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00:00Thank you to our panelists. I was pretty excited because this is extremely important. Many global CEOs have really placed these U.N. Nash U.N. sustainability development goals at the foundation of their sustainability agendas and this agendas . Many many questions people. Let me start off with you. Give me the business case in a minute. Vestiges. So that's an elevator speech. The main one is that business cannot succeed if society doesn't succeed. Nor can business be a bystander in a system that gives it life in the first place. We're seeing inequality go up. We see the increasing effects of planetary boundaries . We see too many people being left behind. It's affecting all of our business models. So there's a moral case for the SD which is to irreversibly eradicate poverty in a more sustainable and equitable way. And I think we all should contribute to that otherwise society wouldn't function. And there is also an economic case. If you look at the cost of not acting right now we're getting to a point where the cost of not acting on climate change protecting biodiversity addressing the issues in the food value chain for example are starting to exceed the cost of acting implementing the Sustainable Development Goals 3 to four trillion a year just a cost that the world is incurring and in conflict prevention and wars 9 percent of GDP climate change 5 percent of GDP biodiversity lost 3 percent of GDP. So we're getting to the point that the economic opportunities are enormous and that's probably the best business case for most people. I haven't actually how many people how many investors actually want a slice of this. So increasingly I think more and more people are waking up to this reality because as Paul said we're at that point in history where we have more capital available than at any point in history and we have more business opportunities than at any point in history. And for too long the debate around the hostages was around definitional issues and whether it is OK to do good in ways that are trade offs between doing good and making money and the realities is actually a trade on. There's no trade off you can do both and do them extremely effectively. And the most interesting thing that I'm finding is that there is a momentum that has built thanks to the hostages definitional ability to pull in all the stakeholders and more and more businesses are now waking up to the reality that you don't have a choice. Actually it is being propelled by the young people in the world the millennial generation who are finding it increasingly difficult to reconcile their imperatives in the way they think with the way businesses act and so therefore businesses have to change not the people but. How can you make sure that this is not just window dressing. This is not some massive PR exercise Francine one of my theme songs over the past few years has been this is not a tradeoff. As I said this is the single biggest business opportunity for the next couple of decades. I don't even know what we're arguing about. If you look at my group of companies we have this rather colorful imagery use of a banyan tree. And for those who don't know what that is it's a tree which has its central trunk to begin with and then it has aerial roots which are our new businesses which fall down to the ground looking for nutrition AKK a new businesses all of those aerial roots of our banyan tree. Are you looking at as DG related businesses where in my communication we had an electric vehicles. We didn't do it in housing. We are in water management. So to my mind anyone not looking at these opportunities is going to miss out on growth. Now when we heard that America was pulling out of the Paris agreement that's unfortunate but frankly speaking purely from my competitive juices point of view we are delighted if somebody is not going to look at these opportunities they'll be all there for us. John Aitken the business opportunity for FTSE. I absolutely believe in what. And then just said and we happen to be in similar businesses both in agriculture and cars . So we we we also are seeing many many opportunities to come . I also think that being careful with resources is at the core of how we've been conducting business. And ultimately if you are diligent in in being careful about how you manufacturer. So if I look at the car business who has around 150 plants worldwide only in 2000 16 with all the initiatives on trying to see how we can use less energy how we can use less water. We've actually been saving a lot of money which is good for the bottom line but it's also good for for our world. Xi Jinping the concern or what we're arguing about maybe is how you report it or if you force companies to report it and actually short termism. Do we need to rethink capital because of this. Yeah but I think you're always as a CEO or you're always torn between this need for a short term return and actually doing the long thing. I would tell you that you don't need to wait for the synergies . People like Larry think what I think is around today has let us about thinking out longer term and I admire that kind of approach to business because I think you only succeed if you have a view that goes out further which we're kind of what all these guys are saying. I do think that there's one thing about poverty that we need to just understand poverty alleviation is different from taking people from poverty to prosperity. If you care about taking them from poverty to prosperity the business opportunities