WEBVTT - Kopi Time E117 - Munib Madni on the Gigaton Coalition to Decarbonize 0:00:05.889 --> 0:00:09.149 Welcome to Copy Time, a podcast series on Markets and 0:00:09.159 --> 0:00:12.270 Economies from D BS Group Research. I'm Pareek, chief economist, 0:00:12.398 --> 0:00:18.600 welcoming you to our 117th episode. Today. We welcome back 0:00:18.610 --> 0:00:23.069 an old friend Mori Mai Ceo of Singapore based penalty partners, 0:00:23.079 --> 0:00:27.549 a fund management company with responsible investing at its core. 0:00:27.930 --> 0:00:32.270 Patchy is also a certified B corporation meeting the high 0:00:32.279 --> 0:00:37.619 standards of verified social and environmental performance, public transparency and 0:00:37.630 --> 0:00:42.270 legal accountability to balance profit and purpose. We last spoke 0:00:42.279 --> 0:00:43.470 with Munib in the 0:00:43.549 --> 0:00:46.810 middle of 2022. Let's get a sense of what pa 0:00:46.819 --> 0:00:49.340 partner has been up to since then. And I want 0:00:49.348 --> 0:00:51.319 to ask you a couple of questions in general in 0:00:51.330 --> 0:00:54.709 the world of eg type investing based on some recent 0:00:54.720 --> 0:00:57.869 headlines that I've been coming across. So Mudi Mali, great 0:00:57.880 --> 0:00:59.459 to have you back on Kobe type. Uh 0:00:59.470 --> 0:01:02.869 Great to be here, Tamur. It's every 18 months or 0:01:02.880 --> 0:01:04.929 two years we catch up, which is fantastic. 0:01:05.440 --> 0:01:08.099 I think there is so much going on with your 0:01:08.110 --> 0:01:10.279 firm and the work that you do. I think that's 0:01:10.290 --> 0:01:13.459 a maximum uh period and we need to probably do 0:01:13.470 --> 0:01:15.529 them more frequently. Um 0:01:16.400 --> 0:01:19.459 will you give us a highlight reel if you will 0:01:19.470 --> 0:01:22.099 of Paar Park's achievements since we last talked? 0:01:22.470 --> 0:01:26.239 Yeah. So um last time we met, uh I think 0:01:26.250 --> 0:01:29.399 I was already sort of sharing with you how my, 0:01:29.410 --> 0:01:32.940 my team and myself, we were helping our institutional clients, 0:01:32.949 --> 0:01:36.629 uh you know, with their portfolios uh moving from a 0:01:36.639 --> 0:01:39.970 risk return outcome to a risk return, sustainability outcome. Uh 0:01:40.010 --> 0:01:43.120 Now since, and even when we last spoke, we talked 0:01:43.129 --> 0:01:47.209 a lot about climate investing at a very high level, 0:01:47.220 --> 0:01:50.559 at a let's say, 30,000 ft level and a helicopter level. 0:01:50.873 --> 0:01:54.413 Um Since then, um my team have obviously other than 0:01:54.422 --> 0:01:57.373 managing our global equity strategy, which is a strategy of 0:01:57.383 --> 0:02:01.273 purposeful companies. We've fine tuned and sort of strengthened our 0:02:01.282 --> 0:02:06.053 environmental capital sort of focus within the portfolios within our 0:02:06.063 --> 0:02:09.263 own portfolios. We've put in place certain climate goals and 0:02:09.272 --> 0:02:13.143 guardrails uh which is a must have nowadays for most 0:02:13.151 --> 0:02:17.503 global equity strategies. Uh And, and, and we've also sort 0:02:17.513 --> 0:02:18.822 of now been engaging 0:02:18.906 --> 0:02:23.475 with our portfolio companies and also our investors, mostly most 0:02:23.485 --> 0:02:26.865 of whom are institutional investors on how they can do 0:02:26.876 --> 0:02:31.906 climate investing in the listed equity space, but with an 0:02:31.916 --> 0:02:35.945 impact focus as opposed to having just very climate conscious strategies. 0:02:35.955 --> 0:02:38.475 And again, later on, we can discuss the difference between 0:02:38.485 --> 0:02:42.445 a climate conscious strategy and let's say climate impact strategy. 