WEBVTT - A Look at Energy, ESG, and Addressing Climate Change 0:00:01.760 --> 0:00:04.400 This is Bloomberg Business Week. I'm Karl Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.280 --> 0:00:09.800 you the latest news from the world of business and finance, 0:00:09.800 --> 0:00:13.640 plus technology, politics, economics, all partnising the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.120 --> 0:00:19.960 analysts in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.200 Bloomberg Business Week on iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.360 --> 0:00:25.120 You can also listen to our radio show at two 0:00:25.160 --> 0:00:28.320 pm Eastern Time on Bloomberg Radio or watches on YouTube 0:00:28.360 --> 0:00:33.120 search Bloomberg Global News. We're watching the energy markets once again, 0:00:33.280 --> 0:00:35.320 Open Plus agreeing to increase the size of its oil 0:00:35.320 --> 0:00:38.279 supply hikes by about fifty in a deal that kept 0:00:38.320 --> 0:00:40.280 Rush at the heart of the cartel while also heating 0:00:40.280 --> 0:00:43.760 pressure from major consumers, including the YES and the United States. 0:00:43.760 --> 0:00:46.840 Excuse me meantime, we've got the EU approving a six 0:00:46.920 --> 0:00:50.879 packet of sanctions, including a partial ban on Russian oil imports, 0:00:50.880 --> 0:00:53.920 after further objections from Hungry held up in agreement. Great 0:00:53.920 --> 0:00:56.640 to have with us right now. Dr ellen Wald, President 0:00:56.800 --> 0:00:59.880 of Transversal Consulting, also senior fellow at the Atlantic Council, 0:01:00.000 --> 0:01:03.080 Andy Bloomberg opinion contributor. Ellen's joining us on the phone 0:01:03.080 --> 0:01:05.800 from Jacksonville, Florida. Dr Wald, good to have you with us. 0:01:06.120 --> 0:01:09.120 Can you explain to me why, given the news that 0:01:09.120 --> 0:01:12.280 that we got from about OPEC increasing the size of 0:01:12.280 --> 0:01:16.279 its oil supply, uh, why we're not seeing oil prices 0:01:16.319 --> 0:01:20.160 pulled back at all? Exactly. Well, the part of the 0:01:20.200 --> 0:01:24.760 reason is because we're unlikely to see the amount of 0:01:24.800 --> 0:01:29.000 oil that actually actually get on the market that OPEC 0:01:29.160 --> 0:01:32.319 is talking about increasing their quotas by so um. You know, 0:01:32.360 --> 0:01:36.559 we're we're talking about an increase of about six hundred 0:01:36.600 --> 0:01:40.600 and fifty barrels a day for the group's quotas. But 0:01:40.760 --> 0:01:44.160 at this point really only Saudi Arabia and the UAE 0:01:44.720 --> 0:01:48.520 can increase production, and to the maximum amount of production 0:01:48.600 --> 0:01:51.160 we can see it increase out of Saudi Arabia that 0:01:51.160 --> 0:01:53.720 we would expect to see would be about a hundred 0:01:53.720 --> 0:01:58.640 and seventy thousand barrels per day, which is really not 0:01:58.760 --> 0:02:02.000 that much when you consider the size of the global 0:02:02.000 --> 0:02:05.160 oil markets. So um. While a lot you know, pay 0:02:05.200 --> 0:02:08.440 members are free to increase if they can, we're talking 0:02:08.480 --> 0:02:10.600 about a group where a lot of them are just 0:02:10.639 --> 0:02:14.120 tapped out. So Ellen I earlier talked to the CFO 0:02:14.120 --> 0:02:18.840 of Chevron for an upcoming Bloomberg event, and you know, 0:02:19.160 --> 0:02:22.920 we were reminded that there are energy booms and energy busts, 0:02:23.120 --> 0:02:25.079 and he says, this is cyclical and it will settle 0:02:25.120 --> 0:02:29.760 down again. And so, you know, do producers think about that, 0:02:29.960 --> 0:02:34.240 Especially when you think about the major integrated global oil companies, 0:02:34.560 --> 0:02:36.520 you know that in terms of kind of investments to 0:02:36.760 --> 0:02:39.960 really ramp up supply, they're going to be hesitant because 0:02:39.960 --> 0:02:42.600 they know it's cyclical and there's also a world that 0:02:42.919 --> 0:02:47.560 we're supposed to be increasingly moving towards alternative energy. Well, 0:02:47.600 --> 0:02:51.079 I think that they are definitely aware of the cyclical 0:02:51.160 --> 0:02:54.920 nature of