BlackRock’s Fink and Eskom’s De Ruyter Set to Speak: NEF Update
(Bloomberg) -- The third day of the four-day Bloomberg New Economy Forum is focusing on the many challenges posed by climate change, the coronavirus pandemic and an unstable global economy.
In the next set of sessions that begin at 7 p.m. New York time, BlackRock Inc. CEO Larry Fink, Eskom Holdings Ltd. CEO Andre de Ruyter and Xie Zhenhua, who led China’s climate policies and represented the country in international climate negotiations for more than 10 years, are among those scheduled to speak. Darius Adamczyk, Chairman and CEO of Honeywell, will discuss pathways to a low-carbon energy future on a panel with Jean-Pascal Tricoire, Chairman and CEO of Schneider Electric, and Christiana Figueres, a founding partner of Global Optimism.
The event is being organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News. More information can be found online at www.neweconomyforum.com and on the Bloomberg Terminal.
HSBC’s Quinn Calls for Bank Action on Climate Change (11:05 a.m. NYT)
Big banks cannot shirk their responsibility to help fund the world’s move towards a low-carbon economy, HSBC Holdings Plc Chief Executive Officer Noel Quinn said.
“We have got to finance this transition,” said Quinn, who called on other institutions to get behind efforts to provide more funding for green technology. “The whole financial system needs to play its part in that.”
HSBC expects to help finance between $750 billion and $1 trillion over the next 10 years as part of its commitment to fight climate change.
Quinn said it was important that banks agreed to set of common standards on sustainable financing to aid efforts to expand green finance, with peer pressure also motivating change. -- Harry Wilson
Guggenheim’s Minerd Wants Climate Change Standards for Companies (10:50 a.m. NYT)
Guggenheim Investments Chief Investment Officer Scott Minerd said there needs to be standards put in place for corporations to act together in support of global climate change.
“There’s no uniform definition of what net zero is” and “little time is being spent on trying to set economic incentives,” Minerd said. The approach to climate change needs to focus on the “substance of the matter,” rather than the individual act of individual corporations, he said.
Corporations will continue to act in their own best interest without standard policies in place, according to Minerd. There are incentives that can be set “that basically don’t cost anything” for the governments in order for change and progress in climate change to be made, he said.
“In a free market society, we are driven by everyone’s self interest,” said Minerd. Today, there is no economic incentive for investors to change their standards, which will continue until there is broader change and support, he said. -- Katherine Doherty
Moniz Calls for Increase in Gas Capacity as ‘Backup System’ (10:25 a.m. NYT)
Gas capacity will be needed even as renewable power soars globally, said Ernest Moniz, former U.S. Secretary of Energy and chief executive officer at Energy Futures Initiative. Gas will remain relevant even as new technologies such as hydrogen are developed.
“It’s in effect a backup system,” Moniz said. As an example, “electrifying heating is great, but when you get that polar vortex in New England, we’ll probably need to bring in the cavalry,” he said. -- Laura Millan Lombrana
Iberdrola CEO Says Clean Energy Investments Need to Triple (10:12 a.m. NYT)
Investment in clean energies needs to triple to deliver on greenhouse gas emissions cuts and efficiency measures committed up until now, said Iberdrola SA Chairman and Chief Executive Officer Ignacio Sanchez Galan.
“The investment necessary to make for electrifying the economy is so huge that there is room for everybody,” Sanchez Galan said. “Those oil cos moving in this direction are welcome. I used to say they were our enemies --now I’m very pleased that they are our competitors, that’s great.” -- Laura Millan Lombrana
Africa Faces Enormous Energy Transition Challenges, Wapakabulo Says (10:05 a.m. NYT)
Africa is facing huge challenges in implementing the energy transition, said Josephine Wapakabulo, founder and managing director of TIG Africa. About 600 million people today still don’t have access to electricity and getting it would require an investment of $120 billion just in Sub-Saharan Africa.
The issue is “how we can make the majority of that” renewable energy,” she said. “The beauty of the ops we have in Africa is that because some of the remote areas don’t have access today, there’s a lot of leapfrogging happening in terms of decentralizing grids and solar.”
Africa’s path toward the energy transition will be dual, with oil and gas powering a lot of the demand over the short to medium term, and gas and renewable power taking over in the longer term. -- Laura Millan Lombrana
Carney Says Covid-19 Shock Provides Ecomomic Opportunity (9:50 a.m. NYT)
The recovery from the economic shock of Covid-19 will provide an opportunity to direct economies towards sustainable growth models, a shift that would require huge investment and would be “capital intensive and job heavy,” said former Bank of England governor and United Nations special envoy for climate action Mark Carney.
Governments can do a lot to set the general direction of travel, said Carney, who’s also finance adviser to the U.K. prime minister for the upcoming United Nations climate summit.
U.S. President-elect Joe Biden’s commitment to reach net-zero emissions by 2050 and move to 100% clean energy serve as clear markers, while the development of hydrogen power, zero emission vehicles and clean power generation send signals to investors and “get money moving,” he said.
“Government has to start with the objective, fill in the framing and then, candidly get out of the way so the private sector figures out where to go,” Carney said. -- Alastair Marsh
Allbirds CEO Says Consumers Want to Buy Sustainable Products (9:25 a.m. NYT)
Shoppers care about sustainability and want to buy sustainable products, but they’re confused about what it all means, said Joey Zwillinger, CEO of sustainable shoemaker Allbirds Inc. That’s a consistent theme he’s seen across markets in Asia, Europe and North America.
