SoS #8: The Unspoken Truths of COP28

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Transcript: 

Isobel: Hello, welcome to State of Sustainability. Live.  I'm just going to preface this conversation with two things.

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One, we've got quite a bit of background noise because we're in situ. And two, we know that there is a lot of COP noise out there. So we're using this podcast to just say the things that everyone's thinking and perhaps not saying. So, bear with us. I think it's going to be a good one. Welcome, Saif.

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Saif: Hi, Izzy, glad to be here. Exciting to have a different location for this. I know, outside, in the open, children running around. Actually, one of the things that they've done here in the Green Zone is that all the schools have been encouraged to bring kids in. So that they can learn about climate change, learn about sustainability, wander around, see the pavilions. So it is quite busy. I think that's probably not a really good thing. But there will be a bit of background noise and the occasional child may be scampering through in the background.

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Isobel: Well, I think on that, who, who is here? What kind of characters are you meeting with? Are you seeing? Give us the rundown.

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Saif: Oh God, so many ways to answer this question. And so I think that, let me kind of maybe tell this story six months ago to now. Six months ago, most companies that I was speaking with were telling me that they weren't sure if they would come. And most professionals in the sustainability space were telling me that they thought this COP would be a bit of a washout in some ways.

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I think because of all the noise around the COP presidency and so on.  What I'm finding here now that I'm here is that literally every company seems to be here. And the question is whether they have a couple of people, or whether they have 50 or 60 or 70 people. I think you came across the JBS team and they had, they had a whole, whole set of people with them at the events that they were going to.

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And I think you see that whole range, in terms of types of characters, This is a slightly charged one, but, I said this on a LinkedIn post recently. A somewhat spicy LinkedIn post. I, I thought two or three times before posting it, uh, I did test it with a few other people that I met here and they said they thought it was okay.

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And so I feel like we're seeing three types of characters here.

1, One is the missionaries. The missionaries are the zealots, the ones who have a big-picture vision and are charting a course to that vision. I was at an event where I heard someone talk about the three trillion dollar blue economy. And then when you ask them what the three trillion dollar blue economy is, they talk about sailing, fishing, tourism on the ocean, uh, et cetera, et cetera, et cetera. And it really makes you wonder who do you invoice for the blue economy? Who do you go to if you're an innovator or you're trying to actually get your hands some of that money.

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2, The second category I'm seeing here is the workhorses. And I think these are the ones that in many ways kind of have the most dignity but are sort of part of the system. In that they're going through with their agenda, they're going through with their roadmap, and they're in implementation mode. You'll often find them within the oil and gas industry, these are the people who are, helping reduce the fugitive emissions and the flaring emissions, all of which need to happen, but they're kind of missing the bigger picture of sustainability and climate change. They're solving for their little piece without challenging the system.

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3. The third category that I'm seeing here is the parasites.  These are somewhat newer to the party, and you'll find them in suits at the night cap event you were at, or at the dinner, they work for, you know, I mean, you have a lot of bankers here, you have a lot of law firms. I was actually just, you know, just a couple of hours ago I was meeting a senior lawyer at a magic circle law firm and he was telling me that over the past three months, he's been repackaging every bond that he's worked on as a green bond, every capital financing event as a sustainability financing event. And he says it's exactly the same stuff we were doing last year or five years ago. It's just now called sustainable rebranded And so you see a lot of these parasites.

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In all honesty, i'm a bit of all three probably and many of us here are a bit of all three and you know, I think I think that's what you kind of need to to get things moving I was speaking with Cliona Howie from Foundation Earth and she was saying that you sort of have to be this hybrid of all three if you want to make any change happen.

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The real question is, who translates fr all the others to each other? How do you get the missionaries to actually manage to unlock some of the capital that the parasites are bringing to the party? If you speak with any of the banks here, and so one of the unique things about this COP is that you could probably have spent any amount of money here, so we probably spent about $7 -8k in our presence. It's a real guerrilla warfare version of COP. And, you know, I would say commercially speaking, we will probably make a 5x return on what we've spent.  And at the same time, you could have spent 70, 000 or 700, 000 or 7 million.  And probably even multiples of that, and there are definitely companies here that have spent multiples, as in, tens of millions of dollars around the whole COP presence and peripherals. And they are all expecting to make a return on that.

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Isobel: Yeah, I mean look at the green zone. It is just like, glitzy beyond belief. There are like, the most incredible stages, panels. So much money has been thrown into it. I mean, you were saying that there are cars lifted upside down with flags and banners all over them.