are enormous. If all you care about is so-called poverty alleviation it's only the first step off the ladder and that exposes the idea of not having enough business opportunity . I think you got to think that we are doing this thinking all the way John just think out about this banyan tree and then it becomes poverty for prosperity as compared to just a deviation . Paul do we need reporting standards or transparency reporting standards. Yeah. So what is obviously difficult is you need to move the financial system if you want to our economic system for reporting solely on financial data. Also on environmental and social data. So we call that if you want to redefining value if we put a price on environmental equity like for example a price on carbon people will actually start to behave differently and the same thing for social capital. So redefining value is a big idea of if I was Mark Wilson says working on an initiative that we certainly support on how do we integrate SD in our reporting the World Business Council for Sustainable Development has a project called Redefining value where we bring in the environmental and social capital and then individual companies have made their own attempts. The issue here is you need to do it by industry. You need to get the the materiality of what you're reporting. The comparability and there's obviously a lot of discussion going on and a lot of people having perhaps a free ride there as well undermining the consumer confidence. So the quicker we move to common standards the better. That's why we applaud Michael Bloomberg initiative on on carbon disclosure because that's probably one of the right steps as we know to accelerate the construction to green energy. So you know everybody here is the CEO and we're all used to execution decisions thinking and moving on. So I think what you've just said Paul this is great. The intent is there. Okay. And now we have to start talking about the of indices and reporting and so on. There's one thing that we have to also come to terms with which is that the plumbing of the global financial system is actually broken. Okay. And what do I mean by that by. By plumbing what I'm talking about is the fact that you have nine trillion dollars of money sitting in what I essentially negatively yielding debt. Okay. Fiduciary is of capital are actually guaranteeing the fact that they will lose money rather than deploying money into areas where there is enormous opportunity and there is scale and things can be done. And at the same time at a time when we're getting polarized for some reason or the other the world is getting globalized and yet cross-border capital flows I guess have gone on 65 percent since 2007. That's astronomical. Right. So what we are missing now are two things one is a little bit more trust. We're missing trust in the system of what actually makes for good business good opportunities and good projects. And the second is a redefinition a little bit around risk because we continue to look at risk through a very narrow lens that continues to say that if you're going to invest in these businesses in these markets you're actually going to have to need a redefinition or a premium on risk. What very few people realize is that the default rate on projects and infrastructure businesses in North America is eight point nine percent in Africa it's one point one percent. Trying to figure that one out. Right. And so all I'm saying is that the allocation of capital to directionality of capital needs to come with the arch that it needs to involve trust in the definition of risk. I don't think that trust points to another level as well. I think that one of the biggest problems is that the public sector and the private sector do not trust each other on this topic. And so when you're on the ground trying to convince a multilateral institution or local government by the need for applied technology and methods to let's say drive inclusive growth which is how we contribute to the hostages or to drive growth and gives people identities which I think if we don't have an identity you're kind of like being in prison you'll find the first reaction from government and multilateral institutions is why is this guy doing it and what's in it for him and after some years of doing this our company has committed to putting 500 million people into financial inclusion. We have 330 million and counting. And we'll get to founded across it. You would believe that by doing so you would build trust. It is a uphill struggle. Every day every week we need to build a trust that says there's not enough money in philanthropy. There's not enough money in government to get to the SD. We're gonna need trillions. We need to divert private sector capital and energy to help with getting this done. But you can do it in India . There's a saying to clap. You need two hands. Well I need the two hands to work and that needs trust. OK. But when they ask you about trust and they ask you for you would you answer. I fight again back to people coming and talking to us. My view is it's not only enlightened self-interest. We are in the business of giving cash. And so who is the biggest single gender out of cash in an economy. It's the government paying its citizens and giving social benefits doing the distribution of the social benefits globally. Took you to 40 percent of what's distributed does not reach the citizen in the NGO world that's called leakage. In my words it's called theft and we can fix it and we can fix it through technology and transparency and to do that . Well