Constellation Energy Corporation (CEG) Earnings Call Transcript & Summary

He doesn't remember me, but I came on stage at a net zero conference in the U.K. in the autumn after Chris, and he did an amazing job, and I was struggling to know how to quite follow you. I nearly thought about singing a song, but I didn't, probably much the relief of the audience.

So my opening question then is related to the Inflation Reduction Act. So we know that here in the U.S. is working a green subsidy manufacturing raise. The ground is set for clean technology to supercharge the transition to a net zero economy. But my opening question to you both, get to the heart of the title of this conversation is, can we rely on technology, in some cases, technology that is unproven, unfunded and unscalable to save the planet? Chris.

Okay. Well, I think this is not a sort of and/or question, it's a both and. I was the U.K.'s Energy Minister that signed net zero into law for the U.K. back in 2019. And this year, I published a report on how the U.K. could achieve net zero in a more effective manner. And Part 6 of that report was net zero in the future because at the same time as obviously recognizing we can tackle the climate crisis, recognizing that we have the opportunities to deliver on decarbonization here and now with the technologies at the present above all, solar and wind. We've got to have that twin-track approach that sort of recognizes even with net zero. We've got sort of probably more than 1.5 degrees of global warming baked in and this is about 2100. This is about looking at the projections from the IEA and the UN CCC, which I think sort of say, certainly for the U.K. that we've got to be thinking about capturing 60 gigatons worth of CO2 emissions. That's 1/3 of industrial emissions in the U.K. And so if we don't begin to mature those technologies now, begin to begin to scale those up, then we're not going to be thinking beyond 2050 effectively. Yes, we've got to focus relentlessly on delivering that certainly in 2050, but we've also got to think beyond. And that's a sensible situation when we plan out the future and thinking beyond what we need to achieve.

And so just to push you a little bit then, I think what you're saying is we can't totally rely on technology or...

No. I mean what we can't do is that Hollywood film where everyone said, "Oh, it will be fine, we can sort of -- sort out sort of like you give...

Technology will save you.

Mine the asteroid, and it will all be fine. But sort of actually what we need to recognize is that net zero is not about 2050, net zero is about 2030. If we don't halve global emissions as the Global Stocktake report for [ COP 28 that I showed ] last week. In the U.K., if we don't reduce emissions by 68%, we're not going to make net zero by 2050. So it has to be a renewables revolution. We've got to really focus relentlessly on [ trebelling ] renewable power as hopefully that will be the commitment made at COP 28 this year. There's all about the -- less than 80 months, we've got left now to 2030, but beyond that, thinking towards 2050 that we do need to make those investments. As I said, it's not an and/or it's a both and. And we've got to be able to recognize we can't just pick this up after meeting 2030. If we don't start creating the demand side and the supply side requirements for hydrogen, for carbon capture and storage then we're not going to make this sort of a future carbon economy that can be developed today.

Great -- thank you, Chris. The same question to you, David.

I think Chris is absolutely right. I think the key in both the U.S. and around the world is to kind of fail fast. There are dozens of new clean technology ideas out there being tried out. We need to identify those that are going to work and then run to build those out in scale and in a way that keeps power affordable and reliable at the same time.

Great. Thank you, David. And if I could stick with you and just circle back to the Inflation Reduction Act and the subsidies that are embedded in it for green infrastructure development. This legislation was passed over a year ago now. What's your assessment of the progress that's been made towards decarbonizing the grid as a result?

Yes. I think we've started down that path, right? I mean I think that we've seen a lot of announcements. The Department of Energy just started tracking all these announcements on an interactive map on their website. So that's great to see. For Constellation, it was really transformative for us. We went from kind of considering what the future was going to be for clean technology like nuclear and a lot of uncertainty around that. Today, we have announced plans to uprate some of our existing nuclear plants and get more clean megawatts out of that same footprint, that same generation plant. We're going to be investing in the hydrogen economy. We've acquired part ownership in another nuclear plant and we've got other plans that are out there, all total about $3.5 billion so far. That's going to take a while to get in place, but I think that we're seeing just, again, dozens even hundreds of announcements to push new clean technology out.

