 All right good afternoon everyone. I will begin as any good host really by assaulting my audience with some numbers The web has done all the hard work by crunching the numbers and here they are to generate $1,000 of GDP a country today must consume 460 kilograms of materials 111 kilograms of energy so simply stated a thousand dollars of growth costs 416 kilos of materials and 111 kilos of energy under these circumstance What we're asking ourselves today is how can carbon emission targets be achieved without compromising the global economy now in this session We'll debate relationship between economic growth and decarbonization We aim to solve the green growth equation here to help us some differing perspectives Jennifer Morgan executive director Greenpeace International Andrew liveries member of the board at Saudi Aramco Mark Carney governor of the Bank of England and Marianna Mazzucata professor of economics of innovation and public value at University College London So thank you all for joining us Jennifer Morgan. Let me kick off with you to achieve Decarbonization what is the green nirvana? What would we actually have to give up in order to make it more sustainable? I Have to say I think that might be a false question if I may Because I think that it's more that if we don't shift away from our existing Economy that's based on fossil fuels What we will be facing so the the impacts that we are seeing happening already around the world Are massive and the costs of those are massive even for a country that is as wealthy as Australia So I think the question really is more what's holding us back in moving into that economy because it's there It's been there for a long time. That's there for the grasp But what would we implement now would we only be allowed to travel by train? Would we eat less meat? What are the top three things that you see the world doing to become better? So I think the first thing that would happen is that the private banks should stop investing in fossil fuels They have been investing trillions in fossil fuels And move into investments in low-carbon zero-carbon infrastructure and renewable energy and you would put in place Laws that would do that you would be powering the world with a hundred percent renewable energy And you would be putting in place the incentives and the infrastructure To do that so people could get around by high-speed rail Powered by renewable energy you would eat less and better meat and dairy and we would have a Common agriculture policy for example in the European Union that would move away from industrial agriculture and support ecological agriculture So in every sector there's really something that's there that needs to happen And I think on the whole will be we'll have cleaner cities and better air And healthier people because it the pathway is actually quite a beneficial one for people Andrew livers Could we do without fossil fuel? I believe the answer that is yes, and I not just and speak with a Saudi Aramco hat there I speak with my former hat as a major industrialist running one of the largest industrial companies in the world The notion of growth that isn't sustainable doesn't work Sustainable growth. I hate the word sustainable in front of growth because if growth isn't sustainable We shouldn't be in business So the ecosystem that we're living in called this planet is strained to the limit We have only one planet last time we checked that we can live on So we've got to do something about the humanity that we've inhabited the planet with and fossil fuels the fuel of the 20th century It's days a numbered are not over but they're transitioning to be over to answer that question How do we get there is a range of different things that have to be done? The criticality that I'm sure the governor's going to talk about which is finance and how finance speaks is a biggie Regulation legislation around the world Paris the climate change accords and really putting oomph behind that and then innovation Which I know everyone's going to speak about here on this panel But while I've got the floor is really key the swath of available technologies to humanity today The ability to put policies in place from efficiency to alternatives to carbon hydrogen economy All the things we can do to actually transition away from coal and oil ultimately to electrification and and really truly natural gas plays a role is all available to us today what lacks is alignment and will and Purpose for all of the various groups to get together to make that happen and in my new life I'm putting a lot of time into that actually, but how can the strategy of big oil actually be compatible with the net zero world? Well, look the term big oil is almost a neanderthal term. I think we've got to realize these companies are energy companies Energy companies like Aramco have realized that this is a time and a place that humanities speaking Communities are speaking Audiences around the world including hopefully more shareholders are basically voting with their feet and basically we're going to have to respond to that Saudi Aramco is a newly formed public company and there is a KPI the UN SDGs are pretty key to this Let's put the KPIs in place and let's help big oil become truly energy companies and let them manage their own transitions They can afford it and they should be able to afford it We should work together to make it so it's not punitive To the immediate world, you know, we can't get there overnight So there are ways to get there Jennifer talked about them and we can't Governor Carney, you're leading the crusade to wake up investors right to climate related risks. Are they listening? I think they are and it's certainly not not listening to me, but they're listening to To the realities that we're touching on so this is these issues have moved very swiftly from being Corporate