Alphabet Inc. (GOOGL) Earnings Call Transcript & Summary

Good morning, everyone. I hope you're all having a great Climate Week NYC. Welcome to the third and last of these flagship sessions where we're exploring the new frontiers of climate action. And to me, this is all about determination and positivity, the exciting that we will pass. The things that need to happen and will happen to make the transition a success. A large part of that is linked to climate innovation and tech, which is booming, innovative technologies like AI, floating wind farms, huge improvements in battery storage, to stretch the use of solar and wind energy across continents and time zones, things we can do with recycling to help the secular economy. To ensure the transition is gaining in traction in more ways than we can imagine, but it does come with challenges. We need to make sure that the biggest emitters can and will use these technologies at scale to drive down emissions at scale. Business, policy and finance need to join forces to make sure innovation and investment have the biggest impacts where it's needed most, including the global south and communities that are hit hardest by climate change. Which brings me back to we can, we will, in that critical word, WE. We means all of us. And in that light, it's good to remind ourselves that innovations will often directly impact people's lives within people's backyards. And it's all of our job to make sure that it's not just the poor people's backyards that are impacted or their jobs disappearing or communities in developing countries, benefiting the least. We need to be honest. Innovations can upend people's lives. So it's up to all of us to ensure that no one gets left behind. And I'm confident we can do that, and I'm confident we will. So I'm hugely excited about the rest of today with sessions on the decarbonization of the steel and concrete sectors in which members of our steel zero and concrete zero campaigns play a leading role. We'll be discussing clean tech, health and community resilience. So with that, let's get stuck in. But before we do that, I'd just like to thank again all Climate Week NYC sponsors and partners, especially Saint-Gobain, our headline partner; and AB InBev, the Hub Live partner Because without their support, we just couldn't put on the event these weeks. And some housekeeping notes. We will be live streaming all the sessions throughout the day on the Climate Week NYC website at www.climateweeknyc.org. So welcome to all our viewers online as well. But if you want to -- I'm still calling it Tweet or X or share thoughts on Threads or Insta, you can use the #climateweeknyc. And we will leave time for Q&A at the end of our panel discussion today. So please use that Hub Connect to be able to connect with each other, you can request meeting, but you can also put Q&A through the platform. And we're obviously keen to hear from all our expert speakers, but we do want to hear from the audience as well, and you can scan a QR code on your badge to submit questions, and we'll do as best to get to those in the panel. And then finally, you will have earned a networking lunch from 1:45 p.m. onwards here in the venue. So stay, talk about lunch or you then get round on to your next round of exciting events meetings and conferences in the wider week. There's 585 events affiliated Climate Week NYC. So whoever gets to the most of them doesn't get priced, but we will salute you. So with that, I'm thrilled to be moderating our first panel discussion of today and delighted to introduce our next crop of impressive panelist to the stage. So first up, we have Judith Weise, Chief People and Sustainability Officer at Siemens AG; I'd like to introduce Kate Brandt, Chief Sustainability Officer of Google; and Emily Shuckburgh, Director of Cambridge Zero at the University of Cambridge. Please join me on the stage.

So let's start. So while we know that there's no silver bullet for protecting the planet against global warming. What technologies do you think today are going to be truly transformative against the fight against climate change? Emily, let's start with you.

So I come from the University of Cambridge, and we just have wealth of activity going on in Cambridge at the moment. Of course, pretty much every different sector, whether that's in terms of some of the more traditional technologies in terms of renewable energy. We're looking at advances in terms of some of the material science associated with photovoltaics that could create a really substantial increase in the efficiency of solar cells. We're looking at similarly, battery technologies, new materials that could substantially increase both the duration of batteries, but also their environmental and broader sustainability criteria. You've got an initiative that you're launching around cement and steel. And just last week, there was a new innovation that came out of the University of Cambridge that's looking at emissions-free recycling of cement and steel in tandem with each other, which is a really exciting initiative. And then on the other side of things, we're looking at both how we can deploy nature to help in the fight against climate change, looking at landscape regeneration. And we're looking at technologies that could be utilized to remove carbon dioxide or methane or other greenhouse gases from the atmosphere. So it's a super exciting time actually, a huge amounts of creativity and innovation that's being undertaken.

Thank you. Recently, [indiscernible] they say, what gets you excited? I'm like concrete. So it's good to hear someone else is excited by concrete. Judith?

Yes. I tend to look at technologies in 2 time horizons. The technologies that gets us into 2030. They're basically all here. And this is around electrifying, digitalizing also from a Siemens perspective, which means the energy transition needs to progress but then electrification, digitalization is all there. The latter AI will obviously put on steroids in terms of what we will be able to do in terms of doing more with less. So that's exciting. And then I think beyond that, it's a question of how do we scale some of the things that you've mentioned, carbon capture and storage, et cetera, et cetera. And how do we really scale that up.

Great. And Kate?

Yes. So of course, at Google, we are thinking a lot about AI these days. And we've actually been an AI-first company since 2017, and our approach is that we want to pursue AI in both a bold and a responsible way. And we see really powerful and exciting applications for AI to unlock more solutions to the climate crisis. And I would just give you 2 examples. One is around information. We now see that AI can put more helpful information in the hands of people. And one of my favorite examples of this is a tool called eco-friendly routing. So you may have noticed, if you use Google Maps, a little green leaf appeared several months ago. That's the most fuel efficient route. And we're doing all the computation in the background, looking at the gradient of streets, all the different ways you could drive and then giving you the most fuel efficient route to make that easy sustainable choice. This has saved about 1.2 million metric tons of CO2 equivalent already, and we just launched this a little over a year ago. Another big AI application that we see a lot of promise for is around optimization, machine learning is especially good at optimization. And we just recently announced a partnership with Breakthrough Energy and American Airlines, where we were looking at contrails. We've all seen those plumes coming out behind the back of airplanes. What the IPCC tells us is, those are actually responsible for about 35% of the emissions associated with aviation. So if we can reduce contrails, it takes a big bite out of this very hard-to-abate sector. And so through this pilot, we used AI to analyze the routing, times of day, all the causes of contrails and we're able to reduce them by about 34%. So again, another really exciting opportunity where AI can drive faster climate action.

That's really interesting. Thank you. I just haven't thought about that. Yes. The most companies, Kate and Judith, company's development of technology, the age in fighting climate change is moving. It's not just a nice to have it, but need to have it, it's fundamental to the culture of the organization, also its bottom line. You're both Chief Sustainability Officers. How do you ensure that climate and profit are aligned to your companies? Judith?

Yes. At Siemens, we're in the nice position, is that, virtually all of our portfolio either directly impacts outcomes sustainable or that depending on how our customers use the technology, can have sustainable impact. So whatever we put into R&D, whatever we develop, the innovations we do together with our customers, are very much geared for helping the world do the right thing and be profitable. Let's take technology like digital twins. You can simulate product design, production, life cycle. You can do that for the design as well as the operations. We know that about 70% of emissions are stuck in industry and buildings and infrastructure. This is where digitalization helps, this is where we can help with our products. So for us, it is squarely part of the strategy. It's squarely part of who we are and what we do. So there's no contradiction really. Having said that, there is, of course, investment that we also need to make in making sure our own house is in order. The nice thing, however, is we can do a lot of that with our own technology and whether it's our buildings, our retail -- real estate or whether it's our factories. Whatever we do, it's actually a business card that we happily hand to customers who say, "Can you show us how you do that for yourselves?" And so we very often invite people over to show exactly how we do that for our campuses and our factories as well.

