Episode 34: Climate Week NYC 2025: Realism, Determination, and Optimism

The transcript highlights below have been edited for clarity

Mark Lee

Welcome to this episode of the Sustainable Connections Podcast. We’re getting to do this one from New York City. I've been here for Climate Week with many of my colleagues, and we're taking a moment out of the incredibly packed schedule (there were over 1,000 events this year), to try and capture what we've learned, what we've heard, and what we think we can do differently moving forward to keep decarbonization moving.

I'm not going to do that alone, I’m incredibly lucky to be here with several of my colleagues today. Welcome Linden, she does all things sustainability internally at ERM and leads our Climate Week delegation. Liam Walsh is our Chief Commercial Officer. This is his first climate week, and we're going to play on that a little bit to get those fresh perspectives. Finally, Sabine Hoefnagel, who is responsible for sustainability and risk at ERM. Like Linden, she has been a veteran of many of these events. We're going to look at how these things have changed over time and what we learned this year.

Sabine and Linden, I want to start with the two of you. You've been to a whole bunch of climate weeks. Liam, as we've already said, you're at your first. I'd like to get overall responses from each of you. Linden, can you focus on how this climate week has been different than other years you've experienced in New York?

Linden Edgell

The external context has changed a lot. We all know this. When we were planning and preparing for this climate week, it was really a question of, is anyone going to show up? Who will show up? What we've learnt and what's actually happened is lots of people have shown up. But it's not the normal crowd alone. We're seeing different companies coming, so more companies in different parts of the value chain, because they see the opportunities to really engage and do business. It's different companies turning up and different people in those companies who are turning up. For example, we have the strategy folks, the procurement folks, the detailed lenders, analysts, and lots of people. It's lots of different folk turning up and learning to talk to one another. And they want to get into the details. I think that's the other thing, we've gone past headlines and the big stages, with big announcements. People are in rooms, really getting into the detail.

Mark Lee

Sabine, as a point of comparison, you were at London Climate Action Week earlier this year. It grew enormously. We wondered what impact that was going to have on New York. It certainly didn't stop the scale here. But how was the conversation different in the two places? A few months apart, but also geographies apart?

Sabine Hoefnagel

I'd say firstly, the amount of people, lots of people in London and lots of people now in New York. I think over 1000 events, as you said. Many of the people here are business leaders. So, the good news is, in both London and in New York, business is engaged. They show up. The second thing that I saw, again, both in London and in New York, is that the one-size-fits-all era of sustainability is kind of over. It really depends on what industry you work in and what geography you work in. Transformation looks very different depending on those factors. For example, if we're thinking about the mining sector, we had an event with them this morning, the topics that they're struggling with can be around social license to operate. But if you compare that with a consumer goods company, it might be more about how they decarbonize the inputs into their products through alternative feedstock. So, I think that kind of specificity is really showing up.

You asked me what's different between London and New York. If I'm honest, I don't see that much difference. I think more of a continuation of these themes. One theme that I'm sure we'll talk about more today is this link between sustainability and enterprise value. That's been a loud and clear theme, and that was already the case in London and even much louder this week in New York.

Mark Lee

Liam, we want to benefit from your fresh exposure. What did you pick up and was it any different than what Linden and Sabine are starting to reflect?

Liam Walsh

Well, firstly, I didn't think you could be exhilarated and exhausted at the same time, but I've discovered this week that those two things are possible at the same time. It's been a great week. I think the volume of people, the profile of the different people, and candidly, the level of engagement around the topics in the different sessions has been really outstanding. The fact that people are bringing so much energy and interest, it's a pragmatic conversation, it's an action-oriented conversation, it's a recognition that things maybe need to change, and they want to explore and learn from each other. So, I've found the week just phenomenal, but definitely the themes that Sabine has talked about are there. Definitely there is more of a call to action as we leave the week, and what are we going to do differently? I think we've heard it in multiple different ways, across multiple different sessions, but it's - let's just go do stuff. This is really the thing I've picked up on.

Mark Lee

ERM held a whole bunch of events over the course of the week. We hosted about 12 of our own. We were partnered up with others on some of them, and we can't cover them all, but I would love to hear about what you heard in some of those rooms. Liam, you were at the mining event that Sabine mentioned a moment ago. We called it sustainability that pays. What happened there?

