 Thank you very much indeed for joining us on this new climate for doing business debate. I'm Steve Sedgwick, an anchor at CNBC, and I spent the last three and a half hours in very much an old climate, very cold outside, but I gathered a lot from people about the importance of what happened at COP21, what happened in Paris, and how we actually built up momentum on something very, very positive. And that's quite rare for 2015 when we're worried about China, we're worried about geopolitics, we're worried about markets, we're worried about US-fed rate hikes. And yet COP21 was an unambiguous success. There are very few people who deny that we have climate change now, and there are very few people who, it seems to me, from all the amazing talks I had in Paris and the talks I've been having since and before who don't want to do something very positive and it's the business community who I think a lot is going to rest upon. It's all very well talking about the governments who did so much about the public sector, but it's the private sector that's got to find so much of this finance and it's got to provide so much of the catalyst for change. And then we get to this title, a new climate for doing business, and I thought to myself, is that a statement or is it a question? Have we a new environment or are we hoping for a new environment? So let's just go through the panel. My idea is to speak very little, believe it or not, and Fike I know who knows me very well over the years finds that absolutely incredulous, but my idea is that the panel talks to themselves. And then eventually, yeah, there's lots of smart people in here. I'd like you guys to all get involved as well. And I will spend a little time talking unless, of course, there are gaps to feel. But let me just tell you about this quite amazing panel of people we have. And I'm going to start off just by explaining who's around the desk. Then we'll start talking to you individually. Cristiana Figueres, what can I say? Executive Secretary of the UN Framework Convention on Climate Change, otherwise known as the Chief Cat Herder from COP 21. I already know your secret. That's much better than Chief Whip, which is my other friend. But I know your secret source already. It's PG Tips, everybody, by the way. The good old fashioned English cup of tea. And I know how that drove you round to getting these people together. So it'd be great speaking to you about events. We'll come back to you in a few moments of time. Stuart Gulliver, of course, Group Chief Executive of HSBC. He tells me shy on these events. So it's up to me to bring Stuart out and talk not only about what HSBC is doing itself, but also about what it's doing to finance this new revolution, this new climate as well. Doug McMillan, President and CEO of Walmart. It's a real pleasure to have you over. And I think it's great that we've got representation on this panel from the US because if there has been some skepticism about the new climate, it's come from the US, I think, especially. And so it's great to get a CEO who I think is pretty much paid up to the change that's happening and transforming your company as well. And as I say, my old friend Fikisi Besma, CEO of DSM, who, well, I know you're a fully paid up member of the Weemian Business Coalition. You're a great advocate for what business needs to do and actually enacting what needs to be done rather than just talking about it. But let me start off with you if I may, Chris Young. I think it was a very big success, what you achieved in December. Do you feel one month on that you achieved everything you wanted to achieve at the COP21? Well, I think that we did achieve. In fact, it even surpassed my expectations. But before we sit here and congratulate ourselves, I think the success is not yet on the table because whether Paris is successful is going to depend on how we interpret and how we act upon the signals, the very strong signals that came out of Paris. So I think that we need to keep that in mind that, yes, that was success. But frankly, even after 20 years of working toward that, that was the easy part and now starts the difficult part. So why do I say that? Because I think we need to listen to two things, understand two things. First, we need to understand the very, very clear signal that Paris gave and we need to understand the very clear risks that are pointed out. And then we have to figure out on the other side here of my panel members what are we all going to do? So the signal is very clear. The signal is toward a long-term transformation that is urgent. And usually you don't put those two things in the same sentence. But in this case, it is true because it is a transformation to a decarbonizing or this morning the chemical industry corrected me and said it's not decarbonizing, it's defossilizing the global economy. But it is toward a long-term transformation and transition however there is a ticking clock because we have to be at a certain point which is carbon peaking within five to 10 years, global peaking and then descent. So there's a ticking clock. We cannot have abrupt changes but we have to have very, very clear progress toward that. And I think what is very important about the clarity of the signal is A, the urgency, B, the direction because it does set out not just short-term, medium-term, but long-term where do we have to be? Amazingly, amazingly we have to be at restoring the balance between what we will continue to emit and what we can absorb 35 years from now. Honestly, in planning terms, that's the day after tomorrow and we have to start moving in that direction, walk it back and figure out what we're doing. So the signal is very clear. The other thing that is very clear is the risks, the other side of that. What is very, very clear in addition to understanding the signal is understand the risks and that is the whole family of the stranded assets which frankly after Paris does not refer anymore just to fossil fuel industry per se. It actually refers to the embedded carbon in everything that we do, in all our processes, in all our goods, in every one of our widgets. So all of that has now become perilous and we have to figure out how are we going to dial back. And I think that is the huge challenge now. So take Paris as a clear signal, take it as a very clear indication of how we are at risk, but now the real work starts. What are we going to do about it? Let me just ask you one or two very quick questions and that is doing business in the emerging world and opposed to doing business in the developed world. It became a very clear theme throughout the couple of weeks of COP 21 that actually the developing world was going to be given different rules. It was going to be given a different timeframe to get to market, to get to the end position as well. That's a difficult signal for business, isn't it? Doing business in emerging under one set of rules and under developed world in a different set of rules. Well, but I think you need to understand the difference between political reality and real reality. The political reality is that of course developing countries need to carve out that space because it doesn't take too much to understand that they are farther behind, that they are actually the ones that are just beginning to be positioned for the huge growth that we have seen in the industrialized countries and that they're now being expected to enter into that growth cycle and that growth effort with a much lower