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Connect the World
Oil Producing Nations Looking at Massive Revenue Drop; Rainforest at Risk as Deforestation & Fires Rage in Brazil; Pakistan High on "Climate Risk" List of Most Vulnerable; Putin Promises to Pump more Gas to Europe; UAE Announces Nationwide Net-Zero Emissions Target by 2050; CNN Talks Climate with Business Leaders ahead of COP-26. Aired 11a-12p ET
Aired October 07, 2021 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[11:00:00]
(COMMERCIAL BREAK)
ANNOUNCER: Live from CNN, Dubai. This is "Connect the World" with Becky Anderson.
BECKY ANDERSON, CNN HOST, CONNECT THE WORLD: Wherever you are watching in the world, you are more than welcome. All this week we've been bringing you
discussions about the causes, and indeed the solutions to the climate crisis from the news gathering to the newsmakers we know one of the main
causes that could make our planet uninhabitable.
The emissions released from fossil fuels and this region where we are has been at the forefront of those emissions. Take a look at this chart of the
world's biggest carbon emitters per capita, Arab Gulf countries outpaced economies such as the U.S., Canada, and Australia.
Now don't forget, countries like Saudi Arabia like Qatar, and here, the UAE are at the top there. They are big oil and gas producers. Now they're -
even big hydrocarbon producers have heard the call for change. Today, right here at Dubai's Expo 2020 the UAE announced it will become the first Middle
East nation to achieve nationwide net zero emissions by 2050 the first major oil producing OPEC member to pledge to do so.
So make no mistake about that. That is a big pledge. The news was welcomed by the Head of the International Energy Agency, which over the summer
released a report outlining a roadmap for the world to achieve net zero carbon emissions. When asked about that report, Saudi Arabia, major oil
producing OPEC member called it a "La La Land Sequel".
Well, the UAE's net zero announcement aligns it with those countries leading the fight against climate change. And the announcement will put
huge pressure on other big oil producers to make similar moves to cut their emissions.
But the question is how will this country which has built its economy and fueled its global ambitions from hydrocarbons go net zero in mere decades
and why now? Well, that is the question I put to the UAE's Minister of Climate and Environment.
MARIAM AL MHEIRI, UAE MINISTER FOR CLIMATE CHANGE AND ENVIRONMENT: It shows that the UAE is a solution provider in global problems. And we really see
this as a pathway. We see this as a vehicle for economic opportunities. Basically, we're going to be leveraging on the net zero by 2050 initiative
in creating new jobs, new knowledge, new skills, and really enhancing the UAE is competitiveness and attracting investments and attracting people.
ANDERSON: But you are an oil and gas exporter. This is how this country was built and financed. Are you sitting here today and telling me that's all
over that there is this pivot to green energy, that means going forward, there will be no more oil?
MHEIRI: Becky, we're in an energy transition. We in the UAE have actually thought of this many years back, it all started and 15 years ago, actually,
when we started investing in renewables. And really, if you think about it now, we will be providing oil and gas if it's still needed, and we can't
just switch off the tap.
This is a transition. And what we have to be really careful of is that any hydrocarbons need to be low carbon. And we're actually very lucky that the
UAE has a competitive advantage and that our hydrocarbons are amongst the lowest carbon intensive.
So this is our competitive advantage. So yes, oil and gas is still needed. But as we go through this energy transition, we are diversifying.
ANDERSON: Back in May, the International Energy Agency warned the global demand for oil would decline from 90 million barrels a day in 2020 to less
than 25 million by 2050. And that means oil producing countries looking at a potential drop of 85 percent in global revenues.
You talk about the shift to clean energy as providing economic opportunities. There is also the argument that says how do you mitigate the
costs of the potential downside of a drop in demand?
[11:05:00]
MHEIRI: Well, this is this is part of the journey. You have the political will, which we have, we've set the target. Now we have to go on this
pathway. And we have to work towards that. For any transition this takes time it takes you have to speak to all the stakeholders involved because
it's a really nationwide effort.
I really need the people to understand that we're not just starting from scratch today. This has been a journey we've started back 15 years ago.
ANDERSON: And a call by another OPEC member Iraq just early on in September this year, to get fellow members, fellow OPEC members to move away from
fossil fuel dependency and into renewable energy. There were some relatively candid remarks from for example, the Saudis in response to that
call. UAE is the first OPEC member to go on record and state, it's pledged to net zero? Do you expect others in this region to follow suit?
MHEIRI: Becky, I cannot say what other countries are going to decide for themselves. But what I can say is the UAE is following the legacy of our
grounding father, Sheikh Zayed. This is why we have led in signing and ratifying the Paris Agreement. This is why we have put forward so much
investment not just in the country, but also over 70 countries we've invested heavily in renewable energies.