I don't make money out of it. You can look at my piano. I don't make money out of this or what I do is I'm changing for generations. The attitude towards cash and using an identity and electronic payments to drive transparency and inclusion that benefits me for 30 years trickle not just five. Don't give me an example of a commercial solution that's worked for your company . Well I I think that one example that I can get that I can come which relates to other businesses is for example on agriculture equipment. We have a very big market share in Brazil and sugarcane is one of the big one of the big agriculture activities there. And the process in sugar cane was extremely difficult and very polluting. And we have been coming up with solutions product solutions that on one hand are able to come to the problems that that you're facing there . And by solving those problems they are in effect making process work conditions and the economics of it's much much better. And that would be an example out of many. And on do you have an example and also where does this need to be decided. Is it at the board level or does it come from the chairman and the CEO let me just go back to the issue of trust if I may. And while I am working with the government there are two planes on which that can work. One is at the granular level. And to give an example since you were looking for examples currently we're the only player in electric vehicles in India . And we've just been believers for a while haven't been making any money. But now the tipping point seems to be reached by one of the experiments we are very very interested in and optimistic about is in a city in India called not for where we are supplying the cars the drivers have signed onto a ride sharing company their goal owner and the government has provided the charging station initially for this to begin and it's working well and if it works extensively then we're going to replicate it. So that's an example of a government stepping in actively participating. So more than trust you need a public private partnership to work. And it can happen. The second plane in which you want government help. And I really don't believe in subsidies at all because I think these businesses are all profitable as I said earlier is you need the leader of the country to give a direction. And let me give you an example here again when Prime Minister Modi laid out his vision for solar power and wanted to make India a leader in solar power stated a very clear goal of one hundred and seventy five gigawatts of renewable energy by 2020 200 of which were solar reinvested. So businessmen look for stability they look for direction. You don't need that much more if you're just smelling opportunity. So in three years we've built a company that is now the second largest builder solar power plants . You're not looking for subsidies. We were just saying tell us if that's the track you're going to follow if you're going to do that. There's money to be made. There is going to be a return . So those are both the levels in which I personally experienced trust with the government and I think those two planes have to be pursued if you're going to get opportunity. You know where you're going with everything that you said is stakeholder engagement. And I've often said that you cannot be an island of excellence and an ocean of turbulence. And what we're seeing out there is a lot of frothy water some more and more people need to come together and need to understand that it is only when we look in alignment with each other with the stakeholder approach not just the idea of making money which are shareholder returns. So going back to what I said a little bit as well you need to go more towards the long term. You need to focus on what people like Paul are practicing in public markets very bravely by saying we're going to change the way in which things are done. So what I'm trying to get at is that all of us need to focus that it is not business as usual and we don't need to have business as usual. We need to redefine the paradigm that we're going to be facing going forward because it is going to be a different world. Technology is going to disrupt the world the way in which politics disrupts it anyway and so on. So we need to start thinking out of the box. Again I call it partnership capital. And since everybody is giving examples from their businesses we launched a business about a year and a half to two years ago around the healthcare space where we put a fund together with the partnership of the Gates Foundation with Philips with Medtronic with the IFC. So it was not about my firm abroad. It was about the reality in totality of all the players in that ecosystem and space and collectively what we have managed to create a solutions that are going to affect 300 million people across Africa and the subcontinent. That's called result. And at the same time you make money. If I could just come in for a quick minute because you know I might leave behind an impression that I'm completely mercenary not only for returns but to be very honest. I'm through with ticking the boxes in a corporate sphere. That's not what brings change in my personal philanthropy. I can take a very long term view and that's my business. So along with the Michael and Susan Dell Foundation I'm a big player in distributed water and I don't look for the return but if I talk about stakeholders the more we talk about the long term and RTS J. I'm not making more money at this and I'm doing for the long term nothing is going to change. That's