Sustainable Business Summit Singapore | Session 1

[Music] foreign [Music] [Music] [Music] [Music] [Music] foreign [Music] foreign [Music] [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] foreign [Music] [Music] foreign [Music] [Music] foreign [Music] [Music] [Music] foreign [Music] [Music] [Music] [Laughter] foreign [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] foreign [Music] [Music] the program will begin in five minutes [Music] foreign [Music] [Music] [Music] thank you [Music] time [Music] foreign [Music] foreign [Music] [Applause] [Music] [Music] ladies and Gentlemen please take your seats the program is about to begin please take your seats the program is about to begin [Music] thank you [Music] foreign [Music] thank you foreign [Music] operates at the heart of the bio economy our renewable resources replace Plastics Alternative Energy reduces carbon emissions and eco-friendly materials are in products used by billions of people every day we use waste and residue to produce sustainable aviation fuel because we believe that a Greener future starts here please welcome to the stage Meg Szabo senior editor for Bloomberg green and sustainability events [Music] good morning everyone wow what a packed room we're so so pleased to be back hosting you here in Singapore again for our Bloomberg sustainable business Summit we have a great program ahead focused on innovative ideas and scalable solutions to help you meet your sustainability goals but before we get started a couple of quick announcements first I would like to acknowledge all of our Summit advisors Bangkok Bank Frazier's property rge and Schneider Electric and we would love to hear from you today if you flip your badge over you'll see a QR code where you can submit questions you can see the agenda you can also respond to some of our live polls that we'll have and you can also find the Wi-Fi information on the back of the badge as well and we would love for you to engage with us on social media today using the hashtag sustainable bizsummit and also for you those of you in the back we you know please feel free to take any open seat that you can find in the room and we'll continue to bring in seats as as needed as well so with that let's please get started with our first session of the day we begin with a look at Asia's role in the global green economy please welcome to the stage Marie Chung founding partner at wavemaker impact Peck chem canist CEO and founder of impact electron Siam and Esau Sega Gucci president of Nissan asean for a conversation with Bloomberg's Alan Tom Abraham foreign [Music] good morning everyone it's a pleasure to be here and very nice to meet you all we are here to talk about sustainable business and Asia's competitiveness in the green economy I'm from Bloomberg nef Bloomberg nef or those of you who do not know us is a research provider within Bloomberg and we look at global commodity markets as well as Technologies and business models that drive global decarbonization so in order to just set the context for today's discussion I have a couple of charts that I put together on the first chart [Music] if you could project that yeah thank you so much on the first chart this is in our annual exercise of accounting where investments into the green transition or energy transition is happening across the world every year we go about tracking where our new renewable energy projects getting built where our EB sales being deployed and also all the other technologies that is driving the energy transition and what we've seen is that APAC as a region is historically one of the regions where we have seen majority of Investments going historically in fact in 2022 we tracked record Investments about 1.1 trillion dollars flowing into the energy transition of which about 59 percent went into the APAC region on the second chart I have this is about within aipac where did this investment go to you can see renewable energy which is the black bar here accounting for a large share over half and then electrified transport with an APAC becoming the second largest portion for all the Investments that's flowing into energy transition in the APAC region together these two sectors account for about 91 percent which means that we have a lot more Investments that needs to flow into all the other sectors that require decarbonization as well so this is where we are today and over the next 30 minutes what we would like to discuss is where we are today what does this mean in terms of changing geopolitics and Dynamics and how can Asia stay competitive over the next 20 or 30 years as we roll forward this transition and with us we have a very eminent set of panelists to talk to us about different aspects of this transition and I would like to welcome all of them and thank them for their time today here kick off our discussion I would like to First go with uh go to [Music] let's start with power renewable energy as you can see is one of those sectors where you've seen historically a lot of Investments flowing in the APAC region when you look at the status of deployment of Renewables in APAC how do you rate that in the region and I also know that you're investing huge amounts and building large projects in Southeast Asia as a region very eager to hear your thoughts on the Readiness of Southeast Asia as well to kick forward this transition thank you thank you um my name is I'm a founder and CEO of impact electron Sam a humble small company in Thailand where we tackle a large project it's been 12 years of working on that project Monsoon 600 megawatt Wind Farm we built in Laos applying to Vietnam under a long-term PPA which is bankable I think this is a very challenged project but it's set up a platform for more renewable a novel more renewable into the region the project it's make it possible I think it's by by our belief personally and a team effort led by the managing director could not and I think we have a great PPA where we have I would say at a fair PPA we give us which provide Vietnam the cheapest renewable energy power into their portfolio in addition I think we have Innovative financing led by our mandate leader Ranger who is here today Jackie sutani from ADB and now there are eight banks that participate that lendings um additionally not only the wind farm that we own but very strategically we also own with our own 500 KV double circuit that deliver power from from Laos to Vietnam and it is strategic because the wind is highly complementary to the hydro which is Lao has abandoned abundant resources when combining both we can provide Vietnam with a stable and dispatchable renewable energy which is quite key I think our ambition is not stopped there I think we're looking at expanding additional one gigawatt on a Json site and to combine them with surrounding Hydro to be able to deliver fully utilize the transmission line of two gigawatt so that's that's um that has been our next chapter and I'm excited to thank you thank you same question again how do you rate when you look at Southeast Asia's region how do you rate the momentum here with respect to policies to support renewable energy deployment well I think the we had a big support from government Laos in Vietnam and I think as you aware also there's a lot of other countries is having a policy to promote the renewable such as Singapore which is Singapore Imports um it's one of the the next Target of us I think we we would like to to work on WE participate in the Singapore Imports together with EDF we plan to build subsea cable you know 1200 kilometers taking power from Laos to to Singapore it's a crazy ideas but when we start Monsoon 12 years ago people think we're crazy so you're always crazy until you did it so yeah sure I mean yes the policies are starting to come in big projects are starting to come in to you the question about transport electric vehicles and electrified transport another big area of Investments that's flowing into the energy transition but historically a large part of that has been driven by China and it's huge scaling up of the electric vehicle industry please take us to how Nissan is driving the the growth of electric vehicle adoption and Manufacturing in APAC region yeah so um it's one of the Hot Topics even within the industry these days and as you mentioned as you started off on how geopolitics are also being impacting uh the entire automotive industry not only the supply chain but also from the policies aspects we see U.S going to their own Direction in terms of the policy Europe is another where you need to be selling EV to be compromising or leveraging the penalties that you need to pay now where we stand in terms of Emerging Markets especially Southeast Asia um so we know that some governments in this part of the world are pushing for Ev for different kinds of reasons whether you have the natural resource to commercialize it or you want to continue to be the Hub of the export uh in terms of transition to technology from the conventional gasoline engine to EVS now um we see that Chinese OEM are aggressively and strategically uh in in expanding their footprint to this part of the region in Southeast Asia and from our point of view the speed to be honest faster than we thought to begin with because of the Readiness of infrastructure is not there yet having said just the statistic point of view 60 of cards sold in Hong Kong last year were Bev 15 of cars sold here in Singapore were Bev and just last month 10 of the total sales in Thailand were pure Bev and all led by either Tesla or the Chinese OEM so um I think this is where not only Nissan but many Japanese Automotive companies especially having a predominant presence in this southeast Asia are revisiting our entire strategy and not only on Eevee but on the supply chain as well because we've been here for decades making gasoline diesel cars which are needed by each of the country at the end of the day still even today the customers decide which car that you want to buy but I think the trend is Shifting we see that visibility and I believe your statistics shows that there are significant investment year on year coming on the electric transport so how Nissan will compete in this very competitive environment and understanding where we set a Target on carbon neutrality towards 2015. so there are basically four pillars how we are going to go about it so one is to continue to invest in the Innovative batteries this is meaning that we are we have started to work on making the old solid state battery we have already announced to commercialize it by latest by 2028 so our team in Yokohama headquarter are working day and night what does it mean it will bring into efficiency and also the cost drastically down to today's conventional batteries so that's one number two having the Bev in place still there are many countries are in the transition mode we continue to invest in more eco-friendly uh engine namely our technology is based on EV but what we have is the e-power technology it moves with the 100 electric but without a need of a charge so we continue to invest in technology that will probably bridge between today's conventional gasoline diesel engine to be EV third we continue to we have started actually producing and selling EV back in 2010. since then we've been working in creating the ecosystem around uh and going beyond the EV so we have a recycling system remanufacturing system uh how we are going to reuse the battery after it has been taken up from the market and fourth we continue to invest in efficiency in the manufacturing and one of the proof points is our collaboration in Thailand where we have the solar panel from Pax company that will help us to reduce the emission by more than 5 000 ton a year so there are here and there work that has been done and in progress to be contributing to one of the region that generates CO2 emission globally so I think those are the the perspectives that we see from a transportation thank you evolving geopolitics U.S Europe policies there we'll get into more details of this and also collaboration and and setting up manufacturing especially for batteries and focusing on the technology and technology is a good segue to come to you Marie uh we've talked about Renewable Power and transport but there are lots of other sectors that also needs to go through decarbonization and some of those Technologies are still in very early stages and that's where you come in so please tell us a little bit about your Investment Portfolio or your companies or your uh your projects in in the region and also what are some of the technologies that you're most excited or optimistic about thanks Ellen and thanks uh Bloomberg for for having me so uh I'm Marie I'm I'm one of the founding partners of wavemaker impact uh we launched about two years ago with a mission to build a portfolio of climate tech companies that can Abate 10 of the global carbon budget and we do that by working with Incredible entrepreneurs in the region to build what we call 100 by 100 companies so companies with the ability to Abate 100 megatons of carbon emissions equivalent and be 100 million dollar uh Revenue companies on an annual basis um so you know when we launched Waymaker impact we did a kind of back of the envelope calculation and we realized that actually it's possible to Abate about 50 of the global carbon budget just using the technology that we have today the the challenge particularly in in this region is one of misaligned incentives so the structures uh the incentives uh are not there to really Drive adoption and that's that's what we thought okay you know that's something that the startup world knows how to do right how to create uh incentives get users on board Drive adoption um and and I think the second part of it is that you know Carbon is physical distributed and embedded so you know a lot of our our energy infrastructure Air transport infrastructure is built around you know these large centralized hubs of production and when you look at it from a carbon lens what you realize is that that that you know Carbon is incredibly distributed in the region on average households sit on about nine to ten tons of CO2 Emissions on an annual basis uh a rice Farmer for example um you know sits on half a hectare in our region uh they cultivate a very small amount of land so you know these are these are the challenges that exist in in our region so in terms of the the sectors that we focus on we focus on the five biggest drivers of emissions in the region which are land use change and agriculture together that's about 50 they're highly into like the biggest cause of deforestation in in the region is agriculture we look at energy in the built environment uh industrial processes and and transportation as well so the types of technology that we're we're most excited about is is technology that creates um you know increases revenue or decreases cost for customers and just happens to do it through through Greenways so a great example of that is one of our portfolio companies agros which is decarbonizing smallholder Horticultural farmers in the region uh starting with replacing diesel irrigation pumps with solar irrigation and uh you know when Max our founder is going and selling uh uh solar irrigation pumps in the field he's not talking about the impact of climate change or you know why uh solar is better than Diesel he's simply just saying that you know um using solar irrigation can increase uh a farmer's uh Revenue by up to 60 on an annual basis because they don't have to pay the variable cost of diesel and because they don't have to pay the cost of diesel they can fit in a third season so it's this kind of you know low-cost decentralized technology that isn't heavily reliant on R D um or or science but instead more kind of like an engineering challenge you know how can I make a solar pump economical for a small holder farmer here how can I make a biochar paralysis machine workable on an SME basis and it's creating incentives for for customers around the region to adopt this technology because it makes good business sense rather than you know having to pay a green premium or having to invest in sustainability so those are that's the type of innovation that we're super excited about fantastic I think yeah unless and until what we've seen is unless and Untold Solutions are cheap it's difficult to distribute it and and scale it on a distributed basis shifting gears a little bit geopolitics and and the impact of the growing Divergence in policies in different regions and what that means for Asia if I can get like a one minute answer from all three of you about the impact of inflation reduction act as well as other policies in Europe like the sea bam or any other carbon related policies that of the Net Zero industry act that's coming up in markets like Europe and the impact on investments that's flowing into Asia or APAC as a region do you think it's a positive thing or a negative thing for APAC as a region Murray let's start with you and and go