the oil market, and oil companies are used 0:02:54.960 --> 0:02:57.320 to this kind of boom and bust. In fact, you know, 0:02:57.360 --> 0:02:59.880 if you look at hiring when it comes to oil companies, 0:03:00.160 --> 0:03:02.360 you know they'll hire a lot of people when things 0:03:02.360 --> 0:03:05.120 are good, and then when prices collapse, a lot of 0:03:05.120 --> 0:03:07.120 them end up getting laid off and and that's kind 0:03:07.120 --> 0:03:10.920 of the nature of of the business. It's interesting because 0:03:11.080 --> 0:03:14.200 you know, high oil prices do tend to spur investment 0:03:14.240 --> 0:03:18.399 and development of new resources, but that takes time. It's 0:03:18.400 --> 0:03:22.480 not something that happens overnight. And UM, I think it's 0:03:22.560 --> 0:03:26.760 it's taking a bit more time in this cycle because 0:03:26.800 --> 0:03:31.200 there's so much external pressure on oil companies not to 0:03:31.240 --> 0:03:36.200 invest in new resources. Be that from UM shareholders who 0:03:36.280 --> 0:03:40.200 are really just looking to see oil companies putting uh, 0:03:40.240 --> 0:03:44.160 you know, putting their profits back into uh dividends and 0:03:44.160 --> 0:03:48.720 and other things to return uh money to shareholders or UM. 0:03:48.760 --> 0:03:51.200 We're also seeing pressure from governments. They are making it 0:03:51.280 --> 0:03:55.240 very difficult for companies to uh, you know, to develop 0:03:55.320 --> 0:03:58.640 new resources. The US, for example, has there's been a 0:03:58.640 --> 0:04:02.160 lot of regulatory uncertain t with a buid administration, and 0:04:02.400 --> 0:04:06.000 that makes companies very hesitant to expand we're just now 0:04:06.120 --> 0:04:10.880 starting to see companies in Europe expanding in you know, 0:04:10.960 --> 0:04:13.920 new gas fields, for example. But those kinds of fields 0:04:13.920 --> 0:04:16.720 are not going to come on into production for some time. 0:04:16.880 --> 0:04:19.839 So we may be into a period of uh it 0:04:19.920 --> 0:04:22.520 may be a bit of an extended period of high prices, 0:04:22.600 --> 0:04:25.040 just like we saw an extended period of low prices 0:04:25.120 --> 0:04:28.240 preceding it. What does an extended period of high prices mean? 0:04:28.320 --> 0:04:30.599 Because everything that you just said, Dr Wald makes me 0:04:30.640 --> 0:04:33.960 think that there's no end in sight to five six 0:04:34.000 --> 0:04:36.279 dollar downs of gas at the pump and high energy 0:04:36.320 --> 0:04:38.920 bills in summer and winter. And I'm curious what extended 0:04:38.960 --> 0:04:44.520 means and what how high it might go in that extension. Well, 0:04:44.560 --> 0:04:46.880 how high it goes depends on It depends on a 0:04:46.880 --> 0:04:49.120 lot of things. And also we are seeing. Part of 0:04:49.160 --> 0:04:51.760 what we're seeing in the market is also there's there's 0:04:51.800 --> 0:04:56.160 a premium and prices, both electricity prices and gasoline prices 0:04:56.600 --> 0:05:00.640 up from the geopolitical events in Europe without a out. So, 0:05:01.040 --> 0:05:04.480 you know, if that were to say, be resolved in 0:05:04.520 --> 0:05:06.720 the next couple of months, I think we would definitely 0:05:06.839 --> 0:05:10.120 see prices pulled back, although I really don't know if 0:05:10.680 --> 0:05:12.520 barring you know, if if we're still at the same 0:05:12.600 --> 0:05:14.960 levels of demand, I'm not sure that we would see 0:05:14.960 --> 0:05:18.120 a return to say, like you know, forty or fifty 0:05:18.200 --> 0:05:20.799 or even sixty dollar oil. We'd probably be more firmly 0:05:20.880 --> 0:05:24.960 in the seventy eighty maybe ninety dollar area. Now that 0:05:25.040 --> 0:05:28.120 of course sounds great when you're talking about prices are 0:05:28.160 --> 0:05:31.440 like a hundred and eleven today, so you know, so 0:05:31.440 --> 0:05:34.279 so it is all all kind of relative um and 0:05:34.640 --> 0:05:37.320 the oil market is very volatile right now, and it 0:05:37.320 --> 0:05:40.799 does depend if we enter a period of economic recession 0:05:40.880 --> 0:05:45.440 and potentially contraction, we could also see demand drop and 0:05:45.640 --> 0:05:49.120 that could help cause oil prices to pull back some. 0:05:49.279 --> 0:05:51.520 Though I still don't don't see us getting back to 0:05:51.920 --> 0:05:56.720 those low numbers that we had, you know, in twenty nineteen. 