You're listening to Bloomberg Business Week with Carol Messer and Tim Stenebek on Bloomberg Radio.
Envoys representing more than one hundred and ninety nations they're going to be gathering for COP twenty eight, the UN's annual Climate change Conference Bailly. It's held in Dubai later this week. You know, with everything going on, we can't forget that world leaders have made commitments when it comes to climate change.
Yeah, no, it's definitely interesting. And I don't know if you saw the big take about China's remote deserts hiding an energy revolution see that head of COP twenty eight. So definitely top of mind as always, but even more so given the week ahead.
Yeah, and think about the year that we've had right in terms of the hottest on record in terms of the climate. So let's get to it because someone who will be there. We know that the world's two largest polluters, the heads of those nations we're talking about, President Biden and Chinese President Xijimping, they will not be there, but our next guest will be there. Katie mcguindy is VP
and Chief Sustainability Officer at Johnson Controls. They make building HVAC systems, building management and fire detection systems, security solutions, and a lot more. She joins us on zoom from Milwaukee. Katie, how are you doing terrific?
How are you today?
Doing well? Doing well? It's kind of a quiet day after what's been a chaotic year to say at least. First of all, I know you're head to Dubai, But tell us what do you think the significance is of presents Biden ag not being there. We know the two have held some talks recently to step up action joint action when it comes to climate change, So that's the good news, But their physical presence not being there, what's your view on that?
Well, Look, ideally they would all be there because this is a critically important issue at a very sensitive and important time. However, I know they will be well represented and there is I think significant momentum in the direction of progress on important dimensions of the climate issue that both can tackle the problem as well as open up new opportunities.
Well, Katie, decisions right, correct me if I'm wrong. They have to be unanimous. So how does that play into what we're going to hear and see from COP twenty eight?
Yeah, it was an excellent point. And when you think of one hundred and ninety countries coming together and reaching agreement on issues that go to the heart of their economies, it is remarkable how much progress has been made. And I think as we look at the issues that are top of the agenda, tripling renewable energy, doubling energy efficiency, those are policy priorities that can drive common ground because
they hit a trifecta. They help the environment, but they also grow economies and provide good, home grown new jobs. So I think that's a recipe to enable progress to accelerate at this conference of the parties.
Well, we've definitely seen here in the United States the commitment, the investment and you know, through legislation to help when it comes to renewable energies, and that's certainly a significant way. What I do wonder about is that governments are increasingly around the world, the US included, Katie, you know that their budget deficits are growing, and I do wonder what's
going to be cut going forward. So how are you thinking about that and the impact it could have on progress when it comes to climate moves.
Well, I do think that those policies that send a market signal that the investment direction is in a climate friendly way or incredibly important. They're coupled though, by a business imperative that in buildings, for example, as you note that Johnson Controls is a one hundred and forty year young sustainable building technology company, and you know, we are all about both cutting carbon in buildings as well as
giving a favor to the bottom line. So you know, buildings are forty percent almost of global greenhouse gas emissions, and that's just a lot of waste. When we get in there and electrify those operations and put a digital platform so you can have data, put data to work. We're seeing buildings where we're cutting their carbon by seventy plus percent while saving them more than sixty percent in
their electric bills. So that is a recipe to enable us to both get on and accelerate action as we have to do on climate while lifting economies and accelerating growth.
Well, Katie, how easy is it to deploy those technologies and kind of what regions of the world are actually set up to have things like that deployed and utilized in their buildings.
Yeah, you know, it's a great question because people think, well, maybe it's just for brand new and state of the art buildings, but it's not that is the case, or maybe it's just for buildings that are in the sunniest parts of the planet where you can use solar energy.
We have worked both on the one end of the spectrum with public housing authorities, community colleges where every dollar is precious and we can knock twenty thirty forty percent off the energy bills there and an equal amount of carbon so that the carbon footprint, you're doing right by
the planet while you're doing right by your pocketbook. We have buildings that are way north of the Arctic Circle that not only are net zero buildings, they actually generate more electricity than they consume and they give the rest of it back to the surrounding communities through what's called
district energy loops. So these technologies work in every building, and for every building, there is the opportunity to make the people who live, work and play in those buildings healthier, more productive, more engaged, while you are also dialing down that energy bill and dialing up doing your part for the planet. And I think what we have found is, you know, sometimes I think of ESG is becoming JGB just good business. Shareholders expect it, they see the weather
events that have been happening. They want to know their investments or future proof attracting the best and brightest talent. Young people are being cleared. They want to work with purpose driven companies. And it is true that customers are voting with their dollars as well to say give me a sustainable option. So I think it comes together for progress.
Katie, no argument there, and again I feel like these are the arguments that have been around for a couple of years. Understanding that people want it. It makes good sense, it's good for the environment. Having said that, if you're a publicly held company, yeah, you get also make sure that your shareholders are happy a old timely otherwise it's
going to be tricky. And I understand this idea of it's good business, but you know, sometimes you've got to make a decision between a CAPEX spend that's going to move the needle more when it comes to earnings versus doing the right thing. So how do we get around that.
It's a great point, and we actually have new research that we'll be releasing very soon. Here a poll of three thousand and five hundred senior executives, and they are pointing exactly to a couple things. First of all, that sustainability is a top business priority. A third of them have made great progress against their commitments to reduce climate change, but they all are saying, look, we don't necessarily have the upfront capital, and we need partners to help us
accelerate our progress. I guess the bright side of the downside that buildings are forty percent of global greenhouse gas emissions is that when we make those buildings more efficient, those interventions cash flow to the extent that companies like Johnson Controls now offer net zero as a service. We'll pay all that upfront capital because we know we'll see a return and the incredible savings on the back end.
So that is something that is very important. It's a solution that people need because in these days where you're worried about are we going to have a recession or not, every dollar needs to go to the purpose of that business and this can help when you embrace decarbonization in a smart way.
And Katie, we only have about twenty five seconds here, but as Carol mentioned, a lot of companies and a lot of leaders will talk, but will they actually make action happen. What is going to happen this week, and what actually can we take away from a meeting of leaders again really quickly.
Yeah, there'll be some tough things like writing the check to enable developing countries to grow in a more sustainable way, and that'll be tough to reach agreement. But I think we're going to see great progress on energy efficiency or renewable energy and in understanding that we can grow the world's economy even as we cut global greenhouse gas emissions. And that's the imperative for us to do right now.
And gotta ask, all right, we'll certainly be looking for some headlines out of a Cup twenty eight later on this week. Katie mcguinny, VP and Chief Sustainability Officer at Johnson Controls on Zoom from Milwaukee