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The key thing that I kind of realized very quickly after leaving is that if I wanted to address all the things that you said right at the start of the podcast in terms of sustainability, make it sustainable, inequality, all the other kind of societal issues that exist in this world, while you can't do it through philanthropy and government spending, unless we bring in private capital at scale to address those issues, in my view anyway, that those issues will not actually get addressed in the way they should be, in a way long-term and sustainable way.
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Like what does sustainability mean?
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Sustainability means that you're focusing on the three or four key sustainable metrics which matter for your business, which are going to create long-term value in terms of upside and minimize long-term downside risk.
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If I look at my student body, a significant portion of them are looking at startups or going and looking at companies that are in some shape or form part of the energy transition.
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Now, whether it be in new technologies, whether it be in building out infrastructure, a whole spectrum, right?
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From startups to massive infrastructure projects and everything in between.
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This climate and sustainability is always talked about as it's a risk, it's a good thing to do for the world, it's important, you know, otherwise we won't be able to breathe and all that.
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All important.
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But this is a once-in-a-lifetime generational investment opportunity and a business opportunity for people who are in their 20s.
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Welcome to the latest episode of Ready Steady Green.
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In this podcast, we're discussing challenges and opportunities of turning climate awareness to climate action.
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In other words, making sustainability sustainable.
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This is not intended to be a specialist podcast of sustainability experts.
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Instead, it aims to broaden the discourse and help everyone realize how closely topics such as sustainability, climate, health, quality of life, equality of chances, innovation, technological development, prosperity of business, mindset change are all connected.
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The episodes from Ready Steady Green aim to inspire everyone to step up and step out in their lives and in their communities.
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Make sure to follow us on your favorite podcast platform, share it with your friends, and invite others to listen.
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You can also listen to our earlier episodes and feel free to send me a message.
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Who would you like to invite as our next guest for the show?
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Our guest for today is Vikram Gandhi, a professor at the Harvard Business School.
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Vikram is an investment banker with extensive experience in the international market and an interest in public policy and philanthropy.
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At the Harvard Business School, he teaches in the MBA and executive education programs.
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He has developed two elective courses in the MBA program Sustainable Investing and Development while decarbonizing India's path to net zero.
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He advises the public, private, and social sectors to bring institutional high net worth and development capital to India and Asia.
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Also, he is actively involved in impact investing as a professor, investor, and policy advocate.
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Welcome to the show, Vikram.
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Already, steady, and green is something close to my heart.
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So I look forward to this conversation.
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Thank you.
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That's very kind of you.
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Did I perhaps miss something important in the introduction to you?
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No, I I think you covered it well.
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I I would just add that you know I also have an impact fund called Asha Ventures, which invests in early stage um both sustainability and impact-oriented uh companies.
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But otherwise, I think a combination of teaching, investing, and advising is what I do.
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Okay, so I did my homework.
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Now it's no secret now.
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It's no secret that we have known each other for very many uh years.
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And I remember after university when I followed your career, it was definitely in the field of investment banking and finances and the practical business-oriented world.
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In a nutshell, what makes someone being successful in those fields then later on make a significant turn in their life and move towards academia?
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I spent 25 years in investment banking, as you mentioned, uh around the world, uh largely in the US and then a little bit in Hong Kong and India as well.
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Um and I the, you know, the skills that you develop during that period of time are the typical business skills of running businesses, growing businesses, dealing with capital allocation, dealing with human resource issues.
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And so the skill set, if you think if you uh think about it that way, that was built was essentially building sustainable businesses and making good investments and developing uh human capital.
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So those are the three things.
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And so when I decided uh after 25 years, this is about 14 years ago, to leave investment banking.
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I had a very successful and very fulfilling career, but that's at that point I'd just turned 50 and I said, well, okay, I need to do something different now.
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I've done banking for, as I said, nearly 25 years.
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And I started that after I graduated and did my MBA at the Harvard Business School.
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So I'm an alum there in addition to being professor.
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The key thing that I kind of realized very quickly after leaving is that if I wanted to address all the things that you said right at the start of the podcast in terms of sustainability, make it sustainable, inequality, all the other kind of societal issues that exist in this world, while you can't do it through philanthropy and government spending, unless we bring in private capital at scale to address those issues, in my view, anyway, that those issues will not actually get addressed in the way they should be, and in a way long-term and sustainable way.
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So that's how I essentially said, Well, I'm going to take the skills I learned in my career and apply them in a business for-profit setting to solve important problems.
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And that's when I set up an impact fund.
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I really had no vision of being a professor or anything, but I was spending time at the Harvard Business School because my daughter was doing her MBA there.
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And so I started talking to some of the faculty members there on sustainability issues and whether you know there were things in the curriculum.
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And before you know it, I teamed up with a finance professor and we wrote 25 new Harvard Business School cases and launched a course, and now I've been teaching there for 10 years in a variety of ways.
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So I think the key thing is that, and I'll stop there, is the key thing is that at the business school, at least at Harvard and some other business schools as well, about a third of our faculty are like me, are like practitioners who are who bring, have worked, kind of had careers, and then come and teach the MBAs.
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And where the MBAs get benefited is that we're bringing our practical experience to the classroom discussion.
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Okay.
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Well, thank you for this insight.
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And I'm not saying it's very far from my journey or my experience when moving from running my own business into academia and helping young people uh benefit from all of those things that I did rightly or wrongly at the stage.
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But uh work with young people, I think that is that is essential.
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Now, one of the things that I note is that I read a lot of literature about the importance of responsible investment.
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Everyone agrees and everyone uh claims that how important it is and that they are doing so.
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However, when I myself try to help someone in their investment decision, not that I am qualified to do that, but they were just interested in my views.
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I found it was very difficult to get actual uh credible information and 100% bulletproof information and confirmation whether investment is uh sustainable or not.
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Uh what could be the guide points here?
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So I I think the first thing is like what does do people actually mean by a sustainable investment?
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And I mean that itself is such a wide, it's subject to so much interpretation.
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Like, what is sustainable actually even mean?
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The way I think about it is that you know you have basically got two pools of capital in this world.
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One pool of capital is what I call fiduciary capital, which is the majority of capital in this world, which is and I'm talking about the private side, private capital, is essentially that needs to earn its commercial rate of return.
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So, for example, pension plans, insurance companies, family offices, the asset owners, I would say, the people who actually ultimately own the money.
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And sovereign wealth funds would also fall into that category.
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And so their kind of mission is to earn a fiduciary return, which is that they can't sacrifice the returns in the name of public good and social return and all that.
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So there, so that's one.
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The other pool of capital is where you know you have more values, could have values-based investing, which is that for achieving a certain societal goal, I'm willing to sacrifice some return, uh, but I want to have a measured impact.
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And so there are family offices and some sovereign wealth funds, et cetera, fallen.
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And even governments actually are starting to do that.
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So I think when I think about sustainable investing, is where those investors, particularly the fiduciary kind, are intentional about the fact that in addition to the financial return, which is very important, they've identified two or three key criteria of impact of sustainability, whether it be climate change, inequality.
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I mean, you know, there's a whole slew of ESG kind of metrics.
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But they've been pretty intentional about the fact that they are going to measure those metrics in addition to financial metrics.
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And so I think that's where in my mind, when investors are looking at sustainable investing, is to really look at, well, in addition to the financials, how are these companies or these funds or whatever the ETFs where that you might be investing and, you know, how are they actually measuring the impact having and are they intentional about it?
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I mean, that's I think is the key difference to think about.
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So if I follow this well, would this mean that you believe that it is possible to actually match sustainability goals with profit motives or profit expectations?
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Absolutely.
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So in the public markets, it's actually been shown over multiple periods of time because they're so that let's again break down the kind of universe of capital into publicly traded companies and private.
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So in the public creative, because there has been a lot of data, you know, it's been shown that, and we have a lot of research that we've we can point to, where if companies focus on the three or four ESG things that actually matter to them, which are material to their business, that they outperform.
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And so for I mean, it's kind of if you think about it, it actually is makes logical sense, right?
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So there are about six, seven hundred different ESG factors.
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But for every company, those six, seven hundred don't matter, right?
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So for what, for an oil and gas company, the the ESG matter, you know, the carbon emissions and all will be very important.
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For a consulting company, human capital management, et cetera, will be very important.
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Right.
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For a manufacturing company, supply chain kind of quality will be very important.
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So if you actually look at the company, there'll typically be four or five ESG metrics which are core to the business and if done correctly, help the business perform better.
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And so, you know, that's where I think the difference comes because that's why I started off with like what does sustainability mean?
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Sustainability means that you're focusing on the three or four key sustainable metrics which matter for your business, which are going to create long-term value in terms of upside and minimize long-term downside risk.
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I mean, those are the two things.
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And so there's enough evidence that investing in companies which focus on those rights, it's like saying, for me to grow the business, I focus on my customer, I'll focus on my margins, I'll focus on my distribution.
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The core things of a business model.
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ESG is very much part of that.
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If you think about it, there's been actually a four, and the research that I'm pointing to, it shows like over a 30-year period, a 6% per year, per year differential in returns of companies that focus on material ESG factors, report them, monitor them, have core part of their metrics, versus other companies that either don't focus on it or focus on ESG in such a broad way that is actually not impacting the business, and it's more what I would call greenwashing.
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And the private side, there are now lots of funds, you know, in major PE firms like TPG and Blackstone and BlackRock and others that have set up impact funds.
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They're on the second or third fund, they're very intentional about impact and sustainability.
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But all this has happened only in the last five, ten years.
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And so while there is anecdotal evidence that you don't need to sacrifice returns to have a good impact, I think we need a little more time to actually establish that as a fact.
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What comes to my mind is in the way you explain this, it's really convincing, and clearly a six percent difference is a very convincing factor in itself.
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So if it is so clear that one can achieve a significantly higher margin, how come it is not more investment funds or companies or investors who go on that route?
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Yeah, so I think the challenge, quite honestly, is that focusing on those factors, like for example, if I am now remodeling my business because I think climate risk is a big risk, and so therefore I need to like modify my supply chains, my manufacturing process, my distribution process, because over time climate risk becomes more and more risk, and you know, you try and get ahead of the regulation.
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Before regulation hits you, you know, you can try to get ahead of the curve.
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Or alternatively, that there are some really fabulous opportunities out there which you miss because you haven't really thought about sustainability as a business opportunity.
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The thing is that those are kind of medium to long-term kind of investments.
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So if you're going to make an investment in your business model change to deal with climate risk, it takes three, four, five years for it to materialize before you get the returns.
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And so the big conundrum, I think, partly, is that asset owners, and that's why I mentioned asset owners at the start of the podcast, they typically have they're multi-generational.
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You know, they have a 20, 30 year time horizon.
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You know, when they talk about quarter, they're not talking about 90 days, they're talking about 25 years.
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Right.
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So because they pension liabilities, like in UK or Hungary or US, the pension liabilities are over 25, 40 years.
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I advise the Canadian pension plan.
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They they have an actual evaluation of 70 years.
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And so they're thinking long-term, and climate risk and opportunity is a real long-term issue for them.
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Unfortunately, or I don't know, just reality is that a lot of their investments are done directly, which then they can work with the companies on long-term plans and think about how long-term investments are needed.
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But a lot of the investments are done through asset managers who have a relatively shorter time period.
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So there's a huge difference between the motivation and focus of an asset owner who has a 25-year time horizon, an asset manager who has a one or two-year time horizon because that's how their incentive systems work, or even a PE fund has a five, seven-year time horizon, a typical hold period of three or four years.
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So climate risk and opportunity is not going to take fold in two, three years, right?
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It's a longer period.
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So that's where the conundrum comes in, where the asset managers who are more short-term oriented are like pushing companies to kind of generate profitability in the shorter term and not necessarily invest for the longer term.
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And that's where the tension comes in.
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So I think the way that's being dealt with right now, actually, is because a lot of the investors in these funds are long-term investors.
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They're really pushing the asset managers that, hey, this is a real thing, and you need to kind of focus and make sure managements that you invest in are focused on it as well.
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Okay.
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And much clearer now.
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Thank you.
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One last question on this topic.
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Speaking to some of uh our earlier guests, there seem to be two groups of people.
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One who said that for an organization, for a company to be sustainable, it is primarily a technological issue.
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It is adapting the uh appropriate uh metrics, systems, uh supply chain, and so on and so on.
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The other group of a couple of people, they still claim that it's uh primarily a management issue where the human factor is essential.
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So whether the management and the people who work there, do they have the correct mindset to uh build a sustainable path?
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Which one would you go for?
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I think it's much more the latter.
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I mean, I I think the technology piece, if you if people put their mind to it, and because again, technology investments and returns are a longer time horizon, right?
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They don't happen overnight.
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And that gets back to my earlier point about business model changes.
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Essentially, it's an investment in new technologies.
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And so I think it's more a mindset issue.
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And the mindset issue, I think the companies, again, who have outperformed the last 25, 30 years that I referred to before, have a mindset of a longer-term mindset.
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Again, I think that even in the US, like you know, where I teach, the fiduciary obligation that the board and and the management have is not just to shareholders, it's to the company as a whole.
