L'Air Liquide S.A. (AI) Earnings Call Transcript & Summary

Good day, everyone. This is Aude Rodriguez, Head of Investor Relations. Thank you very much for attending the call today. Available on our website, you will find our 2023 sustainability report on today's presentation. Joining me today are Diana Schillag, VP, a member of the Executive Committee supervising sustainability, health care and group procurement. Armelle Levieux, member of the Executive Committee and group HR VP. Armelle joined Air Liquide a few. months ago and Ashutosh Misra coordinating sustainability development. Let us go directly to Slide 2. In the agenda, we will start with the overview by Diana, the key elements of our sustainability conditions and strategies then Ashutosh and Armelle will go over the details of our performance in 2023 on the various dimensions of sustainability. Over to you, Diana.

Thank you, Aude, and good day to everyone. I'm very pleased to welcome you to our annual ESG call and to share with you an overview of our progress on sustainability. Let's turn to Slide 4. Air Liquide sustainability is more than a stated ambition. It is a commitment with concrete actions. This is why the group's strategic plan advance, we have placed extra financial performance at the same level of importance and rigor as financial performance, and it is fully embedded in our governance. You recently saw the publication of our 2023 annual results, which showed that Air Liquide achieved solid financial performance, highlighting the resilience and the quality of our business model. In parallel, our extra financial performance was equally robust and demonstrates that the focus on critical ESG topics are producing results. Please turn to Slide 5. Let us start with the deep rooted convictions that shape and drive our sustainability strategy. Air Liquide is deeply committed to creating a positive impact on both the environment and society. Our strategies and actions are designed to address crucial challenges the world faces today, where we can make an impact. We strongly believe that we have an important role to play in decarbonizing the planet by not only reducing our own emissions, but also helping various industry to make progress on their decarbonization pathways with the use of our technologies. It is with these convictions that we have committed to carbon neutrality across our entire value chain by 2050, with intermediate milestones in 2025 and 2035. For us, a more sustainable planet also requires attention beyond CO2 through the conservation of natural resources like water and the preservation of biodiversity. This is why we are implementing water management plan at sites, which are most at risk of water stress, and we have made new commitments related to biodiversity. Creating a positive global impact also means undertaking actions that enhance the well-being of society. It starts with caring for our people by building a safe and inclusive work environment, where they can draw strength, thrive and innovate. We have, therefore, taken actions in the field of safety, diversity, inclusion and equal care coverage. Beyond caring for our own teams, we strive to be useful to the society as a whole. In health care, we are seen by our ecosystem as pioneers driving value, and we strongly believe in our ability to enable transformation across health care systems across the world, whether it is by facilitating access to medical oxygen in low and middle-income countries, all by accelerating the shift to outcome-driven treatments for patients in mature economies. Being useful to society also means giving back to the communities that we operate in. This is why we give our teams the opportunity to serve their local communities to make a positive impact by providing on-the-ground support and leveraging their skills and commitments to support local projects. Please turn to Slide 6. The convictions that I just mentioned are embedded in the 3 pillars of our ESG strategy and the associated commitments for the environment, for health and for all. And you will be hearing about our progress on these commitments from Ashutosh and Armelle in the next section. Please turn to Slide 7. We are firmly positioned to decarbonize our value chains with our technologies, our strategic partnerships and our strong global presence in key industrial basins while at the same time, seizing business opportunities with solutions to decarbonize are becoming increasingly important. We rely on 3 decarbonization levers to decarbonize our own operations. The first lever is sourcing massive volumes of renewable energy for our operations through power purchase agreements and other market instruments. This enables us to provide molecules such as oxygen, nitrogen or hydrogen with a significantly lower carbon footprint to a variety of our customers. The second lever is how we manage our assets, deploying technologies to reduce energy consumptions as well as emissions. The third lever is carbon capture and storage, which has been identified as a critical lever for reaching net 0 by leading international agencies. Beyond using these 3 levers to provide decarbonized molecules to our customers, we also provide them with solutions to reduce the emissions of their processes, especially in hard-to-abate sectors such as cement or steel. For example, with the use of our proprietary Cryocap technology, we are not only able to significantly reduce direct emissions from our own assets but also able to deploy it at customer sites and help them decarbonize. And we are deploying all these levers simultaneously. However, one needs to recognize that the ramp-up pace is not fully under our control. The environment we operate in needs to evolve as well at a sufficient speed, accelerating the demand for low-carbon solutions while setting in parallel support of policy frameworks, partnerships, advocacy and infrastructure buildup to accelerate the path to net 0. We are convinced that we will only succeed if we act and lock step together with our customers and stakeholders, with collective will, determination and speed. Let's turn to Slide 8. As you can see, our actions are delivering strong results in all ESG dimensions for the environment, for health and for all. In line with our commitments on the CO2 trajectory, our absolute CO2 emissions continue to decrease. On health, we continue to make robust progress on personalized care plans for our patients as well as facilitating access to medical oxygen. And on the social front, our focus remains on enhancing diversity and inclusion within the organization while continuing to ensure the well-being with continued deployment of a common basis of care coverage worldwide. Please turn to Slide 9. Our sustainability results continue to be recognized not only by our customers who see value in our innovative solutions, but also by leading extra financial rating agencies. We remain committed to transparently communicating on progress on our objectives and bringing more visibility to the world about the actions we are undertaking. It is for this reason that we remain in the top quartile and among the best in class on various ESG ratings. I will now hand over first to Ashutosh, followed by Amelia to present our performance on key ESG metrics in 2023.