0:02:42.595 --> 0:02:46.326 So the focus over the last 18 months has very 0:02:46.335 --> 0:02:47.005 well been 0:02:47.279 --> 0:02:52.020 on how we can share our learnings and also help 0:02:52.029 --> 0:02:56.320 our clients move their portfolios towards a climate impact strategy 0:02:56.330 --> 0:02:58.758 within the listed equity space. And that's been taking a 0:02:58.770 --> 0:02:59.850 lot of time as well. 0:03:00.419 --> 0:03:02.638 I can imagine just off the cuff 0:03:03.639 --> 0:03:07.300 a company, let's say a big fossil fuel producing company, 0:03:07.309 --> 0:03:11.299 it emits 100 tons of carbon a year. Uh Of course, 0:03:11.309 --> 0:03:14.500 that's a very big polluting entity in this world, but 0:03:14.508 --> 0:03:17.300 it is on a credible path to reduce that emission 0:03:17.309 --> 0:03:20.550 by 10% in the next two years. Would that make 0:03:20.559 --> 0:03:22.100 you interested in investing in that company? 0:03:22.699 --> 0:03:26.830 Hm. Uh So last time when we spoke uh TII 0:03:26.839 --> 0:03:30.779 I said to you, my, my personal uh philosophy is 0:03:30.788 --> 0:03:35.509 that incremental, positive change uh is a good move and 0:03:35.520 --> 0:03:40.470 absolute big numbers follow. So for me, I'm, I'm always 0:03:40.479 --> 0:03:44.110 uh you know, an investor who is looking at uh 0:03:44.119 --> 0:03:49.190 the incremental pace of change as opposed to big law, 0:03:49.199 --> 0:03:49.949 a big 0:03:50.419 --> 0:03:55.240 uh sort of commitments that are made, you know, with 0:03:55.250 --> 0:03:58.250 zero plans and there's plenty of that, especially when we 0:03:58.259 --> 0:04:00.380 come to climate and this, we will discuss that in 0:04:00.389 --> 0:04:03.649 a bit more detail later. So when I and my team, 0:04:03.660 --> 0:04:06.570 when we look at a company, uh we definitely want 0:04:06.580 --> 0:04:08.720 to see some movement in the right direction we want 0:04:08.729 --> 0:04:11.619 to see. Are they genuinely doing it and have they 0:04:11.630 --> 0:04:13.070 got in place plans and 0:04:13.615 --> 0:04:16.794 to achieve that as opposed to someone who just goes 0:04:16.803 --> 0:04:21.195 and makes a blind uh sort of without no plans commitment, 0:04:21.415 --> 0:04:24.404 uh which is not genuine. So I think to answer 0:04:24.415 --> 0:04:27.294 your question, you need to sort of open the hood 0:04:27.303 --> 0:04:29.815 and look under the hood to see what truly is 0:04:29.825 --> 0:04:34.695 that company, uh uh you know, doing delivering uh and 0:04:34.704 --> 0:04:36.354 not just go with headline numbers, 0:04:36.720 --> 0:04:40.489 ok, without mentioning any company's name. But if uh I 0:04:40.500 --> 0:04:43.170 see an ad by a global energy giant and usually 0:04:43.178 --> 0:04:45.890 see many ads about how they are, you know, focusing 0:04:45.899 --> 0:04:50.260 on decarbonization and including the world. Um And if you do, 0:04:50.269 --> 0:04:52.000 I mean, do your due diligence and you find that 0:04:52.010 --> 0:04:53.730 that energy giant is sort of, you know, 0:04:54.549 --> 0:04:57.890 speaking the talk and but also doing the job, uh 0:04:57.899 --> 0:05:01.010 would you then consider investing in a fossil fuel company? 0:05:01.290 --> 0:05:01.579 So 0:05:01.589 --> 0:05:04.558 for us in our portfolio, we 0:05:05.540 --> 0:05:08.760 only invest in fossil fuel companies if there's a clear 0:05:08.769 --> 0:05:13.029 line of sight to removal of fossil fuels over an 0:05:13.040 --> 0:05:16.299 extended period of time, right, a realistic period of time. 0:05:16.570 --> 0:05:21.220 Um So I would say if someone is increasing their carbon, sorry, 0:05:21.230 --> 0:05:24.880 uh let's say renewable portfolio, but at the same time, 0:05:24.890 --> 0:05:29.429 they're going and exploring for more oil and gas, it 0:05:29.440 --> 0:05:31.000 will be fine. It would be hard for us to 0:05:31.010 --> 0:05:33.678 justify having that in our portfolio. Now, 0:05:34.339 --> 0:05:37.320 that is our approach, there are fund managers and in 0:05:37.329 --> 0:05:42.200 strategies that do you know, invest in companies in transition. 