social responsibility issues or more niche issues within finance to fundamental value drivers I I think we're seeing a fundamental reshaping of The financial system that I'm quoting someone else in using that that term But and there was a lot of publicity for a large asset manager Last week, but that seven trillion joined another hundred and ten trillion dollars of balance sheet that's looking for Climate disclosure and not just climate static disclosure, but disclosure around transition So let me make a core point and pass back, which is what we're talking about is a transition from where we are today To where we need to get to and the question is we need to speak a common language about Units and time frame, but let let me give you One variant of this para stretch goal one and a half degrees 66% probability we have eight and a half years something there about so you round it up to eight and a half years on current emissions Trajectories, okay, what does that mean for the fuel mix that's going to be produced? What technologies are profitable which who are the winners who are the losers in that? What's their horizon? There are other ways to do these calculations, but what you need is common common information common understanding and then a market in it and what is happening is That with the major investors. This is becoming the question. What's your plan to get to net zero of every corporate? It's a question. What's a Ramco's view on net zero? What is your old company dows chemicals plan to get to net zero? Oh Microsoft has just done this to get to net negative What are people's plans and that will that will determine where capital is flowing obviously influenced by? public opinion pressure and government policy as well, but that Moving from if I may from the periphery to absolutely the mainstream is what's going to drive transition And I might add growth and jobs what why don't we have a harmonization of definitions? Yep, we're 2020 look the first real comprehensive definitions came out four years ago Four years ago actually the mandate to do it came out four years ago the actual definitions came out two and a half years ago, they're being refined this year just came from meeting with the IBC they're looking to reduce them down and We expect by COP 26 in Glasgow this November that we will have the refined definitions of this climate disclosure and The leading jurisdictions we want to make those disclosures mandatory But the core thing we want to get as part of the dialogue and you're helping with it Everyone around this table and this and watching can help with it is to make sure that the core question for any business Or any financial provider is what's your plan for the transition? Where are you on that path? What are you doing about it and have that sophisticated conversation because that's what alongside, you know Climate policy and government initiatives are going to drive Adjust transition and Maria Matzikata first How long does this transition actually take place and what mechanisms should we put in place to tilt the market towards? more green energy policies well There's lots of talk right now and people are talking about an urgency to this right so there's the business round table saying we Absolutely must change how we do business and I think what the opportunity is right now about this purposeful company Kind of talk is what would it look like if you bring that purpose to the center of this discussion? And if you bring government to the picture given that markets aren't just kind of out there putting pressure on company markets are in Outcomes of how public private increasingly third sector institutions are governed and how they relate one to another Currently we have three times more government subsidies going to fossil fuels than to climate solutions But also how we do government whether it's procurement Industrial strategy grants and loans does not have this at its core the procurement budget just for the country where I live In the UK is three times larger than the innovation budget. What if we procure differently? What if we do the loans of a public bank in such a way that they're conditional on the transformation of sectors in Germany? We were just talking the steel sector has lowered its material content So it's carbon emissions not because it just woke up and said I want to be purposeful It had to in order to get the loan from the KFW's public bank And this call for bailouts from steel in the US steel in Italy right now is asking to be bailed out They should be you know strongly conditional on transformation of those sectors towards these targets and this is about innovation You don't just you know reduce your material you do it through Innovation and investment and that's a long-run driver of growth and innovation and productivity Try and make a quick point here with one of the things the more we're actually talking about transition The more we'll see what's easy and what's hard what's hard exposes where the opportunities are for innovation So one of the things that he's I mean the Electricity transformation is relatively easy given the existing technologies that are out there The only thing the thing that's hard about it is the existing stock and the transition to that But what is harder is around things like the extent to which there's going to be carbon capture and storage and the technologies around that Shining the light on that battery technology, which has made a lot of progress. It needs a bit more of a push Those areas where you get the focus on what's crucial for the transition That's when money starts to flow in a way that will really make a difference both public money for primary research and Private money with the right signal, but it's got to be framed in the way right way Yeah, so I lord I just want to add I lord the urgency coming out of the