v=fzQvQzoGoaM)
3. [think ahead: COP28 Expectations and the Role of Business](https://www.youtube.com/watch?v=MU9Li2tUwTM)
4. [think ahead: Challenging Contemporary Energy Systems](https://www.youtube.com/watch?v=hJOeONgMszA)
5. [think ahead: Energy Transition, A View from the UAE](https://www.youtube.com/watch?v=ONsN6nxftZk)
6. [think ahead: Complex Climate Trade-Offs](https://www.youtube.com/watch?v=XE9DPMV4ENM)
7. [think ahead: Meeting the Climate Challenge](https://www.youtube.com/watch?v=_LE1nBUDaDQ)
8. [think ahead: How Regulation is Supporting the Path to Net Zero](https://www.youtube.com/watch?v=HyC66Ybmhok)
9. [think ahead: Climate Transition and Emerging Markets, led by the Wheeler Institute](https://www.youtube.com/watch?v=jKanGWK6WmA)
10. [think ahead: Fireside Chat Hosted by Christopher Caldwell](https://www.youtube.com/watch?v=Bc5pYw7tppQ)

## Transcrições

### think ahead: Welcome from the Dean
URL: https://www.youtube.com/watch?v=oljHIw2qnG8

Idioma: en

you read
it tackle real issues with the best
business
Minds that's why we're here today
welcome to the road to cop 28 aligning
expectations with
actions today at London Business School
we are proud to bring together leading
voices from our community voices from
our faculty from our alumni from our
staff from our students but also from
practitioners at the Vanguard of climate
issues to discuss the most critical
issues that face our planet
today we come together to share our
thinking to explore synergies challenges
opportunities but also the tradeoffs
that all of us need to face
together
we doing this today here in London
mindful of cop 28 about to happen at the
end of the
month I want to thank all the speakers
who going to be joining us and everyone
who contributed to this organization I
want to thank all of you for taking the
time to join us here in London and all
of you who are
online the program will explore the key
themes relating to cup 28 including
energy transition
complex climate trade-offs and the role
of regulation on the path towards net
zero and climate
transition we will have a view from
Dubai on the road to cup 28 and look at
the future of how business can work to
help save our planet and future proof
the world for the Next
Generation we also look forward to
discussing these same issues in Dubai in
the week to come at an event there next
week
now I hope that you the audience
understand that you have a real role to
play and that you will take advantage of
today whether you are here in London or
online to think not just about how is it
that we should align expectation to
actions but how is it that in the days
to come in the weeks to come in the
years to come you will all contri
contribute in aligning your actions to
expectations and with that again a warm
welcome to all of you and join me in
welcoming Professor julan birkenshaw our
vice Dean to the stage thank
[Applause]
you

---

### think ahead: Introduction from the Vice Dean
URL: https://www.youtube.com/watch?v=fzQvQzoGoaM

Idioma: en

okay thank you fris and welcome um we
have a packed schedule today uh lots and
lots of speakers over the next six or
seven hours or so um and I'm going to be
your your master ceremonies I'm going to
be up and down all day introducing
speakers I'm also going to be uh keeping
track of all the questions coming your
way our way so I think those of you in
the room I'll shortly show you the QR
code so that you can access the online
system those of you who are online oh
there it is um those of you who are
online um and I think there are more
than 2,000 people have actually signed
up um who will be monitoring our show on
a live stream uh you will also be able
to ask questions as well my job whil
other people are speaking will be to
monitor those questions and figure out
which ones to ask our various
speakers um I've got a short slot here
where I actually have an opportunity to
say something about London Business
school's point of view on climate change
and
sustainability and all such things um
and also I think I want to do that in
the context of Business Schools more
generally so in anticipation of the
event we we sent out a little LinkedIn
po you know these things you can click
on these things whilst you're you're
going through your LinkedIn feed uh we
asked several questions one was how
important is it for business schools to
take an active role in tackling the
climate emergency 18% said it was uh not
very important 21% fairly important 60%
the significant majority said it was
either very important or critical that
Business Schools play an active role now
I appreciate that there's a self-
selection bias in the people who answer
these things and indeed every body in
the room I suspect believes we should be
doing this stuff but nonetheless I take
that as a as a positive sign we ask the
second question which is essentially how
effective Business Schools have been up
to date in tackling the climate
emergency and I don't think you'll be
particularly surprised to know that 31%
said we've been ineffective so far 52%
limited effects some small gains and
only 18% said Business Schools as a
group have been highly effective so no
surprise this is important stuff we need
to do it better and we haven't done
enough yet so at London Business School
we are absolutely on the case I can see
several people in the audience here who
are working very specifically on London
Business Schools sustainability agenda
sustainability strategy and over the
weeks ahead we're going to be starting
to talk much more widely about what
we're doing in this area let me just
offer you my kind of three minute
introduction if you like to to what I
think we should be talking about at
London business school and what we
should to to link to what fris said
actually be doing about it so our
purpose statement is very clear we had
to our purpose at London Business School
was to have a profound impact on the way
that the world does business and the way
that business impacts the world in other
words we want to ensure that anybody
coming through London Business School
our graduates from our degree programs
and indeed our executives are given a
set of tools to help them to become more
effective at dealing with the world not
as it is today but as it is going to be
in the years of ahead so in other words
we want to develop a point of view on
the future of business and it's very
clear that that point of view includes a
very clear understanding of the
challenges we face around the climate
emergency but also very specifically
around the kind of tradeoffs that every
business decision maker is having to
make we we know that there is a tension
between profits people and Planet our
job as Business Leaders is to figure out
a way of managing those tensions so we
are already I think doing a decent job
of providing our students with the
knowledge that they need but that's not
enough we also need to provide them with
tools and an awareness and a mindset if
you like to ensure that they feel that
they actually have the ability and
indeed the courage to do the right thing
things as they move into whatever jobs
they're doing next whether it's working
for a big bank or whether it's working
as an entrepreneur or working for an NGO
or whatever it is and so a lot of what
we're trying to put into our curriculum
at London Business School isn't just
about the thinking but it's also about
the doing and so for example we run
So-Cal Global experiences and some
students in the room some of you have
been on these Global experiences where
we allow people to go off in groups of
50 or 80 uh with faculty leading them to
take Global
Experience Adventures Adventures is is
underplaying it because it's an active
role that you play in the countries
where you go we go to rural India we go
to the townships of South Africa and we
give our students real business problems
to Grapple with and so what we're trying
to do there is to essentially help them
to structure messy problems to Grapple
with the realities in places that
they're not familiar with so
experiential learning action learning uh
trying to shape our skills as agents of
positive change that for me is the
agenda that we are trying to really kind
of interrogate and become much better at
pursuing through London business school
so I'll just I'll wrap up my
introductory comments with um I I wrote
I wrote a report I co-authored a report
for the British Academy on this precise
topic around what role Business Schools
can play to inh enhance corporate
purpose and that work was spearheaded by
a chap at at Oxford Professor Colin
Mayer and he has a definition of purpose
which I quite like he says you know
purpose of business is to solve the
problems of people and planet profitably
in other words he thinks that there's a
necessity for capitalism to be
respectful of profit making but that
that profit making activity should be
geared to solving the problems of people
and Planet those are the real problems
and challenges that we face that's his
language if you like for reconciling
these tensions and I do like that so our
job as Business Schools purpose of
Business Schools is to essentially
provide our students with the ability to
solve those problems that for me is what
London Business School should be about
that is what I and many of my colleagues
here in the room are already working on
so without further Ado I'm just shortly
going to introduce our our our first
speak of the day two housekeeping points
first as I said use slide
uh to ask questions feel free to ask
questions through slido at all points
and I will field them as appropriate the
other points I'll make for those of you
who are in the room rather than online
we are going to be using um photography
and video throughout the day so if
anyone particularly does not want to be
photographed please let us know uh
otherwise we we will indeed be wandering
around taking images so I am going to
pause I'm going to now introduce our
first Speaker of the day my colleague
and good friend Professor Janis yanu
Janis
[Applause]
thanks

---

### think ahead: COP28 Expectations and the Role of Business
URL: https://www.youtube.com/watch?v=MU9Li2tUwTM

Idioma: en

all right good morning everyone uh what
a privilege to be here with you uh this
morning thank you so much for joining us
so when Katrina and Julian asked me to
speak at this uh wonderful event they
said you know we want you to speak about
the role of business and the
expectations about cop 28 I was like
wonderful great topic do I have about an
hour 90 minutes something like that and
Katrina turns and says you have 20
minutes I was like wonderful okay so I
made two promises to myself for today
one to keep it within the 20 minutes and
therefore I scripted what I wanted to
say to you but second and most
importantly perhaps a promise that we
should make ourselves for today is to
avoid the easy path of Doom and Gloom
when we look at the scientific facts
about cop 28 let's be optimistic let's
be proactive let's be more impactful
today so here it goes so as I'm sure all
of you know cob 28 presents a
significant ific milestone in our
Collective Journey towards climate
action as I'm sure you already know the
the conference of the parties start at
convening in 1995 that's three decades
that we've been discussing uh climate
change and the pro the challenge here is
to forge those global agreements and
reduce greenhouse gas emissions um and
do our best to mitigate climate change
impacts these conferences have been in
in fact instrumental in in fostering
this International cooperation and and
to some extent at least propelling
climate action hence for example the the
Paris agreement now there's no question
that the urgency to address climate
change is both clear and immediate right
some recent assessments that we know
they conclude that we have only a 50%
chance of staying within the 1.5 degre
Celsius and to do that we have a
remaining carbon budget of about 250
gatons of old CO2 how long is that how
long is that going to take us at cuted
emissions
six years six short years before we hit
the uh the boundary of only 50% chance
of of heating 1.5 now two months ago
September 2023 the global temperature
anomaly sounded alarms across the
scientific Community not only did we
witness the hottest September on record
but also 2023 is now on track to be the
warmest year ever with surface
temperatures being around
1.75 de warmer than pre-industrial times
and pushing this year's average to 1.4
de cels above pre-industrial levels
right the implications of this
trajectory couldn't be more profound and
of course the stakes could not be higher
the science confirms an existential
urgency to take decisive action so as we
head to cop 20 uh cop 28 unfortunately
the whole atmosphere is a little bit of
a cautious optimism at best um which of
course reflects the complex and
inherently political nature of global
climate neg negotiations and climate uh
diplomacy right the I I would argue that
the global communities expectations
remain at best cautiously optimistic so
of course the road to cop 28 is not
about policy alone it's a more holistic
effort it calls on us the business
Community to introspect to engage and to
mobilize in alignment with our
sustainability goals so looking at the
agenda for today's event and we do have
an exciting day ahead of us I'm
confident that our discussions are just
are not going to be just academic there
will have to be a call to action and
urging all of us from our respective
roles to realign our business strategies
our business mindset mindsets even with
a global sustainability agenda so
hopefully in sodim we also cultivate a a
more collaboration to tackle this quite
unprecedented challenges so as we go
through today's reach agenda I invite
each one of you to engage with an open
mind to embrace the spirit of
constructive but also Fierce debate um
and to cont contribute actively to our
discussions across the day and across
the various panels what I would like to
do next is share with you some of my
views about the expectations for cop 28
and in fact um the interplay between cop
28 and business strategy now first let
me start by saying it's important to
understand that cop 28 is not just
another annual Gathering but I do
honestly think it's a crucial turning
point this year we start at the
threshold of the first Global stock take
under the Paris agreement which is a
comprehensive process that evaluates the
process of this the progress of nearly
200 Nations toward the ambitious climate
targets that we collectively set in 2015
15 this stock take which started last
year is set to culminate at cop 28 and
it will reflect it will reflect how far
we've come or rather perhaps how far we
have not come uh in our path to uh uh to
confine global warming uh within the
thresholds of 1.5 to 2 degrees this
technical assessment um concluded as I'm
sure many of you may have read it with
the synthesis report in September
2023 and sadly painted a very dire
picture despite an increase in the
number of countries that adopting CO2
reduction targets the existing pledges
are not on track to keep temperature
rise under 1.5 degrees in fact global
temperatures are optimistically are
projected in the 2.4 to
2.7 degrees range by the end of the
century this is far beyond the parties
agreement targets so against this
backdrop cop 28 um will host and uh and
and and will'll discuss some key policy
discussions on some critical issues
including the establishment of the loss
and damage fund and the global momentum
towards phasing out as opposed to
phasing down um fossil fuels and CO2 um
fossil fuels now I do think that the
loss and damage fund it is a historic
development this fund is the first
United Nations mechanism to help
countries that have already suffered
irreversible
um climate driven damage however the
successful oper operationalization
beginning with the World Bank hosting
this fund um it does inevitably face
geopolitical tensions and reflects
broadly the challenges that will all
that will have to be addressed at cop 28
now developing and developed countries
have made significant concessions to
facilitate an agreement but big
questions still remain an answer about
who will contribute to this fund and
when now importantly though uh cop 28
has also is often described as the
implementation cop that's because the
conclusion of this stock take exercise
that I talked about earlier is supposed
to set a road map of uh how exactly
we're going to accelerate climate action
as I mentioned just now it's also the
stage where we hope to operationalize
this loss and damage fund and for the
parties to agree on the Frameworks that
uh that will enhance overall climate
resilience and
adaptation at the same time the
negotiations will focus heavily of
course on climate Finance with a
standing committee on finance preparing
a report on the developed countries
pledge to double adaptation Finance by
2025 so the emphasis there is not only
going to be on meeting the hundred
billion pledge that countries have done
in the past but also to start thinking
about post 2025 CL climate finance and
in fact update that that pledge and and
set a new Target for Global fin for
climate Finance now all of these
ambitious challenging and often
contested agenda items of course
reinforce the idea that cop 28 is about
turning previous commitments into action
and deciding uh concrete steps for
forward now these issues all of the the
ones I just mentioned of course
underscore the critical link between
these Global Climate policies and the
business landscape in fact the business
Community finds itself at the crossroads
um of these discussions with the
decisions that we will hopefully take at
cop 28 very likely to inuence to
influence a whole host of factors
including regulatory Frameworks policy
commitments investor expectations even
potentially consumer preferences so what
does that mean for us it means that um
there's a need to for a robust road map
uh in terms of how we're going to
realign our strategies with climate
Target and in so doing to set a
pragmatic um but hopefully optimistic
and ambitious path forward for business
in fact and this is a lot of the work
that I I do is in in terms of the
integration of environmental and social
issues into strategy more broad more
broadly we know that the business world
is already undergoing a profound
transformation A disruption as I often
uh call it it's um a slow but steady
shift from rhetoric to T tangible action
so this change is evident in businesses
not only in terms of innovating uh their
products to be more socially and
environmentally responsible but also in
terms of how they entirely restructure
their operating and business models
doing their best to align line with the
planet's uh limits so this fundamental
shift is motivated by several factors of
course to create value to manage risks
to comply uh with emerging laws and
regulations to better manage the
stakeholder ecosystem that actually
places these demands on business and of
course as part of the broader effort to
really redesign and reconstruct um the
entire infrastructure within which our
Industries operate now there's no
question my mind that the engagement of
the business sector um especially when
it comes to climate but also broadly
with sustainability issues has moved
from considered an optional extra
something wonderful to do on Friday
afternoon activity to a core and
fundamental element of strategic
management in fact you'll even see that
some some companies already think about
Beyond Net Zero and they talk about so
companies like Microsoft for instance
say not only will be Net Zero but we're
going to be net negative hoping to take
out of the atmosphere all the CO2 that
we have put in since the founding of the
company now just an example of several
commitments uh that reflect a growing
recognition uh that the urg of the
urgency of climate action and the role
that Us in other words corporate leaders
can play in D in really driving
sustainability forward now uh reflecting
at least some of the themes that we're
going to see at cop 28 and uh in the
various panels that we're going to see
today um is of course the the commitment
to renewable energy which has seen a
significant surch in recent year so give
you some numbers in 2022 the global
investment in energy transition
Technologies including Renewables re
reached a record high of $1.3 trillion
do um but even with those amounts the
investment Stills fall short of the
average annual investment that is needed
to remain on track for 1.5 deg the IIA
the International Energy agency
estimates that around 2.8 trillion will
be invested in energy in
2023 with over $1.7 trillion doar
directed towards clean energy which
includes Renewables nuclear gr storage
and low emission fuels now it's
important to understand kind of these
numbers Visa V fossil fuels because this
is a significant these are significant
increases in clean energy investment um
to give you a sense is 24% for
Renewables versus only 15% for fossil
fuels and again demonstrates this um
hopefully decisive shift towards um in
our investment priorities now even more
recently and ahead of cop 28 um over 100
CEOs from the alliance of Co climate
leaders have issued an open letter
urging both the public and private
sectors to adopt transformative policies
to accelerate decarbonization efforts
their message is clear without bold
action and enhanced collaboration the
goal of a 50% reduction in emissions by
2030 with remain Elusive and some of you
may have already seen the UN report that
came out yesterday um according to the
estimates we need a 45 to 50% reduction
by 2030 what are we on track on nobody
knows an increase of 9% so we're moving
at speed but in the wrong direction um
I'm I'm I'm going back on my second
promise of avoiding the Gloom so let me
return to my script um so um I believe
that this interplay between government
policy and political will to the extent
that it exists and we'll talk about that
in a bit and pro proactive steps by
businesses in fact underline what I
mentioned earlier as the essence of cop
28 which is to have an implementation
cop in fact I do think that the private
sector and the business sector's
commitment and importantly and this
reflects back to what Julian was saying
about business as problem solvers right
and therefore the Innovation
capabilities that we bring to the table
combined always with supportive
regulatory policies and Frameworks and
the necessary infrastructure are
absolutely pivotal for this
transformation or this transition to Net
Zero so let's be a bit more specific
let's go from the general to the more
specific and think about how potentially
these cop 28 discussions and potential
outcomes may affect or could shape or at
least impact business business
strategies I mean we all we're only
going to know once we see the outcomes
but let's let's play this thought
experiment so first there's no question
that at cop 28 we're going to see a huge
push to accelerate the transition to
clean energy um and this will require in
many cases a significant acceleration
perhaps for some companies it's going to
be a strategic shift towards embedding
sustainability more deeply within
operations and business models companies
will have to adapt by investing more in
renewable energies rethinking energy
procurement strategies and funding
Innovation aimed at reducing emissions
these alignment will have to move Beyond
environmental responsibility is it will
it is and will become even more so a
business imperative and is will be
motivated by of course the need to
create value regulatory pressures market
dynamics and in some Industries changing
consumer expectations I think that um
companies across across Industries are
likely to also emphasize the crucial
role of collaboration especially in
those Industries where the transition is
more difficult and is and and sticking
your head out first as a business can be
risky um but also collaboration between
businesses and government in order to
fundamentally transform the global
Energy System system and move away from
our unhealthy Reliance on fossil fuels
also this shift in towards sustainable
energy sources could open doors of
course to economic growth new markets
and and growth opportunities for
companies and I do think that those the
companies that do make those Investments
today or already started making these
Investments on more sustainable energy
solutions would benefit from potentially
government incentives top into these new
markets first and of course bu their
brands and reputations now to
effectively manage this transition
though it's also crucial for companies
to optimize their energy usage expand
their Reliance on G green en clean
energy sources and prepare for for
upcoming policy shifts that favor
environmentally friendly Alternatives
now navigating these uh challenges these
changes successfully is becoming
increasingly vital for businesses
especially those that do want to
maintain or enhance their Competitive
Edge in a very Dynamic landscape as I
mentioned earlier and and we discussed
this a lot in our classes here at lbs
looking at sustainability and the energy
transition As A disruption as opposed to
a path with a Rosy path ahead second
issue at cop 28 there's a growing
expectations that businesses will place
a greater emphasis on integrating nature
people lives and livelihoods Into
Climate strategies this approach isn't
just about reducing the negative impacts
right but hopefully going to move Beyond
and build an understanding about
improving the relationship between um
what companies do and the broader
ecological and social environment so I
both anticipate and hope that an agreed
upon policy framework will incentivize
companies to take more proactive
measures to ensure that their activities
positively contribute to environmental
sustainability and social well-being
this includes for example making Supply
chains more resilient to climate impacts
and actively supporting biodiversity for
example now this focus on on people
nature lives and livelihoods also
highlights the need for a more holistic
approach to climate action it calls for
companies to actively contribute to the
restoration and preservation of natural
ecosystems and it's broadly about
evolving from this idea of simple
compliance to laws and regulations to
actually focus on a regeneration which
of course will will benefit the planet
but will also benefit Society local
communities and so on um they um I also
think that um companies will ultimately
have to consider more carefully and
diligently the social implications of
their environmental strategies and
especially their transition plans to net
uh zero emissions this relates back
again to what Julian mentioned as
potential tradeoffs right because we
need to have plans that reflect a
transition that is both just and
Equitable and this could involve for
example creating jobs in GRE in green
Industries ensure ensuring Fair label
labor practices and supporting
community-led initiatives that enhance
resilience to climate change I think
that these type of strategies will play
an increasingly Central role in
corporate decision making as companies
uh seek to align their growth objectives
with the broader goals of sustainable
development and social Equity third the
focus on climate Finance at cop 28
highlights an important shift in
perception and handling of climate
related funding for businesses this
means um reevaluation of investment
strategies and financial moders models
to better align with the broader goal of
sustainable development especially in
developing countries indeed a key aspect
of the cop agenda is making climate fin
Finance more affordable available and
accessible and this may result in
increasing funding for green projects
enhance support for climate adaptation
Technologies in vulnerable regions and
greater incorporation of sustainability
criteria into investment decision making
I also think that within that context
companies are going to face huge
pressures for more transparency and
accountability about their climate
Finance contributions requiring them to
report not only on the amount but also
the effectiveness of their investments
in reducing emissions and improving um
resilience now third inclusivity in
climate action it's another central
theme of cop 28 and marks a shift
towards integrating a wide range of
perspectiv and experiences in addressing
climate challenges I think that for
businesses this means that future
strategies will likely need to Encompass
a broader spectrum of stakeholders their
interests particularly those of
marginalized communities and future
Generations this could result in
businesses adopting more Community
centered approaches ensuring their
practices not only comply with
environmental standards but actually
positively contribute to local economies
and their social fabric um finally I
think there's going to be a development
potentially on the legal front we know
that uh in recent years there's an
increase in terms of climate litigation
risk so depending on what decisions and
what commitments we collectively make at
cob 28 for for instance if we do set new
benchmarks and expectations it may well
be the case that businesses might find
themselves under closer legal scrutiny
to ensure compliance with these enhanced
standards so to summarize cop 28 will
likely influence significant shifts in
business strategies emphasizing the
urgent need for a transition to clean
energy integrating holistic climate
strategies that consider people and
nature and re-evaluating climate Finance
models the focus on inclusivity in
climate action will require companies to
adopt more Community focused and
socially responsible practices while the
rising Trend in climate litigation
underscores the need for robust legal
preparedness um I think that as we look
forward these tees will be crucial for
shaping the corporate approach to uh not
only climate policies but sustainability
more broadly now before I close my talk
it's important to address directly a
critical issue the not so green elephant
in the room so the yawning gap between
our Global Climate Ambitions and the
tangible actions that we take despite
this widespread consensus on the urgency
of climate crisis there's a trampling
disconnect between intentions and real
world actions and outcome within the
business Community our community there
huge gap between aspirations and actions
is equally apparent while many companies
have indeed pledged to reduce carbon
emissions and Achieve Net Zero targets
there's a prevailing trend of
overstatement and greenwashing this is
partly due of course to the still EV
evolving regulatory Frameworks which
don't give us clear understanding well
what does Net Zero actually mean but
might also be the fact that these are
very very long-term targets that often
constrain or avoid immediate action but
I even with these challenges I think
that the majority of companies genuinely
do strive and actually experiment
profoundly for ways to reduce their
carboned um footprint we I've also seen
a new phenomenon too by the way it's is
not just green washing uh more recently
we we' also seen green hushing right
where companies actually shy away from
disclosing the environmental effort
which again highlight a very complex and
evolving in this case political
landscape with respect to
sustainability um so as we approach cop
28 and and even Beyond cop 28 there's a
very pressing need to align these lofty
climate climate goals with concrete
actionable steps so ladies and gents
it's crucial to acknowledge the
challenges and inconsistency and the
path ahead a recent Stark and sad
illustration of this is the UK
government's uturn on their Net Zero
policies prime minister Rishi sunak
decision to delay the ban on new petrol
and diesel cars from 2030 to 2035 along
with easing Energy Efficiency targ
efficiency targets for rental properties
and backtracking on plans to replace gas
boilers with hit pumps exemplifies a
concerning Trend this comes of course
after president Trump with drew the us
from the climate agreement these steps
taken under the guise of a socalled
pragmatic approach do raise serious
questions about the commitment to
long-term climate goals in the face of
immediate economic and political
pressures or indeed populist or extreme
right-wing pressures this us U-turn is
not just a local misstep it sends a
disconcerting signal to the global
Community suggesting that climate
commitments can be relegated when faced
with daunting challenges or political
expediency this is a narrative we cannot
afford to entertain and as active
citizens should not tolerate especially
at a time when the urgency to act
against climate change is
Paramount nevertheless and despite these
challenges there remains a margin for
cautious optimism and a call to action
the road ahead in climate action is
indeed fraud with complexities but it
also presents opportunities for
transformative change the discussions at
cop 28 and the evolving business
strategies in response to these
conversations are not just formalities
let's grasp let's grasp this for a
second they are in essence survival
strategies for our economies our
communities and our planet so as we move
forward let us remember the words of the
former un Secretary General of the un
bimon who said there is no plan B well
because there is no Planet B This is Our
Moment to shift from incremental steps
to significant string climate action so
as we engage in today's discussions and
look towards cope 28 let's carry this
thought with us let's not only Envision
a sustainable world but let's actively
construct one our decisions our actions
will shape our Legacy one that we hope
will be marked by stewardship and
foresight as the book says let's be good
ancestors for the generations to come
let us challenge the status qu and
transform our Ambitions into tangible
actions for for our the future of our
planet hinges on the choices that we
make today so thank you so much for your
attention I wish you an enjoyable fierce
but productive day ahead thank
you
you just stay
there okay so thank you Janis thank you
terrific stuff we've got a bunch of
questions uh so keep them coming but I'm
going to pick up on a few of the ones
that have come through already um just a
little bit on the Regulatory and
governmental en environment and then
I'll move to kind of business business
issues um so question about private
initiatives
um and development of codes of conduct
actually let me ask you this specific
one I see mainly protectionist measures
such as the Border carbon adjustment
mechanism that taxes carbon and there's
also a question around uh carbon trading
markets what is your view of the
efficacy if you like of these types of
politically motivated attempts to to
manage these things sometimes for
climate benefit sometimes arguably for
yeah protectionist regions yeah so those
are two separate issues carbon markets
and the carbon border adjustment border
tax but I do think that um both
highlight the idea that even within the
system there might be market-based
solutions that we can take advantage of
so the devil is always in the details in
terms of how well do we design and
implement this market so in my view for
instance the fact that you might have a
carbon uh trading Market whereby you
reduce the carbon allowances for
instance in line with what science would
require us to do and therefore
constraining the market and in the
process um essentially pushing companies
to adjust their carbon emissions through
through an increasing price of this
offsets makes makes sense but the
question is how is it implemented is it
Global how does the European versus the
Chinese versus an American or the
Californian system change can we
exchange those globally because these in
a sense cannot be local markets because
we're addressing a global issue right so
again in those kinds of of of issues I
would I would go with with um um sort of
the devil is is in the design details
when it comes to the Border adjustment
tax I do understand the arguments that
it might be more protectionist but look
even the inflation reduction act in the
US um got criticism by the EU that is a
protectionist act now we haven't done
this before we need to navigate this and
these are all going back to the issue
that climate change and what we do is a
global problem it's the problem of you
know know of the commons if if you like
and we'll just have to work hard and
with political will to resolve them I I
frankly don't think there's anything
depending on you know how the the who's
going to pay for this tax I don't think
there's anything wrong in terms of
leveling the playing field and say you
know if you're producing in Europe with
low carbon and someone is trying to
undermine You by importing from
elsewhere with products that have been
produced with high intensity of of
carbon yeah of course you should be
taxed maybe that may create a race to
the top by other other comp countries
but again is going to be a design
feature what are you going to do with
those processs how are you going are you
going to increase the size of the
government are you going to redistribute
those tax proceeds back to the people in
a progressive or regressive way so there
again it's all about those design
choices that we make that will determine
the outcome and we will be coming back
to some of these issues around
government policy over the course of
today we'll also talk about measurement
and that was another question but I'm
not going to touch on it now let's go to
corporate strategy because you like like
myself I mean we're professors of
strategy we try to help companies to
make good choices somebody says I love
Colin mayor's definition of purpose the
one that I I used half an hour ago but
are there any good examples of big
companies who don't put growth and
profitability
first yeah frankly Julian I think that
this conversation of you know uh profits
first Milton Freedman said this Milton I
mean Milton Freedman is dead it's been a
long while so
in every sense right exactly so let's
let's actually have a more comp more
nuanced argument of what what's going on
here right so if if you look at the
business world there's no question that
if you see their stakeholder ecosystem
everybody is demanding that they do
things differently whether it's
customers investors governments
accountability in the supply chain and
so on and so forth so it's part of a
corporate objective right of course
you're a business you have to remain
profitable but the question is how are
you going to do this how are you going
to do this in a world where the
competitive lands is Shifting so
fundamentally because every single
demand that you're facing and these are
fundamental demands right we're talking
about your investors your customers and
so on you will need to adapt so this is
an adaptation Challenge and that's what
we so that's why I mentioned before it's
not a Rosy picture right I I don't agree
with this views that say oh you know
it's all about finding a stakeholder
finding win-win dance kumaya and the
world is going to be a better place it's
not it's a disruption and disruptions
are deadly think about you know Sears
Kodak Polaroid Blockbuster that was an
easy disruption compared to
sustainability so that's why I said that
sustainability has these two components
you have to start investing in a world
where these negative externalities are
going to be priced in so that's a higher
cost world and on top of that if you
have the foresight you also need to see
where will the opportunities arise right
but you have to do both and I think a
lot of the companies you know May in in
rhetoric for the focus on the
opportunity while misunderstanding the
elevated costs and while at the same
time not really building the capability
in order to build differentiated
position yeah so we need to wrap up I've
got one one final question for you I
mean you you absolutely as you lay out
the facts there's a risk of Doom and
Gloom as it were I avoided it though I
did try to avoid you did your best to
avoid but you know there are some un
escapable facts which are really uh
rather
uncomfortable um I'm wondering what what
makes you OB optimistic I mean there
must be some things that you see out
there you know in your conversations
with Business Leaders that that at least
give you some grounds for optimism I
mean and I guess I mean particularly
around businesses because those are our
our primary audiences a business school
what what do you see them doing do you
see any any role models that you can
really look to and say this is what
others should be yeah following I think
what the I mean in addition to being in
and I'm not saying this in a Cheesy way
but in addition to being in the lbs
classroom and seeing our current mbas
our embas across exeed even the the the
early careers seeing you know it used to
be the case that 15 years ago you have
to convince people about the why they
should care about these issues right
today they come in knowing all of these
facts and ready to and demanding of us
to tell them how on Earth do I do this
help me do this help me bring about that
change so that's one key component of
optimism the second one at the corporate
level is the fact that we are witnessing
and I think across the board and in most
indust is a profound level of
experimentation companies are truly
putting money into and and we are going
to see failures because these are
fundamentally difficult issues these
were issues that were always somebody
else's problem these were issues that
often they were under the rug like you
know meeting um all the greenhouse gas
emission gases for instance so there is
a um um a wave of profound
experimentation which we have already
seen paying off at least in some
Industries like electric vehicles
renewable energy and I think the task
the first task which was let's try to
instigate let's try to start the process
of change to a large degree has been uh
achieved and now so that's a point of
optimism and now the the the our key
challenge perhaps even bigger challenge
is how do we accelerate it right and I
think that even the fact that we got the
conversation to that point is a point of
optimism for me as well good a point of
optimism is where we will end thank you
thank you very much your thoughtful
ideas thank you everyone thank
you