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And that's the company's long-term sustainability is a core part of their legal responsibility as board members and managements.
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And so I think the companies are the ones that actually have that kind of mindset, are the ones who are performed.
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So I think the mindset is more important because once the mindset is there, it leads to capital allocation for new technologies, it leads to patient kind of monitoring of those new technologies and better execution.
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All right.
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Thank you for casting your vote here.
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Now, in the next couple of uh minutes, I would like to turn our attention a little bit to India, your uh home country and a country with which you keep regular contacts, professional, personal, uh business contacts.
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So uh when I read about India these days, uh usually two things come up.
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One is that clearly it is uh turning uh to become one of the uh economic powerhouses of the world, uh rising rapidly on the rank of countries in terms of their overall GDPs and any other factor.
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But at the same time, I read uh quite a lot around sustainability challenges in terms of the countries facing coming from the population, coming from the energy and industry structure, and so on.
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What is your perception of today's India and the future of India in sustainability terms?
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Yeah.
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I think this is a real challenge in India, and that's part of the reason why you developed this new course, which you referred to at the introduction of development while decarbonizing India's path to net zero.
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And let me just give you maybe a minute of context here.
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So India is this year will become the third largest economy in the world after the US and China.
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Now, the gap between the US and China and the third economy is very large.
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So it's very comparable right now in the size to the UK and uh Germany and Japan and all that, but it's going to be third.
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More importantly, is the is the largest, large growth economy.
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I mean, it's growing at 7-8% a year.
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And so the implications of that are that everything that kind of so-called pollutes, let's just focus on sustainability factor, everything that pollutes power is about a third of India's carbon emission.
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Hard to abate sectors like steel and cement are about 25% of the carbon emission.
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Agriculture is another 20-25%, rice particularly, and cattle, right?
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Huge.
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Uh, and then mobility uh and real estate.
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I mean, if you add all those up, it's nearly 90%.
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All those essentially, because of the growth of the 8% on a population base of 1.45 billion, uh, and not growth in population, but growth in GDP, and therefore the growth GDP per capita, is that the demand for all those things is expected to go 4x or more in the next 20 years.
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And so if India carries on in this path of growth with that kind of emission trajectory, it's gonna be a real disaster because the actual negative impacts on climate change in a place like India are gonna be far worse than what will happen in Europe or the US or the OECD generally, just because the infrastructure to deal with it and the money to deal with it is not there.
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There's a massive recognition that this is a problem and that needs to be dealt with.
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And so balancing this growth with a decarbonization or what I call how do you achieve low emission growth is like a key agenda item.
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So I'll give you one example of a success and how that potentially can be replicated going forward.
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And the success really would be renewables.
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Ten years, twelve years ago, renewables were not a thing in India.
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Today they are fifty percent of the energy capacity in India.
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Fifty percent.
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Fifty, five oh five zero.
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Five zero.
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Oh my god, yeah.
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But that's Capacity, but the actual generation from renewables is only 25% of the total.
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And so let's talk about those two things.
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The reason it got to 50% is because of the incentive systems put in by the government 10 years ago in terms of providing subsidies, one, and now taking them away while the cost curve of installing solar and wind kind of started coming down.
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Two was they mandated, because they are obviously a huge consumer of power, they mandated the private sector that X percent of energy being put into the grid had to be renewable.
00:22:35.200 --> 00:22:38.799
So they've forced the private sector to do it through regulation.
00:22:38.799 --> 00:22:46.799
And then the third is they've created enough of a risk-sharing mechanism that renewable producers would actually invest in that.
00:22:46.799 --> 00:22:53.440
So as a result, it's gone from literally zero or nothing to in like 10, 12 years ago to 50% today.
00:22:53.440 --> 00:23:05.599
The reason why the capacity is 50, but the generation is 25 is because storage technologies don't exist to actually have 24 by 7 seamless power.
00:23:05.599 --> 00:23:12.480
So the baseload factor is still coming from either coal or oil gas fired plants.
00:23:12.480 --> 00:23:17.839
And so therefore, investing in technologies, grid-level technologies around storage is a key issue.
00:23:17.839 --> 00:23:19.440
And that's happening big scale in India.
00:23:19.440 --> 00:23:35.039
Because once you get there, and it's happened globally, by the way, like in the US, if people talk about Texas and oil and gas state and this and that, if Texas were a country today, it would have the fifth largest installed capacity of renewables in the world.
00:23:35.039 --> 00:23:35.680
Right?
00:23:35.680 --> 00:23:48.319
It's basically China is by far number one, India uh US number two, Germany number three, India number four, and Texas number five.
00:23:48.319 --> 00:23:49.759
Who who would have told that?
00:23:49.759 --> 00:23:51.359
I I I wouldn't have no.
00:23:51.359 --> 00:23:52.160
Yeah, yeah.
00:23:52.160 --> 00:23:55.680
I mean, Texas is like this, you know, oil and gas state, and this and that.
00:23:55.680 --> 00:24:00.000
It's like it's got so much sun and wind that renewables make a hell of a lot of sense over there.
00:24:00.000 --> 00:24:00.960
So they have them.
00:24:00.960 --> 00:24:01.359
Right.
00:24:01.359 --> 00:24:04.799
But they don't have storage or they don't have enough grid.
00:24:04.799 --> 00:24:09.599
So I think technology innovation, getting back to the India thing, that's a big, big issue.
00:24:09.599 --> 00:24:15.839
And now they're trying to replicate the same thing in cement, in steel, in EVs.
00:24:15.839 --> 00:24:30.720
And I think the what's going on in the Middle East right now is actually, again, been a real massive wake-up call about energy security, you know, because India is like hugely dependent on oil imports, and mainly a lot of it coming from the Gulf and coming from Russia.
00:24:30.720 --> 00:24:40.480
And so they've basically now I think the acceleration of not just renewables, but geothermal, hydro.
00:24:40.480 --> 00:24:47.119
There's a big talk about nuclear, like really pushing the country in that direction will accelerate.
00:24:47.119 --> 00:24:53.759
So it's a challenge because you know, at the same time, you've got to have growth in terms of GDP per capita, get people out of poverty.
00:24:53.759 --> 00:24:56.319
And so there, but there are lots of interventions.
00:24:56.319 --> 00:25:05.440
There's the power side on the steel side, you know, JS, the steel companies are very focused on reducing intensity of steel emission, right?
00:25:05.440 --> 00:25:08.720
Bringing down the CO2 per ton of steel produced.
00:25:08.720 --> 00:25:16.000
But if your capacity is doubling, so I have a you know with the largest steel company is part of my course, we go and see all their steel plants and all that.
00:25:16.000 --> 00:25:19.359
But their capacity is doubling in the next five years.
00:25:19.359 --> 00:25:26.240
Even if they drive down the emissions per unit of production, if their capacity is doubling, their aggregate emissions are only gone up.
00:25:26.240 --> 00:25:26.640
Right.
00:25:26.640 --> 00:25:28.240
So this is a huge challenge.
00:25:28.240 --> 00:25:32.880
But but I think what's important is that it's recognized as a challenge and being dealt with it.
00:25:33.519 --> 00:25:39.440
And in your experience, how do Indian businesses uh relate to this challenge of sustainability?
00:25:39.440 --> 00:25:47.200
Do they see this as an obligation which is enforced on them, or is it rather a business opportunity, or is it a mixed bag?
00:25:47.440 --> 00:25:48.720
I think I think it's a mixed bag.
00:25:48.720 --> 00:25:50.319
I think there are a whole spectrum.
00:25:50.319 --> 00:26:00.160
I mean, some people just are totally oblivious of it and just don't care because once regulation, which it will happen, comes and they're not prepared for it, I think they'll be in trouble.
00:26:00.160 --> 00:26:15.839
But I would say that the ones that are more, again, getting back to your management mindset, who think a longer term, understand what the implications are, not just from a risk and regulation standpoint, but an opportunity standpoint, are the ones which you know are getting ahead of the curve.
00:26:15.839 --> 00:26:17.920
And it's being reflected in stock prices too.
00:26:17.920 --> 00:26:31.599
I mean, the Indian market has gone through a rough time here in the last three months, but largely because partly due to the Middle East uh war and therefore the oil imports, uh the oil prices rocketing up, gas not available, this, that, and the other.
00:26:31.599 --> 00:26:35.599
So it's had a big impact on foreign cash outflows and things.
00:26:35.599 --> 00:26:46.000
But I think the companies that are actually focused on sustainability, while they may have near-term earnings kind of depression, their P multiples are actually higher.
00:26:46.000 --> 00:26:53.039
Because a company, you know, investors recognize that these are the companies that are thinking longer term, both in terms of opportunity and risk.
00:26:53.039 --> 00:26:55.119
So it's it's a kind of a mixed bag right now.
00:26:55.519 --> 00:26:56.079
I see.
00:26:56.079 --> 00:26:58.559
Now, one last question to India.
00:26:58.559 --> 00:27:05.359
I know that as part of your course, you do bring uh your students on a field trip to India.
00:27:05.359 --> 00:27:10.559
And I'm wondering, talking to them, what is your impression?
00:27:10.559 --> 00:27:13.759
What is the impact these visits are making?
00:27:13.759 --> 00:27:15.119
What is it that they learn?
00:27:15.119 --> 00:27:16.960
What is it that surprises them?
00:27:16.960 --> 00:27:20.400
How does it contribute to the learning curve of your students?
00:27:20.799 --> 00:27:23.599
So maybe a minute on just why this course even came about.
00:27:23.599 --> 00:27:30.240
So I've been quite involved with a lot of the climate-related things at Harvard University across not just the business school, but across the university in various ways.
00:27:30.240 --> 00:27:41.440
And I have found about three, four years ago, that most of the discourse is around like what's happening in the OECD, right, in terms of climate change and impact of climate change, or what should we do about it.
00:27:41.440 --> 00:27:52.720
And not a lot, talking about the fact that you know there's a whole huge percentage of the world's population out there which are trying to get out of poverty and growing and this and that and the other.
00:27:52.720 --> 00:28:06.319
So, and they're balancing, just like the India story of balancing growth and decarbonization is critical, which is why I chose India as the course, because anything that happens in India is happening at scale, both on the upside and downside.
00:28:06.319 --> 00:28:09.039
So it's a good learning point.
00:28:09.039 --> 00:28:18.000
So we basically spent five, six, we have some classes in Boston in the fall, you know, between September and November, December, and then spent 10 days in India.
00:28:18.000 --> 00:28:22.559
And the goal is to every day we go and visit a different company.
00:28:22.559 --> 00:28:28.720
So, like we visit the steel company, we visit the largest power company, we visit a huge bunch of lots of startups.
00:28:28.720 --> 00:28:30.079
So it's a whole spectrum.
00:28:30.079 --> 00:28:42.160
It's like how are big companies like steel and power and Unilever, for example, on the plastic side, what are they doing to really reduce their carbon footprint while doubling their capacity at the same time?
00:28:42.160 --> 00:28:42.640
Right?
00:28:42.640 --> 00:28:43.759
That's the big challenge there.
00:28:43.759 --> 00:28:46.480
And how are they using technologies and business properties?
00:28:46.480 --> 00:28:49.680
The other side is what's happening on the innovation side.
00:28:49.680 --> 00:28:57.279
So, like as you know, outside of the US and maybe China, you know, India has the largest startup ecosystem in the world.
00:28:57.279 --> 00:29:00.480
And so, and a big chunk of that is around clean tech.
00:29:00.480 --> 00:29:19.359
So we go and visit companies around green hydrogen, companies that are converting methane to animal and human feed, companies that like the whole scooter EVs, like there are huge startups which are not the incumbents going from ice to EVs, but just startup EVs, innovation around battery technology.
00:29:19.359 --> 00:29:24.000
So the learnings, I think a lot of people have never even been to India before in part of this group.
00:29:24.000 --> 00:29:27.920
So one is just the that look, there is like what is that?
00:29:27.920 --> 00:29:35.119
I don't even, it's like 50% plus of the world, don't have basic access to basic power and needs.
00:29:35.119 --> 00:29:36.960
And so this is a whole different problem.
00:29:36.960 --> 00:29:40.079
So there's just that awareness that there is a whole world out there.
00:29:40.079 --> 00:29:48.720
Second, I think, is that I found that most students leave there but with a sense of optimism that this is a huge business opportunity.
00:29:48.720 --> 00:30:03.839
I mean, I think one of the key messages, which I hope your podcast listeners will take, that this climate and sustainability is always talked about as it's a risk, it's a good thing to do for the world, it's important, you know, otherwise we won't be able to breathe and all that, all important.
00:30:03.839 --> 00:30:12.000
But this is a once-in-a-lifetime generational investment opportunity and a business opportunity for people who are in their 20s.
00:30:12.000 --> 00:30:23.519
This is a 30-year horizon where the whole world is going to get rewired, just like we went from horse carriages to ice and everything got carbonized, everything is going to get decarbonized in the next 30 years.
00:30:23.519 --> 00:30:34.640
And so I think the takeaway for a lot of students, and that's what I try and emphasize both in that class as well as in the sustainable investing class, yes, this is a societal problem.
