Michelle Brechtelsbauer
We are here today with Rachel Kyte, who is the Dean of the Fletcher School at Tufts University. But that alone doesn't nearly go deep enough into your incredible career, Rachel. So, welcome to the Energy Impact Podcast.

Rachel Kyte
Well, it's lovely to be here. Thank you for the invitation.

Michelle Brechtelsbauer
Great, great. For our listeners who might not be familiar with your career, you held sustainable development positions at the International Finance Corporation and the World Bank before becoming a special representative to the UN, Secretary General and CEO of the Sustainable Energy for All organization. And we can't wait to dive into all of those amazing roles that you held, but I'd like to start a little farther back in your career, and actually kind of start really at the beginning of what brought you into the world of sustainable finance and climate and energy.

Rachel Kyte
Well, I grew up in the United Kingdom in the 70s and 80s. I think there was a whole discussion at that time around what did it mean to be European, what was the future of Europe. This was before we had the Maastricht Treaty and the European Union had been fully developed. It was also a time when there was an iron curtain down the middle of Europe. But certain things transcended or went around or underneath the iron curtain, including the environment - the air you breathe, the water that we depend upon. So, environmentalism was a big part of the peace discussion and a very big part of what it meant to be European or what Europe meant. While we were having mutually assured destruction sort of discussed over our heads between the Soviet Union and United States, young people were sort of trying to work out what kind of future we wanted. So, that was where my environmental sensitivity came from. And then I ended up - I was very involved in youth politics in Europe at the time - really being able to watch political leaders that took the environment seriously, including Gro Harlem Brundtland and others and got to work with them a little bit. I really began to sort of understand the importance of environment issues in politics and in development. And then I went on to work on those issues, working on the gender elements of that as well and working more globally in development. I think where the finance came into it was when I was working in NGOs on Environment and Development issues. I worked for a series of very smart people and Joan Dunlop, who I worked for actually in a women's health organization out of New York, said to me, Rachel, if you're really going to make a difference, and you really understand how to change things, then you need to follow the money. I took that to heart and really decided that I needed to understand how that worked. And then later on in my career, I ended up working on the first arrangements for conflict resolution and management around large scale private sector investments from the World Bank Group into developing countries. That got me into the International Finance Corporation. But before I arrived there, understanding the flow of money - where it came from, how it moved and where it went to, and for what and who made those decisions - that was sort of baked into me fairly early on.

Michelle Brechtelsbauer
Yeah, it sounds like you had some really great mentors to help steer you towards an area that not only were you passionate about, but something that is going to be an incredibly important area to understand and to help create change and impact. Especially now, given back then when you were a youth, there were a lot of great global challenges. Today we face similar, if not even more daunting, challenges and climate change and this global energy transition for achieving targets of net zero. I'm sure a lot of that kind of fundamental work that you were looking at and following the money, understanding different stakeholder motivations, understanding geopolitical tensions, really helped to pave the way for your career going forward. Can you maybe start with your career in the IFC? I think it's a really fascinating organization that we have actually covered on this podcast before, but I'd love for you to kind of jump into some of the work that you did there - you were there for quite a number of years - and kind of what you focused on and how that prepared you for going into these other roles within World Bank and eventually SEforAll and now kind of in these advisory capacities that you find yourself in.

Rachel Kyte
I joined the IFC at the turn of the millennium, which was such a long time ago and makes me feel very old, but I joined the IFC really sort of - and I kind of joke about this - through the back door. In the late 1990s,... had preceded the IFC at the World Bank, on the public sector lending side in 1980s. There had been a series of very high profile conflict around major investments and so, in the case of the IFC, I think the one that caused the most angst and the most storm and fury was an investment 3% equity stake in Endesa and a series of dams Endesa was going to be building in Chile on the Biobío River, halfway sort of down Chile, above Concepción. People were resettled or were to be resettled, land was to be acquired, I mean, the usual things that go with a large scale infrastructure development, but infrastructure at that time was moving into places where infrastructure hadn't been built before. We saw a series of complaints around large mines, large infrastructure, dams, toll roads, these kinds of things. These were also, at that point, for the first time you were seeing private equity moving in. You were seeing large scale private investment in these kinds of activities. And there was no recourse and there was no real sense of whose voice could be heard, and who had what rights and who needed to be consulted. And so, Jim Wolfensohn, at that time, was the President of the World Bank, and he said, Look, we've got to have some way of managing all of these conflicts. And so, there was a process of consultation and advisors brought together. It was suggested that, for the IFC and MIGA - so, for the private sector lending and the private sector guarantee entities of the World Bank Group - it would be more interesting or more useful to have an ombuds service, so that those who were affected could file complaints and that the focus would be on conflict management rather than a sort of judicial process of blame. I was asked to join the Office of the Ombuds and the first ombudsman was Meg Taylor, who's just stepped down recently as the Commissioner of the Pacific Island Forum. She was from Papua New Guinea, has a long history of managing conflicts around large mines and she was very involved in Bougainville, etc. So, together with Meg, I helped set up the Office of the Ombudsman and, for the first four years there, really mediated disputes around large scale investments that included IFC's equity in the Yanacocha gold mine in Peru in Antamina, which was a mine in the high Altiplano, but also mines in Tanzania, dams in Uganda, toll roads in Panama, things like that. And what happened is, in the course of those four years, it became very clear that the safeguard policies that the World Bank was using - the environment and social safeguards - were written for public sector lending. They weren't written for private sector lending. And so Peter Woicke, who at that time was the CEO of IFC, asked if our office would run a sort of an analysis or an assessment of whether these policies were working or not and what we needed to do differently. We came back and sort of said they actually fit the business model very awkwardly. So, he actually, I think I had coffee with him and he said, We're going to need a new director of our Environment Social Development Department, that department is going to have to take this report and decide what to do with our safeguards, you should apply. I was a long way from being director level so, I threw my hat in the ring. I got the job and then, for the next really three years, together with an extraordinary team of specialists at the institution, we ran a very, very large scale consultation process and a very large scale sort of analytical process and drafted the IFC performance standards, which then formed the basis for the equator principles and for the first time, private banking, project finance really using environment and social performance standards in its lending. That was the journey.

