Sustainable Business Summit: Day 1
December 8, 2021
The Bloomberg Sustainable Business Summits bring together business leaders and investors globally who drive innovation and scale best practices in sustainable business and finance.
Reaching the tipping point of consumer and investor demand for sustainability is accelerating the innovation and scale needed for net zero, as panelists expressed optimism, called for regulations to continue the push, cautioned against missing global diversity that requires flexibility and offered sage advice for investors seeking profitable and responsible portfolios.
Hosted in conjunction with Bloomberg’s Fourth Annual Sustainable Finance Week, our final summit of the year provided key examples of how companies and investors are making the financial case for sustainability.
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- Darius Adamczyk, Chairman & CEO, Honeywell
- Greg Belt, Founder & CEO, EverGrain
- Robert M. Blue, Chair, President & CEO, Dominion Energy
- Rebecca Boon, Partner, New York, Bernstein Litowitz Berger & Grossmann LLP
- Suzanne DiBianca, Chief Impact Officer & Executive Vice President, Corporate Relations Salesforce
- Farshad Family, Lead, Salesforce Business Group, North America, Accenture
- David Gessler, Vice President, Procurement & Commodity Management, Flex
- Sarika Goel, Global Head of Sustainable Investment Research, Mercer
- Andrew Lee, Global Head of Sustainable & Impact Investing, Chief Investment Office, UBS Global Wealth Management
- Liana Magner, Executive Vice President & Head of Retirement & Institutional, U.S., Natixis Investment Managers
- Mads Nipper, Group President & CEO, Ørsted
- Bernardo Novick, Managing Partner & Head, ZX Ventures
- Sanda Ojiambo, CEO & Executive Director, United Nations Global Compact
- Michael O’Leary, Managing Director, Engine No. 1
- Jens Peers, CEO & Chief Investment Officer, Mirova US
- Connor Teskey, CEO Renewable Power & Co-Head of Transition Investing, Brookfield
- Paul Washington, Executive Director, ESG Center, The Conference Board
- Mary Wenzel, EVP, Head of Sustainability & ESG Integration, Wells Fargo & Company
- Kyra Whitten, Vice President, Sustainability & President, Flex Foundation, Flex
- Rob Du Boff, ESG Analyst, Bloomberg Intelligence
- Katie Greifeld, Reporter, Bloomberg News & Anchor, Bloomberg Quicktake
- Lauren Kiel, General Manager, Bloomberg Green
- Francine Laqua, Editor-At-Large & Anchor, Bloomberg TV
- Kailey Leinz, Anchor, Bloomberg TV
- Carol Massar, Anchor, Bloomberg Businessweek TV & Radio
- Jess Shankleman, Reporter, Bloomberg Green
- Alix Steel, Anchor, Bloomberg TV
- Meg Szabo, Senior Editor, Bloomberg Green & Sustainability Events
- Renita Young, Host & Broadcast Correspondent, Bloomberg Quicktake, Radio & TV
Driving Sustainable Development in the Private Sector
“We here, we’re ready, we have the ambition, we want to contribute,” is the message from the private sector global leaders need to hear, according to Sanda Ojiambo, CEO & Executive Director, United Nations Global Compact. “But governments need to lay the groundwork.” The compact is moving the needle on sustainability with accountability, Ojiambo said. It’s 14,000 member companies are asked to adhere to 10 principles of a responsible and resilient business, not philanthropically, but embedded in operations. Those who don’t, indicated by tracking, are asked to step away, with the potential to rejoin after remediation. Ojiambo said moving forward means properly positioning the trillions of dollars in climate crisis funding for a holistic world approach, including Covid-19 vaccine access for everyone.
The Future of Impact Investing
Connor Teskey, CEO Renewable Power & Co-Head of Transition Investing, Brookfield said what some call the “war on coal,” is really “coal’s war on health.” Brookfield currently has $60 billion in assets on five continents, across all major technologies. Teskey said technology assures the reliability of renewable power sources, and already-consistent energy production will improve as the cost of storage drops.