Thank you. Kate?

And for us at Google, asset information company. Also this work is so core for us as a business. And when we think about information, what we see through Google trends [Technical Difficulty]. What we always look at as an information company is how can we be most helpful to people in their moments of decision. And so we've put sustainability squarely within that mission. And what we see is that increasingly, people are coming to Google, asking questions about how to live more sustainably, searches for results like solar or EVs or how can I recycle are at all-time highs right now. And so we're using that to inform our product strategy. So I gave the example of eco-friendly routing. We're very focused on both transportation and home energy because we see people seeking these solutions. And those 2 sectors represent about 20% of global emissions. So it's also a way in a very science-based approach. We can help people take action. So this is everything from in Google Search now. We have features for people who are buying EVs and want to compare them with base vehicles. You can see how much money you could save through tax incentives through a calculator. Will start showing you routes, so you feel confident that you could take your EV to your favorite destination. Similar features will be coming for heat pumps. And then in home energy also, this is a place where we've done a lot of work through our Nest Learning Thermostat. This has saved our customers over 100 billion-kilowatt hours of energy over the last decade that could power Portugal for a couple of years. And then we've introduced new features where people can actually shift the energy in their home to times of day when the grid is cleaner. So we've really put the sustainability work at the core of our information mission.

Great. And Judith, Siemens are considered one of the most sustainable companies globally. But you've chosen not to do that just on your own, but through a lot of partnerships. Can you talk about those R&D clean tech partnerships and some of the success stories?

Yes. I think innovation happens at both ends, doesn't it? It happens on the R&D development side and here, our corporate core technology group. Of course, works a lot with start-ups, does research with institutions. We do things with our Siemens Financial Services arm that really invest and scout new opportunities, like 4401, which is a way of petrification of CO2. We invest in those things. Next47 is our venture arm. They scout opportunities. But a lot of the innovation also is something that we do with a customer ecosystem where we're trying to make our technology much more open, much more available on a platform so that really we can innovate together. And I think the biggest lever really is where we really get to convene people together along value chains to see how we can really rethink certain things. And I'll give the example of the move into electrical mobility. We're working with the battery companies that are very keen to make sure that the production and the design and the recyclability is high because otherwise you have no credibility of being part of the transition, if you're not green yourself. We're working with the automotive industry. We're having charging opportunities ourselves. We're working with a company like Ford. You get a Siemens charger with the purchase. It works bidirectionally, so that you can actually not only charge your car, but your car can charge your home, then you're into grids, et cetera. So I think the minute we start really thinking along those value chains and those ecosystems, that's where you have the biggest point of leverage. And then maybe 1 last comment. The more either the regulator or industries that sound themselves are the better. And we have some really nice examples of where either the automotive or the chemical industries is starting to use certain products like actual carbon product footprint and tracking to where the regulator hasn't quite delivered on certain things that value chains actually convene amongst themselves and decide on standards that they want to set on these things. So those things, I find pretty exciting.

Great. Emily, let's build on that and continue to talk about collaboration. Where have you seen most potential for closer public-private partnership?

Yes. So we've got some really exciting examples in the university on some of the sectors that have already been mentioned. So one of the initiatives that's become established over the last few years in Cambridge is our Aviation Impact Accelerator, which is exactly looking at a future of net-zero aviation. It's bringing together -- we've got more than 80 companies across the aviation sector involved in that from the airports to the engine manufacturers, to all the SMEs that are involved in the sector. Bringing them together to look at the different potential solutions for aviation, whether it's about routing to minimize contrails or whether it's about looking at hydrogen or electric planes or sustainable aviation fuels, trying to understand in combination with them what the trade-offs of those different routes are, and then working together with the policymakers to get the policy framework and regulation that's necessary. So really looking to bring together those multiple stakeholders with the research, embedded with the research, and looking to how in partnership with people from the corporate sector, we can look to accelerate the time scale of innovation in a university and then out into that real world deployment. And another thing that we've done recently as part of our Institute for Sustainability Leadership, we've launched. But I think it's a really interesting new initiative called Canopy, which is where we put in the same building, people who are really at the early stage of innovation, the entrepreneurs, together with our corporate partners associated with that institute, so that you can get those serendipitous conversations. Because a lot of the times, what we find from and hear from our innovators is that they have some great innovation that's relevant to sustainability, but they don't know what the best use case is or they don't have those kind of partnerships, particularly with corporate partners, where they could really revolutionize some key problem that might exist. So creating the environment to enable those partnerships is equally important as the partnerships themselves.

Great. And Kate and Judith, let's pick this up and talk about that because how can the public and private sector work better on this? And are there particular barriers which the public sector can have unlock for corporations to continue the investment state?

Yes. So I personally come from a background where I began my career in the public sector. I was the Federal Chief Sustainability Officer before I came to Google. So I'm very passionate about this opportunity for a public-private partnership. So I mentioned how we think about putting information in the hands of individuals who want to take action. We also want to put helpful information in the hands of decision-makers. So we've developed a tool in partnership with cities, with the global covenant of mayors and C40 that's called the Environmental Insights Explorer. We developed this in partnership because we heard from cities that they needed more insights into how to do climate action planning, how to do adaptation planning. And this tool has the data sets that they told us that they need, everything from what's the solar potential of all the rooftops in my city. San Jose used that data [ at a 1 ] gigawatt solar target. The carbon footprint of buildings, the carbon footprint of transportation, then cities came to us and said, "We need to plant more trees. Can you help us figure out how to do that strategically?" So we use machine learning on top of aerial imagery of cities. So we could show over 350 cities where are your trees today. Austin use this to plant more trees in frontline communities. So that's 1 great example. Another is a tool called Data Commons. Datacommons.org is built by Google, but it's freely available and it's really meant for policy decision makers. It's the world's largest knowledge graph. And today, it has 200 different public data sets that you can look at, at an intersection point. It's also great for researchers, by the way. So here you could look at census data alongside climate data alongside agricultural information and we've just now put a new chat feature on the front of it to make it even more accessible and useful for policymakers and decision makers. So that's what we're really focused on is getting feedback. We love coming to events like Climate Week to hear that about how do we accelerate progress more through our information and our tools.

Yes. For us, a very, very typical area of public-private partnership would be in the mobility space when we do mobility on rails and on rail tracks. So that would be one. Cities is another one where, again, we're also delivering a lot of technology around making cities smarter, including smart grids. I think this is something that is under leveraged. We're very often talking about the big high-voltage transitions that need to be made, but a lot a lot can actually be done in decentralized energy systems and microgrids. So I think that is another one. And then I think that's the question of the carrot and the stick, right? And we need the regulator to help with setting standards as much as we need the regulator to help induce capital and OpEx allocation and really making sure that the money gets deployed quickly into technology that already exists before time is up and to make that as speedy and unbureaucratic as possible.

Great. And Emily, what do you think is needed to support clean tech companies from conception through to scaling globally?

