Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovic from Bloomberg Radio. But earlier this year,
Speaker 1: Engine Number One took three board seats and exon to
Speaker 1: speed up the company's transition. It's the small activist fund
Speaker 1: that is now got the world watch, especially after taking
Speaker 1: on x In. Joining us now is Jennifer Grantio, chief
Speaker 1: executive officer of Engine Number One. She's with us on
Speaker 1: site at the Milk and Institute Global Conference. Give us
Speaker 1: your interpretation or your reaction to the conference this year,
Speaker 1: because we were talking during the break and use the
Speaker 1: phrase people are ready. What are they ready for? Yeah?
Speaker 1: I mean we've set out with Engine number one to
Speaker 1: do things in a different way. And so instead of
Speaker 1: what we all think of as slightly older school e
Speaker 1: S and g people aren't sure if it works, people
Speaker 1: aren't sure to think it returns. We built Engine number
Speaker 1: one to take the data, the environmental or the climate
Speaker 1: or the governments data and use it to drive returns.
Speaker 1: And so, as I've watched and talked with lots of
Speaker 1: people over the last couple of days, large pools of
Speaker 1: assets as well as younger people, people are ready, But
Speaker 1: they're ready because the performance is there, or they're just
Speaker 1: ready because it's the right thing to do. What is
Speaker 1: it they're they're ready, they're ready to have impact in
Speaker 1: their investments, but they're not willing to do it with
Speaker 1: giving up returns. So the way they think about it is,
Speaker 1: we care, we care about people and wages and workers,
Speaker 1: we care about climate, but we need investors to do
Speaker 1: it for us in a way where we don't give
Speaker 1: up returns. So, Jennifer, is it harder though for a
Speaker 1: company that is delivering the returns to kind of get
Speaker 1: them to make the changes? And investors are maybe not
Speaker 1: going to be so supportive because they're like, listen, I
Speaker 1: like these returns. So give me an idea. Yeah, we
Speaker 1: think it's all. We think it's all about using the
Speaker 1: data on climate or environment people using it to drive
Speaker 1: returns over time. So to take an example, let's take
Speaker 1: General Motors. UM. So Mary bar has got up a
Speaker 1: great business, she's a great CEO, she's got a strong board, um,
Speaker 1: but they can actually make more money if they get
Speaker 1: to an e V transition faster, longer term, longer term.
Speaker 1: But if you think about it from a scale perspective,
Speaker 1: so what's the you know, the what's the multiple of
Speaker 1: GM today compared to Tesla. Let's take that example. If
Speaker 1: you can get to an e V transition sooner and
Speaker 1: you're doing nine million electric cars a year, that's a
Speaker 1: huge increase in multiple for GM, and we get to
Speaker 1: the climate transition sooner. So yes, it takes more than
Speaker 1: a quarter, but it's the way to do it at scale. Hey,
Speaker 1: talk to us about your investing framework and how you
Speaker 1: think about potential targets. Are our audience absolutely familiar with
Speaker 1: what engine number one has done and did earlier this
Speaker 1: year at Exxonmobile and also of course at General Motors too,
Speaker 1: But how do you think about your next potential targets? Yeah,
Speaker 1: we think about it as being active owners in all
Speaker 1: these companies, as opposed to target or old school activism.
Speaker 1: And so what does that mean. That means we're running
Speaker 1: with all the public companies, every single one. We run
Speaker 1: through their wages, their workers, their social impact, and their
Speaker 1: climate and environmental impact. We do it in dollar sense,
Speaker 1: and then we forecast how does that change their value
Speaker 1: and over time? And so we will work with both
Speaker 1: companies that are laggards where we think they're not managing
Speaker 1: the business as well as they could, and we'll do
Speaker 1: that constructively. We won't try to do it um you
Speaker 1: know the way we did with that Exxon. Better to
Speaker 1: do it working constructively with companies, and so we're working
Speaker 1: with a number of companies now. But behind the scenes,
Speaker 1: we don't talk about that as much. Tim was doing.
