Sustainable Business Summit | London
March 31, 2022
By Bloomberg Live
The Bloomberg Sustainable Business Summit in London brought together CEOs, thought leaders, business people and politicians to discuss the urgency and concrete plans for reaching a sustainable future.
Expert speakers discussed the challenges, benefits and complexities of ensuring energy efficiency, economic stability and human well-being. The time is right for stakeholders to join forces, diversify energy sources and head onward to a greener, more sustainable future.
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- Richard Batten, Chief Sustainability Officer, JLL
- Julie Brown, Chief Operating & Financial Officer, Burberry; Audit Chair, Roche
- Emma Champion, Head of Regional Energy Transitions, BloombergNEF
- Charlotte Degot, Managing Director & Partner, BCG; Founder & Global Leader, CO2 AI by BCG
- Claire Dorrian, Head of Sustainable Finance, Capital Markets, London Stock Exchange Group
- Rachael Everard, Head of Sustainability, Rolls-Royce plc
- Emmanuel Faber, Chair, International Sustainability Standards Board
- Elizabeth Fernando, Deputy Chief Investment Officer, Nest
- Dexter Galvin, Global Director of Corporations & Supply Chains, CDP
- Mark Kenber, Co-Executive Director, External Affairs, Voluntary Carbon Markets Integrity Initiative
- Sadiq Khan, Mayor of London; Chair, C40 Cities Climate Leadership Group
- Simi Lindgren, Founder & CEO, Yuty
- Sherry Madera, Senior Vice President, Public Policy & Government Affairs, Mastercard
- Elizabeth Nyeko, Founder & CEO, Modularity Grid
- Ariel Perez, Managing Partner, Vertree
- Joseph Pinto, Head of Distribution Europe, LATAM, Middle East & Asia, Natixis Investment Managers
- Marc Romano, Head of Impact Private Equity, Mirova
- Sandrine Sommer, Chief Sustainability Officer, Moët Hennessy
- Anna Stanley, Director, Climate Action, WBCSD
- Mark van Baal, Founder, Follow This
- Nathalie Wallace, Global Head of Sustainable Investing, Natixis Investment Managers
- Nat Whalley, CEO & Co-Founder, Organise
- Lizzy Burden, Reporter, Bloomberg
- Anna Edwards, Anchor, Bloomberg TV
- Lauren Kiel, General Manager, Bloomberg Green
- Francine Lacqua, Editor-At-Large & Anchor, Bloomberg TV
- Alastair Marsh, Reporter, Bloomberg
- Akshat Rathi, Reporter, Bloomberg Green
- Aaron Rutkoff, Executive Editor, Bloomberg Green
- Meg Szabo, Senior Editor, Bloomberg Green & Sustainability Events
Building an Inclusive Climate Future
The conversation started with Simi Lindgren, Founder & CEO of Yuty, discussing the sustainability issues the beauty industry is trying to tackle. Sustainability of the supply chain is a vital matter, Lindgren replied, saying that as a consumer, she struggled to find companies that transparently disclosed their ethical sources of ingredients.
“It’s so incredibly difficult for consumers these days, and there’s more than 64% of them than want to shop sustainably, that cannot, because there’s so much fragmentation in that buying journey,” Lindgren added.
Yuty wanted to make it easy for the consumers so they don’t have to research all the data while also using AI to match customers with products “in a real way.” Over 50 percent of the $3.3 billion worth of “beauty essentials” products bought during the pandemic were thrown away, Simi pointed out, creating massive waste.
Elizabeth Nyeko, Founder & CEO of Modularity Grid, stressed the need for proper risk assessment in the industry. “Where we come in is adding the what we call the Intelligent Observability Layer to the renewable assets so as you’re deploying these assets, we add that layer of sensors with software, provide a single dashboard that allows people to access engineering data and get actionable data,” she added.
Lindgren and Nyeko then reflected on their life voyages from joining med schools to becoming CEOs of tech startups, showcasing unusual yet successful business journeys.
