Speaker 0:
Hello and welcome to the sustainability edge on asset TV. I'm Rory Palmer today. We're looking at three key areas that are front of mind for those working in G. We're gonna be looking at the circular economy. We're going to be looking at whether UK investors are moving away from S G. And it's losing its shine. And then, with six months to go, we'll be looking at the countdown to cop 28. Well, with me in the studio to discuss this, we have Jane Bromsgrove, investment director at Charles Stanley.

Speaker 0:
We have Jake Moeller, senior investment consultant at Square Mile Investment Consulting and Research, and Katerina Cosmo, head of E S G at J. Stone.

Speaker 0:
Well, Jane, if I could start with you, what does the circular economy mean to you? And what do you think it means to everyday investors? Yes, I think it is a very big topic. It impacts on a number of different industries. So it is something that people have to consider when they're investing. Even if it's not a particular factor that you're looking at

Speaker 0:
in terms of the industry that you're looking at, you can pick up some of the themes that are captured in this sort of circular economy. If you're looking to invest more specifically in some of the areas that are captured under that theme, and Jake, when I say the circular economy to you, what really stands out, what are the big themes within that? I think most people would think of recycling first up, wouldn't they? Something we all do in our own homes. But it's also also about resource efficiency. There's lots of touch points that can be,

Speaker 0:
you know, increasing the, um in in the way that inputs into buildings work or technological advancements making resource use more efficient the way that we use water the way that we recycle plastics or use plastics. So there are a lot of touch points and a lot of ways that investors can invest in those and Katherina building what Jake said there, How can investors really play this theme?

Speaker 1:
Well, there are multiple. There are multiple ways to participate in the theme. First of all and the most obvious one is in solutions providers to the solutions providers that enable the circular economy. So that's companies that either do recycling companies that do waste management or companies. The industrial companies that provide

Speaker 1:
that provide processes that enable the recycling to, uh to happen so multiple ways with which you can participate in the theme

Speaker 0:
and transition technologies. Where do they fit in this whole narrative of the circular economy?

Speaker 1:
Uh, as I said it. It it's It's, uh, you. You can play the theme with with through multiple, uh, through multiple ways, one of which is, um, enablers in the transition so I can give you an example within our industrial holdings. Honeywell, one of our

Speaker 1:
one of our invest companies, provides solutions to the recycling industry, so they have advanced recycling, advanced recycling technologies and processes that effectively enable a wider scope of plastics to be recycled. That is key if you want the circular economy to work going forward.

Speaker 0:
Jane, do you think as a term it's quite accessible for investors? Do you think they know what it is at this stage, or is it perhaps too early in its infancy to to really know? I I think it probably is something that people can sort of understand, you know, as you touched on about sort of people doing their own recycling, I think people understand why, why they're doing that and why. That's sort of important. And I think sort of snappy,

Speaker 0:
Um, phrases like sort of reduce, reuse, recycle and think, you know, enables people to understand what it means. I think obviously, in the context of an industry, it can be a lot more, um, sort of complicated. But I think the general concept people can grasp and understand why it's important and the impact that it'll have on the environment and and why that is important to, you know, try and improve the whole sort of circularity rather than the sort of linear

Speaker 0:
production that we've used in the past. Well, yeah, that linear production, Jake, that take make dispose model That's a culturally ingrained, though it's gonna take a while to click out of that, isn't it? Yeah, I think the we you do need to have a change in mindset to some some extent,

Speaker 0:
but I think your average investor is getting their heads around this. Um and I think if you want exposure to the circular economy, you might not think of it in terms of exposure to the circular economy. You might think of it in terms of thematic investing. So, you know, we've got funds like red and Sustainable water and waste, which have very high exposure to the circular economy pic a global environment,

Speaker 0:
M and G Climate Solutions Fund. All of these funds have got big thematic drivers. But when you look at the constituent stocks, um, they have high proportions of stocks that are exposed to the circular economy. So you're if you're an investor, you think probably an ETF or an investment trust might be a useful way to play this thing. I'm not necessarily sure that an ETF or an investment trust would would well, if the investment trust was, um, an actively managed fund,

Speaker 0:
I think until we get slightly more sophisticated indices that you want to track, um, it could be a little bit difficult to invest, possibly in this area. But I certainly think it's a rich picking ground for active fund managers who have got that expertise and Katrina from your side from Jay Stone. What's your kind of sustainable approach? How do you look at the companies you invest

Speaker 1:
in? Well, E s G is fully integrated into our investment approach, so we have a framework with which we approach sustainability.

