Name: Impact Initiative 2024: Sustainability Goals - Are Market Movers On Track
Uploaded: 2024-10-08
Duration: 18 min 35 s
Description: Andrea Barrack, Senior Vice President, Sustainability and Impact, Royal Bank of Canada Amelia DeLuca, Chief Sustainability Officer, Delta Air Lines Gayle Schueller, Senior Vice President and Chief Sustainability Officer, 3M Moderator: Molly Wood, Founder and CEO, Molly Wood Media; Co-chair Fortune Impact Initiative

Andrea Barrack, Senior Vice President, Sustainability and Impact, Royal Bank of Canada Amelia DeLuca, Chief Sustainability Officer, Delta Air Lines Gayle Schueller, Senior Vice President and Chief Sustainability Officer, 3M Moderator: Molly Wood, Founder and CEO, Molly Wood Media; Co-chair Fortune Impact Initiative  

Impact Initiative 2024: Sustainability Goals - Are Market Movers On Track

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Impact Initiative 2024: Sustainability Goals: Are Market Movers On Track

Andrea Barrack, Royal Bank of Canada, Amelia DeLuca, Delta Air Lines, Gayle Schueller, 3M Moderator: Molly Wood, Molly Wood Media

Thanks for joining us. Welcome to my lovely panel. Um I am going to dive right in with the, the key question, the, the title of our session right now and I'll just sort of go down the row here. Are you market movers on track? Andrea? Ish your honesty as always is appreciated in this room. I'm glad I didn't have to go first. So now, you know what to say? That's all. Ok. I wanna say it wasn't a closed session when we're on the panel. I have my legal team is not here to tell me if I can disclose this or not. Listen, you have to be an optimist to be in this space. I'm sure all of you are here today because you're optimist. So I'm always gonna be optimistic unless I'm talking to my board and then I'm gonna have a little bit more of a realist viewpoint, but in general, I will say yes, it's very hard or we're gonna hit our targets. Exactly. Spot on. Probably not, but we're gonna make a heck of a lot of progress. And that to me is wonderful. I would say it depends on who we are because I would say three M, we've been ambitious with our goals. We really hold ourselves to a high standard in terms of developing the math path and plan. So three M is on target. In fact, a little bit ahead of what we said is our public goals. We as a planet and a society, I think we have some things to work on and we can only do it by being together. So it's great that everyone's here together to work on that flew in on Delta obviously. So also great partnership. Yes. Exactly. Exactly. Well, and I, I the reason that we put together this panel and it, it is interesting because the reason we put this panel together was to say we would love for these companies, these market movers to come here and say, you know, this is the progress that we're making here are the benchmarks that we're setting here are the standards we're creating for the industry. And also I can safely say in this room, a lot of people dropped off of this panel as we were programming it. And so I think this question of where you are in your goals is stressful for company. So Andrea not to, to make you the avatar for the entire financial sector, you no longer answer. But no, no, you know, we're just gonna keep going here. Ish is a really good answer. Um I also recently learned the phrase no, is a complete sentence. So I think that's, you know, also an acceptable answer to many questions. Um the financial sector has come under a lot of pressure. I was just reading a financial Times story today about how none of the major banks and financial institutions are at attending cop 29 in Baku. Um How do how are you thinking about balancing sustainability goals with the reality of achieving them and, and sort of the evolving role of banks in these goals? Yeah. And I love that you led with the evolving role of banks because I think that's really something that, you know, like, I don't know, sort of 2016, 2017, we were all just like, let's do the Moonshot and we're gonna be net zero by 2050 we're just gonna rely on human ingenuity to get there because we don't really know the path yet, but we believe in and we believe in innovation and that's gonna get us there fast forward to. Now we're in this exceptionally volatile and dynamic external environment. And you know, R BC has uh you know, our core markets are the US Canada and the Eu and they have vastly different landscapes when it comes to ESGDE I standard setting. And so trying to sort of thread that needle has been extraordinarily difficult. And I think the one way that we've sort of approach that is to say we have to be so tightly aligned to the business goals and to the values of our organization that is the way through, that's how we're gonna get there. And then sort of dealing, I think, then back to the reality, sort of to say, what are the societal issues that impact the success of our business today, but also in the future and that we also feel like we could have a positive influence on. So those of you who follow CS RD, it's kind of that idea of double materiality and starting to bring that in. And then what are our ambitions and then what are our contributions that we can make to get there? And we use the