0:05:42.209 --> 0:05:44.160 And we again, we spoke about that in a bit 0:05:44.170 --> 0:05:46.440 more detail last time we spoke. So I think the 0:05:46.450 --> 0:05:49.200 definition that and that's, I think that's where when I 0:05:49.209 --> 0:05:51.410 originally said that we've spent a lot of time putting 0:05:51.420 --> 0:05:54.720 in place in our global equity strategy, climate goals and 0:05:54.730 --> 0:05:56.428 guardrails and 0:05:56.910 --> 0:06:00.529 every investor who comes into our portfolio is, comes in 0:06:00.540 --> 0:06:03.750 knowing exactly what kind of climate goals we expect our 0:06:03.760 --> 0:06:06.290 global equity strategy to have and what guard rails and 0:06:06.299 --> 0:06:08.409 one of the guard rails is that there has to be, 0:06:08.420 --> 0:06:10.940 if we are going to invest in a fossil fuel company, 0:06:11.029 --> 0:06:12.570 there has to be a clear line of sight of 0:06:12.579 --> 0:06:17.029 removal of fossil fuels over a reasonable and feasible period. 0:06:17.940 --> 0:06:20.250 It has to be almost in line with what IPCC 0:06:20.260 --> 0:06:24.488 or the S BT I folks are prescribing um for, 0:06:24.500 --> 0:06:25.640 for a fossil fuel company. 0:06:26.369 --> 0:06:29.440 Great. Again, that is our, our mandate, other people can 0:06:29.450 --> 0:06:30.349 have different mandates. 0:06:30.359 --> 0:06:34.489 Sure. Sure. Um Well, I on my day to day work, 0:06:34.500 --> 0:06:36.609 spend a lot of time looking at the US economy 0:06:36.678 --> 0:06:40.428 and I see that, you know, we're stepping into 2024 0:06:40.440 --> 0:06:43.719 with the US still looking very, very strong economy wise. 0:06:43.809 --> 0:06:48.428 It's got a very tight labor market and the Ira 0:06:48.609 --> 0:06:51.470 Act that inflation Russian act that President Biden passed a 0:06:51.480 --> 0:06:53.909 couple of years ago is turbo charging a lot of 0:06:53.920 --> 0:06:56.670 investment in the, in the green area. And yet M 0:06:56.920 --> 0:07:01.928 I recently read that last year esg job departures outpaced 0:07:01.940 --> 0:07:04.599 arrivals in the US and it marked a reversal of 0:07:04.609 --> 0:07:07.428 a multiyear trend. So just give me a sense whether 0:07:07.440 --> 0:07:09.149 you have been sort of following this and if there 0:07:09.160 --> 0:07:11.709 is anything to read from that, and also is there 0:07:11.720 --> 0:07:15.089 some counterpart of that observation with respect to Asia? 0:07:15.559 --> 0:07:19.429 Yeah, now you're asking me to comment on the US 0:07:19.440 --> 0:07:23.018 uh as an economist. Now, that's dangerous, right? And I, 0:07:23.029 --> 0:07:25.350 I'm so scared of answering that because, you know, the 0:07:25.359 --> 0:07:27.850 US economy much better than I do. And, and you 0:07:27.859 --> 0:07:31.239 also know the jobs break down in the US, much 0:07:31.250 --> 0:07:33.828 better than I do. Um So it's, it's going to 0:07:33.839 --> 0:07:34.429 be hard for me to do, 0:07:34.480 --> 0:07:39.160 say how much of uh the ESG, let's say uh 0:07:39.170 --> 0:07:44.109 uh exits versus applications or let's say new job entries 0:07:44.190 --> 0:07:50.070 is because of uh a step away from uh Ira 0:07:50.079 --> 0:07:53.089 or Ira not being delivered. And there's 0:07:53.690 --> 0:07:55.420 at least on the ground when I speak to a 0:07:55.429 --> 0:07:58.529 lot of portfolio companies in the US who are considered 0:07:58.540 --> 0:08:02.929 beneficiaries of Ira, they would openly say that they're not 0:08:02.940 --> 0:08:07.670 seeing the money hit their accounts yet, right? And there's 0:08:07.679 --> 0:08:10.589 still bureaucracy, there's still a lot of sort of uh 0:08:10.600 --> 0:08:14.549 uh pent up potential. But whether they're seeing it actually 0:08:14.559 --> 0:08:15.730 manifest itself in 0:08:15.839 --> 0:08:19.850 more sales and therefore more employees and more production that 0:08:19.859 --> 0:08:22.000 is not happened yet. So whether there