1 00:00:00,280 --> 00:00:03,280 Speaker 1: Hi, This is Dana Perkins and you're listening to Switch 2 00:00:03,279 --> 00:00:06,000 Speaker 1: It on the B and E F podcast. Today, we're 3 00:00:06,000 --> 00:00:07,800 Speaker 1: going to welcome back to guests who have been on 4 00:00:07,840 --> 00:00:11,959 Speaker 1: the show before, Maya Galdemar and Mallory to Gliano. They 5 00:00:12,000 --> 00:00:14,360 Speaker 1: write about sustainable finance for us at b NF, and 6 00:00:14,400 --> 00:00:16,480 Speaker 1: they're going to provide us with an update on what's 7 00:00:16,520 --> 00:00:19,120 Speaker 1: going on in their space. One of the key developments 8 00:00:19,160 --> 00:00:21,760 Speaker 1: since we spoke to them last are the proposed rules 9 00:00:21,800 --> 00:00:25,159 Speaker 1: to enhance and standardize climate related disclosures by the U 10 00:00:25,280 --> 00:00:28,600 Speaker 1: S Securities and Exchange Commission, or SEC for short. We 11 00:00:28,640 --> 00:00:32,040 Speaker 1: go through some important aspects of the proposed rules and 12 00:00:32,080 --> 00:00:34,760 Speaker 1: how this might play out in the coming weeks. We 13 00:00:34,800 --> 00:00:38,519 Speaker 1: also discussed the EU taxonomy for sustainable activities and some 14 00:00:38,640 --> 00:00:41,800 Speaker 1: of the recent updates regarding nuclear and gas. And we're 15 00:00:41,840 --> 00:00:43,960 Speaker 1: going to end today's show with an overview of the 16 00:00:43,960 --> 00:00:47,960 Speaker 1: Glasgow Financial Alliance for Net Zero. The next episode following 17 00:00:48,000 --> 00:00:49,960 Speaker 1: this one will be part of a special series with 18 00:00:50,040 --> 00:00:53,120 Speaker 1: external guests from our b NF summits and will include 19 00:00:53,120 --> 00:00:55,600 Speaker 1: an interview with Mark Karney, the chair of the Glasgow 20 00:00:55,640 --> 00:00:58,320 Speaker 1: Financial Alliance for Net Zero or g FANS for short. 21 00:00:58,560 --> 00:01:00,920 Speaker 1: Note that b and EF does not provide investment or 22 00:01:00,960 --> 00:01:03,960 Speaker 1: strategy advice, and a complete disclaimer can be found at 23 00:01:03,960 --> 00:01:05,560 Speaker 1: the end of the show. If you want to read 24 00:01:05,600 --> 00:01:08,840 Speaker 1: more of b NF sustainable finance research, clients can read 25 00:01:08,880 --> 00:01:11,399 Speaker 1: it at b NF on the Bloomberg terminal, at BNF 26 00:01:11,440 --> 00:01:14,000 Speaker 1: dot com, or via the BENF mobile app. If you 27 00:01:14,040 --> 00:01:15,720 Speaker 1: get to the end of the show and you like 28 00:01:15,800 --> 00:01:17,480 Speaker 1: what you heard and maybe you want to listen to 29 00:01:17,520 --> 00:01:20,039 Speaker 1: the next one, don't forget to subscribe to our show 30 00:01:20,080 --> 00:01:23,360 Speaker 1: on your podcast player. Now let's get to today's podcast 31 00:01:23,560 --> 00:01:31,960 Speaker 1: on sustainable finance. Maya and Mallory thank you so much 32 00:01:32,000 --> 00:01:33,520 Speaker 1: for coming back to the show and talk to us 33 00:01:33,520 --> 00:01:37,840 Speaker 1: a little bit today about sustainable finance and regulations. So Maya, Hi, 34 00:01:37,959 --> 00:01:41,560 Speaker 1: Hi everyone, and Mallory Hi, thanks so much for having us. 35 00:01:41,800 --> 00:01:44,320 Speaker 1: We've got three female voices on here, so who wanted 36 00:01:44,319 --> 00:01:46,520 Speaker 1: to make sure you know who was who. We've got 37 00:01:46,520 --> 00:01:49,680 Speaker 1: a lot of ground to cover, so typically on the show, 38 00:01:50,240 --> 00:01:52,000 Speaker 1: one of the things we do is we think about 39 00:01:52,440 --> 00:01:56,320 Speaker 1: one piece of research that our analysts have covered in depth. 40 00:01:56,400 --> 00:01:59,000 Speaker 1: We dive in and we get into some of the 41 00:01:59,040 --> 00:02:01,600 Speaker 1: different things that were at up during that research. And 42 00:02:01,760 --> 00:02:06,760 Speaker 1: today we're actually addressing three pieces of research, of which 43 00:02:07,000 --> 00:02:09,400 Speaker 1: one is actually quite long, so we'll see how much 44 00:02:09,400 --> 00:02:11,600 Speaker 1: ground we can cover. But well, let's start in the 45 00:02:11,720 --> 00:02:15,080 Speaker 1: US because there's been some interesting developments and I'm going 46 00:02:15,120 --> 00:02:17,600 Speaker 1: to be honest, I am not quite sure what they mean. 47 00:02:17,760 --> 00:02:20,640 Speaker 1: So I hope you can shed light on that the 48 00:02:20,840 --> 00:02:27,040 Speaker 1: SEC has proposed some regulations. I'm thinking that similar maybe 49 00:02:27,120 --> 00:02:29,440 Speaker 1: in some respects to what the EU taxonomy is doing. 50 00:02:29,800 --> 00:02:31,440 Speaker 1: Let's see if I'm right or if I'm wrong, what 51 00:02:31,560 --> 00:02:34,160 Speaker 1: is it that the SEC is proposing. Basically, to break 52 00:02:34,200 --> 00:02:37,280 Speaker 1: it down, the SEC has proposed a new rule, so 53 00:02:37,320 --> 00:02:40,519 Speaker 1: it's not finalized yet, but they have voted to sort 54 00:02:40,520 --> 00:02:43,720 Speaker 1: of bring forward a rule that would change the way 55 00:02:43,919 --> 00:02:48,480 Speaker 1: registrants sort of filers with the SEC have to disclose 56 00:02:48,560 --> 00:02:51,560 Speaker 1: things like climate related risk. And in my mind this 57 00:02:51,639 --> 00:02:55,280 Speaker 1: is really a watershed moment because the US is not 58 00:02:55,440 --> 00:02:58,080 Speaker 1: a super strong player as of right at all in 59 00:02:58,200 --> 00:03:03,600 Speaker 1: terms of regulating setting policies for sustainable finance or e 60 00:03:03,720 --> 00:03:06,200 Speaker 1: s g. Environmental, social and governance. You might hear that 61 00:03:06,240 --> 00:03:09,320 Speaker 1: acronym a lot disclosure. You know, on a global scale, 62 00:03:09,400 --> 00:03:13,480 Speaker 1: they're well behind regions like the EU. So what this 63 00:03:13,600 --> 00:03:17,000 Speaker 1: new proposed rule would do if it comes into effect, 64 00:03:17,000 --> 00:03:19,920 Speaker 1: in a similar form to the proposal, which is over 65 00:03:20,200 --> 00:03:23,440 Speaker 1: you know, five hundred pages long sort of describing the 66 00:03:23,520 --> 00:03:26,960 Speaker 1: reasoning for their decisions, and a lot of detail is 67 00:03:27,000 --> 00:03:30,600 Speaker 1: it would require registrants. I'll use that word a lot. Basically, 68 00:03:30,880 --> 00:03:33,639 Speaker 1: you know, folks that are registered with the SEC to 69 00:03:34,000 --> 00:03:38,440 Speaker 1: a detailed existing and potential climate related risks, the impacts 70 00:03:38,480 --> 00:03:41,520 Speaker 1: to their business, and sort of the oversight and management 71 00:03:41,520 --> 00:03:43,320 Speaker 1: of those risks as they see. They'd also have to 72 00:03:43,400 --> 00:03:46,720 Speaker 1: detail any transition plans that they've made. So like a 73 00:03:46,760 --> 00:03:49,520 Speaker 1: company who set you know, a public net zero target 74 00:03:49,560 --> 00:03:53,360 Speaker 1: for you know, meeting net zero emissions by saying or 75 00:03:53,440 --> 00:03:56,240 Speaker 1: something like that, they'd actually have to sort of detail 76 00:03:56,440 --> 00:03:59,600 Speaker 1: in their typical filing documents there, you know, what are 77 00:03:59,680 --> 00:04:04,760 Speaker 1: usually financial risk related documents with the SEC, what those 78 00:04:04,800 --> 00:04:08,960 Speaker 1: plans mean, how they're planning to achieve those goals over time, 79 00:04:09,040 --> 00:04:12,240 Speaker 1: what they've been doing, whether they're using carbon offsets. You know, 80 00:04:12,280 --> 00:04:14,600 Speaker 1: a lot of detail in there. And then one of 81 00:04:14,640 --> 00:04:19,040 Speaker 1: the I think the most anticipated or unsure elements. You know, 82 00:04:19,040 --> 00:04:21,799 Speaker 1: it's something that was really a bit more contentious going 83 00:04:21,839 --> 00:04:24,280 Speaker 1: into this, although all of it is really quite important 84 00:04:24,600 --> 00:04:28,039 Speaker 1: is that they'll also have to disclose their greenhouse gas emissions. 85 00:04:28,680 --> 00:04:32,120 Speaker 1: And I mean that's a pretty big deal in my mind. There. 86 00:04:32,200 --> 00:04:35,000 Speaker 1: You know, entities are going to have to start putting numbers, 87 00:04:35,040 --> 00:04:38,120 Speaker 1: you know, into the public. Many already do, but you 88 00:04:38,120 --> 00:04:40,080 Speaker 1: know they'll have to do it in a uniform of 89 00:04:40,120 --> 00:04:44,520 Speaker 1: what they're emitting. Scope one really direct emissions. Scope two 90 00:04:44,520 --> 00:04:46,760 Speaker 1: emissions which are more indirect things like you know, from 91 00:04:46,839 --> 00:04:50,960 Speaker 1: electricity and heating, and then Scope three for most entities, 92 00:04:51,279 --> 00:04:53,440 Speaker 1: will also have to be disclosed. Those are the super 93 00:04:53,480 --> 00:04:56,400 Speaker 1: indirect emissions in many cases, you know, like what's being 94 00:04:56,440 --> 00:04:59,880 Speaker 1: emitted by the products you know, put out by customer, 95 00:05:00,200 --> 00:05:03,440 Speaker 1: or what's in the value chain, or emissions from travel 96 00:05:03,520 --> 00:05:06,479 Speaker 1: of employees and and things like that. So there's there's 97 00:05:06,520 --> 00:05:09,240 Speaker 1: a lot included in this new proposed rule. Then the 98 00:05:09,279 --> 00:05:12,560 Speaker 1: proposal is still in some respects and its infancy, is 99 00:05:12,560 --> 00:05:14,880 Speaker 1: it not? So when we're talking about Scope three, have 100 00:05:15,040 --> 00:05:19,480 Speaker 1: they defined what that actually entails? And I know this 101 00:05:19,560 --> 00:05:21,320 Speaker 1: is one of the more tricky things to measure for 102 00:05:21,440 --> 00:05:24,680 Speaker 1: many companies. Oh yeah, And my understanding is that there 103 00:05:24,760 --> 00:05:28,240 Speaker 1: was quite a lot of deliberation between the SEC commissioners. 