WEBVTT - Improving Carbon Management With Better Measures 0:00:00.640 --> 0:00:04.080 ESG is constantly evolving. Over the years, it is shifted 0:00:04.120 --> 0:00:09.120 from socially responsible investing to impact to sustainable finance. While 0:00:09.160 --> 0:00:12.680 the terminology continues to change, what hasn't changed are the 0:00:12.800 --> 0:00:17.759 underlying science market pressures, tangible physical and financial impacts of 0:00:17.800 --> 0:00:22.079 the climate crisis, as well as increasing regulatory scrutiny and 0:00:22.200 --> 0:00:26.160 rising consumer expectations. We aim to filter out the noise 0:00:26.239 --> 0:00:29.880 by speaking with industry experts to identify what is really 0:00:30.000 --> 0:00:34.120 driving value. Welcome to ESG Currents, brought to you by 0:00:34.240 --> 0:00:35.480 Bloomberg Intelligence. 0:00:38.560 --> 0:00:41.920 Welcome to ESG Currents. I'm Rob Duboff, senior ESG analyst, 0:00:42.200 --> 0:00:45.880 your host for today's episode. One of the biggest challenges 0:00:45.880 --> 0:00:49.479 in ESG analysis is data. We know in theory what 0:00:49.520 --> 0:00:52.879 the major environmental, social, and governance issues are, but how 0:00:52.880 --> 0:00:55.960 do we measure them? After all, if you can't measure, 0:00:56.040 --> 0:00:59.960 you can't manage. You need comparable, well understood metrics, which 0:01:00.120 --> 0:01:02.520 for many issues are hard to come by. But at 0:01:02.600 --> 0:01:04.800 least when it comes to the world of carbon there 0:01:04.800 --> 0:01:07.640 seems to be one universal standard. Pretty much everyone in 0:01:07.680 --> 0:01:11.160 the market talks about the Greenhouse Gas Protocol. You've all 0:01:11.200 --> 0:01:14.639 heard of Scope one, Scope two to three, pre standard 0:01:14.680 --> 0:01:17.600 stuff in the ESG world, But is that really the 0:01:17.680 --> 0:01:21.400 right way to look at it? As consumers of goods 0:01:21.480 --> 0:01:24.360 or an investor in the production of said goods, will 0:01:24.360 --> 0:01:27.960 a corporate wide scope one analysis really ensure you're making 0:01:27.959 --> 0:01:31.760 the right decision? Enter Carbon Measures, a new coalition of 0:01:31.880 --> 0:01:36.399 industrial businesses seeking to develop a globally adopted framework for 0:01:36.520 --> 0:01:40.839 product level carbon accounting and advocating for mandatory product carbon 0:01:40.880 --> 0:01:44.760 intensity standards. Joining me to discuss this week's episode of 0:01:44.959 --> 0:01:49.200 ESG Hearns is Amy Bratio, CEO of Carbon Measures. Now 0:01:49.240 --> 0:01:51.680 if the name sounds familiar to listeners, that's because Amy 0:01:51.760 --> 0:01:54.120 joined us about a year ago, which she was Global 0:01:54.160 --> 0:01:57.720 Vice Chair for Sustainability at EY, discussing how major CEOs 0:01:58.040 --> 0:02:01.440 were integrating sustainability into business. Try. I highly encourage you 0:02:01.800 --> 0:02:05.200 to check out that episode. Welcome Amy, or should I 0:02:05.200 --> 0:02:06.320 say welcome back? 0:02:06.720 --> 0:02:08.680 Thank you so much for having me back. 0:02:09.040 --> 0:02:11.560 Now, when we spoke about a year ago you were 0:02:11.560 --> 0:02:14.400 at EY. How did you wind up with Carbon Measures? 0:02:14.720 --> 0:02:18.040 Yeah, so I had spent thirty years of my career 0:02:18.080 --> 0:02:21.800 at Y and it was just an absolutely amazing adventure 0:02:22.440 --> 0:02:26.080 and I the closer I got to what's a traditional 0:02:26.120 --> 0:02:28.720 retirement age, the more I thought about wanting to make 0:02:28.760 --> 0:02:31.880 an impact in my second chapter and making sure I 0:02:31.919 --> 0:02:34.359 was bringing the skills and capabilities I had learned over 0:02:34.360 --> 0:02:36.840 the years to it, and so I just decided this 0:02:37.000 --> 0:02:40.040 was the time. And then this opportunity with Carbon Measures 0:02:40.120 --> 0:02:43.640 came my way, where it was putting together my background 0:02:43.639 --> 0:02:47.359 as a certified public accountant and my background and sustainability 0:02:47.880 --> 0:02:51.400 to help drive real progress and reducing emissions. And I 0:02:51.520 --> 0:02:53.240 just couldn't jump at it fast enough. 