Net Zero and the decarbonisation path for South Africa | ESG Conference

Speaker 0:
Hello and welcome to this session on the E s G virtual conference on the Net zero and the Decarbonisation path for South Africa. I'm joined today by Rob Leinen, head of responsible investing at the Old Mutual Investment Group. Roberta Bar fund manager and head of Value Team E S G at Schroders, as well as Makabe, portfolio manager and deputy chief investment officer at PERPETUA Investment Managers.

Speaker 0:
Welcome to you all.

Speaker 0:
So, Roberta, I'm gonna kick off with you. Should decarbonisation efforts not be focused on the highest carbon emitting countries and their transition to a net zero future?

Speaker 0:
I thank you, Thank you. And it's, you know, great. Great to join you. Um, today. So I definitely understand. Um, what you're saying, uh, from that decarbonisation focus. Um, question, um, but I actually I think I think in reality is going to take more of a global effort for the world to transition to net zero. So

Speaker 0:
we're gonna need global technologies, and that's going to absolutely need global investment across a huge range of different companies and different different countries. So just maybe, for a few examples of the sort of sort of other companies which we're going to really heavily rely on something like Panasonic. You might not instantly

Speaker 0:
think of them as a sort of key company when it comes to a Net zero transition, but actually they hold around 10% of the patents out there for clean tech. So actually, they're a crucial company when it comes to the innovation required for other companies to transition their businesses to net zero.

Speaker 0:
Or maybe just for another example, something like Bridgestone. So the tyre manufacturer, well, you know, 30% of emissions from cars come from the microplastics when the tyres are friction with roads and actually what Bridgestone are doing in terms of looking for different materials that they can use in their tyres which aren't so polluting. And also keeping in mind that as we move to more electric vehicles, they're heavier cars. So there are there are more microplastics that come out.

Speaker 0:
Actually, sort of making sure that we have those responsibly made tyres is going to be so important. So you might not always think of these other companies which are going to need to get involved, uh, for a net zero transition, but they're certainly certainly crucial to that journey. So I think I I probably agree on the physical access point. And I certainly see that point of, you know, needing those investments regionally. Certainly. Um, especially for a just transition.

Speaker 0:
In reality, I think it's gonna take a lot more than that. And it's gonna take a a global effort of innovation and transition.

Speaker 0:
I may I add to that, though I just talk about the sense of, uh, a fair share of of this global effort because it is important to recognise the differences in regions in in in countries, in abilities in technology,

Speaker 0:
uh, and access to to, uh, to infrastructure to allow this the this transition to take place. But I fully support Roberta's view that it's a global effort and that we should all be doing something no matter what. Uh, our circumstances are on the ground, uh, recognising, uh, of course, the keen realities that we face

Speaker 0:
Absolutely So. South Africa is also a signatory to the Paris Agreement to limit global warming to below 1.5 degrees Celsius by 2050 but then again, for South Africa as such a fossil, fuel dependent country, and that's heavily reliant on industrial activity is the South African decarbonisation targets realistic. Lubo considering the context of our economy

Speaker 1:
Yeah, I think that's, uh and good morning, too. I think that's a great question. I mean, I, you know, to to some degree, um, Eskom contributes about half of our emissions. Um, you know, so so, to the extent that, for example, they do, um decarbonise. And, you know, we, um as we as we replace the electricity grid, um, with green energy, it'll have a significant impact on our certainly on on on our emissions.

Speaker 1:
Um, and and in fact, you could actually argue that it's something that's necessary. We all know that s r um capacity is effectively running at around 60% at at best. So, you know, um, technically, um, you know, it's something that actually is already, um, in in progress, but I I think just to put it into context, it's quite a it's It's significant work that needs to be done. I mean, sort of South Africa, the automotive industry account,

Speaker 1:
or 6% of GDP. So traditionally internal combustion engine. So and and it would be fair to say that we are behind the global tiers in terms of, um, new. Um, um, vehicles and and new vehicle, um, technology. Um, it's about half half a million jobs, um, in in that sector,