This is why we've put forward our bid for COP-28. This is all part of Sheik Zayed's legacy. And we do hope we'd like to say that the UAE likes to ride
the wave and be on the crest of the wave and not underneath. So we do hope that others will follow pursuit because it is a duty as responsible global
citizen, it is a duty that we take this to heart, climate action is real. And we must move forward with this. And we do like to be the first movers.
ANDERSON: Do you expect the Saudis the curators and Iraqis to follow suit?
MHEIRI: Let's put it this way. We hope they will follow suit.
ANDERSON: You have recently held the portfolio of food security here; you now have the wider portfolio of climate. How are those to fit into your
mind?
MHEIRI: So food systems and climate change actually are very interrelated. Food Systems contribute to a quarter of greenhouse gas emissions. We're
extremely excited that in COP-26, we will be announcing the aim for climate the agricultural innovation mission for climates, officially and this is
alongside with the United States of America means what?
ANDERSON: Which means what?
MHEIRI: Which means we are trying to accelerate research and development for climate smart agriculture technology.
ANDERSON: Well, it is the Climate Minister in the UAE. And the country pledging some $250 million worth of investments in the green transition,
both here and for projects around the world, though that announcement today, short on details to that effect.
Well, the massive cost of climate change, forcing some companies across the globe to consider their own strategies to tackle the crisis. Coming up
later this hour, I'm going to speak to three business leaders who are here at the Dubai Expo about why it's so important that the private sector takes
action and how they plan to help make that happened?
Well, the Amazon rain forest, the so called lungs of the world is being devastated by deforestation and fires. More than 2 million acres gone this
year most of that is happening in Brazil according to a new report tracking the destruction of the rain forest which is accelerated under Brazilian
President Jair Bolsonaro.
Well, it's becoming a vicious cycle the fires many of which are deliberately said are worsening the impact of climate change on the Amazon.
Grassroots groups are fighting back but at the risk of their lives. CNN's Isa Soares has this exclusive report.
(BEGIN VIDEO CLIP)
ISA SOARES, CNN CORRESPONDENT (voice over): Smoke billows above the Amazon state of Rondonia. A haze so thick it blankets this lush forest. Fires so
intense that the earth is left charred only dust remains. It's a sign of the troubles Romulo Batista the Spokesman for Greenpeace Brazil tells us 60
hectares of the Amazon have gone up in flames in four days. And the blame falls squarely he says on President Jair Bolsonaro.
ROMULO BATISTA, GREENPEACE: We see him announcing a moratorium on fire. These are measures that have already been taken. In last two years and
nothing has worked. This year we are seeing this again.
[11:10:00]
SOARES (voice over): CNN flew over some of this year's hardest hit areas to see the devastation for ourselves. From above or cameras capture the damage
of these increasing fires the demarcated lines as sign of human destruction at work.
As the forest is cleared for agriculture or mining there has been nearly 13,000 fires in the same area, roughly a 50 percent increase from 2020 to
2021. Now compare these images with these every five year period.
BATISTA: We are living an extreme year in Brazil. Record floods in the north and the biggest rain deficit in South, Southeast and Midwest of
Brazil. Scientists say that this may already be the effect of devastation in the Amazon.
SOARES (voice over): Further south in the same state, Milton Da Costa, a former cattle rancher is fighting to protect what's left of the rainforest.
This month, he begins the task of helping restore and reforest 2600 hectares of land that had been burned and used for cattle production.
MILTON DA COSTA, REFORESTATION PROJECT LEADER: If it continues this way in no time our children and grandchildren won't have these places to come to.
So that's our battle.
SOARES (voice over): He's made it his mission to reforest the burned land, but in doing so he's facing attacks on his life.
COSTA: As he was talking to me, the other one was telling him shoot him, shoot him right away.
SOARES (voice over): Recounting vividly when he was ambushed in early September.
COSTA: I just came to deliver you a message, the message is delivered. So if you don't leave, it will no longer only be a message.
SOARES (voice over): With the fight for land and resources comes increasing intimidation for those who work here. According to Brazil's Land Pastoral
Commission, 97 people have faced death threats this year alone as the Association Leader of a Restoration Reserve in the Amazon Jose Pinheiro
Borges has seen this often.
JOSE PINHEIRO BORGES, RESERVE LEADER: It is hard to know who is threatening. But we imagine that they are offenders who illegally exploit
the conservation unit.
SOARES (voice over): His love for the Amazon has kept him going.
BORGES: This was burned in early August. It has the hallmark of the people who work here illegally.
SOARES (voice over): Borges say along with the other Amazon defenders could be facing a losing battle. Carbon samples from the Amazon collected over a
period of nine years by scientific research at Luciana Gatti has shown the 20 percent of the Amazon is releasing more carbon than it absorbs.
LUCIANA GATTI, RESEARCHER, INPE: This Southeast of Amazon now the forest itself become a source. This can means the trees are dying more than
growing.
