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...

you hear us?

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Okay. And we are

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and we are live.

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sustainability.

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it seems has

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finally,

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cut through

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not just as a good thing to have, but

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as a strategic business value, and

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what's more, of course, as a key to our survival on this

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little blue green rock out in space in the decades and centuries.

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ahead

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as a business.

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unless you have factored sustainability into into your processes and your P and,

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you are doing your company, not just the Earth.

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of this service

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to discuss sustainability and climate change.

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through the lens of innovation I've asked into the Be global studio to

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there someone

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who straddle the space between those two field storm.

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tom is a Vp at the software giant Sip and resident

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global futurist and innovation

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evangelist welcome to the Be Global studio again, Tom.

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Thanks so much, for my audio. Okay.

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It is just fine. Thanks, man.

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tom Tell me is that str of the world of sustainability?

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and innovation

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a comfortable one

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and also,

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in today's world, can we have innovation without

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taking sustainability into account.

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Yeah. So

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Good question. No. Was the short answer.

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And there's all countries of reasons why

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if I just expand and, I don't know.

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So

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sustainability

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has been hanging around into periphery.

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of

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business and enterprise for

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you know, I wanna say about a decade now really kind of

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maybe thirteen, fourteen years back to

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know, two thousand and seven, two thousand, it started to rear its head and

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you know, companies, some of the more progressive companies

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started to, you know, report

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you know,

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give out Pdf of latest Cs or

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or corporate responsibility reports as they call them vain.

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And that is moist that has changed enormously in the last

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just say,

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thirteen years or so to where we are today. And no.

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you know, the idea of Ps4 or as it was known then has

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now changed Cs, very often in the Function very often organization

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was in the marketing department, which

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tells you straightaway away how seriously it was being taken.

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Whereas the evolution of that

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has brought us into generally in the more

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progressive companies is no a a function of the finance

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organization.

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And there's a number of reasons.

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But

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you know, before I I I get into Them, I would like to

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take a step back into white

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I think sustainability is

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morph thing this way and why it's becoming increasingly important.

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to the point where in the next few years,

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every single business decision being taken

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would be weighed on two criteria. It's financial implications and it's climate in

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patients.

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and that's not far away.

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So this is this is moved on somewhat from the

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unfortunate time, we we were in even in the last decade when

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taking care of your Bottom line essentially meant

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signing up to some organization that put your

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name on a list of companies that took

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care of the Cs bottom line.

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and that was the end of that.

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Yeah. No. Absolutely.

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And

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one of the main reasons that I I see this

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as gaining in

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importance, you know,

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out of reach of anything that anyone is imagining today.

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And as i said to the point where

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every business decision would be weighed against its claim communications.

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The reason for that

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well the the main reasons for that are

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the three main

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global economic blocks.

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China.

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the Us

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and the Eu

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have all

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laid down

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they're

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plans

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and their goals

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for the next few years and decades.

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China has said, it wants to become net zero by

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twenty sixty at the latest

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up a little later than everybody else, but at the same time,

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they didn't start to industrial lot on to went after everyone else as well. So they have their share of

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polluting to do before they or they can

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start winding back then again, I'm being able move procedures there. But if we look at

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the Us

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under the new blatant administration, the Us has

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set targets reducing emissions fifty two percent.

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like, twenty thirty.

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That's enormous.

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I I should mention about China as well. They've also twenty thirty goals. They want

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forty percent of their energy to be sourced from renewables.

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in all the regions so each region has now been nominated with sourcing all of its.

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or forty percent of its energy from renewables my twenty thirty.

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And generally speaking, when the central government

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in China says something it gets done. Right?

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Exactly.

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exactly. And then in the Eu, the eu has now

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mandated

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This is now legally belonging on all twenty seven states in the Eu.

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that we reduce our emissions machines, fifty five percent

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by twenty thirty against our nineteen ninety,

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baseline.

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The Us ambition is fifty two percent against its two thousand and five.

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baseline, which is, you know, less ambitious. But the Eu one is

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It is all incredibly ambitious, especially

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considering that that emissions have been rising over the last few years.

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incredibly ambitious. And, you know, in fairness a fifty two.

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Exactly. Exactly. So I'm trying to get them and

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the the the really interesting point about the Eu one is it's not a question of

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This is in the binding.

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So

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what that means

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is that there will be

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legislation passed in each of the twenty seven

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states mundane the fifty five percent reduction in the emissions by two thirty.

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which means every single organization

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is going to be mandated to reduce their emissions machines.

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so that we get to that fifty five percent direction.

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Not only that.

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They're no talking about

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ten rolling out and will happen.

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a border tax.

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so that we count

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bring in carbon rich stuff.

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from outside the Eu, it will have a carbon tax

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that put on us as soon as it enters the Eu to push its points up,

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What about

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to make it less a tractor.

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what about exporting, which we seem to be particularly good at?

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Yeah.

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the

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I mean, that that's up to the importing countries what they do

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stuff that we export. But

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if it's built in the Eu,

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it will by definition be the carbon.

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at least fifty five percent by twenty thirty.

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So

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what you've gotta keep in mind is well Ralph is

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Yes. We will reduce our mission fifty five percent by twenty thirteen.

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But

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that fifty five percent

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will be very much

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the low hanging fruit.

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So the the remaining

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forty five percent.

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which we have to get rid of

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in the following.