Speaker 1:
Um, you know, so that will be impacted. And you have to think about the coal coal mining sector. Um, it's actually not as many jobs as as one in bank. It's about 90,000. Um, jobs. That would also be, um, impacted there. Um, and then you also have to think about the petro petrochemicals value chain. Um, so so it also includes a and that accounts for about 12% of our emissions. Um, and that's probably another half a million, um, jobs, Um, you know, that, um, would need would need replacing. So

Speaker 1:
I mean, I I think the you know, I'm not saying I guess that, you know, there won't be opportunities to to grow into. So, for example, something like green energy, you know, could be a potential, um, significant benefit for for South Africa. Um, you know, particularly when one considers the the platinum metals,

Speaker 1:
um, but also bear in mind, there's an opportunity cost there, you know? So the, um particularly if the internal combustion engine loses market share and taking the the P G MS that go into, you know into vehicles will also decline, you know, So there's an opportunity cost there. So, yes, there's opportunities. But we must also bear in mind the opportunity, um, cost. So I think that for me, the net impact of this I think when you consider how,

Speaker 1:
how significant the changes that need to take place in South Africa, particularly as a relatively more carbon reliant economy. Um, you know, we we've basically got to replace our electricity grid, which is no. So so for me, the point is that when we negotiate, you know, with our international partners for, you know, on funding and kind of plans, I think we need to take into account, um, the the particularly onerous environment that South Africa finds itself in.

Speaker 1:
Absolutely.

Speaker 0:
Rob. It seems as though South Africa faces a lot of short term electricity security, um, challenges. But now how do we reach the net zero goal by 2050 while balancing electricity security in the country without rapidly Decommissioning, um, our local power plants.

Speaker 0:
So it's a difficult balance, but I would say that it's it's one that we know to look at in terms of who the users are of our of our energy.

Speaker 0:
And when you look at who the main users are, it's in our heavy industries and in our industrial complexes that that many of the our scope, what we call scope two emissions arise. Now a lot of those companies in the in in all kinds of industries, um, are starting to self generate. There's been a lot of policy development to allow for the head room for these companies to, uh, generate their own sources of energy.

Speaker 0:
For me, it's what's What's concerning is more around the social side, uh, for South Africans in general, it's not so much the fact that, you know, as perhaps Eskom becomes less relevant in our in our huge, uh, industrial complexes as they as they producing their own New York energy. What's in what's more concerning from my perspective, is that for the people on the ground now we've we've seen say, for example, uh

Speaker 0:
uh releasing, um burdens or strictures around the amount of C 02, or or emissions or or or atmospheric emissions that that our coal power plants, uh you know, produce. By doing so, we are actually going to create significant and and further exacerbate the health challenges for communities in and around those power plants and in some cases, many, uh, many many miles away.

Speaker 0:
So we we are seeing that there's a there's a social tradeoff for us to try and for keeping our and extending the life of our coal fired power plants. And for us that that that is something that that we need to recognise and accept, that that's that's just that that that can lead to

Speaker 0:
exacerbation of our social framework of social fabric, our healthcare systems and everything else that is linked directly linked to the output that those coal power plants are producing.

Speaker 0:
So whilst we may solve and may be able to solve a short term need, we may in in in in the end of the day create in a long term social problem as a result of that. So for me, it's it's it's not a it's not fixing the the for the short term that that we need to look at more, um,

Speaker 0:
integrated solutions to to to get off our appetite for coal while at the same time securing the the the energy supply. The good news, of course, is that renewables as they come on the grid, they are have a much shorter timeline. So there's been big talk, of course, about additional energy gas, et cetera, as baseload feed stocks.

Speaker 0:
But these things take very long time. They've got very long tenure, and our immediate needs are kind of now, as we know, given that we, uh, have going through bouts of bloodshed as we speak.

Speaker 0:
So, um, you know, the my thoughts are that we need We need to, uh, adopt a more, more pragmatic approach that simply allowing, uh, the the the, uh, extension of life coal-fired power stations, as well as additional emissions being produced as a result of short term is, is very short term and will create some significant long term social ills. Absolutely. Thank you, Rob.

Speaker 0:
So Roberta Roberts mentioned Scope two emissions. Now between the three emissions are scopes of emissions. There's a scope 12 and three. What's the difference between the three and what are the emissions that companies are targeting to reduce?