Thank you, Diana. Let us go to Slide 11. Advancing for the environment is one of the key pillars of our ESG strategy. This includes our focused actions not only for the climate, but also in areas such as water and biodiversity. As a responsible company, we are committed to preservation of all aspects of the environment. Please turn to Slide 12. First, let us look at our performance on CO2. Our absolute CO2 emissions continue to decline now for 3 years in a row despite significant growth in business. In 2023, we saw a 4.9% drop, which is equivalent to 2 million tonnes relative to the 2020 baseline. We are on a robust path to achieving the committed inflection point in 2025 as well as the trajectory for a 33% reduction by 2035 and carbon neutrality across the entire value chain by midcentury. Our commitments and performance on CO2 support 5 UN sustainable development goals related to climate action, clean energy, industry and infrastructure, responsible production and partnerships. We are now on Slide 13. The reduction in emissions that you just saw are being enabled by the decarbonization levers that Diana illustrated before. The deployment of these 3 levers may not produce results in the same year, but they are critical for achieving the trajectory that we have committed to. First, look at the progress made on the decarbonization of our assets. Using the first lever, which is low carbon electricity sourcing, in 2023, we signed new renewable power purchase agreements that will bring more than 1.5 terawatt hours of renewable power, when in operation in South Africa, Benelux and China to decarbonize our operations. As the underlying renewable capacity comes online, this would amount to a reduction of our CO2 footprint by 1.2 million tonnes per year. On the second lever, which is asset management, we launched the electrification of 2 steam-driven air separation units in China, which would amount to an additional reduction of 370,000 tonnes of CO2. We also launched construction of our largest electrolyzer to date with a capacity of 200 megawatts to enable production of renewable hydrogen in Normand'Hy. Now for the third lever, which is carbon capture and storage, in 2023, we announced plans to build, own and operate a world-scale carbon capture unit, leveraging our proprietary Cryocap technology. The new unit will be installed at the group's largest hydrogen production plant in Europe located in the port of Rotterdam and will be connected to Porthos, which is one of Europe's largest carbon capture and storage infrastructure that will enable it to reduce emissions by 2.5 million tonnes of CO2 per year. Then in terms of helping our customers decarbonize. We have a robust pipeline of investments in energy transition projects, which are linked to long-term contracts with our customers who are willing to pay a premium for low-carbon products. 12 large industries projects, which represent around EUR 2.7 billion of CapEx have been awarded European funding. Among them, 2 projects have recently been signed and are now included in the backlog. Another electrolyzer project, which is the Trailblazer project has already started in 2023. We have signed MOUs with cement and lime production companies for bringing our carbon capture services to help them decarbonize. And the remaining 9 projects are on the move to final investment decision and represent more than EUR 2 billion of CapEx. Now finally, in terms of decarbonizing the ecosystem around us, we are convinced that partnerships are critical for bringing collective strengths to the ecosystem in which we operate. In that spirit, we have formed JVs in the area of hydrogen mobility and in electrolyzer production as well as the multiple partners to foster the use of hydrogen for heavy-duty mobility applications. We are also proud to be named as a partner in 6 out of the 7 clean hydrogen hubs in the U.S. So as you can see, these projects not only bring significant growth potential in the energy transition field, but also opportunities for Air Liquide to decarbonize our assets and operations. Now we move to Slide 14. Our commitment to decarbonize is not only for our own assets and operations, but across the entire value chain, we operate in. That is why we have enhanced our focus on actions to reduce scope 3 emissions. Now if you look at our Scope 3 profile, there are 3 categories that contribute to greater than 85% of Scope 3. About 20% comes from procured goods and services, where we have implemented a procure-to-neutrality road map for all our critical suppliers. Another 40% is attributed to upstream of fuel, feed and power, of which more than 60% is upstream of power. As we continue to secure more renewable energy in our portfolio, it will cascade into a similar order of magnitude in the power upstream. Similarly, for upstream of fuel and feed, which is natural gas, we have started engaging with suppliers. We strongly support the Global Methane Pledge, which should reduce upstream methane losses by 30%. And the remaining 28% of the Scope 3 comes from sales of mostly 2 products, CO2 and nitrous oxide for which we are looking on a long-term plan assessing usage as well as the ability for customers to replace these products, which, by the way, are in their scope 1. Beyond these major categories of Scope 3, we have also launched programs to decarbonize our own transport fleet as well as reducing the emissions related to employee commuting and business travels. Please turn now to Slide 15. Beyond reduction in CO2 emissions, we are committed to conservation of natural resources. We consume water in our operations for cooling, for steam generation and for production of hydrogen via electrolyzers. Recognizing that water is a critical natural resource for which we have the responsibility to conserve, we have made commitments to implement water management plans at high water consumption sites in areas of high water stress. We continue to deploy the plants at priority sites and have defined group standards for quality of discharge water at our operations. In 2023, over 90% of recycled water was returned to source. To give you an example of the type of projects being undertaken at one of our largest medical gas production sites in France, investments were made in technology to clean water ready for reuse in the production cycle, resulting in a tenfold reduction in the volume of water being discharged. Similar initiatives related to water management are being deployed in various other geographies. Similarly, we are happy to report that our biodiversity commitments have now been validated by Act4nature. This year, we will be reinforcing biodiversity assessment criteria in new projects to ensure that we systematically assess any possible impacts on biodiversity from our operations. Now let us go to Slide 16. The second pillar of our ESG strategy is around advancing for health. We are convinced that we can make a significant contribution to UN's Sustainable Development Goal #3, which is good health and well-being with our products and services that we bring to patients. We believe that addressing the social needs of individuals and communities will improve the sustainability of health care system. Therefore, we have social objectives for health care in both mature economies and low and middle income countries. Let us turn to Slide 17. In mature economies, we aim at providing personalized support for our patients who are living with chronic diseases with the objective to make it easier for them to comply with their treatment and to improve their quality of life. We do this via the use of adapted devices and personalization of support as well as launching new patient-centric initiatives and patient advisory boards. In 2023, 55% of our patients were under such plans, which is a 6% increase versus previous year. Low- and middle-income countries have very different health care challenges and dynamics to deal with. While oxygen is critical to saving lights, access to medical oxygen remains sparse, especially in many developing economies. It is our conviction that we can play an important role in facilitating access to oxygen, and we are doing this via our access oxygen program. To date, close to 2 million people in rural areas of Senegal, South Africa and Kenya have been facilitated with such access through 260 primary health care facilities by providing them oxygen cylinders, concentrators, pulse oximeters and regulators. Let me now hand over to Armelle to cover the third pillar of our ESG strategy advancing for all. Please turn to Slide 18.