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twenty years from twenty thirteen to twenty and fifty, will be

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significantly harder to get out the system.

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And so if we're calling the twenty twenties,

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the decade of action.

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All that means is the twenty thirties and the twenty forties

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will be the decades of even more action and holy crud that's a lot of action

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you know, so this is not a fan.

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This is gaining

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increasingly and importance as we go along. This is gonna be something that

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is going to be part of our lives part of

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any businesses lives

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far the coming twenty eight half years brings us to twenty fifty.

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and beyond because this ...as we see more and more climate design

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it's going to become even more urgent. So I

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we have those, you know, paris based goals set for twenty fifty five.

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it could be the case that we decide to become more ambitious yet again, because we have even more

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climate disasters happening.

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It seems that we're actually in

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in a playing field. That's

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governed largely by psychology.

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because physics and the climate

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you know, time science. It is what it is. There's no

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walking around it no circumvent no avoiding

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So the the thing that we actually can

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work on is how we react to this and

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can we generalize that that crisis is where human beings

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excel seems like we are finally

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collectively.

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individually and organization and in terms of business

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waking up to the fact that

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we have a very serious problem.

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Yeah. It's ...I mean,

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this is something we should have started tackling

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back in the

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seventies.

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frank when we knew

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already, it was an issue. So

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How, if even if we started in the nineties

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would been no to get a different

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Yeah.

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different story.

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Yeah. Yeah True. But, you know,

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we we're all aware of the

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billions of

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euros dollars that spent by also few of used to

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enact legislation to delay

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to also so doubt the

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various lobby groups that, you know, went around and

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created this massive

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campaign of doubting climate science during the nineties and two thousands.

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which didn't exist before.

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you know, that it was it's the tactics of the tobacco companies.

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exactly the same playbook.

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not only use the same playbook.

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keep using many of the same players, the companies that were used by the

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companies were then used

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by the fossil companies to, again, sow out in the science.

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And frankly, there when

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b

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I suspect

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I don't suspect. I'm I'm I would be in ninety percent sure

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that the ruby class taken against the fossil food companies

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because

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of what they did because not alone did they know

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they were causing this damage. They've made sure

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that they put friendly governments in place

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got a legislation passed to ensure that they could keep doing that because

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planetary destruction for profit worth the business model.

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that they have can't

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going along more. It's not a sustainable business model because

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once the planet is destroyed, and then you can't continue making a profit.

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but that's the ...or authority that's the business model that they continued with

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even opted today.

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Can we

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somehow unpack

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we you got as you've started to but it's un unpack

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a little more.

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the difference between the so called

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and much volunteered net zero.

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and actual action to

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combat climate change because the devil is always in the details

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as are the angels

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and it's all well and good to talk about net zero by such such

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that. But what well it actually

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take for

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your average company, fifty employees,

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producing something doesn't really matter what

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Yeah. That's that's

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a good question. I've I and I haven't been asked many times what

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companies can do and, you know, there are

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many things individual companies can do.

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And there's many things individuals

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can do. And

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you know, if you're talking to

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individuals

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I would say

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try and

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educate yourself.

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try and only by

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low carbon products.

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difficult. I know because it's hard to tell how much carbon is in any particular product.

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But, for example, a a good one is meet.

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beef.

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for example, has an horrendous

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carbon footprint

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and just significantly water footprint as well. So

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even if you don't want to give a meet,

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If you just give up or,

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drastically reduce

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your beef

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intake.

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Well, That's that

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that will go a long way towards your juicy your personal

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Talking.

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beef beef has something like twenty times, I think

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the the environmental impact of the next

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category of of meat. Right?

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Yeah. Yeah. Yeah.

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I don't know the exact numbers, but it's it's that order magnitude.

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Mhmm.

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definitely. So, you know, avoid beef at all costs and reduce meat

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does touch one very simple. The the other one that you

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very simple. And this applies to individuals as much as companies.

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that is electrified

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everything

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So that could be ...if you were if you're a homeowner owner,

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electrified your cooking, electro, your

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home heating your home.

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cool, you know, your ...heating, electrolyte everything.

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and then switch to a one hundred percent renewable

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electricity provider.

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And like I say, that can apply your companies as well.

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again, elect everything and electrified all your transportation.

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all your heating including, you know, anything at a whole

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electrified it.

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and then switch

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to

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differently, not necessarily order. I mean switch to the renewable provider.

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first, if also, about then start microphone anything that's not electric.

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it did the order doesn't matter?

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just do it as soon as possible.

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you know, so

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easy steps right there. Other things if you're an organization that you can do,

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is if you're putting on Rf,

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make sure to include that the people

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responding into the Earth include the carbon consequences.

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Oh,

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the deep proposal that they're put in.

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This is when you're when the companies is looking for vendors to

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Exactly.

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provide whatever product services

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Yeah.

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Okay.

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that that isn't always easy not all vendors are capable of doing that today that's

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hard. I knew of make sure I'm trying to educate your vendors down this road.

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But

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make the policy.

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Ultimately, it's going to be in very short order. It's going to be a competitive advantage

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Exactly.

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for these for these providers. Right? If they can ...if they can fully demonstrate,

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and the end document and then and then execute Right?

...

