Green Builder Media CEO Sara Gutterman surveys what she calls the decarbonization decade, covering ESG, SEC climate disclosure rules, carbon pricing and offsets, and the climate tech investment reshaping the building industry.
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Mike Collignon: All right. Our final presenter of the day is Sarah Gutman. And in case you aren't familiar with her, she's a former venture capitalist and has established a reputation as a visionary, thought leader and passionate advocate for sustainability. She works closely with a diverse group of stakeholders in the building industry to develop sorry, impactful, long term green strategies that are simultaneously sustainable and profitable.
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Mike Collignon: She's here to talk to us today about ESG, climate disclosure and carbon solutions. So, Sarah, take it away.
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Sara Gutterman: Wonderful. Mike, thank you so much. And first let me confirm. Can you see my slide my title slide.
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Mike Collignon: Looking good from here.
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Sara Gutterman: All right. Super. Thank you. So I am incredibly excited about this presentation today because there are so many things happening with respect to sustainability and climate action, ESG, decarbonization, climate tech investments. And so I'm going to try to consolidate a lot of information into, you know, less than an hour. So we have some time for Q&A. Just know that any one of these topics I could probably spend an hour on, I promise I won't.
00:01:23:21 - 00:02:02:11
Sara Gutterman: But I think these are some of my favorite topics to talk about. I think that when we look back at this point in history, we may just deem the 2020s as the decarbonization decade. I really believe that the 2020s have been already and will continue to be breakthrough years in terms of climate tech and carbon tech advancement. Advancements of policies and incentives like the Inflation Reduction Act, market adoption of things like electric vehicles and solar, plus storage and electrification and other enabling technologies.
00:02:02:11 - 00:02:31:16
Sara Gutterman: And, you know, I think that we are in the age of decarbonization. As Jeremy Rifkin said yesterday, we've moved away from the age of progress, so to speak, which came with the Industrial Revolution. And now we're really moving into this age of decarbonization where we have this tremendous opportunity to effectively reshape and refashion our economy at the scale and scope of the last industrial revolution.
00:02:31:17 - 00:03:01:02
Sara Gutterman: And what's so exciting is that the transition to the decarbonization economy will effectively require a complete overhaul of our socio economic system. We won't be able to shoehorn sustainability into old systems, so it means that we have this rare and thrilling opportunity to redesign our economy at a massive scale and massive scope. And so this means that we have the opportunity for incredible innovation, for incredible economic gains.
00:03:01:02 - 00:03:50:18
Sara Gutterman: And we know that this transformation is scary for some, for those individuals and for those companies and for those governments that are clinging to antiquated business models and obsolete energy sources and outdated technologies. And we see that they will fight and they will continue to attack and fashion every conceivable obstacle possible to impede progress towards decarbonization. But the good news is that, you know, just as naysayers couldn't suppress the adoption of breakthrough innovations like the steam engine or the combustion engine or, you know, at the time, incandescent lights and then LED lights or indoor plumbing, let's say any progress to hinder the transformation to decarbonization will ultimately be futile, both from a political but really
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Sara Gutterman: as much as anything from an economic and from an from a market driven standpoint. I think our presenters yesterday did a really masterful job of outlining the market driven dynamics and forces that are propelling us towards this decarbonization economy. And the good news is that, you know, no sector is going to be immune. Buildings, transportation, industry, agriculture. We'll all sooner than we think, I think will be clean, connected, electric, resilient.
00:04:19:17 - 00:04:41:08
Sara Gutterman: And the world is evolving into a cleaner and greener and better version of itself. And the good news is that I think the conversation is already shifting with has already shifted with respect to things like understanding the full carbon emissions cycle. Right? We used to talk about net zero energy, which is a metric of energy from operations and buildings.
00:04:41:08 - 00:05:06:04
Sara Gutterman: But now we're talking about net zero carbon with respect to everything from raw material extraction to transportation to the manufacturing of the products that go into our homes and our buildings and our consumer goods and all the things in our world around us, to more transportation and delivery to in the building sector, installation and operations of buildings to end of life.
00:05:06:04 - 00:05:36:12
Sara Gutterman: So I think we are certainly talking about that full emission cycle. And we have a very clear decarbonization roadmap that extends from one end of the spectrum of sequestration and carbon capture to the adoption of renewable energy, clean hydrogen, electrification of buildings and transportation all the way through to ending subsidies for fossil fuels and imposing taxes on carbon and methane and other greenhouse gas emissions and even toxins.
00:05:36:12 - 00:06:01:26
Sara Gutterman: So we're starting to see some of that conversation taking place now. I think the other things that are real game changers and the shift to decarbonization first, are as carbon pricing. So putting a price on carbon where carbon ceases to be a harmful greenhouse gas and actually starts to be a useful and valuable and valued raw material input.
00:06:01:29 - 00:06:30:03
Sara Gutterman: I'll talk a little bit about more more about that in a little while. I think, you know, certainly carbon taxes and then carbon offsets are also playing a big role in the conversation and the transition towards decarbonization. Now it's really show time because the the cold hard truth is and recent studies have shown and this is mentioned yesterday, I think by two of the presenters that we have hit a 1.5 degree temperature increase.