As much as $150 trillion needs to be invested in the net zero transition. “Private markets can absolutely support that. I expect the money to show up in spades.” His company’s global transition fund supports an incremental buildout of renewable power to zero carbon energy capacity globally and is helping businesses with their transformations. Hydrogen is the next big opportunity, he said, with production costs trending down.
Salesforce and Accenture Advisory Board Spotlight: Embed Sustainability Into the Core of Your Business
Suzanne DiBianca, Chief Impact Officer & Executive Vice President, Corporate Relations Salesforce and Farshad Family, Lead, Salesforce Business Group, North America, Accenture spoke about finding common values and partnering to provide sustainability solutions, propelled by employee, customer and investor demand. The results are evident in work that includes providing Mastercard with Scope 3 analytics that shortened comprehensive reporting from two months to two weeks, Family said. DiBianca noted Salesforce has already hit net zero and said the key is to overcome the big challenge of carbon data management and employ a strong ESG reporting framework.
In Conversation with Mads Nipper
Mads Nipper is Group President & CEO, Ørsted, one of seven companies, globally, to have its net zero commitments validated by the Science-based Targets Initiative. He spoke of transforming the world’s energy systems, including time-consuming struggles for land, seabeds and permissions for off-shore wind farms. Nipper termed it a leadership challenge, that needs to avoid holding up “trillions of dollars ready to be plowed into investments.” “My top priority for 2022 is to ensure that we keep full speed on proving to the world that the rollout of renewable energy can happen faster than we think.”
Preparing for Proxy Season
Takeaways from this season included the analogy of ESG as a wave, but not temporary, according to Paul Washington, Executive Director, ESG Center, The Conference Board. He described a new alignment between mainstream investors and activists, with them joining forces to influence.
“We’re seeing investors pushing for positive social change, for the first time,” added Rebecca Boon, Partner, New York, Bernstein Litowitz Berger & Grossmann LLP. “Size doesn’t matter. Even tiny activists are having success.”
Michael O’Leary, Managing Director, Engine No. 1, said investors are starting to understand what his company is built on, that “environmental issues are financial issues.” O’Leary said, “Climate is becoming a Big Ten issue for investors, and the largest investment managers are driving success.”
Boon said next year looks like an opportunity for real progress on social issues. using as an example Microsoft shareholders recent vote to compel a transparency report. O’Leary predicts mandatory disclosure requirements on carbon emissions, and more. Washington sees investors and companies on a collision course, and although he agrees on mandates, proxy season will still be a “Wild West.”
Wells Fargo Advisory Board Spotlight: Advancing Net Zero Through Sustainable Finance
For Wells Fargo & Company, net zero goals include using its size to influence, according to Mary Wenzel, EVP, Head of Sustainability & ESG Integration. “We’re working across the enterprise to really be a leading voice on addressing climate change, and for sustainability to be part of the culture of our company.” Wenzel spoke about the company’s new Institute of Sustainable Finance, using philanthropy to catalyze a focus on climate solutions, and of focusing on client journeys, recognizing that many are just getting started, “but are certainly aware of the conversation and thinking about ESG and sustainability as a value creation opportunity.”
Empowering Transformation Through Technology
“This is the year demand is not our problem,” said Darius Adamczyk, Chairman & CEO, Honeywell, of the strong markets around sustainable solutions. Demand is high for green jet fuel, diesel, plastic recycling, and more, as “customers look to remake themselves.” Since 2018, the trend for sustainable products has been not linear, but exponential, Adamczyk said, as “all countries began addressing net zero goals.”
While hydrogen is the buzz right now, the more than 300 projects underway are long term, he said, reflecting costs and difficulties to overcome. He suggested opting first for what’s at hand. “For the most part, most of the sustainability technologies are out there, and we know how to do it.” He spoke about Honeywell’s “local for local” supply chain philosophy and that up to 90-percent of their current work is in retrofitting existing buildings for efficiency and safety.