Yeah. Because

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again, back to the original point by

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twenty thirty are in the years up to twenty thirty. We're going to have mass

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months of legislation passed to make sure

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that we hit about fifty five percent of Mark. So

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just laser,

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between now and twenty, thirty, a company would be required

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to report.

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there machines.

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Then it's gonna be ...it's gonna be expensive not to do so.

...

Yeah.

...

I mean, if you just think of the example of volkswagen like,

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So

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and the folks like an

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Yeah group. I don't know what are the group problems it volkswagen like themselves.

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sorry. I don't know the which which of the two ones. But folks like, in, for example,

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missed their emissions targets for twenty twenty.

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ended up

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paying a fine to the Eu of a hundred million euros in January of this

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here

...

and that happened because the plans they have

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to launch their led series of electric cars, the Id

...

three in the Four. The eighty three was launched in September.

...

Four was launched in December.

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they were launched to life.

...

your original plan had been to launch the Ui and kind of

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the second quarter kind of March April time frame.

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on the Four in September, but they had software issues with

...

them and they they launched them late. So the carbon footprint of

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the vehicles they produced was higher than they had intended.

...

So they went over the the targets that have been set

...

so they ended up paying the Eu a hundred million.

...

you know, not insignificant fine. Those

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finds are only going to get bigger, and that's a big reason why

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folks like and now are pushing the electro of vehicles as hard as they.

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harder than i knew of the other vehicle on the manufacturers of Tesla.

...

mm-mm

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for the longest time, dicks

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Some of the other

...

Yeah.

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Sorry Go go. Yeah. Please.

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So sorry. Just some that thing that that that's good

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organizations can do

...

So I I mentioned the Rfps require

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you know, anyone who's supplying you require them to report the

...

the other things that you could do another very simple step

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is thai executive remuneration.

...

to emissions reduction Kpis.

...

if

...

their bonus is linked.

...

you know, if one of the Kpis and the bonus is linked two emissions reductions,

...

you'll start to find that that happens very, very quick.

...

are quicker than otherwise.

...

something guess.

...

and dis incentives, not too. Right.

...

Yep.

...

Absolutely.

...

something else is to

...

put a carbon

...

twice

...

on everything.

...

in the organization.

...

So today,

...

organizations are used to having a an essential price for everything.

...

so if they wanted to buy a a suite of furniture for a new office,

...

they know the financial applications are doing that and find it out very quickly.

...

but they should also have to pay

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internally.

...

a carbon price.

...

So the company sets

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an internal carbon price of, let's say, call it fifty euros a ton.

...

And so any

...

projects or anything that any

...

division of the organization wants to do

...

they have to calculate the carbon implications of the same

...

and pay from the carbon communications of the two

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the company's sustainability organization and the company's sustainability organization and takes

...

money and uses the for purchase of

...

renewable energy are for the funding of a new wound farm or, whatever it is

...

Yeah.

...

any of the sustainability dishes that the companies wants to roll out

...

they get their budget from the carbon tax that the institute

...

internally.

...

sounds like a an interesting opportunity for a

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a whole raft of

...

startups.

...

providing that the the the appropriate in internal accounting

...

systems and also maybe

...

building gamification around it so that

...

departments of companies end up competing against

...

Mhmm.

...

each other. Let me, I you can see all sorts of cool stuff happening there.

...

And, John, exactly, finally, of course,

...

probably, they should have been punch number one, but finally, of course,

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all companies shouldn't be

...

measuring and reporting their missions.

...

you know, that ties into the executive remuneration as well and ties in

...

to the rf fees, You know, that should really

...

I guess the step number one is to measure

...

underdog on your emissions so that you can then do all these other steps.

...

for the longest time.

...

the excuse for not switching to renewables.

...

as a source of energy has been that cost too much

...

this

...

is now a grossly outdated view, isn't it?

...

Yeah. It is.

...

it is because the cost

...

of building

...

new renewables now is cheaper

...

than it has ever been.

...

So over the last number of decades,

...

the cost of building renewables has

...

absolutely gone through the floor.

...

And this is because of what's called the

...

experienced hers or the learning curve

...

or once law

...

this is different names. The cost of solar, for example, is dropped by

...

factor of five

...

since twenty ten.

...

you know, the cost of wind has fallen not as much

...

but as ...because it hasn't ...it hasn't been ruled out as much.

...

but has again fallen, you know, fifty to sixty percent since twenty twelve.

...

and it continues before both of them continue to fall. It's

...

you've got this beautiful virtuous circle

...

happening in both these spaces in wind and solar.

...

where

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you know, you get economies of scale. You get that

...

learning curve that causes the price to fall

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the more that you manufacture

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And though as the price falls,

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these sort kind of beginning need to become more attractive

...

to more organizations so that demand goes up

...

so then you have to make more again. So, again, the learning curve kicks

...

and again, the price drops even more, which

...

again, so you you get the idea of the virtuous of circle as the price drops. It becomes more

...

active more ruled causing the price to drop even further and so on and so on.

...

And this has happened over the last twenty

...

thirty years in solar, and in the last ten years to

...

twelve of years and wind that had continues to happen year on year on year.

...

to the point now

...

in most regions.

...

where the cost of a new solar farm

...

net new sort farm going from green.

...

to solar panels generating electricity, the cost of that

...

today is

...

cheaper

...

than the cost of fueling

...

an existing

...

Cool.

...

or gas plant.

...

I mean, that's right there.