So good progress?

Yes. I think very good progress. I think that -- the key is that there's a lot of pent-up demand also waiting on the treasury department to implement their regulations to enact the [ build ]. So that's a big sticking point.

I love the words, good progress. You don't actually hear that very often, do you? But bearing in mind, good progress then. Just curious to know from Constellation's perspectives and from your conversations with lawmakers in D.C., what would enable even better progress? Are there any choke points to accelerating progress and how are those being addressed?

Yes. I think there are 3 primary things that I'd look at beyond getting the treasury regulations finalized as soon as possible. I think permitting reform has been a major topic of discussion in Washington. We need to build more faster. I think that human capital is an enormous barrier out there, finding people to put to work here and get going. So if we can take care of those items, we'll really expedite things.

Great. Thank you very much. So, Chris, sending back to you. Quite a lot has been made about the IRA's isolation in nature, particularly in Europe. There's been a lot of grumbling about the IRA. Firstly, I'd like to know, is this fair? And secondly, what should the U.K. and European governments be doing in response that they aren't doing now?

So I actually take a different view to the U.K. government on this. We've seen a couple of my ministers sort of claim that the IRA is protectionist, that somehow it's going to be hauled up in front of the world sort of trade organization. The reality is it's not even going to happen for like the next 12 years and all of that money will be spent by then. Secondly, the nature of politics is around trade-offs and dealmaking. And all that's happened in America is that there are certain deals that had to be struck to get it through both houses. And so we need to recognize that. Secondly, I've come out openly by saying that we should have a new green special relationship between the U.K. and the U.S. We should look where we have areas of comparative advantage, where actually the money that's being delivered, particularly on clean technologies [indiscernible], there isn't actually the capital, particularly within the workforce to be able to deliver on some of that investment. So actually, Constellation is looking at the U.K. alongside a number of nuclear companies to say, well, actually, the U.K. has a strong record and high-temperature fission reactors. It's got the workforce here. It's got a number of reactors that are coming off stream, wants to develop new SMR technology with a workforce that wants to actually get involved with this. It's ready and really willing to go. And actually, that means that the U.S. invests into the U.K., and that creates, I don't know, like sort of 100,000 jobs in the U.S., but it creates 10,000 jobs in the U.K., that's a partnership we can work with. So I sort of see this as an opportunity where actually the IRA is a catalytic moment, this drop were actually the ripples that come out it can be felt by all countries, those countries that are willing to engage. And after all carbon dioxide knows no borders. So why should we not recognize that we can work together on developing the technologies of the future.

Great. I love the notion of a green special relationship, bearing buds of possibility here in Climate Week. Thank you for that. My final question to you both. In your view, what are the concrete actions that lawmakers and businesses need to be taking now to ensure accountability and maintain their claims to leadership, both in the clean tech space, but more broadly? And I guess the backdrop to this is a whole raft of legislation coming through in Europe, coming through in California, that's requiring much more disclosure on claims. But yes, what are the concrete actions that you would both like to see from lawmakers and businesses to ensure accountability and maintain these leadership claims, both in clean tech and beyond. I don't know who would like to go first.

So I think for myself, having taken forward this Mission Zero report earlier this year for the U.K. government, we sort of set out we've got to have consistency, clarity, continuity of political judgment of policy frameworks. And the challenge is, if politicians sort of row back on commitments that are sadly beginning to happen in the U.K., we've seen potentially Prime Minister Rishi Sunak coming out and changing certain decisions on actually not having any new gas boilers from 2035, that destabilizes the industry completely. And there are investments that need to be made that have a 10-year, 15-year horizon that are going to be made today. One of the reasons why I'm getting to any new oil and gas build licenses is it takes 24 years for the development of an oil field. That's 2047, and by that time, the cost of oil and gas would have risen. These become stranded assets. We have to be really careful about the political decisions that we make today and the impact they have on the workforce of tomorrow. And we've got to focus on transitioning high-carbon industries away from fossil fuels, but that requires us to lead. I always say there are no -- so there's only first mover advantages when it comes to net zero. There are no free rider opportunities here. We are the leader we follow and the cost of following the not zero path will be more expensive ultimately than actually moving forward and leading on net zero.