“I really do sense that people want to do the right thing,” Zwillinger said. “Once we clear up some of the confusion on what does carbon footprint even mean, I think we’ll start to see even more progress.”
It wasn’t like that back when Allbirds was founded in 2015, he said. When it came to actually shelling out dollars for a product at the cash register, consumers would prioritize the product over all else. That’s been shifting in recent years, as people care more about how things are made and how it affects the climate.
It took the company almost three years to develop a shoe sole that was sustainable, made from sugar-cane byproducts rather than the typical petrochemicals. -- Kim Bhasin
Unilever’s Jope Says Biden Win Is Benefit for Climate (9:07 a.m. NYT)
Joe Biden’s victory in the U.S. presidential election is positive for companies committed to fighting the climate crisis, Unilever Chief Executive Officer Alan Jope said.
“The capital markets and investors need to invest in properly run sustainable and green businesses,” Jope said. “In that regard, an administration in the biggest economy in the world that reenters the climate-change debate and a green recovery of course is going to be good for the system.”
Jope also reiterated earlier comments that the “most important” measure governments should take in the near-term is pricing carbon, either through a cap-and-trade mechanism or a carbon tax. Unilever is working with Microsoft Corp. to build a digital model of the planet that will enable the company to label the carbon footprint of each of the products sold under its more than 400 brands, which include Dove soap, Ben & Jerry’s ice cream and Domestos bleach.
Information relating to issues such as deforestation and social impact will either feature directly on the label or will be accessible online via a QR code, Jope said. -- Thomas Buckley
India Takes Steps Toward Carbon Neutral, Tata’s Chandrasekaran Says (8:55 a.m. NYT)
Becoming carbon neutral by 2050 isn’t as straightforward for a country like India as it is for other countries and regions, said Tata Sons Ltd. Executive Chairman Natarajan Chandrasekaran. Energy consumption will raise over the next few years as the country becomes the world’s third-largest economy, and so will its carbon footprint.
The country is on track to fulfilling its 2015 Paris Agreement commitments by increasing the presence of renewable power in its grid, setting up micro grids and investing in electric vehicles.
“While the commitment might not be by 2050, the point is that India is taking very aggressive steps,” Chandrasekaran said. -- Laura Millan Lombrana
IMF’s Gopinath Pushes for Carbon Tax to Drive Green Recovery (8:46 a.m. NYT)
Harnessing energy sources that are cheaper than fossil fuels “isn’t enough” to drive a green recovery, IMF Chief Economist Gita Gopinath said.
More important is a carbon tax, which should be “set up small but then increase over time to change consumer behavior” and incentivize the private sector to invest in renewables, she said.
In addition, carbon pricing is one of the most efficient ways to transition toward a low-carbon economy, but countries setting up carbon markets on their own won’t be enough, Gopinath said.
“There has to be cooperative solution here,” she said. “Agreeing on a minimum carbon price globally would be very helpful in bringing about that transition.” -- Laura Millan Lombrana and Thomas Buckley
Anheuser-Bush Makes Big Push Into Renewable Energy (8:39 a.m. NYT)
The pandemic hasn’t changed beverage manufacturer Anheuser-Busch InBev’s plans to source 100% of the energy in its operations from renewable energy in 2025, Chief Executive Officer Carlos Brito said.
About 60% of the company’s volume now is made using renewable power; it was zero two years ago.
The current situation has taught the company that it needs to take care of its supply chain, which includes farmers and retailers, Brito said.
“Farmers need to be competitive in this world where water is going to be more scarce and productivity will be top of mind for everybody,” he said. -- Laura Millan Lombrana
IMF’s Gopinath Sees Opportunity for Green Recovery in 2021 (8:25 a.m. NYT)
Most coronavirus stimulus spending this year has been focused on saving lives, but there’s an opportunity to have a green recovery in 2021, said Gita Gopinath, chief economist at the International Monetary Fund.
So far, a total of $161 billion of support measures have been made to cut emissions since the pandemic started, according to BloombergNEF research. By comparison, $878 billion will go into stimulus for carbon-intensive industries without green conditions.
“I am hopeful more will be done --2021 is the year when this should happen,” Gopinath said. “We know green investment is more job intensive and it can help in that dimension.” -- Laura Millan Lombrana
Von der Leyen Says EU Wants to Lead Green Recovery (8:11 a.m. NYT)
Europe wants to spearhead a sustainable global recovery from the coronavirus pandemic by investing more than a third of its 750-billion-euro ($890 billion) economic stimulus in projects compatible with the bloc’s climate neutrality goal, European Commission President Ursula von der Leyen said.
The world can’t afford to make the same mistake that it did in the last financial crisis when it rebuilt a “broken system” based on fossil fuels, Von der Leyen said. The 27-nations European Union has designed its latest strategy to combat the recession around the Green Deal, a sweeping overhaul that will accelerate pollution cuts, promote emissions-free cars and spur low-carbon energy technologies such as hydrogen.
“We need to use our recovery stimulus to invest in the clean and digital technologies of the future to make our economies more resilient and our societies and job markets fairer,” Von der Leyen said. “We can do it if we do it together. You can count on Europe to lead the way.”
The Green Deal, which calls for Europe to zero-out greenhouse gas emissions by the middle of the century, will affect every corner of the economy, from agriculture and energy production to how cities are designed. To help kick-start the clean shift, 37% of the EU’s 750-billion-euro recovery fund will be spent on projects linked to the Green Deal. -- Ewa Krukowska
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