around okay I think I might have a I don't know somewhat uh controversial view on this I mean first of all I think a lot of governments in a region particularly you know Singapore which is our our host country today is is doing a tremendous amount in terms of a policy environment and and helping pave the way for more investment to flow Into Climate Tech um that being said I think you know this is not not a challenge that we can rely on on governments to solve for us and particularly you know in asean it's it's so many countries with different stages of development with different kind of uh objectives uh and outcomes that they're looking for so so you know I think this is really where the private sector uh has a role to play and and it has a role to play in coming up with new business models that are genuinely profitable and not reliant on you know feed and tariffs or incentives from governments uh and and that's where I think you know we'll crack something that that that's uh truly um truly sustainable okay so don't rely on policies and don't think about geopolitics okay I I share Maria's view I think I feel like we met for 10 years but I think we just met but I think I share a lot of her view on I think a private sector can help the policy to be implemented in in optimal and in sustainable ways one of which is the what we do with with our project it's never been done before we start with the new policy we start with a clean PPA a white paper basically that allow providing the cheapest energy to to Vietnam with International Bank abilities I think beyond that on on the micro level we work with Nissan on total decarbonized solution but the thing that we we are pushing for is open access I think you know to to allow more sharing of the renewable energy and allow more access for renewable energy in in all the Asian level but I think it has to be more private LED because as Maria said government has many agendas um so but I think we we we we we're hopeful and I think we we believe that it's coming along as especially in in Singapore actually maybe one thing to add is that um climate Tech I think was news this week is now officially the largest sector of VC so I think there is a tremendous amount of interest in uh from from the private sector and and funds flowing into to fund innovation in this space so I think it's it's a good uh a good link okay so do offer panelists saying technology is going to reduce the impact of these sort of policy changes in the APAC region and how it's dependent on other policies in other regions is awesome what do you think well I can only talk from the automotive industry point of view but as Marie said the speed of the development really differs from country to party even within this region and and government as Beck said has many perspectives many agenda um and definitely automotive company cannot do a loan uh if you want to push for electric vehicle for example infrastructure has to be there incentives need to be there to to promote it but um one thing that we should not also forget is the speed of the transition and the transformation as I mentioned earlier that we've been developing the automotive industry namely in Indonesia Thailand Malaysia for many decades and automotive company alone cannot make a car we need 30 000 parts to build the one unit of a car now if we push with this speed of the transition electric vehicle normally requires one third of that so how do we make this industry sustainable so that not only the automotive companies are leading the way but we need to make sure that our tier one tier two tier 3 suppliers are coming along the way on the transition otherwise the automotive industry itself will not be a sustainable so this is something that we need to work with respective departments in respective governments making sure that there is a right speed for the transformation and the right solution and the right product for the customers in each respective country I think this is something that we forget sometimes that pushing too much from from the product LED but also we need to think from the customer side and another thing that we tend to forget is to how to make the supply send supplies side feasible so more and more EV requires let's say fast charges more electricity is required Are We There Yet in this part of the world to generate and provide and supply enough electricity to the society that are required I mean we were just talking before the discussion in Vietnam I was there last week they still have a planned blackout is country ready to push for such kind of electricity electrified world where tons of supplies of energy are required I mean how can we make together so this is not about the automotive industry but as a society as a whole how can we make a sustainable Society in this part of the world in a way that is suitable for our region to develop and I think it requires Partnerships it requires support from the government and definitely companies like yourselves that are coming with the technology by needs funds to go with it I think Collective work needs to be done in making sure that we set a Target that is in a sustainable manner I I think that's how I see that there is a necessity on that on the collaboration part in this part of the world especially so tailored Solutions and Partnerships critical for scaling up some of these Solutions and making sure Asia continues its path towards the green economy we have about six minutes left in the clock uh Meg I would like to pass this to you to see if there are any questions from the audience that that are there for our panelists yes we have um one question for everyone um which what do you what would you like to see um as far as Government action and regulations that could help to move the green economy forward who would like to go first pick Let's Stop um I don't really rely on government policy that much I I usually have an IBS and approach government I think it's the other way around um but I I think one thing I'm not talking about the government but I think one thing that we all should should be um you know recognize of is is sustainable is not about just about you know renewable energy or technology it's about sharing for me I think how do we share the the wealth in our region how do we share a country where a lot of resources but lack of demand where other country has a demand but lack of resources how do we do that and and importantly on the community level once you have present in such a local community you need to be part of such community and what we did with Monsoon is we commit Beyond royalty fee we pay to the the government of Laos we commit directly to the local that improve their life in in health education and uplift their career and that has been our value core value that we will be part of Community where we operate in and I I think I I think in the other the other sense like secondary she said you know Maria how do we Implement technology to to the micro level in my view I think to prepare for electricity or or EV you need to upgrade a lot of grid and reduce policy is open access or allow more access to renewable to come into the grid need technology digital technology I think we come across one technology that allowed dimming effect of whether it's EV charging or solar which I think that's that's very small technology investment and policy going down to distributed level I I think I would like to see more of access to the renewable on on the consumer level very glad to hear that you know companies and and entrepreneurs are thinking they want to go beyond policies and deploy Solutions it shows the majority of technology and how comfortable you are with scaling those Solutions uh one of you who wants to take that question so let me take that one so I I go from my own experience that I that I that I have from day to day so I live in Bangkok in a Main Street on scumbit I take my dog out for a walk every morning at five five in the morning less traffic but still I see many cars coming out with a black smoke and before we talk about going to the EV I would like to see some policy where we can work with the government to replace some of those cars that are 20 years old generating black smoke every morning on the main road of Bangkok or it could be in Jakarta as well so one of the one of the one of the incentives where government can consider before going to having nice EVS because today who's by Evie it's the it's the rich High income for second third fourth card that but not the first time buyers so one policy that we can consider is to have the scrap incentive replacement incentive so that we can start from today taking out those cars that are 30 40 years old in the market replacing with with a cleaner energy car including gasoline energy gasoline car which produces much less CO2 emission we can do from there from a practical start point of view but I think it requires a bit of awareness that we don't go jump into the future there are many things that we can do from today and as Mary said using what technology that are available today so we don't need to you know start anything from scratch there are technical apologies that we can provide there are things that we can start from today like I see you have one more question yeah one last one for everyone can each panelist talk about one thing they are most excited to see in terms of creating the biggest climate impact in each of their areas of work buddy do you want to take that uh yeah I'm I'm really excited about um we're working on an idea at the moment to accelerate financing for decentralized decarbonization assets so the the large projects that maybe pet can can argue about this but you know are well served right people know how to price risk they know how to finance large-scale projects um but there's there's much less infrastructure available for you know projects that are uh say between the 300K to 2 million dollar Mark um and I think that's very much needed around the region so uh we'll hopefully be launching something at the end of the year that addresses that scaling up decentralized Solutions go ahead well yeah I would like to see a a a a time where the electric vehicle become less expensive and be affordable to all the people in this part of the region I think today the car is too expensive even the regular normal car is too expensive how can we I think one of the missions for automotive company how can we make a car cleaner car that is accessible for all the people uh in this part of the region so I would like to see that happen in coming do you have a timeline yeah that's a challenge to say right okay in fact anything that you want to add here sorry anything that you want to add here no I'm good where I am okay what I do is exciting enough so big projects massive projects and wind across borders okay thanks so much thank you panelists let's let's join our hands to welcome and thank our panelists thank you for the wonderful insights please welcome to the stage Grace Foo Minister for sustainability and the environment of the Republic of Singapore for a conversation with Bloomberg's has Linda Amin [Music] good morning for Singapore climate change is a matter of life and death not my words but the words of the Prime Minister a four or five minute increase in sea levels would mean that 30 percent of the country will be flooded it's also about Rising temperatures I mean Singapore experience its hottest day in about 40 years just recently so it's not surprising that climate has become a national priority the government has pledged more than 70 billion dollars over the next Century to I guess guard against damages from climate let's get inside's perspective from Minister Foo good to have you with us thank you very much Miss Linda yes the rising sea levels an existential threat to Singapore might this little red dot one of the riches in the world risk disappearing from the face of the Earth absolutely I think first of all we're talking about sea level rise that can actually inundate the country we are also dealing with more intense rain we have seen how we have in July and August which is supposedly drier months we're getting rain when we're not expecting very intense very short but intensity that really can cause problem for us and we are also looking at the nokon effects of climate change we're talking about warmer oceans affecting livestocks in the sea we're talking about you know changes in temperature and humidity in our forests that could cause or that could allow wife wildfires forest fires to go uncontrolled we have seen that in Canada as well we're also looking at this in this Immortal system months with drier conditions that has an impact on availability of water has an impact on renewable energy as we have seen in the in the case of France last year where the lack of water or warmer water that's too warm is affecting the generation of nuclear power the water that they need to cool the plants for example wasn't there wasn't enough so water itself knocks on to other systems and we're talking about the most important one really is food security we have seen how variation in weather patterns are causing you to be affected India for example have just announced that they will have a ban on export of certain rice varieties and why is that so is because they have some bad flooding in the recent months they expect that to have an impact on the yield and therefore prizes is going to go you know quite crazy and therefore they said that for political price stability they will have to keep the rice for themselves and of course for India such a large rice producer to do that you can imagine that many countries around the world will have to deal with the downstream effects of you know shortage in food and that will be food inflation again so this is now when it's 1.1 degrees higher in temperature what if it's going to go to 1.5 1.8 or 2.3 if some prediction is showing us so many of these effects is going to be yourself self-reinforcing we talked about how for example dryness is the rainforest it's going to cause more Fire and Fire will then you know create or destroy some of our carbon sinks and that actually cause a vicious cycle so to us we take this very seriously across many fronts we are going ahead with our Coastal protection we have about 135 million in terms of r d That's set up set aside for Coastal Protection work we have divided the country into eight parts starting with you know sort of detailed forecasting of impact of climate change on each of these sectors we are calling for proposal we have some engineering studies done to look at what that would entail what kind of options engineering Solutions are available to us at the right time in a cost-effective way we're starting public engagement with stakeholders in those areas to get them sensitized to this you know possibility to get them to think about options to think about new spaces that's that can be created as a result of this project that's on Coastal protection we're looking at Water security we have looked at Water security for five decades so that's really putting us in a good position we have desalination plans that have been set up we have recycling of water that allows us to reuse water adversely we are now looking at Food security as well we have the plan to grow 30 percent of our nutritional needs by 2030. really having the capability to grow in a more climate resilient way in a more resilient in a resource resilient way we invested in r d to get that going we put a set some funds to support the capital expenditure of our businesses we are now working out with our businesses on getting the optic they are starting to produce we are creating space for them to sell their products locally so you would say there is a sense of urgency to do something yet they are Skeptics Among Us they are people who are still complacent saying you know what you talk about an imminent threat but you know that's going to happen at in the year 2150 for instance how do you urge businesses to take action today to protect us in the future well just look at what's happening around us if we're looking at in Greece they have to have warning to move to evacuate their tourists and if you have you own a hotel property in one of these Greece Island what's going to do what's that going to do to your yield going to do with your business your valuation of the hotel you're going to ask yourself is this going to be once in a 50-year event or is this going to be recurring is South Europe going to be a good place for tourists in summer months so that's really something that businesses should think about but we are not leaving it just to the Business Leaders we are working with for example Central Bankers around the world to start quantifying climatic risk we need companies to think about the risk of climate on its business we need Bankers to think about the risk of climate to their portfolio and we also need Central Bankers around the world to think about how is all that going to add up if you have a