00:06:30:05 - 00:07:17:08
Sara Gutterman: We are there. We have hit that threshold. So that's the bad news because we are not sure exactly what happens after that threshold. And as we get continue to get hotter and hotter, because climate change is the great unknown and there is a threat multiplier. The good news is that we do know that as we bring emissions down, we hope that climate change, the impacts of climate change mitigate a little bit, and that we also know we have a lot of innovation that exists today, and development of additional innovation in the next handful of years into the next decade, that will create some significant impacts in the amount of emissions that we release.
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Sara Gutterman: Now, it is really showtime. So Simon Style, who is the executive secretary of the United Nations Framework Convention on Climate Change, just last week gave a presentation called Two Years to Save the World. I used to say that if we stay on our current trajectory, we have five years until we hit a two degree temperature increase. Simon just emphasized, we really have two years to manage runaway emissions, and he called for everyone from banks and lenders and international organizations to companies to really look at the way that we manage everything in the value chain, because at the end of the day, now is our moment in time to create the future.
00:08:08:20 - 00:08:43:16
Sara Gutterman: And in that presentation, Simon said he asked a really important question. So who has two years to save the world? And he emphasized that every person on this planet has two years to save the world. He also emphasized that every individual action, every individual choice, not just businesses choices and government choices, but individual choices have a clear and tangible impact on climate change.
00:08:43:16 - 00:09:19:16
Sara Gutterman: And so my emphasis to you all is that we are all feeling the heat, literally and figuratively, as we experience extreme temperatures and as we experience a changing climate and the impact that that has on our lives, on our homes, on the ecosystems that we love, we see that the only thing that we can do is drive less, travel less, plant trees, purchase carbon offsets, take these actions, which may feel small, but really do collectively have an incredibly large impact.
00:09:19:18 - 00:09:46:05
Sara Gutterman: Now, the good news is that cognition smart data, which is Green Builder Media's market intelligence and data division. When we ask our consumer audience what they are doing to take action, they are telling us that they are driving electric vehicles. They're increasing the energy efficiency of their homes, their reducing waste, their electrifying their homes, their installing solar and eating organic and local food and buying sustainable products and recycling and many more actions.
00:09:46:05 - 00:10:40:02
Sara Gutterman: And that's good. I think also that there is a clear awareness about the concept of decarbonization and our early adopter and first mover consumer audience, especially younger generations. We talk a lot about millennials and Gen Zs. They believe that decarbonization is helpful to businesses. So they have a positive perception about companies that implement decarbonization strategies. And that's really because that consumer audience believes that decarbonization strategies result in enhanced innovation, create, generate and create positive brand equity and yield greater financial returns and mitigate risk in with respect to homes, we also see that more and more consumers believe that living in a net zero carbon home is extremely important, very important or important.
00:10:40:02 - 00:11:07:11
Sara Gutterman: So we can see now that it's nearly 70% that believe that living in a net zero carbon home is important. And I can tell you that these numbers are shifting from the right to the left. So becoming so trans, transferring from less important to more important year over year. The good news also along those lines is that builders, many builders are listening to the call.
00:11:07:12 - 00:11:34:13
Sara Gutterman: Our cognition smart data shows that 75% of builders are optimistic about the long term prospects of the housing market, largely because they believe that the Inflation Reduction Act will drive energy efficiency and electrification technology upgrades to meet that demand for net zero carbon homes. And dare I even say that net zero carbon homes are kind of becoming all of the rage in the building industry.
00:11:34:13 - 00:12:07:17
Sara Gutterman: I personally have never had so many engaged conversations with manufacturers about how they can provide products with environmental product declarations to create net zero carbon homes. I've never had so many active conversations with builders, and I'm talking to big builders. I mean, we're talking with, you know, eight over the top 15 big builders about how they can get to energy ready homes and net zero carbon homes, as well as lots of mid-sized and smaller builders and their related architects and designers and engineers as well.
00:12:07:17 - 00:12:42:16
Sara Gutterman: And so, you know, we're clearly seeing a shift in this direction towards a net zero carbon built environment. And then we're also seeing codes and policies back that up. So California's 2025 code will likely favor heat pump technology over central air conditioning systems. We see Ashrae as drafting a zero net carbon emissions code, and then states like Michigan passed a major legislative package that makes the state a national leader in energy efficiency, electrification, and emissions reductions for homes and buildings.
00:12:42:19 - 00:13:07:07
Sara Gutterman: Now moving on. Anyone who hears me speak knows that ESG is one of my very favorite topics to talk about, and I understand that ESG has become a politically charged topic. And this is partly, I think, just because of political posturing and folks, you know, trying to grab on to anything that will be, you know, kind of a hot potato talking point.
00:13:07:13 - 00:13:56:14
Sara Gutterman: But I think that there's also some legitimate concern over transparency and accountability around ESG. I think also, certain critics say that by promoting environmental, social and governance strategies businesses have, they might put ESG over profits and therefore are not fulfilling their fiduciary responsibility. The truth there is that actually studies and research shows, for example, research by PitchBook, which is a morningstar company, show that ESG funds in some cases actually have yielded over the past many years higher returns on investment, or at least their net net with non ESG funds.
00:13:56:14 - 00:14:27:19
Sara Gutterman: So there's no real evidence to show that there's any financial difference between in terms of return on investment for ESG versus non ESG funds. Proponents of ESG say that actually ESG helps minimize risk because it helps companies prepare themselves better for climate change. So we know that ESG is it's really here to stay. And whether it ends up being called ESG or fried green tomatoes, it doesn't really matter.
