Podcast
August 22, 2024

Unlocking Finance as a Force for Good

Climate change requires industries to align capital and business intentions with solutions to tackle it. The finance industry is quickly acknowledging and acting upon the urgency of the climate crisis. Who better to discuss the opportunities and challenges in scaling sustainability performance than Alison Rose, CEO of NatWest and David Giampaolo, CEO of Pi Capital. We will unpack the incentives, consider the risks and forecast the road ahead.

Listen to the episode directly via Spotify here.

Transcript

Saif:
This is Altruistiq, where we speak with pioneers in the Race To Zero and unpack the lessons from their experience for you, our community of impact professionals. I'm your host Saif Hameed. And in today's episode, we're going to talk about financing the green transition. Climate change requires industries to align capital and business attentions with solutions to tackle it. We're excited to have two pillars of the investment landscape with us today, each bringing a unique set of perspectives. Alison Rose, CEO of NatWest Group and David Giampaolo, CEO of Pi Capital. We'll unpack the incentives, consider the risks and forecast the road ahead. Alison, David, welcome.

Alison:
Thank you.

David:
Thank you.

Saif:
Just to get us started I guess, I think it'd be good to give our listeners a bit of an entry into both of you in the work that you do. Alison, here at Altruistiq we fully subscribe to your mission statement that finance can act as a force for good. I know that's something that you've been quite passionate about and quite clear on, not just in your public statements and interviews, but also in terms of how you guide the business and really try to shape the culture of the bank and really of the industry. Perhaps more so than the leader of any other major bank, you've carried this banner of sustainable business. And what I find particularly impressive is that you defined this agenda almost as soon as you came into your role, what made sustainability so important to you so early on?

Alison:

Yeah, thank you. Well, I fundamentally believe finance is a force for good. We occupy a very privileged position in people's lives, in businesses' lives. And finance, when applied well, connect for good and it supports capital and growth. I've also seen that finance doesn't act for good. So I've seen both sides of that equation. But in terms of sustainability and climate, I made that one of the first things that I set out when I took over as CEO and repositioned the bank very much as a purpose-led bank. And our purpose is to champion potential, to help people thrive and build long-terms sustainable value for all of our stakeholders. And I think the reason we made climate a strategic imperative and a absolute strategic focus, it's not a sustainability agenda. It's not something done on the side. It's a cool part of our strategy.

Alison:

For me, I'm going to help people, families, and businesses to thrive, if I'm going to build long-term value. And focusing on the climate transition is really critical part of what we could do. And fundamentally is one of the UK's biggest banks, the largest lender to business. We've got a huge role to play, both in terms of directing where the money goes, where the capital goes, makes a difference, but also more practically helping our customers transition, because transition isn't going to happen by me doing something, that's going to happen by us helping.

Alison:

So when we set out climate as a key strategic imperative, we said there are three ways in which we need to really break that down. One was get our own house in order, so as a large corporate, we need to be at zero and we are and we've been very clear about the house. The second was ending harmful activity, so oil and gas exposure is now 0.7% of my balance sheet lending, but we're working with oil and gas providers who can transition in line with Paris. And then finally, most importantly was fund and finance the transition to a low carbon economy. And I made a very clear commitment to say we're going to halve the impact of our financing in terms of climate and emissions over the next 10 years. And by doing that, it's directing the capital. I've committed a hundred billion pounds of financing to fund and finance the transition. And then practically putting things in the hands of our customers to help inform them, support them and help them transition. And that's what I can do.

Alison:
And then more broadly, and I'm sure David will talk about this. The climate emergency is not something I can solve as NatWest. It's not something banks can solve on their own. It's going to require massive collaboration, global cooperation, public and private working together, so that we actually address this as a just and fair transition. Developed nations are going to be moving at a different place to developing nations. We've got to play our roles. You're going to be a purpose-led bank, if you could heed finance for a force for good. Address the biggest challenge that our generation is going to face, which is moving and rewiring the whole economy to a low carbon economy.