serious flood incident how is that what's going to do to your portfolio what's what's how's that going to impact your economy how's that going to impact you know the wider Society so all levels businesses Bankers Central Bankers investors pension fund investments will have to start thinking about the private sector on board are they buying into the sense of urgency because the reports now that's suggesting that yes the government is clear on what it wants to achieve yes the government has a plan but the private sector is trailing behind well of course like all things there are companies that are really leading the charge thinking about this and taking a very offensive position they see this as a new business they see that the world is you know discovering or looking for new products Alternative Energy so they see this really as a new area of growth but there are leg guards as well and the leg guards will take some time to realize how it's going to impact their com their businesses but we think that the momentum is coming I've seen stronger momentum now this year compared to last and a lot of it is driven through financial institutions investors and of course from time to time you will have events that push that back the Ukraine war for example didn't help because you see that you know all core plans started to be turned on again nuclear plants extended its stay but I think the trajectory is quite clear and I think there is a sort of willingness across sectors particularly among the larger more Progressive companies to see that movement who are the LIE guards many companies which sectors in particular well many sectors I think every sector will have its leg guards but as I mentioned you know we need to work through the system for example our banks in Singapore I believe that all three major Banks DBS ocbc UOB have pledged 2015 Net Zero to Green to decarbonize their Bank book they will have to then go sectorally to look at you know how do they achieve that that zero targets there will be sectors there is harder to abate because there's no available commercial technology right now but having that sort of trajectory if you know that you are here right now and going to go down to zero at that point 2050 that sort of gives you the kind of time frame the kind of gradient that you need to work at and by investing time resources including Financial Resources in r d in looking for new projects I think we're going to find Solutions the amount of investment that has gone in for example the U.S inflation reduction act for example has really seen you know the growth of you know EVS on the car the growth of investors Academia that's interested to find that solution the new technology to carbon capture by having a price tag if I've been if I remember correctly about 180 dollars per ton for direct air capture that number is focusing attention of many many interested parties to look at Solutions not everyone is going to be cutting edge right there will be this that uh Progressive one that's going ahead but we also see what others if even if you are not really looking for new technology there are many ways to reduce your carbon footprints for example just reducing waste just reducing you know assets that you don't need or optimizing resource utilization have your trucks fly in a more optimized way reducing number of trips reducing time that they are going around on the roads these are always that companies you know can work very very I would say low hanging fruits that they can work very easily as I think one of the speakers said earlier on not everything needs to be new technology there are many things that we can do right now to achieve you know mitigation in terms of private sector participation what role do you see them playing oh too many things you know when we're looking at say just take an example of the the every tank the food industry we need investors that will come in be really a part of this new business that we are developing we need technology providers that's going to you know work with us we need people that's going to invest in infrastructure we're going to develop you know a whole piece of equity Tech Park in Lim Chu Kang and in that process there will be people that's helping us to do planning design infrastructure laying out cables laying a waste collection facilities a whole range of possibilities and more importantly we're working with companies to off take we need the retailers the supermarket the Caterers to start taking local produce so there's so many ways that you know companies private sectors can participate and most of all as I mentioned we need financiers you talk about Greening the Singapore economy yet Singapore is a key hub for refining petrochemical it accounts I think about five percent of GDP is there a plan to Pivot away from the industry to Pivot away from its Reliance in oil absolutely good question because we get asked a lot you know of our high per capita admission we have a sizable petrochemical and Refinery sector that employs I think 26 000 people in Singapore good paying jobs any exports is probably number eight in terms of Refinery capacity so it's not just for our own domestic consumption the products are exported to many parts of the world what do we do in a sector like this we can take the one way we can say that you know we just don't want anything that's brown that's fossil and say get out of Singapore where does it go it has to go somewhere because we are still depending on these sectors to provide us with the chemicals that we need the plastic that we need all the PPE or the medical equipments that we are using plastic to make we need them so how do we then deal with a second option which is really work with the industry to decarbonize to make their products better and to incentivize them to do so so where are you in that journey into trying to get them to decarbonize so we have a carbon tax we have already implemented it since 2019 we are first in the southeast Asia to do so right now it's at five dollars five Sing dollars per ton we have already said that it's going to go up to 25 next year it's going to go up to 45 two years later and 50 to 80 by 2030. so that's a very strong signal as a signal to companies large emitters that and to avoid paying the government tax they should really look at reducing the admission it's really to tilt make the cost of admission very explicit and therefore to tilt that Level Playing Field in the favor of Green Technology at the same time we have also said that tax revenue that's collected from carbon tax will actually be put back to the industries to the companies to the smes to you know it's sort of vulnerable households to help them with the transition because the transition has to be an inclusive one so we are really working very closely with the companies that are working on jurong island for example they have a plan to make jurong Island a sustainable chemical hub working with one another working with Regulators working with Logistics players to decarbonize the process we believe that we have to work with all stakeholders to make this transition Minister you talked about waste Singapore produces more waste than it can handle in fact the samachar landfill is about to be full what's the strategy there when that happens how are you looking at it so first of all we incinerate all our ways if you are not we're not recycling them we will incinerate them so by incineration we are recovering the energy we are shrinking the volume so volume that's that's you know going down to two to three percent is original volume through incineration and the remaining incineration Ash we put it on samakao and that's still filling up quite quickly as you say so now we are thinking about can we recycle the incineration ash as well we have new scent that can be used for Pavements and construction purposes we are exploring other uses for incineration ash we are quite hopeful that within a few months we think we're going to have some decision on what to do with this incineration Ash and it's not just new ashes that's going to samachau we're thinking about mining the entire summer cow to recover the ashes for a second lease of life Rising tensions between the US and China in fact John Kerry was just in Beijing recently achieved very little in terms of new commitment from China should we just forget about that Net Zero Target is it impossible to get there with the two biggest emitters continuing with the tensions U.S and China are two biggest admitters is two strong superpower economic powers we need them to be part of this discussion we need them to be part of this movement U.S has put in place you know 370 million billion dollars Ira in inflation reduction act many many useful incentives we see them already at work already causing interest and movement on the ground China has a net zero 2060 targets impressive plan of rolling out renewable energy and they are doing that so I think while there's Joe political tension two countries are doing their you know their respective roles to get climate action going but it's always useful for them to cooperate because we need all parties to come together at the multilateral level the fact that John Kerry is meeting uh you know special negotiation negotiator uh it's a good sign they're talking they were not talking before and we have seen in the past when major countries with big countries get together when they are able to agree on Direction it gives negotiation climate negotiation a big push and we hope that this will happen it happened in G20 in Bali it happened in G20 a year before we hope that G20 this year will continue to see that momentum is it going to be easy not at all we have seen you know sort of past G20 meetings in India still having problem over Russian Ukraine still having problem over joint communique but we are hopeful and we have to keep working at it but hope it's not a strategy Minister just one final question because we're running out of time as we head towards cop 28 is it optimistic to even expect anything and how would you define success at cop28 I think with cop 28 uh well I'm hopeful that we're going to see progress in on two fronts first of all on the negotiation fronts um I would like to see that we make you know really to do a dual Global stock tank this is something that we've agreed in Paris it's midway between Paris and 2030 and take to a realistic and you know um effective stock tank in other words where have we what have we been doing where have we been going is that enough if not what else do we need to do what can we do I think there are some you know useful um thoughts that are being thrown around can we look at implementation renewable energy can we look at Energy Efficiency as some targets for us to work towards I also like to see more discussion on adaptation because I think that's the part that we have not paid sufficient attention what should we do on water security for the world what should we do on food security for the world especially the most vulnerable countries we need to pay some attention we need to have a global discussion so that you know we can reduce and manage the poverty that we are seeing today and it's going to get worse with climate change 50 60 chance that it could be a successful meeting well I can't put a number to it because it's still ongoing and you know the next six months is really going to be a lot of work where a lot of work is done uh but I would say that actually cop 28 I'm also hopeful to see the non-negotiation track showing concrete results because this tool has to work hand in hand political leaders environmental ministers like myself we take the queue from the businesses we take the queue from our constituents so when we see that there's actually call for greater policy Clarity for movements in their targets then I think it gives us the confidence to go in for negotiation and where we have clearer negotiation outcome it helps businesses as well so this itself is a virtuous cycle it feeds on energy of each other so we hope that the business sector Finance sector oil and gas sector for example can give us that vibe that energy that signal that they want to move and they want Clarity of policies from us Singapore environment gracefully we thank you so much for your insights today thank you very much please welcome to the stage Matthew tan legal and compliance director for Southeast Asia and corporate Affairs manager for Singapore at purno Ricard and sui Ling Chia executive board chair of Eco Spirits for a conversation with Bloomberg's ishika Mukherjee [Music] hello everyone thank you for joining us today um what we're talking about today is waste reduction and glass waste reduction in particular in the alcohol business and if that's good news or bad news for the Greek wedding planners but uh that's what you're talking about today and let me introduce you to the panelists we have Matthew tan who is legal and compliance director at for Southeast Asia at Bruno regard and swelling Chia who is the executive board chair for Eco spirits this feeling let's begin with you why don't you tell us about what ecos Spirits does and introduce the product the ecotote sure I'm not here to serve the drinks just so young not yet um so essentially I'd start with the numbers so 70 billion glass bottles were manufactured last year for the wine and spirits industry alone and these bottles A lot of them a majority of them are single use some of them are recycled now but the majority of them either end up in the landfill where it takes thousands of years to degrade or even if they're recycled because Glass is very expensive to produce the heat that's required um the energy intensive intensity uh the fact that it's breakable is very costly and difficult to recycle so it ends up being like less than even 20 that gets recycled even in the uh developed world so we came up with ecos Spirits which essentially is the mission is to end the use of single-use glass bottles how so for example um absolute vodka get gets manufactured in Sweden and in the past it would be or as it is now it gets manufactured there it gets bottled in these iconic bottles and then it gets shipped across the world now with in collaboration with a very treasured partner panoriga who is the company behind absolute vodka the Vodka gets shipped in bulk to we're present in 21 markets globally uh and going up to 27 markets by the end of the year proudly made in Singapore founded in Singapore um so the Vodka now gets shipped to Singapore we have a containerized semi-automated plant um into us so it gets shipped in 1 000 liter stainless steel Vats and so that saves uh significant amounts of shipping costs and and because glass is usually expensive to to transport because of its weight now gets transported in bulk to our destination markets and there it gets filled in these what we call Eco totes and then from to us we then we are now present in more than 400 bars and restaurants and hotels in Singapore alone we distribute these ecotodes with the Vodka to these bars where the consumer experience does not change you still see this glass bottle at the bar but when it's empty it gets um the Vodka gets dispensed from this tote at the back of the house and so and then after this gets emptied we take it back to the plant where we clean it we sanitize it and refill it and then it's that's why it's a circular so we are now we're essentially the world's first low carbon circular distribution technology uh for the wine and spirits industry I think that's I'll stop that Matthew if you could talk to us about the pilot rollout in Singapore and what the impact really has been for berno Ricard in terms of waste reduction um yes so I think we started the pilot a few months ago and we started uh primarily with three of our products Havana Club absolute and beef so I think across uh the last few months we rolled out to about 31 bars with our products and I think we've saved about about 3 000 bottles so far it's it's still small right but we definitely have plans to scale it up so the whole process of getting the technology validated I think took about 18 months for us to ensure the product security as well as integrity and to ensure that the whole process actually works so this this pilot is really a test to to roll it out but we are actually in the process of working with people's spirits of rolling out a global agreement that will roll our product uh Eco sprayer and our products across the rest of the world which countries are you targeting at this stage uh we don't have a specific countries yet we're still negotiating on the global agreement but we intend to roll up where all our products are across the world so sailing um this seems like a pretty common sensical sort of solution right to reducing glass weight waste in the spirit's business what are the challenges of developing the product scaling it what were the challenges while you were doing that to be honest I mean because there is no uh distribution technology that's low carbon