Speaker 0:
And it is a good question because I think you know, scope 12 and three are often just used. Um, and some people know exactly what that is. Some people that you know make guesses it means different things to different people. But I think sort of the the formal definition is scope one, uh, emissions that come directly from your company. So, for example, if you've got a fleet of cars in your company, those are the emissions from those cars. So it's very much emissions that you're in control of that are coming from your sort of physical assets of the company

Speaker 0:
scope two emissions come from the emissions, um, from the energy that you use in the company. So, for example, if you've got an office that uses a lot of electricity, your scope two emissions are the emissions that were created when producing that energy that you're using.

Speaker 0:
So it's scope one and two are generally the the two scopes that companies mainly focus on in their in their net zero transmission plans because, you know, ultimately, those are the two scopes that they've got most control of. And I mean, they're not easy to measure, but they're certainly a lot easier than scope three and scope three is basically all of the emissions, which aren't sort of owned or controlled by a company but are sort of, uh, indirectly the company is indirectly responsible for

Speaker 0:
so that can be upstream or downstream. It can be, you know, the emissions produced when, um, suppliers are delivering, you know, materials to a manufacturing company. Or if you're an auto company, it's the emissions that are produced when when customers are driving cars that you've you've produced.

Speaker 0:
So obviously that's a a hugely challenging, um, thing for companies to begin to measure and even more challenging for companies to begin to. You know, try and control and try and influence. You know, a lot of companies

Speaker 0:
historically haven't, you know, told suppliers, you know the intricacies of how they want their operations to run. It's not really been seen as their business, whereas sort of increasingly, it is becoming part of your business as your Net zero transition plan. So I think sort of overall scripts one and two are the the sort of must have for a company in this transition plan. Group three is increasingly important,

Speaker 0:
um, for companies to have but also sort of measuring that in a robust way is gonna take it. Gonna take longer time?

Speaker 0:
Absolutely. Thank you very much. Chloe and I just wanted to highlight this point because I think we we need to unpack it a bit more in terms of what it means around the scope Three in the both the supply chain and in the ultimate in use of products. We know that for certain companies, for example, most of their emissions actually, in some cases for extractive industries or extractive industry mining companies, about 90% or more of emissions are in the scope. Three bucket.

Speaker 0:
Um, now what that means from, uh, a a supply chain perspective is, if you picture that What What that means for South African government?

Speaker 0:
Um, you know, if if 90% of the emissions are in that in that range and they are supplying the world with the with P g MS with the raw materials that are going to be required for the greens transition,

Speaker 0:
there's gonna be a great demand on those companies to decarbonise and think about their scope three emissions in terms of because that's gonna have knock on effects for the manufacturing and other industries that are using those raw materials. So we already seen, uh, a a carbon gate at in in the EU around, uh, the heavy manufactured industries like steel, etcetera, etcetera. And I think we're gonna see more of that as as more and more,

Speaker 0:
um, countries are increased and certainly in the developed market, increase their manufacturing capacity in in the in the transition, finance and transition materials. I think we we're gonna be It's another sort of, uh, reason for us to focus very carefully on how we, um, manufacture and how we store and use our our raw materials, Uh, that we have as well as the abundant natural resources that we have.

Speaker 0:
So that's something that I think is very important for and hasn't been given enough thought in terms of in the South African market. Absolutely. Thank you.

Speaker 0:
Simon Wabo. You've mentioned that South Africa's two largest emitters, namely Eskom and Sasol and then followed by the extracted industries that rob is referred to in the mining space such as Glen Coin South 32. What would be the unintended consequences of decarbonising? Um, these companies, um, emissions?

Speaker 0:
Yeah, I think I

Speaker 1:
mean, you know, just to some degree it, you know, it is an existential risk. Um, you know, if you if one was to consider, actually, probably all those companies, um, you know, So what you're seeing,

Speaker 1:
uh, you know, it just, you know, obviously, the companies have, um, line of sight, you know, in terms of what's coming. Um, regulation wise as well. As you know, um, just the environment in terms of improving their impact.

Speaker 1:
Um, so they're also taking steps, you know? So it's not entirely, um, you know, out of out of their control. I mean, I I'd probably say the first one is is naturally trying to achieve the 2030 targets, you know, and cutting emissions by some 30 odd odd percent, which I'd say the companies are are largely on track, you know, to to achieving them. Um, obviously, the the early stage is really just putting plans together, and then it's a more difficult stage now comes to to execution.