Speaker 1: You know, we're doing some research. Tim showed a story
Speaker 1: with me and we've been following this down. Jones, you know,
Speaker 1: had reported I guess it was. Was it just today, Tim? Yeah,
Speaker 1: that X and XN is debating abandoning some of its
Speaker 1: biggest oil and gas projects. Do you feel like when Well,
Speaker 1: I think the first win is get the right people
Speaker 1: on the board. So that was a big victory in
Speaker 1: getting three people with great energy transition experience, UM. And
Speaker 1: the second when we're looking for is what's the long
Speaker 1: term capital all occasion strategy. And if x and we're
Speaker 1: not in the boardroom their independent directors, but if Exxon
Speaker 1: with the new people on the board, comes to a
Speaker 1: decision to rethink long term petroleum development, we think that's
Speaker 1: very smart. Aren't for business? Any environment? And the environment? Well,
Speaker 1: what does that Excel mobile look like to you? I mean,
Speaker 1: help us understand that, because I think people think of
Speaker 1: Exon Mobile is like the opposite of a It's think
Speaker 1: about the business that it's in, right, it drills for
Speaker 1: fossil fuels. Uh, it's an energy company. And so if
Speaker 1: you think about the expertise that Exon has, they have,
Speaker 1: you know they have huge I p in great technologies
Speaker 1: and with the batteries. Traditionally they were a founder pioneer
Speaker 1: from research perspective, and then they have an ability to
Speaker 1: execute things at huge scale. If you want to do energy,
Speaker 1: even a new kind of energy at scale, think about
Speaker 1: the engineering capability of a Chevron or an Exxon to
Speaker 1: do that. So they're an energy company. They don't only
Speaker 1: have to be an oil company ten and twenty years
Speaker 1: in the future. So in terms of industries, I know
Speaker 1: you can't probably reveal I don't want to say the
Speaker 1: word targets. I know that's what we keep thinking. But
Speaker 1: I mean, what are the industries that you think you're
Speaker 1: going to be looking at or are currently looking at
Speaker 1: pretty aggressively when it comes to doing the research that
Speaker 1: you know are transitioning need to be trans motioning for
Speaker 1: the better of all mankind. Yeah, I think I think
Speaker 1: the heavy fossil fuel industries are definitely, I mean definitely,
Speaker 1: that's an obvious one, which is why you see us
Speaker 1: talking about energy and talking about transportation. That's a place
Speaker 1: where you transform and companies can be much more profitable
Speaker 1: and you get to climate better climate impacts sooner. They're
Speaker 1: also financial services Squares an example where Squares business is
Speaker 1: cash app in particular serving underserved communities. It's driving financial
Speaker 1: inclusion that has huge positive benefit. And a lot of
Speaker 1: healthcare companies their whole business is to do good and
Speaker 1: so helping them get that story out and explain to
Speaker 1: investors that that's a good place to be driving this
Speaker 1: transition around better social outcomes. The big banks might be
Speaker 1: a dorko. We are. We quickly put this. We put
Speaker 1: this valuation framework against every different company in every different industry.
Speaker 1: And the nice thing about the vote et F, So
Speaker 1: we've got a private fund, We've got a vote e
Speaker 1: t F. It holds all big companies, so we can
Speaker 1: work through a lot of these issues over time. We'll
Speaker 1: have to find a better river target. Yeah, would you
Speaker 1: come back, would love to love your premise and what
Speaker 1: you're doing. Jennifer Gracio, she's chief executive officer of Engine
Speaker 1: number one right here at Milken This is Bloomberg. So
Speaker 1: I do feel like this topic is definitely the kind
Speaker 1: of conversations that are happening here at Milkin, which is
Speaker 1: where Tim and I have been for the last few days. Uh.
Speaker 1: And the topic is about the role of universities in
Speaker 1: our democracy. Our next guest says in a new book,
Speaker 1: universities are a bulwark institution when it comes to democracy.
Speaker 1: Ronald J. Daniels is president of Johns Hopkins University. He
Speaker 1: joins us on the phone from Baltimore. He's the author
Speaker 1: of his book What Universities, Oh Democracy? The Johns Hopkins
Speaker 1: Bloomberg School of Public Health. It is supported by Michael R. Bloomberg,
Speaker 1: founder of Bloomberg LP and Bloomberg Philanthropies. Ron it's really
Speaker 1: great to have you on the show. How are you.
Speaker 1: I'm great, and thanks for the opportunity to talk to
Speaker 1: you about the book. Well, let's talk about the book.