Great. I couldn't agree more. And for those of you that are outside of the U.K., Chris is doing a really good job of sort of prodding the government to stick. I think you are -- you are, you're keeping them honest, and we certainly need that. So same question to you, David, if I may.

Yes. And I think certainty is at the top of the list, right? I think that if you're going to have long-term investments made, you need to know that the incentives that have been set out are still going to be there. There was initially a lot of Republican backlash to the IRA because of how it was passed. I think that as these investments are being announced, you're seeing a lot of those investments in Republican districts or districts currently represented by a Republican. So you're starting to see kind of a pullback in the opposition to that as it comes along. I think in terms of getting going. I mentioned permitting reform, I mentioned workforce, supply chain would certainly be up there at the top of the list as well with critical minerals. But I think just having a continuing dialogue between business, industry and the NGOs and government is going to be a key to successfully implementing the bill.

Great. And you said something really important there that the opposition that we saw, which was based upon party political grounds to the IRA, that is dissipating? Can you just expand a little bit on why that is?

Well, again, because investment announcements are being made.

Okay. So jobs are getting created.

I mentioned we've made -- well, in all probably $3.5 billion worth of investment announcements, probably 95% of those are in districts that are currently represented by a Republican House member. So when you're going in and saying we're going to invest $2 billion in your district, they get pretty excited about that.

Good. So we have 10 seconds remaining. Gentlemen, my last question to both really quick. Clean tech, silver bullets or red herring or neither?

Trying to think of a mixed metaphor where you can bring in a silver bullet and a red herring together. I'm not sure I'm going to achieve that in 10 seconds. It is essential. We've got to make the investment. We've got to be able to ensure that we ride both horses here again to mix [indiscernible] and ensure that we think not just about our immediate future 2030. We are planning out those decisions beyond net zero, beyond 2050 towards 2100.

Great. David?

I'd just say it's going to be a silver buckshot, it's going to be a variety of things, not 1 thing that gets us across the finish line. And that's both on the new clean tech on the generation and supply side, but also on the energy efficiency side to make us more efficient and get us a lot more what we're generating.

That's a very strong message of hope. And maybe it's a silver very adaptive herring that's going very fast. And gentlemen, thank you so much for joining me on stage. You are free to go and I'd like to invite the rest of the panelists up, please.

So we're going to continue this discussion, but from a different perspective. And if I could invite my 3 panelists to come up, please. So we have Esther An, who is Chief Sustainability Officer, City Developments Limited who is coming from Singapore; then Harish Hande, Founder and CEO of SELCO Foundation; and Roy Torbert, who is the Chief Program Officer at Third Derivative, RMI's Global Climate Tech accelerator.

I've got a few questions for you all. And as I ask you the same first question, if you wouldn't mind saying a bit about your own organization, so these lovely people can put your remarks into context. Is that all right? So my first question to your both is just picking up this idea of liability around climate tech. What are some of the key criteria that need to be considered when evaluating and selecting clean tech solutions to fund and scale. And we've heard some of these considerations in the previous discussion. So yes, what are the [indiscernible] key criteria that need to be considered when evaluating and scaling clean tech? Esther if I may start with you.