financial world The regulatory world has been slow and governments have been slow even though we've got Paris But I think this whole point you just made mark is really key and I do think Corporations leading corporations have already responded But there are a lot of laggards and so what needs to happen is we need to get very serious on the financial side on these KPIs And we also need to understand that there is a transition available right now I mean, I'll take my home country of Australia with the tipping point of the bushfires That is a tipping point that conversation is no longer the economic harm done to Australia Okay by those ravages that have occurred whether you contribute to climate change or not it does Happen and it's happening with more frequency So now Australia's a big coal exporter Australia's a big user of coal-based fire coal-fired power plants There's natural gas available right away a 10-year economic transition or 8.5 year economic transition would lower emissions by over 40% we can do that now What stops that is the lack of courage for policymakers Okay, and in fact many of these companies not responding You know to get us out of coal and put us into natural gas actually natural gas should not be the stopping point Okay, but is it more expensive and actually do you need nuclear? Well nuclear of course is the ultimate answer and you know a lot of people working on safe nuclear and how we actually put that in place I'm a fan of nuclear. I know maybe others aren't I do think we have to put nuclear into the mix But let's make that a conversation that says to the zero carbon discussion If I want zero carbon if I want minus 1.5 if I want to get to this, you know in zero emissions world I've got to figure a way to get their safe technologies out there now I think the safe bet low-hanging fruit is natural gas-fired power until we get to safe nuclear and until we get to things like hydrogen and Safe batteries and affordable batteries. So I actually want to come in on I think nuclear It's fairly obvious that the risks are very high and so building a new nuclear right now But I want to come in on the gas issue because I hear a lot of gas being the bridge into And I I think that we don't actually want to invest in an infrastructure for gas When we know that that won't get us all the way where we need to go and that we should be investing in the renewable infrastructure I agree with the part that it one gets to where we need to go. I don't agree with the part that it can't be a bridge But anyway, keep going. I mean, I just think Well, that's a start So I mean so I because I think if you were to take the funds if you're looking at government funds and where they're Going and be putting them in the place of accelerating the pace of the Innovation if you look at the the dark e-program in the US actually that is still going on of Actually moving those things forward if you you don't want to take your eye You need to put your eye on that ball completely and if you keep it in the fossil side of things You could be creating a whole nother stranded asset in the mix So why not kind of have two eyes we can actually keep an eye on both And so I think you there's a power of the and the Jim Collins to a story here You can't there's no awe in this discussion as long as we agree on the goal Okay, which is zero emissions as long as we say we've got to solve this on a line I think you've got a lot of ands you can use but I agree with you It's not one instead of the other to help us get to a low carbon for we world I think you've got to say it's a transition. I like the word transition with metrics It's also for that right? I mean, it's not about choosing solar or wind or is there danger? But if you have a portfolio that also means risking along the way So the ability of governments also to welcome that risk-taking along the way currently for Necessarily an appetite for that but also the demand side policies. I mean if you look a hundred years ago mass production Which was a mass, you know kind of innovation at the time changing production distribution would not have had the effect It did without the demand pull from suburbanization I agree in many ways these green policies that are not necessarily out there systemically could even be a pull for how the IT revolution the previous tech revolution gets fully deployed and diffused across the economy because it still hasn't compared to the speed of Say electricity, right Jennifer you worry that you know putting some of these policies in place will be hard and therefore governments will back away from it. I Don't think the pudding. I think the policies are quite clear. I think that we know we have we have The reporting standards we have we know what to do on renewable energy. We've researched it. We know long-laut Clear signals are the key So I think the the seemingly hard part which doesn't need to be as hard as it seems is for Government leaders to actually sit down and put this all together with the experts around the world and listen to the public As well as you know smart innovators to put it in place And I don't feel the courage right now in a lot of those CEOs or in a lot of those leaders, but they but it's there And I think the the other factor to bring in here is I think we're on we're in the midst of like the largest civil society And public movements that we have seen we haven't seen this since like the Vietnam War or before the Iraq War That's not gonna start now. That's not gonna stop So it's just getting started actually and you'll hear youth talk about that So I I don't think it's policy wise I don't think it's hard you can get a big part of what we need with existing technologies It's actually the politics that is holding us back on this and that's what I think That's why that need to really bring in the the public the expertise You