104 00:05:28,240 --> 00:05:31,200 Speaker 1: There's four Commissioners right now there I think can be 105 00:05:31,240 --> 00:05:34,200 Speaker 1: a max at five. They were really trying to tease 106 00:05:34,240 --> 00:05:38,440 Speaker 1: out whether or not to include Scope three, and to 107 00:05:38,680 --> 00:05:41,440 Speaker 1: whom they've put in place some nuances, you know, like 108 00:05:41,480 --> 00:05:46,040 Speaker 1: a gradual phase in period for these different types of disclosures, 109 00:05:46,080 --> 00:05:48,520 Speaker 1: and Scope three would come a little bit later for 110 00:05:48,680 --> 00:05:51,839 Speaker 1: entities than Scope one, sort of helping ease into the 111 00:05:51,920 --> 00:05:56,320 Speaker 1: process by level of difficulty. But it's still very ambitious, 112 00:05:56,360 --> 00:05:59,920 Speaker 1: and they use a lot of existing frameworks to sort 113 00:06:00,160 --> 00:06:03,760 Speaker 1: inspire this proposed rule, Things like the Test Force on 114 00:06:03,800 --> 00:06:07,400 Speaker 1: Climate Related Financial Disclosures often called the tcf D just 115 00:06:07,440 --> 00:06:11,200 Speaker 1: sort of a voluntary guide for disclosure that is widely 116 00:06:11,200 --> 00:06:14,440 Speaker 1: adopted and in some cases, you know, used as a 117 00:06:14,440 --> 00:06:18,599 Speaker 1: basis for mandatory disclosures in in different regions, and also 118 00:06:18,640 --> 00:06:21,880 Speaker 1: the Greenhouse Gas Protocol. They use that to sort of 119 00:06:21,920 --> 00:06:25,920 Speaker 1: base their definitions of what is constituted as Scope three, 120 00:06:25,920 --> 00:06:28,840 Speaker 1: and it would include a lot of activities. To your 121 00:06:28,839 --> 00:06:33,240 Speaker 1: point about its infancy, yes, it's it's still unsure the 122 00:06:33,320 --> 00:06:36,479 Speaker 1: final form that the rule will take, but I think 123 00:06:36,520 --> 00:06:39,919 Speaker 1: it's anticipated that it will be somewhat similar in many 124 00:06:39,920 --> 00:06:43,400 Speaker 1: ways to the current proposed rules. So basically what happens 125 00:06:43,440 --> 00:06:46,800 Speaker 1: is they voted, the rule was sort of moved on 126 00:06:46,960 --> 00:06:50,360 Speaker 1: to the next stage. It's now in a public comment period. 127 00:06:50,640 --> 00:06:54,240 Speaker 1: They'll get those comments back at least through May twenties, 128 00:06:54,440 --> 00:06:58,000 Speaker 1: if not a longer, and then they will sort of 129 00:06:58,000 --> 00:07:01,960 Speaker 1: take those into consideration. How it out amongst themselves, reformulate 130 00:07:02,000 --> 00:07:04,520 Speaker 1: sort of the typical process for putting out rules with 131 00:07:04,600 --> 00:07:08,240 Speaker 1: the SEC, and then they will you know, put out 132 00:07:08,279 --> 00:07:11,560 Speaker 1: and vote on a finalized rule. We could see that 133 00:07:11,680 --> 00:07:13,840 Speaker 1: as early as the end of the year. So the 134 00:07:13,920 --> 00:07:18,280 Speaker 1: US Security and Exchange Commission is voting on this and 135 00:07:18,320 --> 00:07:21,560 Speaker 1: then putting it out for what did you say, no, no, 136 00:07:21,680 --> 00:07:24,360 Speaker 1: you're good, so for public comments. So basically they have 137 00:07:24,440 --> 00:07:27,880 Speaker 1: formulated this proposal amongst the different you know divisions of 138 00:07:27,920 --> 00:07:30,880 Speaker 1: the SEC through the drafting process, and then there was 139 00:07:30,920 --> 00:07:35,920 Speaker 1: a public meeting and they almost sort of presented publicly 140 00:07:36,080 --> 00:07:40,560 Speaker 1: the details in a shortened form of the proposal. And 141 00:07:40,600 --> 00:07:44,800 Speaker 1: then they the commissioners sort of those those members who 142 00:07:45,000 --> 00:07:47,920 Speaker 1: vote on on the proposed rule. They sort of lead 143 00:07:48,240 --> 00:07:50,560 Speaker 1: the SEC and they're appointed by the President and they 144 00:07:50,560 --> 00:07:53,840 Speaker 1: sit for a term. They all sort of gave reasoning 145 00:07:53,920 --> 00:07:57,680 Speaker 1: behind their support or opposition of the proposed rule. And 146 00:07:57,720 --> 00:08:01,120 Speaker 1: then they voted and it passed through three to one, 147 00:08:01,360 --> 00:08:03,680 Speaker 1: and so now, yes, it it's going. It's it's open 148 00:08:03,720 --> 00:08:06,280 Speaker 1: to the public. Anybody can read the document and submit 149 00:08:06,320 --> 00:08:08,800 Speaker 1: a public comment and then that will all be taken 150 00:08:08,800 --> 00:08:12,480 Speaker 1: into consideration before things are sort of rehashed and finalized 151 00:08:12,520 --> 00:08:18,440 Speaker 1: by the SEC. So maya, how does what the SEC 152 00:08:18,720 --> 00:08:21,760 Speaker 1: in the US is proposing to do? How does this 153 00:08:21,840 --> 00:08:25,320 Speaker 1: stack up with some of the existing regulations? It maybe 154 00:08:25,600 --> 00:08:29,320 Speaker 1: do rate more highly. We we actually have a policy 155 00:08:29,360 --> 00:08:32,240 Speaker 1: scoreboard where we actually look at countries and the different 156 00:08:32,240 --> 00:08:34,640 Speaker 1: policies they have in place in comparison to one another. 157 00:08:34,720 --> 00:08:37,400 Speaker 1: So that's something we look at it being how does 158 00:08:37,679 --> 00:08:39,800 Speaker 1: what the US is proposing to do in the future, 159 00:08:40,720 --> 00:08:42,800 Speaker 1: where does it get them in terms of stacking up 160 00:08:42,800 --> 00:08:46,480 Speaker 1: with perhaps the European Commission for example. Yeah, so what 161 00:08:46,520 --> 00:08:49,240 Speaker 1: we're seeing right now with the US is that it's 162 00:08:49,320 --> 00:08:52,720 Speaker 1: just the necessary first step to kick off the wider 163 00:08:52,760 --> 00:08:56,840 Speaker 1: strategy the US is really behind and and to be 164 00:08:56,880 --> 00:08:59,680 Speaker 1: completely honest, and we agree on that with Malorie as well, 165 00:09:00,440 --> 00:09:04,040 Speaker 1: this first step there's nothing compared to the EU A 166 00:09:04,120 --> 00:09:07,320 Speaker 1: gent down sustainable finance and the strategy that we're seeing 167 00:09:07,440 --> 00:09:11,520 Speaker 1: here in the EU it's an important and necessary first step, 168 00:09:11,880 --> 00:09:16,720 Speaker 1: but for now it very much looks like mandatory tcs 169 00:09:16,880 --> 00:09:20,160 Speaker 1: D reporting tcf D being what Mantery explained, which is 170 00:09:20,200 --> 00:09:24,760 Speaker 1: the Task Force on Climate Related Antrol Disclosure, which basically 171 00:09:24,880 --> 00:09:28,720 Speaker 1: forces company to look at the risk and opportunities that 172 00:09:28,800 --> 00:09:32,200 Speaker 1: are linked to climate change and and this is due 173 00:09:32,200 --> 00:09:35,079 Speaker 1: to many reasons. The first reason is the fact that 174 00:09:35,240 --> 00:09:39,600 Speaker 1: the SEC, the mandate of the SEC, only allows them 175 00:09:39,720 --> 00:09:44,600 Speaker 1: to look at what is financially material, then look at 176 00:09:44,920 --> 00:09:51,280 Speaker 1: and create a great regulations or legislation to basically protect investors. 177 00:09:51,640 --> 00:09:56,600 Speaker 1: So their mandate is much more refined and smaller than 178 00:09:56,920 --> 00:09:59,640 Speaker 1: the one of the European Commission and all the Europeans 179 00:09:59,720 --> 00:10:03,839 Speaker 1: pre isory authorities plus the European Central Banks, because all 180 00:10:03,880 --> 00:10:06,920 Speaker 1: the regulations were seeing in the in the European Union 181 00:10:07,280 --> 00:10:12,440 Speaker 1: come from everywhere. So for now, the US isn't the 182 00:10:12,520 --> 00:10:17,040 Speaker 1: tier in the third tier of the G twenty country 183 00:10:17,160 --> 00:10:21,440 Speaker 1: that countries that we rent so far, and it's most 184 00:10:21,480 --> 00:10:24,440 Speaker 1: probably going to remain in the tier three because this 185 00:10:24,600 --> 00:10:30,440 Speaker 1: is just one legislation looking at one type of organizations, 186 00:10:30,480 --> 00:10:34,840 Speaker 1: which are corporations as a whole, like older registrants to 187 00:10:35,000 --> 00:10:38,600 Speaker 1: the SEC. But it might probably push them to the 188 00:10:38,640 --> 00:10:41,240 Speaker 1: top of that tier three, because at the moment they 189 00:10:41,240 --> 00:10:44,280 Speaker 1: were more at the bottom. All right, So then now, ay, 190 00:10:44,679 --> 00:10:46,400 Speaker 1: I want to ask you whether or not you think 191 00:10:46,400 --> 00:10:48,760 Speaker 1: it's actually even going to happen, because one of the 192 00:10:48,800 --> 00:10:52,080 Speaker 1: things I have learned over the years from discussing different 193 00:10:52,080 --> 00:10:55,400 Speaker 1: regulations in the US is that you have things that 194 00:10:55,440 --> 00:11:00,240 Speaker 1: are proposed and then a new administration comes in in 195 00:11:00,240 --> 00:11:03,120 Speaker 1: in Washington and then things get rolled back. Is there 196 00:11:03,160 --> 00:11:06,680 Speaker 1: any risk that that will happen and that any changes 197 00:11:06,720 --> 00:11:08,240 Speaker 1: in the White House will have an impact on the 198 00:11:08,280 --> 00:11:10,880 Speaker 1: way the SEC is actually functioning? You know, as of 199 00:11:11,000 --> 00:11:13,280 Speaker 1: right now, I think it's pretty likely that it will 200 00:11:13,559 --> 00:11:16,720 Speaker 1: get through. As I mentioned, there's four commissioners right now. 201 00:11:16,760 --> 00:11:19,840 Speaker 1: Three of them are Democrats and one is Republican. The 202 00:11:19,880 --> 00:11:23,920 Speaker 1: one Republican commissioner Hester Perse, She voted no, but the 203 00:11:23,920 --> 00:11:29,160 Speaker 1: other three voted yes. And basically the appointments of the 204 00:11:29,200 --> 00:11:32,360 Speaker 1: commissioner are put in place by the President and then 205 00:11:32,360 --> 00:11:36,760 Speaker 1: they serve a term. One of the appointees Alison Heron Lee, 206 00:11:36,760 --> 00:11:40,560 Speaker 1: who previously served as the acting chair. Her term is 207 00:11:40,600 --> 00:11:44,040 Speaker 1: coming up for a close in I believe June, but 208 00:11:44,160 --> 00:11:46,640 Speaker 1: she has sort of put a statement saying that she 209 00:11:46,679 --> 00:11:48,440 Speaker 1: will be stepping down at the end of her term 210 00:11:48,679 --> 00:11:53,160 Speaker 1: once a successor is confirmed. So it's unclear exactly when 211 00:11:53,200 --> 00:11:56,720 Speaker 1: she'll be departing from the SEC. But given that you know, 212 00:11:56,880 --> 00:11:59,520 Speaker 1: Joe Biden is the president and he is you know, 213 00:11:59,559 --> 00:12:02,960 Speaker 1: of the Democratic Party, and there's room for more