Yes. Thank you for having me. And well, definitely, we actually a developer, headquarters in Singapore, but we operate in 29 countries and regions. We build home, commercial property as a landlord. We also have a global footprint of 150 hotels worldwide. So definitely decarbonization is our top priority. And since we actually place for net zero using the World Rebuilding Council advancing that zero framework, where we lose a lot of sleep, honestly. And we ask ourselves whether we can, but we -- now we stop asking. We will have to do it. There's no more questions. And of course, technology and best practices and also finance are all enabler. So technology, yes. Every day, we are [ shopping ] for new technologies and all. But I think most importantly, we have to look at the ABC of it. A, is whether it aligns with what we have set for goals and targets that are aligned with global rates to zero and also the industrial like green building standard and our national -- the Singapore Green Plan, so that is the alignment. B, it has to be a business case. It has to create business value for us. And we can't just say that we'll lose money and just get the technologies to decarbonize. So business case is very important. We are a listed company. We have to return value to our stakeholders. So C is really creating the impact that we want. The criteria are very important and looking at the technology, whether they really have the potential to address the pinpoints, the gaps and where exactly are the gaps. We know better where the gaps and of course, we have to assess a lot of -- sometimes technology will give you a lot of hopes and potential but you still need to really be very prudent to assess it and pilot it and also looking at -- see whether the potential of scaling it up, those are very important. And we actually use a few ways to look for technology apart from the established name, the big boys. We also work with some startups as well, and we also develop the R&D program with university. And we compare a few what are the options. And we look at whichever technology that can help us achieve the impact that we want. And of course, when we talk about the impact, we must measure if we don't [ better ], you can't manage the problem at all. So, there are basically the criteria that we're looking at.

Great, I love that. The ABC, that's really clear. So Harish, the same question to you. What are some of the key criteria that you feel are important when you're evaluating and selecting clean tech solutions to fund and to scale?

Thanks, Sally. Thanks for inviting me here and to the Climate Group. See, I'm not going to say much of SELCO foundation, but just I'll focus on 2 programs that we have embarked on. And which is why I'm going to lose my hair is we -- last December, we -- along with [ IKEA ] Foundation, we embarked on a program to do -- to solar park our 25,000 health centers by December 2026. So we have raised the capital. And so now we are doing 45 health centers on a daily basis. So by COP, we should finish 5,000 and by December '26, we also have a plan -- not a plan, we are implementing 50,000 livelihoods that are either using solar as a catalyst or using -- solar and livelihoods as a catalyst like solar power sewing machines, solar powered hammer mills, rice mission. So that's our goal, not goal. I mean it's a fact December, I have to finish on December 31, 2026, 25,000 health centers on solar, that's 150 million people, which is 12% of India's health centers to be powered by solar and 50,000 livelihoods. So it can happen, provided we actually have the will power to do it. And that's why I think we need to stop talking. It's no longer silver bullet and red herring, it's the oxygen. It is the only way to survive. And I think -- I mean, why I'm saying that, last year, philanthropic capital, only 12% went into implementation. You can have all the policies in the world. You can have best of the papers written about. The question is who's going to do it? You see a number of practitioners in this conference, less than 2%. So who is going to do it?

You are.

But see, it's one, but the world has 2.5 billion people who do not have access to health. And solar is the only way to actually make that happen. And so my question is, we need to start looking at implementation more seriously and that's what's up.

So what's [ really ] -- and I hope you don't lose your hair. I don't think you will. I feel very optimistic. [indiscernible] I think what you're saying, what's really important is kind of scaling for impact, and you've got really clear goals there, which are super precise, and that's really important, and it's kind of not just the possibility of the technology. It's actually making it happen on the ground. That's -- I hear that loud and clear. So thank you. I hope you get there. I shall check in with you in Dubai, see how you did. So Roy then, okay, I'd love to hear a bit more about RMI Third Derivative. And what's important for you when you think about scaling and funding clean tech please.