carbon footprint than anybody else has done in the past. So of course they need to have that space. Now, the fact however in the real economy is that it is precisely the developing countries that present our biggest opportunity because that is where population is growing, that is where energy demand is growing, that is where infrastructure is growing, that is where consumer demand is growing, that is where finance is flowing. So no matter from where you look at it, those are the countries that represent the hugest opportunity to actually be able to move in and support them in this growth in a clear and in a clean and predictable and safe way. So yes, they have to politically, they have to protect their space there but they also understand as does everybody else that this is where the change is really going to happen. And there are a lot of people in this industry who look at the fossil fuel industries, who look at the oil and gas industry and say these guys need our support in the interim and yet they're being demonized by many. I look at the unburnable, uninvestable, the untradable products and I think we need these on the transition period. So we need to support the fossil fuel industry rather than demonizing it in the medium term, don't we? And I think that's an important point, isn't it? Because if we don't see investment, we've seen hundreds of billions of dollars of investment coming out of fossil fuel, we're going to see price shocks, aren't we? Well, I completely agree and actually I would say, not demonize just the fossil fuel companies but not demonize anyone, whether it is a country, whether it is an industry, it doesn't help. But there are people who are climate change lobbyists and activists who will demonize and continue to demonize anything that comes out of the ground. Well, but that doesn't include me. And I really, I have been very consistent in saying it is very clear that the oil and gas industry has to play its part. It's not an invitation. After Paris, there is no other way. They actually sit on access to capital, on technology, on incredibly trained engineering mass, critical mass of engineers who can be all of which can actually be now moved over to the new economies while they transition out. So they have to have two strategies, right? They need to figure out which are their completely untenable investments that are already coming off the table, right? 400 billion already in capital expenditures of very, very high cost oil and gas in deep well or Arctic drilling or sour gas or any of those very, very expensive. 400 billion already taken off the table, but at the same time, so they have to focus on their much more efficient products, but at the same time, they need to begin to be the motor behind the transition. It's very interesting. As I was asking that question, and as I'd asked that question, I looked over Christiana's shoulder and saw a very senior oil industry executive just nodding and smiling. I won't embarrass him, but it's nice to get that question and him being here as well. Stuart, you were going to come in on this. This is absolutely pivotal to HSBC. It is, and I mean, we obviously furiously agree with one another on this. It's not a question of leaving the fossil fuel industry behind. I don't think that is responsible. I don't think that makes any sense. But for two or three reasons. One, you're absolutely right. The emerging markets will be users of coal for the foreseeable future. And yes, business can easily get around the idea that there are different standards in different parts of the world. As part of our lending policy on power stations using coal, we have different pollution requirements for emerging market power stations from the developed world. Emerging markets, it's 850 grams of CO2 per kilowatt hour. In the developed world, it's 550. You're holding them to a higher standard and I don't think that's difficult. The other reason to work with fossil fuel companies is, as Christiana says, massive engineering skills. But actually for the foreseeable future, a number of emerging countries will be dependent on this. And actually there's another nuance in this that we also need to be realistic about. So oil and gas companies, mining companies are major tax contributors to many, many countries. You can't suddenly have a step jump where you basically isolate these companies because actually a lot of the education, healthcare and various budgets of governments come from the taxes that these companies pay. So there has to be an orderly transition. There's an unintended consequence that will have all sorts of implications for government budgets if you actually did this in a disorderly fashion. No one's denying the direction of travel. It's a question of doing this in an orderly way. Yeah, and that's very interesting. And there's a conversation I had with Lord John Brown a few years ago about the contribution to UK pensions. I mean, you mentioned the tax contribution, the contribution that BP used to make to UK pensions. It was something absolutely enormous. And I know dividend is a very contentious issue at low oil price as well. But the contribution to people's pensions, to the exchequer, to the country in its entirety and its skills basements, it's huge, isn't it? So are you coming under pressure from activists, the people that Christiana doesn't associate herself with, to say you should not invest in coal at all regardless of that criteria you mentioned? So yes, we do come under pressure from activists. You can particularly see it come to a high point around annual general meetings. We get a lot of lobbying in between times. But as I say, we have responsible policies which we publish as to what we will lend to. And I think it's important that we actually manage this on an orderly basis, as you say. These companies are major contributors to the value of people's pensions, to employment, to actually tax contribution. I say direction of travel, no debate. But the actual end point needs to be reached in a sensible manner. So things like the Montreal Pledge for Asset Managers to publish what the carbon footprint of their investments are are all part and parcel of creeping social pressure on everyone to keep that direction of travel moving at reasonable momentum. But what I think is dangerous is this idea of there's suddenly a binary moment where effectively everyone abandons the oil and gas and mining companies. I just don't think that's workable, to be quite honest. And it's certainly not workable for many emerging countries which, as you said in your opening remarks, are being asked to operate with a carbon footprint way below what any of the developed world ever was required to do. Doug McMillan, you represent the world's largest retailer and it's hard to move such a super tanker of a company very quickly, but your company made some very strong commitments in 2010. And my understanding is you surpassed those quite significantly. Just tell me where Walmart is now, where it feels it needs to be. And as a perhaps as a follow-up on that as well, do you feel there was a defining moment in Paris in December? We do, and very encouraged by this moment in time and want to seize the opportunity. Our journey really started 10 years ago and the perspective changed caused us to set three big goals. We want to be supplied by renewable energy. We want to eliminate all of our waste and we want to sell more products that are sustainable in packaging that is more