Thank you, Ashutosh. Creating a positive impact on society is important to us. As such, we are committed to creating a safe, ethical and engaging environment for all our employees. We also strive to foster a more inclusive society and support the local ecosystems wherever we operate. At Air Liquide, we are convinced that diversity is a source of motivation, performance and innovation. Women have typically been underrepresented in areas such as engineering and science, which are key for tackling the technical challenges of the future. This is why we are committed to increasing the proportion of women in manager and professional positions. In 2023, we continued acceleration of efforts to meet the 2025 goal of 35%. In 2024, with the dedicated diversity manager in place, we will be deploying diversity action plan toolkits adapted to geography specificities by country. This tool kit will enable us to plan and monitor actions to enhance diversity and will be rolled out in 2 steps. First, there's an assessment phase to identify the specifics of the country. And based on that, a series of action plans that local entities can choose and implement to improve diversity and then monitor. Well-being of our employees beyond the workplace is crucial because it directly influences their overall health, productivity and job satisfaction. At Air Liquide, we are committed to a holistic well-being of people, helping foster a positive organizational culture. To this end, in 2023, we made significant progress in providing a common basis of care coverage to all of our employees. This includes health insurance, life insurance and a minimum of 14 weeks paid maternity leave. At the end of last year, 78% of our workforce globally had access to such common care coverage versus 42% the previous year, on track to meet the objective of 100% by 2025. Our 67,800 strong workforce is also a remarkable reservoir of talent, energy and willingness to give back to their communities. We are actively leveraging this shared commitment to empower our people to volunteer through a structured and engaging program called Citizen at Work. Our objective is to empower 100% of our people by 2025 to dedicate a portion of their working hours to lend a helping hand in their local communities. In 2023, 73% of our workforce had access to such opportunities. We're convinced that investing in our people and the communities where we work is essential to ensuring a sustainable future. I now invite Diana for the conclusions. Please turn to Slide 20.