is a little 0:08:22.010 --> 0:08:24.089 bit of, there was a little bit of excitement when 0:08:24.100 --> 0:08:27.079 it all happened two years ago and people hide people 0:08:27.089 --> 0:08:31.339 thinking OK, we, there's a tsunami of sort of environmental 0:08:31.350 --> 0:08:33.520 deals coming through and not showing up and then they're 0:08:33.530 --> 0:08:35.880 having to cut those people that could very well be 0:08:35.890 --> 0:08:37.659 happening on the ground in the US. 0:08:38.400 --> 0:08:40.909 If I take a sort of a global sort of 0:08:40.919 --> 0:08:47.739 approach to sustainability esg roles, uh I think there is 0:08:47.750 --> 0:08:52.419 no doubt uh even in Asia, for example, uh there's, 0:08:52.429 --> 0:08:57.179 there is a, there's plenty of demand for folks who 0:08:57.409 --> 0:09:02.539 uh are either upgrading their own experiences and skill sets 0:09:02.549 --> 0:09:06.140 to include sustainability. And I think especially if you look 0:09:06.150 --> 0:09:12.500 at environmental capital focused roles, especially in Asia, this I 0:09:12.510 --> 0:09:15.419 would say this there, there will be demand for a 0:09:15.429 --> 0:09:17.489 long time to come still because we are starting from 0:09:17.500 --> 0:09:19.510 a very low base as we will speak 0:09:19.619 --> 0:09:23.820 later on. The actions taken by companies, regulators organizations in 0:09:23.830 --> 0:09:26.719 Asia is still at a very low base. So then, 0:09:26.729 --> 0:09:28.390 and it's a part of it is the chicken and 0:09:28.400 --> 0:09:30.590 the egg. Many of them don't have the actual employee 0:09:30.599 --> 0:09:33.960 capacity and the knowledge and know how. So I think 0:09:33.969 --> 0:09:36.159 that in Asia, I think there's still going to be 0:09:36.169 --> 0:09:38.590 plenty of demand for people who are, you know, who 0:09:38.599 --> 0:09:41.719 are skilled in sustainability and especially in the environmental space. 0:09:42.309 --> 0:09:45.140 Yeah, some of if you want to wish that there 0:09:45.150 --> 0:09:47.559 was an entity out there that provided the no house 0:09:47.570 --> 0:09:50.348 to companies. That's just a teaser. We'll come to that 0:09:50.359 --> 0:09:53.380 a little later. Um We need uh one more uh 0:09:53.390 --> 0:09:56.900 news uh headline related question. So I read last week 0:09:56.909 --> 0:10:00.000 that um JP Morgan Asset Management, Blackrock and State Street 0:10:00.010 --> 0:10:03.150 Global Advisors. They have all retweeted from the Climate Action 0:10:03.159 --> 0:10:04.580 100 plus Investor Compact. 0:10:04.809 --> 0:10:07.989 Uh And the interpretation in the press was that they 0:10:08.000 --> 0:10:10.750 don't want to deal with the political and legal liability 0:10:10.849 --> 0:10:12.549 uh that the compact would have sort of, you know, 0:10:12.559 --> 0:10:16.150 push on them. Uh Can you unpack this development for us? 0:10:16.719 --> 0:10:20.108 Uh Yeah, it's hard for me to say why they left. 0:10:20.119 --> 0:10:22.929 Uh But I can sort of maybe for uh share 0:10:22.940 --> 0:10:25.859 some observations which might be helpful to, to your listeners. 0:10:26.000 --> 0:10:28.270 So if you look at the, the whole climate action 0:10:28.280 --> 0:10:32.919 100 plus, right, it was initially started in 2017 and 0:10:32.929 --> 0:10:35.099 it was meant to be for a +15 year period. 