Lindgren added that her company’s dream is to become the “Amazon of beauty” and help consumers find their ideal beauty products, similar to how Alexa assists millions worldwide in various decisions.
Asked if getting funding was difficult since they are black females, Lindgren said she acquired funds after extensive research, stressing the one VC she reached out to recognized the potential of Yuty and has remained supportive ever since.
“It is obviously challenging, especially challenging for founders who happen to be black and females, especially in the UK,” Nyeko chimed in, saying her journey was more from a tech angle, praising grants as a “brilliant way to get funded.”
“I got a grant, initially from the University,” Nyeko said, adding, “And what I find great about grants is the way they assess them. It’s all about your technical skills and what you can offer as real, tangible skills.”
Natixis Investment Managers Advisory Board Spotlight: Why a Sustainable Future Needs Active Investors
The conversation commenced with Joseph Pinto, Head of Distribution Europe, LATAM, Middle East & Asia at Natixis Investment Managers, discussing his approach to ESG investing and how he presents the concept to clients. “It always starts with a conversation with clients,” Pinto said, adding that these lengthy discussions always come down to two topics. The first one is identifying the client’s ESG preference, which “requires a long discussion,” and then the second topic revolves around the risk of entering the space.
Nathalie Wallace, Global Head of Sustainable Investing at Natixis Investment Managers, joined the conversation with a discussion on the impact of the Ukraine war on the ESG investing space.
Wallace called the war a “humanitarian crisis” and a “wake-up call that democratic values should be preserved.”
“We expect to see acceleration of investments in the transition,” she said, identifying three pre-war factors for the energy transition: regulation, consumer demand, and technological advances.
“Now there is a fourth element to that,” Wallace added, “which is energy security and independence. We expect an acceleration of investments into renewable energy and renewable solutions.”
Asked why active investors are needed in the space, Wallace said active investing is “the best way to make a change. We need to engage with companies in our portfolio to reduce carbon footprint overall. So active engagement is key.”
Wallace and Pinto agreed that transparency is vital for the whole industry as a method of risk protection.
In terms of the future, Wallace said the industry is under heavy scrutiny, expecting more transparency in years to come. “All sophisticated investors have understood it,” Pinto concluded, saying client education is vital.
BNEF Outlook: Europe’s Path to a Net-Zero Economy
During a 15-minute presentation, Emma Champion, Head of Regional Energy Transitions at BloombergNEF, discussed Europe’s journey towards renewable energy and the impact of the ongoing energy crisis.
From the get-go, Champion pointed out that the economics are already driving Europe’s transition towards electricity generation, showcasing an evident rise of renewables along with the use of electric vehicles. However, she also noted that we still have work to do to gap that bridge to net-zero and cut down CO2 emissions.
As the two critical solutions, she singled out electrification and green hydrogen. “We must accelerate our clean energy transition.”
Champion went on to add that while wind, solar, and battery storage dominate the current green climate, Europe must focus on finding clean backup capacity as the energy needs rise.
Noting that “the progress begins to stagnate” around 2035 under the current model, Champion pointed out, “we need something else to provide power to the grid during lulls of wind and solar output.
Focusing on green hydrogen, Champion said that a smoother transition is possible, although assets must be ready. “Almost every single new gas power plant that we’re building would need to be hydrogen compatible, and conversion of the existing power plants may also need to be considered,” she said.
Champion wrapped up her presentation by stressing that land is vital when transitioning to renewables. We would require up to 3% of all European landmass, or some 140,000 sq km, to fully make the switch. At the moment, 0.2% of the land is utilized for onshore renewables.
“This isn’t an impossible task, but it is really important that we consider how we approach permitting bottlenecks, how we approach public acceptance of renewables as we progress,” she said.
Champion concluded that we are looking at a $5.3 trillion investment opportunity in the coming three decades.
In Conversation With Sadiq Khan
The conversation with Sadiq Khan, Mayor of London and Chair of the C40 Cities Climate Leadership Group, kicked off with a discussion on the current energy crisis caused by Russia’s war in Ukraine.