Yes. So we've -- in Cambridge, when we announced some of the research that's undertaken in the University, but Cambridge is also well renowned for its innovation ecosystem that's broader than the university itself, particularly in some of the IT sectors. AI is a big area of concentration of AI innovation in Cambridge, but also in the life sciences. But what we've more recently tried to do is look to see how we can really get that clean tech innovation ecosystem really up and running and firing on all green cylinders. And it's quite clear that there are differences compared to the common kind of boom where you might want to had all flowers blooming and those that were more successful. It was sort of survival of the fittest. In terms of green innovation, you want particular answers to particular challenges. And so it's that combination of creating the exciting environment to support innovators and then making sure that it's a combination of, obviously, the finance support and helping to -- help people through that journey. But also connecting up with the regulatory environment and those other aspects that help shape the market so that you're not just leaving things to chance that we're really helping to shape the future that we require sector by sector. And part of that really is taking that sectoral approach. And that's why the initiatives -- the ones that you've been undertaking sector by sector are so important because it helps galvanize people around those sectors. And you almost [ pulled me as sort of ] support group, didn't you? And I think that's equally important.

Great. And then, Kate, Google is globally recognized 1 of the most sustainable technology businesses. We aim to be the first major company to operate in [indiscernible] Carbon-free energy by 2030. Can you talk a bit more about that, how you're driving down your own carbon footprint and then how you're also looking at how you support others?

Yes. So I think speaking of the sectoral approach, we know that decarbonizing grids is absolutely critical to working towards net zero by 2050 globally. And so as we think about 24/7 carbon-free energy. That's not only a goal that we have set for our own operations, but we really want to partner to drive systems change on that journey. So we think about this in a variety of ways. One is that we can, again, use the power of AI to drive more productive clean energy. We have a great partnership with ENGIE. I was just talking with our colleague from ENGIE in the room this morning, where we've been partnering to use machine learning to predict wind energy 36 hours ahead of generation. That makes it much more productive for the grid and also makes wind energy more valuable. We also are thinking beyond wind and solar. How do we look at a broader suite of carbon-free energy solutions like advanced geothermal. We teamed up with Fervo, an advanced geothermal company, in Nevada. We said, well, we'll be an off-taker for the power from your carbon-free solution from your advanced geothermal, but we'll also help you do it more efficiently. And so again, we brought machine learning to the table to partner with Fervo to unlock more advanced geothermal energy. And then the last thing I'd mention is, I talked about how Nest Learning Thermostats are helping homeowners shift energy to times of day when the grid is cleaner. We're doing the same thing in our data centers. We're now able to shift load in both time and location so that we can take advantage of when there's more clean energy on grids and we see big opportunities for that for others to do the same.

Great. That's Fantastic. So we have got time for audience Q&A. Those of you who may have stopped believing in hub connectors working, and I've got questions. The first one is for Emily, you might not like it. Can clean tech rescue the U.K.'s reputation? Just a little [ silly ] question.

Well, I didn't know about that. But I mean, I think it is absolutely clear that green innovation is going to be absolutely central to our future and making sure that, that is central to the, if you like, industrial strategies country by country, is also going to be essential. And one of the things that we've been thinking a lot about in Cambridge is not just how we can ensure that we're benefiting the U.K., but also how we can collaborate externally and how from the U.K., we can help provide benefit, particularly in the Global South. I know that was one of the themes that you had in your introduction. We've got this amazing program that's actually funded by the Mastercard Foundation, where we're working -- well, first of all, we're bringing 500 scholars from Africa to the U.K. And then with the intention of then going back to the African context, but also we're working with 3 anchor institutions in Africa to build up communities, particularly so that the innovations have that local knowledge and context as they're being developed. So I think it's not just about the U.K.'s reputation within the U.K., but it's also how we can help support that transition country by country around the world.

I would be -- if you like to comment on the U.K.'s reputation now. We can take it. The other question I've got is around the IPCC driven SDG metrics and how we use those to measure progress and enable digital transparency. So how do those things link together maybe, Kate?

Yes. Well, I mentioned our tool, Data Commons that is focused on bringing together public data sets and really inherent in that is really valuable information around SDGs -- around progress towards the SDGs. I know we're all here talking about half time not being on track. So again, kind of back to the theme I shared earlier, we want to put helpful information in the hands of policymakers who are trying to drive progress more quickly towards the SDGs and we think that we can do that through tools like Data Commons that make that public data more available and makes it easier for us to track progress and drive action.

I mean, not much to add. Other than -- data is the name of the game and how we get that both in terms of own operations, but then also the wider and wider ecosystems, how can we get intelligent data to make choices around or assessments around risk and opportunities. And this is one of the things that we're grappling with as a company today, how do we really manage those data flows in a way that it all comes together. And we're probably able to solve that as a company our size. But at the end of the day, we also need to do this and solve this for companies of a very different size. And so anything that moves us forward in this regard is going to be hugely helpful.

And I was just going to mention, in particular, nature-related data. So we had TNFD launched whenever it was yesterday, was it this week is going to follow. But one of the things we've been looking a lot in Cambridge, we have the Cambridge Conservation Initiative, which is a -- I think it's the world's largest accumulation of conservation NGOs that in our David Attenborough Building. And the wealth of data that they have hidden away, stored away somewhere in some filing cabinet, that could be hugely useful for helping to inform decision-making associated with -- its nature is getting ever more up the agenda. Very valuable, but we need to connect together with companies like Google, actually to make sure that, that data really is available and accessible.

Great. Thank you. Are there more questions in the room? I think we can get a mic to people, hopefully.

Hi. So thank you for the great panel. I have a question for all of you. Where do you think AI will have the biggest impact in terms of sustainability moving forward in the next 5 to 10 years?

And I just want to make sure, you said AI, right? That was your question. Yes. Well, I've already shared lots of examples, but I'll come to something I haven't spoken about yet, which is not only are we seeing really powerful opportunities for AI and information and optimization, but also for prediction and for early warnings. That is also a really big priority of the Secretary General. There's a lot of discussion around that here this week. AI is enabling us to, for example, predict flooding 7 days in advance. We know that as we're adapting to the impacts of climate, flooding is impacting millions of people around the world. So now for 80 countries, we have a tool called Flood Hub, and it will show you 7 days in advance, where is there likely to be riverine flooding. So government authorities can use that information. We're also pushing out alerts. We're doing the same with extreme heat. We're making those alerts more available. We're putting that information in the hands of policymakers and then also using AI to provide solutions to extreme heat. So I talked about Tree Canopy. We're doing the same for cool roofs. How do we use machine learning to assess the most optimal places to do white roofs or other cool roof solutions to reduce extreme heat. And we're also partnering. We recently gave a grant to the World Resources Institute to do this work as well to figure out how do we continue to support communities and reducing urban heat islands through cool roof. So also really powerful AI applications in the adaptation space.

Yes. No, I think part of what we already came on to is, there's so much data out there, but is that actually being mined and then sensibly channeled towards questions that we're sitting with. I also think that, again, if we get into entire value chains to be able to make data transparent, in a way that is acceptable now, will help hugely inform the right choices. I think we're only at the start of a circular -- truly circular economy. AI is going to help there. And part of AI has already been out there. I know the large language model is something that is now coming our way. But already -- and today, AI technology helps identify leakages, when we work with wastewater companies. That's a huge part of how you do prediction and detection already there. And that will simply be put on steroids, if you like, in terms of capability going forward.