Liam Walsh

I think it was a really great conversation around this enterprise value theme that Sabine had referenced. How do we quantify the value of our sustainability initiatives in a way that actually drives engagement? I think we had the benefit of people representing companies, but also people from the financial community as well. I think a key theme for me was that the idea that we have a green premium doesn't really exist anymore. So, this really is around tangible value, measurable value, and approval value. I think there's also an appreciation now that there's multiple levers of value, and the fact that there are different ways that you can equate value to your specific circumstances. Again, I think it’s about Sabine's point around it being industry specific and geography specific, as to which of those levers will be most impactful. But I think generally just an awareness that there is value to be had. We shouldn't shy away from the fact that we should look for the outs to quantify impact in a different way. There is a way to do that in an enterprise value perspective. Everyone seems very willing to kind of rally around that and drive investment around sustainability initiatives as long as it can translate very clearly to the bottom line.

Mark Lee

Yeah, I got to be there too and then the comments about the lack of green premium were striking. Yet I thought people rushed then to say, it's not that sustainability doesn't have value. It's not that value. We're finding the value in other ways.

Linden, we're hosting today an event on carbon credits. I think it's fair to say carbon credits have had a spotty few years. It's really been up and down. But there's some more momentum in the space, maybe it's about quality or availability. What's driving the new shift in that conversation?

Linden Edgell

A number of governments in the world, the UK, Kenya, Panama, Singapore, and others have come together to form a coalition to drive the voluntary carbon markets. Our partner, the World Business Council for Sustainable Development (WBCSD), has been asked to convene the business voice into that and asked ERM to help. We had a workshop today and moved from listening mode for many people. We got out the flip charts, the sticky notes, and the markers and said to people, how do we drive incentives in these markets? What is it that governments need to do? What are the elements of markets need to do? What is the message coming from business that will unlock the voluntary carbon markets? And people were there, the charts were full, there's lots of ideas and lots of drive. I think that's one of the roles we play in a week like this. We brought together finance, project developers, policy makers, and others to say, let's figure out how we can solve that. I think that was practical and really brought that business perspective and got very specific.

Mark Lee

Do people trust the carbon credits market again?

Linden Edgell

Trust is probably a strong word, but I think they are very clear about what integrity looks.  Certainly, that's a focus that, both on our climate markets team and our advisory side, we’re very specific on what does integrity looks like, and how do you deliver for climate, for nature, and for people? And if it's not doing that then it's probably not a credit you want.

Mark Lee

Sabine, Linden mentioned WBCSD, is a longtime partner. They were having a celebration this week. They're 30 years old, which in this field is pretty extraordinary. They hosted their council meeting on Monday of this week. Can you put that in context. What does that mean and what happened at one of the major events here this week.

Sabine Hoefnagel

The World Business Council for Sustainable Development is an organization that brings together 250 leading organizations in the world. They were celebrating their 30th anniversary. ERM was a founding member, so it was also a special day for us. There was a bit of look back, but there was a lot of look forward and so many topics and sessions were discussed.  Tom, our CEO, did a great session on the plenary stage, and three things that stuck with me. The first one, which came out in the very first session that we attended that day, was that we need to focus on the demand side and follow your customers. So, don't just think about as a business, how do regulations affect me? But really, how do regulations affect my customers and how is that going to create demand?

Second, I would say focus on physical risk and particularly physical risks all the way through your supply chain. I mean, there's so few businesses that have properly done that analysis. The last thing I would say, there was a really brilliant session on the just transition, which is the people element that you just mentioned, Linden. I think that is still misunderstood for many businesses, particularly at the C-suite level. I know they're producing a guide that ERM is also collaborating with, which will come out just before COP 30, and I look forward to that because this cannot be done without taking people into consideration.

Mark Lee

Beyond the ERM events and the ones we got to attend, this all in some ways builds and rolls from climate week to climate week, London to New York, and on towards COP 30. Linden, you've been part of the prior two, and you're headed to COP 30 in Brazil in a couple of months. I wonder which of these things you think are going to play forward in a big way in a couple of months in Belem?

Linden Edgell

It's actually not a couple of months, it's a couple of weeks. Which kind of scares me at this point. I went to an interesting session with Ana Toni, who is the CEO of the Brazilian COP presidency. Her message to business was basically show up. Show up in force, because the action is happening in the private sector at the moment. Her plea was for the private sector to show up and to demonstrate the ways in which progress is being made now. So, there’s a bit of a vacuum in the narrative in some areas. People are going quiet, but in that vacuum is noise. And she's encouraging business to come back in with very practical examples. In the 10 years, for example, since COP21 in Paris, renewables have increased by 140 percent on where it was. Things are making progress and a lot of that is getting lost. So, we need to come with those specific examples.