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Saif: Yeah, exactly. I was standing in front of a hydrogen taxi. Hydrogen-powered taxi showpiece at a little booth somewhere. And I was literally wondering, where's this hydrogen going to be coming from? Are we converting electricity generated with fossil fuels into hydrogen to power this car? And, we've got a little fan club joining us here.

And, it really makes you wonder at some of the stuff that's going on here. The green zone is a bit like Disneyland. That is why there are so many children here as well. There are children and families. But, you know, it's Disneyland in every aspect. There are attractions. There is a playground. There are many, many restaurants.  There are goodie bags beyond belief. There's fantasy and make-believe all over this place.

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Isobel: And you can find your adventure in any way you want to. But then on that, so if everybody's here, does that spotlight who isn't here more? Are there any big gaps of people who you haven't seen here yet? And why?  

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Saif: Yeah, actually good, good question. I think there are actually two camps that I've found that aren't here.  

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1. One I think I would kind of put into the conscientious objector camp and I was speaking with the team at Lush, for instance, and they said that the money that they would have spent being a COP, they actually preferred to use that money to bring activists. And I think that's really, really impressive, really commendable, frankly, and the activists that they want to bring are activists from emerging markets, global south, areas that are going to be suffering the brunt of climate change. And they wanted them to be here.  And I think that's fantastic, to be honest, in so many ways.

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2. The second camp that I'm seeing not here are companies that feel like COP is a bit of a distraction from the work that they should be doing and they'd rather focus on the work and then come back to talk about it maybe at the next COP. So I had this conversation with the head of sustainability at one of the largest meat companies in the world based out of the US. They were telling me that they didn't think they had a lot to talk about this this time around. They're going to be doing the hard job of the heavy lifting of decarbonising their business. And then they're going to come back and talk about it next year. And I think those are both. Very valid, very, very commendable reasons not to be here.

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Isobel: I think maybe my last point on this mix of people, I think we've seen this mix being reflected in the actual panel discussions. I know that we've attended quite a few panel discussions which perhaps have covered the breadth, but not the depth.  Do you have anything to speak about on that?

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Saif: I think that there's a bunch of interesting stuff happening. And let me first say that I agree with everyone who is saying that not enough is happening. And this is certainly true. And I don't think we're anywhere on track for 1.5 degrees. We'll be lucky if we can be within 2.  So let me kind of first just preface and caveat by saying that this is nowhere near enough.  

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Within that context, I think we're seeing a few interesting themes. And so, the consensus on methane and the oil and gas industry is meaningful, is significant, incremental and different, and I think it will, it will create some change. I don't think it'll be enough, but I think it's still, it's still something we should all be proud and grateful for in its own right.  Not that we owe gratitude to the system, but, you know, it's, it's, it's still something.

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I think the second is we're seeing a lot of interesting momentum now on methane in dairy, and you can see the DMAA as well launched with Kraft Heinz and Danone and other companies in the lead. I think that that's, that's a really impressive coalition and movement. We were speaking with David Shaw and Kraft Heinz and he's been really one of the kind of the ringleaders or really at the forefront of this. And he was telling us that they actually had so many new companies come to them even in the last few weeks wanting to be part of this. And they just couldn't process the inclusion, the membership fast enough to actually have everyone represented at the big announcement at COP. But just the fact that there is all that interest and excitement.   I think that's fantastic.

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Isobel: We're seeing that across the board with the Regenerative Landscape Alliance. I know that this alliance had an amazing array of companies that had signed up and committed to it, but there were still some big gaps in terms of companies who perhaps wanted to be part of it, but didn't quite get the memo in time.

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Saif: For sure, and I think, you know, another great ex example of an initiative backed by, I think it's the WBCSD and the Food and Land Use Coalition, in that case amongst others, you know, regenerative agriculture and methane are both great examples of important topics which have not had a lot of consensus on the definition of how to approach them, how to tackle them, how to account for them. And I think that you know, both of those are really important for that reason.

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We see a lot of movement on investment. I would say there's a, let's say a big foot, little foot or like a big piece and a small piece. The big piece is the announcements on what I'm going to say climate finance because I think it's actually energy transition and specifically renewable energy finance.  And, you know, that's in the tens of billions of dollars. And that's exciting to see. At the same time, I think we need to start, as a society, a sustainability community, we need to start to see that differently because most renewable energy is now an attractive investment irrespective of sustainability. And I don't think that funds and investors should get kudos anymore for investing in renewable energy. I think that is business as usual. And the stuff that you get kudos for, should be incremental. It should not be that. It should be other stuff. And I think there are exceptions. I think if you're going out there and helping to really install so, you know, large scale solar and wind farms in emerging markets in hard to reach areas. That's different. But for most of the money that's going to be invested, I actually think it's going to go into mainstream sort of projects.

