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Speaker 1: Welcome to the Bloomberg Penel podcast. I'm Paul swing you

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Speaker 1: along with my co host Lisa Brahma Waits. Each day

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Speaker 1: we bring you the most noteworthy and useful interviews for

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Speaker 1: you and your money. Whether at the grocery store or

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Speaker 1: the trading floor. Find a Bloomberg penl podcast on Apple

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Speaker 1: podcast or wherever you listen to podcasts, as well as

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Speaker 1: at Bloomberg dot com. Well, the energy infrastructure in the

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Speaker 1: Middle East is certainly getting a lot of attention. There's

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Speaker 1: been a lot of attacks over the last several months

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Speaker 1: on oil fields, on tankers, just raising the question of

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Speaker 1: the vulnerability of that infrastructure and very important source of

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Speaker 1: energy in the world. To get a sense of what's

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Speaker 1: going on, Welcome Seth Gray. Seth as a president CEO

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Speaker 1: of light Bridge Corporation located in Reston, Virginia, joining us

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Speaker 1: on the phone. So, Seth, again, we've had a series

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Speaker 1: of attacks uh in the Middle East on some of

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Speaker 1: the oil infrastructure. How vulnerable do you consider that part

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Speaker 1: of the world to be in terms of oil infrastructure. Well,

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Speaker 1: really it's vulnerable, which is very sad and very dangerous

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Speaker 1: as we see from the drone attacks on the Saudi

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Speaker 1: oil fields, as we see on the attacks on the

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Speaker 1: Iranian oil tanker. One of the programs we have going

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Speaker 1: under the Department of Energy here in this country is

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Speaker 1: to improve our grid resiliency so that we have power

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Speaker 1: plants that have can have fuel on site and if

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Speaker 1: the supply is cut off, they can run for months

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Speaker 1: or even years, the greatest of which are the nuclear

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Speaker 1: power plants, which have several years of fuel on site.

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Speaker 1: So we have supplies are cut off, they could run

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Speaker 1: for years. And in particular, as the US is producing

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Speaker 1: more oil domestically, the potential cutoffs and supply of oil

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Speaker 1: really threatened our allies, including Japan and many others that

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Speaker 1: are very dependent on Middle East oil. So you know,

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Speaker 1: it's an issue for US and it's an issue for

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Speaker 1: our allies. So Seth, considering the fact that your company

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Speaker 1: is a nuclear fuel technology company, it's not surprising that

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Speaker 1: you'd say, look, it's so important to build that grid.

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Speaker 1: But I'm wondering how secure the nuclear grid would be

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Speaker 1: or could be, given the fact that clearly energy infrastructure

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Speaker 1: is a very very uh big target right now. Yeah, yeah, Well,

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Speaker 1: the reactor sites themselves are are very robust, very protected sites.

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Speaker 1: With many feet of concrete and steel protecting the facilities.

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Speaker 1: And we are moving toward more local grids over time

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Speaker 1: in this country too, with small reactors advanced technologies coming out,

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Speaker 1: so that rather than just the giant, interconnected electric grids

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Speaker 1: that could be attacked, there could be smaller grids which

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Speaker 1: provide a level of protection onto themselves. We're also starting

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Speaker 1: to electrify the transportation sector with electric cars, with electric buses.

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Speaker 1: There are a lot of projections that will increase the

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Speaker 1: use of electricity by fifty in the United States in

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Speaker 1: the next couple of decades and similarly around the world,

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Speaker 1: which puts even more pressure on the electric grid and

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Speaker 1: not having the source of energy cut off. So what

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Speaker 1: we're seeing there is an opportunity for American innovation, not

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Speaker 1: just for domestic markets, but for exports for this advanced

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Speaker 1: technology that will produce no carbon as we do move

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Speaker 1: to electrify the transportation sector in addition to the traditional

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Speaker 1: electricity sectors. SETH just give us a sense of kind

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Speaker 1: of the state of nuclear energy in the United States.

