ESG Matters episode 6: transcript

Transcript

Anna Marie:
Thanks for joining us for our latest 30 for Net Zero 30 episode. Today I am thrilled to be joined by Lord
Deben, who is the chairman of Sancroft, an international sustainability consultancy, who works with
leading companies around the world on environmental, ethical and social impact issues.

Lord Deben is also the chair of the UK's Committee on Climate Change, and prior to this served for 16
years as a British minister for the UK government, where he was once noted as, quote, the best
environment secretary they ever had, unquote.

Lord Deben, thank you so much for joining us today. Perhaps you could give us a quick introduction to
yourself.

Lord Deben:
Well, I spend my working hours running a business called Sancroft, and we help people with all sorts of
concerns of sustainability. So we do things like helping with modern slavery, dealing with the issues of
the supply chain, ensuring that people use as little water and energy as they can, and working very hard
to see that we protect the biodiversity, the soil fertility, that we have. So it's a fascinating job.

And then my public job is to chair the climate change committee, which is the independent advisor to
the government which sets the targets and the budgets which Britain has to meet in order to get to net
zero, which is now a legal necessity.

So we have just published our Sixth Carbon Budget, which takes us to the end of the 2030s, and the
government has now said that it will accept it in its entirety. So we will be getting, in Britain, to
something like a 78% reduction in our emissions on 1990 by the end of the 2030s.

Anna Marie:
Yes, some excellent news coming out on that front. I think your work and the committee's work around
that has really put the UK at the forefront of this conversation, certainly from a governmental
perspective.

You've been doing this for a very long time. Can you tell us, have you seen any shifts in the last kind of
18 months to two years? And if so, what shifts do you think you're seeing in the wider conversation
around sustainability?

Lord Deben:
Well, I think there have been two major shifts. One is really caused by COVID. Pandemics don't actually
change things, they speed things up, so what was happening already, what COVID has done is to move a
whole series of things and make them more urgent and immediate.

And I think that's very important because it means that people who always had pandemics on their risk
list, companies who had that and climate change on their risk list, would pass over those pretty quickly
and get to the immediate risks as they saw them, the things around the corner.

What COVID has done is to make people realize that these, what seemed to be long-term risks, turn out
to be really very, very direct and make huge differences, and therefore they've begun to take seriously
climate change as an immediate and urgent area for action, which they hadn't done before.

And I think at the same time, because so many people have been locked up at home, so to speak,
they've also become much more aware of the dangers that we have really made widespread to
biodiversity, to the countryside, to the natural world. And so the other big change in that first one is that
people are now thinking of these things in a much more coherent, much more holistic way.

But the biggest result has been specifically on the financial world. Whereas 18 months ago in Sancroft, if
I wanted to get a company which was going to invest in other companies, if I were going to get them to
understand that sustainability was a crucial part of the way in which they did due diligence, it took a
long time. You had to bang on the door. You had to talk to a lot of people. You gradually got them
round, and in the end they would understand.

Now they come to us, and it's quite noticeable. And the reason for that is that their supply chains have
been so much interrupted by COVID they've begun to realize that companies that don't think about
these things in advance are more likely to find themselves into real difficulties. And they've also
understood that this is quite a complex matter.

So I give a simple example. We had one particular company which prided itself on the fact that it... it
was in the clothing industry, and that it had made sure that its products were produced in six or seven
different countries so that it wouldn't be affected by any kind of internal turbulence or the like.

What they hadn't noticed was that all the cloth itself to those six or seven countries all came from the
same country. So at the beginning of COVID, they were knocked for six because there was no cloth, and
that's what they began to see, that the supply chain wasn't just about the people you knew, but it's the
people the people you knew knew.

It's the whole line to third and fourth and fifth groups which are supplying companies. It was a company
that could do everything, except it found it couldn't actually stick its packaging together because it
hadn't worked out that the glue for the packaging came from a country which had a revolution.

Now, you do have to see a huge change in that. People have understood that this is not only an absolute
necessity for the financial world, but it is much more complicated than they thought.

Anna Marie:
That's fascinating. And I think when people talk about scope three, for example, which is an expression
that most people didn't understand what that meant 18 months ago, I think you really get to the heart
of how much you have to think about your entire chain. And I really like the example of the glue. That's
a good example of not having focus on all the areas.