00:30:34.640 --> 00:30:36.240
Yes, there is a lot of risk.
00:30:36.240 --> 00:30:40.000
But most importantly, this is a massive opportunity.
00:30:40.000 --> 00:30:43.440
And you, as young students, shouldn't be missing out on this.
00:30:43.440 --> 00:30:44.480
You should be thinking about it.
00:30:44.480 --> 00:30:56.000
And now with AI coming in, the actual acceleration of that opportunity in terms of innovation and climate tech in a whole bunch of areas is only going to accelerate that opportunity.
00:30:56.000 --> 00:30:57.680
So I think that's the key takeaway.
00:30:58.079 --> 00:30:58.720
I get it.
00:30:58.720 --> 00:31:04.000
Um, just out of curiosity, in this course, what is the assessment uh regime you have?
00:31:04.000 --> 00:31:06.160
How do you measure what students learned?
00:31:06.160 --> 00:31:10.079
Is it related to the field trip itself or is it broader by the?
00:31:10.240 --> 00:31:14.240
Yeah, so I think it's uh it's a little broader in the sense that it's a course, right?
00:31:14.240 --> 00:31:20.319
It's a full credit class for, you know, basically to get an MBA or Harvard, you have to take 20 courses with full credit.
00:31:20.319 --> 00:31:21.599
So this is one of them.
00:31:21.599 --> 00:31:27.440
Essentially, we have each so the class is divided into teams, and each team has to do a research paper.
00:31:27.440 --> 00:31:31.519
So there's a research paper on like a hard-to-based sector.
00:31:31.519 --> 00:31:39.359
So one team works on steel, another term working on power, like how do you build out the whole renewable infrastructure, another one working on green hydrogen.
00:31:39.359 --> 00:31:42.240
So the learnings really come out of that research paper.
00:31:42.240 --> 00:31:46.240
They also have blogs and stuff, which I'm sure you've seen on LinkedIn, which we post over there.
00:31:46.240 --> 00:31:50.079
So I think is there like a more formal metric?
00:31:50.079 --> 00:31:58.960
Like I didn't know this before, and now I know this, probably not, but it comes across through the research papers and the blogs and the dialogues and the class discussions.
00:31:59.440 --> 00:31:59.759
Okay.
00:31:59.759 --> 00:32:00.720
Thank you.
00:32:00.720 --> 00:32:06.079
Now uh to have a little break, I brought along uh a game.
00:32:06.079 --> 00:32:06.480
Okay.
00:32:06.480 --> 00:32:11.680
And this is a game that I've been uh uh playing with all guests on my podcast so far.
00:32:11.680 --> 00:32:23.200
So we are now in episode 13 of uh Ready Steady Green, and I would like to bring a couple of terms or words all starting with the 13th letter of the alphabet, which is letter M.
00:32:23.200 --> 00:32:25.279
The English alphabet.
00:32:25.279 --> 00:32:36.640
And I'm curious to hear uh from you in maximum one minute what uh associations or thoughts uh come to your mind in relation to sustainability when you hear this one word or term.
00:32:36.640 --> 00:32:39.039
So uh you're ready for the challenge?
00:32:39.039 --> 00:32:43.119
So the first one is uh mitigation.
00:32:43.119 --> 00:32:48.720
And especially in the context of mitigation versus adaptation, what comes to your mind?
00:32:49.359 --> 00:32:51.200
Uh carbon capture and sequestering.
00:32:51.200 --> 00:32:56.319
That for me is like one of the biggest solutions and opportunities that exist.
00:32:56.319 --> 00:32:57.440
Okay.
00:32:57.440 --> 00:33:02.799
And do you see it coming or is it very much uh Yeah, the technology is there.
00:33:02.799 --> 00:33:06.400
Uh just like renewable technology was there 10 years ago.
00:33:06.400 --> 00:33:09.519
Uh just like battery technology is there right now.
00:33:09.519 --> 00:33:17.759
What is not there right now is that it can be produced or done at scale at a price point that makes sense, uh, economic sense.
00:33:17.759 --> 00:33:23.759
And so I think the work, and again, like I keep on going back to renewables, that's where renewables were 10 years ago.
00:33:23.759 --> 00:33:27.119
They were available, the technology existed, but they were too expensive.
00:33:27.119 --> 00:33:29.920
I think that's where carbon capture is right now.
00:33:29.920 --> 00:33:35.599
And I think there's a lot of work being done to drive down that cost because scale starts going up.
00:33:35.599 --> 00:33:40.559
And you also need carbon, what carbon capture means you capture the carbon and then you gotta pipe it.
00:33:40.559 --> 00:33:44.799
And if you're gonna sequester it, you've got to pump it back down into the earth and seal it off.
00:33:44.799 --> 00:33:49.440
And that takes a lot of public-private partnership and building out the infrastructure.
00:33:49.440 --> 00:33:51.440
So I think it'll get there.
00:33:51.440 --> 00:33:54.559
The technology is there, it's about scaling and cost curves.
00:33:55.359 --> 00:33:56.319
Okay, thank you.
00:33:56.319 --> 00:33:58.720
Uh the second one is microplastics.
00:33:58.720 --> 00:33:59.440
Yeah.
00:33:59.440 --> 00:34:01.039
Any thoughts on this one?
00:34:01.680 --> 00:34:01.920
Yeah.
00:34:01.920 --> 00:34:05.200
So microplastics are a huge problem.
00:34:05.200 --> 00:34:11.280
And I think the solutions actually that have been put in place I think don't address the problem.
00:34:11.280 --> 00:34:23.760
I mean, I this is one of those classic cases of where public-private partnerships need to work because it's a combination of infrastructure, behavioral change, incentives, carrots and sticks.
00:34:23.760 --> 00:34:28.480
And I think a lot of talk has been done around it, but I think a long way to go.
00:34:29.280 --> 00:34:29.599
Okay.
00:34:29.599 --> 00:34:37.280
And the last one I think you will be especially close to your heart, it is around market and market failures.
00:34:38.000 --> 00:34:38.480
Yeah.
00:34:38.480 --> 00:34:44.960
I think the uh market failures uh in my mind deal with uh short-termism.
00:34:44.960 --> 00:34:59.519
Companies and managements that have been thinking longer term, the market failures typically come about because they get pressured into doing short-term things which are not good for the long-term value creation for the company or its stakeholders.
00:34:59.519 --> 00:35:08.159
And I think that's a big issue around market failures of this short-termism of asset managers versus long-termism of the asset owners.
00:35:08.159 --> 00:35:22.239
Which I think draws an interesting parallel to one of the earlier discussions when there was word about uh the difference of time frames between a scientist's thinking and a politician's thinking.
00:35:22.239 --> 00:35:33.519
And there again, uh they might agree on many things, but uh the what they need to think about and by what time they need to reach somewhere is vastly different.
00:35:33.519 --> 00:35:38.480
Yeah, and I I mean, getting back to your India question, that's also a huge issue in India, right?
00:35:38.480 --> 00:35:40.000
I mean, it's a democracy.
00:35:40.000 --> 00:35:48.559
Every five years there's a there's a national election, pretty much there are 26 states that have state elections, just three or four of those state elections just finished a few weeks ago.
00:35:48.559 --> 00:35:51.760
So every there's an election going on all the time.
00:35:51.760 --> 00:36:04.000
And so people are voting with their pockets, you know, and again, no one like climate change is a collective action problem, it's a tragedy, the horizons problem, tragedy or commons problem.
00:36:04.000 --> 00:36:11.599
And so the politicians have to balance, like, I need to get voted again versus dealing with some long-term problem of climate change.
00:36:11.599 --> 00:36:12.719
So I think it's a big issue.
00:36:13.679 --> 00:36:14.639
I I get it.
00:36:14.639 --> 00:36:15.440
Thank you.
00:36:15.440 --> 00:36:20.400
And thank you for standing up for these uh uh challenges in terms of these quizzes.
00:36:20.400 --> 00:36:27.760
Now uh I would like to move on geographically and turn our attention a little bit to the US, where you are uh based and working.
00:36:27.760 --> 00:36:49.760
Again, uh I'm an outsider, and the outsider's view is that on the one hand, the current administration uh put uh a lot of uh barriers uh in front of uh uh sustainability actions, uh turning back on a number of issues starting from the Paris Agreement and going on many other areas uh related to renewable energies and so on and so on.
00:36:49.760 --> 00:37:05.119
But on the other hand, it seems there is a thriving um uh business background which is actually seeing eyeing and using on the opportunities that that exist there in the terms of renewables and sustainable business and economies in general.
00:37:05.119 --> 00:37:07.599
So, what is actually the situation now?
00:37:08.159 --> 00:37:18.800
Yeah, so I I I think that, you know, I mean, if I look at my student body as well as if I look at what's happening on the ground when talking to companies, because I spend a lot of time with companies in this area.
00:37:18.800 --> 00:37:31.599
I think the opportunity in terms of, as I said before, like if you think about this as a investment generational opportunity of changing in the next 20, 30 years, I think the companies are still very much focused on this.
00:37:31.599 --> 00:37:33.519
Uh so let me like break it up.
00:37:33.519 --> 00:37:45.199
So if I if I look at my student body, a significant portion of them are looking at startups or going and working at companies that are in some shape or form part of the energy transition.
00:37:45.199 --> 00:37:51.760
Now, whether it be in new technologies, whether it be in building out infrastructure, a whole spectrum, right?
00:37:51.760 --> 00:37:55.760
Right, from startups to massive infrastructure projects and everything in between.
00:37:55.760 --> 00:38:00.960
And I think that people see this as a really interesting business opportunity.
00:38:00.960 --> 00:38:16.719
I would also say that while, you know, there was this the act called the Inflation Reduction Act, which was passed in the previous, that that was by far one of the largest incentive systems that have been put in place by the US government, you know, since World War II.
00:38:16.719 --> 00:38:24.239
And yes, some parts of that have been taken away by this current administration because they believe that you know it doesn't, those subsidies are not justified.
00:38:24.239 --> 00:38:26.320
And you know, that's their view, and that's fine.
00:38:26.320 --> 00:38:29.599
A lot of the subsidies and incentives are very much in place.
00:38:29.599 --> 00:38:38.639
I mean, around storage, around nuclear, around carbon cap, you know, they're a significant percentage of those are very much still in place.
00:38:38.639 --> 00:38:47.599
And so I think the US, uh, you know, we're talking to companies and all that, they've they are still very much implementing the plans that they had.
00:38:47.599 --> 00:38:52.719
Again, not because they're trying to good for the world and all that, it's just because it's good for their business.
00:38:52.719 --> 00:39:06.960
So I think um, you know, while the headlines sometimes give this impression, and clearly, you know, stepping out of some of these global agreements sends a pretty strong signal to the rest of the world, that I think on the ground a lot is happening in terms of taking advantage of these opportunities.
00:39:07.360 --> 00:39:16.480
So your students actually see this as an opportunity for themselves in identifying places where they want to work and where they want to start their businesses.
00:39:16.480 --> 00:39:17.119
Is that so?
00:39:17.440 --> 00:39:18.239
Absolutely, absolutely.
00:39:18.239 --> 00:39:27.360
There are, I would say, I mean, I can't, I don't have a percentage, but I know because a lot of them come and talk to me because I they know this is my area of expertise and interest.
00:39:27.360 --> 00:39:37.599
And so I know, for example, like the first year students that I just finished teaching, you know, who then do the summer, and then this the elective course in India is an elective course in the second year.
00:39:37.599 --> 00:39:47.360
I know a few people going into the startup world, a couple are going into investing, like VC clean tech investing or PE clean tech investing, infrastructure investing.
00:39:47.360 --> 00:39:49.760
So it's from an investor lens.
00:39:49.760 --> 00:40:00.320
A lot of consulting firms have now this kind of energy transition vertical where they're advising companies on how to kind of plan for the energy transition.
00:40:00.320 --> 00:40:03.519
So a lot of people going into consulting in that area.
00:40:03.519 --> 00:40:05.440
And then on the operating side as well.
00:40:05.440 --> 00:40:05.760
Yeah.
00:40:05.760 --> 00:40:08.000
So I'm seeing it across the spectrum.
00:40:08.559 --> 00:40:09.199
I see.
00:40:09.199 --> 00:40:31.039
Now, speaking of young people and and academia, I'm curious to hear whether outside the group of students whom you meet uh on a regular basis and outside the students of your actual course, do you have any uh experience or perception about their level of climate awareness and their readiness to act on climate issues?
00:40:31.599 --> 00:40:31.840
Yeah.
00:40:31.840 --> 00:40:38.719
If I look at our generation, you know, while we talk about it, the implications for us are somewhat limited.
00:40:38.719 --> 00:40:45.840
Um I think the next generation, which is our kids, and so the students that I teach would be in that generation.
00:40:45.840 --> 00:40:51.599
I think there's a much higher realization about this issue because it'll impact them.
00:40:51.599 --> 00:41:00.159
Yes, it will, but actually the major impact of climate change as in when it ha you know comes and implicates, is going to be on their children.
00:41:00.159 --> 00:41:06.800
And I think what I found, not just outside my students, but like my kids are three of them are in that age group, right?