0:10:35.320 --> 0:10:38.718 And the whole purpose of this was that uh quite 0:10:38.729 --> 0:10:42.460 a few big, big investors all got together and 0:10:42.570 --> 0:10:46.140 having a substantial amount of aum under their, you could 0:10:46.150 --> 0:10:50.939 say mandates, they had obviously influence on companies. And the 0:10:50.950 --> 0:10:54.108 view was that let's go and focus on some of 0:10:54.119 --> 0:10:57.659 the biggest emitters and get them to actually commit to 0:10:57.669 --> 0:11:00.830 certain climate targets and goals. And that was the whole 0:11:00.840 --> 0:11:06.340 purpose of ca 100. And it's been relatively successful in 0:11:06.349 --> 0:11:07.989 doing that, you know, 0:11:08.400 --> 0:11:11.640 the all these investors did come out did go. And 0:11:11.900 --> 0:11:13.830 I would say in some cases, name and shame some 0:11:13.840 --> 0:11:17.530 of these companies into putting in climate targets and, and, and, and, 0:11:17.609 --> 0:11:20.669 and the whole approach of C 100 has been very 0:11:20.679 --> 0:11:25.218 target oriented with very clear. If a company does not 0:11:25.229 --> 0:11:27.960 do it, they're going to take action almost in an 0:11:27.969 --> 0:11:32.559 activist way. Uh and, and sort of bring voting action 0:11:32.570 --> 0:11:35.619 against the management and the board. And I think uh 0:11:36.140 --> 0:11:38.880 that worked, it worked for a while getting people to 0:11:38.890 --> 0:11:41.950 come and commit to targets. But once those targets have 0:11:41.960 --> 0:11:43.400 been put in place, 0:11:44.630 --> 0:11:47.679 many investors are like, OK, there's now a next level 0:11:47.690 --> 0:11:50.590 of engagement and that next level of engagement most probably 0:11:50.599 --> 0:11:53.979 cannot be aggressive. It cannot be the name and sort 0:11:53.989 --> 0:11:58.329 of shame approach, maybe. So that's where I think some 0:11:58.340 --> 0:12:02.409 of these investors that you named may be thinking, OK, 0:12:02.419 --> 0:12:07.488 we've we've done what the coalition or this grouping initiative 0:12:07.500 --> 0:12:10.559 wanted to do for the first, let's say five years now, 0:12:10.570 --> 0:12:12.489 it's time for us to revisit how we 0:12:12.590 --> 0:12:15.829 engage with our portfolio companies. That would be my sort 0:12:15.840 --> 0:12:19.289 of observation, I think for me and my team at 0:12:19.299 --> 0:12:22.969 Panahi pans, the one thing that becomes very clear from 0:12:23.000 --> 0:12:26.130 this event is that there's two things that we've believed 0:12:26.140 --> 0:12:29.299 in for a while. Now, the first one is that 0:12:29.489 --> 0:12:33.739 the name and shame approach does not work, you know, 0:12:33.809 --> 0:12:37.489 and this is me speaking for 30 years of doing 0:12:37.500 --> 0:12:40.450 investing and engaging with listed companies globally. 0:12:40.710 --> 0:12:43.200 Uh and especially in Asia, it doesn't work, but even 0:12:43.210 --> 0:12:46.689 globally to get management and boards of companies to act 0:12:46.700 --> 0:12:50.169 and act in areas that are not very, let's say, 0:12:50.179 --> 0:12:54.049 clearly beneficial to the shareholders in a very quick instance. 0:12:54.270 --> 0:12:57.250 Uh the name and shamed approach does not, they might 0:12:57.260 --> 0:13:00.039 commit to targets, but they're not going to act on it. 0:13:00.090 --> 0:13:04.960 So that to me is very clear from uh what 0:13:04.969 --> 0:13:08.409 happened with this, uh you know, coalition is that 0:13:08.789 --> 0:13:12.289 you, you can't, you can't sort of uh force through 0:13:12.299 --> 0:13:15.849 name and shaming companies into acting. Um I think the, 0:13:15.859 --> 0:13:18.580 the second thing that became very clear is that 0:13:19.770 --> 0:13:22.150 investors have plenty of climate 0:13:23.030 --> 0:13:23.689 initiatives 0:13:25.159 --> 0:13:29.780 which they force their investing companies to adhere to, right? 0:13:29.789 --> 0:13:32.539 Uh There's many of them uh I don't have to 0:13:32.549 --> 0:13:35.390 mention them here but they've been around for the last 0:13:35.400 --> 0:13:40.619 5 to 7 years. Uh What is missing is the, how, 0:13:40.630 --> 0:13:44.460 how are those investing companies going to go and deliver 0:13:44.469 --> 0:13:48.429 on those commitments that these initiatives have forced them to make? 0:13:48.820 --> 0:13:53.489 And we're at that moment now where uh even investors 0:13:53.840 --> 0:13:56.119 when they go and speak to their investing companies are saying, 0:13:56.130 --> 0:13:59.559 thank you for agreeing to the C A platform 100 0:13:59.570 --> 0:14:03.390 plus or let's say uh net zero commitments or S 0:14:03.400 --> 0:14:06.500 BT I, you name it all these initiatives and targets. 