Talking Business with Leon Gettler Interview with Veolia CEO Richard Kirkman.

Richard, tell us about this latest survey that Veolia has done about Australia. Yeah, so we conducted actually a global survey of people around their views on climate change and pollution and the environment. And in Australia particularly, it was a really interesting result because what we found is that there were some climate skeptics around still, one in five people not thinking that climate change and carbon emissions are associated to human activity, and not everyone really tuned in to the fact that climate change is happening, it's caused by man-made efforts, and that we need to do something about it. That said, of the people that do believe there is an issue with the climate, very high numbers are willing to change the way they do things, so buy and recycled products, adjusting their lifestyles and doing things differently to have less impact. So we think there's a massive opportunity here to first of all get more people on board that this is a good thing to do for everyone, and secondly, once we get them on board, we know that people will be up for those changes.

Yeah, that's the kind of anomaly. There's one in five or a third of people more skeptical, but at the same time they're anxious about climate disruption. I think maybe people don't necessarily think it's a human-caused issue, and that it's around how we use waste, around how we produce drinking water, around our energy production methods. People clearly see that there is an impact on the climate. There's clearly more droughts, more bushfires, more floods in Australia, so that's evident. And that's why you've got your high 84% of people concerned about that climate disruption, but probably there's not enough people yet recognizing that there's something we can do about it. It's not a given, and we can adapt to these changes in the climate.

That's right. And that's clearly evident in Australia where there are lots of natural events happening more often than they used to. You just have to look at the last couple of years with the wet weather on the eastern seaboard to see that that's happening more often. And we need to have new infrastructure that is able to respond to that. So a great example would be 10 years ago there were desalination plants built across Australia and nothing's been built since then. Now we need a new wave of desalination to ensure that we have enough drinking water during periods of drought, but also during periods of flood. Because during periods of flood, the rest of the water networks are not able to cope and we run the desalination plants at full bore. And that's been recognized in policy now. We're seeing that new kind of renaissance of desalination plants happening across Australia.

Well, I think one of the big impacts for businesses more broadly with climate change is the emissions, their carbon dioxide emissions either that they're producing directly or that they're responsible for through their supply chain, through things they buy. And clearly there's been a turnaround in policy in the last year or so with the Labor government coming in with the 43% emissions reduction target. So businesses are realizing, and 65% of businesses say they need to do more in our survey, they need to do more about how they control their emissions. And we can help them with that because our mission of ecological transformation is all about how can Australia continue to mine its resources, to manufacture materials, to produce food and to manage its resources to the benefit of all the people of Australia, to the wealth of the citizens. But at the same time have less impact. I don't think this is an agenda of let's stop doing things because I don't think that's sustainable for an economy. It's more about how can we continue to do those things but protect the environment, have less emissions, recycle more waste, collect food waste and turn it into energy, use recycled water instead of producing new water. All those things we know work. The technology works, we just need to roll them out.

Yeah, absolutely. And that I think that's why I'm saying that I don't think curbing a resources industry is the right way forward. I think enabling that resources industry to be carbon neutral, to recycle materials and to introduce recycled streams into their product is the way forward. So we can produce renewable energy for these large resource companies, we can provide them fresh water from recycled water rather than using new sources of water, and we can push material back around the supply chain. An example could be lithium in car batteries. You know, in other countries, in northern Europe, we have battery recycling centers where we take in car batteries and we recycle the lithium and the rare earths back into the economy, back through those mineral companies who have the expertise in how to refine them. And that is coming here very soon.

Well, I would say we don't have enough of the industries and skill sets, and that's why we're working very hard with the academic community to see how we can have engineers, scientists, marketeers, legal people, all the different disciplines trained up for a new wave of industry which is about how we ecologically transform. We need the right skill sets. I think in the circular economy alone, which is recycling materials around, we need about 100,000 new people in Australia over the next 10 years. And we will need to retrain, and I think as other industries tail off, some will reduce. For example, the coal sector might see some reductions and we've seen some plants already announced that will reduce. People will become available or open to be retrained to work in the new economy, the new economy of environmental sustainability.

Yeah, and I think there already, as I say, have been some announced that will close, and there will be people that operate those facilities. And I really need people that know how to operate steam turbines, which is what a coal-fired power station requires, to operate facilities running on waste producing energy where we have a steam turbine. And I need those resources, those human resources that are skilled in running those kind of machines, to move to the more sustainable version of that technology. While at the same time there may be many facilities that continue operating but we capture the carbon from them and we store that carbon or we convert it to something useful like a sustainable aviation fuel or ammonia for fertilizer, sustainable fertilizer production. So all these new kind of industries are going to pop up and we need new engineers, new marketeers and new sales people to work in that sector.

But I think that mind shift has already started, and people talk about the ESG agenda and sustainability reports, and that is all becoming very real very quickly now that there are carbon emission reductions requirements, there's the safeguard mechanism, which I think has started already the transition, the transformation to businesses thinking about their entire supply chain and their emissions all the way from scope one to scope four. Scope one being what you emit directly, scope two being the electricity that you buy, scope three being your supply chain, and scope four being the positive carbon reduction you provide by running your business. Because when I operate a recycling center, I recycle 100,000 tons of material, somewhere someone's not having to produce that new material, and that's providing huge benefit to the economy and to the environment.

That's right. And I honestly think it's happening. And we can pick lots of examples which may be few and far between in Australia at the moment. If you look overseas, particularly northern Europe, you'll see a lot of industries are thinking about how they can cycle all the material around, ensure they use their waste to either produce energy, produce fresh water, or to use that material again in the process. So there are examples and references of being able to do it. In Australia likewise there are examples. The brewery and distillery industry is famously a good example of being able to use its waste either as another product, a byproduct, or to produce energy. So digesting their sludges into a biogas which can be used to power the plant. There's other sectors like the dairy sector where we think there's lots of opportunity. I actually think if you were to take all the sewage sludges from water treatment and the food waste, and also collect all the methane produced at landfills, we'd be able to produce about 10% of Australia's required gas supply, which is massive.

Thank you very much, Leon. And now let's talk to AMP Chief Economist Shane Oliver.