Name: Impact Initiative 2024: Clean Wheels, Clear Skies - Powering A Green Transportation Transition
Uploaded: 2024-10-09
Duration: 16 min 33 s
Description: Lauren Riley, Chief Sustainability Officer, United Airlines Kristen Siemen, Chief Sustainability Officer, GM Moderator: Kristin Stoller, FORTUNE

Lauren Riley, Chief Sustainability Officer, United Airlines Kristen Siemen, Chief Sustainability Officer, GM Moderator: Kristin Stoller, FORTUNE

Impact Initiative 2024: Clean Wheels, Clear Skies - Powering A Green Transportation Transition

Photography by Rebecca Greenfield/Fortune

Conferences

I want to do something a little fun. So bear with me. Uh Please raise your hand if you got here by plane. Oh, wow. Ok. So this makes my next question. Maybe irrelevant. Um Raise your hand. If you got here by train, no one by car. Ok. For those of you gonna have your hands up, keep them up. How many by electric vehicle? None. Ok. Wow. All right. Got some work to do. We do some work to do clearly, we're all contributing to the problem, which is, I think it is so important. Um Lauren, I wanna start with you as you saw the overwhelming majority here, got here by plane. You work at United. Is there any lower carbon alternatives you are exploring right now? Um And what work do you think still needs to be done? Yeah. So it's great to be here and chatting with all of you about how aviation is going to transition. We're one of those industries, there's probably six or eight that are designated as hard to abate, which simply means we have the solution set. We know the technologies we need. What we do not have is a market. What we do not have is the commercial scale that's gonna enable us to transition right now. Um You know, today, we're responsible for about 3% of global greenhouse gas emissions. That number is going to go up. So as other industries like road transport start to decarbonize and shift to electric, our contribution is going to go up. So the scrutiny, the focus, the desire for transition plans execution against those it's going to increase over time. We do have plans for that. We have investments in this space. It is primarily around technology. So thinking about aircraft, thinking about engines, thinking about lightweight, thinking about all of those components that go into the aircraft that you flew here on. Um but then it's also about the fuel. So if you look at our greenhouse gas inventory, 98% of our emissions, 98% are from the combustion of jet fuel. So we have one very big single climate elephant in the room when it comes to aviation and that is fuel. And so we have been dogged in our attempts to create a market for sustainable aviation fuels. Those are chemically identical to conventional jet fuel, but it's derived from either waste or renewable feedstock. So uh today, those those fuels create um fuels that have 85% less emissions on a life cycle basis. We have the potential to go to net negative fuels in the future. So tremendous amount of innovation tremendous amount of technological advancement, tremendous amount of investment in the infrastructure which we absolutely need because we are global in industry, we connect communities everywhere. And thank you for those that flew in United. Um But you know, we, we need to make sure that we're able to transition responsibly with these fuels in every airport that we need to use them in so that we can simply continue to enjoy the travel that we also appreciate. But without the emissions associated that contribute to climate change, how long do you think it's going to get or take to get to that ideal future that you described? Oh, that's a great question. You know, the industry came together um under both the UN as well as an industry association and globally committed to net zero by 20 50 which was kind of a big deal. All airlines everywhere made this commitment. It's going to take us probably up until that point which we hope to push that timeline sooner. But it's really a question around what is the most appropriate timeline for aviation to transition when perhaps there's a more efficient use frankly, of that renewable power of that green hydrogen to put out in the economy to enable the clean energy transition to happen first. And so it's a lot of conversation about what is that time look like. Policy is the foundation of all of this and without policies that accelerate, like we saw in solar, like we saw in wind. Um We're not gonna, we're not gonna move as fast as I'd like to see us move. Yeah, I wanna come back to policy but Chris and I wanna talk to you. Um Clearly, we thought there's a lot of work to be done to transition to an electric vehicle future. Um But I think the biggest problem right now is we just need the grid to support it. So what do you think needs to be done here to improve access to a V for all? Yeah, for sure. So again, thanks for having us here today. Um I think when you think about this transition to an EV future, there's a couple of key components. One is having a product lineup that meets the needs of customers everywhere. I mean, if you think about where we've been, you know, EVs were either very small vehicle or they were a luxury vehicle. So it wasn't necessarily an option for everyone who was considering. So as we've expanded our portfolio at GM, we have everything now from family size SUV to full size pickup trucks, to luxury vehicles, to super trucks. So it really is becoming a choice for everyone. Um Then it's an an education issue. There's still a lot of concern around infrastructure, which is kind of the third piece. So from an infrastructure standpoint, we're doing everything we can do to expand that network. GM customers now have access to over 100 and 74,000 charging stations across the US and Canada, which is significant. We just recently announced that they