00:00There's an honesty deficit, to be quite honest, which we need to address if a product or an action damages the environment. It's not high quality.
00:13Welcome to The Big Question, the series from Euronews where we speak to leaders in business.
00:19I'm Angela Barnes and today I'm joined by Chris Hocknell, who is the director at 8Versa.
00:26Chris, thank you very much for joining us on the show.
00:30Thank you.
00:30So, Chris, you are the man to talk to me about unpacking some of the jargon, aren't you, that we hear around sustainability, terms like net zero and carbon neutral.
00:41In your view, what is wrong with these terms and why do they no longer land the way that they used to, essentially?
00:49So, I think the terms themselves are actually pretty well defined now and net zero was better defined since 2021.
00:56And carbon neutral has been redefined in 2023.
00:59And up until that point, they were used very interchangeably with other terms and manipulated, I won't name many names,
01:06but plenty of companies were using them in probably, to be quite honest, completely incorrect and inappropriate ways.
01:11One of the problems is that it's not properly audited and verified.
01:14So, we have companies that will use it incorrectly and say things that are technically untrue,
01:19but they can't actually be verified unless you have the data to dig into.
01:23So, there's a lack of policing, effectively.
01:31Are there examples you've seen where these terms are being misused, like where the messages don't quite match the reality?
01:38Apple is very loose with its terminology.
01:41Oil companies like BP is one example.
01:43They use a term called net zero in operation, and that really kind of doesn't exist.
01:48It's like their own term, and it really means that they exclude the use of their product, the oil and gas itself,
01:54which is technically not correct.
01:56So, there's a bending and a distortion of definitions to suit the company's definitions,
02:01and that is most pronounced amongst a lot of the larger companies.
02:04For businesses and governments, how can they talk about climate goals in a way that's more trustworthy for the public?
02:12We have a big issue in the broad environmental sustainability space,
02:15where organisations are really trying to have their cake and eat it too.
02:20They want to have these ambitious, grand strategies to meet net zero or even carbon neutral.
02:25But they actually, in many respects, don't actually have the solutions within their control,
02:31or they don't actually have the plans to get there.
02:33So, probably four out of five companies haven't done that reconciliation,
02:36and they're really engaging in more PR than action.
02:39I've always favoured the use of carbon efficiency.
02:42So, that means, rather than these more nebulous terms like net zero or carbon neutral,
02:46it's kind of, you know, in 2020, we produced a million, and this was our carbon footprint.
02:51Next year, we produced two million, and this was our carbon footprint.
02:53And we're showing we're getting more and more efficient.
02:56We're doing more with less each year, and I think people intuitively understand that.
03:00And I think we need to move to, rather than using abstract terms,
03:03using terms that are based on, say, efficiency.
03:06And would you say, Chris, it isn't part of the problem as well
03:08that these terms give companies cover, essentially, to delay real action as well.
03:14Is that something that's still very prolific?
03:16I think one of the challenges is, obviously, that it takes a very, very long time to get net zero.
03:20So, net zero, what you basically need to do is you need to reduce your company footprint
03:23by 90%, which is an enormous undertaking.
03:26And realistically, no one can do that in less than 15, 20 years.
03:30And most people are, well, probably all the people on the board at this point in time,
03:33to be fair, probably won't be on the board in 2040, 2045, 2050.
03:37So, we have this real challenge where it's much easier to just kind of keep pretending you're on track.
03:41And there's quite a lot of data now through various institutes
03:45that are reconciling company statements with their stated commitments.
03:49And the chasm gets wider and wider every year.
03:52Is there a world where an oil company can be net zero, in your view?
03:56Or is it just fundamentally at odds with their business models?
04:00It's a bit of a nonsense, really.
04:02Your product is liquid carbon, effectively.
04:04Then, you know, oil is ultimately used to be combusted and turned into other products,
04:09or even as a fuel.
04:10So, your main product is not a net zero product.
04:12So, I think what we need to focus on, oil companies,
04:15is how they can do their refining more efficiently,
04:17their direct emissions, the plants in their control, etc.,
04:21how they can operate more efficient,
04:22rather than expecting them to become a net zero company.
04:25They are investing a lot in, say, renewable technologies and things like that.
04:29But, in reality, they're still maybe 10, 15, 20 times more invested in fossil fuels.
04:34But I don't have a problem with that, to be honest.
04:37You know, there's that kind of original sin philosophy
04:40in the environmental movement around oil companies,
04:42but oil and gas are the lifeblood of the whole economy and industrialised society.
04:47So, while we know we need to phase it down over a very long period of time,
04:51there is no advanced civilised society without them.
04:54So, yeah, we need a much more, I think,
04:57adult approach to how we're going to transition.
04:59What kind of impact could it have on the economy,
05:02both short and long term,
05:03if companies actually follow through on their net zero goals?
05:07I think one of the big myths we have is that the renewable technologies are there,
05:11they're fundamentally cheaper and they're a better option.
05:15But the reality actually isn't, that isn't the case.
05:17So, a lot of the kind of quoted cost per megawatt hour
05:21is probably undervalued by maybe 50% of what it actually is
05:26because they don't count downstream costs, for example.
05:28So, one of the big challenges is getting honest and accurate about these technologies.
05:34You know, energy transitions have cost hundreds and hundreds of billions of euros
05:38and, obviously, if companies are going to be forced to do that,
05:41they need long-term transition plans
05:43and the impact of policy uncertainty in Europe
05:45could be adding a third or more kind of cost to companies
05:50in terms of planning their green transitions
05:52and that's obviously acting as a huge disincentive
05:55to making commitments to technologies.
05:57A good example in the sense of what not to do is, say, the UK.
06:02So, the UK is heavily de-industrialising
06:04and half of its stated emissions reductions
06:08are just pure offshoring and de-industrialisation.
06:11and I think the UK is probably the worst in Europe
06:15for its de-industrialisation
06:16and its kind of, its gap between reality and what it's done
06:19and I think we haven't kind of squared that circle yet
06:22of if we are going to go down this route of transitioning technologies,
06:26it's going to push up energy prices, which it already is.
06:29It is one of the fundamental drivers of why Europe has higher industrial energy costs
06:33than, say, China or the US.
06:34That is absolutely fundamental within that equation.
06:37So, we need some big structural changes
06:41as to how we are going to keep the industrial energy prices down
06:44so companies aren't offshoring all of their production.
06:47There's talk about, in the policy circle,
06:50something called CBAM, the Carbon Border Adjustment Mechanism,
06:52which is where you would say if you're getting high carbon
06:54but low-cost imports from China,
06:57they would be effectively taxed at the border
06:59to account for their increased carbon
07:02and then that puts them more on parity
07:04with, say, European-produced products.
07:06Finally, Chris, looking ahead,
07:08what's the one thing you'd want businesses or consumers to change
07:11in how they approach sustainability?
07:14What would make the biggest difference as well
07:16in getting us closer to genuine action?
07:19One of the things that I try to do in my work
07:22and my company's work
07:23is that we try and synonymise the idea of environmentalism,
07:26sustainability with quality
07:28because, you know, by definition, I suppose,
07:30if a product or an action damages the environment,
07:33it's not high quality.
07:34and I think once we kind of make those connections,
07:38then I think the consumer choices will hopefully start to flow.
07:42Let's hope so, Chris.
07:43And thank you very much for joining us on The Big Question.