Speaker 1:
Um, now there are interesting things that take place. So, for example, we know that coal has made an offer for tech resources, and and part of what they're thinking is, they wanna grow into what would be the green metals? So it will increase cos exposure, you know, to to green metals. Um, but then ultimately, what they'll end up doing is they'll un bundle the business if the transaction goes through.

Speaker 1:
Now, you know, maybe this is one of the unintended consequences. Is that, um, yes. M coal manages to divest itself of the, um, you know, coal emissions, particularly this coal three. As as mentioned. Um, but actually, it still is a problem for society is that demand doesn't go away. Um, you know, so, um, we not quickly,

Speaker 1:
um, you know, So that's, uh I'll probably say that's one of the unintended consequences. And then, you know, for I mean so obviously, as I was trying to grow into renewable energy, Um, so that will be quite key for them, Um, over the next coming years, Um, in in terms of how much of their, um, energy needs can be met from solar when first, what used to be, um, you know, coming from, um, from Eskom. And it would seem, you know, they recently had a bid or an announced a bid. And,

Speaker 1:
you know, um uh, I have made steps in terms of getting some 800 megawatts from renewable energy there. So they have also taken the, um the the the right steps. Um, but it is still most successful. You know, they being a petrochemical, that they're still quite exposed. Even if they reduce their, you know, the initial consumption by some emissions, at least by some. Good,

Speaker 1:
um, that. And so really the the key for them will be being able to Then how how can they use their technology to use even less carbon in future? So, for example, a company like so they're pretty agnostic whether they use, um, gas or carbon or rather coal,

Speaker 1:
you know, So to the degree that they can access more gas, then they can actually substitute that from from, um, carbon dioxide emissions. Now there is. I think there's probably, you know, I I'd say some scientific guidance that's still required here in terms of the impact of gas. Um, versus um, this carbon. There are obviously concerns around methane, and you know what is the impact and and I guess

Speaker 1:
probably globally or something that just needs to to have a bit more direction. Um, I can see that the many of the large, um, oil companies globally have pretty much put their foot down on gas. And l n g um, you know, um, so to the degree that that's, you know, this, um, scientifically correct, then it actually could be a life changer for C o. Um, particularly when you consider that,

Speaker 1:
you know, in in on, in the southern, um, tip of Africa, there's actually been gas fines pretty much all around, you know, the the coastline. So I'd probably say we South Africa, is a country that, you know, obviously guided by science. We've got a decision to make on really double down, Um,

Speaker 1:
you know, on on on those investments. So I guess if I were to answer your question, I I'd say companies they do have options, um, that they're executing. Um, some of those options are a bit longer dated than than others, and some are more technically difficult. Um, you know, um

Speaker 1:
and you know so to the degree that they obviously will execute on the more immediate ones. Um, but but certainly the the future ones or things like green hydrogen, you know, um, potentially successful. Um, you know they would. They would then, um, need some breakthrough, Um, to to be able to, to achieve those and and

Speaker 0:
thank you.

Speaker 0:
So, Roberta, I would like to understand from a global perspective, what are the primary risks then, to global investors of a rapid transition that is expected from emerging nations And then, as well, the risk of a delayed transition of not reaching, um, the targets by 2050.

Speaker 0:
Yeah. Um, so I guess to start to start with the risk of the rapid decarbonisation. I think we already touched on it quite nicely already. But I would certainly say that the risk of an unjust transition So the risk of a a transition that doesn't they just, um

Speaker 0:
uh, increases already existing inequalities, uh, throughout society. Um, so that can be, you know, through people losing their jobs, people who currently work in very carbon intensive industries, which just won't exist post decarbonisation and not necessarily having been up skilled so that they can participate in sort of greener technologies. Or alternatively, it's, you know, um

Speaker 0:
uh, communities which are going to see increases in mining operations for, you know, minerals like cobalt or lithium. Essential renewable technologies where the sort of risk of human rights is only going to in, uh, human rights violations is only going to increase, um, with sort of increased demands on those on those mining areas. And, I think, sort of as an investor,

Speaker 0:
this is a big risk because, you know, firstly, socially, it's not right, but also financially, you know, we all know that there's a direct link between stakeholder relationships and the long term profitability of a of A company. And, you know, at the end of the day, a just transition is just sustainable and appropriate. Responsible stakeholder management. You know how you're treating communities, employees, suppliers and so on.