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Speaker 1: Are we adding plants, are we taking plants offline? What's

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Speaker 1: kind of the trend here and how do you think

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Speaker 1: that's going to play out well. We're pretty level at

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Speaker 1: about one ent of our electricity from nuclear power, and

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Speaker 1: we've closed some plants. We have two plants under construction

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Speaker 1: in Georgia now, but mostly as the demand for electricity

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Speaker 1: has been rising, we've been improving the efficiency of the

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Speaker 1: existing plants to stay level at that. Now we're in

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Speaker 1: danger of that falling down a bit and losing that

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Speaker 1: zero carbon energy from the grid. So we have companies

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Speaker 1: like light Bridge bringing new technologies that can better justify

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Speaker 1: the economic case of keeping those plants open and building

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Speaker 1: new plants. But part of the state domestically is where

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Speaker 1: our nuclear companies are and the companies and the supply

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Speaker 1: chain for exports, because the international market is bigger than

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Speaker 1: the domestic market, and the greatest threats are from Russia

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Speaker 1: and China, which together are taking about six of the

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Speaker 1: global market and new reactors, and they are doing that

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Speaker 1: partly for strategic reasons, for their national security reasons. Setting

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Speaker 1: hundred our supply relationships with countries like Turkey where Russia

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Speaker 1: is selling reactors too, and that does not necessarily lead

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Speaker 1: to good things in Turkey and other places where they're

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Speaker 1: selling reactors, So there are national security implications as well

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Speaker 1: for Americans competing and winning against Russia and China overseas.

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Speaker 1: How expensive or or cheap is what's the relative cost

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Speaker 1: of nuclear energy versus say crude. Well, when when you

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Speaker 1: levelize the cost of electricity, nuclear power is cheaper. It's

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Speaker 1: it's quite a bit cheaper overall from these reactors that

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Speaker 1: are already built and are operating. It's the new reactors

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Speaker 1: that are being built. They're having problems with the cost

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Speaker 1: overruns that are making those expensive. But as we design

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Speaker 1: the new advanced reactors and build more of them, and

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Speaker 1: we stop building a first of a kind plant, the

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Speaker 1: new reactors will also produce cheaper electricity. How much is

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Speaker 1: the lack of adoption of nuclear energy in the United

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Speaker 1: States relative to some of its competitors competing nations. How

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Speaker 1: much does this do just because there's a diversion to

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Speaker 1: the word nuclear and the fear that if something happens

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Speaker 1: that it could be catastrophic. Well, look, obviously that's part

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Speaker 1: of it. In the United States, nuclear is the safest

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Speaker 1: industry we have. Nobody has ever died from radiation in

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Speaker 1: the history of the industry. Here, even at the only

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Speaker 1: accident we ever had at three Mile Island, nobody died,

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Speaker 1: nobody was hurt, and in fact, the twin plant on

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Speaker 1: the same site kept operating for decades until just a

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Speaker 1: few weeks ago when it was closed down. So we

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Speaker 1: know how to build and operate these reactors very safely

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Speaker 1: so that no one can can be hurt, and with

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Speaker 1: the new advanced technologies that are coming, they'll be even

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Speaker 1: safer with small underground plants uh where there will be

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Speaker 1: no danger to the public. Seth countries are deploying nuclear

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Speaker 1: most aggressively. Well right now we're seeing the United Arab

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Speaker 1: Emirates about to start opening four nuclear power plants that

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Speaker 1: they've been building littill supply about a quarter of their country.