Saif:
Thank you Alison. At Altruistiq, we're in the software side of this space and we specialize on the enterprise front and B2B. We obviously see a lot of software companies coming up on the retail front as well. At NatWest obviously you play in both camps, with the business banking and also the consumer banking. To what extent do you see this as a retail agenda for the bank versus a business agenda? Is it a clean split? Is there a slight weightage more one to the other? I noticed from your three priorities, they skew a little more towards business, but maybe I'm misreading.

Alison:

I would say it's both. With the largest business bank in the UK, I think in terms of funding and financing that transition, big businesses down to very small businesses, employee people, create jobs, make decisions about investments. So you've got to help businesses do that. And frankly, if you're a large corporate, you have the resources to be able to make choices and do things. If you're a very small business, we know that 80% of SMEs want to build a sustainable supply chain, but don't have the tools to do that. So there's real practical help for business. Every individual person on this planet has choices around where they send their money. For our retail customer base, they own homes and the UK housing stock is a huge part of our emissions. And so working in collaboration with other companies and government to make sustainable housing will make a huge difference.

Alison:
But equally we've partnered, for example, with a FinTech called Cogo, where we put in our app the spending choices that everybody makes and can they make some differences that will change things. And I think that comes down to one of the fundamental things we have to grasp about the climate transition, is it feels like this massive insurmountable problem and challenge. And I know talking particularly to young people and to families, how do I make a difference on this global issue that everybody is facing? Well by making some choices as well. So it's a retail and business agenda. We just have to approach it in terms of putting tools and information and choice in the hands of people, where they spend their money, how they spend their money, how they invest, to drive an outcome to the carbon economy.

Saif:

Thank you Alison, I think what's particularly exciting as a practitioner in this space, is how this has become in many ways a retail topic as well. You and I were both at Glasgow for the COP conference. And one of the most inspiring aspects of that conference was it had actually drawn a big pool of unaffiliated individuals to be part of the conference atmosphere and event program. And I think a lot of the examples that you are citing of people starting to look at housing stock, heating transition, the day to day activities of individuals and families and SMEs frankly, is because this topic has gathered so much emotive power over the last few years for the individual.

Saif:
David, maybe this brings a nice opportunity to pull you into the conversation as well. Pi Capital has become one of the go-to communities for British business. And your engagement with that community is very much often as an individual, one person to another. Many of the members of Pi Capital will be CEOs, will be leading large organizations in their own right, but your conversations and your dialogues with them are very much person-to-person. What role do you see for organizations like Pi to play in capitalizing this debate and moving it forward, at the level of individuals trying to reframe and reshape their organizations, much like Alison is doing at NatWest?

David:
Yes, you're right that the community at Pi is small and it's made up of individuals, but those individuals typically have a large footprint, if I could say that, both in their personal lives and in their corporate lives. We are trying to do a number of things in our role as one of the think tanks of the UK or of the world. We think about informing, educating and actually hopefully inspiring, because the speed of change in climate sustainability as in many other sectors is virtually exponential. And therefore having access to some of the greatest minds or practitioners in the world to help us on this curve is really valuable.

Saif:
I know from experience that one of the topics that routinely plagues those minds and practitioners is around measurement. And I'm sure both of you have seen the recent news around H&M, there's been some news around Tesco, a few other large corporates. Often with really the best of intentions and a lot of hard work going into this, facing accusations that actually they've missed a few stones in their efforts and actually not really gone as deep as they should have.

Saif:
On the topic on measurement, sustainability ratings in particular have been quite aggressively attacked by a pretty varied cast. And maybe this is a little more towards Alison. To what extent is the financial community across debt equity or other instruments starting to look past the ratings and towards the underlying sustainability performance of the assets. I notice you mentioned the transition away from let's say oil and gas towards other industries. Do you see the potential for this to really scale up? How are you thinking about it?