Speaker 0:
And I guess sort of zooming out as well. You've also got the fact that an unjust transition would just exaggerate those, um, inequalities in society. And for every, I think 1% increase in, um, inequality. You can expect GDP for that country to reduce anywhere from 0.6 to 1.1% so you can have a really material financial impact as well. That comes from an unjust transition.

Speaker 0:
I say the risk of a transition not happening is probably, you know, well, better documented. You know, we all know the the physical risks, um that are gonna happen. We all know the sort of the scare stories, but they're scary for a reason because, you know, it's not. It's not so unrealistic.

Speaker 0:
Some of these things might happen with the changes in climate, the changes in the way that society is going to have to operate as a whole. And in many ways, that's going to face the same problem, because that's going to be worse. Felt by, um, people who are already struggling. And it's going to just further increase inequalities again. So, actually, a just economically sensible, robust transition

Speaker 0:
is ultimately, I believe, the best way for us to ensure a sort of social justice at the same time. Absolutely. Thank you, Roberta. So, Rob, we've spoken about green hydrogen before. What is the opportunity for green hydrogen globally and more, more specifically, locally in the South African context? And can this technology then be scaled rapidly enough to address, um, sector decarbonisation targets?

Speaker 0:
Oh, thanks. Very good question. I mean, the the bottom line is it is one

Speaker 0:
part of the bigger puzzle around our transition journey. I think it will play a major part. But I would say that, um, what has to happen? Um, as as much as green hydrogen can be produced and is by the way being,

Speaker 0:
uh, the the the framework for that production has been rapidly, uh, deployed across the world. And the various incentives across, uh, the the US EU and China in the production. Uh uh, fast tracking, really. The production of green hydrogen and the the offtake of that of the material and introduction into industrial processes

Speaker 0:
and the the the the methodology that we have to to connect it to to being the underlying feedstock for our energy system still has quite a long way to go. Um, so on the supply side, there's a lot being ha that's happening. I mean, I I've I've seen all over in in China and in the US, the ramp up of production

Speaker 0:
of electrolyzers. There's a company called n, which is, I believe, just, uh, started a new four gigawatts, um, or five gigawatt. Uh, electrolyzer production facility in Michigan. Partner with,

Speaker 0:
uh, General Motors. Uh, of course, there's no there. There's There's a key, um, a key joint venture there in terms of, uh, looking at production using the production of that hydrogen or that electric in in producing hydrogen for, uh, heavy vehicles and heavy technologies out of the Detroit plants and and the like, So you can see the the the basis of a economy starting to be created.

Speaker 0:
But what is going to be crucial is on the demand side, that is, that that demand keeps up with supply that the the heavy industries, the aviation fuels, the, um, the transport logistics sector are all being rec constructed and restructured to on take, uh, and use green hydrogen as the primary feedstock. Or as for the fuel cell sources, so

Speaker 0:
and it is happening, and it will. It's happening fast, but I don't think it's gonna be the the the only solution, uh, around this along the transition journey. Um, you know, it actually doesn't, in my view, matter to how much, uh, whether a car is using cell or an electric vehicle cell. It's about whether that overall net has led to a net benefit and emissions reduction within the production of that particular

Speaker 0:
right. So I think that, um, we've got some ways to go. The costs are, uh, of production of green nitrogen are going to come down right now. It's been, uh, it's becoming attractive by way of incentive. Uh, either in the inflation production act, the US, or in the European Creek deal, or in China, where where mass scale and and economies of scale are allowing for the per dollar, uh, cost per per tonne of hydro to produce to reduce.