why I'm saying my only anthem is look there's money in this. When businessmen see money in it you're going to see change. And as I said at the risk of sounding mercenary but actually when you want change you want to return upslope. What I give personally is my business and I will take a very long time. Absolutely. Well the good thing is that that is now increasingly accessible to everybody and in the area of energy for example you can see that increasingly on the county level or regional level or a city or state level you can get your green energy and be cheaper ise. We've moved all of our energy in Europe and the US to green energy. I never had a proposal was a payout requirement or was a payout of less than of more than three years. So they do pay out but we get excited about it . There are some things you do on a corporate level going to green and G running your factories with zero waste treating your people well and the value chain and they actually make good sense in terms of reputation or in terms of productivity or attracting the right people to work for you. But increasingly we put our brands to the surface of the disease and linking each of our brands to the relevant as disease is really making these brands relevant for society. So life boy which is a brand and handwashing soap has a mission to reach a billion people more and teaching them to handwashing that brand is running double digit because they are in touch with the relevance of society a brand like domestics on toilet cleaning is trying to attack the issue of open defecation which you have one and a half billion people by building more toilets. They're in touch and they're actually growing their brands faster. A brand like Global News 24 hours a day on air and @TicToc on Twitter. powered by more than 2700 journalists and analysts in more than 120 countries. this is Bloomberg one of our food brands attacking the issues of stunting or food security and as a result was 8 a million people still going to bed hungry. It's an enormous market out there to address that issue. So hiring good people they'll figure out how to manage these tensions. Sometimes you have a little bit of a tradeoff. That's what we have to deal with in anything in life. But my answer is very simple. We are willing to make investments now for factories that pay out in five years or later. We are willing to invest in people that pay out in 25 years. What we're talking here about actually is very sane investments for the future of humanity and yet we have to argue in defend about it. We should spend more time getting people on the panel and asking them why they're not doing it. That would be an interesting panel in my opinion. We'll do it for next year. JON Yeah I mean I think from a different viewpoint what is interesting is is the constraints. And one one is always somehow against constraints and you have more regulations and you have more targets to meet. And I think those are very helpful and especially in companies like the ones we have which are engineering based companies people love to solve problems . And I'm just seeing how many new inventions we're doing how many new problems we're trying to tackle. So rather than looking at it in a heavy way and somehow why shouldn't other people do it . I think it's it's we should be very positive in saying there are these issues and we're going to confront them and we're going to make very stringent objectives and to work to those objectives will actually come with very clever solutions. So for example electrification seems to be now the solution. The reality is electricity is being being mainly done by burning fossils of which 40 percent coal. So there are also other ways that only electrification which is one way there is natural gas there is many different ways in which we can solve some of these these these issues. And I think that's what we need. And to some extent more stringent. We have goals to achieve better will We'll get to them. And and I just want to come back to one thing. I think using energy using resources carefully and trying to optimize them at the end of the day is is very very important. And everyone can do it. Every organization can do it. So you know both company and mine are actually doing something interesting for extending the ability for small businesses in Kenya to start with to get access to digitizing that entire system from buying commodities to being able to get access to credit. Now what we're doing together is using technology and getting them to record their payments on a electronically so that they can go to a bank and say you can see I have this much revenue every day and the bank can make a better decision on lending and then they lend that money they can use it to buy Paul's lifeboat and so. And I on the other hand by using it make money from that transaction the bank makes money. The SMP is happy. That to me is a business opportunity that is connected to our core competencies. And what I'm trying to get at here is the moment you look at the SD GS and the issues around them and you figure out we're all over the saying in different ways. If you take our photo capabilities and you build them as business reasons to attack those issues you can get through as I said from poverty alleviation to pastoral prosperity. It becomes a business as compared to a philanthropy which is useful and very important but not the way we're discussing it. That's what I'm trying to get at this. There is a way to make money out of this the right way in a sensible way . But also make the place better