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Speaker 1: In terms of exports, Russia is the largest in the

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Speaker 1: world right now, followed by China. The UK is making

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Speaker 1: a big push to build new reactors, including one potentially

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Speaker 1: from China, which shows how China is really impact then

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Speaker 1: even our closest allies and UM generally, France has always

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Speaker 1: been very strong and nuclear power, and they're they're deploying

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Speaker 1: some in their own country as well as in neighboring

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Speaker 1: European countries, and actually even two in China. So those

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Speaker 1: are the major markets right now, and for US companies

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Speaker 1: throughout the supply chains, lots of manufacturing companies, it's important

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Speaker 1: that we keep pace and compete with them. Seth Great,

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Speaker 1: thank you so much for being with as Seth Gray

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Speaker 1: as president, chief executive officer of light Bridge Corporation, There's

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Speaker 1: been a feeling that the bigger risk right now to

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Speaker 1: markets at any time of central bank support and slowing

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Speaker 1: but still positive growth is a trade deal that actually

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Speaker 1: encourages people to rush into markets. Morgan Stanley today saying

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Speaker 1: don't do it. It hasn't worked before, it won't work

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Speaker 1: this time. Let's find out if Steve dou Dash agrees.

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Speaker 1: He's president of i HT Wealth Management based in Chicago. Steve,

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Speaker 1: do you agree that if there is some sort of

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Speaker 1: trade deal that isn't necessarily a signal to just go

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Speaker 1: dive back into risk your stocks? Does anyone? Has anyone

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Speaker 1: seen the same cycle over and over and over again,

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Speaker 1: or it last year or so. They come out and

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Speaker 1: they say we got a trade deal or a partial deal,

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Speaker 1: we're gonna work out something, and the markets go up

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Speaker 1: upper cent or two, and then two weeks later they

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Speaker 1: turned around and like, oh no, we're not gonna get

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Speaker 1: a trade deal. No one wants to work this out,

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Speaker 1: and then the cycle repeats itself over and over. So yes,

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Speaker 1: I know they came out with some partial potential plan,

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Speaker 1: and then today they didn't surprise anyone, come out and

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Speaker 1: say no, maybe we don't have a plan. No one.

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Speaker 1: I do not believe right now that we're going to

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Speaker 1: see some magical, huge deal worked out overnight or at

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Speaker 1: least in the short order, um that answers all those

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Speaker 1: questions and gives the market true clarity anytime soon. It's

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Speaker 1: too massive of a deal and there's too much political

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Speaker 1: drama around it for it to happen in such a

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Speaker 1: short period of time. Steve, to what extent, if any,

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Speaker 1: do you think that this trade uncertainty is weighing on

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Speaker 1: global economic growth? I think it's it's completely been weighing

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Speaker 1: on it. If you if you strip out the tax

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Speaker 1: break that took place a couple of years ago and

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Speaker 1: the market snapping up because of that, you strip that out,

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Speaker 1: we've been basically range bound for years now, Over and

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Speaker 1: over again, we've not seen any substantial growth. Now that's

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Speaker 1: a good thing too. To the extent that you know,

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Speaker 1: I know a lot of people are worried about inversion

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Speaker 1: right now. I am not buying into that to the

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Speaker 1: same extreme extreme, and they're worried about recession that could

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Speaker 1: be meant from that, which again I do not believe

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Speaker 1: in um. But if things do level off sideways, it's

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Speaker 1: not like we have this euphoric high stock market price

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Speaker 1: that's built on just you know, emotion. It's been flat

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Speaker 1: for years with the exception of that trade tax deal,

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Speaker 1: and therefore it's not like we have a huge downside

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Speaker 1: risk um posed to it. So what are you buying

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Speaker 1: I'm by I personally do believe that they'll eventually get

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Speaker 1: some sort of trade deal done over the next few

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Speaker 1: six months. Let's just say, because the politics involved, the

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Speaker 1: Trump organization does need to win. This is the one

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Speaker 1: area that they can control a great deal of it.