0:02:53.360 --> 0:02:56.320 Awesome, So what is Carbon Measures and why is the 0:02:56.320 --> 0:02:56.919 market needed? 0:02:57.160 --> 0:03:00.720 Yeah, so Carbon Measures is a business association, and I 0:03:00.800 --> 0:03:03.560 always think it's really important to start with the problem 0:03:03.560 --> 0:03:06.760 that we're trying to solve, and so what we were 0:03:06.840 --> 0:03:09.360 stood up to do is make sure that we are 0:03:09.360 --> 0:03:13.720 aligning business incentives with the actions that companies need to 0:03:13.760 --> 0:03:17.239 take in order to drive a reduction of emissions. At 0:03:17.280 --> 0:03:21.200 the same time they're able to deliver value to their shareholders. 0:03:21.720 --> 0:03:25.120 And so when we look at what is getting in 0:03:25.160 --> 0:03:28.639 the way of reducing carbon emissions today, it's not necessarily 0:03:28.680 --> 0:03:31.840 a lack of ambition or a lack of commitment. But 0:03:31.919 --> 0:03:35.000 if you're producing it good and customers aren't buying it, 0:03:35.640 --> 0:03:37.720 then you're not going to be able to keep producing it, 0:03:37.760 --> 0:03:39.800 And so that's what we're doing. And then through that, 0:03:39.920 --> 0:03:42.680 like you said, we're looking at the carbon accounting, the 0:03:42.760 --> 0:03:44.840 data that you need to underpin that, as well as 0:03:44.880 --> 0:03:46.640 the regulation to help drive that demand. 0:03:46.800 --> 0:03:50.920 Yeah, we definitely love data here at Bloomberg. So you know, 0:03:51.200 --> 0:03:52.920 I think one of the things we keep hearing about 0:03:53.320 --> 0:03:56.000 to really drive that policy is the need to properly 0:03:56.040 --> 0:03:58.680 price carbon. So for example, you know you have the 0:03:58.720 --> 0:04:02.080 carbon the ceband, the carbon Border adjustment mechanism came to 0:04:02.120 --> 0:04:05.080 affect it. Europe just comes to mind. So what role 0:04:05.120 --> 0:04:07.680 would carbon measures play in that kind of policy? 0:04:07.920 --> 0:04:10.680 Yeah, so when you look at that kind of policy, 0:04:11.320 --> 0:04:14.600 we think that everything starts with better data. So policy 0:04:14.640 --> 0:04:17.440 gets made better by the fact that you have granular, 0:04:17.800 --> 0:04:22.960 comparable data at the product level that will allow organizations 0:04:22.960 --> 0:04:25.719 to differentiate their product, but in this case, regulators to 0:04:25.760 --> 0:04:27.320 differentiate their product as well. 0:04:27.560 --> 0:04:29.839 Can you go into a little more detail, you know, 0:04:29.839 --> 0:04:32.160 how do you propose actually measuring carbon intensity? 0:04:32.440 --> 0:04:37.160 Yes? Absolutely, So when you think about carbon intensity, what 0:04:37.200 --> 0:04:41.160 that looks like is how much carbon went into the 0:04:41.320 --> 0:04:44.120 generation of that good, And I think it's really important. 0:04:44.120 --> 0:04:47.440 Then when we talk about product level accounting. In this context, 0:04:47.839 --> 0:04:51.440 what we're looking at for carbon measures is all of 0:04:51.480 --> 0:04:55.080 that hard to abate sectors at the very early end 0:04:55.279 --> 0:04:58.919 of the value chain. So think about the energy sector, 0:04:59.040 --> 0:05:02.159 whether it's the fuels or the energy that goes into 0:05:02.200 --> 0:05:06.160 the grid. Think about the built environment with steel and cement, 0:05:06.680 --> 0:05:11.599 ammonia that goes into fertilizer. All of those goods are 0:05:11.640 --> 0:05:16.240 sold in units, right, So a ton of steel is 0:05:16.279 --> 0:05:20.200 a unit of steel, and we want to calculate what 0:05:20.279 --> 0:05:25.480 are the carbon emissions associated with the generation of that 0:05:25.600 --> 0:05:27.880 ton of steel, And that's what you get to with 0:05:27.960 --> 0:05:32.520 respect to carbon intensity. And so that