Sustainable Views: How business climate action is evolving

Welcome to the Sustainable Views podcast from the Financial Times Group, where we discuss all things sustainability related. My name is Philippa Nuttall and I'm editor of Sustainable Views, and I'm delighted to be here today with a great set of speakers. This podcast and the upcoming editions are rather special because we're recording them in partnership with the We Mean Business coalition. With us today, we have Jesper Brodin, CEO of the Ingka Group, the largest IKEA franchisee, Maria Mendilucci, CEO of the We Mean Business Coalition, and Sir Ian Cheshire, formerly CEO of Kingfisher, the international home improvement company, chairman of Debenhams, chairman of Barclays Bank. And today, in addition to being chair of the We Mean Business Coalition, I think you're also chair of Lloyds Securities, Channel 4, and too many other organizations to name. Well, thank you everyone for being with us today. It's great to have you here. So Ian, I'd like to start with you. Today we're going to speak about climate action in businesses and how it's changed over the years. As we mentioned previously, you were CEO of Kingfisher, and under your leadership, the company became one of the world's first major businesses to commit to becoming net positive, which means you were seeking to replenish more timber and other resources than you consumed and remove more emissions from the atmosphere than you were producing. So perhaps you could tell us a little bit more about your sustainability journey and how you've seen things change over, over your years in the world of business.

Thanks very much. Great to be here with you. I think the perspective I bring, I suppose, is of not really, yes, but is actually still doing a proper job, but looking back and seeing how much the world of business has changed because essentially back in originally firstly back in 2005, I suppose I committed B&Q then to a One Planet strategy and then at Kingfisher later on, 2008 onwards, to the net positive journey. And at the time it was pretty hard work to convince people that that was an appropriate thing for a business to do as opposed to a government. And actually even then governments were surprised to find businesses willing to speak up about it. I remember certainly meeting Tony Blair for the first time with when I chaired the Corporate Leaders Group on Climate Change, and there was a genuine surprise that businesses were stepping into this area. But I think that has fundamentally changed, and it's really probably the biggest thing I've seen in my working career is now a sense that business has a real role to play. And actually, when, for me, the most important thing is when we talk to our colleagues over all the organizations, they expect us to be leading these issues. But it, but With two crucial requirements, I think. One is you've got to be authentic about this. You cannot get into some sort of general 35,000-foot discussion about climate. The question is, what can you do? And certainly it was easier for us at Kingfisher because we were using a forest basically the size of Switzerland every year. And so our impact was meaningful. And equally, we could have a serious impact on our customers' energy saving. Efforts with things like LED light bulbs and various other controls. So we could actually play a role that was meaningful. I think that is really vital because if you start getting into sort of generic initiatives, you'll get into greenwashing quite quickly and you don't have the credibility to do it. Secondly, you've got to, I think, have a multi-year ambition. This isn't something you do overnight. And some of these journeys, frankly, we announced net positive. We really still didn't know how we were going to get there. And I'm not sure if I checked in with Cheri, who's running Kingfisher these days, whether we've probably made all the progress we've made, but we've made unexpected progress in some areas and less in others. And I think that sense of you've got to be willing to push the organization out of its comfort zone to do this. So this isn't something that is actually that easy for businesses to do. But if it's not hard, it's not meaningful. And I think what I've seen is hundreds of our businesses, including here at Lloyds Securities, being willing to really talk about how far they can push here in the case of embedded carbon, for example, and biodiversity in development. So there's always something that business can be doing. And I think the leadership now with Jesper and other people like him is really massively changed in my sort of 20 years of engaging with this topic.

And perhaps could you just quickly explain for any listeners that don't know what the ONE Planet strategy is?

Yeah, so this was a very basic idea of living within planetary bounds that we were consuming effectively 3 planets worth of resources. And we went— last time we checked, we only have 1 planet and tried to really look back at that and say we have the responsibility to think very hard about our footprint, our impact. And I think going beyond merely minimizing that to saying what can you do to start being regenerative in some of your activities and that extra stretch I think made it, made it really interesting to be involved with.