Asked if the war delays our progress towards renewables or makes us double down on efforts to go green, Khan replied: “I think there’s a number of responses to what’s happening in Ukraine with Putin’s barbaric aggression.”
Khan explained that on the one hand, the aggression gives us a “clean pass” to do more exploration of gas and oil, while on the other, the war “accelerates the speed at which we get to renewables.”
The mayor stressed the importance of energy security, adding that “you can’t have a situation” like in Germany, which is “going cap in hand” to Russia, or like the UK going to Saudi Arabia for more carbons.
“It is a wake-up call for those of us in the global north,” Khan stressed.
Asked how realistic his targets are in terms of improving insulation across London and making the city more energy-efficient, Khan said that the carbon emissions could be divided into three categories: transportation, workplaces, and homes.
“We’ve got a big issue retro-fitting buildings” to the new energy-efficiency models, Khan said, adding he expects the public and private sectors to collaborate and reach the end goal.
A number of funds were set up to assist the private sector, the mayor said, adding the projects will create a wide variety of new job opportunities. He also said the incentives should start with the landlords.
Switching the discussion to the transportation department, the mayor was asked what the city’s public transport should look like in the coming years.
Khan explained how his party had turned environmental problems into a “now” issue by highlighting their health consequences.
“We know toxic air leads to premature deaths,” Khan said, saying he’s quite pleased the projects led Londoners to put more pressure on politicians about the environmental issues.
Asked about the impact of the pandemic and whether Covid-19 made London more “radical” towards addressing air pollution. Khan replied:
“I think it was Churchill who maybe had said, ‘Never waste a good crisis.’” The mayor said the pandemic drove more people to cycle and walk, driving the city to create more cycling lanes and widen the sidewalks.
Later in the conversation, Khan pointed out: “For me, the issue of climate justice is an issue of social justice and racial justice.” Khan explained that the communities least likely to own a car suffer the most from the consequences of poor air quality caused by vehicles, which are typically minorities.
Investing in Climate Adaptation
The conversation with Elizabeth Fernando, Deputy Chief Investment Officer at Nest, and Marc Romano, Head of Impact Private Equity at Mirova, focused on climate adaptation from an investor perspective and a market perspective.
“To serve the challenge we all have, innovation is a co-part of the solution,” Romano said, stressing the importance of selecting the appropriate companies to deal with various issues.
“We are trying to tilt towards companies who we think are well-positioned for the transition, and we tilt away from the companies who we think have stranded assets,” Fernando chimed in, stressing the importance of applying standards equally across portfolios.
Fernando pointed out that change is vital to the approach instead of focusing on mere numbers in portfolios. Romano agreed with London Mayor Sadiq Khan’s recent remarks that environmental issues were turned into a pressing affair rather than a question that future generations should address.
Asked if physical climate risk “necessitates a new way of looking at companies,” Fernando replied that it “increases the importance of understanding where your firm’s operations are so you know when to react.”
Romano then explained how back in the ’50s, the financial return was the only level of consideration for investors. Risk analysis was invented in the late ’60s, driving investors to look at risk and return and analyze the data.
Fernando said she “completely agrees” with Romano’s assessment. She added that it’s paramount that investors place themselves on “the right side” of any big wave before it hits.
Fernando concluded on the subject: “People like the idea of adapting to climate change, and they agree with the transition plan, but when they see it might cost them money, they turn to be less thrilled about it. I think it’s up to the government to try and show what’s in it for other people and support that transition so it genuinely can happen, and there will be great opportunities for investors to support that.”
The Scope 3 Challenge
Anna Stanley, Director of Climate Action at WBCSD, commenced the conversation by explaining the three scopes of emissions a company can make. Stanley noted that Scope 1 encompasses the emissions “under the direct influence of the company,” listing emissions from a company’s vehicle fleet as an example. Scope 2 includes indirect emissions like energy a business buys to be used during operation, while Scope 3 consists of emissions in the supply chain. Focusing on the third type, Stanley divided the third scope into Corporate Scope 3 and Lifecycle Emissions.