allows organizations to 0:05:33.240 --> 0:05:35.480 compare if I've got a ton of steel from company 0:05:35.520 --> 0:05:38.120 A and a ton of steel from company B, how 0:05:38.120 --> 0:05:41.240 do those two compare with respect to the carbon that 0:05:41.440 --> 0:05:43.480 was carbon emissions required to generate it? 0:05:43.960 --> 0:05:46.040 Yeah, and I think you know, we always look at 0:05:46.040 --> 0:05:49.320 carbon intensity, and it's always tricky because if you have 0:05:49.440 --> 0:05:51.960 a single product, then it's very easy to take you know, 0:05:51.960 --> 0:05:54.279 what are traditionally thought of a scope on emissions, divide 0:05:54.279 --> 0:05:57.360 that by what you're producing. But if you're let's say 0:05:57.400 --> 0:06:00.280 diversified mining company, you know, how do you do that? 0:06:00.960 --> 0:06:04.560 So is this design to replace the GG protocols or 0:06:04.600 --> 0:06:06.080 is this really just to compliment it? 0:06:06.360 --> 0:06:08.479 This is really to complement it. And so I think 0:06:08.520 --> 0:06:11.680 it's important to think about the different roles that players 0:06:11.760 --> 0:06:15.920 in the ecosystem play. And so when you think about SBTi, 0:06:16.400 --> 0:06:20.560 SBTi was established because companies were making commitments and you 0:06:20.640 --> 0:06:24.080 needed an independent, trusted voice to say that they were 0:06:24.080 --> 0:06:27.520 based on science. When you look at the greenhouse Gas Protocol, 0:06:28.080 --> 0:06:31.839 it was put together to think about the risk associated 0:06:31.839 --> 0:06:36.640 with greenhouse gases for enterprises. There are others like CSRD 0:06:36.839 --> 0:06:39.800 and ISSB that are meant to give data to investors, 0:06:40.279 --> 0:06:42.560 and what we want to do is give that investment 0:06:42.600 --> 0:06:45.000 grade data at the product level so that you can 0:06:45.080 --> 0:06:49.440 underpin a transaction and you can underpin regulation. And so 0:06:49.520 --> 0:06:52.200 if you've got that based data, you can make all 0:06:52.240 --> 0:06:54.279 of the other reporting you do even better. 0:06:54.520 --> 0:06:57.240 I mean one of the big challenges obviously Scope three. 0:06:58.200 --> 0:07:01.120 You know, I hear from many in industry, some of 0:07:01.160 --> 0:07:04.200 them your members about the double counting that's going on. 0:07:04.240 --> 0:07:07.159 Can you get me maybe walk through that problem? And 0:07:07.200 --> 0:07:08.560 how you think you you can? 0:07:08.720 --> 0:07:11.920 Yeah? Yeah, So how I think about it, Well, first 0:07:11.960 --> 0:07:16.240 of all, we're a growing Business Association. We are up 0:07:16.280 --> 0:07:19.280 to twenty six members, and that means twenty six different 0:07:19.320 --> 0:07:23.000 opinions on all sorts of things, including Scope three. And 0:07:23.080 --> 0:07:25.600 so when we look at what we're trying to do, 0:07:25.840 --> 0:07:28.520 it really is to get to that transactional level data 0:07:29.160 --> 0:07:32.360 that's going to allow for the driving of demand, which 0:07:32.400 --> 0:07:35.800 is not what the Scope one, Scope two, Scope three 0:07:35.840 --> 0:07:39.160 framework was designed to do. As you said, some of 0:07:39.200 --> 0:07:41.680 our members don't love that approach and the double counting 0:07:41.720 --> 0:07:44.720 that goes into it. Other members are really supportive of 0:07:44.760 --> 0:07:48.080 that approach, and you know, choose to report against it. 0:07:48.320 --> 0:07:50.880 It's so when I think about what we're doing, it's 0:07:50.920 --> 0:07:53.920 not to displace something like that. But if you've got 0:07:53.920 --> 0:07:59.640 this more granular data that is trustworthy, verifiable, and based 0:07:59.680 --> 0:08:02.720 on actuals early on in the value chain, it makes 0:08:02.760 --> 0:08:04.880 all of the reporting that comes later in the value 0:08:04.920 --> 0:08:05.400 chain better. 0:08:06.280 --> 0:08:08.280 Great. Now, I don't want to get too deep into 0:08:08.280 --> 0:08:10.600 the woods with the numbers, but again this is Bloomberg. 