Alison:

I think you hit on a really key question, which is the data, and getting reliable and clear data, and most importantly, consistent data. And in a lot of barriers, people are doing this for the first time. The data is incomplete. You are measuring things for the first time. And I think what we have to be really clear about is obviously nobody wants greenwashing and using data for the wrong purposes, but waiting for the perfect data as well, until we have an agreed set of global standards also means we won't get on with it. So I think there's an element in we've got to get started. But I think increasingly people are looking under the data. A lot of people are using, building their own ESG models, are starting measuring. On my own balance sheet, we've measured 12 sectors to very detail around what the emissions are, so that I know where I can start from, to then how I can track.

Alison:
And that data is really helping me, not as much for reporting, it's really important, but to know where I am and what's the different levers I can pull what the information tells me and where we can move. I think that the ESG ratings that are being developed are a really good trigger for engaging different organizations. We know that investors are increasingly looking at where do I put my assets to work? I think about three, four years ago, I would be asked about ESG ratings maybe at the end of a meeting. Now it's probably the first thing I get asked and I have dedicated meetings on it. It's a really important aspect. And I think if the data develops, as there's more scrutiny, that's going to be really important.

Alison:
But you know, now a lot of investors are looking at, for example, specific bond impact reports, linked to instruments. They have green and sociable ratings, looking at how they will balance their portfolio. Rating agencies are now embedding ESG in their reports. So I think people are looking below in terms of what it tells you from a risk perspective and a mixed perspective, but people are moving at different paces. And I think what's important is to be very transparent and then identify where more data will help inform you and help you move faster. And I think that's going to be key aspect as we go forward. And the standards will improve, the reporting will improve and the transparency will improve.

Saif:
I really like the thinking around reliable, clear and consistent data. And I think actually often the consistency of it tends to get underappreciated, because one of the worst things from a business perspective, and we see this with our customers, is to have numbers that are constantly moving around. It's almost better to have the same assumptions going in, so that you can start to do business planning that is consistent over the years.

Alison:
Yeah, absolutely. And I think that's why I would always encourage people to get started, at least have your benchmark so that you can show progression on a consistent basis so people know where they stand. I think that's really important.

David:
All I would add is I agree, everyone's not on this journey yet. We have to get them on the journey. And therefore I think both absolute and relative matters. And so where are you today and where are you a year from today or six months from today? I think it's really important. And I do think in this particular case, because often people see this as important, but not urgent. And it's relatively easy for this to continue to not make it to the top of the agenda, or even in the top five or to slip out of it. And I do think it would be good if there was more positive reinforcement out there on what people are doing versus the negative of what they're not doing. It's important six or 12 months from today, they're doing a lot more than they are now. So that's why I think we're on a journey. And different companies and organizations are at different points along that path.

Saif:
Thank you, David. I think when we get down to the business of how can business implement this pattern more effectively, one of the bets that we've made as a company at Altruistiq is to go really deep on carbon and really deep on emissions and then branch out into the environmental column. So our ambition as a business is almost to be the best in the world at enterprise level, environmental data and ingestion and insights. Alison, when you think about ESG, I sometimes feel like actually the term is just way too broad to actually be able to drive a lot of action. How do you equate, for example, child's labor in a supply chain to water intensity. These are just not comparable. How do you approach that topic?

Alison:
Yeah, it's a great point. ESG is a very broad rating. I think it is really being very clear in building clear measurements and being very distinctive in terms of that. So for example, we have a very clear environmental climate, measured by sector, measured by emissions, using science-based targets, where we start, where we're going, what the levers are. And as part of that, we measure in our supply chain. We have a supplier charter for example, where we ask our suppliers to disclose and work with us on what their emissions are in their supply chain. That's helpful to them, it's helpful to us. But we also have human rights and slave labor and all of those elements as well, and expectation of standards. And I think you have to break it down into the components parts. Governance is a really important part, because that's how you can measure and report internally and externally.

Alison:
So I think you have to break it down and be very clear about what you are doing and what you are yet to do. This is complex and where we all really want to get to is fundamentally the circular economy, because it all needs to fit together. When I'm talking about supply chain, for example in the agriculture sector, I'm working with farmers, they represent 7% to 8% of my lending, but 22% of my emissions, but I'm working with farmers on helping financing them with renewable. And universities and supermarkets in terms of their purchasing power, and transport course, it's that circular element. So I think it's really keen to break it down and then be clear what you are doing and what you're not doing. And the nature-based elements, biodiversity for example, are much harder for me to measure as a bank, but they're an important part of the whole circular element. And we are developing more in that space. So again, it just comes back to transparency and people not being afraid to say what they can do and what they can't do and what they would like to do next.