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Isobel: That is a shame. So when you speak about these incremental investments into other initiatives, what would be the initiatives to look for?

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Saif: So that's the little foot, I think, right?

The big foot is the stuff that we were just talking about. I think the little foot is actually what's going to emerging markets. And to be honest, a lot of us were hoping for bigger announcements there. We're still non stop. seeing anything significant in terms of the scale of funding to go towards climate change mitigation.

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It's a fraction of what it needs to be. And I think if we talk about actual adaptation and resilience, I don't hear that talked about nearly enough. Let me give an example. I was at an event the other day, and we were all talking about raising the level of ambition for 2050 and what we want to achieve for 2050. And, you know, we're talking about hydrogen and different fuels and peak emissions and so on. But actually, I come from from from Pakistan and over there, what we're expecting is 40 million people are going to lose their homes because you have you have them living in areas which are already hitting 49 degrees and higher.

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And when it's not 49 degrees and higher, you're also having flooding, washing away people's homes. This is all the actual impact of climate change, and I don't see anyone promising tens of billions of dollars going towards constructing homes in areas where they're not going to get washed away, or in ways that they're not going to get washed away, and helping relocate the tens, if not hundreds of millions of people who are going to be displaced as a result of climate change.

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We need COPs to solve this problem. We don't need COPs to solve for rolling out tens of billions of dollars of renewable energy assets in the global north. We need someone to help us figure out what's going to happen to Bangladesh.

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Isobel: Well said. I think we're at another event where there was a survey that you could, you know, put forward your recommendations for what would be the key lever for like unlocking this finance and getting a transition going. And I think the majority put down collaboration and stakeholder engagement.  I think it's another point that we need to highlight, which is financial alignment and putting more money on the table.

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Saif: Yeah, for sure. I mean, I think that, you know, we are, we're, we're all in kumbaya mode, right? We're all talking about collaboration and partnership and, and, and, and fraternity between corporates. Whereas actually we need to be talking about incentives. And you know, there's vast sums of money here on one side of the fence, and there's vast need for money on the other side, and nothing is bridging the gap.

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There is clearly no shortage of money available to be spent on global causes when it's needed. We've seen that with financial meltdowns, we've seen that with COVID, and we're starting to see a bit of that here. The problem is, there are also massive volumes of hungry mouths on the other side, and the ability to actually connect the dots and turn capital into incentives that can actually filter through the value chain, that's missing.

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Isobel: So, on that note, we've kind of touched on it a little bit, but if there's one thing that you would spotlight in terms of like, what everyone is thinking, but perhaps not saying. What would that, what would that be in your eyes?

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Saif: Yeah, I mean,  I think that there's a, the big thing that I think a lot of people are wondering is whether the whole corporate process and the sustainability movement, if you will, has been sort of taken over by, by corporates.

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And I think that there's a big, just, you know, regulatory capture that we're seeing, and we're seeing it repeated at multiple levels. At the highest level, it's about the actual negotiation around global climate policy, and you know, this crop is in many ways evidence of that.  At another level, we're seeing the largest corporations stepping in to influence frameworks  and standards.

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And sometimes they do it as part of industry coalitions, where they are the loudest voice. And sometimes they do it behind the scenes. And sometimes they go through lobbying directly to government agencies. And that's, that's, it's quite disturbing.  Part of the reason that we're in the situation we're in is incumbency.

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Greg Jackson at Octopus puts this very well, which is, "we don't owe incumbency anything". Actually, the reason that we have a climate change problem is because of old ways and old processes. And we need to be ready to challenge that. And that doesn't happen if the watchdogs or regulators are effectively in the same camp as corporations, you don't end up with a world where you challenge the governments.

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Isobel: So what would be the key levers that corporates can pull in this sense?

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Saif: You know, I think that there are a few levers here, and if I define the problem, let's say, of how do you channel, how do you make sure that every dollar spent on sustainability has the maximum possible return?  

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I think one is around, let's say, unification of frameworks and standards. And, you know, Jason at JBS actually put this very well, which is, he says, look, there's no shortage of frameworks and standards out there. We need some unification and consolidation to make this easy.  What happens in the Global South needs to be able to inform what's going to happen in the Global North, and it's not helpful if every subcategory in every industry in every region has its own framework for, you know, how they're going to account for, let's say, product level emissions, for instance, right?