Right. Thanks, Ian. I've got plenty of questions, so I'll come back to you in a minute. I first wanted to turn to Jesper. And so obviously IKEA is a huge brand that probably all our listeners have heard from and probably bought from. And as Ian has said, you obviously use a fair amount of resources. So could you tell us a little bit about what IKEA is doing to, to become more sustainable? And again, the changes that you've seen in your years in the business?

I think over the years, IKEA and I have been on a journey, both on one side to basically take a responsibility as a good citizen, as a corporate citizen. And you can say there is at least 3 reasons why this is important for us today. I think to start with, if I zoom in on climate in particular here, when it started to become a reality for us that the changes that we are experiencing now in this generation is a reality. It's not the theory or an idea, it's actually a fact and it's happening now as we speak. It was a few years before the Paris Agreement that we came to that conclusion. So the first reason for us was really moral and ethics to say that maybe previous generations could blame not knowing, but we certainly can't. So it sits with us, being a citizen, being fathers, mothers, and so forth, to take the moral obligation to do something, even if the task is still and then even seemed more daunting. Secondly, we have seen over the years incredibly interesting movement when it comes to consumers' interest in the topic. So the latest research we do with the GlobeScan, about 33,000 people we ask around the globe, Today, it's about 68%, or it is 68% of our IKEA customers who is deeply concerned about climate change. Interesting enough, 64% of everybody asked is also actually today making some decisions, taking some action. Most people think it's difficult to say if it makes a difference, but people seem to be willing to take actions, and they do care among brands more and more. Also very interesting, the difference isn't that spread as you might think from US to China to Europe. It's actually quite coherent. And when you go down in age groups, it becomes even more relevant. So therefore we say to be a relevant brand in the future, we have to be a leader in this space because that's what our customers want. And of course our coworkers as well. Then third, which I over the years have found the most interesting part here is As we set out on the track, it was more driven from obligation and necessity of doing things, only to find out step by step that almost every decision we have taken in line with putting us where we are today in climate has been an amazing business decision. And it leads us to say that goes for people, again, as well. But if you take climate, eventually, we think it's good business to be a good business. And I haven't Numerous examples to prove that, right? I've also numerous challenges that we haven't cracked yet. So it's not just an easy, quick fix that we talk about. But the interesting thing is we, as IKEA, since Paris Agreement, when we committed, first it was to the 2 degrees, and of course now it's the 1.5, updated plans and commitments, SBTi targets and so forth. But we are, in our last report, we are actually +31% in business growth. We are -24.3% in absolute carbon, not relative, but absolute carbon. So I think from our side, my side, one of the most important narratives to change is that this would be detrimental to business when it's actually the opposite.

Yeah, I think that's a really strong point to make. I wanted to ask in terms of, you mentioned emissions reductions and Ian mentioned that Kingfisher was using a forest the size of Switzerland every year. Has IKEA also decreased the amount of wood it uses, its resource use?

I would need to do a fact-check on that. You can say materials as such used to be in 2016, it used to be about 42% of our footprint. Now it's 46%. So materials is actually the staple that has moved the least. It looks like it's increased, but it's a relative share. And the reason for that is that areas such as mobility and renewable electricity has moved much faster, while circularity, which is the trigger most for material use, is still a lot to happen. On the other side, you can say IKEA has progressed with many more hollow constructions and more technologies driven into how we make our products, which of course then also save a lot of money. So I couldn't give you a straight answer to exactly what would, But on the totality, we are down.

Yeah, sorry to put you on the spot. I was just intrigued by Ian's comparison. Please. Thanks. That's great to have that. And I think also your point about it being a business decision, not just an environmental decision, is obviously really important. Maria, you work with a huge range of companies around climate action and moving from fossil fuels to clean energies. Both Ian and Jesper seem quite optimistic in terms of where business is going. Do you share that optimism? And where do you see the biggest challenges in the years to come?