The second is, if you can't show up, engage your government. This week has been a week where countries have published their NDCs, that's the nationally determined contributions, the country plans. This is their commitment for the next phase, business needs to be all over those in the countries in which they operate. And they need to be engaging governments and saying, okay, if you're setting targets, and many of them now have sector-specific targets and roadmaps within those NDCs. What does it say for your particular sector and the sectors in your value chain? How do you really engage governments? Her language is very much about telling governments what the enablers are, what else can happen in the policy framework, the regulatory framework, the taxation framework to enable action on climate. What are the barriers? And again, be specific. Yes, it's a bit of self-interest, but actually be specific about, maybe there's subsidies over here that are not contravening this over here. Maybe it's layers of permitting law, finances aligning etc. Whatever those things are, get super specific. I think that's going to be our message and our plan going into COP. How do we convene the conversations where people get in a room and get specific about driving that momentum.

Mark Lee

Liam, coming back to you, earlier in the week, we got to attend an event that was based on recent research that we published with GlobeScan and Volans. The research was called Sustainability at a Crossroads. I'll try and briefly summarize it for the sake of setting up a question for you. The research talked to 1000 people worldwide and said we need radical change to the sustainability agenda. We need to do that at a time when there's tremendous backlash against the agenda, or at least putting pressure on the agenda, and when trust in the institutions that we look to lead all of this (governments, business, UN, etc.) is pretty low, actually as low as it has been for more than a decade of tracking. All this begs that we make some kind of a transformation. Before ERM, a big part of your career has been transformation. I'm wondering what you observed about, not the detail of the research, but what do sustainability leaders need to do to enact the kind of change that the survey seemed to suggest we need?

Liam Walsh

It was interesting because as you lay out your intro about this massive case for change, going into the event, I was expecting a little bit more of a pessimistic tone. But in reality, the group was really engaged and I walked away with way more positivity and optimism than perhaps the research would expect you to indicate. I think there was a realization that the world has changed, and the fact that the tactics that we've been deploying or have been deployed over the last number of years are not necessarily the tactics that will be successful in going forward. Again, Sabine mentioned earlier, a regionalization, an industry-specific component around that. So, there's a level of complexity now around the transformation agenda that everyone's going to get their heads around and really rethink their approach. That said, there was also a realization that some of those tactics weren't particularly effective either, and a realization that maybe a bit more honesty and transparency around what has worked, and what hasn't worked and using that to inform the way forward.

For me, it very much felt like a realignment around a transformation mission with a couple of key principles that people really need to focus on. Firstly, we have to set a destination that's anchored in value, and value that's measurable, trackable, and translatable to the business broadly, not just the sustainability experts. I think there's a recognition that there needs to be a much broader engagement across the enterprise around the sustainability agenda, and therefore that we need to use different language in how we describe what we're trying to do. It's not a specialty area anymore. It's a general area and we have to engage differently with the business around that and educate as well as engage them around the agenda.

I think there's also a recognition that we need to show progress and we need to drive momentum through progress. Typically, in a transformation program you always want to have quick wins and celebrate those wins, that drives enthusiasm and drives output. Though I think the bigger question is what does that mean for sustainability leaders and their roles in their organizations? And it's really that pivot away from being an initiative leader to being an orchestrator of a theme across multiple initiatives. That's going to take a different set of skills, a different set of activities, and maybe people playing a slightly different role of really driving engagement, leading from the back, not always leading from the front, and making sure that sustainability as a theme is reflective in all the key strategic priorities for the organization, not just treating it as if it should be an individual priority on its own.

Mark Lee

Sabine, you know this Crossroads research really well, and also the Catching the Wave research that we did with WBCSD last year. The Crossroads research ranked a bunch of possible solutions, up in the top right corner, the highest potential/impact of things we could do for the next five years is technological innovation and R&D that supports sustainability. Also really close to it, the commercialization and integration of more sustainable products and services. So how much did the technology theme appear here this week? Do we have examples of that working in practice, if that's the solution we're supposed to grasp?

Sabine Hoefnagel

Yes, lots of talk about that. Both in the events that I attended, but also in one-on-one conversations, you're hearing many companies putting serious investment into innovation for new technology and new materials. One example that was mentioned this morning was JSW Steel, a big Indian steel company, who talked about how they are using waste material from their processes to make a new kind of cement, which has much lower carbon. So, here you're seeing circularity in action.