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Speaker 1: I think the tech sector has been hit the hardest

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Speaker 1: due to the trade deal, certainly the semi connector semiconductor

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Speaker 1: set or if you want to go high risk, high return,

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Speaker 1: I think that's an area where you can overload right

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Speaker 1: now with the assumption that something works out, with the

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Speaker 1: assumption that we are not sitting in the right before

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Speaker 1: recession just because of the inversion that's going on, and

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Speaker 1: question cutting into it, yes, and looking at Micron shares

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Speaker 1: they're up this year, how do you how do you

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Speaker 1: say that they've gotten hit pretty hard from the trade

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Speaker 1: wars because, frankly, because they probably should be higher right now,

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Speaker 1: and you're in the sample size, just the here to

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Speaker 1: day doesn't show how you're looking in the year's past

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Speaker 1: when it got hit a lot harder. I think there's

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Speaker 1: so much uncertainty in the semiconductor sector right now because

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Speaker 1: of the trade war and because of the unknown of

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Speaker 1: how that's going to affect a political piece that is

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Speaker 1: a part of the day of that deal right now

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Speaker 1: that you're seeing restrictions on what the actual return should be.

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Speaker 1: We are in the middle of the Internet of everything,

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Speaker 1: right Everything is getting computerized. There's only going to be

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Speaker 1: needing more and more chips to integrate everything that we

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Speaker 1: do in the future. And so you remove that politically

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Speaker 1: induced unknown to it, and you have a very strong

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Speaker 1: sector in moving forward. So, Steve, how do you feel,

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Speaker 1: I guess within the tech sector about the Fang stocks.

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Speaker 1: They've been such a big, big driver really over the

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Speaker 1: last decade, both on the upside and on the downside.

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Speaker 1: I think about the fourth quarter of the fourth quarter

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Speaker 1: of last year. Where are you on those names? I

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Speaker 1: don't personally, I don't believe in Facebook. I think that

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Speaker 1: the business model has been dying and that they're getting

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Speaker 1: eaten up by their competition, including themselves in Instagram, and

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Speaker 1: therefore generating less revenue UM per click because of it.

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Speaker 1: Um the Amazons of the world. I've been on Amazon's

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Speaker 1: bandwagon for a decade now. A decade ago people were

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Speaker 1: talking about how was overpriced. Everyone uses it more and

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Speaker 1: more and it's easier and easier to buy anything at

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Speaker 1: any given time. So I know people like the lump

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Speaker 1: thing in together as one big thing. It's just not

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Speaker 1: Netflix is not the same as Facebook. Uh. Amazon is

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Speaker 1: not the same as Google. It was a cute little

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Speaker 1: term that people could use for a couple of years there,

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Speaker 1: but I think you've got to be a little more

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Speaker 1: selective on what you're buying. I believe Facebook is a

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Speaker 1: dying business model right now. So am I going to

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Speaker 1: look at that It's the same as Amazon, which I

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Speaker 1: think is a high growth business model. No very interesting Facebook.

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Speaker 1: Just looking at the stock up about this year, um.

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Speaker 1: But you know a lot of those tech stocks to

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Speaker 1: continue to perform well. Steve Doodash, thanks so much for

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Speaker 1: joining us. Steve as a president of I h T

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Speaker 1: Wealth Management based in Chicago, giving us his thoughts on

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Speaker 1: the market. He does not see a recession. Um, it

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Speaker 1: does not. He's not worried about the when we had

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Speaker 1: that inverted yield curve several weeks ago. Uh and UH

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Speaker 1: I think probably believes on some light deal in the

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Speaker 1: next six months. Might all that might be enough with

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Speaker 1: a accommodator fed four equities. Well, space is a growth

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Speaker 1: of business and it's no longer the sole purview of NASA.

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Speaker 1: Investors can actually play it via the E t F market.

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Speaker 1: To give us a sense of what's going on in

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Speaker 1: the space investing race, we welcome Andrew Shannon, chief executive

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Speaker 1: officer of procure a M, joins us here in our

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Speaker 1: Bloomberg Interactive Broker studio. Andrew, thanks so much for joining us.