00:41:06.800 --> 00:41:12.800
The mid-30s to late 20s, kind of like that level of awareness is pretty high.
00:41:12.800 --> 00:41:17.920
I think they're taking more ownership of the fact that something needs to happen on this front.
00:41:17.920 --> 00:41:21.199
And then, you know, how do you actually put that in action?
00:41:21.199 --> 00:41:22.639
Like to your podcast, right?
00:41:22.639 --> 00:41:25.360
Okay, how do you take climate awareness into climate action?
00:41:25.360 --> 00:41:25.920
Exactly.
00:41:25.920 --> 00:41:28.719
And I and I think the there's a whole spectrum.
00:41:28.719 --> 00:41:52.159
I mean, there are people who are on the activist side and public policy side, but I would say the majority of the people I come across are seeing this as an opportunity and saying, okay, we have behavioral change we need to do, we need to kind of focus on public policy issues, but this is a collective action problem, and so we need to focus on what are the opportunities that come of it, whether it be on the business side, whether it be on the nonprofit side, et cetera.
00:41:52.159 --> 00:41:57.679
So I think the level of awareness is very much there, much more than it was in our generation.
00:41:57.679 --> 00:42:08.800
I just wish it were a little more cohesive because what happens is that the public discourse gets focused on the two extremes, right?
00:42:08.800 --> 00:42:15.440
So there'll be the hardcore activists who say everything should be green, shut down the oil and gas companies, blah, blah, blah.
00:42:15.440 --> 00:42:19.920
Just complete unrealistic, never gonna happen, but gets the headlines.
00:42:19.920 --> 00:42:24.639
There's the other side which says, oh, climate change is not real, nothing is happening.
00:42:24.639 --> 00:42:26.719
This is just yeah, yeah.
00:42:26.719 --> 00:42:28.159
So that's the other extreme.
00:42:28.159 --> 00:42:31.360
And those are the two extremes which get all the publicity, right?
00:42:31.360 --> 00:42:41.360
But there's a huge, like I would say, uh, if you look at the curve, like 80% of the people are in the middle, which say, yeah, it's a problem, but it's not something that can be dealt with overnight.
00:42:41.360 --> 00:42:42.719
Yes, we need oil and gas.
00:42:42.719 --> 00:42:44.639
I mean, without that, the world will come to a standstill.
00:42:44.639 --> 00:42:46.960
We can see that right now, what's happening in the Middle East.
00:42:46.960 --> 00:42:48.880
The world will come to a standstill.
00:42:48.880 --> 00:42:54.239
But we need to have a well-developed transition plan, which is a 2030 year plan.
00:42:54.239 --> 00:42:55.840
And let's think about it that way.
00:42:55.840 --> 00:43:00.559
The rational 80% that are actually doing something about it don't get the headline.
00:43:00.559 --> 00:43:02.320
It's always the two extremes.
00:43:02.320 --> 00:43:05.760
And I think that's gets lost in the PR discourse.
00:43:06.800 --> 00:43:07.440
I see.
00:43:07.440 --> 00:43:09.119
Well, yes, absolutely.
00:43:09.119 --> 00:43:18.960
Here in the UK, also you hear a lot about the extremes, especially on the on the activist and uh movement side that hits the headlines.
00:43:18.960 --> 00:43:21.920
But the big center part is quiet, and you don't know.
00:43:22.559 --> 00:43:24.239
Let me give you an exact example, right?
00:43:24.239 --> 00:43:26.079
So I advise the Canadian Pension Plan.
00:43:26.079 --> 00:43:31.760
It's a $750 billion pension plan, and they've got global investments everywhere.
00:43:31.760 --> 00:43:35.599
And they're Canadian, they're they're managing Canadian pensioners' money.
00:43:35.599 --> 00:43:47.280
And so they invest in oil and gas companies because they believe is that they can engage, they can provide long term capital as these companies transition from a very carbon-based business model to a non-carbon space.
00:43:47.280 --> 00:43:50.400
And that's their view, and that's how they're operating.
00:43:50.400 --> 00:43:54.719
And they at the same time, they're looking at decarbonizing their whole portfolio.
00:43:54.719 --> 00:43:59.840
But because of that, they'll have people standing outside their offices with placards or selling.
00:43:59.840 --> 00:44:02.000
Oil and gas, sell this, sell that.
00:44:02.000 --> 00:44:04.480
So most people get all the headlines.
00:44:05.440 --> 00:44:09.360
Yeah, but there is a genuine and valid movement, actually.
00:44:09.360 --> 00:44:11.440
Also, for example, with universities.
00:44:11.440 --> 00:44:23.840
Again, here in the UK, there are cases where uh universities are pushed to divest from oil and gas companies or anything to do with the fossil industry simply for the same conviction.
00:44:24.159 --> 00:44:26.400
Yeah, I personally disagree with that.
00:44:26.400 --> 00:44:35.199
If you can actually provide the capital, uh, first of all, you can make a strong argument that that goes against the fiduciary obligation of the investor, right?
00:44:35.199 --> 00:44:44.400
If as soon as you reduce the universe, unless and the people who have actually who are fiduciary investors who have divested of oil and gas, they use the same uh logic as tobacco.
00:44:44.400 --> 00:44:51.199
That the actual litigation risk is so high, the down there'll be stranded assets, therefore we are not investing.
00:44:51.199 --> 00:44:53.039
And that's fine if that's what they believe.
00:44:53.039 --> 00:45:01.119
But if they're not investing just because oil and gas companies create emissions, then I just think that's the wrong reason not to invest.
00:45:01.119 --> 00:45:02.800
My view, anyway.
00:45:03.199 --> 00:45:03.519
Okay.
00:45:03.519 --> 00:45:09.199
Now, in the last few minutes that we have left, I'm really curious to hear a little bit about the future.
00:45:09.199 --> 00:45:17.920
And it's not that I'm asking you to tell what the future brings, but I'm interested in your personal plans or some exciting project that you have in mind.
00:45:17.920 --> 00:45:24.079
Is there perhaps uh another course in the pipeline that you are planning, or where do you want to take it from here?
00:45:24.400 --> 00:45:24.559
Yeah.
00:45:24.559 --> 00:45:50.320
So I think uh the one of the key courses and work we're doing, you know, ultimately, if you think about, if you zoom out, this solution or the solution to these problems around sustainability, like has been in any problem in the past, ultimately is about creating new technologies which can be adopted at scale and that makes economic sense.
00:45:50.320 --> 00:46:05.840
And clean tech has got its own issues because, unlike other investments, it's about investing in new technologies, but also being able to scale them before those technologies are actually proven in terms of building the manufacturing capabilities and et cetera.
00:46:05.840 --> 00:46:15.119
And so I think a lot of my work and some of the new courses really be about tough tech investing in new technologies, whether at the early stage, later stage.
00:46:15.119 --> 00:46:18.880
The other big one is infrastructure build out around AI.
00:46:18.880 --> 00:46:29.840
You know, so two years ago, we weren't even talking about AI, but the fact is that like aggregate emissions in Europe and the US have been coming down the last two years.
00:46:29.840 --> 00:46:47.840
You know, I fear that with AI, and it's gonna happen, that a lot of the AI data centers are being fired up by gas and others, and because again, the renewable technology does not work 24 by 7 in terms of reliable energy, that tend is going to reverse.
00:46:47.840 --> 00:47:00.320
And so my hope is that investments in technologies that can result in data centers being fired up by renewables, whether it be nuclear, renewables, other forms of cleaner energy, kind of accelerates.
00:47:00.320 --> 00:47:03.920
So that's a lot of the exciting work that I see happening in the next five years.
00:47:04.239 --> 00:47:04.880
All right.
00:47:04.880 --> 00:47:06.880
Well, thank you very much.
00:47:06.880 --> 00:47:09.360
This has been a very inspiring discussion.
00:47:09.360 --> 00:47:15.679
I really appreciate your thought and our uh travel around the world, including uh India and the US.
00:47:15.679 --> 00:47:21.679
And I wish you uh all the best uh for your endeavors with your students and with your projects.
00:47:22.159 --> 00:47:23.280
Thank you so much, Gabor.
00:47:23.280 --> 00:47:25.599
Thanks for hosting the show and thanks for having me on it.
00:47:25.599 --> 00:47:27.360
This is terrific that you're doing this.
00:47:27.599 --> 00:47:28.079
Thank you.
00:47:28.079 --> 00:47:31.199
And thank you everyone for listening to our podcast today.
00:47:31.199 --> 00:47:37.920
If you liked it, make sure to follow us on your favorite podcast platform, share it with your friends, and invite others to listen.
00:47:37.920 --> 00:47:41.920
You can also listen to our earlier episodes and feel free to send me a message.
00:47:41.920 --> 00:47:44.400
Who would you like me to invite next?
00:47:44.400 --> 00:47:46.639
Help us get the message through.
00:47:46.639 --> 00:47:49.039
We all need to act on sustainability now.
00:47:49.039 --> 00:47:52.719
This was Gabo Taros with Ready, Steady, Green.
00:47:52.719 --> 00:47:53.760
Bye for now.
00:00:14.720 --> 00:00:45.679
The key thing that I kind of realized very quickly after leaving is that if I wanted to address all the things that you said right at the start of the podcast in terms of sustainability, make it sustainable, inequality, all the other kind of societal issues that exist in this world, while you can't do it through philanthropy and government spending, unless we bring in private capital at scale to address those issues, in my view anyway, that those issues will not actually get addressed in the way they should be, in a way long-term and sustainable way.
00:00:45.679 --> 00:00:55.359
Like what does sustainability mean?
00:00:55.359 --> 00:01:09.599
Sustainability means that you're focusing on the three or four key sustainable metrics which matter for your business, which are going to create long-term value in terms of upside and minimize long-term downside risk.
00:01:09.599 --> 00:01:28.079
If I look at my student body, a significant portion of them are looking at startups or going and looking at companies that are in some shape or form part of the energy transition.
00:01:28.079 --> 00:01:34.640
Now, whether it be in new technologies, whether it be in building out infrastructure, a whole spectrum, right?
00:01:34.640 --> 00:01:38.879
From startups to massive infrastructure projects and everything in between.
00:01:38.879 --> 00:01:56.959
This climate and sustainability is always talked about as it's a risk, it's a good thing to do for the world, it's important, you know, otherwise we won't be able to breathe and all that.
00:01:56.959 --> 00:01:58.000
All important.
00:01:58.000 --> 00:02:06.480
But this is a once-in-a-lifetime generational investment opportunity and a business opportunity for people who are in their 20s.
00:02:13.280 --> 00:02:16.479
Welcome to the latest episode of Ready Steady Green.
00:02:16.479 --> 00:02:22.319
In this podcast, we're discussing challenges and opportunities of turning climate awareness to climate action.
00:02:22.319 --> 00:02:25.520
In other words, making sustainability sustainable.
00:02:25.520 --> 00:02:30.000
This is not intended to be a specialist podcast of sustainability experts.
00:02:30.000 --> 00:02:49.039
Instead, it aims to broaden the discourse and help everyone realize how closely topics such as sustainability, climate, health, quality of life, equality of chances, innovation, technological development, prosperity of business, mindset change are all connected.
00:02:49.039 --> 00:02:56.319
The episodes from Ready Steady Green aim to inspire everyone to step up and step out in their lives and in their communities.
00:02:56.319 --> 00:03:02.879
Make sure to follow us on your favorite podcast platform, share it with your friends, and invite others to listen.
00:03:02.879 --> 00:03:06.879
You can also listen to our earlier episodes and feel free to send me a message.
00:03:06.879 --> 00:03:11.520
Who would you like to invite as our next guest for the show?
00:03:11.520 --> 00:03:16.479
Our guest for today is Vikram Gandhi, a professor at the Harvard Business School.
00:03:16.479 --> 00:03:24.560
Vikram is an investment banker with extensive experience in the international market and an interest in public policy and philanthropy.
00:03:24.560 --> 00:03:29.919
At the Harvard Business School, he teaches in the MBA and executive education programs.
00:03:29.919 --> 00:03:40.240
He has developed two elective courses in the MBA program Sustainable Investing and Development while decarbonizing India's path to net zero.
00:03:40.240 --> 00:03:49.280
He advises the public, private, and social sectors to bring institutional high net worth and development capital to India and Asia.
00:03:49.280 --> 00:03:56.159
Also, he is actively involved in impact investing as a professor, investor, and policy advocate.
00:03:56.159 --> 00:03:58.479
Welcome to the show, Vikram.
00:03:58.479 --> 00:04:04.560
Already, steady, and green is something close to my heart.
00:04:04.560 --> 00:04:06.560
So I look forward to this conversation.
00:04:06.560 --> 00:04:07.599
Thank you.
00:04:07.599 --> 00:04:08.719
That's very kind of you.
00:04:08.719 --> 00:04:12.400
Did I perhaps miss something important in the introduction to you?
00:04:12.960 --> 00:04:14.400
No, I I think you covered it well.
00:04:14.400 --> 00:04:26.240
I I would just add that you know I also have an impact fund called Asha Ventures, which invests in early stage um both sustainability and impact-oriented uh companies.