00:14:27:19 - 00:14:51:00
Sara Gutterman: What we do know is that there's an environmental reality that I already talked about. There's a social reality, actually, and Shia both talked about it in terms of these high levels of climate anxiety, where younger generations really consider the future to be frightening. And cognition. Smart data shows that 56% of millennials and Gen Zs actually say that they think humanity is doomed, right?
00:14:51:02 - 00:15:17:27
Sara Gutterman: That's not 6 or 16%. That's 56%. So clearly something has to happen to address this climate anxiety. And then of course, there's investor demands. Again, as I mentioned, I think that a lot of investors believe right now, as does the SEC, which we'll talk about in a minute, that companies with those ESG strategies, as I said, are considered to be a better investment, a safer investment, because they are more prepared to deal with climate change.
00:15:17:27 - 00:15:51:11
Sara Gutterman: And we've also seen massive investments in ESG companies and funds, you know, growing by multiples year over year, showcasing support for ESG. We also know that when Green Builder Media, through Cognition Smart Data surveys our leading edge consumer audience, we see that 60% of our consumer audience believes that companies with strong ESG strategies are more likely to have long term financial success than those without.
00:15:51:13 - 00:16:36:03
Sara Gutterman: 75% have stopped purchasing products from companies over concerns about their sustainability policies. Now, and this is always a really interesting data point to me. Over 50% of our consumer audience perceive that a company's ESG practices is tied into the quality of its products and services. Now, whether or not that is the case, that is the perception. We also see that our consumer audience, about 50% trust companies with strong environmental policies more than those without, and that it's very important, again, to our consumer audience that companies align their marketing and advertising messages with their ESG practices.
00:16:36:03 - 00:17:01:19
Sara Gutterman: So they want to hear about it in marketing and outreach and education messages. We see that the younger generation and again, this should be no surprise after the previous two sessions today, the younger generation, the more important ESG is when making decisions about selecting products for their homes and their lives. So the green in this chart is extremely important, and the blue is very important.
00:17:01:19 - 00:17:28:24
Sara Gutterman: And we go from baby boomers at the top down to Gen Zs at the bottom. We also see that the younger generation, the more they expect and want companies to take stands on environmental issues and on so social issues. Probably no surprise there. We do see an increasing inclination by consumers to select homes and residences with strong ESG practices.
00:17:28:24 - 00:18:07:05
Sara Gutterman: So that could be energy efficiency, net zero, you know, energy, carbon, water, healthy home elements and upgrades. And it's really because our consumer audience at least believes that strong ESG practices has a positive impact on the health and well-being of occupants. Switching over to our builder and building professional audience when we survey them, nearly 60% of our builder audience tells us that when they are going in to get financing for their projects, their lenders and their bankers are now requiring some kind of ESG policy.
00:18:07:05 - 00:18:32:15
Sara Gutterman: And that's a big change that's occurred over the last couple of years. They're also seeing an increased demand for ESG compliant homes and buildings. Just in the past year, over 60% say that they've seen an increased demand. Now, our builders tell us that they are adopting ESG practices because of that access to capital, and then also in response to consumer and investor demand.
00:18:32:15 - 00:18:59:25
Sara Gutterman: And they are also requiring ESG practices from their vendors and from their supply chain, mostly so that they can access accurate data for their own disclosures, which is really interesting, because what that means is that they are looking at how they can increase their accountability and their transparency, and that's partly through the pull through from their supply chain.
00:18:59:28 - 00:19:30:15
Sara Gutterman: Speaking of climate disclosures, this is another trend that is really impacting our economy in general and will certainly impact the building sector. So first let's talk about what climate disclosure is. It's basically the transparent disclosure related to climate risk mitigation efforts and governance from companies. Now there are terms scope one, scope two and scope three that are associated with climate disclosure.
00:19:30:15 - 00:19:51:17
Sara Gutterman: And in case you're not familiar with those, I'll just go through them very quickly. Scope one emissions are direct emissions from sources that are owned or controlled by a company. So you can think about scope one in terms of the word burn, because this includes anything that a company basically burns. So fuel to heat or power buildings, vehicles or other equipment.
00:19:51:23 - 00:20:35:22
Sara Gutterman: Scope two is comprised of indirect emissions from purchase, electricity, steam, heat and cooling. So you can remember scope two with the word by because it's really about the type of energy that companies by to run their operations. Now, scope three is probably the most vague and certainly the most complex of the three. Now, these are all other emissions associated with a company's activities, including purchased goods and services, business travel, employee commuting, waste disposal, transportation, distribution, how consumers actually use a company's products, how they dispose of them.
00:20:35:22 - 00:21:06:21
Sara Gutterman: So end of life implications. So as you can see, it's complex, it's layered. And it can be up to 80 to 90% of a company's carbon emissions. Now what we have seen is that there are emerging climate disclosure rules. And I'll use California because California is really it's the first state that has passed climate disclosure rules. It's going to have an impact, certainly on a national basis, potentially on an international basis.
00:21:06:21 - 00:21:51:06
Sara Gutterman: So let me talk about what California has done. California passed last October the Climate Corporate Data Accountability Act, or SB 253, which is a landmark climate ruling mandating that large companies report climate emissions. And they also enacted SB 261, requiring disclosure of climate related financial risks in accordance with recommendations from the Financial Stability Board. Now, these new climate laws, they're facing opposition and they will probably see their day in court, but they certainly reflect an important and important inflection point in state and federal climate legislation.
