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Lindsey Hall: Hi. I'm Lindsey Hall, Head of Thought Leadership at S&P Global Sustainable1.

Esther Whieldon: And I'm Esther Whieldon, a Senior Writer on the Sustainable1 Thought Leadership team.

Lindsey Hall: Welcome to ESG Insider, an S&P Global podcast, where Esther and I take you inside the environmental, social and governance issues that are shaping the rapidly evolving sustainability landscape.

COP29 is coming up in just a few weeks, starting November 11. That's the UN Climate Change Conference of the parties taking place in Baku, Azerbaijan. And in last week's episode of the podcast, we heard how this will be the so-called Finance Cop.

We heard how scaling climate and clean energy financing will be a major focus and that the public and private sector will both play a role in addressing the massive climate financing gap for developing countries, including through blended finance. We've also been hearing on the podcast about the need to accelerate investments in low-carbon technologies and solutions across sectors. 

Well, in today's episode, we'll explore how companies in some of those sectors are approaching the low-carbon transition. We'll hear about the different technologies those companies are investing in, what challenges they face and the role that partnerships and government policies can play.

Esther Whieldon: We talk with Vaishali Sinha, Co-founder and Chairperson of Sustainability at ReNew. That's a decarbonization solutions company that develops and owns renewables and other low-carbon technologies in India. 

We'll also hear about the low-carbon strategies of a company that focuses on sustainable HVAC and refrigeration systems. For that, we'll talk with Holly Paeper, Trane Technologies President of Commercial HVAC Americas business.

And we'll talk with Garrett Quinn, Chief Sustainability Officer at Smurfit Westrock. That's a sustainable paper and packaging company that operates in 40 countries. Garrett describes some of the ways the company is looking to lower its emissions. 

I sat down with all three of today's guests on the sidelines of the Nest Climate Campus, where ESG Insider was an official podcast during Climate Week NYC. First up, let's hear from Vaishali, who starts off by describing ReNew's approach to the low-carbon transition.

Vaishali Sinha: Hi. I'm Vaishali Sinha. I'm the Co-founder of ReNew, which is India's largest renewable energy company. I am a Co-founder. I also chair the sustainability function at ReNew, and we're just kind of pushing the pedal to keep doing more and more because the opportunity in India is pretty large with a 500 gigawatt ambition, which our government has. So there's much to be done there, and I'm sort of co-sharing the burden to drive the company there.

Esther Whieldon: So how much renewables do you currently have installed? And for those who don't understand like megawatt, gigawatt sizes, can you give us an idea of what that means?

Vaishali Sinha: Yes, sure. So we have 10 gigawatts. We've put it up in 10 years. And what does 10 gigawatt mean? It's large enough to perhaps, power a country like Nepal or Bangladesh. So it could power a country, the amount of clean energy we have as far as our capacity is concerned.

Esther Whieldon: So talk to me about how this fits into the bigger picture of needing to help the Global South with the energy transition.

Vaishali Sinha: Sure. So let me start with how we're doing in India. So I think the private sector can be ambitious. That's what we've seen around the world, most often. But I think in India, we've been lucky to have a very ambitious government who set very high targets for the country. 

And what that's done is -- and come up with enabling policies. So what that has done is that has encouraged companies like ours to get engaged and deliver on the ground. And actually, if you have enabling policies, it's really about getting the capital, which is the other big pie to solve for and then executing on the ground.

So in India, we've been able to, I would say, prove to the world that it is possible with enabling policies and with private sector, when both come together, we can really outperform our targets, which we've done in India. We just crossed 200 gigawatts of capacity in the country, which we celebrated recently in an event we had in India. So it's a good example for other countries which are setting targets to push the envelope and set more ambitious targets.

Esther Whieldon: Can you give me some examples of some of the policies that have helped drive this change beyond setting the targets?

Vaishali Sinha: Sure. If you look at it, we've had the National Solar Mission, and that has driven our growth in the solar sector. We've had the National Hydrogen mission, which is really where it has encouraged us to partner and position ourselves for the Green Hydrogen journey.

I know it's a long journey because a lot of kind of issues have to be sorted, the cost of electrolyzers and various other things. But I think it's a unique opportunity for countries to come together and not for countries to be insular and inward looking, but work together. So for example, what we can do for green hydrogen in India is quite useful for Europe. and because green hydrogen is fungible. So the idea is for us to be able to work together with countries.

