Sustainable Business Summit | London 2024 | Session 2

[Music] [Music] [Music] [Music] [Applause] [Music] he [Music] he [Music] [Applause] [Music] [Applause] [Music] [Applause] [Music] he [Music] [Music] n [Music] [Music] [Music] [Music] friend [Music] [Music] br [Music] [Music] friends friends friends friends friend friends friend friend friend friend [Music] [Music] friend friend [Music] br [Music] w [Music] oh [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] be [Music] feel [Music] [Music] be [Music] feel [Music] n [Music] [Music] [Music] w [Music] the streets up mixed [Music] with feel again and the relationship between tourism and nature has always been a very important relationship but unfortunately it has been always a negative relationship where one is thriving over the other we need to change the fundamentals of how we are approaching things what Global is trying to do is have a very different approach we believe that tourism does stand a very good chance as an industry to be the role model to demonstrate to the world how things can be done differently the scientists were the first people we engaged with for the development of this project to make sure that we enhance our understanding of the environment and the habitats that are here in the location this is our first million Mangrove seedlings that are now making their way to their Plantation site on the islands and on the coast you see the crab just went into its hole those crbs were not here and and they're here now because of the mangrove Nursery that's how we know that we have created viable habitat for those crops and now those crops are attracting uh the birds regenerative tourism is everybody within the whole system taking part in regeneration where the guests will be part of that regeneration guests will be able to contribute to that regeneration not only enjoy it when they come out of their rooms on the islands and this is how we're keeping a connection with the local community they're employed everywhere within the company and this is because we need to learn from them and we need to you work with them in order for this tourism destination to succeed the the designers and the engineers are are building wonders and the people in the environmental and sustainability side are teaming up with them at every single stage to make sure that we deliver it in a way that is the red SE way please welcome to the stage Meg Zabo managing editor of Bloomberg green and sustainability events hi everyone welcome back I hope you had a great lunch I hope you enjoyed the facilitated networking or regular networking whatever kind of networking you did um just a couple of quick reminders before we get started you can join the conversation um on using the hashtag sustainable business Summit sorry sustainable Biz Summit uh and you can also do submit questions and respond to our polls using the QR code on the corner of the screen I will be doing um audience questions for every session for the remainder of the day so please submit a bunch of them including mine at the end so um please keep them coming you guys have so many great questions um so we have our next session coming up is a great one it is the business agile sustainability leader um and I want to give a special Shout shout out to our moderator Abby Danzig who is The Mastermind behind this entire program so please enjoy our next session please welcome to the stage rienne Kelly Chief sustainability officer at National Grid Caroline Lori vice president of corporate responsibility at burbury and TI Roswell pupet Chief sustainability officer at sensco for a conversation with Bloomberg's Abby Danzig thank you Meg for the wonderful introduction and I'm so thrilled to be joined by three Dynamite sustainability leaders um this is just fantastic to have uh three different Industries represented here on stage and really excited to to dive into to our questions today um in the past when we've had you know workshops with sustainability officers or other conversations with sustainability officers I've noted that they can almost take on a little bit of a event session form I think um there are certainly challenges that um you all are facing and many of you in our audience are facing um as we're seeing um sustainability in ESG move from you know sort of our our big and exciting commitments into um sort of a phase where we have more eyeballs on on what we're doing and um greenwashing concerns are in high effect um and there's a lot of turmoil that's going on in the world around us so um I'm curious to hear from each of you what is the biggest challenge facing sustainability leaders today T I'll start with you thanks Abby I'm super happy to be here actually those who don't know science go couple of words it's pronounced science go it's a Specialty Chemicals company that really enhances the way we live work travel and play in fact our specialty Solutions are available in many many applications you can think about uh medicines 80% of medicines packaging 25% of shampoo biodegradable shampoos and so forth so really using chemistry as an opportunity to enhance Sustainable Solutions for our customers I think we're a new company we we span out of Sol um a larger Chemical Company and uh with 13,000 employees strong around 30 30 countries in fact and uh I like to think of us as a startup it's a good sizable startup in a way is that 13,000 employees but the mindset is very much there we're small enough to be nimble and agile at the same time large enough to scale Sustainable Solutions for for businesses I think you asked about greatest challenge I would really say it's in round of time I think you know we have a huge sense of urgency to find these Solutions uh and and Tackle sustainable for better world and um at the same time transition is a journey and takes time so Balancing Act the sense of urgency and Agility and and and acceleration while we transition is really something that is a real reality and necessity I think for us and uh in our own operations we look at um sustainability in two ways we we break it down in our own operations but we also look at uh our products so we leverage in chemistry to bring sustainable products to our customers and we have today 62 industrial sites around the world uh who have already out of those 65% are using uh renewable energy actually and even in us and China our manufacturing sites have 100% uh renewable electricity so it shows how we're tackling rapidly our own operational emissions and then of course on our products and I can speak about that little later is really our Innovative capabilities uh how we drive for instance Next Generation uh batteries and and uh bring lightweighting for uh Aviation and and cars so I would just say all of that happens but not alone so this is huge need for Partnerships and uh I think if we recognize the power of Partnerships we're really able to accelerate uh at PACE and scale while we transition on this journey yeah absolutely there's a lot to do and not a lot of time to do it so it's going to take going to take a a full force um ran I'd love to go to you next what's what's the biggest balancing act that you're facing at National Grid I'm going to give a couple of answers you asked for the biggest thing I'm going to give like a number one of them I guess um is I think particularly in sustainability is how do you balance the need to comply in reports with the need to continue to be strategic and I think that you could get sucked into all the compliance you need to do you could s get sucked into the yearly reporting this we in even in the internal quarterly marking of your goals but at the the same time I think the sustainability of the CSO role is sort of um so Broad and so strategic that you actually need to sit across the top of the business and actually I think the risk is if you get drawn into the day-to-day reporting you forget to look more strategically and you forget to engage widely across the business so I think getting that balance right is one of them um the second thing I've got three so I'm not going to the list isn't endless the second thing was probably um how do you get it seeded through the whole of the business so it's fine to sit at the top and set commitments and goals and targets but actually it needs to be something that goes right through the DNA of the business so it needs to go right to the bottom so we spent a lot of time in the last year embedding it um in transformation business plans embedding it in the financial planning process embedding it in the way we manage and per manage performance in the business embedding it in renumeration so that you you start to build that picture that what you say at the top is the work that you're doing at the bottom of the organization and the another one just to throw it out then I'm sure will come up in conversation has come up before is is I I do also think about the talent and sustainability we were sort of briefly touching on it I think you know 10 years ago perhaps it was just about greenhouse gas accounting and sort of head down and it was just about how do we do the numbers and I think today the skill set that you need in sustainability teams is far wider than that and so you need people who understand investors you need people who understand the strategy you need people who communicate you need people who can do the accounting you need people who can think about the policy environment for us the regulatory environment because we can't do this without the support of our Regulators so I I think the skill set then becomes really multi- discipline and building teams that then that can adapt to that I think is another another thing that uh is is is that I'm sure I'm think well I'm thinking about it but I'm sure other csos are as well yeah fantastic Caroline would love to hear your thoughts on this and what your biggest challenge is I think we are seeing an explosion in regulation which is really changing all the time there's new stuff coming on track and whil we really um support that in terms of a leveling of the playing field that does of course bring with it challenges um I'm super happy that I work in a company that's had a 20y year long sustainability program so you know I'm coming off the back of a very strong program already that we can build on in terms of Meeting those regulations those disclosures across product across you know csrd csed D that the list goes on so really strong underpinnings um the other area of underpinning is really achieving that supply chain traceability and I know many businesses both within the luxury and fashion sector and Beyond are really grappling with traceability and again we have a clear commitment to achieve that supply chain traceability and a program that's in flight at the moment that's really unlocking that but again it's a big piece of work and it's it's a complex area for for myself for many businesses yeah I think it can be very hard to predict um what's happening particular in the regulatory space when explosion is right I mean it's just seems to be nonstop and we've had some conversations earlier in the day that that got to um I think it was Daniel Hannah said this has been you know just a little bit lost in in the alphabet soup of things and I so I think it is a very big challenge that that we're all facing and I think if I add quickly to that I think you know it's it's absolutely right I think the increasing regulations are are there and they not only in Europe you know China us are looking at their own versions of things and that is an absolute massive challenge for our companies I also see it as a huge opportunity in fact it kind of stretches us all our thinking how do we strategically look at sustainability and and and I think also on scope free and supply chain and broader value chain uh recognition of of emissions and so forth data is our best friend I think in a previous channel data was brought up at and I think it it resonates here too and I just wanted to bring it up I think all the possibilities of AI that could help us to augment our data that we collect in a way that we can better for is really a huge opportunity for us and uh we have actually as a company which has created our own science go. a that enables us to do just that actually so we're recognizing recognizing the opportunities within the challenging landscape sure and I think we're all looking the Quest for all of us right is better D more data better data quality data and that's reliable um we could probably have a whole another session on AI and sustainability and and debate on that um but I would love to actually toss to the audience and uh take your temperature a little bit we have a poll um that is about where the sustainability team sits within your organization um so really curious to to hear from all of you who are working um in this space today on kind of where your reporting line goes as a directly to the CSO are you may be reporting to a CFO the finance department operations more of a legal or compliance type of leadership um and then also we we often see marketing and Communications um maybe where this has sat in the past is before we have started really getting into some of these other pieces of the business um I think we can all agree that the best strategy um is to integrate sustainability across all of these departments um so I I'll be curious to see where where the audience lies with this we'll get to those responses in just a minute but in terms of our panelists on stage Caroline and tia you report directly into your CEOs um and then Ren you report into your strategy and regul regulation office I'm curious how that regulatory piece kind of comes into your daytoday um and how that impacts the way that you you do your job yeah so um I think sustainability is in the right place in our organization because I think it is strategic issue it does run through all of our businesses so it sits in a team with strategy strategic regulation transformation and again it's this link to the top to the bottom and getting it embedded um as a strategic priority but also in all of our transformation um and we are a regulated utility so we basically both here in we have 50% in the US we work with regulators and we get periods of Investments so three years five years and so The Regulators are really really key because actually what you need in those regulatory settlements is the ability to make the Investments that transforms the business so sets