know, I think oftentimes that's not enough in the room of the scientific community That really knows how to move forward policy instruments. I mean, yeah in Europe, for example There's a new instrument around missions and the idea is that you have a hundred billion horizon program around innovation And now part of it will in fact be focused on Moonshots and these aren't kind of random pet projects that are ministered besides right these are you know The big question is bringing citizens to the fore to even kind of think about what does a green city look like? But that becomes the condition through which you then access the funding so instead of picking winners This idea of what are we investing and you pick the willing but to even have access to any of these funds You need to be willing to experiment towards a solution But that required a new policy instrument, but transitions are difficult sometimes, right? Yes, yeah, they can be they can be difficult They're easier look any any journey any transitions easier if you know where you're going and so the clarity of the objective clarity and credibility about the direction of government policy and the consistency of that commitment even if it's starting relatively small low carbon-tact but with with with a credible Trajectory to where it's going or a sustained R&D effort or you know highlights around certain skills that work in certain areas All of those things signal to individuals to companies to investors where to put their money where the opportunity is and then What the market will do is it will pull forward adjustment It will act more rapidly than actually Paul and policy will help fill in and without question, you know public public attitudes and And and pressure and other things also help shape those decisions as well And and and I think that's part of what we're seeing In terms of the response because the response again in finance if you look at what's happening in finance You have the core of the financial system all the investors wanting information about what about the transition now Different investors gonna have a slightly different view or a different view on how fast is going where to put their bets That's fine. You have the Bank of England and a number of other central banks will do this as well stress testing their banks For a transition to net zero okay, so the world's largest most complex financial system That's what we're doing so at the core of the system now These questions are being asked and are you on the right side or the wrong side of that transition? And if you're on the wrong side, what are you gonna do about it? Why are investors suddenly realizing this is an issue is it the protest industry or is it something else? Well, I think it's I think it's a combination of things I think I mean the the biggest investors biggest asset owners are gonna be around 30 years from now and so they can see the The implications likely implications for their assets that the people at the front line We're in the insurance and reinsurance industry where they're dealing with the pricing costs of this every day But then as well people are responding to their clients and actually, you know, they're not disembodied these institutions They're made up of individuals and they can see the the imperative and in the end, you know What is that? What is the market system? What's it there for? It's to solve problems, right? It's to find solutions It's becoming pretty clear That this is if it's not the biggest problem it is in the top three and therefore That's where the market will go So I not to pour a cold shower on that point, but your new role I mean and what do you bring to the table is really key because I was CEO for 15 years almost I had 60 quarterly earnings calls Yeah with my investors and I never got asked once exactly and it but and when did you start being a CEO? Last year or so ago. Yeah, I didn't I mean so not once did I get asked by a financial owner About my KPIs on my SDGs or my climate change trajectory even though we'd make great progress So I do think we need to take advantage of this tipping point that I totally agree with that we've arrived at Society speaking and speaking loudly the next generation speaking and speaking loudly. We have the UN goals We need to incorporate them in through the financial system. The other vacuum is political Which I'd love to hear more about from Ariana and others which is We're have this notion that we're gonna lose jobs in this transition There is evidence now that is showing that no we're gonna actually gain jobs We need to be very clear then on the transition for the worker Because the worker is the one very afraid and voting Okay in certain countries not you know the US being one of them about I'm gonna lose my job and I'm afraid So we've got to do a lot about that. What is that transition for that worker? How do we put that in place where the policies around that? I know corporations are doing some work on this, but they're fragmented You can't do it from the corporate sector alone. You can do a lot, but not what governments can do So I think those two areas but need to be addressed. Can I just come back though in terms of the degree of shareholder? activism on these issues, so Yes, until the last couple of years But if you look at major systemic banks, you'll get two-thirds of the questions at their AGMs are on around these issues Tripling of proxy actions that have happened. It is shifting very rapidly and the question that people are effectively asking is It's not the vest overnight. I mean some are but it's yeah, what's your plan and and and you see it I mean, we're just in a room with a bunch of CEOs where They're all clocked okay a lot of them have the plan But I think everybody in that room knows they need a plan I agree Can I ask you a question then Jennifer and Mariana what