Speaker 1:
That entails looking at material issues that could have an effect on our company's revenues, costs or valuation. So we use the sustainability accounting standard board, the SAS materiality framework as a guide, as well as alignment with global sustainability

Speaker 1:
norms. Whether that's the UNSC, GS or or others in terms of the circular economy in specific, it's an important theme for us within specific industries. So say, for example, within,

Speaker 1:
within the consumer industry. We look at what initiatives our invest companies have to tackle plastic to reduce virgin plastic consumption, to use more recycled recycled materials, as well as be active participants in fostering a circular economy.

Speaker 1:
So a big a big thing for us, so

Speaker 0:
consumer staples would be the most likely. Can you think of any other industries as well?

Speaker 1:
Industrials is another one, as I mentioned previously, the companies that provide some of the solutions in terms of processes or or business models that enable effectively recycling. So that's that's the type of companies that we that we look into.

Speaker 0:
This has also been called the the Fourth Industrial Revolution. Do you think that's another useful term to go along with this? Yes, I suppose you know, touching on the concept of having a a sort of a shift in sort of mindset. I think that probably, you know, does help people realise that, you know, some big changes are needed and, you know, to hopefully get people and businesses on board. So I think that's, you know, it is helpful and you know it. It does also sort of illustrate the fact that, um, whenever you have that sort of, uh,

Speaker 0:
industrial sort of revolution, then you know, lots of, um, businesses are impacted. And you know the impact on sort of commodities and things like that. You know, it's it's a big thing. And, um, I think it's, uh, calling it that does, I think, acknowledge the fact that there are going to have to be a lot of changes. Um,

Speaker 0:
whether that's sort of individuals, companies, governments, and it's quite wide ranging. And from Charles Stanley's perspective, what do you look for when you're looking through companies, and how do you apply to that? So our research team do integrate considerations when we do that at an asset allocation level as well, we run some responsible models as well, Which

Speaker 0:
their underlying investments, um, all have vehicles that either sort of tracking a particular E S g or S R I sort of index or on a particular theme. So, um, you know, we pick up some of the sort of renewable energy clean energy. Um, we've got some sustainable food in there and things like that as well. So, um, we pick up some thematic investments as well,

Speaker 0:
and Jake not to put you on the spot, but how important are metals in all of this? Because moving forward, we're going to have a huge reliance on these kind of metals to build batteries to build other technologies. Where do you think they sit in the circular economy? Well, the the, um, the metals are crucial. Um, but you need to have a specialist to work out how the best way to access or benefit from investments in those companies that mine or, um, use them in in, um, in the supply chain. Um,

Speaker 0:
you know the two edged sword with mining, isn't it? Um, you've got to make sure that, um, talked about solutions before, um, where a solution for some good potentially has a bad side effect. Um,

Speaker 0:
it's It's an issue that needs to be looked at very, very closely. Um, And when we interview fund managers who are involved in lithium, um, we ask a number of questions to make sure that they're on the right side of the responsibility. Um, spectrum for that, Catherine. Or do you think metals is a tricky one, Isn't it? Or mining especially? Well,

Speaker 1:
it it is, indeed. And and it goes back to, um um as it was alluded it It goes back to issues of sourcing,

Speaker 1:
uh, responsible sourcing, respecting the local communities in which the mining the mining takes place. Uh and I think and I think actually, what it shows is is the the complexity of those of all of those, uh, of those issues in in many respects, Um, uh, if if you look at an issue in isolation, there's a danger that you you don't see the the the broader ecosystem,

Speaker 1:
that sort of, um that that that plays into, uh, into these into the dynamics of of of, um of what you're trying to to achieve. And and as it was mentioned, the solution can actually have negative repercussions that you then oversee. So a AAA holistic approach and an ecosystem approach, I think are critical in in this