You've done so much, different actions over the years. But now, where we are standing right now, is
there any specific actions that you think need to be taken now, in the next kind of two to three years, to
really be able to deliver in 2030 and 2040 and 2050? I mean, obviously the fantastic work around getting
the UK to sign into really robust targets is one step, but is there anything you wanted to share on that?

Lord Deben:
Well, yes. I think the fundamental thing is action. I mean, I think we've now won the battle of
understanding. I think we've even won the battle of people realizing that we have to do something now,
that it's urgent, that's you can't put it off.

But the trouble is the gap between policy and delivery is very considerable. And this is not just about
climate change nor just about particular sorts of government. The fact is that all governments, from left
and right and center, and almost on every subject, the problem they always have is delivery.

I mean, I remember a comment by Tony Blair when he said, when he won his second election, he said,
"This time we will remember that we were wrong when we started, when we thought that when we
said something, it would happen."

It doesn't. You have to make it happen. And it's that delivery that is the thing that we'll be pushing on
the British government, and it's the thing that the United States will have to see as it, thank goodness,
has rejoined the world under Joe Biden. But of course, because he will have to use executive action in a
way which we don't have in this country, it'll be more difficult... It will be easier for him to actually get
the action working.

But it's still true that what I really want in the next two years is to ensure that nations, having signed up,
as they have so widely, to net zero, get on with it and get on with it effectively and admit that
sometimes they get it wrong. And that means you stop doing that and you start doing something else.

The other thing they have to accept is that if you started down one route and you think of a better one,
and the route that you're going down is going to work but it's not perfect, stick with the one you're in,
because there is nothing so bad as making the investors feel that they aren't certain.

And we need, in order to meet our climate change requirements, the net zero, we need to spend just a
little under the 1% of our gross national product in Britain every year until 2050. Now, actually, it'll fall
away. Actually, I think it'll end up by being cheaper that.

But most of that money is coming from the private sector. It's all there. It'll all come, but only if the
government ensures that the private sector feels safe in investment.

And therefore you really do need not to change your policies all the time. You need to have permanent,
long-standing policies. And if they're not quite as perfect as you learn in hindsight, then stick with them
rather than upset the market.

Anna Marie:
Certainty in the market is definitely something that people will respond to, and having those guideposts.
Can I take a step back maybe and ask you just on a personal level, are there any commitments that
you're making, and maybe that's just to continue the good work that you're doing in your consultancy
and in all of your other efforts?

Lord Deben:
Well, I shall certainly continue doing that, and I have no intention of retiring. It seems to me this is a
battle which we have to fight. And given that we've caused much of the trouble in our lifetime, it's our
job to put it right, as much for our children and grandchildren, and I have quite a lot of those, so I'm
looking forward to going on doing that.

But I suppose we've done two things in particular, well, three things, really. First of all, we've got rid of
our oil heating. We live in a house which isn't very suitable for modern heating systems, but we've
installed an air-source heat pump. We're running that with gas at the moment, but it will be with biogas,
which is the only way we can do it in this long-listed Victorian-Gothic house we live in.

We've just agreed to change the sewage system, which enables us to replace the Victorian system for
what you might call lavatorial spillage. But all the water from the roof from the back of the house will
now go into the old system, which we'll be able to pump for the garden and the farm. And we've already
got that in the front of the house. There's a very good Victorian place which takes all the water
underground, and we're fitting a proper pumping from that so that we can use that for the front part of
the garden.

And next, well, in about a fortnight's time, I take delivery of my first electric car, so I replaced the hybrid
that I have at the moment with a fully electric car. So I'm doing my best.

Anna Marie:
Wow, you're pretty impressive. I think that sets the bar very high for everybody else. Especially in the
UK, this question about domestic heating is massive. How do you transform that system as well as
transform where the energy is sourced from? And I don't think that gets as much airtime, really.

And then you touch on two more areas that people also spend less time on, water usage, which is really
going to be an interesting one going forward, and transport. So you have managed to hit all of the main
issues on the head there.

Lord Deben:
Well, you should try to walk the walk if you're going to do the talk, and that's very important, I think,
anyway. It's very interesting, and it does teach us a lot.

You see, if you do it, you realize that it's very easy to buy an electric car. I mean, you have to have the
money and all that and sell the other car and do all those things. You look at the cars, and you get in
touch with the company whose car you want to buy, and they have a system being able to sell it to you,
and they want to sell it to you.