00:04:26.240 --> 00:04:31.360
But otherwise, I think a combination of teaching, investing, and advising is what I do.
00:04:31.839 --> 00:04:33.680
Okay, so I did my homework.
00:04:33.680 --> 00:04:36.000
Now it's no secret now.
00:04:36.000 --> 00:04:40.000
It's no secret that we have known each other for very many uh years.
00:04:40.000 --> 00:04:50.399
And I remember after university when I followed your career, it was definitely in the field of investment banking and finances and the practical business-oriented world.
00:04:50.399 --> 00:05:01.040
In a nutshell, what makes someone being successful in those fields then later on make a significant turn in their life and move towards academia?
00:05:01.360 --> 00:05:10.079
I spent 25 years in investment banking, as you mentioned, uh around the world, uh largely in the US and then a little bit in Hong Kong and India as well.
00:05:10.079 --> 00:05:21.279
Um and I the, you know, the skills that you develop during that period of time are the typical business skills of running businesses, growing businesses, dealing with capital allocation, dealing with human resource issues.
00:05:21.279 --> 00:05:31.759
And so the skill set, if you think if you uh think about it that way, that was built was essentially building sustainable businesses and making good investments and developing uh human capital.
00:05:31.759 --> 00:05:33.199
So those are the three things.
00:05:33.199 --> 00:05:39.680
And so when I decided uh after 25 years, this is about 14 years ago, to leave investment banking.
00:05:39.680 --> 00:05:48.000
I had a very successful and very fulfilling career, but that's at that point I'd just turned 50 and I said, well, okay, I need to do something different now.
00:05:48.000 --> 00:05:51.360
I've done banking for, as I said, nearly 25 years.
00:05:51.360 --> 00:05:55.680
And I started that after I graduated and did my MBA at the Harvard Business School.
00:05:55.680 --> 00:05:58.319
So I'm an alum there in addition to being professor.
00:05:58.319 --> 00:06:30.000
The key thing that I kind of realized very quickly after leaving is that if I wanted to address all the things that you said right at the start of the podcast in terms of sustainability, make it sustainable, inequality, all the other kind of societal issues that exist in this world, while you can't do it through philanthropy and government spending, unless we bring in private capital at scale to address those issues, in my view, anyway, that those issues will not actually get addressed in the way they should be, and in a way long-term and sustainable way.
00:06:30.000 --> 00:06:41.920
So that's how I essentially said, Well, I'm going to take the skills I learned in my career and apply them in a business for-profit setting to solve important problems.
00:06:41.920 --> 00:06:44.000
And that's when I set up an impact fund.
00:06:44.000 --> 00:06:52.319
I really had no vision of being a professor or anything, but I was spending time at the Harvard Business School because my daughter was doing her MBA there.
00:06:52.319 --> 00:06:59.439
And so I started talking to some of the faculty members there on sustainability issues and whether you know there were things in the curriculum.
00:06:59.439 --> 00:07:08.720
And before you know it, I teamed up with a finance professor and we wrote 25 new Harvard Business School cases and launched a course, and now I've been teaching there for 10 years in a variety of ways.
00:07:08.720 --> 00:07:26.399
So I think the key thing is that, and I'll stop there, is the key thing is that at the business school, at least at Harvard and some other business schools as well, about a third of our faculty are like me, are like practitioners who are who bring, have worked, kind of had careers, and then come and teach the MBAs.
00:07:26.399 --> 00:07:32.480
And where the MBAs get benefited is that we're bringing our practical experience to the classroom discussion.
00:07:32.879 --> 00:07:33.199
Okay.
00:07:33.199 --> 00:07:35.040
Well, thank you for this insight.
00:07:35.040 --> 00:07:51.279
And I'm not saying it's very far from my journey or my experience when moving from running my own business into academia and helping young people uh benefit from all of those things that I did rightly or wrongly at the stage.
00:07:51.279 --> 00:07:54.800
But uh work with young people, I think that is that is essential.
00:07:54.800 --> 00:08:02.000
Now, one of the things that I note is that I read a lot of literature about the importance of responsible investment.
00:08:02.000 --> 00:08:07.439
Everyone agrees and everyone uh claims that how important it is and that they are doing so.
00:08:07.439 --> 00:08:16.160
However, when I myself try to help someone in their investment decision, not that I am qualified to do that, but they were just interested in my views.
00:08:16.160 --> 00:08:28.800
I found it was very difficult to get actual uh credible information and 100% bulletproof information and confirmation whether investment is uh sustainable or not.
00:08:28.800 --> 00:08:31.199
Uh what could be the guide points here?
00:08:31.199 --> 00:08:37.200
So I I think the first thing is like what does do people actually mean by a sustainable investment?
00:08:37.200 --> 00:08:41.840
And I mean that itself is such a wide, it's subject to so much interpretation.
00:08:41.840 --> 00:08:44.480
Like, what is sustainable actually even mean?
00:08:44.879 --> 00:08:50.399
The way I think about it is that you know you have basically got two pools of capital in this world.
00:08:50.399 --> 00:09:03.120
One pool of capital is what I call fiduciary capital, which is the majority of capital in this world, which is and I'm talking about the private side, private capital, is essentially that needs to earn its commercial rate of return.
00:09:03.120 --> 00:09:13.120
So, for example, pension plans, insurance companies, family offices, the asset owners, I would say, the people who actually ultimately own the money.
00:09:13.120 --> 00:09:16.240
And sovereign wealth funds would also fall into that category.
00:09:16.240 --> 00:09:25.360
And so their kind of mission is to earn a fiduciary return, which is that they can't sacrifice the returns in the name of public good and social return and all that.
00:09:25.360 --> 00:09:26.960
So there, so that's one.
00:09:26.960 --> 00:09:43.120
The other pool of capital is where you know you have more values, could have values-based investing, which is that for achieving a certain societal goal, I'm willing to sacrifice some return, uh, but I want to have a measured impact.
00:09:43.120 --> 00:09:46.879
And so there are family offices and some sovereign wealth funds, et cetera, fallen.
00:09:46.879 --> 00:09:49.759
And even governments actually are starting to do that.
00:09:49.759 --> 00:10:09.679
So I think when I think about sustainable investing, is where those investors, particularly the fiduciary kind, are intentional about the fact that in addition to the financial return, which is very important, they've identified two or three key criteria of impact of sustainability, whether it be climate change, inequality.
00:10:09.679 --> 00:10:14.159
I mean, you know, there's a whole slew of ESG kind of metrics.
00:10:14.159 --> 00:10:22.559
But they've been pretty intentional about the fact that they are going to measure those metrics in addition to financial metrics.
00:10:22.559 --> 00:10:42.639
And so I think that's where in my mind, when investors are looking at sustainable investing, is to really look at, well, in addition to the financials, how are these companies or these funds or whatever the ETFs where that you might be investing and, you know, how are they actually measuring the impact having and are they intentional about it?
00:10:42.639 --> 00:10:45.519
I mean, that's I think is the key difference to think about.
00:10:46.480 --> 00:10:59.759
So if I follow this well, would this mean that you believe that it is possible to actually match sustainability goals with profit motives or profit expectations?
00:11:00.639 --> 00:11:01.120
Absolutely.
00:11:01.120 --> 00:11:12.879
So in the public markets, it's actually been shown over multiple periods of time because they're so that let's again break down the kind of universe of capital into publicly traded companies and private.
00:11:12.879 --> 00:11:31.279
So in the public creative, because there has been a lot of data, you know, it's been shown that, and we have a lot of research that we've we can point to, where if companies focus on the three or four ESG things that actually matter to them, which are material to their business, that they outperform.
00:11:31.279 --> 00:11:36.080
And so for I mean, it's kind of if you think about it, it actually is makes logical sense, right?
00:11:36.080 --> 00:11:39.840
So there are about six, seven hundred different ESG factors.
00:11:39.840 --> 00:11:42.960
But for every company, those six, seven hundred don't matter, right?
00:11:42.960 --> 00:11:49.120
So for what, for an oil and gas company, the the ESG matter, you know, the carbon emissions and all will be very important.
00:11:49.120 --> 00:11:52.720
For a consulting company, human capital management, et cetera, will be very important.
00:11:52.720 --> 00:11:53.039
Right.
00:11:53.039 --> 00:11:57.919
For a manufacturing company, supply chain kind of quality will be very important.
00:11:57.919 --> 00:12:07.919
So if you actually look at the company, there'll typically be four or five ESG metrics which are core to the business and if done correctly, help the business perform better.
00:12:07.919 --> 00:12:13.679
And so, you know, that's where I think the difference comes because that's why I started off with like what does sustainability mean?
00:12:13.679 --> 00:12:27.519
Sustainability means that you're focusing on the three or four key sustainable metrics which matter for your business, which are going to create long-term value in terms of upside and minimize long-term downside risk.
00:12:27.519 --> 00:12:29.279
I mean, those are the two things.
00:12:29.279 --> 00:12:41.039
And so there's enough evidence that investing in companies which focus on those rights, it's like saying, for me to grow the business, I focus on my customer, I'll focus on my margins, I'll focus on my distribution.
00:12:41.039 --> 00:12:43.360
The core things of a business model.
00:12:43.360 --> 00:12:45.360
ESG is very much part of that.
00:12:45.360 --> 00:13:11.200
If you think about it, there's been actually a four, and the research that I'm pointing to, it shows like over a 30-year period, a 6% per year, per year differential in returns of companies that focus on material ESG factors, report them, monitor them, have core part of their metrics, versus other companies that either don't focus on it or focus on ESG in such a broad way that is actually not impacting the business, and it's more what I would call greenwashing.
00:13:11.200 --> 00:13:21.519
And the private side, there are now lots of funds, you know, in major PE firms like TPG and Blackstone and BlackRock and others that have set up impact funds.
00:13:21.519 --> 00:13:26.639
They're on the second or third fund, they're very intentional about impact and sustainability.
00:13:26.639 --> 00:13:29.600
But all this has happened only in the last five, ten years.
00:13:29.600 --> 00:13:40.000
And so while there is anecdotal evidence that you don't need to sacrifice returns to have a good impact, I think we need a little more time to actually establish that as a fact.
00:13:40.000 --> 00:13:51.120
What comes to my mind is in the way you explain this, it's really convincing, and clearly a six percent difference is a very convincing factor in itself.
00:13:51.120 --> 00:14:03.039
So if it is so clear that one can achieve a significantly higher margin, how come it is not more investment funds or companies or investors who go on that route?
00:14:03.039 --> 00:14:25.519
Yeah, so I think the challenge, quite honestly, is that focusing on those factors, like for example, if I am now remodeling my business because I think climate risk is a big risk, and so therefore I need to like modify my supply chains, my manufacturing process, my distribution process, because over time climate risk becomes more and more risk, and you know, you try and get ahead of the regulation.
00:14:25.519 --> 00:14:29.360
Before regulation hits you, you know, you can try to get ahead of the curve.
00:14:29.360 --> 00:14:37.440
Or alternatively, that there are some really fabulous opportunities out there which you miss because you haven't really thought about sustainability as a business opportunity.
00:14:37.440 --> 00:14:43.039
The thing is that those are kind of medium to long-term kind of investments.
00:14:43.039 --> 00:14:52.320
So if you're going to make an investment in your business model change to deal with climate risk, it takes three, four, five years for it to materialize before you get the returns.
00:14:52.320 --> 00:15:03.759
And so the big conundrum, I think, partly, is that asset owners, and that's why I mentioned asset owners at the start of the podcast, they typically have they're multi-generational.
00:15:03.759 --> 00:15:05.840
You know, they have a 20, 30 year time horizon.
00:15:05.840 --> 00:15:11.120
You know, when they talk about quarter, they're not talking about 90 days, they're talking about 25 years.
00:15:11.120 --> 00:15:11.440
Right.
00:15:11.440 --> 00:15:18.320
So because they pension liabilities, like in UK or Hungary or US, the pension liabilities are over 25, 40 years.
00:15:18.320 --> 00:15:20.159
I advise the Canadian pension plan.
00:15:20.159 --> 00:15:23.759
They they have an actual evaluation of 70 years.
00:15:23.759 --> 00:15:30.399
And so they're thinking long-term, and climate risk and opportunity is a real long-term issue for them.
00:15:30.399 --> 00:15:41.679
Unfortunately, or I don't know, just reality is that a lot of their investments are done directly, which then they can work with the companies on long-term plans and think about how long-term investments are needed.
00:15:41.679 --> 00:15:48.320
But a lot of the investments are done through asset managers who have a relatively shorter time period.
00:15:48.320 --> 00:16:06.720
So there's a huge difference between the motivation and focus of an asset owner who has a 25-year time horizon, an asset manager who has a one or two-year time horizon because that's how their incentive systems work, or even a PE fund has a five, seven-year time horizon, a typical hold period of three or four years.
00:16:06.720 --> 00:16:10.960
So climate risk and opportunity is not going to take fold in two, three years, right?
00:16:10.960 --> 00:16:12.159
It's a longer period.
00:16:12.159 --> 00:16:25.120
So that's where the conundrum comes in, where the asset managers who are more short-term oriented are like pushing companies to kind of generate profitability in the shorter term and not necessarily invest for the longer term.