sustainable. When we set those targets, it felt uncharacteristic for us because those goals are so big they're hard to measure and we know that the world holds us accountable to results. But what it has turned out to be is that those objectives were large enough that we had room underneath them to set more specific targets and then make progress against those. And in 2010, we set an objective of eliminating 20 million metric tons of greenhouse gases from our system and we were pleased to announce recently that we achieved 28 million. We've been able to reduce our energy needs per square foot by 9% during that same period of time. We have an objective by 2020 of getting to 20% reduction in terms of energy usage per foot. So what we're trying to do is to use the size and scale of the company to make a difference in the world and lead by example and at the same time influence those that we do business with through our supply chain, large and small, fresh food, dry grocery, general merchandise, apparel across the gamut of the products that we sell. And I too am encouraged that the leaders of the companies that we do business with are becoming increasingly like-minded about this. And they see that making a difference in the world is actually good business not only from a reputational point of view but in terms of the math. We can lower costs. We can be more efficient and drive a better P&L. And for us once it became clear that those things were one in the same, our own people started to lead, make decisions and do things that they weren't directed to do but they were empowered to do. And I think that's very proud of. It's helped us recruit talent, it's helped us retain talent. And so what you can expect from us is we will continue against those three big goals, we'll set more and try to do everything we can both socially and environmentally to set an example. Is American public skeptical? Is it on their list of priorities? There's a lot more important things I think to Americans in 2016 maybe than climate change. They've got cheap fuel at the moment so it's not necessarily affecting them there. They've got a presidential election to worry about, worrying about Mr. Trump and all kinds of other issues which are to the fore. Is climate change something that your customers are really in tune with? Because I feel that of all the continents in the world, North America perhaps is the least on board in many ways. At Walmart we're very familiar with skepticism and I've kind of gotten to the point where we'll just ignore it. And as I said doing the right thing is good business. And so while the US population and other populations may not all be like-minded about it it almost doesn't matter because the decisions we're making behind the scenes improve the products we're selling. They increase the value we're able to offer to our customer. And what we can ultimately do is make the path of least resistance for that item, that choice they make at shelf level or online, one that is more sustainable. Fike, tell me about your experience of COP. You are a fully paid up member of let's get on with this. Let's get on with it regardless. Doug was talking about the math making sense. You've said this to me time and time again. The maths works for us as well. But as we spoke about on air this morning as well you're having to make some difficult cost cutting as well at the moment. It's a very difficult environment. We've got lower oil price as well. Does it make it harder given the cycle we're in given where the oil price is to carry on doing the right things? Of course the low oil price is not helping alternative entities. Although maybe it is the best moment in time now to put a price on carbon and I would advocate really to do that. We internally since a year work with an internal price on carbon or 50 euros per tonne. There is not a price we need to pay or 50 euros a tonne but we anticipate that that drives our investment that opens up opportunities et cetera. But we see as a company we need to do three things. Enable, first reduce then enable and then advocate. Reduce, reduce our own footprint by reduction of our own emissions, buying 50% renewable energy, those kinds of things. Reduction of our own operations. Secondly enable, enable the whole supply chain to our customers at the end to the customers of that who buy our products, our ingredients whatever it is in the food industry or in the automotive industry where we make cars lighter or the solar panels we boost in energy output or second generation biofuels using the agricultural waste. So that's the second thing enable and the third thing we're doing now advocate for it. I think the new climate economy report showed and so what Dirk is also saying showed that gross of the economy, gross of profits in companies can go together with addressing climate change. It is not that we need to go back to the agent times and live all very sober and being all very cold. That's just not necessary. And the technology today is available to make this transition from the fossil age we are living in for, but it's 150 years, now to the buy renewable age we are entering in right now. That's two of you who've said that the maths works now. Does it Stuart, does the maths work for investors who are coming to you with a proposition to whether it be a wind farm, whether it be a turbine, or whether it be something tidal, whether it be putting solar panels on top of stores, does the maths actually work? I need convincing on this one because I think without that carbon price and we can come back to carbon price, the maths doesn't work for a lot of investments. So I think we're at the early stages of the development of what's kind of a green financing market and a green bomb market. And at the early stages of development of any market you get pockets of dislocation to your point about investors want a higher return than actually the issuers have prepared to pay. Because in the start of any market any new financing structure will tend to be more expensive than conventional. It's only a matter of time though before that price catches up because again the investor community, insurance funds, asset managers, again are investing the money of the public and the public want to do this. It is absolutely the right thing to do. So therefore as walls of money come in and funds are set up to invest with green principles I absolutely believe the spread will tighten between where green bonds price today and where conventional prices and I actually do honestly believe that it'll tighten inside. So I actually do think that the mass works and one of the big roles that banks can play is clearly in underwriting and distributing financing that hits the green principles, the IGMA principles on green finance which is all about raising money for renewable products for climate change investment type of opportunities policing that that's where the money's actually gone, et cetera. There's a real industry that now exists around it. We did one of the first RMB denominated green bonds which we issued for the IFC in China. We issued ourselves a green bond earlier this year. There's a real demand for this. So actually I am optimistic that the mass works. I do think also if you look at what came out of COP21 it's five and a half trillion dollars a year of additional expenditure has to be put in to change infrastructure to meet the requirements of the commitments that everyone's made in COP21. That's gonna have to be