There's a supply somewhere like from India. There's a demand coming from, let's say, Germany. Now how do we work together to ensure that we are looking beyond our countries, we have good trade sort of paths and understanding so that we can all achieve our goals of the need and also the ability to produce.

So I think a global mindset is what is required in some of these very new and emerging technologies, and we must work together to be able to solve for it. And once we are able to scale, of course, cost comes down. And when cost comes down, you're able to scale even more and more people get engaged. So that was a story for conventional renewables, now that we call wind and solar. And I'm sure we'll have to double down for some of the new emerging technologies to be able to scale and to partner.

But then we have other emerging technologies. We have battery storage, and I think we are not living in a world where we were just generating renewables through solar or wind. It's about how we can marry all these solutions and solve for problems like intermittency.

And so we have something called Round The Clock, which was kind of innovated during COVID where you need to solve for intermittency because the sun doesn't shine all the time, and the wind doesn't blow all the time. And so how do we ensure that if we have to replace conventional with the renewables, how is it that we can make them reliable? And so there's a lot of work which is being done there, and ReNew was the first company, which came up with the Round The Clock, sort of won the tender, and was the first company to set up projects with that.

Esther Whieldon: Vaishali went on to describe some additional ways that will help drive the advancement and deployment of low-carbon technologies. By the way, you'll hear her mention how these strategies align with those of the World Economic Forum's Alliance for Clean Air, which she co-chairs. Okay, here's Vaishali.

Vaishali Sinha: In India, the national commitment has been pretty strong as we've seen. We really need to now match the subnational commitment. That's going to be a key driver. The corporate commitments and engagements to decarbonize is going to be a big driver.

The greening of cement and the greening of steel and the first movers by corporates to take the risk to kind of proof test some of these technologies. These are the drivers. We have to really walk the talk at a microlevel and companies have to push the envelope, take the risk and show that it can be done and then others join.

And it's like what we are doing in Alliance for Clean Air. That's what we are trying to do. We're getting companies together to think about -- to showcase technologies which are working to decrease emissions in companies for others to adopt. So it's a little bit like that in the renewable space as well that you really do need low emission sort of technologies to be tried, tested, and companies must step up a little bit and take the risk.

Esther Whieldon: As we mentioned at the top of this episode, COP29 will include a big focus on climate finance. At Climate Week NYC, we heard about the need to derisk investments in emerging economies. This topic also came up in my interview with Vaishali, who gave some examples of what her company has done. Here she is.

Vaishali Sinha: How did we derisk capital? We did it in two ways. One was by ensuring that we have the largest grid, which is great. Then we set up the first of its kind bidding agency called SECI. Now what does SECI do?

SECI is a company which makes it transparent for various participants to bid. And once there is transparency, it just makes projects more bankable. Projects are more bankable, you have more players who get involved, and get into this area, so by derisking capital, you kind of scale the sector, get more people engaged and so on and so forth. So I think we also have the largest grid which solves for a lot of problems from a logistical point of view as well. Yes, derisking, of course, is important.

Esther Whieldon: Did the auction -- did the ability to kind of see the interest even of those who didn't win the bids? Was that part of what helps derisk it?

Vaishali Sinha: Yes. No, I think it was just the transparency of the process, the transparency of the planning of the whole sort of areas and some subsectors, which required the auctioning. So just a very transparent plan, the engagement with the private sector. So it just made the whole process way more organized and more reliable and more understandable. Also, it got all the states engaged in a very systematic way. So you could see the bigger picture of what was being done as auctions happen.

It wasn't like random, okay, now we are doing this and that. So I think that very systematic approach with a transparent sort of communication with the parties who were involved gave that clarity, so perhaps, made it easier for financial institutions to understand what's going on. Once they understood what it was, projects became more bankable and more profitable and so on and so forth, yes.

Esther Whieldon: Vaishali talked about the need to "double-down" on investments in emerging technologies to accelerate the transition. And I think this leads nicely to our next guest, Holly of Trane Technologies.

Holly talked about how Trane Technologies is working to accelerate innovative technologies. You'll hear her mention Scope 1, 2, and 3 emissions, so Scope 1 emissions are direct emissions from a company's operations. Scope 2 emissions are indirect ones. Those are primarily derived from purchased energy, and Scope 3 emissions occur up and down a company's supply chain as well as when a customer uses their products. By the way, when we talk about HVAC, that refers to heating, ventilation, and air conditioning. Okay. Here's Holly.