0:14:07.270 --> 0:14:09.890 But the how is missing, not many people are telling 0:14:09.900 --> 0:14:13.539 their investing companies this is how maybe you can achieve that. 0:14:13.809 --> 0:14:17.150 Um And, and I think that is also become clear 0:14:17.159 --> 0:14:21.739 from this reversal or let's say of people leaving maybe 0:14:21.750 --> 0:14:25.489 something like the C 100 is that investors know they've 0:14:25.500 --> 0:14:29.750 done their first big move of converting people to putting 0:14:29.760 --> 0:14:30.440 in climate 0:14:31.250 --> 0:14:34.349 ambitions and targets. But now we are in the next phase. 0:14:34.359 --> 0:14:37.190 How do we get these converted to actually act? 0:14:38.239 --> 0:14:41.280 So I'm really curious about that nitty gritty part. Uh 0:14:41.289 --> 0:14:44.500 I think every year when cop happens and you know, 0:14:44.510 --> 0:14:48.039 we hear this sweeping announcement and proclamations by both countries 0:14:48.280 --> 0:14:52.250 and companies, you know, 2050 2016, 90. This that or, 0:14:52.260 --> 0:14:54.179 you know, even China making very 0:14:54.739 --> 0:14:57.669 heroic, you know, claims about how its carbon intensity would 0:14:57.679 --> 0:15:00.539 sort of peak this decade and it will progressively decline. 0:15:00.590 --> 0:15:03.679 But to your point, these are all end points very 0:15:03.690 --> 0:15:06.809 well taken, very well intentioned. But how do we go 0:15:06.820 --> 0:15:09.520 from here to there? Um So you said that, you know, 0:15:09.530 --> 0:15:13.229 there's no shortage of coalitions. Uh let's talk about one 0:15:13.239 --> 0:15:17.359 of those coalitions uh Gigatons coalition. Uh you've been working 0:15:17.369 --> 0:15:20.159 on it. Uh Let's talk about it. What is it? 0:15:20.169 --> 0:15:22.270 And where do you see it becoming over time? 0:15:22.989 --> 0:15:25.880 Yeah, so the gate and coalition is uh uh the 0:15:26.159 --> 0:15:32.809 paky partners team um solution, I would say uh to 0:15:32.820 --> 0:15:36.309 a TRM that we have. The TRM that we have 0:15:36.320 --> 0:15:39.320 is first that globally we know that there's a depleting 0:15:39.330 --> 0:15:40.130 carbon budget. 0:15:40.390 --> 0:15:42.479 Uh If you uh you know, look at the work 0:15:42.489 --> 0:15:45.780 that's being done by the carbon project. Uh They say 0:15:45.789 --> 0:15:49.219 that we've got about 625 billion tons of carbon emissions 0:15:49.229 --> 0:15:53.690 left before we go beyond a 1.7 degrees or higher 0:15:53.700 --> 0:15:58.440 from industrial level. So at current emission levels, that's 12 years. 0:15:58.630 --> 0:16:02.929 Uh So a depleting carbon budget, how do we stop 0:16:02.940 --> 0:16:06.130 depleting it, conserve it if not grow. That pie is 0:16:06.140 --> 0:16:07.729 a challenge and that's a global challenge. 0:16:08.059 --> 0:16:12.070 Uh The second dilemma is that many invested companies, as 0:16:12.080 --> 0:16:15.380 I was saying to you who have committed to these initiatives, 0:16:15.590 --> 0:16:18.119 they don't know how to deliver on those. And I'll 0:16:18.130 --> 0:16:20.580 give you some numerics here, right to help you understand 0:16:20.590 --> 0:16:24.119 this problem. Currently, there's only 7411 0:16:24.304 --> 0:16:27.385 companies who have given S BT I, which is the 0:16:27.395 --> 0:16:31.325 science based target initiative, some kind of a climate ambition 0:16:31.335 --> 0:16:36.294 or target with a plan, right? Only 7411 globally, there's 0:16:36.304 --> 0:16:40.484 hundreds and thousands of listed companies let alone unlisted companies. 