---

### think ahead: Challenging Contemporary Energy Systems
URL: https://www.youtube.com/watch?v=hJOeONgMszA

Idioma: en

so we move directly on to our next
session and I am going to welcome up
onto the stage Professor Derek bun a
colleague at London Business School uh
who's going to be leading a panel to
talk about challenging contemporary
Energy Systems Paving the way for
transformation Derek thank you thanks
here we go go yeah please
yeah so if you you
sit thank you Julian so um we have uh um
I a challenging set of issues to go
through at the moment I think the energy
transition and it's been with us for
about 20 years since the Kyoto Protocol
and uh it's had its ups and downs
various progresses have been made and
you know in some respects I mean I feel
that the uh the easy things might have
been done already and the big challenges
are are kind of facing us at the moment
and so to kind of put some of those
things in perspective we have we have
three guests who are both prominent in
their fields and can bring a lot of
expertise uh into this area I'm very
pleased to to welcome Daniel Hannah from
from barles uh Albert from um uh
Bloomberg new energy finance and Marta
basz from BCG I'm going to ask them each
to kind of just say about a minute uh
for about a minute about themselves um
and what they do and what their
expertise is and then we're going to go
into some of the big questions and I
will post post some some topics there
that I think um are kind of crucial uh
over the next uh 20 years really in in
kind of building on the energy
transition and making a kind of a a
substantial impact on decarbonization
and there will be an opportunity for for
questions uh both online and and from
the audience um in the in the way that I
think has been explained to you already
um if you just scan the the the QR code
and they will appear on my um my um iPad
here and uh I I have the the uh the
privilege of deciding which ones I might
I might kind of ask the group so if we
if you could just spend um maybe 30
seconds introducing yourself what you do
uh and your expertise so so um Daniel
please yeah uh Daniel Hannah the global
head of sustainable Finance at Barley's
Bank um we've got a commitment to
mobilize a trillion dollars of
sustainable and transition Finance by
2030 and to align our financing towards
the NetZero pathway and we are um also
investing 500 million in early stage
climate
Technologies perfect thank you Albert
you um first of all yeah thank you very
much for having me um I so I noted
earlier that I'm the only person here on
stage who's not an alumni of lbs so
thank you in particular for for
welcoming me here to speak today um so
my name is Albert Chung I'm Deputy CEO
of Bloomberg NF we call ourselves bef
for short um and we are the research
business within Bloomberg that focuses
on low carbon transition um so all we do
every day is think about um the past
present and future of of global low
carbon transition across energy
transport industry um agriculture uh
increasingly financed as well um and uh
I've been there about 15 years at this
point so yeah looking forward to the
conversation yeah and and I promised
that you would be an honor Alum us after
this thank you very much it is a
pleasure to be here I'm Martha Vasquez
I've been in Upstream oil and gas
exclusively for more than 20 years the
first 10 at the slom so have field
operations practical uh experience
experience and I have the privilege to
be leading at BCG the topic of the
decarbonization of the Upstream asset
and I would like to also make the
disclaimer that uh we firmly believe I
firmly believe that oil and gas demand
will decline in most scenarios and there
is a big challenge to make sure that the
pathway is clear on how we do this in
the most responsible and low GSG
emissions way and that is my Miss
thank you very much thank you we we'll
come back to some of those points I'm
sure in the next half hour so I I think
I'd like to start by by taking a kind of
a perspective view um looking at at the
current trends looking at in particular
the challenges in the trends and that
and I think Albert you'll be best place
to kind of start that off with your your
work at
Bloomberg um so I'll try and kind of
talk a bit about where where we see
things at the moment I think to work in
energy transition is is to kind of live
with contradiction and to have cognitive
dissonance every day because you're
always seeing record growth things are
always moving faster than ever and the
progress is incredible but at the same
time it's it's never enough and you're
never like the transition is never
moving fast enough so maybe just to back
that up with a few kind of facts and
data points that we see from BF um last
year for the first time we saw more than
a trillion dollars invested into low
carbon Technologies so think of
renewable energy plants um electric
vehicles battery storage hydrogen um
carbon capture stage all these
Technologies we know and needed to to
achieve Net Zero and a trillion dollars
is not a small number it's uh it was a
fantastic um and it grew 30% year on
year so I don't think there's that many
Industries growing 30% year on year so
that's really great um renewable energy
installations this year will be um
almost 500 gaw again up 30% from the
year before um 90% of new power plant
capacity that's being installed is clean
so almost all if you're building a coal
or a gas plant today you're an absolute
minority um and and shrinking um
electric vehicles we think um today
they're probably 14 or 15% of the market
globally which is an incredible
achievement we used to count the number
of countries that had 1% EV sales and we
the first country the second wow we now
have three countries that have 1% today
it's 14% globally and we think it's 30%
in the next 3 years so just in
incredible progress um however lots of
challenges um you will have seen um
we're starting to see offshore wind
projects being cancelled um or auctions
for offshore wind failing and that's
probably the biggest kind of red flag
that we've seen recently um and that's
because of supply chain disruption cost
inflation and there's this window right
now where the costs of key Renewable
Energy Technologies have risen and so
the project developers who signed
contracts in the last year or two to
deliver projects at a certain power
price now suddenly find themselves
unable to achieve those those power
prices that they they said they would do
so they're having to cancel their
projects and that's causing a lot of
pain and it's putting at risk some of
the the energy and climate targets of
certain countries and we're also seeing
Rising competition between countries um
we all know that these Technologies are
largely produced in Asia many of them
produced in China anywhere between 50 to
80% of the supply chain of these
Technologies is in China and so you have
the US Europe India other countries
stepping in and saying well we want a
piece of that pie so we're going to
start um putting in TR barriers and
subsidizing local production which is is
creating some tension as well and then I
think the going back to the cognitive
dissonance just with all that growth um
if you take that trillion dollars you
add in another 300 billion that's going
into Power grids investment which is
also critical for the transition you get
to about $1.4 trillion going into kind
of Net Zero compatible kit that's that's
being deployed at the moment um we think
we need to be doing three times that
much about $ four and a half trillion
dollar per year for the rest of this
decade in order to get on track for Net
Zero by 2050 so that's the scale of the
challenge um and we I know we want to
talk about hard toate sectors and so on
but maybe I'll leave it there for now
and we can come back to other challenges
as well yeah thank you very much that's
good and I think just where that that
those trillions are going to come from I
think um we we've got the third speaker
that can perhaps say a few things about
that um I'd like to ask you a little bit
about the the supply chain issues that
you brought up I mean to what do you
think those are temporary or do do you
think there really has been a structural
shift and that and that this this idea
that the costs are going to continue to
come down is now historic and that that
going forward the you know the supply
chain issues are crucial and possibly
becoming more crucial um there's good
news on that front um so um as I said
during the energy crisis because of
these disruptions um solar became more
expensive for the first time in 15 years
batteries became more expensive for the
first time in 15 years and and wind as
well all those things have been coming
down for a long time so solar is now
backed down and back down in in fact to
record lows and because the supply chain
responded very quickly that's been an
incredible turnaround just in the last
year so on solo we're we're in a great
place actually it's hurting the
manufacturers because they've they've
now
overinvestment year um in about a week
and a half um and I can't tell you the
result of that but I can tell you it's
yeah things are looking better and then
um wind is really the one that's still
having pain and I I do think it will
return to a downward cost Trend it's
just taking little bit longer because it
it's easier for the other Supply chains
to respond for a variety of different
reasons um the raw materials are um uh
smaller markets that can respond more
quickly the supply chains frankly a lot
of them are in China and Those comp
companies can respond more quickly so I
think wind is just going to be a little
bit slower to respond and that's why
you've just got this window where
projects are really challenged but
ultimately we we think it does turn
around yeah that's good to hear your
optimism we we may come back to some of
the those issues shortly I mean I'd like
to pass over to you now Mar and
particularly uh from the the oil and gas
perspective um in in some respects there
hasn't been quite so much progress there
as there has been in power generation
and you know I'd like to to kind of hear
your thoughts on on kind of what are the
possible easy wins that we might have in
the near term and what may need to
happen in in the medium and longer term
thank you thank you Derek just to ground
us on some of the facts the oil and gas
industry contributes to 5.1 gigaton of
emissions scope one and two this is
about 15% of the emissions in energy and
uh but when you put together the scope 3
emissions that is about
24 um gigaton which is more than 50% of
the emissions in energy and you are
noing so I think you some of you are are
familiar with this statistic it it is
material okay it it matters just
intrinsically from the footprint now I
started my introduction just saying that
um there is only one way going forward
which is a decline for the demand and
the supply of oil and gas still there is
a big role to play for this asset class
however not all the barrels are equal
okay and we believe that whenever uh
whenever we put together all the barrels
in the world uh both what is existing
what is in development what is in
Exploration what hasn't been uh explored
yet uh some of those barrels will stay
on the ground and the winning barrels
will be the low low cost and the low
emissions barrels now you you say we
haven't made uh enough progress there
the pressure I I want to make a third
Point around the pressure that is in is
high it has been high and it is
increasing is extremely hard and we will
hear more from Daniel uh and I was just
in a conference in in London uh over the
last today increasingly hard to get
access to Capital it is not debt but
especially when there is a uh a
transition from the big owner to the
meat and a small cap company um they
need to demonstrate that they are doing
this in the most competitive way uh to
get access to Capital Talent extremely
difficult to access the talent pool that
we have in this room and to actually
retain the great people that we have who
we by the way we need in order to
decarbonize other Industries as well
right and uh finally there is a huge
pressure and um on the tax front on the
fiscal front I think most people here
will have heard of the IRA in the US
Australia has made progress in methan
the the carbon border mechanism in
Europe but also the methan uh the methan
emissions tax Outlook all of that is
putting pressure this is an important
point to remember
now why else we haven't done enough
progress um I think what what we notice
is extremely hard uh for uh for
companies to T called the energy
trilemma I think for the last three
years this is a topic that we have
spoken at length but we can leave it so
vividly in new ways even in the UK right
in the UK that we have the offshore
petroleum licensing bill you know uh
being proposed at the moment so that we
can have annual licensing rounds there
is a big element of energy security okay
energy security that if countries like
the UK have it in top of Mind imagine
other countries in the world who are
very early not only in their energy
security but the second point is the the
economic growth element and on top of
that having to decarbonize and do this
uh with a net zero mindset is extremely
hard sometimes to to reconcile these
tensions and possibly the fifth point
that we leave every day whenever we work
with some of these companies is that
it's extremely hard to change the
context in which people work it is not
only about the operational and Technical
challenge or the commercial and the
financial challenge it's about creating
the context for people to make different
choices every day right the people who
are doing offshore and onshore
operations have to have the right
performance framework and incentives to
say hey I'm going to take eight hours to
restart this well instead of two hours
okay to minimize flaring because this is
one of the most practical l so to
transform each of these companies it
takes time it is not going to happen in
weeks so I can expect uh the earlier we
engage um the better but it will still
take uh months um and possibly the last
the six point just in direct answer to
what can we do today versus what might
take
longer this is a positive news by the
way but uh 40% of the emissions uh um I
mean there is a dark side but a positive
news 40% of scope one into emissions in
in in my industry is from methan uh and
it is has it is woring from one side but
on the other side we have viable
technically operationally and economical
solutions to Abate this emissions today
it is not IR realistic when a company
says by 2030 I will be zero mean
operations okay so this is really
important together with Energy
Efficiency in flaring there goes 50% of
the footprint okay now longer term what
people are what we need to bet uh to bet
on in order to really have a net zero
pathway is two main things
electrification for which Renewables or
nuclear or anything that is uh lower uh
G emissions is is really critical
enabler and carbon capture so ccs and
fortunately just to end in a in a
positive note part of the actions that
we see
many oil and gas companies taking is
actually launching these new businesses
right and I think if some of the some of
the gains in this very profitable
industry go towards launching these
businesses as soon as possible I think
it is a huge contribution to the energy
transition yeah thank thank you very
much M there's a lot in in what you have
said there um I I want to pick up very
quickly on a couple of points and then
then then then bring in bring in Daniel
I mean methane is very topical at the
moment and you right to suggest that
that that is a possible um significant
win that that can happen I mean as
probably most people know or not
everyone I mean methane is about eight
times as detrimental as carbon dioxide
in terms of emissions uh and and a lot
of it can be solved by better
operational performance um what's what's
the quality of a kind of international
government governance and audit and
uh in some way
authenticating the the the supply chain
for for methane I mean given that a
number of countries are putting in uh
regulations uh that oil and gas you know
should should have methane limits below
certain levels EU has just done that and
so on um I mean I mean is is the quality
of monitoring sufficient to be able to
kind of uh authorize that process yeah
no thank you Derek and uh
no
uh and and I would like to say more uh
no uh however in some jurisdictions
we're moving really fast and I think it
is the
combination uh when it works best we
have a combination of Market you know
pushing for a shareholder and the the
commitments of the companies but also
the fiscal and Regulatory support when
you put them together it can I think it
can be quite powerful uh to create not
only the pressure to have to do it uh
but also a way to monetize the low G
emissions hydrocarbons and the two more
points the certification of this low G
emissions gas is an increasingly
important topic and miq is an example we
work closely with them is an example of
a third party organization who says I
think we were talking before um it is
not about monitoring mean emissions at a
country level level it's hard to take
action we need to go to the asset level
to the facility level to be able to
track down and be able to certify hey
yes you know along the value chain this
LG cargo is indeed you know L um mean
emissions so yeah that is the
certification and possibly the last part
I just would like to give the audience
and the panelists here confidence that
we do see and we are working with
companies who are taking action to
prepare you know for more market and uh
government support and incentives but
also to be able to monetize these low G
emissions G emissions gas thank you and
then there's just one other thing that
that you you mentioned um and that that
I think possibly could link back to an
aspect that Albert you could comment on
um you you talk about the the kind of
the inevitability of of demand
Destruction for for oil um uh I'm not so
sure about that I mean a lot of that
depends upon the transportation sector
and the transportation sector basically
um in that context is all about
electrification and I just wonder um
what the scope is for electric vehicles
uh in uh third world countries in you
know in in Africa in in South America do
we really expect
Transportation uh in developing
countries to move away from diesel uh
and
I don't know I don't know if you want to
comment or maybe Albert first of all in
terms of of Trends you're seeing on
electrification I mean globally not not
just in um sure maybe just very quickly
I think um if you take our sort of base
case view from our long-term electric
vehicle Outlook um ro road fuel demand
Peaks sometime later this decade um and
then starts to decline from there um but
we we need to go a lot faster if we're
going to reach Net Zero and I think
Emerging Market countries are one of the
big um you know call it challenges um
and adoption in those countries is
really really far behind so when I talk
about the 14 or 15% penetration of EV
sales globally today um that's because
the big markets are doing that heavy
lifting China Europe uh us is catching
up and those are responsible for you
know I don't know the very large portion
of auto sales but it overlooks many many
many small markets where penetrations
are not or
1% um I think this can change I think
it'll change first in the kind of two
and three wheelers Market think of you
know bikes and um Tuk TS and things like
that buses as well I think those will
change first but even with cars I think
there's there's room for optimism
because we see in the second half of
this decade between 2026 and 2030
depending where you are in the world um
it will become cheaper to buy an EV than
to buy an equivalent quality internal
combustion engine 2030 2031 in Emerging
Market countries for cheaper cars so
it's a a bit further away in those
markets but it is coming um and that's I
think that's when it starts to become
interesting can can I can I come in here
because I I think it's worth just
stepping back I mean five years ago 1 in
70 new cars were EVS now this year we'll
probably be at what one in four one in
five and so just in five years we have
seen an exponential growth in EVs and I
take your point very much on on Emerging
Markets but actually here the majority
of mileage done in Emerging Markets is
two wheelers not four uh and you're
seeing in places like India huge
Innovation already on in terms of EVS uh
in terms of the two-wheeler Market but
then also battery swapping and the sort
of infrastructure around that that can
really start thinking about how you
create an ecosystem so actually India
kind of gives me hope that again you
know what what we have seen is
technology has consistently outperformed
the expectations particularly in places
like on Sola and and EVS I think the big
question if I if I can keep going uh the
big question for all of us though which
I think and Mar and Albert did a
fantastic job scene setting the one
thing we haven't talked about was
interest rates were a rock bottom level
for the whole last decade and a bit in
which we've seen this tremendous growth
so I think actually one of the big
challenges speaking as a as a banker is
you know is the transition affordable at
5% interest rates I I think that is and
you've seen that impact in the markets
in terms of valuations of some of the
very big renewable companies coming down
70% since their Peak um and it is
definitely getting harder to raise
capital for even great companies I mean
we work with a lot of early companies
and you know that process is now
probably taking more like 12 to 18
months when you know just a year ago it
was probably taking about six so there's
definitely the the trend has shifted and
I think it's important to reflect that
but and I think it was right that I go
last because money in some ways I think
is is the last thing to worry about I
think as as Mar and Albert very well set
out if the context works if if the
project works the transaction Works
money will find a way and I think
there's really two big challenges in my
mind that we need to solve for one is we
need to scale Renewables I think Albert
absolutely correctly talked about it
three-fold increase in Renewables needed
we need to Electrify what we can and
then power that through Renewables and
the second is that we need to really
tackle these hard to evate sectors that
Martha kind of talked about 30% of the
emissions that we need to reduce in this
decade is going to come from new
technologies that need to get Scaled up
so you take those two things and I think
that then presents two challenges um at
Barkley's we've funded Moray West which
is going to power half of Scotland's
electricity through offshore wind um and
in my past life I've done a lot of
renewable financing including the
largest uh concentrated solar Park in in
the world but the Big Challenge and the
big stat that sort of was missed out is
if you strip out the big countries China
and India Renewables are basically flat
since Paris and I think that's that's a
disaster so how do we scale financing
into the emerging you know the the
lowest the countries that have most
exposed from climate change and actually
have the biggest opportunity Elite R I
think is one of the big challenges we're
going to see more around things like
using the World Bank and other catalytic
type Capital crowd in the private sector
but really we've got to collectively
think about how do we go after uh and
really Electrify at PACE um and then
power that through Renewables and
Emerging Markets the second one is about
the hard to evate sectors so how do we
tackle other sectors where you can't use
electricity uh and power those through
Renewables and so that's going to need
new technology um Mar talked a couple of
those carbon capture hydrogen the likes
at Barkley we think the hydrogen Market
is going to grow Eightfold over the next
sort of couple of decades and we're
already starting to see momentum coming
in there but we need to move faster to
tackle climate change we've got to take
great ideas from ideation to IPO and at
Barkley we're trying to create this kind
of escalator to speed that up that's why
we've got some very focused Partnerships
around the early stage there's something
that we do with unreasonable and
actually I was with them yesterday with
20 new companies that are thinking about
all these sort of challenges um we've
backed 300 of those companies over the
last since 2016 they've gone on to raise
over 10 billion of financing employed
more than 24,000 of people um and some
of them have then gone unlisted we're
also deploying 500 million to support
these technology companies directly
through Equity carbon capture some Great
British companies like Brill power and
the energy storage or proteum which is a
hydrogen Solutions company but we've got
this Gap at the moment this kind of
scale Gap and broadly I think that we've
got very good as an industry at scaling
software companies right Facebook social
media these type of companies but the
issue there is adding a million people
onto those platforms is a marginal
increase in capital in climate Tech you
basically have an exponential increase
in capital you have more and more
Capital that you kind of need to deploy
and I think that the finance industry as
a whole is not very well suited for for
tackling this missing middle of capital
and that's something that we're very
focused on I think a couple of things
that will help the inflation reduction
act in the US the EU new green deal the
sort of work that the UK is doing around
providing cfd back stops for some of
these new technologies but overall we
need to innovate there to really scale
up these technologies that can tackle
the heart to evate sectors I'll pause
that thank you and and I think that that
queued into a number of things that I
was going to ask you about um but I mean
you mentioned hydrogen um and I mean I
mean hydrogen's to to me seems to be a
kind of a major challenge because you're
trying to kind of create a new economy
almost um o overnight it's not just you
you're bringing in something like an
offshore wind and it's going to kind of
slot in where there was previously other
kind of generation you know you you
you're developing something which has
got production infrastructure and Market
um I mean h how does that new economy
come in because you you've got the
demand the infrastructure and the supply
all of which don't exist at the moment
um I mean do do you see that being done
through major policy commitments or do
you do you see it being done through if
you like organic growth where the the
industrial sector does it first because
they need to do and then and then from
the industrial clusters it it spreads
out um it's clear that we need long-term
storage and it's clear that hydrogen is
the best solution for that
but I mean I I think I think the
investment will is it makes a lot of
sense but but how does that kind of
translate in into the development of the
sector so I think it's a great set of
question we probably do a whole panel on
just hydrogen and I'm sure Albert and
Mar have got very strong views on this
as well um I I'm not sure I agree with
you that it is the solution for
long-term storage I mean I think there
batteries um and deploying other
Technologies we've backed a company
called Energy Dome that use compressed
CO2 that can provide more than 24 hours
storage at a very cost effective rate so
I think there's a lot of innovation in
the storage but I think the challenge
where I see hydrogen fitting in is the
things where you can't use Renewables
and storage in a simple way and where
you may have excess renewable capacity
then I think to your point you could
then transfer it but the economics
around hydrogen I think are you know
there's a lot that we could talk about
there but to come back to your framing
which I think was right I think one of
the big challenges is we got a
coordination problem so you're a
professor of decision sciences and I
think is exactly right so you need both
investment from the producers and the
consumers but both producers and
consumer looking at each other and
saying well you go first and that leads
to a sort of suboptimal equilibrium and
so that's why I think policy has to play
a really key role the inflation
reduction act which I think you know
estimates and again probably these are
Albert's numbers I'm sure I'm borrowing
you know could unlock over a trillion
dollars in carbon capture and hydrogen
both of which have been mentioned big
policy tool we're seeing the hydrogen
hubs here in the UK as well I think
that's really really important um but
the key thing that we need to deliver I
think is kind of
from a to make a project bankable is
offtake and so how you can have
long-term off-take of these things which
really comes to this this point around
if you like the inflation reduction Act
is trying to pump Prime the production
but we need to see the consuming sort of
businesses effectively commit to
long-term off-take so if you look at I
was involved in financing the world's
largest green hydrogen project in in in
Saudi Arabia and Y and effectively that
was the key piece there was a long-term
off take often these places there aren't
now there is some discussions going on
in us and UK policy tools effectively
how do you provide that sort of support
in the absence of it as a temporary
thing and then get the private sector to
come in so I think this this is a very
live issue I think you put your finger
absolutely on it um and there's a lot of
work going on across the finance
industry and policy to think about what
are the solutions to tackling that but I
think Albert I'm sure you no yeah Daniel
Mak some really important points and
I'll just maybe build a little bit and
add a couple other other other points to
that I think um one thing that's
important to know about hydrogen is I
think there is now a a consensus a
narrowing consensus around where
hydrogen should actually be used and it
used to be this idea hydrogen will be
used everywhere and we use it in our
homes and our cars and I think all a lot
of those things have gone away and it's
really understood now there's some
really key applications where hydrogen
is required to decarbonized like steel
production um ammonia production
chemicals you know some some parts of
refining now the issue is that those are
big industrial companies whose products
are Commodities and therefore if they
are not competitive if they decarbonize
first but but become uncompetitive
because they've taken on a load of cost
then they lose so they they've gone
green but they go out of business and if
you want to buy green hydrogen today
it's probably going to cost you5 or $6
doar per kilogram depending where you
are in the world most of these
industrial companies say we need it to
be one or $2 per kilogram if we're going
to be able to uh switch to hydrogen and
still be competitive so that premium for
them like somebody's got to help deal
with that so whether it's government
mandate subsidies um uh things like that
but but what's interesting is when once
you feed that through so if you're a
steel manufacturer and you switch to
hydrogen and it increases your costs by
10% it makes you uncompetitive but for
the car manufacturer who's buying that
steel to make a car the car that's sold
at the end is maybe only 1% more
expensive and to us as a car buyer you
you would find that negligible you would
say I didn't even notice that so I think
there's to your point about off-take I
think there's really um an important
focus on how do you get the whole chain
to recognize this value or somehow kind
of connect the user through to the the
kind of green hydrogen whether it s kind
of green certificates or other programs
that can really connect it through and I
think that's where well we it needs more
work and more thought to figure that out
yeah thank you and in terms of the chain
Upstream I mean are are they oil and gas
companies enthusiastic about developing
their capabilities in hydrogen or are
they dragging their feet I think um um
more
broadly many of them are enthusiastic
not only about hydrogen but about carbon
capture and Renewables I think there is
at least um two examples and I hope it's
okay to expand Beyond outside of
hydrogen but just I think in the last
two weeks we heard the total energies is
a partner partly owner of the largest
offshore wind farm in Scotland and it
has just started 114 turbines so I think
that is a very tangible example of
something that a traditional oil and gas
integrated company is doing right to uh
to expand uh there is also I think over
the last six months uh exom Mobile in
the U in the US acquired a 5 billion
pipeline operator to support the carbon
capture agenda so I think it is we need
them in this business we need them in
the future in the future businesses and
I'm I'm very glad to see that thank you
can I ask the panel kind of a pointed
question on this um you know we we
understand how to decarbonize the
electricity system in this country for
example what what do we do about the gas
Network um I mean do do we expect
hydrogen to be the the solution for
decarbonizing the gas Network do we
think the gas Network should become a
stranded asset and we shouldn't use it
anymore I wean
do I I yeah let me go first because we
we we are the carbonizing gas networks
at the moment and by the way um we need
the gas Network to be transporting gas
low carbon for the foreseeable future I
think first before we I I hand over to
you to speak about the hydrogen uh
Network and most I would say 90 or 95%
of the emissions are methan leaks so
which we can actually aate today so I
genuinely feel really positive you know
about the Outlook this almost low
hanging fruit um to decarbonize the the
gas Network
there so by decarbonizing you you mean
putting hydrogen through the existing
network no I mean I mean transporting
gas with low G emissions impact I'm
talking about the operation
Transportation the switch no the the
switch of fuel that is a that is that's
a different topic right but the point is
that we will need gas between now in
2050 right okay yeah yeah but do you
have any thought on decarbonizing gas
yeah just to say you know we have our
own Net Zero scenario that we've built
at BF that goes out to 2050 and kind of
tries to answer the question of what's
the technology mix that will decarbonize
the global energy economy in that
Outlook in the net zero scenario we
still have oil we still have gas we
still have coal in 2050 um alongside
some carbon capture and storage a little
tiny little bit of carbon removal for
for some of the really really difficult
things so I don't think we're saying
these fields go away and and you still
need to transport the hydrogen if you're
going to have hydrogen in some of these
um facilities you're going to need to
transport the hydrogen as well so there
will be a role for molecules that will
be retained in a net zero world but it
will be smaller it will be quite quite a
lot smaller in some cases so I think the
challenge and the question for gas
networks is what does that transition
really look like for them how do you
avoid kind of um investing in stranded
assets and that there you need to go
much more in depth into what's the role
of this particular asset is there a
carbon capture inore storage facility
nearby which makes it Net Zero
compatible and so on it I think it gets
quite specific at that point interesting
do you do have a view on this Danel I
mean so the only thing I would add is is
also this point around carbon capture
because I think we're going to have to
use pipes to effectively transport CO2
the other way to to storage so I think
and I think I'll pick up on Albert's
point which is maybe to tie it a little
bit back for things like hydrogen but I
think we're going to see the emergence
of very large projects like neon but
then also there are going to be some
very specific on on site situations
where you're trying to decarbonize
something that's just very hard to do so
and then there'll be the emergence of
these sort of smaller projects there
kind of a barbell Outlook and I think
that context then becomes really key
because I think we can all model things
um you know very well now and you know
they've got some great modeling that BNF
and others have done but actually there
is the Practical context of when you're
trying to decarbonize a situation and
that may mean that you're using
something that from a model perspective
looks suboptimal but needs to be
delivered so I think we're going to see
these bespoke small projects that's
something that I mentioned proteum
that's where they're very much focused
and these really large Mega projects
that are going to kind of think about
how do we get things like green ammonia
and others to the most cost- effective U
Place possible thank thank you um I
actually wanted to to ask you a question
Daniel about infrastructure in general
and infrastructure financing um I mean
we we've we've spoken a lot about about
the Technologies which are coming in but
when you're thinking about
electrification in general the the
degree of network expansion that has to
occur is enormous not not just the kind
of the high voltage but but local as
well I mean um what what's the kind of
the the solution there I mean is a scope
for a lot more third-party Finance in
infrastructure ownership we've already
seen in this country for example
separation of the system operator from
from the the transmission ownership
which should open up the potential for
for you know independent investment uh
in a regulated way on infrastructure
assets is that an asset class that would
be
attractive um regulated asset class
obviously and more of that or I mean it
has to happen no no I think it's a very
good question I think it definitely does
I think we have seen infrastructure
become a sort of recognized asset glass
and actually increasing amounts of
capital going into financing it I mean
you're absolutely right I think the
amount of capital I think Albert touched
on this as well that needs to go into
grid infrastructure is is is very
significant we're going to have to see
um companies that own and run grids you
know increase the amount of investment
you know manyfold over the next um few
years and that needs to be financed I
think it will be financed through Equity
I think it'll be financed through
infrastructure debt and and the like so
um and then that effectively has got to
be paid at some point as well so I I
think I I think the capital actually for
infrastructure is is actually an easier
discussion to have because in some ways
that's scaling what we've already got
and I think you've seen a number of very
large funds like Brookfield and other
raise large amounts of capital to deploy
into these sort of decarbonization
stories and other things for me the
bigger challenge actually is this
scaling of the next set of Technologies
these sort of Technologies full the hard
to evate sector and that sort of missing
middle I talked about rather than say
the infrastructure financing I think you
know for the right project the right
sort of scope money will find its way
for that but I actually think the the
sort of this mid middle of capital for
how the sort of new technology the next
wave of climate Tech that's going to
require a bit more Innovative
thinking and and there's a thinking
there because um that that technology is
unproven and it's very high risk because
of that or be because it's kind of
economic role is not understood or or
yeah that it it may not be the right
solution it it's all of the above I
think it's all those situations and and
I think we should you know think about
EVS I mean to to to use an example just
to make the point but I think the first
EV came over like more than a 100 years
ago um we are trying to scale some
technologies that um not all I mean
hydrogen and carbon capture have been
around in some components but some of
these other areas we are trying to scale
technologies that are very
nent um and you've got effectively risk
on risk you've got new technology risk
you you've got infrastructure risk
you've got Le sort of regulatory risk as
well so I think it's there is a number
of different um Dimensions there that
even with you know certainty as I have
that we are going to see this kind of uh
decarbonization wave continue it's just
a question of how fast um you know for
an investor that's a very hard set of
risks to break down and so that's where
you know public private kind of
coordination can really work and I also
think coordination across um both within
the industry you know Insurance private
Equity Banks but then I think Albert
made a fantastic point which I hly agree
on we're going to have to start thinking
about value chain financing and value
change Solutions and how do you
effectively look through the entire
ecosystem and work out how to
effectively uh effectively create the
lookth through that allows that
situation to be bankable um across the
ecosystem thank you thank you very much
that that leads into uh a question which
is not a surprise in this institution
it's coming from the audience and that
is you know the the scope for for new
businesses for startups for for uh
Innovation uh for the kind of things
that that graduates from Business
Schools like to do um I mean do you see
the the this the energy transition being
a kind of a big established company game
or do you think there is a kind of
fertile ground for for a lot of new new
new innovation to to come in
uh and grow
yeah I'll ask yeah yeah I mean I so I
think it's both um I feel I'm going to
maybe repeat a lot of what Daniel's
already said but um I I actually think
the sort of startup ecosystem in climate
energy Tech has been pretty healthy the
last couple of years slightly more
difficult at the moment than it has been
but um lots of Venture Capital Money
available for those companies developing
new technology um much more hard tech
than I'd seen in the previous round I
think when we were doing this a few
years ago was a lot of software
companies trying to optimize this this
or that bit of the chain which is
incredibly important but I think now
there's an understanding that okay
there's some really hard Hardware based
issues like can you apply
electrochemistry to mind tailings to get
clean copper out the back because we
have an issue with copper production you
know really difficult things um that are
now able to attract capital or until
this year I would say we're able to
attract Capital to to to do exciting new
Innovations
um and and then at the sort of later end
and again I'm just repeating what Daniel
has already said but um there's a lot of
money available for sort of proven
Technologies infrastructure um funds um
you know obviously Bank debt and and
large large corporates so I again
apologies for saying what you've already
said but there is just this missing
middle right now for kind of the first
of a Kind projects um and so I'll give
an example from hydrogen so our team our
hydrogen team has this um market share
pie chart they produce which is all of
the kind of hydrogen electrolizing
manufacturers around the world and how
much market share they have or how much
production capacity they have and it
looks like a um like a sea urchin or a
like a dandelion or something because
there's just hundreds of tiny slivers so
if you if you want to develop a hydren
project how do you choose a vendor that
you trust is going to produce a piece of
kit that you can rely on for 20 years
when it's an emerging industry there's
100 suppli all of whom have just built
their first factory so it's almost like
you it's starting the company now is
doable but it's sort of how do you get
to the point where you're the The
Trusted one how do you get the finance
for that first project to demonstrate
that your thing works that that's where
the the tricky part is so can I I mean
agree with everything Albert says I'm
trying not to repeat it but my journey
around sustainable Finance really
started here at London Business School
um and I I with a few others launched uh
the first green online search engine uh
we had a bit of success planted like
250,000 plus trees H and then it didn't
work out and so I had to become a banker
instead of a
successful um but so do I think to your
question Derek absolutely there is a
huge space of that and I and I think um
there's a lot of innovation going on in
this sector I you know you can get quite
um sad and depressed I think about where
the state of of climate can be and you
spend any time with people that are
innovating entrepreneurs it really does
give you faith and I think you know some
of the stats that we've talked about
today you can see the impact of
technology and I think that's what's
going to really ultimately win this for
us right is just scaling great new ideas
and there's a number of different ways
to do it I think so you know I've
mentioned one of the Partnerships that
we have at Barkley is unreasonable
there's a focus one called carbon 13
that we're working on so if you've got a
great idea you know have a look you know
you can see we run a number of corporate
challenges as well so we've kind of
worked with some of the very large
companies say okay well how can they
decarbonize say ports and Southampton
we've got a Challenge on at the moment
you got a great idea on that have a look
on my LinkedIn you'll see a link to it
you can kind of go to or just email me
so I think this kind of ecosystem and
actually we just we're just about to
publish a research piece and 99% of the
people that we uh spoke to companies and
entrepreneurs said the UK is a great
place for climate Tech um and you know I
think 70% of the companies that we talk
to see decarbonization as a Big Driver
of value for them going forward so I
think there you know all the challenges
that we talked about absolutely are
there but 100% you know there's
definitely capacity to do it and I'm
sure there are someone sitting you know
many people probably sitting in this
room who've got a fantastic idea that's
going to make a big difference to this
whole situation over the next few
years I think that's a very good point
on which to finish this panel I think um
I think we've covered a lot of
interesting issues I think we've covered
a number of kind of very big intractable
problems to a large extent um but but I
think there there's more optimism in
this panel than I I was kind of
expecting to start with and so so with
that in mind I want to thank you very
much for your contributions thank
[Applause]
you

