Alan Murray, FORTUNE
Peter Vanham, FORTUNE

Impact Initiative 2022  - COP27: The Work Ahead

Conferences

Let's go up and look at climate change from the 35,000 ft level with the appropriate carbon offsets and attack. What happened at Cop 27 is the private sector showing more initiative and commitment than national governments when it comes to climate action. Our country shine away from committing to a phase out of fossil fuels and to what extent is the private sector getting behind a blended finance to affect what happened? What didn't happen and what is needed from cop 28 please welcome fortune executive editor Peter van in together with fortune media ceo allen Murray. So the, the cop meeting has been this big disorganize has become a big disorganized mess that is turning out to be pretty important to the world of business. I wonder, by the way, how many of you, anybody in this room was in Egypt for the cop meeting? Great. Any two? I've got three of you and three of you. Okay, I'm gonna, I'm gonna call on you guys in just a minute. I want, I want, I want to get your on the spot. Let's get microphones to the three of them because I want to get your views. But I want to start with Peter. I think everybody's met Peter van and Peter's the, the newest addition to the fortune team came from the World Economic Forum. Don't tell Klaus Schwab. I said what I'm about to say, but he's the guy who actually wrote Klaus is book on stakeholder capitalism. Um, so he knows this topic inside out. And Peter. I know you've spent a lot of time looking at what happened in Sharm El Sheikh, what, what's your big takeaway from this year's meeting? Sure. I mean, first of all, there's the actual outcomes. That means the outcomes of the multilateral negotiations there. The government's talking to each other about what to do about climate action. Two things. There one is they agreed to create a so called loss and damage fund. That means that wealthy countries developed countries are going to be paying poorer countries that are suffering the concept of climate change for the damage that they've suffered. They've agreed on the principle, they have not agreed on the financing. So not really meat around the bone yet. But the principle is there. The second outcome is that there was a big drive to include the facing out of fossil fuels into the final agreement, meaning that everyone would say all the governments around the world would say such a year, no more fossil fuels. This was a big drive for that, but that drive was unsuccessful. So that is the second outcome or non outcome in terms of the agreement. Does that mean that the group has accepted the kind of Vicky holla view of the world that this is not going to happen anytime soon? Well, listen, yesterday's session to me was a revelation and I think that for many people, including governments, it would be a revelation to hear this point of view on the, on fossil fuels and the role of fossil fuels. There is a cynical point of view that says that there was a big oil lobby there um you know driven in part by the next cop hosts in Dubai and abu Dhabi in the Middle East. And that they were just against any uh decrease of fossil fuel use at all. But my senses and I'd love for you to talk more about this. That the other thing that happened was You know, the cop was a cop began as a governmental meeting in Glasgow. You started to see more and more companies show up in sharm El Sheikh. It really turned the corner. Yeah. I think that estimate started there were about 30,000 people in total. I don't know if people here in the room can confirm that in terms of their impression. But what you would have seen is that you know, imagine that this room was the room where the negotiations took part. Now in this room there would be no business participants because this is for heads of states to negotiate. But in every other room there would be business participants. And so what you would see is that for the first time ever, you really had almost a majority of private sector participants or at least private sector presence at a meeting like this. And now you can have all kinds of opinions about whether that's good or bad. That was that was my next question. Is that a good thing or is it a bad thing? Um is this uh, is this a force for good in the world? Well, listen, we like to believe that it is right that you need the private sector to execute on a lot of these commitments, Right? And so I think that's the perspective that I would take. But of course there are those cynics that say, you know, they're there to lobby against climate action. Was that the case? You know, maybe some of the people that are here can can talk well, let's let's do that. And I'm sorry Peter and I have have spotlights in our face so we can't see very well, but I think it's kristen back there uh, yes, can I put you on the spot? I just did, I don't think you gave me a choice there. Um, I think a lot of it's what you said, Peter, I think that um as we talked a lot of general motors, it is about everybody in, right. We we can't do it alone from a private sector. I'm sorry, a public sector. It it needs to be public and private together. I think what I took away from Coppin as I