Speaker 1: What was the moment that prompted you to to write
Speaker 1: this time? When did you realize that you needed to
Speaker 1: write this? So you know, it was an interesting moment
Speaker 1: several years ago. Um. And it was a time when
Speaker 1: there were a few instants across American campuses where UH
Speaker 1: there were deep platforming of speakers and disinventations and so
Speaker 1: for what that were happening across the country. And it
Speaker 1: was at that moment that we, like several other universities,
Speaker 1: really felt it was important to UH very intentionally remind
Speaker 1: our students, particularly in the context of the first moments,
Speaker 1: that when they step onto the campus, of what it
Speaker 1: is that sets the university apart from other institutions in society,
Speaker 1: and in particular our commitment to open debate, to contestations,
Speaker 1: UH to UH to UM, deep probing of and critique
Speaker 1: of one's positions, to see that as a lifebut of
Speaker 1: the institution. And it was in that context that we
Speaker 1: had a session early on in the year for incoming
Speaker 1: students and we talked UM a lot about the role
Speaker 1: of free speech and academic freedom and so forth. Then
Speaker 1: you know, I stood at the back of the lecture
Speaker 1: hall and at the end of the lecture I talked
Speaker 1: to a few students and I said, so, what did
Speaker 1: you think of the event? What do you take from it?
Speaker 1: And remarkably so all the students said, we never knew,
Speaker 1: we never knew the case for free speech. No one
Speaker 1: had ever exposed us to this argument before. I said,
Speaker 1: my god, you've come through great schools from across the country,
Speaker 1: and you're telling me that you never were exposed to
Speaker 1: these central ideas which are at the core of American democracy.
Speaker 1: And so, you know, that was a moment when I
Speaker 1: started to think more and more about the ways in
Speaker 1: which the university uh intersects with democracy, and to ask
Speaker 1: the question, as much as we do for democracy, and
Speaker 1: as much as I think we're a bulwark institution for democracy,
Speaker 1: as you mentioned earlier, is there more we can do?
Speaker 1: And that the book well, and you you write about
Speaker 1: early on in the intro. You know that democracy and
Speaker 1: liberalism liberalism do not exist in easy alignment with one another,
Speaker 1: and it is that collision of opposites that is a
Speaker 1: vital part of liberal democracy. Genius genius, however, I mean,
Speaker 1: it fascinates me, and I think about when I went
Speaker 1: to college, the whole idea was diversity of thought and
Speaker 1: challenging one another but having an intelligent and level headed discussion. Journalism.
Speaker 1: I like journalism because there are you know, different perspectives
Speaker 1: and hopefully we put out those different perspectives for people
Speaker 1: to make informed decisions. But something happened in academia right
Speaker 1: where there was so much pushback against controversial thought because
Speaker 1: if you didn't believe in it, or you didn't agree
Speaker 1: with it, you didn't want to hear about it. And
Speaker 1: that's that's a dangerous that's you know, freedom of speech.
Speaker 1: That's when we start to really kind of filter out
Speaker 1: what's being said. So you know, it's um, these these incidents,
Speaker 1: when they happen in universities, they always get a lot
Speaker 1: of attention, and to my mind, particularly lost for years
Speaker 1: where university presidents of faculty members have really been much
Speaker 1: more active and educating students about the centrality of free
Speaker 1: speech and academic freedom, and particularly saying, you know, however,
Speaker 1: one wants to think about other institutions in American society,
Speaker 1: the university, with its commitment to fact and to reason
Speaker 1: and too spirited debate, it must be a place where
Speaker 1: we bend over backwards to provide space for people to
Speaker 1: express their views and to have them tested and challenged.
Speaker 1: And so I think that had happened. Um, but um,
Speaker 1: what I think has not happened as much as it should.
Speaker 1: And again it's something I talked about in the book
Speaker 1: is are educating the students that are here with us,
Speaker 1: and you know, increasingly representative of the great diversity of
Speaker 1: American society, how they can have good conversations, how they
Speaker 1: can actually meaningful engage, meaningful engage one another across difference
Speaker 1: and find ways to UM continue conversations even when you
Speaker 1: have very deeply dividing perspectives in the world. And to
Speaker 1: my mind, UM the university essentially a rare opportunity for that.
Speaker 1: We are talking with Johns. Hopkins University President Ron Daniel
Speaker 1: still with us. His new book out is what Universities?
Speaker 1: Oh Democracy? What's something you guys have done at Hopkins
Speaker 1: to ensure that there's diversity of thought, that democracy is
Speaker 1: really being played out UM fairly and and and in
Speaker 1: a good way and the way it should be UM.