commissioners 214 00:12:03,240 --> 00:12:07,000 Speaker 1: with and without commissionerly, I think it's you know, pretty 215 00:12:07,440 --> 00:12:10,960 Speaker 1: much likely that whoever is or is not appointed before 216 00:12:11,000 --> 00:12:13,920 Speaker 1: this finalized rule gets voted upon, because you know, you 217 00:12:13,920 --> 00:12:16,679 Speaker 1: could see more commissioners appointed before that time, or or 218 00:12:16,720 --> 00:12:19,839 Speaker 1: perhaps not, that it will get past in a form 219 00:12:19,920 --> 00:12:23,520 Speaker 1: that is probably pretty similar to what it is now. 220 00:12:23,600 --> 00:12:26,840 Speaker 1: I don't anticipate them pairing it down too much because 221 00:12:26,840 --> 00:12:29,360 Speaker 1: I think the biggest hurdle was them actually putting a 222 00:12:29,360 --> 00:12:31,960 Speaker 1: lot of this like scope three emissions disclosures in the 223 00:12:32,000 --> 00:12:34,800 Speaker 1: proposed rule and sort of putting that out there, so 224 00:12:35,000 --> 00:12:36,960 Speaker 1: you know, it kind of behooves them to to put 225 00:12:37,000 --> 00:12:40,280 Speaker 1: it through. To One concern in terms of things like 226 00:12:40,440 --> 00:12:44,880 Speaker 1: rollbacks is legal action. So there have already been threats 227 00:12:45,200 --> 00:12:49,040 Speaker 1: for lawsuits to you know, challenging the SEC, which would 228 00:12:49,080 --> 00:12:51,640 Speaker 1: happen after the rule is finalized, so it wouldn't be 229 00:12:51,679 --> 00:12:54,040 Speaker 1: happening in this form because the rule is not complete yet, 230 00:12:54,440 --> 00:12:57,120 Speaker 1: and you know, challenge whether or not it violates the 231 00:12:57,160 --> 00:13:01,200 Speaker 1: mandate of the SEC. As Maya mentioned, you know, astuteley earlier, 232 00:13:01,480 --> 00:13:04,080 Speaker 1: the SEC you know how is sort of regulating things 233 00:13:04,120 --> 00:13:08,240 Speaker 1: that pose material you know, financial risks, and that's something 234 00:13:08,280 --> 00:13:11,559 Speaker 1: that I didn't mention earlier. Some of these disclosures are 235 00:13:11,559 --> 00:13:15,680 Speaker 1: subject to to that sort of materiality clause here. That 236 00:13:15,679 --> 00:13:19,000 Speaker 1: buzzword a lot, but basically it's you know, meaning that 237 00:13:19,600 --> 00:13:23,199 Speaker 1: a reasonable person would think that information is financially important, 238 00:13:23,520 --> 00:13:26,840 Speaker 1: and so it's you know, it's a very strong rule 239 00:13:27,000 --> 00:13:29,720 Speaker 1: in my personal opinion, but it does leave you know, 240 00:13:29,800 --> 00:13:33,160 Speaker 1: some of this quote unquote materiality of what to disclose 241 00:13:33,240 --> 00:13:36,520 Speaker 1: or not disclose up to the discretion of the disclosure, 242 00:13:36,600 --> 00:13:39,640 Speaker 1: you know, which can you know, pose those questions are 243 00:13:39,640 --> 00:13:43,600 Speaker 1: not I'm stealing so of Maya's European pessimism, but for 244 00:13:43,600 --> 00:13:46,720 Speaker 1: for this, you know, I think that you know, analyses 245 00:13:46,720 --> 00:13:49,720 Speaker 1: have shown that it's sort of likely that even if 246 00:13:49,880 --> 00:13:54,079 Speaker 1: a lawsuits were to be waged, the rule will probably 247 00:13:54,520 --> 00:13:59,440 Speaker 1: survive in you know, the form without being completely paired down, 248 00:13:59,520 --> 00:14:02,240 Speaker 1: strip down, you know, to to its nuts and bolts 249 00:14:02,320 --> 00:14:04,720 Speaker 1: and get through, which you know, I think would be 250 00:14:05,120 --> 00:14:07,400 Speaker 1: a pretty big deal. It remains to be seen how 251 00:14:07,440 --> 00:14:10,200 Speaker 1: things will go in the future, but you know, current 252 00:14:10,240 --> 00:14:12,880 Speaker 1: concerns are whether or not you know, the greenhouse gas 253 00:14:12,880 --> 00:14:18,640 Speaker 1: emissions disclosure components, for example, you know, violate the rule. Uh, 254 00:14:18,679 --> 00:14:21,040 Speaker 1: you know, the mandates from Congress so that established the 255 00:14:21,120 --> 00:14:25,240 Speaker 1: SEC of having to disclose financially material information, and whether 256 00:14:25,240 --> 00:14:28,840 Speaker 1: it's sort of oversteps by requiring them to disclose too much. 257 00:14:28,880 --> 00:14:33,440 Speaker 1: There's also concerns over whether it violates the Constitution's First 258 00:14:33,480 --> 00:14:35,840 Speaker 1: Amendment of free speech, because the SEC is sort of 259 00:14:35,880 --> 00:14:39,960 Speaker 1: allowed to compel speech to promote transparency from companies, but 260 00:14:40,120 --> 00:14:43,120 Speaker 1: there have been questions over whether or not this, uh, 261 00:14:43,280 --> 00:14:46,560 Speaker 1: this oversteps that that first Amendment as well. So we'll 262 00:14:46,560 --> 00:14:49,120 Speaker 1: see the like. You know, it's likely that lawsuits will 263 00:14:49,160 --> 00:14:51,600 Speaker 1: be waged, but I think it's also equally likely that 264 00:14:51,960 --> 00:14:55,440 Speaker 1: the rule will come through sort of unabashed and and 265 00:14:55,560 --> 00:14:58,000 Speaker 1: make it in a final form that looks very similar 266 00:14:58,000 --> 00:15:00,600 Speaker 1: to what it is now and sort of in supreme 267 00:15:00,640 --> 00:15:03,400 Speaker 1: for for quite a while now for a very short break, 268 00:15:03,480 --> 00:15:09,480 Speaker 1: stay with us. So well, then let's go back to 269 00:15:09,680 --> 00:15:13,120 Speaker 1: Maya and that you are calling it European pessimism. But 270 00:15:13,160 --> 00:15:15,600 Speaker 1: I think she's just giving it a good dose of 271 00:15:15,720 --> 00:15:20,520 Speaker 1: critical thinking and realism on some of these and she 272 00:15:20,640 --> 00:15:23,160 Speaker 1: applies it to Europe as well. So let's then talk 273 00:15:23,200 --> 00:15:26,320 Speaker 1: about the EU taxonomy. There have been some changes on 274 00:15:26,400 --> 00:15:30,440 Speaker 1: that side and some discussion around incorporating gas and nuclear. 275 00:15:30,880 --> 00:15:35,560 Speaker 1: Now I know that you have some strong opinions regarding 276 00:15:35,640 --> 00:15:39,080 Speaker 1: what this may do to Europe's climate goals. So Maya, 277 00:15:39,080 --> 00:15:41,040 Speaker 1: why don't you lay out what what is what is 278 00:15:41,080 --> 00:15:43,480 Speaker 1: the problem here, and what is your critique of gas 279 00:15:43,520 --> 00:15:46,640 Speaker 1: and nuclear in the taxonomy. So ney's try to make 280 00:15:46,640 --> 00:15:48,920 Speaker 1: it short because we don't have three hours in front 281 00:15:48,960 --> 00:15:51,640 Speaker 1: of us and a long debate, you know the French way, 282 00:15:52,120 --> 00:15:55,000 Speaker 1: like everything hands and stuff. Anyway, I'm going to play 283 00:15:55,040 --> 00:16:00,720 Speaker 1: devil's advocate here too, ready for that. So they two 284 00:16:01,240 --> 00:16:05,840 Speaker 1: very different points. The inclusion of nuclear and natural gas 285 00:16:06,160 --> 00:16:09,640 Speaker 1: have come together into the taxonomy. But this is more 286 00:16:10,160 --> 00:16:14,560 Speaker 1: because of like diplomatic and political like reason is the 287 00:16:14,600 --> 00:16:17,320 Speaker 1: fact that some countries were pushing for one some so 288 00:16:17,480 --> 00:16:19,720 Speaker 1: others were like, you know what, if you're pushing for one, 289 00:16:19,760 --> 00:16:23,280 Speaker 1: we're pushing for the other. So the taxonomy has been 290 00:16:23,800 --> 00:16:25,960 Speaker 1: the first thing that people need to know is that 291 00:16:26,000 --> 00:16:29,520 Speaker 1: the taxonomy, the first texts have been approved, they've been 292 00:16:29,560 --> 00:16:33,600 Speaker 1: signed off, they've been passed, they came into force this year. 293 00:16:33,800 --> 00:16:38,760 Speaker 1: Companies have been reported their inligibility percentage to the taxonomy 294 00:16:38,880 --> 00:16:41,480 Speaker 1: and it's going to be full alignment next year. But 295 00:16:41,600 --> 00:16:47,400 Speaker 1: then in December one, the European Commission proposed and put 296 00:16:47,440 --> 00:16:52,440 Speaker 1: out an addendum to the taxonomy to basically create conditions 297 00:16:52,520 --> 00:16:57,000 Speaker 1: under which nuclear and natural gas could be considered green 298 00:16:57,360 --> 00:17:00,200 Speaker 1: in the taxonomy within the framework of the tex ME. 299 00:17:00,840 --> 00:17:05,760 Speaker 1: And so after that the Platform and UM and the 300 00:17:05,960 --> 00:17:09,200 Speaker 1: Europe of the Platform and the member states have reviewed 301 00:17:09,440 --> 00:17:13,119 Speaker 1: this these conditions, and then after there was another point 302 00:17:13,320 --> 00:17:17,800 Speaker 1: where the European Commission has actually approved the text that 303 00:17:17,920 --> 00:17:21,000 Speaker 1: was that was proposed at the end of December without 304 00:17:21,119 --> 00:17:26,040 Speaker 1: any changes, despite the despite the analysis from the Platform 305 00:17:26,200 --> 00:17:30,000 Speaker 1: and the member state. So the two facts are the 306 00:17:30,040 --> 00:17:33,800 Speaker 1: inclusion of nuclear in the in the taxonomy is where 307 00:17:33,920 --> 00:17:38,480 Speaker 1: any new built nuclear but also maintenance of installation. The 308 00:17:38,520 --> 00:17:41,480 Speaker 1: main issue with the inclusion of nuclear in the taxonomy, 309 00:17:41,640 --> 00:17:46,160 Speaker 1: according to being if analysis is being at finds out 310 00:17:46,240 --> 00:17:49,520 Speaker 1: that basically there is no issue in terms of like 311 00:17:49,720 --> 00:17:53,920 Speaker 1: announcing the de carbonization potential of nuclear. Nuclear is a 312 00:17:54,160 --> 00:17:58,359 Speaker 1: very low carbon source of electricity, well below the hundred 313 00:17:58,359 --> 00:18:02,080 Speaker 1: grams seal too perclude our that is requested from any 314 00:18:02,200 --> 00:18:07,520 Speaker 1: power generation plants within the taxonomy. So nuclear depending on 315 00:18:07,600 --> 00:18:15,320 Speaker 1: the estimates, we range between ten grams and sixty grams. 