Yeah, thank you. So yes, I share the optimism, though with caution, because emissions continue to rise. And so some businesses are doing really a good job, some countries as well, and others not so good. There are now 15,000 companies that have committed to science-based targets, whether it's through the Science-Based Targets initiative or through the SME Climate Hub. I asked my team this morning, about the SMEs because it's something that is very close to the hearts of those that are on the call today. And there are 5 SMEs that sign to the SME Climate Hub every day. Okay, so in the last year, almost 2,000. So this is good business for both big and small companies. And it's good because the solutions are getting more affordable. That's the other cause of optimism. So renewable last year increased by 50%. It had never increased so much. To end with around 10 gigawatts. This is enormous. It's the fastest-growing energy source. And now the challenge is electrification because renewables is available. Now it is about how do we accelerate the electrification so that we can continue with this upward trend. I think for business and in my conversations with many, many companies from different sectors, what I conclude is that when it is in the hands of business, they can figure out a way to do it. And the challenge that they face is when it depends on others, whether it's the regulatory regime. So the regulations and policies are made for fossil fuels at the moment. It takes you one day to have gas at your home. It takes a long time to have air pumps and solar panels on your roof. Okay, just one example. I think it's also about the enabling infrastructure. Many businesses that need to deploy renewable energies or hydrogen need and enabling infrastructure, whether it's grid, battery storage, et cetera, which is public. Okay. And lastly, consumers. Often we hear from companies, yes, we have here EVs, but the consumers do not want to buy them. It was really interesting last week, the UN published a report and they asked people around the world how the government should tackle climate change. 77% of people think that governments should seriously tackle climate change. What I want to say is that at the end, the policymakers and governments have a fundamental role to play because they set the rules and they create the markets, they create the conditions for companies to thrive. And we don't have time. And there is so much consensus across the political spectrum, because 77% is a lot of people across the political spectrum, that with so many elections coming up or having having been done also in Europe, this must be a top priority for the governments.

Yeah, so we've heard that lots is changing and things tend to be changing, at least if they're not leaping forward, things are moving forward. I mean, Ian, you've worked in lots of different companies and no doubt seen different solutions. Sometimes you get the feeling a bit that each company kind of works slightly in a silo and there's very little replication and sort of we keep reinventing the wheel in a way. Do you get that feeling or do you think there are certain solutions now that are being replicated complicated, and how is the best way to scale up the action that you've managed to put in place in the companies where you've worked?

Yeah, I'm a very big believer in systemic change is very hard to do for individual companies. You can't impact the whole ecosystem yourself, but if you can actually get the players together in an industry group or a topic group, you can make change really quite significantly. And give credit to IKEA and ourselves back in the day worked on, for example, illegal timber and LED lights across Europe. And actually the fact that we could have 5 or 6 major companies getting together to make a change persuaded in some cases the politicians that that was enough to do it. And typically these things are, you know, they're concrete problems. I mean, you take one literal example of concrete or EVs or decarbonization of electricity, that these are systemic issues that require lots of people to come together to fix it. Find the sort of low-carbon concrete, low-carbon steel, getting EVs adopted at scale. So one of the things that We Mean Business has done is I think helped by bringing 7 NGOs together is to help signpost people that want to get involved into how they can actually contribute to the change, because it will only be through systemic collaborative change that we'll see some of these really difficult challenges getting solved. And I think my experience has been that, again, businesses are actually willing to collaborate on these things. It's not anti-competitive. It's precisely how you make things change if you have a level playing field. And what businesses need is that certainty that the things that Maria was talking about there, about the sort of picture of the future, and you can collaborate with people who you spend your life competing with because, you know, these are the things that are systemically important enough to want to do together. And I think there's actually lots of evidence we've seen of people working together really well in these areas, providing we know that we're trying to get to that long-term strategic outcome.

And in terms of creating a level playing field, a few people have raised regulation. Is regulation the way of creating this level playing field, or a market, sort of leave that to the free market more and it'll sort itself out?

