Good morning everyone, and welcome to our second ESG Day at UniCredit. Let me welcome our guests here in the room at UniCredit Tower in Milan, but also the people connected from 13 countries. We have live streaming from our legal entities. We are also translating in five languages for the first time. And let me also introduce our colleagues — sorry, welcome our colleagues connected from our offices. Some of the countries are also hosting side events in parallel with our event here today. And this morning I won't be alone on the stage. Let me welcome with us Fiona Merose, Head of Group Strategy and ESG at UniCredit. Welcome, Fiona.
Welcome everyone, it's a real pleasure to be here with everybody in the room, and also, as Rossella said, online. We're so looking forward to ESG Day and the opportunity to discuss matters around sustainability and ESG, and to have so many of our stakeholders here with us today. This morning, we plan to have a client journey which will drive us through credible solutions and concrete options to drive us through a just and fair transition, and we want to be partners for this transition with our customers. What are your expectations from today?
Well, at the first ESG Day we spent a lot of time looking at the challenges. Today, what we're focusing on is the greater need to make progress towards those challenges. So we'll be discussing a wide range of topics, ranging from how climate and technology are having an impact on society, to how we could go about solving the transition trade-offs. So I hope you all find that very interesting and informative. But also this time around, we're putting our clients at the center. We're looking at it from a client's perspective and how we can take the journey together to make progress to tackle the challenges that face us. So we're looking to discuss how we can do this in a tangible way and the actions that we all should be taking. Obviously for UniCredit, leading by example on ESG is very key to our strategy, and I think today is very much evidence that we all have the need for a collective dialogue on this and collective responsibility. But what we're also looking at today — and excuse the play on words — is 'response-ability'. So what are the levers, what are the actions that we need to take to make progress and move forward? So the transition requires trade-offs, which we'll discuss at length today, but also we have real opportunities in this transition to do things differently and more effectively and to make a difference for future generations. Thank you.
Thank you, Fiona. And I would say that you're setting the bar for expectations from today, but I'm sure that our speakers and the panels will be able to meet your expectations, and we will see in the end what the outputs from these discussions are. Thank you, Fiona.
So, it's now time to guide you through the agenda for today. So let's see what the event content is. We will have an opening speech which will be delivered on the topics that we will be facing on the panels today, so they will drive us — TLON will drive us through this event, giving us a broader key of reading of sustainability and transition. The first panel will discuss the social dilemma. We know that last year we put the social at the center; we do have a responsibility towards society, and so this is why we will challenge ourselves, asking how climate change and technology are reshaping society. Then we will have an interlude in which we will present one of our key projects that will be launched today: 'Skills for Transition'. Then we will have an introductory speech for the second panel, driving us through a sustainability trade-off analysis in which we will discuss how we can be concrete in finding solutions from these trade-offs. After the break — please, I anticipate you, we need to be sharp — back at 12 because we will have our CEO, Andrea Orcel, interviewed by Fiona Merose. And after this we will have a live performance which will be a surprise for all of us. The third panel, last but not least, is driving towards the direction that Fiona was mentioning — so finding responses, the ability to find responses to the responsibility of driving the transition. And then we will have final remarks from UniCredit and, of course, a wrap-up. Let me also mention that this year we produced a white paper that you can scan here on the screen to download it, which is driving you through the contents and the reasons why we will be discussing this topic today. It's now time really to start, and I'm honored and also a bit excited to welcome on stage the first speakers, the speakers for the introduction. Let me welcome Maura Gancitano and Andrea Colamedici, philosophers, writers and founders of the cultural project TLON. The stage is yours.
With this ecological transition, sustainability, the climate change, the question we most often ask is how — how do we change, how do we innovate? But perhaps we should start with a different question: why? Why aren't we already doing everything necessary? This question leads us to the heart of the matter. The ecological crisis is first and foremost a crisis of thinking. The Anthropocene is not just a geological epoch; it is an ethical imperative that causes us to completely rethink our role in the world. We live trapped in what philosopher Douglas Hine calls the tyranny of the present — a present that holds us hostage with speed, constant urgency, the demand for immediate results. Yet never before have we so desperately needed what we call 'long thinking' — not just long-term planning, but a different form of mind, a different way of inhabiting time. The anthropologist Gregory Bateson states that the creature that wins against its environment destroys itself. Today this insight takes on new meaning. It's no longer just about limiting damage, but about completely reinventing the relationship between technology and humanism, between innovation and ancient wisdom. This profound observation leads us to a crucial reflection: we ourselves are technology. We are not separate from it. We are techno-biological beings from our origins. The first stone tools, the control of fire, language — these were not simply external tools, but extensions of our being that shifted our evolution. From the first stone tools that became extensions of our hands, we moved to language as an extension of thought, writing as an extension of language, and digital networks as extensions of our nervous system. And now we are all at a fascinating juncture with technology, even just standing our capabilities, not beginning to merge with our biological nature in unprecedented ways, from neural interfaces to genetic engineering. Marshall McLuhan captured many years ago — but it's so contemporary this is — when he described media and technologies as extensions of human. Actually he said 'extensions of men', but I prefer 'extensions of human'. Sorry, not sorry. What's crucial is that extension recursively keeps us in return the tools we create, like our smartphones, and that created aspects modifying our cognitive patterns, our social structures, our very conception of what it means to be human. This isn't just technological determinism, though: it's a complex dance of evolution. We shape our tools and our tools shape us in an unwinding spiral of development that has characterised human evolution from the stars, from the stones. This perspective radically changes the way we see the relationship between humanity and technology. They are not two separate entities in conflict, as people imagine nowadays, but an evolutionary continuum. The challenge is not to continue technology as if it were something alien in technology itself, but to understand that technological innovations are expressions of our human nature, our creativity and our needs. The real point is to completely rethink how our techno-biological nature can evolve in harmony with the natural systems of which we are part. Okay, I always forget it, but the ancient wisdom that Bateson evokes is not in opposition with innovation; it is the key to innovating wisely and sustainably. We speak of 'cathedral thinking' — I don't know if you have heard — in the mindset of those who built cathedrals, knowing they will never see them completed. It's a patient and focused way of thinking, based on the awareness that great work requires vision, dedication and the ability to think beyond one's own time. Today we should also speak of 'garden thinking' — thinking like gardeners who know that every action has long-term consequences, that everything is interconnected. The gardener does not control nature; it collaborates with it. And today, with artificial intelligence and new technologies, we have the possibility to be more conscious gardeners, to use technology not to dominate but to grow together. This brings us to a crucial point: ecological transition is not just a technical problem to solve, but an opportunity to evolve as individuals, as society, as a species. It's a challenge that requires integrating technology innovation with ethical imagination. Now take a look for a moment at the screen of your smartphones. I know that you are being there with you. Take a look at this Black Mirror — that small rectangle of glass and silicone and other materials contains more computing power than NASA had when it sent humans to the moon! This tool. Now take a look for a moment at your fingers. The fingers that swipe across your smartphone belong to a brain that evolved to survive on the African Savannah. The brilliant biologist E. O. Wilson captured this paradox perfectly when he said: the real problem of humanity is that we have only Paleolithic emotions, medieval institutions and God-like technology. This isn't just an interesting observation; it's a central challenge of our time. Think about it: we're trying to navigate the complexities of artificial intelligence with emotional responses designed for spotting lions in the grass. We are attempting to regulate genetic engineering with legal frameworks for settling land disputes. We are wielding the power of appearance with the emotional maturity of our beloved ancestors. But here's the thing: this isn't a story of doom; it's a call to action. For the first time in human history, we have the ability to consciously direct our own evolution — not just technologically, but emotionally and institutionally as well. We need a new kind of integration: imagine institutions that breathe and adapt like living organisms; picture technologies designed not to exploit our ancient impulses, but to help us understand and grow beyond them; and envision educational systems that teach holding and emotional intelligence. The challenge of our generation, even just to create new technologies, is to create a new synthesis of human capabilities. We need to build bridges between our Paleolithic roots and our extraordinary medieval structures and our powerful technological futures. Give us the great work of our time: not to transcend our humanity, not to fully realize it, not to leave our ancient wisdom behind, but to carry it forward into the future we're creating. The tools for this transformation are already in our hands. The question is: do we have the wisdom and the courage to use them well?