SOARES (voice over): Behind this an increase in forest fires, which is leaving the Amazon unable to renew itself.
GATTI: You know we have records in deforestation fire in Amazon, and also records in reduction in precipitation in the whole Brazil.
SOARES (voice over): The devastating impact of human behavior that experts say tipping the climate scales in the Amazon leaving us all potentially
gasping for air.
(END VIDEO CLIP)
ANDERSON: CNN's Isa Soares joining me now live from London. Isa and just fill us in on more. I mean that's the most remarkable and quite frankly
frightening report. What more do we know?
SOARES: Becky, the numbers are staggering when you look at the numbers. I gave you the numbers in terms of the fires that we've seen, but I've been
crunching the data in terms of deforestation that we've seen in the last few years.
Let me give you the numbers from January-September this year, just this year, Becky, we've seen a 68 percent increase in deforestation in Brazil.
Compare that to 2018 that's the comparison 2018. That's the year before Bolsonaro took office.
So we've seen a 68 percent increase just in those days. What does that mean in terms of the rise of land, we're talking about 2745 square Kilometer
increase in deforestation in the Amazon. And to put into context for our viewers Becky, that is more than two times the size of Los Angeles three
times the size of New York City.
Now we have put - we've taken all be filmed and all the data that we have listening to the evidence to the sciences, and we've gone to the Brazilian
Environment Ministry. And in a statement the Environment Ministry tells us that it has suspended agricultural fires from July to October.
But our footage that you see that well that was shot Becky in mid-November. And as you can see, those fires keep on raging, so not quite what they've
seen to us. The Environment Ministry also claimed in its statement to us Becky that it's allocating more money. It is hiring more firefighters to
combat and prevent fires.
[11:15:00]
SOARES: On that first point, our team was on the ground for five days, in those five days and not sees one firefighter in Rondonia in this region.
And these comments kind of really don't give the full picture that coming from the government.
The Bolsonaro government and this is important here has taken multiple steps to reduce the overall budgets for the Environment Ministry. So these
recent investments they talk off, only really bring spending back to roughly what he was before Bolsonaro took office. So context really is
needed here, Becky?
ANDERSON: Absolutely. And meantime, as we know, things are getting worse, not better as far as emissions globally, not just there globally are
concerned. And thank you Isa very much indeed.
Coming up, Pakistan barely contributes to global carbon emissions yet climate change, already wreaking havoc on the nation of more than 220
million people costing lives and livelihoods. We speak tonight with the country's Climate Minister to get his opinion on the world's biggest
polluters. That is up next.
Plus, the Russian President seems to want to play bold with Europe, promising to pump more gas but what's in it for Vladimir Putin? I've got
team coverage for you a little later in this show. You're watching a special edition of "Connect the World" live from Dubai. We are taking a
deep dive on climate and clean energy.
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ANDERSON: Well, although it is home to more than 220 million people, Pakistan is not a big contributor to the climate crisis. It is responsible
for less than 1 percent of global CO2 emissions. However, it is still one of the most vulnerable countries to the effects of climate change.
In the last two decades, South Asian nation has lost more than 10,000 lives to extreme weather events every year. The damage from those events costs an
average of $3.8 billion. That is according to the Annual Global Climate Risk Index Report.
Broken communities, broken homes scenes like these all too common just last month it was reported by flood list that at least 20 people died following
heavy rain and mudslides in Northwest Pakistan. As the death toll from this year's monsoon season ticked over 160.
Well, joining me now is Malik Amin Aslam, who's Pakistan's Minister for Climate Change and a close advisor to the Prime Minister Imran Khan. Your
country can try its very best. It can try and shift to a greener energy future. But in the end it is, isn't sir at the mercy of other countries?
MALIK AMIN ASLAM, PAKISTANI CLIMATE CHANGE MINISTER: Exactly. Becky that's how it is. And you know it's very important for countries like Pakistan to
be telling the world that they need to stop polluting.
[11:20:00]
ASLAM: They need to stop these greenhouses gases. Now, we are looking at, you know, these net zero targets for 2050, 2060s. These are - and they
don't matter to us in Pakistan with hurricanes, you know, our glaciers are melting. It is the hottest place on Earth right now.
And lives and livelihoods are affected today; we need to know what's happening in 2019? What happened in 2019? And what are these countries
doing for the year 2020 and 2021? 2050 is another age. I mean, Pakistan, and the world may not survive by that time.
ANDERSON: Even as a very ambitious green plan, for example, committing to not importing any more coal, but these are tough times financially,
especially with COVID. And what the country has been through over the last 18 months, can you genuinely afford a renewable energy strategy at this
point, in these times?
ASLAM: Well, look, we are trying to be a part of the solution and not add to the problem of climate change we less than 1 percent of the emissions.