00:21:51:06 - 00:22:23:07
Sara Gutterman: They do require scope one, two and three reporting. And if you think about it, California is the world's fifth largest economy by GDP, and it's home to tech industry behemoths like Apple and Google and Microsoft, all of whom, by the way, support the climate legislation. And it's long been the harbinger for progressive climate and environmental policy. And so we know that other states like New York, Colorado, new Jersey, Massachusetts are keeping a keen eye on what's happening in California.
00:22:23:07 - 00:22:55:25
Sara Gutterman: And so California's rules are very similar to what's in place in the EU, the European Union, through what's called the Corporate Sustainability Reporting Directive, or the CSR, which also requires scope one, two and three reporting. So international or multinational companies that do business in Europe. Those are probably the companies that are not quite as afraid of what's happening in California, because they already have to adhere to scope one, two and three reporting in climate disclosures.
00:22:56:01 - 00:23:21:22
Sara Gutterman: Now, California's laws will apply to both public and private companies that do business in the state that make more than $1 billion a year in annual revenue. Now, critics of these climate disclosure laws assert that smaller companies will actually be the ones to feel the biggest impacts, and that they'll have to assume a level of regulatory burden that could impede their own ability to remain viable.
00:23:21:22 - 00:23:59:08
Sara Gutterman: And that's really because if you think about it, these large companies, well, they can probably fairly readily measure their scope one and two emissions. They're going to have to lean on their vendors and their supply chain partners. And even companies like lawyers, outsourced lawyers and accountants and bankers and all kinds of service providers and contractors to start reporting their emissions so that those large companies can get an accurate feel for their scope three emissions.
00:23:59:08 - 00:24:24:16
Sara Gutterman: So there's a lot of downstream impact. And so a lot of companies, not just the big ones, making over $1 billion in revenue in terms of that threshold, but also the ones that sell to interact with and service. Those large companies are going to really have to start thinking about the measures that they need to comply with this frankly, inevitable shift in climate disclosure requirements.
00:24:24:18 - 00:25:08:29
Sara Gutterman: Now, we have also seen that the U.S. Securities and Exchange Commission, or the SEC, also recently finalized its long awaited rulings on climate related disclosures by public companies and in public offerings. Now, the SEC's rules ended up only requiring scope one and two reporting. And there's a couple of things that are really worth calling out. First, the final rules will require companies to disclose material climate related risks, strategies to mitigate those risks, and the oversight role of boards and directors on environmental targets and goals.
00:25:09:01 - 00:25:39:09
Sara Gutterman: The ruling also calls out what's called accelerated filers, which are companies with publicly traded shares valued at $75 million or more that are mandated to close to disclose scope one and two emissions, contingent on the emissions being deemed material to the company. So there is some gray area there. And then also companies have to provide disclosure on how extreme weather events or other natural occurrences can impact the finances of the company.
00:25:39:10 - 00:26:09:23
Sara Gutterman: Now, what I have to say about this very honestly and transparently is that, you know, some people were really thinking that these SEC. SEC climate disclosure rules would be a watershed moment for increasing the transparency of climate change related risks and the material impacts on their businesses, providing investors and, frankly, the public, more information about the climate risks that companies face.
00:26:09:23 - 00:26:41:15
Sara Gutterman: However, the real truth is, is that, you know, it's good that the SEC put guardrails around climate disclosure, but the finalized rules were fairly watered down, and I understand that climate disclosure and just understanding emissions is a process, and it's a journey. And it's not a light switch that can be flipped on overnight because it's hard. It's hard to understand a company's scope one and two emissions, not even to mention scope three emissions.
00:26:41:15 - 00:27:20:02
Sara Gutterman: And so it's a process. But I would say that a lot of people were very hopeful that the SEC rules would be stronger, but unfortunately they ended up again, probably not capturing the full scope of major emissions and sources related to risks that companies face. Now, let's move on to carbon offsets, because carbon offsets are also going to play an incredibly important role in the transformation to a decarbonized economy, even though they, too, are somewhat a hot button with respect to greenwashing.
00:27:20:03 - 00:28:05:01
Sara Gutterman: Again, I'll get into that in just a second, but first, let me define what a carbon offset is for any of you who are not familiar with them. Basically, it's a transaction that removes CO2 or other greenhouse gases from the atmosphere to compensate for emissions made elsewhere. Now, large corporations that that pass a certain threshold of greenhouse gas emissions are required to purchase carbon offsets smaller companies and less less polluting companies, as well as individuals, can also purchase voluntary carbon offsets to counterbalance emissions from buildings, manufacturing, travel, energy use, and other polluting activities like living and breathing.
00:28:05:03 - 00:28:39:01
Sara Gutterman: Now, the most common carbon offset projects today focus on emissions reductions, forest management and conservation, biodiversity protection, renewable energy, biochar and direct air capture. And carbon offsets are important because while we know we do have that roadmap that I mentioned earlier, and we know how to decarbonize our economy through the electrification of buildings and transportation, the adoption of renewable energy, the reimagination of manufacturing regenerative agricultural practices.
00:28:39:03 - 00:29:21:01
Sara Gutterman: All of these things take time, and we need to take as much action as we possibly can now. So I would submit to you that carbon offsets are more important today than they will be in the future. As we continue to evolve carbon solutions. But even as those advanced decarbonization solutions, climate technologies, carbon technologies are created, I believe we're still going to need carbon offsets just because there will always be some carbon emissions that we can't counterbalance, that we can actually mitigate through carbon offsets.