In a famous tale by Hans Christian Andersen, 'The Emperor's New Clothes', there is a fascinating psychological phenomenon that speaks directly of our current environmental crisis. Sorry, it's not about the people pretending not to see the Emperor's nakedness — they really couldn't see it. Their minds, bound by social pressure and the fear of appearing foolish or incompetent, created an elaborate vision that only the child's innocent clarity could shatter. Today, we find ourselves in a similar pattern of collective blindness. The science of our environmental degradation surrounds us: in changing weather patterns, in the disappearing species, in the plastic-choked oceans. As in the emperor's subjects, many of us don't truly see these changes. It's not that we are consciously choosing to ignore them; our minds have woven an intricate tapestry of normalcy over these disturbing realities. We have normalized the abnormal, accepted the unacceptable. This act took aside some filter and perception to break the spell. In under-sensitizing, today's youth movement for action serves as a wake-up call. Their clear-eyed assessment of our environmental reality cuts through the sophisticated self-deception of adult society. When young activists speak out, they're not just pointing to problems we are ignoring; they are breaking through the psychological virus, the spell in which we live, preventing us from truly seeing what is in front of us. The child in the tale didn't just expose the emperor's nakedness; it freed the entire kingdom.
Companies are not just organizations that produce economic value, but places where a new form of thinking can be cultivated, where technology can meet humanism, where innovation can become wisdom. Think about artificial intelligence, for example. We can see it only as a threat to human existence, or as a punishment for all else, or we can use it as a mirror to better understand what makes us truly human. Like any powerful technology, it forces us to ask deep questions: what is our role in the world? What does progress mean? What does it mean to create value? This is where the image of garden thinking becomes crucial. In a garden, technology — whether it's an irrigation system or an algorithm — is never an end in itself, but it's always in service of something greater: the life we want to flourish. And this is precisely the turning point: moving from an extractive to a regenerative vision. It's no longer just about minimizing damage, but also maximizing the power of regeneration. Like the child in the tale who has the courage to speak the truth about the naked emperor, today we need the courage to imagine and build something completely new. And we need a new way to look at our data. It's a new form of beauty emerging from the relation of data and meaning — not the antiseptic beauty of numbers, not a purely aesthetic beauty of art. It's something entirely new: the beauty of complexity made visible. Consider Giorgia Lupi's revolutionary insights. Maybe you know her — data can be both precise and human. Her data humanism shows us that when we treat numbers as expressions of life rather than just measurement, we discover entire new dimensions of understanding. It's not about making data less accurate; it's about making it more complete. When we transform data into sensory experiences, we are not just making information more accessible; we are creating a new language that speaks simultaneously to reason and intuition — a language that always has to feel the fruit of numbers and calculate the depth of emotions. Imagine being able to touch the heartbreak of a forest, to see the breath of a city, to listen to the rhythm of climate change. This isn't science fiction; it's the new frontier of knowledge, where the boundary between measuring and understanding dissolves into a new form of wisdom. Thank you!
Thank you, thank you Andrea and Maura. Thank you for your inspiring speech. We will hear across the day evolutions about these preliminary, but not so preliminary, I would say, thoughts. And it's now time for a video from Junior Achievement. Climate change impacts everyone, but the future belongs to young people. That's why we spoke to students from Junior Achievement Europe, an organization supported by the UniCredit Foundation that inspires and prepares our youth to succeed. Let's hear their voices.
Climate change will have a huge impact on my future, especially in terms of environmental stability, health and opportunities. It will affect everyone.
My view on climate change and our future is that we can see the impact of climate change right now, with more dangerous natural catastrophes happening all around the world. And in the future, it will just get more dangerous and more drastic if nothing changes.
Welcome back. And I told you that the news this year were many. And so let me welcome on stage our moderator for the three panels of today: Silvia Berzoni, Chief Editor of Class CNBC. Hello, Silvia.
Good morning, good morning. I'm not stealing too much time; I leave you the stage with your panels. Thank you, thank you very much. Thanks a lot, Rossella, and of course thank you Andrea and Maura for these really inspiring messages, as mentioned. Well, good morning to everyone. First of all, as mentioned, I will be guiding you through different panels and roundtables today. The fil rouge will be that mentioned by Fiona: innovation. So innovation can be defined, if you think, as the place where ideas can connect. So this is exactly what we will be trying to do today: to connect ideas, but do so in a very pragmatic and realistic way. We want to give answers, we want to talk about innovative solutions, new mindsets, new business models — so the way to transform challenges into real opportunities, because at the end sustainability is about adding value. So in order to do so, we have to start from the roots, and the root is society. If we think about every transition, and especially the twin transition we're experiencing, social justice is a prerequisite, and social justice is built on social cohesion. It's a matter of the global north and the global south, it's a matter of generations, different generations, it's within companies, employers and employees, it's between producers and consumers. So we have to try to find a viable compromise. And with that said, it's my great honour to welcome on stage the speakers of the first panel: Marco Piccolo Reynaldi, the CEO of Reynaldi SRL; Maura Gancitano, of course; and Andrea Colamedici; and Matteo Innocenti, he is the president of the Italian Association of Climate Change Anxiety. So welcome to you all, and welcome back on stage. So, as you're more familiar than the others, Matteo, let me start from you, because we've seen a video from the young generation. We can say that the young generation today has two main characteristics: they are hyper-connected, and they are more anxious than we were. And about climate anxiety and the shades of environmental feelings that they have, how can we transform this into something that is positive, a lever for change, let's say?
Environmental emotions, especially eco-anxiety, are intense emotional responses to the climate change and environmental crisis. Eco-anxiety specifically refers to chronic feelings of worry, often fueled by a sense of powerlessness when facing the scale and complexity of environmental issues. Many young people, as well as adults, feel overwhelmed by the urgency and severity of the climate crisis, leading to emotions such as eco-paralysis that can be debilitating if left unmanaged. However, these emotions don't have to be a barrier; instead they can serve as powerful levers for change when properly channeled. To transform eco-anxiety into action, we must first recognize and validate these emotions, creating spaces where people feel seen and heard. The journey begins with fostering a sense of community and connection around environmental concerns. When individuals know they're not alone in their fears, they're more likely to feel empowered and capable of taking action. Companies can play a crucial role here by building support networks that encourage shared purpose and resilience, and by providing opportunities for employees to actively participate in environmental initiatives. Moreover, organizations can harness this drive by setting up programs that focus on sustainability goals, both internally and externally. By involving employees in corporate social responsibility projects or environmental impact campaigns, companies can offer a sense of agency and real contribution. When people see the tangible impact of their actions, even at the local level, eco-anxiety often diminishes, replaced by a sense of achievement and hope. In short, eco-anxiety, when met with the right support and tools, can be a powerful motivator, converting distress into determination for a better world.