Thank you very much, Armelle. In conclusion, we are performing in line with the commitments we have made in all dimensions of ESG. The 2023 results show that our extra financial performance is as strong as financial performance with a clear strategy, the right governance and solid execution. Our CO2 emissions continue to decrease, while at the same time, the business growth is strong and profitable. This means that the decarbonization levers we are deploying are working within a framework of a robust business model. Our pipeline of energy transition projects is strong, and this reflects our confidence of our customers in Air Liquide's innovative solutions to help them decarbonize. And all of this has only been made possible by the continued efforts of all our teams around the world who I would like to very warmly thank for these results. Moving forward, we remain focused on delivering our commitments. This means continued efforts on all dimensions on our CO2 trajectory, on Scope 3 actions, on bringing innovative decarbonization solutions to our customers, on water management and on the diversity and other social programs. As 2024 will be the first full year of reporting under the CSRD guidelines, we take the new reporting regulations as an opportunity to continue our transparent approach of reporting while leveraging this reporting standardization to streamline and automate as much as possible. Nevertheless, one has to recognize it is a significant reporting burden. And while we address it, we intend to make sure we maintain our team's focus on actually delivering concrete results. My last comment, we cannot do it alone. It requires collective action to make this change happen. First, acceleration is needed in the development of renewable energy infrastructure, carbon markets, CO2 things that we mentioned before and policy frameworks. Second, as we help decarbonize our customers, in some instances, we ourselves are taking on additional emissions on our CO2 footprint. We are not hesitant to do so as we believe that a collective approach is the only way to meet the net 0 pathway for the planet. Yet it would be useful if the markets recognize these complex dynamics and reward those who are really making the change happen. We hope that you have found this presentation insightful, and we will now take your questions. Thank you very much.

[Operator Instructions] Now we will take our first question, and it comes from the line of Alexander Jones from Bank of America.

Two, if I may. The first in the presentation, you talked about how the ramp-up pace of your decarbonization efforts isn't fully under your control and your reliance on external factors. Could you highlight for us which of those sort of external factors, be that government policy or customer willingness to move is currently the most challenging for you and is sort of binding your progress on that decarbonization? And then the second question, you also talked in the presentation about alternatives to CO2 and nitrous oxide. I wonder if there are any examples you can give already of end markets where you found alternatives and what those are?

Thank you very much for this question. So maybe just the first word of introduction. I will then hand over to Ashutosh to go more into detail. So regarding the first part of your question about the external factors, it is the whole ecosystem that needs to move. Of course, it is policy frameworks that we have clearly identified, which will really help to move the whole ecosystem. Very often, it comes with a price tag. So we need as well to onboard our customers to identify solutions that comes of low-carbon offers. And then there's as well the availability of things, the carbon capture and sequestration things where we are still at the beginning of what I believe will be a long road ahead of us. So maybe Ashutosh, let you complement.