financed with a public private sort of partnership. It can't all be done by governments. It can't all be done by the private sector. But actually there is enough money in the private sector to finance this and there is enough momentum behind this and I agree with Doug. People working for HSBC really like the fact that we're one of the top three banks in the world under right and distribute green bonds and we've made this a big strategic initiative because they wanna work for a firm that's kind of doing the right thing. And therefore we have signed up to all the disclosure stuff around our own energy commitments, our own climate change commitments, et cetera. So actually I am confident it works. I think as I say you'll get little bits of pockets where from time to time it appears difficult to do this. But to be honest with you that's the true at the start of every bond market I've ever been involved in opening up. I think it's important to remember that the time horizon matters. If you're trying to deliver a quarter you might not make a decision like this but if you think about it over a year, three years the capital related to HVAC equipment or solar or other things but the math becomes really clear. I totally agree with what Doug is saying. We are responsible for our companies not only for the next quarter. We need to deliver the next quarter but not only responsible for the next quarter. Even stronger responsibility that our companies exist and do well in three years and five years and 10 years. You must be really blind if you don't see in the world that we are at the tipping point and into a transition. Now any change, any transition will have winners and losers. Now the nice thing is you can choose right now whether you are in the category of the winners or the losers in the coming years. If you don't prepare yourself right now and find out on five or 10 years that indeed the world was transitioning and you didn't do anything then most likely you belong to the losers. If you are in the chemical industry and you need carbon atoms to make your products in the future then bio is one of the alternatives. If you don't invest in bio right now you are making your future more difficult and I think it is a free choice of companies. Basically it should not be a free choice because you should work on it preparing your company for the future. Companies cannot do it alone. We need the support also of Christiana and all her governance behind her because like Doug knows better than I do. There are two people fighting tremendously with each other and that are citizens and consumers. Those are the same people by the way but at different moments in time. The moment they are citizen or voter et cetera they want to have a new future et cetera. The moment they turn into the shop into a consumer they said well let's postpone this citizenship to tomorrow and buy the cheapest product today. We could be talking about organic food couldn't we? We could be talking about organic food. People want responsibly resourced animals until they think hang on that pork is this price and this pork is this price plus 20% as well. That is a great point isn't it? Citizens versus consumers. You must have that battle every single day. We do but if you think about the system and you plan long enough out you can make changes to the system and help shape it collaborating with others and one of our changes in the company was to let universities and NGOs and other people influence us and use the assets that we have through their own thoughts and the way they work with us to engineer the product and the packaging so that those trade-offs are minimized or best case eliminated. We don't believe we're going to be able to launch a marketing campaign and convince people to pay 20% more nor do we want to. But we can take a Band-Aid package from Johnson and Johnson and make it smaller. No one will notice it's more efficient. The footprint goes down and we sell just as many units. We can make all kinds of those decisions across our assortment. Winners and losers. You talk about winners and losers as in winners is those who get on board the technological change, the renewable change. I'm going to have to disagree with you all by the way because you're all agreeing with each other. So hence my role will be slightly different. But Stuart, for the investor there's going to be a lot of losers in various green bronze in these investments. Whether it's dot-com bubble in 2000 whether it's building the trains in the industrial revolution whether it's the gold rush there's an enormous amount of blind alleys technology that won't work technology that won't be able to compete with China as well. So we're asking people to spend billions and trillions of dollars and yet a lot of it's not going to work. It's not going to pay off. I wouldn't compare it to the sort of dot-com bubble and so on but it's absolutely the case that there are high risks in innovative technology. But that's one of the great things that was coming out of COP21 is this notion of public-private partnership because one of the problems are very long-dated financing and particularly if you're doing it around say a power grid or you're doing it around renewable energy production, et cetera is that during that period tariffs can change legal risk can change over 25, 30 years. You're very, very exposed to the legal system to frankly the populism that takes place around democratic elections you find tariffs change, you find pricing changes and that changes the dynamic of financial risk every bit as much as it was just the wrong technology in the first place. So there is a need and this is why we do think that COP21 is historic is you've got civil society, you've got business and you've got governments all working together. Now that doesn't mean that money won't get lost there will be technologies that don't work, okay? But the risk that can be managed which is kind of legal, political risk, et cetera can all be dealt with by work between the multinational agencies, the World Bank IFCs, et cetera of the world, EBRDEIB and the private sector and the UN and so on to actually minimize the hedgeable risks. The risks you're not gonna deal with or be able to take down and that's kind of the way the capitalist model works is some of the stuff just won't work, yeah? But there's a second series of risks that we can deal with which weren't dealt with before COP21 which is if I come to you and say, look I've got this, I've got this ability to create electricity with a much lower carbon footprint sign up for it for 40 years but in the meantime to your consumer point five general elections later the government decides that actually they're gonna reduce the cost of electricity by 50% and wipe out those bond holders that risk is being dealt with by the work that's coming out of COP21. So a lot of it's gonna lock consumers, Cristiano as you come in on this one a lot of it's gonna lock consumers into higher prices. Well I've been sitting here as you've been talking and thinking my father had a fantastic wisdom he said, if things are going badly continue in the battle if things are going well take another battle and so I think we have agreed and most enlightened leadership no matter what sector whether it's government, civil society, industry whatever banking everybody has agreed and you have heard it here on the direction of travel okay so now what is the next battle because now we can say okay got it right