LIZZIE O’LEARY: From PwC’s management publication, strategy and business, this is Take on Tomorrow, the podcast that brings together experts from around the globe to figure out what business could and should be doing to tackle some of the biggest issues facing the world.
I’m Lizzie O’Leary, a podcaster and journalist, and this is Series 3 of the show. And I am excited to say I am joined by a new co-host.
FEMI OKE: Hello there! I’m Femi Oke, a broadcaster and journalist. I am really looking forward to joining you this season, Lizzie. And we also have plenty to be excited about! Over the next few months, we’re going to cover everything from quantum computing, to what’s next for AI, and the role ideas play in creating growth for companies and whole economies.
LIZZIE: We will cover all of this with the help of businesspeople, academics, and civil society leaders, who are researching, leading, and disrupting in those fields— exploring the role business plays in these global challenges and opportunities.
FEMI: We’re starting Series 3 with a special live episode, recorded on the ground at Climate Week NYC. And while I wasn’t there with you, Lizzie, I can’t wait to hear that conversation right now.
LIZZIE: When you think about the warming planet, what words come to mind? Risk? Disruption? Crisis? But are those ideas enough to motivate action? We’re going to look at another set of ideas that are important to motivating change: hope, opportunity, and resilience. Today, we’re live at Climate Week NYC, the largest climate conference of its kind…to get a sense of the opportunities for businesses and climate solutions they can be a part of. I am joined by Helen Clarkson, CEO of Climate Group. Welcome…
HELEN CLARKSON: Hello!
LIZZIE:…and Renate de Lange, PwC’s Global Sustainability Markets Leader. Hello.
RENATE DE LANGE: Thank you.
LIZZIE: I want to start with you, Helen. The theme this year in New York City is “It’s Time.” Time for what?
HELEN: So, we chose the theme “It’s Time” because, you know, we really want to push this point about urgent action. I think, we come together each year, we have annual Climate Week NYC. We’re often talking about urgency, actually. But often people are thinking about 2030, 2050. And we really want to make the point, we’ve got to do things today. We’ve got to do things tomorrow. And so we want to give participants that sense of, Okay, what am I going to walk away from here? What action am I going to take? Twenty twenty-four is going to be, is on track to be, the warmest year on record. We can see the impact, but somehow there’s still this gap between what we know needs to be done and the, sort of, doing of it. And a lot of that is to do with these long-term goals, which are really important. But we also want to give that real sense of urgency and action, and push that. So we wanted a theme that really brought that sense together. And we put our own global to-do list out there as well, so that we could say, “Okay, this is what we think needs to be done,” but invite others to bring their thoughts as well.
LIZZIE: Renate, if business leaders are hearing that sense of urgency, knowing that it is time, what is getting in the way for them?
RENATE: That’s a good question. And it’s also interesting to see that last year in the CEO survey, 22% of CEOs said, Okay, my business is going to be disrupted in the coming three years by climate. Last year, it was 30%. So you see an increase of 8%. But at the same time, that means that 70% of CEOs did not prioritize it yet. So it’s not in the top three priorities. And I can imagine that we really need to move beyond what is the problem? but how can we solve it? Where’s the business opportunity of moving fast? And I think the good news is we see more and more tangible business benefits of climate action, and I hope that does the trick.
LIZZIE: Helen, we are talking about businesses, but obviously this is not business leaders alone. So what role and maybe how large a role do policymakers play here?
HELEN: I mean, the two go really together. So, policy is really important, and I think one of the things I’ve been talking about a lot this week is businesses really want regulation. And when you talk about business and regulation, the assumption is businesses don’t want regulation. They hate regulation, right? But actually, what we hear from businesses is they want a level playing field. They want to know what the rules of the road are. They want to understand how Paris Agreement, which has been implemented at the national level, like, how is that actually driving us? Because if you give us that playing field, that framework, then we can bring our competitive talents within that, you know. Take fashion companies, they compete on design, right? They don’t compete on where their energy has come from. So you can collaborate on that—where your competitive advantage is and where can you collaborate. We see this really intricate connection between businesses and policymakers. So, the sorts of things that are stopping the tripling of renewable are permitting, siting, all these really dull regulatory things, but they’re the things that are really stopping it. It’s not so much about money. The money’s ready to go. I was hearing yesterday that in China, they can basically get a wind farm up in like three, four months, whereas it can take us years.