at the moment we've had very uh strong interest so we now see we have two segments of customers one is the likes of Peno regard the world's largest Spirit companies that have committed to Net Zero because for each bottle that uses our solution we save about half a kilo of carbon and actually this toad itself you look at the store we actually can use uh up to a thousand bottles for this particular toe so we've and and then for each cycle of tote we plant a tree in Borneo and we planted about 35 000 trees so far and so perno is one of our Brands we have about 150 brands in our stable at the moment uh and there are a few more hundreds in the pipeline so actually the scale is trying to be able to grow as fast as our customers want us to grow in the many markets that they're in and a couple more numbers you know so because why do they like us it's not really just because we are obviously the green bit is is the overriding factor but at the end of the day why is it um an overriding fact is also because we save up to 60 depending on where the the spirits are being manufactured we save up to 90 in carbon emissions we save 95 percent of glass and paper uh of waste and so um and 30 grams of uh carbon per cocktail so even you know we have a we are in the Savoy Hotel in London for example and the there is a low carbon menu and the uh the cocktail that has low carbon using ecos Spirits as the the uh the bottling technology is the um best-selling cocktail in the history of the bar and so we know that consumers are very willing to um uh adopt uh the solution as well but we're now we just do B2B at the moment because that's where the biggest impact is so but going back to your questions is really being able to grow as fast as our customers want to and I guess this question is to both of you can you really apply this model to every Spirit out there to every kind of alcohol or is it limited to certain ones right now so for Spirits yes because the inside of this so it's temper proof we actually have um uh what we call a smartphone technology that is also uh Internet of Things uh using RFID and so we can do track and Trace um we because and the inside is actually glass and so you know the spirits actually come in glass right so we can use in for example for any kind of spirit and we've actually been certified by the French organic wine authorities as well to do wine and so for both Wine and Spirits we can do so right now what's Bernard doing in terms of the rollout uh we've actually just recently finished the pilot so we are taking the studies of the pilot to sort of uh figure out how to further roll out this uh thing and as I say we have a global agreement to really review how we're going to roll in order markets with the different Milestones which are still negotiating but the idea is that we also intend to potentially increase the number of products currently we are at three of Our Brands we've got a few hundred Brands so you know we're going to increase the number of brands that we're going to be working with equal spirits on and really that is how we hope to scale this across the rest of the world as well not just within the Singapore Singapore is just the initial test Market but we we tend to roll it up for the rest of them so we we have both the the bigger Brands as I mentioned uh the likes of fedorica and we also have a stable of smaller Brands and actually for them the cost savings and the waste savings actually even higher because they don't have the economies of scale um that's required to do all the bottling that's um so actually we have a long tail of those Brands as well okay yeah and so we are now in in Singapore with over 400 bucks but in globally we've got 2 000 uh bars and and uh hotels uh likes of Four Seasons Rosewood uh there are big supporters uh and I have to say shout out to penorika who's also invested in the company um which is uh you know and and I would say panorika is extremely um uh open-minded with regards to the the platform you know the spirits companies they they compete fiercely but uh panorika using is using our platform and has also um you know it's essentially the platform is agnostic so we are open to Diago and all the other bigger big brands that are also um uh competitors of binary car but for the good of the planet um they've been supportive of our roulette yes I believe uh to us cellularity is something that is not just confined to you know our company but really something that we encourage as part of innovation as well as you know across the entire industry so we are very happy for uh you know to work with uh Eco Spirits uh even with our competitors as well because we believe that's how we really bring about change so why ego Spirits why why did you decide to take a stake in the company I think um because the ego Spirits is one of those it is a very unique company right so the idea of reusing and everything it's not uh something that's particularly new but I think for ecos Spirits they've demonstrated through our tests that they are able to ensure that product Integrity our product Integrity security and of course the how the bottles are being reused and everything because uh as you some of you may be aware there are counterfeit alcohol issues in some of the other countries so this is really a significant risk for us if we were to work with other parties in terms of scalability I think ecospirits has the ability to really scale it across the world as I say we're not just looking to do it in Singapore so I think that's why we when we looked at uh what they were offering we we could really work with them and to bring this to a much larger level okay I don't want to put you on the spot but if you do have numbers for us what kind of emissions um reduction are you seeing and cost reduction are you seeing now because of using Eco dots uh well have you been able to quantify that we we don't really have absolute numbers but looking at a we're looking at about 50 to 60 percent at least reduction in the glass waste depending on the number of users for uh the glass bottles depending on the brand as well depending on the brands as well because I think some of our Brands uh have stricter controls in terms of the number of users so perhaps that would reduce some of the numbers so it but it would at least be about 50 to 60 reduction in all glasses so when thinking about circularity and the alcohol business what what else can alcohol brands do or are they doing at this stage to reduce waste and bring in a more sustainable angle to their business what more about alcohol Brands considering right now in terms of sustainability in terms of waste reduction okay so other than the reusable model which is what ecospirits is we are actually exploring uh glass recycling so I think in Singapore we recently had a first class recycling facility so we're really we started a pilot at the event with our uh at a trade Association level to explore how to do glass recycling in Singapore right and that is something that we are very excited about uh We've not actually proceeded with that we're still at the Explorer three-stage but really this is something that we hope to push glass race in Singapore as it has that been so far have you been able to because um the national environment agency they came out with some numbers in 2022 I think only six percent of plastics were recycled in Singapore and just 14 of glass waste so it's quite a difficult material to recycle as well so yeah how successful has that been uh well like I said we are expected exploration stage but uh because the news about the glass recycling facility just came early part of this year so we've actually started the studies on how we can create a pilot around glass recycling but definitely that is something that we are hoping to support the Singapore government as well because the glass the the landfill situation Singapore is fairly dire I believe we run out of space by 2035 so that's where we really hope to support uh in our way the classmates in Singapore okay thank you I think we can take some questions from the audience now Meg are there any questions you kind of answered this question but I will um in the way this way of recycling bottles in this Spirit business is excellent do you see that it can be adopted by Coca-Cola and the likes I'm not in the Coca-Cola space what I actually think you know the the thing about Coke is like is that at least the bottles are uh one kind right whereas in the sports industry you've got absolute vodka that looks like this and you've got different kinds of spirits that have different shapes and sizes it's just harder to to make it circular or recycle that way um but I think I can't speak for cook actually sorry and also in general they did ask are there other industries that you can see that could benefit from the technology and infrastructure of ecospirits so we are focused on um the a product that is quite premium um where we can actually make a difference where there's premium and there's volume um I'd have to say you know for other kinds of consumer uh let's see you know how well we scale in the next few years and then see how it can be applied elsewhere how do you ensure the contamination risk when bars refill themselves into the glass bottle that's how when we get vetted by the likes of Parental record these are the things that we look out for and actually so this for the absolute vodka that uses our our um uh technology we have an RFID that actually matches to the tote itself and that it can only be dispensed like an absolute tote can only be dispensed into an absolute bottle so we try to you know these are the kinds of measures that we've put into place to make sure to reduce the the contamination is actually the one thing I would have to say is that you know for a lot of the brands um where counterfeiting is an issue where you know an empty bottle of shivas or absolute is more is worth more than a full bottle in certain markets um transferring making it into an Eco tote actually makes it a lot harder for counterfeiting as well last question um what is the expected number green of green job opportunities that you believe will be created through this initiative I'd have to say not many I mean we are a B2B very Capital efficient business and so you know we are we're only a team of 30 but we are now in you know 21 markets so it's actually an extremely Capital efficient uh business uh that's able to scale thanks Meg for the questions I have one last one what do you price that at how expensive is that there are now about 60 000 uh totes in circulation already yeah um it so it depends on how many you buy so you can buy for 50 years you know we're trying to actually make it because as we scale even more it's actually economies of scale right yeah we can try to reduce the prices as okay good answer okay thanks very much thank you for your Insight healing and Matthew and it's time for a short break now so everyone please go outside grab a drink and we'll be back here at 11 10 to speak to sgx the CEO low moonchai so please come back to hear that conversation thank you thank you [Music] [Music] [Music] [Music] thank you [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] [Music] foreign [Music] [Music] foreign [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] foreign [Music] foreign [Music] [Music] [Music] [Music] [Music] [Music] foreign [Music] [Music] foreign [Music] foreign [Music] [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] [Music] foreign [Music] [Music] [Music] the program will begin in five minutes [Music] [Music] [Music] foreign [Music] foreign [Music] [Music] [Music] [Music] thank you [Music] [Music] foreign [Music] [Laughter] [Music] [Laughter] [Music] [Laughter] [Music] [Music] ladies and Gentlemen please take your seats the program is about to begin please take your seats the program is about to begin [Music] [Music] foreign [Music] [Music] [Laughter] chai CEO of sgx group for a conversation with Bloomberg's akshatrati [Music] foreign [Music] I hope you're well caffeinated thank you for joining us enjoying joining us for this talk uh now I'm a senior reporter for Bloomberg green uh and I am usually based in London uh and it's been a pleasure to be in Singapore for the past week I've been I came to Singapore when I was 15 years old 21 years ago and the changes here have been spectacular and I've learned a lot about you know what the island nation is trying to do on all things sustainability um the conversation we're about to have are the kinds of conversation I have on my podcast weekly it's called xero if you're interested in climate Solutions please uh listen to zero but today we're going to try and focus our conversation on what Singapore exchange is doing in this space so let's just to start the conversation uh give us an overview of uh as somebody who runs an exchange you are at the Forefront of understanding what are the needs of investors and what are the trends that investors are following so over the past few years what is it that you have seen as a mega Trend and how have you tried to find solutions for it from an Investor's perspective uh good morning and thank you Joshua and thank you to uh Bloomberg for uh having me here uh as you mentioned being an exchange we are in a unique position at the Forefront of the market ecosystem we look at our roles in three ways one is a company how do you run a company with over the last few years I started our Net Zero pathway secondly the product and services that we offer which is I guess your question around what investors and what trends are we seeing and then third I think importantly at the Forefront of the ecosystem how we try and lead the ecosystem in terms of the sustainable journey to come to your question in terms of Trends and what investors need I will characterize characterize it as the following there's obviously one where investor sound is starting out new but they want to get into the Journey of Net Zero and sustainability and there they would probably invest in funds that will allocate Capital Into Climate resilient companies or low company meeting companies secondly there will be those that will be confined to let's say aligning with regulations let's say the Paris aligned regulations and last but not least there'll be companies that are really into it in terms of allocating capital and researching companies and helping them in that Journey so we've actually seen a trend where more and more companies and investors are down that journey and we as ourselves obviously will be in there providing product and services like passive indices and benchmarks if you are new to this and you're just trying to get a feel for it what is it that uh CX is going to offer that would allow you to start to understand what is a complex environment uh I would look at it in three ways one the allocate Capital into ETFs into the therapist markets we ourselves as launched with msci climate actions set of indices which is really bottom-up sector Diversified that really allocates capital in a rule-based transparent way in what most index would do but really only allocating Capital to companies they are on their Pathways transparent about it and also have targets to achieve this one and two if you are a more sophisticated investor they're allocating Capital to factors we provide what we call a climate impact consistent index that really tilt greater weights to the companies depending on their climate performance we're not looking to optimize at the popular level we're really Equity allocating more weights to the company that are really on that Net Zero Pathways that would be carbon credits we ourselves have partnered up with damasi the DBS and stencia in impact X that offers carbon credits for companies that are beginning on that journey in terms of having carbon credits to compensate or neutralize emissions so let's split the conversation on two parts here one on sort of indexes and ESG in general and another on on carbon credits and and trading but also net zero plans uh and maybe let's start with carbon credits because uh it's something that blimber green has covered widely if you search for where the market is today um you know the the issues it is facing uh they're quite serious so you launched uh cix over the past year there have been you know multiple auctions that have happened and about half a million tons of credits have been auctioned on the market now just for context uh Singapore's annual emissions are 50 million tons and plus so it's still a small fraction relative towards Singapore's emissions are but the common credits and the use of carbon credits have come under huge criticism because most of them as we look deeper into the market turn out to be junk so what is it that you are doing to ensure that what gets sold because there's demand for it it's not later on turn out to be junk well as if any Market development and new markets it's going to be a journey there's going to be issues along the way I think what is important for the carbon