Holly Paeper: Trane Technologies is a climate innovator, and that's how we describe ourselves. And it's really a company that's 100% focused on sustainability. It's who we are. It's not part of the strategy. It is the strategy, and we innovate for climate solutions for homes, for transport, for businesses, for industries in terms of making things hot and cold.

Esther Whieldon: So primarily like HVAC and cooling and heating systems?

Holly Paeper: Yes. HVAC, cooling and heating systems, also industrial process heating and cooling, mission-critical heating and cooling, transport refrigeration, and businesses like that.

Esther Whieldon: So for Trane Technologies, what is your approach then to climate change and sustainability?

Holly Paeper: Generally speaking, our approach is everything that we do, meaning sustainability is our strategy. It's -- 100% of our employees are focused on sustainability. And so we tend -- because the challenges are grand in terms of the climate crisis and the markets that we focus on and play in that we tend to have an approach of transformative innovation in everything we do.

We play a role leading the industry, not only in things like climate commitments. We're on our second round now after over a decade ago, achieved our first round. We tend to be the first in our industry to do a lot of things.

So for instance, we rolled out a Gigaton Challenge a couple of years ago, which is our commitment to reduce our customers' carbon footprint by a gigaton, which is 1 billion metric tons, which is equivalent to the annual emissions of France, Italy, and the U.K. combined.

And so the scope of that is pretty significant, and we're hoping that -- and we believe that one company can change an industry and the industry can change the world. And so by making a bold commitment like that, that we can get others to rise with us.

Our net zero commitments were -- we were the first company in the industry and one of the first in the world to have science-based targets initiative validate our net zero goals. And just this week, we also did an industry-first precedent-setting announcement in terms of reducing embodied carbon. Embodied carbon is essentially all of the greenhouse gas associated in the product life cycle from raw materials to making the product, to transporting the product, to recycling it.

And so we've made a commitment to reduce that by 40% by 2030, which is a really hard thing to do because there's some fundamental industries that we rely on in terms of our products and our customers rely on in terms of steel, in terms of copper, in terms of aluminum, in terms of refrigerants and working with our whole supply chain to reduce the greenhouse gas emissions of all the materials coming into our products.

Why is that important? Most of our products last for a couple of decades. So if we don't solve for that now, it means 20 years from now or more, we're going to be still talking about the same issues.

Esther Whieldon: So give me a sense then of what has changed either within your company or external factors to make you feel confident enough to do that commitment you just mentioned?

Holly Paeper: Yes. It's a really good question. I think the spirit of a company like ours, which is an innovation company, we're an engineering company, we tend to think 10x and put big bold commitments out there maybe, before we know exactly how we're going to go do it. And we kind of have a history of doing that across everything that we do. And so all of that said, we've been making more progress, more and more progress around our Scope 1 and 2 emissions. 

So the work we're doing on our businesses, our facilities, the work that we're doing in terms of how we source energy for our businesses, our facilities as well as how we help our customers' footprints.

So we've now got enough progress where we said, okay, the next frontier must be really getting after and starting on the Scope 3 piece of this and helping move the industry forward because we know there's so much opportunity in the built environment and some of these foundational things we're talking about have such a huge impact. So some of it is momentum. Some of it is the grand challenge of the next frontier, and I think some of it is, the industry feels and seems ready to tackle some of these bigger things where maybe we weren't a couple of years ago.

Esther Whieldon: We just heard Holly describe how Trane Technologies sees tackling Scope 3 indirect emissions as the next frontier for the HVAC and built environment industry. I asked her where the industry is currently at in tackling emissions and other climate issues.

Holly Paeper: It's a great question. I think right now, buildings account for 40% of the energy used in the U.S. and 15% of global greenhouse gas is directly related to heating and cooling buildings. So the challenge is huge, right, in the built environment and including the kind of building we're in now, are part of the climate challenge. The good news is there's technology that exists today to change that, and we're really starting to see more and more customer demand for those solutions. So I'll give you some examples.

So decarbonization is, for sure, the #1 opportunity that still remains, and we've got some momentum there. Some of the innovation that we talk about a lot without getting into a lot of technical details is around electrification of heat and using heat pumps. Some of that innovation is around thermal management systems and something we call a thermal battery, so finding a different way to store energy on behalf of our customers. And then there's the kind of smart connected buildings piece.

So if you think about a building as largely a domed box, like a bunch of walls, how do you turn that into something that's smart and connected and a resource for the community in terms of not only the low or no carbon footprint, but also how the building uses energy and gives energy back. And so we have -- there's innovation and technology today, and we're working with customers on solutions like that.