...

mind blowing.

...

So

...

it's cheaper to build.

...

dirty energy.

...

New

...

been viewing

...

cost cost more to run.

...

interesting.

...

Yeah.

...

then then clean energy costs to create

...

Correct.

...

Well, if the cost of renewables are falling, then

...

where

...

costs balloon

...

because

...

businesses have not

...

build sustainability into their profit in most calculations.

...

Well, again, if we just look at

...

in the energy space, the cost of

...

cool on the constant cast.

...

ongoing

...

up and there's are unknown reasons behind them.

...

one of the reasons is is

...

because more renewables are being built

...

And because more renewables are being built

...

they're generating more electricity.

...

And because

...

in any energy market.

...

The

...

renewables

...

on the whole fed market.

...

are price takers.

...

So

...

on the whole market, the price fluctuates,

...

daily by hour of day by demand by supply all this kind of thing.

...

you can fluctuate by an order of magnitude within a twenty four hour period.

...

and the renewables in that marketplace.

...

are what's called price takers.

...

they don't care what the price is. They just say

...

take us i'll take that price.

...

here's the electricity. I don't I don't care I know what is I'll take that person.

...

use the electricity, and that's because they don't have a few cost.

...

But

...

cool.

...

and gas.

...

and i.

...

and these they all have

...

fuel costs. So one the points

...

So the basic

...

basic difference between Cuff and Topics. Right?

...

Yeah. On the price drops.

...

below the cost of fueling the plant.

...

then the fossil generators drop over the market. Said no.

...

No. No. No. No. It's come to know we cancel electricity so they drop the market.

...

So

...

the

...

if you are actively selecting for low cost energy,

...

you are Jay thanks.

...

actively selecting our electricity with a higher percentage of renewables in the next

...

just right there, because as i say, as the price drops,

...

if fossil few companies drop out because they're losing money on because they have to pay few costs.

...

And because

...

So he here's where it gets interesting.

...

Because

...

if also few companies

...

are drop the ends of the market.

...

more and more

...

because more renewables are in the Market and they're not dropping in.

...

that means that the

...

the cost

...

of the energy

...

from the corn plants

...

and the gas plants.

...

actually rises.

...

because they are coming online less often.

...

So

...

you measure the price of energy

...

over the lifetime of a plant.

...

and suddenly,

...

these

...

plants the what's called the capacity factors, the amount of time that they're generating electricity.

...

because the capacity factor

...

for the fossil fuel plans.

...

is dropping because they're

...

going offline more often because they're not

...

because of price electricity is talking, and they're not gonna make money. This means the overall cost

...

of the plant are the overall time to recoup.

...

the build cost of the plant is going out.

...

further and further because they're not making money.

...

because.

...

And the cost the cost per electron produced

...

Yep.

...

goes up. Right?

...

Yeah. Yeah. But

...

what it also means is if the plant was supposed to recoup the cost

...

of its

...

buildup out in ten years, say,

...

nothing like now go out to twenty years.

...

And because increasingly,

...

also few plants are being

...

shut down corn plants today tomorrow, we can be gas that because they're on uneconomic

...

This means that they become stranded assets.

...

This means

...

there will never actually recoup the capital that's gone into them.

...

which is why they're becoming less and less attractive.

...

to the investment community.

...

So the investors are backing away now

...

from funding these and the ones who do fund them

...

the cost of funding then goes up

...

to the cost of capital

...

to offer fuel projects

...

is rising and rising and rising.

...

This

...

is the Global studio my name Ralph, and

...

I'm in here talking to Tom Raft, the long time.

...

sustainability expert currently flying the flag at Sap.

...

Sap is a very large and somewhat conservative company.

...

what steps?

...

has Sap being taking that you've seen.

...

to marry up the innovation track with the sustainability track

...

on the inside.

...

Sure. You're a good question. So

...

Sap was the

...

Well, let me be careful how I say this.

...

I wanna be sure it to right.

...

Sap was one of the first

...

if not be first.

...

major corporation.

...

to report. It's

...

commissions in what's called an integrated report.

...

What that means is is integrated it's a emissions reporting

...

into its financial recording.

...

And

...

we did that long before I joined us said. I joined us At in twenty sixteen.

...

sap issued its first sustainability report.

...

you wanna say twenty thirteen, twenty fourteen, that kind time frame I'm not sure that

...

which year it was, but I remember when it happened.

...

because I had an interest in the space.

...

So Sap has been issuing an integrated report

...

every year ever since

...

And we have all the software to do it, and this is

...

this is not

...

this is something that we

...

keep up tour our status our to our customers and potential customers as well. So we

...

we and evil

...

organizations to do fully integrated reporting. That's the first time.

...

The second thing is we

...

call our ourselves, or we say that when we are,

...

exempt

...

and

...

neighbors.

...

on the exact front,

...

we are constantly year on year on year reducing our emissions

...

while at the same time

...

growing

...

are

...

revenues. So we have completely discovered emissions

...

from revenues, and we've also decode emissions from head.

...

our head count goes up here on year year. Our missions go down year year year.

...

interestingly, in the year twenty twenty, our emissions dropped.

...

fifty percent

...

No.

...

that's because

...

a large portion of our emissions traditionally has been from

...

executive travel.

...

and there was

...

Mhmm,

...

and then

...

close to zero, Exactly travel in twenty twenty. So, you know, we've been managed got.

