Heather, welcome and thank you for joining us onNetZero Conversations. Absolute pleasure.Thank you.You are Executive Director at theAll Party Parliamentary Group on Fair Business Banking.Yes. That's quite difficult to say.Can you tell us a bit about that group, please?So it's a group ofabout 140 MPs and peers within Westminsterwho have an interest inthe relationship between businessesand financial services sector,and making sure that the financial services sectordoes the best for businesses in the UK.And you also were involved in setting upthe NetZero Alliance forthe banking sector. Is that right?Yes.So we co-founded a project called Bankers for NetZero.It was originally just supposed to bea one-off project that lasted for a year until COP 26,which turned into two years,of course, because of COVID.And it was born out of the idea that wecan see that there was going to be a really intense changethat the whole industry was going to be going through.And fundamentally that was going to changerelationships because ultimately banks were starting,were in the process ofredefining risk and redefining value,which, of course, are fairlycentral to the financial services sector.So we just wanted to make sure that westarted the conversations earlywith businesses, with banks,and making sure and withpoliticians as well and policymakersto make sure that we have as much ofa glide path as possible rather than cliff edgesbecause if the wrong incentiveswere put in the wrong place,it could become very difficult.So that was really the origin of that initiative.And since then it's grown arms and legs.And we're now the UK country chapter ofthe NetZero Banking Allianceso we're the first country chapter in the worldand it is very much about takingthe commitments that have been made at a high level,and then translating those into what that looks like onthe ground, given our particular legislative,regulatory, cultural framework thatwe have within the country.So what types of things will banks be doing to beable to activate those commitments that they've made?What does that mean in practice?Well, that it's really tricky actually inpractice because not to put to fine a point on it,but a lot of these commitments cannot bekept without significant policy intervention.So a perfect example because banks have signedup to decarbonize the scopethree emissions and go through the entire loan book.Every, they're essentially responsiblefor the carbon emissions ofevery household that has a mortgage.Right yeah, of course.Every and every small business.So to get that kind of the retrofitting,that level of decarbonization,and that level of behavioural change,that's often stuff that really needs to happen fromgovernment. And industry can support that.So there's a lot of tricky discussions onhow do we engage with the retrofit agenda?how do we engage with supporting SMEs?Those are the two areas we've done deep dives into so far.The plan is to gointo another sector, probably agriculturenext and then take those. And essentially, to a certain extent,we're also trying to de-risksome of the bold policy decisionsthat parliamentarians need tomake in order to move the agenda forward.So it is very much about having the kind oftough conversations because you've got a lot ofcompeting interests in the room,but we were very keen thatthis initiative involved a very broad scope.So we've got WWF and E3Ginvolved. And Nigel Topping was onour original steering committee before we've turned itinto this long-term project now.So we've had a lot of tough conversations,but that's the whole point,is engaging, not justwith the sustainability teams within the banks,but starting to do workshops where you actually engagewith the people that are dealing withclients and that are front facing.So trying to make it more real,I guess, for the industry.And I think.. I mean, it's fascinatingthis part of the conversation,because actually what we're talking about here is oftenvery small businesses who maywant to take steps to reduce their carbon footprint,but simply don't have the kind of access to finance or,the know-how to make those changes,so the role of government and policy is really important.Is that something that the Alliance, have yougot an active workstream on policy engagement?What are the sorts of conversationsyou're having with policymakers?Loads. I mean, we work reallyclosely with Bays and Treasury in particular,so Bays on the retrofit team.So we meet with them quiteregularly to talk about ideas that they may have.We're certainly looking to dosomething for the SMEs in the country,which will involve basically Bays andall the major business representatives atthe CBI, and the IOD, and Institute of Directorsand whatnot and the financial services sector,and seeing how we can usethe banking, the banking system asa conduit for this informationto get out there as well.And you mentioned also earlier about mortgages. Yeah.And can you expand on that a little bit more?Because that's another interesting areawhere we can all try todecarbonize our homes more andmore if we knew how. Well absolutely.And I think this is probably one ofthe biggest challenges we haveis, particularly around the retrofit agenda.And because you're talking about people's homes,it's quite personal. Andbest will in the world if you takea few points off of mortgageand somebody saves 50 quid a month,they're not really going to...That's not going to inspire the behavioural change thatwe need in order to reallyproperly retrofit our homes and whatnot.So our kind of proposals have been that we needto go really heavy onsome kind of mass social housing retrofit projectsin order to start bringing the cost curve downbecause, essentially, it's still,it's boutique right now, retrofitting.So it's kind of like goingto a nice little boutique shop on the high street suite,where really it needs to be Ikea standard or B&Q,where it's just what's done, and we're just not there yet.And really, a lot of that is going torely on the policymakers leading that.But because of the commitmentsthat banks have made, all of a sudden,you've got financial institutionsmuch more interested in this,in the fabric of the buildingsthat they're actually lending on.And there's loads of risks that come with this as well.So if we don't do it well,you can end up in a situation where we getunmortgageable properties, all that.So it you've got to reallynavigate your way through carefully.Otherwise, the unintended consequencescan be quite severe.Now, of course, you are focused work on the UK,but are you seeing similar type ofactivity in banking sectors in other countries as well?I know that there are, there are some alliances,but certainly, I think the ambition is thatother country chapters do evolve out of this.And we've quite purposelygot a lot of international organizations that sit on our advisory board,but that's certainly... I know that the UN are quite keenfor other countries toevolve as well and do something similar.And one final question, if you don't mind,Heather, as we look forward to COP 27,in your opinion, what do you think isthe one thing that really we need to get right,so that the summit is a success?I think that we're going in the right directionin terms of the focus isnow on implementation rather than the commitments.And we need to start speaking the same languageI guess, first and foremost.I always like to say right now,the way that we can measure sustainability and ESG,it would be the equivalent to The Big Fourstarting to compete with each other on how theypresent a balance sheet or a profit and loss.It's a ludicrous idea isn't it?And we're still in that mode.And so I think that's the implementation.The consistency is probably the thingsthat we need to really focus on now.So presumably, you are a fan of the introductionof globally consistent disclosure standards?Yes, definitely.And looking forward to the ISSB standards coming in.Yes, absolutely. Great.Alright. Well, many thanks and lovely to talk to you.Pleasure. Thank you.