---

### think ahead: Energy Transition, A View from the UAE
URL: https://www.youtube.com/watch?v=ONsN6nxftZk

Idioma: en

so just to get a started Alex I mean not
everybody will know Peta I I know it
pretty well as a company that weon and
business school have worked with a lot
over the years just tell us petac and
what you do at petac so petac has been
going for about 42 years now uh and we
started out as the clues in the name
right it started out as an oil and gas
Services Company um based birly in
abedine looking at the North Sea and as
well as in in sha in the UAE where a lot
of our business is based so we've been
delivering large scale onshore and
offshore energy assets mainly oil and
gas for the last 40 years so we design
it we build it and then we operate it
and more recently we started
decommissioning it as well uh my role is
we started an energy transition projects
group about three three years ago um
because the the essence of what we do in
in the oil and gas Services when
engineering construction and operation
is equally applicable in hydrogen or
carbon capture or offshore wind uh a lot
of the uh the the periphery of the the
job that you do a lot of the actual work
to make project successful revolves
around safety procurement Logistics
construction safety uh scheduling
invoicing all all that good stuff uh it
doesn't really matter whether it's a a
steel pipe with oil and gas in it or
whether it's a steel pipe with carbon
dioxide in it like going for a CCS
project so we are a a company that can
deliver um the energy assets for a low
carbon future thank you good so you've
lived in the UAE I think Abu Dhabi for
many years obviously you're doing
business there all the time so we're
going to just pick your brains a little
bit on the view in that region and I
guess there's a for some people there's
an in conr in congruity easy for you to
say thank you around um cop 28 happening
in the region because for a lot of
people who are perhaps not so involved
there they think of Saudi aramco
literally the biggest company in the
world they think of the state oil
companies in AB Abu Dhabi Oman Qatar
Kuwait and so forth and they think this
is a region which of course was built on
oil uh and continues to invest in oil
and gas so how how do you make sense of
what they're doing is this is this their
attempt to sort of show to the world
that that they are part of the solution
rather than being part of the problem so
I think it's an existential question for
the GCC countries if you look at their
history the last 7500 years they've
built their wealth they've built their
geopolitical presence and and influence
based upon delivering energy to the
world and I say energy rather than oil
because um it has been oil and gas for
the last 100 years or so but ultimately
they they deliver the energy that we all
need to turn the lights on uh to to
produce the pet chemicals that that we
all use day daily and it's quite it's
quite interesting sometimes when you I
always like to talk to just stop oil or
Extinction rebellion and I normally take
my Petra fat lanyard off but I'll ask
them you know well how did you get here
and what are your shoes made of and and
what did you eat today and because
actually the oil and gas it permeates
everything we do so so the Middle East
has been the swing producer a massive
producer of the energy for the globe um
for for for decades
if as customers the world starts turning
to a net zero future which is the plans
is in law and so their customers are now
going to say to aramco to adnoc we need
energy but I want it to be zeroc carbon
or low carbon um that's if if adnoc or
ramco can't Supply that they'll go out
of business um so for them to retain
that that social Packa with their CI CI
citizens to retain their their Global
footprint to retain their business model
they're going to have to change to and
they are changing to a lower carbon
Energy Future um and they're uniquely
well placed in order to do that in that
not only are they able and have done so
for 40 50 years deliver large scale
projects they've got the infrastructure
for export they've got the
infrastructure internally for large
companies to deliver projects um and and
they have that interaction with customer
and Supply chains the shipping the the
import terminals Etc so that they're
there they've also now fortunately for
them made a shedload of money with the
oil price that they've got the enough
funding if they choose to to then invest
in the capex needed in order to build
those assets so it's a strategic play
for them and you've seen aramco and
adnoc uh moving faster and further in
the energy transition uh and they
they're they're part of the cop 28 and
cop 27 discussion around phasing out or
phasing down the view from the the
Middle East is very much oil and gas
will still be needed um we're still
going to need fertilizers and pet cams
for for well well past 2050 and what
we're asking for is net zero so overall
it has to be Net Zero so that means
you've got some emissions you can't do
we're not saying we have to all stop
Flying or stop using Plastics um but
you've got to then counteract that with
either direct air capture carbon capure
project so we've got the uh uh we've got
that Net Zero piece so for them it's
existential it's required and they're
well placed to do it so so talk about
some of the specific types of uh
projects that you see in the middle e so
for for most of the general public
they've heard of neom and indeed um it
was just mentioned in the previous panel
by Daniel um many people have heard of
Mazda um I mean you don't have to focus
on those but it would be quite good to
get your just your explanation of what
some of these major projects are that
we're seeing being so there's there's
two main strands one is to produce oil
and gas more efficiently so reduce
emissions reduce methane leaks make sure
that they are the lowest carbon
production of of uh of oil and gas that
will continue to need into the future I
think um the UA calls itself the the has
the lowest carbon footprint for per
barrel of oil produced because it's
actually quite easy to get it's not deep
water offshore in Brazil where you've
got pre-salt deposits that takes a lot
of energy just to get the oil out for
them it's it's abundant it's fairly
allow they've got the infrastructure so
cleaning up their emissions and making
sure there's no leaks and producing the
lowest carbon barrel of oil we need uh
that we will continue to need for the
for the future secondly they're looking
at low carbon projects the um I think
the largest solar farm is now in the UAE
Mazda was set up in 2006 actually run by
uh Dr Sultan aljaba um who's now the
president of well the leader of CEO of
adlock and the president of of cop uh
cop 28 uh so his his background for
instance has been in that for a while uh
petat were fortunate enough to be
awarded a main CCS project in habshan uh
just back in November for adnoc so
there's a lot of carbon capture work
going on uh along with solar there we're
starting to see some potential wind
projects particularly in the GCC that
can produce if you've got abundant solar
and decent wind you can start to produce
green hydrogen uh we see a lot of
activity in Oman for instance where
they've got uh very good um export
routes from dukham down in the South
that can go to Africa up the Su canal
and also to Asia and they're looking at
you know billion dollar scale projects
with wind and and and solar to produce
green hydrogen from water and again
that's another energy Vector they can
see so that's where we're seeing the
activity and which Technologies do you
see the most potential I mean the
previous panel we talked a little bit
about some of this but green hydrogen
carbon capture uh I think blue ammonia i
l do not know what blue ammonia is
apologies but I mean are there some
technologies where you think I mean
particularly in Middle East but perhaps
more broadly where you see the biggest
potential for actually reducing
emissions given that we're going to be
using um oil and gas for the foreseeable
future so I think it's going to be a a
wide fragmented mix of energy sources
and and vectors for transporting the
energy we've been really lucky the last
100 years our wealth industrial sort of
growth has all been in the globe um
being lifted up out poverty by
hydrocarbons as a bit of a monoc crop or
monoculture coal gas or oil highly
energy dense easy to transport uh and
can be used in a a multiple different
different ways from Aviation through to
you know Coal Fire Stations um as we go
forward in the low carbon world you're
going to find a really fragmented mix of
Technologies so in some places it might
be wind if you've got abundant wind some
places it might be geothermal uh it
might be Hydro right if you've got
somewhere like Norway with with Lo loads
of hydro facilities um you might find
that it's hydrogen again where where
that makes sense uh and you might find
that it's it's sustainable aviation fuel
so where we're seeing activity and where
we're focused on is in four main areas
one is carbon capture and we are uh tech
technology neutral as a company that
allows us to sit with a number of
different solutions whether it's a well
established aiming solution or hot
potassium carb we've been looking at uh
and even just yesterday quite a novel uh
a novel Solution that's that's basically
an organic solution um so carbon capture
we think is is where we're seeing
activity in the UK for instance you've
got these clusters coming up in tside
and uh humberside the Scottish cluster
Etc in the UAE clearly in order to get
low carbon um fuel out they're going to
have to start capturing some emissions
or direct air capture so carbon capture
is definitely one way of doing it and
that speaks to Net Zero because we're
going to have emissions so therefore you
need you need to capture some of the
remaining heart toate sectors hydrogen
is another uh key directive and we're
seeing a huge amount of that in in the
in the GCC I mentioned Oman hydrogen is
a really tricky molecule as my colleague
would call it it likes to escape it's
very small goes through valves Etc it's
also not particularly efficient because
you have to take electricity and water
by electrolysis uh to produce hydrogen
which is best then used locally if
possible because it's quite hard to to
transport um and if you want to
transport it long distances we're
starting to see it being used as either
ammonia so turning it from hydrogen into
ammonia so it can be shipped or used as
shipping fuel MK is looking at that and
others or we're seeing it as a ethanol
as well being used so there's a I think
is it Michael Li talks about the
hydrogen ladder which is is ruffle some
feathers but in my view if you've got
Electrify everything so if you've got
electrons and it's completely zero let's
use let's use electricity that's fine
but if you've got a stranded electron
sitting off the North Coast of Scotland
and the grid can't take it you have to
do something with it so you could use a
battery to then store it part-time uh
that's quite expensive in short term if
you can't use a battery and you can't
put it into the grid then you might as
well turn it into some kind of liquid or
gaseous fuel so hydrogen is the the The
Logical The Logical route use that
hydrogen locally um either blend it to
to make uh sustainable aviation fuel or
a methanol or ammonia for transportation
um is the it's the best way of using it
because that otherwise if you transport
hydrogen on its own even as a a liquid
organic or as a compressed that's
actually quite expensive in terms of the
energy penalty so those are the reasons
thank you um final question um bringing
it back to kind of the corporate level
and I was just looking online so adnoc
the Abu Dhabi National oil company they
plan to to spend 15 billion on clean
energy projects by 2030 they've got a
pledge to get to Net Zero by I think
2045 I looks on Saudi aramco's website
they've got a pledge to get to Net Zero
by 2060 that's an awful long time away
um they have a 1.5 billion
sustainability Fund in aramco but you
know they spend $38 billion a year on
capex so I guess my my question is you
know not withstanding all of this good
stuff you know is it is it enough right
I mean this is this is a good a good
effort it's progress but it does feel
like we're still you know going back to
what Yan says right at the beginning
we're still you know not getting
anywhere near where we we need to and I
guess it's a question to to you in terms
of how do both the companies think about
it but but also of course how do the
governments because in all cases these
are basically government controlled
companies so we can't completely
separate out the state oil companies and
the national governments how how are
they thinking about it how are they
talking about actually managing to get
to the uh to the ultimate Net Zero
Target so it is interesting because they
are setting they got targets 20160
2050 um and and they're getting pressure
to bring that further down they have
interim targets I think uh um KSA have
got a a 2030 Target to reduce by 280 odd
million tons per year uh uae's got a
2030 Target as well so they are they are
moving that direction however their
business model is also predicated on
selling hydrocarbons and energy to the
world so there's definitely a ying and
yang there in terms of how they do that
I think as a as a globe everyone is
agreed we've got to get to an N zero the
end point is set and we we're kind of
saying mid mid century is what we need
to do I think you we're horribly off
track right we we need to accelerate
absolutely clear um but it's us as
consumers right so there's a business
model there right how how do we change
our demand as well and it can feel
overwhelming as a consumer what
difference can I make as an individual
but I would strongly encourage everyone
to look at their what they're doing what
they're buying you vote three times a
day or more depending how hungry you are
on when when you eat right where's your
food coming from is it you know is it is
it is it carbon intensive meat is it
plant-based is it highly processed is it
packaged has it had how how many food
miles does it have we as consumers can
make that choice every day three times a
day on what you eat likewise how you
travel what you wear um
can you cycle can you take public
transport I think I've seen the climate
Action Report came out with we need to
build every um every year a public
transport system the size of New York
cities every year for the next 10 years
in order to you know again get people
because car mileage is still going up
and and while the battery electric
vehicle uptake is is is is on track that
still takes carbon intensity to to run
those vehicles and you've got to charge
them where's that electricity coming
from so I would really encourage you I
think we can all individually make a
difference and that's ultimately it's
those buying signals that will affect
the business models of what the of what
has produced and and we we have the
power indeed thank you good we are going
to take a break in one second um so
first of all thank you so much Alex for
a terrific
[Applause]
session