Saif:

I think that makes a lot of sense. I like the clarity around being specific about what you are doing and what you aren't doing. Another approach that we found helpful, in which I applied while I was a consultant at McKinsey, was around decide what are your one or two strategic bets that you're really going to go big on and build your brand around almost. And then all the other things that you're going to be good at and be above forward at. David, you also flagged that business should start to see a little more in the way of, I don't want to say credit or appreciation or encouragement, but whatever the right term or phrase is, around what they do get right. In your conversations with the Pi community, do you actually feel like some people are seeing the outside from actually being sustainability winners? Are there premiums on exit of investments? Is there any other form of incentive at the end of the road?

David:
I would say that we have a very enlightened intellectual community. And so at a macro level, yes they would all agree that the direction of travel is right and necessary. Where the disagreement would be around the transition measured in time. Is it a three years? Is it five years, seven years, 10 years, 15 years? The other area I think would be where you see a lot of conversation taking place right now is actually at a more personal level, from a behavioral point of view, from a consumption point of view. How many homes do I own? How many flights do I take? What am I purchasing? So the whole area of behavior consumption is a topic that comes up a lot, because whilst we know we can do more in our business, we know we have control over what we do ourselves. Whereas it's a lot harder to move a thousand people in one direction than it is to move yourself in one direction.

David:
There's a very interesting discussion that's going on, which goes from the macro. Well, how do I fit my organization over the next 10 years, to not just achieve net zero, but actually beyond that, to how do I change my behavior today as a corporate leader, as a father, as a mother, as a global citizen. And I can tell you, people are saying things and doing things today that was unheard of only one or two years ago. Taking the train and not a plane, or getting rid of another house or making rules around travel, both their own travel, as well as corporate travel. Can we zoom this meeting? Does it have to take place? Unheard of, yes COVID contributed to it, but more than anything, the discussions around ESG and sustainability more than any single thing is now at the front of people's consciousness. It's not necessarily their behaviors. There's often a gap between their words and their actions, but the direction of travel is profound in my opinion.

Saif:
Alison, in many ways as an individual, you are shaking up a very traditional industry. And I imagine that within the bank, but also more broadly, you are starting to be seen as a real role model for many other people going up through their career. And so picking up a little on where David left off. As an individual, what do you find to be the most powerful actions from you as a role model to others, in terms of how they can be playing their part here?

Alison:
Yeah. And I think we can all play that role. I think it's important to talk about it, to make it there... As a business role model, talking about it with my customers, talking about it with my colleagues, being transparent about what we're doing, what we're trying to do, how we're doing it. I think talking about those trade-off of choices that we're all making in different things that we're doing. And I think for me, because of my role, a very privileged role, to be in my customer's lives, to really showcase best practice that I'm coming across, so that other companies can see what the art of the possible is. And then taking those tools.

Alison:
I was in Darby a few months ago with David Nieper, which is a family-run business. He now has complete circular economy. He has all his own energy from solar panels on his roof. He does his own printing of textiles in-house. He doesn't outsource. And so he's a great role model for addressing climate sustainability. Energy security, he has a really local supply chain. He sponsors the local academy, sponsored children, employees. So he is creating a dynamic. Those are great best practices that we can showcase and share.

Alison:
But I think it is down to the individual choices you make and talking about them, as well as personal consumption as David was saying. I have solar panels now on my roof, I have an electric car. These are things that I can talk about. But I think it's also recognizing that at the moment we are dealing with making sure there is a just transition, making sure that we can help close the green premium cost. Carbon isn't priced in, as a negative. And the sustainable choices tend to be more expensive. And so trying to figure out how we can close that gap and be a voice and a role model for solving that. I think all of the above are all things we just need to do. And I think particularly in a post-COVID, GA political environment that we have in all of these issues, making sure this agenda doesn't get pushed back because of short-term immediate concerns, because we're trying to solve a long-term global problem.