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Speaker 1: Real quickly, just tell us what procure a M is

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Speaker 1: and how you kind of interact with the space business. So,

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Speaker 1: procure a M is a registered investment advisor where we

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Speaker 1: launched both our proprietary own ideas for e t s

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Speaker 1: as well as help third parties launch their products, and

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Speaker 1: UFO is the first product that we've brought to market

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Speaker 1: listed on the New York Stock Exchange, launched in April

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Speaker 1: of this year. So I'm looking right now at UFO,

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Speaker 1: which is obviously a really catchy ticker. And there's obviously

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Speaker 1: a lot of intrigue around space exploration in what exactly

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Speaker 1: do you invest in? So I think a lot of

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Speaker 1: people have wanted to invest in space for a long time,

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Speaker 1: and until launching this fund and very recently, it's been

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Speaker 1: a fairly difficult space to actually get exposure too. And

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Speaker 1: so unless you're an institution making a private uh, you know,

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Speaker 1: a private company type of purchase, that there weren't too

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Speaker 1: many pure play space companies. But right now this market

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Speaker 1: has really expanded and has brought new entrance into the market.

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Speaker 1: And what we've seen is that satellite companies are a

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Speaker 1: very big driver of this industry, as well as some

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Speaker 1: of the traditional aerospace and defense companies, but those aren't

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Speaker 1: typically as pure play. So when you're looking at our fund,

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Speaker 1: what you're actually getting exposure to is satellite operators and manufacturers,

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Speaker 1: launch equipment company, ground station company, as well as other

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Speaker 1: companies that are completely reliant upon UM space based systems

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Speaker 1: in order to get their services or products to market.

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Speaker 1: Space and exploration has changed a lot in my lifetime.

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Speaker 1: Remember being a little kid watching the moon landings. Um,

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Speaker 1: now it seems like, you know, rockets going up left, right,

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Speaker 1: and center, and I don't know who's sending them up there.

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Speaker 1: So but give us a sense of how space has

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Speaker 1: kind of changed. And it was the purview of kind

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Speaker 1: of the US government, maybe the Russian government, NASA, but

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Speaker 1: now there's mostly private right right. So in the early

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Speaker 1: days you have the the EESA and ROSS, Cosmos and NASA,

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Speaker 1: and those government agencies were really the driving force for

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Speaker 1: the space economy. And this year, actually the just a

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Speaker 1: couple of weeks ago, the numbers came out for the

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Speaker 1: two thousand eighteen space industry and it's set a new

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Speaker 1: record for itself. Roughly four hundred fourteen billion plus dollars

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Speaker 1: um spent on space was and so going over four

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Speaker 1: hundred billion for the first time ever. And then you

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Speaker 1: look at Morgan Stanley that's been building up research groups

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Speaker 1: as well as Bank of America. Morgan Stanley's predicting over

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Speaker 1: a trillion dollars by twenty forty. Bank of America sees

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Speaker 1: up to two point seven trillion dollar industry by so

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Speaker 1: you're looking at a lot of UM analysts out there

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Speaker 1: looking to see this this be a continuum trender of

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Speaker 1: growth for the broader space industry. So I'm looking right

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Speaker 1: now at the assets in UF It's a twelve million

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Speaker 1: dollars and I'm wondering what you needed to get up

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Speaker 1: to an order for this to be sort of a

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Speaker 1: sustainable investment vehicle in itself. So break even for for

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Speaker 1: products such as this is in the several tens of

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Speaker 1: millions typically UM. But you know right now, we just

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Speaker 1: launched this product in April, so to be at twelve million,

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Speaker 1: we're pretty happy, given that the summer is typically a

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Speaker 1: pretty dead season for growth. How much is the construction

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Speaker 1: of an index guided by what investors are asking for

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Speaker 1: versus what registered investment advisors are looking to be able

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Speaker 1: to provide in terms of, you know, a pitch. That's

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Speaker 1: a really good question because I think a lot of

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Speaker 1: times you'll see a thematic fund and maybe the name

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Speaker 1: is really catchy, and so someone says, oh, it invests

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Speaker 1: in this you know, thematic area. I want to own it.