0:05:56.760 --> 0:06:00.920 Ellen just quickly just got about here, will though today's 0:06:00.960 --> 0:06:05.320 current situation geopolitical crisis lead the world to think about 0:06:05.560 --> 0:06:11.640 Venezuela more aggressively despite problems obviously with that political environment 0:06:11.839 --> 0:06:14.800 or present Biden meeting with MBS in Saudi Arabia. I mean, 0:06:14.839 --> 0:06:16.560 do we need to think that these alliances are going 0:06:16.600 --> 0:06:20.400 to have to change? Sorry, just got about seconds. Yeah, 0:06:20.560 --> 0:06:23.479 I think it's difficult to say that because Venezuela has 0:06:23.600 --> 0:06:28.240 such issues with its oil industry anyway, that we can't 0:06:28.279 --> 0:06:30.120 expect a lot of oil to come on the market 0:06:30.160 --> 0:06:34.600 from from them anyway, regardless. Alright, situation, Ellen, Always nice 0:06:34.640 --> 0:06:36.560 to get time with you, Dr Ellen Wall. She is 0:06:36.600 --> 0:06:39.600 President of Transversal Consulting, Senior Fellow a the Atlantic Council, 0:06:39.800 --> 0:06:43.280 Bloomberg Opinion contributor, and she also wrote the book Saudi Inc. 0:06:43.360 --> 0:06:46.640 On the history of Aramka Ramka excuse me in Saudi Arabia. 0:06:46.800 --> 0:06:51.840 You're listening to Bloomberg. This is Bloomberg Business Week with 0:06:51.920 --> 0:06:57.239 Carol Masser and Bloomberg Quick Takes Tim Stenovic on Bloomberg Radio. Well, 0:06:57.279 --> 0:07:00.480 it is a thirty billion dollar market cap company customers 0:07:00.480 --> 0:07:03.600 around the globe, more than two thousand locations around the world, 0:07:03.920 --> 0:07:07.200 helping to create so called intelligent buildings to help address 0:07:07.240 --> 0:07:10.600 our worsening climate crisis. We're talking about Johnson Controls International, 0:07:10.880 --> 0:07:12.840 which is also a company's got a great vantage point 0:07:12.880 --> 0:07:16.320 when it comes to the global economy and corporate expenditures. Well, 0:07:16.320 --> 0:07:18.440 that's exactly where I want to start with George Oliver, 0:07:18.560 --> 0:07:22.560 Chairman and chief executive officer of Johnson Controls. George joining 0:07:22.600 --> 0:07:25.800 us via zoom from Milwaukee. George, how are you. I'm 0:07:25.840 --> 0:07:28.320 doing very well. Great to be with you today. Well, 0:07:28.320 --> 0:07:30.480 as Carroll mentioned, you do have such a great view 0:07:30.520 --> 0:07:32.880 on what's going on here in the United States and 0:07:33.080 --> 0:07:36.640 around the world. What is your view of the economy 0:07:36.640 --> 0:07:39.720 here in the US. Yeah, when we look at what's 0:07:39.720 --> 0:07:42.720 happening within our business, um, you know, we see unprecedented 0:07:42.720 --> 0:07:45.480 demand for what we do within buildings. You know. Let 0:07:45.480 --> 0:07:48.080 me start by talking about what we do were smart 0:07:48.200 --> 0:07:52.440 solutions provider for buildings and infrastructure, and uh, you know, 0:07:52.480 --> 0:07:54.920 we did a merger five years ago which put together 0:07:55.520 --> 0:07:58.960 to leadership companies in the space Tycho and John's Controls, 0:07:59.480 --> 0:08:02.640 and what our strategy of of taking the multiple you know, 0:08:02.720 --> 0:08:06.440 building systems and then being able to deploy technology with 0:08:06.480 --> 0:08:09.120 a data platform that enables us to be able to 0:08:09.160 --> 0:08:12.960 significantly change the outcome of buildings. And those outcomes are 0:08:13.000 --> 0:08:17.840 reducing energy demand, improving the indoor indoor air quality, and 0:08:17.960 --> 0:08:21.800 ultimately you know, making autonomous buildings. And so for us, 0:08:22.160 --> 0:08:25.840 given the the the environment that we're in, we're seeing 0:08:26.000 --> 0:08:28.800 very strong demand. We've got backlogs that are that are 0:08:28.960 --> 0:08:32.559 reckon high backlogs. Our challenges have been shorter term is 0:08:32.920 --> 0:08:36.520 ultimately converting with the supply chain challenges on that demand. 