Saif:
Alison I'm really glad that you also brought us on the topic of the green premium and actually how we can get better at pricing carbon into business. There are two aspects of this that we hear coming up again and again from our customers. One is around if I'm, let's say, producing bottles or cans or other materials for business consumption. At some point, do I actually get to price in the fact that I'm lower emissions product?

Saif:
The other aspect of this is in terms of the financing that I'm getting, is there going to be a lower rate for a sustainable instrument? And you, right now, see almost across all the spectrum, the difference in terms of basis points can be very small in some cases, a little higher in others. There's also a view that actually all finance is going to be sustainable finance at some point, because sustainability indicators and metrics and baselines are going to be built into a lot of mainstream financial instruments. Where do you see this going in terms of the Delta for business? Is this a small difference for example, when it comes to financing? Or is it a big difference? What do you see this playing out as over the next five years let's say?

Alison:
I think this is going to evolve quite a lot over the next five years. I think we are going to have to get to a point where we can price carbon and carbon pricing, so that we are being the relative pricing of the old and the new, so that we can actually have transparency and visibility on that. And I think that that is certainly where we should be going. I think in this big challenge of transition is really important from a number of aspects. One, there isn't the capacity yet to provide all of our energy needs globally through renewable sources. And so how do we make sure there's enough investment to building better, for building the capacity, building carbon capture, all of those different elements, hydrogen and all the new, so that we can transition through.

Alison:
We also have a gap between actually it is going to require investment and we must make sure that we don't end up with either a global or social or economic dislocation caused by that. Developing nations are going to need huge investment from developed nations in an audit at the starting point. So careful management of this is going to be important.

Alison:
Now we can build in incentives to do that. In our bank, if you have a green mortgage it's cheaper. We've recently launched green SME loans that if customers are investing in green and transition, it's cheaper. So we are trying to build that in. That's not priced into our capital. It's still the same capital cost to us, but ultimately we need to move to that transparency of carbon pricing. And I think that will evolve over the next five years.

Alison:
What we have to make sure is we manage this transition. One of the things I'm very clear about is we work with oil and gas companies who have a plan to transition, an incredible transition plan. We're not divesting of assets because those hard-to-abate sectors are going to need transition as well. And if we just dump assets, you're not actually solving the fundamental problem, which is get carbon out of the atmosphere. Get the economy rewired to led carbon economy. So that's what we need to keep focused on. But over the next few years, I think carbon pricing will enable us to be informed about that and build more incentives in and fundamentally make sure we are transitioning the economies.

Saif:
Alison, a big part of that transition is going to be some of the investments that you've mentioned. And while there'll be a lot of small bread and butter investments, for example related to housing stock, there will also probably be some big thematic investments, which present the opportunity for, let's say for the UK, to actually build new centers of excellence and competencies and expertise. I realize that this is a somewhat charged time to be asking that question, but what are those opportunities do you think from a government standpoint and do you feel like actually there is the political will to come together behind a few big bets and make new competencies for the country?

Alison:
Yeah, absolutely. I think one of the things about the climate transition, which are really important from a risk and an income perspective, pick a report, but the McKinsey report and the IPCC study was saying for transition that's $275 trillion of investment that's going to be needed in order to transition the economy. We know from SMEs in the UK, who represent 60% of the turnover of the UK and 50% of the private sector employees, that actually participating in the transition is 160 billion revenue opportunity for those businesses. So there is enormous opportunity and we know with every major shift, whether that was to the internet, whether it was the industrial revolution, early adopters tend to accelerate and benefit more.

Alison:
So I think there is real opportunity, whether you look at in the UK what's happening in the NT side, in terms of development with battery manufacturer, with carbon capture, the big projects that are going on. There is a real opportunity, as well as the small opportunities for the SMEs in this country to really transition. And we produced some analysis last year in October, which was called Banking on a Sustainable Recovery, SMEs can be part of this transition. 130 billion revenue opportunity for SMEs, 30,000 new businesses, 130,000 new jobs. There's a massive opportunity here in funding and financing and transitioning. So that commercial element and value element is I think huge and something that gets lost in obviously the challenges of enabling it to happen.