Market is for any platform cix included to provide the robust information transparency and in the end the market as of now lacks a benchmark price setting mechanism for carbon credits to clear and like you rightfully said there are different grades of carbon credit and what CIA does are as follows it has a Marketplace that lists projects it also has a auction platform and also recently launched an exchanged for spot trading but I think key to that is for any credits or any projects to be listed it has to be uh globally recognized it should not have any negative uh obtained or linkage to that it must have sufficient verified unretired credits right and last but not least in that process any platform CX included is to help companies and buyers of credit in that Journey no matter which Spectrum you're at with the information education and then helping them to make their own decision on purchasing any credits when it comes to stock trading for example There are rules and regulations in place you can't have insider trading you know you do uh something that goes against those rules you get into serious trouble now the entire carbon offset Market is based on voluntary rules and voluntary commitments that companies are making even these Global standards that you're talking about are essentially industry not-for-profit sometimes academics coming together and creating those rules do you see that there is a need for regulation to ensure that there is not just credibility in the market but that credibility is backed by laws that would then punish if people do abuse the markets well I think that's the beauty of Market Evolution if I give you an example of even at the Singapore exchange we are now the largest I know Market globally outside of China it started off 14 years ago purely as over the counter market no so clearly bilateral and then it gets cleared on The Exchange sgx in the last couple years they have now been brought onto a rule-based well-defined clearing mechanism on sgx and today the total volumes are now two times the underlying exactly what you just said you clearly need time for rules to be developed and evolved and I think the carbon credit Market is just part of that journey and I think we're just seeing the early signs the green shoots of what it is and with any Market you're going to get some of the issues but Marketplace can come together well is that that's different because carbon credits themselves are at least 30 years old the oldest carbon credit program was created in 1988 and so the journey has been going on for quite some time so I'm not sure it's the same equivalence that you can draw because the market has been shown to have troubles again and again over the past two decades since it started some Market lasts for 10 decades and I think the different markets have a different kind of evolution right and uh for us as an operator or an exchange in this partnership that's what we like to bring to the Forefront in terms of how Market should be structured should be developed and how players should come together and how the rules should be designed now one other thing that's happened is obviously all the auctions that you've run have been oversubscribed but globally uh for the first time in six seven years uh the number of carbon offsets sold declined in 2022 relative to 2021 and part of it is because of the credibility issue that the market is facing we understand that Traders uh who are going working on cix are struggling to find supply of good credits why is that the case well I think for uh high quality uh credits they're clearly lesser in Supply but I think for any kind of credit what is important is the transparency and secondly globally recognized well-established projects and then three I think more importantly is the continuous monitoring of the such projects and I think that's the key uh to that and for example uh cix did an auction of the Delta blue carbon project the largest Mangrove restoration project in southern Pakistan over the life of the project is going to sequester over 140 million tons CO2 and that when it was auctioned about two years ago today is trading at almost 40 percent premium to the current stock price so high quality carbon credits does have the demand that it deserves and just for context I mean it's 140 million tons is a huge project so um I was looking at Singapore's emissions Singapore's cumulative emissions has its lifetime over the past uh you know since its independence are two billion tons so you know you're making one project that can make a substantial contribution if it actually works now going to ESG uh you know I I live in London as I said uh when I look at ESG it's sort of a different flavor but depending on which region you are looking at there's a whole political backlash in Europe in America around ESG which is getting mixed with Democrats versus Republicans uh in Europe uh the government and especially the European Union is coming out with real big strict rules but sometimes those rules are either too complex or too strict and then there's backlight from industry that there is lack of clarity when you look at ESG in Asia what is it what is the flavor of ESG over here is very widely defined uh frankly as you said and it really depends on the sector and the stage of the economic development of each country and even if we take the E part of ESG and Link that back to environment slash climate let's also not forget in many of these projects that we just talked about some of those the corresponding benefits are the social cool benefits into the community and that's part of the aspect and I think critically in this part of the world and we'll talk about energy and transition I think just transition is important no one should be left behind I think it should be inclusive and I think that's a journey for the sectors and companies and including governments and Regulators all come together to play the other role so you are seeing there being demand for ESG oriented investing and that's the reason you've created the products or you want to be ahead of the market and you're creating the products because you expect an ESG Market to happen where are we right now we're seeing a good take up rate as more Capital are allocated towards climate transition as portfolios get bigger investors would require similar tools at their disposal so at sgx we want to be at the Forefront it's never easy to try and predict demand and a trend but I think climate risk is real it's here and now and I think it's important that we want to play our part in whichever role we are which company sector and we think investors would require more tools at their disposal and with an exchange works for the ecosystem to try and provide the relevant products and services now there is one way in which you can move Capital which is through indexes where people make choices that weight them towards environmentally friendly uh companies but there's another one which you can use which is exclusion so you can exclude a certain amount of say coal financing which banks many banks have done uh or you can exclude uh oil and gas in the Arctic there are these exclusionary principles that many banks have adopted are there any exclusionary principles that you have a doctor or are considering adopting uh when it comes to running the exchange itself exclusion typically happens at a portfolio optimization level and I don't think that really plays a useful role in any company that is undergoing a net zero transition you can't turn from a brown company to a less brand or new company tomorrow I think what is important is in that Journey capital is being made available for companies who wants to go on that transition for a very clear on what are they emitting today what forward targets do they want to set but more importantly a very near-term intermediate step to demonstrate that they are really on their Pathways and continuously achieving disclosing and being transparent with them and I think one of the ways to do to look at that as I said earlier whether that is the msci climate action indices that we do that really rewards company on that Journey continuously monitor you or if you're more sophisticated in the climate index concern index that we have that really allocate more Capital the better you are as a company in your climate performance the trouble is when you look at what's happening in the world right now you know heat waves in Europe uh floods in China it's very hard for people to see that climate impacts are growing emissions haven't actually declined we had a record emissions globally last year and so even as companies are making plans and there are targets to try and keep them on track observe if they are doing what they say they will do surely there's a point where there's not enough progress somebody has to draw a line and say okay we've given you enough time we've monitored your progress you're not making enough progress what's the punishment what happens when that moment is reached for a large company that's either trading on on the exchanger as part of an index I think financial markets can play an important role and I'm very glad being part of the Glasgow Financial Alliance on Net Zero part of the principles group we're going to launch a new work stream globally that sgx will be part of that to mobilize Capital the words companies that are really making that effort and I think for uh investors the pressure of climate change is real I think we can all play our part to try allocate Capital to help companies in their pathways and when you look at single persons what are the types of conversations that given all the products that already exists but uh the rapidly changing environment in which ESG operates what are the kinds of products that are on the horizon that investors want or what are the kinds of needs that they come to you with that make you think okay I need to work on this what will really seeing in terms of demand and pickup rate is really in the barbell part of the investing passive investing via indices but very clear and transparent around only Capital being allocated increasingly only the companies that are performing better in their climate journey and then the other one is really allocating Capital directly to companies and then what we're also seeing in between is carbon credits and I think carbon credits are here to stay notwithstanding some of the challenges that we see and carbon credits doesn't need to be a consequential action that companies or anyone take and it's not after a broad footprinting knowing your emissions then you look at carbon credits it could be in tandem it could be Imperial because you can use that for compensation of for neutralization of emissions that's great well for taking all the questions uh uh listing and if you enjoyed this conversation I hope you'll tune into uh zero Bloomer greens podcast that comes out every week thank you thank you [Applause] foreign [Music] T Executive Vice President of international operations at Schneider Electric pan out sirivadhana bhakti group CEO of Fraser's property limited chart series sopang Panet president of Bangkok Bank and Anderson tanoto managing director of rge for a conversation with Bloomberg's Mark whaling [Music] thank you [Music] foreign [Music] good morning how many of you believe that Society is moving at a sufficient Pace on the climate crisis and on the ESG agenda raise of hands efficient I see a few hands for the virtual audience maybe two percent of the room has raised their hands how many of you believe that your business is moving at a sufficient Pace on the climate crisis and the ESG agenda we've gone down to zero point nine percent well so the four leaders to my left represent businesses that are accelerating this agenda and they're going to have a chance to elaborate a little bit more than I let you all now I think what's important is that they are representing solutions that are scaling the effort against climate change and also other aspects of ESG and so in the next 28 minutes we're going to talk to these essential players and understand how are they accelerating the agenda through the lenses of technology and collaboration contoni let's start with the money now Net Zero requires significant massive technology deployment we've never seen before that requires Finance how do we accelerate Capital flows yes this is the very important issue that's why the Target also need to be sent on both the medium term and longer term basis for the carbon maturity as well as the net Silo the capital expenditure need to be planned well especially with new investment that will be taking place and how to adopt the sustainability and the green concept into this part just we work with many customers to help them make the transformation and the transition to these major requirements uh for instance we work with many customers on the renewable energy projects but the wind solar across the region in Thailand in Vietnam in Indonesia in China for instance so even in Japan and also we work with many of the companies that making the transition to reduce the carbon emission and also reduced different types of carbon dioxide for example in the installation of the solar panel for the manufacturing facilities or energy saving so these are challenges that we are providing and working with our customers accordingly and could you tell us when did the shift toward Renewables begin for the bank you've been doing it for quite some time and today maybe what what portion of the energy portfolio do Renewables take up I think the first part start with the government side I think some over 10 15 years ago the government started with the consideration of the diversification of the energy sources which I think previously mostly on the fossil base we have some Hydro power but mostly in the core lignite or the fursuit base so over the next over the last 10 15 years government have been found systematically on the renewable energy with the solar energy then later on with the Wind initially with significant support financial support tech support in order to make the project moving forward But as time goes on the expertise move forward and together with the production course that has come down quite significantly and become quite quite comparable to other sources actually in some sense also somewhat cheaper in essence nowadays so we work with those customers along that basis both in terms of the commercial loans and later on also access to the Capital Market to the green Bond sustainable Bond and also sustainable sustainability link bonds which also have certain targets for the corporates to achieve [Music] and I haven't looked on Bloomberg just this moment but uh I know in the past you have been a leader of the market share for green bonds does that stand very true in Thailand today yeah I think about 70 of the bond instance uh on the green Bond and the sustainable bones we have always been uh at the right in the process Manish we heard contoni speak a little bit about renewable energy um there's there's a whole lot to the Energy System supply side demand side and Schneider Electric brings a whole lot of different Technology Solutions to Market critical for decarbonizing could you tell us what you are particularly most excited about sure and and thank you great to be here we'll follow the money I I would say yes at Schneider Electric we are the digital partner for sustainability and efficiency uh you know today uh 80 percent of the problem of carbon is linked to energy and what we say that 70 percent of this problem uh can be resolved today I think this has been the theme of this morning that we need to move fast and there are solutions which have been existing today uh if you the equation uh is simple uh or if I oversimplify it it is electrification plus digitization is equal to sustainability and why because you know electrification is the best Vector of decarbonization because it can be renewable it could be stored you could work with microgrids it could be decentralized it could be coming close and then you have digital which is the best Vector for efficiency and say that because digital is making energy visible so today you have connectivity from plant to plug across the full flow of energy that was not possible now now thanks to kovid we've had and you know we have seen the acceleration of digitization we have episode one of Internet which is about Connecting People to People now we have to go faster on the episode two which is connecting machines to machines and machines to people uh and and and together with this we are able to to drive much more sustainability now if I if I go to the next step you know this 70 of the solution exists from Technologies today and and we say that because uh you know there you can look at the demand side as well as the supply side on the demand side which is more pressing and something that we can address today and and thanks to you know financing which is available uh first is about Energy Efficiency we need to