316 00:18:15,320 --> 00:18:18,639 Speaker 1: But whatever the the exact number, it's for a bit 317 00:18:18,680 --> 00:18:21,760 Speaker 1: of the freshials that are imposed in the taxonomy. So 318 00:18:22,200 --> 00:18:25,240 Speaker 1: from the angle of what we call substantial contribution, we're fine. 319 00:18:25,680 --> 00:18:28,960 Speaker 1: It has a potential for the carbonizing the grid. The 320 00:18:29,040 --> 00:18:32,120 Speaker 1: problem that BNFC is in the inclusion of of nuclear 321 00:18:32,640 --> 00:18:36,440 Speaker 1: is the aspect of doing no significant harm. So for 322 00:18:36,440 --> 00:18:39,320 Speaker 1: for those who listen to us often, we did a 323 00:18:39,359 --> 00:18:42,240 Speaker 1: session with Data and Mark back in the days to 324 00:18:42,240 --> 00:18:45,040 Speaker 1: to explain how the taxonomy works and for the taxonomy 325 00:18:45,160 --> 00:18:48,879 Speaker 1: not an issue. You prove that you're green by substantially 326 00:18:48,880 --> 00:18:53,879 Speaker 1: contributing to to an environmental goal like plane to change mitigation, 327 00:18:54,280 --> 00:18:57,160 Speaker 1: but you should also prove that you're not harming any 328 00:18:57,160 --> 00:19:01,199 Speaker 1: other environmental goal such a protection of of econsistent but 329 00:19:01,280 --> 00:19:04,960 Speaker 1: what are use waste management annicating things? So you can't 330 00:19:05,200 --> 00:19:09,359 Speaker 1: You need to ensure that you're not only decarbonizing, but 331 00:19:09,440 --> 00:19:12,880 Speaker 1: you're also not harming the rest of the environment, and 332 00:19:13,000 --> 00:19:17,080 Speaker 1: with nuclear this has been highly contests so that was 333 00:19:17,119 --> 00:19:21,400 Speaker 1: the main reason why eyebrows were raised with the inclusion 334 00:19:21,440 --> 00:19:26,040 Speaker 1: of nuclear. Because of nuclear waste, because of military safety 335 00:19:26,080 --> 00:19:29,639 Speaker 1: issue as we're seeing right now in Ukraine for instance. 336 00:19:29,960 --> 00:19:32,639 Speaker 1: So there are a lot of points that raise eyebrows, 337 00:19:32,640 --> 00:19:34,840 Speaker 1: but the main point that being at raised about the 338 00:19:34,880 --> 00:19:39,040 Speaker 1: inclusion of nuclear is that whether nuclear is labeled green 339 00:19:39,359 --> 00:19:44,040 Speaker 1: or not won't make change in terms of if we 340 00:19:44,119 --> 00:19:48,800 Speaker 1: are financing nuclear. So whether nuclear is including in the 341 00:19:48,880 --> 00:19:53,760 Speaker 1: taxonomy or not, nuclear will get financed if needed. The 342 00:19:53,840 --> 00:19:57,200 Speaker 1: reason why nuclear is not finances because it's far too 343 00:19:57,280 --> 00:20:01,400 Speaker 1: expensive and it's far too lon to build. So so 344 00:20:01,520 --> 00:20:05,679 Speaker 1: so basically we're all saying at benish and that's the 345 00:20:05,760 --> 00:20:09,639 Speaker 1: point of our report is to say, well, you've been 346 00:20:09,680 --> 00:20:13,520 Speaker 1: pushing for the inclusion of nuclear, there are some big 347 00:20:13,600 --> 00:20:17,400 Speaker 1: caveat in the way that do no significant harmony structured. 348 00:20:18,240 --> 00:20:23,880 Speaker 1: We don't like being a doesn't put doesn't push back 349 00:20:23,880 --> 00:20:25,960 Speaker 1: on the fact that it's it's a low carbon in 350 00:20:26,000 --> 00:20:28,440 Speaker 1: a source of energy, but it's the risk, it's the 351 00:20:28,480 --> 00:20:31,439 Speaker 1: associated potential for the two arms. I think that's an 352 00:20:31,440 --> 00:20:34,840 Speaker 1: important distinction. It's potential, but not necessarily it just depends 353 00:20:34,840 --> 00:20:39,440 Speaker 1: on circumstances exactly, and the criteria that we're stepped out 354 00:20:39,640 --> 00:20:45,680 Speaker 1: to ensure to reduce that potential. We're two weak according 355 00:20:45,760 --> 00:20:49,679 Speaker 1: to the platform and according to being a research but 356 00:20:49,800 --> 00:20:52,760 Speaker 1: for it being if our angle was much more pushing 357 00:20:52,800 --> 00:20:55,720 Speaker 1: around the fact that it doesn't make sense whether it's 358 00:20:55,800 --> 00:20:58,000 Speaker 1: labeled ring or not. So that's the point in nuclear. 359 00:20:58,720 --> 00:21:00,879 Speaker 1: The concern with nuclear is that potential for there to 360 00:21:00,920 --> 00:21:04,159 Speaker 1: be harm. And you referenced actually what's going on in 361 00:21:04,240 --> 00:21:07,920 Speaker 1: the Ukraine and some concerns over actually nuclear power stations 362 00:21:07,960 --> 00:21:11,320 Speaker 1: being taken over. Also related very much to this, in 363 00:21:11,359 --> 00:21:14,520 Speaker 1: particular in a European context, but actually very much globally, 364 00:21:14,560 --> 00:21:17,760 Speaker 1: is what's happening with gas prices, which we're already high 365 00:21:17,800 --> 00:21:21,280 Speaker 1: before that conflict kicked off, and now there is concerned 366 00:21:21,280 --> 00:21:25,480 Speaker 1: around the security of supply of natural gas. Europe is 367 00:21:25,560 --> 00:21:28,439 Speaker 1: very dependent upon natural gas at the moment, and it 368 00:21:28,640 --> 00:21:31,200 Speaker 1: is in many respects. I know we don't love this term, 369 00:21:31,280 --> 00:21:33,240 Speaker 1: but many have referred to it as a bridge fuel 370 00:21:33,480 --> 00:21:40,560 Speaker 1: or something that can provide assistance with providing seven access 371 00:21:40,600 --> 00:21:44,560 Speaker 1: to clean energy when you don't have the supply coming 372 00:21:44,600 --> 00:21:49,800 Speaker 1: from either wind or sunshining at certain parts of the day, month, year. 373 00:21:50,520 --> 00:21:53,000 Speaker 1: What is the issue with incorporating natural gas and the 374 00:21:53,040 --> 00:21:57,240 Speaker 1: important role that it plays within you know, providing security 375 00:21:57,280 --> 00:22:00,439 Speaker 1: of supply and so you know, I know, Maya that 376 00:22:00,760 --> 00:22:03,080 Speaker 1: right now what you're going to talk about is really 377 00:22:03,119 --> 00:22:05,320 Speaker 1: I mean an opinion that we have put forward being 378 00:22:05,320 --> 00:22:08,439 Speaker 1: and yet as a house view regarding where this fits 379 00:22:08,480 --> 00:22:11,520 Speaker 1: in there. And we can talk, like you said, for 380 00:22:11,600 --> 00:22:14,320 Speaker 1: three hours about whether or not it should or should 381 00:22:14,320 --> 00:22:17,440 Speaker 1: not be included. So within the stance that we've taken, 382 00:22:17,440 --> 00:22:19,040 Speaker 1: if we press that a little bit, what is the 383 00:22:19,040 --> 00:22:21,679 Speaker 1: b NF house view on why gas maybe shouldn't be 384 00:22:21,680 --> 00:22:25,320 Speaker 1: included in the U taxonomy? Like all the your remarks 385 00:22:25,320 --> 00:22:27,600 Speaker 1: are great remarks, and they are the ones that are 386 00:22:27,640 --> 00:22:30,879 Speaker 1: pushed onto us at the moment and that are pushed 387 00:22:30,880 --> 00:22:35,840 Speaker 1: onto the platform. So the taxonomy is a grain taxonomy. 388 00:22:36,200 --> 00:22:40,720 Speaker 1: It's a standard to define what we call green in 389 00:22:40,760 --> 00:22:43,960 Speaker 1: the European Union. It means that whether you're in the 390 00:22:44,040 --> 00:22:48,080 Speaker 1: taxonomy or not in the taxonomy, you'll still get access 391 00:22:48,080 --> 00:22:52,359 Speaker 1: to financing. The main stuff that it ensures is the 392 00:22:52,400 --> 00:22:56,520 Speaker 1: fact that what's in the taxonomy has the potential to 393 00:22:56,640 --> 00:22:59,960 Speaker 1: have access to preferential rate so that we can accept 394 00:23:00,080 --> 00:23:04,640 Speaker 1: narrate the transition, right. It's not saying we're gonna make 395 00:23:04,800 --> 00:23:07,960 Speaker 1: for now like the europe Incordition doesn't have the plan 396 00:23:08,080 --> 00:23:11,400 Speaker 1: to create like a list of what we should stop financing, 397 00:23:11,680 --> 00:23:14,800 Speaker 1: and that actually can be a different podcast at different 398 00:23:14,840 --> 00:23:17,240 Speaker 1: points in time because we're also thinking about that. It's 399 00:23:17,280 --> 00:23:20,200 Speaker 1: not about that. So the inclusion of natural gas in 400 00:23:20,240 --> 00:23:26,119 Speaker 1: the taxonomy is out of context because nuclear is a 401 00:23:26,240 --> 00:23:30,040 Speaker 1: needed source of power. I mean, for those of you 402 00:23:30,119 --> 00:23:33,000 Speaker 1: who are listening to us and and know our new 403 00:23:33,080 --> 00:23:37,840 Speaker 1: energy outlook, who know the European energy transition outlook, you 404 00:23:38,000 --> 00:23:42,520 Speaker 1: know that from our own scenarios there is a role 405 00:23:42,680 --> 00:23:45,200 Speaker 1: for gas to play in the transition to look carbon 406 00:23:46,240 --> 00:23:50,960 Speaker 1: look carbon economy. So that's no no question asked on that. 407 00:23:51,800 --> 00:23:54,359 Speaker 1: The main question there is is to label a for 408 00:23:54,560 --> 00:23:59,960 Speaker 1: sale fuel as a sustainable investment as a green investment, 409 00:24:00,720 --> 00:24:05,399 Speaker 1: and it's mixing up everything in the investors of you 410 00:24:05,960 --> 00:24:09,520 Speaker 1: because what being I found out is that first the 411 00:24:09,560 --> 00:24:15,200 Speaker 1: criteria that are set in the taxonomy, despite potentially being 412 00:24:16,280 --> 00:24:19,920 Speaker 1: hard to meet, some of them has to have such 413 00:24:20,040 --> 00:24:25,159 Speaker 1: strong caveat that the it makes them weak. So for instance, 414 00:24:25,520 --> 00:24:29,159 Speaker 1: there is there is an annual capacity level of carbon 415 00:24:29,480 --> 00:24:33,240 Speaker 1: and carbon emissions that is set for a certain guest 416 00:24:33,520 --> 00:24:36,600 Speaker 1: power plant that is a twenty year average. But you 417 00:24:36,640 --> 00:24:40,359 Speaker 1: need to report your taxonomy alignment every year. So that 418 00:24:40,440 --> 00:24:45,320 Speaker 1: does that mean that you basically upload or offload all 419 00:24:45,520 --> 00:24:49,320 Speaker 1: your greenhouse gas emission at the beginning of the life 420 00:24:49,320 --> 00:24:53,400 Speaker 1: cycle of the power plants for ten years, and then 421 00:24:53,400 --> 00:24:56,840 Speaker 1: after you'll be like, okay, after ten years, basically I'm 422 00:24:56,880 --> 00:25:00,760 Speaker 1: gonna be neutral in terms of greenhouse gat shin and 423 00:25:00,800 --> 00:25:04,320 Speaker 1: therefore overall over the twenty years, I'll meet that average. 