us up to bring more renewable energy um into people's homes and businesses but in the US we also um put gas into people's homes so it we work with The Regulators there to basically enable us to decarbonize the gas to put into people homes so it's really fundamental to what we do as a business yeah um I may have forgotten to say but you can vote in this poll by going to the QR code up there um scanning that and and getting your votes in and we'll we'll get to the results in just a minute um let's let's switch over to the CSO sort of reporting line um Caroline I know when we had previously spoken that this is something that your CEO is deeply involved in on on a day-to-day level absolutely yeah I'm super fortunate to report directly into the CEO and again um you know massive benefit for me in the role when I took the role it means that I'm sat at the table with our exec um Jonathan our CEO chairs our sustainability committee we get together on a monthly basis for 90 minutes dedicated to this agenda with all of our exec round that table really looking at what we're trying to achieve how we're going to achieve it and how we can embed it in those functions so I see my team as a center of excellence it's almost like a Consulting function to the business but with delivery sat Within supply chain within merchandising within digital and as the old saying goes what uh what interest my boss fascinates me obviously when Jonathan's there chairing the sustainability committee all of the exos sit up a little bit straighter it sits in their objectives we've managed to embed it within not just our executive bonus but also within our colleague bonus uh it means I get a very direct line into the board as well so I'm in with the board regularly a few times a year but not only that I have regular calls with you know our head of audit committee our head of Remco committee um and we have a lot of sustainability expertise on our board and I have that direct line um so I I do see it as a really key unlock and it it just speeds up decision making as well I've got that direct rout into sort of drive those mandates and I'm not saying that's enough you've also got to have the ground swell it's got to be built from the bottom up as well but having that high level leadership and mandate is really a a great benefit Tia I'm curious ilam of course um has been sort of a Pioneer in this space and um has has come over in in the spin-off so can you tell me a little bit about how the two of you are working together and sort of what your vision is um for science Co sure I think you know it's a huge pleasure to work with Dr ilham cadri Who's our CEO she's a passionate and committed to sustainability and and I think she is the real CSO in in in in certain ways and uh we both believe actually that uh we will be able to make greatest impact if we make everybody in a company a CSO yeah it's every it's everyone's responsibility and that's what I'm after right so really drive that ambassadorship and inspiration and helping across the organization colleagues uh to understand in their roles and functions what can they do uh so that is really something we're after and that will be helped by a lot of Education and Training programs that we have um similar to You Caroline as well uh you know I think it does really help to have a CEO not just buy in but drule drive on this agenda not just just internally but also externally uh and and I think this is really really vital I have seen companies who don't have necessarily CEO buyin and and you know perhaps the action is is is slower or or perhaps the targets are not as ambitious in a way so so certainly for us uh we are aiming for our next best and uh and ilham is a really true leader in this base we' also been able to doe to this uh bring our board even closer um to to sustainability with our ESG board committee and uh and also make sure that uh different functions in their own own uh capacity are acting on sustainability so um yeah and I think making this really accountability for everyone happens also through how we look at our uh you talked about bonus schemes uh we have incentive schemes that actually translates directly our targets so everyone actually you know sees what they need to do and it's accounted on and when it comes to uh incentives or bonus pay day one realizes we're doing good by doing good yeah yeah that's a great sentiment and I'm curious to see the answers um of our poll to see where you all sit within your organizations if we could pull those results up okay so looks like CEO and operations are really taking the lead um I I oh almost T tied here um this is I think this is very interesting to see yeah now now we pull it up and we're all we're all getting involved I like it I like to see it change that's fun yes uh I think this is a I think this is a really unique breakdown and um I'd be curious to see if in a couple of years we see that legal and compliance piece um you know reg regulatory piece perhaps ran that that maybe you lead into um if that will grow or if we'll start to see the CEO um direct reporting line take take on more precedent um I would like to shift over um and here are some some concrete examples from you all um you're you're in the trenches on this and so there's nobody better to ask um but with all that's going on in the world that we alluded to at the beginning of the session um can you share an example of a time where perhaps your company has been facing adversity or there's just been um you know other outside factors that have made it difficult to advance your sustainability goals and can you share a little bit about a time that that you worked through that um I'll start with youan yes I don't think it's adversary difficult but it but I guess it's interesting how things have changed so we had um our near-term um 2030 targets validated by the science-based targets initiative last summer we published them in September um and you know we previously had them aligned to two degrees we've now got them aligned to 1.5 degrees and it's just interesting comparing I think the way we originally did it with the way we did it last year so you know we basically spent a lot of time time with the businesses working out actually could they get to the targets and and what would we need and how much could we can control and actually how much did we need support from our policy makers and Regulators um and then on top of that we then spent a lot of time um with the board sort of two hours in total talking it through um looking at the pathways understanding um the the opportunities and the risks um and I think that wasn't what we did previously and so I I think that sort of for me it shows the way this is become a very strategic topic that everybody is interested in to the opening comic more eyeballs on and in fact I think that we we then you know we wanted to know we could do it which we can but we we took time so it wasn't just a sort of you know um a quick decision we took and I think it's that level of scrutiny and Analysis um and um senior strategic eyeballs and thinking this is a strategic decision we're taking for the business this is something that that um sets us apart this is something that drives the future this is something we'll investigate and I I I my feeling is that that to your opening you know we all set commitments a few years ago I'm not sure we always knew exactly what those commitments meant but it was the right thing to do and I think today that level of scrutiny has changed and so they're much bigger decisions and more strategic decisions so yeah that was a probably a case study from us yeah I'm very curious TI you mentioned you know sort of this the challenge of urgency and time are you all feeling like maybe having all these eyeballs so to speak on or these added layers of process and and getting things through um is that deterring us from this kind of urgent need to to meet these 2030 2040 targets yeah I don't know I mean part of me thinks at times you know I I do believe that having harmonized regulatory Frameworks reporting Frameworks will help us all to advance now at times uh one might say today we're spending on reporting today we're not doing MH and and that that's quite real that sentiment at times is that when we need to accelerate and find the raw materials and and buy a feed stock for our customers to be able to deliver products uh the day we're spending on reporting isn't doing that sure Caroline anything to add on your side exactly that point I think you can only report on what you're doing we've got to make sure that those programs are still moving forward and remain absolutely committed to that so um absolutely but I I see Frameworks like the transition plan framework super helpful actually this is about moving this agenda away from these big commitments you know we sort of all set commitments back in the day I I came out Kingfisher where you set big audacious goals and then you figured out how you're going to deliver them we're now in the place where we've really got to nail down those tangible action plans and there are those Frameworks out that Define what a credible action plan looks like and I think we're super supportive of that I think the other thing I'd add and I think in a way csrd does drive this is I think materiality assessments as super important they're much more strategic um Endeavors than perhaps we thought in the past because you can't do everything so I think we have to be really clear and really strategic what is it that matters to each of our businesses where can we as a business make a difference versus everybody else and then really go after in a focused deliberate actionable way those areas I mean when we first did a materiality assessment I think we had about 30 issues that appeared on it we did another cut about 18 months ago and I think there were about 20 issues I think we could imagine doing it again in a couple of years and that coming down it's not that the other issues aren't important it's just you get better at understanding where do we really make a difference as a business and let's then double down on that those are think in a way it's about not giving up you know and challenging the status quo going after what you need to go and do what you can do right in and measuring that we have we have uh devised circular sale goals um targets for our company and it's it's it's actually quite rare in a hard toate sector like chemical industry we're in and uh it took us three years to to understand what is a circular sale in a way and so L macara foundation for instance helped us to Define what that looks like and and now we're on it and uh now we are uh reaching our Target very closely from 18% we're at 13% now and and that's really great in a way and these kinds of materiality Assessments help us to to Define that space I think we're also seeing a m maturing of the agenda away from just it being a pure carbon agenda to really expanding into that nature agenda and those framework is beginning to come through so it can't just be that carbon's the name of the game anymore and regulation is supporting that but business is becoming more mature in looking more holistically at exactly like you say what are our material impacts both through a financial lens and an environmental lens and how can we really take tangible action to affect those okay we only have a few minutes left but um I sort of want to shift gears um you know we were talking about the power of Partnerships and and how that can you know help you accelerate your goals I'm curious from another source of pressure that you may be getting from a customer or your consumers your sort of end users here um obviously three very different companies represented here so I just quickly wanted to sort of ask each of you what a customer means to you and how Are you delivering quality and affordability to them uh you know not sa without sacrificing those things as you're delivering them A Greener end product ran I'll start with you yeah so in the US we actually deliver gas and electricity directly into people's homes so we are constantly thinking about how do we make it clean how do we make it affordable actually how do we make sure everybody has access so it's quite front and center of everything that we do here in the UK customers are tend to be people who want to put renewable energy into the grid and connect and so actually we've been working quite hard with the industry and with government to make sure you can connect all of what we need we end up having this long queue and you like it's sort of quite topical at the moment but the long connections queue we've got way more than we need so we've sort of had to shift the way we do it um to to make sure it's not a first come first serve but it's a use it or use it or move in the queue and even then how do you get the most important projects to the front so it has the the the need to um think through our from our customers perspective has basically enabled us working with government to totally alter the way we run the business and the way that regulation is set up to allow us to run the business Caroline what about you what about your luxury customers are they demand in Greener products absolutely I mean we run pulse surveys but myself when I first joined bur almost two years ago I went and spend time in our Regent Street store which is a delight and just talk to our colleagues there about what customers are asking them and they want to know the products are made from the most sustainable materials that they come from the most ethical Supply chains and that those products are going to stay in use for a very long time so we know that that matters and you look at our heritage trench which we we Mill and we make within the UK still uh we've moved that to be almost completely organic cotton 97% organic cotton with a fully traceable supply chain but not only that we repair we reseal we reproof we keep that product in use for longer and then we also offer resale opportunities so it's kind of the opposite of fast fashion and we know that matters to our customers that Delights them that they can buy a product and know that they're almost buying a product for life and and that mess I'm just super proud of absolutely uh we are about to get kicked off of this stage but I will let you have the last word TAA oh thank you very much well I'll be really short I think we see ourselves as Innovation partners for our customers