0:08:10.680 --> 0:08:13.520 So yeah, I want to maybe understand a little bit 0:08:13.560 --> 0:08:15.720 and drill down into how you're going to do this. Yes, 0:08:15.760 --> 0:08:17.880 you know, how do you look at a ton of 0:08:17.960 --> 0:08:20.200 steel and figure out how much carbon went into that? 0:08:20.440 --> 0:08:24.000 Yeah? Absolutely, and so one of the things to recognize 0:08:24.040 --> 0:08:27.080 is that we are very early on with respect to 0:08:27.360 --> 0:08:29.640 the work that we're doing, and so we launched back 0:08:29.640 --> 0:08:33.280 in October one of the things we've done to get 0:08:33.360 --> 0:08:35.320 to all of the details. So I'll give you a 0:08:35.360 --> 0:08:38.760 high level answer, but we have launched an expert panel 0:08:39.280 --> 0:08:42.280 with the International Chamber of Commerce where we are bringing 0:08:42.320 --> 0:08:47.240 together all sorts of experts from academia, from science, from business, 0:08:47.360 --> 0:08:50.880 from NGOs to look at the mechanics of how you 0:08:50.920 --> 0:08:54.640 take it from the academic to the implementable. And so 0:08:55.160 --> 0:08:57.679 there will be more work done around that, but at 0:08:57.720 --> 0:09:00.200 the highest level, what you're doing is you're looking at 0:09:00.040 --> 0:09:04.120 all of the materials and processes that go into the 0:09:04.160 --> 0:09:06.520 production of that ton of steel. You need to be 0:09:06.559 --> 0:09:09.640 working with all of your suppliers to understand the carbon 0:09:09.679 --> 0:09:13.439 emissions associated with what they did to produce the materials, 0:09:13.880 --> 0:09:16.520 and at each step of the way, you are adding 0:09:16.600 --> 0:09:20.079 up the data to ensure that you understand what went 0:09:20.160 --> 0:09:23.760 into that production and so, for example, what did it 0:09:23.800 --> 0:09:27.280 take when that blast furnace was being used, what kind 0:09:27.320 --> 0:09:29.920 of emissions were associated with it to produce the steel, 0:09:29.960 --> 0:09:32.080 And you'd be capturing it at each point in the 0:09:32.120 --> 0:09:35.240 process and adding it up, so you've got that total. 0:09:35.360 --> 0:09:38.520 And would that be company wide or would that be 0:09:38.600 --> 0:09:42.320 like for this plant XYZ. You know, we know that 0:09:42.360 --> 0:09:43.800 it uses power from this. 0:09:43.880 --> 0:09:46.480 Source, So we think you've got to get down to 0:09:46.520 --> 0:09:49.559 the level that's most granular. And so what will you'd 0:09:49.600 --> 0:09:52.480 be looking at is really for a given plant where 0:09:52.520 --> 0:09:56.239 it was producing that good that you would be calculating 0:09:56.280 --> 0:10:00.400 the actual emissions associated with it. Now, when you think 0:10:00.440 --> 0:10:05.800 about applying the frameworks from financial accounting to karbon accounting, 0:10:06.200 --> 0:10:09.480 everything's got a balance, right, and so we would expect 0:10:09.480 --> 0:10:12.280 that all of this does add up to what the 0:10:12.320 --> 0:10:15.360 emissions are associated with the enterprise out of the hole. 0:10:15.600 --> 0:10:20.000 Got it? Now you've talked about I think it's ten products. 0:10:20.040 --> 0:10:21.920 What are they and why were they chosen? 0:10:22.040 --> 0:10:24.000 Yeah, So what we had looked at were what were 0:10:24.000 --> 0:10:27.720 the products that drove seventy percent of the emissions. So 0:10:27.760 --> 0:10:30.320 it's the different types of fuel, whether it's jet fuel 0:10:30.520 --> 0:10:35.960 or motor fuel. It's a steel, it's cement, it's ammonia, 0:10:36.559 --> 0:10:39.360 it's the energy that goes into the grid, and so 0:10:39.440 --> 0:10:43.520 it's all of that that will drive our seventy percent coverage. 