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Speaker 1: But when you actually look at the index, and boil

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Speaker 1: it down, you're actually getting the exposure that you actually

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Speaker 1: wanted to when you invested in that product. So for me,

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Speaker 1: looking at the index is one of the first most

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Speaker 1: important aspects of building a truly representative thematic product. And

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Speaker 1: for this, we actually have a partner who's a former

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Speaker 1: director of the Space Foundation. UM has been studying space policy,

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Speaker 1: space business, all these various areas as well as the technologies,

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Speaker 1: and he actually built this index. So I think what

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Speaker 1: he was able to do is get a pretty strong

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Speaker 1: representation of what the global publicly traded space industry looks like.

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Speaker 1: So you're not going to get every single company because

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Speaker 1: some of them are private and some of them are

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Speaker 1: maybe smaller or less liquid companies. But when you actually

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Speaker 1: look at the breakdown as far as what's driving the

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Speaker 1: space economy, a lot of these names are represented in

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Speaker 1: the fund today. So the space business is growing, it's

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Speaker 1: becoming more and more private. Are you expecting more publicly

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Speaker 1: traded companies to come into the marketplace, UM, I would

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Speaker 1: certainly like to see that. I think, you know, the

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Speaker 1: one getting the most buzz recently on that front is

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Speaker 1: Virgin Galactic, which did this, uh this spack kind of

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Speaker 1: merger that can bring it out to market, hopefully within

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Speaker 1: the next couple of weeks or months um which could

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Speaker 1: be a new way for investors to get exposure to

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Speaker 1: the space industry. Um. You know, I love to see

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Speaker 1: a strong industry that you're constantly seeing acquisitions and I

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Speaker 1: p o s and things like that, and you know,

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Speaker 1: I hope we're getting closer to that stage. But right now,

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Speaker 1: you know, thirty one companies from around the world is

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Speaker 1: a pretty um my view, an interesting way to get

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Speaker 1: exposure to this industry. Andrew Shannon, thank you so much

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Speaker 1: for being with us. Andrew Shannon, the CEO of Procure

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Speaker 1: a M and I gotta say UFO brings me back

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Speaker 1: to watching Doctor Who, growing up with the tartists and

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Speaker 1: with you know, the different the seven different doctors. I

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Speaker 1: could geek out. I'm pretty much anything but definitely science

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Speaker 1: fiction and face exploration. If we appreciate you being with us.

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Speaker 1: There's a lot of back and forth in the political

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Speaker 1: sphere when it comes to global warming, climate change and

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Speaker 1: some of the steps being taken, but the trend is

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Speaker 1: clear when you take a look at business and joining

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Speaker 1: us now to discuss that we are very pleased to

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Speaker 1: say is Rich Lesser, who is the chief executive officer

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Speaker 1: of Boston Consulting Group, which is based in New York.

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Speaker 1: But Rich right now is in Munich, Germany. And before

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Speaker 1: we talk about climate change, what are you doing in Munich.

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Speaker 1: I'm in the middle of hell. It's nice to be

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Speaker 1: here with you. I'm in the middle of an around

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Speaker 1: the world trip, just visiting clients, doing some meetings around

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Speaker 1: the world. So I was in Boston, then Abu Dhabi,

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Speaker 1: now here, then off the Asia, then Seattle, then dot Home.

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Speaker 1: Sounds pretty exciting. So I want to talk a little

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Speaker 1: bit about climate change and what your research has shown

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Speaker 1: in terms of the shift that you've been seeing among

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Speaker 1: the c suite offices. Sure so, um so so, First

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Speaker 1: just the facts and then what we're observing in terms

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Speaker 1: of the dialogue. The facts are really clear. The economic

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Speaker 1: downside from not addressing climate change is enormous, and we're

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Speaker 1: right now not on a one and a half degree path,

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Speaker 1: or at two degree path, or on a much higher path,

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Speaker 1: depending on who you talked to, three and a half

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Speaker 1: or even four degrees. The economic consequences of that are enormous.