Sherry Madera, Senior Vice President, Public Policy & Government Affairs at Mastercard, said her company is a valid example for Scope 3 discussion as 70% of MasterCard’s emissions fall within this category.
Focusing on Mastercard’s efforts in dealing with Scope 3, Madera stressed the company “really, really” pushes every segment of the company’s supply chain to disclose.
Switching to Richard Batten, Chief Sustainability Officer at JLL, said he “hates to say it,” but close to 99% of his company’s emissions fall under Scope 3.
“These are the properties that we maintain on behalf of our clients,” Batten said, adding the company had pledged to cut down emissions from its real estate and also contribute to its clients going eco-friendly.
Rachael Everard, Head of Sustainability at Rolls-Royce, marked a “heavy-weight” in Scope 3 emissions, noted that 99% of the company’s emissions fall under the third category. Evarard noted that Rolls-Royce is committed to reaching net-zero carbon emissions by 2050 but also “incredibly reliant” on everyone in the production chain to help them get there.
Everard continued by discussing the longevity of the company’s products, as many of their engines built today will last until 2050 and beyond. She pointed out that the company must, therefore, already consider adapting and even withdrawing some of the earlier models if clients are interested.
Evarard concluded the segment by stressing that flying is undoubtedly highly beneficial to the world, but we need to “find a way to remove its carbon footprint.”
Returning to Stanley, she stressed the importance of setting clear rules to help organizations understand and become accountable for their emissions.
Asked how Mastercard handles its emission measurements, Madera said disclosing emissions is only a part of the approach, adding that there are many ways to implement sustainability into the company’s offerings. “There are gaps and holes here,” Madera said, adding that a company like Mastercard is dedicated to defining its Scope 3 emissions but also bringing thought leaders in the field to its ranks. “Those building blocks of data are essential,” she concluded.
Everard pointed out that investors of all sizes shifted their approach to Rolls-Royce in the past two years, with many of them asking about the company’s carbon footprint and sustainability. “We’ve seen a real shift, and the conversation is really maturing,” she said.
Batten agreed with Everard‘s assessment, saying that many investors are “trying to put obligations on us” regarding sustainability and turning to eco-activism.
In Conversation With Julie Brown
Julie Brown, Chief Operating & Financial Officer at Burberry, discussed the sustainability aspect of the fashion world. Asked about the fashion brands becoming more conscious in recent years about their carbon imprint, Brown replied: “It’s been a challenge, but I think what’s important is that everybody has come together to realize the importance of the planet.”
Brown continued by saying success can only come by broadening the focus across every industry involved in the fashion process. “We’re involved with a number of organizations that are pursuing that level of interest,” she pointed out.
She said Burberry now has a genuine strong desire to become an industry leader in sustainability. “Within fashion, the luxury brands have a golden opportunity – because their products have longevity and their supply chains are very well established,” Brown said, adding, “They’ve got a golden opportunity to lead the industry.”
Burberry has officially taken a stance that they want to become climate-positive by 2040, Brown pointed out.
Focusing on the more current goals, Brown singled out the need for measuring and transparency, saying “the world has woken up” to keep the Earth clean.
Shifting the focus on the entire industry, she summed up her thoughts by saying: “We’re fashion companies, we compete on product, and we compete on customer service, but we should never compete on the planet; we should work together on the planet.”
Asked if the possibility of the ongoing energy crisis distracting the industry’s work on sustainability worries her, Brown replied: “In some ways, it makes it more important because you’ve got the social conscious, the environmental conscious, as well as the humanitarian conscious.”
Brown then drew a parallel with the Covid-19 pandemic. She said the pandemic also initially got companies worried about surviving the crisis, but many “quickly pivoted towards, ‘How do we make ourselves stronger? How do we make ourselves more sustainable?’”
She added that while taking the greener route might seem more expensive on paper, it is actually more beneficial on the grand scale. “Time is of the essence,” Brown pointed out, saying ambitious goals and targets are needed across the board.