No, I think the challenge with climate is that it can't really be solved by the free market on its own. We play a huge role in delivering that change, but really the framework has to be governmental and actually international as well as just, you know, government by government. So I think it requires people being willing to talk. And again, the difference I've seen is, you know, 20-plus years ago, I couldn't get into the COP meetings because businesses weren't actually allowed in. Now we're out there and we're absolutely a key part of it. But we are part of a framework that has to be ultimately led through international regulation. But businesses are ready with answers, I think, inside that framework.

Yes, but I wanted to ask you about the consumer side of how businesses are reacting. You sort of said that 68% of IKEA consumers want to act on climate change and are making changes. Maria suggested that sometimes it can be difficult to bring consumers on board. And we've obviously had, you know, a cost of living crisis. People are watching what they spend. How do you balance at IKEA this desire to move people forward, which often costs a little bit more money than it might have done otherwise, if that's even correct? How do you take your consumers with you on this journey to help them sort of move forward your sustainability journey?

I think, to be honest, this part is easier than the challenge that Ian is referring to. When it comes to customers in the IKEA environment, The uniqueness with IKEA to that point is that 100% of the range is IKEA's range, so to say. So in a way, we can thereby determine the content, the way things are produced. And interesting enough, more and more, we have also started to invite people not only to buy things that are made upstream in a better way, but to engage in solutions that help downstream. So I think in 2016, about 20% of IKEA's footprint, carbon footprint scope 3, was life at home, customers using our products. And by shifting to LED lighting, we were one of the early ones on that, reducing consumption of electricity and appliances, and then offering solutions for saving water, waste, and so forth under an umbrella that we call Sustainable Life at Home. We have actually— we are down to about 12% of our footprint there. So you can say we, and together with our customers, have had one of the fastest tracks in actually reducing carbon. And people are willing to do that on one tough condition: that it doesn't cost more. And that is very, very clear. For us, it's only 6% of IKEA's customers who are prepared to pay more. And I think it would be wrong to conclude that people don't care in the end of the day. People simply don't have the money. So they expect us to come up with the solutions and the innovations and the investments that can drive at least same price for the functions. So people are willing to change if the price tag is right.

And is it possible to get to 1.5 and to make the reductions needed by business as well as everybody else without raising prices? Or as you said, some of the low-hanging fruit has been taken and now it's going to get a bit more difficult at some stage. Does that argument have to be made that people will have to pay more?

It's a very important question, but I would also say, I would answer it this way. We operate under circumstances that I would say economically have been more challenging than the climate crisis. So if you look at the inflationary impact on IKEA's value chain during the pandemic, we talk about up to 30% inflationary damage on some of the value chains. So there is nothing in the climate, so to say, solutions that would be even close to that, as far as I know. At the same time, you can say if there is not a level playing field, it doesn't matter if we would, so to say, lower our margin on a product with a certain percentage. If we can't compete on the same terms, then it becomes tricky. So I would say it's a little bit about timing.

Maria, you mentioned renewables and the huge amounts of renewable energy that we're seeing brought onto the system. But one of your campaigns is also an end to fossil fuels. And we saw the Energy Institute Institute's report last week, which said that we've also never brought as much fossil fuels onto the system. So at the moment, we're just sort of increasing our energy use. How difficult is that within businesses to really make the shift away from fossil fuels and towards renewables? And what support do they need to achieve that?

