00:00There's an honesty deficit, to be quite honest, which we need to address if a product or an action damages the environment.
00:06It'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.
01:44They use a term called net zero in operation.
01:46And that really kind of doesn't exist.
01:48It's like their own term.
01:49And it really means that they exclude the use of their product, the oil and gas itself, which 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, where 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 or they don't actually have the plans to get there.
02:33So, probably four out of five companies haven't done that reconciliation and are really engaging in more PR than action.
02:39I've always favoured the use of carbon efficiency.
02:42So, that means rather than kind of these more nebulous terms like net zero or carbon neutral, it'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.
02:58And I think people intuitively understand that.
03:00And I think we need to move to, rather than using abstract terms, using terms that are based on, say, efficiency.
03:06And would you say, Chris, it isn't part of the problem as well that 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 by 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, to 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 that 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.
04:01If your product is liquid carbon, effectively, then, you know, oil is ultimately used to be combusted and turned into other products or 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, is how they can do their refining more efficiently, their direct emissions, the plants in their control, etc.
04:21How they can operate more efficient rather 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'd have a problem with that, to be honest.
04:37You know, there's that kind of original sin philosophy in the environmental movement around oil companies.
04:42But, oil and gas are the lifeblood of the whole economy and industrialised society.
04:46So, while we know we need to phase it down over a very long period of time, there is no advanced civilised society without them.
04:54So, yeah, we need a much more, I think, adult approach to how we're going to transition.
04:59What kind of impact could it have on the economy, both short and long term, if companies actually follow through on their net zero goals?
05:06I think one of the big myths we have is that the renewable technologies are there, they'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 is probably undervalued by maybe 50% of what it actually is because 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.
05:39And, obviously, if companies are going to be forced to do that, they need long term transition plans.
05:43And the impact of policy uncertainty in Europe could be adding a third or more kind of cost to companies in terms of planning their green transitions.
05:52And that's, obviously, acting as a huge disincentive to 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 deindustrialising and half of its stated emissions reductions are just pure offshoring and deindustrialisation.
06:11And I think the UK is probably the worst in Europe for its deindustrialisation and its gap between reality and what it's done.
06:19And I think we haven't kind of squared that circle yet of 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 than, say, China or the US.
06:34That is absolutely fundamental within that equation.
06:37So, we need some big structural changes as 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 a policy circle, something called CBAM, the Carbon Border Adjustment Mechanism,
06:52which is where you would say if you're getting high carbon but low-cost imports from China,
06:57they would be effectively taxed at the border to account for their increased carbon.
07:02And then that puts them more on parity with, say, European-produced products.
07:06Finally, Chris, looking ahead, what's the one thing you'd want businesses or consumers to change in how they approach sustainability?
07:14What would make the biggest difference as well in getting us closer to genuine action?
07:19One of the things that I try to do in my work and my company's work is that we try and synonymise the idea of environmentalism,
07:26sustainability with quality, because, you know, by definition, I suppose, if 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, then 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.
07:45It's been a pleasure to have you with us and to hear all your insights.