Well, I'm a climate scientist by academic background, but I announced it in a computer science deployment because AI is absolutely central to so much of what we do. And in fact, the rest of the day-to-day I'm putting my scientists back on again and going down to NYU, where we have a large program, international collaboration, actually, that's using AI in climate modeling to really transform our ability on many of the topics that you talked about. But there's so many other ways in which AI is also being used in terms of helping to speed up the discovery of new materials or the digital twins that we're using to help power smarter systems, whether it's a smart operation or a wind farm or whether it's about smarter transportation systems and so forth. So we really are seeing it revolutionizing so much of this space as, frankly, to many other areas as well.

Fantastic. So that brings me on to my last question. What does the future hold for climate innovation globally and how can we make sure that everyone benefits from new technology and not leave people behind? Judith?

Well, I think one of the things is to make sure that we find a way of packaging it in a way that makes it much more accessible for small, medium-sized enterprises. I think that's one. And the other, I would say, because we haven't really talked about this much on the panel is with my other hat with the people hat. I think we also need to make sure that we take people with us on that journey from an up and reskilling perspective and really make sure that there are no barriers to deployment because people are hesitant around this. So that would be my $0.05.

Thank you. Emily?

Yes. I mean, they're taking people with you is clearly really important. We've -- 1 of the initiatives that we've launched relatively recently in Cambridge as our Center for Landscape Regeneration. And that involves a huge number of different academic researchers across the university from scientists and engineers through to the social scientists. But also critically importantly, it also involves all the different stakeholders, including local communities, who are relevant to those landscapes. So we're looking at peak land restoration, for example. That involves engaging with the farming community, engaging with the conservation groups but also really importantly, engaging with the people who live and work in those landscapes. And many of the times, AI -- we can look from the academic perspective of what different solutions are feasible, but it's combining that with what solutions are desirable, but so important to ensure that you get a future that is both fair, but also sustainable in the true sense because if you're [ imposing ] solutions are not ones that people want, then it's not going to be effective in any case. So that broad engagement, we've talked about public partner -- public-private partnerships. But that broader engagement beyond those traditional, so you've got sort of radical collaboration beyond the traditional partnerships is also really important.

Yes. And I would very much build on both of your excellent comments. I think as we look to adjust in sustainable future, we want to be developing solutions for everyone. And so for us, one of the ways we do that is we don't only think about this in Mountain View. We think about this in Ghana at our AI research center in Ghana, where we are developing relevant solutions for people all over the world. So our AI research center in Ghana is thinking about where you don't always have formal addresses. And how do you use AI to make sure you have a clear mapping of buildings, which is really important for development. It's really important for emergency response. We've also teamed up with organizations like Vaani, who are doing incredible work in Africa using AI for more sustainable and productive agriculture so you can target really clearly to see where there's infestation or disease in crops and address it so that you can have a more productive and sustainable food system.

Well, please join me in thanking Judith, Emily and Kate for absolutely fantastic panel. I think being an optimism for the conversation. Thank you. Thank you so much. I still don't know if I'm supposed to be terrified of any, but I may be feel a bit better. So next up, we're actually going to see a video interview between Climate Group's, Luke Herbert, our Executive Director of International Communications. He's talking to Dr. Thomas Becker, Vice President of Sustainability and Mobility at BMW Group, to discuss BMW Group's innovative approach to reducing their carbon footprint within the automotive industry. So let's see the video.

Good morning, Thomas. Thank you very much for joining us at Climate Week NYC. I understand, actually, you are very much hoping to be here with us, but circumstances had other ideas.

Absolutely, Luke. I really would like to be with you, but at the end of the day, still better than, [ oh it is ] a possible engine failure, while you are still on the ground then somewhere over Greenland. But very clearly, I would rather be in the room with you guys. So very good morning from Munich in any case.

Well, thank you very much, and thank you for doing this so early this morning. BMW is a very significant player, obviously, in the automotive market, not just in terms of the models you sell, but also in terms of driving technology and sustainability. Where is BMW Group now in its decarbonization journey, particularly in relation to electric vehicles?

Absolutely. I mean, we are part of the 1.5-degree ambition. We thereby said very clear that we want to be and we need to be climate neutral at the latest by 2050. We follow the rules of the game set rather science-based target initiative in that regard. And very clearly, electrification is a crucial element of that. And that means that for those targets, which we have now operational, which are for a time horizon where decisions are taken today, meaning, in our case, for 2030, we are clear that we want to have every second BMW car sold worldwide, be fully electric by that date at the latest. Our MINI and Rolls-Royce brand will be completely electric by that date anyway. So a big asset in order to ramp up electrification. But very clearly, just changing a drive train is by far not enough to reach your Paris agreement goals. So if you would -- don't do anything, you would end up with your supply chain dominating your complete corporate footprint pretty early in to transition. And that means that in order to make sure that we have the full benefit of electrification, we need to tackle supply chain emissions at the same time, which only can be done if you really integrate climate targets into very, very many decisions taken in the company. So that each purchasing manager, for example, has the responsibility for also managing the CO2 footprint of what he or she purchases just to name that example. Not to speak about our own plants where we want to replace natural gas as fast as possible by renewable energies.

So a huge range of actions across the business.

Absolutely.

But looking more widely at Climate Group, we push for accelerating climate action. And whilst there's great progress in transport, missions globally on transport is still going up, plateauing and developed economies and not going -- and going up actually in the emerging markets. What mores needed to tackle that, do you think?

Well, our contribution is the technology in our new vehicles. But this is just 1 piece of the equation. The other piece is mileage, the kilometers, people use their cars. It is also about the age of the fleet and the technology penetration. And very clearly, data shows that at the moment, in markets like Europe, the average age of the car that is driving around here on the road is going up and not down. So that means that policies that accelerate the migration to newer technologies are highly important. But also to think about how can we lower the CO2 footprint also of the fuels that go into combustion engine cars for still a very long time. And all of that is not an either-or question. We need all of that combined, including, for example, using the additional potential that we see in the hydrogen fuel cell technology, namely for customers where the likelihood to go for a battery electric vehicle may be highest, people who depend on large distances, drive heavier cars who namely appreciate the much faster fueling time. So all of this tends to be discussed always, as you have to do this or you have to do that. You have to do it all, and you have to work with partners. And just to name 1 crucial point, as everybody knows, a lot is about infrastructure. And if you look at about the pace of electrification in different markets, there is still a one-on-one correlation between the availability of public infrastructure. Here, we contribute with our IONITY joint venture, together with other carmakers to take fast charging, high-power charging to the main motorways. But we can't bring it to the road side in the cities, for example. So here, we need also other players to take their responsibility fully, while we seek to also make a strong contribution, for example, to supporting the ramp-up of renewable energies. We just last week announced a collaboration in the United States named ChargeScape, which is all about the grid integration of electric vehicles. Meaning with an electric car, you accelerate the transition to renewable energies. You may get a better deal for the customers when they support the synchronization with the electric grid and thereby make the entire system, not just the car, but the energy system behind more efficient.

So do you think there's still potential for business and government to work more closely together to drive that infrastructure across the world?

Absolutely, that is urgently needed. And if you look at the European Union, we have a big difference in EV uptake, for example, if you compare the Netherlands to Italy. So we need a stronger collaboration, namely in those markets who today are not as fast as we think they could be in order to make it clear for our customers that electric driving is a choice that is supported not only in terms of financial incentives, but in terms of certainty that you can use it really on a day-to-day basis.