And we want to show the world that the solutions are out there. And if there's political weight and political commitment behind it, like we have
in Pakistan, with a prime minister's clear vision on climate change, then the solutions are out there.
And countries even like Pakistan can take them. We are shifting towards renewable energy 60 percent of our, you know, energy mix by 2030. An EV
transition is happening in Pakistan. And we have we are one of the world leaders on nature based solutions.
And you know the World Bank yesterday came out with some really good numbers. They said that, you know, they had a comparison done of countries,
which are actually trying to shift their mainstream development towards climate friendly policies and Pakistan came out tops on that.
ANDERSON: Sure. Can you afford this, though? I mean, we know that President Biden committed another 11.5 billion to the fund for helping developing
countries in this green energy transition, will you tap into a fund like that? What about the private sector? Where are you seeing the potential
private investors who say Pakistan is an opportunity at this point?
ASLAM: Well, you know, to answer your question, can we afford it? I think we cannot afford not to do it.
ANDERSON: OK. Fair enough that's a --
ASLAM: But you know that we are living that cliche in Pakistan. We're not just talking the climate talk, we are doing climate action in Pakistan, and
we are spending whatever we can. And our NDC, which is going to come out next week, is going to clearly show the world that this is what you spent,
this is our direction.
And this is what we need to keep on going on this direction. And we need the world to partner with Pakistan. And these climate funds you know, we
haven't seen these climate funds so far.
ANDERSON: You're exactly. I mean, this is the putt, we haven't seen these climate funds so far. You are going to I assume have these discussions at
COP-26 in Glasgow, are you?
ASLAM: Exactly. I mean, we're going to COP-26 with a very clear message that Pakistan is a country which is affected by climate change by climate
injustice. But we are one of the countries which is leading the way on nature based solutions.
And this is our direction that we have said, which a climate friendly direction is. The World Bank yesterday said that, you know, 44 percent of
our mainstream development is climate friendly investments. And we doubled it from one year.
ANDERSON: You talked about climate injustice. And we've talked about the extreme weather events which have cost Pakistan thousands in lives and
billions in dollars. It's also brought close to 30 million climate migrants over the past decade.
I mean, we just looked at the country of Afghanistan, where you are already seeing a significant uptick in migrants as a result of what's been going on
off late. That is a country that is suffering from the climate crisis, as well.
Are there contingencies in place to take more climate migrants, as this crisis inevitably worsens, because at this point, we are not on a good
trajectory?
ASLAM: I mean, there are no contingencies, I mean, but there also, there's also no choice on climate change. These are force adaptation measures. This
is what loss and damage is. This is what happens when you cannot adapt to these circumstances.
But Pakistan is coming out with a solution to that also. You know, the countries of the world are facing a triple crisis. The first one is the
COVID crisis, which came up totally unplanned. Then on top of it, you've got the climate crisis, which is coming up with costs today.
So it's not talking about 2050 or 2060 but the costs have to be borne forcibly today. And then the third one is the debt crisis. So it's like a
Bermuda Triangle on climate change COVID and the debt crisis. So we've come up with a solution which is called a nature based performance bond.
So countries like Pakistan, which are investing in nature, you know, we'll be planting 10 billion trees expanding our protected areas should be
compensated through a debt relaxation or debt reduction, which has linked with that nature performance.
[11:25:00]
ANDERSON: How much nuclear fit into your future energy plans? Pakistan and the nuclear industries always were a bit of a headline, making story. Of
course, it's a big, big controversial story. But recently, Imran Khan has praised the importance of that source of energy. How does it fit into your
energy mix going forward?
ASLAM: Well, you know going forward, 60 percent is going to be clean energy that includes many, many hydro, wind, solar and energy. And then the rest
of the 40 percent includes the furnace oil and nuclear power. Nuclear power, of course, is zero carbon energy.
So it's got a big plus for climate change. And a lot of countries like France, you know, Japan, they've got a major reliance on nuclear as a clean
power. So we will be also looking at that option, because we want to go towards a clean energy future in Pakistan.
ANDERSON: Do you want the support from the rest of the world? If you inject nuclear energy into your new clean energy mix, you will be looking for
support from the rest of the world for what you will describe, I assume, as a safe and peaceful program?
ASLAM: Exactly. Yes, definitely we will do. You know, Pakistan is, is made a political commitment to go along the zero carbon clean energy pathway,
the nuclear has to be a part of it, and we will need the partnership for that.
ANDERSON: With that we'll leave it there. It's been a pleasure having you on sir.
ASLAM: Thanks a lot.
ANDERSON: We'll have you back. Good luck.
ASLAM: Thank you.
ANDERSON: Good to know what your message is there. Could Europe, be at the mercy of Russia over energy? Up next, what Moscow is saying about output
and what it all means for the EU's energy crisis? Then I'll be joined here by a panel of experts for the big question, which is simply this. What can
businesses do to meet this climate crisis?