---

### think ahead: Complex Climate Trade-Offs
URL: https://www.youtube.com/watch?v=XE9DPMV4ENM

Idioma: en

thank you very much Julian it's it's
really great to be here so what I'm
going to speak about is complex climate
tradeoffs so when we think about the
climate crisis we think it is so urgent
that we should stop talking and start
acting we might think about the Nike
logo just do it we don't need to talk
about issues such as this but the
reality is much more complex there are a
variety of tradeoffs where if we pursue
the climate agenda there might be some
other types of cost to society and we
need to be mindful of them and this is
absolutely not to downplay the scale the
magnitude the urgency of the climate
crisis but to number one recognize there
are other considerations and number two
if we don't recognize those
considerations then any strategy that we
have to address the climate issue might
run into problems and resistance
so there's three types of tradeoffs that
I will focus on in my talk
today so the first is the tradeoff
between climate and financial returns
now you might think well is it is that
even a trade-off to begin with if you
look at the letters from Larry thinkink
the CEO of Black Rock he claims that
climate risk is investment risk so if
you want to maximize your risk adjusted
Financial returns minimize climate risk
he also says investment conviction is
that sustainability and climate
integrated portfolios can provide better
risk adjusted returns to investors again
this suggests that there is a win-win
and no trade-off finally we believe that
sustainable investing is the strongest
foundation for client portfolios going
forward and you might think well this is
what Larry think says but maybe he's
talking his own book so let's go to a
more objective source so the financial
times so so they produced some really
impactful paper articles entitled The
ethical investment boom claiming the
outperformance of ESG strategies is
beyond doubt and many other
authoritative newspapers and media
Outlets have articles with similar
claims but the big concern with all of
this is the issue of confirmation bias
so what is confirmation bias this is the
idea that we accept a claim
uncritically if it can confirms what
we'd like to be true and this
particularly applies to ESG investing we
would love to believe that ethical
companies perform better and
particularly in the area of climate we
like to think that companies that
pollute the planet will meet their come
ups and later on suffer from high lower
Financial returns but the problem of
confirmation bias is that we will
believe things even if it's not backed
up by rigorous evidence and this was the
topic a TED Talk I gave at lbs a few
years ago called what to trust in a
posttruth world about how critical and
how Discerning we need to be on issues
that we feel very strongly about like
climate and indeed there's a book I've
written which is coming out next year
with penguin called may contain lies
about how careful we need to be with
simple statements which seem quite
appealing so how do we apply the idea of
confirmation bias to the examples that
I've already given if you go back to the
Financial Times article then a reader
wrote in and said well actually the case
on ESG investing is far from closed and
he highlighted a number of pieces of
evidence suggesting there sometimes is a
tradeoff maybe ethical companies don't
perform better and then if I go to the
Larry fin statements let me start from
the bottom and work up we believe that
sustainable investing is the strongest
Foundation but if we are to take some
action it has to be more than just
belief our investment conviction is that
sustainability can provide better
returns but again we want more than
conviction is their evidence and this is
why the heartbeat of what we do at
London Business School is not just to
tell nice stories but make sure that
this is backed up by rigorous academic
research and that's what I'm going to
apply to the first statement of Larry
thinkink climate risk is investment risk
so is climate risk investment risk now
the prevailing consensus is the answer
is yes and this is backed up by some
research published in a top Finance
Journal so the paper finds and I'm
quoting stocks are firms with higher
total carbon dioxide emissions earn
higher returns so more polluting
companies earn higher shareholder
returns and their interpretation is our
results are consistent with an
interpretation
that investors are already demanding
compensation for their exposure to
carbon emission risk so the idea is that
companies that emit a lot of carbon they
are risky why because there might be a
global carbon tax in the future and so
investors are only willing to invest in
these risky companies if they are
compensated for by a higher
return but let's think about this and
let's think about it critically because
what happened
if we replace carbon dioxide emissions
with another ESG Factor so let's replace
this with employee satisfaction so there
is evidence shown that stocks of firms
with higher employee satisfaction earn
higher returns now would the
interpretation be the reason for these
higher returns is that companies with
lots of employees satisfaction are risky
it's just too risky to have happy
employees and therefore we will demand
higher returns because we don't want to
hold stocks with happy employees
absolutely not we would not interpret
this as risk we would interpret this as
outperformance right so why is it that
companies with happy employees they do
better it's just these are better
companies they are generating higher
Financial returns because they are more
profitable and so that might be the
interpretation for the carbon emissions
result companies that emit more carbon
have higher profits why because they can
get away with polluting we don't have
sufficient government action on climate
change so there are polluting companies
which are able to generate higher
profits and those higher profits lead to
higher shareholder returns so there
seems to be a bit of ESG double thing
here where if we see a bad thing leads
to higher returns we say well that's
proof that it's risk and if it's a good
thing we which leads to higher returns
we say well that's proof that it is
actually good so the question is well
how do we disentangle if we have higher
returns is this a good thing it's
outperformance or is this bad thing is
it compensation for risk and the
standard way to do this is to do what's
known as an earnings surprise test and
so this is what I did in one of my
earlier papers where I looked at the
link between employee satisfaction and
long-term share shareholder returns so
how do you show that it is out
performance well what I did is I took
earning surprises so this is every 3
months in the US a company releases
their earnings and before they do so
companies like Goldman Sachs or my
former employer Morgan Stanley they
predict what the earnings are going to
be and I compare how these companies do
compare to what analysts were predicting
and I found that companies that treat
their employees well deliver higher
profits than what the analysts were
predicting and therefore the higher
shareholder returns was due to
outperformance not risk but we'd
accepted the early result on carbon
emissions without doing that
disentanglement we just accepted the
interpretation that we want to be true
so in a more recent paper with other
co-authors what we did is basically the
same methodology to try to disentangle
the for of the carbon premium why is it
that these emitting companies are
earning higher shell returns and to our
dismay we wish this was not the case we
found it was because they were
performing better they are delivering
higher profits why the absence of
government action means that they are
doing higher better returns than what
analysts were expecting and just four
earnings announcements per year can
already explain 30 to 50% of the carbon
premium so what are the implications
from all of this well number one it
suggests that sadly climate risk is not
investment risk so the message that we
can just leave everything to the market
because the market is pricing everything
in the market is already punishing
companies that admit we don't need
government action that is not correct
the market is not getting everything
right number two is that a low carbon
portfolio sacrifices is risk adjusted
returns why because emitting companies
are performing better now one could say
I don't care I believe the climate
crisis is so severe I willing to
sacrifice Financial returns to
decarbonize my portfolio and that's
absolutely fine but the goal of evidence
is just to highlight that there is a
tradeoff there is a sacrifice many
people will still be willing to pay that
sacrifice just like people pay more for
organic food but the goal of evidence is
to show that a sacrifice is needed and
finally there might be potential
tradeoffs for investors wanting to take
climate action between net zero and
fiduciary duty so if fiduciary duty
highlights that you need to generate
long-term returns to your investors
maybe pension fund beneficiaries then
these are complexities that we need to
address and my colleague Tom goling an
executive fellow has written an article
about this in a
lger okay so that's one tradeoff that
I've highlighted tradeoff between
Financial returns and climate carbon
emissions now the second trade-off is
between climate and other environmental
and social goals let's say we don't care
about financial returns or at least we
deprioritize them but we are concerned
about Society more generally not just
climate but other things there might be
tradeoffs with those other things
600
million what is that you might think
well that's the amount of investment per
month needed to achieve Net Zero no you
might think well this is the amount of
donations every year to exension
Rebellion or or just a oil
no 600 million is the number of people
in Africa who don't have access to
electricity so last month I was at the
world economic Forum in a for in a
session on a just transition and we were
talking about in a developed country how
we make sure that if we transition
towards renewable energy we don't lose
jobs for those employed in fossil fuels
and then a lady from Africa got up and
she said you all talk about a just
transition we don't have anything to
transition from right we don't have
electricity to begin with so you
responsible investors you can talk about
decarbonizing your portfolio but if
you're pursuing this too aggressively
then you're going to stifle economic
development for many many millions of
people so you might think okay just stop
oil that is a powerful statement but for
her it's just stop Economic Development
so this is one of the things which might
be an issue here do we need to recognize
that there are some countries which
don't even have access to electricity
this is again not to downplay the
severity of the climate crisis but to
recognize there other issues that may be
asked in the west we might not be aware
of and then if we go back to the West
what's go back to the jobs issue because
many of us I have to admit that despite
me working in this field I don't know
anybody who works in the coal industry
and the average age of somebody in the
coal sector is 55 years old so if he or
she lose their job then this could be
the human equivalent of stranded assets
how are they going to retrain and this
is something with long-term impacts on
their family if their children then are
less affluent and then cannot get the
same education that's something with
long-term implications which again us
perhaps we don't know these people as
much we might not emphasize or recognize
when we focus on the very important
issue of climate and let's say we don't
care about the social the social issues
with somebody whose goal is only to
maximize the environmental performance
there are also trade-offs with other
environmental factors so we talk about
carbon capture technology and then I've
heard statements like why do we need
carbon capture technology we have a
great carbon capture technology that is
trees why don't we just grow loads of
trees which sounds simple but sometimes
growing trees will consume substantial
water often in places where people are
already thirsty it will drive people off
land that is not a problem that many of
us in the west need to think about but
this is a serious issue we could say
well to Country X why don't you grow
more trees well there is an impact there
on humans what about emissions reduction
we can also try to have different types
of fuels say biofuels but sugar cane for
bioethanol and palm oil for biodiesel
those are great biofuels but they can
lead to monocultures and that reduces
biodiversity which is another emerging
environmental
issue and the final set of tradeoffs is
the tradeoffs between the portfolio of
an investor and wider Society so there
are many investors who are very well
intentioned are taking very seriously
the climate crisis and their goal is to
aim for portfolio
decarbonization or Net Zero portfolios
or climate aligned
portfolios but decarbonizing your
portfolio does not necessarily mean de
carbonizing Society so if I own some
fossil fuel stocks if I'm to sell my
shares I can only sell if somebody else
Buys so I'm not depriving it of capital
and notice this is quite different from
boycotts as a customer if I choose to
boycott a company then maybe the
products stay on the stores I am
depriving it of Revenue but the analogy
to investors divesting is not perfect
because I can only sell
if somebody else buys I am not starving
it of capital
immediately now others will say yeah we
get that but when you sell and somebody
else Buys in order to encourage somebody
to buy you have to sell for a lower
price if you drive down the stock price
then you make it harder for the company
to raise capital in the future and again
that seems a logical argument but again
if we think about this if you're an
investor
and you choose to sell every fossil fuel
company in order to reduce their stock
price and then make future Capital
raising harder well then what are the
incentives of a fossil fuel company to
reform they know that even if they are
best in class and putting in a credible
transition plan which is being
implemented they will still be divested
so this black and white view that we're
going to divest from everybody irrespec
of whether you are reforming just
because you're a fossil fuel company
that doesn't provide any incentives it's
just like if a company was to say my
policy is never to hire any ex offenders
well then this means if you're somebody
who's been in prison what are your
incentives to reform if you're not going
to be able to get a job afterwards so
this is why one of my more recent papers
with a couple of other co-authors what
that suggests that actually a tilting
strategy or the best-in class strategy
when I'm willing to hold maybe a fossil
fuel company if it's Best in Class if
it's taking action to reduce its climate
impact that might be better than blanket
exclusion and notice it doesn't apply
just to energy companies maybe I could
hold something in a hard to Abate sector
such as cement or concrete if I'm in
holding a company which is reducing its
usage of clinkers and that's something
which has a huge effect on the
environment maybe this is something
needed we still need concrete we still
need to build schools and hospitals yes
there are emissions associated with this
but can I hold something which is best
in
class and the final reason why that's
important is that sometimes you might
hold a quote Brown company a polluting
company but that allows you to engage
right so if you have a seat at the table
then you might be able to ensure that
the company has a plan and is putting
this into practice like as a professor
do I want to say look I have all the
very best students all my students do
very well or is your job to work with
students who might be finding the topic
more difficult and then you work with
them in order to improve their knowledge
and then end up doing much better than
they would have done otherwise and so if
You' like to learn more on this there's
a great Ted Talk by a lady called nilly
Gilbert who is the vice chair of a the
um the carbon trust which is working on
these issues and it's about how we need
to take a very nuanced view on these
issues which are often seen as black and
white and so let me then sum up before
we get to um the Q&A so all the three
tradeoffs that I've highlighted
emphasize that there's danger in binary
thinking so binary thinking is saying
that divestment is good holding it is
bad pursuing climate is good let's a
ignore all of the other objectives of of
society and also it's better to always
reduce our portfolio carbon footprint
not recognizing that this may mean that
somebody else holds the emitting company
and so this is exacerbated by some
recent developments so often people
think well we need climate action as a
regulator let's try to come up with some
rules and some numbers and some metrics
but with all of these things we think of
the toris and the hair more haste less
speed we need to take action but we need
to make sure that the action is
effective it doesn't backfire it doesn't
have unintended consequences so the
urgency of the issue does mean we need
to act fast but also we need to act
wisely so we currently have these
taxonomies in the EU saying well what is
good and what is bad but hopefully I
highlighted that there is no clear
distinction between good and bad some
something that generates electricity
could well be good particularly if it's
for people who otherwise would not have
access to it something like producing
cement or concrete we still need for
construction but if you're doing this in
a way which minimizes your impact on the
environment that could still be a good
thing what are ESG ratings they're
trying to measure the ESG performance of
a company and so this leads to some
investors trying to hold highly rated
stocks and divest from lowly rated
stocks
in order to show how committed they are
to uh ESG but again if I'm selling the
poor performers number one I'm not
providing them with incentives to reform
and number two I don't have a seat at
the table I'm not holding these
companies I'm not able to engage with
them to improve their ESG
performance and finally and more
specifically to carbon there are many
investors which will report their
portfolio carbon footprint there are
even some CEOs of asset managers whose
pay is linked to the portfolio carbon
footprint of what they're holding and
one of the big trends now in ESG is to
pay for ESG the idea is that if you care
about something deeply let's link pay to
it to show that there is bite to show
that you don't just have statements but
those statements have implications for
reward but again this is problematic
because you can simply reduce your
portfolio carbon footprint by selling
emitting companies and somebody else
buys it it's just like I'm going to
clean up the trash in my garden by
throwing it over the fence to the
neighbor right so I've reduced my trash
but I've have not done anything for
society and this is something which may
well be a consequence and also this only
looks at carbon footprint but not the
positive aspects of some activity that
generates emissions as a byproduct such
as the production of electricity or the
production of cement or conrete so what
might be the solution to all of this and
I might be biased being somebody who
works for an educational institution but
it is literacy and education but what do
I mean by literacy we hear often
financial literacy we now hear AI
literacy but maybe an important issue is
climate literacy so there was a lot of
action and a lot of excitement among
young people and groups like Extinction
rebellion and just top oil have
highlighted the criticality
of taking action but if the message is a
one-sided message we're only
highlighting the um problems of things
like fossil fuels and not the fact that
it might be providing electricity not
the fact that it might be currently
providing jobs that in the long term we
do want to phase this out but in the
short term there might be some real
consequences then we do have some
potentially quite strong policies which
are so extreme they may not be
implemented so I've seen some policies
suggesting let's ban all non-essential
flights well that would be devastating
to a number of countries which rely
heavily on tourism for the economy for
jobs for economic development and so
just to highlight that yes we do care
about these issues very seriously but
there are also many other considerations
around that I think this would lead to a
richer a more nuance and ultimately more
realistic conversation about climate
where we can suggest some ways forward
but both ways forward recognize the
tradeoffs and therefore they're more
likely to be implemented okay thanks
very much I'm going to give to Julian
for
the thanks Alex do you do you want to
sit down we we've got you want to sit
down yeah sure let's do that yeah let's
do it that way um so I've got a bunch of
questions um and and of course as as as
Alex was talking I was my thoughts were
being provoked I've got a few similar
questions um I mean you're raising the
the trade-offs you are absolutely I
think of course giving us a much more
nuanced view of those trade-offs than
perhaps most of us had had before um a
couple of the questions I'm going to ask
you this specific question in a second
but somebody says given that these are a
series of trade-offs what's the answer
uh somebody else says you know how would
you like us to move away from this
binary thinking let me sharpen the
question in the following way which is
you know we we work at Business Schools
we we we believe in markets um and as
you said yourself the market don't get
it quite right in this case so if we
have some sort of market failure we
almost always say then the government's
job is to step in and to sort of nudge
the market in the right direction so
inevitably that leads to questions one
of the specific ones isn't carbon
pricing the way forward tell us about
your thoughts on how governments can
help to resolve this if you like market
failure we'll get to the kind of
corporate response in a second yeah
thank you it's it's a great question so
so what does a market failure
essentially this occurs when there's an
externality so this is when a company
has an impact on wider society which
ultimately doesn't bounce back and
affect the company's profits in the long
term and so then the solution to a
market failure is regulation so one of
these could be to completely ban certain
activities so you might ban something
like child labor but something like
carbon emissions where we think there
could be benefits but also costs it's to
take the milder solution of of taxing so
that you are recognizing the full social
consequences of your action so this is
why I and a lot of economists and a lot
of um academics who work on this I'm a
strong advocate for a carbon tax so that
companies will face up to the
consequences of their actions because
actually the market is not failing in
pricing things the market correctly
prices carbon emissions under the
current regime which is not to punish
emitting companies because there's no
consequences so the market gets things
right given the regime but I'm
suggesting we we need a different regime
got it so that's and of course we know
there were challenges technical
challenges in implementing these things
but I I do completely buy into that
direction of travel moving to the
corporate side then and and and you
touched on this and I know you've
written about it elsewhere how should
what's your advice if you like to to the
these Chief Executives who are looking
at these trade-offs and they are making
this inevitable choice to some degree in
the short term between of course you
know doing good in the world versus
making profits we we know that that's a
stylized choice we know that the truth
is of course more nuanced how do you how
do you advise companies to to to resolve
that tradeoff I I think it's a great
question because some people might say
oh yes if the government is who should
deal with it but if the government isn't
dealing with it then the companies need
to step in I think if there are
tradeoffs and you're pursuing something
because you care about the climate and
there's a financial cost to that I think
this is fine so I think there are many
investors who will support companies who
make make some return sacrifices to
address the greater good we saw this in
um the pandemic where many companies
were giving products for free is this
because they're forecasting in the
future our reputation will be improved
by this and it's going to come back to
help us or is this because we think this
is the right thing to do and there are
many shareholders who supported
companies doing that or companies which
may be fur their workers and continue to
pay them rather than just uh laying them
off immediately so I think when you have
this message and you say well it's a
completely win-win we're going to do
something and there's never going to be
a financial cost then shareholders then
get upset if you deliver substandard
results but if you're upfront as to why
you're doing this I think this gives a a
a much better message and you're more
likely to be supported why do
shareholders invest in the company it's
not just to get a higher return in the
future but to get a higher standard of
living in the future right when I retire
in I know 40 years time I don't just
care about my income but whether the
planet is two degrees warmer or whether
we have a cus of society so there are
many investors and the Pension funds
survey their beneficiaries and they
realize that they don't just care about
financial returns they are willing to
pay the price of a trade of but just be
upfront that there is a price to be paid
and many in the audience remember Danon
the French company Emanuel Fab was the
chief executive who was very very uh you
know thoughtful about the environment he
I think they made them into a big uh
benefit Corporation he lost his job at
least in part because the board felt he
was wasn't delivering enough financial
returns any any Reflections on that I
mean did he just push sh say too far CU
a lot of what he did was things that I
think you and I would probably agree
were good things to be done yeah so this
is interesting so if you if you read
sort of how this is often portrayed they
say this was a Visionary CEO who wanted
to do the right thing but it was the
short termism of the stock market which
prevented him from doing so but the
reality was that he was that down on for
6.5 years so this was a long time period
and the company stock price was flat
whereas the kakah Hun which is the the
peer group that had gone up by 50% unila
other competitors have gone up by 50%
and why is this well Janis has also done
some work on this it's because of the
some poor strategy some poor strategic
decisions some poor acquisition some
poor corporate governance and so what
this suggests is that yes you can do
good things for the environment and for
society but you are also a business and
so the challenge of a CEO yes you do
need to deliver on ESG goals but you are
also business and you also need to
deliver in the standard stuff as well
indeed a final question um you and I
Yannis we we're all teaching our
students um we're hopefully doing a
decent job um are we teaching outdated
theories because there's a there's a
hypothesis out there that all of our
theory is rooted in this sort of
traditional shareholder based view of
the world and that that's somehow
actually teaching our students the wrong
stuff another great question and I have
incentive to claim that we are why so
the um textbook that I I I I learned
when I was an undergrad at Oxford and
when we started at Morgan Stanley was
principles of corporate finance by
brillian Myers I am now a co-author of
that book for the 14th Edition which
came out a few years ago I would love to
claim I completely rewrote the book
scrapped 30 years of outdated work and
I'm now I'm changing it but that's not
the case because actually in many cas's
traditional business theory is about the
longterm now it may well be that the
longterm 100 years ago was an oil
company engaging in Exploration and
production and that is not what we would
call long-term right now but that aspect
of investment that long-term investment
was something supported by business
principles what is shareholder value the
very first class in finance shows you
that shareholder value is the present
value of all future dividends right
until the end of time so somewhat
bizarrely maybe some of the concerns are
not enough focused on shareholder value
and this might seem heretical but the
problem is companies are focusing too
much on shortterm profit short-term
profit is not long-term shareholder
value long-term shareholder value would
say to a car company invest in electric
cars this is something which will cost
you in the short term but in the long it
will benefit you beyond climate
long-term shareholder value will say
invest in a diverse and inclusive
Workforce it will cost you in the short
term but it will benefit you in the long
term and I think the message that we
need to complete scrap the rule book and
go to something new that can be a
damaging message because then some
companies think we've been successful
for so long without this why do I
suddenly need to change or do I have to
go with something unfamiliar and untried
and untested but given that what makes
business successful and has done so for
centuries is a focus on long-term value
creation I think that message is
something which should still be getting
across perfect we are going to close
there thank you very much Alex for a
fascinating
talk