And I mean, EV technology has evolved a great deal over the years. What would you see as cutting edge now? How is it moving forward most recently?

So the new generation of batteries that will go online with our so-called [ Motorrad ] classic cars from 2025 onwards has, I think, addressed some crucial issues around battery technology. One is, it is 20% -- 20% higher energy density, meaning you need less material, less resources, less CO2 in the making for storing a given amount of energy. And the price has also been going down significantly. So the overall proposition to the customer in terms of cost and in terms of sustainability, I think will significantly improve with that generation of batteries. And very clearly, also for these coming cars, we make sure that all the energy that goes into the making of the battery, the electric energy is from renewable sources that we start ramping up the use of secondary material in our batteries in order to really reduce the footprint where the battery is the very clearly biggest piece of the equation when you look at what an electric car cost us in CO2 in its making and not in its driving.

Yes, yes. So that's great news, and we're going to see that coming through in terms of reduced costs. I know that will usually help uplift. Now obviously, BMW has got a major footprint beyond itself in terms of its supply chain. So just quickly, Thomas, could you give us maybe an example of one or two ways in which you drive innovation through your supply chain to support responsible sourcing and support your circular economy approach?

Well, if you look at aluminum, for example, using renewable energy gives you a quick reduction of the CO2 footprint, it is a much harder task to do the same in steel because here, you are talking about different production technologies like electric arc furnaces versus blast open furnaces. And here, a very close collaboration with the different steelmakers not only to say what is it that we get from you for supply next year, but to have a mid- and long-term perspective, a transition trajectory that will really deliver on more ambitious footprint targets is essential. And I must say I'm strongly encouraged by many of the hugely constructive and engaged discussions we have with our supply partners most of which are really energy intense about addressing climate change.

Thomas, thank you very much for joining us today. We really appreciate it.

With pleasure.

And we hope to see you soon. Thank you.

Thank you, Luke. All the best.

Great. And now I'd like to introduce our final panel discussion of this flagship where we'll turn our attention to the world of Climate Finance and look at how we get investment to the areas where it's needed most. And so to help us unpack this, I'd like to welcome Climate Group's Executive Director for India, Divya Sharma, to the stage. Divya would be joined by Nena Stoiljkovic, the Undersecretary General for Global Relations, Diplomacy and Digitalization at the IFRC; and Dr. Werner Hoyer, the President of the European Investment Bank. Divya, yes, grab a seat here. I'll just take over. Divya is coming. Thank you.

Good morning, everyone. Thank you, Helen. It's too loud. So yes, very pleased to see you all over here, and Nena and Dr. Hoyer. I'm very pleased to be joining all today from India and proud to be representing the global south as we focus for the next 30 minutes on ensuring the flow of funds, to help developing countries fight the interlinking crisis of climate change, death and poverty and see that these ones reach the right place at the right time. Joining me on the panel today is Nena and Dr. Hoyer. And together, we'll discuss the bold action needed to protect the most vulnerable. So welcome our panelists, both of you. Thank you very much for being here with us. I have the first question which is common to both of you, and I would like your reflections on the same.

Back in 2009, rich countries solemnly promised to work towards giving $100 billion per year in climate finance to developing countries, but this pledge has never been fulfilled, and it looks like it will never be. Where did we go wrong? Can I ask Nena to start first?

Thank you very much, Divya. Good morning to all of you. President Hoyer, it's a great honor to share the stage with you, and I remember some of the good old times when our two organizations worked together. Divya, I understand the question, but I also think that $100 billion at that time showed a very strong commitment to addressing climate change. And of course, it was the countries who are greater remitters than those who are meant to receive those funds who are making that pledge. Now more realistically, I deeply believe that it's hard to raise $100 million, in particular from the governments. And that's why I'm very excited by the new ideas that are being discussed in various forums, hopefully this week as well in New York. We're talking about the role of private sector, possible taxation on fossil fuel companies, possible reform of the IFIs, more of the blended finance options where you could use actually less than what was pledged but multiplied several times to achieve the large amounts of financing that would need to go into climate, in particular, climate adaptation.

Well, thank you very much for the question. I must say this is my, I think, my 30th general assembly in different capacities and probably my last one, by the way. But I must say this thing has changed so dramatically. And this initiative here is really something we would not have imagined 30 years ago. So thank you very much for this effort. Well, on your question, I always hear these big numbers, we need $100 billion in this time for the developing countries, we need $600 billion within a couple of years for the rebuilding of Ukraine and all these things, I don't really believe in this money figures. I would like to set some impact objectives. What do we want to achieve? And there, I think we then need to go into the substance of the things and not only in, let's say, thinking in terms of donor recipient activities or budgetary resources being distributed. My institution, by the balance sheet, the biggest multilateral development bank in the world, is not about having volumes. It's about having impact, and we need to measure this impact. And this is, for instance, we decided in -- at the peak of the first wave of the climate crisis that we would move out of fossil fuels completely in 2019, and. That was not very popular everywhere. And then we said, okay, but where do we go? The goal is obviously towards renewable energies where we have been very active for a long time. But then we say, okay, now we do it 100%. And that means then also the readiness to embark on new technologies. I have come to the conclusion that we must forget to think climate development and innovation in 3 different boxes. It belongs inseparably together. And I think this UN General Assembly can be a great moment in order to bring this to the awareness of everybody. It's not just about 100, 200, 500 billion of euros, dollars or whatever. It's about how do we really address the issue of reducing, quantity wise, the number of poor people in this world how can we improve inclusion in the process of these many people? How can we support those who particularly suffer from climate disasters or other natural things? So what can we do from a professional point of view in order to ease the situation? And I think there, we are making considerable progress.

Thank you. And I'll keep with you, Werner, because you spoke about phase out of fossil fuel. So to phase out fossil fuel and protect their citizens from worsening climate disasters, developing countries will need trillions rather than billions of dollars. What more can IFIs such as the European Investment Bank can do to ensure that the part of climate investment finance is expanded?

When I try to answer this question, I will give you an example of why I think we should always see the overall context of climate development and innovation. I had recently a discussion with an African leader of state and he realized and appreciated that we are moving out of fossil fuels. Unfortunately or fortunately, that country has lots of fossil fuels underground. And he say, okay, if you don't want us to take advantage of these fossil fuels, then we must have alternatives. Now you are setting floating wind farms all around Africa. You're investing a lot in geothermal and all these things. Nowadays, you produce electricity at incredibly cheap prices but you don't bring them to the villages and towns up in our mountains. You'll bring them through the electrolysis capacity that you need in order to turn dirty hydrogen into green hydrogen. And then you put the stuff on boats of pipelines and bring it to Europe or to North America? Jesus, isn't that something you did 200 years ago already? Isn't that colonialism 2.0? No, we must think in terms of what's in it for whom. So what does it mean in terms of participating in the value production, in the value -- further value change and what does it mean in terms at the end of the day of jobs for these people?

Thank you for bringing those into linkages, very important. Nena, can I come to you? So an effective early warning system, can create early action and working together with the UN partners, the IFRC's aim is to bring is to ensure that everyone on earth is protected by early warning systems. Just how critical is anticipatory action? And what more can we do to act against disaster risk?