David:
I am starting to see, with this cost of living in crisis, the inflationary pressures that are real, specific impact blowing out of the Russia-Ukraine war. I am worried that a lot of the momentum going into the new year from COP has either been put on hold, moving backwards, et cetera. Now I may be wrong and it may be a data set that I'm spending more time with than not. I think it's very hard to talk about this transition and this journey, without acknowledging some very real and material market changes in the last 90 days or so, that to me are profound and unprecedented. And I just wonder how you see this overlaying with what we're talking about.

Alison:
Yeah. I think it's a great question, David. I think, in some ways, energy transition has become more about energy security now. And I think that energy security point is actually helpful in the climate transition debate, because actually securing your own energy supply is giving yourself security so much more from a geopolitical lens rather than an energy lens. And actually the reality is the premium gap between renewable and sustainable energy sources and traditional sources has closed quite a lot. So in some ways, although incredibly unhelpful, I think that energy security question and over-reliance from a geopolitical perspective has really, in some ways, sharpened the view of we really need to continue to focus on this. It's interesting. We do a regular survey with households in the UK and two quarters ago, 53% of them said, ''We want to make our houses more sustainable over the next 12 to 18 months.'' We did it only recently, so within the last 90 days, so our last quarter, and that number's gone up to 83%.

Alison:
So I think that, although for different reasons, I think it does come in. But I think what it does highlight even more as well, is the challenge for this just transition becomes even more critical. The debate around oil and gas bad, wind good. It's never that simple. It becomes even more critical that we have intelligent debates about this. We are going to have to transition. We are going to have to factor in energy security. We don't have access to globally clean energy and renewable energy yet, so we need to transition. And then we need to make sure we don't leave parts of society behind, who are right now going to be super squeezed, with costs of living and inflation. So I think the complexity of the discussion remains apt, with energy security adding greater incentive on it as well.

Saif:
If I just even build on Allison's words with our own experience from the companies that we work with, Altruistiq tends to work with companies producing physical products or delivering physical services. And in that space what we're seeing is both a quantitative and a qualitative side. On the quantitative side, these companies tend to focus on energy logistics and packaging as three of the first areas of opportunity. And actually sustainability improvement often dovetails nicely with business improvement. Logistics optimization, route optimization is a great way to reduce fuel consumption and improve emissions. The same is true for packaging, for example. So there's still a pretty good business imperative.

Saif:
And then on the qualitative side, it is that much harder to compete for the consumer's wallet as a result of the cost of living prices, which means that companies need to do that much more to differentiate. So the positioning as a sustainable brand becomes all the more important. David, if I could almost flip the question back to you though, from another angle. A lot of your community is the investor landscape. Do you see appetite there for a lot of the big investment bets that Alison was referring to previously, do you see appetite rising, falling, or perhaps shifting towards lower risk asset classes within the transition?

David:
Look, I think that we're in a sort of risk off environment. Most people, when they look across their holdings, corporate or personal, have taken some headwinds over the last couple of months. I think people are ascribing more of a premium to liquidity today. And I therefore think the environment is less friendly for making investments that have 5, 10, 15-year payoffs. The investment landscape has changed profoundly in the last three or four months. And it could change again in three or four months, but at the moment I would say the bar is much higher for people to allocate capital to projects that are high-risk or just long slow paybacks.

Saif:
I think that can end up being particularly bad news for some of the emerging markets that are involved in this transition. Alison, you mentioned the amount of investment that we needed for the Global South in particular, to be able to be part of the solution in a way that facilitates a just transition. As we've seen in Bonn, right now it seems like the Global South feels that actually climate change financing commitments are being rolled back, rather than forward. And that frankly, having talked a big game, the Global North is now reneging somewhat. Do you think we're seeing action briefly pause or be materially deferred?