talked earlier, I'm relatively new to the overall climate space, I was in Glasgow and and now in Sharm El Sheikh and I think the collaborations and um a lot of what comes after is what's so important and the value of us being there, you know, I talked earlier about our focus on equitable climate action and so we had a lot of discussions, you know, with other companies with N. G. O. S about how do we bring more into, you know, our climate collaborative and and more work in that space so that we are bringing others along with us, I would say the other thing that I walked away with um is one of the panels I was on was with a gentleman from the Smithsonian and he was talking a lot about um optimism and and looking for optimists, and it reminded me of the mr Rogers, if those of you have heard the story, he said told the story when he was little that he was worried when there was tragedies. And he said his mom always told him to look for the helpers. And I walked away from that thinking, look for the optimist, because optimists are the doers, and it's like we I said earlier, we won't get to 2040 today, but we can do a lot to get there and a lot of progress can be made. And so I walked away thinking, you know, we've got lots of opportunities from an innovation standpoint, there's a lot of opportunities to continue to make progress and if we can focus on the optimistic view, we'll get more done than if we focus on what we can't get done. So it's it's a worthwhile gathering, you'll will you do it again next year? Absolutely in Dubai, Yeah, uh somebody over here. Yeah, but thank you for going first. Thanks Dave Summers with P. M. I. Project Management Institute, uh and we were there as guests of the host country Federation of Egyptian Industry um hosted us for a panel to discuss about that very topic of implementation. How do you get from the problem? We see now to actually achieving the targets and there's still so much confusion about the how, um but it's probably no accident that this being the implementation cop um was where you started to see private sector come and attend and it will be very important for the private sector to continue to contribute to the effort and and really drive the change. So your big takeaway is the same that this is increasingly that the private sector's involvement in this is growing. They have to be there, we have to be there, you'll go back, we'll be there in Dubai and then there was great Kristin Sullivan with Deloitte. I know kristen we had the opportunity to to join a session together. Um I was there for the first week, so very much focused on Finance day and and the role of the capital markets in particular and I think my key takeaway um led by the world economic forum and some of the activities and the World Business Council. I don't know if Peter bacher is still here. Um it all comes down to data and the rapid acceleration we're seeing in that capital markets infrastructure? That that the you know, the standards infrastructure. So we have a common language, a common taxonomy so that we can actually improve the supply of comparable, consistent timely information to unlock the capital needed to finance this transition, the governance and accountability. This word accountability has become really critical of U. N. Came out with that uh their their report on integrity and and the greenwashing risk. And what's going to constrain the ability to make progress rapidly towards Net zero. Is that that gap between the ambition versus action and then at the end of the day, we need all of these working together to to to rapidly accelerate the pace. Um and so tremendous involvement by every participant in the capital markets and really just that reinforcement that we're making progress rapidly, but we need to get to a place and the policy and regulatory interventions are going to be essential. Yeah, it's interesting. I mean, it sounds like a metaphor for the environmental challenge itself. You have lots of participants, everybody there, you know, trying to figure out how to make progress, but there's no organizing frame. Well, you see some progress also at cop so for example, the CdP formerly the climate disclosure project that is assisting many companies of course in their disclosures threw its weight behind the I. S. S. I know this is a lot of uh a lot of international meetings are great for acronyms threw their weight behind the I. S. S. B. Proposals on on disclosures, so what does that mean? This is the international sustainability standards boards? I think I hope I got, I hope I get that right, led by the former Ceo of Danon, um Emmanuel Faber, and there, of course, the ones that are saying, we gotta get to the scope 123 disclosures and really sort of the expansive view on on on emissions. So you can see that at an event like that, you get that buy in for these kind of, let's say, leveling up of your disclosures, that's on the one hand, and I think that you're really seeing coalition building happening at a meeting like that, and people creating that buy in. And then on the other hand, you know, what also happened was that a lot of people through in the way behind things such as the First Movers Coalition, so basically companies