0:08:37.000 --> 0:08:39.040 And when you look at what we do within buildings, 0:08:39.480 --> 0:08:41.720 you know, when you look at the global carbon footprint, 0:08:42.000 --> 0:08:46.440 it represents about the of the overall global covernment footprint 0:08:46.440 --> 0:08:49.040 buildings do. And then the opportunity that we have now 0:08:49.120 --> 0:08:52.640 as a smart building solutions provider to significantly reduce the 0:08:52.760 --> 0:08:55.360 energy that's consumed in the building at the same time 0:08:55.360 --> 0:08:58.600 that we're upgrading the indoor air quality and ultimately creating 0:08:58.600 --> 0:09:01.600 an autonomous, autonomous build So for us, we're watching the 0:09:01.600 --> 0:09:05.520 economy closely. But given what we see now going forward, 0:09:05.559 --> 0:09:08.800 where now buildings have become much more strategic um. I 0:09:08.800 --> 0:09:11.640 think in the past they buildings were built with multiple 0:09:11.679 --> 0:09:14.920 systems separating apart, and now with the opportunity to bring 0:09:14.920 --> 0:09:18.440 that all together into one solution set, we're seeing very 0:09:18.440 --> 0:09:20.920 strong demand. So when we look at the market that 0:09:21.000 --> 0:09:23.320 ultimately is being created with these new problems that our 0:09:23.360 --> 0:09:27.400 customers are are trying to solve, we see roughly accumulative 0:09:27.600 --> 0:09:32.120 about billion dollars of additional market over the next decade. 0:09:32.160 --> 0:09:35.080 So we're watching it closely, but right now we're really 0:09:35.080 --> 0:09:37.920 focused on being able to execute on the backlock to 0:09:37.960 --> 0:09:42.439 support our customers. It's interesting when you talk about unprecedented demand, 0:09:42.600 --> 0:09:46.520 strong demand, UM George. How much of it is because 0:09:46.840 --> 0:09:49.720 of companies looking to cut costs and be more efficient. 0:09:49.800 --> 0:09:52.720 How much of is it because of regulatory changes or 0:09:52.800 --> 0:09:55.320 the push towards you know, concerns about climate change and 0:09:55.320 --> 0:09:58.000 being much more sustainable. How much of the demand is 0:09:58.040 --> 0:10:01.760 new build Well, when you look at let me start 0:10:01.800 --> 0:10:04.520 with the commitments have been made on climate change or 0:10:04.760 --> 0:10:08.959 or decarbonization that have been made broadly across businesses as 0:10:08.960 --> 0:10:11.480 well as with governments, and I think coming back from 0:10:11.559 --> 0:10:14.040 Davos from last week, it's how do we take all 0:10:14.080 --> 0:10:16.720 of the commitments that have been made and ultimately how 0:10:16.720 --> 0:10:20.120 do we now you know, bring that together with a 0:10:20.120 --> 0:10:23.640 combination that's shared between business and government and ultimately now 0:10:23.720 --> 0:10:26.760 capitalize on what we see the opportunity to be. So 0:10:26.840 --> 0:10:30.000 for us with those commitments and recognizing now to get 0:10:30.040 --> 0:10:32.679 to net zero, buildings are going to be an important 0:10:32.679 --> 0:10:34.800 part that have to be addressed to get to the 0:10:34.840 --> 0:10:38.439 commitments that have been made. So we're seeing that for instance, 0:10:38.440 --> 0:10:43.040 in our in our sustainable sustainable solutions business, we we 0:10:43.120 --> 0:10:45.839 see a pipeline now or of let's say about seven 0:10:45.840 --> 0:10:48.719 billion dollars and will convert roughly a billion of that 0:10:48.800 --> 0:10:51.079 during during the course of the year. So we are 0:10:51.120 --> 0:10:54.080 seeing a significant demand for the type of solutions that 0:10:54.120 --> 0:10:57.360 we can now provide. And where you are uniquely positioned 0:10:57.360 --> 0:10:59.720 as Johnson Controls that not only do we have the 0:10:59.720 --> 0:11:04.440 billing systems, but now with our open Blue platform, which 0:11:04.480 --> 0:11:06.320 is a platform that allows us to be able to 0:11:06.360 --> 0:11:11.400 bridge all of the building systems together and then ultimately 0:11:11.400 --> 0:11:14.520 create outputs