Thank you very much, Matteo. And indeed, sometimes it's very, even, difficult to find and address, but this could be transformed, as we were saying, to transform challenges into opportunities with the right tools. But Maura, of course this channels into companies and society, but if we think intergenerational link, it's a very powerful tool in a company. So how can a company build such a vision?
It's so important because nowadays we talked so much about young people, but I think that every person in this moment, in this moment of crisis, is in search of meaning. We are asking at work something different from before. In the sense, we are in search of meaning; we want to overcome the dichotomy between personal life and work life. It's not just work-life balance; it's about values, it's about a vision of the future. So it is important to me that companies focus now on human growth and not just economic growth and not just achievements, but something that could give sense to the human. And it's not just about new generations, not just about young people; it's something about human sustainability. When we talk about sustainability, we're talking, to me, on three sides: environmental sustainability, economic sustainability and human sustainability. The person at work wants to make something that has a sense, that could create a better world. And this is a great breach from people who were in the work, working in, from the kids and people that are starting work nowadays. So to me it is important that we could, we have to validate emotions, we have to validate this willingness of agency from people. And on the contrary, in these years, many companies are trying not to see, like the tailor in, and suppressing, and the sense not to see what's going on. Now we could say what's going on: it's a great shift of paradigm. We have to have sense in our lives. So it is important that in this sense, that companies make values, human values, the ground of every action, every single little action in the work. So it is important, and it is important to create a debate between, among generations, from young generations to older generations, because every person here, I mean, or on the streaming, is searching for something that could make sense about our lives. So, and this is not just an individual path; it's a collective path. So to me it is important not to say that it's just an individual issue; it's something that this new path that you are, that we could choose, it's a collective path. So it is important to change our perspective.
And of course it's very important also the transfer, the contamination, the exchange of know-how and of values. The more values we have, of course, the better it is. And speaking about this, Marco, you are considered, of course, an ethical entrepreneur, but also the ambassador of the civil economy. Can you explain and tell us more about that, and how can companies really match profit and non-profit values?
Okay, thank you all. Civil economy was the first school in the world, 1753, in Naples, Antonio Genovesi, okay, the chair of civil economy, because the economy is the engine for the growth of the community, for the common goods. That's the point! And so to be an entrepreneur is a vocation: the company in the service of the community. But no one studies Antonio Genovesi, and there is no school today, university, that teaches civil economy. Twenty-two years later in Scotland, Adam Smith theorises the political economy. What they say: Adam Smith, Taylor, Friedman — shareholder theory. The entrepreneurs have to focus and to maximize their own interest: maximize the profit without taking care of the consequences. In political economy there are two great issues: the first one, all the theory, and think that environmental aspects are limitless — infinite fish, wood, water, and so a company that makes paper, they have to cut the maximum quantity of trees to maximize their profit. But in the end we will not have any woods. Okay, so that's the problem. The second issue is that there has... Adam Smith tells that there is an invisible hand that will set everything in the west, we will be distributed to all the people, trickling down to the riches to the poor. Instead, today we can face that 10% of the population owns the 90% of the property of the world. So today, we need to see a new paradigm. It's not a theory; it's a paradigm, it's how I can see the world and economy. In the civil economy now, I am ambassador of it and I teach that the point: what is in this situation, company has to focus on maximizing the profit without taking care of nothing, making kill and wounds, and on the other side there are the associations that on one hand put the sticks on the wood and with the other hand ask money to the state. It's not functional. Instead today we need companies that, making an honorable profit — Cutrulli: 'L'Arte della Marcatura' was a merchant in Florence in the Renaissance — in the moment making an honorable profit, in the same time, we make social and environmental profit for everyone, in the same moment. And it is not philanthropy: I have a lot of profit and then I give money — this is philanthropy, it doesn't work. We must find out the new economy that normally makes positive aspects in economy, but contemporary in the same time. Can I make an example?
I was about to ask you — I produce cosmetics, so sorry.
Also only cosmetics. So what's the point? I take them in Barge, next to Cuneo in Piedmont, there is a company that makes apple juice, and they have a lot of waste of apples. So we decided to take the waste of apple juice with a patent, so thanks to the technology we transform it into raw material for cosmetics. This is not recycling; it's upcycling, to give more value to the products, okay? So a circular economy, an increase of value. Then in production we are zero waste water, zero CO2 emission, recycle 98% of the waste, okay? And then we choose all recycled packaging, okay? And then the picking — there is my friend, I'm very active in social and with associations in Piedmont, so a friend that has the community of people with Down syndrome. These people, instead of staying at home doing nothing, they come, they work, then prepare the packaging. So when you receive the package, you find out the photo of that person that says: 'Thank to your order today I have worked.' It's not only a question of money; it's that work gives sense to our life. And we have to take care about the waste of a population that is not a waste, or a weight for the society, but we have to find out a way to maximize their work, from the start of from waste to a reserve. Okay. And the point is that the political economy says Homo homini lupus — every man is a wolf of the other. But you know, the real economy is functional when there is trust. In fact, civil economy says Homo homini amicus natura — for nature, people are friends one another. So we have to find a relation: trust. And with the common wealth and the community grows faster. During Renaissance in Florence was so beautiful and big because there was a lot of trust. The common trust is fundamental for our society.
And you gave me a perfect assist talking about trust, because Andrea, generative AI — of course we are just at the beginning of what we can possibly see as a powerful ally, or of course a powerful tool for disinformation, for example, we have seen during the US elections. So how can we make sure — and this is a very difficult question, I understand — but that generative AI can be a co-pilot for an effective and efficient use of resources and human resources?
The precedent speakers led me to think about a quote from Edgar Morin, that is a 'young' philosopher — yeah, he's getting 102 years in July, and it's a great mind — and he says that 'we have to navigate the oceans of uncertainty using islands of certainty'. So around us there is a lot of uncertainty. We don't know where we are. What the science of the last centuries gives to us, it's very strange because it's a lot of knowledge that tells us that we don't know a lot. We know more than we ever knew, but we understand that most of the things of the world we already don't know. We already don't know about them, because, you know, we have to live in this crisis of thinking. We have to understand that generative AI can help us to shape our world, but of course they will improve the chaos, too. Umberto Eco created a difference and spoke about it very deeply about apocalyptics and integrati. So that one who, when a new technology comes from, says this will save our lives absolutely, that's a panacea — they are the integrati, and the apocalyptics says everything that came out is bad. We have to become apocalyptics and integrati at the same time. There is a beautiful dialogue, a dialogue of Plato, it's called Phaedrus, in which Thoth, that is the Egyptian god, says to Tamos the Pharaoh that invented something new. Thoth invented a lot of things, invented the astronomy and some places too, and he gave to the Pharaoh Tamos a new invention. Plato wrote the invention was 'grammata', the writing, and he said: you know, the writing — Thoth said to Tamos: the writing will help your people to become more intelligent, more smart and to improve their memory. And Tamos stops him and said: you invent, I say, you are the inventor, but I am the one who understands what you have invented. This invention that you made, the grammata, the letters, the art of writing, is dangerous, because it creates the feelings of knowledge, but you don't have the knowledge. It creates the illusion of memories, but you don't have the memories inside of yourself; you have outside of yourself, you have a hard disk in which you put your memories. And this is very similar to what's happening to us. Plato, otherwise, wrote some of the best pages of our history of literature, and this could seem a paradox. Why he's so angry about writing and then he wrote 14 dialogues? It's difficult to understand, but you understand that something was changing in his era, and you understand that he has to become one of the greatest artists of his time. It's not just a philosopher; he's also a great writer. If we stay also in the Phaedrus, we see in the Ilissos Valley that the narration is amazing, and we have to think just like him.