...

typically, we haven't been dropping us around, you know,

...

ten percent to fifteen percent year on year in the in the preceding years.

...

So

...

our am now is to be competing at zero by twenty twenty

...

three we brought it forward from our team of twenty twenty five.

...

But that's the

...

exe our side of the house, and that that's nice.

...

But when we're talking about emissions of a hundred and

...

thousand tons a year

...

you know, that's a drop in the ocean.

...

it's it's important, absolutely, but it's a problem in a massive.

...

massive ocean. And so that's where the invaders

...

side of the house comes in because

...

pounds

...

you know, the software vendor to most of the are organisms organizations on the planet.

...

most of the large

...

emit on the planet.

...

are our customers.

...

So

...

if we

...

can enable our

...

customers

...

a large emit to reduce their carbon footprint

...

by

...

one tenth of one percent.

...

then we would have a large large much larger impact than reducing our own, but

...

fifty percent.

...

So that's where our energy is and our aim is not to reduce

...

are customers emissions by one ten of one percent it's

...

Mhmm

...

far more than that obviously. I'm just, you know, exaggerating for effects there.

...

obviously, we want to have our customers reduce their emissions by fifty

...

five percent by twenty thirty and beyond that again. So

...

we have the technology

...

to enable them to do that. We have this project called climate twenty one, and I have a podcast

...

named on twenty one podcast, which goes out every Wednesday.

...

And the the climate twenty one project is

...

where when you build emissions into business processes,

...

an organization. So organizations can see the climate that impact

...

of any

...

business decisions they take. And so that way, we're helping them

...

to

...

see

...

report

...

calculation and court. Their emissions machines and also

...

the implications of business decisions they make be of

...

through procurement or anything else i thought through their there their supply chain.

...

if I were to

...

if I were to look for innovative,

...

tools and solutions appropriate to my own

...

whenever the sector may be,

...

where would I start other than following Tom raft on Twitter and listening to your

...

clever twenty one podcast.

...

Actually, the

...

I know this is gonna sound very self serving with a climate twenty one podcast.

...

has turned out to the

...

pretty amazing. I you I'm I'm

...

constantly blown away by the

...

status of the people who have agreed to come on podcast and

...

talk about this and the kind of things you're talking about, You know, I have the chief environmental office

...

of Microsoft, Lucas On. About sir David King,

...

who is, you know, Cambridge professor reform former a scientific advisor to you

...

and government. You know, I've had just

...

this week, I published a yet.

...

but I interviewed your guide who's that you've risk

...

officer for Zurich, you know, the insurance company are.

...

huge stakeholders in this space as well. So, you know, getting the chief risk officer from of

...

not just insurance companies was huge. So I'll be publishing that on a couple weeks time.

...

Well, if someone, if there is someone out there exposed to

...

Yeah.

...

very large amounts of very expensive risk well, that's it's the the insurance

...

and reinsurance companies

...

correct. Correct done. And I've had other really interesting people on as well.

...

you know, I did die people on from the London stock exchange group, for example,

...

these and and from, you know, from the finance community from

...

Jp morgan gonna under their head of Eg business on a polar connor.

...

And, you know, because all of these stakeholders have part

...

play the investment community if you play a huge part of this for me,

...

This is

...

fascinating because

...

these are, you know,

...

I I'm I I tell people I don't have the financial team i'm I

...

self jeffrey the Essay, but, you know, what most people find it hard to balance

...

checkbook. I couldn't bonds check. So ...but I I don't have that financial dream

...

I don't understand the money. But

...

I and I I I I say that.

...

to these people coming onto podcast first kind of, you know, level sets so to

...

you know,

...

i I don't want to take

...

I don't want to presume the audience

...

you know, our financial wizards either on these are financial wizards I'm talking to. As I said,

...

head of sustainable investment for Creepy morgan the head of the hundreds

...

that is the same business for on the stock exchange these these guys live in, this kind of

...

But that means, it means that that you are in fact, asking

...

stuff. So Get

...

the

...

say again,

...

it means that you're in fact asking the sort of questions that

...

I or thousands of other quote normal humans would like to know answer

...

to rather than hide the archaic technical

...

you know,

...

only understandable to to financial wizards.

...

and and i'm jargon gonna try and get them away from speaking in financial jargon as well. So that, you know,

...

Yeah exactly. Yeah.

...

that that, you know, idiots it's like me can understand this. And

...

and when you hear these people coming on of those were phenomenon

...

so it's, you know, paula commerce from Jp Morgan, You know, you

...

talking about the shift of the investment community to to sustainable business. And

...

the same for David Harris from Abundance Stock Exchange Group and

...

trail calling as well talking about green bands, you know,

...

not amazing. So it's know how all the investment community is starting to

...

turned this direction so, you know, Larry think who's the head of black.

...

you know, is he issues a a letter annually for

...

where your values that what that should be doing is

...

coming year, and, of course, he did again this year in twenty twenty one, then, you know,

...

The last few years of this year was no exception. He's coming down.

...

harder and harder saying that, you know, unique

...

to be looking at companies that are investing in

...

green and renewable projects you need to be moving away from fossil fuels you need to do.

...

moving more towards companies that are doing Eg reporting and looking those

...

reports and see what it is are doing in the Years space, you know, and

...

so money is

...

and investment money

...

is shifting away from fossil fuels and towards

...

renewables towards greener projects.