have access now to North America charging standard Tesla's network and we've got partnerships across other um charging infrastructures. We have a partnership with other OES where we're trying to expand that network even more. And so that is going to continue to accelerate and happen. You know, these evs now have over 300 miles range. Our ev in our portfolio, our pickup trucks have over 400 miles of range. So you're now at a stage where pretty much everyone can do this, but it is going to take, it's going to take policy, it's going to take partnerships, it's going to take customer education. And, you know, I think once people get exposed to it and have the opportunity experience, it's a better driving experience. I mean, acceleration is instantaneous. The the thought of not having to go and get gas whether it's, you know, and I live in the Detroit area, obviously in the middle of winter, it's not a fun experience, but you just you change your behavior. So now understanding that not everybody can have a charging station or a charging um unit at home, but 80% of the customers currently do and that's really the best um application and the easiest just you come home at night and then when you talk about the grid, the only way that we get to zero, you know, similar to Lauren's challenge, our footprint, over 98% of scope three out of that 69% of the customer usage of our vehicles. So in order for that piece of the pie to get to zero, they need to be clean, sorry, charged with green energy. So we're doing everything from our perspective that we can do. We've made some really big renewable energy commitments. In fact, we announced last year that we'll be 100% renewable in the US for all of our operations. Next year, we just um cut the ribbon on our latest solar farm actually down in Arkansas that feeds the miso grid and powers the three of our assembly plants. So, so th that functionality is gonna continue to accelerate it over time, but we've still got a long way to go. Yeah. And I think, you know, for there's a stigma with, with electric bills at least in, in people of, of my cohort where they're just like, you know, we don't want to wait and, and wait around and gas is so fast. So you just get that. So how do you can change the consumer mindset to think that way because these people have been doing it this way for, for years and years and years. Yeah, I, I mean, I think if you think about your daily commute or what you do on a regular basis, most people take a trip that's gonna be over that 300 mile range once or twice a year, right? And, and that availability of charging along, you know, say from Detroit to Florida is continued to expand. We have a partnership with pilot and Flying J. So you're starting to see big large um charging stations along these major thoroughfares. But otherwise you're driving most people's daily commute is less than 40 miles. And so to come home and plug it in at night again, when the grid is cheaper and charging is cheaper, it really becomes a real ease of use. And then the other thing that EVs are going to do from a grid perspective is, you know, it is a huge battery source. Uh You know, when you think about the car park of the EV market that will be able to put energy back or, you know, or enable you to power your home or those things. So it really becomes a win, win in the long run. And I want to come to the audience if they have any questions. Um So think of those, raise your hand in just a second. Um But first Lauren, I want to talk to you a bit. Um I feel like a lot of airlines have been accused of, of greenwashing when they talk about this stuff, make these promises. How do you respond to, to critics? Um And, and address those challenges head on. Ok, we're going there. Um Well, you know, I think I think a couple of things are happening. And um first and foremost, the consumer today is a lot more sophisticated than they've ever been, which is great. So for everyone in the room, we want them to understand the complexities, we want consumers to understand the challenges and we want them to understand the solution set that we're gonna need to advance. And so that is a great development. I think also there's this push, there was a panel recently about um ESG and disclosures and how are we talking about progress that has been kind of the wild West for a while? I call it the alphabet soup of disclosures. Um lop of whatever framework you want to use to disclose it has not been consistent and that is starting to change too. So this desire to sort of normalize and that how we talk about progress and bring that to market, we're working through that turn right now, which is also good. Um I also think that there is a desire for different um regulators to lean in, particularly we're seeing this in the eu um around what does it mean to actually advance the sustainable agenda? Again, it's been a little bit wild west and up to some of the enterprises to decide how you describe that. And so they're starting to sort of define, help us define across industries. Now, what does it mean to advance the sustainable agenda? And so I think this is part of the evolution of us introducing climate metrics into business. And um I see that as a positive, I mean, I say all the time our roles and sustainability, we're change management people. That's what we do. We're asking our executive suite, our board, our peers, the industry, the markets to introduce a different kind of KP I into what we're talking about when we say successful business. And so I think part of this whole greenwashing skepticism that's out there is and parcel because we're actually starting to take a step back to say, OK, let's reset so that we can compare apples to apples and actually show that progress is happening because the last thing we want is to have unintended consequences