very good news we have the direction of travel. Well the next battle is speed of moving around along that direction of travel and everyone you know one of the strengths of Paris is that it actually if you will builds a very broad highway with many different lanes and allows every country because those are the ones who sign up for it to choose the lane of choice are you gonna be in the slow lane are you gonna be in the fast lane you know whatever but we have a common direction of travel. The same thing is true for everyone else who participates in that and I would say Walmart has been in the fast lane for a long time. Now with Paris my challenge here is how do you move from the fast lane to the even faster lane? What does it take to move even faster? What does it take to take these raw materials that you produce for down the value chain and actually move that farther? What does it take to de-risk the flow of capital because we are definitely moving in the right direction but folks we are not moving fast enough so I'm beginning to think of myself as a ticking clock and it's very concerning to me the fact that if we are going to get to a point of economic stability around the world where we can all have the basic well-being and prosperity then we need to get to global peaking over the next five to 10 years. How are we gonna do that? So you know to come back to de-risking finance which I think is one of the major levers I would be really interested to know how do we de-risk that? Do we need to have either a collective effort, a facility that everybody puts in some capital into that actually acts to de-risk the capital flows that then go into the major investments? Do that, does that need to be decentralized? How do we deal with the risk? Because sometimes it's perceived risk, sometimes it's real risk. What can we do to really effectively de-risk the flows of capitals because we know 90 trillion but they've got to be put down this one path. What do we do? I think we've all been asked the challenge but do you wanna start off on that challenge? What can you do to move back to the fastest part of the fast lane though? Two things came to mind. One is in addition to speed breadth, where do we work, what drives the result, the outcome the most, we're working on everything from agriculture with small and large suppliers to the way factories use energy, the number of things we're working on is this broad and sometimes we worry we can get diffused. Are we doing what's most important? If we're focused on the most important things we will be able to move faster. The other one is the role of data. There's an opportunity in front of us to better understand which factories are most productive as it relates to the issues we're discussing here. We wanna do business with those that practice the right employment practices. We wanna do business with people who don't introduce toxins into products or dump things into a river. Data today with the role of sensors and how the internet and mobile and other things can impact this may give us a better shot at progress and optimization and ultimately speed than we've been able to take advantage of in the past. So there is a technological solution to part of the question that Christiana's asking. I believe so. There's an opportunity to optimize the supply chain in a way that includes all costs. True cost is what we've been calling it recently. There is a cost for water. There is a cost related to people and how they're treated as they work. Are they paid overtime, et cetera. And if you had perfect visibility into that data you'd make better choices and that's possible and I believe that will increase speed. Lucky. Yeah, to add to the point stuck, mate. I would like to add to, of course, innovation. I think the new technologies, new innovations make it possible to make this transition. But we addressed already the point that some of the new innovations are not yet fully competitive and we need to get also a help from governments where it's with the price on carbon, et cetera, to make if you want to go. From citizens, yeah. From consumers. At the end, it's not the governments who are going to pay for it, it's me. It's you lot, isn't it? For your children and your own future and your own best film. We're already paying for this. You see that. Sensitive wind farms off the coast of Marge. I'm paying for these expensive solar panels that are not competitive in some cases. Well, when we opened our second generation biofuel factory that was in the age of time, 14, 15 months ago when the oil price was over 100 and people said at what reference point you took to be competitive? I said, we calculate with $70 per bail and at that moment, it was only 16 months ago, people said chicken at $70 per bail. You will always be competitive then because the oil price will always be above $70. Yeah. But that was ancient history 14 months ago. But I think we will be helped in this system change. Correct me when I'm wrong, Christiana, but all the national plans and the great thing of the national plans is they are bottom up. So if they don't implement, they lose their own credibility as a government. All the plans together gives us to 2.8 degrees Celsius increase. So not yet to the 1.5. Better than where we were. Better than where we were. But not yet there. But we also said we refueled in five years. So my hunch is. We did get to that, didn't we? Because there were certain parties who didn't want the five-year review. It's done. It's done. It's done. Even those parties in the emerging world. What happens in five years? In five years we will refuel it. Most likely we will not see that all intended national plans were being executed. And so hopefully we are around this 2.8 or a little bit less. At the same moment, the same people in Paris have said but we should be at 1.5. So I guess within five years we make up the balance which we did. We said great Paris, great transition point. But not good enough. Not good enough. We are not meeting our own targets. And the discussion will be within five years. Hey guys, what else are we going to do? Because we're not meeting our own targets. Price of carbon will come. Other system changes will come. Brings me back. This will happen within five years. I bet, please stay with it. Within five years we have that discussion. If you don't prepare yourself now as a company. We're taping the whole thing, Fike. Everything you say, we're going to throw back at you in six months to a year, to five years. Five years, I said. Actually, the good news is that date has been set, 2018. So three and then from there on it goes in a five year period. So the first conversation that we're going to have invited by Fike is 2018. All right. Sure, this de-risking of capital. Fike has mentioned the carbon price. We can come back to the carbon price next. We'll do that, I promise. But in terms of this fund or money coming together, the pools of money, is there any progress on that front of people putting money in together so that some of the risks are negated? Look, I think there is momentum. I think there's tremendous momentum from across the financial services industry, whether it's banks as underwriters and distributors, whether it's funds, insurance companies, and indeed the multilateral development banks. So I think there is the momentum and I think there is strategic leadership in the banking, insurance, fund management and the multinational agencies to get this. I think everyone