Speaker 1: As I described the a few moments ago, one was
Speaker 1: the UM the orientation programming that we were doing around
Speaker 1: our academic freedom policy and and right from the moment
Speaker 1: that kids get on campus giving them exposure to that.
Speaker 1: We have UM this past year UM step that up
Speaker 1: much more significantly and in fact had a day in
Speaker 1: orientation dedicated to educating students on the tenants of democracy
Speaker 1: and giving them exposure to a host of different challenges
Speaker 1: confronting America. That involved more than twenty five faculty from
Speaker 1: across the university. So what we're trying to do is
Speaker 1: right from the get go, is remind students that there's
Speaker 1: something really precious at stake here and that they have
Speaker 1: got to think about their role as citizens and how
Speaker 1: they are going to advocate for democracy, understand its challenges,
Speaker 1: and work to improve it. And that's something that we
Speaker 1: really really want to see as foundational to the experience
Speaker 1: at Hopkins. How have you seen that change? And justin
Speaker 1: we have about thirty seconds left changed during your tenure
Speaker 1: at Hopkins. So you know, I think, um, we've just become,
Speaker 1: like so many other universities, much more attentive to the
Speaker 1: level and intensity of polarization and discord and distrust around us.
Speaker 1: And so we're working to become much more effective and
Speaker 1: trying to push back against these trends and again get
Speaker 1: the incredible diversity of our student bodies is used that
Speaker 1: as an opportunity to try and build bridges and habits
Speaker 1: that they'll take on graduation out in through the country.
Speaker 1: I want to get right back to Ronald J. Daniels,
Speaker 1: the guests we have joining us now, President of Johns
Speaker 1: Hopkins University. He joins us on the phone from Baltimore.
Speaker 1: His book is called What Universities Oh Democracy? The Johns
Speaker 1: Hopkins Bloomberg School Public Health. It is supported by Michael R. Bloomberg,
Speaker 1: founder of Bloomberg LP and Bloomberg Philanthropies. Ron I asked
Speaker 1: you why, what prompted you to write this book? Partly
Speaker 1: because when I started reading it and thinking about it,
Speaker 1: I thought about January six and what happened in the
Speaker 1: United States on January six, And I'm wondering how you
Speaker 1: see the role of the university in that context when
Speaker 1: a lot of people would say, wait a second, We're
Speaker 1: at a point in the history of the United States
Speaker 1: where too many people democracy feels really fragile. So, you know,
Speaker 1: I think January six is an extreme manifestation of that.
Speaker 1: But well before January six, of course, all of the
Speaker 1: trends indicated that democracy was and is under significant threats.
Speaker 1: So if we look at the level of polarization of
Speaker 1: distrust and institutions, as I mentioned earlier, you know, just
Speaker 1: even people's views have shifted over the last several decades
Speaker 1: in terms of their willingness to have a serious conversation
Speaker 1: with someone of the opposite political party. In fact, even
Speaker 1: it's been documented that Republicans and Democrats are less excited
Speaker 1: about and even you know, concerned that their children might
Speaker 1: marry someone of who comes from a family of the
Speaker 1: opposite political party. So it's in this context of deep
Speaker 1: discord and distrust that given that more than uh of
Speaker 1: students graduating from high school in the United States will
Speaker 1: go on to uh college, it seems that we have
Speaker 1: got an opportunity in terms of the four years or
Speaker 1: two years even for two year colleges that students are
Speaker 1: with us to try and enter being here and try
Speaker 1: and first of all sensitize them to what's at stake
Speaker 1: in democracy. But more than that, helped them to find
Speaker 1: ways to abridge the difference and to just turn down
Speaker 1: the temperature and restore some idea of what political philosophers
Speaker 1: called civic friendship. We don't necessarily have to agree with
Speaker 1: each other, but we at least have to understand that
Speaker 1: we're all tied into this enterprise of American democracy together. Ron,
Speaker 1: have you had any conversations with the politicians down in
Speaker 1: Washington lazy, like, how is it that? And and it's
Speaker 1: I think it's safe to say whether it's on the
Speaker 1: left or on the right. There are prominent players in
Speaker 1: our political sector right now and certainly in government, UM
Speaker 1: that have gone to the best of the best in
Speaker 1: terms of universities Princeton, Harvard, Yale, Stanford, where you would
Speaker 1: expect that there is this wonderful diversity of thought and
Speaker 1: there would be civic friendship you know, coming out out
Speaker 1: of it. And yet we have these extreme views, um
Speaker 1: that are really uncomfortable in making democracy very difficult. How
Speaker 1: do you square that? And what's the responsibility is it
Speaker 1: the universe? Would you point? Yeah, No, I think it's
Speaker 1: a great question. And I think this is when we
Speaker 1: see these habits and we see the incentives that politicians
Speaker 1: are facing. You know, again, there's you know, lots of
Speaker 1: reasons for that in terms of the role of social
Speaker 1: media and so forth, and just changes in the nature
Speaker 1: of the party system, like all these things can explain
Speaker 1: the incentives for for extremism. But it seems to me
Speaker 1: that what we've got to do is to try and
Speaker 1: push back again, set and give our students a sense
Speaker 1: that there is something that stake here, and that, however
Speaker 1: strong those temptations might be, there's an overriding responsibility and
Speaker 1: a call to commitment by them to help peel this country.