00:16:25.120 --> 00:16:27.759
And that's where the tension comes in.
00:16:27.759 --> 00:16:35.200
So I think the way that's being dealt with right now, actually, is because a lot of the investors in these funds are long-term investors.
00:16:35.200 --> 00:16:43.759
They're really pushing the asset managers that, hey, this is a real thing, and you need to kind of focus and make sure managements that you invest in are focused on it as well.
00:16:44.320 --> 00:16:44.639
Okay.
00:16:44.639 --> 00:16:45.919
And much clearer now.
00:16:45.919 --> 00:16:46.480
Thank you.
00:16:46.480 --> 00:16:48.399
One last question on this topic.
00:16:48.399 --> 00:16:54.080
Speaking to some of uh our earlier guests, there seem to be two groups of people.
00:16:54.080 --> 00:17:01.120
One who said that for an organization, for a company to be sustainable, it is primarily a technological issue.
00:17:01.120 --> 00:17:07.599
It is adapting the uh appropriate uh metrics, systems, uh supply chain, and so on and so on.
00:17:07.599 --> 00:17:15.200
The other group of a couple of people, they still claim that it's uh primarily a management issue where the human factor is essential.
00:17:15.200 --> 00:17:22.880
So whether the management and the people who work there, do they have the correct mindset to uh build a sustainable path?
00:17:22.880 --> 00:17:24.319
Which one would you go for?
00:17:24.880 --> 00:17:26.400
I think it's much more the latter.
00:17:26.400 --> 00:17:35.359
I mean, I I think the technology piece, if you if people put their mind to it, and because again, technology investments and returns are a longer time horizon, right?
00:17:35.359 --> 00:17:36.799
They don't happen overnight.
00:17:36.799 --> 00:17:40.079
And that gets back to my earlier point about business model changes.
00:17:40.079 --> 00:17:42.720
Essentially, it's an investment in new technologies.
00:17:42.720 --> 00:17:46.240
And so I think it's more a mindset issue.
00:17:46.240 --> 00:17:55.440
And the mindset issue, I think the companies, again, who have outperformed the last 25, 30 years that I referred to before, have a mindset of a longer-term mindset.
00:17:55.440 --> 00:18:06.720
Again, I think that even in the US, like you know, where I teach, the fiduciary obligation that the board and and the management have is not just to shareholders, it's to the company as a whole.
00:18:06.720 --> 00:18:13.680
And that's the company's long-term sustainability is a core part of their legal responsibility as board members and managements.
00:18:13.680 --> 00:18:21.279
And so I think the companies are the ones that actually have that kind of mindset, are the ones who are performed.
00:18:21.279 --> 00:18:33.359
So I think the mindset is more important because once the mindset is there, it leads to capital allocation for new technologies, it leads to patient kind of monitoring of those new technologies and better execution.
00:18:33.759 --> 00:18:34.240
All right.
00:18:34.240 --> 00:18:36.319
Thank you for casting your vote here.
00:18:36.319 --> 00:18:49.519
Now, in the next couple of uh minutes, I would like to turn our attention a little bit to India, your uh home country and a country with which you keep regular contacts, professional, personal, uh business contacts.
00:18:49.519 --> 00:18:53.759
So uh when I read about India these days, uh usually two things come up.
00:18:53.759 --> 00:19:07.359
One is that clearly it is uh turning uh to become one of the uh economic powerhouses of the world, uh rising rapidly on the rank of countries in terms of their overall GDPs and any other factor.
00:19:07.359 --> 00:19:19.839
But at the same time, I read uh quite a lot around sustainability challenges in terms of the countries facing coming from the population, coming from the energy and industry structure, and so on.
00:19:19.839 --> 00:19:26.480
What is your perception of today's India and the future of India in sustainability terms?
00:19:26.880 --> 00:19:27.359
Yeah.
00:19:27.359 --> 00:19:39.119
I think this is a real challenge in India, and that's part of the reason why you developed this new course, which you referred to at the introduction of development while decarbonizing India's path to net zero.
00:19:39.119 --> 00:19:42.160
And let me just give you maybe a minute of context here.
00:19:42.160 --> 00:19:48.400
So India is this year will become the third largest economy in the world after the US and China.
00:19:48.400 --> 00:19:52.480
Now, the gap between the US and China and the third economy is very large.
00:19:52.480 --> 00:19:59.279
So it's very comparable right now in the size to the UK and uh Germany and Japan and all that, but it's going to be third.
00:19:59.279 --> 00:20:03.200
More importantly, is the is the largest, large growth economy.
00:20:03.200 --> 00:20:05.759
I mean, it's growing at 7-8% a year.
00:20:05.759 --> 00:20:19.599
And so the implications of that are that everything that kind of so-called pollutes, let's just focus on sustainability factor, everything that pollutes power is about a third of India's carbon emission.
00:20:19.599 --> 00:20:25.279
Hard to abate sectors like steel and cement are about 25% of the carbon emission.
00:20:25.279 --> 00:20:31.119
Agriculture is another 20-25%, rice particularly, and cattle, right?
00:20:31.119 --> 00:20:32.000
Huge.
00:20:32.000 --> 00:20:35.440
Uh, and then mobility uh and real estate.
00:20:35.440 --> 00:20:37.920
I mean, if you add all those up, it's nearly 90%.
00:20:37.920 --> 00:20:59.519
All those essentially, because of the growth of the 8% on a population base of 1.45 billion, uh, and not growth in population, but growth in GDP, and therefore the growth GDP per capita, is that the demand for all those things is expected to go 4x or more in the next 20 years.
00:20:59.519 --> 00:21:20.319
And so if India carries on in this path of growth with that kind of emission trajectory, it's gonna be a real disaster because the actual negative impacts on climate change in a place like India are gonna be far worse than what will happen in Europe or the US or the OECD generally, just because the infrastructure to deal with it and the money to deal with it is not there.
00:21:20.319 --> 00:21:24.960
There's a massive recognition that this is a problem and that needs to be dealt with.
00:21:24.960 --> 00:21:35.359
And so balancing this growth with a decarbonization or what I call how do you achieve low emission growth is like a key agenda item.
00:21:35.359 --> 00:21:41.359
So I'll give you one example of a success and how that potentially can be replicated going forward.
00:21:41.359 --> 00:21:43.359
And the success really would be renewables.
00:21:43.359 --> 00:21:47.680
Ten years, twelve years ago, renewables were not a thing in India.
00:21:47.680 --> 00:21:53.119
Today they are fifty percent of the energy capacity in India.
00:21:53.119 --> 00:21:54.000
Fifty percent.
00:21:54.000 --> 00:21:55.920
Fifty, five oh five zero.
00:21:55.920 --> 00:21:56.720
Five zero.
00:21:56.720 --> 00:21:58.559
Oh my god, yeah.
00:21:58.559 --> 00:22:06.400
But that's Capacity, but the actual generation from renewables is only 25% of the total.
00:22:06.400 --> 00:22:08.960
And so let's talk about those two things.
00:22:08.960 --> 00:22:23.200
The reason it got to 50% is because of the incentive systems put in by the government 10 years ago in terms of providing subsidies, one, and now taking them away while the cost curve of installing solar and wind kind of started coming down.
00:22:23.200 --> 00:22:35.200
Two was they mandated, because they are obviously a huge consumer of power, they mandated the private sector that X percent of energy being put into the grid had to be renewable.
00:22:35.200 --> 00:22:38.799
So they've forced the private sector to do it through regulation.
00:22:38.799 --> 00:22:46.799
And then the third is they've created enough of a risk-sharing mechanism that renewable producers would actually invest in that.
00:22:46.799 --> 00:22:53.440
So as a result, it's gone from literally zero or nothing to in like 10, 12 years ago to 50% today.
00:22:53.440 --> 00:23:05.599
The reason why the capacity is 50, but the generation is 25 is because storage technologies don't exist to actually have 24 by 7 seamless power.
00:23:05.599 --> 00:23:12.480
So the baseload factor is still coming from either coal or oil gas fired plants.
00:23:12.480 --> 00:23:17.839
And so therefore, investing in technologies, grid-level technologies around storage is a key issue.
00:23:17.839 --> 00:23:19.440
And that's happening big scale in India.
00:23:19.440 --> 00:23:35.039
Because once you get there, and it's happened globally, by the way, like in the US, if people talk about Texas and oil and gas state and this and that, if Texas were a country today, it would have the fifth largest installed capacity of renewables in the world.
00:23:35.039 --> 00:23:35.680
Right?
00:23:35.680 --> 00:23:48.319
It's basically China is by far number one, India uh US number two, Germany number three, India number four, and Texas number five.
00:23:48.319 --> 00:23:49.759
Who who would have told that?
00:23:49.759 --> 00:23:51.359
I I I wouldn't have no.
00:23:51.359 --> 00:23:52.160
Yeah, yeah.
00:23:52.160 --> 00:23:55.680
I mean, Texas is like this, you know, oil and gas state, and this and that.
00:23:55.680 --> 00:24:00.000
It's like it's got so much sun and wind that renewables make a hell of a lot of sense over there.
00:24:00.000 --> 00:24:00.960
So they have them.
00:24:00.960 --> 00:24:01.359
Right.
00:24:01.359 --> 00:24:04.799
But they don't have storage or they don't have enough grid.
00:24:04.799 --> 00:24:09.599
So I think technology innovation, getting back to the India thing, that's a big, big issue.
00:24:09.599 --> 00:24:15.839
And now they're trying to replicate the same thing in cement, in steel, in EVs.
00:24:15.839 --> 00:24:30.720
And I think the what's going on in the Middle East right now is actually, again, been a real massive wake-up call about energy security, you know, because India is like hugely dependent on oil imports, and mainly a lot of it coming from the Gulf and coming from Russia.
00:24:30.720 --> 00:24:40.480
And so they've basically now I think the acceleration of not just renewables, but geothermal, hydro.
00:24:40.480 --> 00:24:47.119
There's a big talk about nuclear, like really pushing the country in that direction will accelerate.
00:24:47.119 --> 00:24:53.759
So it's a challenge because you know, at the same time, you've got to have growth in terms of GDP per capita, get people out of poverty.
00:24:53.759 --> 00:24:56.319
And so there, but there are lots of interventions.
00:24:56.319 --> 00:25:05.440
There's the power side on the steel side, you know, JS, the steel companies are very focused on reducing intensity of steel emission, right?
00:25:05.440 --> 00:25:08.720
Bringing down the CO2 per ton of steel produced.
00:25:08.720 --> 00:25:16.000
But if your capacity is doubling, so I have a you know with the largest steel company is part of my course, we go and see all their steel plants and all that.
00:25:16.000 --> 00:25:19.359
But their capacity is doubling in the next five years.
00:25:19.359 --> 00:25:26.240
Even if they drive down the emissions per unit of production, if their capacity is doubling, their aggregate emissions are only gone up.
00:25:26.240 --> 00:25:26.640
Right.
00:25:26.640 --> 00:25:28.240
So this is a huge challenge.
00:25:28.240 --> 00:25:32.880
But but I think what's important is that it's recognized as a challenge and being dealt with it.
00:25:33.519 --> 00:25:39.440
And in your experience, how do Indian businesses uh relate to this challenge of sustainability?
00:25:39.440 --> 00:25:47.200
Do they see this as an obligation which is enforced on them, or is it rather a business opportunity, or is it a mixed bag?
00:25:47.440 --> 00:25:48.720
I think I think it's a mixed bag.
00:25:48.720 --> 00:25:50.319
I think there are a whole spectrum.
00:25:50.319 --> 00:26:00.160
I mean, some people just are totally oblivious of it and just don't care because once regulation, which it will happen, comes and they're not prepared for it, I think they'll be in trouble.
00:26:00.160 --> 00:26:15.839
But I would say that the ones that are more, again, getting back to your management mindset, who think a longer term, understand what the implications are, not just from a risk and regulation standpoint, but an opportunity standpoint, are the ones which you know are getting ahead of the curve.
00:26:15.839 --> 00:26:17.920
And it's being reflected in stock prices too.
00:26:17.920 --> 00:26:31.599
I mean, the Indian market has gone through a rough time here in the last three months, but largely because partly due to the Middle East uh war and therefore the oil imports, uh the oil prices rocketing up, gas not available, this, that, and the other.
00:26:31.599 --> 00:26:35.599
So it's had a big impact on foreign cash outflows and things.
00:26:35.599 --> 00:26:46.000
But I think the companies that are actually focused on sustainability, while they may have near-term earnings kind of depression, their P multiples are actually higher.
00:26:46.000 --> 00:26:53.039
Because a company, you know, investors recognize that these are the companies that are thinking longer term, both in terms of opportunity and risk.
00:26:53.039 --> 00:26:55.119
So it's it's a kind of a mixed bag right now.
00:26:55.519 --> 00:26:56.079
I see.
00:26:56.079 --> 00:26:58.559
Now, one last question to India.
00:26:58.559 --> 00:27:05.359
I know that as part of your course, you do bring uh your students on a field trip to India.
00:27:05.359 --> 00:27:10.559
And I'm wondering, talking to them, what is your impression?