0:16:41.015 --> 0:16:43.205 And I would say the majority of the people are 0:16:43.215 --> 0:16:46.114 not giving S BT this information is because the majority 0:16:46.125 --> 0:16:47.544 of them don't know how to do it. So why 0:16:47.554 --> 0:16:48.484 would they commit to it? 0:16:48.820 --> 0:16:53.049 So there is a massive massive disconnect between what companies 0:16:53.099 --> 0:16:57.609 know about climate reduction or carbon reduction and climate action 0:16:57.659 --> 0:16:59.919 and therefore the commitments they are willing to make. That's 0:16:59.929 --> 0:17:05.530 the second problem. And the third one is that investors, 0:17:05.550 --> 0:17:09.879 institutional investors, they now want to have climate impact but 0:17:09.890 --> 0:17:12.400 they can't find it at scale and with integrity, 0:17:13.280 --> 0:17:16.930 they can find it in pockets in small private investments 0:17:16.939 --> 0:17:20.050 and technology, hoping that, you know, they will find a 0:17:20.060 --> 0:17:23.469 carbon capture technology over the next 10 years. But hope 0:17:23.479 --> 0:17:26.619 is not a good strategy when you are dealing with 0:17:26.630 --> 0:17:28.939 such a global existential issue. 0:17:29.324 --> 0:17:33.515 So these three problems, my team and I said, ok, 0:17:33.795 --> 0:17:37.074 how do we help solve for this? And we thought 0:17:37.395 --> 0:17:40.755 and having spoken to many investors and investing firms over 0:17:40.765 --> 0:17:43.704 the last seven years and especially the last six years 0:17:43.714 --> 0:17:44.675 at Pak Pans, 0:17:46.079 --> 0:17:49.459 what we needed is uh and what we've created under 0:17:49.469 --> 0:17:53.589 the Gatan coalition is a unique investor invest led 0:17:54.630 --> 0:17:57.300 and this is very important. It's investor invest led 0:17:58.229 --> 0:18:01.689 uh uh grouping of uh 0:18:03.099 --> 0:18:07.069 or you could say investor investigated uh platform uh for 0:18:07.079 --> 0:18:09.030 solutions that are practical, 0:18:10.010 --> 0:18:13.670 financially feasible and tested for decarbonisation 0:18:14.449 --> 0:18:17.810 and the third player in this coalition, other than the 0:18:17.819 --> 0:18:23.270 investor in investing are solution providers for decarbonisation. And just 0:18:23.280 --> 0:18:25.409 like I know for a fact that when I go 0:18:25.420 --> 0:18:27.589 to and speak to many of my portfolio companies in 0:18:27.599 --> 0:18:30.099 my global equity strategy who have a net zero target 0:18:30.109 --> 0:18:31.310 or S BT target. 0:18:32.010 --> 0:18:34.530 I'm very happy that they have it. But when I say, 0:18:34.540 --> 0:18:37.500 show me the plan and show me the suppliers who 0:18:37.510 --> 0:18:39.910 are going to help you get there and those suppliers 0:18:39.920 --> 0:18:41.880 can come in many forms, they can come in the 0:18:41.890 --> 0:18:45.938 form of consultants who are providing them with internal KPs 0:18:45.949 --> 0:18:49.699 and organizational structures to create this change. It can come 0:18:49.709 --> 0:18:52.949 in soft technology, software technology or hardware technology and it 0:18:52.959 --> 0:18:55.540 can also come in the form of policy and research 0:18:55.550 --> 0:18:58.069 support that they might need for lobbying. Right? 0:18:58.729 --> 0:19:01.030 Many of these companies don't have that. And the whole 0:19:01.219 --> 0:19:04.920 gate coalition is about providing a library of solutions 0:19:05.709 --> 0:19:09.179 that help decarbonisation and it helps those companies that have 0:19:09.189 --> 0:19:14.569 already converted by having targets achieve those. And what it, 0:19:14.660 --> 0:19:16.449 I suppose that another way to look at it is 0:19:16.459 --> 0:19:19.170 that the Gin Coalition, what it's not, it's not an 0:19:19.180 --> 0:19:23.599 initiative with plenty of signatories but no solutions. It's not 0:19:23.609 --> 0:19:25.800 a it's not meant to be a consultancy that goes 0:19:25.810 --> 0:19:28.290 into a company investing company and say, oh by the way, 0:19:28.300 --> 0:19:29.319 this is your problem 0:19:29.780 --> 