I think because you are an AI enthusiast.
I am. I think we all... I have no sense, no... no... I completely understand all the critics, yeah.
You love generative AI in particular.
But I think that there are different places, different steps. The first step could be huge love or huge hating. But then you have to make another step: you have to love complexity and understand that you can love and hate something at the same time. And generative AI is that place, because you can lose agency, you can leave an entropy of your mind, you can delegate enough.
It's not about thinking less, but thinking more than ever. Or maybe it's not about putting love and hate, but it's about being, putting the feet on the ground, being realistic: how can you use AI? And we sometimes forget that a generative AI was born from human, is nurtured by human language, and wants to imitate our brain and our functioning. So the human is always at the center.
We love to speed up a little bit. Matteo, we'll come to you, just wrap it up. Is it true that young people right now are fighting within companies the common knowledge of productivity, and they're fighting an old system of values?
Yeah, there is a common misconception that younger generations are disengaged from traditional notions of productivity and uninterested in career building. In reality, many young people are already finding what it means to add value to the world and their communities. There is a rising phenomenon that is called 'climate quitting', by which young people are quitting their work for following their values. Climate quitters, they are not rejecting work altogether, but they are questioning a system that often places profit above planet, inclusivity and long-term well-being. What they truly seek is meaningful work that aligns with their personal values — a shift from focusing solely on financial success to creating a positive social and environmental impact. For these young professionals, the workplace must reflect an alignment with issues they care deeply about, such as sustainability, diversity and ethical practice. Companies that wish to attract and retain this talent need to understand this and respond by creating a work environment that supports these ideas. This could include flexible work models that allow for personal growth, spaces for employees to engage in volunteer work, and open dialogues about the company's social and environmental impact. By embedding these values into the company culture and showing genuine commitment to sustainability practice, companies can not only attract talent but also foster a contagion of positive values. When employees see that a company is not just talking about, but truly investing in sustainable and inclusive practice, they are more likely to feel connected and inspired. In this way, companies have an opportunity to build a culture of mutual respect and propose their values impact are central not only to their mission, but also to the everyday experience of their people.
And talking about which, Matteo, thank you very much. Marco, last question for you. You are the first Italian cosmetic company that became a B Corp, and we have seen in the last year the evolution of some, let's call them exaggerations, the woke culture in the US, here in Europe we had some scandals about B Corp certification. So first question is: why did you decide to become a B Corp? And the second: does it really give you an added value?
Okay, cool. Okay, the two key benefits for a certification like B Corp is: a framework that gives you the information to set, understand your position in sustainability and to help you to improve your next step. You have to work a lot to become a B Corp if you want, if you need — open, yes, a lot of, few people, few companies can enter immediately. The second one is that you receive an external validation of your certification, of your sustainability image, okay. But the problem is that a lot of companies use the certification because they lavish like a shield to improve their image, instead of changing the action. Reynaldi was the first benefit corporation because medics neatly, but we never applied to the because I believed that it is our actions that define our business, who we are, not our image or logo. So that's the point, okay. If a company can demonstrate its commitment in such environmental activity, the certification should be not interesting. So it should be, it depends on the company. But the point is, the real changes are through the action, not through a certification. The certification could be a good framework for validation image, but not to change the company too much. I see companies that ask: we need to make some social activity or we need to have some sustainable environmental performance of our products. Why? Because we have to sell more. We live one time and we spend more time at work than home. I want a good life. I want a good time at work, a good time with colleagues to live well. That's the point why we do it.
Okay, thank you very much! I want to thank our speakers: Marco Piccolo Reynaldi, Maura Gancitano, Andrea Colamedici, Matteo Innocenti. Thanks a lot. Thank you. And of course, unlocking value is about action. So Rossella, I will hand it over to you.
Thank you very much, Silvia. Thanks to our speakers. You see how many contents we created already this morning. I think that this panel — I have back Fiona Merose, Head of Group Strategy, and you see here on the stage with me at UniCredit, the contents that were created that give us a narcissist right, because it is coupled with our purpose, which is empowering communities to progress at UniCredit. And this gives us the opportunity to launch our Skills for Transition project, on which we worked extensively in the last month, and we're very proud of it. Fiona, can you maybe share with the audience, also with the connected audience, what is it about?
Yes, we're very excited to announce Skills for Transition. This is a project wholly powered by UniCredit, so this is something that we're undertaking, and it is across several of our countries. And it is really giving strategic training for different groups which will go through, and this strategic training is tailored towards the green transition. So it is enabling people to have the right skill set and the ability to meet the challenges that we face. And so we're doing this across a number of countries: Italy, Germany, Bulgaria, the Czech Republic, Slovakia and Romania. So that's six countries at the moment, and it's going to be addressing three different groups. So NEETs — not in education or employment — as one group. The other very important group is the employees of UniCredit clients, so corporates, and also students. So we are basically addressing the green transition and the reskilling, all the new skill sets that are required, which is something that we feel very strongly about. And this closely aligns to our strategy, our number one principle of accompanying our clients on a just and fair transition, and also it's very aligned with our social strategy in terms of empowering communities to progress. So for us this is a very key project, and we're excited to talk about it in more detail today.
Yeah, thank you Fiona for this introduction. As you were saying, we do have three target populations. You mentioned the NEETs, and we are addressing them via organizations which are delivering projects in the different countries in which we operate, and that Fiona just mentioned, to bring them back to the job market. But you also correctly mentioned that the students and the workers are from our companies, the client companies, for which we really want to create a path. So we deliver for the students together with the POLIMI GSOM path, which two paths actually: one is a master, and then we have three boot camps on topics related to transition and also net zero sectors. So we developed a very extensive training. Let's and please hurry up because we are closing up the subscription to participate to these masters, which you said for free, because UniCredit is fully financing a training path. Fiona, since we are approaching the day for the closure of these additions, what would you recommend the young people? Why would you recommend these courses?
This course will enable them to have new skills and obviously totally relevant skills for the future, in terms of not only the green transition but more details around net zero and how to operate in the new frameworks that we're living in. So we would argue that it will really improve their employment prospects and have a measurable social impact. So I think it is certainly something they should all be looking at.
And last but not least, there is a third category which we mentioned, which are the clients for our client companies, of which there is a big announcement. We developed different training paths together with the support of Accenture, and we basically are delivering it to a training platform, a digital platform that is focusing on cross-ESG skills to be developed and also some sectorial deep dives for different profiles. I mean, which is the value that you at UniCredit that you would see, or would you recommend that we are client companies to adhere to this initiative?