realizes this is so hugely important. So within my own bank, the fact that I'm sitting here today having this conversation is massive signalling to the quarter of a million people who work for HSBC that this is incredibly important, which is why we're at COP21, which is why we're in New York earlier in 2015. And actually, particularly for us, it's also relevant because the significance as well of COP21 is China signed up to all of this. It's also the head of the G20, the 13th five year plan, the whole green bond stuff within China. China's gonna be a huge part of this climate change progress we're gonna make. And actually as well, you're gonna see as China does the One Belt One Road Initiative, that will also have to hit to the same principles. So therefore the financing requirements vast. There is a business imperative. There's also a moral imperative. So I don't think we actually will lack momentum in this. I absolutely agree though that we will have to keep chewing this up because to get this kind of significant change in people's behaviour and mindset, it will require the pressure to be kept very intensely on everybody. Look, I'm a consumer. I use diesel oil. I live in the countryside where that's my choice to fuel at the moment. Now for me to put solar panels on top of my roof rather than using heating oil, my heating oil is trading 25 P in the pound at the moment. That is a quarter or a third at least of what I was paying over a year ago. So I as a consumer, do I need to be cajoled into making these decisions or do I need it more in silent because the governments, UK governments, pulling away the incentive for using solar rather than giving it. So the governments are giving a different signal, aren't they in many cases? They signed up to COP 21, but actually on the ground, certainly the UK government and others as well, we can set the Spanish government which used to be fantastic on the renewable front. It's pulling away some of the support mechanisms. So is government and business moving in tandem still? Well, there's no perfection anywhere and certainly not there. Taking away the incentives? And UK certainly needs to figure out how they're gonna move forward because they are having a domestic versus international position. We do that all the time, Christiana. It's called Europe. No, more Latin America if you will. I'll stew it about that one. I might even have to ask him about that on this panel. But do you know, I think the, I agree, but also we have to look long term, okay? So maybe right now, because of many circumstances that we all understand, there's a very low price on oil and you're thinking, ah, you know, give me all the fossil fuels. Can you sit there and tell me that is going to be the case two, three, four, five years ago, years from now? No. Can I sit here and tell you, you know what? The cost of the fuel that we use in solar and the cost of the fuel that we use in wind will be consistent today, tomorrow, the day after da, da, da, da, da, and that is zero. The cost is zero. So once you have made the upfront investments in the infrastructure that you need in solar, in wind, whatever, then you have predictability there that you do not have with hydrocarbons. And furthermore, sorry, before you interrupt me, furthermore, what is very, very clear is that the costs of renewables are absolutely incontrovertibly coming down. Here are my two data points. Cheapest solar was adjudicated by Abu Dhabi Water Company at 5.98 cents a kilowatt last year. Cheapest wind was just adjudicated a few weeks ago in Morocco, three cents a kilowatt. Excuse me, right? Excuse me. And we know that wind is not going to become more expensive, don't we? So there's got to be, there is a compelling argument here. There is a very, very compelling argument. There is, and you know I'm a fan, but why didn't you get a carbon price? You knew early doors, you couldn't go for a carbon price. There are members of this audience, and I know a couple of you here who tried really hard to push for a carbon price. It would have given that confidence to the money men, to the big companies, to the investors in renewable and biotech. I can answer that question with one word. Unanimity. You knew you couldn't get it. The Paris Agreement had to be not taken and adopted by consensus. It had to be, for many reasons, it had to be unanimous. If there was one country, and there were several, that didn't agree with a carbon price in 2015, doesn't mean that they won't agree with it in future, but they did not agree with it in 2015, had that been rammed down the throat, we would not have a Paris Agreement. So, there's a pretty clear choice. Do you have a Paris Agreement that sets a regulatory international framework that is going to guide us for decades to come along a path of increasing- It would have been too much of a deal break. We talked about trust, we talked about implementation. No, it would have been a deal breaker. It's like, DM versus EM, but at the end of the day, that was the one that was just not gettable. When will it be gettable? Because I think, I mean, let's have a little bit of a straw poll. People around the audience who think we need a carbon price to be confident of investing in the new climate, in new business, in renewables, in sustainability. I know you want a carbon price, I'm presuming you want a carbon price. Does everybody here think- Can we vote? Yeah, everyone. Do we need a carbon price? It needs to be good policy. Do we need a carbon price over this side? If you'll put your hands up, you do. So, is that everyone? Anyone think we don't need a carbon price? Do you want to comment on that, sir? You're very welcome to. We've got a microphone here. Why do you think we don't need a carbon price? Just for argument's sake. I thought that was my role. I understand that, but I'm trying to help you. No, I think, have we proven that that price increases not going to somehow inhibit economic activity? I mean, we're in the US, we have a lot of middle class people who are worried about good jobs. I mean, what do you think? I think there's a lot to be worked out. I think timing of implementation, the way policy is written, thinking through unintended consequences needs to be done. And the more good policy proposals can be put forward for debate, the better. But if I might add, so what you're doing internally by putting a carbon price is seriously smart, because if you don't put a carbon price on, even if it's not a global price for carbon, even if you think it's a regional price, even if it's your company's, you're going to be misinvesting. If you're assuming it's zero, you're misinvesting. And in terms of, I mean, the pressure that's coming in states, how close are you to the administration? How close are you to working with the president? Because he seems to be moving in the same direction as you are, but you seem to be doing it in parallel rather than together as well. Does Walmart need to work closer with the administration or the next administration as well in getting this done? Because we keep hearing about public-private partnerships as well. We do collaborate and other businesses, I believe, are in an increasing fashion, and I do think it's important. I don't think the private sector itself can do it. You're back in the president's clean power plan. We are, and others are as well. So again, I don't think that either one of the sectors can do this by ourselves. We need NGOs. We need the private sector. We