0:10:43.679 --> 0:10:46.040 And then who are the members and why have they 0:10:46.080 --> 0:10:47.920 signed on? Yeah, hoping to get out of it. 0:10:48.000 --> 0:10:51.320 Yeah. So we've got a nice breadth of membership across 0:10:51.360 --> 0:10:57.920 the energy sector, financial services, chemicals, mining and metal transportation, 0:10:58.880 --> 0:11:03.079 all sorts. And what the common thread is across our 0:11:03.320 --> 0:11:07.760 member organizations is that they believe in the issue of 0:11:07.800 --> 0:11:11.240 climate change. They know that there's responsibility with respect to 0:11:11.320 --> 0:11:14.640 companies and playing a role in driving the change that 0:11:14.679 --> 0:11:20.520 we need. They've invested really heavily in low carbon products, 0:11:20.559 --> 0:11:24.520 so whether that be fossil fuel replacements, whether that be 0:11:24.600 --> 0:11:29.680 carbon capture, green steel, green ammonia, you name it. And 0:11:29.720 --> 0:11:32.480 they aren't necessarily seeing the return on the other side. 0:11:33.000 --> 0:11:35.880 And if they don't get a return, they can't keep investing. 0:11:36.480 --> 0:11:39.040 And so they're stepping back and they're saying, how do 0:11:39.120 --> 0:11:44.199 we innovate the underlying system such that we both thrive 0:11:44.280 --> 0:11:48.840 as a company and we thrive as a society. And 0:11:48.920 --> 0:11:52.480 so just some examples of our members include Bear and 0:11:52.600 --> 0:11:58.640 BASF and we've got Banco, Santander and air Lekeeed and 0:11:58.679 --> 0:12:01.880 we've got a number of companies from Japan. So of 0:12:01.920 --> 0:12:04.000 our twenty six, we have five from Japan. 0:12:04.080 --> 0:12:07.439 Oh wow, Yeah, why do you think there's such interest 0:12:07.480 --> 0:12:07.920 in Japan. 0:12:08.280 --> 0:12:10.720 So I think the interest out of Japan comes from 0:12:10.960 --> 0:12:14.520 a few different sources. One the fact that if you 0:12:14.559 --> 0:12:16.880 think about Japan, they really are the supplier of the 0:12:16.920 --> 0:12:19.800 world right so much so many of our goods that 0:12:20.000 --> 0:12:22.880 we look around every day and see come out of Japan. 0:12:23.679 --> 0:12:26.680 They also are limited with respect to their energy sources 0:12:26.760 --> 0:12:29.200 just based on their geography, and so they need to 0:12:29.200 --> 0:12:31.440 make sure that they've got access to the energy that 0:12:31.480 --> 0:12:34.320 they need, and they want to be competitive in the 0:12:34.400 --> 0:12:38.959 world marketplace and more and more. You know, competitiveness isn't 0:12:39.040 --> 0:12:41.760 just based on your product, it's also based on the 0:12:41.800 --> 0:12:43.319 carbon intensity of that product. 0:12:43.440 --> 0:12:47.080 That makes sense. Now, the list of members does include 0:12:47.080 --> 0:12:50.280 several oil and gas companies, which I imagine would be 0:12:50.320 --> 0:12:54.240 looked at with some skepticism by the market. So why 0:12:54.320 --> 0:12:56.360 should this not be viewed as some kind of attempt 0:12:56.400 --> 0:12:59.439 to greenwash? And forgive me? I mean, sometimes you know, 0:12:59.440 --> 0:13:01.360 you just think that anything they're trying to do is 0:13:01.760 --> 0:13:04.040 some kind of greenwashing. So what do you say to that? 0:13:04.240 --> 0:13:06.480 Yeah, so you're certainly not the first person who's asked 0:13:06.480 --> 0:13:10.000 me this question, and it was something that I reflected 0:13:10.000 --> 0:13:12.720 on personally when I thought about what do I do 0:13:12.800 --> 0:13:14.800 in this next chapter of my career and how do 0:13:14.880 --> 0:13:17.800 I most have impact? And when I looked at it 0:13:17.960 --> 0:13:21.240 and step back and thought, who do we actually need 0:13:21.520 --> 0:13:26.000 to drive the change? We need the energy companies at 0:13:26.040 --> 0:13:28.880 the table to drive this change. And those that have 0:13:28.960 --> 0:13:31.600 come forward and joined are saying we will be transparent 0:13:31.640 --> 0:13:34.520 and regulate us just help level the playing field so 0:13:34.559 --> 0:13:36.800 that we all have to compete to get to low 0:13:36.840 --> 0:13:41.640 carbon solutions. And for those that remain skeptical, what I 0:13:41.679 --> 0:13:44.000 ask of them is just to be really curious about 0:13:44.000 --> 0:13:46.320 what we're doing, watch us and judge us based on 0:13:46.360 --> 0:13:46.960 our actions. 