Flex Advisory Board Spotlight: Redefining Partnerships to Accelerate Sustainability Across the Value Chain
The big value chain picture is what is needed to make progress on sustainability, said David Gessler, Vice President, Procurement & Commodity Management, Flex who said there was much to learn from working on supply issues during the pandemic.
Kyra Whitten, Vice President, Sustainability & President, Flex Foundation, Flex said that as a contract manufacturer, the company is an extension of the customers supply chain and their operations. “There has been a dramatic increase in demand for information, driven by a conscious behavioral shift to sustainability.” Working with companies on Scope 3 challenges requires remembering that “everyone is in a different place in their journey. It’s important to listen and determine that when providing solutions,” Whitten said. Gessler said Flex is ahead of its sustainability schedule because they first took the time to understand and educate.
Unlocking Innovation Through Corporate Venture Capital
Moving the needle forward in the food and beverage sector is another partnership based on shared values. Bernardo Novick, Managing Partner & Head, ZX Ventures said the goal six years ago was to find new areas of growth. Last year, they reached $1 billion in revenues, investing in ventures such as cold beer delivery and ecommerce like Beer Hawk. Among them is EverGrain. Founder & CEO Greg Belt talked about “the golden remainder,” the nutrient-rich byproduct of beer brewing they use to make products such as meat alternatives and plant-based milk. A goal is to solve food security issues and reduce food chain impacts. “Our products have greenhouse gas emissions equivalent to 10-percent traditional food production,” Belt said.
The Community Conscious Energy Future
About 15 years ago, about half of Dominion Energy’s electricity came from coal-fired plants, compared to 10-percent now, with about 35-percent from nuclear and emission-free sources, said Robert M. Blue, Chair, President & CEO. By 2025, they expect to be coal-free. He spoke about finding a balance, using natural gas to pick up the slack of wind and solar to “keep the lights on.” Underway is a $10B wind project 27 miles off the Virginia coast. “We’re the only ones in federal water off the U.S. coast,” Two, 6-megawatt turbines have been producing better than predicted for more than a year. By 2026, they will be joined by 174, 14-megawatt turbines that will provide power to 660,00 homes. While the project will feel the pressure of inflation, Blue said additional costs are projected to be offset by the bonus production. He spoke also to the critical need to expedite permitting in such projects, retraining their labor force, the power tragedy in Texas, and pilot hydrogen/methane blend projects.
Getting to Net Zero
Liana Magner, Executive Vice President & Head of Retirement & Institutional, U.S., Natixis Investment Managers spoke of seeing firsthand the shift to sustainability in investing and innovation, with relevant funds now part of more than 250 retirement plans in the U.S. “ESG is now integral to sound investing,” Magner said.
Financing the Net Zero Journey
Key takeaways from COP26 for Jens Peers, CEO & Chief Investment Officer, Mirova US, was that all major economies are now committed and setting targets, with the private sector showing up with the more ambitious ones, a deforestation pledge and the U.S. and China willing to work together. “It’s crunch time,” said Andrew Lee, Global Head of Sustainable & Impact Investing, Chief Investment Office, UBS Global Wealth Management. He is looking for closing the action gaps going into the next COP. They discussed the $50 trillion needed to avert a climate catastrophe, and about not missing the big picture. Solution providers and those with mediation plans need to be in portfolios, Lee said, “while keeping an eye on what’s happening in the world. The social cost will be high.” Peers said an environmental portfolio requires a road map, but said, “Don’t let a search for perfection be a roadblock.”
In Conversation with Sarika Goel
Sarika Goel, Global Head of Sustainable Investment Research, Mercer offered first-step advice when aligning portfolios to net zero. “A good strong transition plan sets the scene out to 2050, she said, urging taking a holistic approach. She spoke about benchmarking and looking for companies with authentic goals, targeted outcomes and those that leverage initiatives and frameworks. “They should have a strong stewardship for change,” Goel said. “Investor engagement is absolutely essential.”
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