need public sector. We need to listen to each other, and we need to jointly solve frigate policy. I'm very happy to open this up. If anybody was wanting to get involved, and we've had one gentleman already, to ask this excellent panel any questions at all as well, there's a lady over there who's got a question. Anyone else who can get the mic to them? Let's just, and then there's one here as well. So let's start off with you. Hi, I'm Diane Regas with Environmental Defense Fund. We're a global NGO that works on aligning and economic prosperity with environmental solutions. We've been privileged to work with the gas sector to help them with their methane emissions, work with many companies, including Walmart to help find solutions. I'm interested in pursuing this question of getting in the faster lane. And it seems like the topic we were just on of what are the determiners for companies to engage, especially in the United States, but not just there, with the political sector to find solutions. It's been very tough, and I'd be really interested in hearing comment from each of the panelists about what are some of those determiners for your company, for your institution in engaging much more actively with the political sector to get a price on carbon, to get other solutions in place. Thank you. Do you wanna pick up on the first? We do have conversations with people on the Hill as well as the administration. And I think, you know, part of what kicks in here is common sense and return on invested time. We need to solve the political issue in the United States to get some of these things solved. So I'm sure the next election will do that and then we'll engage in a different way. So it's the election, probably, it could be a very different way. I mean, but is the administration, or is the current political situation, the constant electoral cycle, is that a barrier to getting things done in the United States? It is. It's off-sighted, isn't it? We have midterms and we have a presidential election. And the presidential election seems to be going on for, well, I mean, we still haven't had it yet, have we? But it seems to be going on for a good part of a year. Yeah, listen, I've got plenty to worry about without fixing politics. And, you know, what we need is something to debate and we need some people on either side to be willing to debate and find common ground. And we try to encourage that with the role that we play, but there is a limit to what we do. The polarization between the Democrats and Republicans, people talk about it at a lot of the moment, that's a barrier to getting other things done. Lots of issues, including this one. Yeah. Gentlemen, do you always want to answer this one as well? That's the very same question. Working more closely with government. I mean, I was speaking to Francesco Starracci this morning of NL. And once again, he's another one of these gentlemen in the power sector who's crying out for a common European power policy. We've been crying out, and he said, well, maybe we'll get the blueprint done this year. If we can't do that, Fike, what hope have we got of having a common green policy, a sustainable policy across the EU? Well, to give a small example, during the COP 21, all the different political parties, the parliament members responsible for sustainability were at Paris at a certain moment. And they organized a session with me, because I seem to be vocal about this topic. Okay, what else are the different opinions about the different political parties? We have a lot of political parties, sort of with 12 representatives in the room. And they hit the debate. And at the end of the day, I said, what is the debate all about? I mean, who of you, let's build the onion, who of you is against a better future? Who of you is against a better climate for your children? Et cetera, et cetera. And whilst debating, they said, well, we don't have so many debates amongst ourselves. So it's a very different debate from the United States. But we need to get, I mean, the politicians are trying to fight against each other in most countries and trying to debate, et cetera. But on this topic, to whom are we debating? What are we debating? We see all that we're moving from a tipping point into a new future. Let's just shape it together and let's not make this a political agenda between political parties, but join each other. And to be honest, I think all businesses, all investors, et cetera, would welcome that attitude from government because that stability will only help us to invest further to create a more certain future for financial investors, et cetera. This is wonderful. I think this is something they should experience, they should understand, and they should take that seriously. I mean, it's nice to be a politician, but there is a responsibility that goes together with it as well. And this is one. Sure, I knew I'd get in a question about different jurisdictions and where the best place to do business was, but I won't ask you that question, despite my head of news desperate for me to ask you. But in terms of dealing with different jurisdictions, I mean, you're dealing with China, you're dealing with Hong Kong, you're dealing with the United States, the UK government, and you have a presence elsewhere. Is there a certain regional jurisdiction where you think, I mean, obviously China's more centrally planned. Is it easier to get this done in China? Is it easier to get the momentum between politics and business? So China is centrally planned, and the 13th five-year plan specifically mandates green financing for most of the infrastructure that gets built. So it's actually very straightforward. So therefore, the slippage between policy, creation, and execution is very small. So therefore, yes, that is the case that it's very straightforward. It's a mandatory requirement that financing is done around the one belt, one road, and the stuff in the 13th five-year plan that has to be looked at to be done to the infrastructure, the building, the construction, to be done to sort of green standards. But I agree with Fike. I don't find anywhere, certainly in Europe, so I can talk really about the UK and Europe, where politics gets in the way of this, to be quite honest, because it's such an obvious value judgment statement. It doesn't make good political tactics to stand up against this. So therefore, in reality, nobody's going to. I think this is much more about good intention and much more about slippage around the friction of bureaucracy in the sense of small b, than it is about any political endeavor to thwart the initiatives that have come out. I don't see that at all. Did you want to come in on this one as well? I mean, you represent obviously the UNFCCC, but do you find that actually there are certain places where I just can't get the politicians and the business community on the same page? Well, and it's such a crying shame, right? Because honestly, this is not about partisan politics. If there ever was an issue that actually speaks to the agenda of both, let's say, traditional political sides, okay? Let's say the political side that to put it at completely irresponsible simplification, the political side that gives some primacy to the private sector. And the political side that gives primacy to, I don't know what to call it, to the common good, let's say. And it's an irresponsible simplification because both address both. But I think you get what I mean. The fantastic thing about investing