Alison:
I think there is more that can be done. I think David's point is right. People are pausing in terms of investment decisions. And I think it is critical for particularly global alliances to continue to drive that. I'm part of the GFANS Alliance, which is really committed to helping connect internationally. Standards to help it easier for people to drive that. And we are seeing progress, but I think we need to keep continuing to push that forward. I can see a continuing demand for climate and sustainable funding and financing. The momentum on that remains very strong. I do think it is harder at the individual level, for households who are facing in some cases 50% increases in energy costs to be thinking about this. And I definitely think that the GA political pressures are putting a very significant challenge on and people don't have the ability to measure yet, either. So what does it mean what we can do?

Alison:
So I think what's important is in this period that particularly global alliances like GFANs, large banks like ours, continuing to make sure we don't defer action, because I think about a lot of what I'm doing is putting practical information in the hands of customers to measure. Practical steps to fund and finance transitions, making sure we can measure generating products with incentives. We are not pausing on that.

Alison:
So I think continuing to proactively reach out and support and understand the issues that businesses and consumers are standing in and helping, think long-term, I think is an important one. Because if you've got right in your face, the short-term pressures, it's very easy to step back and say, ''Well, let's just wait till this calms down. And then we'll get back to this.'' It's really important for leaders like us, for international organizations to recognize this is a climate emergency and inaction now is only going to make it the problem worse. So we have to thoughtfully continue to keep moving forward and challenge progress on that, but also be aware of individual challenges. Some areas will be able to make more progress than others. That's going to be the reality.

Saif:
And Alison, what is the one thing that gives you the most optimism looking forward on this topic?

Alison:
I think if you step back and look at the younger generation consumer choice, leaders who are running major businesses today, they are actively gripping this and trying to drive this. People are making choices. I can see by putting information in the hands of my consumers with, for example my Cogo app, on the pilot that we ran on that with our customer base, we saw a 40% reduction in the amount of carbon that they were using in their day-to-day choices. So people want to make this change. They don't want to pay for it, of course they don't. We're particularly in a cost of living squeeze, but I think the more businesses, the more leaders, the more people who focus on long-term sustainable value, this is a non-negotiable area.

Alison:
If we generally want to have a future, we have got to address this issue. It's not going away. So I am optimistic. From a business perspective, I can see the business value in this, and so encouraging and helping businesses to unlock that value and create value, that's what business owners want to do. Household families want to plan for the future. So I see a huge opportunity, geopolitical very difficult, but it focuses the attention on energy security and I can see progress. So for example, I committed a hundred billion pounds last year to fund and finance the climate transition. We've already funded and committed 14 billion of that. The demand is there and we just have to keep pressing and supporting people to go ahead with this.

Saif:
David, same question to you. Biggest reason for optimism?

David:
Technology and the youth, if I had to pick two things. I think fundamentally people want to make better decisions, smarter decisions, more climate friendly decisions for more sustainability, but I think there's a lot of misinformation or lack of information out there. And I think the role of technology is making a profound impact and will continue to do so even more over the next couple years. I have a 19-year-old son, 22-year-old daughter, and I see how they think, talk and behave. And it's profoundly different than me. And in fact, they have had an enormous impact on my behavioral changes. And so I think the youth sees the situation as a climate emergency. The majority of the people, my cohorts, see it as a climate challenge or sustainability challenge, we have to convert the challenge into an emergency, because you will make the necessary investments or behavioral changes if it's important, versus if it's urgent and critical. And I think that is the biggest thing we have to try to happen over the next couple of years, is to change the mindset and change the verbiage that it is an emergency.

Saif:
Thank you both. I think that's a nice set of uplifting notes around which to bring this to a close. And also to our listeners, thanks for listening to today's episode of This is Altruistiq. Do get in touch if you're on a journey to understand your business' environmental impact. The notes from this episode are available in the show notes below, and you can find more episodes of the This is Altruistiq Podcast on Spotify, Apple Podcasts, and Google Podcasts. And also Alison, David, big thank you to you both for taking time to be with us today.

David:
Thank you.

Saif Hameed
CEO