term contributions really deliberately because actually banks didn't cause the societal issues were challenged with, with climate change or with inequities. Um And so we have a contribution to make, but it's not the whole thing. So how do we kind of look at that and then try to balance it, needing to be ambitious, set the bar, but we have a legislative environment and a litigation environment that really punishes any sniff of greenwashing. And so we need to be careful there. And so it's trying to sort of say, be realistic, but something that allows you to stretch at the same time to because we want to spur action at the end of the day. Um A reminder that we are gonna come to you with questions. I have a couple more for the panel but start thinking of your questions and we've, you've been through a couple of sessions now, raise your hand and a Mike Renner will come to you. Um But before that, Amelia, I wanna ask you about the airline industry. Uh Delta is of course more sensitive than most to this question of greenwashing for reasons you probably can't talk about on stage today, but it does raise this sort of the idea of evolution, right? Like the idea of e the, the evolution of the, the backs on the ground when goals were set and how you work toward meeting them. Yeah, I think, and I think just to step back for a second, um, you know, aviation is a hard to decarbonize sector. And so while we're doing everything that we can today, if you flew in on dealt with some things that I'll point out that you may have seen or the sustainable packaging, many of our products are in, um, things that you did not see is how we're taking weight off the airplane, through both our catering products as well as through the structural items. How potentially we landed you with a slightly different vector to reduce fuel usage, how we maybe change the speed we flew you out for 30 seconds, all of which saves millions of gallons of fuel every year, but we burned 4 billion gallons of fuel every year and you can't take off with anything besides liquid based carbon fuel today, essentially. You know, it can't be a battery electric. And so we got a long ways to go sustainable aviation fuel is our North Star. It has been our North Star and will continue to be our North Star as an industry. I think where the evolution comes in is an understanding about the need to accelerate what we can do today and talk a lot more to our consumers, to educate them, to let them know that we're not just waiting for this moon shot, but we are getting all the fuel out of our system that we can today in really ingenious ways. While we scale sustainable aviation fuel and sustainable aviation fuel has been a really interesting product to watch evolve. It competes with the same feedstocks that on road vehicles use, whether that's in our liquid fuels today or in the future, synthetic fuels, either of those are competing feedstock resources, we're a completely new value chain. So if you think about what these fuels of the future are going to look like, I never thought as an aviation leader and this is the only career I've ever had that I would be spending my days on a farm, for example, and that I would be lobbying in the Midwest more than I'm actually home in my home base in Atlanta. And so to me, I think the evolution is building these partnerships that you may not need today. But then in 5 to 10 years from now when that breakthrough starts to come or that technological advance and is finally here that we have those relationships and those partnerships and that trust. And so to me, the evolution is that, and it's data backed and I think it's the fact that data is changing to say that, you know, a lot of money needs to go into this. Let's make sure that the money goes into the right places. And so part of that is through both our policy as well as how we spend our money just being agile and also transparent about what we're doing with that money. And when we find a better solution than we've seen in the past, we will be transparent and tell you about that switch. Yeah. And then gale three M is such an interesting case because it, it is so broad. There are so many things in scope, which is one of the conversations that we have had. How do you even determine which parts of the business to tackle and talk about what a challenge that is? Yeah. Well, we have on the order of 55,000 products, banning post it notes and command strips and scouring sponges that you might be familiar with, but also adhesives that go into aircraft and solutions that go into your electronics devices and helping batteries be safer, helping fuel economy and vehicles be more efficient and helping workers work safely every day. I mean, we became, we used to be known for Poster Notes, then it was a 95 respiration. So it's really been an evolution. We, we have, like I mentioned, we're very science based and we have this maths path and plan approach. We have systematically analyzed every one of our facilities around the world. And we're just now at a point where we're looking at every product portfolio which is a big effort. And um we've needed that at least at the facility level to look at that math path and plan. And by going systematically through the approach, whether