and the way we do that is we have our 2,000 scientists uh in our adap um um adaptation labs around the world and this means we're actually co-creating designing in Sustainable Solutions for our customers what they require and that means we're able to bring uh products such as composite materials that enable light waiting for airplanes or cars we're able to we're piloting on hydrogen for instance for better fuel efficiency and cleaner fuel so you know opportunities like that is really working together with our customers on what they need is vital and that is where I think the added value comes in and that helps out Top Line fantastic Ren Caroline TAA thank you so much for joining us this was a fantastic conversation and I hope you all enjoyed it as much as I did thank Youk you please welcome to the stage Chris dodwell Global head of policy and advocacy and co-head of the sustainability Center at impacts Asset Management Alex Edmunds professor of Finance at London Business School and Tina mrai chartered portfolio director and strategic adviser for a conversation with Bloomberg's Eric Shater good afternoon everyone uh just so you are aware of who's who this is Tina quite obviously that's Alex and that's Chris we're here to talk to you about something a little spicier perhaps the politicization of ESG uh I'll begin by saying that um ESG has definitely suffered from politicization back in the United States where I live it does I suppose depend a little bit on where you live but thanks in part to Media amplification the whole country is feeling the push back and the net effect is either less support or less enthusiasm in the mainstream in particular around two issues energy transition and Dei initiatives there are I should add some real consequences to this investors pulled a record $1 13 billion from us-based sustainability focused investment funds in 2023 and now people here in the United Kingdom and in Europe are asking some of the same questions and coming to some of the same conclusions so before we get into a panel discussion with my distinguished guests uh let's run a poll folks uh colleagues of mine if you could please bring up the poll where will ESG be in 5 years you know by now how to respond by the way I should say we must be doing something right when you show up at 2:30 in the afternoon the room is still packed um where will ESG be in 5 years a even more polarizing and politicized B no longer controversial C succeeded by a new sustainability framework or D utterly discredited so we'll give the audience time to respond to the poll and then we can see how they feel about it but in the meantime let's get dig into an important question panelists and Alex I think I'll begin with you on this one why is this happening is ESG I mean there could be a number of potential explanations is ESG conceptually flawed overly broad too ambitious is this payback for sanctimony perhaps does it reflect maybe real societal cultural generational divisions over things like individual for or Collective rights what's going on I'm actually not sure what's going on so to me it's confusing why this is so politicized because to me ESG is something which is entirely rational so how did I get into this topic to begin with so 21 years ago when I started my PhD at MIT I wanted to study what creates long-term value within companies and I recognized that in the 21st century firm it was not just tangible assets such as plants and machinery and buildings but intangible assets corporate culture relationship with customers trust and stewardship of the environment and so what I looked at was the link between these forms of intangible capital and long-term shelder value so to me it's quite confusing that there are some particularly on the right who are concerned with ESG when this is a way of creating long-term value within companies now it's true that there could be legitimate disagreement as to whether to invest more in human capital or social capital or environmental capital or just physical capital but we should be able to have a reasonable grown-up discussion about that just like there's discussions as to whether company should expand geographically or be more domestically focused without one person being called a climate change denier and the other a hippie so what I hope is to have more grownup conversations yes we can disagree but what we're trying to do here is to create long-term value within companies and have that discussion Tina Chris I want you to help answer this question why is this happening it may not make sense to you but I still want an answer I I first of all just a a little parenthesis because you made the effort to be here I'll try to liven it up even more I take issue with that question that you put there oh where will ESG be in 5 years what is ESG that where it's going to be in five years Mak such a big difference if Alex is right that ESG is just people process human capital and any form of capital coming together in the value creation process what is really the question that you're asking that is fewer willing or making emotional a topic that it's not meant to be well it's a good question I mean I would say in some camps it's it it is more than a framework it is more than a system of values it's oh in fact if it is a system of values there's no value in this what where are the where where did we talk about principles or values we talked about we talked about core ingredients to Value to the value creation process so the very question that you're asking and I I'm not taking issue with that I'm taking isue with the way that the whole ESG conversation is I mean if you the way we've been talking about ESG the way that it's framed it's as if we are starting to talk about religion here it's not and where is it going to be in 5 years well we're going to take it wherever we are taking this conversation so why don't we get back to basics understand what it is that we're asking exactly and then answer these questions well the question so so the question is why why has it why has but we can take issue with a poll um the poll is meant to be provocative I'm glad it provoked you um what uh why is this happening why has ESG become politicized so I'll I I think this level of intensity calls for some real curiosity around this you're asking a very valid question in my in my point of view and what I think is happening is that everyone is trying to solve their problems through ESG I got badly paid it's ESG I got my subsidies taken away it's ESG I got a bad director of course it's ESG no it isn't ESG has always been around we just gave it a name and because we gave it a name we' got fashion out of it we got because we got fashion out of it it's gone in a million different directions because it doesn't belong to anyone to sponsor it properly so why is it that climate transition I love the two points that you've identified in the US because they're very real think about it for a second climate transition in an arena of geopolitical Mega fluidity right in an geographical area where you hit record insured and uninsured losses last year according to the insurers and the reinsurers so why this irrationality and my sense is that we found a culprit and now you know throw the your divorce into it of course it's going to Chris you're nodding your head over there yeah well I think uh I think Tina's got a really good point about breaking this down I mean if you break down ESG into its three different elements the governance piece who is going to want to invest in a company that's got poor governance so kind of let's park that one uh then on the social and the climate or the environment BR brought large you can see risks associated with both of those that investors are really concerned about for good rational reasons but actually the policies that you want to put in place to address them can become politically divisive and they can be quite difficult so I spent 20 years working on climate policy before I joined impacts I used to go to the UN climate cop as the head of the UK delegation there and you you think this is tough try to kind of convince developing countries in the early 2000s that they needed to take action on climate change now everyone's realized this is a whole world problem and we're moving forward with it together but we're reaching the stage where even though the economics are getting better actually we're reaching a stage of implementation of this this targetry where um it needs real behavioral change across the whole of society and that is quite a difficult thing to affect without some policies to support it even if talking about decarbonization of the Grid in the UK and elsewhere we're going to need planning reforms and those have to be pushed through they have to be handled really delicately with the communities that are going to be affected there are going to be peoples whose jobs will be displaced and will turn into new jobs again these need to be really well handled by shall we say a a sensible coherent mature set of kind of policy makers that are willing to build Bridges rather than look for division and I think what we've got at the moment is people that are trying to find divisive policies and they've landed on this as a potential one also let's just remember the geopolitical context we were on a high point at the end of 2021 where it really looked at on after the Glasgow cob that things were coming into alignment and then even with the pandemic the build back better programs and all of that and then we went into a very difficult geopolitical ERA with the with the Ukraine war that that pushed Energy prices up and had everyone scrabbling around for Solutions so that's taken up a lot of kind of policymaking bandwidth Alex I'd like just to endorse the point that Tina made earlier about the religious approach that some people have to ESG so I've highlighted the benefits of ESG but some sometimes that can be taken too far and replace clear-headed thinking so sometimes people view ESG as a magic word that defies the laws of gravity or the laws of General business economics so sometimes people think more ESG is always better no ESG just like anything else that can have diminishing returns sometimes people will put ESG on a pedestal above other drivers of company performance if you're an investor and you vote against an ESG proposal you might get cancelled in the media whereas if you underperform the index 5 years in a row you might not be shamed for the same for the same thing so what's interesting is that ESG is important but it also should not be put on a pedestal compared to all other factors when a new director gets appointed maybe his or her credentials and experience might matter more than whether they're an ethnic minority or or their gender but sometimes the ESG factors will outweigh General sensible business factors and that's where there might be politicization can can I add a tiny little thing um and we'll get to it in in in a bit as you promised but but um how about we think about the financial materiality of what it is we're trying to solve for in ESG you mentioned transition the other thing you mentioned is dni so I have a question for all the people here I'm an investor and I'm engaging with you as a company and I come and review your Dei statistics and of I I look at I for a change and you at telling me that you know what Tina you're investing one $1 doll and because we're not including everyone you know you're getting 50 cents back tell me who is going to take that who's going to take that proposition no one so Financial materiality is all ESG is about in my mind it's not a high moral ground it's how things come together to produce a financial result for this quar next year and in a in a pattern in a pattern that is sustained financially that's my take on isg before I move to the next question I'll ask Meg here is it too early to see what our polling results look like so let's see those polling results folks um we asked the question where will ESG be in five years okay succeeded by a new sustainability framework wins out uh even more more polarizing and politicized come second nobody is giving any Credence to this notion that ESG will be utterly discredited or almost no one it might be one or two people in this room we'll find you later um no longer controversial almost not quite a dead heat with polarizing and politicized so that's I think that's Illuminating the fact of the matter though is that for the time being as we've established there is a politicization it's worse in some parts of the world than in others what I'd like to know is do you see evidence yet that it is changing or influencing decisions the not ESG as a concept the politicization of ESG is affecting the decision-making process um at companies in the SE suite at the boardroom uh for investment managers uh in financial markets any thoughts yeah I mean we we make decisions every day based on what we think the future is going to look like for the companies we're investing in impact has a policy team that advises the investment managers and tries to read the Runes of what's going to be happening so you know we're looking at all sorts of scenarios about what happens with the US election um uh not not thinking Ira re re um being totally thrown out is is a lightly scenario but you know we are we're considering all of those we're thinking about we're reading to the end of the speech we were discussing this earlier on um the richy sunak U-turn that everyone went on around last year actually had quite a bit in it about delaying dates for boilers but at the back end of the speech was some really promising stuff around planning and permitting reform that will actually kind of increase the speed of roll out of Renewables in the UK so we're we're looking hard at these questions and I think what we need to be doing is working out how we navigate a bumpy transition it was you know you look at the ngfs scenarios and kind of like the the orderly transition has a nice straight line on a graph well that was never going to happen we were always going to hit bumps on the road so so I think I think we're moving more into a scenario where things are not going to go as smoothly as they might have done but does that affect what you do at impacts and and by that I mean and I suspect I know the answer but I'm going to ask the question anyway do do you read the room and soften your message you know moderate your Ambitions or does the ESG push back