But I think this goes to the heart of one of the key levers for ESG, which is training. So we believe these are really thoughtful courses that are also targeted. So there's a lot of building of skills and reskilling. So we also see this as a great opportunity to assist our clients in the transition. So we are hoping that everybody sees the value there, that also pretty targeted to certain sectors, but there's an overall ESG fundamentals background. So we see this as something that's very attractive for all of us to consider.
Thank you, Fiona. And I think that we have also the countries that are piloting this first phase of this project connected. Okay, welcome to our yesterday. A big round of applause to our colleagues in the countries. Clapping. So thank you for being with us this morning. I think that we would like to have your view on what is, considering also the geographical, let me say, but peculiarities that you may have on the scenario, economic scenario that we have so far, which is the main value added there for of the Skills for Transition program that you would see? I will start with Italy. Nadia Cento is connected with the team from yesterday. Italy, please, Nadia.
Thank you, Rossella. UniCredit has long understood that sustainability means a paradigm shift that involves looking at our customers from a new perspective. We know that embracing this new paradigm can be demanding for our customers. This is why we think that supporting customers in boosting upskilling and ensuring proficient knowledge on ESG topics is key to help them develop and update their professional ESG competencies. In this sense, it is an opportunity and a differentiating factor for their businesses and transitions.
Yeah, thank you Nadia. And then we have Stephanie Kraus-Nijboer from Germany, Head of Social Impact Banking at ESG Germany. Please.
Yes, UniCredit is the only bank in Germany offering such a high-profile training for free, and that's contributing to a sustainable and fair society. The training is particularly valuable for the German Mittelstand companies, who have to reskill their employees for the transformation of their business to green technologies. And for the future employees of the German companies, studying is more and more a question of financial resources of the parents. And here, the Skills for Transition Master and boot camp helps a lot, because it's fully financed by UniCredit and provides the students with a unique opportunity to deepen their knowledge on green transition and make them fit for the job market.
Thank you, Stephanie. We have then from Romania, Simona Petrescu, ESG Director. Greetings from Romania.
So for us, Skills for Transition is a significant step for Romania and a unique opportunity to help businesses adapt to the paradigm shift in an evolving market, while also driving sustainable growth by investing in people and keeping employees and future employees across the key sectors with essential future-focused skills. We are fostering resilience, enhancing productivity, and building a more competitive Romanian economy for the years to come.
Thank you, Simona. And also from Bulgaria, Biliana Mladenova-Mileva, Manager ESG Strategy.
Hello from Bulgaria. So in Bulgaria, the small and medium companies are forming around 75% of the real economy, which means that this is the backbone of the work of economic development. We understand that the small companies get limited resources for consultant services and additional education of their staff. So for us, Skills for Transition is essential for their needs. The program addresses our country's needs for greater knowledge in ESG practices, regulations, the right sustainable growth and meet the EU standards. The development of sustainable practices is quite recent in our economic environment, and for both target groups — students and employees of SMEs — the provided skill sets is extremely very well. Thank you.
Thank you, thank you Biliana. And also from Czech Republic and Slovakia, Zuzana Michon, ESG Governance Specialist.
Good morning from Prague. Our answer to the question which has been asked is that ESG is not a one-man show. ESG is about the whole community, and everybody has his role. Everybody can and must participate in the transitional journey, regardless of whether people are young talents, students or managers who understand the of the challenges ahead of us is crucial in achieving the European Sustainable Goals. Each of us will feel the impact and the benefits of ESG in our daily lives. Program Skills for Transition is designed specifically to support our corporate customers or the students during the journey. We try to equip them with the necessary skills and know-how to enable a smooth and successful transition towards a greener economy and more sustainable future. Thank you for your time.
Thank you, and really thank you to all the countries and Fiona. I think we are thrilled in the mention that both you, we expected both students and the employees of our client companies that can join us with these, the training parts that we really shaped to support the Just and Fair transition that we mentioned many times in our strategy. And now it's time for the second video from Junior Achievement. Thank you.
Each of us, regardless of age, can take action to reduce the effects of the climate crisis and have a more sustainable world.
I have done my research for five years now, researching sustainable fashion and other sustainability aspects.
And it's now time to move ahead with our program. We have now a connection for our introductory speech to our first panel. So let me welcome Professor Dieter Helm. Professor Dieter Helm is connected. Okay, we don't have the connection. Probably we can recover it afterwards if we are able to connect him. He's unfortunately connected from London. But let me welcome back on stage then Silvia, who will manage the first panel. Thank you very much.
As we wait for the professor to be connected, I think that we can start the next panel as we speak. Of course, the COP29 in Baku is ongoing. Negotiators are trying to find available compromise, let's say, on climate finance. And we are in between this COP, it's considered an interim COP, between the ambitious targets that were set in Dubai, not achieved, and the ambitious ones that will be set in Brazil, where every country will have to submit their end disease. And as always, of course, during these two World Leaders' Days, many, many speakers have been reminding us about the urgency. The General Secretary of the UN, Guterres, just said that 2024 was the best masterclass of climate failure. And indeed, if we want to keep Paris alive, and we are already over 1.5 degrees, we have to reduce emissions by 9% by 2030. We have to reduce energy production, fossil fuel production, by 30% by 2030. And of course, we have to gather all the shareholders necessary to ramp it up for climate finance. I see that Professor Helm is ready to speak. So, Professor, welcome, of course. Thank you very much for being with us. I was just anticipating some themes that they are discussing at COP29, but I leave you the floor.