that historically haven't been delivered. All right, So 0:11:14.600 --> 0:11:16.800 help me out here. So how much though is you know, 0:11:16.800 --> 0:11:19.160 in terms of that demand, if you had to put 0:11:19.200 --> 0:11:22.000 it into cuts of a pie or percentage wise, how 0:11:22.120 --> 0:11:25.360 much of that demand is new build how much of 0:11:25.440 --> 0:11:27.959 is it cause of regulatory change? You know? How can 0:11:28.000 --> 0:11:30.040 you break it down a little bit? I'm curious about 0:11:30.040 --> 0:11:32.120 what's the psyche of people who are who are doing 0:11:32.120 --> 0:11:36.040 the spend. So Carola, what I would say, it's both 0:11:36.559 --> 0:11:39.560 with the pandemic. When the pandemic hit, we immediately saw 0:11:39.559 --> 0:11:42.559 our demand to be able to upgrade the indoor air quality, 0:11:42.840 --> 0:11:46.680 which requires upgrading systems and deploying digital to be able 0:11:46.720 --> 0:11:49.840 to then optimize how you deliver a clean air delivery 0:11:49.960 --> 0:11:53.200 rate within buildings. So we saw that which is really 0:11:53.640 --> 0:11:56.520 taken the built environment and being able to elevate that 0:11:56.559 --> 0:12:00.880 built environment to solve for today's problem. So lot of retrofit, 0:12:00.960 --> 0:12:03.760 a lot of upgrade, a lot of repair, leveraging our 0:12:03.800 --> 0:12:07.280 our technologies. Now at the same time you've seen the 0:12:07.320 --> 0:12:09.959 new construction come back. You know, when you look at 0:12:10.080 --> 0:12:13.000 Architectural Building Buildings Index and a lot of the other 0:12:13.040 --> 0:12:15.920 metrics you've see whether there has been an expansion and 0:12:15.960 --> 0:12:18.600 a lot of that growth is coming back. So for us, 0:12:18.640 --> 0:12:21.360 it's been both and it's not only a significant demand 0:12:21.400 --> 0:12:25.440 for upgrading the existing built environment, but at the same 0:12:25.520 --> 0:12:29.720 time fundamentally changing how buildings are built that ultimately going 0:12:29.720 --> 0:12:32.959 to be able to deliver a significant different outcome as 0:12:32.960 --> 0:12:35.720 it relates to energy consumed as well as the environment 0:12:35.760 --> 0:12:39.360 that's created. One thing I want to know, George Um, 0:12:39.400 --> 0:12:41.760 you know it's interesting are David Weston catching up with 0:12:41.840 --> 0:12:45.040 Larry Think over a black rock and talking about we're 0:12:45.040 --> 0:12:48.400 gonna be living with more uncertainty, saying the inflation problem 0:12:48.960 --> 0:12:51.560 isn't you know, it's policy related, but that the fet 0:12:51.640 --> 0:12:55.960 isn't someone who can fix some of these issues. Specifically 0:12:56.200 --> 0:12:59.760 talked about the supply chain, UH and the supply chain problems. 0:12:59.760 --> 0:13:02.120 How is your supply chain? Are you seeing any kind 0:13:02.120 --> 0:13:04.160 of loosening in some of the snarls that have been 0:13:04.200 --> 0:13:07.199 out there if you look at what's happened over the 0:13:07.320 --> 0:13:09.240 last couple of years with the pandemic and then the 0:13:09.360 --> 0:13:13.320 multiple shutdowns that have occurred to contain the virus, and 0:13:13.320 --> 0:13:15.680 now some of what we're experiencing in China with the 0:13:15.679 --> 0:13:18.880 shutdowns there, I mean, then at the same time with 0:13:18.920 --> 0:13:22.360 the Ukraine crisis and and then with in our space 0:13:22.440 --> 0:13:25.120 the unprecedented demands. So when you put all of that together, 0:13:25.200 --> 0:13:28.320 we've we've had our own challenges and we've it's really 0:13:28.360 --> 0:13:31.480 about resiliency, and so not only with what we do 0:13:31.559 --> 0:13:34.080 to help our customers with their buildings and infrastructure and 0:13:34.080 --> 0:13:38.200 creating resilient, much more resilient buildings and communities, but also 0:13:38.280 --> 0:13:41.679 making sure that we're working with our suppliers to create 0:13:41.720 --> 0:13:44.200 a much more resilient supply chain globally. And that's what 0:13:44.640 --> 0:13:46.280 that's what we've been doing the last two years, and 0:13:46.280 --> 0:13:49.079 we've made a tremendous