Indeed, Diana and thank you, Alexander. Let me start off by saying that in terms of the most challenging factors, the world itself is not on a 1.5-degree track, meaning the existing policy frameworks, the existing habits, the existing infrastructure is not supporting a 1.5-degree trajectory. So we -- since we are dependent on the world around us to decarbonize at a sufficiently fast pace, we have that challenge. I would say today, the buildup of renewables, while it is continuing to happen at a reasonable pace, it needs to accelerate. The second most important part believe are the carbon pricing mechanisms, which are scattered all over the place. As you know, there is no standard carbon pricing mechanism. So today, for the customers, it may be less expensive to emit than to abate. And unless this happens, we are not going to see the change in customer behavior that will drive them to adapt or adopt rather the decarbonized solutions that we are offering. So I would say, infrastructure policy and carbon pricing are -- I would consider them all at an equal pace of need to be accelerated. To your second question about CO2 and nitrous, so CO2, there are 2 aspects of it. The first most important one that we are considering is supplying more bio CO2 to our customers because most of the time, the CO2 is going for beverage applications and so on. And there are no known alternatives other than to make the CO2 of a greener quality, which is the bio CO2. That's what we are driving. The second one on nitrous oxide, there are 2 type of applications that it goes into, one in the electronics segment, where abatement techniques are -- we are fully encouraging, and we are working with the customers to see how much efficiency of nitrous abatement can be enhanced so that less nitrous goes back into the atmosphere. But for health care application, primarily in anesthesia applications, we have more challenging task because there are no known alternatives to nitrous in sedation techniques. So again, working closely with the customers are -- is the way that we can help reduce those 2 emissions.

[Operator Instructions] And the question comes from the line of Jean-Luc Romain from CIC Market Solutions.

When you first presented your ambition is to reduce your emissions by 33% by 2035, you highlighted a small proportion of ASUs, representing a large proportion of your emissions. I guess those ASUs are priority to be replaced or for CO2 emitted by these ASUs to be abated. What's your progress on these specific ASUs?

So thank you, Jean-Luc, for the question. So there are 2 cases. One is certain ASUs are what we call steam-driven ASUs where they are not electrified. So as we mentioned earlier, 2 of our steam-driven ASUs are in China are already in the process of conversion. This helps reduce the CO2 footprint associated with them by electrifying them. And as you get the electricity to be more renewable in nature, it further reduces the CO2 footprint. That's number one. The second comment, I believe, if I understand correctly, you were talking about some ASUs, which is not some ASUs, but we actually mentioned in some key geographies, which is where our retention are -- is to secure more renewable energy. And that is where you see the more than 1.5 terawatt hours of renewable PPAs that we have signed this year to decarbonize our ASUs in South Africa, in China and in the Benelux. But I can provide you more details if that's not the direction you were taking the question.

And the question comes from the line of [ Hanna Hauser ] from Federated Hermes Limited.

I have 3 questions, if I may. You have disclosed some levers for decarbonization, but it would be interesting for us to know which lever is really driving decarbonization and to see some quantification of the contribution of each of these levers. Then we were also wondering whether you could demonstrate that your investment in electrolyzers and CCS are indeed having an impact on the emissions intensity of your hydrogen production? It would be good to see some more forward-looking disclosure that shows how this investment is paying off in terms of decarbonization. And then finally, you have given us some information on Scope 3 today. We just wanted to confirm that by the 2025 AGM, you will have set some time balance Scope 3 targets.

So maybe just one word about the 3 levers. One is the renewable energy, and this is clearly the one where we have been making excellent progress. This is the one where we see actually a lot of contribution coming and you have -- Ashutosh just mentioned in the previous questions, how much is actually being leveraged from this particular lever. Now the second one being the asset management. And here, we are making as well good progress in decarbonizing, improving the efficiency of our own assets, our own production sites. And the third lever is the carbon capture usage and storage. And this is probably the one where we still have a road ahead of us to deliver this and to remain on track with our objective. And this is where we need actually the -- an acceleration in the ecosystem to implement those things and to secure as well the access to those things for our customers and, of course, for us as an enabler. And in order to complement and address the other 2 questions, I hand over to Ashutosh.

