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Well, it is Climate Week here in New York. That yearly event that brings together leaders from business, government, and civil society to drive climate action, happening at the same time, the UN General Assembly, as well as the Concordia conference. That brings together nonprofits, governments, and the private sector. And that's where I spoke with Mars Inc. CEO Paul Viirak. And we talked about sustainability. I asked him how he thinks about that for his company.

We get bang for the box. It's an investment, and we will see a positive impact through the way we we run our business through the talent we attract. And I think really, if there was a message I could share, there is no trade-off between purpose and profit. There is no trade-off between sustainability and good business.

And it's interesting here because Mars is of course a privately held company controlled by the Mars family with some $50 billion in sales, and of course, it's set to get bigger with its $36 billion acquisition of Calinova. It's awaiting approval and expects to close on that by in the first half of next year. But if you look at the company's sustainability initiatives here, they first set out the plan to shrink their greenhouse gas emissions and a bigger sustainability plan back in 2015. Since then, they have cut those emissions by 16% at the same time growing sales, sort of speaking to Virock's point there. Uh they've tied employee compensation to sustainability goals and also those goals extend beyond the company itself to their supply chain including in agriculture as well as customers. So that's just one example of the kind of thing we're hearing during Climate Week. But let's talk more about where the investment opportunities lie within sustainability. For that, let's bring in Trevor Allen. He's head of sustainability research at BNP Paribas. Trevor, thank you so much for being here. Appreciate it.

Thank you very much for having me today.

Well, I think we have to acknowledge first, Trevor, that even as this is a big topic of conversation here in New York during this climate week and sustainability is still very much a priority for some companies, that there has also been a backlash against it. So I wonder from your perspective, if you are seeing as much interest from clients and as many sustainable investment opportunities out there in the past couple of years.

So so far, we are absolutely seeing as much interest in the market. I think the difference here is we really need to start to depoliticize the issue. The reason that solar and wind have really become attractive, particularly for utilities, is that they're economically competitive with natural gas or with nuclear. And that's true, whether we look at China, we look at Europe, or we look at the US. So I think the important part here is really understanding that in the US on July 4th at 1:00 p.m. when you're looking for a bit of relief from the heat, most places in the US, something like solar is going to be very effective and and cheap form of electricity to provide for that air conditioning. And likewise, when you move into a situation on, you know, December, when it's very cold and it's 7:00 p.m., you're very much going to be more likely to rely on natural gas or or a nuclear source that is non-intermittent. So the important part here is that we're very much seeing opportunities as a portfolio approach. So we expect utilities to have nuclear, to have natural gas, but also to have wind and to also have solar.

And do you, are you seeing the opportunity sort of evenly distributed globally, or are there some geographies where you're seeing more chances for investment than others?

Well, there's no doubt that on a pure scale basis, China is clearly the leader. China manufactures around 90%, 90% of the world solar panels, and they've also installed 220 gigawatts of solar last year. They're going to install about the same this year. So you're looking at China having around 880 880 gigawatts of solar by the end of this year. That's significant, but we are seeing the numbers continuing to tick up both in Europe and in the US. So these are growing areas in terms of development, and certainly, we would look more on the investment side of developing solar farms as being the more profitable venue to approach to go into the solar market rather than the manufacturing of the panels. So I think it's important to what part of the development process you're investing in in that sense.

And I guess with farms, there are more opportunities across geographies as well. I mean, since you mentioned China, I have to ask about the China stimulus that was just announced as well. Um is that going to give an extra lift to some of these types of investments that you're talking about, whether it's solar panel manufacturing or say electric vehicles, for example?

So I think if we we take the two separately, China has a name plate capacity of around 900 gigawatts of solar panels that it can produce every year. The world cannot absorb 900 gigawatts of solar panels. So I think in in China, we are looking for a bit of consolidation in the solar industry. Particularly, the companies that are making the new technology solar panels are likely going to be the winners there. But yes, today's stimulus is a step in that right direction. I think with the EV space in particular, once again, you're looking at consolidation. So one of the risks in China is over supply. The more consolidation we see in those markets, the more strength we actually see out of equity investment, equity investment into those companies in particular. So that's something we were looking for on the back of the stimulus here. And the other part about the stimulus, it would be nice if this is another step in that stimulus pathway and not necessarily the end game.

Something else I want to ask you about without getting too in the weeds here, Trevor, is that you guys sort of try to update your framework about how you're evaluating these companies. You're looking at sustainability of course, but you're also looking at some more quantitative metrics here. And again, without getting too wonky, if I'm an investor, and I want to look for sustainable opportunities, what do I need to prioritize here?

I think one of the basic things is looking at what part of the economic cycle you're in. Some companies are more cyclical, some are more growth-oriented. When you figure out what part of the economic growth that you're really going into, certain sectors are going to benefit from that. So I think it's worthwhile having a macro view of where you think you are in the economic cycle. So if you're in a buying phase, the growth companies certainly make a bit more sense, and it's a bit easier in terms of EVs and new energy to kind of fall into that growth area. But certainly if you're in a more defensive area, we found many opportunities in industrials and materials that offer companies that truly have sustainable goals, but are are actually more defensive plays in that sense.

Trevor, thank you so much for taking the time. Appreciate it.

Thank you very much. Have a great evening.