you talked about the tipping point if we are to see a recession the next 12 months. Yeah, well that good will go away. Yeah, well, so maybe I'm a perennial optimist on what's going on with this world But we we have a technology revolution that's creating a new economic growth that we actually if you look at these trillion dollar market cap companies that are appearing We're becoming richer the world's becoming richer. Are we distributing it perfectly? No Are we actually finding a way to actually put the right policies in place for this century? No And frankly, this is where government's ends are not working very well Now the leading corporations are doing a great job of job creation in their supply chains, but you're right I mean if it scales back so I'm saying there won't be a recession Maybe I'm wrong maybe the governor has some views on that but I'm not planning. Yeah I don't think well we had a way to nine and we all got scared and we all got Way different in our forecasting, but look, I think technology driven growth of the type We're seeing will keep our world at the three to three percent level for a while I think we have some time to get this right my personal view not a lot of time for this transition But you're right, you know corporations will March to a different tune if they suddenly start losing money now That's where your point comes in mark and I think it's important that they get the KPIs right Yeah, and the KPIs and maybe just a couple points on the transition I mean, I think yes the plan but it needs to be earlier than okay the 2050 piece But it needs to be a plan for the next few years. Yes. It needs to have milestones. Yeah, right And I mean this net zero by 2050 thing is not actually It's far from adequate. We need it to be much earlier I mean the net zero but then also we need to see the commitments of the companies and the governments before then and That's one thing on the transition. I also wanted to raise the just transition Yeah, and I wanted to link into the the inequality that we have in our world today because as we know Not everyone is getting rich or or richer So first is to make sure that there is a just transition for the workers that that have given great wealth to our societies Right and to make sure that that is built in to any agreement and transition plan But the other thing that I think gets less Attention than it has and I'm starting to call it socially just climate policy because I can't think of a shorter name Is the fact that you see if climate policy isn't put in in in place with In mind with the people who are trying to make ends meet The cost that will go on to those people Right is deeply unfair. It is avoidable It is avoidable and it causes polarization in our societies and that's the risk I think in the transition if people aren't smart those you know You could Australia did this right half of the population in another government didn't pay taxes anymore Right, so I just think that is a key part that we need to take care of people And that's linked to social and inequality today and it can be done, but I think it's often overlooked Mariana then go into what I wanted to say which is that there's this underlying assumption unless we make it clear That this is all win-win, you know, this is all good innovate and invest transform transition And actually along the way we have to make certain types of activities less profitable Including you know, we can talk about the problems with shareholder maximization and the need for stakeholder maximization But you know the amount of for example share buybacks just in the last ten years has exceeded four trillion Dollars in you know globally that currently is bringing profits to you know parts of the system and profits currently are record high So the profit share of GDP as at a record high Investment globally has actually been falling and this is fundamentally an effect of the lack of reinvestment back into the system So you talked about market cap. That's not about investment That's just about rewards going to particular, you know It's one percent and this is important to realize that you know This isn't again about just saying oh, let's do it differently There have to be strong conditions attached and I always go back to the IT revolution because I do think there's some really interesting lessons One of the most innovative companies actually in that period was Bell Labs of you know A very innovative company R&D laboratory outside of that came out of AT&T that came from government forcing AT&T to reinvest its profits back in the real economy back in innovation and big innovation beyond telecoms in order to maintain its monopoly So looking at the monopolies including the kind of Arancos in terms of you know market share and subsidies There should be strong conditionalities in place in order even just to maintain their existing status quo But that does mean change and that change in the short term will mean profitability Going down in certain sectors unless they change of course. That's what winners and losers mean It means not just profitability going down. It means Companies going out of business and sectors Becoming sunset industries, but I make a couple more points if I may first on the regressivity point I absolutely absolutely right to be careful on climate policy on that I think we'd all agree the climate change itself is regressive It hurts the most vulnerable the most both within a country and and globally and we're seeing that with increasing frequency And so secondly when you put in place climate policy in particularly if it's a price on carbon Thinking about how you recycle that price in carbon and whether that's progressive or not isn't is hugely important and Obviously there is you know, there are winners and losers and there needs to be restructuring that's Always the case as you