Sustainable Business Summit | New York
Roundtable: Mobilizing Capital in the New Green Economy
December 7, 2022
The Bloomberg Sustainable Business Summit brought together business leaders and investors globally to drive innovation and scale best practices in sustainable business and finance. In this roundtable, top executives from a variety of industries, including manufacturing, energy, freight, public relations, finance, accounting and the UN discussed the implications of the Inflation Reduction Act on the business community and explored the opportunities and challenges resulting from this sweeping legislation.
- Jeffrey Crawford, Vice President, Sustainability, Sustana
- Pat Dillon, Chief Financial Officer, Flock Freight
- Adam Roy Gordon, Interim Executive Director, UN Global Contact Network USA
- Tyler Haak, Program Director, US Digital Buildings Federal Stimulus, Schneider Electric
- Alex Heath, Managing Director, US Social Impact & Sustainability, Edelman
- Casey Herman, US ESG Leader, PwC
- Robyn Luhning, Chief Sustainability Officer, Wells Fargo
- Geneviève Piché, Head of Sustainable Finance & Advisory, Wells Fargo Corporate & Investment Bank
- Karen Reif, Vice President, Renewables & Energy Solutions, PSE&G
- Eric Weng, Managing Director, Renewable Power & Transition, Brookfield Asset Management
- Kailey Leinz, Anchor, Bloomberg Television
What is the thinking around the Inflation Reduction Act, and the impacts on businesses?
It has raised the big question of how it’s going to roll out for stakeholders, said Jeffrey Crawford, Vice President, Sustainability, Sustana. “We don’t yet know all the tax incentives and rebates that will come down at the state level. We’re engaging state energy offices to make sure they are working with the federal level to make sure those funds are coming down.”
It’s a strategizing process, said Tyler Haak, Program Director, US Digital Buildings Federal Stimulus, Schneider Electric, agreeing that it’s a waiting game on funding. “In the broader context, companies will need to understand how it will work within the context of their states.” Lots of questions remain, such as if it can be used on products, or if it’s just for services.
Eric Weng, Managing Director, Renewable Power & Transition, Brookfield Asset Management offered an overview of a portfolio consisting of 24 gigawatts of renewable energy, with more in development. “The IRA really supercharged our platform. With a focus on corporate energy building projects, “The real question for us is how these rules and regs will apply, so we can deliver for our clients.”
Karen Reif, Vice President, Renewables & Energy Solutions, PSE&G, which owns three nuclear plants in South Jersey, opened a discussion on “the best clean energy source,” receiving only agreement on that assessment. “What’s interesting to me is how the states are going to get the money, how they’re going to deploy, and how they’re going to work with utilities, to ensure that their customers get the benefit.” Tax credits make it so complex, she said. Their goal is to simplify it for the customer, while expecting it to be a battle on behalf of customers.
“What’s becoming clear in the narrative of conversations that we’re having with clients is that the IRA and some of the fundamental changes, structurally, that have occurred in the last two or three years in our economy, are making sustainability all about value creation. So, it is good for the world but it is also an economic imperative that we do it,” said Geneviève Piché, Head of Sustainable Finance & Advisory, Wells Fargo Corporate & Investment Bank.
Has anyone been engaged in the U.S. Treasury’s feedback discussions on decarbonization?
Casey Herman, US ESG Leader, PwC hears from trade groups, including mining, energy and real estate, that the treasury will bring 30 people at a time onto a Zoom call, or are inviting 20 people into a conference room and take copious notes, but there’s not much coming back in terms of how rule-making is panning out. He believes they are struggling with it. “Our tech guys tell us the IRA is unique in that the law is less specific, in terms of implementation, and they left room for the treasury to build in as they promulgate their rules.”
In the trucking space, Pat Dillon, Chief Financial Officer, Flock Freight said about half the trucks on the highway are only half full. Their work to coordinate full loads is making a significant reduction in emissions. As for the IRA, right now, it looks as if that industry will be less impacted. Potentially relevant is the capital formation around it, and a general awareness around carbon footprints and value creation. “It’s not some little side project. It has to be part and parcel of everything you do. It’s built right into our business model.”
That led into a conversation about Scope 3. Herman said there is a “tremendous debate” over reporting, and vagaries around estimations, such as basing them on volume or spending. Haak added that a lot of businesses in the industry don’t have a sustainability officer. “We’re spending a lot more time trying to meet Scope 3 companies where they’re at, and to help them wrap their arms around where their emissions are, to simplify it for them.”
Beyond the climate and social issues, what about the human element?
Alex Heath, Managing Director, US Social Impact & Sustainability, Edelman said that it is going to take demystifying the complexities of the new law to move forward, rallying employees and consumers to bring them along. “What we see in our data is that business is very much expected to act on climate change, but business is not believed that it actually is acting on climate change. This is an opportunity for businesses to bridge that gap.” From an impact perspective, the climate justice provisions within the act are going to help those businesses struggling with that.
Adam Roy Gordon, Interim Executive Director, UN Global Contact Network USA called the IRA a critical part of, but still just one of the solutions needed to solve a global problem. On carbon capture, he said, “There’s a recognition that it’s needed, but a reluctance to bring that into the calculations. We want to see companies reduce their emissions first. We want to see countries reduce their emissions first. And while that’s meaningful, it’s not going to be enough.”
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