I think it's very critical and especially where the poorest people on the planet are most affected, that's in the faraway communities. Dr. Hoyer talked about impact. When we look at, for example, what happened in Pakistan, 33 million people were affected by the floods in Pakistan. And those floods were predicted or the weather conditions that caused floods were predicted. The same goes for Libya. There was a prediction of the weather that caused now 11,000 of people dead. So these are huge catastrophes. And on the Red Cross side, and they work for the largest humanitarian network in the world, our focus is very much to support those communities most impacted. Our volunteers live in those communities before, during and after crisis. And they are involved through the spectrum of resilience building, crisis disaster response and then the reconstruction. What I also wanted to say is that it is absolutely great that there is a commitment on early warnings for all by the UN, and we are working very closely. We are leading on one pillar together with UNDRR, WMO and ITU, but that's science. And as I said, I mean, even when you can predict certain weather conditions, people do not necessarily know about it. And that's why work at the local community level in their own languages, within their own culture, within their own way of receiving warnings, which is exactly what Red Cross volunteers do. I think it's very, very important. And then when you have that warning, you also have to have some action around it, whether it is providing clean water ahead of flood with chlorine pills or putting sandbags around houses or even moving the communities away from their homes to where it's safer. That type of work, again, has to be done at the community level, even if you have more scientifically precise weather forecast.

Thank you for bringing community level action because that is very important. I mean, as you said, that the early warning systems are good and we need them. But what do we do after we have those -- that information with us. And thank you so much. Dr. Werner, if rich nations fail to invest in poorer countries, this will impact growth in supply chain, stability and security. And in a globalized economy, no one escapes when extreme weather hits. So what will it take to transform development finance so it truly works for all?

Two points on this issue. Number one, the developments over the last couple of years, including with the war in Ukraine has been a wake-up call for people in this part of the world and in Europe indefinitely. Because we need to move out of dependencies. And that is not only true for energy, that is true for other necessities of lives as well. So we are moving into this direction. And secondly, we need to be as concrete as possible. So I took up the initiative by the Bridgetown initiative, in particular by Mia Mottley, and we agreed on a couple of concrete points. For instance, we have now a differentiation in the tenors of our loans between small island states and these developed countries on the one hand and more developed countries on the other hand. So it is easier to live with a long-term loan for the smaller countries and the most vulnerable. And then we have introduced disaster relief clauses in our contracts. So when a natural disaster hits, then we do not need to begin to negotiate how we can ease the burden, but they have from the beginning the right in the contract to reduce their debt payments and so forth or prolong them so that they can concentrate on the resolving of the consequences of the natural disaster. These are concrete big projects. And by the way, when I look at our cooperation with the IFRC, that's exactly where we can do much more together because the IFRC is the hero on the ground there, and we can help from the long distance.

Nena, at the end of 2022, the IFRC launched the Global Climate Resilience Platform to increase the resilience of communities most vulnerable to the changing climate with -- and this is placed on funding local time action. With only an estimated 10% of funding currently granted at the local level, what the private sector can do to balance funding local action with large-scale national projects?

I wanted maybe just to explain to our audience what is the climate resilience platform, and then we'll respond to the role of the private sector question. To address the issue on early warnings and early action at the deepest local community level, in most impacted countries to climate, and we have around 100 of them, we developed a 5-year platform targeting USD 1 billion fundraising for it. And the money would really go to those communities through our local national societies, Red Crosses and Red Crescent societies around the world. And one of the pillars of that platform is exactly early warnings and early action, and we already have a programming underneath including in collaboration with UNDRR, WMO. We're very proud of that. And the second pillar of the platform is nature-based solutions, again, at the community level. The third one is shock responsive social protection to prepare again communities for disaster. So we wanted the support so that we can seat at the table as the humanitarian organization. And as Dr. Hoyer said, it's a great opportunity to link humanitarian budgets, development budgets of the government as well as the work of humanitarian agencies and development agencies. Only if we work together, we will be able to address the big issues, including at the community level. And the platform for us became a tool to connect those different funding sources. It also became a tool for us to attract more private sector. It doesn't -- private sector does not need to fund us. We operate basically on ground funding. But private sector can help build the hardware, the harder infrastructure that has to be resilient, while the software part could be done by humanitarian organizations dealing with people in those communities and preparing them for disasters. I think we need to work together, both on the climate resilient infrastructure, roads, housing, dams. We see what's happening around the world, but also at the community level so that there is trust in terms of how they respond and also prepare for those crisis. And maybe the last point that I wanted to make, because they work in a grant space right now. And in the past, I was working with loans and other instruments more returnable, what we are also looking at IFRC is how to create instruments, financial instruments that could bring private sector in a more financially sustainable way into some of our programs. And we're very pleased just recently to be in a position to launch an insurance scheme with Aon insurance company, Aon, that will allow us to multiply donor funds, traditional donor grounds by 4x for disaster response around the world.

Thank you very much. We are into the final minutes, and it would be good to have some audience questions. I have two questions from audience that have already arrived. So Werner, the first question is for you. How would you advise the next president of the EIB to balance climate finance with reigniting a low-growth economy?

I'm not worried about my succession at all, 5 high level -- highest level candidates competing. So maybe I'll have to stay because they cannot agree on which of them is going to be it. That's not my point. I think what is really necessary is to keep in focus the recognition that all public state budget money in the world will not suffice to allow us to reach the SDGs. So we need to mobilize the private sector. And private sector mobilization does not mean charity. Private sector mobilization means leading to business cases, business opportunities. Let's take investment needs into investment opportunities. And I happen to be the structural optimist. I don't like doomsday scenarios. I think we can do it. And this means that we need to see where is the bankable business case for the investors and then they will come in out of their own interest and not because of charity considerations.

And the second question is for Nena. It's a very wisely written question, I must say. There has been criticism level at various scopes regarding progress stalling and the risk that the ambition to deliver and build on commitments is slipping away. What is your hope for COP 28? Do you think we've seen enough to ensure it will deliver on equitable finance for the most vulnerable?

It's a very wise question and a challenge for all of us. I have to stay positive. For me, it's not all doom and gloom, but I do think that we need to find a way to bring funding and support to where most vulnerable people live. And that's very difficult because that cannot be financed necessarily by, as I said, more returnable instruments. Those people need basic needs, basic advice, basic services to be able to live in those communities and protect their households, their livestock, their livelihoods from climate disaster. So this is what is offered from IFRC to work with development organizations with governments and with private sector to find solutions that will help those most vulnerable. They are the ones who die when the flood happens. They are the ones most affected when earthquakes happen. And we collectively at COP28, have to continue to work on what we call locally led climate action. Those solutions have to be where it matters.

Thank you, Nena. Thank you. So we have reached the end of our panel discussion. Please join me in giving a huge round of applause to Nena and Dr. Werner. It is really a pleasure to sit along with you and speak about some of the critical questions that we need to answer around climate action to get it passed and get it done. I am very excited to see how we can all do it collectively. Thank you very much for being such a great audience. Thank you very much, both of you.

Thank you.

Pleasure. Thank you.