I think it is quite obvious that if we want to tackle climate change, we need to tackle the source of climate change, which is burning fossil fuels. And while it is as simple as that, it has not been reflected in this way, both in terms of the strategies of companies and the NDCs and country plans, because obviously we have an over-dependency on fossil fuels and we need to keep the economies going. I think many businesses, like 250 businesses, have said, yes, we can do it. We can phase out fossil fuels. Let's get started. And we're going to be working with them on developing some checklist on what do you need to do to get there. It is clear and it And Jesper has mentioned this, that it's all about the timing. It's not about fossil fuel phase-out today. It is in 2040 and what would it get there. And it is about being at the right moment in the market with the solutions that are appropriate. And sometimes you win and sometimes you lose. But it is clear that renewable energy is now, you know, all business are putting renewable energy in the roof. It's competitive, it's available, etc. Now it is the time for electrification, to accelerate electrification, which is a combination of policy frameworks, but also ecosystems and group of companies coming together and showing to the consumer that yes, they can electrify their fleets and it's good business. Anyone that is listening to us today that has an electric car can look how much savings they have done. I think for me it was €400 in the past 3 months. So savings are real, but there is a disinformation campaign saying, oh, EVs are more expensive, are more difficult, et cetera. There is a lot of education that is needed. Now, we are seeing that Europe has agreed— well, is working on a commitment to reduce their emissions by 90% by 2040. This is really ambitious. And with that, we need to see the package of regulations and incentives that will go into that direction. So, today the conversation that is happening in Europe is not so much about whether we have to do this or not. It is about how do you couple the climate goal with an industrial policy that will support industries, not in delivering the solutions that are needed and also benefiting from it, because it is clear, and we have heard it in this podcast, that this makes a lot of business sense. This systemic change that cannot be done alone by the countries or the companies, these collaborations that we're trying to do with Women in Business, the B Team, the World Economic Forum, there's plenty of organizations that are working to creating this, the space for the collaboration to look beyond one country or company interest and look at the holistic picture.

Ian, you mentioned the COP and how, you know, businesses weren't really allowed in. So now there's a sort of perhaps a slight pushback against that with sort of some organizations suggesting business is too much involved in this sort of driving, or certain industries are driving where these decisions are made. Obviously, this nexus and these links between regulation, policymakers, and business are vital if the transition is going to happen. Do you think there's a way of improving those dynamics either at COP or in other fora to move things forward much faster than we're seeing at the moment, especially with the last few COPs?

Yeah, well, I think I would go back to this point about trying to come up with industry-specific action plans. So, you know, let's just talk about climate. You know, if you can decarbonize steel, that changes the world. Actually, now renewables is probably more to do with getting the grids to work better. And that is, again, a series of joined-up exercises, including difficult things like planning when you're putting more pylons around the country and no one wants a pylon in their backyard. So I think it's sort of breaking it down into the big game changers that we can see happening, which decarbonizing electricity is absolutely sort of one of the biggest and things. So, but transport, as Jesper said, is a massive area. We've also got particular types of industries which are sort of key emitters. But at the heart of it, it's essentially about stopping fossil fuels. And if you had to really boil it down to that, I think by shining the spotlight on fossil to clean is to say, look, this is not an option. We have to see this transition. And the ones that get it right will make probably more money than the ones that don't. And that's where the benefit of leading on this debate comes in, because it'll all be about innovation, new models, and different ways of doing things. And those that get into it, you know, I think this was right. I've always tried to be a fast follower rather than an absolute pioneer, because the pioneers tend to end up in the ground with the arrows in their back. It's the early settler and the fast follower that does it. But you've got to be agile and willing to invest in this. So I think there's a huge number of opportunities and business needs to sort of articulate to government and regulators where it can make its change. There are some pretty obvious areas now for business to get involved with.

And in terms of those obvious areas, you mean in terms of decarbonizing certain industries, as you just suggested, or is there something else you're thinking of?

No, I mean, I think particularly energy networks is probably sort of the biggest single dial mover, but then, you know, individual areas, you know, and there are still debates about, you know, how much will hydrogen play a role, how much would some of these newer technologies sort of kick in. And the answer is we don't know some of these answers yet. So we've got to actually spend the time trying things and innovating and working. And for that, probably there does need to be some sort of regulatory structure that makes sense. So, you know, it's probably a shopping list of maybe 10 to 20 major systemic changes that I think business can contribute to. You need to figure out which part of it you can contribute to.