or actually not progress the sustainability agenda because we never stop to say, are we working from the same sheet? And so that that's sort of what I think is going on now and all of this is very healthy, very healthy and it's good to talk about it too and address it. Head on and Kristen for you, it's different in your industry. I think, you know, there's many challenges. Some car companies are, are rolling back promises, some are going hybrids. There's a lot of different things. What do you see as the biggest challenge and how are you addressing it at GM? Yeah, I, I mean, I do think it's a little bit of market acceptance um as we talked about, you know, having that those options available and affordable options. You know, one of the things that has happened with some of the latest policies and the tax incentives around Ira, you know, we now have a product for the Chevy Equinox that starts at $35,000. You add on the, the tax incentive. You now have a, you know, family size SUV, that has over 300 miles of range, that's under 30 grand. That's something that didn't exist before. And so I I there's a lot of talk of the market slowing down, but look this, it was never thought to be a straight linear curve that its option was gonna just continue to accelerate at the same point. And so, you know, we're very committed and General Motors is committed to continue on this all electric future. We're, you know, we're focused on jobs and innovation and American competitiveness. And so as we look at our supply chain and the resiliency that we need there for battery production, you know, a lot of the work that we had done of building a sustainable, reliable supply chain was done even before these texts or, or policies were put in place. And so I think the challenge is there for, again, getting customers to understand having product portfolio that's available is gonna change that having the charging infrastructure that it's there, but it's gonna take time. It's not gonna happen overnight. And I think we've got to continue to educate, including everyone in the audience of what's available and, and that the transition isn't difficult. I mean, any questions and again, feel free to raise your hand. I'll, I'll come to you. Um, but in the meantime, we talked a lot about policy besides the Inflation Reduction Act, what other regulations or incentives would each of you like to see going forward? And Lauren, let's start with you. Well, I'll tell you, I think um market based incentives are crucial. Uh What we're starting to see is what was once really a space where we can innovate and lean in and drive strategy and, and frankly differentiate your company. It's becoming so highly regulated. I mean, from, from where I sit every day, it's a about uh now we have staff mandates a sustainable aviation fuel requirements. We've got to have a proportion of our fuel over time in certain markets, the eu the UK certain Asian countries um graduate into staff uh usage. We have emissions policies. So right now we've got Corsia which is a UN policy that sort of caps the amount of emissions from international flight. That's a good thing, but that sits on top of the staff mandates. And then we have ESG and all the disclosure requirements in different markets. So it's becoming almost inhibit. So really focusing on market based policies is super crucial. I know you said not the Inflation Reduction Act, but I am going to go there because the staff for sustainable aviation fuel. We were one of the very few industries that got a tax credit it for two years and that two year tax credit expires in December when they just got the guidance out, maybe Treasury got it out three or four months ago. Ok. What does that do to the banks in the capital market? Absolutely nothing except confuse them. And so we're working really, really hard right now to say you need to take that 10 year tax credit, which is the first ever established huge big deal, but make it 10 years. So then it becomes bankable, it becomes investable. There's confidence that the transition is going to happen right now. Capital is not flowing to aviation because they're totally confused about is this policy here? Is it going to go, what's it going to become? And how do we make sure that we get a return on our investment? And so there's a lot of work to do around policy improvement to build upon the foundations that we have right now that I do think is either going to enable a swifter transition or inhibit. That makes sense. Kristen, what would you like to see? Yeah, I I mean, I think Lauren mentioned it a little bit earlier too. The the transparency around reporting has is great and I think it helps drive standards, but we need to make sure that we're not report wording so much that we're not doing you know, and as we continue to see the complexity and II, I use the same thing of alphabet soup, you know, of whether it be the, you know, CS RD or, or potential sec rules, we've got to standardize those as much as possible. The, the transparency and the accountability is extremely important. But I, we were talking behind stage, I spent most of my career in product development and the best example was always the crash laws. And so in the US, we had us NCAP and in Europe, there was Euro NCAP. And what happened is they were different. One wasn't better, one wasn't, you know, they were just different. And so in order to design a vehicle that when we could sell in both markets, we had to design it twice and we can't, I mean, that's a huge example. But if we do the same thing in reporting, we're just spending so much time and money, time and money where, which, you know, again, it's not spent on the actual solving the problem. Right. Right. Well, thank you both and, and best of luck in that and appreciate you being here. All right. Thank you.