Thank you, Diana. [ Hanna ], to your question about quantifying the -- between the 3 levers. So to give you an idea, when we do a few steam-driven ASU conversion, the reduction in emissions is about 1% for such a project. It's about 1% emission reduction that happens with 2 steam-driven ASUs. Second, when we are doing a carbon capture project, it is in the range of 0.5 million to 1 million tonnes of CO2 reduction each time we do such a project. Now which levers are actually producing results today? So what I can tell you that the renewable energy sourcing lever is already starting to have an impact because many of the power purchase agreements and other market instruments have been started a few years ago, and it takes time for them to have an impact on your actual CO2 footprint. Now as we have signed these new PPAs, they will start producing additional reductions as these projects come online. CCS lever is the one that has not started to produce any significant impact on our CO2 footprint just yet because these projects are just now starting and will be operational more in the 2026 time line. So I hope that answers the first part. The electrolyzer related emissions intensity. So this -- here, I would say that -- what we are focusing on is the scale-up of the electrolyzer technology, starting with the 20 megawatts that we first had in Bécancour and have just now started in Germany. And going on to 200 megawatts with the Normand'Hy and some of the other projects that are now coming on -- are going to be coming online. So what I would say is that in terms of an actual impact on the CO2 intensity as a result of electrolyzers, you will not see that in 2024 results because 20 megawatts is just a very small portion of the total hydrogen that we produce. But as these capacities are going to come online, you will start to see a significant reduction. And these are not just hypothetical projects. They have gone through their final investment decisions or will be going through those in the coming months. On the final question on Scope 3. What I would say is that we have identified the levers. We are engaged with multiple stakeholders, including the work group on the chemical sector with fans-based targets and other think tanks on the profit. For the chemical sector, it is a complex topic because of the heterogeneity of emissions and the interdependence of the emissions. So we are waiting to have clarity on methods that are standard and applicable and relevant to us before we take a quantitative target. But rest assured that whether or not we have taken a quantifiable target just yet, we do have internal targets that we are working on in all different categories that are relevant to us, as I had talked about a little bit earlier.

[Operator Instructions]. There are no further questions. I would now like to hand the conference over to Air Liquide team for any closing remarks.

What I could do is maybe just add maybe a word on Scope 3 because usually, when we interact with you, with our investors, we often get a question on net-zero commitment on Scope 3. So maybe if -- for those of you who might be interested in it, I suggest that maybe I go through the details of our commitments and what we are doing. So as we have seen last year in 2023, we actually announced the objective we are on our customer sign that we want to engage with our customers, with the top 50 customers to make sure that they are committed as well to net zero. This is something that is well underway. We are today at 73% of those top 50 customers being engaged. So we are very confident to be able to reach the 100% target for 2025. Now the other elements that we are focusing on and where is our largest -- what are the largest categories in our Scope 3 emissions. I would say the first largest one is really the upstream the emissions from energy production that are not included Scope 1 or Scope 2. So those are really the ones that we are focusing our effort on. Then obviously, the 11th category, the use of sold products and we already had the discussion about CO2 and nitrous. So that was the point that Ashutosh was making. And last but not least, procurement. So the category one upstream again. So the footprint of procurement, where we have taken action to engage our suppliers on a renewable road map and as well to make sure that they as well commit to net zero. So it's really across the board. We are very much engaged across the value chain with our customers, with our procurement teams in order to have a positive impact on our total Scope 3. But as Ashutosh just said, we are not ready today to commit to quantifiable objectives simply because the standard and the methodologies are not yet clear. Not for the whole chemical sector, where SBTI has taken a product-based approach and neither not even for the -- and even further out for the industrial gas segment because this pure product-based approach, well, it's only complying to part of our activities. So there, we are waiting for this to clarify. We are taking active part in the different work groups in order to identify and define this methodology but this is still underway, and this is why we felt that we -- when we take a commitment, we take it very seriously, and we like to deliver on it. So maybe we are a bit too careful, but this is the approach that we have always taken to maybe deliver first and then be sure when we are ready to take a commitment. So this is the remaining question. So maybe I don't know if that was clear for you, if you have additional questions. So I maybe open the floor once again. In case we have another comment or a question from those of you who are still there.