0:19:32.959 because companies who have already got targets in place, they 0:19:32.969 --> 0:19:35.170 already kind of have to know what their problems are. 0:19:35.339 --> 0:19:37.430 This is meant to. And this is not also a 0:19:37.439 --> 0:19:39.319 rating agency that is 0:19:39.880 --> 0:19:44.219 forcing companies to tick the box and get a rating 0:19:44.229 --> 0:19:48.459 and therefore claim to have certain climate and then stop 0:19:48.469 --> 0:19:50.859 there and say, ok, now it's not our problem. So, 0:19:50.869 --> 0:19:54.179 so I think for us this is a very practical, 0:19:54.189 --> 0:19:57.939 it's we envisage this to be a library of climate 0:19:57.949 --> 0:20:03.180 solutions that investors and investors can tap into to get 0:20:03.859 --> 0:20:08.119 practical, financially feasible and tested decarbonisation solution. So we can 0:20:08.209 --> 0:20:10.709 address this problem as soon as possible. 0:20:11.930 --> 0:20:16.030 And how are you building this um solution set if 0:20:16.040 --> 0:20:18.790 you will, is it based on your six years of 0:20:18.800 --> 0:20:21.550 investing where you've seen what works and what doesn't uh 0:20:21.560 --> 0:20:24.319 do you have other, you know, partners who will also 0:20:24.329 --> 0:20:27.069 help you provide solutions? How is that all working? 0:20:27.670 --> 0:20:29.520 Like any coalition, like any group? 0:20:29.839 --> 0:20:32.780 This is, has a snowball effect, right? You need to 0:20:32.790 --> 0:20:36.079 have a few visionary players who come in, they help 0:20:36.089 --> 0:20:39.619 you start the ball rolling. What we we're confident and 0:20:39.630 --> 0:20:43.760 we're comfortable is that over the last six or seven years, 0:20:43.770 --> 0:20:46.589 we have through our global equity strategy engaged with some 0:20:46.599 --> 0:20:51.129 of the I would say best decarbonising companies in the world. 0:20:51.170 --> 0:20:54.150 And from speaking with them, we already have a, 0:20:54.939 --> 0:20:58.599 a list of, let's say solutions that providers that we 0:20:58.609 --> 0:21:01.020 believe that should be able to help the companies and 0:21:01.030 --> 0:21:03.739 the investing companies who want to, who have, who want 0:21:03.750 --> 0:21:06.930 to deliver on their carbon ambitions, if not at a 0:21:06.939 --> 0:21:10.530 faster pace and at a bigger scale as well. So 0:21:10.540 --> 0:21:15.319 this coalition of investors, investors and solution providers is going 0:21:15.329 --> 0:21:19.540 to grow over time. We have intentionally uh 0:21:21.579 --> 0:21:26.790 we intentionally have planned for the Gatan Coalition to go 0:21:26.800 --> 0:21:29.800 grow in three different phases because we want to do 0:21:29.810 --> 0:21:32.399 the test case in phase one, which is a very 0:21:32.410 --> 0:21:35.380 Asia Pacific centric because we are based here with the 0:21:35.390 --> 0:21:37.239 view that in phase two and three 0:21:37.410 --> 0:21:42.479 Giton coalition investor members, investing members and solution that providers 0:21:42.520 --> 0:21:45.569 by the by phase three will be global in nature. Therefore, 0:21:45.579 --> 0:21:48.399 have an impact. I I if I may add one 0:21:48.410 --> 0:21:52.349 more thing that makes this Gigatons coalition different from most 0:21:52.359 --> 0:21:55.869 other dare I say, initiatives or platforms and all the 0:21:55.880 --> 0:21:59.899 rest is that it in itself has put on itself. 0:22:00.609 --> 0:22:05.939 I gat to 1 billion ton carbon emissions saving uh 0:22:06.010 --> 0:22:11.760 target for the next decade in phase one. because to us, 0:22:11.770 --> 0:22:16.150 uh we want to put the onus on the secretariat 0:22:16.160 --> 0:22:19.969 of the Gatan Coalition that are you truly delivering, helping 0:22:19.979 --> 0:22:23.819 invest investors who bring their investing companies to find solutions? 0:22:23.829 --> 0:22:25.869 Are you truly contributing to that 0:22:26.150 --> 0:22:30.569