 Our final speaker this morning is Karen Fang, who will be speaking on the topic of financing. Karen is a managing director and head of global sustainable finance at the Bank of America. The title of Karen's talk is financing considerations for carbon capture and storage. Over to you Karen. Thank you. Can you guys hear me okay. Okay. Thank you, Sarah and Mickey and the Stanford University for giving me this opportunity. We at Bank America Corporation has a long standing relationship with Stanford so I want to give a shout out to the entire team here for the excellent work that's been done over the years I know my colleague Rich Brown is on this call as well so as Sarah said I run global sustainable finance for Bank America. I've been with the bank for 11 years, running various structure financing and sales and trading businesses in the front line. And I was asked to run sustainable finance as of a year and a half ago financing the energy transition is a C sweet agenda pretty much at any large global company. So it is a topic that's very, very important. And I think the, the goal here is to talk about from the financing lens, I do realize I'm the, the black sheep here in terms of representing the financial services sector. Obviously everything does cost money. Everything does run on capital in terms of this very important climate transition so we have a very important role to play to connect the supply and demand of capital and carbon removal and carbon sequestration and storage is so important, but it's so nascent. It really requires a lot of the, the collective work between us to make sure we can scale this, and achieve the climate benefit that we all want to, we all want to see. So just want to give you a couple perspectives from our, our standpoint, in terms of when we think about this from a bank perspective and investor perspective. We see these opportunities, and what are the incentives such as the 45 queuing the tax code for carbon capture and other asset financing and project financing considerations that are necessary in order to scale this very, very important sector. This is a sustainable finance framework that I was talking about. So this is how we actually think about it, and any financing related to carbon capture and sequestration of storage obviously falls into the first pillar which is environmental transition, and inclusive development is very important obviously in terms of affordable housing healthcare education, racial and gender equality so how we think about these things is every project we do we also want to look for the intersection between the costs. So as we consider where we put our financing, where we put our investments. That is also an important consideration is this environmental justice or climate equity point so that's just a side point. So the mission is about mobilizing scaling right so very, very, you know, interesting experiments are are good to try but when you think about, you know, human capital and financial capital in terms of, you know how we want to focus and prioritize we definitely want to focus our capital and and and frankly human resources on in the area that you all collectively in academia believe is the most scalable technology going forward. So that is actually frankly a lot of the work we're doing and we're spending so much time in the academic arena to understand things that are just not in the marketplace today the soil carbon topic we talked about direct air capture and point source capture a lot of these, you know, engineering topics and solutions that you guys are studying and making incredible discoveries. How do we really make sure that those become commercialized in a scalable manner so that is effectively the work we're doing is to help incubate and scale capital deployment. I mentioned we have a net zero 20 by 2050 commitment at Bank of America, we're not alone 400 out of the 2000 largest companies in the world have made a net zero commitment. And obviously you know many many countries including China have a national commitment commitment as well. What that means to us simply is that the understanding of carbon emissions and carbon reduction strategies needs to be strengthened. And I think the learning curve is still is very steep. And I think a lot of the private sector investors and corporations. The reason it's a top of the house agenda is that the knowledge base is still very limited. And the solution set is very limited in terms exactly just exactly how you can achieve carbon neutrality and zero that need to really kind of speed up the learning and speed up the capital deployment is very much there. In order to support our net zero transition we also announced. This is one of the work that my team has driven with the top of the house and our eight lines of business and all of our colleagues at Bank America is we decided that we have to hold ourselves to a goal of monetary capital deployment. It's not just net zero as an ambition but it's also when we say we want to scale capital deployment we got to have, we got to lead by example. The goal of this year we announced that we will commit $1.5 trillion by 2030, and out of that one trillion is to focus on the environmental transition pillar that I spoke about, and, you know, 500 billion plus will be a will be deployed towards inclusive development which is a social side of the, the sustainable finance as we discussed. So that is a pretty big commitment, and pleased to report that we are joined by the five other large, you know, large US banks. So collectively we have a almost a $4 trillion commitment between now and 2030. And all of us are looking at the best technology for carbon removal and storage and sequestration to finance frankly, we believe without that you just the net zero accomplishment will be in question. So we are not starting from scratch the firm has been at this for a long time we're not doing this because you know this is fashionable. We are the top issuer of ESG bonds in globally, we are top underwriter ESG bonds all of those can contribute to the financing of these instruments. We have financed over, you know, underwritten almost $400 billion worth of green bonds and social bonds and sustainability bonds. We are top renewable energy investor and lender in the US. We intend to use that skill set for carbon removal. So we financed 17% of the US renewable generation, for example, in tax equity and in asset financing. So we believe that we have the know how in terms of, you know, structure the right financing to scale a particular technology or sector. So absolutely looking forward to using our skill set there to help in this space on the social side we're also very advanced we're one of the largest affordable housing developers and investors in the US. We are one of the largest CDFI lenders and investors in the US. And we do a lot of work right now with our corporate clients globally in helping them understand, you know, what does carbon neutrality and that zero mean and what are the, you know, tank fruits they can, they can implement today to reduce energy use to renew their source energy to wind and solar for example, and how do we really help finance and lease and and trade for our clients, such that they can actually have a very credible glide path towards net zero. So, with that next page please. So the tailwinds are here, right so the private sector is not moving alone obviously from the public sector perspective, you see that 191 parties ratified the Paris agreement I don't have to tell this audience today, you know that the US is very focused on this. And so my administration has really sped up a lot of the different, whether it's tax policy discussions whether it's different types of earth shots for clean hydrogen. There's a lot of momentum from the public sector. But if you look at regulation wise, the EU and the UK are ahead of the US, when you look at the EU on ESG disclosure or the sustainable finance taxonomy. And what in the UK the PR a the regulators doing all of this is pointing to convergence of ESG disclosure, carbon disclosure, and potentially a dictionary essentially to tell global capital markets and investors and banks. What is sustainable finance taxonomy compliant, and what is not, and the intended consequence there is that there will be a differentiation in cost of financing and cost of capital. In the most compliant projects, the financing will become cheaper and more scalable, and the sustainable finance taxonomy non compliant instruments will not be so will attract more expensive financing costs, for example. So all of that is basically to say that there is a lot of momentum from the public and private sector to finance the right technology and the right sectors that are doing the right thing to decarbonize as fast as possible. The cost of momentum is there 32 trillion out of our global asset management assets under management has declared net zero. That's 36% of the global AUM. As I mentioned, we are one of the 400 plus companies that have announced net zero commitments by 2050, and that's out of the 2000 largest companies in the world. How much does this cost. So we've seen different reports from BCG to the UN. And actually, the energy transition is expected to cost around 100 to 150 trillion dollars in the next 30 years. So that's roughly three to five trillion dollars a year. And as I mentioned, that's why we stepped up our commitment to say, we as one bank will commit $1 trillion into aiding this transition, and the top five banks actually, you know, have collectively pledged about $4 trillion. There are long ways to go, but we do believe that the momentum is there and the capital will be there. Very focused on the following four sectors in terms in the in the banking industry, clean energy and power clean transportation, carbon capture and sequestration and offsets credible offsets high quality offsets of course we understand the criticism. And then agriculture sustainable agriculture and water and waste to energy. These are all important sectors that we're putting a lot of capital and helping companies go public. Bring them debt and equity capital through you know IPOs and, and some specs, and as well as the capital markets and converts financing. We offer a variety of financing advisory and trading solutions to our clients you can see this at the bottom. Whether it's, you know what I won't go through all of it, whether it's all the, you know, ESG bonds and loans that we can offer securitizations, looking at different types of PPA solutions for corporates, looking at tax equity solutions in a variety of sectors when solar EV believe the tax equity solution might be coming in a very, very credible way for SAP as well. So the space is evolving fast. And I think the incentive scheme and the market participation structures are all evolving very fast. Our job is to apply what we have learned in wind and solar financing and EV and energy efficiency financing into more nascent technology space and that's why we're here is to learn. What is the most credible way to remove carbon from the atmosphere using both engineer solutions and nature based solutions. And then we all look forward to your guidance on what's the technology to bet on, because I believe, as I mentioned the capital is there, but we do need to prioritize and differentiate such that we're not you know spending money on 100 different experiments, and then hoping one of them sticks. It's really very much about, you know, being aided by knowledge and basically make sure we can commercialize the most credible technology, you know, in a very speedy manner. I do want to say the supply chain financing is very important topic for our clients, because many clients realize just because they can, you know, become carbon neutral in scope one and two and in their own operations and in their own power usage. That's not enough in the whole climate solution space. They really need to affect their entire supply chain and value chain. You see what Apple is doing, you see what Amazon is doing. We are even looking at everything we source, and the $53 billion expense base that Bank America has is a powerful tool as well. In addition to our clients that we service. It's a very, very important tool for us to say where do we want to spend our expense, everything we're using the company, how do we really affect that decarbonization in the supply chain so I do think that's a very, very important topic, because my scope three is someone else's scope one and two, and we're all in this together. Next page please. I believe carbon removal is, you know, it's kind of one of the four, you know, main solutions that we see for decarbonization. And this is by the way one slide that we show our corporate clients, where we go through. So after you develop a plan, what are the core areas and principles of decarbonization that that you need to follow right, they're always the easy things first and the harder things later, but you got to reduce your energy usage right that's why we're looking at all these different solutions in terms of least certified construction of new buildings, you know, obviously looking at corporate travels, the corporate car fleets, how do we make them electric. How do we really just implement energy efficiency upgrades everywhere in existing buildings and the lighting and the heating and the cooling so it seems very basic to you all but this is not obvious to every CSR office at our corporate clients so we kind of go through this to say, you want to reduce then you want to renew your source energy to renewables, you want to realign your entire supply chain of value chain as I just discussed, and then last but not least put that last mile of unavoidable emissions right we absolutely advocate for very disciplined use of offsets. And that's really for those emissions that after you have done all of the three things on the left, that you can avoid that those inevitable final mile of emissions, you should use a, you know, very high quality offsets, right, to basically remove that last mile so you can become that zero. So that's the framework that we, we use with our clients. And how do you think about the compliance carbon market versus the voluntary carbon offset market. How do you think about, you know, using engineer solutions, whether it's DAC whether it's point source and other type of, you know, engineer solutions, waste of energy, for example, to achieve that offsets, or do you use the more conventional nature base, which I think there's a lot of debate around the green carbon on reforestation I fm for example, clearly soil carbon is a tremendous amount of potential, but it hasn't really come to the financial services industry as an asset class. And I think that asset class needs to be developed with urgency, because just because the amount of carbon absorption potential it has. Blue carbon has been talked a lot of talked about a lot as well. All of these coastal wetlands. And the preservation is very important to some of the climate vulnerable nations. So the work we're doing with United Nations and web there is also very focused on blue carbon because not only you have carbon benefits but you also have a tremendous amount of social benefits. And really, you know, when you think about those vulnerable island nations that the blue carbon is very much in need for those nations to receive the capital that need to revitalize their communities. So carbon offset is not carbon removal is not a standalone topic. We view them as an integral part of the decarbonization work that we do with our corporate clients. Next page please. So this is a slide I don't have to, you know, show this audience but again it's important to show our corporate clients and when we talk about this topic, which is, you know, for for those that believe carbon offsets are just not needed. For CC us obviously you know, again, everyone can be this chart but it's really around. Hey, how do you different path right if you actually have faster CO2 reduction. You may need less of CC us but if you have slower you definitely need to have a lot of carbon capture and and other nature based solutions. And by the way, even if we all collectively achieve net zero by 2050. You know, if you look at the science we still need to be carbon negative between 2050 and 2100 in order to continue to stay on this one and a half to two degree path. So the work is not done in 30 years, and the carbon sequestration and carbon, you know capture work, and the technology need is not done, you know, in 30 years we actually have to continue to capture carbon into many decades into the future. So this is kind of what we see the road ahead, and in terms of developing very robust scalable financing solutions for nature based carbon capture solutions, but also engineer solutions to make sure that we can contribute to this very important climate path. Next page please. So this is where you can see the climate announcement. The capital is there, as I mentioned so you can see that we have the highest sort of climate transition capital deployment goal, along with JP Morgan and some of some of the other us who are managing as well. And the, the, the energy and power majors play a very, very important role in terms of kind of focusing on. Okay, we got to develop a lot of renewable, you know, power I think this is public information to tell just reprinted themselves to tell energies, and just the amount of renewable installation they expect to do alongside BP and many, many other majors and you see here is tremendous but it's not just renewable power. It's also, you know, wind and solar, it's also clean hydrogen, but they're all investing heavily in carbon capture and sequestration and storage. So, we absolutely are talking to all of them in terms of, you know, what's the capital need, how much is equity how much is debt, how much is project level how much is company level. So all the typical work we do for these established companies. They can also tap capital markets, you know, look at the amount of issuance of green bonds and sustainability bonds. I think right now the ESG bond market is $3 trillion market cap. Last year doubled, you know, the level of 2019 and this year is going to potentially double again so the amount of capital that's aligned with this purpose is increasing by the day. There's a lot of M&A activities that's happening as well where, you know, oil and gas major acquiring a wind and solar company, you see what BP did with light source. It is my belief that a lot of oil and gas majors are going to acquire carbon capture type of companies and technologies and projects to basically scale this. So if you look at the project level, we are actually working on a couple of live transactions right now utilizing 45Q in the tax code to basically essentially reward the tax equity investor, you know, X dollars per ton of CO2 captured. So that's going to help, you know, if you look at the ITC and PTC market, they really helped wind and solar scale in the last decade. So our hope is that the 45Q will be a very important link to bridge the economics to make sure these carbon capture projects get financed. The startup companies on the emerging market side, you can see that it's more venture capital, early stage PE. The good news is that it's not just TPG rise, it's TPG climate, you know, it's breakthrough. There's a lot of capital and a lot of funds are being formed investing these carbon capture technology companies right now and project level companies right now. So I do believe that's actually going to put probably equity level financing to those less mature companies first, and then potentially then getting to the project level tax equity and debt considerations. So this is the last last slide. As I said, we're all in this together. So the intersection between financing and policy is very, very important. This is this is not our research. This is from the global CCS Institute. So many of you probably know this, but we agree completely in terms of the action points here. Kind of driving the learning curve so we can drive the drive down the cost curve increase the financing incentives 45Q is a good start, but I do believe that will be additional incentives could be capital liquidity incentives for banks. That could be very helpful liability protection for the developers. Carbon tax, probably politically we won't get there in this country, but it's good that you has, you know, serious considerations for that and Canada already has a carbon. Carbon tax for 40, 40 Canadian dollars, for example. So I do believe that will be hopefully that playing field would be leveled going forward. Regulatory disclosure that's very important and that convergence needs to happen. So with that sir I know this is 115 so I'll turn the floor back to you. Great. Thank you so much Karen. Okay, we do have a couple questions I'd like to ask. First, how does Citibank go about validating nature based solution projects to ensure that they're actually making greenhouse gas reduction impacts. Oh, I'm sorry. Bank of America. Oh, sorry. Thank you. We validated our interim so we actually work with a lot of external parties to validate where we are the baseline and basically kind of get that certified so we absolutely don't it's not just an internal report because the information goes into our annual report. And in TCFD. So we absolutely have third party verifying our emissions and emissions reduction path. And that's how we, we do this every year but we also, when we became carbon neutral in scope one and two in 2019, we did a pretty serious audit internal and external audit as well. Great, okay. And how much risk needs to be removed before you finance projects so you know are there a certain number of plants need up and running or you do need some demonstrations of the technology to take off agreements what how much of that needs to be reduced It sort of is that it really depends right so we're working on a biomass to to sing gas and with a carbon capture so it's a negative carbon sing gas project right now. And then when we're looking at it we're looking at the offtake of the LCFS credits. So that becomes part of the revenue stream part of the revenue stream is a 45 q tax credit. Then part of the revenue stream is a carbon offset offtake by corporates. So when you add up those three aspects of the revenues, we all of a sudden makes a very very early technology, somewhat financeable because you have corporates essentially taking on that technology risk. But if you have a project where you don't have these offtake contracts you don't have any 45 q application, then the revenue side becomes very lucid that becomes much harder to finance. Okay, and a related question how about. How do you value the CCS projects when there are very few markets, having a serious policy in place to pay for them. And there's no clear revenue path, how do you go about doing that. And that's exactly the question which is why you know we believe that in the absence of public policy or incentives, you know, like if 45 q didn't apply for some reason because you apply to industrial sites for example, then you have to really get the offtakers. So you leverage these net zero pledges, and you get companies that are therefore thinking, you know whether it's our company Bank America whether it's Microsoft whether it's others that are willing to lean in before these essential removal benefits get recognized as a sort of valid offsets that people can put into their sort of scope 123 offset officially. So it's a little bit of a leaning in a leap of faith, but without any kind of offtaker. You know on any part of the carbon benefit, it is very difficult to finance not going to lie. That's why I think a lot of those technologies require early stage seed or serious a or serious be financing and you can see that right and is still equity funded largely the debt becomes much harder, because when the debt tends to be lower risk low return. So the debt capital doesn't come in until you have some kind of, you know, certainty in cash flows on the revenue side. Awesome. Okay. Thank you so much. Thank you Karen for presenting today.