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Speaker 1: What was fascinating to us starting with what we just

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Speaker 1: happened to do in Germany coincidentally and have now expended

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Speaker 1: around the world is when you model through the macroeconomic

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Speaker 1: impacts of addressing climate change at a macroeconomic level, that actually,

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Speaker 1: even if a country does it alone, of course it

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Speaker 1: gets better if all of us do it together. The

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Speaker 1: macroeconomic case is quite strong. So to take Germany in

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Speaker 1: the US, for example, if you were to you could

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Speaker 1: improve eight percent of carbon emissions, take down carbon emissions

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Speaker 1: in Germany and in the seventies in the US with

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Speaker 1: no net negative economic impact um. And that's true in

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Speaker 1: many other countries around the world. The last twenty or

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Speaker 1: thirty percent to get to net zero by that will

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Speaker 1: require technological innovation or have some economic consequence. If we

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Speaker 1: can't find that innovation, So then the question is, if

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Speaker 1: that's so good, why don't companies just go do this.

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Speaker 1: It's because while it may be true at a macro

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Speaker 1: economic level that the net impact is slightly positive or

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Speaker 1: neutral macro economically for individual sectors, it will clearly be

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Speaker 1: very hard in many sectors of the economy. So we

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Speaker 1: need governments to set good policy, to create the right incentives,

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Speaker 1: ideality to create a market for carbon That will encourage

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Speaker 1: companies to take the right action, because sector by sector

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Speaker 1: it won't always make sense to do it on their own.

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Speaker 1: So the suite executives now realize how much the public cares,

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Speaker 1: and I think many companies are getting their arms around

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Speaker 1: being much more aggressive on this. So Rich, how difficult

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Speaker 1: is it for you and for your clients to push

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Speaker 1: through meaningful sustainability issues when President Trump and the U.

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Speaker 1: S administration does not appear to be supporting that at all.

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Speaker 1: I think most companies are realizing the there's more opportunity

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Speaker 1: to make progress than they realize, and more of a

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Speaker 1: sense of urgency from many of the customers than might

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Speaker 1: have been in place a couple of years ago, and

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Speaker 1: that will lead to real progress. I think we're also

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Speaker 1: seeing more integration across the public, private, and social sector

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Speaker 1: than we had before. But let's be clear and certain

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Speaker 1: sectors of the economy. Absent effective government action, it will

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Speaker 1: not go as far as it needs to go. And

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Speaker 1: so the lack of the lack of engagement, support and

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Speaker 1: acknowledgement of the magnitude of the issue from the US

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Speaker 1: government and other governments. It's not the only one, but

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Speaker 1: but certainly, the US, given the size of its economy,

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Speaker 1: has a meaningful impact on how far we're going to get,

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Speaker 1: even if companies are serious, and even if companies genuinely

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Speaker 1: try to make progress. Can you give us an example

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Speaker 1: of a concrete measure that an industry has been taking

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Speaker 1: that actually costs them quite a bit of money that

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Speaker 1: moves them towards being more sustainable. I think that's not

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Speaker 1: where most companies are right now. I don't think most

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Speaker 1: companies feel like they either have a defense from their

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Speaker 1: investor base or from others to be able to do

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Speaker 1: things that have purely negative economic consequences. I think the

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Speaker 1: focus right now is that there are a lot of

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Speaker 1: ways you can get better. We see the banks pushing

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Speaker 1: much more investment towards sustainable and renewable industry plays. You

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Speaker 1: see the auto industry pushing towards electric vehicles. You've see

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Speaker 1: the industrial sectors focus on waste and water. But but

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Speaker 1: part of the challenge we've got is it's very hard

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Speaker 1: for one company to take the risk of very negative

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Speaker 1: economic consequences when you've got activist investors and you've got

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Speaker 1: how they'll be portrayed in the financial market. If there

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Speaker 1: was a price on carbon or some other way to

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Speaker 1: have everybody bear a cost. Then I think you could

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Speaker 1: see much more aggressive action and would have negative consequences

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Speaker 1: for one, but collectively will have marginal impact if it's

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Speaker 1: if it's shared burden Without that kind of measure, though,

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Speaker 1: are any of these companies taking real measures towards becoming

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Speaker 1: more sustainable or is it more of a PR push.