amount of progress. Now what we're 0:13:49.080 --> 0:13:52.480 seeing is with that strategy, we are seeing improvement um 0:13:52.480 --> 0:13:55.560 and and it's across all of our commodities, whether it 0:13:55.559 --> 0:13:59.760 be microchips and semiconductors or other other materials, and so 0:14:00.200 --> 0:14:04.520 we've been working through it um. But resiliency in in 0:14:04.520 --> 0:14:06.600 in supply chains and mean, George, what does that mean? 0:14:06.640 --> 0:14:08.360 Does it mean you're shifting where you're doing it or 0:14:08.400 --> 0:14:11.120 what does that mean. We've always had a strategy in 0:14:11.160 --> 0:14:13.720 our supply chain to be local for local and so 0:14:13.760 --> 0:14:17.200 when you are manufacturing footprint. We have manufacturing footprint and 0:14:17.240 --> 0:14:19.600 all of the key markets we support, and then we 0:14:19.640 --> 0:14:23.440 build local supply chains to support those manufacturing plants with 0:14:23.560 --> 0:14:26.600 local supply and so there are when you're building a 0:14:26.640 --> 0:14:29.520 global supply chain, there are some products that are used 0:14:29.560 --> 0:14:32.960 across multiple markets and so you can't predict you know, 0:14:32.960 --> 0:14:36.760 whether it be the environment and natural disasters or pandemics 0:14:36.880 --> 0:14:41.000 or you know, these some of the geopolitical challenges that 0:14:41.000 --> 0:14:43.680 that might exist. And so our strategy has been to 0:14:43.760 --> 0:14:46.640 be local for local and we've been developing not only 0:14:46.680 --> 0:14:49.800 the right product but also having the local supply chain 0:14:50.120 --> 0:14:53.280 that creates resiliency and how are how we're able to 0:14:53.320 --> 0:14:55.920 then you know, be able to support our customers and 0:14:55.960 --> 0:14:59.280 deliver for our customers. So that with the idea that 0:14:59.360 --> 0:15:02.920 you have multiple sources globally, so as you're going through 0:15:03.000 --> 0:15:05.680 some of this disruption, you've got a supply chain that 0:15:05.720 --> 0:15:10.880 has multiple sources, so you can source from multiple multiple locations. Um, 0:15:10.960 --> 0:15:13.360 all of that comes together into having a supply chain 0:15:13.400 --> 0:15:16.760 that's much more resilient. George, I'm really intrigued when you 0:15:16.760 --> 0:15:19.600 said you're seeing improvement in the supply chain where specifically 0:15:19.600 --> 0:15:21.480 are you seeing that and you're seeing improvement when it 0:15:21.480 --> 0:15:23.800 comes to commodities as well as it chips? Is it like? 0:15:23.840 --> 0:15:26.600 What is it? It's been When we look at the 0:15:26.640 --> 0:15:30.040 work that we've done to strategize our semiconductors and chips 0:15:30.040 --> 0:15:33.520 were making good progress there across the globe. UM. A 0:15:33.560 --> 0:15:36.720 lot of our supply chain challenge was in North America. 0:15:36.840 --> 0:15:39.040 When we look at our supply chain, we have multi 0:15:39.120 --> 0:15:41.960 tiered suppliers and a lot of the challenges that we 0:15:42.040 --> 0:15:45.440 had with the disruptions from from COVID shutdowns and then 0:15:45.720 --> 0:15:49.360 some of the labor challenges UM not necessarily within our facilities, 0:15:49.400 --> 0:15:52.600 but within our suppliers that UM and so we've worked 0:15:52.680 --> 0:15:55.320 very closely with them and being able to address their 0:15:55.400 --> 0:15:59.760 their labor challenges ultimately getting the supply chain back operating. 0:16:00.080 --> 0:16:02.760 So it's really looking at all levels of the supply 0:16:02.840 --> 0:16:05.360 chain UM as well as all when you look at 0:16:05.360 --> 0:16:08.480 the global footprint, all regions, and we've been making part 0:16:08.680 --> 0:16:12.120 pretty much across the board. Georgia, are you expecting a 0:16:12.160 --> 0:16:15.520 recession movie later this year or maybe next year? Are you? 0:16:15.560 --> 0:16:19.000 Are you when you gather your management team, do you say, guys, 0:16:19.000 --> 0:16:20.880 this is what you know? We need to have the 0:16:20.880 --> 0:16:25.040 playbook ready for well, you can go back with the pandemic, 0:16:25.080 --> 