just make what impacts is doing that much more differentiating and so you lean into it that much harder yeah I think we lean into it you know it's our area of expertise we have broad environmental strategies that aren't just focused on climate they're focused on other aspects of the transition um looking at what's happening the interest in nature and how do you kind of uh limit the drivers of biodiversity loss and with all of this wanting to really work out what the impact of the risk is So Physical climate risk is not a political question um that's going to have we're stuck with this climate that is going to get increasingly uh difficult to live with for the next 10 years because of the inertia in the system so some of this stuff is not affected by politics so we are um we're looking at other aspects to to sort of add to that environmental portfolio but I think we just sharpen our pencils and uh and look harder at the detail I think the the implications will be distortions of decisions and unintended consequences so I recently ran a poll of a a survey of over 500 portfolio managers on the impact of ESG and some have Financial consequences so the inability to invest in stocks that could have outperformed and Achieve portfolio diversification on behalf of your clients now you might say well I mentioned unintended consequences isn't that an intended consequence shouldn't ESG deprioritize Financial returns at the expense of the environmental and social so what was particularly striking about the survey was that ESG constraints actually hindered asset manager pursuit of the ens well why well number one is ESG often is reduced to quantitative Dimensions so asset managers have to prioritize the quantitative stuff which is in the metric not the qualitative staff so this might be demographic diversity at the expense of cognitive diversity or social diversity and also diversity and not equity and inclusion and also the way in which ESG is sometimes measured is pretty black and and white so this might lead you to not investing in say a hard tobas industry even if you could have invested in that company and made sure it's decarbonizing because Industries are defined as either good or bad so sometimes these constraints and the fear of being lionized in the newspaper for investing in this company in the difficult industry may actually hinder com investors from making the real changes that are actually going to improve the es performance can I just come in very quickly on that this idea of reducing freedom to invest seems just so counter to the whole message of the the The Advocates of anti-g you know why would you want to restrict your options um if if that was happening from the other side of the aisle uh and they were restricting options then you'd have massive push back from from the red States I think there's something equally interesting to point out about what you said you said ESG at the expense of financial returns now that is what we're talking about here well that doesn't answer your question unfortunately but let's let's complete the parenthesis here why do we have to separate the two so there was this very interesting uh article that I read very recently and I will give the source because Alex sedman is going to come back and haunt me otherwise um so who was it it was um NBC that was talking about the last solar eclipse that cost they tried to to kind of uh parameterize the the Tred to to appro approximate the cost of it if it cost the entire us working population 20 minutes to get off their desks to look at the solar eclipse and that um is that that you have to correlate it with the salaries that these guys get paid back in 2017 alone 20 minutes cost 694 million I love the maths let me ask you another question the fact that that you're not you're not included in conversations you have dis miscommunication with your bosses miscommunication between board all the way down to the third line of defense or to the trenches if you multiply that by the number of 20 minutes that you're losing what is the financial materiality of that no one talks about that but it's so real who do you think produces models if we're run by models in AI who produces models it's people so why all of a sudden people are not important in decision making and in financial decision- making that's the real issue that I'm taking with The Advocates of ESG it's not ESG and the rest it's all about making money consistently in the long term now let me answer that poor question that you asked a while back because we don't have much time this what you asked here encapsulates the the way that you phrased the very question here it's really encapsulates the point that language matters tremendously it does right and you to my in my experience it makes makes a huge a huge impact in board decisions in in excom discussions they talk ESG matters and they say oh we have to do ESG now well you just did it for 9/10 of the of of the time and now it's at one10 or you say you know what will our customers thinks of think of VG well this is ESG you are talking to your customers and the way you have to phrase it so you don't piss some people off or you dissect your customer base and you increase your differentiated Service as a result of different preferences or needs actually is ESG so yes you need to introduce new language you need you tell that's what you tell the CEOs that's what you advise the boards on which you sit absolutely I don't advise a direct right so yeah well so if if director start advising them and you know good luck to directorships but um Fair Point um uh lost my train of thought for a second but I was asking bottom line is language matters tremendously if you're talking to your politics you're talking ESG don't say ESG talk geopolitics if you're talking Supply chains you're doing ESG don't call it ESG call it Supply chains if you want to do governance you're talking risk management God forbid we're having financial decisions without risk management so let's refocus our language let's get Back to Basics and let's solve for the problem at hand you're absolutely right that you know people that are taking an issue with ESG are right in saying that it's not one dress that fits everyone after Christmas dinner right it is each to their own so find out your financial materiality what are the real issues that you're dealing with in the organization start measuring for goodness sake Alex edmans you have to agree with me on that one right measure measure to death s you can measure you know we're all left brain people here Tina I'd say this is already happening even in even in the US where there's the push back if you actually the conversations we have with the asset owners and the conversations we have with the companies suggest they're still managing these risks they're still looking at these issues it's just that there's a there's this political kind of misdirection almost happening that is suggesting this is a bigger a bigger swing than than it is in reality so it new needs a new name so why do we even need a name to begin with so why can't we call this long-term value so we're here to create long-term value that is not political now some people say well that directs people to consider environmental and social factors why do we not have a pic acronym for productivity Innovation and culture they also matter we don't need an acronym because anybody I agree with Tina who's doing their job as a director as an investor will be considering productivity Innovation and culture and they should also be considering governance it's a no-brainer as you suggest Chris also environmental and social factors so I think this this this acronym has led to politicization which we do not need to begin with it's a four-letter word you have an answer for it though you're calling it something else to stay well this is a moment in ESG in Bloomberg history you heard it here first so my latest paper calls it rational sustainability so why sustainability that's about creating long-term sustainable value and the whole idea of rational is that we use evidence and Analysis we understand diminishing returns we're going to use the rigor to address these sustainability factors as we would for any other business decision can we neutralize eliminate the politicization around this this three-letter term ESG which as I say has become a four-letter word by just is it can we by calling it something else just this week um Chris St the outgoing chief executive of the committee on climate change has said he'd be quite happy to say goodbye to Net Zero because he thinks it even that has become a politic call something and break it down to constituent factors what we've got to do is reduce emissions Ender story that's where we need to start a label about where you got to the end was quite helpful in communicating the the degree of change we needed to have to start with but actually we need to just get on with implementing not setting long-term targets very quickly before we end we have 40 seconds just out of curiosity is there any one or anything you look to look at and say that's why we have this problem people are getting very angry you had this conversation but what made them angry is there's something that that stirred the pot it's the economy stupid to me it's the economy you know why in in 2021 everyone was happy to talk about this why because it was a time in the world after Co where everyone said you know what we're humans now you have anger escalating From The Trenches all the way down to you know countries right so the angrier people get the more you're looking for culprits who was it was it Lord Brown that said when the tide turns the majority hits on the minority well I think we have another instance of that so let's cool it down let's think sensibly let's start talking let's start listening and then start responding let's have genuine conversations let's start bridging that's the only thing I can of advise here call it board call it XCOM call it risk management committee call it at home call it anywhere as much as I'd love to keep the conversation going I think that is a lovely place on which to end Tina Alex Chris thank you all very much thank you please welcome to the stage khabba al-arashi co-founder and chairperson of Emirates Environmental Group and a Barack delogo President of the investment Office of the presidency of the Republic of Turkey for a conversation with BL BS Natasha [Music] white good afternoon everyone and thanks for joining um so before I get started and I think you're well acquainted with this there'll be a Q&A at the end so if you've got any questions please submit via the QR code which is at the top of the screen there um and we'll come back to them um so the topic of this panel is ESG in Emerging Markets over three quarters of the global population live in emerging markets and that's a figure that's only expected to increase despite accounting for such a large chunk of the population Emerging Markets are responsible for just a third of global emissions that profile is fast changing however and this group of countries is likely to make or break whether whether or not the world achieves the Paris agreement Target of Li limiting global warming to 1.5 degrees so the case for ESG is clear but what's harder is adopting an investment strategy along those lines data is often in short supply or patchy investment investor engagement with corporates can be challenging and environmental social and government factors can be weaker or at least rated weaker than in developed markets and we're joined today by two people who each in their own way are at the Forefront of these pressures and actions to address them welcome to you both thank you um HBA I'd like to start with you um you've expressed frustration that what's embedded in terms of ESG at a company's headquarter level often doesn't filter down to the regions particularly in the Middle East where you're based what can be done to address this what are you seeing through envir Emirates Environmental Group and how can investors help uh thank you very much Natasha um I would would like to mention here that I started the first environmental NGO in the United Arab Emirates in 1991 and I have been pushing the agenda of Environmental Protection and sustainability amongst the different sectors of the society so of course one of the our most important partner is the private sector and we have been working with them for gener you know for decades now and it has become for me clearer and clearer when I'm dealing with multinational organizations you have beautiful set of of laws regulations everything that guides organizations very well structured but it is not cascading uh to every part and to every region particularly to our region for example when I started corporate you know corporate social responsibility and rolled it out as an independent platform in 2004 many of the multinationals were not uh stranger to that concept and they were implementing it so my question is when this is something that was part and part of what you are doing yet it is something very new why wouldn't this have come to us much earlier to enable us to put our houses in order and to enable the the businesses and and the Academia and everybody to incorporate it so that it becomes a a normal norm and becomes mainstreamed uh and the answer I got that we don't have the right laws and regulations um and again I always say that the private sector is a beautiful and dynamic sector and it's it's the Dynamo that makes any economy of any country move so the leadership that lies within the private sector has to be harnessed and has to be brought regardless of whether you have the laws or you do not have the laws particularly in the Gulf countries when all of it is new where would we get those laws so it's evolving as we evolved and the maturity of these laws will come through practice and through learning and through sharing best practices that we get from the multinational organizations so yes it is very frustrating another point that I would like to mention here is 90% of the businesses particularly in the UAE are smes okay so they need that guidance we need that support and we need the maturity that is there in the global market to be brought to us so that we can get from it the best practices and roll it out to fit to fit us to fit our culture to fit our requirements our priorities yeah okay and you mentioned just before before we joined today