Speaker 0:
Jane moving on and moving on to UK retail investors and their their appetite for E s G from what you've seen, have you seen it Wayne at all? Have you seen their enthusiasm drop in the last sort of six months a year? Um, I think you know, when we we use some passive vehicles in our, um in our some of our models. And when you look at the particular European, um, inflows into that area,

Speaker 0:
there was quite a big jump up in interest between sort of 2019 and 2021. It did drop off to about sort of half the level of flows and sort of last year. And this year it's running at similar sort of levels. So I think definitely a couple of years ago, there was perhaps, um,

Speaker 0:
a little bit more interest. Whether that was just it happened to be sort of flavour of the month and people were sort of interested in it from that, you know, sort of perspective. I think it is an area certainly There are a lot of conversations going on, um, around E s G still. So I think it is still of interest. I think the actual investing is, you know, tends to lag a little bit. You know, there's a lot of interest to start with, and,

Speaker 0:
um, it takes a little bit of time to people to actually back that, you know, with their money. So, um, but it is certainly something that we're still having conversations about and still getting interest in. Jake Flavour of the Month sums up a lot of E S C investors. And there are a lot of investors who have come to the party a little bit late, and they will have experienced some poor performance. As, um, you know, that was evidenced in in some of the major indices.

Speaker 0:
Um, you know, you look at the flows li a refinitiv data came out the quarter 14.1 billion went into, um UK. Um sustainable or E s G type funds. Only 2.6 billion went into conventional funds. Um, that's not a bad figure for for Q one this year. Our advisor survey, um, that we've done recently at square mile.

Speaker 0:
You know, um, most of our advisors are saying that some 50% of their advised assets will likely be in AES g or responsible, um, mandate by 2025 you know, So there's certainly intent there. Um, I don't think it's flavour of the month, because I we have a rising tide with this. Um, the narrative is getting easier to understand. People are becoming more educated on the the matter. Um, but those who have experienced poor performance, um, might be a bit hesitant to put their foot in again. Um,

Speaker 0:
any time soon. And Katherine, Or have you seen similar kind of outflows from E. S G?

Speaker 1:
No, I think I think it remains. It remains top of mind for for our clients. I think what you have seen in the broader industry is the normal sort of pendulum moving back and and forth. So you had this This huge sort of momentum behind E. S G

Speaker 1:
and what people are discovering is is actually well, how do we How does it How does it mature in its role in the industry? How does it become an integral part of how we approach uh, financial analysis and investment, and therefore, how does it become? Also sort of credible and transparent Part of that, uh, of that, uh, equation.

Speaker 1:
So you had, you know, you had initially some people rush into it, some claims being done, that perhaps you shouldn't have been done by some players in the industry. You have a reassessment. But I fully agree The role of S G is here to stay. And there are multiple reasons why that is the case. There is a regulation that is supporting it.

Speaker 1:
There is demand by clients, especially a newer generation that feels very, very passionately about those issues. You have standard standardisation in many elements, whether that's reporting disclosures and that obviously, that helps in terms of credibility, of the of the messaging. And I think,

Speaker 1:
more importantly, the case of Well, if I do an SG analysis, does it enhance my financial analysis? Does it lead me to better investment conclusions because a company that has bad practises may face reputational or regulatory issues and fines and sort of damages

Speaker 1:
a year or two or three years down the road? I think I think that case has been increasingly been proven and therefore the case for is here to stay, and it is because of multiple factors.

Speaker 0:
But there's a disconnect. Isn't there really between a lot's been made of this between UK. Sorry, the US and European investors and how they how they see and how they really approach it and integrate it into their portfolios is the rising tide equivalent in the US

Speaker 1:
Well, it's coming. I mean, the US, you know, the US has historically been a bit behind in those in those issues. I think again, I think, where the focus has been by a lot of the the client based in the US has been in shareholder returns rather than broader issues. That Europe was perhaps a few steps ahead ahead of that. And that reflects also, frankly, social dynamics within Europe and a better,

Speaker 1:
you know, a better appreciation of, uh, of

Speaker 1:
social considerations and how society functions as a unit vis a vis, perhaps a more individualistic approach in the US. So there are multiple reasons why that has that that that has historically occurred. But the regulatory environment is changing. Also in the US, I mean, the S E C is pushing for higher disclosures on climate, for example. That is

Speaker 1:
one manifestation of that, and I think key to it is what does it do to your financial returns? If over the longer term integrating enhances your financial returns, then there is a business case for it. And inevitably the US will also follow.