The goal for Burberry is to develop the technology to make the entire supply chain eco-friendly by 2025, Brown concluded.
The Evolution of Carbon Markets
The three-expert panel commenced the discussion with Mark Kenber, Co-Executive Director at Voluntary Carbon Markets Integrity Initiative, saying the journey of the carbon markets has been “very bumpy.”
“I think the clean-development mechanisms suffered from too much bureaucracy, but also lack of scrutiny,” Kenber said, highlighting this aspect as one of the challenges the carbon markets have faced. “It makes it hard for people to see if this market is serving its public purpose – reducing additional greenhouse emissions,” he pointed out.
In the coming years, the industry will move towards an integrity- and credibility-driven approach, which is crucial for the market’s growth, Kenber added.
Asked about the industry’s “Wild West” reputation, Kenber politely disagreed, saying that while the industry is new, rules and regulations are clearly set.
Claire Dorrian, Head of Sustainable Finance, Capital Markets at the London Stock Exchange Group, said her company sees the voluntary carbon markets as an opportunity to “support the transition and also support financing into projects in developing countries.”
“What we’re looking to address is that bottleneck of the supply side,” Dorrian pointed out.
Ariel Perez, Managing Partner at Vertree, was then asked how the carbon markets can invest in what’s needed most rather than the cheapest options and then claiming carbon neutrality.
Perez replied by saying the buyers are increasingly more educated on subjects like energy efficiency, destruction of HFC gasses, compliance matters, and more. “That basic tenet of additionality, I think, is really the lens through which we need to look at these opportunities,” Perez pointed out, stressing the urgency of focusing the capital on the most cost-effective opportunities to stay on course for net-zero.
“Things like ending deforestation,” he added.
Asked about the decreasing prices of renewable-energy projects compared to a decade ago, Perez replied, “You can’t register a renewable project as a carbon project; the rules have been changed.”
He summed up his stance by saying: “Objectively, you are better off investing into renewables, even before the [Ukraine] war, than you would from generation fired by oil, coal, and gas.”
Later in the conversation, Perez concluded, “most companies that have made net-zero pledges have no idea how they’re gonna get there because it’s impossible to know,” stressing that the balance will be achieved down the line.
BCG Advisory Board Spotlight: Decarbonizing Supply Chains: The Ecosystem Imperative
Early in the conversation, Dexter Galvin, Global Director of Corporations & Supply Chains at CDP, reflected on urging the industry to focus on Scope 3 emissions long before they were in the spotlight.
“I’m pretty excited to see that Scope 3 has become sexy,” Galvin said with a chuckle, praising the market’s willingness to adapt to the situation. Galvin then focused on his company’s mission, saying that CDP is driven by “an outrageous sense of urgency.”
“We’ve got eight years to reduce emissions by 50 percent. It’s crazy, right?” Galvin said, adding that the company has been working on a new tool to help organizations check not just their operations, but operations across the value chain.
Charlotte Degot, Managing Director & Partner, BCG; Founder & Global Leader of CO2 AI by BCG, chimed in by saying that measuring is the first step organizations need to take now.
“We’ve really started measuring the impact,” Degot pointed out, saying the data gathered will allow measuring the actual impact and taking appropriate action. Agreeing with Galvin, Degot said, “It is time to act now, and act fast.”
Galvin reflected on his company’s activities in the sector for the past 14 years, saying the time has come for their work to come to fruition with concrete results.
Degot was then asked why so many companies struggle with carbon footprint measurement. She singled out three key factors: data issues, the scale effect, and data security and sensitivity. “This is why bringing technology to be able to solve this point is key,” Degot added.
Galvin concluded by saying the CDP software is free in order to get as many companies engaged as soon as possible.
“That’s what it’s all about,” he said, “We’re trying to facilitate action at scale, urgent action at scale.”
The New Drivers of Change
The conversation started with Nat Whalley, CEO & Co-Founder of Organise, sharing an exciting story. She explained how her company drove Amazon UK workers to rally around the organization’s practice of burning products and ultimately changing their ways not just in the UK but elsewhere in the EU.