that um so just now you mentioned laws but before you mentioned voluntary standards and how these voluntary standards that have evolved for example out of Europe and the US have criteria that just simply aren't applicable um where you're based could you share a few more examples of those I can share with you in 2006 um I co-founded Emirates Green Building Council and it was number eight in the world and the first in the Arab region and it was a completely new uh issue that we were bringing on the table why did we push that agenda agenda because um UAE was witnessing an unprecedented growth in the built environment scale speed and all the big investors all the Architects from all over the world who are coming to our uh country so we need to ensure that we are doing it correctly and there is a lot of Buy in from entities from the developers want to know what is the right thing what is out there on the global level so we looked at what are the criteria what other rating systems that are out there one of them was the lead rating system from the US you have briam and you have Hong Kong and you have so many others the marketing of of lead was very successful and majority of the entities uh opted for taking lead actually but then when you look at the requirements of lead not all of it fit us and this is an issue that we pushed more and more to say that these are issues that do not fit our Market weather conditions are different you know for us water in the Gulf countries is the top issue but that is not the case in in Europe and US carbon emission is is a priority issue I'm not saying that it is not for us but for us water is more important um you have transportation systems we have cultural norms that are different we have our weather condition when it's that 52 degre Centigrades you do not expect people to be on the bicycles on everything yet you are required to put um you know parking spaces in front of the buildings or in front of places that have been rated as as lead Platinum yet entities have to fulfill those requirements otherwise they don't get that certification and because they want to be seen and they want to actually comply with International requirements that they go for that I have another issue I was very actively involved in in gri and in sustainability reporting we introduced sustainability reporting in the country from uh the mid uh 2000 again there are quite a few things that Europe and us has is far more advanced but we would not expect that immediately to be implemented on the same level and the same maturity in our part of the world so it becomes um very tasking for entities even if they want to implement it and to do it correctly as I mentioned 90% are small uh and mediumsized Enterprises or financial resources will be very big for them uh the technical capacity the knowledge that they need to ensure that then they will shy away from issuing sustainability report in spite of that we have pushed and pushed and really encouraged and built the capacity to encourage organization I did that through Arabia CSR Awards yeah to give entities extra points if they issue sustainability reports and I remember when I first rolled it in year 2008 there was not even one entity that head sustainability report today Mah you know there are quite a few that issue sustainability reports so it's spurring progress but there's still some some some problems with the kind of tick boox approach that isn't necessarily applicable and um Barack your focus is on attracting foreign investment into company in into companies in Turkey a which has lagged from a peak in 2007 to what extent are these kind of um factors playing a role here like do you are you feeling pressure from foreign investors um when it comes to investing in Turkey around ESG factors how is it um channeling through to your to where you're sitting good afternoon everybody uh so I had the opportunity to join Singapore edition of this uh very similar meeting and I'm really pleased to be here today with you to share the experience of turkey as you said we compete with other countries especially Central and Eastern European countries to win FDI foreign direct investment projects and I've been with the organization you know 15 years and I when I compare with you know the very early days of my you know work here I can clearly see that the investment rational decisions are based more and more on the STG related principles and especially in Emerging Markets ESG is important but environment is having a kind of more priority role and we can clearly see that those companies would like to invest in countries where they can practice you know those principles and we can you know say that easily the the competition in that field the competitive advantages come from the country's adaptability to the ESG or you know depending on the environmental you know depending on the perspective the environmental issues so the very frequently questions that we get is can I procure renewable energy from the grid so in Turkey yeah that you can do that we have a free very liberal energy Market we have an energy exchange platform then companies can certificate that you know they know this IR certificate that they use renewable energy or very important issue is to decarbonize the whole supply chain especially on the logistics and Etc and for companies operating in Turkey it is easier for them you know compared with some other Emerging Markets so we have to you know Define the competition Zone accordingly so if you look at the country this is a hub for a wider region when multinationals take investment decision they do not just focus on the domestic Market it is important for them to you know to access to the other markets and if you look at the export composition of turkey more than half is to Europe UK and United States so this is the sophisticated Market you know for the client let's say uh preferences so for the client base for the uh supply chain Dynamics and the shareholder of those companies and for the local uh regulation perspective yeah ESG matters and it has a very I mean serious impact on the decision making maybe one good example one of the fmcg companies were and doing a kind of site selection study in the region in the region wider region and we were tring to get the project to Turkey and at that time I was Junior and I'm talking about 2013 uh so we propos them some you know uh locations sites and you know in some of them they were getting higher incentive because of the regional development experties and I remember that they were like you know ruling out some options which are more you know offering more incentive because they were saying that this is not in line with our sustainability principles so we have to lower the carbon because of the uh suppliers because C of the target market this and that so uh even you know on those know 10 years ago for multinationals uh sustainability principles were shaping their investment decision so yeah in the next years we will feel it more and more and it's it's carbon it's it's the environmental that you're feeling the pressure on the first prior is on the environmental side because the cam will be in in effect by 20 26 and uh the countries you know which are more ready to you know those cbam regulations and Etc are having opportun such projects and um the the renewable energy plays a big part in Turkey turkey's um Energy Mix but I think you've also got the largest coal pipe third third largest coal pipeline possibly in in the world um and the country's climate plan has been judged um quite quite poorly by climate action track tracker which is a kind of independent um assessment platform um so what is the government doing to um Advance there and is there a role that investors can play for example we've seen in Southeast Asia um raising investment through for early retirement of coal plants and through carbon credits for example are you exploring those kinds of options uh actually we have to know understand those countries within know a certain context so and if you compare turet among those emerging markers our share of Renewables is definitely higher than many of them currently we have installed capacity in generation capacity around 107 GW 55% comes from Renewables uh and uh our investment strategy has been focusing on Renewables since 26 so and for example by the year 20 35 the share of Renewables will be more than 65% so I think we are committed there can be negative judgments so we can I can respect them but I think we are on the right track to develop the renewable and this is not just the generation turkey is one of the largest renewable equipment manufacturing generation in ecosystem in Europe uh we have multinationals we have local suppliers so turkey also developed this capability to you know manufacture the equipment this is much more important so uh we have to as I said you know understand the know this within the same competition geography and we compare us with you know Central and Eastern European countries our uh program is working well and we are committed to that so coming back to maybe the carbon uh exchange mechanism as I said we have an energy exchange and soon hopefully we are waiting for a legislation on that we respect to Parliament and when it is the right time the legislation will pass and we will have a active carbon trading mechanism in country as emission trading system the emissions emission and will carbon carbon offset credits be allowed in the emissions trading system or will that be purely um yeah most probably so after the legal you know changes we will see that but the plan is to have it okay great and um KH I just wanted to come back quickly on the comment that you made about 90% of companies in the Gulf region be being small and medium-sized Enterprises and you also mentioned that many are family-owned how is that Dimension playing into um the ability of them to adapt to um ESG ever evolving ESG norms and how is Emirates Environmental Group helping um in that sense that's a very important uh point that I would like uh to focus on thank you very much Natasha for bringing it again you look at ESG um governance structure when you look that family business is it's a different set of structure that is governing but it does not mean that it is not a proper way but it doesn't fit that size but then these businesses are sustainable because they have managed to sustain themselves for four four generations it means that they have a proper governance structure transparency responsibility to move from one generation to the other with profitability with growth with scalability so this is uh one of the issues that has been tackled but when you come to issue of U uh ESG you know you have boxes that you take which in my opinion sometimes that will push companies to look at shortterm I fulfill this I fulfill that but what about the long term and what about the Innovation you know it's so rigid let's look for example we have solar panels and UA today has got the three largest solar parks in the world and we have developed uh solar panels that are resistant to send um uh you know pollution and maintenance and all that and it's beautiful and it is but there is nowh that will show in the requirement of uh ESG so then you are stifling really The Innovation part and then companies will be focusing on the short term because I sure that I am reducing my CO2 emission and yes they will be doing very good but then when you are uh not encouraging them to install or put solar panels in their own operations which is a much longer uh process and it will require a very good investment up front then you are really losing uh the game I believe uh for these smmes you look at the cultural aspect of it you know um when you look at ESG it is a straightforward thing but then you have in societies like our part of the world culture is really a very strong part of our daily life and our development and that you do not see it at all in this kind of U Global uh requirements that are coming so I'm saying one size does not fit all we need to look at different regions and we need to adopt and adapt to fit that the requirement of that particular uh region yeah you look at retrofitting for example you know retrofitting requires a good investment UPF front Okay but then if there is no incentive if there no support from the financial institutions to really support entities to go into that why would uh small developers think of going into this uh retrofitting and it is nowhere to show in the ESG the importance of this uh aspect so while it is very good you measure and it is helping and many organization around the world I'm saying that this is not the only template that we need to look at this in a more critical Manner and develop things that fit the Emerging Markets okay we've just got a couple of minutes left I just wanted to see if there were any questions from the audience okay um so um Barack we've mentioned you mentioned that the you mentioned a carbon border adjustment mechanism this carbon tax that's being um set up on the EU border um how is that impacting the competitiveness of of your private sector and what are some concrete examples that are of changes that are being made to to um adapt so all the public policies actually to encourage those companies business both Turkish companies and international companies uh to you know adapt to the you know ESG compliance uh because this is obviously happening and you know it is important and public funds are available to the investors just as an example I mean recently there are different scales for the corporate structures we announced a kind of new financing mechm a credit mechanism that they are going to access to financing with a lower interest rate and you know the heavy weight is coming from the environmental you know side you know they have a complex Matrix to analyze the projects or measure the projects so it comes from there another important mechanism I think this is related to family businesses as well you know smmes there must be some motivation you know a factor to push them so as I said in Turkey many of those businesses even the smmes are I'm not talking about those CAF restaurants but you know those manufacturing or some Services serving to the manufacturing Industries since they are a part of the global value chain you know either it can be International om or it can be a Turkish OM they encourage or push those companies to you know be ESG compliant because