And we will be specifically talking to the business of finance, and investment absolutely crucial. If we are to do something about this crisis
that affects our planet that is all ahead. Stay with us.
(COMMERCIAL BREAK)
ANDERSON: And some breaking news that we are following. A 5.9 magnitude earthquake has struck in Japan. This is video from inside a home the moment
it struck on the East Coast near Tokyo.
At least 250 households are without our power. The Japanese government is set up a task force to deal with the situation. Officials say they haven't
detected any abnormalities at nuclear facility. Selina Wang joining us live from Tokyo Selina?
[11:30:00]
SELINA WANG, CNN CORRESPONDENT: Well, Becky, so far no abnormalities, as you say at those nuclear facilities and no tsunami warning has been issued.
But for people here in Tokyo, we felt this incredibly strongly. That's because the epicenter was not too far away in neighboring Chiba Prefecture,
which is just east of the Capital here in Tokyo.
And here in my apartment, these TV lights were shaking aggressively. The entire ground was moving shaking for at least 30 seconds. The alarms were
blaring to all residents in this apartment, reminding everyone to stay calm that the earthquake is coming, and that this building is in fact earthquake
proof.
But my heart was certainly pounding and just moments later I got a text message saying the earthquake is coming. Please seek shelter. Now people in
Japan are used to earthquakes they are extremely common here in Japan.
This is one of the most seismically active places in the world but this one for many people was especially severe in Japan's public broadcaster has
said that there have been sporadic power cuts and that some train lines have stopped as well.
Several injuries have been reported so far in Chiba Prefecture but all minor injuries so far Becky, that we will keep you updated on any further
developments.
ANDERSON: Very good. Selina Wang is in Tokyo. Thank you, Selina and do stay safe. While price swings in long lines for gas. The EU is struggling with
an energy crunch and OPEC shrugging off poles to pump more oil, but Vladimir Putin is stepping in.
The Russian President vowing to boost fuel supplies to Europe. And as he talks about coming to the continents rescue, some people in the Kremlin are
also mentioning the controversial Nord Stream two pipelines.
Now it's looking for clearance from German regulators and the Kremlin says faster certification would help the crisis. Well, I'm joined now by CNN's
Clare Sebastian, she is watching OPEC for us and Anna Stewart looking at Russia and Europe from London. Let's start with you, Anna, what more do we
know at this point?
ANNA STEWART, CNN REPORTER: All we know is that President Putin has said that they potentially could supply more gas to Europe, which is a huge step
change really given there'll be many calls, including from the IAEA in the last couple of weeks for Russia to do just that.
And so far, Russia has just said, well, we are fulfilling our long term contracts in terms of, you know, increasing gas on the spot markets.
They've been pretty quiet. So this was very good news and why we saw quite a lot of market reaction really based on this.
But within the same meeting that these comments were given, Deputy Prime Minister also said, well, if you could authorize Nord Stream to the
pipeline that German regulators need to approve over the next four months.
If that could be done much quicker, well, that too would stabilize the gas price and lots of people drawing connections between the two wondering
whether it's you know, if the Nord Stream two pipeline were to be authorized quickly, would that mean that perhaps Russia would then export
more gas to Europe and alleviate this crisis.
In addition to this, of course, quite aside from Russia and the fact that they haven't exploited as much gas as they did, for instance, last year to
Europe. That is just a huge supply crunch in Europe and much of the world. The fact of the matter is economies have left lockdowns; there is huge
demand for gas.
And there isn't enough supply a long winter last year and solar and wind supplies are very low, just due to bad weather, a combination of issues a
perfect storm really. And gas prices up eight fold this year, Becky.
ANDERSON: And ironically, of course, as we talk about a pivot from fossil fuels to clean energy, so we see the need and calls for many Claire, for
OPEC.
And these are the big oil producers to ramp up production in order to put a bit of a crimp on these rising prices and prices of oil, of course, as they
are of gas extremely high at this point. What do we know from OPEC? Are we likely to see a ramping up of production at this point?
CLARE SEBASTIAN, CNN CORRESPONDENT: Well, right now, Becky, they are sticking with their original plans to ramp up only slowly that analysts are
saying could keep prices high and particularly through the end of the year, and particularly because some OPEC countries actually had trouble even
meeting those targets because of various supply disruptions.
So that's where we are on the production side. Interestingly, there pressure now on two sides from OPEC, one from many countries, in particular
the U.S. to ramp up production to help bring down those soaring prices seen as a major threat to the fragile COVID recovery.
And also, given the sort of climate targets that you've been talking about, we see the UAE today announcing that it's now targeting a net zero
emissions future by 2050.
That will also put pressure on a brick on the other side to start to limit production to bring down at global emissions. I think that announcement
from the UAE really sort of sets the tone going forward for how OPEC has to seek to balance these competing forces.