424 00:25:04,720 --> 00:25:07,360 Speaker 1: This is impossible to check you here on here. So 425 00:25:07,480 --> 00:25:09,600 Speaker 1: maybe we're going to have assets that are going to 426 00:25:09,680 --> 00:25:11,960 Speaker 1: be labeled as green at the beginning of their life 427 00:25:12,480 --> 00:25:14,919 Speaker 1: that are not necessarily green because you'll feed just on 428 00:25:15,000 --> 00:25:17,520 Speaker 1: the on the big steme of the twenty years. That's 429 00:25:17,560 --> 00:25:21,520 Speaker 1: one example. The problem is that it's as if they 430 00:25:21,560 --> 00:25:26,399 Speaker 1: had pushed to get natural gas into the taxonomy for 431 00:25:26,520 --> 00:25:30,879 Speaker 1: many different reasons why it's not necessarily in that text 432 00:25:30,920 --> 00:25:33,480 Speaker 1: that it should be so in in our note, for 433 00:25:33,560 --> 00:25:39,600 Speaker 1: instance benf analysis, the fact that this the role that 434 00:25:39,720 --> 00:25:44,240 Speaker 1: gas has to play could be regulated by other sorts 435 00:25:44,240 --> 00:25:48,440 Speaker 1: of regulations, but not by the taxonomy. The taxonomy is 436 00:25:48,440 --> 00:25:54,440 Speaker 1: a sustainable like a green and roamentally friendly green framework 437 00:25:54,600 --> 00:25:58,560 Speaker 1: for investor for them to be a no brainer and say, okay, 438 00:25:58,640 --> 00:26:00,960 Speaker 1: if it's a line with the taxonomy, me if in 439 00:26:01,040 --> 00:26:04,280 Speaker 1: my portfolio I have a line with the taxonomy, means 440 00:26:04,320 --> 00:26:07,720 Speaker 1: that I had all of my investments are a line 441 00:26:07,760 --> 00:26:11,760 Speaker 1: with the Paris Agreement. And now it creates doubts. While 442 00:26:11,840 --> 00:26:13,600 Speaker 1: at the same time, at the beginning of this week, 443 00:26:13,680 --> 00:26:18,080 Speaker 1: the European Platform and Sustainable Finance, which is the expert 444 00:26:18,119 --> 00:26:23,080 Speaker 1: group that like responds to the European Commission on these topics, 445 00:26:23,320 --> 00:26:27,120 Speaker 1: has just put out a transition of taxonomy. So why 446 00:26:27,480 --> 00:26:30,399 Speaker 1: can't it be that because, as you explain rightly, Diana, 447 00:26:31,160 --> 00:26:33,920 Speaker 1: it's a bridge fuel, it's a fuel that we need 448 00:26:33,960 --> 00:26:36,560 Speaker 1: for a certain period of time. So your argument is 449 00:26:36,560 --> 00:26:38,480 Speaker 1: that there is a separate taxonomy. They can take this 450 00:26:38,560 --> 00:26:42,120 Speaker 1: into consideration but walk back confusing things. I don't think so. 451 00:26:42,160 --> 00:26:46,560 Speaker 1: I think right now the main discussion and the reaction 452 00:26:46,880 --> 00:26:52,040 Speaker 1: from from from investors what BNFC is that investors are 453 00:26:52,920 --> 00:26:56,399 Speaker 1: are just saying they don't understand anymore. The taxonomy was 454 00:26:56,440 --> 00:27:01,360 Speaker 1: supposed to be this kind of pure grain list that 455 00:27:01,400 --> 00:27:04,880 Speaker 1: they could follow without asking themselves the questions because most 456 00:27:04,920 --> 00:27:07,239 Speaker 1: of them don't have a scientific background. Most of them 457 00:27:07,320 --> 00:27:11,120 Speaker 1: don't have an engineering background. They don't necessarily know when 458 00:27:11,200 --> 00:27:14,560 Speaker 1: hydrogen is green, when cement's green, and that was supposed 459 00:27:14,560 --> 00:27:18,080 Speaker 1: to be our common methodology, and now in the middle 460 00:27:18,080 --> 00:27:20,840 Speaker 1: of all of that you have a fossil view. So 461 00:27:22,119 --> 00:27:25,320 Speaker 1: it's better to have different sets of rules being I 462 00:27:25,440 --> 00:27:27,600 Speaker 1: think that this came up as well because one of 463 00:27:27,640 --> 00:27:30,960 Speaker 1: the biggest criticism against the taxonomy was the saying that 464 00:27:31,040 --> 00:27:33,880 Speaker 1: it didn't have a shaded approach. It was either your 465 00:27:33,920 --> 00:27:36,400 Speaker 1: in or you're out. So hence the need for the 466 00:27:36,480 --> 00:27:42,080 Speaker 1: transition tacconas exactly. This is why the Platform and Sustainable 467 00:27:42,080 --> 00:27:45,280 Speaker 1: Finance and the European Commission still have a lot of work. 468 00:27:47,520 --> 00:27:50,200 Speaker 1: How much work to do? So much sure to do. Okay, 469 00:27:50,280 --> 00:27:53,560 Speaker 1: so there's that that's sober looking up. So we've talked 470 00:27:53,600 --> 00:27:56,280 Speaker 1: a bit about Europe. We've talked about the u S 471 00:27:56,320 --> 00:27:59,040 Speaker 1: and some developments there. Let's add one more thing into 472 00:27:59,040 --> 00:28:02,560 Speaker 1: the show today, which is the Glasgow Financial Alliance so 473 00:28:02,640 --> 00:28:06,119 Speaker 1: g FANS, which is fairly new and it would be 474 00:28:06,240 --> 00:28:08,680 Speaker 1: useful for us to just kind of quickly go over 475 00:28:09,280 --> 00:28:12,040 Speaker 1: what it is, what it isn't, because it is going 476 00:28:12,119 --> 00:28:16,280 Speaker 1: to be a new force within all of these different 477 00:28:16,560 --> 00:28:20,959 Speaker 1: frameworks for companies and governments to look at. Absolutely, and 478 00:28:21,240 --> 00:28:23,239 Speaker 1: maybe I'll jump in on that because I think it's 479 00:28:23,280 --> 00:28:26,959 Speaker 1: a perfect secret data, almost as if it were by design, 480 00:28:27,160 --> 00:28:30,560 Speaker 1: because you know, Maya's talking about, you know, the need 481 00:28:30,680 --> 00:28:35,320 Speaker 1: for transparency and green activities and and every great point 482 00:28:35,359 --> 00:28:37,760 Speaker 1: that she's just brought up, and it's the same you know, 483 00:28:37,800 --> 00:28:40,960 Speaker 1: with the SEC, investors have been asking for a long 484 00:28:41,080 --> 00:28:44,000 Speaker 1: time for more transparency. That's part of the impetus for 485 00:28:44,040 --> 00:28:46,640 Speaker 1: putting forward any type of rule like this, you know, 486 00:28:46,680 --> 00:28:50,680 Speaker 1: whether it's a taxonomy or SEC regulation or anything you 487 00:28:50,720 --> 00:28:53,880 Speaker 1: know that runs the gamut is that people are saying, hey, 488 00:28:53,920 --> 00:28:56,120 Speaker 1: you know, we need more information if we're going to 489 00:28:56,160 --> 00:29:02,160 Speaker 1: make prudent financial or other decisions related to asks, opportunities, decisions, 490 00:29:02,760 --> 00:29:05,800 Speaker 1: what have you. And the same is true, you know 491 00:29:05,880 --> 00:29:09,440 Speaker 1: for the g fans, the Glasgow Financial Alliance for net zero. 492 00:29:09,760 --> 00:29:11,800 Speaker 1: It is sort of like a I like to think 493 00:29:11,800 --> 00:29:15,920 Speaker 1: of it like a coalition of coalitions. Basically, a group 494 00:29:16,760 --> 00:29:21,280 Speaker 1: or groups rather of the financial participants, whether that be banks, 495 00:29:21,760 --> 00:29:26,600 Speaker 1: asset managers, insurance companies, asset owners and many others have 496 00:29:26,760 --> 00:29:31,400 Speaker 1: sort of come together in different coalitions to sign on 497 00:29:32,160 --> 00:29:38,240 Speaker 1: to achieve net zero emissions by or earlier, and there 498 00:29:38,280 --> 00:29:41,640 Speaker 1: are different types of, you know, additional goals that go 499 00:29:41,760 --> 00:29:44,000 Speaker 1: along with that, and you know, oftentimes you hear about 500 00:29:44,000 --> 00:29:46,840 Speaker 1: things like me for setting interim goals, not just saying 501 00:29:47,520 --> 00:29:50,360 Speaker 1: see you in t like you know, we'll meet you there, 502 00:29:50,640 --> 00:29:53,240 Speaker 1: but like you know, things coming you know, every five 503 00:29:53,320 --> 00:29:56,520 Speaker 1: years or so, or at least you know, one interim goal. 504 00:29:56,560 --> 00:30:00,600 Speaker 1: There's different elements of these sort of voluntary standards, but 505 00:30:00,720 --> 00:30:04,120 Speaker 1: generally the gist is let's all get to net zero 506 00:30:04,160 --> 00:30:07,480 Speaker 1: by and the g FANS, which was initiated I believe 507 00:30:07,480 --> 00:30:12,000 Speaker 1: in April, sort of coalesced these coalitions, brought them all 508 00:30:12,040 --> 00:30:15,320 Speaker 1: together under one roof for umbrella so that things could 509 00:30:15,360 --> 00:30:17,800 Speaker 1: be streamlined. So basically you have all these financial institutions 510 00:30:17,840 --> 00:30:21,640 Speaker 1: saying yes, net zero, me too, and then they're all 511 00:30:21,680 --> 00:30:24,880 Speaker 1: working in tandem under sort of a similar umbrella to 512 00:30:25,360 --> 00:30:28,400 Speaker 1: figure out how they do that. So, whether that means 513 00:30:28,520 --> 00:30:31,760 Speaker 1: you know, figuring out how to call for more regulation 514 00:30:31,880 --> 00:30:33,880 Speaker 1: like we've been talking about as a group, say we 515 00:30:33,920 --> 00:30:36,920 Speaker 1: need more info, or whether it's about figuring out how 516 00:30:36,920 --> 00:30:40,960 Speaker 1: to identify and calculate the pathways that they're going to 517 00:30:41,040 --> 00:30:43,440 Speaker 1: do that. The g FANS has set up several sort 518 00:30:43,480 --> 00:30:46,719 Speaker 1: of work streams or priority areas, and they released this 519 00:30:46,960 --> 00:30:51,600 Speaker 1: at the time of COP last October slash November UM 520 00:30:51,640 --> 00:30:54,720 Speaker 1: and you know, now they're sort of working on helping 521 00:30:54,760 --> 00:30:58,200 Speaker 1: to enable that transition that many of these companies have 522 00:30:58,320 --> 00:31:00,800 Speaker 1: signed onto and and they're still signing onto these These 523 00:31:00,840 --> 00:31:03,560 Speaker 1: initiatives are growing. I believe at the time of COP 524 00:31:03,680 --> 00:31:06,120 Speaker 1: it was announced that there were four hundred and fifty 525 00:31:06,160 --> 00:31:09,520 Speaker 1: participants or you know sort of sign on across the 526 00:31:09,560 --> 00:31:13,440 Speaker 1: institution types. And this is something that I think we're 527 00:31:13,480 --> 00:31:16,400 Speaker 1: seeing more and more. Is you know, I like to 528 00:31:16,400 --> 00:31:18,400 Speaker 1: think of it as like a bit of a wave. 529 00:31:18,600 --> 00:31:20,520 Speaker 1: It's like you start