00:29:21:02 - 00:29:52:02
Sara Gutterman: Now, carbon offsets are particularly important in the building industry because the built environment is one of the most conspicuously consumptive sectors in our economy and has a tremendous impact on greenhouse gas emissions. I think most of us in the industry have heard these statistics before from the Department of Energy, that buildings and homes in the US account for 40% of our nation's total energy use, 70% of electricity use, and emit 40% of our total national carbon emissions.
00:29:52:02 - 00:30:20:06
Sara Gutterman: And another stat that I always love to cite is that the United Nations, about the emissions from buildings must be reduced 50% by 2030 and 100% by 2050. If we are going to remain under that two degree warming threshold. And unfortunately, according to the UN, only 1% approximately of existing buildings are considered net zero carbon today. So clearly we have a long road to travel.
00:30:20:06 - 00:30:52:11
Sara Gutterman: And I think that given the intensive carbon emissions of the building industry right now, it's very important that builders, developers, manufacturers, other related stakeholders really look seriously at carbon offsets in order to not greenwash, but to bolster energy efficiency, electrification, renewable energy, water conservation, habitat protection and other sustainability strategies. Now, from a homeowners perspective, and this is pretty interesting.
00:30:52:11 - 00:31:25:11
Sara Gutterman: So the EPA notes that the average American household or home emits about 14,000 pounds of carbon dioxide annually. So given this data, it actually would only cost about $130 a year for a homeowner to offset the carbon emissions of their home. Now, I want to address the question about greenwashing, because obviously, it's important that we don't leverage carbon offsets to greenwash.
00:31:25:14 - 00:31:47:06
Sara Gutterman: So in some cases, for example, if a highly polluting company is buying carbon offsets and not doing anything else to mitigate their carbon emissions and claiming that it's carbon neutral, no doubt that is absolutely greenwashing. However, I don't think that it is a black and white thing. I don't think that carbon offsets means that a company is greenwashing if they purchase them.
00:31:47:06 - 00:32:13:09
Sara Gutterman: Rather, I actually think that there has to be a blended approach to carbon offsets, because really, at the end of the day, there aren't enough carbon neutral products, transportation options, manufacturing innovations or installation practices available to make really anything. But since many of us are in the building industry, I'll just talk about homes and buildings and the products that go into those homes and buildings.
00:32:13:09 - 00:32:53:04
Sara Gutterman: There just aren't enough of those things right now to get to net zero embodied carbon in the built environment. So we have to purchase offsets to mitigate our impact now and probably for years into the future. And so while this transportation to net zero carbon, energy efficient solar plus storage powered homes and buildings is happening, we also have to be realistic about where we are and utilize all the options that are available to us, including carbon offsets, because we're really in a critical yes and moment in time where we need all of these solutions.
00:32:53:06 - 00:33:32:24
Sara Gutterman: Now, the hard part here, and the rub is that not all carbon offsets are created equal. In fact, the voluntary carbon offset market to date has been fractured and has been, it has lacked transparency. And so I will tell you in a shameless plug, Green Builder Media has actually recently started offering carbon offsets. We started selling carbon offsets in response to queries from our manufacturer partners, our builder partners and other stakeholders that we work with who have said to us, how do we buy high quality carbon offsets?
00:33:32:24 - 00:34:04:23
Sara Gutterman: So we now have a partner that we're working with called cNOT, that is vetting high quality carbon offsets on our behalf that were then able to provide to our our network and our partners. So whether you buy carbon offsets through us or somewhere else, which whatever works for you, just please buy them. Make sure that if you're buying voluntary carbon offsets, you're looking for projects that do things like provide robust and timely data reporting and analytics on mitigation activities.
00:34:04:28 - 00:34:28:21
Sara Gutterman: Eliminate double accounting, which means they don't plant a tree and then sell that tree planting to ten different people. They insure permanent carbon removal. And this is important because each carbon offset project varies in terms of efficacy. So for example tree planting is great. We need to plant more trees. And then planting trees does remove carbon dioxide from the atmosphere through sequestration.
00:34:28:23 - 00:35:19:07
Sara Gutterman: However, once those trees die, the sequester carbon is then is then again released into the atmosphere. So those projects are actually considered to be impermanent, permanent, whereas something like a gas capture project is regarded as high quality and permanent. And then make sure also that any project you purchase offsets from offers well-defined pricing and benefits and results. Now there's a little bit of scope three scuttlebutt that just three just recently happened last week that's worth mentioning, and that is the UN backed Science Based Targets Initiative, or SBT, which kind of is the gold standard for certifying science based targets for companies in terms of sustainability and ESG strategies, and helping them, again, really categorize and
00:35:19:07 - 00:35:55:04
Sara Gutterman: clarify their scope. One and two reporting. The CEO announced last week that the SBT was going to start allowing for carbon offsets in scope three reporting. The employees kind of revolted against that and called for the resolution resignation of the CEO and any board members that supported the decision because they didn't want the SBT to become a greenwashing platform that was really taken over by political interest, lobbyists and special interests.
00:35:55:07 - 00:36:34:08
Sara Gutterman: We'll see how that plays out. The CEO is kind of backed away from allowing scope three reporting to include those carbon offsets just wholesale, and says that it's still that any carbon offsets would certainly be verified and science backed. But again, it's worth just mentioning today because there's some controversy and some questions around carbon offsets. So anyone any company that's looking at carbon offsets, you know, there's kind of a good approach and then potentially not so good potentially greenwashing approach.
