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VITAL SPEECHES OF THE DAY206

A SEAT AT THE TABLE If climate change could be solved by getting exactly the right people together around a table, who would those people be?

Address by BERNARD LOONEY, CEO, BP Delivered virtually to the One Young World Summit 2021, July 23, 2021

risks when so many have yet to fully develop? At the San Francisco Fed we have taken a very direct approach. We are working intentionally and delib- erately with our communities, other public institutions, and the private sector to catalog the risks and how they are playing out in the 12th Dis- trict, the nation, and across the globe. These data collection efforts are multi- faceted and include formal surveys, lis- tening sessions, and targeted meetings with CEOs to better understand how climate risk affects decision making and resiliency planning.

We are also convening the best aca- demic thinking on these topics, hosting conferences and sponsoring a virtual seminar series on climate econom- ics that features a range of research on the issues we are facing. Finally, consistent with our history, we have assembled a team to study how these issues are likely to impact the Federal Reserve’s mandates in the future. This team allows us to leverage our strength

as students of the economy to prepare for the challenges and uncertainties that lie ahead.

The Transition We Choose

Future occurrences, especially when uncertain, are easy to push off. But doing so leaves a mark.

I saw this myself. As a teenager growing up in Missouri, I witnessed factory after factory move away, or simply shutter. Each one of them left people behind. Some of those people—too many to count—never recovered. I saw the same thing in Syracuse, where I got my PhD. Car- rier air conditioning closed, and the community struggled. Drive any- where in America and you can see vestiges of a similar story.

Now, it’s tempting to blame glo- balization. And so many do. But the real miss was a lack of acknowledge- ment. Acknowledgement that, while the economy would be better off in the

end, the end is a long way off and the transition would not benefit everyone equally. In fact, there could be collat- eral damage.

So, what do we learn from this? The key lesson is that transitions mat- ter. And how they play out is our choice. On the cusp of an economic transformation that will likely be even more far-reaching, we have an oppor- tunity to do things differently.

Our future is uncertain: no one really knows the severity and scale of climate change, where and who will be most affected, or the nature, extent, and duration of our response to the risks. But one thing is certain—the economic ground is shifting. And we have a window of opportunity to pre- pare; to choose the degree of hardship we will endure.

Economic transitions are inevitable, but the degree of pain they inflict is not. In the end, preparation gives us agency. It is our duty to use it.

Thank you.

Hello everyone—it’s great to join you and sorry not to be there

with you all in Munich. I’ve heard so much about One

Young World from the amazing bp delegates who have been coming for many many years. And, I actually met this year’s bp team yesterday. I’ve heard about the energy you all gener- ate in the room and I really wanted to experience it myself.

But as you know, travel is still diffi- cult this year. I’m going to have to wait until next year in Tokyo. And for now, I want to say a big thank you for includ- ing me this year. I and bp do not take your welcome for granted.

I’m very aware that many

people—maybe some of you—think that if energy companies like the one I lead went away, then so would climate change.

And I understand why people think that way. I do get it. But I want to tell you—and I believe this with all my heart—I believe that bp is an impor- tant part of the solution—bp and com- panies like us that are able to use our scale and capabilities to make change happen. I want to share with you why I believe that—so thank you for your time and the opportunity.

Let me start by saying that the envi- ronment and sustainability and climate change—these were not big topics of conversation when I was growing up.

I was brought up on a small farm in the south of Ireland, in a place called County Kerry—one of four brothers, one sister and 14 cows. It was a simple life. My brothers fixed tractors to make a few extra pounds. They were great at that; I wasn’t.

In those days, if someone had talked to me about the environment, I would have thought it was the fields around the farm. If someone had talked to me about ‘green’—I would have thought they were talking about how innocent and naive I was as I went to the big city for the first time to begin university.

My life and my circumstances are very different now. And so are the

SEPTEMBER 2021

207BERNARD LOONEY

issues I care about. Today, we all know the global carbon budget is finite and running out. Today, we all know that dramatic changes are needed to deal with that. And momentum for change is growing all the time. The world wants as well as needs to be greener— and that’s what makes change possible.

And what I’d like to do is ask a question which gets right to the core of how companies like bp can help to solve this problem.

The question is this...

If climate change could be solved by getting exactly the right people together around a table, who would those people be?

In the UK, we had something called the rule of six during the Covid lockdown. No more than six people could get together—not unless they were part of the same household.

So, let’s say, if you could only get six people together around a table— around our table that is going to solve climate change—who would you invite?

Who would you have at the table?

Would you invite Greta Thunberg, who has mobilized a new generation behind climate action? Or maybe Luisa Neubauer, Adelaide Charlier, or Xiye Bastide? Or Damilola Ogun- biyi, the chief executive of Sustain- ability for All?

Would you invite Christiana Figue- res—one of the architects of the 2015 Paris Agreement? Or Patricia Espinosa, who succeeded Christiana as the head of the UN Framework Convention on Climate Change—the UNFCCC.

How about Sir David Atten- borough, Prince Charles, or Mary Robinson—whom my mother so admired—and who you’re about to hear from? Or how about Pope Francis? What about John Sauven of Greenpeace, or Mark Rose of Fauna & Flora International?

Every one of them is remarkable— an influencer, a changemaker, a leader. Passionate about the world and des- perately wanting to make it better. We could easily fill a table of six. Every one of them would be great—and I’m sure you can think of many more.

But I want to suggest a few different names to consider—some you might not ever contemplate.

Here goes…

I suggest we invite Jan Jenisch, the chief executive of LafargeHolcim, the world’s biggest producer of cement.

I’d also invite Lakshmi Mittal, the chairman of Arcelor Mittal—the world’s biggest producer of steel.

How about Ed Bastian of Delta Airlines—or Søren Skou of Maersk, the big shipping company?