out with something like you know, 530 00:31:20,640 --> 00:31:23,000 Speaker 1: green Finance or the Call for Disclosure, and it's a 531 00:31:23,040 --> 00:31:27,640 Speaker 1: few voices and it's you know, not necessarily put into 532 00:31:27,720 --> 00:31:29,560 Speaker 1: action very quickly, a couple of people are sort of 533 00:31:29,560 --> 00:31:32,080 Speaker 1: crying out in the wilderness saying we need more of 534 00:31:32,080 --> 00:31:34,760 Speaker 1: this or we need to set just in that little 535 00:31:34,840 --> 00:31:38,280 Speaker 1: tiny voice too, I'm really I hear that from the 536 00:31:38,280 --> 00:31:44,120 Speaker 1: financial services community exactly. That's how they speak outward. Yeah, 537 00:31:44,160 --> 00:31:46,440 Speaker 1: and then it like swells, you know, all of a sudden, 538 00:31:46,480 --> 00:31:48,760 Speaker 1: all these voices join on. It becomes more of a roar. 539 00:31:48,800 --> 00:31:54,680 Speaker 1: I'm not going to do that voice preserved some of 540 00:31:54,720 --> 00:31:58,000 Speaker 1: my dignity while we discussed this. But basically, then you 541 00:31:58,040 --> 00:31:59,880 Speaker 1: have this sort of swell where a lot of d 542 00:32:00,040 --> 00:32:02,360 Speaker 1: these are calling for the same thing. Maybe they're setting 543 00:32:02,360 --> 00:32:05,360 Speaker 1: out frameworks, they're trying to figure out their footing. Us 544 00:32:05,360 --> 00:32:08,040 Speaker 1: they paved the way toward the future, and it becomes 545 00:32:08,040 --> 00:32:10,880 Speaker 1: a bit confusing. So you start out with not enough guidance. 546 00:32:11,080 --> 00:32:13,640 Speaker 1: You get to everybody wants the same things. So there's 547 00:32:13,640 --> 00:32:15,920 Speaker 1: all these different avenues and now we're sort of in 548 00:32:15,960 --> 00:32:18,560 Speaker 1: the last part of the wave where it's starting to 549 00:32:18,640 --> 00:32:21,680 Speaker 1: funnel down again, but with more clarity. So you take 550 00:32:21,720 --> 00:32:24,440 Speaker 1: all of those voices, all of these frameworks, all of 551 00:32:24,440 --> 00:32:27,680 Speaker 1: these coalitions, and you're putting it under one roof so 552 00:32:27,720 --> 00:32:32,080 Speaker 1: that you're not having everybody doing things with a different methodology, 553 00:32:32,120 --> 00:32:34,800 Speaker 1: which is super important. You have to, you know, make 554 00:32:34,840 --> 00:32:38,480 Speaker 1: sure that calculations are similar, otherwise things will be completely 555 00:32:38,520 --> 00:32:42,040 Speaker 1: incomparable and will sort of wind up with, you know, chaos. 556 00:32:42,400 --> 00:32:47,800 Speaker 1: Now for a very short break, stay with us. Yeah, 557 00:32:47,840 --> 00:32:51,040 Speaker 1: it makes it impossible for the investment community to compare 558 00:32:51,800 --> 00:32:55,120 Speaker 1: different companies within their portfolio to one another and make decisions. 559 00:32:55,160 --> 00:32:57,680 Speaker 1: And for Emmy and for us the public as well, 560 00:32:58,240 --> 00:33:01,160 Speaker 1: that's exactly right, And something like the g FANS serves 561 00:33:01,240 --> 00:33:03,920 Speaker 1: as a funneling exercise like that, it takes a bunch 562 00:33:03,920 --> 00:33:06,080 Speaker 1: of coalitions and says, hey, let's get on the same page. 563 00:33:06,120 --> 00:33:08,920 Speaker 1: Because you can also imagine one financial entity, you know, 564 00:33:09,040 --> 00:33:11,040 Speaker 1: bank for example. You know, they might have an asset 565 00:33:11,080 --> 00:33:13,920 Speaker 1: management arm. It makes sense for them to be doing 566 00:33:14,040 --> 00:33:18,280 Speaker 1: something that is comparable across their different types of activities, 567 00:33:18,360 --> 00:33:21,000 Speaker 1: so that calculations are similar. And that also takes away 568 00:33:21,040 --> 00:33:23,600 Speaker 1: some of the burden of things like reporting and trying 569 00:33:23,600 --> 00:33:25,400 Speaker 1: to meet goals because everybody is sort of on the 570 00:33:25,440 --> 00:33:27,880 Speaker 1: same page, and even if it's between entities, it's not 571 00:33:27,920 --> 00:33:30,440 Speaker 1: the same entity. It just like you said, it helps 572 00:33:30,560 --> 00:33:34,560 Speaker 1: folks that are on the outside understand what things mean 573 00:33:34,840 --> 00:33:37,200 Speaker 1: and things like a taxonomy so that everybody's on the 574 00:33:37,240 --> 00:33:39,840 Speaker 1: same page about what is or is not considered green 575 00:33:40,120 --> 00:33:43,920 Speaker 1: SEC regulations, so everybody's sort of disclosing information the same 576 00:33:43,960 --> 00:33:46,600 Speaker 1: way instead of just here and there with different parts 577 00:33:46,640 --> 00:33:49,080 Speaker 1: included in different units, you know, in there in there. 578 00:33:49,160 --> 00:33:52,240 Speaker 1: It helps read that level of transparency that then will 579 00:33:52,280 --> 00:33:55,360 Speaker 1: help us understand not only what the goals are things 580 00:33:55,400 --> 00:33:58,200 Speaker 1: like net zero, but also how far are we on 581 00:33:58,280 --> 00:33:59,760 Speaker 1: the way to get there because we can sort of 582 00:33:59,800 --> 00:34:02,520 Speaker 1: come pair as a group. So actually, I I have 583 00:34:02,560 --> 00:34:05,880 Speaker 1: a question for both of you who really spend a 584 00:34:05,880 --> 00:34:08,759 Speaker 1: lot of time thinking about sustainable finance. That is that 585 00:34:08,880 --> 00:34:11,480 Speaker 1: is the job after all. So my question is, actually 586 00:34:11,560 --> 00:34:15,200 Speaker 1: we're talking about g FANS, which is trying to consolidate 587 00:34:15,239 --> 00:34:18,080 Speaker 1: and look at different frameworks. Invariably, the TCFD was looking 588 00:34:18,120 --> 00:34:20,600 Speaker 1: to do the same thing. There are not the same thing, 589 00:34:20,640 --> 00:34:24,080 Speaker 1: but was also looking to consolidate various different frameworks that 590 00:34:24,120 --> 00:34:26,200 Speaker 1: are driving to an end. We are at a place 591 00:34:26,200 --> 00:34:33,719 Speaker 1: where there are these moves to consolidate information data frameworks 592 00:34:33,800 --> 00:34:37,080 Speaker 1: create alignment as we head into world where E s 593 00:34:37,160 --> 00:34:40,799 Speaker 1: G is becoming less niche and becoming more mainstream. And 594 00:34:40,800 --> 00:34:44,920 Speaker 1: the main question within this is is this consolidation happening 595 00:34:45,000 --> 00:34:48,640 Speaker 1: quickly enough that we will be able to capitalize on 596 00:34:48,719 --> 00:34:52,920 Speaker 1: the amount of energy and interests that is coming from 597 00:34:52,960 --> 00:34:56,600 Speaker 1: the financial services community at the moment because there are 598 00:34:56,680 --> 00:35:00,400 Speaker 1: so many companies that are looking to better under stand 599 00:35:00,480 --> 00:35:03,320 Speaker 1: what their E s G strategy should be going forward 600 00:35:03,719 --> 00:35:08,160 Speaker 1: and probably formulating their own methodology, they're buying data, they're 601 00:35:08,200 --> 00:35:11,680 Speaker 1: coming up with their views. All of these frameworks going 602 00:35:11,719 --> 00:35:13,960 Speaker 1: to get there in time. Will they be additive or 603 00:35:14,360 --> 00:35:16,960 Speaker 1: will they be a moment too late. I think that's 604 00:35:16,960 --> 00:35:21,080 Speaker 1: the main issue. I was actually having a moderating and 605 00:35:21,200 --> 00:35:24,120 Speaker 1: conferences today on the topic, and I think that's going 606 00:35:24,160 --> 00:35:28,720 Speaker 1: to be the main concern of everyone, because, let's be honest, 607 00:35:28,920 --> 00:35:33,000 Speaker 1: we create all these data sets, and we build all 608 00:35:33,080 --> 00:35:38,040 Speaker 1: these new regulation so that financial market participants can act 609 00:35:38,120 --> 00:35:42,000 Speaker 1: on it, so that corporations can act on it, but 610 00:35:42,080 --> 00:35:47,279 Speaker 1: in particular investors and lenders, and ensuring that they take 611 00:35:47,320 --> 00:35:51,759 Speaker 1: into account social and environmental. In this particular case, whe 612 00:35:51,760 --> 00:35:54,160 Speaker 1: we're mostly talking about environmental, but there is the whole 613 00:35:54,160 --> 00:35:59,040 Speaker 1: part on social. They've taken too account environmental impact of 614 00:35:59,080 --> 00:36:02,560 Speaker 1: their investments. Not only do they take into account the 615 00:36:02,680 --> 00:36:06,960 Speaker 1: risk that the like climate change fairs on their investments, 616 00:36:07,040 --> 00:36:09,799 Speaker 1: but all their investments is bearing on the environment as 617 00:36:09,840 --> 00:36:13,400 Speaker 1: a whole. And the problem we're seeing is that the 618 00:36:13,480 --> 00:36:16,600 Speaker 1: same way we've been talking about the EU taxonomy, but 619 00:36:16,840 --> 00:36:19,960 Speaker 1: at the moment we're talking about this taxo mania, because 620 00:36:20,000 --> 00:36:22,880 Speaker 1: so many taxonomys are created around the world. Is that 621 00:36:22,960 --> 00:36:25,719 Speaker 1: the technical term for it. Tax so Mania. It's a 622 00:36:26,080 --> 00:36:31,000 Speaker 1: term that has been like spreading in the in the 623 00:36:31,400 --> 00:36:34,520 Speaker 1: in the market. Yeah, the one that has been used 624 00:36:34,680 --> 00:36:39,240 Speaker 1: and basically that that tax so Mania. It's great because 625 00:36:39,280 --> 00:36:43,000 Speaker 1: it shows that we're creating this common language, but there 626 00:36:43,000 --> 00:36:46,799 Speaker 1: are some small discrepancies between one country and another, like 627 00:36:46,840 --> 00:36:51,520 Speaker 1: we saw the Russian taxonomy or the China taxonomy, EU taxonomy. 