0:13:48.000 --> 0:13:50.520 And you also have a couple of financial firms, Yeah, 0:13:50.640 --> 0:13:53.240 what's the benefit to them? What are you bringing to 0:13:53.320 --> 0:13:55.679 financial markets, to CFOs, to investors? 0:13:55.760 --> 0:13:57.480 Yeah, So I think that there are a couple of 0:13:57.520 --> 0:14:01.320 things that we're bringing to investors and financial institutions. I 0:14:01.360 --> 0:14:04.680 mean one, I mean you work at Bloomberg, I come 0:14:04.720 --> 0:14:08.120 out of public accounting, and I think in the investment community, 0:14:08.640 --> 0:14:12.520 we all believe that better data drives better decision making. 0:14:12.600 --> 0:14:15.480 So that's one element just at the macro level. But 0:14:17.160 --> 0:14:21.680 many of the big financial organizations have made broad commitments 0:14:21.720 --> 0:14:26.560 with respect to sustainability both in terms of finance emissions 0:14:26.560 --> 0:14:28.520 and then also in terms of what they want to 0:14:28.560 --> 0:14:33.040 put against financing the transition, and financing the energy transition 0:14:33.240 --> 0:14:37.280 is a multi trillion dollar market opportunity. But if there 0:14:37.280 --> 0:14:41.600 aren't projects out there to finance and companies aren't seeing 0:14:41.680 --> 0:14:46.400 return in the transition, then there's no transition finance work 0:14:46.440 --> 0:14:48.960 to be done. And so that's one element. And the 0:14:49.000 --> 0:14:51.840 other element is that banks can only do so much 0:14:51.960 --> 0:14:54.600 and investors with respect to driving down the emissions of 0:14:54.640 --> 0:14:59.560 their customers, and so this systemic change underneath will drive 0:14:59.680 --> 0:15:03.800 down the emissions associated with many of their customers. 0:15:04.080 --> 0:15:08.160 And I've also thought that especially financial institutions that do 0:15:08.200 --> 0:15:09.600 a lot of sales and trading that you know, the 0:15:09.640 --> 0:15:11.840 carbon markets seem like they would be right for but 0:15:12.520 --> 0:15:14.400 just we haven't gotten there. And I think part of 0:15:14.400 --> 0:15:16.160 the problem, or a big part of the problem, is 0:15:16.160 --> 0:15:19.320 that kind of attribution or accounting. Is this something that 0:15:19.360 --> 0:15:21.400 gets us to a more robust carbon market. 0:15:21.560 --> 0:15:24.040 Yeah, absolutely, because one of the things that we'll be 0:15:24.080 --> 0:15:26.600 looking at in the accounting framework as well as on 0:15:26.640 --> 0:15:29.160 the policy side is the role of the carbon markets. 0:15:29.640 --> 0:15:32.520 And so if you look at, for example, a carbon 0:15:32.600 --> 0:15:36.520 intensity standard, if you're a company that is selling in 0:15:36.560 --> 0:15:40.120 and your product is lower than that intensity standard, you 0:15:40.160 --> 0:15:44.000 could create a credit out of that positive difference that 0:15:44.040 --> 0:15:47.200 you've got that would create an additional revenue source and 0:15:47.320 --> 0:15:50.800 incentive for overperformance, but also a new type of credits 0:15:50.800 --> 0:15:52.200 that can be sold into the market. 0:15:52.840 --> 0:15:56.520 Interesting. So are there other industries that I know you 0:15:56.560 --> 0:15:59.400 mentioned you pick products and industries that were probably the 0:15:59.440 --> 0:16:03.680 most responsible for emissions, but other other industries, I mean, 0:16:03.720 --> 0:16:07.200 I let off talking about consumer choice. I imagine you 0:16:07.240 --> 0:16:10.520 know consumer products, you already have the labels of calories 0:16:10.520 --> 0:16:12.720 and fat. Is this something that ultimately we could see 0:16:12.840 --> 0:16:14.160 you know, carbon on there as well. 0:16:14.520 --> 0:16:16.880 Yeah, So I think in the beginning we really are 0:16:16.960 --> 0:16:20.240 focused more on the business to business transactions because if 0:16:20.240 --> 0:16:23.920 you think about the chunky side of emissions, that's where 0:16:23.960 --> 0:16:26.440 a lot of them sit. The scale, but the scale 0:16:26.480 --> 0:16:29.120 absolutely and the materiality. And I think that one of 0:16:29.160 --> 0:16:31.000 the things that we have to look at is how 0:16:31.040 --> 0:16:34.320 far do we go with this? Because I think we all, 0:16:34.560 --> 0:16:37.360 many of us as consumers want to be making better decisions. 