Companies are stepping up on climate action, says DSM's Feike Sijbesma

Well, we have been moving very much on globalization and one big village in the world. And I think people see that they are dependent on each other and do not always like that. And also not everybody in the world benefited from globalization. If you take the United States, the middle part of the United States did not really benefit from globalization; the two coast areas did. And then, of course, you can also see political reactions to that. People are advocating for that group of voters. And so I think if we want to keep globalization as this, we need to make it much more inclusive, inclusive for all. And if we leave big groups of citizens, of consumers, from globalization, I think we get a counter-reaction, and that results in protectionism, rightly so, driven by the citizens, and that is not helpful in addressing all the issues we just mentioned.

Yeah, I'm not even immediately here to advocate for more taxes, nor for corporations nor for individuals, although I think that everybody should pay a fair part of the taxation. But for example, if due to globalization you lose some businesses, take the middle part of the U.S., move some businesses to China, you need to think carefully how you can replace that. From my former company DSM, when I was CEO, we did that. We had a coal mining company, we stopped with all of that later on, chemical company, then the nutrition company. But every time when we made huge changes which had a big impact for the province, we thought, okay, what kind of new activities can we bring there? And that is a private-public collaboration. The other topic I would like to mention, which is heavily on the agenda here, is the whole area of sustainability and climate, of course. And we built in this Davos on what has happened, what happened in Sharm el-Sheikh in Egypt during COP27. The next COP is in the Middle East now. Companies are stepping up. We had a big meeting with 80 CEOs, part of the CEO Climate Leaders Alliance, who really want to step up. They reduce emissions, they report more clearly so that investors can choose which company is really future-proof. The element which is added in this Davos also is the area of adaptation, because everybody knows we will not mitigate totally. We will reach maybe one and a half or more degrees Celsius. And the Africans also here are saying, well, we cost the least, we suffer the most, and we hope that you do care. So we need to help them to adapt at the same moment. And that means also opportunities for adaptation as well. Exactly, mitigation and adaptation. And for some businesses, seed companies, they can benefit. They can develop seeds which are better in drought areas and those kinds of things.

Yeah, it's a very good point. I am a strong believer that technologies will help us. Technologies always helped us in the last 100, 200 years to develop ourselves. And there are a lot of new technologies. We can now take CO2 out of the air and use it as raw materials. We have seeds which can grow in drought areas and all that stuff. So technologies can help. What we need to do with blended financing tools is to deal with risks, because people say, yeah, but if we invest that in Africa or in Pakistan or Bangladesh or India, maybe it's more risky, and then they ask more interest on the capital they provide. So we need to diminish that a little bit, otherwise only projects in the West will benefit. But I think that is possible, and that is what we are discussing here in Davos also with the investors and also with companies and of course with countries. So you get private-public relationships.

Well, the alliance I set it up a couple of years ago. It started with the multinational companies. 80 were present at the meeting. It is 125 companies now, with hundreds of thousands, a few hundred thousand suppliers, and we pull the hundred thousand suppliers into this alliance also. But to your point, it was funny. I was discussing with the COP president, Minister Shoukry of Egypt, and he was very much impressed about 125, and he summarized at the end of my conversation, 'Mississippi? 125,000 companies? I'm so impressed.' And I said, 'No, I meant 100,000. I'm at 125.' So I agree, we need to grow the alliance also with our suppliers and customers to have more impact. It's interesting, this group, if you take the group totally together, it would be the third largest country in terms of emissions. We don't want to remain the third largest country; we want to become one of the smaller countries in terms of emissions. All together we've committed ourselves to reporting, to reducing, and to take action. Yeah.

China has, I think, a dual track. On one end, you should give credit to China. The biggest windmill parks in the world are in China. The biggest solar parks in the world are in China. So China is doing a lot on technology development, on changing its own energy infrastructure. At the same moment, they're also still building new coal power plants and say, well, be careful of committing our own reductions. On the other hand, for about 2,000 companies, mainly energy related, there is a carbon pricing in China, a modest carbon price of five or six dollars. In the United States, there's no carbon pricing, only in some states. So I would like to be careful to say China is holding back, only doing nothing. I think they are on a dual track. I think they are prepared totally for a low-carbon future, and one day they will arrive there. And I expect China at that moment to say everybody should have a low-carbon economy. When they have it, but when they still do not have it, they will be nuanced in the message. And I think the whole challenge and debate is how do we align. And that was the issue in each of the COP issues now: United States, Europe, and China. More here, the private sector can play a role because we feel from the investors behind us the pressure to future-proof our companies. The investors think long term, and they feel the world will change anyway, whether you like it or not. And we investors, and that was also clear on the meeting we had with 80 big companies, investors say we want you to future-proof, otherwise we want to be careful with our investment. That is a good driving force also for businesses.

Oh, absolutely true. And therefore Europe, we see European Green Deal. If you look at why Europe wants the European Green Deal, it's one to be a net-zero or low-carbon economy, etc. It is good for the environment, but a lot of reason for Europe to do this is to develop all the technologies needed and to have some competitive advantage at a certain moment, knowing the world will change anyway, it is inevitable. So then those countries who have the technologies, those countries who have the companies who are fully future-proof, have developed a competitive advantage. It's difficult to assess that exactly. It's in the coming five years, ten years, fifteen years, but for people who think a little bit more long term, this will happen anyway.