know in the in the economy. This just happened This is the new big vector of that last point I make if I may we're just around technology If you think about the applications now on technologies a couple examples in the overall transition You think about precision agriculture and using computing power and Microsoft and others there you think about grid optimization Through artificial intelligence again I'll come back on carbon sequestration and the opportunities in agriculture carbon sequestration not not injection but egg And you know, these are huge opportunities there. There is no one answer But it is a way that technology spreads out and helps and helps address this challenge Can I go back on my honest point about share buyback and dividends and the governor is gonna Look at me and grimace a little bit here But I I would say the last 20 years of monetary policy Has created lots of new financial instruments where public companies have had to be responsive to to short-term profits And so unfortunately many of us who ran public companies I run public run a public company The quarterly march through earnings created this need to actually buy back shares increase dividend yield to attract new money Activists investors became part of our life hedge funds became part of our life and the long-term investor disappeared on us Okay, and actually strangely enough in the 80s. I would have said the long-term investors Were around in big swaths and private equity came along and that was short-term today. I consider private equity long-term private equity private capital has become much more long-term than the public markets and This is the excess of monetary policy. We've got a swath of money out there trying to find returns pension funds You name it so actually it's a lack of fiscal policy The lack of courage and fiscal policy that doesn't build infrastructure doesn't build education doesn't build systems for the 21st century The lack of courage in the political sector has created this monetary situation which has to be remedied And I'm glad this is exactly what you are asking for and what we need We need a long-term public sector investors back Design the tax system to well games hands are working that area But the same companies I mean you're blaming the politicians of the policies But there's massive lobbying efforts to reduce, you know capital gains for example It should be taxing material more than labor. We could redesign the whole tax system You know not not just about carbon taxes, but literally, you know corporate income tax capital gains tax Taxes on labor versus materials in order to reach the objectives So you may not have liked the BRT statement But that was a sign that the business community is fed up with this vicious circular economy that we've created That one begets the other and that we've got to take a stand on Inclusive capitalism and actually multi stakeholder returns and rewards as a massive signal that was not an easy thing to get I was part of the executive committee that got us to that point that we just can't report a return to one sector of The economy that you've got to think about just transitions You've got to think about communities you got to think about how actually you can help educate politicians to give you the long-term trajectory Alternatives of capitalism or how would you I hate to think of an alternative to capitalism? Maybe some of your terms are used, but democracy and capitalism in its current form is not Distributing capital in the right way to the affected communities. That's the answer So we've got to find a better way of doing it inclusive capitalism is a term being used There's a lady behind me that runs something called FCLT global focus capital on the long-term Sarah someone behind here That's a big big movement What Larry Fink's been saying and you know the passive for the index funds and what they need to do There's a lot of work that needs to be done in this area Yeah, but Larry and two of the other largest asset managers have increased since 2015 the Paris agreements their investments in fossil fuels Exactly the degree to which this goes in the center of the value chain will determine whether this word inclusive capitalism I agree just bullshit or not, right? So I mean currently unfortunately There's lots of talk, but the actual walk continues to be not going in this direction And the literally the lobbying effort that gets done in order to keep the system Yep, to be rewarding short-term capital, you know, why don't we have a financial transaction tax? But something change and because of what some of the big asset managers came out to say that was loudly applauded by actually a Significant change in how they view risk and sustainability. Does that not change a lot and that was two weeks ago Well, we'll see but I think what will really cost change is if the way we govern business the way that finance is steered The way that policy is used both ambitiously and it's not just basic research Mark which you mentioned several times many of the innovations you talked about actually even downstream or coming out of you know ambitious public investments like out of ARPAE which you mentioned Yeah, and the way that these organizations relate one to another less parasitically, you know We've socialized the risks privatize the rewards after the financial crisis We're risking to do the same thing around the green economy How we're actually going to distribute the value that comes about by having this active public Inclusive capitalism investment is is you know, it's not clear right now given how the contracts are set up I mean just maybe a couple a couple points I mean because I think you know we we issued a report today called it's the finance sector stupid Because I think although this group gets it I think it's it's not well known around the world the