[11:35:00]
SEBASTIAN: But we know that they have as a group, been very skeptical of these climate targets in the past when the IAEA brought out its very
influential roadmap to a net zero future back in May.
The Saudi Energy Minister described it as the "La La Land Sequel"; they have warned that it will lead to more unstable prices. So it's you know,
sort of conundrum for OPEC and a lot of competing forces as we sort of hit this supply crunch.
ANDERSON: Absolutely to both of you thank you very much indeed. Up next, well, climate change could shrink the world's economy. I'll be connecting
you to some major business leaders who say it is time for a corporate rethink that is after this.
(COMMERCIAL BREAK)
ANDERSON: Well, it has been a summer of extreme weather in many places with heat waves, wildfires and floods around the world, the human and financial
cost of our changing climate is becoming increasingly stark.
According to a report from Swiss Re, one of the world's largest reinsurers, the impact of a changing climate could reduce global economic output by up
to 10 percent by 2050.
Now all of this comes as the global price of fuel goes up significantly amid shortages and panic buying, the rising cost of climate change forcing
countries and companies alike to rethink their climate strategies.
Well, as we said earlier, just today, the UAE announcing a nationwide net zero emissions goal by 2050. And that is the first of the OPEC producing
companies to do so. Joining me now are three business leaders trying they tell us to do something about this climate crisis.
Chuka Umunna is a former MP a British MP is currently the head of ESG for Europe, Middle East and Africa at JP Morgan view as ESG stands for
Environmental, Social, and Governance factors.
So we'll find out why one of the biggest financial institutions in the world needs a head of ESG in a moment. Rajit Nanda is Chief Portfolio
Management Officer and acting Chief Investment Officer at ACWA Power, that's a company that generates power and also operates major water
desalination wells, so good to get into that with you, Sir.
And Malek Sukkar is the CEO of Averda, a leading provider of waste management services that recently received as I understand it, a $13
million green loan from HSBC and we will talk about what that means in a moment.
Chuka let me start though with you if I can. You are basically charged with helping your clients make investment choices that are environmentally
socially, sound and fit governance standards, which, which is important because that's quite controversial at present
[11:40:00]
ANDERSON: These ESG funds are popular, but they are those who say they are simply green washing, giving big corporations an opportunity to get
investors to feel they're doing something when quite frankly, they're not what do you say to them?
CHUKA UMUNNA, HEAD OF ESG IN EMEA, JP MORGAN: Well, I actually, I think there's a much more positive story to be told about this. And look,
essentially, what is the need, the need is globally, we have to spend three and a half to $5 trillion a year for the next 30 years, greening our
economies.
Now, you could say, this is all for it's going to do huge damage to the economy, it doesn't have to be this way, it's actually a big opportunity.
And if you look at the emissions reduction that we're going to need to achieve and to reach the goals of the Paris Climate Agreement, you know,
many envisage that a third of the emissions reduction will come from new technologies, we're not going to be able to get there without that.
And in order to get those new technologies, we need amazing companies like those represented here to be producing the new technologies. And they need
to raise finance to do it, which is where the banking sector and my bank come in.
ANDERSON: Rajit, let's talk about some of the projects that how you've lost your microphone. So let's not talk to you just for a moment and we will
come back to you as we attempt to get your microphone back.
Malaga, HSBC is approved 30 million in what's called a green loan for your company, so just talk about some of this sort of opportunity, the money
that's around and the opportunities that they that might afford. What do you have to do to meet the terms of that loan, Sir?
MALEK SUKKAR, CEO, AVERDA: We have to invest in --good evening. We have to invest in facilities that create circularity at a local level. And so for
us, we were very excited to receive the very first green lawn in the middle east of its kind.
And we will be implementing, you know, plastic recycling, we will be implementing food reprocessing through composting and you know, energy from
that green loan. And it's not only that we're speaking to HSBC, HSBC was brave, and they led that we're speaking to the IFC to DFC.
A lot of the international development funds as much as JP Morgan here to create a groundswell around this, because what is happening today in the
world, we only have about 10 percent of the infrastructure needed for you know, a circular waste management system across the world. And so if we
don't do this today, we're not going to meet those targets.
ANDERSON: We don't typically think of the role of waste management and in helping us protect the environment. It's not - it's not two things that I
would equate necessarily, do you think we need to reassess what we mean when we talk about a green economy.
SUKKAR: Sure. And it's very funny because I was reading something this morning. The waste management industry globally is as big as telecoms, but
somehow it doesn't get the sort of the respect for the lack of a better word that it deserves.
And you know, it, if you don't manage the waste management cycle, it's a very difficult place to be and you recreate a lot of waste every day. And
we need to change that.