00:27:10.559 --> 00:27:13.759
What is the impact these visits are making?
00:27:13.759 --> 00:27:15.119
What is it that they learn?
00:27:15.119 --> 00:27:16.960
What is it that surprises them?
00:27:16.960 --> 00:27:20.400
How does it contribute to the learning curve of your students?
00:27:20.799 --> 00:27:23.599
So maybe a minute on just why this course even came about.
00:27:23.599 --> 00:27:30.240
So I've been quite involved with a lot of the climate-related things at Harvard University across not just the business school, but across the university in various ways.
00:27:30.240 --> 00:27:41.440
And I have found about three, four years ago, that most of the discourse is around like what's happening in the OECD, right, in terms of climate change and impact of climate change, or what should we do about it.
00:27:41.440 --> 00:27:52.720
And not a lot, talking about the fact that you know there's a whole huge percentage of the world's population out there which are trying to get out of poverty and growing and this and that and the other.
00:27:52.720 --> 00:28:06.319
So, and they're balancing, just like the India story of balancing growth and decarbonization is critical, which is why I chose India as the course, because anything that happens in India is happening at scale, both on the upside and downside.
00:28:06.319 --> 00:28:09.039
So it's a good learning point.
00:28:09.039 --> 00:28:18.000
So we basically spent five, six, we have some classes in Boston in the fall, you know, between September and November, December, and then spent 10 days in India.
00:28:18.000 --> 00:28:22.559
And the goal is to every day we go and visit a different company.
00:28:22.559 --> 00:28:28.720
So, like we visit the steel company, we visit the largest power company, we visit a huge bunch of lots of startups.
00:28:28.720 --> 00:28:30.079
So it's a whole spectrum.
00:28:30.079 --> 00:28:42.160
It's like how are big companies like steel and power and Unilever, for example, on the plastic side, what are they doing to really reduce their carbon footprint while doubling their capacity at the same time?
00:28:42.160 --> 00:28:42.640
Right?
00:28:42.640 --> 00:28:43.759
That's the big challenge there.
00:28:43.759 --> 00:28:46.480
And how are they using technologies and business properties?
00:28:46.480 --> 00:28:49.680
The other side is what's happening on the innovation side.
00:28:49.680 --> 00:28:57.279
So, like as you know, outside of the US and maybe China, you know, India has the largest startup ecosystem in the world.
00:28:57.279 --> 00:29:00.480
And so, and a big chunk of that is around clean tech.
00:29:00.480 --> 00:29:19.359
So we go and visit companies around green hydrogen, companies that are converting methane to animal and human feed, companies that like the whole scooter EVs, like there are huge startups which are not the incumbents going from ice to EVs, but just startup EVs, innovation around battery technology.
00:29:19.359 --> 00:29:24.000
So the learnings, I think a lot of people have never even been to India before in part of this group.
00:29:24.000 --> 00:29:27.920
So one is just the that look, there is like what is that?
00:29:27.920 --> 00:29:35.119
I don't even, it's like 50% plus of the world, don't have basic access to basic power and needs.
00:29:35.119 --> 00:29:36.960
And so this is a whole different problem.
00:29:36.960 --> 00:29:40.079
So there's just that awareness that there is a whole world out there.
00:29:40.079 --> 00:29:48.720
Second, I think, is that I found that most students leave there but with a sense of optimism that this is a huge business opportunity.
00:29:48.720 --> 00:30:03.839
I mean, I think one of the key messages, which I hope your podcast listeners will take, that this climate and sustainability is always talked about as it's a risk, it's a good thing to do for the world, it's important, you know, otherwise we won't be able to breathe and all that, all important.
00:30:03.839 --> 00:30:12.000
But this is a once-in-a-lifetime generational investment opportunity and a business opportunity for people who are in their 20s.
00:30:12.000 --> 00:30:23.519
This is a 30-year horizon where the whole world is going to get rewired, just like we went from horse carriages to ice and everything got carbonized, everything is going to get decarbonized in the next 30 years.
00:30:23.519 --> 00:30:34.640
And so I think the takeaway for a lot of students, and that's what I try and emphasize both in that class as well as in the sustainable investing class, yes, this is a societal problem.
00:30:34.640 --> 00:30:36.240
Yes, there is a lot of risk.
00:30:36.240 --> 00:30:40.000
But most importantly, this is a massive opportunity.
00:30:40.000 --> 00:30:43.440
And you, as young students, shouldn't be missing out on this.
00:30:43.440 --> 00:30:44.480
You should be thinking about it.
00:30:44.480 --> 00:30:56.000
And now with AI coming in, the actual acceleration of that opportunity in terms of innovation and climate tech in a whole bunch of areas is only going to accelerate that opportunity.
00:30:56.000 --> 00:30:57.680
So I think that's the key takeaway.
00:30:58.079 --> 00:30:58.720
I get it.
00:30:58.720 --> 00:31:04.000
Um, just out of curiosity, in this course, what is the assessment uh regime you have?
00:31:04.000 --> 00:31:06.160
How do you measure what students learned?
00:31:06.160 --> 00:31:10.079
Is it related to the field trip itself or is it broader by the?
00:31:10.240 --> 00:31:14.240
Yeah, so I think it's uh it's a little broader in the sense that it's a course, right?
00:31:14.240 --> 00:31:20.319
It's a full credit class for, you know, basically to get an MBA or Harvard, you have to take 20 courses with full credit.
00:31:20.319 --> 00:31:21.599
So this is one of them.
00:31:21.599 --> 00:31:27.440
Essentially, we have each so the class is divided into teams, and each team has to do a research paper.
00:31:27.440 --> 00:31:31.519
So there's a research paper on like a hard-to-based sector.
00:31:31.519 --> 00:31:39.359
So one team works on steel, another term working on power, like how do you build out the whole renewable infrastructure, another one working on green hydrogen.
00:31:39.359 --> 00:31:42.240
So the learnings really come out of that research paper.
00:31:42.240 --> 00:31:46.240
They also have blogs and stuff, which I'm sure you've seen on LinkedIn, which we post over there.
00:31:46.240 --> 00:31:50.079
So I think is there like a more formal metric?
00:31:50.079 --> 00:31:58.960
Like I didn't know this before, and now I know this, probably not, but it comes across through the research papers and the blogs and the dialogues and the class discussions.
00:31:59.440 --> 00:31:59.759
Okay.
00:31:59.759 --> 00:32:00.720
Thank you.
00:32:00.720 --> 00:32:06.079
Now uh to have a little break, I brought along uh a game.
00:32:06.079 --> 00:32:06.480
Okay.
00:32:06.480 --> 00:32:11.680
And this is a game that I've been uh uh playing with all guests on my podcast so far.
00:32:11.680 --> 00:32:23.200
So we are now in episode 13 of uh Ready Steady Green, and I would like to bring a couple of terms or words all starting with the 13th letter of the alphabet, which is letter M.
00:32:23.200 --> 00:32:25.279
The English alphabet.
00:32:25.279 --> 00:32:36.640
And I'm curious to hear uh from you in maximum one minute what uh associations or thoughts uh come to your mind in relation to sustainability when you hear this one word or term.
00:32:36.640 --> 00:32:39.039
So uh you're ready for the challenge?
00:32:39.039 --> 00:32:43.119
So the first one is uh mitigation.
00:32:43.119 --> 00:32:48.720
And especially in the context of mitigation versus adaptation, what comes to your mind?
00:32:49.359 --> 00:32:51.200
Uh carbon capture and sequestering.
00:32:51.200 --> 00:32:56.319
That for me is like one of the biggest solutions and opportunities that exist.
00:32:56.319 --> 00:32:57.440
Okay.
00:32:57.440 --> 00:33:02.799
And do you see it coming or is it very much uh Yeah, the technology is there.
00:33:02.799 --> 00:33:06.400
Uh just like renewable technology was there 10 years ago.
00:33:06.400 --> 00:33:09.519
Uh just like battery technology is there right now.
00:33:09.519 --> 00:33:17.759
What is not there right now is that it can be produced or done at scale at a price point that makes sense, uh, economic sense.
00:33:17.759 --> 00:33:23.759
And so I think the work, and again, like I keep on going back to renewables, that's where renewables were 10 years ago.
00:33:23.759 --> 00:33:27.119
They were available, the technology existed, but they were too expensive.
00:33:27.119 --> 00:33:29.920
I think that's where carbon capture is right now.
00:33:29.920 --> 00:33:35.599
And I think there's a lot of work being done to drive down that cost because scale starts going up.
00:33:35.599 --> 00:33:40.559
And you also need carbon, what carbon capture means you capture the carbon and then you gotta pipe it.
00:33:40.559 --> 00:33:44.799
And if you're gonna sequester it, you've got to pump it back down into the earth and seal it off.
00:33:44.799 --> 00:33:49.440
And that takes a lot of public-private partnership and building out the infrastructure.
00:33:49.440 --> 00:33:51.440
So I think it'll get there.
00:33:51.440 --> 00:33:54.559
The technology is there, it's about scaling and cost curves.
00:33:55.359 --> 00:33:56.319
Okay, thank you.
00:33:56.319 --> 00:33:58.720
Uh the second one is microplastics.
00:33:58.720 --> 00:33:59.440
Yeah.
00:33:59.440 --> 00:34:01.039
Any thoughts on this one?
00:34:01.680 --> 00:34:01.920
Yeah.
00:34:01.920 --> 00:34:05.200
So microplastics are a huge problem.
00:34:05.200 --> 00:34:11.280
And I think the solutions actually that have been put in place I think don't address the problem.
00:34:11.280 --> 00:34:23.760
I mean, I this is one of those classic cases of where public-private partnerships need to work because it's a combination of infrastructure, behavioral change, incentives, carrots and sticks.
00:34:23.760 --> 00:34:28.480
And I think a lot of talk has been done around it, but I think a long way to go.
00:34:29.280 --> 00:34:29.599
Okay.
00:34:29.599 --> 00:34:37.280
And the last one I think you will be especially close to your heart, it is around market and market failures.
00:34:38.000 --> 00:34:38.480
Yeah.
00:34:38.480 --> 00:34:44.960
I think the uh market failures uh in my mind deal with uh short-termism.
00:34:44.960 --> 00:34:59.519
Companies and managements that have been thinking longer term, the market failures typically come about because they get pressured into doing short-term things which are not good for the long-term value creation for the company or its stakeholders.
00:34:59.519 --> 00:35:08.159
And I think that's a big issue around market failures of this short-termism of asset managers versus long-termism of the asset owners.
00:35:08.159 --> 00:35:22.239
Which I think draws an interesting parallel to one of the earlier discussions when there was word about uh the difference of time frames between a scientist's thinking and a politician's thinking.
00:35:22.239 --> 00:35:33.519
And there again, uh they might agree on many things, but uh the what they need to think about and by what time they need to reach somewhere is vastly different.
00:35:33.519 --> 00:35:38.480
Yeah, and I I mean, getting back to your India question, that's also a huge issue in India, right?
00:35:38.480 --> 00:35:40.000
I mean, it's a democracy.
00:35:40.000 --> 00:35:48.559
Every five years there's a there's a national election, pretty much there are 26 states that have state elections, just three or four of those state elections just finished a few weeks ago.
00:35:48.559 --> 00:35:51.760
So every there's an election going on all the time.
00:35:51.760 --> 00:36:04.000
And so people are voting with their pockets, you know, and again, no one like climate change is a collective action problem, it's a tragedy, the horizons problem, tragedy or commons problem.
00:36:04.000 --> 00:36:11.599
And so the politicians have to balance, like, I need to get voted again versus dealing with some long-term problem of climate change.
00:36:11.599 --> 00:36:12.719
So I think it's a big issue.
00:36:13.679 --> 00:36:14.639
I I get it.
00:36:14.639 --> 00:36:15.440
Thank you.
00:36:15.440 --> 00:36:20.400
And thank you for standing up for these uh uh challenges in terms of these quizzes.
00:36:20.400 --> 00:36:27.760
Now uh I would like to move on geographically and turn our attention a little bit to the US, where you are uh based and working.
00:36:27.760 --> 00:36:49.760
Again, uh I'm an outsider, and the outsider's view is that on the one hand, the current administration uh put uh a lot of uh barriers uh in front of uh uh sustainability actions, uh turning back on a number of issues starting from the Paris Agreement and going on many other areas uh related to renewable energies and so on and so on.
00:36:49.760 --> 00:37:05.119
But on the other hand, it seems there is a thriving um uh business background which is actually seeing eyeing and using on the opportunities that that exist there in the terms of renewables and sustainable business and economies in general.
00:37:05.119 --> 00:37:07.599
So, what is actually the situation now?
00:37:08.159 --> 00:37:18.800
Yeah, so I I I think that, you know, I mean, if I look at my student body as well as if I look at what's happening on the ground when talking to companies, because I spend a lot of time with companies in this area.
00:37:18.800 --> 00:37:31.599
I think the opportunity in terms of, as I said before, like if you think about this as a investment generational opportunity of changing in the next 20, 30 years, I think the companies are still very much focused on this.
00:37:31.599 --> 00:37:33.519
Uh so let me like break it up.