Speaker 0:
So Jake on that Do you think it's an educational thing? If people realise that won't harm their returns? If anything, it can really boost them over the long term.

Speaker 0:
Yeah, I agree with that. Absolutely. The you know, you've got to remember the fiduciary duties concept has been tested in the UK and Europe a little bit more, um, at both common law level and, uh, with legislative, um, backing in the US. Um, the fiduciary duties aren't quite as haven't been tested in that way. So the you know, Americans will want to see financial returns as the primacy of, of, of, of their outcome for invest investors. And that is changing.

Speaker 0:
And I think the the the evidence there is, and it's not just anecdotal. There's lots of evidence that, uh, well, run companies, companies that do good things can generate good returns. Um you know, that's going to be attractive to an American investor as it is to a European investor as it is to a UK investor.

Speaker 0:
So I mentioned the rising tide before, Um, as these things become ingrained, uh, I think we'll come to a point where we probably don't even think about them. Um, it'll just be so firmly embedded in what a company does. Um, you know, E S G as a term might become totally redundant.

Speaker 0:
Jane coming back to the UK. How important do you think for the investor for the individual investor is knowing exactly what a fund is labelling, you know, having a clear sort of taxonomy into what goes into that fund. I think that's very important. I think the fact that the whole sort of language has been sort of evolving and continues to sort of evolve, I think the F. C A. Have recognised in their sort of efforts to

Speaker 0:
put rules around the disclosure requirements and the labelling. I mean, it's not finished yet. We're expecting the final rules out in the third quarter that will help investors sort of understand what they're actually buying. And I think that's one of the objectives of the F C. A to try and,

Speaker 0:
um, eliminate sort of green washing. You know, that's that's one of their objectives. And and by tightening up on some of that language, then you know that should help that. So, um, I think anything, um that does try and standardise some of the terminology so that everybody understands. Um what, uh, what is meant by some of these terms? Um, you know, is really helpful. Um, but as I said, I think it it's continuing to sort of evolve. So even

Speaker 0:
the F. C. A s paper, you know, change their sort of language in terms of their labelling, from the first draught to the latest version. So

Speaker 0:
and the green taxonomy will be coming out after that as well. So, um, it's it's constantly sort of evolving. And I think you know where people have perhaps been playing a bit sort of fast and loose with some of the definitions, you know, they're being, um, sort of caught out. So hopefully there'll be less scope for that, um, sort of going forward. But I think, um, it's just the the transparency and and the continuing sort of education to help people understand. Um, what these terms mean? And, um yeah, you know, when they're investing.

Speaker 0:
So, Jake building on that Do you think that's the key Tightening up the language there.

Speaker 0:
Words matter. Um, I think we tie ourselves in knots trying to work out in our heads. What the words mean, The taxonomy. Uh, I think you're seeing an increasing trend towards, um, specified themes, and investors understand that. So if you've got climate solutions in the name of your fund straight away, that kind of tells you where you're invested. If you've got, you know, sustainable water and waste in the name of your fund, it's probably going to point you into a particular direction. I think that's going to be the trend.

Speaker 0:
Uh, where the particular keywords are going to be incorporated into offer documents, Um, which are easily relatable to mum and Dad. Investors.

Speaker 0:
Kaine, do you think perhaps before we were too vague, maybe calling a fun green just that won't cut it anymore?

Speaker 1:
Uh, I think I think that's right. I think people will require greater,

Speaker 1:
uh, funds being more specific in terms of what they're trying to to achieve more transparent about how, um, how they measure what they include in in in the holdings and more and will require also more disclosures and more transparency around the impact the funds are are having. So if you say,

Speaker 1:
uh, I'm, uh, say a water, um, water fund, Well, what does that? What does that mean? And do you have three or four networks with with which you measure basically the impact that your holdings have towards that? The I think that's critical

Speaker 0:
moving on. I mean, we're six months now to cop 28 the huge, huge conference. Do you think where it's being held is a bit of an issue?