And, and yes, but it's quite difficult for, as Ian's just said, you know, pioneering companies sometimes get shot down. You don't want to have the arrow in your back, and that's sort of happening at the moment through certain groups pulling out companies for greenwashing and saying that what they're doing isn't quite true or they've gone too far. And then we've recently heard more about green hushing, whereby companies don't want to stand up and sort of lead others because they're worried about being shot down. How do you manage these tensions between greenwashing and greenhushing, but at the same time remain an industry leader?

Well, I delegate. No, I'm just kidding. Well, if I have to choose a starting point, I would say silence is probably the most dangerous thing here. I've had very interesting conversations with legal experts, NGOs working on basically challenging companies that are not doing this right. And I think there's a divide. It's a matter of intentions. Are your intentions good or bad? When I look back on some of the communication we've done in IKEA, there's been arguments and points made that was less clear or less clearly defined with facts and so forth. So we are fast tracking how to make sure that any claim that we have is substantiated, which is of course good. It's not only good because it's the right thing to do, but it creates confidence towards customers. Then we should know that some of the areas are highly technical, so it's not an easy thing how to make that into good communication. I think as much as there is a very important drive to make sure we don't see greenwashing out there, I think also we need more support for what is the right examples of how to do it. And focus on that. And today I know far too many companies and colleagues that is basically pausing some of their communication initiatives because it's just so unclear. What I think here in the circus that we are today, which is highly interesting, right? We are, we mean business and IKEA, we have other types of constellation. We work with youth, we work with all of us, I'd say, to try to figure this one out. I think it would be good to have, so to say, a playbook of what are the dos and don'ts in communication to support companies. It's important to have friends to guide you. And if you have to take a risk, rather communicate than not, would be my advice.

Yeah, no, that sounds like sound advice. Sorry, Ian, did you want to say something?

No, I just think there's always going to be a current in these things that comes and goes a little bit. I think, you know, there are certainly slightly more nervous CEOs around than there were on some of these issues because they are getting attacked more so in the States than, than here or even in Asia. But I think it goes back to this question about authenticity, about if you've got a real reason to be there, you should be willing to communicate. And one of the things that business should be a force for if it's trying to have an impact here is it should communicate with its colleagues and its customers. And it's one of the great advantages retailers have is that we have lots of contact and we should be thinking hard about how we use that and how we help people change.

Marie, I think you wanted to add to that.

Yeah, I just wish that we spent much more energy in looking at those that are not doing anything. You know, if we spend the same amount of energy on doing that, on pointing to the laggards, I think we would advance much more. Than criticizing those that have started to do things. Because the reality is that many of the companies started and committed without knowing how they were going to get there. It is technical to communicate and they are learning on the journey. And now we are not allowing that learning to come through because many companies do not want to talk about it. They have never intended this to be a way to greenwash, but rather a way to show that they are super committed to tackle climate change and they are putting the CEO's name and the executive's name to make this happen. So, as I say, well, let's focus on what is important. Let's stop greenwashing, but also let's focus on those that are not doing anything and are slowing us down. Thank you.

And Maria, do you think it's helpful to have clear targets or progress points? I mean, we've got the science-based targets, which you mentioned already, which many companies companies are aligning themselves with. Does that help sort of balance out this sort of greenwashing claims because there is actually sort of clear markers? And do we need organizations or government even targets so that companies can actually benchmark themselves and it's much more difficult for others to say, well, you haven't met that because it's very clear?

Definitely. I think the Science Based Targets initiative is the most successful initiative that Women in Business has been part of. It has been growing exponentially at a rate that was not even envisaged. And because it's given the rules of the game to companies and because those targets are validated. And of course, like any standard, it needs to evolve and improve and learn and evolve and improve. And that's the journey. We cannot get stuck on how it was created 10 years ago. And that's what the organization is doing. I think the more companies that they set the science-based targets, the better. But even better it would be if at some point this becomes regulated, because then it will apply to all the companies and not those that are doing it voluntarily.