Yes. Thanks, Sally. Great to be here, Harish and Esther [ as well ]. Pleasure to join you on this panel. My name is Roy Torbert, I'll say a few words about RMI and then speak a little on the criteria side. So Rocky Mountain Institute, now RMI, is a 40-year-old nonprofit entirely focused on driving the clean energy transition globally. We have 7 global offices. We work most places where energy is currently being used or where it's projected to have a major climate impact. My team, in particular, is Third Derivative. We are the venture accelerator nested within Rocky Mountain Institute. We work with start-ups across all sectors of clean tech and nicely align with the experts that RMI brings to the table. So we do work in buildings and building energy efficiency. We do work in industrial decarbonization, power sector, transportation as well as a lot of enabling factors like policy and helping support start-ups who are trying to unlock key things like permitting as well as finance. So my particular role is to help really get these startups to do the sorts of projects that you think we need so many more hands for because we couldn't believe more in that. We have had the luxury of getting about 4,000 startups who applied in our 3 years to be part of our program. It is an 18-month virtual accelerator program. We are currently accepting applications for all you founders out there. But I think the other key thing to note is -- we always -- the criteria are pretty transparent. We share this with all of our corporate partners, our VC partners. The first is a start-up has to have the proof to say their technology can be a gigaton scale climate lever. That could be a particular region if their technology only applies to 1 region, it could be less than a gigaton, but really the major carbon impact is the first. And so I think when we talk about technology, we have to be pretty discerning to say -- there's many technologies out there that are really trying to enable a longer life line for fossil fuels and what we need are the ones who are going to displace them and displace them quickly. The second key criteria is technoeconomic. We do want to show our investors and the broader world that these climate technologies are the profit center of the future. There is a multitrillion dollar transition happening, and we want to find ways for that to create wealth across societies and in particular, in the places of the world that are going to face the most damaging effects of climate change. So the innovation has to come for more than just the rich world. And then lastly, and this is a little unique to how we operate. We think a lot about the sort of ecosystem we both support and then help enable elsewhere. And that means that you can't -- no startup could survive on their own, right? They need connections to customers and offtake agreements and suppliers as well. They need to understand how they're going to work in a rapidly changing policy environment. And so creating that ecosystem and making sure those start-ups are going to be supported well by all the corporates and funders we have in our work is key. So that's our third criteria.

Great. So 3 kind of quite different perspectives there. So even clapping you from -- amazing. So thank you for that. Picking up Harish's point around practical implementation. Esther, my next question to you then, City Development Limited, you've been recognized to your sustainability efforts. What advice would you give to other organizations looking to incorporate clean tech solutions into their sustainability efforts? So that practical advice, particularly in the real estate and property development sector, which is obviously the sector you know so well.