A bit of a different example is Mars, and they're trying to get their supply chain to decarbonize through buying renewable energy supply. But it's very difficult if all these different suppliers of them need to do that on their own. What they've done is bulk energy buying and with that, I think they've tripled the speeds that they have been doing. So, a brilliant example of scale and speed.

Mark Lee

Sabine, about quantification, financial value, business case, (Liam, these were some of your opening thematics as well), we have seen a narrowing, and I don't mean that in a negative way. A focusing of businesses in terms of assessing their sustainability strategy on what financial value is this delivering. Can we have some examples of how that played this week?

Sabine Hoefnagel

I think it is sort of like a natural next phase of where sustainability is going. And as I like to say, it's time for the movement to perhaps also grow up more and stand on its own two commercial and financial feet. I think the benefits of that is that it allows greater alignment within the company with all these different departments that need to be part of this transformation. It allows innovation to happen, and it also depoliticizes the topics. Just a couple of examples, Microsoft has used water evaporation to cool their data centers, which is a huge issue. I think that has allowed them to use 90 percent less water and are 30 percent more energy efficient. Last example that I mentioned is work that we've done for a hotel chain and looking at how they can kind of create value through their sustainability targets across waste, energy, water, etc. That's led to them being able to reduce their emissions by 12 percent, their water use by 15 percent, and creating US$100 million extra in enterprise value.

Mark Lee

Perfect, and you're talking about the financial quantification, which must mean the finance people are here. Linden, you also talked about the diversity that now populates Climate Week. Liam, one of the things we saw is that the presence of finance and of investors is really prominent. And they're not sitting on the sidelines, they're pretty deeply engaged in the conversation. So how are capital markets adjusting the way they put value on sustainability? Are they supporting it? Are they standing back and waiting for the deals to come to them? What's it look like?

Liam Walsh

I think there was a high degree of engagement. They were given the opportunity to attend this week and they came en masse. I picked up thematically that a challenge to the sustainability leaders is around, look, we want to invest, we see the opportunity, but we need better opportunities. We need you to frame better investments and better initiatives so that we can invest behind it. So, from my sense, I took it as a high level of engagement and a challenge to start tuning investment grade initiatives that are available and the funding's there. I thought they were really kind of challenging us to come up with some better things to invest in.

Mark Lee

Yeah, I think that often there is that strong push from them about the quality that they see in the sustainability plans that come forward, and comparability too. Comparability, actually, Linden, that's going to take me to you. Because one of the ways we get to comparability, or we try to, is reporting and disclosure. And through the development of the sustainability agenda, transparency around sustainability performance has been a big thrust. Last few years, there’s been quite a bit of regulatory action. It's a little wobbly now in terms of it's going maybe in multiple directions. But I almost want to set the mandatory regulatory driven part aside and ask, what are companies doing with their voluntary narratives? Like how are they telling their story beyond the compliance part?

Linden Edgell

Yeah, I think we're in a pendulum shift at the moment. I think there was a period of time where the sustainability attributes of a company were showcased. And greenwashing and rainbow washing is a phrase that many of us heard. Perhaps they went too far and didn't have enough of the fact and kind of carried away. Then I think it started to swing back to, we won't say anything because we're too scared to say anything in case the regulators or our consumers are after us or what have you. I think we're now swinging back to the middle that says, if you're creating value and you have to engage your investors, boards, employees, communities and others, you need a really clear narrative. Because if you've got a really clear narrative that says, this is what we're doing, here's the proof points, here's why, and here's the difference it will make, that just shifts everything. I feel like we're just starting to settle in on that. If we can really get that articulation to those different stakeholder groups, in language that means something to them and their lives and what they're trying to achieve for their business or they're a supplier, then I think those companies are the ones that'll cut through.

Mark Lee

You mentioned briefly earlier on the just transition, but I want to come back. And Climate Week is about decarbonization. A big part of it is private sector. We assume corporate decarbonization and adaptation initiatives and doing this is good, but it all affects lives and livelihoods. I think we're seeing more of the social impact as a factor in addressing climate change be considered. Can you bring that a bit more to life?

Linden Edgell

Yeah, I mean we're talking about a people-centric climate transition. Those people are you, each of us, employees, our suppliers, the communities in and around it, the regulators, we're all people and we're on this journey together. So that's the people piece. Then I think there's two dimensions we need to think about. We call this the inside out and the outside in. So the inside out is, actions that companies take will have impacts on people, and it's not always taken into account. If you're going from a traditional source of energy to renewable energy, maybe we're closing down coal-fired power stations. That impacts people, jobs and communities. Typically, they're in a community around that. That is real. If you don't deal with that up front, then it's going to be a world of pain.