Speaker 1: And so, you know, again, we can talk about this
Speaker 1: in abstract terms, or we can get you know, in
Speaker 1: more concrete ways. You know, the move that we've seen
Speaker 1: over the last several decades to universities allowing students to
Speaker 1: self select their first year roommates instead of actually the
Speaker 1: universities deciding how to mix it up. I mean, that's
Speaker 1: something that I think a number of universities, including our own, recently,
Speaker 1: have decided to say, you can't replicate the kind of
Speaker 1: enclaves that you're coming from on campus. We're gonna insist
Speaker 1: that you meet others and learn about others, you know,
Speaker 1: at the same time, UM, and we're thinking about living
Speaker 1: and dining arrangements and so forth, and trying to again
Speaker 1: really foster UH, the UM requirement that people interact across
Speaker 1: UH the differences that are here. We're also thinking about
Speaker 1: how we can can I Can I jump in? Run?
Speaker 1: Can I jump in? I think that's brilliant because when
Speaker 1: I went to college, I didn't have any choice in
Speaker 1: my freshman roommate and um, I have to say, she
Speaker 1: was a black American and it was is really good
Speaker 1: for me having grown up in a New York City
Speaker 1: suburb where it was largely white and um, along with
Speaker 1: being in New York City, it was just eye opening
Speaker 1: for me. And I think it was really educational. But
Speaker 1: I didn't have a choice, and it was, I think
Speaker 1: a great thing. And I see what the kids. I
Speaker 1: saw what my daughter who went off to college, where
Speaker 1: they're back and forth and talking to each other and
Speaker 1: everybody's kind of select they were able to select like
Speaker 1: who she was with. UM, and I just think, I
Speaker 1: think you're spot on about how that could make a difference.
Speaker 1: So that's just, you know, that's just it's such a
Speaker 1: small thing, but it's a very powerfuling in a way.
Speaker 1: And you know, when we know that the city that
Speaker 1: we know, we Americans are increasingly living in Enclays where
Speaker 1: we're with people who are a lot like us in
Speaker 1: terms of shared political beliefs, socio economic levels and so forth.
Speaker 1: But again, we can mix it up at university and say,
Speaker 1: given the incredible diversity of backgrounds as here in perspectives,
Speaker 1: we're not going to let you replicate the enclaves, the
Speaker 1: solitudes we've seen in America. The other thing that I
Speaker 1: was just you know, I also think it's important is,
Speaker 1: you know, having students and be exposed to lots and
Speaker 1: lots of structured debates where we see conservatives and liberal
Speaker 1: progressives interacting with each other in the same forum. It's
Speaker 1: not a case of you bring in a confortative one
Speaker 1: week and then on the same subject the liberal students
Speaker 1: will bring in their candidate or their speaker, but rather
Speaker 1: that you know, we start to model how it is
Speaker 1: that you have good conversations that UM again are indicative
Speaker 1: of our effort to try and figure out what are
Speaker 1: the best ideas on artiments that Leach have listen such
Speaker 1: a timely conversation. Thank you so much for joining us, UH,
Speaker 1: and I hope we can get you back on in
Speaker 1: the future. Again. That was Ron Daniels, his president of
Speaker 1: John Hopkins University. His new book is What Universities Oh
Speaker 1: Democracy Now. As we mentioned Michael Bloomberg certainly UM a
Speaker 1: supporter of the Bloomberg Hopkins School of Public Health,