ANDERSON: Rajit and you got a microphone now, which is great. Ahead of your company's upcoming IPO in which as I understand it, you hope to raise about
a billion dollars, you say, you aim to play a, "major role in the transition to greener energy by producing renewable electricity and
exploring opportunities in hydrogen".
Is that just to attract the likes of our friend Chukka here and his clients? Are you actually taking concrete steps to introduce clean energy
into your portfolio?
RAJIT NANDA, CHIEF INVESTMENT OFFICER, ACWA POWER: So thank you for having me here.
ANDERSON: That's all right.
NANDA: Look, ACWA Power, we have just finished our subscription. And we went to the market to rise with the help of banks like JP Morgan and Citi
and that excess $1.2 billion. And we have ended up with more than $300 billion in terms of subscriptions.
So it's been a record subscription, in terms of equities, capital market, but a lot of that underpinning in the form of oversubscription.
And the strong support that we saw from the investor community was on the back of the fact that they saw ACWA Power as a company that is into
responsible investment into actually delivering on the climate agenda, the climate change agenda. The Paris 2015 Treaty commitments in the context of
the next -- is here.
ANDERSON: Right. Your business based in Saudi, Saudi said they want 50 percent renewables by 2030. At present, I think solar makes up something
like 1 percent. So that's a big target.
How do you expect to be involved in helping Saudi reach that target and quite frankly, so with respect is it is really realistic at this point?
[11:45:00]
NANDA: I think we will see those commitments being achieved much before 2030, which is what they have put out there. I mean, Saudi is a country
that needs enormous power, not only in terms of the green pill, but also in terms of replacing a lot of the old fleet, which are not climate friendly.
So if you put all of that into the equation, the total amount of green energy that is required is enormous. Remember that Saudis ambition is to
become the capital of green hydrogen for the world. And what we will see now is that a country which is endowed with the best resources, solar
resources in the world, capitalizes on this and use itself.
ANDERSON: Let's be quite clear, it will also continue to pump oil and is likely to want to pump more oil as we go for.
NANDA: Yes, but we need to recognize that end of the day we are the world is all targeting at 2050 net zero. So --
ANDERSON: What do you make of these 2050 chance? We heard the UAE announcing its -- 2050 target today a bit short and detailed, significant
cash, they want to invest both here and internationally.
When you live here, you do see the pivot to green energy really to, I mean, and it's very much sort of baked into the economic strategy here and the
growth pillars for the next 10 years. But what do you make?
I mean, in their entirety of these places, I mean, so many people saying this is and Greta Thunberg said the other day, blah, blah, blah. Is it --
are we seeing enough detail enough substance at this point?
UMUNNA: Well, look, it's good that we have these targets, because having the aspiration and a goal provides a level of certainty for investors about
where the direction of travel. And what you're seeing is I think, yes, last year, it was invoked for corporate renounced in 2050 net zero targets.
This year, investors have been much more demanding of our clients, frankly. They don't just want to 2050 target that's kind of a given in many
respects, they want an intermediate target, a 2030 target. They want to know your roadmap as to how you're going to get to net zero by 2050.
And they expect for example, executive compensation to be linked to delivery of that roadmap from here on in. That was a sense that --
ANDERSON: Is it your more --moments?
UMUNNA: Yes, I think, I think it is. And I think it's great that we do have products like green loans, sustainable bonds, green bonds, sustainability
linked bonds, because amongst investors, there is a demographic change going on, where younger people are coming into the slipstream.
And we've got this big asset transfer going on from the baby boomer generation to younger generations and they're saying, yes, we want our
family savings to deliver value, but we want our values to be adhering to in that process.
And these different products, like you know, a bank, doing a green loan or green bonds, give investors at least the label which says, OK, if this is
how you want your money to be deployed, if you put it into this asset, then hopefully it's going to deliver the outcomes that you want value and
values.
ANDERSON: And this new generation of investor is also very mindful, they do not want to get involved in any green washing, of course. So just explain,
I mean, just how concerned are you about that as an issue?
UMUNNA: I think this is a sign of a maturing market. ESG investing has ballooned; it's become a lot bigger than what it was. And people have been
attaching labels in some cases where they shouldn't. And the EU has done a good service for everyone.
But at least setting some benchmark standards, they're not perfect, which determine, you know, and regulate how you label different products. And
that should hopefully protect against green washing.
And frankly, you know, there is more litigation against companies for making misstatements on these things. And so you know, when we talk to our
clients, we're quite conservative in terms of how you describe things. Is it really going to deliver on these KPIs?
What is the use of proceeds? So is it a perfect market? No. But look, it's bigger than what it has ever been before. We need it to grow. If we were to
get the allocation of capital needed. It's very easy to accuse politicians and business people blah, blah, blah. The question is, how you are going to
move capital to fund the transition that we need, and that's sometimes hard, it's not glamorous, it's kind of pretty technical.