0:16:37.560 --> 0:16:39.880 We just need to make sure that in driving down 0:16:39.960 --> 0:16:43.160 to that skew level at the consumer product level, that 0:16:43.240 --> 0:16:45.680 you're not actually generating more emissions in some of the 0:16:45.680 --> 0:16:48.680 calculations that would be required than you're saving through the 0:16:48.720 --> 0:16:53.120 customer choice. But I think with you know, the capabilities 0:16:53.120 --> 0:16:55.160 that we've got, once we've got this framework in place, 0:16:55.160 --> 0:16:57.480 that should be able to drive it throughout the value team. 0:16:57.720 --> 0:17:00.800 So what is your path to worldwide domination? How do 0:17:00.880 --> 0:17:04.359 you get widespread adoption of carbon measures? Yeah? 0:17:04.480 --> 0:17:07.720 I love that idea. So the first is that we're 0:17:07.760 --> 0:17:11.520 really focused on driving our membership base, because in order 0:17:11.560 --> 0:17:13.920 to make change, we've got to make sure that we've 0:17:14.000 --> 0:17:17.960 got a big base of companies that are saying we'll 0:17:18.000 --> 0:17:20.560 be transparent and regulate us and providing us with the 0:17:20.640 --> 0:17:23.639 technical expertise to help get this work done. And so 0:17:23.760 --> 0:17:26.720 that's part of it. The second as we're engaging in 0:17:26.800 --> 0:17:30.760 early discussions with policymakers, sharing information about our ideas and 0:17:30.760 --> 0:17:33.760 why we think this is additive to the policy world 0:17:33.800 --> 0:17:36.800 today and how it will help to drive down emissions 0:17:36.800 --> 0:17:39.560 even further. But ultimately it comes down to the quality 0:17:39.560 --> 0:17:42.320 of our work. And so I mentioned we got started 0:17:42.359 --> 0:17:46.159 with the International Chamber of Commerce on the development of 0:17:46.200 --> 0:17:50.520 the Technical Accounting framework, and they're worldwide and so teaming 0:17:50.520 --> 0:17:51.600 with them is a big help. 0:17:52.800 --> 0:17:54.879 So is there a plan to work with governments and 0:17:54.880 --> 0:17:55.920 regulators at some point. 0:17:55.960 --> 0:17:59.280 Yeah, Ultimately we want laws passed, and so when you 0:17:59.320 --> 0:18:02.960 look at the Carbon Accounting framework that will be working 0:18:02.960 --> 0:18:05.480 with standard setters. That's got to be adopted on a 0:18:05.560 --> 0:18:08.760 global level, just like you look at Generally Accepted Accounting 0:18:08.800 --> 0:18:11.640 Principles and IFRS. You need to be able to trade 0:18:12.040 --> 0:18:15.120 and so you need that commonality. But ultimately to get 0:18:15.119 --> 0:18:18.200 the product intensity standards in place, that would need to 0:18:18.240 --> 0:18:21.480 be adopted at the government level. And so we'll be 0:18:21.520 --> 0:18:25.240 working with policymakers in different countries to talk to them 0:18:25.520 --> 0:18:28.000 about you know, why we see this as a positive 0:18:28.000 --> 0:18:28.639 path forward. 