culpability of the financial sector and calling causing the climate crisis and There may be these types of statements that are out there But you know since the Paris Agreement was agreed you had one point four trillion dollars From 24 banks that have come here in the last five years going into fossil fuel investments, right? So pardon me if I am not very convinced No matter how hard it was to get that done which petrifies me a bit because you know the interests Clearly aren't where they need to be right now but I think Getting those the policy frameworks in place that will move this in the in the central banking system across the disclosure side of things moving the subsidies and Moving away from a definition where GDP is the thing that defines What what growth is what what well-being is so moving more into something that that looks at our health systems That looks at that looks at do we have a an ecosystem and a living earth that we can actually all Live on moving more into that direction, right? You have a New Zealand that's starting to work there There's been work that's done on that but to me that would at least start redefining some of these things and address some of these gaps that are there and the fact that we are using these resources as if We could use them forever and we know that we can't so there's some key parts of yeah There's key parts. Can I pick up on that? Okay, we have caught 26 November 9th and 19th in Glasgow. You all invited and let's Channel some of this energy. I mean there's lots of issues, but let's channel some of this energy Particularly around the finance sector. So what does the finance sector need? What what do do private financial actors need to do? What do regulators and authorities who govern that? What do they need to do to put in place the information the risk management and and the return Vectors the way they manage returns That take climate into account in every single professional financial decision. Okay, that's the that's the question We've got we have a plan to do that. It's open source come in feed into it help shape it. I Start with this. Let's start with the system. We have today The meeting is in 10 months. We're not going to fundamentally change the system or the starting place. We have today Let's move that system so that the core of what is you know is being demanded Which we move to a net zero or to a zero world you can find a zero world But a world where we stabilize the climate in as as as rapidly as possible Get behind that agenda or improve that agenda But within the context of where we're starting from today, and I think actually you do have Jury will be out. We'll see whether what happens from where I sit and all I do is talk to financial institutions Well, three quarters of my day There is a fundamental reshaping of the system underway Underweight not assured underway and the question is whether it gets pushed in how difficult is it so the more questions? You ask about your company and how it you know It deals with climate change and how many more questions are there is it more complex than we thought it was once you get Once you get everybody talking about the transition Exposing whether company a thinks the transition is over 40 years company b thinks it's in 10 You know investor y wants it in a shorter time period, etc. Once you get a common approach to this and Dialogue around it then you have a market then you know where to put the pressure right now the conversation can be deflected so easily Because different people are talking about different priorities with a different language and that's why we need a The language needs to change right so we often hear leveling the playing field right you're talking about tilting the playing field massively towards a green direction and Currently if you look sector by sector there's huge differences in how corporates behave when we talk about stakeholder capitalism Some currently are governed by stakeholder capitalism even in telecoms You know Huawei's a cooperative Erickson has workers on the board Cisco has done one of the biggest You know buyback scheme from the last Ten years so there are ways that we can fundamentally tilt the playing field so that we reward long-termism We reward green transformations and sectors worker training in order to transit On buybacks and returning capital shareholders, which is as part of the transition What you will want we want is that big energy companies are buying back a lot of stock and returning a lot of capital to shareholders Because they're they're their core activity those who haven't reinvested in new energy Has to be returned because what happens to that it doesn't just sit with shareholders I don't just look at it, but that is they reinvested they reinvested in the art But it depends on whether they have the capabilities because not every big energy company Yeah, is going to be a winner in the transition because they haven't developed these core competencies it's the flip side of people of not not adjusting now some of them might and We want a system that moves the capital from those who are going to be left behind to those who might be moving ahead I want to be responsive Mariana's challenge. I mean frustration talking about it Time is over, you know, so it's not what it's the famous quote. I hate to use it I won't use his name, but it's not what you expect. It's what you inspect. So please cop 26 KPIs yeah, KPIs around climate change goals that will keep performance indicators for those who don't Keep performance in these days. Yeah metrics. Yeah metrics that business will respond to metrics Whole people are accountable for it. Okay, money goes to those metrics Okay, they won't get behavior change unless you do that. Yeah, okay You'll get more of the same you'll get talk and you'll get conferences like this that don't re yield in any