it's the manufacturing processes, the portfolios themselves or how we source and how, how we deliver the products that's allowed us to reduce our scope one and two emissions by more than 80% since 2002. And that includes more than 43% since 2019. And so we, we just, it's taken us maybe longer than we might have liked, but we just had F BT I validation for our near term target um relatively recently and we're committed to continuing down that path. It is a lot of hard work though. Um because it means that every different business needs to be engaged in the own way that we're their most relevant, right? Um Are there questions from the audience just yet? I see a hand right in front of me. Look, look at you. Yeah, this is Khwaja Shekh uh fascinating panel. Um It is very important to, to integrate sustainability with the business strategy. And there comes the balancing both short term and long term. And if you apply the VC mindset on the venture capitalist, they are, they are very much high risk takers where they invest a lot for the long term, where they are literally creating new business models. So from the financial services industry standpoint or from the travel and transportation industry standpoint, what are your views on how do we make sure we apply the VC mindset to fundamentally create a new business models instead of just looking at the short term, only from the regulatory reporting needs trying to do minimum versus looking for the long term, any ideas you would like to offer? Interesting. Yeah, I mean, and do you want to apply a VC mindset? Yeah, so banks in North America are highly regulated um entities but, but I think you're absolutely right. If you look at what is the number one driver that banks have to try to make a positive impact in the world, it's the allocation of capital. And so we do think about how are we driving more green and even more sort of greenish brown to try to help the transition to accelerate. And you know, people set uh sustainable finance goals and you know, we've got a new one that we're putting out there. But the fact of the matter is is there's not that many things that meet our risk return profile that we can invest in that are green at this point in time. So it really does beg the question. And I think it's not just R BC, I think it's all financial institutions to say, would we consider modifying our business model a little bit looking at that risk return profile, what would that mean to be able to incent more additive kind of activity um that we could then sort of really say that we're, you know, being a market mover, I think in those kinds of things. So I don't think we're there yet, but I think financial institutions have a huge role to play in getting there. And I think maybe I'll just take it with very short, which is, you know, I think business today, it's very easy for me to argue why, what we're doing is good and we save jet fuel. That's our largest cost driver. That's easy. I don't think that it's the role of the airline to be financing these kind of risky bets when it comes to sustainable aviation fuel producers, as mentioned, that just doesn't fit in our business model nor our margins. But I just want to give an, for example, we have um a sustainable aviation fuel hub in Minnesota and it is public private partnership. It is the state. It's all the major Corporates. You've got major oil and gas, you've got a, you've got the energy company all trying to figure this out because that's the answer. Right. You're right. Everyone needs to up their risk a little bit but not one single industry or party can take that risk. I will Bill. Please go ahead. I love your question. Um In part because it gets to a core value that we have as a company. We're really focused on innovation and we've put forward a requirement since 2019. So it's five years old now that every new product we develop must have a sustainability value commitment. Now, some of these and I will tell you especially the first year, um some of them I was much more excited about than others, you know, but, but each year, so the first year we allowed, ok, if you're not packaged and recycle recyclable packaging, that can be your commitment. But the next new product has to be built on that and has to be above and beyond. And that's really led to a lot of things and in terms of venture engagement, um yeah, I could go on for a long time but I won't. Um But it's led to a lot of really interesting breakthroughs, but in terms of venture engagement, it has us leaning in stronger than ever to climate tech and so new ways. How can we bring things forward? You know, whether it's carbon capture or whether it's a hydrogen economy, all of these things because collectively, we're all trying to find solutions and increasing. I think there's a really important role for materials. And there's a material science company that's an important opportunity for us as a business that I was only going to add to that, that corporate venture capital has actually emerged as a really interesting source of some of that catalytic capital. And so you have this market mover advantage in terms of procurement, sometimes CV C certainly financing mechanisms. I know where there's a question over here uh