Feike Sijbesma in conversation with Paul Hopman on climate adaptation

My pleasure. Thanks.

Well, climate change is impacting all of us, we know that. And we anchored our approach on climate change during the COP five years ago in Paris to take care of mitigation, preventing that climate change would really hurt us further. And we need to conclude that five years later, we are not yet or not on track of our own commitments of five years ago. And in the meantime, climate change is continuing and impacting the most vulnerable countries. It's also impacting our country in the Netherlands, but many developing countries in an enormous way in food production, in flooding and droughts, etc. And therefore, we need to work on adaptation as well, in order to make them resilient and to take care that the world will further prevent climate change via mitigation, but also deals with the impact of climate change already today. So what we need to do is developing technologies, innovations, how to grow our crops in times of droughts or floodings, or how to protect cities, or how to protect infrastructure. And that is the adaptation agenda next to the mitigation agenda we need to continue as well.

Yeah, of course. I mean, we had the famous Paris Agreement five years ago, and almost a year afterwards the US said we withdraw. And the US is of course a very big country with a lot of companies, and it was not helpful of course if the US withdraw. So we're all very excited and happy that Biden and our fighter climate envoy John Kerry rejoined the Paris Agreement and focus again on mitigation, but since climate change is reality today, also to help on adaptation. And we need to do more because we are spending globally, or companies, cities, governments, etc., to make ourselves resilient, to protect ourselves, about 30 billion a year. But it's actually went down, whilst we need to increase it a factor 10 in the coming years in order to cope with it. And therefore we need also the help of the US. We need the companies on board, we need the country on board, because we need to do much more. And I think the developing countries who are really hurt already today, and we cannot say that they caused the climate change. We caused, and the West caused most of the climate change of today. So we have a responsibility also to those developing and most vulnerable countries.

Well, I think there are differences and similarities of course with COVID. I want to be careful to one-to-one link it. But at least what we have seen in COVID is that the global collaboration has been very difficult. Many countries fought for themselves in masks, goods, tests, etc. And this needs collaboration. So yeah, we were tested the last year: can we collaborate? But can we also collaborate to something which is hugely important, can have a huge impact already today, but it's also moving slowly? And the world reacts with a slow speed to slow development sometimes, and that's not good. And once climate change will impact on us even stronger, we cannot say, 'Oh, we didn't see that coming.' We know all of it already for years, so we need to address it.

It's a very good question. All those big conferences, there are state actors who are in the lead of the commitments of the Paris Agreement, now the Adaptation Summit, etc. But at the end of the day, it is not the public sector only. Even stronger, the majority of the investments, the majority of the money spent, need to come from the private sector. So the public sector needs to set policies to get the private sector on board, like a price on carbon or whatever. The public sector should call up the responsibility of the private sector to do something, because indeed the private sector needs to do a lot. They need to spend a lot of money, not only out of moral obligations, but also out of self-interest. I mean, the private sector needs to protect its own supply chains in agriculture, in other ways. The private sector needs to protect its own locations and sites that sometimes are in danger, to protect its own employees. If the employees have no access to water, why would they come to work? So it is in the interest of the private sector also to invest, to contribute, to protect our own businesses. And whilst doing that, taking up a moral responsibility for the world as well. Like you and I shared also before, the economy and the private sector never developed itself with a focus on making money. I mean, the private sector started, the economy started with barter trade: you do this, I do this, we exchange goods. Oh, we are with three, four people, we need to invent something to trade: gold, money, computers, whatever. We find out to trade our competences. But making money is a means, is a facilitator. And therefore there is a responsibility to contribute to this world of this generation. And it's interesting, today some of the younger people said, 'Well, we contributed less to climate change, most likely we're paying a bigger part of the bill.' And that's true. So it's our generation who has the responsibility as well.

Yeah, in COP again, mitigation will be discussed and adaptation will be discussed. Carbon pricing is a tool, I think, to mitigate and to transform ourselves faster to a low-carbon economy. And there are many surveys, and I've led one of the bigger studies with the High-Level Commission on Carbon Pricing. A price on carbon of about 30, 50 towards 100 dollars per ton will help tremendously the business sector from a financial perspective just to invest in a low-carbon economy, in an energy transition, and to change their own emissions and reduce them fast. So it's a very effective tool. Now the big question always is: okay, if it is an effective tool, will it go at the cost of the economy, cost of jobs, cost of competitiveness? And what we have seen, well, if you do it globally, we all have the same burden in all places, so it doesn't matter for competitiveness. But the report and the study we have done shows that it will impact competitiveness and jobs very limited. Even on jobs, to reverse, a new economy, a greener economy will provide a lot of jobs. So it is an argument, jobs, economy, competitiveness, often used against carbon pricing, but there are not many data that that argument is correct, to be honest. And therefore, like Guterres also said today, it's a very effective tool. Now Europe has a system, an ETS system, of carbon price between 20 and 25 today. Some states in the US have it, Canada, Mexico, Peru, Chile have a price of carbon in a modest way, China, South Africa, Singapore. So more and more parts of the world are putting a price on carbon, and it will be interesting to see what the US will do in the coming period.

The more fortunate countries, or the more fortunate companies as well, should take up a moral responsibility because we have been benefiting from our own emissions, where the effects of that is now more seen in the developing countries who have not benefited from the positives and now get only the adverse effects. So we have a strong moral responsibility. But once again, it is also just common sense. If we don't help the developing countries, how can we prevent further mass immigration from, for example, Africa to Europe? Or if we don't adjust ourselves, how can we protect our own supply chains and our own businesses? So for me, always this is a combination for businesses of just common sense and for countries as well, and a moral responsibility. And I hope we take both. And I'm very glad that you, as your company, make this a very important topic and see how your business from a complete different angle can contribute to this. And I hope that many businesses and many companies do the same and think, 'Hey, how could we contribute?' And most likely it will benefit you also. Good, and it is also an engagement to your own people or to hiring new people. So it is a total systemic approach, I think.

Yeah, it's a good question. But the thing is, I think I don't have to call on the next generation or to come with a message. I think what you see increasingly is that the next generation is calling upon us. You've seen Greta Thunberg, you've seen youth movements, we've seen people joining companies and said, 'Hey, how purposeful is your company? Otherwise you don't join even,' et cetera. So you see that the young generation is putting some constraints to us, and that we don't need to call upon them. And we have seen some companies who said, 'Well, I don't want to be involved, I don't want to do anything,' who get problems with own employees or with hiring new people. So I think the young generation realizes, by definition, the future is theirs. By definition, they contributed less and they pay a bigger bill. And they want us, together with them, now to take action in mitigation and trying to prevent it becomes worse. And tools like carbon pricing or reduction targets or transparency helps, and developing tools in adaptation, how to grow crops in droughts and floodings, and city protections, etc. And I think we need to do both. And what I like is that there's so much energy, so much passion, and also so much technologies and innovative power there, that if we want, we can do that. And together between generations, together between countries or businesses across the world, and together private and public sector. And I think, Paul, that's what we need to do.