Well, thank you very much for inviting me to this really important conference day. What I'd like to do is just go back to basics to start with and consider where sustainability and ESG has been leading us, and that will indeed lead me to make some remarks about where we are or where we are not on climate change and what will need now to be done. So, in terms of trade-offs, the topic of the session, we started with sustainability, and sustainability really got traction back in the long-distance past of the late 1980s, when the UN commissioned the Brundtland Report about North-South economic development. And Brundtland defines sustainability as that which leaves the next generation with at least as good a set of opportunities as ourselves. Now, we had a lot then of excitement about sustainability, but I think broadly what happened was that we descended into a kind of sustainability means anything you want it to mean, and therefore enabled an enormous amount of greenwash. And people moved on to try to find something more tangible that they could get a handle on. And ESG is exactly that attempt. It's focused overwhelmingly on investors and the corporate sector, doesn't really have much to say about us as the consumers, and it attempts to provide a more precise framework by which we can decide what it is that it's right to invest in and what it is that it isn't. Just in passing, by the way, by pinning this on the corporate sector, and of course it's very important that it is, and investors, it ignores the fact that ultimately us, you and me, that buy the stuff that has the environmental, social, and governance problems associated with it. You know, it's not really about just stop oil. If you really want to work out why oil is produced, it's not because directors sit round the boardroom table, investors sit round in a meeting and say, hey, let's do some pollution today. What's actually going on is that we are buying the stuff, and ultimately all pollution comes down to individuals. You could just stop buying it if you really wanted to do so, but we're a very long way from that, and I'll come to that at the moment. Now, in that old attempt to do something about what sustainability meant, we ended up with these three categories, and the three categories really just ask the questions, but they don't tell you what the answers are in themselves. And there are problems within each, as well as problems between them, trade-offs in each and trade-offs between them. It isn't a win-win world. It isn't a kind of happy-clappy route to environmental and social and governance a wonderland. It's about hard choices and about how trade-offs are evaluated. Within each, there are problems. For example, take the environmental bit. It's not true that everything we do to reduce the risks and the degree of climate change necessarily benefits biodiversity. There's quite a lot of things we could do to get emissions down quickly, which would do a lot of damage to biodiversity. Planted eucalyptus trees, fast-growing, quickly sequestering carbon on areas of previously much more earthless forest cover, or indeed different kinds of land use, can have devastating effects on biodiversity. So we have to be really careful when it is that we're doing something for climate change and when we are doing something for biodiversity, and how to mix those things together. So that's the first area which we should be quite concerned about. We have to be clear. We have to be realistic about what is being sacrificed for what. Between the categories, the trade-offs are enormous. China is doing a number of really good things on the climate change front, but it's not so good on some of the social and the governance issues. We really are going to say, well, you know, climate is so much more important than social and governance that we basically say, don't worry about it. In which case, we should be explicit about the options in front of us and say very clearly why we're making the trade-offs we are. Now, why is all this matter? Well, because it's not as if things are going well at the global level or indeed at many national levels. You know, people want to be optimistic. They don't want to be pessimistic. You know, I'm asked all the time, are you an optimist? My answer, and I think it's really important in any consideration of these kinds of concerns and ESG in particular, is to be brutally realistic. So where are we? Well, after, you know, more than three decades of trying since 1990, we are 80% dependent on fossil fuels. If we were to just stop oil or just stop gas, our world economies would collapse. It's really important to understand this, and that 80% come down a tiny bit, but broadly it's that sort of number is of a massively bigger world energy demand than we had in 1990. And behind that lies the fact that we've been adding two parts per million of carbon to the atmosphere every single year since 1990. There aren't any blips. You can't find the 2007-2008 financial crisis. You can't find much for COVID even within this framework. Why? Because climate change is the product of two things, not one. It's all about emissions, of course, and we must try to reduce those, but it's also all about sequestration. And so, for example, during the COVID years, why wasn't there a plummeting of parts per million in the atmosphere? Well, the answer is that while we've been merely increasing emissions, we've been destroying some of the most vital carbon sinks in the world. Mining nickel in peat areas and clearing rainforest to do so, to make the stuff for electric batteries, does a lot of emitting by stopping the natural world absorbing. Having bits of the Amazon burning each year is turning what should be the greatest or one of the greatest world's climate sinks into a net emitter of carbon in some areas. So we have to be brutal that we've got to do both, the sequestration and the emissions reduction, if we'd have a hope of reducing the parts per million of carbon in the atmosphere, which is the only thing that matters. And you're just looking forward to the great agricultural transformations coming in areas like sub-Saharan Africa. Bear in mind that roughly the soil has four times the stock of carbon in the atmosphere, so you have to do a lot about agriculture too. So the challenge is really big, and when it comes to biodiversity, it's largely unseen what we've been doing in this last century, in the beginning of this century. You may notice if you're in Europe that there are no insects on the windscreen when you drive your car around. When I was a child, you had to stop the car regularly to clean the insects off. We've destroyed enormous amounts, quantities, percentages of our invertebrates. We're doing great damage to our oceans. All of these things have to be brought to the table, and so that comes the fundamentals of what ESG should be about. We should go back to Brundtland right at the start and go back to that idea of leaving the next generation with an environment at least as good as we inherited, inherited, to put it in terms that I use, in order to ensure that the future generations can have the freedom to choose how to live their lives with those assets at least as good as we found them. That means we must treat these core requirements, and I include the social in this, as assets in perpetuity. They're not for depreciating. They're for current cost accounting. And our duty as stewards in achieving ESG and achieving sustainability is to make sure we do the capital maintenance to make sure that those assets are kept intact. We maintain our atmosphere, we maintain our biodiversity, and yes, we maintain our social networks and our core institutions. So that's what we should do, and in doing so, we should realize that when we make the trade-offs, the environment is the trump card. It's the one that really matters. And sadly, although we can report lots and lots of reductions in emissions in Europe in particular, and the UK is the exceptional case in this world of very big reductions in emissions, don't kid yourself, these are territorial emissions. What we've been doing in the UK and what much of Europe has been doing is basically deindustrializing. If you measure carbon consumption, which is the true measure of your carbon footprint, of what you cause to climate change, then the story for Europe and the story for the UK in particular is a very, very different one. What does it achieve if you reduce the number of, let's say, beef cattle in Britain or Europe and import them instead on cleared rainforest from the Amazon? You have to get serious. CBAM is one of those steps, but there are many more steps that have to be brought into frame. So I conclude, if we are serious about ESG, if we're serious about climate change and biodiversity, it matters enormously that we are brutally realistic about the baselines, we're brutally realistic about the size of the challenge that goes ahead, and that we measure and pursue the right targets. Carbon consumption is the one that matters, not territorial carbon production, for example, but so too is biodiversity consumption and what we're doing on the sequestration side. So it's all to do, it's all doable, but we have to be much more realistic about what we're trying to achieve. I hope that's helpful. Thank you very much for listening.
Thank you very much, Professor, and I will ask you to stay connected with us to participate in our panel. And of course, we had a very stark reminder these past few days, yesterday in Sicily, in Valencia, and of course in the United States with Hurricane Helene and Milton, on how urgent is the matter. And we need to move fast, and in order to move fast, we need also to encompass all the solutions available, while we try to solve the energy dilemma, which is being affordable, which is addressing security, and of course, sustainability. So we will discuss this with our speakers, of course. Professor Helm, you already listened to him. Marco Alverà, co-founder and CEO of Zhero and TES - Tree Energy Solutions. Marco, welcome and thank you very much. Welcome to Nicola Monti, Edison CEO. Welcome to Valerio Camerano, Managing Director of Algebris Investments. And welcome, connected remotely, to Matthias Pöverlein, Sustainability Officer at SWM. Welcome to all of you. So welcome to all of you. Marco, I will start from you. I don't know if you are already in Baku for COP29, but anyway, as we speak, we know that if we think about, for example, solar and wind, the cost of solar and wind is cheaper today than oil. But this is given your effort, and that you are working very hard on hydrogen and e-fuels. So what do you see as the market evolution? What are the main challenges, especially when you look at something you know very much, that is e-NG and e-SAF? Marco, we cannot hear you. I think you're on mute.