drive much more Energy Efficiency which can solve according to our studies uh almost 25 percent of the problem then it is electrification I mean we we heard from uh from Nissan this morning electric vehicles are more efficient uh and you know uh Electric electrical energy is much more efficient than any other form of of energy uh you know you can feed in electric vehicle directly to the to the wheels of the car the energy so you're not wasting you know in in very simplistic terms the thing the same about process electrification so electrification can resolve almost 30 percent of the problem electricity is uh you know today as it's roughly and I think I quote Bloomberg here uh around 20 percent of uh the primary energy is is electrical that is going to almost triple uh in in the coming three decades so electrification is the other uh solution that we have and finally we have the supply side which is other 45 percent uh which is again decentralized you need to make sure that you're ready for that bi-directional flow of energy uh through through microgrids through storage through electric vehicles feeding back into the grid Etc and and you know this is what is going to solve uh today those issues and you know 2030 is around the corner where we are we are committed to reducing by 50 and if you don't meet 2030 I think 2050 is far away so you know this combination of electrical and digital and uh I think there's no energy transition possible without the digital transition and I and the two will go together it was farmland and then it was a radio station and now it's the most expensive mixed-use development in all of Thailand tell us about one Bangkok and why should we be excited about it after this video and I'm sure it links to a few of the things that that Manish has talked about thank you thank you and thank you Mark thank you boomberg thank God the important part of what we do is to think a lot about sustainability and you know at phraseless property we we know real estate make a big impact to carbon emissions we tribute to 40 of globally of carbon emissions in in the real estate sector and if you talk about City development we are account for 70 of the carbon emission so sustainability and carbon neutral objective is very important to our strategy um the knowledge that we we built over since the first initiative of uh sustainability and green development started in 2006. we have evolved and it takes time because you know real estate cannot be changed overnight and as mentioned of many of the discussion today we talk about if this is going to work is because of collaboration because of like-minded you know approach and together the most important part is technology as well definitely the partnership with with Schindler is is definitely the journey as well to us so at the one Bangkok it's it's a collective experience and knowledge as well that we did across different parts of the world and many of initiative even Brownfield also started happening because of what Minister Foo mentioned on the collaboration and the effort of Singapore government together with Singh power tamasek we work together to create a new green energy note as well like our retail Center in Tampines we work together to create a more adaptive EV solutions to create it um the thinking on on joining with multiple developers to create District cooling on a brownview projects so those are the the change we want to continue to make and many of those things drawn to an ambitious scale of one Bangkok where it's built out of close to 20 million square people on a single development planning that allow us to create the one of the largest gesture cooling by first by private sector and working together with a strong experience of golf energy Tokyo gas and mitsui so be able to provide the thinking on what the future race it looked like and how it could be future proof but that's only a beginning of the stage where from that then the design the collaboration with the technology partners with user with even the better Insight that we we work with Accenture to create a new thinking on customer Journey we work with Hitachi on creating the new smart cities thinking how with the single connective development of office Hotel retail residential and we can see uh in the trends of of the city development mixed use will become the model that components need to be more connective and that will build first thing on Energy Efficiency built into a better circular economy well working on the entire supply chain as well how we work from the build form it's a great example at one Bangkok where we're able to work with scg which is one of the largest cement company in Thailand to recycle the the top concrete power that fully recycle because of the scale of the waste concrete just on the single build form able to build 30 000 prefabricated panel 30 000 square meter prefabricated panel structure so we are able to prove the circular economy can be efficient can reduce waste and can build better efficiency to raise it as well so uh to scale of one Bangkok we we're coming live next years and it will be exciting stage to us looking from build form to operational form and the important part is understanding to build the more sustainable customer journey and build efficiency together we're creating a full life cycle of sustainable and Energy Efficiency and looking at part of the journey to renewable energy as well the group has been focusing on renewable energy especially on solar so we have now already installed about 25 megawatts of solar system onto our real estate and by next year we'll complete to 35 the 35 000 megawatts of solar power and Manisha talked about digital what are some of the exciting digital aspects of of what you are doing there have been a good part in building up this heart of of the the operating system uh we operate the entire complex through data centers to District cooling so Sheila has been part of the main electrical equipment onto the facility as well it's proof to to give us the best insight and and the knowledge in in improving and developing the right efficiency uh to fit the right energy into the life of one Bangkok into 20 million square feet of operating real estate thank you thank you for giving us this opportunity and we are you know the platform that you're using which is Echo structure is something which can uh you know there is one side is the capex and the other side is the Opex and I think that when we are talking about sustainability we you have to look across the full cycle and I think that here is a Visionary and forward-looking company that is already thinking around it and I'm sure that Bangkok Bank is also looking at you know financing is this how we can look at the totex you know the capex plus Opex across the full size it's this kind of intelling the the decade of effort of us that the policy maker and the financing part like Bangkok Bank as well has seen in us and and we have been working in a focus to to drive the outcome of our sustainability initiative and today we already done over 10 billions of green sustainably linked loans and bond and Bangkok Bank has been a great Partners in in the Journey of all those initiatives with us as well and thanks for the support giving me some words on his project because I was showing the project at the point of the conceptualization I think because the chairman has a long Vision but then put a very young leader in charge of the project so he brought in many technology and at that time also the expertise of Fraser Singapore also good inquiry significantly so I could see at that time I was explained about how is so not only commercial complex uh which normally we will see from a developer but he also spent a lot of emphasis on sustainability in different components and use different technology so to your part about acceleration sometimes a leader can also help change that Direction with the same investment but then put in different emphasis and I think we probably see the final product soon of how this will come out thank you just recap done on the part of that objective I I would want to mention on how we become the the first lead neighborhood certification in Platinum level as well what we do here is the aim to support our partners our customers as well where they are now if they are part of one Banker they already get more than half of the certification point to make themselves a fully sustainable retail sustainable real estate space as they plan as well so our investment and future investment of what we think it's relevant to how we will be able to build and connect sustainable Partners to the Future as well Tony said it I think a lot of these complex systems Solutions today require the the wisdom of age but also that that young understanding of technology and and really it's that that mix of talents that need to be on these projects um well everyone is excited the businesses and the residents I'm sure to to move in next year uh and now if we shift gears to Anderson you have such an extremely Diversified uh set of businesses and that ranges from Pulp and Paper to palm oil to energy to real estate what are the levers of decarbonization that you look at and how do you prioritize them Mark again thank you Manish uh what's what's fascinating just now is you say the two levers electrification and digitalization but you got to bring that value change just one step above because if that electricity that you're using is coming from fossil based energy generation yeah it's not it's pointless you can be EV but you're using electricity that's actually generated from coal so I think if you take one step back energy generation basically sustainability needs to be done as a whole supply chain uh Upstream all the way to Consumers and I think that's the exciting part and the biggest challenge for us how do we connect the supply chain for us uh we're more on the Upstream side that's from energy generation which is from the gas business but also from biofuels um for me the exciting part about about the transition right now is that going green actually makes business sense a perfect example solar panels we've also decarbonized a lot of our operations from fossil fuel fossil based energy to to solar panel-based energy in 2019 when I first installed my first megawatt of solar panels the payback as I shared a few years ago was about 12 13 years right now with fossil fuel prices High going to solar the payback is less than six years so right now going green is not about going greens great for business that's the first second if you want to decarbonize our business I look at it from two two value chains one is feedstock are we sourcing sustainably are we sourcing the right materials seconds how are we fueling or energizing our process Industries and that is for us in our case where about 90 of our energy sources from biomass but the last 10 percent is still from fossil base whether it's gas or cold that's how we're trying to decarbonize it by going through solar and some level of digitization digitization allows us to gain more efficiency but fundamentally if we're still having from I mean energy sources from from unsustainable sources it's not going to solve the fundamental problem and and we heard a little bit earlier about electrification and you mentioned that in the beginning I think it was the U.N Secretary General when the most recent report came out talked about the need to Electrify everything everywhere all at once a phrase that we all know quite well at this point now you you mentioned fuels in a net zero world what is the role of fuels looking Beyond electrification I think electrification definitely makes sense for a number of things I mean I give a good example we have an LNG facility that we're building right now in western Canada and British Columbia uh compressors are effectively uh large fridges that cools gas from ambient temperature to minus 160 Celsius the compressor that we have instead of going gas Drive which is very natural because the gas is right there we're going with electric drive so that allows us our emissions to be reduced nine folds so our average emissions is 11 of a regular LNG facility and then the remainder 11 we're deciding to offset it with nature-based Solutions projects over there so that's a good example how electric electrification can reduce emissions but it still doesn't 100 to me limited emissions and hence there's still a lot of opportunities for the conversations upsetting in the right format that's the first second electrification doesn't always work at least the next 10 20 years Aviation is a good example because of its weight and power to weight ratio so I think if um I think there'll be still uh maybe another 5 10 15 20 years where you see planes flying on electric batteries because of its weight so that's when biofuels come in I think there's a lot of discussion about sustainable aviation fuel not only I think Europe just launched a mandate uh two percent of South blending starting 2025 and one percent increase every single year up until 2030. Singapore's looking at that as well and many other countries is looking at that so biofuels have a role to play because it's actually readily available of course the big challenge of buyers food versus fuel right I mean are we using corn uh edible oils to actually go into fueling machines um and in an inflationary environment like this now it's very very sensitive so we have to move towards Next Generation feedstock or or second generation feedstock of biofuels which is recycled oil which is agricultural waste again bringing the circular economy concept to make sure that we're decoupling uh food versus fuel carbonization so what I like about biofuels is readily available the technology is there and you can immediately Implement and decarbonize existing machines even though yes their internal combustion engines or turbine engines but you you're immediately solving this problem in the next 10 years so that's the exciting part about biofuels readily available feedstall readily available machines to convince the Airlines boeings and Airbus to switch to electricity in the next 10 years that's going to be a stretch I don't think we'll be on that airplane but at some point we'll be on one of those we'll see now if we go back to Yukon Tony you know we talked about capital and naturally that is collaboration you're providing Capital into your customers and into the market what are some of the other ways that you're influencing or or supporting your customers uh just to have access earlier about how Thailand started the renewable energy and certain incentives provided in order to get the business moving energy is the largest carbon which I think next is the logistics and in Thailand I think they also try to convert and not have the ultimate of the electric vehicle the EV Abdullah the next year promoting the adoption of the youth that purpose and I think the important part is in order to get the volume up so that the manufacturers can do the assembly in Thailand as well as to build other related Park components in order to make the business uh possible so yes on one hand to go for sustainability economics is also an important factor and certain incentive also is needed in order to keep in order to make it possible and also then we'll be able to survive in the medium to longer term actually on uh and distance point on the biofuel for example in Thailand the usage of the agricultural products to feel delayed and also help farmers to be able to stabilize the price of the food of their products which is also good for them for the long-term purpose and also so that the subject leads to the volatility of the Agricultural because Industrial Products sometimes price are more stable such an important point in terms of the S of ESG and really the inclusive nature that we need to have in this energy transition is is Farmers and other groups that may not be part of that technical solution but actually can play a role things like feedstocks and the way this can be circular as Anderson and Company talked about as well Manish you talked you were saying some really fascinating things separately earlier about how you influence your suppliers and tell us about that collaboration and how do you bring the whole ecosystem along you know uh you know sustainability is about achieving together and uh it's something that we have to Embark the whole ecosystem and for us uh you know we have to also think Upstream I think taking Anderson's Point uh and this is about how we are able to work with our suppliers so if we have if we are committed to Net Zero by 2050 we need to make sure that our suppliers as well are embarking on that Journey so we have launched what we call as a zero carbon project where we have taken our top 1000 suppliers uh actually a quarter of them are here in in this region and we want to get them on a path of reducing 50 of their carbonate density by 2025. so it's a it's a much more ambitious program because it's taking the top 1000 so we