...

we saw a great example at last

...

No. Not a last month i know. So two months ago in anything in may

...

on the

...

twenty six of me.

...

It was a Wednesday.

...

And we had three phenomenal decisions

...

come together.

...

So the first was in the Chevron,

...

boardroom.

...

Chevron, there was a A vote

...

put

...

to Chevron.

...

by activist investors calling on them

...

to reduce their emissions by twenty thirty, and they assumed

...

that it would not get passed.

...

unto two their amazing

...

it was passed.

...

Some now,

...

their shareholders have mandated that they have to reduce their missions like

...

twenty thirty. This has never happened before for Chevron.

...

which is somewhat somewhat tricky considering that, you know,

...

If your product actually by virtue of existing,

...

is is

...

polluting, then how do you

...

Yep.

...

how do you go about reducing that?

...

you you have to rebrand this an energy company, which is lots certainly of month. That's start.

...

to do but on that same day that Chevron had that decision

...

in the shareholder music for.

...

same day.

...

Excellent, they lost three director ships

...

three

...

of the

...

directors server called for election went to

...

climate activist to investors.

...

never happened before.

...

So now there's three new directors on their board.

...

who are

...

climbed friendly.

...

on the board of.

...

and stuff.

...

on the same day.

...

is same Wednesday. I think it was the twenty sixth of may.

...

same day.

...

There was a court case taken

...

against shell.

...

saying that they had saying that they weren't being responsible and they were causing damage

...

to the climate.

...

in the netherlands neurons.

...

the

...

Judge came to the decision on the twenty sixth.

...

and the judges is ruling

...

was that shell have to reduce

...

here.

...

global

...

emissions

...

out to scope three.

...

by forty five percent.

...

by twenty thirty.

...

No.

...

straight away.

...

first thing shelves so they're were gonna do is just said,

...

going to appeal the city.

...

which, you know,

...

choose you what good corporations there.

...

it was ...but

...

the the those three things right there.

...

tell you

...

the wings of change are blowing.

...

This was the first

...

major

...

court case.

...

loss

...

for a fossil human company.

...

in a climate case.

...

it's gonna be the first of many or many many more coming down the.

...

And it was the first time

...

or Chevron lost big

...

or votes like that, You know, the investment community

...

are becoming active who came.

...

active you getting activist investors who are now requiring

...

all organizations

...

to reduce their missions.

...

because of what we talked about earlier because

...

of the

...

is the risk of having stranded assets.

...

the because of the risk of these regulations that

...

are going to be rolled out between now and twenty thirty to ensure

...

that here in Europe, we get two fifty five percent reduction by twenty thirty. And

...

it's not legally binding in the Us yet. But hopefully, that legislation will be passed

...

to they do hit their fifty two percent target.

...

and there will be increasing pressure

...

in all jurisdictions to do this.

...

even Australia.

...

So well, Australia isn't it

...

And I said email australia because the ones who done the list.

...

Australia is an interesting case because

...

the government has just announced that it's going to appeal

...

the

...

Yeah.

...

court decision requiring it

...

the the government of Australia to look after

...

the health and well being of future generations

...

tells you that where they're at.

...

So

...

the winds of change are blowing.

...

But neither of us is a political scientist

...

despite that,

...

we both know to

...

to observe politics and to draw conclusions.

...

and it is rather interesting that

...

research recent research. This has like very recent research.

...

says that eight out of ten European believe that

...

promoting new expertise in clean technologies.

...

to countries outside of that you can help create new jobs

...

within the, for example,

...

yet.

...

If we look at

...

the current election campaign in Germany so, they

...

conversation about the climate change and clean packets

...

etcetera doesn't seem to be happening much on that front.

...

where are politicians listening to the electric?

...

when it comes to these issues,

...

who is

...

who is making the right political decisions out there.

...

K.

...

No idea.

...

And

...

isn't that interesting? You know?

...

Yeah. I mean,

...

Is that isn't that an indication of of how much

...

change.

...

actually is required out there. So that next

...

time we talk. We can actually read remove how a dozen countries.

...

you.

...

where where the right decisions are being

...

being made. Let's get back to let's get back to the world of of business

...

which is a

...

before we need us,

...

Yes.

...

rough just be the become I would make on that.

...

is that

...

we

...

all work.

...

to

...

incentives to an extent.

...

and we all have our own priorities.

...

I'm a weirdo.

...

you know, when I moved here to Spain in two thousand and eight,

...

I had to get a car.

...

and my soul

...

sister. Well was my source I you do?

...

young families I need a funny car. But

...

within the

...

you know, find everything thing a family car, my soul, the drew was missions.

...

I went on found

...

ones of the lowest missions, which

...

back in two thousand and age where we didn't have much internet today.

...

the that kind information wasn't as disease as with as it is today, but the two cars were the lowest missions

...

or the four focused c max and the prius.

...

So

...

color prius.

...

but

...

politicians.

...

are

...

their priorities is the next election.

...

The next election

...

is typically

...

you know, a maximum of five years away.

...

and usually less as you get closer.

...

So

...

climate implications

...

you generally think in decades.

...

not in

...

three, four, five years periods. So

...

there

...

almost know

...

politicians.

...

for whom

...

claim.

...

is a pressing issue.