Whalley said that her organization connects people based on their employment, allowing individuals to discuss work with colleagues worldwide. She continued by reflecting how Amazon UK employees registered on Organise noticed the company was taking “perfectly good” products, ranging from TVs to chocolate, to landfills and incinerators. “It was basically cheaper, as we understand it, to burn them than it was to do anything with them,” Whalley said.
She added that workers were quite upset about Amazon’s practice, driving them to connect with other Amazon workers on Organise and establish that the company was doing the same thing across the country.
As matters developed, the workers gathered 40,000 signatures to draw Amazon’s attention but to no avail. Their pleas were rejected the first time, saying they lacked the actual context of what was happening. But the workers persisted in the efforts, providing video evidence of Amazon’s practices, which the company couldn’t ignore.
A month later, an investigation established that around 300,000 items were incinerated weekly. Amazon couldn’t dispute the argument anymore, leading them to change policy in the UK, France and Spain. “That’s what I love about giving the power and the voice to workers themselves, because they see the reality of it,” Whalley concluded.
Mark van Baal, Founder of Follow This, joined the discussion by saying we must not underestimate the effect of climate change.
“If climate change gets out of hand, big parts of the world will be unlivable,” van Baal pointed out, stressing the need to steer the oil companies in the right direction.
He then reflected on the process of getting Shell to become more eco-friendly, saying the company “didn’t want to hear it” at first.
Scope 3 played a significant role in changing Shell’s ways, van Baal said, noting the company then went from pledging to cut emissions in half by 2050 to now aiming to go net-free by the same year.
The next step, he said, is to get the companies to “take action now” and make plans for the coming decade.
Sandrine Sommer, Chief Sustainability Officer at Moët Hennessy, said her company became increasingly interested in Scope 1, 2 and 3 emissions, driving the decision to cut emissions in half.
Van Baal continued the discussion by saying oil companies “love” to set Scope 1 and Scope 2 targets because it only reflects 10-15 percent of their impact. “But the elephant in the room stays,” van Baal stressed, “The Scope 3, the burning of fossil fuels.”
Sommer singled out the soil as the vital area her company wants to improve in, saying Moët Hennessy is looking to implement new practices in the vineyards across the board.
In Conversation With Emmanuel Faber
Emmanuel Faber, Chair of the International Sustainability Standards Board, commenced the conversation by stressing the need to recognize that “capital markets today do not count everything that counts.”
“The challenge is that you need to be as precise as possible for this approach to work, yet these are the topics that are more difficult to grab and grasp,” he added.
Faber explained that the Board starts with climate change and measures the impact across the board, explaining that the Foundation is driven by the market needs. “Climate first, but not climate only,” he pointed out.
Faber praised the SASB Standards in the U.S., saying Europe is working on matching the standards accordingly.
Asked if he’s worried about making the standards too finance-focused and losing sight of the big picture, which is looking at companies that create more emissions, Faber replied: “No, I don’t worry because the remit of the Foundation is really working for the interest of the capital markets.”
If the standards begin moving the prices and capital allocation in a few years due to the impact of sustainability topics, the Foundation will do its part to ensure the climate transition is done in sync with the finance and that the finance sector has appropriate tools for decision making, Faber added.
Focusing on the Foundation’s approach, Faber stressed the need of remaining neutral, saying: “We are not doing policy. We are not even deciding what is good or what is bad; we are providing the disclosures that allow people to clearly see what the issues are and decide.”
Sharing a more specific example, he added: “We would require companies to disclose their energy mix in Europe, and then it’s everybody’s decision whether they like nuclear or they don’t like nuclear. It’s not for us to decide.”
Asked if the companies “want transparency, or is it easier for them to hide?” Faber replied: “I’ll put it this way: I don’t know a CEO of a large corporation, and I know quite a few, that today are not worried about not being able to take sustainability issues as part of their strategy because they are lacking tools to discuss that with their board and their investors.”
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