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, a 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, and up until that point, they were used very interchangeably with other terms and manipulated, 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, so 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, where the messages don't quite match the reality?
01:38Apple is very loose with its terminology. Oil companies like BP is one example.
01:44They 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, which is technically not correct.
01:56So, there's a bending and a distortion of definitions to suit the company's definitions, and 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 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 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, and 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, 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.
03:51Is there a world where an oil company can be net zero, in your view, or is it just fundamentally at odds with their business models?
04:00It's a bit of a nonsense, really.
04:02If 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.
04:20How they can operate more efficiently, 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 don't 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 de-industrialising and half of its stated emissions reductions are just pure offshoring and de-industrialisation.
06:11And I think the UK is probably the worst in Europe for its de-industrialisation 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 an absolute 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 policy circles, 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?
07:13What 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,
07:32it's not high quality.
07:35And 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.