Speaker 1:
Well, it's It's raised a lot of questions, and I think, you know, it's it's It's, um it's fair enough to raise to raise the questions. Reality is that, um,

Speaker 1:
the U A. Is is an, you know, is is is a big producer of oil and gas. Uh, the president of the of cop 20 cop 28 is also the CEO of the Abu Dhabi National Oil Company. That that that of course, that raises that raises question. I should say that one shouldn't underestimate Also that perhaps it is an opportunity

Speaker 1:
to the extent that the fact that it is being held, where it is, if you have, if you have basically pressure by by the U A to some of the

Speaker 1:
to some of the more, um, you know, polluting countries in terms of bringing them along in the journey and there are examples you know, to to make its is is one of those examples a huge methane emissions producer with a very close relationship to the U A. That that that could be. That could be a relationship that could be leveraged as part of the as part of the conference, basically

Speaker 1:
to bring to bring the country closer, basically to the to the goal of net zero. So a risk, but also an opportunity.

Speaker 0:
Jake, what do you think? Is it an opportunity there? Or is it maybe an opportunity to change its image to how people see cop as a as an organisation? Rory, if you were to do a vox properly of the key takeaways outside of cop 27 to 100 people here, I doubt whether you'd get one response that could point out a single thing that was mentioned at Cop 27.

Speaker 0:
Um, so cop 28 has to be, in my view, an event that becomes far more visionary and appealing to your average punter. Because unless, you know, we're trying to fix an externality here, right? Climate change, which, you know, affects everyone but costs a lot to fix. And, you know, there's a there's no incentive to pay, um, to fix it necessarily.

Speaker 0:
Right. So in my native Australia, I've just come back. They've closed, um, a coal fired power station in New South Wales. Uh, that has resulted in electricity prices going up. OK, so you've got that juxtaposition about, OK, hip pocket meets one of the, you know, a closure of a dinosaur generating, um, fuel source. But that wasn't the narrative that was picked up in the Australian press. It was about the mum and Dad having to pay more for their electricity. So

Speaker 0:
in order to come over the argument and to persuade people why they should be on board with this whole climate change issue,

Speaker 0:
Cop 28 in my opinion, has to be a far more inspirational and visionary forum than it has been. And they've got to come out with some really interesting sound bites. They've got to have some good PR. You know, I don't care whether it's in the United Emirates or it's in America or or Scotland, Um, as long as the the output is relatable, um meaningful and generates some interest into this cause that affects us all.

Speaker 0:
Jo, do you think that's a fair, fair summary there because we've got high energy prices here in the UK as well. But how do they change that image? What's the PR stunt going to do? I think it is important. I mean, one of the you know, the final UN sustainability goal is all about sort of collaboration, and I think it is important to try and take as many people on that journey, and you get them engaged with it. So I think it's important to be able to appeal to individuals as well as making sure that companies are on board as well as,

Speaker 0:
um, sort of government. So I think you've got to capture people's imagination and start taking action. You know, there's a lot about of talk about pledges for this, that and the other, and I think it's, um, actually, it's the delivery. Now, you know, each year that goes past is a year, you know, sort of nearer the deadline effectively. And I think it's the,

Speaker 0:
um it's the delivery of that. Really, That's now got to sort of come through. You know, they're going to be doing a score card this time around. Um, you know, which will show as hopefully show, You know, where we are relative to where we want to be And, um, you know, and I think that's that might focus people's attention. Um,

Speaker 0:
because, you know, I think if people aren't sort of directly feeling, you know, some of some of the impacts, you know they'll feel it when the you know the prices go up. But equally, it'll focus their attention if we have another very hot summer, and there are droughts and things, you know. So when people feel things directly, sort of impacting them, Um that

Speaker 0:
tends to get their attention more. But as you say, it comes around once a year. People focus on it for a little bit. It's it's really sustaining that interest over a long period of time and and although it seems like a

Speaker 0:
a very big problem to solve. You know, people individually can do things. And I think it's it's trying to appeal to that as well, so that they feel that they can contribute. And I think you know, certainly, you know, I think the younger generation feel that, you know, they want to sort of be part of it and try and do things. So I think that's, um, you know, important as well. When we caught up before you said, it risks being another perhaps G seven. A lot of important people go, but not a lot really coming out of it. Yeah, there is that, you know,