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Or if regenerative agriculture is defined differently in Latin America versus South Asia. I think that there's another piece, which is we need to be able to have changes flow through into contracts.  And so it's one thing for us to talk about regenerative agriculture in lofty terms, and it's another for us to say that actually every company signing up to this sort of commitment is going to reshape its supplier contracts to be longer-term contracts that then actually give the supplier coverage to invest in change. Because right now, most commodity purchases still happen in some form of spot purchase. It's not a long-term commitment that de-risks it.  And so, you know, at Altruistiq, we obviously do emissions measurement and product breakdowns and supply chain engagement. We want to facilitate the flow of capital into supply chains.

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And one of the areas that we've now had to innovate is we've worked with one of the world's leading law firms and their ESG practice to define the kind of articles that should be embedded into their supply chain contracts. We've had to do that. It wasn't our main goal.  We had to do that to enable what we want to happen in the world.

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And, you know, now we're thinking about whether we should just make those articles open source, rather than just making them available to our customers so that other businesses can use them and embed them. A great innovation that happened in the tech space was the Y Combinator SafeNote, which was the Y Combinator, which is kind of like a startup incubator and investors released a model, a template of a legal contract that startups could use to raise early stage capital. Because they made it open source, it was very easy for everyone to start using it for free. And I think we need more of that to happen in the kind of legal contracts and articles that would enable suppliers to invest and suppliers to actually do their job differently.

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Isobel: Yeah, what we're hearing from a lot of sustainability professionals is that a major pain point for them is having to speak all these different languages, whether it be across like R and D, whether it be across finance, whether it be across like procurement and law now. So actually having a solution like this that can perhaps like streamline that would be incredibly helpful, I'm sure.

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So bringing us back to COP, I guess the last question is like, what are you most excited about? What has like piqued your interest?  What is the highlight for you?  

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Saif: Yeah, that's a good question. I think that I guess, and maybe this is more just me thinking about, right? Like, I've been in the sustainability space for  close to 20 years, in one form or another.

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And for 15 of those years, you were wandering through no man's land.  Uh, you know, I was telling someone at an event just here that I very briefly headed the ocean practice at McKinsey, and it lasted all of six months because there was no client willing to pay anything.  And so I think that there's, there's genuinely some excitement in the fact that there is so much momentum now behind this topic.

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And I think that what we saw starting maybe with COP 26 in Glasgow was that this has become a retail event. And, and I think that's actually continued here. You can actually see, even in this video, you see families wandering around.  And when I was a kid growing up,  I was taught that fossil fuels should be preserved because they were a scarce resource and there weren't enough of them. And if we didn't put off the lights, we'd run out of fossil fuels one day. And it's taken 20 years, 30 plus years for that narrative now to become one of saving the world. I'm actually very optimistic that all these families and kids that we see wandering around grew up with that narrative versus the one that I grew up with.

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Isobel: Yeah, it definitely is an exciting buzz.  I think I saw that there are 100, 000 people who have visited COP already, which is absolutely monumental.  

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So onto my last question, what do you think is going to come out of it? What's the main thing that you think you're going to see from COP28?

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Saif: I think that one of the things that we're seeing now that wasn't true a couple of years ago is that sustainability has been sort of absorbed by business. Despite all the noise around the war against woke and so on, what you're seeing is that there was a lot of hype a few years ago, and there's still a lot of hype. But actually, no business that I have seen has actually, in a real way, moved back on what they're going to be implementing.  And so if you take the Unilever effect, right, or the Unilever example,  a lot of companies or individuals have looked at Unilever's public statements and seen a retrenchment, whereas I actually see a reality check.

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I see what was a very broad commitment to do really very little practical stuff on very many things. And I see that being shifted towards a deeper, kind of more institutionalised commitment to do, do stuff on a few things. And I think that's what we're seeing happen more and more across businesses, that every business is actually moving forward on the

implementation, certainly all the ones that I've spoken with.I haven't spoken with every big business on the planet. But I've spoken with probably most of them in the last 24 months, and I just see a lot of kind of slow build-up of momentum into real impact. Again, I caveated at the start of this episode saying it's not going to be enough,  but it's it's more, and it's becoming faster, if that makes sense.

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Isobel: Movement in the right direction. Well, thank you, Saif. I feel like this has been a good episode to just wrap up what's going on. We're at the end of week one, so feeling, feeling a bit, a little bit tired on the ground. Um, but yeah, if you've got any questions for us, please pop them, pop them in a message to Saif. Thank you so much.  

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Saif: Thank you Izzy, pleasure to be here, and uh, looking forward to running the next one!

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