00:36:34:08 - 00:37:01:10
Sara Gutterman: So just eyes wide open. You know when you start having conversations about carbon offsets. Now I want to move on to climate tech and carbon tech because I think that, again, the 2020s, this decade is going to be a breakout decade for climate tech and carbon tech. And in fact, I would submit already that 2020 and 2021 were breakout years for climate tech investments.
00:37:01:10 - 00:37:38:22
Sara Gutterman: There was about $130 trillion pledged just in that very short time frame for climate, tech, tech, climate, technology, investments that, you know, really can help solve for climate change. And the good news is that a paradigm shift is happening right now. We're in private capital now perceives that climate technology is a promising investment opportunity. And those technologies are evolving in such a way that actually investments investment criteria is becoming more stringent.
00:37:38:22 - 00:38:08:12
Sara Gutterman: And that's actually a good thing, because it means that this very nascent segment and sector of investment is maturing. So investors are not just making investments in climate tech anymore based on starry eyed five and ten year and even 20 year plans. But they're really looking at, you know, robust top line revenue, revenue opportunities, real market growth opportunities and sound unit economics.
00:38:08:15 - 00:38:32:21
Sara Gutterman: And the race is on. You know, as I said, we've we've had, you know, about 130, 140 trillion that's been pledged by fund managers, banks and pensions and other asset owners towards technology that will transition us to net zero energy, water and carbon. But we need another about 150 trillion over the next 30 years to really reach our climate goals.
00:38:32:24 - 00:39:09:01
Sara Gutterman: So, you know, I think that what is very important to understand right now, it's two things. One, 35% of the technology that is needed to reach our climate goals hasn't even been invented yet. So there's a colossal opportunity and challenge ahead of us. But I think really the biggest challenge right now is not so much the innovation and the entrepreneurship, but it's really can we turn this momentum and capital into rapid deployment and into the mobilization that we need to decarbonize at scale.
00:39:09:01 - 00:39:31:20
Sara Gutterman: So I like to think of it this way. Yes. The world has, you know, the world invested 1.8 trillion in climate technology last year, but it needs to ratchet up that amount even further to get to net zero emissions. Yes, over 30 countries have passed a key electric vehicle tipping point, but that means 160 or so still need to catch up.
00:39:31:21 - 00:40:01:07
Sara Gutterman: Yes, technologies like direct air capture are emerging, but they're still very nascent and expensive and unproven. And so there's a lot of progress that still needs to be made. Fortunately, we do have this new wave of carbon reduction technology called carbon tech that is emerging, and it's capable of capturing, capturing and embedding large amounts of carbon into all of the products around us using carbon utilization techniques.
00:40:01:14 - 00:40:29:01
Sara Gutterman: There's also direct air capture carbon technology advancements, as I mentioned, which is basically pulling carbon out of the air and storing it into rock or, you know, other types of storage elements. We see advances also in point source capture, which captures carbon at industrial facilities from flue gas before it's released into the air. Lots of attention to that right now.
00:40:29:03 - 00:40:55:16
Sara Gutterman: And then I think, you know, beyond carbon tech advancements, which again, we're very excited about. And by the way, let me just go back to, to, you know, carbon tech for a minute before I move on. In the built environment, we are seeing a lot of advancements in things like concrete solutions that sequester carbon into the cement mix to make it more structurally sound, concrete.
00:40:55:16 - 00:41:26:19
Sara Gutterman: So I know we've been following a company called Carbon Cure that's been successfully doing that. We're also seeing other really interesting carbon technologies emerge in the building industry, like phase change materials and 3D graphics, caffeine and aero, graphite and other types of elements that are really in a radically change the way that we build. Now, when we talk about carbon tech, it isn't just about whiz bang technologies that are emerging that will make our Star Trek fans proud.
00:41:26:26 - 00:41:57:12
Sara Gutterman: But, you know, we have to look at solutions like electrification. In fact, Blackrock, the largest fund manager in the world. You know, when they speak, the market listens. And they just released some projections talking about the low carbon solution, Megaforce, that is fundamentally reshaping the economy. And they have projections for this transition to low carbon solutions. That really indicates that immense investments in the sector are forthcoming.
00:41:57:12 - 00:42:28:29
Sara Gutterman: And they've identified three main areas, and that's electrification. It's climate resilience. And that's and also clean energy. So I'm going to talk about those three things first, as well as 1 or 2 that I'd add to the list. But clearly with respect to electrification, you know, this is being driven by the heat pump revolution and plummeting battery storage costs in terms of let's start with just electric vehicles, they can already outcompete their gas guzzling counterparts on a lifetime cost basis in most markets.
00:42:28:29 - 00:43:15:01
Sara Gutterman: And more than 1 million EVs were purchased in the US alone in 2023, and we can expect to see about 30 million on the roads by 2030. That's being spurred by the Inflation Reduction Act and other incentives, which offer as much as $7,500 in rebates for new EVs and about $4,000 for used ones. And the uptick in EV sales means higher demand for home chargers, vehicle to grid charging, and that in terms of chargers and battery storage and vehicle to to grid charging will actually really fundamentally alter the way that we power our homes and optimize for demand side energy management, which will increase self-sufficiency of homes.