628 00:36:51,640 --> 00:36:54,520 Speaker 1: Now we're going to have the UK taxonomy. South Africa 629 00:36:54,640 --> 00:36:57,000 Speaker 1: is working on one's well, like so many I don't 630 00:36:57,040 --> 00:36:59,680 Speaker 1: even have enough time to talk about it. But it's 631 00:36:59,680 --> 00:37:02,520 Speaker 1: also going to be harmonizing all of that and ensuring 632 00:37:02,600 --> 00:37:05,719 Speaker 1: that investors can compare one with another. That's gonna be 633 00:37:05,760 --> 00:37:10,280 Speaker 1: really like difficult the part on corporate disclosure. They could 634 00:37:10,280 --> 00:37:13,759 Speaker 1: do a big effort in harmonizing all of that, and 635 00:37:13,800 --> 00:37:17,360 Speaker 1: I think initiatives like I S, S, B G funds, 636 00:37:17,719 --> 00:37:23,640 Speaker 1: TCND really need help with the harmonization and standardization of 637 00:37:23,680 --> 00:37:28,879 Speaker 1: the type of data that we're capturing. But also I 638 00:37:28,960 --> 00:37:32,560 Speaker 1: hope that could bring a bit of like ambition, you know, 639 00:37:32,600 --> 00:37:34,960 Speaker 1: I don't want them to just don't do something because 640 00:37:34,960 --> 00:37:36,640 Speaker 1: you're scared that the other one is not going to 641 00:37:36,719 --> 00:37:39,880 Speaker 1: do or something like that. I hope it can feel 642 00:37:40,040 --> 00:37:43,640 Speaker 1: like a healthy competition to ensure that we get more 643 00:37:43,680 --> 00:37:46,200 Speaker 1: and more data on the e s G. Performance of 644 00:37:46,480 --> 00:37:49,520 Speaker 1: companies and organizations as a whole. Yeah, it's certainly not 645 00:37:49,640 --> 00:37:51,840 Speaker 1: fair to say, well, then we should do nothing because 646 00:37:51,880 --> 00:37:55,560 Speaker 1: other people are working on it. There's definitely need. I 647 00:37:55,600 --> 00:37:58,400 Speaker 1: was playing Devil's advocate there in a few different respects. 648 00:37:59,080 --> 00:38:02,479 Speaker 1: Is invariably Idea. Definitely do see and understand the need 649 00:38:02,600 --> 00:38:07,399 Speaker 1: for harmonization in this world of lots of different taxonomies. 650 00:38:07,520 --> 00:38:10,040 Speaker 1: So final thought on what the SEC is doing in 651 00:38:10,040 --> 00:38:14,120 Speaker 1: the US, this seems like an excellent step forward. Let's 652 00:38:14,360 --> 00:38:17,520 Speaker 1: let's play both sides of this coin. Actually, so malory. 653 00:38:17,680 --> 00:38:20,600 Speaker 1: How about you say, is this a good initial step? 654 00:38:20,640 --> 00:38:23,759 Speaker 1: And what do you see is the change that it 655 00:38:23,800 --> 00:38:27,600 Speaker 1: may spur in the future, And Maya do, where do 656 00:38:27,680 --> 00:38:30,600 Speaker 1: you see this falling in terms of what additional steps 657 00:38:30,640 --> 00:38:35,640 Speaker 1: do need to take place in order for the US 658 00:38:35,680 --> 00:38:39,600 Speaker 1: to really be competing, if you will, with other countries 659 00:38:39,640 --> 00:38:44,880 Speaker 1: with more sophisticated or let's say, developed frameworks in place. 660 00:38:45,080 --> 00:38:47,439 Speaker 1: Thanks so much, Dana, I love that question because Maya 661 00:38:47,440 --> 00:38:50,000 Speaker 1: and I often love to debate these kinds of things. So, 662 00:38:50,160 --> 00:38:51,960 Speaker 1: you know, putting one of us on one side, one 663 00:38:52,000 --> 00:38:54,120 Speaker 1: of us on the other side is is a great exercise, 664 00:38:54,200 --> 00:38:57,320 Speaker 1: So thank you. I think it's a great first step. 665 00:38:57,680 --> 00:39:00,719 Speaker 1: And you know, Maya mentioned earlier that we ran company 666 00:39:01,000 --> 00:39:04,560 Speaker 1: excuse me countries as UM part of you know, want research, 667 00:39:04,719 --> 00:39:07,120 Speaker 1: you know, research insights. We have sort of a tool 668 00:39:07,280 --> 00:39:10,320 Speaker 1: ranking the G twenty on there sort of sustainable finance 669 00:39:10,360 --> 00:39:14,000 Speaker 1: and E s G disclosure regulatory landscapes, and the US 670 00:39:14,080 --> 00:39:16,800 Speaker 1: falls pretty low. One of the things that we found 671 00:39:16,880 --> 00:39:20,160 Speaker 1: in that analysis is that often times, what for for 672 00:39:20,360 --> 00:39:24,920 Speaker 1: countries or markets that you know have been developing sustainable 673 00:39:25,040 --> 00:39:29,120 Speaker 1: finance related than the SU disclosure regulations. Over time, there's 674 00:39:29,160 --> 00:39:33,399 Speaker 1: sort of a natural progression at the beginning picture sort 675 00:39:33,400 --> 00:39:35,680 Speaker 1: of like a graph with years on the x axis, 676 00:39:35,680 --> 00:39:39,640 Speaker 1: you know, looking over time. The beginning is usually across 677 00:39:39,680 --> 00:39:44,359 Speaker 1: countries starting with UH corporate E s G disclosure, just 678 00:39:44,480 --> 00:39:46,600 Speaker 1: like what you're we're we would be seeing with the 679 00:39:46,960 --> 00:39:51,280 Speaker 1: with the SEC proposal, and then over time you see 680 00:39:51,480 --> 00:39:54,120 Speaker 1: sort of a shift. There's no more of a need 681 00:39:54,160 --> 00:39:57,080 Speaker 1: to put forward new policies within a given country on 682 00:39:57,480 --> 00:40:01,360 Speaker 1: UM on just disclosure from co Brits because that's already established. 683 00:40:01,440 --> 00:40:04,560 Speaker 1: And then you start with more investor disclosure, and then 684 00:40:04,600 --> 00:40:08,080 Speaker 1: you start with mandating the incorporation of E s G 685 00:40:08,440 --> 00:40:12,120 Speaker 1: into investment decisions, you get things like taxonomy. Is if 686 00:40:12,120 --> 00:40:15,120 Speaker 1: we're thinking about different types of policies, you start with 687 00:40:15,239 --> 00:40:18,520 Speaker 1: something usually like a corporate sue disclosure, and then you 688 00:40:18,560 --> 00:40:20,960 Speaker 1: build from there. I'm not saying that, you know, this 689 00:40:20,960 --> 00:40:23,880 Speaker 1: couldn't be leap frogged or incorporated into a big policy, 690 00:40:24,040 --> 00:40:26,279 Speaker 1: but it seems like we're seeing something very similar in 691 00:40:26,320 --> 00:40:32,000 Speaker 1: a nascent climate policy world, that is the US. You know, 692 00:40:32,000 --> 00:40:35,200 Speaker 1: we're starting out with something like that that's just corporate disclosures, 693 00:40:35,239 --> 00:40:38,239 Speaker 1: and they're gonna move from there. It is pretty ambitious 694 00:40:38,239 --> 00:40:41,399 Speaker 1: in my mind because it's requiring that scope three and 695 00:40:41,480 --> 00:40:44,399 Speaker 1: to disclose on transition plans. So it's doing a lot 696 00:40:44,440 --> 00:40:46,719 Speaker 1: more than just saying like, hey, if you think you 697 00:40:46,760 --> 00:40:49,480 Speaker 1: know a climate risk is important, you know, disclose it. 698 00:40:49,480 --> 00:40:53,880 Speaker 1: It's it's giving more specific guidelines that help that transparency 699 00:40:53,880 --> 00:40:56,040 Speaker 1: and that comparability, which we were just talking about a 700 00:40:56,120 --> 00:40:59,000 Speaker 1: question or so ago. So you know, I think that 701 00:40:59,080 --> 00:41:02,359 Speaker 1: this is ripe as a first step because we've seen 702 00:41:02,400 --> 00:41:04,960 Speaker 1: this in other markets as well. But one of the 703 00:41:05,000 --> 00:41:08,239 Speaker 1: benefits of you know, being a latecomer, even though it's 704 00:41:08,280 --> 00:41:12,279 Speaker 1: not good in terms of climate stuff, is that you 705 00:41:12,360 --> 00:41:16,319 Speaker 1: already have examples in place to build off of. So 706 00:41:16,440 --> 00:41:19,000 Speaker 1: you know, when the EU taxonomy was being developed, there 707 00:41:19,080 --> 00:41:23,000 Speaker 1: was no other you know, big taxonomy to look at 708 00:41:23,120 --> 00:41:25,440 Speaker 1: as a as an example and build off of. But 709 00:41:25,520 --> 00:41:28,760 Speaker 1: now we see that other taxonomy's that are arising across 710 00:41:28,760 --> 00:41:33,120 Speaker 1: across the globe are hearkening to the EU version because 711 00:41:33,160 --> 00:41:35,160 Speaker 1: they don't have to reinvent the wheel. There's something that's 712 00:41:35,160 --> 00:41:38,160 Speaker 1: been established and they can you know, they can get 713 00:41:38,160 --> 00:41:41,480 Speaker 1: through it quicker because it's already been done somewhere, and 714 00:41:41,680 --> 00:41:45,840 Speaker 1: the US can leverage its position as a bit of 715 00:41:45,880 --> 00:41:50,560 Speaker 1: a laggard in terms of setting sustainable finance policies because 716 00:41:50,600 --> 00:41:53,799 Speaker 1: many other jurisdictions have done it already and they can 717 00:41:53,920 --> 00:41:55,840 Speaker 1: use that to their advantage. I think it would be 718 00:41:55,840 --> 00:41:58,759 Speaker 1: actually very prudent to look at what other regions are 719 00:41:58,800 --> 00:42:01,920 Speaker 1: doing and say, okay, now we now we sort of 720 00:42:01,960 --> 00:42:03,560 Speaker 1: know the landscape, this is what we're gonna do, this 721 00:42:03,560 --> 00:42:05,200 Speaker 1: is what're I'm gonna do, try, you know, tried and 722 00:42:05,239 --> 00:42:08,960 Speaker 1: tested by others, because it helps again not reinvent the wheel, 723 00:42:08,960 --> 00:42:12,719 Speaker 1: but it also promotes that comparability, it helps you look 724 00:42:12,719 --> 00:42:15,920 Speaker 1: at other regions and nowhere to align. And then the 725 00:42:15,960 --> 00:42:17,520 Speaker 1: other side of that coin, I think is a bit 726 00:42:17,680 --> 00:42:21,080 Speaker 1: of the SEC proposal and something they should do more 727 00:42:21,160 --> 00:42:25,440 Speaker 1: of is using existing well established frameworks, whether that be 728 00:42:25,560 --> 00:42:29,760 Speaker 1: mandatory or voluntary, so not just in another country's taxonomy, 729 00:42:29,800 --> 00:42:34,080 Speaker 1: but also something like the tcf D. Many people already 730 00:42:34,239 --> 00:42:36,799 Speaker 1: use that. You know, number of tcf D supporters goes 731 00:42:36,880 --> 00:42:40,439 Speaker 1: up and up over time. And when you establish based 732 00:42:40,480 --> 00:42:44,920 Speaker 1: off of a well understood and respected um, you know, 733 00:42:45,640 --> 00:42:48,440 Speaker 1: something that is comprehensive and thought of as being very 734 00:42:48,440 --> 00:42:51,759 Speaker 1: reasonable and sound framework, even if it's voluntary, you're sort 735 00:42:51,800 --> 00:42:55,600 Speaker 1: of already ensuring some buy in because there's recognition at 736 00:42:55,600 --> 00:42:58,480 Speaker 1: the beginning. You're not starting from scratch. So I think 737 00:42:58,520 --> 00:43:01,080 Speaker 1: that's those are a couple of good points in favor 738 00:43:01,120 --> 00:43:03,080 Speaker 1: of you know, what the SEC has done, you know, 739 00:43:03,160 --> 00:43:05,120 Speaker 1: in addition to just the fact that they brought