Thank you very much, Silvia. You're always spot on with your questions. So indeed, we are going to be signing an important agreement tomorrow. It will be announced tomorrow, so I can't reveal too much tonight in Baku. The idea is very simple, as Dieter was saying, we have to be brutally realistic about the state of affairs. And also, you see behind me the map of all the infrastructure in Europe, the pipelines. We cannot imagine a system where we have to replace all the existing infrastructure. The pipelines are just the tip of the iceberg. The problem is every pipeline is connected to something, to a home, to a factory, to a power plant. To think of throwing all that away, not only would be a big waste of money, but it's just unthinkable. And we have to, instead of trying to convert everything to go to hydrogen or everything to go to electricity, we need to bring down the cost of fuels and make synthetic renewable hydrocarbons. Hydrocarbons will continue to exist in many ways. There are biogenic hydrocarbons, there are fossil hydrocarbons, there are hydrocarbons with carbon capture, and what we're working on is making synthetic, making electric hydrocarbons. So exactly like you said, our job is to go and take the cheapest solar and wind, where it is already much cheaper than oil and then diesel. Take that sun and that wind and convert it into green hydrogen. And then the trick is to add the CO2. If we add the CO2 that we've captured, it can be industrial, it can be biogenic, eventually in the future it can be direct air capture. Then by adding CO2 and H2, I don't want to become too technical, but you create CH4, you create synthetic methane. And the beauty of synthetic methane is that it doesn't require any investment whatsoever in any infrastructure whatsoever. You just drop it into the grid. It's a one-for-one solution, exactly like biomethane is for fossil methane. The problem with biomethane is it's constrained by the availability of land, and it impacts all the issues that Professor Helm was raising in terms of biodiversity and land usage and population growth. So e-fuels, you can make infinite quantities of them if you take the sun of the deserts, if you take the wind of where there is a lot of wind, again in the desert. There's a lot of tremendous wind in Finland and Sweden. We're working in Spain. So the idea is very simple. The idea has been used since 1912 when Paul Sabatier, who invented this reaction, CO2 plus H2 make CH4. In China, they've been using it a lot to turn black hydrogen made from coal into LNG for their trucks. So there's nothing new. What is new is that now we can get renewables that are very cheap. So the market will be very significant. e-NG, like we call it, we have a global coalition. We have companies like TotalEnergies, RWE, Sempra, Mitsubishi. We have a dozen of the world's biggest energy companies that are working with us to develop these projects because it's beautiful. It's a completely renewable fuel using the existing infrastructure. So if you think of all the effort we made to build the TAP here from all the way from Baku, all the way coming down from the Caspian Sea, all the way down across Turkey, from here all the way back with Azerbaijan, Georgia, Turkey, Greece, all the way across Albania into Italy in Puglia, the TAP, the Southern Corridor, that infrastructure which is now bringing fossil fuels, tomorrow will be bringing gradually, like we agreed in COP28 in Dubai, the transition away from fossil fuels has to be a just transition, has to be a gradual transition, but it has to happen. And so in the world after fossil fuels, you'll be left with two types of fuels: e-fuels and biofuels. And what we're working on are the e-fuels. And synthetic methane is the king of e-fuels because it's the cheapest to make and by far the cheapest to use. As you can see from this map behind me, you just drop it in. What we have in Europe is something very special called the Union Database. So if they take very cheap sun in Spain, we have negative prices today in Spain when it's sunny, and there's also some very strong wind. For the wind surfers who've been to Tarifa, you know how strong the wind is here. If you take the sun and the wind of Spain, I can produce very cheap e-NG here, put it into anywhere in the gas grid of any gas, and then I can sell it to a German or Northern Italian steel company where there's not as much sun here in the Black Forest as there is here in Andalusia. So you're playing this arbitrage. Synthetic methane is the future of hydrogen. It's a very easy product to make. It's still expensive. So the work we have to do with the electrolyzer companies is to bring down the cost of the electrolyzers. I think in the next five or seven years we will make it cheaper than biofuels, cheaper than biomethane. And I think the trajectory is that we will make it cheaper than fossil fuels and LNG in some parts of the world. Of course, if you're in Iran, if you're in Qatar, if you're in Saudi Arabia, based in Saudi Arabia, you will never be able to beat fossil fuels on pricing point of view. That's why CBAM, that's why carbon pricing, that's why all those things are important. But let's also be aware that there's a big market, and I really welcome the effort that UniCredit is putting on ESG and on sustainability. There's a big market, financial market and consumer market, that really wants green products, increasingly green products. So there's a voluntary market. The data centers want to be green. They want to buy green energy. A lot of the consumer companies, they want to buy green energy to make green products. So we have different types of markets. We have subsidies, we have mandated markets, we have voluntary markets, we have regulated markets, but the market will be there. We need to be good to build the best projects and start one at a time, and it will be a snowball effect.
And we will ask you later about your projects and how they are evolving. Nicola, so this speaks very much about Edison's strategy, your focus on long-term solutions and short-term solutions. So can you share with us your strategy, and in particular, I want to know if you think that right now the policy landscape is the right one to accelerate the transition at the speed that we need?
Thank you, Silvia. Good morning, everybody. Yeah, it's not definitely the political landscape, and it's not, I think, the right one to really complete the transition. I think from what Marco just said and Professor Helm said, the complexity of the energy transition is pretty clear. There's not a single solution to that, but it's a pretty complex mix of technological solutions. What we can concentrate on Europe, what Europe did with the Green Deal was to, you know, to set an ambitious plan, net zero by 2050, but with first target 2030 with a few milestones that you, we have seen and have been mentioned at the beginning. But are we able to reach those targets? I think it's going to be very difficult because the solutions are complex, and to have a smooth transition, we need to plan, to make it really a careful plan, which is not happening. So selecting the technologies to be used to go through the energy transition is not definitely the right point or angle to tackle the problem because there's not a single solution. So the idea is just promoting solar projects or wind projects. Those were the white solutions to fill the gap in terms of emissions was not the right one because what we're experiencing in Europe is the cost of energy is going up. We have to do a lot of investments, and counting all the uninterruptible sources of energy, wind and solar, does not give any right response to industries, to any intensive industries. What we have done, fixing targets, which requires a lot of investments. Italy has to do something about 300 billion US investment from today to the end of the decade to which the targets. What is the benefit for the manufacturing, energy manufacturing industry in Europe? Very limited. So work, if we're counting only on those renewable technologies, we're basically importing panels and batteries from China. So huge investment to be done, but benefit for the domestic European industry, I won't say zero, but close to zero. That's not the right answer that we need to give to have a sustainable transition. Sustainable transition means also sustainable from an economic point of view. We cannot increase prices, reduce competitiveness of our industries, and depress a few industries and economies that we have. So the other big question is that you target very ambitious, but we need to be able to drag along the other part of the world. So the ambition to be net zero in Europe, where we meet 6 or 7% of the world green gas overall, does not bring a solution to the problem. So we need to be able to drag along all the others. It is something which is happening, probably will not happen at the same speed that you percent because, well, let's talk about electric mobility. Is it an issue for a city like Milan, Paris, or London? I don't think it is an issue for Nairobi or New Delhi or any other place in developing country. I think in the COP in Baku, as it has been in the last COP, one of the big issues is how developing countries can make available the financing required to drag along the other countries and developing world in going through the energy organization. So I think the new commission, and we are very anxious to see what the new commission will be able to do, if it comes, yeah.
Well, hopefully, if it comes in a few days, we have November 27th, we should have a commission.
We'll have, I think we need to concentrate, and not simply on the Green Deal, but also on the Industrial Deal. That's very important. So the Green Industrial Deal is enough. We need to keep competitiveness and industry in Europe.
Well, Nicola, while you were talking, it made me think about what Draghi said in his competitive report, for example, on solar panels. We are too late, so we should focus on something else, which, for example, is new technologies. You're working on SMR, so maybe we can explore it later. But Valerio, so we have this need of being more realistic, more pragmatic. So how do you see that going forward, and especially what do you search for when you're investing in companies that potentially are the ones driving us through an acceleration?
First of all, let me thank you for the invitation. I think I appreciate Fiona. I appreciate all your teams smiling, connecting. So it's good. Is it working? Maybe we'll borrow Nicola. Okay. Nicola, I'm not going to pay for it. Thank you.
Edison is always working, so thank you for it.