00:43:15:01 - 00:43:47:27
Sara Gutterman: It will save homeowners money, and it will also reduce great stress. We're also seeing, of course, heat pumps are really becoming affordable thanks to similar federal tax credits of up to $2,000 from the IRA, as well as other state and utility incentives. And heat pumps today are really four times more efficient than conventional solutions. So when you look at the total cost of home ownership, not only upfront costs, it's, you know, heat pumps have become a truly cost effective method of heating and cooling.
00:43:47:27 - 00:44:14:16
Sara Gutterman: And we're going to continue to see demand for heat pumps explode in 2024 and beyond because of many reasons, one of which is that 20 state governors have committed to quadruple heat pump sales, with the goal of reaching 20 million installations by 2030. Now moving on to climate resilience, I think we've all seen the 2023 was the hottest year on record.
00:44:14:22 - 00:44:43:20
Sara Gutterman: El Nino promises to make this one a scorcher as well. And as rise, we're seeing that cities are really suffering from heat island effects, right. So you know, they are these cities are effectively oceans of impermeable asphalt and concrete and steel and other heat absorbing materials, and they're really becoming intolerable for inhabitants and impacting the health and wellness and quality of life for residents.
00:44:43:20 - 00:45:19:12
Sara Gutterman: So we're seeing many cities respond with climate responsive design practices, things as well as, you know, more tree landscapes and vegetation and shade structures to protect homes and buildings, sidewalks and streets within our homes. Climate resilient design elements include window films and awnings, and systems that may make use of pressure differences within a building to increase natural ventilation and circulate cool air.
00:45:19:14 - 00:45:49:17
Sara Gutterman: We're also seeing reflective surfaces on roofs and walls, and hard scapes that are being deployed to keep interior spaces and surfaces cool. And we also I mentioned phase change materials earlier. These are substances that are designed to melt at specific temperatures, absorb heat, and cool down the surrounding area to help mitigate the, you know, thermal gains from the solar gain and to really keep those temperatures cool.
00:45:49:17 - 00:46:32:13
Sara Gutterman: And, you know, I think that while climate resilience starts with climate responsive design, my good friend, architect Peter Pfeiffer, would kill me if I did not emphasize that. We also need to look for innovations in technologies like storm and flood and wildfire monitoring, monitoring and early warning systems. Demand side energy management technologies to optimize energy use, which also, by the way, lower costs for home and building owners and reduce grid stress, water infrastructure monitoring and purification technologies, and home and building retrofit upgrades that will enhance the capacity to deal with climate impacts.
00:46:32:15 - 00:47:03:00
Sara Gutterman: Of course, I don't really need to talk about solar domination because our speakers yesterday did such a good job of it. But you know, what I do want to say is that in 2023, investments in solar outpaced investments for the first time ever, which is a trend that will likely continue this year and into the future. You know, and that's really because since the early 2000, the cost for solar modules has plummeted from $4 per what, to an astoundingly low $0.10 per watt.
00:47:03:02 - 00:47:41:08
Sara Gutterman: And it's really driven global solar installations, up from about one gigawatt in 2004 to about 413GW in 2023. And those global installations and the manufacturing capabilities are really going to reach into the terawatt territory here pretty quickly. We're simultaneously seeing a surge in the adoption of battery storage. Third quarter of 2023 boasted more grid storage installations than ever before, and battery prices are plummeting from about $400 per kilowatt hour to approximately $100 per kilowatt hour.
00:47:41:08 - 00:48:12:14
Sara Gutterman: And they're expected to plummet even further to about $10 per kilowatt hour by the end of the decade. And that's primarily because of ever declining lithium prices, which are really important in lithium ion batteries. With respect to the built environment, we can also expect to see massive changes in the intensive and polluting industries of concrete and steel. So concrete is the second most consumed material in the world after water, and the most widely used building material.
00:48:12:14 - 00:48:46:11
Sara Gutterman: And on a global scale, concrete's ton for ten usage is twice that of steel, wood, plastics and aluminum combined. So as you can imagine, it's a highly polluting material. But fortunately, stakeholders throughout the concrete and the cement industry are not turning a blind eye. They are very actively trying to mitigate the impact of their sector. Some companies are introducing alternatives like fly ash and slag into the cement mix.
00:48:46:14 - 00:49:25:29
Sara Gutterman: Others, like Carbon Cure and another company called Fortuna, are creating either innovative cement. Excuse me, concrete solutions. As I mentioned with carbon cure infusing carbon to make it more structurally sound concrete or for Tura is excuse me for Terra is another company that's now basically capturing CO2 in the cement processing process and then actually using that in in the concrete mix again to make it more structurally sound and lower impact.
00:49:25:29 - 00:49:53:09
Sara Gutterman: So we can see a lot of changes in the concrete sector. And then steel is also one of the most consumptive industries in our entire economy, pumping out nearly 7% of our annual global carbon emissions and guzzling about 8% of total global energy. And fortunately, the processes for making new steel are improving through the use of electric arc furnaces and direct reduction of iron ore.
00:49:53:12 - 00:50:21:05
Sara Gutterman: And then we're also seeing that, you know, there's a lot of existing steel that can be recycled. So we're seeing a lot of a big increase in recycled steel. We're also seeing increases in carbon capture. So while the carbon capture industry like direct air capture or pulling carbon out of the air is evolving, as I mentioned earlier, it's still fairly nascent and many states are turning to natural solutions.