I don't want to turn this into a political decision, but there's obviously various politics that are sort of swimming around at the moment that we probably shouldn't ignore, given that we're talking about regulation. Ian, you've been very clear that this is, you know, this is a long-term project. It's not— things don't change overnight. Are you— do you have any concerns at the moment in terms of the enabling environment, given sort of the shift in certain countries to the far right and questions around climate action and net zero coming up? I mean, I was reading Le Monde yesterday and the general sort of thing seemed to be from people being interviewed was climate change exists, we need to take some action, but just not too much. And obviously, you know, that's— we don't really have time not to take too much action. So yeah, is business concerned that there could be a step back or a slowdown or do you think business can continue the momentum?

Well, I think all businesses have to operate inside a political and legal framework, so we can't escape that. So if there is backtracking on things like net zero, it's not helpful for companies trying to make the right moves. But I think the fundamental direction of travel is so clear, and we are talking about how to get to net zero, not not what. And I think there are, you know, legitimate challenges where people say if in the, in the cause of net zero, you start loading consumers and businesses with huge costs and it is too much too soon, that is a valid, you know, democratic conversation to have. And we've just got to be pretty thoughtful and pragmatic about this. What we are still seeing is certainly in the core leadership in most of the countries is there really is a commitment to this. And the thing I find most extraordinary in some ways is that the biggest shift arguably we've seen has been collapse in wind power costs and solar power costs because China and America have actually thrown billions at this. And actually, despite some of the rhetoric, the actual actions that are happening are more meaningful than some of the political sort of headlines. So, you know, we need to engage with it. We're working in a democratic world, which is important, but we should be willing, I think, as businesses to say, look, the long-term framework needs to be clear and stable, and we can do our bit then if that framework exists.

And Maria, I wanted to ask you a similar question. How do you see it working with organizations in different countries at the moment? Is there a concern or is there a sort of strength within business that we can continue, you can continue to move forward?

Well, I want to echo what Ian just said. We did a global stocktake. We asked hundreds of businesses their views on what were the main barriers to address climate change. And 77% said that actually regulation can be an enabler or a barrier to progress. So, that policy attitude is very important. Obviously, with some of the elections coming up, there are in some regions where, you know, we are just hoping for the best. Because it would be too bad that in this moment when there is an exponential growth of solutions, of different policies, and this competition between China, Europe, the US about what is the best policy that can accelerate the decarbonization, that suddenly this is stopped in some countries. Businesses are afraid of this because they have invested a lot of money on a policy environment that was pointing into this direction. And to change plans every 4 years, it doesn't work for a business that has long-term investment plans. I mean, there is only one path and it is fossil to clean. Now the issue is how fast can we move from fossil to clean, which will depend on the outcome of the elections.

Maybe if I may comment on that, I think also absolutely all corporate leaders I meet, it's interesting, we used to say that companies are fast and governments are more long-term, but it's the opposite, right? We need to make investments thinking 5, 10, 15 years down the road, and we don't suddenly shift that because of a political shorter-term. It's not simply, it's not possible. So it creates hiccups. But as somebody, a wise person said to me when I said this is going to be a bumpy journey, I said, yes, it's going to be bumpy, but downhill bumpy. So that I think is pure optimism, isn't it? As we progress, as we see the impact of climate change increase, I think motivation and understanding of the necessity increases, unfortunately. But as we also see the economic benefits of it, there are more and more people, I think, stressed about being left, not being on the train here. And that we definitely see today. And just as an example to that point, in the WEF Climate Alliance, there is now 129 companies. And if you bundle the carbon, it will be the size of the third biggest country in the world. So that would be bad news. The good news is it's a voluntary association of CEOs that are willing to be part of the change, committed to Paris, working on goals who are already having them, so to say. So I think the momentum is increasing in spite of the political lefts and rights, I think.

Okay. Yeah.

So the economic arguments are kind of there. Sorry, Ian.