It's really charming seeing you all, your teams smiling. That means that you know your ESG strategy is very positive. Can I just take one minute to add a little bit more on the topic of the climate transition? And I'm a little bit surprised that we didn't talk a lot, maybe you did it a little bit, Nicola, because we are all enthusiasts. I think in this audience, we are all clear that this is an emergency. We should do more, and there's a massive attention on this topic. But the problem is, why is it not happening at the speed that we want to, okay? And that's a key problem. And I think we need to reflect a little bit on this. And we're going to have more and more, you know, complexity going forward than this. I think the topic is very complex, but I think there are two things we need to remind. First of all, the transition is not a free lunch. That's a key point you need to bear in your mind. Somebody has to pay, somebody's going to take money. So there's an exchange of value between the parties. You know, this field, this needs to be carefully driven and governed. Second point, this is a big time mismatch between the present cost of the transition and the future benefits. This is, you know, just I'm simplifying that there's much more about this, but these two things are critical. And that are creating, are going to create more trade-offs going forward: poor counties against rich, you know, young generation against old, and old polluters against new polluters, and a lot of trade-offs, you know, you name it, can be a long, a long list of contradictions and trade-offs. So you're right. I mean, it's absolutely complex things, and we need a lot of... So the journey is going to be a journey of compromises going forward. You know, there's no one recipe, and we certainly lead the realism, which means what we can do is achievable. I think we need something we didn't talk about. It's governance of the project, okay? We are all okay on the E, we are okay on this S, but do we need the strong need of a governance, okay? Because all these trade-offs need to be managed, analyzed, and solved. Otherwise, we're going to have always a part is disagreeing on everything. You know, do you know how many animals are slaughtered every year on this planet? 80 billion, okay, 80 billion. This is a huge problem. Just a number, just an issue, okay. So we need the very, very strong governance able to really monitor the monitor and agreeing on the, on the, on, you know, who's paying it was actually... Do you remember the gilets jaunes, the yellow vest, you know, phenomenon where they confronted to the questions, do you mind more about end of world or end of month? And the answer was end of month, okay. This is more crucial, and you remember this was the discussion regarding the introduction of an ecological tax in France, okay. So we all agree about this, but we need to solve these trade-offs, okay. That this is very important. It's my contribution, sorry, to me it's contribution of the big discussions. Now regarding what we do, I mean, Algebris, it's a 27 billion, you know, asset under management fund. It's a big guy. You find a big guy. What we're doing is actually trying to invest all young green transition. Now, one point I want to make for you benefits, I mean, ladies and gentlemen from UniCredit, this is very interesting effort you are doing. First of all, you know, the green transition investments are not overruling economic theory. The economic theory is still there. So you need to do good investments, good return. You'd identify good managers, identify good technologies, and so forth.
Risk should be managed, risk and so forth.
I mean, so there's nothing, you know, really much more than economic theory, traditional economic theory. We got to do the right things with the right teams, with the right allocation of capital. And I don't know if you, you know, there's a lot of numbers regarding the energy transition in Europe. But say, for example, we need to invest 40 trillion in the next 20 years. 50% of those amount of money is not going to have a valuable economic return. So who's going to invest on that? You know, with what priorities? We want, you know, public involvement in terms of funds and so forth? This is what I mean by governance. Something has to think we're going to do over, you know, our part. You're going to do your part. We have a venture capital fund that is taking the right return-risk combination. We have a private equity fund, and that's what we are doing. I mean, we're not, we're applying the economic theory on the new platform and the new paradigm, which means choosing the right ideas and come and you choosing the right technologies and choosing the right alchemy of these all ingredients. This is not really new, okay. But clearly, we need to combine economic sustainability and environmental sustainability. This is a key point that we need to be able to find the right solutions and the right people, the right entrepreneurs and the right ideas, okay. But I think we'll talk about this, yeah, a little bit more in the second that what we were talking.
I was reminded by the editorial that Christine Lagarde wrote two days ago on Financial Times, and she admitted, of course, investing in this is costly. And the figure here to reach is $11.7 trillion annually by 2030. And of course, this is just on mitigation. Then adaptation, we have to class 18 times. And this is something. But also Guterres the other day was saying, when we think about climate finance, it's not about charity, it's an investment. So this is the case. So before you go to Matthias, which I would ask you to excuse me, but Professor, I come to you because, of course, in Europe, what also Mario Draghi underlined in his report is that we had a too much ideological view, which then was, let's say, the result was maybe a social backlash, and we were lacking industrial and financial platform. So moving ahead, we need a governance, of course, but we need financing. And unless we find a way to find common debt, do you see any chances that we can accelerate our path?
Well, I think the important thing is to read his report in its entirety and understand what he identifies as the fundamental issues facing Europe going forward. He has four parts to it, but the energy one is, in my mind, by far the most interesting. So what he spells out in black and white is that Europe has really very, very expensive energy. And he makes the point that our gas prices are four times those of the US. And he makes the point that our cost of energy are significantly higher than either the US or China. And although lots of people would like to believe that we're on this path to having the cheapest energy in the world, which is going to be based on wind and solar, the truth is that we've actually been rowing in the opposite direction on costs and prices for quite some time. And if you look at how we got to that, it tells us how we should think again and in new ways about our energy transition going forward. We can replicate the German Energiewende again, but look what it's done. I mean, Germany, in the process, has outsourced its energy to Russia, while having its security outsourced to the US, and essentially its industrial base depended on export to China. And it's no accident that across Europe you see the reaction to the reality of the prices that have resulted, as opposed to be regular stuff about, you know, renewable to 10 times cheaper than fossil fuels and all this stuff, okay. And if you, if you look at this, so I know that of the original six members of the EEC, European Community, five of them had elections this year in which the far right has won in one form or another, where they be regional or national. And the far right is anti-immigration, but it's anti-net zero. In my own country, the four contenders to lead the Conservative Party all express skepticism on net zero targets. So we should confront these prices and take Draghi very seriously, and take very seriously the comments that just been made by the last two speakers in particular. That essentially this is about investment. Investment has to have economic returns. The economic returns come ultimately from the users of the energy going forward, and those returns depend upon whether Europe can compete with the US and China and at the same time make the transition towards net zero. Now, this is plausible, but not by just pretending that it's all going to be cheaper, that the transition is going to lead to lower and lower electricity bills. In my country, promised in the period from now to 2030, the next four or five years, they're going to come cascading down because we're building lots more wind in particular. Well, now the system costs of doing this are extremely high. And what Marco is illustrating is that there's a world of difference between building new systems for decentralized generation. We have to do that. This is really important to do the renewables. But we have to think very hard about cost effectiveness and using the existing infrastructures at the same time. So I think what Draghi illustrates is you need to start with whether the European economy is competitive globally at all, and then you have to think within that framework of how important energy is in that totality, and then you have to work out how to do the transition in a cost-effective way. And I think the Energiewende tells you exactly how not to do it: close nuclear, build more coal, rely on gas that imports from Russia. That doesn't wash. And that's why Germany has some of the extreme economic problems that it now has and faces a very difficult election in the next few months.
And speaking about which, Matthias, I come to you. Of course, Professor was underlining the very and extremely challenging situation Germany finds itself in, especially in rebuilding and reconstructing totally an economic and business model. But I want to have the point of view from inside your company. How do you see it?