---

### think ahead: Meeting the Climate Challenge
URL: https://www.youtube.com/watch?v=_LE1nBUDaDQ

Idioma: en

[Applause]
thank you junian and uh thanks for
having
me thank you all right wonderful thank
you so much so uh let me briefly
introduce myself and then I'll I'll call
up uh the two panelists in the room and
we have a remote panelist as well so my
name is um uh Sylvia pavoni uh I am a
journalist uh I work for the financial
times group so not the company but the
sorry not the newspaper but the company
and I write for a new title called
sustainable views we focus as you can
imagine on sustainability and in
particular on policy and regulations so
all the stuff that may uh feel perhaps
not as sexy but actually is really
driving uh arguably the space uh but
during this panel we're going to talk
about the challenges that specific uh
Industries and companies face uh and not
tackling uh when uh considering climate
change uh so let me invite uh on stage
um Tom and Mata who are going to help us
uh through the discussion so Tom Grande
is the CEO of hybrid uh vehicles and he
will tell us he will tell you all about
the compan is fascinating uh and we have
Mata here who is the CEO of EDF
Renewables UK obviously perhaps we are
more familiar with what uh mata's
company does but uh surely is going to
tell us uh a great uh more detailed
about uh new projects and then joining
us remotely I'm sure we're going to see
him appearing on the virtual stage very
soon is Richard uh W hi Richard who is
the UK head of sustainability for hundas
bankin so welcome everyone right so we
are going to talk about of course the
challenges the companies face um dealing
with climate change so it's not a
particularly easy uh task um to uh to
handle um
but there are different levels of
success and different measures that uh
your companies and your industries peps
may want to see um to really help you
progress um and so let's uh maybe start
with some initial thoughts uh on what
you think uh on the kind of broader
risks that your industries face and
let's start with you Tom so you can tell
us a little bit more about what exactly
it is that you do um and then we talk
about specifics okay well um thank you
Sylvia I'm Tom Grundy I'm chief exective
of hybrid air vehicles and that puts us
squarely in the aviation industry uh
we're developing the world's most
efficient or most sustainable large
aircraft so we're really working to
scale up um technology that allows us to
make an impact on emissions from the
aviation sector and that's a huge
challenge so I look at what the sector's
dealing with overall Aviation is one of
the hardest sectors to decarbonize
um that being through the simple fact
that you need to lift your own fuel up
into the air uh before you can do
anything else useful so that
decarbonization challenge is very real
is very present um and uh and it's a big
deal you know uh aviation's 2 to 4% um
of our um climate forcing emissions um
the difference between the two and the
four being depending on how you account
for the non-co2 effects of Aviation
which are significant in themselves but
it's it's also an activity that only
really a few people around the world
currently use so about eight out of 10
people around the world haven't gotten
an airplane yet put those two things
together um and if you take one long
haul flight you've used up about one fif
of your own personal Paris climate cord
emissions budget so five Long Haul
flights for each of us and that's our
entire budget done um so big challenge
the head for
Aviation thank you Tomy and then we'll
talk a little bit more about the what
you're trying to what you're doing uh
with a company what you would like to
see happen so that Innovation can
actually um take us to to a much uh
better place in terms of uh our
environmental impact um Mata tell us a
little bit about the challenges you're
facing at the moment yeah so so good
afternoon everybody um so EDF renewable
is part of EDF group uh you probably
have heard of EDF group is one of the
world leader in low carbon electricity
generation so 90% % of the electricity
we produce come from low carbon
technology including nuclear Hydro wind
solar and we also do
storage so uh the the heart of our
purpose is basically to help uh achieve
Net Zero so that's that is basically low
carbon electricity electrif
electrification and uh helping people
use electricity decarbonizing their
their
footprint uh so there is a big role for
for our industry into uh into Net Zero
and just to give you a bit of a sense
today of you know uh energy usage 80% of
the energy we use or and more than 80%
comes from coal gas and oil so you know
that's where our emission come from or
most of our emission come from and if
you look at the usage of this energy 40%
is power more than 40% is power so
that's electricity and heat we've got
20% roughly around with transport and
another % industry and the rest is
building and construction so we have two
things to do on our side one is to
decarbonize elect electricity uh which
is entirely doable and then is to
Electrify to enable Industries transport
to be de
carbonized so those are the the
overarching challenges and then again
we're going to talk about what you are
doing um with your projects here in the
UK to to tackle them Richard over to you
so obviously you look at this from um a
different perspective you uh you work
for Bank banks finance all these
projects in theory that Mata and Tom are
working on but also you under the
spotlight um for your involvement in
some other parts of uh of the um economy
that um contribute to to pollution so
after this lovely introduction to what
to what the to the responsibility of the
financi financial services um industry
has tell a little bit about the
challenges you face yeah thanks so much
Sy and I wish I could be in room with
you today so apologies for that but um
yeah I'll come on to talk briefly about
the role of banks overall which you
started to sketch out there but just a
set of context handles Bank in itself is
a Swedish based northern European Bank
um so major focuses around uh the
Swedish domestic Market the UK domestic
Market again uh and and the Dutch
domestic Market those those are are sort
of um big and growing Footprints um
we're particularly uh focused I
mentioned the word domestic probably
three times there so that gives you a
bit of a sense that's that's sort of the
way that we work with uh local uh
branches and with uh individuals
householders uh small and mediumsized
businesses um for the most part but then
we do have a a significant portion of um
which is devoted to the the larger and
indeed largest companies within those
marketplaces so so that sort of frames
uh thinking that's Al also probably the
most boring part about handles Bank
really um because where we are known I
would say we're probably best known as a
values Le
organization uh one that uh has a has
roots in in responsible banking um and
that's particularly uh uh remembered
probably through through the financial
crisis uh both both in the nordics and
and then in uh at a global level um and
that's very much down to the business
model that we've operated now for for 50
of our 150 years which is about uh
empowering um everyone throughout our
organization to take uh responsibility
and to take decisions in their areas of
uh areas of focus um so what's that mean
for for for this whole agenda today well
it it's meant that we've seen fairly
early on our responsibility when it
comes to climate change and indeed to
the developing broader sustainability
agenda and we've set ourselves uh some
what we what we believe are ambitious
goals at least which I would say
probably best represented by the uh 2040
Net Zero goal which covers our
investments our lending and our own
operations as
well um you mention of course the the
the role the banks more broadly um and
the position they're coming from so so
we tend to divide that up as an industry
into thinking about uh Greening finance
and financing green so when we talk
about Greening Finance it's actually
making sure that our organizations
themselves are set up and governed in
such a way that uh in the shortest time
possible we we're at a point where every
decision uh that's made within the
organization
has a lens on it of of climate change
has a lens on it of nature of
biodiversity and sustainability and so
this um you know this affects the
operational developments of the
organization but of course the the
Strategic development of the
organization as well the areas it does
choose to go in um the directions
perhaps it chooses to move away from as
well um and i' probably say in that
context to what you were saying Sylvia
that it was a few years ago that uh
handles bank and
uh took the decision to um to have a
very minimal presence in the in the
fossil fuel sector for instance uh and
it's now you know what you might
describe as a nominal level with some of
the tightest internal guidelines around
that um that we're aware of in the
industry as well so these twin roles you
know we've got to we've got to treat
ourselves first as one might say but
also to then support uh in a in a sort
of strategically focused way the real
economy uh to understand its
opportunities understand its risks
understand climate change as Professor
Edmund was talking about um climate
literacy earlier on and I do think you
know in all of our
organizations um there there is a
challenge there to get that more nuanced
understanding um of of of the way
forward here thank you so much uh rich
and I hope uh you all in the in the room
and um watching us remotely can actually
hear clear clear audio okay very good so
right so the uh policies that uh Banks
and investors have put in place in terms
of where they wish Capital to flow and
of course some of them may exclude
certain parts of the industry and you
mentioned also uh Financial well not
Financial climate literacy um within the
financial services sector but also more
broadly uh throughout the economy and I
would argue also policymaking right
that's also very very important um
because of course whether your projects
and your companies surely would want to
get the support of private Capital be
it's through a bank or an investor um
they I'm sure would also wish to see
perhaps a stronger um support from
policy makers and from from Regulators
um how can can you tell us how you feel
about the current level of support that
you're getting for example for uh
innovate in in the aviation uh area and
what are the tension points
Point yeah it's a it's a very Broad and
complex space um the impact of policy on
what we're doing um the first thing I'd
say is I would split domestic policy and
international policy in the aviation in
the Aviation Space I'm not Aviation as
an industry is regulated under ik which
is a un body and that has some effects
for
example um on again under the Paris
Accords
um if you take off on a flight in the UK
and you land in the UK the carbon that's
been emitted by that by that flight is
the responsibility of London it's it's
on our carbon accounts here if if you
fly internationally it's not it doesn't
form part of uh part of the the UK
accounting and and that covers carries
on globally it falls to Iko which is a
un body and so policy starts from there
for international Aviation um and
therefore
uh it's multilateral it tends to be a
very long process um it's taken uh some
years for there to be a voluntary
offsetting arrangement in place within
the airline industry and if you come
back then to domestic Aviation that
really does um fit within the remit of
individual governments so where we're
finding um there's a lot of support for
what we're doing is in Nations that have
legislated for early Net Zero targets
and have explicitly recognized that
transport is a big part of that
mix and tell us which countries is yeah
so France is uh France has led the way
France has banned domestic flights where
you can take a train in less than two
and a half hours for example um Spain
looks like it's following our launch
Airline customer for our product um has
reserved 20 airplanes to go and serve
passenger markets in Spain um and I
should just say our aircraft that we're
developing is a is a large airplane it's
100 seats uh but but it flies a lot
slower than other aircraft so the idea
is you get there slower than the
airplane but you're going on very short
sectors so it's a small time Delta much
faster than the train journey and of
course there's lots of parts of the
world where you can't put the train
track in in the first place so it's
about being there with an efficient
airplane it's quite different for the
aviation industry to engage with that
compared to the tubes with wings flying
fast that we're all used to um
Andra we've got that um we've got that
traction because of policy um there um
the airplane is a um our technology is a
lifting Wing uh so we we take that bit
from um normal sort of aircraft
aerodynamics and then we add in some
lifting gas from the lighter than air
technology sector things like airships
um that blimps that people are aware of
and we mix the two so what we're doing
is using a little bit of lifting gas to
give us a bit of a head start Against
Gravity uh but not enough to have the
airplane floating like an airship ship
um that makes the economics much better
for the operator and um it means that on
these sectors domestic flights we can
deliver passengers to their destination
more comfortably quietly um and at a
price that's the same or below the price
of today's Jet flights between those
regions critically you get to your
destination with less than 10% of the
carbon footprint that you would
otherwise have okay so which are all
very interesting statistics what would
you like to see to
really from a policy perspective to
really help you develop this technology
so um from a policy perspective I think
Aviation overall and and our and our
policy view of Aviation is pulling two
different threads together one is the
economic benefits that Aviation brings
to society and the other is the
disbenefits the ex externalities
particularly carbon I think there's a
massive choice to be made here and I
think from a policy perspective we need
to be more honest about the costs the
environmental costs of Aviation I
actually price those in um versus the
benefits so ticket we play we pay would
have to be higher or subsidies well if
you look at it doesn't necessarily
follow because we forget the role of
Technology here so yeah if you look at
today's flights you can price in those
externalities and the price goes up for
the passenger demand goes down and but
but what you're also doing is
encouraging technology into the mix so
you take the technology that that we've
developed we have needed to move past
the hurdle of saying this is cheaper
this this doesn't require a green
premium for passengers before we can
start to have a conversation about um
emissions um so the lack of Taxation on
aviation fuel the lack of pricing of
carbon externalities becomes an extra
barrier that we have to get over if
those that can be changed it's
encourages more technology into the
market all right okay so the taxation
one of the big things um that we'll have
to look into thank you so much um M so
clearly the technology behind Renewables
is been long proven but there are still
a few economic and bureaucratic
challenges right so take us through
those yeah well I mean we speak in our
sector of energy transition so it's
moving from oil and gas moving into
Renewables or other low carbon
generation like nuclear so usually start
with setting some targets so uh most
countries have set some Target to
decarbonize electricity because it's
possible as you said you know we have
the technology to do it um so in the UK
for example it's 203 35 we're saying
that none of the electricity will Pro
will produce will come from oil gas or
or coal MH so the um and beyond that
then as I mentioned you know we'll need
to Electrify so we need to grow uh the
the generation capacity massively so we
we're speaking of huge growth of the
industry if you think about our industry
it's a lot of infrastructure so uh you
know there are big investment required
you know we speak of grid but Power
stations and so forth there is a big
supply chain behind so we are looking at
a lot a lot of investment and um and
infrastructure so the the policy is key
in setting the environment that will
enable this infrastructure or this
investment to happen um so it's key on
the planning side it's key on setting
the uh investment environment so that
people continue to invest and grow their
industry being supply chain or like our
s developers and operators um what we'
seen is you know Chang in policies I
think the uh I mentioned about targets
being set everywhere what we see for
example in North America or in Europe or
in China you know is is also the support
that is provided uh to enable that
energy transition so support in terms of
speeding up planning support in terms of
enabling supply chain industry to grow
uh and developers like ourselves to
invest in in their project um but there
is still a lot to be done because the uh
we've done the easy part of
decarbonizing uh uh you
know um phasing out the coal was the
easy part we've done it in the UK in the
last 10 15 years yeah now growing at the
pace we need we need a lot more uh uh
policy uh to to enable that and that
that is true not just of the UK but
across Europe across all over the world
of although you mentioned Co and they
did make a comeback right following
recent uh really sad events so the war
in Ukraine so actually we we started
seeing some calls being um relooked at
uh across Europe and of course that
remains uh a source of energy in other
parts of the world so I mean it's easier
to have an exclusionary policy for
example thinking about where uh Richard
would uh you know with with um not look
at um when it comes to Coal but then
it's not as easy for every jurisdiction
around the world and um and then there
are other events that take place that
make us rethink
about sources so what what can um your
industry do to really help make the case
for ditching completely those highly
polluting uh energy sources yeah but I
mean the uh electricity is not to
produce like or energy is not to produce
like a any other produce you you can't
stop from uh you know needing
electricity or driving a car uh so uh
you need it all the time so
unfortunately what we see is you know
it's a the high dependency that we have
in the energy sector so here in the in
in in Europe but like in many other
places it's it's mainly gas other places
can be cool you know if you Source your
your gas or coal from a region where
abolutely you can't Source it from uh
you have to make difficult choices and
it maybe switch back on some some coal
plants um so I think removing this
dependency is key uh and the policy that
will make sure that actually there are
incentives so that for example
manufacturing of solar panel doesn't
just happen in China or so we there is a
rule for making sure that there is
Industries uh locally being developed so
we are not as dependent as we are for
example in Europe of f fuel coming from
other other places I think that that is
a big one so we see industrial
Renaissance with nuclear the wind
industry in Europe has been strong hisor
historically but it has been challenged
recently I don't know if you heard about
orad which is a massive player or cement
really struggling financially because
there is not the financial support
needed and you know the supply chain is
slightly struggling to keep Pace with
the investment needed to meet the growth
so we see that we need to protect that
industry and there are other Industries
like solar for example we were the
largest producer of solar panels uh in
the world in Europe and St we generate
less than 5% you know 80% plus comes
from China so you you really need to
think industrial policy and strategy you
know it's not just uh it's just not just
enabling this project is making sure
that you reduce the dependency you have
uh across uh some sensitive regions so
so very quickly before um bringing
Richard back in so um there there is a
series of policies at European level at
least um that look uh exactly what you
discuss so for example Ro critical
materials uh and other
you know we can talk about the uh uh the
carbon pricing schemes and seum and all
of that all these wonderful acronyms so
are you seeing those as positive do you
think that they're actually going to
help at least this part of the world so
I think they the we have we have
instruments you know in uh in our
toolkit so you spoke about carbon prices
I think we need to uh it's carbon
pricing mechanism is too weak at the
moment to really make big shift so there
are other instruments but defintive
carbon is a key one that needs to be uh
just to give you an example on the solar
example uh the producing a panel in
Europe is 50 50% more expensive than in
China if we were just to price a carbon
element right yeah because in China uh
you know the carbon intensity of
electricity is much higher than in
Europe you know we will will reduce our
cost by 10% right so that will start
Bridging the Gap so you can see but it's
not a one Magic Bullet so in it all you
can see the policy is complex there are
many aspects to it and certainly carbon
is a is a key element to the uh to the
policy so do you think the CMA for
example which is the carbon board
adjustment mechanism is going to play a
role in this taxing for example Imports
that come from jurisdictions that don't
they're not seen as equivalent I think
it's essential that you've got this
right signal okay yeah so for example
you could see a Chinese manufacturer
coming to Europe and starting to produce
in Europe which would be a good way to
do a bit of Technology transfer it used
to be the other way around what we need
in this case is technology transfer back
to Europe so that's one of the tensions
that play out so this is a global
problem of course a global crisis but
then it's still a divided world uh and
we we need to navigate all of us through
these complexities absolutely and now
before bringing Richard be in just to of
course let you know that we we are going
the panels um panelists are going to
take a questions so I can see a couple
coming through already so make sure to
uh uh to to type them up if you would
like to uh to have any any if you have
any pressing uh issues that you would
like to raise with the our experts
Richard okay so I mean we we've heard of
course very interesting examples of uh
What's happen in terms of innovation
across Aviation and the Renewables um
industry and also pressure points um and
you I'm certain you're looking at all of
this uh and you have access to
wonderfully complex and and uh big uh
samples of data uh but how challenging
is it to actually understand where to
deploy capital um whether you're looking
at a certain industry or a certain uh
geography and is is this exercise
becoming easier what would you like to
see uh to help you um achieve
uh yeah I think um the challenge is
becoming uh clearer or maybe the
solution is becoming clearer I'm not
sure I would go as far as to say it's
becoming easier yet just listening to
mat talk then about the uh the policy
Dynamics uh that affect his business
you it just it just reminds of how
fishlyn so so that part um you know will
keep this fish complicated well into the
future um I think you're alluding
towards the the data aspects of this as
well um and I think uh we um sort of as
an economy as a whole and and certainly
in the finance industry are making and
have been making really good progress
around uh establishing data
standards um being able to then work
with our counterparties to ensure that
they sort of have a shared sense of
those standards and they you know they
are what they would expect or what
they're planning for as well um and of
course that's not the end of that
challenge either there there there's
plenty still to do you know if we look
at our own Gap analysis as it goes on
there are plenty of areas where we don't
feel we have sufficient um or or in some
Cas is high enough quality data for the
for the risk analyses that we might want
to do um or for the strategic um mapping
that we want to do as an organization to
to chart our Direction but then we
wouldn't have expected to at this stage
either so it is it is partly about being
comfortable with that ambiguity uh and
keeping pushing towards having a greater
level of granularity I think one
particular area um that I've probably
talked about ad nauseum in the past uh
that has
uh especially difficult challenge is is
what you might call well the sector such
as you can call this a sector um because
on the one hand they they they they're
just as heterogeneous as as larger
companies arguably you could say more so
but they typically lack the resource to
have dedicated focus on some of these
complex areas um not all of them can
afford to pay expensive Consultants
either um and so there is a real sort of
Market risk there economic transition
risk there uh that we need to try to
find a way of filling and I think gaps
have a sorry gaps banks have a really
important role in helping to do that so
there's there's an interesting project
just as an example right now uh that
Bankers for Net Zero that we're a member
of a UK organization is pushing forward
and that's called project perus and it's
trying to um work with uh industry
representative bodies sector bodies uh
and government to establish standardized
uh data criteria for smaller businesses
uh ones that will work for them but of
course will work for um the capital
allocation that we came into this
talking about so you know Banks being
able to see enough to make reason
decisions investors being able to do
exactly the same thing and all the way
back up the
chain in that sense is getting it's
improving as you was were saying through
these uh initiatives to to standardize
data now all of you here are part of
Industry that are heavily regulated uh
and and so in in your case uh Richard of
course you have the regulator also
looking at your own uh the way in which
uh the bank uh manages risk uh and risk
related to Financial Risk related to
climate um how is that changing the way
in which you feel the industry is moving
at least in
Europe I think in in very helpful ways
so um you know we have different uh
strands of of of uh
supervisory attention if you like uh on
the credential side uh the work that uh
the international central banks and
Regulators have been doing um around um
scrutinizing and and setting some
expectations on um risk management how
to identify the risks at at the
portfolio level but of course to do that
you need to you need to have good
systems in place to identify them at the
uh at the client level as well uh and
then how those move through your systems
uh integrate into your existing risk
analysis systems all the way through to
uh your you know the sort of Financial
and strategic end of things you know
what does this mean in in how many years
time for uh for the shape of your of
your balance sheets and the risks that
sit on it so I think I think that's
being really helpful I think it's been a
continues to be a collaborative approach
between regulators and the industry and
long may that continue um and then we
have the conduct strand um of of of risk
uh management through through our
financial conduct Authority and their
particular Focus complementary Focus I
would argue is is around uh governance
uh the banks and others have in place um
to ensure uh Integrity uh in the
marketplace so that um one's claims
match the reality at the entity level
just as much as at the the customer
level um and that the outcomes then that
are being delivered uh as a result of
decisions taken by these organizations
are in the best interest of of the
customers just as the credential
regulator might think of the same
question but say in the wider interest
of the banking system of financial
economy thank you so much Richard
question is actually flying in so let me
uh start the Q&A part of of uh this
panel so that there is a really
interesting variety of them I'm going to
start with one um that um is for you mat
in particular and so what do you expect
coming out of cop 28 of course we're
here uh today uh thinking that cop is
only a couple of weeks um um ahead of us
um what are your expectations from uh a
Renewables industry point of view uh
well there is I think a point which is
about the growth of Renewables and I
think it's about tripling Renewables uh
investment uh in in a very short term so
and of course I mean I'm sure you're all
very much aware but cop this year is
going to be hosted um in Dubai um and
heavily um attended by of course um oil
and gas companies Petro States so uh
many leaders so that that probably the
main point I think is is more leadership
into uh into the the N zero agenda
because it takes a huge commitment and
you know making the changes that we're
speaking about in the aviation industry
uh mhm enabling the banking world to
support the The Net Zero decarbonization
of the world takes huge leadership so I
think what I expect of a cup 28 is
leaders to show that they're ready to
lead the way to a net zero is what you
would like to see or what you think is
actually going to happen well I think
you will see commitment because people
cannot afford not to make progress so I
would think uh there will be progress
but there will always be compromises and
the question I think what would be
interesting is to see you know the
commitment that we the progress that has
been made commitment that we make to
accelerate yeah the the transition that
that would be what I'm looking for and
what is the sort of stance uh commitment
that leaders are willing to take yeah as
part of cup 28 all right so um thank you
Mata so let me um ask you Tom but also
um R mat if you like to comment on on
this other question so be because we
talked about regulation and the role of
Regulation and how it could be
beneficial uh to develop certain
um certain Solutions can it also hinder
do you think uh innovation in other
parts of the
world I I do and I think you know that
relates very closely to what I think we
might see come out of cop in our sector
and what I'd like to see come out
there's going to be a lot of talk about
sustainable aviation fuel as an example
which is a very nice solution if we can
get there economically because it just
drops into existing Technologies but you
know there are a lot of disbenefits
there there's environmental harms that
need to be taken into account there's
actually the economics there's the fact
that we've been trying to scale
sustainable Aviation fuels for over 10
years now we're still at 0.1% of
aviation fuel is actually sustainable
right now and I think there's an area
where um you know something that looks
attractive and gets a lot of focus can
actually hinder Innovation going on
elsewhere in the sector um I talked a
little bit about taxation I'd like to
see Aviation sto being treated as a
special case here there is no tax on
aviation fuel at all really today 37
cents a liter which is less than we pay
when we go to the petrol pumps here MH
that would be enough um by by some
estimates to tip the balance in favor of
hydrogen technology in aviation which
does offer the potential of real net
zero actual zero operations so it's a
it's a great case where actually over
focusing on one potential answer can
really hinder the ability to innovate
somewhere else that's got much stronger
longer term potential in my
opinion thank you um Richard uh mat
would you like to comment on this as
well so where the you feel the
regulation for example in the EU uh May
H Innovation elsewhere in the
world I can use I don't know if I yeah
yeah I can use a thre example today uh
death Nest so that's the department for
energy and Security in in the UK is
announcing a change to the cfd the
maximum price you can get through a cfd
auction cfd auction is a is a way to
enable renewable investment by fixing
the price for 15 years for for
technology so they are annual auctions
and what we had as the last auction is
no offshore projects uh securing a cfd
actually no projects participated
because the prices were too low and um
what we're looking for in in the UK is
not just fixed floating so the
foundation that are fixed in the sea but
floating uh because that allow to give
access to much more uh uh uh places
where to to build offshore wind and
today's announcement uh is a good
success for a good news for the industry
because we we've been arguing that
prices you know the cap prices at the
auction were too low to enable a supply
chain and developer in uh operator to
make this Investments and they announce
a 50% increase for example for floating
wind so we have a project floating
projects in in development there are a
few more uh uh developers operator in
the UK having one and the potential for
floating is huge across the world but in
the UK it's also a key technology to
enable Net Zero but this wasn't a
consequence of uh regulation in the EU
or no but it's a it's a I mean the
general the EU regulation uh you know
set some targets and some enbl so are
equivalent right in uh but it's just to
show you know the specific how policy
can really bring Innovation and enable
Innovation the impact the impct on that
it thank you Richard I wonder whether
you would like also to comment on this
point I would yeah only briefly add that
of course um you know policy makers will
only put 90 or 95% of their focus into
into what's going to be effective uh
within their locus of influence or the
locus of policy making um it's good when
we see that there has been some um sort
of international collaboration ahead of
ahead of major policy announcements and
um but we I suppose in reality we can't
always expect that to be the case and we
and we haven't with Ira just as much as
we haven't with uh some of some of our
EU policy But ultimately if it's
inspiring uh other jurisdictions to to
take stronger action as well as I
suppose we're seeing with the cbam now
committed for the UK uh then probably
it's ultimately to the
good all right thank you thank you so
much as we we keep on going back to to
those um highly complex uh and and
potentially very consequential rules um
so I I will try to to finish the panel
not too uh not with too big a delay
because I'm very conscious about um uh
what's going to happen next which I
think is lunch um but I still would like
to uh I still would like to um to pick
up a couple of other questions that came
in and of course the ones that you feel
uh the panel hasn't really addressed do
feel free to get in touch with all of uh
I'm sure you'll be very happy to um to
hear from every everyone um uh today um
and um continue the conversation so
we've been talking about policy and
regulation quite a lot but uh uh someone
is asking sure this is important what
about individual companies what can
individual companies private sector
companies do to improve things and I'm
going to also uh add another part to
this question which is about climate
literacy so what can companies do to um
go ahead with Innovation and really
tackle climate change but also as part
of this what are you doing what can
companies do in terms of improving
climate literacy Tom shall I start with
you uh yes so so I think uh it's a very
relevant and real question for for us as
a business um we have built the
technology that we've developed around
capability gaps useful places to operate
in the market on the one hand and the
ability to drw the emissions of the
overall sector where the technolog is
invested on adapted on the other I I
think you know I'm very aware that in
the middle of all of that we've got a
company to scale and as we scale that
company move our product into production
balancing the hard decisions um about
how far how fast do you go with
infrastructure projects how do you scale
up in the right way how do you trade off
speed to Market so the ability for
inservice emissions to be dropped versus
any impacts we might have along the way
and we don't we don't have all the
answers to that we're working to improve
our literacy as a as a leadership team
actually as anme without dedicated
resource in there to do that um so it's
the leadership it's the question for so
there it's about leadership but I think
it's also about engagement so the the
other example and the the the um the
example I have in mind you watching a
business alongside us we're about to set
up a a production line in the north of
England um business alongside that
alongside us there has invested heavily
in developing carbon literacy in its own
Workforce and it hasn't relied within
the company on top down yes leadership
but stimulating bottom up ideation and
Innovation within the business
operations I think that's a fantastic
model and one that we're looking to
develop and employ so you mean by that
being a becoming aware of uh carbon
literacy and your own impact your own
impact your own your own life at
individual level in the operations that
you deliver within the bus drive those
ideas up through the organization okay
so gathering this information and
sharing that that's AIT having
leadership highly committed to doing so
let me go to Richard uh next and then
I'll I'll we'll wrap up with you m yeah
I very much resonate with what Tom was
just saying there about you know from
the ground up and initiating uh but not
trying to spoon feed an organization I
part of that certainly um you know in
our organization is that you have
different knowledge requirements quite
distinct knowledge requirements in
different roles within an
organization um and so it setting a
framework setting an understanding
overall about uh you know in our case
our banks commitments uh and our bank's
view on where things are going where
they need to be going uh is enough uh to
to then give the you know the department
over here or the Frontline advisors over
here um the you know the direction they
need that to to start looking into the
issues themselves and it really takes
fire just like Tom was saying it really
takes fire when people start to come up
with their own ideas start to test some
other hypothesis and you know being
there to do to to to be the sounding
board for that and to help develop that
is so much more effective than you know
desiging the next year's mandatory
training whatever it might
so do for example your you know the team
involved in origination originating the
do they are they aware of the finance
the missions for example of a potential
deal is it something that they might
help is it something you're doing yeah
yeah that's that's what we're looking to
spread through the organization uh
making some pretty good progress I think
but it's uh it isn't something that
everyone switches on to overnight and so
you know we've got to do some degree of
calibration on that uh and we've got to
make sure we've got sufficient resource
in the organization as things progress
uh to be able to meet these needs but
you do have to be sort of a little bit a
little bit Fleet a little bit flexible
around this uh and in the end I suppose
that's certainly it's our decentralized
way anyway in the end we know through uh
through experience and that's a much
more effective way that just you know
try to drill things into people thank
you Richard mat last word yeah I mean
there the I really like the two points I
mean they they comes back to um uh you
know to make that transition we need
people to change their behaviors mhm to
change their behaviors in fact we need
to invest in so that people understand
what they can do uh what is expected of
them how can they do it so engagement
about understanding or impact is
essential skills uh to change the way we
do things is important if I just look at
you know what we how we try to enable
that with businesses something as simple
as changing the way you procure your
energy today uh into Renewables is quite
challenging because of the complexity of
the uh energy electricity market and
it's relatively simple you know that a
simple things to switch from let's say a
gas to a Renewables by with a corporate
PPA now if you look at the industry
looking to change the way they do their
process so chemical industry for example
we are investing into we're negotiating
with Des again so that the department
for energy Security in the UK uh a
nitrogen project so we will procure
green nitrogen to chemicals industry and
this chemical industry some in some
cases already have process and system
using estrogen in some cases they would
have to replace maybe burning gas into
estrogen that is a huge change in a
company you know changing the way they
process the industrial uh uh path so
there is not that that while the uh you
know the technology is there we know how
to do it the switch you know the uh is
we spoke about policy but we speak about
in fact is how people do things we have
to do things
differently so we need to invest into
people and people need to understand
what they can do to make that the
changes enable these changes wonderful
what the what a lovely way to uh to end
a panel that is uh organized by an
institution that of course looks at
training people and creating new skills
because of course um uh academic
institutions do also play a very
important uh role here thank you so much
for uh for joining us thank you so much
to Tom M and Richard for sharing their
thoughts I I found uh everything that
you guys have said fascinating I hope
you also found it fascinating too and
now um like a big round of applause to
for everyone and
um