Thank you. I think -- well, thank you for the kind remarks. We started the journey almost 30 years ago in 1995 and our thought is consulting as we construct. So what we do is like if I could summarize the 30 years, otherwise, I would take 3 hours to do so. So it's basically there are 4 [indiscernible] the pillars of how we integrate ESG into our business. So the first one is really integration. You can't do it alone. ESG will not be effective if you work in silos. So everyone in the company has a role to play to contribute to sustainability, but sustainability must -- the values, the objectives must support the business strategy and how do we integrate it into the whole corporate structure from -- vertically from the Board of Directors, top management, senior management operation down to the rank and file, and horizontally across all business and operational units. And the whole circle of it is the ecosystem because as a developer, we are like the project manager. We have our vision, we have our aspiration, but we need the whole ecosystem of like architect, designer, engineer, supplier and all the supply chain to support us. And as a landlord, we also need tenants' support because their footprints might [indiscernible], so homebuyers and everybody. So I think the whole ecosystem is very big. And mind you, we also deal with bankers, the investors, and regulator. So real estate, even you are not in the real estate, you live, work and use buildings. So everyone has a role to play and have an impact on the built environment, which account for almost 40% of global greenhouse gas emission. We know that we have big impact, but that also empower us to drive change. So the first I is integration. The second I is actually innovation. That is exactly what we are talking about. Your building will not certainly turn -- become net zero if you don't plan well, but we adopt the whole life cycle. Technology don't come as an afterthought. So we do it when we get hold of a plot of land, how do we use the digital simulation to look at the orientation of the building, to maximize the cross ventilation, natural lighting, natural wind, that actually help us to reduce heat gain by 20% right up front. And we are next to the equator. Singapore is hot throughout the year. So if we don't reduce heat gain, you will just rely on air conditions that will really create a lot of carbon footprint. And what sort of methods do we build is also important. If you use the PVC prefabricated prefinish volumetric technology that actually help us to raise productivity by about 30% to 40%, shorter production time, shorter impact on environment and safer for the worker. So this is very important. And of course, something we learned over the last few years is turned to nature for solutions. [ Ultimate ] design can help us reduce heat gain and solve a lot of problems. And as a small city state, we need to look at green and water features and [ all ] to cool our environment, whether working environment or residential. So the third I is about investment, okay, put money where your mouth is. There are technologies around that can help you really decarbonize, but they don't come free, and they don't come cheap. So we need to look how to tap in to the increasing ESG funds and also the sustainable finance that are really fast growing. And then the last I is impact, we must measure impact. You can set ambition and goal, if you don't track performance, you don't report it, you won't know what gets measured gets managed, which is very important. So these are the 4 I's that we look at. Very complex business, but we try to remind ourselves that everything we do, it has to be clear and you must be able to measure the impact, and you must be able to report. Because even you don't want to report your investors want it, and your stakeholders want it and also even banker. When you want to apply for loan, they also look at your ESG performance. So I think these -- the 4 pillars are very important for us to make sure that we can accelerate action through sustainability, focus, strategy, not looking at today but tomorrow as well.

Okay. That's very practical. Thank you for that. So just changing tack a little bit, then Harish I'm thinking about SELCO. You've got a very strong focus, as I understand it on social entrepreneurship. Can you talk a little bit about this and the role of local entrepreneurs and technicians in driving the adoption of the solutions that you're rolling out? Because your operating context is so different from Esther's. So yes, tell me a bit about the role of entrepreneurship and how that is helping you provide these clean tech solutions often in rural and in off-grid areas.

So just, Sally, that [ the chute today ] is we have so much focused on solar panels and batteries. That's not where the problem lies. And see, when I borrowed a solar power hospital for an autoclave, everybody complains solar to be expensive. Nobody talks about the inefficiency of the autoclave or the swing machine. Nobody talks about the inefficiency of the dental chair and the baby warmer, and solar gets blamed. Your buildings are poorly designed, your autoclaves are inefficient. You have -- I mean most of the maternal labor rooms in the world are execution -- looks like execution chambers, right, inefficient autoclaves, complete dark buildings, no windows. We need to work on efficient appliances where the large companies have to be held responsible for -- like high-efficient baby warmer is 100 watts. The ones that are sold in the world are 800 watts and then people blame solar to be more expensive. If entrepreneurship has to take off, it's not only solar cost coming down, but the demand side equipment and the livelihoods like the [ hammer swing ] machines, the silk weaving machines, the rice mills, those efficiencies have to actually come up, decreasing the value leading to more local entrepreneurs, how can a utopian entrepreneur actually succeed in selling a rice mill, solar powered rice mill? Only it's not because of solar power he's not succeeding. It's because the rice mill is inefficient. So the entrepreneurship in the world will increase drastically once the bigger companies start looking at innovations in their livelihood products as well as in the health centers. Nobody in the world is working on an autoclave, which is what every maternal labor room in the world requires.

Why is that, do you think?

Because it's not sexy enough -- because it's -- wait, I will tell you why, I'll tell you. Because, the medical [ income ], if you look at one of the big guys which I don't [ want to name, that start with GE is ] they said they are more concentrating on the value of every equipment that they produce, not on the efficiency. How many more bells and whistles that are required. And that's completely antithesis to how you want to actually push off, right? And nobody wants to work on rice mill. All the answers actually want to work on a new app, which is more sexy on a resume to get a job, but not on a hammer mill or a Blacksmith blower, tell me how many people in the world look at innovations in Blacksmith blowing. Zip, until we flip the chart of what innovations actually mean and not focus on the supply side, but focus on the demand side, you'll see an uptick on entrepreneurship.