Speaker 0:
geopolitics we've alluded to. But politicians love a platform, don't they? And if it becomes just a platform for pontification, uh, it's not results driven, and it's not. There's no deliverables that are measurable. But also, as I said before, relatable, um, I think it will fail as as a forum. Um, you know, we talk about the just transition. Some of the problems faced by the poorer countries who are, you know, need to to be involved, but can't afford to

Speaker 0:
to pay for this externality. I mean, those Those problems haven't been fixed yet. Yeah, so how do you not disenfranchise everyone? Um, or anyone, Really? It's It's that's got to happen if it becomes a platform for the loudest voice or, you know, um, for an oil company or or, you know, these things are easily hijacked, and I think that's that's what's got to avoid becoming, um, something that's not meaningful.

Speaker 0:
The just transition is a big topic, and a lot of people have said it's a danger of putting planet over people. How do we really bring those emerging markets and the countries that have to deal with this problem the most? How do we bring them along with us?

Speaker 1:
Uh, well, it it's it's a key. It's a key consideration. I mean, the and and again sort of what we're asking of emerging markets is is perhaps to temper their own, you know, their own, uh, a economic growth ambitions. Uh, and and it it's of course, right, that the pushback is Well, uh, you know that the Western world used the last 200 years to industrial. We have achieved to industrialise. We have achieved a huge amount of prosperity,

Speaker 1:
uh, within within the western world. Uh, what? You know what? What are we asking emerging markets to to, uh, to do?

Speaker 1:
And financing is a key is a key part of solving that equation. There's the 100 billion sort of pledge to effectively help some of those countries deliver on climate. And it's a recognition that you will need financing from some of the richer countries into the poorer runs to help them achieve the climate development goals. There is a lot of discussion

Speaker 1:
as to whether that financing is in the form it should be and whether it has actually been the pledge has been met with sort of real real money. So there is. There's that. And then there's a lot of a lot of questions around loss and damage. And how do you compensate perhaps some of those some of those countries

Speaker 1:
for the effects of climate change and there we still don't have, frankly, a solution or an answer. So it's a complex issue, and it will take a lot of money to solve and a lot of political will to put that money on the table by developed developed markets. But it has to happen as you say, there's no there's no

Speaker 1:
there's no point in in, in sort of, um achieving climate targets If it implies that large, you know, portions of the global population remain in poverty. That doesn't solve anything for anyone. That is clear.

Speaker 0:
Jake, do you think there's a danger that we're looking at this from a Europe lens to say a country like South Africa? A lot of the the coal supply chain? A lot of the jobs there are created there again, kind of building on Katerina Point. How do we make sure that the developing world isn't really or hampered by this

Speaker 0:
when you're dealing with an externality which can't be priced accurately, Um, you're going to have these problems all the time. I think it's it's about creating an aspirational vision that brings everyone along, because if you're going to pay for something that you don't necessarily individually benefit from, you have to understand what it's all about. And I think in terms of of, you know, countries that are get a large proportion of their GDP from natural resources and Australia is one of them.

Speaker 0:
Um, you know, uh, you you've got to understand that there's if if that's stripped out from your economy, that's going to affect every individual in terms of higher prices or whatever it is that needs to be understood. That's what the vision has got to be strong because sacrifices will have to be made. And if it's a hit to the GDP, if it's a hit to a particular industry or higher unemployment, um, that's going to have to happen, and that's going to hurt some people. But if we understand

Speaker 0:
the bigger picture, it just makes swallowing that a little bit easier. And I think that's when I talked about the vision piece before. I think that's really got to be what's driving this,

Speaker 0:
Jane. How important, then, is that vision with all this? Because if we can lose a country like China and India, and if they don't come along on this journey, all of it's almost for nothing. I think that's important to to get everybody along and be part of the solution.