for all of us for the next 30 years. That's the logic I'm almost running out of time I can ask you the same question to everyone in terms of priorities . How should SD be seen compared to other priorities for a company . AJ Well I believe that if you have the perspective that you need this to be critical for your future that is the only way to make a difference. I consider them to be one the ways of defining the goals of my company I don't think it's an either or . You gotta do it. John I think it's part of the way at least our companies work so it's not it's not it's not goals to be met . It's really part of how we we function well just to go back to the image I started with the banyan tree. Those aerial roots are reaching out for businesses which are about as DG So I'm just a student of reality. I don't even see the conflict. Just look at those roots are reaching out and those are that's the biggest opportunity of the next decade. But you must see that you must see the conflicts in other companies right. You can't assume that everyone has such a clear vision as this. I'm certainly not assuming that I'm just speaking for myself frankly . All right. So not everyone can change the world and the reality is change your company work within your ecosystem and bring the implementation of what FTSE EV teaches it's great to see it is as a hypothetical or philosophical area. But these are just commonsense principles by which we all live our life and the most important thing is if you can create a corporate environment where culture the and the DNA integrates this thinking entirely then what is going to make another the most populous a year in India. Which she probably already is is not the success of the business but the fact that people want to work for him. Young people are wondering why Romaine Bostick who actually subscribe to those principles and that is what creates corporate culture. That's how we're going to change the world. How long does that take. Not too long. Actually when people see it coming from below and when people see it new people joining who said this is where I want to work. And they see the CEO and the chairman of the board espousing the same principles. Then what you find is it's an unstoppable movement . Oh yeah. The reason I got involved as one of the members of the High Level Panel developing the goals and why I'm still on as DG advocate and proudly wear the pin is because I felt that at a time that global governance had that as at a low point that's probably the only opportunity that we have of a moral framework to work together and to have something that we can all aspire to. I've never met a CEO who wants more unemployment more air pollution or more people going to bed hungry. Then the question becomes in terms of priorities what do we want to work on. Because we're clearly not achieving the goals was to speed and Mr. scale that we needed to move this world forward. And there you have to really put the priorities on changing the boundaries that drive our behavior. How do we move to more integrated reporting and make financial environmental and social capital equally important. How do we move the financial markets to the longer term. How do we decarbonise a global economy. So these are important things. Well the financial market moving the financial markets in the longer term for example requires a change of incentive systems in the financial markets requires a change in the way CEOs are compensated or boards increasingly put pressure on requires a clarity on what the fiduciary duties of companies are. And some probably some regulatory interventions as well. But that would be one of the frameworks that you have to change because if we don't put priority no on changing the frameworks in which we operate we will never get the right behavior to achieve the objectives that we need to do . Take capitalism. There's nothing wrong with capitalism but we're asking a capitalist to optimize the return on capital . And some people are mighty good at it. But it clearly excludes increasingly more and more people. Now if we ask a capitalist to not only maximize the return on financial capital but also on social and environmental capital they're the best place to do this. So moving these systems are moving these boundaries broader drives that behavior that we need to achieve these goals and that's probably the best contribution that we can make as leaders. And that requires us going out of our comfort zone definitely out of our comfort zone. And it's not easy. We need to decarbonise the economy move the financial markets to the longer term move to a circular economy vs. a linear economy finding a way to have more inclusive growth at a moment that global governance doesn't work. Yes that is a challenge for the leaders that we have today. And that's why we need to invest probably in the scarcest commodity that we have which is courageous leadership. It's intimidating to start with but it's easy to implement. Gentlemen thank you so much. We're out of time. Thank you for a very engaging CAC .

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Business Leaders: Sustainable Development Goals

Mastercard CEO Ajay Banga, EXOR Chairman and CEO John Elkann, Mahindra Group Chairman Anand Mahindra, Abraaj Group Founder and CEO Arif Naqvi, and Unilever CEO Paul Polman talk with Bloomberg's Francine Lacqua about the future of sustainable development at the Bloomberg Global Business Forum at The Plaza Hotel in New York City. (Source: Bloomberg)

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