of cban so both the public policies and the policies of the private sector is to encourage companies to you know have this transformation so we see that we are not lagging behind and actually in some Industries we are you know ahead of the competition like you know Automotive you know there's a big transformation in the automotive industry electrification and Etc so uh we are ahead even ahead of some you know uh in some verticles we are ahead of competition and maybe uh one last minute uh today you know I had many feedback insights about the businesses and Etc and one of the important thing was about data traceability reporting and Etc and I think we have to count on those technology startups you know who are digitalizing this you know reporting mechanism or the measure mechanism and in Turkey we see number of you know entrepreneurs establishing startups uh for ESG reporting or the environmental reporting I think in line with the digitalization and in in you know with the support of those startups even can join this club with a I mean minor cost let's say compared to the those huge costs yeah and perhaps bridge that Gap that khabba was talking about around the the metric and measurement that doesn't quite fit for I always believe in technology so digitalization helps a lot yeah okay well thank you both we're we're at time um thanks very much for joining us today and thank you for listening everybody thanks for he us please welcome to the stage walberer hemetsberger CEO of solar power Europe and Anana penu director of Ino energy skills Institute for a conversation with Bloomberg's Olivia rodgard okay um hello everyone um thanks for joining us so um we're here to talk about green jobs green skills um we've got some really interesting perspectives um I have to say as a journalist when I'm talking about any sector as it relates to Green skills jobs always comes up every single time so um I'm really interested to hear um what our panelists have to say um so uh volberg can you tell us about the specific um challenges that you see in soda sort of how does this jobs skills challenge manifest itself in in your sector I mean first of all we are a sector that is grow growing enormously we've been on a incredible growth trajectory over the couple past couple of years 40% growth in the last three years year on year and it also translates into jobs uh that uh that are provided by our sector but that we also need to find so last year at the end of last year the solar sector in Europe employed some 800,000 people uh which is also already a great number when I tell you that a year before we had 560,000 and in two years Time end of 2025 we need to have 1 million workers in our sector uh and 1.3 in 2027 so you know you see that where that is a huge opportunity for Europe because it offers a lot of employment but we also need to find those jobs and um and you know we need to make sure that uh we have the right skills uh it's a whole bundle of skills that we need so because everyone's just thinking about solar install when you think about solar but it's a whole bundle of skills that we need in order to sustain the growth yeah no and I should have said actually before we started if you want to ask questions we'd love to take your questions so um I think there's a QR code behind my head somewhere so please feel free to to send questions it's it's a really good topic I think hopefully people will have uh have good questions um so that's a really good introduction um Anana can we set the scene a bit here so you know what what what type of um you know uh industrial challenges are we seeing you you know as a broader context to the some of the some of the uh you know really big numbers that Industries like wilberg are are needing yes um I think it is important to realize that um Europe and I think the worldwide it's the Tipping Point in our Evolution we are passing from an era to another era and um we are going where we talk a lot in in Europe about reindustrialization and re reshoring Manufacturing in Europe in a lot of Industries such as battery solar PV but also hydrogen um and and so on and so forth and overall we are looking in 2030 to create 18 million new jobs but in order to create these jobs we have to really look at um four major trends that we are seeing at the moment first and foremost we really need to look at the volume uh and ask ourself the question do we have this number of people of workers available in Europe today and tomorrow so this is an tremendous tremendous challenge so if we look at the projection from the industry just in the battery sector which I'm very familiar with um um we see um a growth um in the target from 70 gwatt hour in 2020 uh2 to 300 gwatt hour um to 2025 20 25 in Industry time it's tomorrow so how are we going to manufacture this capacity who is going to manufacture this capacity um and it is uh really let's say uh critical to understand that for every gigawatt hour um of capacity that is produced we need around 100 people so it is I leave up to you to make the the the the math but we are already down almost uh 1 million people only in the battery sector in Europe today so first challenge remember volume we miss people we need to bring people in the second challenge is the skill typology and the um and the evolution of the skills the skills are move the type of skills are moving very very fast so I invite you to do an experiment go on LinkedIn type a job profile for example sell a assembly technician um and see how this job for solar panel um installer uh and and see how this job it is described the the how this job role it is described do the same exercise in three months time or better yet in six months time see if the same requirements will be there I can already tell you we are monitoring that in real time with AI technology and we see that it's um a definition of the job roles and the skill required um it is changing very very fast because the technology is changing very fast therefore we need to prepare the skills and the job roles of tomorrow today to be able to address this Challenge and the third um the third challenge is the time we are at against a tremendous time pressure um the education system at all levels it is not yet fully up to speed to address this challenge in order to create a certified programs we need two years and then the person needs to spend two to three years to take um and to graduate and we need this million people today only in one sector and million others in in other sectors so how are we going to address this time pressure under which we are on in and of course in in Europe it's also a question of migration and the mobility of the worker because we know we have pool of talent in one sect in sectors which are phasing out such as um let's say um Fisheries or carbon Industries and can be um reskilled and repurposed for other industry but there is a language barrier and a cultural barrier so that's things that we need really to look at cross- sectoral um and tackle that in a very very realistic manner but I think it is not only about challenges I think it's also about opportunities um and I think we need to look at ourselves of of the history what we have learned and I think do we really want to go back into that industrial society where people were exploited and were not happy and how does the future um job in manufacturing looks like and more fundamental question that do human beings want to really do a manufacturing job interesting okay yeah I mean you know if we're thinking about the solar sector there are certain jobs that we we have to have human beings do right you can't have a robot go on top of a roof and put a panel in because you or can you I don't know not yet no indeed I mean there's a a number of jobs where we need uh workers and where we also want to give decent green jobs to workers in in in Europe um and and uh and yeah and and it so first of all you know what we try to do as a sector and I should maybe explain that we're representing the whole Solar sector in Europe so uh from manufacturing to uh deployment and Beyond recycling so with more than 300 members so what we're trying to do is really make advertisement for the great opportunities that we have already to start with so I love my solar job also here in this audience um and uh and to highlight with job reports with job trade fairs where we bring together job Seekers and and companies uh but also with uh being active on Tik Tok in order to reach out to the to the young people to join our sector so that's what we're doing from our side but then it needs a partnership with public actors uh because what we need to do as well is uh to map out the skill needs that we have uh everywhere so we need to so we're calling for you Observatory of green jobs for example to really take uh you know take um the the possibility I mean really map basically what we need first of all and then you can build on that basis training programs uh certification is one of the things that uh we would love to see Belgium is doing that for example they're certifying um solar workers in order to make sure that you know also the right quality is delivered so it's not just about having enough workers but also that the right quality is delivered and then the movement of workers also needs to be facilitated in Europe uh we need to make sure that workers can move and indeed there's language barriers but there's first of all also ad administrative barers and maybe one thing that we should also not forget is the skills that we need in our sector is one thing but other challenges that we are facing is that permitting for solar projects is still far too slow you know we have some regulation in Europe now that should make it easier and faster but still you know and that is also down to lack of skills sometimes in administrations uh grid connections is another issue uh also there you know for infrastructure needs that we have in our sector we need skilled people that are making sure that the permits are provided relatively fast this is obviously something again where digitalization can help an AI can help uh but still you know we need people to look at it h and that is something that is also missing at this point in time yeah I mean there's a there's also a sort of an equity um question to all of this right because we're talking about the evolution of green jobs there there are there are sectors that are being left behind there are people that are being being left behind so can either of you talk about you know for example people who've worked in um you know their background is working in fossil fuels or the coal industry or those things things that are you know perhaps not going to be so Central anymore is are their ways to sort of funnel you know they're very talented skilled people a lot of them is their way to funnel that through into these new sectors yeah I think there are a lot of programs out there um at um National level at Regional level of community level at company level but I think um but I think it it's also um a question of individual ownership we work a lot in Europe but we also work a lot in the US and we see that the way the um Skilling and reskilling it is looked at is rather different uh in the sense that in Europe there is this expectation and there is a social network that en enables you to do this transition from let's say under phasing out industry to a new industry and to to some extent that it is out there through the workers as organizations as soci as solar power Euro but also so all the other organization that are out there um um but I think it is also an individual responsibility whilst in the US all this is being looked up it's an investment if I invest in my reskilling I'm going to get access to a better job I'm going to be back into the labor market and have better opportunity be better um be better P paid um um I think overall um there is um a a key drive to have um um to learn to learn to do some to and to be included I think this is not only about jobs and I think it's also question of inclusion to make sure that we don't leave anybody behind in this transition uh towards a net zero economy um and we as Europe we are really well po poised to lead by example and with regulation that we have in place and with the net zeroy that we um um have launched really to um ensure that the same level of content the same level of quality in the content that it is um provided across member states in the languages at the of the learner it is made available um and the message that we want to um um transmit is we don't want to compete with the National Education systems I think the system needs a time to adapt and to become relevant to the new economy we want really to bridge this Gap in terms of time and um change and transformation um and we are have successful down so for the indust for the battery industry we are scaling uh up to dat around 75,000 people that they can move from indust from one industry to the other so we have done so for example with worker from coal and now are have the basics to go into the battery industry um very soon um we are um looking to do the same into the um solar industry as well with um um solar Academy which we will launch very soon um and again we are um really there to facilitate this transition um and to provide uh a different type of answer to the needs that the European economy is uh seeing at the moment and is that sort of in in the Solar sector specifically I mean do you can you talk at all about the specific skills you know that are areas of crossover that are that are interesting I mean very concretely um that's also something where the EUR European commission has done studies around uh the skill set that Cal workers have are are you know skills that very easily can be upskilled in order to make people work in the Solar sector and this is a great opportunity because you know we need to reduce the coal consumption and uh coal regions need to face out so there's several opportunities uh we've been also trying to you know reach out to to these regions in order to highlight the opportunities when it comes to manufacturing to really get industry as well uh to these regions and uh and this is something where we anyway want to scale up in in Europe again and resure Manufacturing so great opportunities but maybe what I what I still want to mention is that uh the trust transition you know one part is the jobs that we're creating but I do think you know