You try trying to get an air-source heat pump. It's a business which has no idea how to sell anything. I
mean, I do say that I'm privileged because, doing the work that I do do, I know people to talk to and
know how to find the place to go.

But it still took me an enormous amount of effort. One really did have to be dedicated to do what we
needed to do. And I think this is the fundamental issue.

And oddly enough, people always talk about the money, and of course the money is true. I mean, I am
fortunate enough to be able to afford it, to do these things. But the fact of the matter is I also had to
have the energy and the determination, and that shouldn't be so.

It should be possible, particularly if you don't have the complication of a listed building and all the rest
of that, but it should be possible that if you live in a normal house, on an estate or semi-detached or
whatever is, it ought to be possible for you to telephone a number and say, "I want to have the best
system to reduce my emissions as much as possible. What do you suggest?" And then you should be
able to buy it like you buy a car.

Anna Marie:
Definitely. I guess that leads to the last point that we have time for today. If you could get someone
listening to take one action, what would that be? What would that look like?

Lord Deben:
Well, I think it's not so much an action as an attitude. I think what we have got to be is asking the
question, what will this do for sustainability? What will this action do for the climate?

I'm very keen on the Pope's encyclical Laudato si', which I think is the best introduction to climate
change that exists. He wrote it six years ago. It is very much one of the pieces of work which has
changed people's minds.

And one of the key understandings there, which I don't think anyone else has really brought out, is that
climate change is the symptom of what we have done to the world. It's not the disease, it's the
symptom. And it's the symptom whereby which the planet is crying out for us to cure the disease.

And therefore, I just think that the way anybody listening to this can really make a difference is just to
ask themselves the question in every decision that they make, what's the best way to help to heal the
earth?

So if you're thinking of buying a new car, make the jump and buy an electric car. If you're thinking of
heating, then think about how you do that most effectively.

But small issues, just tiny ones, like making sure the taps aren't leaking, not cleaning your teeth under
running water, only heating enough water for your coffee and not insisting upon boiling the whole kettle
all the time. These are tiny things, but they add up, they add up to a huge change. We could close two
generators if we all overly heated the water we need for our coffee.

And I know sometimes it sounds too simple and too small to do, but unless we do all those things
together, we're not going to win this battle. And we have to have a different way of thinking about our
lives.

And that is helped by COVID. I think lots of people have begun to say to themselves much more clearly,
"What am I around here for? What is my life really about?"

And I don't mean that in a sort of pompous way. I mean, some people have been thinking of it in a very
deep way and thinking of it in a way which is most remarkable. I'm fascinated to see the effect upon
people in terms of religion and such like. It's been really very notable.

But even if you take it right at the other end, and that is, "Do I really need all the stuff I have? I haven't
used any of it. Here I've been at home and I haven't... Do I need it? Do I need to buy more stuff? Can I do
without, not because I want to lead a less full life but because I want to lead a fuller life?"

And the other thing is, I think we've learned, haven't we, that it's experience? It's what we can do. It's
what we can actually experience, which is more important than what we own and what we have.

And I think there'll be a great new way of looking at things, because we have had to stop in lives which
have been too busy and too noisy and too filled with all sorts of things which don't matter.

So I think it's attitude, I think, is the most important change. Let's all of us say, when we make decisions,
"What's the real issue as far as the world in which we live, protecting the planet and healing it?"

Anna Marie:
Excellent words. Thanks, thank you so much for joining us. I think those are such fantastic takeaways.
Think about what you can do, have a little persistence when it's not the easiest answer, but stick true to
that real purpose, and I think that will really resonate with a lot of people, in their private lives, but then
in the lives that they bring to their workplaces and how the entire ecosystem, the business ecosystem,
responds to that.

Thank you so much for your time, and we really appreciate you joining us.

Lord Deben:
Thank you very much. Goodbye.

Anna Marie:
Thank you for listening to this podcast. We hope you found it worthwhile. To learn more about the
issues we've just covered, please visit Ashurst.com/podcasts.

This 30 for Net Zero 30 episode is just one small part of our continuing podcast series, ESG Matters at
Ashurst. Make sure you don't miss any of our future episodes by subscribing via Apple Podcasts, Spotify,
or wherever you listen to your podcasts. While you're there, you can also listen to our other episodes
and leave a rating or review.

In the meantime, thanks again for listening, and goodbye for now.