0:18:29.280 --> 0:18:33.159 And have you spoken any of the standard setters you 0:18:33.240 --> 0:18:36.640 mentioned IS or IFRS, issb CDP. 0:18:37.280 --> 0:18:40.880 So very early days with those discussions, and so right 0:18:40.920 --> 0:18:43.160 now we're doing just a whole lot of education with 0:18:43.200 --> 0:18:46.040 respect to what we're doing, our theory of change and 0:18:46.080 --> 0:18:47.880 why we see it as different than what's out there 0:18:47.880 --> 0:18:49.040 today now. 0:18:49.080 --> 0:18:51.119 Not to get to policy wonky here, but one of 0:18:51.119 --> 0:18:54.960 the more interesting, if undercovered aspects of the recent appropriations 0:18:54.960 --> 0:18:58.040 bill in the US, there's a provision in there requiring 0:18:58.080 --> 0:19:01.040 the Department of Energy to study the emissions, intensity of 0:19:01.080 --> 0:19:04.760 certain domestic goods versus foreign competition. Now, it seems like 0:19:04.840 --> 0:19:08.159 that kind of mindset, thinking about carbon competitiveness as a 0:19:08.280 --> 0:19:11.520 national imperative is something that would really help with your mission. 0:19:11.560 --> 0:19:14.119 Curious about your thoughts on this, how that aligns with 0:19:14.160 --> 0:19:14.639 your mission. 0:19:15.080 --> 0:19:18.520 Yeah, we were really excited to see that language pass. 0:19:18.840 --> 0:19:22.600 And one of the things that we think is different 0:19:22.680 --> 0:19:25.800 with respect to how we're thinking about driving change in 0:19:25.800 --> 0:19:32.080 this space is that we're bringing together market competitiveness, sustainability, 0:19:32.160 --> 0:19:35.919 and driving down emissions and looking at affordability all at 0:19:35.960 --> 0:19:38.159 the same time. And so I think that that's a 0:19:38.240 --> 0:19:41.200 great first step with respect to thinking about it through 0:19:41.200 --> 0:19:46.280 the events of US competitiveness with respect to commodities in 0:19:46.320 --> 0:19:46.680 the world. 0:19:46.920 --> 0:19:50.160 Yeah, I think as a sustainable alien asset, I look 0:19:50.200 --> 0:19:52.480 forward to the days where they're actually competing on the 0:19:52.560 --> 0:19:55.280 numbers and not just the number of pages in the 0:19:55.280 --> 0:19:58.399 sustainability report or who has more windmills in there, but 0:19:58.480 --> 0:20:01.200 actual you know, this is a goal that we have 0:20:01.320 --> 0:20:02.880 and that's the numbers. 0:20:02.960 --> 0:20:05.520 Yeah. And the one thing we haven't talked about yet 0:20:05.600 --> 0:20:08.080 is one of the reasons that we're looking at product 0:20:08.119 --> 0:20:12.320 level is that companies are really comfortable complying with product 0:20:12.400 --> 0:20:15.720 level regulations. And if you look at how we solve 0:20:15.760 --> 0:20:19.320 THEO is only an issue. How we got addressed acid rain, 0:20:19.440 --> 0:20:22.239 getting sulfur out of fuel. We all drive cars with 0:20:22.240 --> 0:20:25.720 seatbelts in them. If governments give a target the companies 0:20:25.760 --> 0:20:28.600 have to hit, then they can compete and comply with it. 0:20:28.920 --> 0:20:31.159 But it levels the playing field with respect to the 0:20:31.200 --> 0:20:32.520 target that they have to hit. 0:20:32.800 --> 0:20:34.440 As opposed to an enterprise Why. 0:20:34.400 --> 0:20:37.600 That's yeah, enterprise wise or even voluntary commitment. I mean, 0:20:37.640 --> 0:20:42.480 if you look at the world today, we have absolutely 0:20:42.480 --> 0:20:45.800 made progress based on the voluntary commitments and the disclosure 0:20:45.840 --> 0:20:50.960 that's in there already. But we need to move further, 0:20:51.080 --> 0:20:53.359 and we need to move faster. And so if you 0:20:53.680 --> 0:20:58.080 give a target that anyone who wants to sell a 0:20:58.119 --> 0:21:01.640 good into that market has to hit, there is no choice, 0:21:01.720 --> 0:21:05.840 and then those that overperform can actually be differentiated as 0:21:05.840 --> 0:21:08.560 opposed to today where overperformance isn't valued. 0:21:09.280 --> 0:21:12.439 That makes a lot of sense. So what should we 0:21:12.480 --> 0:21:14.879 look forward to for carbon measures in the year ahead 0:21:14.920 --> 0:21:16.000 and beyond. 0:21:16.240 --> 0:21:18.400 Yeah, as we go for it in the year head, 0:21:18.400 --> 0:21:20.919 we've got a lot of very exciting work starting and 0:21:21.040 --> 0:21:24.920 so the first is our work around the accounting framework development, 0:21:25.440 --> 0:21:28.000 and we're starting with what is good that's already out 0:21:28.040 --> 0:21:30.560