---

### think ahead: How Regulation is Supporting the Path to Net Zero
URL: https://www.youtube.com/watch?v=HyC66Ybmhok

Idioma: en

our next panel how regulation can
support the path to Net Zero this is
going to be a panel like all the others
where you can ask questions uh but the
questions will be moderated uh by our
moderator our pan moderator and that is
same as last before lunch Sylvia please
I'm going to let give you the floor and
you can ruce the panel thanks very much
thank you so much uh it's good to be
back um so we started talking about
policy and regulation in the previous
panel and then judging by the the
comments that a few of you um uh submit
in the q& uh through the Q&A app there
was some push back right against policy
I mean so is it just policy should the
companies do more but actually quite a
lot of it I I would argue and maybe you
would expect that from me given that I
cover this day in day out for uh
sustainable views um a lot of this
really a lot of this area a lot of the
world of sustainability and ESG and then
we will continue actually talking about
a lot of this the big and ever expanding
alphabet soup that describes this area
is driven by regulation so in this panel
we actually going to uh to talk a little
bit more and really dive deeper into
what
regulation uh is looking at the moment
when addressing climate change but also
sustainability uh concerns and to do
that let me introduce you to our
panelist
so we have uh at the at my far right uh
lucrecia rlin who is a professor of
Economics here at the lbs uh next to her
we have Emily McKenzie who is technical
director at the task force for on nature
related Financial disclosures uh and uh
right next to me is Marcel Alber who is
assistant professor of accounting so he
can really give us some very detailed
interesting uh aspects of this um here
at lbs and joining us remotely uh is
jaier hiier who is the the CFO of hro a
s I can see your back uh your back there
it's a bage reclaim so uh welcome
welcome everyone so um regulation right
the first thing to I guess to address is
the language of sustainability and the
the language of Regulation because this
is becoming a very
confusing uh subject to address uh not
least because uh of the terminology that
uh we are ending up using so from ESG
environmental social and governance and
arguably already this a pretty clumsy
clumsy not particularly attractive and
some might say meaningless uh term to uh
other uh abbreviation such as csid sfdr
esrs issb issb and many other the NFD as
well so I issb is the uh the initiative
um of the uh of International Accounting
standard set ifs uh and uh it looks at
creating a global Baseline for the way
in which companies disclose information
around sustainability which can help uh
understand what companies doing the same
way that uh we mostly investors but also
other stakeholders uh are now um able to
understand what they do from a financial
perspective so look let me start with
you you're being um very active uh in
the developments of the work of the issb
why don't you take us through uh how you
feel this the language that is
underpinning sustainability through uh
the work that you're doing is is
developing okay thank you Sylvia and uh
you know it's very nice to be here with
you know a lot of people interested in
sustainability that's good uh so for
transparency let me say I'm a professor
of Economics that's my main job but I'm
also a trustee of the if s which is the
International Foundation for reporting
standards and um I think the this F the
ifs is the global standard Setter for
financial accounts so think what the
financial system would be like if we did
not have standards for financial
accounts so how would company you know
read
performance of companies around the
world how investor would you know read
this information if we did not have
global standards which are auditable
assur and so on so now the world is
changing there are new risk new risk New
Opportunities and uh you know the
climate uh uh risk is huge as has been
discussed it's not the only risk we have
risk related to depletion of nature we
have risk which are related to Social
and so on but these risk and
opportunities have to be taken in
consideration by companies investors
want to know
this information so we need standards we
need to achieve in sustainability what
20 30 years ago have been achieved for
for financial accountant for financial
accounting okay so the ifs after a
consultation with stakeholders companies
and regulator ask do we need these
standards and actually 20 in the last 20
years a lot of organization like this
sby the integration reporting Foundation
a lot of these organization actually
formulated some standards uh on you know
and these are private organization which
were followed by companies on a
voluntary basis but uh in a way so we
started this consultation in 2020 from a
situation in which there were lots of
Standards lots of initiatives lots of
you know different acronyms and you know
that was called in fact the alphabet
soup and so in our consultation we asked
do we need to
harmonize and do we need to aggregate
these different initiatives and should
should we do it as Financial Accounting
standard centers the ifs and actually
the result of the consultation was yes
yes yes and uh so then you know I led
the task force that actually you know
eventually uh let you know form the the
SSB uh um and I think it was a
fascinating work because it was the
result of of you know combination of a
bottom up process so something that
aggregating from something that was
actually already there in the market and
the top up process because in order to
be a you know a a an aggregator of those
initiatives we needed to have the
support of the Global Financial
Regulators which we got and so the
support of the iosco the market regulat
the G7 the G20 and so on and so you know
in 2021 at cop 26 we uh establish the
issb now Emanuel faar that the CEO of
donon that Julian talked about is now
the chair of the
SSB so uh and then you know the
standards are out so and I've been out
after consultation so they're going to
start uh you know kicking in from
2024 and um and these are standard for
the global market okay that's a very key
thing so that we are a global standard
sets why because the Capital Market is
global and so we need standards that
work in China work in Africa work in
Europe and work in the US this is not
easy because legal Frameworks and public
policy tools are very segmented so but
we need a global regulator okay so we
came out with this IDE idea of the
global Baseline so we uh you know we
have a concept which we uh you know we
ask companies to disclose standards
which are financially material and then
maybe we we can discuss later what that
means and then if there are jurisdiction
which are more ambitious that you want
to standards because they want achieve
the green deal like for example Europe
they have a top up okay but the
important things is that there is a
coherence between these different level
of disclosure so that the preparers and
the counters don't get crazy okay
basically we need something which is Rel
relatively easy and transparent and
understandable or otherwise there would
be a backlash yeah yeah perfect okay so
this is the issp and how many obviously
I can't see the hands if they would ever
go up uh uh back where you're looking at
us from your offices or homes but here
how many of you are familiar with for
example the ISB or the uh t a few hands
okay good wonderful
uh so my students of course all your
students yes I'm I'm
students wow you have been warned um so
um very important and relevant uh
initiative um
Emily why they need to have another
Global initiative that looks in this
case at nature so on the back of another
uh similar task force that we're looking
specifically at climate related
Financial uh factors why nature and how
does your work um gel with the ISB and
any
others yes there's increasing
recognition from from governments from
um Regulators from central banks and
supervisors from investors and from
companies businesses themselves that
nature more broadly than just climate
change we are experiencing historically
unprecedented loss of Nature and its
diversity uh driven by climate change
but driven by other things also is
creating material risks and also
presents
opportunities
um important Milestones have happened in
December last year we had the Paris
moment for nature where nearly 200
governments agreed to a set of global
goals and targets to Halt and reverse
nature loss so recognizing this as a so
a global
issue the network for Greening the
financial system which is a network of
central by 100 over 100 central banks
and supervisors also recognize that
nature loss creates R macroeconomic
consequences and risks to financial
stability so is core to the Mandate of
central banks and supervisors and we
have a growing number of investors for
example Black Rock Aviva others who at
norus Bank investment management which
is the biggest Sovereign wealth fund in
the world who are also recognizing that
their portfolios are exposed to these
risks and then you have large corporates
who are actually up the front line of
seeing pollinator collapse or water
supply issues or failure to be able to
get permits because of uh the impacts
that they're having um a variety of of
physical risks as well as transition
risks apply to Nature as a whole and in
many ways we've made tremendous traction
through thinking about climate change
and climate mitigation But ultimately
we're under one planet it has a number
of Earth Systems we know um from the
Stockholm resilience Center that
actually six of those nine if you think
of them as Earth system boundaries are
outside of their safe space climate is
just one of six so in many ways we're
just drawing it's like an entry point
into seeing the risks more broadly so
that's all backdrop for why nature I
think very clear argument for why this
is
presenting um implications for Society
at large but also for business and for
finance
um so why another initiative because
there was another initiative uh with
another four-letter acronym that has um
I think been hugely successful in
creating momentum around climate that
was the task force on climate related
Financial disclosures tcfd uh which
created a set of recommendations back in
2017 which um were around disclosure but
also around risk management for these
issues around climate and it's had huge
huge implications I think not only for
disclosure and uh for disclosure for
investors but also for improving
strategy governance and risk management
improving decision- making and capital
allocation so we tnfd saw that success
and also realized that climate and
nature are tightly interlined you can't
really think about climate risks and
opportunities without thinking about
nature because we know uh 30% uh of um
uh nature of climate risks are driven by
nature and and climate is one of the
biggest drivers of nature loss so we
thought we'd build on the same model the
same process we established a market Le
task force so we're actually not we're
certainly not regulation and we're not a
standard we're a set of market-led
recommendations because the market is
recognizing this is a material issue and
we see the issb as an absolutely
critical milestone for creating this
consistency it's already Consolidated a
large number of the alphabet soup indeed
tcfd sister organization has just
sunsetted and declared success because
their recommendations are now folded
into the climate standard as to that
issb has launched so we hope one day
also part of thef part of issb it is
folded in and they have declared success
since 2017 with isb's momentum so we
stand ready to support issb as and when
they have you know they've completed
their agenda consultation process see
where nature is a priority uh stand
ready we've worked very hard to create
the consistency with the standards so
that we'll make it as easy as possible
to to dock in so I think I think
generally I see the path of recognizing
these issues having the momentum to make
progress which sometimes needs a
four-letter acronym yeah but then over
time issb has created this really
important platform for that consistency
for the Baseline yeah and we've been
quite thoughtful about how we can then
enable that top up so the European
jurisdiction is helpful for us because
they've already gone further so how can
we make sure our framework can not only
help to meet the isb's B Baseline but
help sort of 10 10,000 or more companies
in Europe who also need to disclose on
their impacts regardless of financial
materiality perfect so the issb is
serving uh also as an umbrella for other
existing or pre-existing uh uh reporting
standards such as sby we mentioned and
also Incorporated um some of the uh
principles under TCF and and what you're
doing essentially is also helping
companies with their strategy right so
internally they they become more aware
of uh the importance and the impacts of
of nature nature laws uh on their
activities and again as you know there
are many other uh reporting Frameworks
and standards that have been developed
over the years um lots more to come uh
and Marcel coming to you now has have
any of these actually
helped well uh I'm obviously not in the
position to give a perfect answer to
that or any answer to that i' like to
take one step back and help us think a
little bit about um the the usefulness
uh of all of this I think um lcia and
Emily have given fantastic overviews of
where we are are really in the Practical
weeds one step back um something we
academics care about what's the theory
uh behind that and and why do we do that
does that make sense and to also give
you some insights into what do we do as
professors at lbs and with many
colleagues uh all around the world it's
thinking about is disclosure disclosure
regulation a powerful part of overall
climate regulation that can help us get
to a net zero and that's why we're here
so one could ask the question why do
that and look has given um a very
practical argument Capital markets need
this information of course so why not
say okay let's disclose as much as we
can it's not straightforward how to do
that well the reason is that disclosure
can also create costs for companies and
I think Kier will will uh confirm that
compliance cost somebody has to uh
report and file these uh reports that
why why we have so many accountants in
the world maybe but also all sorts of
other proprietary costs for example your
competitors see exactly what you do so
it's not straightforward that full
disclosure and full transparency is
always um the the perfect um
solution I guess the main idea here
behind climate related uh disclosures to
be a bit more narrow and the issp is
that well to help investors but also
induce certain behaviors of companies in
the sense that like sunlight is is the
best disinfectant so if we disclose
things have companies become transparent
then we can measure things and as as we
also say at Business Schools only what
measured uh can be managed so the key
question I would like to give a brief
overview of what we know does this work
MH disclosure General um does this work
and we have a bunch of studies um I
think Alex Edmund would say some of
those are more rigorous than others but
they paint a consistent picture uh
meaning that if we mandate companies to
disclose about their sustainability
activities and environmental outcomes um
more narrowly then they reduce
apparently um their their dirty Behavior
their pollution effect sizes here have
been documented to be relatively large
10 to 25% I don't know whether CFO like
kavier would would believe that that
companies reduce emissions by 10 to 20
uh% because they have to disclose so it
seems to work so it can be a powerful
tool a caveat of course these have been
effects found at the margin for firms
just being pushed in into this sort of
um mandatory uh disclosure regime like
in the UK since 2013 and my students
will know UK companies have to report on
greenhouse gas emissions and those
affected firms apparently reduced
emissions by a to 10% relative to
European PE firms however only in the
first and second year so this effect was
transitory so I think it's obviously an
important Milestone um to have a
globally a consistent disclosure
framework uh but that's only one um one
aspect of Regulation probably we need
more intrusive regulation as well uh to
help um get to Net Zero
okay so emissions have gone down and of
course then also we need to talk about
uh the numbers behind that right so that
this decrease is it because they
actually stopped emitting as much or is
it because they've used some other
instruments such as for example carbon
offsetting to reduce uh those stated
emissions but we'll talk about carbon
offsets as well which I know is one of
those really really hot subjects that
usually people like to hear about uh
Javier okay you are the one that
actually has to put together this data
disclose it I'm sure you have have
plenty of um investors and other
stakeholders asking you for that data um
tell us how complicated it is to uh to
put together a meaningful sustainability
report and and to look also the risks
that uh all these factors um have on on
a company such as yours right thanks
Sylvia and good afternoon I'm very sorry
for not to be there but um I'm I'm I'm
also here in the back at call trying to
make sure that you're having a
successful holiday for some of you that
might be tempted to go out this weekend
so and I think in terms of
sustainability well first of all I think
this is an absolute uh sift in the way
we operate as as as a business I think
particularly Aviation I think is a very
iconic uh
industry is is an industry that has this
perception that this a hard to evate and
uh and and and therefore for many years
I think at hro we have been really
working on sifting our overall strategy
because I think that becoming a
sustainable able business is not just a
matter of uh values it's a it's actually
a matter of of value and license to
operate I think if if we continue
creating a conflict between flying and
Planet uh Planet uh should and will win
and therefore I think the question for
us the way that we are addressing
sustainability is very much about how
can we protect the benefits of aviation
in a world free of carbon that is
ultimately carbon would is killing uh
the planet I think Aviation has many uh
has a critical role in terms of
delivering at least nine of the 177
United Nations sustainable development
goals but carbon is definitely something
that um needs to be removed and needs to
be removed at speed and therefore
urgency I think is one of the
fundamental things and I think sometimes
when we talked about regulation and
Reporting I think I think one of the
important things that we shouldn't
forget the goal of all of that I think
we we ended up where we ended up today
in terms of the impact on planet because
over two centuries we have been
optimizing our economies to a single
currency and that currency is Sterling
Pounds or US dollars but actually what
we have learned over the last couple of
decades is that in the process of
optimizing against that currency we have
neglected the consequences it has in
terms of creating
externalities H to to the planet and
therefore what we really need to figure
out now is how can we H change the
reporting how can we give enough uh data
points to investors to change the way
they measure success not purely in
economic terms but actually economic uh
terms adjusted by the impact on on
planet and that's and that's the
fundamental challenge how we can help
investors which is ultimately the goal
of all these ifs standards how we can
help investors to allocate Capital more
effectively against a slightly more
complicated metric which is a risk
adjusted a carbon risk adjusted economic
value and I completely agree with Lucan
actually is fantastic that the Lucan and
the other colleagues in ifs has created
the ISB because is the in my view the
most powerful and if there's a single
horse to back that's the issb to really
put order when it comes to
sustainability standard because I think
we all have a duty to provide uh data to
investors to allocate Capital more more
effectively I think part of my role as
CFO is that I spent U significant import
part of my time raising funds to fund uh
the terminals that hopefully you enjoy
in my career I have raised uh 44 billion
pounds of financing globally and I have
seen a huge uh increase in investors
seeking that uh carbon risk adjusted
value value generation that's why I
think is is really important the work
that is that is happening at this stage
unfortunately this stage is a bit too
complex uh there are too many standards
and um and I think that we all need to
keep uh co-creating uh this environment
where we try to move as fast as possible
because if there's one thing that we
don't have when it comes to
sustainability and and climate is is we
don't have too much time we are already
late and therefore uh trying to really
converge to a single uh platform which I
hope uh and we are working hard uh to to
make that happen is is the ISB and the
IFRS new
standards part also of my role is I
co-chair the European for leader
leadership networks in the UK to really
on on on reporting matters and uh and I
think that we are working quite closely
with the ASB to try to make the rules
simple and uh but also to create a safe
space where people can can report I
think one of the best news that has
happened also apart from the creation is
also the appointment of the leaders of
the SB Emanuel Faber L mentioned is a
pragmatist he has been a CFO and a CEO
before so he has suffered the
consequences of Po regulation and I
think that one of the great things one
of the great news is that he's an
absolute pragat is the same with Su
Lloyd the vice chair of of the ISB she
has been setting standards for many many
years and therefore I think the issb is
doing a fantastic job but they need help
and I think that the best way of helping
them to create a powerful regulation is
rather than complaining rather than
moaning about the regulator actually the
best thing that we can do is to put in
practice those standards as fast as
possible
so we can find the challenges that those
standards unconsciously or inadvertently
can create for for corporates so one of
the things that we have been doing at
hro but most of the big organizations in
the UK are doing is to take in a
voluntary adoption of the standards
voluntary adoption of tcfd tnfd because
I think that what we really need is
collectively to create standards that
can be flexible enough to create an
environment of trust because is the most
polluting company the ones that needs to
start disclosing early for those
companies who are have a perfect uh
sheet of paper and they are not
embarrassed to disclose they are not
going to be the ones really H helping to
remove carbon from the air or removing
uh or or supporting nature I think are
those who are H creating the worst
impact into that the the ones that needs
to see and that's why I think the ISB
also has done a very good job in terms
of creating clear guidance but again
being guidance not being too
prescriptive to try to avoid uh people
misreporting thank you so muchier so um
we still have uh in theory five minutes
to to have a little conversation among
us but then I we really like to open the
the floor to questions uh which are
already coming in so thank you so much
for submitting them essentially
reporting is good right we all want to
have uh pertinent information available
um too much reporting uh means that of
course there is a burden on companies
and you all the companies and CFOs I
speak to they have the same reaction
that you do Cav which came through the
video this deflation like oh there is
too much too many too many Frameworks
too much um too many requirements too
many standards so number one good there
is a global um effort to bring them
together but of course there isn't
really yet agreement um on uh I would
say on uh what um is important the key
important things to focus on because and
here we start talking about materiality
what is material to companies and
whether uh that should be the sole focus
of these reporting standards or whether
we should also try to analyze and
disclose companies impact on the
environment and on society which is the
point of view of the EU which has been
also very active uh in its regulatory
work uh and uh and um you know being
quite vocal as well about the importance
of of measuring impact in this sense
look let me come back to you so how do
you see this conflict because I think it
is a conflict isn't it being resolved
well uh I don't think it's necessarily a
conflict I mean there are two ways of
understanding this uh this problem first
let me Define it okay so uh at the F FRS
there is a tradition as standard seter
for financial accounts we have a concept
of materiality okay so that you disclose
what do you disclose what is financially
material so what makes a difference for
an investor to decide to invest or not
to invest in a company or for Capital
Market uh you know so is this this is a
very you know clear concept which has
been used for financial account and that
uh and this is the same definition that
we use for sustainability this has
certain advantage of transparency and
also it allows to relate sustainability
disclosure with financial disclosure
because you know at the end of the day
in you know maybe in the future we want
to have a fully integrated reporting in
which all these risk and opportunities
for the companies will be fully
disclosed now U the European commission
comes and says not only the European
commission but also the G or other
organization around there they say no
what we want to know is also what
companies
you know do impact on the environment so
we want the other side of materiality I
call that you know more impact than but
they call it double
materiality now um you know the double
the the the second part of materiality
of course is very difficult to Define so
material for whom material in what sense
material Horizon so you know it's very
difficult to measure so that that's one
you know but a public so an institution
which has a public policy tool like for
example the European Union which have
the legisl you know the the legal
framework to impose these standards they
may want to ask companies to disclose
what they think is useful for their
public policy objectives now as a global
regulator we are not we don't have these
tools because we have to serve a number
of jurisdictions which have different
legal Frameworks and different
objectives so we would not you know so
that would be uh you know just going
beyond what we are uh you know supposed
to do and what so I mean and this is how
you know we got we Define this concept
of the global Baseline in which say we
have this base which is the financial
materiality concept and then if a
jurisdiction has other objectives they
can put a double materiality on top of
it and the gri which is an organization
which uh is also is a private sector
type of organization has also developed
some you know standards that the is is
building on and we are working with the
EU and with the J to make this interop
operable okay to provide
interoperability now but one thing I
want to make sure that everybody
understand that to say to limit the
concept of materiality to financial
materiality that doesn't mean that we do
not have to look at Al the interaction
of what companies do with the
environment because of course you know
these risk and opportunities are very
much you know the two things are related
so in instead in fact in our standards
we ask companies to disclose about C CO2
emission scope one scope two and scope
three so we have also this metrics so
now if we look at the standards of
European commission and our standards on
climate we are very very similar and
what we are trying to you know what
we're working on now is trying to make
sure that it is clear for the
preparers what is SSB specific what is
EU specific and what where there is the
overlap now of course because on climate
transition risk are important what
happened to public policy has an effect
of what is financially material so you
know this connection is very important
for us so and uh and so you know so it's
not that mechanical okay that's yeah
thank you so there already a couple of
questions about the ISB so forgive me I
I'll have to uh stay with with L but do
perhaps you also have something uh to
add to to those points so one of them is
about uh well so G and sasb are they
going to disappear potentially yes now
but they have already not not g ssby has
already so s is part of the issb a gri
yeah so that's the direction of travel
um and another question is about carbon
taxation so we started talking about
carbo pricing um and uh the person
asking the question is is asking whether
the ice speak could ever become a sort
of
designer of a globally consistent and
integrated carbon tax system carbon tax
no I think it's you know I mean the
accountant are not going to solve the
climate transition problem okay so that
how much I you know I love the
accountants you know this is a very
complex which mean which requires
different tools and different policy
tools so the carbon tax is one of these
tools disclosure is about the
information architecture so we need to
have the information in order I mean for
Capital markets and for Public Policy uh
but you know disclosure uh once you
disclose it doesn't mean that uh you do
something you know you just disclose it
okay now you're not going to see
anality then you want to have ta we want
to have a carbon tax May and actually it
is my opinion that you need more than a
carbon tax because you also need
investment and uh you also you know you
need public investment and uh because
you know there is not just an
externality but there is also the need
to to build an infrastructure and also
to incentivize technology which is very
risky in the private Market may not
necessarily go for risk investment so we
have to think about a broad set of tools
just doing a little bit okay not a job
for not a job for the ISB but the
question about carbon pricing and the
global uh price for carbon meaning
either through um markets or through um
tax is there Mel what's are we ever
going to have a global uh and high
enough carbon price yeah hopefully
certainly we're not there countries like
going to blame it Germany uh does not
have a carbon uh tax but there was a
blueprint uh out there or there is a
blueprint out there since 2021 showing
how this can actually work because as L
has pointed out these types of
regulations tax law is jurisdictional so
you need individual jurisdiction like a
country or the you um to um to design
and impose the tax so your question is
how can this work at global scale
because we're addressing a global
problem of course um the blueprint was
um the global corporate minimum tax so
2021 many countries jurisdictions came
together at the oecd level as kind of
the organizer to agree on the concept of
a global corporate minimum tax and
that's now only two years later being
implemented in more than 100 countries
worldwide so this is the way it can work
uh companies um coming together at
events like cop for example in principle
agree on a design commit to a certain
level and then introduce it um at the
domestic or jurisdictional uh level so
there are processes and blueprints out
there and and hopefully um this will
happen okay so let me ask jaier and then
I wanted to ask a question to you Emily
would you like to see a carbon tax a
global carbon
tax well I think I think carbon costs
money and I think that you can call it
tax or you can call it uh a price for
for carbon I think it's uh to be honest
if we use an analogy I think that we saw
the case of Bitcoin a few years ago when
suddenly it was an exercise to try to
measure the whole value of the economy
against 21 million units h of of a of a
particular currency and that's why that
set a price for for for for that
particular currency I think with carbon
something similar will happen I think
that uh in the fible future we have a
limited carbon budget that collectively
we can use and therefore that's going to
create a quantification of uh of a
carbon unit that today I think is uh
from a shadow perspective is trading but
I think at certain point it will be more
than a shadow market and therefore
that's going to create h a price for for
every carbon carbon unit so I think that
the only thing I I I would disagree with
lucrea is that I I do believe that
accountants will be the ones sorting
climate uh change and the reason for
that is because we are the ones who can
quantify what's the cost of these
externalities and once that happens I uh
personally believe that that Capital
markets will play their magic and will
create the right incentives to uh
penalize the wrong behaviors and
incentivize the right Technologies to to
sort it out so as a prate accountant I I
I do think that we have a a huge role to
play all right account as a
revolutionary okay there is there is
certainly a comeback of of account as s
do you have an accounting background as
well I have an economics background but
I have a love of accounting you have a
love of accounting okay yeah so I am
also with Javier in the path of of of um
I guess moving from economics to realize
the reality of externalities to then
witness the gaps in policy and I mean
all of us taking responsibility for this
as as both voters and consumers to to
solve these externalities and in their
absence I see disclosure as a way of of
filling these missing markets addressing
them that it cannot solve all problems
we will still need uh policy and
regulation to play play a role um and in
the meantime uh coming back to your
point about what what we we can only
manage what we measure it is actually
increasing this recognition that yes we
have um produced Capital we have human
capital we have natural Capital that the
depletion of that natural cap is
something that we need to be accounting
for account you can bring us into the
accounting system and look at the
implications of it in terms of risk and
opportunities that will bring all of
this to life so I like Javier have great
faith in accountant saving saving the
world Wonder wonderful and so if you're
the questions coming in are about
tradeoffs and and one in particular is
about um the trade-off of for example
reducing uh emission through means that
may have a negative impact on nature how
challenging is it to measure those those
tra trade off are you looking at those
I'm sure you yes well there's a there's
a there's a downside and that there are
tradeoffs um you know for for um for
many different areas where we may be
looking at solutions for renewable
energy there may be then the source of
minerals for for fulfilling that that is
going to deplete um important uh parts
of nature but there are also upsides in
that there are potentially big solutions
for climate change through restoration
and conservation of I mean basically the
planet as a carbon s sink and a source
of sequestration that we can use to
solve uh the problem so I think yes we
need to be keenly aware of the
trade-offs and we need to be keenly
aware of the synergies and that's where
I think the very interesting challenge
uh I was talking to the credit here is
going to come for the issb now having
developed its first standard with a set
of General requirements for
sustainability overall and then taking
one size of climate now thinking about
the interactions of climate and nature
where there may be both synergies and
trade-offs and then of course the
important Dimension and all of this of
people at the at the heart of this yes
um so I I I mean I think it's a yeah it
and having started I I um I I sort of
switch sometimes thinking why why is
everybody so limited and only think
about climate mitigation not to be a you
know critique of this day's conference
having a focus of that but in many ways
it's an asset in that people have come
to think about this one issue and then
can use that as a bridge to thinking
about others that are connected um but
in some ways is it's so tough to solve
that one thing and coming back to the
reporting context with Javier right one
of the reactions uh we get when
presenting tnfd work would be oh another
issue but it's not just another issue
it's an interconnected issue you cannot
solve one without the other so we are
asking a lot of all of us to solve
interconnected problems and that's going
to be you know uh a really exciting but
challenging part of what we'll all help
issb to to address so to wrap up this
session and given that we're here
talking about this uh subjects um ahead
of cop let me ask you all to share just
a couple of minutes um about what you
think will actually come out of cop in
terms of Regulation I'm going to start
from um
Javier well I think I think hopefully
what it will come out of cop is a bit
more Focus um I think time is the thing
that uh we we do not have uh I think cop
is going to start focusing more in more
specific uh areas and I genuinely hope
that what we get is a bit more focus and
and simplicity which is what we really
need I think a carbon out today is uh is
much better than a unit of carbon out
tomorrow so I think that I hope that
what we get is focus and
simplicity a simpler system Marcel I'm
sure you agree with with that as well
absolutely I mean obviously a lot will
be um uh focus on on the global stock
Tech this year of course in in terms of
Regulation and bring this this together
with kier's ask or demand for Focus I'd
hope as an academic that we focus on
what we know really works transparency
in disclosure is very powerful and we
also know that um tax policy either as a
carrot providing incentives for
investment like through the inflation
reduction act or as a stick carbon taxes
can also provide very powerful
incentives for corporations to to change
Behavior if we focus on that uh I think
that would already be a success all
right so Simplicity and um effective
ways of changing Behavior ta Emily um I
think once again there's going to be a
strong emphasis at this cop on the
connections between nature and climate
so I think increasing awareness and
understanding that that is the Paradigm
we're moving towards and um and have to
move towards and then I think also just
continued momentum there will be
dialogues at cop between the market L
framework developers like ourselves the
standard Setters um like issb and The
Regulators like to continue on that
on on goinging dialogue which because
we're all moving with urgency fast but
these are complicated things to create
that consistency that everybody's asking
for is um toates that ongoing dialogue
you have to have very nimbly be sharing
things to make sure everything we're
doing remains consistent so I think
those conversations will continue
consistency thank you look yeah I think
that you know we have made the first
step which is uh you know we have now a
standard sets at least for climate and
then there will be a discussion about
how to go beyond climate but now they
the challenge is adoption mhm and for
adoption you really need a global
dialogue and we don't have a a global
dialogue I'm not particularly optimistic
about
cop uh and this is for just for what
concerns what we have discussed in this
panel but you know in general you know
that we need I mean according to the IMF
we need about5 trillion dollar annually
of a green investment every year from
now to 2030 a lot of that will have to
be private a lot of of that will have to
be coming from emerging markets and
money are not going to Emerging Markets
so I think that Emerging Markets is the
key issue and uh and also you know to
get that money in Emerging Markets we
need a global dialogue and also in that
you know that's is going to be you know
the main political issues is is there
okay so that of course so uh for a green
transition we also want it to be a just
transition that works at po same
government levels including um uh
supporting Emerging Markets uh
transitioning to uh to a Greener economy
uh and they of course agly and
effectively the most exposed uh to the
effects of climate change and also uh
you want to be able to channel private
Capital towards the the companies and
initiatives that are um arguably
hopefully better at uh tackling this
Challenge and so let's hope that
accounting will will help and by the way
if I can advertise so starting from next
week the wheeler Institute at Lando
business school will have uh you know
four lectures on standards and adoption
in African countries and we have a lot
of you know already demand for this kind
of also capability buildings which I
think is very important where business
school can have a role and you were
already you were saying that were
already uh there was quite already a
High um level of takeup which indicates
the interest that there is in this
subject so that's it thank you so much
for joining uh for joining this ation um
it's uh it's wonderful and the more you
get into the detail the more interesting
it gets uh I think uh so do keep on
following uh all of the panelist work in
this area thank you jaier also for
joining us uh all the way from hro from
uh from the floor um and thank you of
course to also to mcel to Emily and to
lcia and for anyone of course also want
in peps to have a look at the kind of
coverage we do at sustainable views on
policy and regulation come and check us
out at sustainable views
thank you again so
[Applause]
much