Next, I have the pleasure of introducing the very last session of the flagship and it's a great one. We'll be joined by Silvia Pavoni, the Founder and Editor of Sustainable Views, part of the Financial Times, who will be hosting the fireside chat opposite Susan Lund, Vice President of Economics and Private Sector Development at the International Finance Corporation. The IFC represents the private arm sector of the World Bank Group. Susan will also be joined by Mark Hutchinson, CEO of Fortescue. Without further ado, please join me in welcoming them all at the stage.

Hello, everyone. I hope my microphone is on. It's a pleasure to be on this stage during Climate Week and talk about finance. Finance is actually very, very important, as we all know, in ensuring that capital goes to the activities that are needed to transition to a greener economy. But when we start looking into the details of how these financial structures should be put together to facilitate the transition, then that's where perhaps we may get lost. And there is one specific element of finance called blended finance. And I'm sure many of you here are familiar already with it, but we can go and perhaps explain a little bit further what exactly we mean by this. And that is continuously and more forcefully called into action. And so blended finance is a way in which essentially public sector money through the actions of national, but also multi-lateral development banks is being used to leverage and attract private sector capital. And I'm delighted to have Susan and Mark here to talk about how to ensure that this capital does flow towards those deserving areas.

Susan, let's start with you. So you obviously are here as part of the IFC, which is the private sector arm of the World Bank. And just looking at some data that the IFC had released, you do have an interesting ratio when it comes to using concessional funding to then leverage capital, private sector capital. But between the years of 2010 and 2022, we were talking about billions, right? So it was around, I think, the final leverage that the IFC's activity managed to put together in terms of private finance was around $13 billion. When we talk about transition, though, the numbers are way higher. So we're talking in trillions, not in billions. How do we get there?

Thank you. Well, blended finance is going to be critical to catalyzing the amount of money that we need for the clean energy transition in emerging markets. So in June, at President Macron's summit, we released a report with the International Energy Agency, where we really tried to quantify how much money is needed in developing countries to enable the full clean energy transition. And if we exclude China, the numbers are still very, very high. So we're talking about $1.9 trillion annually of investment that's going to be needed. That's 7x what's actually being invested in clean energy today, about $260 billion. So how are we going to scale up to that extent? Well, blended finance is a tool where you take government or philanthropic donor money and you strategically use it to unlock private capital. So in our experience, you're right that IFC has sort of developed this tool, but it needs to scale. We find that every $1 of blended finance donor funds brings in roughly $10 of private investment. So this is what we need to actually go from billions to trillions. We need blended finance at scale to derisk investments. And if used strategically, then what we find is that once projects are demonstrated that they can be profitable and impactful, then the market takes off. So take an investment we did, for instance, in commercial scale solar in Uzbekistan. IFC put in $20 million. The government of Canada offered a $20 million concessional loan that was offered to all bidders on the project. This is for a 540-megawatt solar project. It went ahead. Now the market has really taken off. It's been demonstrated that you can invest in this type of commercial generation and do it profitably. So typically, we don't need blended finance for that type of project anymore. And we need to do this over and over in countries around the world, including the lowest income countries. And if we do that, we think that we can radically scale the amount of private capital that's going towards emerging markets for this very critical climate need.

So it's a matter of making sure that the private sector companies are familiar and comfortable with the mechanism of blended finance? Or do we need a great concessional funds to start with?

Well, we need both. We really need more concessional funds. So blended finance often takes the form of, say, a guarantee to an investor or a company, such as Fortsecue, to help get the project over the line. So in this IEA report, we estimated that to get to the $1.9 trillion of clean energy investment every year in developing countries, we need $80 billion to $100 billion of blended finance. And you'll notice that ratio is much lower because we went through, sector by sector, which types of clean and energy actually need this help and which types of countries. So typically, we find blended finance is useful in two contexts. One is in very low-income countries where there's a lot of uncertainty about the market. Like let's face it, particularly with U.S. treasuries offering 5%, it's a hard sell to get people to go to the developing countries that are most in need. To do that, blended finance can provide, for instance, a first loss guarantee and help reduce a bit of that risk of and uncertainty about the project returns. The other type of investment that can benefit from blended finance is in middle income countries because let's face it, if we're going to fix the global energy and climate issue, we really need to address the middle income countries who are responsible for roughly 2/3 of global emissions today from heat and energy. So to do that, they are most often we're looking at newer technologies. So currently, battery storage for solar farms. green hydrogen and ammonia, which Mark will talk about, offshore wind. Some of these newer technologies that have yet to scale and they're still a little bit uncertain in their commercial viability and also the costs remain very high. So over time, by using blended finance to enable those projects to get over the line, we would expect the cost to fall and needs to scale rapidly.

All right. Thank you, Susan. So Mike, let's go over to you. So technologies, of course, we are looking. You are in charge of Fortescue future industries, which looks at renewable energy. You're part of the group, chaired and founded by Andrew Forrest, who is a proponent of using philanthropic capital to address climate change needs. And of course, as Susan also mentioned, philanthropic and public sector government funding to be used within blended finance. But is it really something that is needed or should it just be that companies such as yours already active in this area, have in theory already all the capital and expertise to know where to invest and do it properly?

So great to be here. Look, just for -- if you don't know who Fortescue is, we're actually an Australian mining company, we mine iron ore. But actually, we've recently flipped and invested kind of everything we've kind of made in that area into green hydrogen. So we want to show the world, you can do green hydrogen at scale, and that's what we're doing because our view is we have to replace fossil fuels. So the market, in our mind, is enormous. And if you just think about what green hydrogen is, think of it as similar to when the LNG world started is you have power, cheap renewable power in one place in the globe and you need to get it to somewhere else. So you change it to a molecule. So that's really what we're trying to do there. The market is enormous and the need is enormous. And where a lot of the cheap power is, and particularly in those countries that don't need it, it's in places which don't have other resources actually. So when we talk to countries around the world, they see this is a huge opportunity in this energy and transition for them to be a resource -- from a resource poor country to a resource-rich country. And invariably they are in countries where it's going to difficult to finance. So we're seeing some really interesting transactions around the world at the moment. There's absolutely demand. I think in our view, the real difference is the economics. And on the philanthropic side, I think philanthropic capital can only go so far. It won't solve climate change. So you're going to have to get business to come in. But I think at the early stage, our view is that we need all the help we can get. So in these -- no one has done these projects before. So it's a brand new market. There is no price, there is no index on what green hydrogen is. So we're starting -- we're doing everything from scratch, everything is new. So this is where you need risk capital. So from the -- from a corporate perspective, there's -- it means we've got to put some capital and step out. But having philanthropic capital next to us and like the IFC, particularly in countries like Kenya or Namibia, we're doing some work is really critical. Maybe I'll just give you one example of one of the projects we're doing, give you an idea of that. So we met -- this is a year ago here, we met President Ruto from Kenya. And he said, "My biggest issue is food security in the country." And what Kenya does, they spend $500 million to $600 million on Russian fossil fuel fertilizer every year. But it's a unique country in that they have abundant renewable energy. In fact, over 70% of the country is actually powered by renewable energy. They actually have too much. And so we were asked, "Can you turn that to green ammonia?" So now you think about this, right? So using capped geothermal power that they don't use and turning that to fertilizer that they produce in country themselves, green fertilizer. They don't have to buy Russian fossil fuel, and they can actually export that to other nations, right? Now it sounds wonderful, but it's in Kenya, and this is a lot of money. And we need others to come alongside us. So making sure we have capital from like the IFC, getting some head start, particularly at the early stage of these kind of projects. where it's very risky, is actually probably the most useful for us. But at the end of the day, what's important is to make them economic for the business sector. Now we think over time, these will become economic. But the early stage is very important. I get asked the question all the time as we were doing these projects all over the world, right, why would you bother in countries like Kenya and Namibia, Brazil when in this country, you have the IRA, which is $3 a kilogram, right? It's a good question actually. So really, theoretically, you should draw your capital here, but that doesn't solve the bigger problem. And I think -- we think there's massive opportunities in these other countries.