00:50:21:05 - 00:50:52:28
Sara Gutterman: For example, Seattle has pledged to plan about 8000 trees and 40,000 seedlings to create a tree canopy canopy to mitigate the the heat island effect, but then also to store carbon. Now, last, I just want to finish up by talking about something else that's really going to impact our the sustainability sector moving forward. And she mentioned this a little bit, but it's really climate activism in Act in Action.
00:50:52:28 - 00:51:34:06
Sara Gutterman: And I'll start with you youth activists, I think, you know, we've seen and we've heard that younger generations have had had enough. They are taking a stand against fossil fuels. They are holding governments and corporations accountable for protecting the environment and safeguarding their future. And as one example of youth driven climate activism, last year, a group of 16 plaintiffs ranging in age from five years old to 22 years old, won a groundbreaking legal victory last year when a judge in Montana ruled that state agencies were violating their constitutional rights to a clean environment by allowing fossil fuel development.
00:51:34:06 - 00:52:02:17
Sara Gutterman: So this suit, which was called held versus Montana, claim that the extraction and burning of fossil fuels by the state of Montana led to hotter temperatures, drought conditions, extreme wildfires, and diminished snowpack, which negatively impacted the plaintiffs mental and physical health, their food supply, and their vital ecosystems. Now, this was a landmark case, first, because it was the first climate change lawsuit to reach trial in the US.
00:52:02:19 - 00:52:45:02
Sara Gutterman: But also it establishes a precedent not just for protecting the environment, but also for defining the government's duty to protect citizens from the impacts of climate change today and into the future. And really, in this case, held versus Montana. Climate science was effectively on trial. And at one. And I think what we're seeing is that it's really created this precedent for other individuals, for businesses, for cities and states to hold fossil fuel behemoths liable for damages, whether that is negligence or whether it is, you know, more proactive damages.
00:52:45:08 - 00:53:15:18
Sara Gutterman: You know, we really see that the held versus Montana case is opening the door to a lot more climate, climate action and climate litigation. Now on the other side of the pond and the other end of the age range, just recently, the European Court of Human Rights in France held Switzerland. It's liable for violating the rights of its citizens by failing to do enough to combat climate change.
00:53:15:18 - 00:53:54:27
Sara Gutterman: Now, this was a case that was brought about by about 2000 Swiss women in their 70s who claimed that actually, in the summer of 2003, when 72,000 people, mostly elderly women, died because of extreme heat, that Switzerland reached their citizens rights by protecting them from the effects of climate change. So again, I think that what we've seen with this European Court of Human rights, which, by the way, there's no right of appeal and the judgment is legally binding across all 46 member states of the Council of Europe.
00:53:55:00 - 00:54:24:10
Sara Gutterman: We're absolutely going to see that as the climate crisis worsens, we're going to see climate litigation become an increasingly popular tool to force governments and companies to step up their climate action. Now, as usual, I'm running late, so I'm just going to wrap it up here by saying that, you know, as climate change is wreaking habit across the globe, climate, the window for climate action is closing quickly.
00:54:24:10 - 00:54:58:07
Sara Gutterman: And for those of you who say that climate action is important, but it is one of many priorities, right? Many other global priorities. What I would submit to you is that really there is no other priority, whether that's economic or social or anything on an uninhabitable, uninhabitable planet. So remember Simon Style, who told us that we have two years to save the planet and that each and every one of us has that responsibility and that duty to do so?
00:54:58:07 - 00:55:28:21
Sara Gutterman: Because really, this is not a dress rehearsal. And together we have to make the decisions and march in the streets literally and figuratively every day, and use our collective voices to speak boldly and loudly and demand an ever increasing rate and pace of climate change. We must marshal our forces again and again, every minute of every day, to ensure that the change we need takes place.
00:55:28:22 - 00:55:56:16
Sara Gutterman: And of course, we all need to actually be that change. So thank you to Mike for being a wonderful moderator. Thank you, Mary Kestner, our wonderful production manager. Behind the scenes. Thank you to John Crites, Michael Barner, Jeremy Rifkin, Shia Bastida and Ashley Piper, just for your enlightening and riveting sessions. And thank you to Train Technologies and to whirlpool for being our generous sponsors.
00:55:56:18 - 00:56:15:13
Sara Gutterman: Most of all, thank you to all of you in attendance for your passion, your commitment, and for helping to combat climate action. It is a colossal feat to change the world, but we are doing it together. So, Mike, back to you to wrap things up right on time.
00:56:15:16 - 00:56:40:05
Mike Collignon: All right. Well, we do want to thank our attendees. And I know some of you who sent in questions for Sarah. The good news is I know her. So I'll be able to get those to her. And then we can get some responses back to all of you. But we do have to put a wrap on this. This was the Green Building Media Sustainability Symposium 2020 for Existential Solutions.
00:56:40:08 - 00:57:02:08
Mike Collignon: Thank you once again to everyone. Thank you to our sponsors to Train Technologies and Whirlpool Corporation for once again sponsoring this wonderful event. I really enjoy hosting this and enjoy all the guests that we have every year. It's just a blast. Well, I'm Mike Collignon and I hope that you enjoy this pre Earth Day weekend. I guess because the earth falls on Monday.
00:57:02:08 - 00:57:23:07
Mike Collignon: We hope to see you again soon, perhaps at one of our upcoming webinars. And we certainly hope that you will join us again next year for the Sustainability Symposium as it will return for Mary Kestner, Sarah Gutmann and the entire Green Builder media crew. Thank you very much for joining us. Stay safe, stay healthy and take care everyone so long.