I’d like to invite Herbert Diess of Volkswagen and Mary Barra—she’s the chair and chief executive of Gen- eral Motors. And how about any of the people like me who run the big international oil companies?

You might be thinking, why any of them, including you? Why anyone from an airline when air travel alone accounts for around 3% of global emissions.

Why anyone from a cement com- pany when cement is responsible for 8% of emissions.

Why anyone from a vehicle manu- facturer when road transport accounts for 21% of emissions—unless it’s Elon Musk?

Good question

What Elon Musk is doing with Tesla is amazing. He’s a brilliant guy running a brilliant company. Tesla sold around half a million electric vehicles last year. That’s a big number, but it is less than 1% of more than 70 million cars sold in total in 2020.

Seven million of them were made by General Motors, the company Mary Barra runs. Over nine million by the Volkswagen Group, the busi- ness that Herbert Diess runs.

And that is my point

If we are going to solve climate change, yes, we need brilliant green companies like Tesla, and lots more of them. But much more than that, we need many, many companies that are not green now to get greener—and, ultimately, green. We need compa- nies like GM and Volkswagen; like Lafargeholcim and Maersk—and, if I might add—companies like bp.

I love the way Mark Carney puts it—he’s the former governor of the Bank of England—and now a UN climate advisor. He’s a true leader in this space. He says, to solve climate change, we have to go to where the emissions are.

And where are the emissions? They’re in energy. They’re in trans- port. And they’re in heavy industries like steel and cement. Those three sectors account for around 70% of all global emissions.

So absolutely we need more solar companies, more wind companies, more battery companies, more compa- nies like Tesla building EVs. We need more green companies—but green companies are not going to be enough. The world can’t create or grow enough of them fast enough to get to net zero on a Paris timescale. That’s just not realistic. The world also needs what I call ‘greening companies.’

So, what is a greening company?

It is a company that is high in carbon today and wants to be lower carbon tomorrow.

That’s greening put very simply, but it’s more than that—having aspi- rations is not enough.

To be a greening company, you have to do a number of important things:

• One—you have a clear and cred- ible plan for your net zero transition.

• Two—you have to have near- and medium-term decarbonizing targets and aims as part of your plan.

• And three—you have to be open and public about those targets and aims,

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VITAL SPEECHES OF THE DAY208

so you can be scrutinized and chal- lenged on the progress you are making.

That way, people can see what you want to do. People can see how you intend to do it. And people can see if you are doing what you said you would do—and call you out if you’re not doing it.

So, to come back to the question of who should have a seat at the table…

Is it the people who advocate for a greener world, or the people who run greening companies?

It’s good that the rule of six has gone because the answer, emphati- cally, is both.

We need a bigger table

We need everyone around it. We need the people who drive change AND the people who can deliver change.

We need the people who are gen- erating the momentum for change through the power of persuasion, argu- ment and advocacy—AND we need the people who can deliver change by transforming their companies.

And not just transforming what they do—but transforming in a way that brings people and communities along on the journey. This is only going to work if no one gets left behind. We all have to do this together.

Now, it’s not going to be easy

Transitions are complex, they are messy, and they don’t lend themselves to simple solutions.

We are ready for that at bp and we are in action on our plan to diversify and decarbonize the company—our plan for greening bp.

We’re growing low carbon businesses and shrinking our oil and gas business.

By 2025, we’ll expect to be invest- ing eight times more in low carbon than we did in 2019, and 10 times more by 2030—that’s around $5 bil- lion a year of low carbon investment.

At the same time, our plan is to make our oil and gas production 40% smaller by 2030—40% smaller. That is on a scale that no other company like us is planning to do right now.

It goes against decades of indus- try history—decades of grow, grow, grow. We’re doing the reverse—we’re going to shrink. And the oil and gas we continue to produce, we aim to do so increasingly efficiently and profit- ably—which is incredibly important, because it’s where the money comes from to invest in growing low carbon businesses.

That’s the core of our ambition to get bp to net zero by 2050 or sooner. And by 2030—by reducing produc- tion and getting more efficient—we aim to have cut our operational and production-related carbon emissions by up to 40%.

That is our plan, and we don’t just think it works for the planet. It works for bp and our shareholders because trillions of dollars need to be invested in replumbing and rewiring a lower carbon global energy system.

And we are at a moment in time right now with a unique set of circumstances.

As the world comes out of the pandemic, there is a huge desire to recover better.

Where people’s jobs are part of a planned transition.

Where a fairer chance in life is part of a planned transition.

And I genuinely believe that— because of the size and scale and need for what we do—a just tran- sition depends on whether or not greening companies like bp succeed or fail.

bp is one of an increasing num- ber of greening companies already in action. But without help, progress is going to be slow. To do this better and faster, we need support.

We can move faster if there is global support for policies, incentives and regulations that make low carbon choices easier and cheaper than high carbonones. The so-called decarbon- ization premium.

We can move faster if people invest in us and use their influence as owners of the company to challenge us to go further.

We can move faster if we have partners working with us across dif- ferent industries, across governments, across universities—and in communi- ties and towns and cities and regions around world—all open to listening, learning and collaborating—together.

Most of all, greening compa- nies can move faster if we have the world’s best talent working for us. It’s an opportunity to help change the world in a very direct and practi- cal way—and in doing so, be part of something far bigger than yourself.

We’re in a world at the moment that’s polarized—where things are either black or white. Where green is good, and if you’re not green then you’re bad.

I think that is a real problem.

Polarization and division will not get us where we want to go

They are barriers that slow down progress when we need to go faster.

We can only solve this problem working together—by being inclusive and not exclusive—by making room for everyone around the same table.

Thank you for listening—and I’m looking forward to talking to as many of you as I can later.

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