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Speaker 1: I don't think it's PR. I don't I so, And

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Speaker 1: to be direct, I don't think it's PR. I think

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Speaker 1: it's a genuine desire to make progress. But I think

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Speaker 1: a genuine desire to make progress within the constraint of

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Speaker 1: having real financial pressures on them. And I don't think

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Speaker 1: we're yet at the stage because because the financial markets,

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Speaker 1: as you know where then most you know, can be

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Speaker 1: pretty unrelenting and and it's hard to do that. But

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Speaker 1: but what I think companies are discovering, so that makes

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Speaker 1: it sound like nothing's happening, I don't feel that way.

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Speaker 1: I think what we see in many sectors as people

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Speaker 1: looking in ways to find win wins, to find wins

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Speaker 1: to to drive carbon out of their footprints, to encourage

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Speaker 1: investments in their industry or in other industries to encourage

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Speaker 1: their suppliers to be bolder in improving their operations because

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Speaker 1: they're the customers for those suppliers. So it's genuine action,

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Speaker 1: but it's not sufficient action. So rich do we need

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Speaker 1: an international framework to really push this forward? So that

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Speaker 1: was the interesting thing. We will be so much better

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Speaker 1: off with an international framework. But look around the world

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Speaker 1: right now, we're not finding international frameworks on many topics

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Speaker 1: right now, trade, you know, many issues, so so we

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Speaker 1: it's it's unfortunate because there would be so much easier

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Speaker 1: for the world to move if we moved together. But

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Speaker 1: what was interesting about our researches that countries can take

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Speaker 1: big actions on their own that are do not bear

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Speaker 1: the negative economic consequences that are sometimes portrayed to make

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Speaker 1: major progress. Again, I don't want to overstate it's not

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Speaker 1: to get net zero carbon by on their own, but

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Speaker 1: to get seventy or eighty percent of the way they

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Speaker 1: are is still a huge step that could be done

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Speaker 1: without negative economic consequences at a country level, but it

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Speaker 1: has to deal with the consequences set or bisector and

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Speaker 1: steal and cement in the energy industries in other places

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Speaker 1: in order to be able to make that viable for

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Speaker 1: individual companies to drip the kind of actions that we

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Speaker 1: need to have them take. Ye. This may be an

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Speaker 1: issue of I think globally and act locally. Rich Lesser,

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Speaker 1: thanks so much for joining us. Rich as the chief

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Speaker 1: executive officer of Boston Consulting Group, joining us on the

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Speaker 1: phone from Munich, Germany, as he does, is around the

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Speaker 1: world trip visiting clients, talking about climate change and how

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Speaker 1: these companies should be dealing with it, a very compelling topic.

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Speaker 1: Thanks for listening to the Bloomberg P and L podcast.

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00:27:34,520 --> 00:27:37,120
Speaker 1: You can subscribe and listen to interviews at Apple Podcasts

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00:27:37,200 --> 00:27:40,280
Speaker 1: or whatever podcast platform you prefer. Paul Sweeney, I'm on

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00:27:40,320 --> 00:27:42,960
Speaker 1: Twitter at pt Sweeney. And Lisa bram Woyds I'm on

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00:27:43,000 --> 00:27:45,879
Speaker 1: Twitter at Lisa bram Woyds. One before the podcast, you

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00:27:45,880 --> 00:27:48,439
Speaker 1: can always catch us worldwide on Bloomberg Radio