We had a great example from one of the industrial players we had there this morning saying it's a war for talent. So a lot of the things that need to get done in businesses, are going to require smart people who've got passion, technology skills, the innovation, the creativity, able to use AI and all of those things. But they need to be in the sectors that perhaps aren't as interesting or as sexy as some might have. But we still need manufacturing, we still need some mining sources for critical minerals and so on. So, a source of talent, if you're not factoring that into your transition, you're going to miss out. You're going to turn around and your part of your workforce is retired and who's there?

And then outside in is, if it's flooding from extreme weather events and your employees can't get to work, what happens? Big productivity problems. So inside out and outside in, think about that new transition planning.

Mark Lee

I would say we could do this all day, but we've already confirmed that we're both exhilarated and exhausted, so we probably shouldn't. I want to bring things to a close. I'm going to give each of you a chance to help sum up here. Liam, you get to go first as it’s your first climate week, so first conclusion. What should businesses do differently after this week? And what's it essential that they keep doing?

Liam Walsh

I think for me, it's two things. Firstly, they need to take a step back, reflect on what they've done to date, recognize and celebrate the things that have gone well, acknowledge the things that haven't gone well, and just reset the strategy that actually can align their whole organization around the change that they need to embrace. As opposed to, again, treating sustainability as an initiative. It's got to be core to strategy and it has to be clear in that. I think the thing they have to keep doing is just doing stuff. They've got to make progress. We all know in the world that we learn from doing. So it's not, take a pause and go away and figure out a big strategy. It's revisit your strategy while continuing to execute the things that you know are working well and keep an action orientation.

Mark Lee

Thanks, Liam. Agree with the observations and see that sense in the doing desire. It wasn't just a wish, it's people asking exactly what they can do in their roles to make a greater difference. Linden, we touched COP 30 earlier, and the last two years probably at climate week, nature was really, really present. It wasn't as strong a theme this week here, at least where I was, but we really expect it's going to be prominent at COP 30 in Brazil, partly because it’s in Brazil, Belem, the Amazon. How do they come together again in that conversation?

Linden Edgell

Yeah, we've been doing some work for some of the leading NGOs on this to really see how does nature fit into the climate discussion? Because you can't solve for climate without nature and people. You just can't, it's not going to happen. I think we're going to really see about those conversations together. Recognizing investment in nature will actually help both the mitigation side and the adaptation side. I think we'll see that and finance coming in that does both. And we talk about the climate markets being part of that, but other forms of finance. So absolutely it will be front and center.

Mark Lee

Sabine, I want to end on what left you optimistic? Give me a couple of tidbits from this week that send you out of here energized to keep doing the work?

Sabine Hoefnagel

Let me start with two optimistic stats. First, there was a very recent EcoVadis survey, I think it was from July this year, that said that 87 percent of businesses are either going to maintain or increase their spend on sustainability. And secondly, 2024 was again a record for investment in renewables. We hit $2 trillion and even the first half of this year was bigger than ever. I think it was two times the level of investment in the same period in 2020. So we keep on keeping on. And whatever we say, it's not if, it's really how. And I don't think any transition is ever going to ever be a straight path, it will be windy, there will be obstacles, there will be challenges. But that doesn't mean that the end goal changes.

The thing that probably made me most optimistic this week was to hear voices from regions that haven't been so present before. So Asia and the Middle East, I would call out. I was in one session where somebody from a massive Indian conglomerate was saying, 10 years ago, a lot of the companies in their country were sitting back and saying, this is not a problem that we've created. Let somebody else sort it out. And now, over the last few years, there is a real realization that we can develop and we don't have to do it in the same way that it happened in the Global North. We can leapfrog. Similarly in the Middle East, just the amount of investment that is being deployed, it's just astonishing. So that's what I mean.

Linden Edgell

And we have Latin American here as well.

Sabine Hoefnagel

Yes, that's true, absolutely.

Mark Lee

Yeah, it's more of a sense of leadership everywhere, right? I think that's a really positive shift for me. I want to wrap up with thanks. It's been really fun to be here with all three of you this week. I've been more energized than I'd actually dared hope. I think that this has been a terrific week in New York. Sabine, Liam, Linden, thanks so much and for the effort that went into everything we did as well.

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