LIZZIE: Businesses, Renate, always respond to the chance to make money, to have opportunities. Are there examples that you have of real opportunities for businesses that get this right?
RENATE: So, it’s interesting, and it also starts with do they really understand where the risk is and pivot that into an opportunity. I was with a client of mine a few weeks ago, and I said, “Okay, what are you going to distribute in a few years?” And they said, “Why?” I said, “I see you do a lot of fertilize. Fertilize will be subject to carbon tax. I’m not sure whether it’s going to be imported in a few years, but if it’s not imported, it will not be in the harbor. If it’s not in the harbor, it’s not in your car.” So if you think through and you combine it with the fact that clients will push you to help them decarbonize their value chain, invest in electronic fleet, then you could think, Okay, does it make sense to do transport service, or should I offer optimizing movements across a specific geographic area? And then, when you have that conversation with clients and they think, Okay, this is really cool. And if you are the first movers in the market, what a difference could we make in our future business models.
LIZZIE: Helen, we are in a moment where technology, particularly artificial intelligence, is growing by leaps and bounds. And I wonder, given the urgency of what is happening right now, where does tech fit into this picture?
HELEN: It’s a good question. It sort of depends what you mean by tech, right? Because I’ve just been running a panel on AI and hearing that kind of, and people are very aware of this, the energy demand of that, but also the potential and hearing about how we can understand forest canopies better. You know, I was hearing earlier this morning about satellites, really some exciting stuff. But actually, a lot of what we need to solve the climate crisis already exists. And it’s about things getting up to scale. And there’s also some sort of hidden technology I was hearing yesterday. And that’s the exciting thing about Climate NYC is you get all these new ideas. But there are ways of changing cabling to allow things to run much faster. People get very excited about silver bullets. And there’s a whole kind of wave of thinking that’s all about breakthroughs, breakthroughs. You know, we need new tech. We’ve got a lot of what we need to do. What we need to do is deploy it at scale and figure out how to get the things we’ve already got to scale quickly in order to allow new technology to come through.
LIZZIE: And does that mean looking at things like carbon capture? Does that mean looking at scaling those up or thinking of totally outside-of-the-box new tech?
HELEN: So, a lot of it is about, go back to the permitting and siting. Getting renewable electricity on the grid as soon as possible is the top, top priority, and that is grid infrastructure. Carbon capture we’re going to need, but the technology isn’t there yet. So one of the balancing acts in the next few years is trying to make sure there’s as much investment into that kind of policy stuff and upgrading our grids as there is thinking about new technology. And we can’t wait for that. Every atom of carbon we emit is going to sit in the atmosphere. So it’s about getting as much renewable electricity up onto the grids as quickly as possible, while also bringing new technologies online. So, unfortunately, the answer to it is we need all of it everywhere as quickly as possible.
LIZZIE: Renate, you talked about tangible examples, but I’m curious, you know, if you could walk into a boardroom and say, “Here are the top few things you need to do right now.” What are they?
RENATE: So, I think that’s also good, because a lot of CEOs want to have, basically, a to-do list, so, where to start? And although it’s perhaps the most boring, I think it’s really relevant to get the data right, because then you know best where to make the intervention.
LIZZIE: This is the what gets measured gets managed sort of thing?
RENATE: Yeah, but also what gets measured gets also the right intervention. So then you can prioritize exactly where you should do the intervention first. So where am I most at risk? And where—should I derisk my supply chain? But also, which resources are the most costly? And how can I trick that around? Basically, when it comes to the data challenge, it’s really relevant to understand which data to grab first, which brings the most value. So it’s a combination of, which data do I need to be compliant with the regulation? Which data do I need to understand where my biggest risks are? Which data do I need to understand where I can make the intervention with the highest impact? And how do I prioritize it? So, get the data right, understand your risk, innovate towards those opportunities, and really try also to collaborate with the ecosystem, I think—and make it smart.
HELEN: Can I add one? Equally boring. What I thought you might say is energy efficiency. And one thing that’s really interesting, there’s so much needs to be done through energy efficiency. And I think CEOs don’t like to hear it, because it sounds inherently dull, but also the, sort of, working assumption that we can’t possibly be being inefficient. I run a great business. I haven’t left dollar bills on the floor anywhere. So how can you tell me that I could be 4, 5% more efficient? But actually, when we look at energy efficiency, and there was, you know, at COP28, an agreement that we’d double energy efficiency by 2030, there hasn’t really been enough tangible that’s done on that. And there’s so much that we could be saving, so that when we then put renewables and stuff on top, and as we move towards electrifying everything, we’ve already kind of banked the savings. So that’s an area that companies really, really need to think hard about. And again, it’s insulation, heating, cooling—all these kind of, you know, the basics of business.