of my lien Buckley, I represent striker Med tech company um Gail, I believe you were referencing the progress on carbon goals. And I imagine three M is it has many businesses as do probably many of our companies. So do each of your businesses have goals around carbon reduction or can you speak a little bit to how you tackle that as a major enterprise? Yeah, so we, we have goals at the prioritized portfolios. Ok. So we go through and we know where our heavy carbon footprint is. And so we challenge those businesses in particular. We don't have an internal carbon tax right now, but we make sure those businesses are very aware of what an external carbon tax might be and try to help them with that incentive and progress. And we give them special love and attention if there are higher carbon footprint areas. Great. Thanks. What have you seen? I think we're probably, we're probably out of time to take more audience questions because we will all get too excited. But um but one of the things we talked a lot about in our prep call for this panel and in the round table that preceded the main stage sessions is this idea of again the evolving landscape, right? That there are things maybe we didn't see coming such as a pandemic, if you maybe set 2025 or 2030 goals in 2018. Um New technologies, innovations, things like that. What have some of those innovations uh evolutions been? What are some of the conditions that have changed the most on the ground in the time that you may set your goals or that are making you think we're on Trek ish? Yeah, I think two things and I'll try to be brief. One is just that we're seeing far more um interest sections between ES and G. Um And so this idea that we would treat them in pillars is no longer really sufficient if we want to get there. But the second thing is that there's been a huge proliferation of regulation and disclosure standards and while some of that can be good, uh in fact, the first panel on uh de I and A that was earlier talked about, never mind the letters. Can we just do the work? And one of the things that I wonder is that companies are so busy hiring up to have people do disclosures and make sure that we're in line with regulations that we actually are pulling away people from doing the work to actually decarbonize or to increase their diversity or to have a positive impact. And so I think in this environment, particularly where it's global and regulations in Europe are far more stringent than they are in the U SI would say. And so we're seeing already companies thinking about listing rather than in Europe listing in the United States that doesn't help global emissions, right? And so if we can't be consistent in that kind of innovation and that regulation, we're not going to get anywhere either. Yeah, I think for us, there's two things. So I think the first in the short term is that it's good for business. And we've proven that out over the last couple of years, which means we actually have more money flowing into our team to spend towards fuel saving initiatives than we ever thought was possible because we proved it's good for business. We will find innovative technologies, we will use the goodness that is sustainability to just get everyone rallied around us. Whether you meet our media from a cost savings perspective or from a purpose driven perspective, everyone can get on board with what we're doing. I think the second is at least for us, our industry is bipartisan, but the concept of sustainability is often not sustainable. Aviation fuel is actually incredibly bipartisan because a lot of the fuel will come out of the Midwest. And so I think for us, the real evolving evolution is realizing we have this once in a lifetime kind of opportunity to truly shore up support on both sides so that no matter what happens in November, it will not significantly impact. And to really tell the story again about how this industry which has always done so much. Good for so many people is now gonna have new connections into agriculture and rural America which again just provides decades worth of kind of new partnerships, new opportunities and new ways to uplift communities that we didn't have before. Wonderful. Wow, great answers. I thought I had 31 was about regulations getting tougher and more reporting. One was about how the politic politicization, I don't know, becoming more political in this space when it really shouldn't be. Um But the third I would say is technologies are really advancing, you know, so you see those like there's a technology s curve concept, you know, as you come up the s curve, things start moving really fast. And so we're seeing that with renewable energy, you know, that that's becoming more and more affordable. We're seeing that with electrification, maybe not of airplanes but of other types of ground um transport. You know, we're seeing those things move, we're seeing more and more different ways of things advancing. And I think it's a matter of getting on with it. And you know, some of those first movers that you were talking about, we're going to geek out a bunch about climate tech at dinner. But that's where I have to leave this panel. Andrea Gill and Amelia. Thank you so much for the time. I appreciate it. Thank you.