And so that's really interesting because I think what you're saying is the tech in itself is a bit of a red herring unless we actually look at the efficiency of the use of those products.

Also is agriculture, right? Who is innovating rice mills, [indiscernible], millet graders, who? 0.

So we should talk to [ Odem Acre ], actually, because I'm sure Dave would like to talk to you about that. Thank you very much indeed. So over to you, Roy, if I may. So obviously, this landscape of climate technology is rapidly evolving. You mentioned that a moment ago. How do you as Third Derivative stay up to date and ensure that the startups that you support remain at the forefront of innovation? So can you tell us a bit about the selection criteria? Because I think you said a moment ago, this is very rapidly evolving, lots of requests for funding. How do you stay up to date? How do you make those decisions about where to place the investment.

Yes, not easily. And it's a constant struggle. But maybe I'll just build -- because Harish, speaking to my heart, I'm going to build a little on his comments first, and I'll circle around your answer. So I think part of the challenge and this question, silver bullet, red herring, right? It comes up -- I hear another question here at Climate Week, which is, should we be innovating or should we be scaling the things that are already proven and already work? And I -- there's something about that question I just want to challenge because it presumes it's an either or. And it thinks of innovation, I think, in this classic kind of fallacy, which is that it's the light bulb goes off and something that didn't exist now exists, right? But most innovation out there does not function that way. It's a product of an ecosystem that is really collaborative. And so we -- and this sort of answers your question, on the Third Derivative team, we think of 3 big chunks of innovation, and we need all of them, right, that might be -- where the school of fish at least has 3. The first is that sort of classic -- if we had cost-effective fusion tomorrow or carbon dioxide removal that was permanent and low energy need, like that would be a game changer. Tomorrow would change the game. We do need to work on those, absolutely agree. The second are the innovations we know we will need for the end game. Even if we abate all the other emissions, things like steel, cement, aviation, shipping. These are not easy to just standard electrify. There's going to be solutions, which we have to start working on now for that end game. But the most important that Harish was sitting on this perfectly, which all the innovations out there that help the things we know move faster. So innovations in permitting, innovations in energy efficiency with underlying equipment, long-duration energy storage is going to make all the variable renewables much, much more cost effective in those grids. So we think of these as innovations that enable scale in the game we're playing right now today, and we have to play better and faster. And they're not -- you can't -- again, you can't innovate those in a lab with no knowledge of the industry. You have to get out there to the rice field and understand what's the underlying challenge? What -- how can we improve this process through a first-hand knowledge of the system? And so that's actually -- our practitioners at their derivative really do come from industry. We tap into the 700-plus experts across RMI who are tied well in the industry to really stay grounded in what's happening really today. It's less of the draw on a whiteboard what the future is and create an innovation that gets you from point A to point B. It's what are the innovations happening now that need to move faster and need support, need to be connected to the customers are informed by the on-the-ground experience. I think that's the underlying impetus here.

I think that's really interesting. It speaks to definitely the work and approach we take at Forum for the Future, which is what you're basically saying, you need to take a systems approach. You can't think about clean tech or innovation in isolation of the context in which it's operating. We need to think about the system and the system transformation as a whole, and that's definitely at the heart of the work that we do at Forum. So I have one last question for each of you, which is if you had -- if I were able to give you a magic wand, and I would love to be able to give you one, but we can work on that. But if you had a magic wand, if there was 1 thing that you can think of that would really maximize the potential of clean tech or 1 thing that you think that needs to be done differently. And you may have sort of already partly answered this. But I guess what we'd like to do is to give the audience some inspiration, some sense of how do we take this clean tech that could be a silver bullet, it could be a red herring. I think we've decided it's neither. It could be both. But how do we take clean tech and really maximize its potential when we're thinking about that real urgency that Chris was referencing earlier to get to net zero? So what's the 1 thing that you would love to see happen differently? Because you never know, there might be a very good [ mother ] in the audience that it could take that away. Esther?