---

### think ahead: Climate Transition and Emerging Markets, led by the Wheeler Institute
URL: https://www.youtube.com/watch?v=jKanGWK6WmA

Idioma: en

thank you Julian let me start by
congratulating those of you whom I've
seen from early in the morning uh uh
today who who stuck it out clearly uh
highlights the both the importance of
the phenomena we're going to study we're
going to discuss uh but also the energy
that's behind uh uh behind uh all the
solutions that we will hopefully uh
discussing have been discussing all
along uh we have an absolutely star
studded panel uh here um and uh I'm
going to very briefly introduce
introduce some of them uh Nick Hughes
did my immediate right uh uh Nick is a
work in case study actually case studies
in the plural because uh at lond of
business school we teach a case on Mesa
the mobile money Service uh I see some
heads nodding you've heard you read it
uh um that Nick started in a in East
Africa that transformed um many
communities in East Africa and has
served as an inspiration for many others
uh around the world Nick then moved on
he's always on to the next big thing uh
that moved on to uh another uh
initiative M Copa uh which seeks to
address the 600 million number that Alex
Edmund uh Edmonds mentioned earlier
today which is uh the the the fact that
so many uh in Africa in particular but
around the world still lack access to
energy not just clean energy energy and
now mopa using some super cool
technology state-of-the-art in very many
ways uh uh addresses uh that challenge
of uh energy and Nick then moved on oh
by the way that's another lbs case
uh which all our first year MB is Du um
and then we haven't written the case yet
but uh Nick's current Venture is called
cavex uh which I'm sure you'll talk
about some more uh Nick and I also teach
a class uh called innovating for impact
at London Business School so Nick
welcome back uh uh antoinet another dear
friend of the school and of the uh of uh
this particular Community anet vermil is
the is the co-founder with John
of the galif foundation which which
forces us uh in very many ways partly
through Sher force of personality but
partly through the the the vision and
the and the importance of the phenomena
uh to look at areas that we often ignore
specifically the
oceans and uh Plastics and the oceans
and the impact that this combination has
on a whole bunch of other things I'm
sure anet could tell us tell us all
sorts of
[Music]
um scary statistics on on that
combination uh the galif antonet and
John have been oh sorry the vermilia
have through their Foundation been uh uh
wonderful supporters um I think we have
at least one galif scholar here uh and
from uh the scholarship that they they
have endowed at L business school
antonet welcome uh gor meta another case
study uh gorov um runs a remarkable
organization in India um called Dharma
life uh Dharma Life Works in 14 states
in India now 14 states in India is the
equivalent of you know the the
particular States inv worlded is the
equivalent of uh all of Europe and the
United States and a whole bunch of other
countries yeah uh one state alone is the
size of Brazil yeah so uh 14 States and
they work on um Rural Entrepreneurship
that has a social impact and energy is
one of the uh uh particular areas but
back to the the point that uh was made
in the earlier panel that it's not just
climate it's a whole bunch of other
things and each of them recognizes and
tries to address that uh in their own
way uh from uh from uh their vantage
point now the focus of the session is on
Emerging Markets we've heard Emerging
Markets referred to many times um and
and and so I I'll start the conversation
with just figuring out what's different
about Emerging Markets you know very
often uh the discussion is almost as if
um these are
victims um that oh gosh through our lack
of empathy or care uh we're causing
victimization uh uh to all of these
hundreds of Millions millions of or
billions of people or they're villains
yeah either they're they're you know the
oceans are rising and they you know air
is being polluted or they're the ones
cutting down the trees uh they're the
ones uh doing you know dirty coal etc
etc I suspect this group has a slightly
different perspective from experience on
Emerging Markets so let me start with
you Nick and then we'll go to the group
as a whole what is different in Emerging
Markets uh especially contemporary
Emerging Markets as we think about cop
28 yeah sure thanks well it's a pleasure
to be here um well I'm I'm a a
practitioner uh thanks for the plugs on
the cases but um you know when when I
look at um subsaharan Africa in
particular um I actually see a a huge
opportunity in front of us to think
about redesigning the infrastructure
that we can deliver clean energy to to
the 600 million people that are simply
Off the Grid I mean it's inexcusable
that number of people
cannot access grid technology today and
yet we have technology at our disposal
which can solve for that problem it's
just and I think the previous panel only
caught a little bit of the conversation
but it boils down to inertia in the
political systems it boils down to
financing um the practicalities of how
we design that infrastructure need to be
thought through so we shouldn't go into
Africa or or other parts of Asia and
start to think about centralized Energy
Systems I mean that's crazy if we landed
on the planet today and looked around we
both in terms of energy and in water you
would not design the systems that we use
today and in many ways similar to Mesa
you know when we when we were thinking
about empa we we were moving money
around on phones 20 years ago long
before we had Apple pay and iPay and
smartphones because we designed the
solution for the person that just had a
feature phone we have to think about the
way we design the next generation of
energy systems for people that don't
have the same needs that we've we've
grown into over the last 200 years let's
think about decensored systems let's
let's think about smart grids I mean
there was a conversation earlier today
about the rise of electric vehicles I I
I've been pestering the World Bank for
decades to give me a business case for a
smart grid it doesn't actually happen
because you don't have the anchor
consumption to use the energy on a grid
and you can't bet your get back your
capital expenditure but suddenly we've
got electric vehicles in the mix
suddenly we might have an anchor use
case to roll out smart distributed grids
properly and so you can a smart grid is
a grid where you you come onto a grid
it's been installed maybe it's us
clean energy at its source so in in
across Africa there's more solar energy
potential that we can actually use
across the globe there's geothermal
energy in especially in East Africa
that's that's under the ground it's it's
clean to access we could put that onto
the grid and the smartness comes when
you pay for what you use you don't just
build a a distributed a centralized
system push energy down load shedding is
happening all across Africa they simply
don't know where to put that energy the
energy companies are only interested in
there what they're called cni customers
the commercial customers they're not
they're not interested in getting to
households we've got a jettison that
thinking and design much more
appropriate systems where where they're
smart the energyy is going to where its
needs and and we give people the ability
to pay for what they use using using
fair pricing and um so so you know if
you look into that into that you know
whole you know where sort of I'm grossly
simplifying the opportunity because it's
complex and it's hard and it needs money
but the opportunity is there for us to
rethink the way we build um Energy
Systems and we do need to start doing uh
the talk earlier today about in
internalizing some of these external
costs we need to build in the pricing
for the global South that gives them the
incentive to move down this path and and
and I do think the Glo through
mechanisms like the carbon markets the
global North and the polluters can
should be we should be finding ways to
get that money from that Source down to
incentivize these new clean cleaner more
cleverly designed um infrastructure
systems great so I'm hearing you say the
word you use a few times was
opportunity um but then the
infrastructure necessary to create the
opportunity uh as well as the the some
you alluded to the interconnected nature
of the World perhaps that's a topic
antoanet more generally what is uh uh as
you look at developing countries uh what
what do you find what is your Vantage
Point so today I've been here by the way
thank you very much for having me and
it's really nice to be here and to have
this audience so I've been listening and
I it's it's very much where we're
looking at using technological solutions
to solve problems which is great and I I
think it's very much needed but we need
to realize that in a very finite World
we're using more and more resources to
do that and in the end where are we
getting most of those resources those
are from our emerging markets and in
addition to that most of the effects of
us doing that are actually affecting
those countries more than us because the
effects of climate change are actually
the consequence of extraction um and of
our industry in creating those
Technologies so it's not and again going
back to Alex um and his of
externalities um it's really important
that when we move forward we are really
considering how we move forward to solve
a problem that it is not solving one
problem and creating others and that's
something that we are very very involved
with you know if you think about it that
indigenous people who comprise 4% of the
world's population have been protecting
70% of the world's
biodiversity and so therefore I'm more
interested in how can we make
nature-based Solutions lucrative and I
hate saying that I hate the word
lucrative but it's got to be an
incentive that we are finding ways to
work also with those kinds of solutions
that sorry that can help um solve this
the the poly crisis because I think
earlier I think Julian was saying about
the planetary boundaries technically six
have been crossed scientists are well
it's seven and we've only got two left
so we really are running out of time and
so in in that respect when I'm looking
at uh at Emerging Markets boy we do
describe them as the victims but oh my
gosh I also work um in areas where we
are very closely in touch with people
who are incredibly creative come up with
amazing Solutions um but every day they
are faced in the oceans you can't go
anywhere where your Beach is not
completely inundated with plastics the
fish that they are fishing is complet
completely filled with plastics they
can't even sell some of it because it's
it's polluted inside and out so we have
to be so this is not just like it's them
it's them it's it's all interconnected
and all of us have a role to play in
that and that's what I actually enjoy is
looking at where can we all start making
those changes so I'm hearing you point
on multiple levels to the externalities
um so the negative effects that actions
here or there uh might have on those
communities that are not uh factored in
um I'm also hearing you say something
about the interconnections uh uh that
that exist we might come back to that
and I'd love to learn more about the
ocean context which you're you're so
closely involved in as well gorov uh
your point of view on Emerging Markets
you left a uh a career in finance uh in
in Europe to to uh head to India uh and
work in rural India what do you see when
you go to Emerging Markets what are the
what is the reality so I see I think
make three points I the first one is
actually a huge amount of inspiration
towards this challenge I think we can we
see um we can see good examples of
Emerging Markets deep frogging uh you
know versus you know outed markets I
think the solutions you find especially
I mean I work in rural India amongst
rural communities and you can see I
think how they actually adapt to the
situation in some cases there are
challenges and we come to that data but
I think the Innovation is amazing and um
also the other thing you'll find is that
traditional ways of uh you know
operating or living were actually
climate friendly so actually the these
communities are much closer to what it
used to be and if you actually go back
to the modernization leads to um I mean
modern things from Western countries
seem exciting and aspirational to people
people but then they are sometimes
causes of these uh you know these
externalities at the Village level so I
mean if you work with uh if you go back
to some of the I mean modernized some of
the traditional methods of of uh living
of uh kind of consuming you will
actually be able to be climate positive
neutral and what's an example example is
um example would be I mean I can give an
example so I I work on households I work
on micro businesses and I work on
communities and in the micro business s
if you look at I'll take an example of
art forms and art right I think we
consume traditional art forms so we we
looked at Supply chains of traditional
hand embroidery or traditional um hand
weaving and if you go back to the
traditional ways of doing this it was
all using natural ingredients and having
circular processes now you are seeing
using chemical paints using there's so
many ingredients now which are in the
Advent of massive scaleup being used
everywhere and they are being brought to
these art forms which destroys the kind
of pureness of them and makes them
environmentally unfriendly and these are
then sources of water pollution wasas
creation um un know climate air
pollution because of energy and health
health obviously implicitly there's uh
kind of other influences on the personal
health and and living conditions and
working conditions so I think that's one
thing I mention and quickly the other
thing would be um I mean there is that
is if you go back to that um the other
thing I see is uh why I changed and
wanted to make a difference was because
it's sad to see what the situation is in
a lot of cases so it's a huge hugely
important to help these communities
modernize um and get what they're
supposed to get I mean versus why should
be I think niiki mentioned it why should
they be off grit why should they be so I
think there's the other side of it is
that the poverty and the issues these
communities face is also you know
something which is a problem so one has
to find a way to solve that and uh have
some sort of just transition yeah I
heard you use the word modern modernize
and I also heard you use Trad tradition
uh so modernize in a traditional manner
somehow maybe you'll come to that great
now and that all of that allude to some
of the challenges maybe we could talk a
bit about the the challenges that you
you see we've heard a lot about the the
you know the need for finances resources
uh what challenges do you see um
question yeah more anybody yeah sure
um uh where to start so so um if we take
the carbon markets as a can I I'll use
that as as an example um they've been
around 20 years I I mean before I got
into the telom space I worked at BP I
went to cop 6 in the ha and I came away
from cop 6 and I thought I'm never going
to go to another cop and I weirdly I
find myself going back into these cops
now and talking about how we can use
digital technology to solve for it so so
what's the challenge with the carbon
Market is it's a lovely economic concept
we'll create a cap so we'll either put
it in with a compliance cap or a tax but
allow people to offset that by finding
somebody who's got some excess credits
to save that that's a beautiful economic
theory how do you make that work in in
practice and for 20 years they bumped
along and we've we've seen market
failure they've disappeared over the
last even over the last you know three
to four months some of this um outing of
greenwash where these flaky credits are
getting sold they're getting sold to
Brokers the money doesn't make it to the
projects there's a much better way to
run these markets and again I'm going to
come back to digal tools we can there
are several things we can do now to
ensure the Integrity of a carbon credit
we've got uh remote sensing imagery that
we can use to monitor oceans and
mangroves and forests we've got internet
of things that you can't go anywhere on
the globe and not be under a network
somewhere whether it's the gsm network
the mobile operators Network where it's
Elon Musk is going to continue pushing
out with his low orbit satellites
connectivity is there data collection
can be done you can aggregate things on
the cloud you can interrogate remote
data uh third parties can go right down
to the very source of the activity that
you want to attach a carbon credit to
whether it's a reforestation or
protection of some Mangrove or it's
displacing a petrol pump somewhere and
putting in a solar
installation the this is all possible
and we can but the challenge is how do
we how do we build that monitoring
infrastructure that gives us the
evidence that the clean activity is
happening and if we can monetize it
using carbon markets we can use those
micro incentives so companies that are
setting Net Zero goals and using carbon
markets properly first of all they
should be reducing everything they they
can in terms of their own emissions but
if they need to need use credits to get
to Net Zero then let's find a way to
give them confidence to buy credits from
the emerging economies and move that
move that money down to the projects on
the grounds that are now that are
following a cleaner energy path so but
it's it's hard to make that work you
need you need that blend of you need
some committed I think the Net Zero um
sort of the the use of the net zero
policy and companies signing up to it
has been brilliant because it suddenly
gives you buy side demand and the
regulations and the regulations need to
come and enforce it and I I think if we
can make those things happen we can
deliver those Solutions using digital
technology there's no reason if I wanted
to offset my journey into London today
and move 500 Shillings down to an Essa
wallet I can do that I can I can do it
now if I can give an incentive to a
small holder farmer to use a use a solar
pump there's no reason why I shouldn't
be able to do that and yet we keep
hearing about all these scams exactly
all these carbon phony carbon credits in
emerging markets absolutely and and
that's what with that again that's
inexcusable we have technology to
demonstrate the Integrity of the
activity on the ground and we should use
that technology wisely and just to make
sure uh we are following so can you give
us an example so I'm a farmer with a
water pump what happens this is an
actual case you're working on
you work so uh typically you might go
and spend let's say $200 if you can
borrow it probably from an MFR you'll
borrow $200 you'll buy a a pump you've
got a choice as a small holder farmer do
you want a petrol pump or do you want to
those solar pumps look good but it's
another three it's $300 not $200 okay my
running costs are low but actually I've
got if I've got to find $300 why would I
make that decision because cash is very
real for me I'm going to make the
cheapest I'm going to buy the petrol
because I can get $200 I'll buy it now
if who said you buy this you you take
this solar pump what you're going to get
is a monthly credit to your impesa
account that every single month you'll
get let's say a th000 Shillings 10 Bob
10 10 $10 to incentivize you to take
that path and or we can use that to
finance that pump for you so there
you're using small micro payments to
incentivize the right choice between
petrol pump or solar pump and the money
for it is coming from the carbon credit
would come from I'm I'm I'm
um let's think of a big water company in
the UK that's trying to get itself out
of a dark corner let's say t water I
I've got a I've got a I've got a net
zero commitment I've got to find 15,000
tons of credit I like that that's linked
to water strategically I can see the co-
benefits exist for the farmer in terms
of its clean water being used for
irrigation that's driving up social
economic benefits I'll P those credits
give me the data that that's actually
happened we can we can do we can
complete that Loop yeah uh so and I can
see why you started with the point about
infrastructure because all of this
relies on financial infrastructure uh
Communications
infrastructure uh uh even in places
where there is no road infrastructure
that's exactly right yeah we have this
incredible digital infrastructure to use
today amazing
antonet and back to the point about
challenges you see I I already see the
entrepreneur here coming up with
Solutions a perun nod to challenges and
we always go to the solutions which is
awesome maybe you have a more sobering
thought for us so well I think it's I
love listening because I'm like oh yes
there's that and there's that absolutely
I totally agree there's and there are a
lot of technologies that are being used
in and blockchain as well which are
super important to track the The
credibility of of many of the things but
I just I just want to give a a bigger
picture of my my my world view which is
is a Learning Journey um so I think I
don't know how many of you know here
that Plastics come from fossil fuels I
mean they are basically a direct output
of it um and because of the growth of
the EV Market um fossil fuel companies
are now focusing on Plastics as their
next Market which is a estimated growth
of up to 40% by 2050 and most of that
about 40% goes on single use packaging
so something that you get from your
supermarket and literally use for a
maximum of5 minutes or have in your
fridge for a week that's it and so what
happens to those those get recycled and
I'm def definitely using my ant hands or
waste to energy which is another set of
ant hands um and the reason is because
we've learned and we've tracked actually
I was just telling rajes that in crumble
Road tesos they put some trackers in for
recycled goods and they found them in
Slovakia and in Turkey for open litter
burning
so the point about recycling is it is a
very open loop and there are too many
holes in it and there is there's not
enough accountability waste to energy is
another thing is where we take our
Plastics and we burn them in
incinerators and say that they will feed
energy the problem with that is that
we've discovered that the off um gassing
are forever chemical products that are
even the who does not accept them there
dioxins furland pasas and these remain
in the soil and in us forever so we've
got to sit back and go hang on where's
the logic here what are we doing and the
other point about it is that Plastics
are also um contain endocrine disrupting
chemicals and poor rajes has heard this
100 times but basically at the rate that
we're going in the last 40 years male
sperm count has dropped 50% due to
endocrine disrup in chemicals and is on
track to hit statistic statistical zero
in about 20 years great news um so the
point is that we're dealing with a
product that is pretty foul and toxic
and we still keep using it and we kill
so that's up here this is where we are
what happens with all of that that stuff
is it gets exported to countries that
are IL equipped to deal with it in
climate condition that basically pour
them into the ocean with every Monsoon
extreme weather event or whatever so
we're dealing with an issue that is
social justice uh social injustice
environmental damage and human health
damage so what has been amazing for me
though has been not so much that we can
find solutions to deal with a problem
that is a problem it we're just
literally putting lipstick on a pig what
we really want to do is stop that and so
the ideal thing is to try and limit this
fire hose of plastic production there
are some ways that that is being done
which is happening right now in Kenya at
unep there's the the global plastic
pollution treaty where it's like the cop
but it's the cop of plastics and we're
trying to negotiate ways to basically
address the plastic life from production
to the end that is amazing because that
has been driven and started mainly by
people from countries that were the most
affected by this the Philippines
Indonesia Africa those were the
countries that were driving so much of
this we've also passed something called
the Basel convention which now regulates
plastic as a hazardous waste so you
can't export it to another country
without prior agreement so these are
huge steps forward but they're more the
legislative regulatory thing because the
market the free market before then only
allow owed for very unsustainable and
untenable Solutions um so in that sense
I'm those are the things that I'm seeing
on the regulatory stage on the other
thing within communities and I've often
told rajes about this is that there is
um one city in the Philippines basically
um they tried an experiment where they
got everyone every stakeholder involved
and they had plasticfree ordinances
targeting businesses and all the people
who were involved in plastic uh
collection were reallocated to collect
everyone's waste from their homes and of
that 80% of the community's waste was
diverted from being dumped in landfills
and it saved them
$750,000 per year in landfill and
transport costs and the waste workers
which is a social justice issue were
treated as formal employees so this
became something that was one of those
amazing Stories where it was just just a
win-win win and has kept
going
um I we'll come back to the point about
oceans and what I heard also from you
was uh the interconnected nature going
from Tesco to the Philippines or turkey
or Slovakia uh the interconnected nature
of this phenomenon because the ocean
surrounds Us in part but also Supply
chains surround us uh whether they are
Supply chains that were originally
designed uh as to be used a certain way
or not uh um gorov challenges and I
suspect you'll come up with Solutions as
well at least that's been the trend so
challenges that you see um as you seek
to make an impact on climate related
issues in Emerging
Markets so I think uh for me the biggest
elephant in the room is financing
challenge I think it's been talked about
that the capital required to address
some of these issues is huge and it's
not really clear how it will I think
we're have massive Gap and I think
that's we heard about a trillion dollars
and so on trillions trillions I think
it's more than that but I think if I
break it down to my context which is the
micro level I mean you would talk about
how do you mitigate for imagine a rural
farmer in female farmer in a village a
typical thousand household Village I
mean first they asked to mitigate their
their footprint which in the scheme of
things is probably doesn't sound that
much but you aggregate it it's a hugee
issue second they have to mitigate um or
kind of they have to mitigate but they
have to become resilient climate
resilient so they face they face the
issues I
think which are kind of caused by others
which they face in their crop in their
current water situation Etc so they have
to adapt basically their their practices
and then maybe yeah technology is there
hopefully there'll be Solutions but
mostly that technology is still too
expensive to finance for them right so
these are micro level challenges at the
let's say a single farmer or farmer
group at the Village level so you know
not all of that can be addressed with
it's Capital it's Behavior change it's
kind of mindset change it is uh who will
fund the loss and damages is there a
loss and damage fund there's talks about
this obviously at cop but you know how
do you bring it to that level I mean
even reaching it to that level we have
the tools we have the technology to do
this but it's a massive Challenge and uh
and I mean how do you explain to that
also how do you explain that to them I
mean like if you so we s working with
women entrepreneurs we trying to explain
this um yeah in some cases it's very
tangible so easy to explain but
especially the things which don't have
any immediate direct impact you know
because mostly that's the case or have
any direct benefit or direct consequence
uh you know require a lot more effort to
explain why the the fair question is why
should they be changing their behavior
whereas others have been allowed to
develop our Behavior change on their
part when we're full of inertia many
issues right in terms of norms or even
fairness so Justice becomes an issue as
well right fairness and Justice so I'm
just again probably being on the
borderline negative as well but I think
these are the real challenges I mean and
not Solutions comes next I'll honor your
sequence and and how are you addressing
that
challenge I think um it's a work in
progress but basically what we've been
doing is we've been trying to look at
these Market these failures and um and I
think some of them have um Clear
Solutions and those get adopted I think
if I look at the let's say the micro
business I'll go to the micro businesses
first I mean there's the solutions which
are Roi positive right so whether it's I
think we've been looking at um the big
issue at rural level is wastage of foods
right so a solar drying use case where
you can dry it's actually a very Roi
positive use case so these things then
Finance themselves and so you can start
with those uh the solar pumps are also a
good example at that in that context um
solar um because for irrig micro
irrigation I think they're efficient
Solutions solar cooling is still
borderline because the the cost of solar
scholing so you have basically three
categories one is things which are
automatically ready adopt ready
adoptable right and because the arrow is
positive and uh you have you have models
of financing which develop and
Technologies which Finance them with pay
as you go models then you have things
which are you need subsidy you need an
offset to actually make them uh and
again there we come to the point of can
we create outcome Payment Solutions
because the climate benefits which Nick
alluded to they are not really
translatable directly to that household
so you need an efficient access to
carbon markets uh through technology so
using usage tracking you know maybe
unique IDs through blockchain where you
can track it back um and then uh to
solve that so that could be done not the
expensive impact bonds which are being
propagated with 30 40% cost you can do
that with technology now so that's kind
of that's the second category and third
one is where the use case is still
experimental where you don't know I mean
there's a lot of innovation required on
the tech side to solve the problem and I
mean here um I mean there's there's many
examples
but that's kind of we group into these
three and then we can take at least on
the second which is interesting
especially given the finance backgrounds
of of a number of folks here uh I see G
Muki who's here who's done a lot of work
with impact bonds Etc um so the logic if
I understand well we're working on uh
some research together uh through with
the wheeler institutes and DL Labs on
so-called results based financing maybe
you could talk a bit about how that
links to potentially with climate change
uh yeah so I think the simple way if you
have this financing Gap um there could
be two ways either it has to be
subsidized or it has to be financed and
the cost of capital is an issue so we
are I mean creating a tech platform and
that's as an example uh not a plug which
just you can just use very simple
technology of image um AI based image uh
classification to prove that this
household uh is the one deserving it so
you can validate the kind of uh
targeting of such a household is most
needy through technology you can um
track the climate impact through sensors
where if only the usage gets paid I
think a lot of criticism of carbon
markets is that you're survey based
paying out the carbon benefits your
technology allows you to actually track
climate you know footprint and then
paying out against the footprint two
sensors and the third thing is that you
create a unique record that this thing
is not duplicated so this one household
actually gets this Ben business gets
this benefit and this is not repeated
and so you have some sort of trust in
the process to by creating a simple leaf
ID on the blockchain so that's a very
simplistic way and you can just prise
this uh directly so hope that answer
just relating to some of the points
you've made uh there's a there are a
series of questions coming through uh as
well I don't know if that's up there um
with there are questions coming through
from from the online panel um and one of
them is uh Alex Edmonds talked earlier
about the need for climate
literacy um how do we achieve this in
Emerging Markets what does that even
mean in the context uh lucreta made a
plug for uh this terrific webinar that
she's organizing on behalf of the
wheeler Institute on on uh climate
standards and Africa uh what about on
the Grassroots if those were not dialing
in the folks the the small holder farmer
or that Community member in the
Philippines or the or the uh Village
rural Indian villager what does climate
literacy even mean in those contexts
Anon I I think they're living it I think
they see it every day you I mean you're
in your if you're on a coast you're
seeing Front Line the amount of plastics
are hitting your Shore you're seeing the
fact that the weather is getting much
more extreme there are countries that
are going underwater right now um and
it's not just I mean I always again
carbon tunnel vision the these are
countries that are not just losing their
land they're losing their culture their
spiritual connection this is much bigger
um so I what I'm sort of when I hear
this I think that um we talk about
climate literacy that's because we're so
disconnected I think that when you are
front line you know full well what the
changes are and you're having to cope
with them front line and particularly in
in coastal areas this is a you know I
was in my home state uh in India uh
Kerala a few weeks ago uh and the person
who was cooking uh at this little hotel
we were in on by the beach uh was a
fisherman it turned out uh and we say so
what are you doing here instead of
fishing apparently that beach used to go
3 kilometers
out in my Homestead I had no idea uh and
and to him it's very palpable and his
children are not becoming fishermen
anytime soon uh they are doing other
professions and and so they see the way
the world is headed from their
particular initial uh unique uh
perspective um so and is that enough I
think I think obviously there are all of
us when we start looking at the
interconnectedness of what we're doing
you can sit there and say well maybe the
way that they dispose of waste or maybe
the way there are Chang changes but I
think that within Villages and we've
leared this that when you work with the
elders in the village they are super
important in um educating their their
communities on better ways and that's
probably the uh it actually started with
Al G with his climate talks educating
you know you you just keep going down
till you get to the point where there is
that level of education and literacy but
the level of literacy that you need
there is probably quite different to
Global Financial markets or whatever
which are too disconnected that's where
I think the the biggest true true but I
was thinking Nick of your example of the
small holder farmer with the pump that
farmer needs to trust that you will keep
giving the 10 sure every month yeah and
so at some level the farmer needs to
understand that there's somebody out
there who has a stake in whether he or
she uses the pump in a c a particular
kind of pump or not and and so there
needs to be some at least implicit
understanding of of cash flows and so on
yeah really but but um remember what
you're doing if you're getting 10 you
know a, Shillings or $10 a month to a
small holder farmer the the the benefit
of that is huge um you know this is the
the strange thing about carbon Market
you've got a you've got a dollar
currency and if if I'm T's war and I'm
buying uh you know I should I don't you
know I'm not picking on T water I'm t
water if I 10 10 pound or $10 per ton to
me if I'm after if I'm chasing 16 20,000
tons per year to hit my Net Zero the you
know I need to understand that you know
as a finance director I'm making
decisions about do I buy now at this
price and at this volume and there are
other things I might want to think about
like these co- benefits that that's a
different type of literacy to a small a
of farmer who's who's who's getting $10
a month $10 a month is going to drive
that you know that's what makes the
difference $10 a month is real income to
a small of farmer and you know it might
sound like we're fiddling around the
edge talking about one small hold of
farmer or one household but there are
literally hundreds of millions of people
like this and we have to think about how
do we create that at an aggregated level
then you start to see a material shift
but I would say bring it back to money
bring it back to some money in the
wallet of that small holder farmer or
money in the wallet of that household
that displaces their charcoal burning
because there's also health issues
linked there and they're getting a an
incentive payment to move across to
clean energy and when you you start to
multiply that by hundreds of millions of
people then you start to make a little
bit of a dent on on on the challenge and
it can all be done I think in the short
term longer term we're going to need
bigger Solutions we're going to need
direct air carbon capture we're going to
have to be pulling literally millions or
hundreds of millions of tons of carbon
out of the atmosphere we don't have the
technology to do that yet but we do have
the the the capability and the systems
to do this at at Big scale to do this
sort of shortterm stuff that brings
social economic impact and if we if we
link L to money link it to real money in
their wallet every month that's what
will drive Behavior
change yeah more of a behavior change
you're you're involved in uh lots of
activities on at the Grassroots level uh
that is around Behavior change some of
which is around uh around climate uh or
at least the environment yeah I think
definitely needed I think at different
levels I think at the house at the
individual level I think the government
of India's mission life is a good
example where you know there a policy
driven or I mean prime minister driven
initiative to get people to live in a
climate friendly way which I think is
not only an educational tool it's also
kind of creating a movement towards
changing your mindset to actually you
know save water reduce plastic all these
I think six seven behaviors they've
outlined and I think it's a great
example of a top- Down you know kind of
movement it still will have to view the
results but I think it's definitely
required and secondly I think the
business um micro business level and I
mean just adding to what Nick said I
think obviously the benefits passing on
the benefits will help but I think there
it's about pivoting and iterating the
business models where I think the
education would be around you know can
you help them actually you know have a
future proof uh business model uh and
the education would be around that and
using Tech and other things to to do
this because it will have to all pivot
and and iterate I see we have 2 minutes
and 14 seconds so I'm going to uh uh
wrap by asking you uh a question
question so throughout the day we've
heard and Anon did a particularly good
job of uh uh reminding us of all of the
challenges uh everything from sperm
counts to uh to
uh all the awful stuff that's happening
in the oceans
um it all sounds kind of
depressing although you've done a
remarkable job of giving us some you
know uh Solutions and reasons to um be
optimistic what keeps you going in this
where it seems like there are so many
thousands of uh players involved not
just a cop but much Beyond uh it seems
like these are such big problems with
all of these interconnections and all of
these inter externalities what keeps it
can seem futile sometimes uh perhaps
what keeps you going yeah it does feel
like it sometimes doesn't it but look
look look at how the world responded to
covid you know look we came up with we
shortened the R&D time you know by by
decades and B Solutions out that have
helped and you know we can have big
debates about you know about that but I
I think humans are are we would you know
I'm I am an optimist I do think we'll
find Solutions I think we are you know
as a as a race we can be quite ingenious
when we need to be um but as a just on a
pure business basis by 2050 one in four
adults on this planet will be on the
African continent as a business
opportunity why aren't we thinking okay
that sounds exciting what in four adults
on this on the planet
will be in subs and Africa if we're not
investing now in good Solutions smart
solutions for Africa then we're not
doing our job in in the you know in a
business yeah so big problems mean big
opportunities uh and you see that uh and
where keeps you going I think it's I
mean the fact that everyone's here in
this room it's it's the it's the
everyone is en engaged in one way or
another so I think I get my Hope from
action I hate just not doing anything
and all of us can do something if some
if all of you just left today and said
I'm going to do something today that's
one thing the other thing is high level
action that's what I look
for gorov you you I was you know you've
had two hours of sleep and this is not
ra frequent I know this and you're
working nonstop on these things I'm just
amazed at the level of energy you put in
what keeps you going thank you it's the
if you it's always a question of
perspective or you from which
perspective you're looking at it I think
for me it's working for the women
entrepreneurs in the village if you see
the challenges they face the challenge I
think the unpredictability and um issues
they they have I think it's just a tiny
thing for us to keep going it's
responsibility it's a duty it's it's an
honor to be able to do this so as long
as you can do it and that's what keeps
me going and it's always a question of
perspective thank you on that not note
of uh of Duty uh let's uh let's all do
our duty and I'll do my duty and end on
more or less on time thank
[Applause]
you