it forward, 740 00:43:05,120 --> 00:43:07,440 Speaker 1: which I think is a good thing for promoting transparency 741 00:43:07,480 --> 00:43:11,680 Speaker 1: for investors and companies of and other financial participants alike, 742 00:43:12,040 --> 00:43:15,360 Speaker 1: but also they should leverage their position as one of 743 00:43:15,400 --> 00:43:20,000 Speaker 1: the bottom third countries that we rank and use it 744 00:43:20,040 --> 00:43:22,279 Speaker 1: in a way, you know, as as you know, a 745 00:43:22,360 --> 00:43:24,400 Speaker 1: benefit to get ahead in the future. I think we 746 00:43:24,440 --> 00:43:26,400 Speaker 1: should have sort of a race to the top in 747 00:43:26,520 --> 00:43:30,879 Speaker 1: terms of making ambitious policies that coordinate and at the 748 00:43:30,920 --> 00:43:34,320 Speaker 1: most recent cop for you know, when countries came together, 749 00:43:34,360 --> 00:43:38,319 Speaker 1: there was a dedicated finance day, So I think you know, 750 00:43:38,320 --> 00:43:41,960 Speaker 1: I'll say this word again, but coalescing around country level, 751 00:43:42,440 --> 00:43:45,200 Speaker 1: company level, you know, whatever else it is, investor level 752 00:43:45,280 --> 00:43:50,480 Speaker 1: initiatives will only help promote the future sort of skyrocketing 753 00:43:50,520 --> 00:43:53,320 Speaker 1: of these types of institutions because everybody will be working 754 00:43:53,320 --> 00:43:56,799 Speaker 1: in tandem. The question here really has to do with 755 00:43:57,200 --> 00:43:59,480 Speaker 1: is it enough like essentially what the US is doing, 756 00:43:59,480 --> 00:44:01,399 Speaker 1: and not only is it enough, like what else needs 757 00:44:01,440 --> 00:44:03,480 Speaker 1: to really trace place take place? Where do you see 758 00:44:03,480 --> 00:44:06,080 Speaker 1: the gap between what the SEC has put forward and 759 00:44:06,239 --> 00:44:08,319 Speaker 1: what is happening potentially in Europe and other parts of 760 00:44:08,320 --> 00:44:11,000 Speaker 1: the world that are have been more developed in terms 761 00:44:11,080 --> 00:44:14,000 Speaker 1: of their stance on a lot of these things. Basically, 762 00:44:14,000 --> 00:44:16,120 Speaker 1: what is the gap? What is the gaptical? It's a 763 00:44:16,160 --> 00:44:19,120 Speaker 1: great first step, and one thing I've realized by working 764 00:44:19,360 --> 00:44:22,160 Speaker 1: with Malory is that it was a difficult one to 765 00:44:22,239 --> 00:44:25,800 Speaker 1: get in the US. Let's let's put it into context. 766 00:44:25,880 --> 00:44:30,600 Speaker 1: Under the Trump organization, the Trump administration, we were talking 767 00:44:30,640 --> 00:44:35,920 Speaker 1: about preventing pension fund to promote E S G investing, 768 00:44:36,480 --> 00:44:41,360 Speaker 1: and we're like, and now we're moving to an administration 769 00:44:41,480 --> 00:44:45,080 Speaker 1: that is trying to do stuff. Even if what Mathery 770 00:44:45,120 --> 00:44:48,480 Speaker 1: explained it's probably going to pass at the SEC level, 771 00:44:49,000 --> 00:44:52,440 Speaker 1: there is a litigation risk afterwards. Like it's a whole 772 00:44:52,520 --> 00:44:56,200 Speaker 1: different world from what's happening in the EU, where we 773 00:44:56,320 --> 00:44:59,560 Speaker 1: have like like a market that is eager to see 774 00:44:59,600 --> 00:45:04,640 Speaker 1: these relations coming. But yet, even if that's the circumstances, 775 00:45:04,840 --> 00:45:07,040 Speaker 1: I still can't say for me that it's enough and 776 00:45:07,120 --> 00:45:09,759 Speaker 1: it's big. I agree with the scope three emission, but 777 00:45:09,880 --> 00:45:13,040 Speaker 1: it's only if there are material So I'm sure there's 778 00:45:13,080 --> 00:45:14,799 Speaker 1: going to be a lot of like playing with the 779 00:45:14,920 --> 00:45:18,160 Speaker 1: words like who it's not. It's almost like a complex 780 00:45:18,200 --> 00:45:21,680 Speaker 1: complier or explain kind of legislation. It's not for everyone. 781 00:45:22,080 --> 00:45:24,719 Speaker 1: So that's already like a big caveat for me. And 782 00:45:24,760 --> 00:45:27,120 Speaker 1: the other thing is then what I want to see 783 00:45:27,200 --> 00:45:31,480 Speaker 1: is that indeed, great first step, amazing, it's a strong 784 00:45:31,560 --> 00:45:34,279 Speaker 1: first step. But now we need this to move to 785 00:45:34,360 --> 00:45:38,279 Speaker 1: the investor side first and the bank side, because right 786 00:45:38,280 --> 00:45:41,440 Speaker 1: now it's mostly looking at registrants, which are they're going 787 00:45:41,480 --> 00:45:44,200 Speaker 1: to be reporting at the company level, So even if 788 00:45:44,200 --> 00:45:48,240 Speaker 1: you're an investor, you're you're like report as an investor, 789 00:45:48,280 --> 00:45:51,760 Speaker 1: but as a company, which is completely different than having 790 00:45:51,880 --> 00:45:55,640 Speaker 1: legislation that are really going to force them to integrate 791 00:45:55,719 --> 00:46:01,360 Speaker 1: it into their investment process, integrate sustainability in their investment process, 792 00:46:02,120 --> 00:46:07,000 Speaker 1: and also stop seeing sustainability just as a way to 793 00:46:07,120 --> 00:46:10,479 Speaker 1: head yourself against the risk. So what I would love 794 00:46:10,560 --> 00:46:14,960 Speaker 1: to see is also having legislation like what we saw 795 00:46:15,120 --> 00:46:18,360 Speaker 1: in the in the you with and s R and 796 00:46:18,400 --> 00:46:21,799 Speaker 1: in the UK with s d R having legislation that 797 00:46:21,880 --> 00:46:26,920 Speaker 1: says you need this angle of double materiality. It sounds 798 00:46:26,960 --> 00:46:29,200 Speaker 1: like a swear word, but basically what it means is 799 00:46:29,239 --> 00:46:32,359 Speaker 1: that how the US as on the first part, which 800 00:46:32,400 --> 00:46:40,480 Speaker 1: is how is sustainability risk impacting your investment impacting your business? Well, 801 00:46:40,520 --> 00:46:43,200 Speaker 1: at the moment they just looked at the business. In 802 00:46:43,200 --> 00:46:45,680 Speaker 1: in the EU, they look out through at your investments 803 00:46:45,680 --> 00:46:49,440 Speaker 1: and your lending, but how is this impacting therefore your 804 00:46:49,480 --> 00:46:52,880 Speaker 1: future profits ability? And then the second angle is like 805 00:46:53,520 --> 00:46:59,040 Speaker 1: how are your investments, how is your company impacting the environment, 806 00:46:59,280 --> 00:47:04,000 Speaker 1: impacting the sustainability of social matters for instance, and that's 807 00:47:04,040 --> 00:47:06,600 Speaker 1: the point that I wanted to and then after that 808 00:47:07,120 --> 00:47:10,960 Speaker 1: having central banks stepping in the e TB. The European 809 00:47:11,000 --> 00:47:14,680 Speaker 1: Central Banks just announced that they are thinking of putting 810 00:47:14,800 --> 00:47:18,520 Speaker 1: capsula look like capital requirements on the back of climate risk. 811 00:47:20,040 --> 00:47:22,399 Speaker 1: That is a massive step. And I wish we could 812 00:47:22,400 --> 00:47:24,319 Speaker 1: see the same in the US because once the US 813 00:47:24,360 --> 00:47:28,439 Speaker 1: will move oll like, it would show that everyone can move. 814 00:47:28,640 --> 00:47:31,560 Speaker 1: So let's see, let's play with the different mandates of 815 00:47:31,640 --> 00:47:34,359 Speaker 1: the different regulators. The SEC has one one day, it's 816 00:47:34,360 --> 00:47:38,120 Speaker 1: maybe like the the executive power will play another role, 817 00:47:38,200 --> 00:47:41,600 Speaker 1: and then the the US like the Federal Reserve will 818 00:47:41,600 --> 00:47:43,920 Speaker 1: play another role. Like there are so many levers that 819 00:47:44,040 --> 00:47:46,760 Speaker 1: we can back on. All right, We'll continue to watch 820 00:47:47,080 --> 00:47:50,920 Speaker 1: these countries and the different developments they make on these 821 00:47:50,960 --> 00:47:54,480 Speaker 1: different frameworks. It's sustainable finance, but it's this fusion between 822 00:47:54,480 --> 00:47:57,920 Speaker 1: sustainable finance and really policy in so many ways, and 823 00:47:57,960 --> 00:48:00,319 Speaker 1: how it's all interrelated that is so fascinating eating at 824 00:48:00,320 --> 00:48:03,080 Speaker 1: the moment, and it does feel like there is this 825 00:48:03,800 --> 00:48:08,319 Speaker 1: sense that there is change afoot all around as people 826 00:48:08,360 --> 00:48:10,920 Speaker 1: are organizing and looking at E s G and taking 827 00:48:10,920 --> 00:48:13,520 Speaker 1: it more seriously. So Maya and Mallory, thank you very 828 00:48:13,600 --> 00:48:16,640 Speaker 1: much for joining and being giving us such clear views 829 00:48:17,160 --> 00:48:20,080 Speaker 1: on what is coming down the pipe and what we 830 00:48:20,120 --> 00:48:22,080 Speaker 1: should be watching in terms of a few of the 831 00:48:22,160 --> 00:48:24,720 Speaker 1: changes that are taking place in the US and Europe, 832 00:48:25,120 --> 00:48:27,399 Speaker 1: and well, I guess with g fans, which is in 833 00:48:27,480 --> 00:48:30,759 Speaker 1: many respects global. Thank you, so thank you so much, 834 00:48:30,840 --> 00:48:38,920 Speaker 1: Dana for having us. Today's episode of Switched On was 835 00:48:39,040 --> 00:48:41,799 Speaker 1: edited by Rex Warner of gray Stoke Media. Bloomberg an 836 00:48:41,920 --> 00:48:44,360 Speaker 1: F as a service provided by Bloomberg Finance LP and 837 00:48:44,360 --> 00:48:47,400 Speaker 1: its affiliates. This recording does not constitute, nor should it 838 00:48:47,440 --> 00:48:51,279 Speaker 1: be construed as investment advice, investment recommendations, or recommendation as 839 00:48:51,320 --> 00:48:53,600 Speaker 1: to an investment or other strategy. Bloomberg an e F 840 00:48:53,680 --> 00:48:56,319 Speaker 1: should not be considered as information sufficient upon which to 841 00:48:56,320 --> 00:48:59,440 Speaker 1: base an investment decision. Neither Bloomberg Finance LP nor any 842 00:48:59,480 --> 00:49:02,279 Speaker 1: of its affil it makes any representation or warranty as 843 00:49:02,280 --> 00:49:04,799 Speaker 1: to the accuracy or completeness of the information contained in 844 00:49:04,800 --> 00:49:08,520 Speaker 1: this recording, and any liability of this recording is expressly disclaimed.