joining together to create technologies, you saw them basically creating future demand for for green technology as well as things such as of course the the G fans, uh if everyone knows that Akram and um this is in Glasgow, they created sort of the financial alliance for Net Zero. And so a lot of companies also joined that Net Zero pledge, so these are a couple of the things that happened and you can really see the needle moving at a meeting like that, you know, it listening to you talk about it, it sort of sounds like what your former employer always aspired to be, the World Economic forum in Davos, if you get the right people in the room and get the conversations going, the coalition's begin to build. Uh, and I think that's a really interesting observation because it seems to me that this cop meeting is becoming what so far the world Economic forum has been, which is to say the place to be globally for the public and the private sector to meet. And so if they are now coalescing around, let's say the climate agenda as being the thing that ties us all together the whole fabric, globally of the public in the private sector. That's really interesting because it almost means it's a paradigm shift and you cannot not be part of it. Yeah, yeah, interesting. And one of the things I'd love to talk with all of you about is is how this new initiative that that were uh, creating here the fortune impact initiative can be a part of that conversation. How can we help you provide you with the tools, the things you need. We have, uh, we surveyed all of you by the way, prior to this meeting and I've got a slide here that shows these are the things that you all said were the most important goals that this community, uh, would focus on and by the way, number one, there is 96% said this is growing, this is increasing, nobody sees falling back, nobody sees pulling back. I think we've heard that repeatedly over the course of the last two days measurement, number two measurement continues to be a very big issue. How do you have consistent measurements that that are comparable across industries uh and and create accountability, rapidly changing landscape? Um It is a, you know, the world on all of these topics is so different than it was three years ago, four years ago, five years ago, uh stakeholder engagement. And then the and then the scope three conversation which we've uh we've had in many ways, I think peter the scope three issue is really interesting because I get on the one hand that unless you address scope three, you might as well forget it. I mean it's company after company in here has made it clear that the majority of its emissions fall into the scope three category. But the second piece is some of the stuff that falls under scope three is, is absurd. You can't measure it. And by the way there's double counting because my scope three may be part of your scope three. And so do we both have to take uh take accountability for the scope three. How do you think that's sorting out? Well, of course it's impossible to say at this point where this is going to land. But what you do see is that there is sort of a groundswell, there is a movement of organizations that are trying to make scope three parts of the mandatory disclosures. We talked about this morning about whether that will be successful in the U. S. Or in europe, but the moment that you have a critical mass for this, both in terms of how you go about the measurement of this and a regulatory environment where this is going to be mandatory, then of course it could become something that is almost like a snowball, right? And that will snowball from wherever it started to wherever it wasn't yet before. And and when that happens, of course, then those places and those organizations that have started with their scope three emissions, um measuring and and reduction. They will have a competitive advantage and those that did not have a competitive disadvantage. And you hear more and more examples of that, Kathleen McLaughlin of Walmart, that the fact that more than 70% of of Walmart suppliers have already signed up. Are there other issues that you all think that we should be focusing on as we build this impact initiative? Because our goal here is to be valuable to all of you. I don't know if anyone has thoughts on that or wants to contribute to it. I see a hand back there. Uh, but peter I know you have thoughts on that. Yeah, I mean, I I think it's really amazing to be part of this. I hope you all enjoy the enthusiasm that I feel. I definitely get really energized from from our time together so far. And so for me it really feels like this is the start of something great. And I definitely hope that we can sort of, I wouldn't say piggyback but be part of that global movement that we see emerging and and possibly also uh meetings such as cop. So I definitely think it's something that is a global conversation and it's important for us to not forget about. And I hope everyone signs up. I think by virtue of being here, you probably get signed up for Peter's newsletter, which is one way to that we can begin to help keep this community together. So, uh, so Peter thank you very much, great having you as part of fortune. Thanks Alan