have created a playbook for decarbonization for them we are using uh what we use for for our customers for our suppliers just as we use it for ourselves in our in our facilities and get them spot helping them get into Renewables and to see how they can be on this journey today pleased to see that we are almost at about 18 percent in terms of the journey and we started this program in 2021 so you know we are on the right path we've also extended this program working with some of our customers so we have a energized program which is with the Pharma industry where we are helping their suppliers get on this gigaton is with uh with Walmart the same project for the Walmart and recently we did a catalyze program with Intel and Applied Materials to see how we are able to take it into the semiconductor industry so this this uh this achieved together that working together is something which is very very important and you know we are we are pleased that we can share what we are doing ourselves with our suppliers you mentioned collaboration earlier and you've all talked about that that ecosystem but in terms of one Bangkok and really any of your projects how do you identify the right Partners who are with you in that agenda you have on sustainability even when it may mean greater costs and you need to bring them along you need to influence them the beginning definitely have to be the vision first because of you know everybody can provide technology provide expertise but do they have the like-minded alignment right to sustainability and it it is the portion of of uh what we see that it's not a short journey is a it's a continuous Journey um in in our part phrases set out you know as one of the first real estate listing in single Stock Exchange to set our carbon neutral objective by 2050 and we set our science-based Target the view of that is built into three stage we built to to get ourselves ready to that Target but the stage of making sure we work with all our partners or our tenants or our customer to making sure we are help to meet that Target together it's the most crucial part so we start to want to making sure we engage deeper in in the vision and the outcome beyond the business as well and and once that's done right is actually but Anderson mentioned it's become even more viable because we are looking at the new efficiency we are looking at the more sustainable outcome of our business and end up all this part as as we look at this of of seeing in a border base of what impact us as the world as uh Society our communities that become the objective of the projects that we are doing it's it has to drive it people-centric it had to drive it the smart thinking on Smart cities on Smart Way Estates but the third part is then if you do that right then the sustainability should be there and sustainability Beyond green is is also the knowledge of the process to get there and Anderson similar question uh when we think about the alignment you have to do upstream and downstream with your partners even when economics may not suggest it regulation may not require it how do you how do you work with those Partners to to drive and and really accelerate your agenda mark thank you for the question it's it's fascinating I always believe the saying it's an old African saying to go fast you go alone to go far you have to go together right unfortunately in this climate uh problem that we have we have to go fast and you have to go far so honestly you you take chances uh we form collaborations with our Upstream supply chain working very closely without sourcing uh team with with the farms uh to get them on rspo certification some fail some do not fail but the reality is not doing anything is not the solution so there are certain work streams for example like electrification the LNG facility we're working with Siemens and BC Hydro which is the hydropower plant that supplies us electricity so there's alignment of interest and collaboration come in but there's certain collaborations they're actually almost misaligning of the interest where for example we're pushing out truck suppliers to go towards electrification because we can provide cheap electricity at site but there is still a resistance because internal combustion engine is still the dominant way of producing vehicles for trucks especially for industrial use in certain Supply chains so really what we see right now is actually the companies with no burden some of the Chinese truck companies are a bit more aggressive because they don't have the Legacy supply chain of internal combustion engines so my my perspective on collaboration to push the sustainability conversation because one of the topic is leading with urgency is form collaborations multiple collaborations some things you have to take risk and you really see after a year or two you'll see whether the collaborations work or not and move forward because not doing anything is definitely not the solutions I'd like to close the question you know you all are leaders of very distinct businesses and you've talked about collaboration and Technology but for all of us in the room as you look at the long Horizons what are we not talking about enough what should be part of the conversation that you think is under our noses and we should be talking about more maybe well I I would say that let's do more of what is available today negawatt uh is the best what so energy not consumed is the one that we don't need to produce I think let's do more of that let's do more efficiency other thoughts as we look at the long Horizon what should we be paying attention to other than GPT we're all paying attention I think awareness is quite an important part and so how can we get the people in the society understand more what what what can what is capable of doing and also how to help the people make that transition I think that is a very important part which also means changes in the way that they do business and their daily life and how to make that transition possible to lead to Greater and faster adoption I I viewed being in in what Edison mentioned I I do like of us be able to make sure we're willing to take the bit of risk for the greater good and and you know moving ourselves uh together with the right speed yeah it's definitely a good context that you have to start to take away your animal I'll I'll keep mine very short Mark um I think I think the reality is as we transition their risks but their trade-offs we just have to take some of these trade-offs I mean energy for example we talk about the energy trilemma we would like low emissions energy we would like secure energy and we want low-cost energy there are trade-offs but we have to make decisions and move forward because if we are in the limbo we want low-cost energy we want low emissions energy we want it secure there's no perfect will out there so we just have to make decisions move forward and certain trade-offs you just have to bite the bullet and make decisions so these are not the leader sorry these are not the laggards that Minister Foo talked about earlier let's all accelerate let's all thank our Summit advisors thank you thank you thank you thank you so much hey Joanne hey fuzzy so nice to see you finally I agree yeah we want to create that togetherness into the painting itself [Music] we pour it our two hearts into a canvas now you're part of the family [Music] yeah please welcome to the stage Elena fanjul debnam founder and CEO of Labor Solutions and Laura McGill Global head of sustainability Global Supply Chain at Bata group for a conversation with Bloomberg's Meg Sabo [Music] hello everyone we are here obviously to talk about building an ethical supply chain and labor in particular so we just wanted to start I think picking up on what the last session was just talking about I'd love to ask you both why do you think it is that we don't talk about the s in ESU quite as much as the E yeah thanks Meg what I find is it really has to do with the fact that we don't have the right language and that we're scared of talking about the S and ESG so when we talk about the snesg and I read reports from investors from other people we see such a wide range of things that people are trying to do like they might be endowing a professorship or they might be feeding you know hungry children food but the fact of the matter is is our first responsibility as companies is to our first social responsibility is to the people in our value chain upstream and downstream and um we need to focus on that there's no such thing as Net Zero when it comes to the essence in Social sustainability you can't have forced labor in your supply chain and then offset it with a professorship at Stanford right that doesn't work we actually have to take on these issues and so I think boards and C CEOs need language to talk about how complex this issue is and to break it into pieces and decide where in their value chain whether it's in the Upstream so their supply chain where Laura works or it's in their Downstream in marketing or delivery or even disposal that they need to spend their energy figuring out what to do about people yeah 100 agree with you Elena you know but so it's really about how we Define the s in is it our workers is it the community is it the school teachers that work in our community and really looking at that level also further defining the workers is it the blue collar worker that is in our in-house manufacturing units or is it the office worker or is it somebody uh working more in a global role and really what are their needs and what are their drivers and how they are giving back to the company as well as to the community in which we are operating in before we really sit down and address the E we really need to look at who is the yes and how we are defining the S and Bata is a global organization I know many people think Bata is more local but we we are in 71 different countries with 21 of our own in-house manufacturing units around the world and how we Define the S within our organization does vary by region and even by our operating uh operate writing countries where we're operating because we have to look at the needs that are relevant for that area where we're operating so how we work with a worker in our manufacturing facility in one region or one country may vary because they could be a shortage of water in that area or in another area there could be not enough water so we really have to evaluate the impact that we're having on the worker and then how they extend that out into the community so I'm gonna kick us off next with our first live poll of the day um just a reminder to respond to our live polls you can just scan the QR code on the back of your badge um to put your response there so the first question is what is your company's primary motivator for addressing humans rights human rights issues in your supply chain so the responses for that are is it Financial companies and investors or is it more driven by the new regulations that that are coming from all of the different countries so I will I'll start with you do you have what would you both say your responses well I think this is really exciting time to be in the space because finally Regulators are catching up and so are financial institutions so I've been working in human rights for over a decade now and this is the first year where I'm advising PE firms where I am advising real financial institutions who have power over how do we talk about human rights how do we make sure that we're not only doing value protection but we're also doing value maximizing so how do we go beyond just making sure there's not forced labor but making sure that we're doing good things and part of that is coming from the fact that there are these incredibly big laws that are coming out around the world we kind of divide them into four different types so the ones that have been around for a long time are disclosure laws simply saying that you you just have to say you don't have forced labor in your supply chain um the second one uh is what we see happening in the U.S where Customs and Border control is saying if you have any product that is made by a uyghur um or that might have uyghur within uyghur slave labor within its supply chain then we won't let it in our borders this model is a guilty until proven innocent model so what we see happening is that containers are being stopped at the border pretty randomly and seizing products right until the company can prove that there was no forced labor and not just forced labor but specifically uyghur forced labor in the manufacturing of that product and so let me tell you this is getting board's attentions right when you have millions and millions of dollars of product held up at a port I mean you can't sell it you can't do anything with it they're paying attention the second thing that we see happening is coming out of Europe where we see these new human rights due diligence laws that are basically saying you are responsible as a company to any harm done to humans or the environment within your supply chain in the making of your product these laws are insanely Mammoth right they're very very big they're far-reaching they have lots of different requirements and so this is a more innocent until proven guilty model but we're going to have to see over time what happens with case law and so how people are going to react to it and so right now from my perspective I see most European companies really seized by trying to figure out what these laws mean to them and what how they're going to act and then the final kind of set of laws that we see are the green washing laws so these are laws that are basically saying you can't market and tell people that you're doing education if you're not actually um and so we're seeing this really change the way that people speak about the social sustainability that they have within their within their supply chain and the Dutch are kind of really pushing that one home right now so you might be seeing a lot of headlines around that so the point is is that board rooms are finally paying attention right so I think regulations are are pushing it but financial and investors are kind of reacting to that regulation right because it's not value protection right I can't invest in you if you have forced labor in your supply chain because you're not going to be able to get your product out you're not going to be able to do X Y and Z but absolutely I I definitely um one of the big things a primary motivator is it's what the government is putting out there and what's their the compliance side of it but really what we're trying to do is it's not just about the compliances it used to be about I want to move Beyond compliance and demonstrate continuous Improvement within my Global Supply Chain now it's moving beyond contingent continuous Improvement to demonstrate due diligence so what you have to be compliant to The Regulators now Financial companies and investors want companies public and private to start to raise the bar and practice that due diligence and What mechanisms do they have in place for those due diligence and that's that for many companies is a big ask and we have to face into that that this is coming and really moving forward the boards are asking for it and ultimately the consumers are assuming that that's already happening it's amazing how many uh consumers are not they assume that it's already there that level of due diligence and it's still coming we have to link the the financials in with the sustainability agenda this has been something that has been uh being addressed for the better part of 10 to 15 years we don't need sustainability as a standalone it needs to be incorporated into every activity that an organization a company is doing so let's see what you all think um if we could see our poll results from the poll I can see them before you guys yeah so we are we it looks like at most of you believe Financial companies and investors are really driving the change I am curious if after hearing um the answers if you feel like regulation maybe I I feel like regulation is a big one but to your point I feel like I should have had a both response on here because well you know like I said I've been doing some some advisory work for our PE firms and I've been reading all of these um sustainability reports right and when we look at the E you know there is such an incredible narrative that we see happening across all portfolios right and and many companies everybody's talking about carbon emissions and it's really clear and every famous CEO you know out there has some e-project right so everybody's excited about it um and I think people just we just don't yet have the words to talk about the s in a way that can get boards excited about it and that's why the regulation part is so important because now it's like this is this is the Baseline this is what we expect you know we're not going to have CEOs walking out and being like woohoo we finally don't have forced labor in our supply chain right like that's