in the technologies that answer climate change is that you're speaking to both sides of that agenda. It makes fundamental sense for business. We've already heard it and it is good for everyone. So please tell me, you know, another agenda, another challenge that we have that is so broad that brings everybody under the tent and that is so potentially beneficial for everyone around the world beyond the jurisdiction of the political debate in which you're having. I mean, it is such a win, win, win, win, win, win agenda. List of priorities, Christiana, that's the problem with you've got shareholders and you've got shareholders and you've got shareholders as well. And Doug, with all of the list of priorities that you've got, people want better returns on their shares. They want better dividend as well. How high can you push this up the agenda with all the best intentions before you're pushing it against the brick wall? Engraining it in the business is a way to think about it. So we have lots of decision makers in our company. There are people that make decisions about our refrigeration equipment, people who make decisions about items. All of them need to have a sustainability mindset and be working to engineer in a more sustainable product, whether it's social or environmental. And then you just make large and small improvements as you work through that process and you don't need to wait on policy changes to do it in most instances. We don't need cap and trade to know we need to be working aggressively against greenhouse gases and I agree on the point on speed, so we're not gonna wait. Hopefully the environment continues to improve and we're encouraged by recent events but we're not inhibited by outside factors. I think, building on some of what Dr. Sain, I think you create, and for the debate, I understand that, so I don't accuse you on that at all, but you create a tension which is just our job every day. I mean, a tension between long-term, short-term profit, a tension between following all the regulations or making sure it's cut. And it's the people who've lost their income on quantitative easing of making that tension. I mean, how can you push this agenda whilst also taking care of your quarterly earnings? I mean, there are hundreds of thousands of issues I need to take care of whilst making my short-term earnings. I need to take care that all the people are motivated. I need to take care that all the people are paid well. I need to take care that I follow all regulations. I need to take care of this and that. It's a great job, isn't it? It's a very tough job, I tell you, but with a lot of fun. So those dilemmas, I mean, that's life. That's not only life of the CEO of a company. That's life of all of us. We are dealing every day with dilemmas. So, amplifying the dilemma we have and saying, well, this is almost impossible. How can you push this agenda whilst taking care of your shareholders? Well, we are pushing many agendas whilst taking care of our shareholders. And that is the job we need to do. And to deal with dilemmas is human mankind. I mean, we need to deal with dilemmas on the short-term, on the long-term. And if you are better skilled to reconcile dilemmas, you can better out of that. Let me just try and get that last question. Was there another question over here, I think, from a gentleman? We've literally got about 20 seconds for your question in about a minute for the answer. Okay, I'm rather going to be a long question, maybe. Now, I'm Lars Josefsson. I'm chairing the Forum's Council on Decarbonizing Energy. And we are focusing on technology and acceleration of technology development. And we are very, frankly, very worried about the lack of discussion of the need of new technology. Because when we look historically, new technology in the energy area has a lead time of about 25 to 30 years before it gets commercialized and before you have widespread use. This is an urgent question. We know also historically that new technology has always needed the work together with public and private section. And we can see it in the solar and the wind. We've seen it in the nuclear. We saw it before by the cold, et cetera. Okay, so we need an appetite for... So why isn't this not happening? We, from our council, we are proposing a few things and pushing them and hope to be done. And I would like to engage in discussions on that. Brilliant, thank you very much indeed. Very quickly, Stuart, is the appetite there to invest in this technology without government support? It needs the government on board as well, doesn't it? I think it needs government on board as well. But the appetite venture capital funds to invest in R&D, I think is not an issue, actually. So the extent to which it's not taking place, it's not clear to me where the roadblock is, rather than perhaps in legislation or the fast tracking of approval processes to take place. So there isn't a lack of financing. And you would disagree with the 25 to 30-year time frame, would you? I guess things seem to be moving a lot quicker than that. It's certainly in the shale industry. I mean, if we can get that in the alternatives, then we're doing very well, aren't we? I think some technologies can move much faster. Seven, eight years ago, to use waste, Sunlow's rich waste agriculture material, to make a fuel is technologically impossible, people said to us. And I was scared when we started investing that they were right. Seven years later, we cracked all the problems and the factory is in Iowa and is running. I mean, it can happen. We've got about a minute left. I'm going to go around the table once and just ask, really, what you feel is the next big thing that needs to happen. We've had the agreement. You talked about implementation. You talked about trust. You talked about getting on with it and about everyone checking on each other. Fakir, I'm going to start off with you again. We've literally got about 25 seconds each, literally. What's the next big thing that needs to happen for you to be able to invest with confidence in a new climate for doing business? Everything we said already, I think I only want to say as a closure. I mean, you talked a few times and that is maybe the crux. I, as a consumer, I would like to turn you into the future, into a user and think about the whole circle of products moving into the circle economy. And you've been working on me for years and you'll get there eventually. At the end, you've become a user instead of a consumer and if that thinking is there, we make progress. Stuart, I don't think there is anything else. It's within the gift of everyone that's actually participated in Paris to get on with it. I don't agree with that. Yeah, so it's all there. Just get on with it. Plus maybe a carbon price. Plus a carbon price. But I think the get on with it is, for me, it means recognize that we have a very different context now that allows for a virtuous circle that is self-reinforcing and that needs to continue to grow and grow and grow in its transformational potential. And let's just have one quick vote then. Do we believe around this auditorium that we do actually have a new climate for doing business? Hands up if you believe we have, hands down if you think we haven't. They're going down too quickly for me but I think most of you, some notable exceptions, think we have. Vykesi Besma, Stuart Ganeva, Doug McMillan and Christiana Figueris. Thank you very much indeed for the conversation over the last half.