RENATE: This is really a great example. It’s on your feet, but you just need to grab with it. This opportunity. And I also think what you can do with energy, you can basically do with every scarce resource. Again, because a lot of the technology is already available to do this.
LIZZIE: One thing that sometimes gets in the way is, if you’re a public company, your shareholder. Shareholders want to see certain things. How can you bring shareholders along and overcome the, sometimes, the assumption that exists for public companies that this is going to cost too much money?
RENATE: Yeah, but I think it’s really relevant not only for shareholders, but I think, at large, to show the business case of sustainability. And it really creates tangible benefits for companies. And luckily, we see the first proof of that. And when companies make climate action, we see a growth in profitability. We see a growth in resilience. But I think showing that business case, including the financial performance, which is coming alongside, is really relevant, to take every stakeholder alongside.
LIZZIE: Helen, when you’re not doing this conference and when you are talking to businesses, what are you telling them to do?
HELEN: We do tell them to set long-term targets, but then work back to what you need to do today and how are you going to think differently about collaboration. I think, one thing that’s really interesting is, you know, we’re both European, there is a different view of this, depending on where you are in the world. And a lot of US companies, I think, are frustrated because they’ve got this noise, they’ve got this kind of ESG backlash, but they’re global companies, right? So European regulation, in the end, is driving a lot of what they’re having to do now. So I think it’s a very challenging time, because, you know, if a shareholder says, “Why are you doing this?” “Because we have to.” It’s not a moral position that they’re taking. You know, the EU has really driven regulations. It’s not all perfect, but it’s really changing the landscape for business and compliance. That’s a fight probably the NGOs have fought more than anyone is to push it into the domain of the CFO or others. Because it’s got to be at, as you say, the heart of the business. And then they can move on to looking at the opportunity agenda, and there is a huge opportunity agenda for most big companies.
LIZZIE: I think often when we have conversations about the climate crisis, about the urgency behind it, it can feel scary or terrifying. What are you hearing this week that makes you optimistic?
RENATE: Well, I think I saw a few things. I think more and more people talk about opportunity. I think, if you compare it with a few years ago, it was really, Okay, this is a problem and we admitted the problem. And you see really a shift into, Okay, but we can solve [it] if we step forward and we do this together, using basically a lot of the technology already in place. And I think, one thing we did not touch upon yet, but it’s also relevant, using the talent of the young people. If you look, in every organization, so many young people, it’s their future, who bring the brightest ideas, the most new, innovative ideas. But you need to create a room for them to flourish and bring those up. A lot of good ideas get stuck in the mid layers of management. So, if I may ask every CEO, create a room for these big innovative ideas. I think then we go much, much faster than we do today.
LIZZIE: And what have you, obviously you’ve heard a lot this week, but are there things where you thought, Oh, that’s brilliant?
HELEN: Well, actually, one of the things that makes me optimistic is just the sheer number of people that are here and the sheer number of events there are. And we’ve seen that growing each year. And seeing the number of people who want to come from big business, from supply chains, from governments, you know. We’ve had mayors, governors. Actually, when the UNDP [United Nations Development Programme] did a survey recently, 80% of people around the world want governments to take stronger action on climate. So I think, coming to New York this week, Climate Week NYC, is a kind of embodiment of everything that’s happening. And, partly, I want people to go away with a feeling of, like, I’ve got a team, and we are all working on this and taking hope from just the amount of energy there is around climate. And that we have to be realistic, but if we can harness that and drive forward—the quality of the conversations is great.
LIZZIE: Helen, Renate, thank you so much for joining us on Take on Tomorrow.
RENATE and HELEN: Thank you.
LIZZIE: Well, that brings us to the end of this episode, recorded live at Climate Week in New York. Join us next time, when we’ll be looking at a technology that could revolutionize the way businesses—and the world—work: quantum computing.
GUEST: You may think quantum? Why should I care? You should care because even if 1% of what we expect comes to be, it will exponentially transform your business.
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LIZZIE: Take on Tomorrow is brought to you by PwC’s strategy and business. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity.