Speaker 0:
I'd like to talk about sustainability in yes year. We'll get onto maybe some of the matches in backward looking data.

Speaker 0:
But just off the bat, surely, from Ah, we're talking about short termism before is she's quite good. That makes people think about the long term.

Speaker 1:
Yeah, I actually think it's may or may not be an unintended consequence of the increasing focus on the SG,

Speaker 1:
but it's making

Speaker 1:
professional investors think about the consequences of how the deploying capital you know, there are really smart people out there who have invested

Speaker 1:
it successfully by speculating other market participants. You know you can, you know, really smart PhDs that right algorithms that can outperform the market. I don't actually call that investing. I think that's speculating, even, albeit in a very smart way.

Speaker 1:
How do you overlay responsibility, the SG onto some process like that? So I don't essentially I don't think you can. So what? What, Yes, years forcing mawr of the industries to come back to our original intended purpose, which is what are the consequences of how we're deploying capital on? I think that there's two things. I think it removes some of the less socially useful approach he used to investing on but also increases the quality of analysis and forces. People in the long term is, um, and that's

Speaker 1:
there's a whole lot of discussion about the social role of investment managers. Are we actually deploying capital into things that make the world a better place? I don't just mean less polluting. I mean improving standards of living so obliquely. I think yes, she is.

Speaker 1:
We causing people to refocus back on where we where we never should have lost sight of in the first place. It's back to the earlier point about, you know, stock markets are no unending themself on DS. So probably yes, she's helping that whole thought process.

Speaker 0:
We can get in to hold about about taxonomy and data, but had had someone describe. Maybe the way he stares at the moment is a perhaps been counting, you know, looking at carbon offset different bits of carbon. But it says all this debate kind of gets lost amidst the bigger picture.

Speaker 1:
I could make your portfolio, which has got 1/10 of index carbon footprint but which is doing nothing at all to tackle climate change on. But I think that's fundamentally what people need to understand. So it's not just climate changes, other things, although people tend to quickly focus in on climate change. Certainly in this country we have to think about it as a process of change.

Speaker 1:
We have to think about it as a process of engagement with companies. Think it, making take, seeing what management are willing to commit tiu in a way which doesn't undermine the prospects for their own business. I think it's labour intensive, so we've added dozens of analysts who we call the Yes, Janos. But the reason the hesitates like these is just investment analysis from a different angle, we have to do more, so we need more people, do it.

Speaker 1:
It's an expensive thing to do properly because you need people to do it. You need to integrate it into investment decision making. So all of that, I think, mitigates against the approaches of using sort of third party readings

Speaker 1:
because it is no consistent with their business model. If you are a passive manager, or if your telling index products the amount that you can reasonably charge for that I think is fundamentally incompatible with the resource intensity that you need to do? Yes, you properly. Others will have a different view of that. But from, I mean, I just don't think we've looked in detail. SG ratings from many of the different third party providers, the very different from each other on as often there's not. We just don't agree with him on that's not.

Speaker 1:
It's not because the people who work there aren't smart is because their business model isn't set up to lead them, to look in enough detail and to engage with management companies to figure if they're actually making progress. So you end up with this box ticking approach. Yeah,

Speaker 0:
So I wanted to talk just briefly about energy companies already. Good bit of research Thea The day that argued that SD inadvertently is turned on and gas companies in to the perfect capital allocates is not spending too much on new investments in oil and gas. Do you think that's a fair reflection?

Speaker 1:
It depends what they're doing. So this is very is not a we we don't for some clients just want us to not invest in certain sectors, and of course we're capable of doing that. And I'm not only that. But we respect that. That's what some clients want. But given a free run at it, we prefer to rule nothing in or out. And it comes back to this point about what our individual companies doing. So

Speaker 1:
we we hardly invest in any oil and gas related stocks, not because we're making apart from some clouds don't want us to, But even apart from that, we just generally don't find them attractive investments. But the reason for that is it's not clear to us yet. Which of them are redeploying today's cash? Those into tomorrow's green energy supplies on If you take your starting point is we the that consumers will vote with their feet and regulators will get harsher and harsher on carbon emissions?

Speaker 1:
If you have a 10 to 20 year view of Often Energy company, they have to be pivoting. It's perfectly possible that some of the big energy companies become very attractive investments if the capital allocate in a way which sets them up for the future. But for the time being, I think it's actually easier for smaller on more focused green energy companies

Speaker 1:
to lead the way in that rather than to shift. You know, the really big companies, clearly these air oil tankers and take this harder turn around. Think things like him. There probably is somewhere in our future energy economy. Green hydrogen is going to figure because it plays a role for heavy transport, etcetera. You do have to think of what he's got, the engineering

Speaker 1:
expertise on ability to rule that out on infrastructure. Todo move green hydrogen around the country, the world that might well be the big oil and gas and comments. So we shouldn't be closed to these possibilities

Speaker 0:
on the hydrogen. Is there a danger? Parts that we're seeing is a bit of, ah, silver bullet.

Speaker 1:
It's no, it's over billet, but neither is anything else on. I think if you look at the the Energy Revolution, which we find that very interesting investment space on gonna tend your view, it's the combination of all sorts of different things. So so is it is everything from the obvious wind on solar, which are now becoming

Speaker 1:
price competitive without subsidies, and that that in itself creates a very different environment. We're no longer really dependent in most countries on government subsidising the industry to scale We've almost got to the point of scale now. But then that's just that's just the obvious. There's then the transportation infrastructure. How do you get offshore wind

Speaker 1:
energy to where it's needed? There's a huge amount of very high spec cabling is needed to do that, you know. So there's there's there's all sorts of again what you might call more traditional types of firms that can benefit hugely to answer the question, you know, is there silver Bullet? No. Is a combination of electrifying the economy where you know that as technology stands, we're not going to be flying long. Let long haul flights and electric planes. So maybe that's where green hydrogen comes in.

Speaker 1:
The the whole transport infrastructure

Speaker 1:
probably needs to change away from there being so many vehicles on the road. So you know things like, what happens if you if we do eventually get self driving cars? What does that mean for energy consumption? Because it means cars are sitting and people who drives 19,

Speaker 1:
95% of the time so that Hydra does not serve ability. But neither is anything else on guy. Think we all need to understand that the scale If if

Speaker 1:
the world seriously deals with carbon emissions,

Speaker 1:
scale of change that needs to happen the next 23 30 years is truly colossal on. I'm not really sure that many people have woken up to that yet.

Speaker 0:
We're sitting here in London. What's your outlook on the UK at the moment? It's has been a lot in the news about. It's a less attractive place to list for a new business I think is arguably under investment in a lot of growth companies. What do you think?

Speaker 1:
I think there's a I think there's a particular challenge in the UK we have great science on. We're really good at creating coming up with bright ideas.

Speaker 1:
And then I don't think it's news to anyone that we're pretty poor commercializing that on. So there's nothing wrong with investing. UK is no, in my view, is really investing in the UK economy. It's about investing wherever you invest. It's about where can you find the most interesting Cos Some of them will be global. Some of it will be local. The challenge in the UK is that it's not been an attractive place for companies to try and raise growth capital

Speaker 1:
on get into this whole current discussion about while pension funds should invest more in UK growth. I can understand where people are coming from with that, But you can't just ask pension front. You can't you can't you? I don't think you can use pensions money for political ends. You have to create an environment in which there is a better opportunity set into which to invest in the UK and some of what's going on. You know, the changes to listing rules, and I think we have to be very cognizant of not

Speaker 1:
reducing standards to a point where we create new problems. But I do think that a greater recognition of what it takes to facilitate entrepreneurialism Andre to make it a bit easier, for example, for founders to retain control of their companies. Post listing. I think some of these air definitely steps in the right direction, and then we should potentially start to attract really interesting cos back to London as a place to list.

Speaker 1:
So I don't think that s so that I think is the dynamic. I don't I don't think that's a UK PLC. If you want to call it that is

Speaker 1:
it is kind of like the key question. If you put the dynamics in place, more companies will list here. But that may or may not reflect the UK economy.

Speaker 0:
Stuart. I think that's an excellent place to leave it. Thank you very much. Okay,

Speaker 1:
thanks very much.