outcomes Okay, outcomes will come if you change the key performance indicators and the perception and make The mandatory because these voluntary things Well, that's a good place for pressure by the way. Yeah, exactly Mandatory but also the innovation agenda don't write off big oil Let big oil become energy. Let it become sustainable energy be it can do it There are some that are actually are leading it right now and I include in rank on that But you know the transition word is key How long so we're running out of time? Let me ask you each how long you think the transition will be first Is it closer or or is it further than we think? Well, if you're looking at me my job right now is to make it closer. I think I'm an advocate I'm an activist if you want to use that term. We're talking decades or five years Oh, look, it's gonna take us most of this decade But if it doesn't take us most of this decade, we're not gonna like the answer in 2030 We cannot get to 2030 and have this discussion. Okay. And so we now Orianna now, but I just want to come back to your early I'll say it really quickly the first question you asked Jennifer is very problematic We have to stop asking that question. That's not about growth or you know, or what not to do Warren Buffett and he was not a communist. He is not a communist. I promise. He's a capitalist. He always says stop Producing my tax. I don't even care about that. I invest when I see an opportunity What we need to do is create opportunities Increase expectations of future growth opportunities in this area Let's not talk about GDP. How do you measure it? GDP attached with some kind of sustainability index. What measure at the macro level? Yeah I'm interested in measuring what often gets called the ecosystem, but then any biologist will tell you what kind of ecosystem Is it mutualistic or parasitic? How can we restructure public and private actors to actually get mutualistic? Progressive not regressive. Yeah ecosystems, which is public private partnerships that word is no longer fashionable But you're still using GDP as a no the structure we need lawyers I mean, I don't like Innovations in this area we have Incredibly problematic contracts relationships in the current state of capitalism in different sectors But given that this is the one that has to change within 10 years, right within otherwise We're screwed massively We do need to have indicators of how we're working together to get this done and if we're doing it wrongly then you know The money for example coming from governments has to stop in a particular area. That's what I mean by conditionalities That's what got the steel sector in Germany to be the only innovative in the green-sense steel sector almost in the world Okay, so how long do you think the transition will be five ten years long? We don't have a choice. It has to be less than ten. Otherwise, it's bye, but it's not what you want It's what you think. How long do you think it'll take place today? Like when I mentioned the procurement budget in the UK for the Ministry of Transport, it's close It's over 30 billion, right? So if you today said we're gonna procure differently It's not going to just be about costs and kind of minimum, you know cost minimum quality just to get the job done If everything becomes about transitioning in this way, it means tomorrow the way that governments procure Changes the way that businesses get evaluated And basically can't survive or not given that so many subsidies are allowing businesses to survive would change We can change that tomorrow people stop smoking in Italy where I'm from over night because there was a ban No, it was it was almost overnight almost They still park on the zebra crossings in front of schools because there's no fine people do change Governor Carney, how long do you think the transition is? The honest answer I don't know how long the transition is but what I think I mean I I forgive me I wouldn't do the it's the finance stupid. I would say it's the transition stupid So forcing everybody to talk about their view of the transition their plan We've got it. We've got a problem plan beats. No plan. That's the one thing I learned in the financial crisis So we've got a climate crisis plan beats. No plan. What's your plan as a company? What's your plan as a bank? What's your plan as an investor? What's your plan as a government? What's your plan as a media organization around this? What's your plan as an individual get it out there? And then and that's where that's where you you start to force the change Around it and look I'm simple finance is what I know That's how finance will that's how finance will adjust and now finance Investors banks insurers asset owners starting to say what's your plan? And I'm sure on the Aramco IPO that question was asked Yeah Well, I think the transition I think the demands will come for it to happen overnight. It's happening You heard I mean the the op-ed that that youth signed up to here was focused on the finance sector I think that that is an incredibly important development that business should be taking into account It's not only looking at governments It's also looking at corporates and it can happen tomorrow It can happen tomorrow and the decisions are there, you know The first study on climate went to Lyndon B Johnson in 1965. Yeah, right that shocked me So it's not that it's not possible. It's not that we don't know so, you know, it's it's there the technology is there and This decade is the key but the decade can't be the last eight in the last two years Glasgow is key. It's not the it's not the end We need to make progress there and need to actually build the confidence For young people around the world that they are not going to face climate chaos when they're 20 years old All right, ladies and gentlemen, thank you so much for a spirited conversation