Yes, of course, [Operator Instructions] And the question comes from the line of [ Hanna Hauser ] from Federated Hermes Limited.

First of all, we really want to recognize the leadership that Air Liquide has on all topics, ESG and decarbonization and so on. But we want to ask if it maybe is time to set more ambitious goals for Air Liquide given this leadership. So you have the goal of reducing your emissions by 33% by 2035, obviously. The IPCC report expects the global need to reduce emissions by 43% by 2030. So our question is, do you have any intention of going more ambitious with your targets in future?

Thank you, [ Hanna ], for that question. So let me put our position in the following manner that there is a global need for the planet to decarbonize at a certain pace. Then the planet needs are translated into country needs and country needs into sector needs. And one thing that the International Energy Agency and the IPCC also indicate is that not all sectors can decarbonize or should decarbonize at the same pace. Not all geographies can or should or will be able to decarbonize at the same pace. So when we are looking at the breakdown of this 43%, we are looking at the power sector decarbonizing much faster because everybody is reliant on the power sector to run their industrial operations. And if you look at the IEA numbers, it's quite clear that, first of all, it will not be a linear curve for many industries. And that is why on the SBTI front, we have difficulty in the absence of an SDA to call ourselves a 1.5-degree or net-zero terminology because linear reduction is a mathematical choice. It's not reflecting the reality of how an industry can decarbonize. Therefore, what we are totally supportive of is what the international bodies are going to put as the correct decarbonization pathway for the sector in which we operate. So as you probably have seen the SDA for the power sector, which is like extremely fast, extremely rapid decarbonization. But for the chemicals it is much of a -- much less of a steep slope with more of a plateau in the beginning, reflecting the reality of the decarbonization challenge followed by a steeper curve, which is in the 2030-plus time frame. And that is exactly what we are modeling our CO2 trajectory on. And if we see the infrastructure and the policy frameworks and the customer demand for decarbonized product around us accelerate, we will, of course, keep pace with the expectation at that point. So at the moment, we are focused on delivering what we have committed. But of course, we'll continue to reassess, depending on how the world around us evolves.

[Operator Instructions] And the question comes from the line of [ Marina Arabe ] from [indiscernible].

You stressed several times the need for the policy framework to change. Could you comment on your engagement with policymakers and any [ lobbying ] activities in that direction?

Yes, indeed. Good question. We -- and it's a geographically specific question. So I'll give you an example, let's say, in the U.S. with the 45V consolidation phase that is happening. So we did see at the end of last year, the treasury coming out with the guidelines on what would qualify for tax credits under 45V for hydrogen production. Some of those conditions are extremely onerous and may actually decelerate the growth of adoption of a new energy vector like hydrogen. So we are advocating through the relevant associations and individually to bring our input on the 45V framework because it is quite critical for the development of hydrogen, let's say, as an energy vector in the U.S. Of course, 45Q provisions are -- have been updated, and they are much favoring the carbon capture cost. So one element regardless in terms of whether it's advocacy in U.S. or in Europe, where the most advocacy actions are happening today, it is to help people understand that energy transition is not a step change. Number two, it requires nascent technologies, nascent methods of decarbonization to be incentivized in the beginning. Otherwise, they will be delayed in terms of being adopted. So any of the positions that we are taking in terms of policies have to be taken carefully into account. So -- also on the policy statements, we regularly assess the position of the associations that we are part of. And at the end of last year, we updated our -- not only our public affairs charter, but the analysis of all -- of many of the associations. This year, we conducted analysis of 33 associations and we found that 5 of them are misaligned and -- partially aligned and one is misaligned. And as a consequence of that, we exited that particular association. So that is another part of what we would call not just the government policy frameworks, but the policies of who we engage with in driving our advocacy positions forward.

[Operator Instructions] Dear speakers, there are no further questions at this time. Please continue.

So thank you very much for your attention. If there are no further questions, and this is what I understand. I would like to thank you very much for your interest for joining us. And I would like to thank as well Ashutosh and Armelle for their time to share with you the results. And we are looking forward to any other communication with our Investor Relations team, who is very engaged as much on financial as on extra financial topics. So thank you all very much, and I wish you a good end of the day.