0:16:28.320 and I think we we we demonstrated this very well. 0:16:28.360 --> 0:16:30.720 We've been creating a lot of agility with how we 0:16:30.760 --> 0:16:33.880 operate as a company, and we've had an incredible opportunity 0:16:34.240 --> 0:16:36.480 with the work that we do within buildings and infrastructure 0:16:36.560 --> 0:16:40.480 to respond to these crisis like for instance, a good 0:16:40.480 --> 0:16:43.440 example is in the early days of the pandemic, we 0:16:43.480 --> 0:16:46.760 support critical infrastructure, which is healthcare, and we were on 0:16:46.840 --> 0:16:50.160 the front lines building hospitals in a matter of days 0:16:50.480 --> 0:16:52.960 that had the highest air quality and ultimately the resource 0:16:53.320 --> 0:16:56.400 that they needed to be able to attend to those infected. 0:16:56.840 --> 0:17:00.000 And so we've we've built you know, we've been very 0:17:00.000 --> 0:17:02.840 agile with what we do, not only responding to the 0:17:03.120 --> 0:17:07.040 new demands and the crisis, but also agility relative to 0:17:07.480 --> 0:17:11.240 understanding a little bit of what's gonna potentially happening and 0:17:11.280 --> 0:17:13.800 make sure that we're always positioned to be able to 0:17:13.840 --> 0:17:17.440 deliver for our customers, be able to solve their biggest problems, 0:17:17.840 --> 0:17:20.880 and then ultimately make sure that we're taken into account 0:17:20.920 --> 0:17:24.360 what we see happening on the horizon. So being agile 0:17:24.560 --> 0:17:27.520 in case of whatever comes your way, So could be 0:17:27.560 --> 0:17:30.960 a recession could not? Is that Is that fair to say? Yeah? 0:17:30.960 --> 0:17:33.479 Like I said, right, our focus right now is delivering 0:17:33.520 --> 0:17:36.239 on the backlog and delivering for our customers given what 0:17:36.240 --> 0:17:41.520 we've seen here over the last about eighteen twenty four months. Obviously, 0:17:41.760 --> 0:17:45.399 I think the demand that we see now solving the 0:17:45.440 --> 0:17:49.199 biggest problems within buildings, which is indoor ere quality, making 0:17:49.359 --> 0:17:52.880 making them much healthier and safer, and then also being 0:17:52.920 --> 0:17:57.159 able to address the global carbon footprint that domain is 0:17:57.160 --> 0:17:59.760 going to continue because the commitments have been made and 0:17:59.800 --> 0:18:02.440 I'll really our customers have to deliver on those commitments. 0:18:02.840 --> 0:18:05.800 So we're working closely to make sure we understand how 0:18:05.880 --> 0:18:09.160 that plays out and how we're positioned to support our customers. 0:18:09.200 --> 0:18:11.880 At the same time that we're taking into account making 0:18:11.880 --> 0:18:15.440 sure that we're we're gonna be agile with any downturn 0:18:15.520 --> 0:18:17.879 that might might occur in some of the key markets 0:18:17.880 --> 0:18:20.320 that we operated. But you know what I would, it's 0:18:20.320 --> 0:18:22.760 really all about making sure that we're not only supporting 0:18:22.760 --> 0:18:24.520 the customer with the demand that we have today in 0:18:24.560 --> 0:18:27.760 the backlog, but at the same time taken into account 0:18:27.800 --> 0:18:30.199 the factors that we see that potentially could impact US 0:18:30.480 --> 0:18:33.200 longer term. George, thank you so much for your time today. 0:18:33.240 --> 0:18:35.840 I really appreciate it. George Oliver. He is chairman and 0:18:35.920 --> 0:18:39.760 chief executive officer Johnson Controls. Joining us via zoom from Milwaukee. 0:18:39.960 --> 0:18:44.000 This is Bloomberg Business Week with Carol Messer and Bloomberg 0:18:44.040 --> 0:18:47.840 Quick Takes Tim Stinovic on Bloomberg Radio. We did hear 0:18:47.920 --> 0:18:49.960 David West and talk about this in his conversation with 0:18:50.240 --> 0:18:53.199 Black Rocks Larry Fink about Getcha Banks and battle d 0:18:53.240 --> 0:18:56.280 the US group, the CEO resigning hours after police raid 0:18:56.320 --> 0:18:58.720 at the asset manager, the culmination of months of controversy 0:18:58.760 --> 0:19:01.880 surrounding the executive. But it really Lee was about allegations 0:19:02.119 --> 0:19:05.600 um by the