---

### think ahead: Fireside Chat Hosted by Christopher Caldwell
URL: https://www.youtube.com/watch?v=Bc5pYw7tppQ

Idioma: en

grateful thank you very much Julian it's
um thank you very much everyone for
coming here um my name is indeed
Christopher Coldwell I'm a um I'm CEO of
United Renewables which is a clean tech
investor and a renewable energy
developer probably more importantly
though I'm alumni of London Business
School member of the alumni Council and
also member of the the sustainability
group here so in delighted today to have
a far side chat with um a as rati uh who
is a award-winning journalist a um
senior reporter of climate so Bloomberg
and a person who has a frankly
unreasonable level of knowledge about
all things climate and amazingly manages
to stay optimistic in face of all of
that knowledge so I just say Julian
there without any further Ado um so it's
a great pleasure to to speak to you
thanks for thanks for this yeah thank
thanks for having me wonderful and
you've got such a um your leading voice
um but also very well-known voice
because you're also the host of a you
know phenomenal podcast uh for for for
Bloomberg uh but the theme for the day
is future Generations yes and future
Generations is both a source of great
optimism but also a source of great
concern uh concern because the the world
that we're living in the mother and
nature has tapped us on the shoulders
and said hey you cannot continue to be
acting as you're doing uh you cannot
continue continue as you are is giving
us warnings throughout the L now the
source of optimism comes from the fact
that well we're all working in this
industry and we're all working very hard
to to be making this right because of
future Generations you know and also
future Generations are the source of of
of Hope the source of the future so if
we can start by just asking um asking
yourself um from what's growing up in
India um what did environments and
nature mean to you uh so I grew up in a
small town which by Indian standards is
small it has about 2 million people uh
it's called nask and it's very close to
Mumbai uh and it's uh it's Wine Country
it's surrounded by mountains uh it's uh
it was a really beautiful place to grow
up in and uh you know my parents are
retired and and they live there and
maybe I will go back and retire there as
long as we don't make climate change far
worse um and so nature was very close to
uh uh us growing up cuz you know uh if
if he could drive 3 km we were at a
river 5 km we were in the mountains uh
and so Nature's always been an important
part uh of growing up but also uh the
other thing that has something that I've
carried through uh is we saw a lot of
change in the you know 20 years that I
lived in in India uh but also within my
family my grandfather never went to
University my dad did and was able to
send us to uh better schools and and and
eventually over here to study and be
able to talk to a very smart crowd so we
saw social Mobility alongside uh access
to nature which is something that I hope
everybody gets to experience not just
now but in future Generations too
fantastic and you're in your your late
30s now uh what generation do you
consider yourself a part of some of us
are you know like a different generation
to yourself unfortunately um and it's
it's a question that to me is very weird
because I don't think the generations
quite match up as they do in India
versus what's you know whatever you
define as generation x y z in in in West
so I I'm sort of you know happy to be
young
forever amazing amazing and how is your
reporting evolved over there over the
over the decades so uh you know I
started as a science student I did
chemical engineering then I did a PhD in
chemistry and so to me coming to the
climate problem from a science angle was
how I was introduced to it um and so uh
you know in all the work that I've done
I started from the place where uh we
understand that the science is dire and
we know that if we keep putting
greenhouse gas emissions into the
atmosphere it keeps getting dire that's
been understood for decades now so what
can we do about it and where can we
apply science that's how I started off
uh to look at Solutions uh and so uh
initially it was very much focused on
bringing my skill set to be able to
understand the solutions that that we do
have in front of us uh and how to scale
that up but in the process of reporting
as you know you mature as a reporter and
you expand your horizons on trying to
cover subjects uh you recognize that
there's only so much Science and
Technology can take you to a level you
need other things to make that
technology actually be useful to people
uh and so that's why I ended up writing
this book which is looking at uh trying
to bring people polic and Technology
together in different contexts uh and so
uh now it's not just about solar and
wind and batteries but also about
finance and laws and shareholder
activism to make sure that uh those
Solutions can be scaled in different
parts okay fantastic before moving onto
your book which we will get in get into
later on um interesting to have a little
conversation about uh your position as a
as as a journalist as a reporter um it's
pretty clear that climate is now part of
the mainstream media uh so thankfully
mercifully it's now been been taken on
by the uh by the by the fourth estate
but if you look at this in the context
of of Youth which is the the the frame
that we're we're discussing this today
and there's at least a perception that
youth is served by a different form of
media by social media and by other other
channels um how do you feel that the
that youth is represented um by and the
future Generations represented by
mainstream media you know con
conventional journalism um I think it's
it's a very good point there was a very
recent survey one that I can quote for
an American uh survey because it was
done by Pew uh we saw Tik Tok becoming
uh one of the biggest sources of news
for people under the age of 30 uh which
is interesting but scary to some extent
because Tik tok's algorithms are as with
any other social media algorithm
very easy to manipulate and we know how
much of a problem disinformation
campaigns can have um
and and yet young people do read good
journalism we know this from our own uh
analysis at at Bloomberg uh Bloomberg
News has a high pay wall uh but we do
have a web friendly uh output my podcast
is free my newsletters are free so we do
know when we do our surveys that young
people are reading us uh and so it's not
that just because yes Tik Tok has become
a big bigger source of of news that
everything's moved in that direction uh
but yes it's a the media landscape is
changing and one that we journalists
have to keep on top of I slightly
surprised that um Tik Tok is being used
as a way of getting the climate
narrative across because it's the
climate narrative is is deeply deeply
complex like we're here at an all day
events and we're barely scratching the
scratching the surface with with all the
the Deep levels of interconnectedness
here how do you do you see a place for
Tik Tok well one thing that as news
journalists we have to be very careful
about is we go where the audience is and
so you do have to figure out ways in
which you can simplify things not dumb
it down to the extent where they're
absurd but you can simplify things to be
able to fit it in a two-minute video
which is things these are things we've
made I've not put it on Tik Tok I don't
have a Tik Tok account but I have put
them up on YouTube and they do get
watched by hundreds of thousands of
people so uh yes I think you know you
are in the business as a journalist to
inform the audience and you have to do
that where the audience is fantastic
okay and you mentioned that your your
entry point to the whole kind of climate
debate uh was was from was as a
scientist but yet a few years ago you
wrote a book uh United We Unstoppable 60
inspiring young people saving our world
um how did that come about like how did
the and that gave a kind of very
unfiltered view from from youth how did
how did that happen so the origin of
that B was uh September 2019 pre
pandemic hopefully a time we all
remember uh it was when Greta thunberg
and uh and young people had come to uh
protest in enormous numbers we are
talking tens of thousands across cities
around the world and I'm talking about
September 2019 in the leadup to the UN
General Assembly where a lot of climate
conversations do tend to happen uh
however as as a journalist what I saw
was the only person and the name I
picked up was being highlighted was
Greta thunberg but she wasn't the only
one who story uh needed to be told
because there were all these people from
very different backgrounds some many of
them coming from developing countries
whose voices hadn't been heard and so to
me that was a place to try and allow
those uh young people and I had uh
everyone from I think 11 years old till
late 30s uh in the book and uh everybody
across uh all the five continents and
from 60 different countries so to me
that was a a chance and opportunity to
give young people the voice to explain
themselves uh and why they are taking to
the streets in such numbers and of
course Co happened and then we had to
stop protest but they are coming back
now so climate protests are are starting
back very ni so and did
that impact your journalism in any way
that they getting all of the insights
and views from the from from this
diverse script yeah it's impossible to
not have the work you do especially when
it's um learning about stories of people
and how their lives change also affect
you so to me I mean coming from a
developing country uh but also having
within a developing country uh a
privileged upbringing which is true uh
in in my case uh to recognize that and
be able to look back at other situations
that people have gone through and how
they've used them to be um more action
oriented so protest is uh I find you
know I've never been uh to a protest I
now as a journalist I likely never go to
a protest but I do find it a courageous
act especially what we are seeing around
the world now where protesters are being
uh criminalized and laws are being uh
brought in to take people who are doing
peaceful activities but label them as
criminals and so it is a courageous
activity and it requires a level of
commitment that is uh uh one that is
worthy of us understanding why some
people feel that they have to take those
steps sure yeah it's it's kind of hard
to argue against the moral case for for
protests and people putting short-term
disturbances now for the benefit of the
future but on the Practical side of it
there there are certainly arguments be
made of how impactful it is what advice
would you give to you know to Young
protesters so a lot of the the nice
thing about being a journalist and being
able to follow stories is many of the
protesters who are in my book are now
young people in professional careers so
I've have seen them going from their
lives as students to being uh being
people who now have jobs and many of
them almost everyone I know is working
in a climate sphere in some sense so you
can see that that uh desire to make
change happen once they recognize that
they also have the power to not just
make themselves heard but also be a part
of the solu solution they do take that
leap and that's a that's a hopeful place
to be yeah fantastic well we are um
running the risk of kind of generalizing
here like one of the themes of your book
is diversity yes um and how do we add
Nuance into that into the conversation
because you can't just say young people
as a block you know we need to have a
little bit more Nuance yeah well again
that's again as a journalist one of the
things that we are very focused on is
making sure that we hear from all
portions of society and all types of
people within Society so so we regularly
have uh audits that we do on our own
stories and look at what sources are we
quoting where are we getting our stories
from are we covering the regions around
the world that are being affected uh so
you know and yet the problems becoming
so big and so was that Things fall off
the crack so the most recent example uh
is there was an extreme heat wve in
Madagascar and we missed it and so we
had to have uh uh and you know we have
to meet as a group and be like how how
did we miss this uh you know how can we
avoid missing such an extreme heat wve
in a country where probably the the news
media didn't cover it as well and so it
didn't come up on our radar so what can
we do next time to not miss it so it is
a it is a conscious choice you have to
make to ensure that you are inclusive in
your coverage okay fantastic well I
think we we're pretty clear of the the
problems and which kind of takes us
along to the to their to to your book
clim capitalism um but fantastic great
congratulations just at a couple of
weeks now um but the the starting
premise of the of the book uh suggests a
need for for optimism and like your your
opening sentence is is a very optimistic
uh thought could you explain why
optimism is so important to you and why
you framed your book in this I would I
would call it possibilist so you know
this is a term I'm copying from Hans
rosling uh the late Hans rosling who uh
wrote a wonderful book called
factfulness and he makes the case that
if you look at progress we have made TR
tremendous progress and he charted those
out and had a wonderful way of
explaining to people how that progress
happened whether that's poverty levels
uh um uh hunger levels uh or uh death of
children uh born young uh all those
metrics were going in one direction for
a while some of those are starting to
reverse hunger is starting to reverse uh
and so to me what you know he got
labeled as an optimist just telling
people about progress but he said that's
not true what I'm saying is there are
possibilities there are possibilities of
progress and that we can learn from
those possibilities and apply them in
other places that's what the book is
about is trying to show where the
solutions are scaling what were the
challenges that people had to overcome
in different political circumstances
different economic circumstances uh and
how they can be applied in other places
okay fantastic and your your book is
essentially um a defense of
capitalism and I think it's pretty fair
to say the capitalism of the last 100
years hasn't exactly driven Us in the in
the right direction um but you we've had
you know inequalities we've had um you
know vast consumption of resources that
has led us to to a place which is like
frankly unsustainable right now but you
think we might be near a a Tipping Point
where where we have caused to be
optimistic that capitalism can can be
moving towards solving these problems
could you could you explain that I would
say it's a case for how you can tweak
capitalism to work for uh solving the
problem rather than worsening it uh
rather than defense of capitalism as it
has existed uh that's why the book is
climate capitalism that climate change
modifies capitalism uh and it's not a
book in the sense of making a
theoretical case it's going out to
places where that's happened uh and
again one thing that I don't have to
tell a business audience but there isn't
one form of capitalism what we have in
America in Europe in India in China are
all different forms of capitalism
they're all constrained by different
regulations different political systems
different economic capacities that those
countries have uh but what what we can
see is despite those differences there
are ways in which you can tweak it to be
able to deploy Solutions like solar in
India or carbon capture in the US or
electric cars in China and those are
solution sets that we can then apply to
many of the Technologies we talked
earlier in the day at this conference
around emerging Technologies like
hydrogen and carbon capture and direct
air capture or carbon removal all things
that will be needed but now we have the
road map on how to do them at scale in
all kinds of uh contexts sure
but as um an award-winning investigative
journalist who spends a lot of your time
popping hopium bubbles 100 yes 100% we
we we have um a capitalism has brought
us to a point where there's a lot of
like smoke being blown and there's
there's an awful lot of smoke screens
being being blown uh where we're we're
supposed to believe that we don't really
need to change very much because
there'll be big machines sucking sucking
carbon out our atmospheres and you know
so we don't worry guys it's okay um
where how do you balance that like so
the the need for optimism and the the
belief that there will might be near a
Tipping Point with the history of saying
that's well we there's most of the
things that are there that are there on
the rack now to save us probably won't
well as a journalist my goal is to try
and help audiences align themselves to
what the reality is because there's
always a gap what we perceive as the
reality versus what is actually
happening is there is always a gap and
that's probably why news journalists
hopefully even in a world of AI will
still be around uh but uh what I would
say is in a way I Define my beat as
covering Solutions and false Solutions
and you're absolutely right when
capitalism is being Modified by climate
there will be people who would want to
make a quick buck and so we are getting
a lot of green washy Solutions come our
our our way that makes for good
storytelling for a journalist it nothing
is easier if it can poke a hole in a
problem uh in a solution that is that
has problems but again while that is a
service that journalism provides and
it's a crucial service because if we
don't point to the problem I don't know
who else will do it at that level and
tell enough people about it
um books are a different piece I get to
sit in a story for years and be able to
make it make sure that when it's out in
the audience they can read it for years
uh and so that's why I wanted to take a
different stance where I'm not shying
away from the problems that are there
and there are many of those but to focus
on the solutions and how you can
overcome those problems and I feel like
both highlighting good Solutions while
calling out bad Solutions are board
services that need to be
journalistically done okay SS sounds
fair and another point that you you make
firmly is the importance of policy now
kind of pulling it back to our our
original theme on on youth um I think
it's pretty clear in the UK and a lot of
places around the world there is a
political bias preference towards
looking after older Generations rather
than younger and certainly more towards
current Generations rather in future um
how would you from a climate lens um
suggest that polic is is is tweet oh
that's an interesting one um it's also I
mean it that's down to the demographics
of the places you've just mentioned
right when it's an aging population
that's what the population is trying to
do that's not the case in India India's
median age is
25 uh and so you are you know many
policies that are oriented towards young
people if anything there is more uh
unemployment in India among youth uh
than there needs to be and it's sort of
a place where a lot of young people uh
and their talents may be wasted if those
young people aren't given jobs that's so
India has a youth problem whereas
invested societies it's an aging problem
um I think one thing that we can look at
least from a climate climate lens is
that there needs to be intergenerational
Equity that people in the older
Generations need to recognize that they
lived on this planet being ignorant of
the fact that climate change was being
rought under them now we are not
ignorant anymore we know the science we
know the responsibility of historical
emissions of many of the people who are
in the older Generations today many of
the countries that became rich on the
back of those emissions not knowing the
problem then but knowing the problem now
and so if there is a way in which and I
don't know what the policy level would
be but if there is a way in which older
Generations can be made to understand
that historical responsibility we may
get more support for policies that are
climate Progressive mhm okay okay that's
hopeful in a in a
sense so um one of the another one of
one of your kind of principles is is
again towards optimism um but it's quite
striking as you mentioned earlier on uh
quite how pessimistic on average the
younger generation seem to be um and you
mentioned kind of Cl climate protest as
a as a as a result of that
um what reactions have you had you
mentioned that you've seen um young
people do enjoy your your your
newsletters and journalism what
reactions have you had what
conversations have you had with with
young people on on your book yes uh so
there was a recent survey done of UK uh
young people in the UK and uh that
survey found 30% feel that we are
heading towards a doomis scenario a
cataclysm a catastrophe uh and that
nothing can be done about it which is a
very high percentage of people under the
age of 25 wanting to not
really uh participate in what is a
completely possible scenario where you
can participate in Solutions make sure
that catastrophe can be minimized if not
avoided uh and so my hope with the book
was to try and show that those Solutions
are possible that progress has been made
right we were on a track to 4° C warming
before the Paris agreement was signed
we're now on track for 2.8 that's the
most recent United Nations um report
that came out just before cop 28 uh and
so we've shaved up 1.2 de C from the top
it's still pretty bad at 2.8 uh but we
have time to be able to try and bend
that even further does that mean we
can't we can avoid all the problems
coming our way no right we continue to
put greenhouse gas emissions into the
atmosphere and thus we'll keep warming
the planet uh but we can try to minimize
the impact every .1 de celi matters as
as we heard earlier and speaking of
running out of time we are seriously
running out of time so if I can ask just
kind of one one final question a little
piece piece of uh advice to you know
people people in the audience and people
listening um how do you feel we should
be uh talking to younger people younger
Generations about the current
crisis um so I said my beat is trying to
tell you about Solutions and false
Solutions but what I often end up doing
is a layer below that which is how do we
talk about climate change uh and I think
one thing that I have found over my uh
seven years of covering climate change
is that every year the pace of change in
trying to deal with the problem has uh
changed and uh the pace of impact is
changing right it's all accelerating
both Solutions are accelerating and the
problems are accelerating ating so we
should start from the point talking to
any young person that we must recognize
that we are going to live for the next
few decades on a two track world where
climate impacts will keep getting worse
but climate Solutions will get keep
getting
accelerated if that is a world that
feels too dissonant well that's the
reality we are in but you can be on the
part of the solution and try and make
those impacts be as minimal as possible
yeah great and thank you very much for
the the U all the great work that you're
doing in trying to increase the pace of
the the positive outcome rather than the
negative that been a wonderful
conversation thanks for
[Applause]
much

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