Yeah. Well, just to reinforce this, but I mean, If I take one example out of the property world, which just demonstrates the reality of what's happening, there's been this thing partly because of COVID that, you know, the death of the office, no one's working in offices anymore. Actually, what we're seeing in London is entirely polarized. Essentially, if you've got a high-quality environmental building, it's all fully let. All the empty buildings are the old, inefficient, unsustainable buildings. And it's literally now seeing different rents for those better properties. So the property industry, to give you one example, has already moved. It is now, you know, we're building net zero buildings and the ones we built are let immediately and there's no vacancy. So there are lots of examples, business by business area, that can say, look, this is already here and this change has happened. It's we've got to get on and do the next challenge and that challenge and that challenge.

And as Maria mentioned, the majority of the companies in Europe are SMEs that are not the size of IKEA or Kingfisher. And Ian, with your wealth of experience, what advice would you give to a company, especially a small company at an earlier stage in this journey, to sort of give them confidence that they can move forward and transition and aren't held up by seeing it as a cost?

Well, I think the great thing is there's lots of examples of other companies who've already done this. So one of the things about the SME Climate Hub that Maria and the team have put together is a signpost to say, if you need to look into this, this is what you can do. So you're not starting with a blank sheet of paper. There's lots of experience and lots of solutions out there. And actually what we're trying to do is cut the learning curve for the SMEs. And that is something that the larger companies, you know, like ourselves and IKEA can do is to help educate our supply chain. Because my experience certainly has been pretty sort of universal, which is if you engage with your supply chain, they all want to do interesting things. They want to be part of a solution. Quite often they don't quite know necessarily how to go about it and what they can and can't do. So we can help make that change happen. And a lot of innovation comes through from engaging with your suppliers.

And Jesper, I don't know if you'd like to comment on that point in particular or just in general, you know, what would your advice be for small smaller companies at an earlier stage in their journey?

As a company, we are asking our upstream oil suppliers, most of them fairly big, but also the smaller ones, I'd say, to comply in order for us to comply. So that is already, I would say, a tick in the box. But together with Marilia and the team, we came up with the idea to try to influence our customers, our B2B customers in IKEA. So we're working right now with the project of inviting IKEA members, corporate members, which is typically the SMEs, to the hub and thereby access to the tools of how do you actually make it happen. And what we learned so far, I think we're still trying to work on the recipe of scaling this, but the interesting thing is the barrier is not the one thing or the incentive of it. It's interesting because the companies are typically privately owned, can be family companies, some of them generations. And if they're good at anything, it's really to make sure they don't miss out on the next wave of competitive advantages. So these people are good at investing. They are not in the backend of change. They're very often in the forefront. And they are mothers and fathers like us. So I think motivational, I found very little we can add there. It's a how-to. So it's technically complicated. And I think One of the interesting points that we could discuss is how do we spread education about not climate change from a nature damage, but from an economic perspective. So the question would be, how do we spread that knowledge among existing hordes of managers and all levels out there?

I think that's a great question to finish with for Maria. How do we spread that knowledge? Is that something that We Mean Business is working on? How can it help spread this knowledge outside just the sort of initial sustainability hub?

Well, it is a privilege to be in this podcast with Jesper because he's such a role model in many ways about advancing this, not only speaking, but actually meeting universities, talking to SMEs, translating the hub to different languages. I mean, this is real, but Jesper is not alone. There are many other business leaders that are very committed and doing similar things. Now we just need to move from the hundreds to the millions. And I think this needs to be a shared responsibility, needs to be part of what it is to be a CEO and a leader today, is this idea that you need to build capacity in your value chain because it's also good for your company. This is a massive reskilling. I think it is top on the agenda of governments as well. So I think the best way to do this is through amplification because No, none of us can do this. I think we need to have webs of collaborators that are pointing to different initiatives that are working on this space. But what is important is that in the mindset of the leaders, this is one of the ticks that they need to check.

Thank you.

Thanks, Maria. Well, that was great inspiration for us to end on. So I'd like to thank all our speakers today. That was a super interesting discussion and as definitely definitely given me more optimism than I have at the moment around politics. So that was great. So thanks to all of you, and that was the Sustainable Views podcast from the Financial Times Group.