company's former chief sustainable ability officer at 0:19:05.600 --> 0:19:07.919 the company inflated its E s G credentials. You and 0:19:07.920 --> 0:19:10.280 I talk a lot coming off of milk in so 0:19:10.359 --> 0:19:12.280 much E s G conversation that it does feel like 0:19:12.359 --> 0:19:15.240 that space is going through a reckoning. Yeah, and interestingly enough, 0:19:15.280 --> 0:19:17.560 Larry Fink said that Black Rock doesn't want to be 0:19:17.800 --> 0:19:20.399 the quote environmental police. We've got a great voice on this. 0:19:20.520 --> 0:19:22.720 Garvin J. Bush is the co founder and chief investment 0:19:22.760 --> 0:19:26.800 officer at Green Alpha Advisors. It's based in Boulder, Colorado. 0:19:26.880 --> 0:19:31.920 But we got j with us right now. Uh excuse me, Garvin, 0:19:31.920 --> 0:19:33.480 We've got you with with us right now. How are you. 0:19:33.520 --> 0:19:35.440 It's good to day. That would be actually kind of cool. 0:19:35.760 --> 0:19:38.320 I was looking at Ja, I was looking right up 0:19:38.359 --> 0:19:40.639 at the J Bush. It's good to help you with us, 0:19:40.640 --> 0:19:41.560 and it's good to have you with us in the 0:19:41.560 --> 0:19:44.360 Bloomberg Interactive Broker studios. It's been it's been years since 0:19:44.400 --> 0:19:47.000 you've been back in the studios, three years. Carol just 0:19:47.040 --> 0:19:49.359 looked it up and it's great to be back. Thanks 0:19:49.359 --> 0:19:50.760 for having me and you guys. Well, how is the 0:19:50.800 --> 0:19:53.040 conversation around E s G shifted? Because I think Carol 0:19:53.080 --> 0:19:54.879 makes a really good point. There's we're sort of seeing 0:19:54.880 --> 0:19:59.040 this backlash right now. It's interesting. I think if cynically, 0:19:59.119 --> 0:20:01.320 I might say, it's interesting to me that E s 0:20:01.359 --> 0:20:04.119 G has finally achieved enough success that it's getting pushed 0:20:04.119 --> 0:20:07.040 back from the more incumbent part of the industry. A 0:20:07.080 --> 0:20:11.960 little less cynically, I might say that while of course 0:20:12.000 --> 0:20:15.800 everyone has their first memory to criticize whatever they want, 0:20:16.000 --> 0:20:19.679 equally we all can invest by whatever criteria we want, right. 0:20:19.760 --> 0:20:22.280 That's how markets are. That's how they work. So that 0:20:22.320 --> 0:20:25.080 could be I don't know, value or growth or momentum, 0:20:25.359 --> 0:20:27.480 or it could be thematic right, including E s G. 0:20:28.040 --> 0:20:30.639 And over time the markets reward the best ideas and 0:20:30.640 --> 0:20:32.440 the things that grow the most and compound the most 0:20:32.440 --> 0:20:34.280 and have the most intrinsic value. So this isn't going 0:20:34.359 --> 0:20:36.639 to be one or lost by rhetoric. But in the 0:20:36.760 --> 0:20:39.080 end the markets will will bear. WHOA wait a minute. 0:20:39.200 --> 0:20:41.359 So I'm just thinking if I'm going to commit money 0:20:41.400 --> 0:20:44.879 to E s G like I expect it to, like 0:20:44.960 --> 0:20:48.080 you guys are all about companies whose products and services 0:20:48.080 --> 0:20:51.359 address the global economy's greatest system level risks. You know, 0:20:51.760 --> 0:20:54.760 I want my money potentially in an area that is 0:20:54.840 --> 0:20:58.240 not going to impact negatively the environment or something, you know. 0:20:58.480 --> 0:21:00.440 So I do wonder to some ex and if you're 0:21:00.480 --> 0:21:03.520 selling something that it's going to do something, doesn't it 0:21:03.600 --> 0:21:06.080 have to do that? I would argue very much that 0:21:06.160 --> 0:21:08.639 it does. And in fact, that Green Alpha we don't 0:21:08.840 --> 0:21:11.879 brand as e SCH for that reason. It's jone. I 0:21:11.920 --> 0:21:13.680 was going through your website. My god, I don't see 0:21:13.680 --> 0:21:16.159 that anywhere. Yeah, thanks for noticing that. Yeah, yeah, no, 0:21:16.320 --> 0:21:19.960 we we want to go right after the actual solutions 0:21:19.960 --> 0:21:22.439 to our to our most key system level risks that 0:21:22.480 --> 0:21:25.320 actually have the ability and our threatening to undermine the 0:21:25.359 --> 0:21:28.320