00:37:33.519 --> 00:37:45.199
So if I if I look at my student body, a significant portion of them are looking at startups or going and working at companies that are in some shape or form part of the energy transition.
00:37:45.199 --> 00:37:51.760
Now, whether it be in new technologies, whether it be in building out infrastructure, a whole spectrum, right?
00:37:51.760 --> 00:37:55.760
Right, from startups to massive infrastructure projects and everything in between.
00:37:55.760 --> 00:38:00.960
And I think that people see this as a really interesting business opportunity.
00:38:00.960 --> 00:38:16.719
I would also say that while, you know, there was this the act called the Inflation Reduction Act, which was passed in the previous, that that was by far one of the largest incentive systems that have been put in place by the US government, you know, since World War II.
00:38:16.719 --> 00:38:24.239
And yes, some parts of that have been taken away by this current administration because they believe that you know it doesn't, those subsidies are not justified.
00:38:24.239 --> 00:38:26.320
And you know, that's their view, and that's fine.
00:38:26.320 --> 00:38:29.599
A lot of the subsidies and incentives are very much in place.
00:38:29.599 --> 00:38:38.639
I mean, around storage, around nuclear, around carbon cap, you know, they're a significant percentage of those are very much still in place.
00:38:38.639 --> 00:38:47.599
And so I think the US, uh, you know, we're talking to companies and all that, they've they are still very much implementing the plans that they had.
00:38:47.599 --> 00:38:52.719
Again, not because they're trying to good for the world and all that, it's just because it's good for their business.
00:38:52.719 --> 00:39:06.960
So I think um, you know, while the headlines sometimes give this impression, and clearly, you know, stepping out of some of these global agreements sends a pretty strong signal to the rest of the world, that I think on the ground a lot is happening in terms of taking advantage of these opportunities.
00:39:07.360 --> 00:39:16.480
So your students actually see this as an opportunity for themselves in identifying places where they want to work and where they want to start their businesses.
00:39:16.480 --> 00:39:17.119
Is that so?
00:39:17.440 --> 00:39:18.239
Absolutely, absolutely.
00:39:18.239 --> 00:39:27.360
There are, I would say, I mean, I can't, I don't have a percentage, but I know because a lot of them come and talk to me because I they know this is my area of expertise and interest.
00:39:27.360 --> 00:39:37.599
And so I know, for example, like the first year students that I just finished teaching, you know, who then do the summer, and then this the elective course in India is an elective course in the second year.
00:39:37.599 --> 00:39:47.360
I know a few people going into the startup world, a couple are going into investing, like VC clean tech investing or PE clean tech investing, infrastructure investing.
00:39:47.360 --> 00:39:49.760
So it's from an investor lens.
00:39:49.760 --> 00:40:00.320
A lot of consulting firms have now this kind of energy transition vertical where they're advising companies on how to kind of plan for the energy transition.
00:40:00.320 --> 00:40:03.519
So a lot of people going into consulting in that area.
00:40:03.519 --> 00:40:05.440
And then on the operating side as well.
00:40:05.440 --> 00:40:05.760
Yeah.
00:40:05.760 --> 00:40:08.000
So I'm seeing it across the spectrum.
00:40:08.559 --> 00:40:09.199
I see.
00:40:09.199 --> 00:40:31.039
Now, speaking of young people and and academia, I'm curious to hear whether outside the group of students whom you meet uh on a regular basis and outside the students of your actual course, do you have any uh experience or perception about their level of climate awareness and their readiness to act on climate issues?
00:40:31.599 --> 00:40:31.840
Yeah.
00:40:31.840 --> 00:40:38.719
If I look at our generation, you know, while we talk about it, the implications for us are somewhat limited.
00:40:38.719 --> 00:40:45.840
Um I think the next generation, which is our kids, and so the students that I teach would be in that generation.
00:40:45.840 --> 00:40:51.599
I think there's a much higher realization about this issue because it'll impact them.
00:40:51.599 --> 00:41:00.159
Yes, it will, but actually the major impact of climate change as in when it ha you know comes and implicates, is going to be on their children.
00:41:00.159 --> 00:41:06.800
And I think what I found, not just outside my students, but like my kids are three of them are in that age group, right?
00:41:06.800 --> 00:41:12.800
The mid-30s to late 20s, kind of like that level of awareness is pretty high.
00:41:12.800 --> 00:41:17.920
I think they're taking more ownership of the fact that something needs to happen on this front.
00:41:17.920 --> 00:41:21.199
And then, you know, how do you actually put that in action?
00:41:21.199 --> 00:41:22.639
Like to your podcast, right?
00:41:22.639 --> 00:41:25.360
Okay, how do you take climate awareness into climate action?
00:41:25.360 --> 00:41:25.920
Exactly.
00:41:25.920 --> 00:41:28.719
And I and I think the there's a whole spectrum.
00:41:28.719 --> 00:41:52.159
I mean, there are people who are on the activist side and public policy side, but I would say the majority of the people I come across are seeing this as an opportunity and saying, okay, we have behavioral change we need to do, we need to kind of focus on public policy issues, but this is a collective action problem, and so we need to focus on what are the opportunities that come of it, whether it be on the business side, whether it be on the nonprofit side, et cetera.
00:41:52.159 --> 00:41:57.679
So I think the level of awareness is very much there, much more than it was in our generation.
00:41:57.679 --> 00:42:08.800
I just wish it were a little more cohesive because what happens is that the public discourse gets focused on the two extremes, right?
00:42:08.800 --> 00:42:15.440
So there'll be the hardcore activists who say everything should be green, shut down the oil and gas companies, blah, blah, blah.
00:42:15.440 --> 00:42:19.920
Just complete unrealistic, never gonna happen, but gets the headlines.
00:42:19.920 --> 00:42:24.639
There's the other side which says, oh, climate change is not real, nothing is happening.
00:42:24.639 --> 00:42:26.719
This is just yeah, yeah.
00:42:26.719 --> 00:42:28.159
So that's the other extreme.
00:42:28.159 --> 00:42:31.360
And those are the two extremes which get all the publicity, right?
00:42:31.360 --> 00:42:41.360
But there's a huge, like I would say, uh, if you look at the curve, like 80% of the people are in the middle, which say, yeah, it's a problem, but it's not something that can be dealt with overnight.
00:42:41.360 --> 00:42:42.719
Yes, we need oil and gas.
00:42:42.719 --> 00:42:44.639
I mean, without that, the world will come to a standstill.
00:42:44.639 --> 00:42:46.960
We can see that right now, what's happening in the Middle East.
00:42:46.960 --> 00:42:48.880
The world will come to a standstill.
00:42:48.880 --> 00:42:54.239
But we need to have a well-developed transition plan, which is a 2030 year plan.
00:42:54.239 --> 00:42:55.840
And let's think about it that way.
00:42:55.840 --> 00:43:00.559
The rational 80% that are actually doing something about it don't get the headline.
00:43:00.559 --> 00:43:02.320
It's always the two extremes.
00:43:02.320 --> 00:43:05.760
And I think that's gets lost in the PR discourse.
00:43:06.800 --> 00:43:07.440
I see.
00:43:07.440 --> 00:43:09.119
Well, yes, absolutely.
00:43:09.119 --> 00:43:18.960
Here in the UK, also you hear a lot about the extremes, especially on the on the activist and uh movement side that hits the headlines.
00:43:18.960 --> 00:43:21.920
But the big center part is quiet, and you don't know.
00:43:22.559 --> 00:43:24.239
Let me give you an exact example, right?
00:43:24.239 --> 00:43:26.079
So I advise the Canadian Pension Plan.
00:43:26.079 --> 00:43:31.760
It's a $750 billion pension plan, and they've got global investments everywhere.
00:43:31.760 --> 00:43:35.599
And they're Canadian, they're they're managing Canadian pensioners' money.
00:43:35.599 --> 00:43:47.280
And so they invest in oil and gas companies because they believe is that they can engage, they can provide long term capital as these companies transition from a very carbon-based business model to a non-carbon space.
00:43:47.280 --> 00:43:50.400
And that's their view, and that's how they're operating.
00:43:50.400 --> 00:43:54.719
And they at the same time, they're looking at decarbonizing their whole portfolio.
00:43:54.719 --> 00:43:59.840
But because of that, they'll have people standing outside their offices with placards or selling.
00:43:59.840 --> 00:44:02.000
Oil and gas, sell this, sell that.
00:44:02.000 --> 00:44:04.480
So most people get all the headlines.
00:44:05.440 --> 00:44:09.360
Yeah, but there is a genuine and valid movement, actually.
00:44:09.360 --> 00:44:11.440
Also, for example, with universities.
00:44:11.440 --> 00:44:23.840
Again, here in the UK, there are cases where uh universities are pushed to divest from oil and gas companies or anything to do with the fossil industry simply for the same conviction.
00:44:24.159 --> 00:44:26.400
Yeah, I personally disagree with that.
00:44:26.400 --> 00:44:35.199
If you can actually provide the capital, uh, first of all, you can make a strong argument that that goes against the fiduciary obligation of the investor, right?
00:44:35.199 --> 00:44:44.400
If as soon as you reduce the universe, unless and the people who have actually who are fiduciary investors who have divested of oil and gas, they use the same uh logic as tobacco.
00:44:44.400 --> 00:44:51.199
That the actual litigation risk is so high, the down there'll be stranded assets, therefore we are not investing.
00:44:51.199 --> 00:44:53.039
And that's fine if that's what they believe.
00:44:53.039 --> 00:45:01.119
But if they're not investing just because oil and gas companies create emissions, then I just think that's the wrong reason not to invest.
00:45:01.119 --> 00:45:02.800
My view, anyway.
00:45:03.199 --> 00:45:03.519
Okay.
00:45:03.519 --> 00:45:09.199
Now, in the last few minutes that we have left, I'm really curious to hear a little bit about the future.
00:45:09.199 --> 00:45:17.920
And it's not that I'm asking you to tell what the future brings, but I'm interested in your personal plans or some exciting project that you have in mind.
00:45:17.920 --> 00:45:24.079
Is there perhaps uh another course in the pipeline that you are planning, or where do you want to take it from here?
00:45:24.400 --> 00:45:24.559
Yeah.
00:45:24.559 --> 00:45:50.320
So I think uh the one of the key courses and work we're doing, you know, ultimately, if you think about, if you zoom out, this solution or the solution to these problems around sustainability, like has been in any problem in the past, ultimately is about creating new technologies which can be adopted at scale and that makes economic sense.
00:45:50.320 --> 00:46:05.840
And clean tech has got its own issues because, unlike other investments, it's about investing in new technologies, but also being able to scale them before those technologies are actually proven in terms of building the manufacturing capabilities and et cetera.
00:46:05.840 --> 00:46:15.119
And so I think a lot of my work and some of the new courses really be about tough tech investing in new technologies, whether at the early stage, later stage.
00:46:15.119 --> 00:46:18.880
The other big one is infrastructure build out around AI.
00:46:18.880 --> 00:46:29.840
You know, so two years ago, we weren't even talking about AI, but the fact is that like aggregate emissions in Europe and the US have been coming down the last two years.
00:46:29.840 --> 00:46:47.840
You know, I fear that with AI, and it's gonna happen, that a lot of the AI data centers are being fired up by gas and others, and because again, the renewable technology does not work 24 by 7 in terms of reliable energy, that tend is going to reverse.
00:46:47.840 --> 00:47:00.320
And so my hope is that investments in technologies that can result in data centers being fired up by renewables, whether it be nuclear, renewables, other forms of cleaner energy, kind of accelerates.
00:47:00.320 --> 00:47:03.920
So that's a lot of the exciting work that I see happening in the next five years.
00:47:04.239 --> 00:47:04.880
All right.
00:47:04.880 --> 00:47:06.880
Well, thank you very much.
00:47:06.880 --> 00:47:09.360
This has been a very inspiring discussion.
00:47:09.360 --> 00:47:15.679
I really appreciate your thought and our uh travel around the world, including uh India and the US.
00:47:15.679 --> 00:47:21.679
And I wish you uh all the best uh for your endeavors with your students and with your projects.
00:47:22.159 --> 00:47:23.280
Thank you so much, Gabor.
00:47:23.280 --> 00:47:25.599
Thanks for hosting the show and thanks for having me on it.
00:47:25.599 --> 00:47:27.360
This is terrific that you're doing this.
00:47:27.599 --> 00:47:28.079
Thank you.
00:47:28.079 --> 00:47:31.199
And thank you everyone for listening to our podcast today.
00:47:31.199 --> 00:47:37.920
If you liked it, make sure to follow us on your favorite podcast platform, share it with your friends, and invite others to listen.
00:47:37.920 --> 00:47:41.920
You can also listen to our earlier episodes and feel free to send me a message.
00:47:41.920 --> 00:47:44.400
Who would you like me to invite next?
00:47:44.400 --> 00:47:46.639
Help us get the message through.
00:47:46.639 --> 00:47:49.039
We all need to act on sustainability now.
00:47:49.039 --> 00:47:52.719
This was Gabo Taros with Ready, Steady, Green.
00:47:52.719 --> 00:47:53.760
Bye for now.