Speaker 0:
Um, you know, particularly those ones that are part of the current problem. It's, you know, whether that's an industry or a particular sort of country, you want to take them along and make sure that they are part of that transition because they will have a big contribution to achieving those goals. You know, what you want to avoid is is having,

Speaker 0:
uh, the situation, uh, politicised like it has been, you know, sort of in the US. You you don't want to end up. Um, you know, in that sort of situation. And I think that's, you know, we were talking about the differences between the US and Europe, and, you know, that's I think, one of the things that's been coming out, you know, sort of more recently, um, and suddenly it becomes a sort of political issue. It it's it's having that vision that that rises above that so that everybody can collaborate. And, um, you know, try and find solutions to the problem,

Speaker 0:
and oil and gas again is at the centre of it being held where it's being held. But where do you see these companies going forward? Because a lot of their sort of pricing or their price earnings for 5 10 years isn't looking so good. But what about now? Where do you see them currently? Well, the transition is happening, OK, if you're if you're a company that's gonna have a lot of, um, stranded assets. Uh, your share price is going to be hit pretty hard.

Speaker 0:
So it's a case of adapt or perish. So what could be five years? It could be 10 years. Um, but these these companies will eventually become redundant. Um, it's a question of can they retain shareholder value by adopting their operations or changing their their focus to become something else? So we are seeing companies do that.

Speaker 0:
You know, cigarette companies have long moved away from prime tobacco. They they they generate less harmful means of ingesting nicotine. It's not a pleasant thing to hear, but it's, you know, better than, um, high high rates of lung cancer. Mining companies, too, are becoming more efficient, are becoming more consultative in the way that they operate and becoming better actors. And I think that's what we've got to hope for, because if you're not a better actor or you don't improve your operational practises, um, you're gonna destroy shareholder value

Speaker 0:
oil and gas companies. Are they moving quickly enough? If they change their processes enough at this stage?

Speaker 1:
Well, I think I think they're moving and again there is. There is geographical sort of diversification, geographical differences between how far some companies in the industry are moving versus others. So the Europeans have led in, in, in in the transition.

Speaker 1:
Now, of course, the last year has complicated that equation, and you have seen the call for energy, energy resilience increase as a result of the conflict in Ukraine, and therefore you have seen some of the goals also being paid back. I mean, BP effectively tempered some of its emission reduction

Speaker 1:
targets as a result of that, and it shows you how difficult it is to actually achieve net zero whilst you also have to to fuel the economy. And you have to ensure that there is sufficient, you know, sufficient access to energy to to to to do that. So, yes, they are moving. Could they move faster?

Speaker 1:
Yes, absolutely. But there are wider considerations to take into account.

Speaker 0:
You mentioned the differences. The US Biden announced a lot of new oil fields and increasing production to then bring the prices down for the everyday consumer. That's almost APR nightmare going into cop 28.

Speaker 1:
Well, the well, the US has a large fossil fuel industry and the US also prides itself in its energy independence, and that has served it very well in the last year. So we shouldn't

Speaker 1:
We shouldn't necessarily sort of underestimate that the economic benefits of that and frankly, the political attractiveness of of of that. You know, having said that, there are political incentives being put on the table, and the Inflation Reduction Act put hundreds of billions on the table to help transition the

Speaker 1:
the US economy into towards net zero. So there is movement, but again, in the context of of of the trade offs that people have to take into consideration.

Speaker 0:
Jake, I'm conscious of time here on this panel. But if there was one thing that you want people to take away, what should they think about cop and what should they perhaps watch out for going into it? Um, don't be distracted by any geopolitical event. Um, try and just try and find the big picture. Ultimately, we're all in this together. And if if a if a forum like cop 28 can help you articulate, um, an important message or formulate a change in behaviour, uh, that for me would be a very successful outcome for the event.

Speaker 0:
And, Jane, similar question to you. If there's someone watching this who is getting ready to go to cop or perhaps even going to watch it? What would you say to them and and how they prepare for that? Um, probably don't fly there,

Speaker 0:
but, uh, yes. So, you know, be part of it. Um, you know, try and ensure, um, as many sort of collaborations, uh, to try and sort of work on it together, Um, and even just, you know, look at what you do yourself to try and, um, you know, be part of that solution. I think, um, and keep it on your mind. Not just around the, you know, the few weeks either side of of cop, But try and, you know, think about it for the rest of the year as well. It's, uh, you know, not just for Christmas or not, just for cop.

Speaker 0:
Great. That's an excellent point to leave on.

Speaker 0:
Well, that is all we've got time for. I'd like to thank all of my guests here in the studio. Katerina, Jake and Jane. Thank you very much for watching, and we'll see you next time.