trust transition is inherent in you know moving to more Renewables because it's democratizing basically energy and everyone can benefit from uh from cheaper electricity and uh competitiveness uh is uh is spurred in in Europe yeah okay great I think we might have some questions from the audience do have a question from the audience um it is regarding the type of employment that we might be seeing in the future and asks um if we foresee that the carbn transition will bring a significant shift of employment from services to manufacturing yeah yeah I can maybe start with with our specific solar sector so the jobs that we have in our sector are 85 % in the deployment of solar today because we're also lacking uh Manufacturing in in Europe now there's plans in order to resure uh to re your manufacturing to Europe at the same time we have to be very clear that most of the jobs will remain in the deployment this is where we're creating value uh in Europe but there's great opportunities also in the manufacturing um if we succeed to resore it to Europe again I think from my perspective what we see and the ni there lots of interest um yes there is a a clear um shift towards manufacturing and a demand for manufacturing jobs because the um industrial base of Europe the expectation is to exponentially growth between uh grow between now and 2030 yeah interesting question oh we don't have I'm sorry we don't have a riving mic so if you wouldn't mind if you do have we we can take more questions but I have to do them via the QR code that's okay um yeah that's that's really interesting so um because I mean one one really interesting aspect of this is the kind of um International competition element right so you know Europe is competing there's been a really concerted effort um in the US to keep um manufacturing within the within the US with the inflation reduction act I mean is there enough of that here you know do we need more of that do we need more of that sort of thing I suppose in order to to make sure that Europe can compete I think if you compare the um Ira with the um green deal that the EU have put in place they are comparable I think it is a question of enforcement and execution if you look at the amount of money time and Regulation and permitting that it is there at the European level it is massive um but what we and this is my personal view um what we see in Europe it's really um um search for a for a perfect answer for a perfect solution I think we just need to relax ourselves and as European and give ourselves the um freedom to fail and maybe it's not a question of failing it's really just having a different outcome than we initially thought um and what I see in the US it's really this okay we are kind of going to start doing something it we know from the start get start it's not going to be perfect but we are going to make it happen mhm and then um there is this agile mentality to pivate whilst we are doing it I think Europe needs to learn from that and um I think we have the instruments and we have the resources to do that we definitely have the talent in Europe and if I would look at for something from the European commission I would really urge um for really making sure that we retain the T good talent that we are growing in Europe we retain it in Europe we create significant incentive and packages to keep the people here um I think um and and then the other thing we we should really um kind of stop looking who should actually start you know doing and kind of say we we are going to do it and that's why I'm very proud of my organization um in know energy that we are doers and we want to really know that um we achieve something very concrete uh that serves the the um economy and but also the the policies that the European commission have put in place great yeah I think we have one more question we do have an additional question um I think this is really interesting one about solar um installations um our question asker is from turkey and says we cannot Place solar on roofs of many historical buildings and I think that's probably something that we're you're seeing quite a bit of um in the Solar industry but how does that translate into you know the new skill set that uh is needed to to push solar forward particularly in a region that is full of many historic buildings that's very interesting the beauty about solar is that it's so versatile so we also have a solution to that problem uh with building integrated PV which you know you can also put on on cultural heritage buildings uh and and by the way that's the beauty generally you know you can just put it everywhere we've been hearing about fences this morning um and and build you know integrated in in cars and so on and so forth so uh there there are solutions um also for structures for roof structures that are uh cannot hold a a lot of weight so you know um how does it translate into into skill um into skills where there needs to be you know in uh within the the industry more cooperation is also between the construction sector and the solar sector and electricians and you know all together so this is why we need to have a whole new uh training programs for example and skill sets that we're looking at this is why I was mentioning it's so important to map skills and then Define the right training programs because you know roofers need to work together with electricians need to work together with uh solar companies and there needs to be a whole new set of trainings that need to be developed in order to you know go down to each and every Pro uh challenge that we have to solve I guess as well that's you know there are probably Heritage skills you know if you think about you know historic roofs the people who know how to repair and maintain those roofs and not even talking about Architects you know we're also working with ar architecture schools in order to uh make them take up solar in their curricula uh and and you educate future Architects about the possibilities um I haven't asked whether you have solar here on the roof yet yeah I'm I I'm not actually sure somebody will know um amazing well that's the end of the the time that we have thank you so much um and thanks to our panelists thank you thank [Applause] you please welcome to the stage John freyer Senior executive editor at Bloomberg and akhat Ry senior reporter at Bloomberg green for a conversation with Bloomberg's Meg Zabo [Music] all right everybody sick of me yet last session of the day we and I'm so excited about this one because I get to just talk to oot and John which makes my life the best session ever so um thank you both for joining we just we've done a couple of these in the past it's mainly just to talk about what we're watching what are the the big um issues that are happening in the green and sustainability space I will be taking your questions throughout so feel free to continue to to submit them the whole time using the QR code we also will have a poll so keep that active um throughout the session um all right great let's get right into it so something that I feel like everybody's been talking a lot about is the sbti stuff um John what do you think why don't you start with you what do I think I mean I think you know offsets are are one of the most interesting parts of the climate story um you know in in in some ways you know you I mean I'm listening to a podcast at the moment about the European Reformation but you know you can actually compare compare them to the indulgences some people would say they're like the indulgences of of of the Middle Ages um in terms of just how divisive you know they are I mean I think what you think about offset says a lot about what you think about climate and capitalism or whether capitalism uh can be uh part of of um of the solution so I think the sbti story is just another really interesting manifestation um of that controversy for those of you who don't know the sbti is this in independent um group that is sort of like the gold stamp on a company's uh Net Zero um commitments and um actually well know the ins and outs of this better than I better than I do but generally speaking you know they they came out and they said well maybe uh when it comes to um dealing with your scope three emissions offsets maybe could could be part of that solution let's talk about it and it provoked a massive feror there was a huge controversy with the staff and the the board of since had to sort of walk um uh walk that back but I think just the whole passion and uh around fairly on the face of it is a fairly esoteric uh debate I think tells you a lot about the power of offsets uh to divide people but I also think you know there are um you know it as I said it's very divisive and there are a lot of power on the other hand there are a lot of very powerful people and companies who want to will this Market into existence and there's a you know they argue that if you're going to get money from the global North to the global South which is obviously as we know one of the big challenges in the climate um story you got to figure out a way to make the offsets market work but AA a yeah what are your feelings on upsets in general and what's happening now I thought John brought up capitalism so I have to acknowledge that you literally wrote the book capitalism I wrote a book called climate capitalism and in it offsets aren't a solution so it's a it's a book about what Solutions are working and at working at scale and offsets aren't in there because I could not make the case for how much benefit they are bringing to either emissions reduction or to the north south uh fund transfer yet but why it's controversial is because the potential for them to do uh what could be large amounts of carbon reduction or could be hundreds of billions of dollars worth of money transfers to the South which would be needed given the the trillion uh problem that is in front of us is large and that's where the market is currently sitting where we've had a number of Investigations some from my colleagues at uh Bloomberg green I've been involved in a few of them which have shown that the offsets that exist in the market today have real problems that they don't deliver on the promise that they are making and so there's been a whole push to try and make those offsets a lot more credible and if they become credible then Market instruments could work so that that's why we have this poll to try and gauge your understanding of Market great setup so yes we've got a poll what will the carbon Market be worth by 2030 um right now the it is currently worth around two billion just for your reference so a 100 billion B 10 billion and C 2 billion so we'll let you guys please uh participate and we'll bring those results up in a in a second um so moving on to our well I guess maybe we should bring them up now because I'm going to move on to another topic so if you want to bring up live and we'll see how they go worth also uh perhaps talking about sbti itself um which is a voluntary body right it's created with nonprofits uh and it's creating voluntary standards uh in some parts of the world you're starting to get some regulations not all the way to approving a company's climate plan but at least talking about whether disclosures on emissions should be regulated and there should be you know Watchdog in a government set up ensuring that those numbers actually match up so sbti is ahead of the game but eventually if you want this to work for all companies some form of regulations would be needed for for scaling up the solution and I one I would make one final point on that as well I mean the European Union uh uh is doing a lot of work on this and they came up with a lot of uh proposals I think in in February of this year about how do you um Define what is a sort of good offset and I would not underestimate the power of the European Union Glo to be a sort of a global Trend Setter and all of this as well so what the EU is doing here to try to create a credible boundaries for offsets I think it's worth so 100 billion was the answer if you yeah what was the final can we see that final one last time sorry to um want to make sure we see what everybody felt okay yeah 100 billion all right so all right this room feels like offsets is going to happen Okay um all right so moving on to our next topic um politic ation politization of ESG which I have a lot of trouble to say we all just heard the session that just happened with Eric um one of the points that came out of that was Alex Edmund said he want he's pushing for the term rational sustainability but moving away generally I think what was discussed is kind of moving away from ESG as a term which seems to be um really impacting people um what are your what are your thoughts on that AUA start with you um I think one way to think about what ESG was and what it ESG is as useful it started off as essentially trying to put under one basket all the non-financial metrics that investors could use to make decisions about investing in a company and a there are a lot of non-financial metrics and B many of them are just not comparable in any way so what we are seeing with ESG is twofold problem one is the measurement of those non-financial metrics and to some extent also the trust in those numbers because a lot of those are self-reported numbers they don't quite have the same uh heft that financial reporting from companies brings uh and so that has been a problem for ESG because the numbers are a bit of a mess and then there's the second side of it which is the politicization which is where you know certain types of political parties are just not interested or are using the the word ESG as a way to just make a political Point both those things are acting in a way to try and make ESG less attractive and yet at the same time you're getting a split because of the two forces people are still focused on some of the many issues under the ESG uh framework but they're just doing it in a very focused way in a more systematic way than has been done in the past do we feel like changing the name would make it less political uh well is I think so I mean I think if you I mean just to pick on what arshad is saying I mean I think the and this this black box story that I think will be flashed up on the screen sort of illustrates the point um you know the energy transition part of es I mean clearly the E part of ESG has sort of won in a way that is the bit that the market investors are sort of running