...

and that's why

...

you rarely hear them talking about tennis.

...

which is somewhat

...

terrifying if you think about it is sort of short term isn't

...

Yeah.

...

But we have what we have. Right?

...

well it's it's where the

...

Indeed

...

it's where the incentives are, you know, they're incentivized by

...

involves

...

let's you look back at the world of business, which is somewhat where

...

Let's verify and

...

One last word in the.

...

more within what we

...

for

...

Yeah.

...

for for for people who might be listening to this.

...

becomes

...

politicians.

...

are incentivized.

...

by votes.

...

contact

...

your local politician.

...

and let them know

...

that climate is an issue.

...

that you're interested in.

...

and ask

...

of their position.

...

and you'll be voting accordingly. Right?

...

Exactly.

...

logistics.

...

Yep.

...

this is an area that you're particularly interested in

...

And it's an area that

...

has been a particularly good example of what the dynamics of

...

of how the dynamics of

...

trained have reacted.

...

to the crisis of the last

...

twelve, sixteen, eighteen months.

...

Some will say, obviously,

...

logistics is at the heart of global trade and global trade has been

...

hugely affected by the pandemic

...

Yeah.

...

shipping prices have gone african in places

...

but somehow,

...

so the markets have been able to coke largely with the increased demand

...

can lessons from supply chains

...

everywhere.

...

be applied to other areas of business, especially

...

in the context of

...

making all of our business more sustainable.

...

It depends.

...

like, like, most answers, I guess

...

So

...

I mentioned that

...

in the

...

kind of renewable space that the cost of renewables has

...

pressured in the last ten years at the same time.

...

the cost of if you mind batteries has

...

craters, you know, it's dropped over ninety percent in the last ten years.

...

and at the same time,

...

Is says ...lithium mind batteries.

...

triggered their energy density.

...

so they can hold three times as much power, and they cost one tenth

...

of what they did.

...

less than one tenth of what they did ten years ago.

...

And, again, it's one of these

...

experience her things that

...

just continues to drop year on year on year and continues to grow and density year on year

...

here. And that has massive implications for

...

energy grids where we're using

...

live batteries now as utility scale to help

...

smooth the variability of the the renewable generators

...

And but also,

...

it has a huge implication as we're seeing in transportation.

...

It's now

...

it's now trivial.

...

to get a

...

car, which can go five hundred kilometers on a charge.

...

for example, almost all of the new family sized that

...

vehicles that are on the market will go five hundred kilometers.

...

and this has huge implications for logistics to get back to your question because

...

we're starting to increasingly see this

...

play into the logistics space as well. More and more

...

vans, delivery vans and trucks are starting to be electrified.

...

because the range of

...

you know,

...

anything over three hundred kilometers is ideal.

...

term very few particularly last month and degree vehicles

...

do more than three hundred kilometers a day.

...

and they're usually traveling around cities.

...

which is stop start, which means they get even longer range than that.

...

plus they're in the cities. So you're reducing

...

straightaway away air pollution and noise pollution.

...

And the the other thing to realize about electric vehicles

...

is that they cost fifty percent.

...

to maintain

...

on a park kilometer driven basis.

...

So if you're half,

...

the cost of your maintenance.

...

you're dropping your fuel costs by one and three.

...

those are the two main cost

...

of fleet managers have

...

maintenance of fewer. If you're dropping those by thirty

...

fifty percent you just know

...

that seats in the next two, three, four years are going to fit

...

even faster.

...

to electric and personal transportation because it's all about the economics

...

for feed managers. They don't care

...

you know,

...

even better if they're being mandated and they can help their companies drop the company

...

emissions fantastic. They come ...the ...they they become

...

climate heroes for their organization, but that's not their incentive.

...

for incentives is to

...

do the most they can for the least amount of money.

...

and if that electric vehicles

...

that's where they're gonna go.

...

So, like, pretty much

...

all other business decisions out there.

...

it comes down to the to the bottom line. Right?

...

Yeah. Absolutely.

...

around around the bottom line.

...

There's been an awful lot of

...

discussion about costs and

...

prices and you know, cost

...

cost risks and and and what have you?

...

of light.

...

and that discussion is intensifying

...

In fact, the amount of

...

activity around

...

and discussion around climate action in general Globally,

...

to grown substantially since we last spoke about a year ago.

...

Yeah.

...

and that even allowing for the fact that we are deep into this

...

sustainable news.

...

But with all that talk all that discussion, all this activity and decision making,

...

how much cross sector coordination is there?

...

much collaboration are you seeing?

...

between various industry sectors

...

and even actually,

...

within

...

various industry sectors, how are people

...

how much are people talking to each other about this? Note?

...

just to the news outlets and, you know, consuming the news data

...

reverse direction.

...

not a whole lot.

...

No. To kinda put that in context.

...

within Sap,

...

I am very closely.

...

aligned with the

...

organization in Sap that deals with things like industry four

...

And four is

...

hugely important the manufacturing space particularly because it's all about the did you

...

about a five, which you know, brings in huge huge huge

...

efficiency games, which obviously as huge

...

climate reduction story, but that's not the main room or just all about, you know,

...

and doing more less

...

again, not about thing.

...

So in that

...

space in the industry for the space.