a probably not something they can ever actually say with full confidence but be definitely not something they want to admit that they haven't been doing um to Laura's point this is something we all expect already happens um so I think it's a combination and it's making sure that we really have good narratives and making sure that we know where is our biggest impact right and for tech companies that's probably going to be in your Downstream and how it's used right how is your product use is that causing harm for apparel and Footwear and electronics companies that's really going to be around who's making your product where did your product come from what materials were used in getting that product right we know Cobalt is a huge issue right a huge risk point and so these regulations are now saying it doesn't matter if you don't know you have to do something about it you have to be responsible for your actions so I think this is an exciting time to be in the industry yeah absolutely and part of the value chain is when you look down a the downstream at the manufacturing side at Bata where also a manufacturer but we're also a brand retailer we we have our own stores around the world and it's also how we're looking at the value stream Upstream you know it's how we're working with our Logistics Partners how do we get that product from a manufacturing facility to poor from poor of Landing to the retail stores right all of that that s in the middle as well is is definitely important in that impact of that s on the environment is equally important we have to keep this in in mind that uh the person that is driving the truck uh you know are are they using an engine or an electrical vehicle as we heard in the last session you know we also have they're the one who either can make that decision and make that impact whether they're a freelancer or a part of a company and they can impact that so it's not only just Downstream but it's also Upstream in our value stream yeah I think it's yeah the question we're asking is is everyone in your Valley train treat it with fairness and respect yeah and that starts at home right you can't look at your suppliers and say you need to treat your employees better if you aren't looking inwardly first right and you aren't so it's in the same way that we're using the examples in carbon or in the environmental side to say look what we're doing we have to do the same thing when it comes to employment right when it comes to who who are our workers how are we treating them what is fairness what is respect do they have overtime right are they paid fairly are they paid competitively you know what what are the things that we're thinking about to make sure we're not causing harms to humans so that leads me kind of to obviously the regulations and the financial impact of where this the change is starting to come from data is the important piece collecting the data and starting to have measurable data and I know that that as you mentioned just because we don't have the same kind of metrics to measure in the east side it can be a little bit more difficult um Laura why don't we start with you I know where are you really on this data collection journey in response to the regulations and the financial impact so basa were 100 year old plus company we have loads of data where we are in the journey is how do we take the data points and Link them in together and make that data readable and usable I think many of us in our roles many companies reading data and understanding data is a completely new skill set that possibly didn't exist 20 15 years ago as it does today so we're very much at taking the data that we have and how do we use that how do we read that how do we take that to make an impact how do we use that financial data how do we use our Labor Statistics and our labor data very much around how we're working in the voices of our workers whether they're coming at different stages of our own values change or our supplier value change uh we're measuring things are related to labor standards working conditions we're looking at things like energy water and waste waste waste water as well as in there we're measuring our chemical use we're measuring and when we review those as well where I trying to identify where we can improve where we can maybe take something out and substitute it to me a practice or a tangible like for example a chemical or a material substitute it with something that will have a better impact for the environment and measure that and we really tend to not go from zero to 100 overnight I think many companies prefer to start small and grow and that's really the approach that we're taking that we start small we learn from that from that experience and then we look to bring that out globally for a bigger impact and for you where um you obviously are working with clients and companies to help them figure out how to start their data Journey what what's kind of the first steps that you take with a company yeah so again I think first it starts with thinking about what data you want to collect and how is that important and I think the scale that we're talking about is so big right we're talking about in some you know if you look at Pepsi supply chain right Pepsi has I think they impact something like 800 000 people right like so how are we how are we breaking this data down in tangible pieces that we can make change and actually know where the problems are and so what we do with companies is we first talk about our own responsibility and then empowering our suppliers throughout the supply chain to take responsibility for their employees as well and what we want to make sure that is happening is that there are systems so we're not out there looking and making sure and seeing if there are issues so for example my assumption is that there's sexual harassment happening in almost every company in the world right the problem is in the sexual harassment the problem is do we have the system to catch it to remediate it and to make change based on you know when we find out that it happens right do we do people do workers have voices to do that and so what we do is we help companies first break it down and then second work with workers to listen to workers to understand what problems they're facing and if they feel like their company is responsive to those problems so I think you know one of the biggest numbers that we use throughout everything we do is an emps an employee net promoters for would you recommend this as a place of work to a friend or family member so to me that's a really comparable number it's great it works in like so many different kinds of contexts that we can we can we can use that number to tell our workers being treated with fairness right yes they may have a complaint but do they trust and believe that that complaint is going to be addressed that's what we care about and so we help companies you know big consumer Brands go to their suppliers make sure that their suppliers have all of the correct Human Resources tools to ensure that their workers are able to do these things and then we collect emps we collect make sure all workers have been educated about their rights and responsibilities we make sure workers have access to agreements mechanisms we ask questions like do you feel safe at work these are really great questions to help us understand what the worker experience is and if there are risks that maybe we don't see because a lot of these things that are happening that are bad are kind of not necessarily out in the open right they may be happening behind closed doors or they may not be like an audit isn't going to find some of these issues audits look for things that happened in the past right they they aren't very good at predictive things so we're helping companies by collecting data speaking with workers directly and then making sure that we segment that data based on suppliers and where it falls within your supply chain so that we know where the risks are and we know how to help them and improve it long term yeah absolutely I I 100 you know listening to the workers and when you mention Elena around uh you know uh audits are looking at what's happening it's a bit reactive and you know we want to be a lot more predictive in that and how do we become a bit more proactive and workers who are doing those jobs every single day they do have a vision in a direction of what they're working on and how they want to see it go forward yeah absolutely and whether it be related to grievance mechanisms and on how to improve a grievance mechanism or you know different ideas on how to uh bring camaraderie around the workforce or to unify people around even worker safety but one of the some of the best initiatives and also to tie the s to the E is some of the best initiatives within Bata are coming from our our workers in our own supply chain uh and you know what we have a years ago we a couple of years ago we had a production engineer Say Hey I want to do solar I'm I'm responsible for all the electricity in this facility and I want to do solar and guess what that project today is very successful and that solar power we now feed back into the grid and this is it's not it's also about forced labor it's also about listening to the worker when you listen to your worker you also can tie things into other areas such as the E yeah I mean and that's a fact right we've seen I mean I don't need to sit here and tell you this right I'm sure you guys know higher emps's have bigger Returns on your bottom line right we know that when we listen to workers that we they're more likely to they're more productive they're less likely to be absent they're more likely to deal with their health issues they're more likely to be collaborative right so it's yes the first place is dignity of work right protection of Rights but then once we do that we can go to engagement right we can go to Value add how do we leverage our workers to make our companies even better than what we imagine right how do we use our workers as part of our systems of innovation absolutely and and that ultimately is you know think about it for I'm sure many people in this room work is where you spend most of your time right and so you want to be happy there you want to feel like if you're not being treated with respect and kindness or engagement man what a not a great you know life to live wait what it's it's a horrible existence and so I think paying attention to that is really important um to solving this problem and to increasing your bottom line ultimately I'm gonna work in a couple of since we're getting to the end of ourselves already Man Too Fast um I wanted to just ask a couple of audience questions and then we I have one last question for myself um do you make your ESD Jada data public and available for your investors this is a great question and ironically I just had this conversation last week so this is something we are gathering we do make the data available so uh at Bata we are not publicly listed um on every stock on multiple Stock Exchange we are publicly listed um on a few of the Asian Stock Exchange uh where we do at this stage provide that Stock Exchange and those investors that data we are working internally as I mentioned earlier to synthesize that and to bring things forward and that's really I've been at Bataan for just over a year now and that's been a big part of the last 12 almost 13 months of my job is to understand what's there and then now let's use it and let's start to communicate it and let's start to use it for predicting and driving things forward for an impact so a question Playing devil's advocate here they say at the end of the day the higher cost of any sustainability initiatives are they passed down to the consumers what do you think yes and no I mean that's why it's really important that we have regulations involved right regulations level the playing field if nobody can have forced labor in their supply chain then all prices are rising right it's the same competitive market so I don't you know I think that's definitely part of it but again as we said like almost all of the work that we do around human rights we can also show that it increases your bottom line yes at the end of the day probably if you don't pay people to work then it probably is cheaper for you long term um you know but is that the right thing to do right isn't that is that the only thing that you can do uh and and we see that when we do start to pay people and we start to engage them that there are other benefits that happen to our company any thoughts to add on that one no not really it's definitely a line with Elena you know we where you're definitely going to see everything is going to be in the bottom line uh of course you have to make some investment up front before you start to see that in the bottom line which you need to start to streamline your employees and ask under ask start to collect that data and read it and understand what it means so I absolutely agree great so my last question to you both is talking going back to the regulation and the data piece all combined I just there are so many different regulations that are in that ask for so many different things how like what do you for these companies in this audience what do you recommend that they start and where can they start on their their journey to try to address all of these new challenges coming from the regulatory Market yeah I think number one first and foremost almost all of these laws are actually based on the you and guiding principles for business and human rights so get educated right they're all based on the same core principles and so you know I think first and foremost is educating yourself your team and your suppliers and that's a really easy low bar to do right the second thing is to at the very minimum set up agreements mechanism for workers within your entire supply chain right you they have to have a way to talk to you now I can talk for ages about what doesn't work about grievance mechanisms but it is a baseline you have to do it it is is the non-negotiable um so I think those are the two places to get started and then I think start thinking about how your human resources and what you know as a Human Resources company or what your Human Resources team is doing how can that help your suppliers right what can you do um and then finally I think you're going to have to focus right you have to focus your supply chain is so big upstream and downstream and everything so where do you have the most impact where is your biggest impact and that's really where you should put the most energy yeah absolutely uh absolutely and just to add to that one of the other things too is you have to have Partnerships external Partnerships multi-stakeholder Partnerships whether it be with a bilateral organizations ngos local community organizations this is uh these are very important uh especially when you when you're working with your workers and they're raising something that they either want to do or a grievance how you react to that it's not about knowing everything 100 internally yourself within your organization but really through those Partnerships and those organizations that have a charter house rules uh uh type of approach really can help you bring everything together and also help you to understand where you are in your journey and how you are comparing to other people because uh some competition can also to be healthy yeah you can't do it alone and there's experts that have been working on this for a really long time and have learned a lot about it so ask ask for help yep absolutely well Elena Laura thank you so much I feel like I feel that I've always thought that s is a very hard to measure area but I feel like there's data that's starting to come towards it so it makes it a lot a lot better to understand so thank you best wraps our morning block of programming um it is now time for lunch you can join us and grab lunch right outside and then at 1 15 in this back in this room we will be doing our facilitated networking so you will be able to connect on some of the topics that will have three different topics with three different Bloomberg moderators that are available the word sustainability seems to be on everyone's lips climate change water and energy crises economic and social upheaval it's overwhelming back on okay so the three topics and speakers that were on the screen behind me uh will be we'll kind of have some signs around that you can find so I'll be back on stage at 1 15 to just direct you for how we'll be operating those facilitated networking sessions but first just enjoy some lunch and we will be back here at 2PM for our main stage programming with the CEO of bamboo thank you so much thank you [Music] foreign [Music] [Music] foreign [Music] [Music] [Music] [Music] foreign [Music]

Channel: Bloomberg Live

Views: 80,781

Keywords: bloomberg, bloomberg live, technology, superbowl

Id: lHxX-nhieVI

Length: 203min 13sec (12193 seconds)

Published: Wed Jul 26 2023