But we're going in the right direction that the thing that's needed for our children's sake is more urgency and for things move faster, but I think
there's been a sea change in business on this over the last 10 years, certainly compared to when I was in college hopefully different there.
ANDERSON: JP Morgan getting an A plus. Or is it could do better when it comes to the sort of products that you are offering and the real
opportunities that are they afford as far as being environmentally sound and sustainable going forward.
We are the biggest book runner on green bonds in the world. We have a leading position in that front. But on our financing portfolio, we are
seeking to reduce the carbon intensity of that overtime; we've set out a goal to do that by 2030.
And we're going to facilitate or help facilitate finance to the two and a half trillion dollars over the next 10 years to deliver against the UN
Sustainable Development Goals. And that's based on our achievements in the last few years.
[11:50:00]
ANDERSON: We saw this share with the chaos that was the Exxon shareholders meeting and the ability by a small group of activists to actually get a
seat at the table, as it were. I mean, I think it was described by one, one expert as a watershed moment in American capitalism, but I think it's wider
than that, right?
Not just American capitalism. But that story sort of reverberated around the world. So listen, guys, you're both in business, you know, you - were
you to have a board. I'm not sure that both of your companies necessarily are represented that way.
But you know do you feel the pressure? Is this an existential threat to your business these days, that, that, that, that you face, where you not to
be seen, to be one, looking for greener opportunities, and to carving out those opportunities with cash that, you know, investors like, like this one
can offer you.
NANDA: If I can take that one now? Look, if you see into the history of ACWA Power, we've been in business for 15 years and we have started as a
conventional power business. And just in the last couple of years, the presence of green - multi technology portfolio to 33 percent.
ANDERSON: So it makes economic sense, is it?
NANDA: It is not only about making economic sense, it is where the whole procurer market, which means the countries, the nations who are driving
their own agenda in terms of the energy mixes, this is where they are gravitating.
There was a time in 2015, 16, when we were bidding for eight or nine procurements in a year, and almost 80, 90 percent of there were thermal
generation, well, mostly gas, but doesn't matter thermal generation.
Today, if we have one gas fired and that too as a transitional fuel for that nation, it's already a lot to talk about. So I think this is an
existential issue. If you see our boats, it's all being reshaped in the last couple of years to bring in ESG experts into the board.
It is all about educating other stakeholders around us into the importance of ESG. Today ESG has found its way into ACWA Power, in terms of being one
of the important underpinnings of the investment philosophy.
We are talking about the climate risk in the assessment of our whole investment thesis. None of this existed five years back, seven years back,
six years back. So you see the big transition, the big transformation in how we are doing business.
ANDERSON: How do you power your desalination plants? And how will you power them going forward?
NANDA: We were the first ones in the world to bring in renewables into the whole concept of desalination production. The largest - which is in
advanced construction in Abu Dhabi, called the Taweelah Plant.
The only reason we picked everyone to the post two years back is because we were smart enough to configure ESG solution power that was based on solar
into the whole desalination production.
ANDERSON: If you had one message to the generation out there who quite frankly, sit and listen to a panel like this and say, you know what? I
really hope you mean what you say, because it's us who are going to suffer. Should this climate get worse? Not better? What would your message be, Sir?
SUKKAR: Do not accept anything that other than true recyclables true circularity. And companies that deliver that on a daily basis. Do not give
us a chance or, or any sort of leeway on this, we have to meet these targets, the world is in trouble.
And we have to you known all unite here to make sure that we do that. And only when the consumer and the legislator are holding us to account, will
we be able to do that.
ANDERSON: And your message ahead of COP-26 last word?
UMUNNA: I'd say to those who don't necessarily believe what business leaders say on this, or bankers for that matter, we all have children.
These are the next generation of our families too. I have kids that are younger than Greta Thunberg.
And so you do feel, you know, I'll try not to use that word. You know, the phrase hand - you do kind of feel a sense of obligation to the next
generation is essential more than for businesses. I mean, if we don't sort this out, the scale of fatality we've seen over the last 18 months under
COVID is what we will be having every year.
And I think business leaders are humans - bankers and we don't want our children to have to go through, that although our grandchildren.
ANDERSON: With that we're going to leave it there. Thank you very much indeed for joining us here. I do hope you are having a successful --.
UMUNNA: Thank you.
ANDERSON: Thank you to all of you. And we will be right back.
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[11:55:00]
ANDERSON: Well, before we go you have to see this, a new museum in the Indonesian town of Gresik. It's made entirely of single use plastics like
bottles, straws, and bags. The museum has more than 10,000 pieces of plastic, all of which were pulled from polluted rivers and beaches.
Environmentalists said museum aims to make people say no to single use plastics, Indonesia, second only to China in the amount of plastic that
ends up in the sea.
Well, wherever you are watching, I hope you have a very good evening from the team working with me here in Dubai and those who work hard with us
around the world. It is a very good evening.
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