Speaker 0:
But the really the game changes in which regions can green hydrogen be produced most cost effective. And of course, once again, it's emerging markets primarily that have the the the blessings of of of solar and, uh uh, and wind, uh, resources and and, um, and sunshine and that that allow us to, uh can emerge. Markets produce,

Speaker 0:
uh, the the the the components of renewable energy, uh, to, uh to and to take advantage of, uh, the ultimately put in that put in that renewable energy into an electrolyzer, which is going to split the the hydrogen molecule, which is gonna allow for that ultimate, uh, storage of green hydrogen. Now that's that's where the opportunity set lies for us. That's where

Speaker 0:
in in a world that's gonna become increasingly th for hydrogen, hydrogen, green hydrogen. That's where I think the opportunity set eyes most, um, in in producing hydrogen cheaply, effectively and being able to transport it, uh, across the globe to where it's needed most.

Speaker 0:
Absolutely. Thank you very much, Rob. So then I want to get an understanding. Now, what have been some of the policy changes locally? Um, and also with regards to the GP programme, Um, with regards to this transition and decarbonisation path for South Africa and who are the main stakeholders that are that are involved?

Speaker 1:
Yeah, so I mean, we So we say the major one was as you mentioned, but just, um, energy transition investment plan that was announced last year by our government. That was in kind of October, October last year. Um, and really? You know it It it was a, um, a task team. Um, a climate finance, um, task team, Um, that was tasked with assessing the offer that was made by international partners. So being the, you know, UK um, front,

Speaker 1:
Germany, um, US being, um, quite key there. Um and then they then, um, offered to, um fund some $8.5 billion mostly in concessional finance, but plus plus guarantees,

Speaker 1:
um, you know, in order to accelerate the the just transition so as a as a consequence of that, and it's kind of allied to the, um NDP or the national development plan that we had, um, you know, So it came out of the target to reduce our emissions by

Speaker 1:
somewhere between 20 to 30%. Um, you know, by by around 2020 2027. Um, So the major part of the reduction in emissions is that also come from electricity generation and then specifically retiring, Um, you know, coal fired power stations. So obviously, that is an area. As we know, there's an area of of contention, even amongst the, um the ministers in terms of how fast do you want, um, to to execute on that,

Speaker 1:
Um, I'd I'd probably say maybe one of the observations are up, you know, from Europe. And the shortage arising because of the, um, the war in Ukraine, um, was that they had kept some flexibility to walk back. Um, some of those coal fire closures as a consequence, and I'd probably say it would be beneficial if we had, you know, some to some flexibility,

Speaker 1:
Um, in in in that regard. Um, but certainly the the you know, the policies where they're coming from, I'd say, would be from jet IP. Um, so they've in total. They think that it will cost a bit, um, 1.5 trillion rand,

Speaker 1:
you know, two or 20% of GDP essentially to affect the the transition. And mostly, as I mentioned earlier, going into green, green energy, green electricity,

Speaker 1:
um, and in in the interim, we know that we also then got the $8.5 billion of funding from the international partners to to at least, um, start, start the process, Um, so that that's probably been the major one. We know that there's also carbon taxes that are expected to start, um, coming into

Speaker 1:
into the fall. So I think that's a 2026 target. It's something like $20 a time, which is significant. So, you know, to put it into con contest as an example, where a company like that or it would wipe out about half the profits. Um, if it was invented, um, you know, as as it stands. Um, so that, um And there was a commitment that was made as part of, um, 26. Um, already,

Speaker 1:
Um, so So that will also be part of key development. How do we navigate? Um, that,

Speaker 1:
um And then and then probably some broader tax issues. So you know, the incentives that are permitted and you know, So if we look, for example, um, E v s, you know, so and generally such tends to happen. So if we were to think about green hydrogen is that you get the, you know, you get the earlier doctors, um, so that today you can afford it and, you know, they they they first, um And then in order

Speaker 1:
for technology to really grow is that you need some form of subsidy, you know, to make it economic for, um, for for wider scale, broader scale, um, news. So I I'd say in some instances, probably there some of these technologies that we're actually what we've got to be looking towards is not just penalising companies, but actually incentivizing them to to do it economically. And then the last stage

Speaker 1:
then becomes widespread adoption, where it's now sufficiently, um, gain sufficient scale. It's cheap enough. It's competitive. And actually, it it it has got momentum of its own.

Speaker 1:
And then that the last.

Speaker 1:
Yeah, So I'd say that's probably the, like, a broader way to to think about all the

Speaker 1:
policy interventions that have taken place but that also still need to to take place. OK,

Speaker 0:
thank you very much.