Well, I really wanted to [ visible ], but you must know how to use it, how to apply it and you must have a very good skill to shoot where -- at the right place. So, I think the bullet may be there, but what is that you couldn't manage to shoot and how you shoot it and where to shoot it effectively, it is still human. So, human and technologies work hand in hand together.

And so what you're saying then is, let's not just view this as a technological issue. We also the [indiscernible]

I think we all say about the same thing. Technology, a lot of startup there may not be so many unicorns. It's about application. You can use certain technology, but how do you apply it to look at the pinpoint of like the building sector? How do we decarbonize operation, how do we use than sensor technology to really identify issues and manage it with resource and energy efficiency as top priority. That's what exactly what we do.

And I mentioned systems change. And one of the early pioneers and system change was someone called [ Dawn Anna Meadows ] you may have read her work. But she talks about the deepest lever of the system change being unwind set. So that's exactly that point is our values, it's our belief. It's how we act as humans. So let's not forget that. Harish?

I would say 8 to 9 innovations in incubation centers in Asia, 8 to 9 in Africa and 6 to 7 in Latin America. We need to reverse it. We need to create centers of innovation and incubation in Zambia, in Indonesia, in Philippines, in rural India, I think we have too top-down approach and the innovations and entrepreneurship needs to come. Where? Failure capital needs to be put in for the young Africans and to actually fail so that then they can succeed, and there is no failure capital. If we create this incubation and innovation centers across the [ south ] you actually look at those 4.5 billion people would do not need to come into the next phase of the climate problem. We are the problem right now. So they are the solutions who can actually lead us to be better world in many ways.

So let's distribute the innovation to where it can really make a difference. Thank you. Roy?

Yes. I think our panel and the prior one have already hit on a couple of system level ones that I think are critical, right, transmission. We really need to solve permitting. But there's another piece and I think Harish has already hit on this, that as I reflect on where the intersection of future human health and the climate crisis are coming, it's cooling. Cooling of the people, but cooling of our food, of our medicines in our industrial processes. These are all flavors of a global challenge that is getting worse and more difficult as our systems are disrupted and the pain and the loss and the burden is going to be borne primarily by people who live on, near or south of the equator. Not the nicely air-conditioned places we're in like today. And there's a few technologies that I think right now we're really excited about, but they're kind of stuck in the lab. So I guess I'm using my magic wand to bring them out and get them into the real world. We think of cooling pretty frequently as the standard compressive cycle that is still pretty energy efficient. There's a lot we can do to make that process a lot better. RMI has run the global cooling prize to reduce the climate impact of a standard wall-mounted air conditioner by 5x, and we have technologies now going to market through that. There's another one which is stuck in the lab. I think of this passive daytime radiative cooling. So an engineered material, it starts with ultra-light white paints, but can go even further and material that increases the efficacy of rejecting heat into the atmosphere, even in daytime conditions and in a time like a power outage that coincides with a major heat wave, which would be very, very destabilizing to a lot of communities, this can reduce ambient temperatures in the building by up to 7 degrees Fahrenheit. And we need more of those, right? Those I talked to great professors who are like, "I want to take 5 years to get this out of lab" and I'm like, "I want you to do that in 5 months." What can we do to like get this into the real world and manufactured faster?

Great. Well, we did it with the COVID vaccine, so maybe we can do it with cooling as well, to supply a little bit of urgency and determination. Well, we're out of time. So that's the bad news. The good news is, I think there's lunch next. If I would -- just one last ask of you all. Let's just join and say our thank you to the panel. I think there is lunch now, Billy. I just want to thank you very much to all our panelists and our speakers from [ afore ] and also Sally for moderating a brilliant session. Thank you, Sally.