...

there's

...

enormous

...

coming together of

...

organizations because

...

the kind of project that you do in industry before

...

can to be done by any single company so you get open source organizations

...

you get large vendors. You get large hardware manufacturers. You get, you know,

...

you get big good things of diverse companies

...

coming together to roll the industry for other.

...

and that's phenomenal to see.

...

but you don't

...

yet.

...

see

...

the same of thing.

...

happening.

...

in the climate space. And

...

it's something that will

...

need to start happening and it's something that will happen

...

i time, you know?

...

it's still not urgent enough in a lot of people's books.

...

you know, wait until we get to twenty twenty four, twenty three five, and we've missed

...

several milestones then people start up and take notice, and then you'll start

...

see a lot of scrambling because at that point, we the five years or less left.

...

and then

...

everyone move. You know, Hopefully you won't be two that points.

...

think I will, you know,

...

we

...

don't me personally.

...

I usually work very much today length.

...

I mean, I'm giving a keynote tomorrow in Mexico.

...

virtually, obviously,

...

but I haven't

...

once I haven't started the deck, yes because I have it open here beside me.

...

and well I've just started

...

honest, for example, you know,

...

for a keynote but I'm given to tomorrow. And I think

...

I'm I I tend to procrastinate and, you know,

...

I'm not alone in that. I I I think that as a

...

species.

...

tend to do that.

...

and

...

having said that we do get to crisis point, and we do then

...

figure out

...

pretty good ways of

...

getting stopped on.

...

we should've have started years ago. So I think that that that's a

...

a species white trait

...

So I'm myself my procrastination by saying everyone doesn't.

...

But

...

which is which is not not far from the truth essay.

...

Well done.

...

hopefully. I'm feeling better about myself one.

...

On that note,

...

on that note maybe

...

Let's wrap up, and we we do have to wrap up

...

Unfortunately,

...

Let's up with a simple takeaway.

...

you know

...

a simple takeaways.

...

I'm still surprised. Maybe I shouldn't be, but

...

I'm still surprised

...

to hear intelligent decent descent good people.

...

So I just don't believe in climate change.

...

you can say that in Australia after the the summer we had last year,

...

or in the Pacific northwest in the Us or British Columbia,

...

that after the events of the last month,

...

or in Europe watching day unfolding disaster

...

in the in the phone also on orange

...

you know, Siberia, and fire. I mean, that's

...

insane.

...

I don't know you tell you how you can say that.

...

But be that as it may.

...

What do you say to such evidently intelligent the decent humans?

...

when they are so obviously getting it wrong.

...

that's one i lays squared at the foot of the fossil fuel companies and their disinformation campaign.

...

Absolutely.

...

that they've spent literally

...

billions of daughters and euros

...

suing those things in teller.

...

The other thing I would say is, you know, depending on who it is.

...

sinclair has a great cool

...

where he says, it's very hard to convince somebody

...

of something.

...

when their income depends on they're not believing it.

...

Not living ideas.

...

So

...

you know, if someone is working in the oil and gas sector,

...

you know, I can understand their

...

they're reluctance to believe.

...

that they're destroying the clouds.

...

but most people are not. Most people are simply

...

consuming the products or maybe not even even not that, you know?

...

yet. They

...

Yeah. Well, the latest tactic, the fast fuel companies to blame.

...

us.

...

you know, the the old

...

the complaining thing.

...

Oh, yes. Yes. Yes. They will ...they will change when when we change. Right?

...

Yeah.

...

Yeah.

...

So, again,

...

Well, but by definition, they will

...

change because once enough of us have

...

started to drive electric vehicles, and we are powering them

...

for, you know, with electricity bought from sustainable companies

...

they'll just be quietly going out of business.

...

But in the meantime, you know, what can you say?

...

as a comeback.

...

other than good god, please. Can you read a b

...

see and the and then come back to me. Once you've done that, I mean

...

most often that just won't wash. With it

...

No. And there are some people that just can't be convinced.

...

and I just don't waste my time.

...

you know, if somebody has

...

at this point.

...

convinced themselves, the climate change is not real.

...

I'm not gonna try and commit some otherwise because I'm not going to be convinced.

...

that you you can't do it. Right.

...

in the face of overwhelming evidence.

...

you just gonna face over about running evidence they're not going to be convinced.

...

or they haven't been.

...

So it's just ...it's just a matter of time

...

until they

...

they realized that maybe there is another way of

...

of looking at this

...

Most of them are people have who are

...

know older

...

the younger generation

...

no full well.

...

this a a huge problem. And as they increasingly come voting age,

...

they'll make their voices heard.

...

and they are. You you see the schools strikes and things about.

...

ended indeed.

...

And on this on this bitter sweet,

...

note. I need to know. Thank

...

Tom Raft for his for his time, Tom,

...

is Vp actor

...

s sap and the

...

global futurist and generally innovation of evangelist

...

times bean in the

...

sustainability, space,

...

as as a consultant forum for a very, very long time.

...

and Tom, let's catch up again this time next year and see

...

how we're doing Shall we?

...

I know what.

...

Thank you very much.

...

Thank you for listening, and we will catch you

...

on the next edition on the obama

...

global studio where we discuss issues

...

large pressing and important and more importantly,

...

ways to

...

cross those bridges and get to the other side.

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with some kind of

...

speed efficiency

...

and without losing a certainty,

...

on the way. Thank you very much.

...

catch you next time.

Fortune Cookie