I think the other piece -- so the building resilience is another area that we see a lot of challenge and some innovation around whether it's preparing for extreme weather events, which we see we have more of or unpredictable grid and working with our customers around those types of things as well.

Esther Whieldon: So like microgrids or things like that?

Holly Paeper: Yes, potentially, one of the technologies that I mentioned a moment ago is this idea of thermal management or thermal batteries. And so I'll give you a really simple example. We have ice tanks, essentially thermal batteries where our customers purchase electricity when it's more available in the evening or cheaper and usually cheaper. They make ice in these tanks.

They store ice in the tanks overnight, and then that ice is melted during the day to cool the building instead of using expensive HVAC equipment, expensive in terms of utility costs or utility usage during peak demands, so something like that provides more stability, and it helps with grid resiliency, and that you're using kind of energy when other people don't want or need it.

Esther Whieldon: Holly went on to describe some of the factors helping to drive the industry to become more sustainable.

Holly Paeper: There seems to be acknowledgment that the time is now and that we've got solutions now that can make a material difference with what we have now. And it's about awareness, the idea that there are innovations and technologies that can solve very big problems today. It's about general awareness, how do we create that awareness, how do we use policy and incentives as tailwind to increase the uptick of that.

So I think that was the second piece. I think the third piece has been really exciting is around just sort of all the different stakeholders coming together and the increased awareness that we need to do more of that. And it's been really neat. It feels different that we even have a lot more climate influencers and different thoughts kind of coming to that stakeholder table that's allowing us as an industry to think differently about how do we create that awareness and how do we net -- can link arms and move forward, so we can really make a big difference in the built environment.

Esther Whieldon: So we've heard how a clean energy company and an HVAC company are approaching this topic. Let's turn now to our last guest, Garrett Quinn of Smurfit Westrock. Garrett starts off by describing what the company does.

Garrett Quinn: Smurfit Westrock is a new company that started back in July of this year, floating on the New York Stock Exchange, and it was the combination of 2 companies, Westrock and Smurfit Kappa. We have revenues over $30 billion and operating in over 40 countries, over 100,000 employees, so reasonably sized business. But essentially, what do we do?

We're a paper-based packaging, so we're the largest player in the world in paper-based packaging. So corrugated boxes when you receive stuff online, when you go to the supermarket, carton, and consumer board packaging as well. So when you look at some of the finer packaging materials, that's what we do.

Esther Whieldon: So what are the sustainability challenges in that arena?

Garrett Quinn: I think when you look at our products, it's -- we're in an opportunity-rich area in terms of people are looking to move away from less sustainable packaging. So when you look at what are the challenges, we need to make sure that we use the phrase that we make it a slam dunk decision. You don't make it hard on the stakeholder to make that call. So for us, we need to make sure that we decarbonize faster because it is carbon-intensive to make paper.

You need a lot of heat to get the moisture out of the paper when you're making it, so we need to make sure that we're doing that. We're doing it well. We're doing it in line with best-in-class credentials. And then when you look at Smurfit Kappa and Westrock, both of those companies were approved as science-based targets in line with the Paris Agreement. So you can see that it's a combination of two leading companies that are part of the solution, not the problem with the product and the process.

Esther Whieldon: Question around the paper sourcing. Whenever I think of paper, I also think of trees, right, what's coming from. How do you deal with the sourcing side, on the sustainability side of sourcing your materials?

Garrett Quinn: Yes. But ultimately, it comes down to having Chain-of-Custody certification, making sure that you've got sustainably sourced forestry products. So for us and for both legacy companies, that's paramount. We've had years of public disclosure.

So if it's kind of like you want to call our bluff, you go and you read about how we do it, the certification schemes that we use across the world. So they're critical for all our stakeholders. So it's not just about doing it to keep stakeholder A happy. 

Customers want this. Investors want this. Our Board of Directors want this because they want to be able to say that we've got a great product, so let's make sure that there are no weaknesses in our story. So sustainably sourced fiber, the virgin fiber is very important. But also, don't forget that we are -- and I think it's a positive and a fortunate place for us that we're inherently circular. We need old boxes to make new ones.

So when you can see how the whole sustainable packaging space, other materials are trying to recycle their old products, but it's not naturally a thing that you want. It's hard to recycle. Where in our industry, we've been doing it for 100 years. It's just the way we are, so I think that's a positive part that supplements the renewable source of fiber.

Esther Whieldon: Okay. So that's interesting. You're saying like paper products are inherently more easy to recycle and they've been doing it longer. Does that mean sort of the efficiencies in the process have also sort of been maximized? Or is there an opportunity there as well?