Speaker 0:
So now, with a lot of the emerging markets such as South Africa that are still heavily dependent on coal extraction and are dependent on industrial activity,

Speaker 0:
the carbon tax, the carbon borders tax in in the European Union And what unintended consequences would it will it have on the economies of these emerging markets that are still heavily dependent as well on the export of of their, um, extracted resources?

Speaker 0:
Yeah, I think, Yeah, I think it's gonna be a really delicate line to walk because you're you're right, there is. There are so many sort of unintended consequences, so that can take place, you know, treating some company, uh, some countries different from others, um, sort of driving behaviours, which you weren't intending to drive in the first place. Um, you know, I understand. They've got to do something, and this is something. But I think I think, sort of keeping an eye on that. Keeping an eye on what companies are actually doing

Speaker 0:
is going to be sort of more important than just relying on relying on these beginning sort of regulations that are coming through. OK, so then what global initiatives have They have come to the fore then, to ensure that Net zero is achieved. And then perhaps, how can it be applied to the context of an emerging market such as South Africa?

Speaker 0:
Yeah, well, I think so. I think there's a huge sort of influx of global initiatives, which is, you know, a little overwhelming at times. But it's also great because it's doing a lot of good in standardising the way that we look at, uh, emissions and standardising know what Net zero actually means to different companies? They sort of go back to that scape one scope. Three a question earlier.

Speaker 0:
You know, having something like the Science based Targets initiative, which really lays out to a company exactly what they're going to see their scope free emissions to be, Um, something like that is really helpful for us is it's really helpful for companies as well. To get a clear idea of, you know, what they're actually going to be measured against.

Speaker 0:
I think other initiatives that we see being having a really great impact as sort of alliances between, um, peers within industry. So something like the, um uh, Net zero asset owner Alliance or the Net zero insurers alliance. And, you know, by getting a group of companies

Speaker 0:
and easily in the same industry together, getting them to work together to, you know, share to share thoughts on how they can transition their industries. And actually to sort of get a collective voice when it comes to speaking with suppliers, speaking with governments and regulators to actually, you know, be heard alliances like that we see as being really, um, impactful as well.

Speaker 0:
So, Rob, then to close up the session. What opportunities are there surrounding some of these transition technologies? I know we've spoken about green hydrogen already, um, solar panels, um, et cetera, for economically important, but also high carbon emitting and capital intensive, um, sectors.

Speaker 0:
Brilliant question. Chloe and I blinked. Response is that the opportunities are boundless that we've got an an excellent uh uh, research and development, that is, And billions and billions of dollars is being deployed into, uh, these technologies. There's a race to the top who can produce, uh, solar panels. Uh, electrolyzers, uh, batteries most efficiently. And the the least unit cost. Uh, we're getting new technologies that come into the for every day And that,

Speaker 0:
uh, for example, um, we are seeing, uh, solar panels, uh, producing far more, uh, electricity at at a for much reduced hours of sunlight we are starting to see. And what's particularly exciting is the the recycling, for example, of lithium iron batteries coming

Speaker 0:
and online so that where in the past, we just draw it down and throw it away. And now we can bring it back, recycle it, recharge it and use it again. Um, there, you know, there are other technologies that are starting to develop, like carbon capture and capture and storage. I I don't think one. It's a one size fits all solution here. I think we we were at the we We're nowhere near,

Speaker 0:
uh, the boundaries of science. And every time there's a new development, every there's a race to talk between all nations plying in this this capital to try and make things more efficient, more effective and and more and more productive. Um, so we we will start seeing new I don't even think we've properly,

Speaker 0:
uh, even intellectualise, even our wildest dreams. What the potential scopes are of the opportunity set by from that's gonna arise from us going down this road of a of a green transition,

Speaker 0:
Uh, we have We've still got, uh a a lot, a long way to go. But I think the the the way that the technology will or leapfrog, I think we've really got AAA this. This is just the the greatest investment opportunity, in my opinion in the last 100 years. Thank you.

Speaker 0:
Absolutely. And to finish on that, uh, very positive note, Um, on reaching net zero by by 2050. I wanna thank you all for your insights. We appreciate your time.

Speaker 0:
Thank you. Thank you.