So -- and before I keep on with my -- with the many, many questions I have for both of you, I just would like to let the audience know that we are going to take questions both from all of you here and also from watching remotely. And I think the organizers are going to give me a nice iPad where I can read those questions. So if anyone wants to bring me the iPad and just inviting you all to start thinking about what you would like to ask to Susan and Mark. So policy. Policy is hugely important. And I have to say all the conversations that I've been having in the few hours here in New York during Climate Week, all the conversations around new technologies are the ones that make me feel really hopeful. Yet those are pockets, as you say, Mark, it's a small project that has huge potential in a country, clever entrepreneur can meet up with new technology. And all these entrepreneurs are concerned about getting the right investors, getting any money at all and also policy that will support them. So is there a role that both development banks -- and I know it's a difficult question to answer to, and companies can do to lobby with governments to bring about those needed policies and not just in places like the U.S. but also in other markets.

Maybe I'll take it, Susan. Absolutely, right? So in all these countries, policies are going to change. So whether it's Brazil or Namibia or Kenya or India. So -- and we've got to help them along this journey because we can't -- this can't wait 2 or 3 years. We've got to get going now. Our view on technology is just a little different actually. Our view is the technology exists to decarbonize the planet today. And so you don't have to wait for the new technology. The new technology will develop over time as you get this ramp up in scale. So for example, in the green hydrogen space, the technology is using electrolysis, which is -- it's been around for a long time, actually, but the technology hasn't really developed to scale yet. But over time, that will develop, but we can use them now, right?

We've used also in -- for household consumption as well?

No, this is more of the production of hydrogen, right? So it's using known technology now, scaling it, getting the right policies in place for things like manufacturing making sure that the projects you can do in country. So look, there's a massive role for, I think, government on policy. I think from a technology perspective, our view is the technology is there today to decarbonize the world. So -- and we just got to get on with it and technology will change over time.

Yes. So you may need the boring stuff to be put in place like updating the grades in all of that to ensure that...

Ports, so countries that don't export product at the moment, helping them with having the right port infrastructure to make sure they can, things like that.

Yes. Let me come in. blended finance is important, and we need lots more of it and we need it soon, but it's not a silver bullet. We do need other things to enable the amount of private investment that we're going to need to enable developing countries to do the climate transition. First is government policy. I think -- Mark, I think others would say that one of the big constraints right now is lack of investable projects either because the regulatory environment doesn't allow private sector participation or because prices aren't right or there's problems importing and exporting the capital goods you need or exporting the products. So there's a lot of regulatory work that needs to be done to enable the private sector to come in. In addition, then we -- there are financial investors. So I'd like to think about strategic investors like Mark's company that actually go in and build the project and operate it. And then there's financial investors. So think about large pension funds and asset managers where there are trillions, tens of trillions of dollars that could potentially be invested in these types of projects. But we need new kind of financial platforms and instruments to enable them to come in because a large institutional investor is not going to go in and invest in a $20 million project in Kenya. It needs to put billions of dollars to work. And so there, things like green sustainability-linked bonds, or aggregation platforms and securitization vehicles. We've created something called the One Planet platform where investors come in and can put in large sums of money and then IFC fines projects like Fortescue's green ammonia in Kenya to invest in. And all the projects are Paris aligned. So we need more of those types of the innovations and financial instruments to really mobilize the institutional investor money as well.

Okay. Thank you so much. And we already have a few questions coming in. You've actually potentially already answered one of them, Susan, which is about which kind of firms are available for the coordinated actions of different stakeholders and perhaps the ones that you mentioned may be a good starting point. And another question, again, asking whether governments are doing enough to make blended finance attractive. So I guess, putting stronger capital behind your work, but also giving you the mandate maybe to use greater capital.

So maybe I was here last year, actually, I was thinking this today, actually. On the green hydrogen space, there was no government help, right, then the IRA came along. And then other countries have responded to that, which is wonderful, actually. So I can't attend -- I can look at this very positively that there's been a big movement over the last 12 months in working on what is for the finance sector, for the investor sector is the right thing is to make sure this new world is economic, right? Does the economic -- the reason that there's no projects out there for all this wall of money is because the economics don't work. So that's where you start, right? And then how do you get -- how do you help countries compete then if you have the IRA, which is domestic American right? Then how do you -- if I'm in Brazil, how do I make sure I can play in this new world? So look, I think it's come a long way in 12 months. There's still an enormous way to go. And the need is actually now. So what I worry about is we take 5, 10, 15 years to do it when it's too late, right? We actually need it now.

Yes. And I mean there are so many questions also around the IRA and it's a fact. So it's a domestic measure. And of course, we had EU retaliate and if you want to use their word with other -- are you concerned at all in 30 seconds, whether there may be protectionism threats around all of these actions?

Well, it's interesting right because you had the IRA and the Europeans responded by saying, "Oh, isn't that terrible," right, whereas really they should have focused on what we need to respond to that, which is they're now doing okay. So, look, I think we need it everywhere. Europe needs probably more than anyone else actually because they can't make the hydrogen there. So they have -- they're incentivized to do it. So look, I think bring it on, right?

So let me say, for developing countries, they can't respond to programs like the IRA. We have a lot of highly indebted low-income countries today. And so the public resources aren't there. And this, I think, is where blended finance comes in. And the local community, be it governments or philanthropic dollars can actually provide small amounts of blended finance that then enable private investment to come in and make up for the lack of economics of the projects and also respond to the global landscape, where there are great incentive programs right now in the U.S. and Europe.

And I hope that what you've just said also helped answer the question about asking you, Susan, directly, how -- if you could explain how the $1 you put towards a project perhaps to leverage $10 of private capital, which -- so it's through the absorption of risk and again, dealing with that side of investment. Now we have no seconds left, but I wanted to give you all here -- well, one at least of you, the option, the chance to ask a question if the organizers will allow us to do. So if there is any burning question that you might want to ask Susan and Mark now? Otherwise, of course, you can drop them as step down the stage. Well, in that case, we are going to be very diligent and finish on time. Thank you again so much, Susan and Mark, for taking us through this blended finance session.

Thank you.

Thank you, Silvia. Thank you for hosting our finance fireside chat. Thank you, Susan. Thank you, Mark.

Thank you.

Thank you.

On behalf of Climate Group, I very humbly, thank you all and also the audience who are joining us online for being with us for the last 3 days in our work and effort around climate action fast. In the days and months to come, our eyes will be on what do we achieve in COP 28 from what we have learned here and what we have heard here from various distinguished people. And we are keen to see where these pledges and actions are taking us forward. Now to close, please join us for lunch in the foyer out there and stick around for networking with your peers and also us at Climate Group. We hope to have some more conversations with you over lunch. And thank you all again, and safe travels to all of you back home. Thank you very much.