Garrett Quinn: No. Well, it's back to when you said opportunity challenge, the challenge is the decarbonization part. So it's still energy intensive. And that's why we need to be looking at collaboration partnerships to how do we decarbonize faster. So we can see in the case of legacy Westrock, there was a lot of VPPAs done, so the kind of the power purchase agreement, virtual power purchase agreements. So looking at renewable energy.

So that was what Westrock were doing. We were doing bits of that, but we were also doing a lot of collaboration with EU funding in Europe. So we were the first paper mill in the world to trial hydrogen and by retrofitting old gas-fired boilers. What that's saying is rather than someone trying to sell you a shiny new toy that costs hundreds of millions, it was a collaborative project, including the likes of Siemens, who are here today, and Centrax, who are the boilermaker, where you're retrofitting existing infrastructure.

And that's really exciting because then the whole idea of dear senior executives or dear Board, we have a big outlay here. When you start talking about retrofitting, the outlay is not the same. So the whole idea of can we get our hands on green hydrogen, and that's the next step because we've now proven that you can do it. So now it's going to be when will green hydrogen be available, what part of our asset base will have access to it, but we've already proven that you can do it.

Esther Whieldon: And so to clarify for our listeners, green hydrogen is what?

Garrett Quinn: Well, green hydrogen is when it's coming from green zero carbon sources, so renewables.

Esther Whieldon: Hydrogen, the power of creating it. The energy needed to create it is renewable?

Garrett Quinn: Yes, from renewable sources. In our case, it was actually proving that you could convert a gas-fired boiler to burn hydrogen. So this is more about proving because again, we have stakeholders saying, "Excellent, is this copy/paste?" And we're saying no, because green hydrogen is not available commercially at the scale that we need it at this point. But at least we're talking and experimenting in technology that should be available in the next 5 years, but we've already proven it can work.

Esther Whieldon: It's interesting, just as an aside, I went to an aviation conference last year, and they were talking about testing to be able to have 100% sustainable aviation fuel versus a small percentage. And the fuels that go in the petroleum products are actually used for lubricants in the plane and all kinds of things that maybe the SAF fuel can't do. So it's interesting, it's a similar test. It's like can the equipment that's made to operate using this type of fuel without much extra work?

Garrett Quinn: Yes. Is it flexible? Absolutely. But then critically, when you look at the company's net zero transition plans, like we're not talking about it's one solution. It could be biomass. It could be hydrogen. It could be electrification, geothermal energy, so all of these sources are things that we're exploring, and they'll all have different application depending on the payback. So what are the economics of the projects? It will also have some consideration for local regulations.

So we found that we have two paper mills in the Netherlands, a fairly small country, but yet one of them is only -- you're allowed to do geothermal from a planning perspective. So it's not always going to be -- we found our solution, copy/paste, deliver net zero. I think it's making sure that you understand that you've got a variety of solutions and being ready for when they're available and critically that they're commercially available.

Esther Whieldon: Great. Well, is there anything we didn't get to talk about that you wanted to mention?

Garrett Quinn: No. I think sometimes, people think about sustainability, and is it just about doing the right thing. And I think the part that we just add to it is it's about doing the right thing and making money. And it's something where, as a company, we've always been saying, "It's okay to do the two. It's not one or the other."

And actually, if you do one over the other, you're probably going to catch a cold in some way, shape or form. So for us, I think it's the business case. It's doing it because it's the right thing to do and that you can make money because we have stakeholders who want us to do it.

Esther Whieldon: Great. Well, thank you so much for talking to us.

Garrett Quinn: Super. Thank you, Esther.

Esther Whieldon: Today, we heard about the importance of collaboration among companies and the role that government policies can play in accelerating the development and deployment of low-carbon technologies. 

Vaishali mentioned the need for a global approach to deploy these technologies and make them more affordable, and we heard about the need to invest in multiple technologies because they will all be needed. 

And Garrett also noted that solutions need to be tailored to align with the needs and regulations of different locations.

Lindsey Hall: Please stay tuned as we continue to explore more key themes for COP29. Next week, we'll be back to hear how the fixed income market is evolving to fill big gaps in sustainable finance. 

Lindsey Hall: Thanks so much for listening to this episode of ESG Insider. If you like what you heard today, please subscribe, share and leave us a review wherever you get your podcast. 

Esther Whieldon: And a special thanks to our agency partner, The 199. See you next time.

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