with we all know the energy transition is going to happen how quickly it happens um uh we don't know um but I think you know when you I think it's important to distinguish between the politics and the policy of all of this you know yes in the US there's all of this anti-g sentiment the Republicans are are running with it although I would point out that the Republican politician who try to make the most hay out of this Ronda Santos I mean where you know where where is he now so you're there's a lot of political heat and noise around it but when you look underneath the surface the inflation reduction Act is an incredibly powerful piece of policy whose implications and ramifications will will be uh will be will be felt for years I do think you know when you talk to Executives around the world green hushing is a real thing people don't want to talk about what they're doing on green and ESG but underneath the surface I do think a lot of companies are making very serious and sincere um uh moves on this you know because they know The Regulators especially in Europe will be on their back there is a lot of if for companies with a big investor base in Europe it is really important if you look at what happened I think in Australia with Woodside um over over the last few weeks you know their investors have made very clear to them that their are Net Zero uh proposals or their their emissions reduction policies are just not where they should be so I think around the world yes I mean ESG has become politicized to the point where I think people are running away from it but certainly if you look at the E part of it the policy part of it and the regulatory part of it that is still trundling along yeah I mean the climate risk part of it in a way esg's service to Capital ISM so to speak is to actually help you figure out where the risk is uh I bring this up this example up because it's just one of those that I can't get out of my head but Unilever as an ice cream maker told me that they are now seeing fewer ice cream sales during heat waves than they used to in the past because heat waves have become so extreme that people aren't going out to get ice cream and at the same time the um their supply chain which is a lot of small small holder Farmers for or everything from sort of vanilla to uh milk are struggling with productivity uh because of climate impacts and so they have this double impact which is now actually affecting their revenues and that climate risk is very real so that's not going away right um so you know talking about black Ro like you said the story that we showed it shows that they're obviously still taking a lot of action but they've been moving away from talking about it as much um but moving to the other side of that you know looking at Trump and the UK okay there seems to be this kind of moving this new protectionism kind of movement on that side which you know what do we feel about that how is that impacting things I mean again this is the panel the subject of this panel is what to watch what we're watching I mean I do think seam the sort of crossb adjustment mechanism I think that's a really interesting uh story to keep an eye on over the next few years for those of you don't know essentially it's the EU will be putting a carbon tax on Imports coming into the European union now really really difficult if you're sending a widget to Airbus or whatever to make a jet engine how on Earth do you measure the uh the carbon footprint of that widget but setting all that aside you know it' be interesting to see if you know Donald Trump gets reelected wouldn't surprise me if a if a climate import tax also appeal to him you know I mean protectionism is the order of the day um it's another way for a president or politician like Trump to put pressure on China so you know in some ways prot you know we could see the sort of surprising reinvention of of Donald Trump as a climate Champion sort you heard it here first everybody well and and protectionism is a good bet on the Democrat side as well I mean you're seeing over the past few weeks the headlines around what the Democratic party is doing to bring in tariffs on solar uh the many many uh local ingredient manufacturing tax credit that are there either in in uh in batteries or in electric cars uh to encourage people to manufacture more at home it's a you know it's a protectionist policy in in a different form um so both sides seem to be quite agreed I'm going to do an audience question regulation is starting to creep increasingly into retail markets I.E SDR labels and fsdr among a few how do you see retail markets and public markets playing a role in transitioning the financial sector one one way to think about it is labeling done well can be quite useful um so we've had now we're kind of used to it but I think it was not maybe 20 years but probably 10 years ago you didn't actually have the labels with how much calories you were getting what type of calories were there what type of protein carbohydrate mix there was in the food that you're eating and that's there on every uh food item now and it's very useful um if you can do that right that can enable people to make better decisions about the products they use but labeling is complicated and that's where again sort of going back to the ESG metrics if you can't measure sort of the widget emissions in a widget can you actually measure emissions in food products that are so complicated these days they have hundreds of ingredients and how many of those are coming from where it's unclear so doing it right is the The crucial part great moving back sorry I'm jumping around a little bit but going to go back um and just wanted to hear from you Arad a little bit on Scotland and what's happening there um right now yeah um so there's been news recently that Scotland I mean the the BBC article I don't know if you have that says Scotland has scrapped its climate uh targets which is technically true in that it's scrapped its annual climate targets but it cannot scrap its climate targets because it is part of the UK still and has to have the UK targets uh that it needs to achieve um but Scotland itself actually had more ambitious targets than the UK what it has acknowledged is by 2030 it can't meet those more ambitious goals so the goal was to reduce emissions by 75% uh relative to 1990 UK's goal is 68% so you'll have to meet that UK goal and it speaks to a general Trend that we are seeing in both countries but in uh companies is that initially when Net Zero by 2050 as a Target was understood everybody was like yes this is what we need to do this is a climate there's a big problem we should solve it together and only way to solve it is to do it together but then short-term targets which are now very short-term right 2030 is not very many years away right those targets they signed on to it but do not realize how much work will be needed to meet them and there's been a recognition on trying to understand what is achievable and become a little more transparent again it's sort of going through a market in where there's hype and then the reality hits and then you you kind of stabilize to what the markets can achieve and we are seeing that dip right now in in climate targets interesting anything to add on that I mean yeah I mean just mean it's really a reckoning right so so we we had this sort of green bubble if you want to call it like three four years ago a lot of these rash promises were made by companies and governments and now we're we're sort of seeing the Reckoning with that the chickens are coming home to roost is actually that people are really realizing this is really hard but it doesn't necessarily need to be a bad thing I mean I think we did a very interesting story with with uh Unilever um a couple of years ago couple of couple of weeks ago um where I sort of found it kind of refreshing the new CEO came in and said look we made all these sustainability promises and not all of them are easy to meet and we are still a company that needs to make money so we're going to be more we're going to be realistic we're going still going to try to do what we can do but let's we're going to be more sort of sharp headed about it uh or clear-headed about it and I I think it's that sort of honesty I think is refreshing because you know the climate crowd you know like to lambas all the disinformation coming from the right there's a lot of nonsense talked as well on the on on the left on the sort of the the climate the sort of proclimate part of the debate as well and I think we just all need to be honest with each other this is going to be really hard and I think you know Bloomberg green what we tried to do you know we tried to skew hype across the board and sort of expose greenwashing but I think there's also a lot of has been a lot of lazy thinking as well on the sort of pro Net Zero side the ESG uh story for unior is one you should Google and readz because it's actually very rare to find an example which explains all the ESG work that we're talking about in one story so what uni lever ended up doing is in its ESG uh goals it is actually keeping its carbon goals it is not able to meet its s goals some of it sort of uh minimum wage goals some of its diversity goals and those it's scrapping so it's sort of acknowledging that between these many goals that we have some we can meet some we can't and we are being transparent about it financialization of climate risk let's talk about that that seems to be something that's a lot more interesting than it sounds um and you kind of started to talk about a little bit with the UN River story but um yeah you want to talk about that a little bit so you can do it in so many different ways uh one of the most interesting stories that is currently playing out a little bit wonky but I think the Bloomberg crowd will get it is that there are these instruments financial instruments called sustainability link bonds now bonds exist companies raise money from investors to do all kinds of things sustainability link Bonds were essentially bonds that companies could use to do whatever they wanted but were linked to certain sustainability targets and over the past few years this Market has really exploded there was a time between 2018 and 2020 or 2021 when it was growing a 100 or 300% annually and then we had an investigation out in 2022 that showed that the target setting wasn't being done very well and so the market slowed down and now what you're uh seeing is that some of the companies so just yesterday NL which is one of the biggest utilities uh in Europe uh said it can't meet its goal and does as a result is going to have to pay as much as $80 million more to investors because it was essentially borrowing at a lower rate saying we would meet that goal now it has borrowed a higher rate because it is not able to meet its goal so financialization of you know client goals is starting to happen in in in interesting ways and I think yes I mean we talked about the politicians the political back and forth on on ESG and Net Zero and all of that but I think you know climate change is happening weather is becoming more extreme and if you're a company whatever you publicly say about it you need to factor it into um your bottom line and I think this is an interesting we've written Lots about this but the most successful alternative investment strategy of 2023 was catastrophe bonds was insurers trying to protect themselves um against more chaotic um weather patterns so you know you might not be interested in climate change but climate change is definitely interested in you um a sort of thing but I think you know climate is as we as as everyone in this room knows is going to climate change will infiltrate everything that we see and do and hear and some things will be impacted more than others but I think financial markets if they do anything they are incredibly effective at incorporating the world world into the you know into metrics um into financial data um into bottom line thinking and that's just going to it's going to see more and more of that yeah we are just about out of time any last thoughts things we didn't get to that you want to make sure that we get on everybody's radar well there's a bloa green festival happening in July there is spoiler alert is a big event that if you liked us three come to Seattle in July you'll get a lot more of us um yeah so we're we're launching our first Bloomberg green Festival we launched as you some of you might know we launched Bloomberg Green in 2020 right before the pandemic so we have done a lot of virtual events we've done our Bloomberg green Summits we've done our Bloomberg green events at cop um but we are doing our inaugural Bloomberg green Festival where we will take the content that we've been creating on these stages and bringing it to a larger audience more consumer focused all about Solutions and trying to just get everybody very excited about climate action so if you want to join us take a look um you can go to Bloomberg green Festival website um and get a ticket and we would love to see you all there so thank you so much thank you guys thank you John and OA um thank you I'd like to just say a quick thank you to all of our speakers and moderators today for all their insights um I would love to thank our Summit advisers uh City Commercial Bank Red Sea Global and Schneider Electric for making this Summit possible and for more info on our sum advisers you can visit the resources tab on our website um and thank you all for being such an Engaged audience today all day you are amazing you stuck with us um just we do also have an addition to the Bloomberg green Festival coming up we have our next sustainable business Summit in Singapore as John mentioned on July 31st um so we hope we can see you there or your colleagues as well um and please if you are here in the room with us join us outside for um the cocktail reception uh right now so thank you so much thank you thank you [Music] going to see again [Music] [Music] feel got to got to got to make it I you got to make it [Music]

Channel: Bloomberg Live

Views: 310

Keywords: bloomberg, bloomberg live, sustainability, ESG, Davos, WEF, World Economic Forum, Satya Nadella, Microsoft, International Monetary Fund Managing Director Kristalina Georgieva., IMF, Kristalina Georgieva, Sam Altman, CEO, AI, OpenAI, bill gates, ruth porat, google

Id: UVNt855Lqck

Length: 135min 11sec (8111 seconds)

Published: Thu Apr 25 2024