Michelle Brechtelsbauer
I'm curious what you saw in those analyses, and just in your experience, kind of helping the IFC transition in this way, what the differences you discovered between public sector financing and private sector financing. Explain for our audience really where private sector financing has a really critical, maybe different, role to play, as opposed to government and international financing projects.

Rachel Kyte
I think an important point is that, decades beforehand, if there was any large infrastructure it was going to be built by the public sector and it was going to be built by loans from the World Bank, or from a Regional Development Bank, to the government. And then the government was going to be contracting with maybe private entities or others to build these things, but they were going to be run off the public sector's rules and the role of the government then would be different than the role of a purely private sector deal. When you think about how the private sector performs, it needs to meet the needs of its shareholders. It needs to understand the needs of its stakeholders and meet the needs of its stakeholders, and it needs to actually understand who they are. And then the lender to the private sector was increasingly- I think we'd come through a decade of sort of extraordinary activism by civil society going after the banks who lent to the palm oil companies in Indonesia, to the forestry and pulp and paper mill companies of the West. So, you had Rainforest Action Network going after Citibank for its lending. You had the palm oil people going after ABN AMRO for its activities in Indonesia, etc. So, investors and banks were increasingly being held to account for what was the environment and social activities of the projects and of the companies that they financed. This was all very, very new. So, if you if your end goal is to achieve a development impact, then understanding that a large, rich infrastructure investment coming into a very poor part of the world is, in and of itself, going to cause social tension. You're going to have contractors coming into perhaps an area of Nigeria in the north, where there is no industrial activity, where there is no infrastructure, and they're going to build the infrastructure for the project. There's going to be a fence around that and then people are going to start moving to live outside the fence, because they're going to be selling Coke and tea and other services, including sexual services to the people working behind the fence. Suddenly, you have a village growing up, and suddenly you have an infrastructure, and suddenly you have communicable diseases, and suddenly you have a need for education for the kids of the workers. You have to understand how much of that responsibility lies with the firm and with the investors in the firm. And then of course, environmentally, you're going to build an aluminum smelter in the middle of Cameroon or in the middle of Guinea or something like that, then what is the responsibility of the company to, A) understand the biodiversity of the area, B) understand the impact on the biodiversity, C) where are the limits of the private sector's responsibility and ability to mitigate, manage or avoid any of those impacts. We were really trying to put guardrails and rules and best practices in place to, first of all, avoid impacts where they couldn't be avoided to mitigate and to then manage. And I think the bar was constantly moving, and the bar continues to move to today. Currently, I chair the Health and Safety Economic and Environmental Social Committee of the Private Instruction Development Group. Today, we've got gender-based violence advice to entities that we invest in, because gender-based violence carried out by the contractors that are employed is a significant issue. There's much more awareness about that now. And then secondly, of course, we have policy around climate impacts in a much more detailed way than we did 20 years ago. That bar is always moving

Michelle Brechtelsbauer
Is this type of advisory service that IFC does for these large international projects, is this something that served a role that previously was completely unserved? Especially, in these Western countries or more rich countries kind of coming into other countries that don't have the infrastructure? And how maybe, I guess I'm curious, how have some of these, after several years of this type of work being very successfully shepherded by international organizations, how has infrastructure, social infrastructure, political infrastructure, maybe changed some of these areas to not rely so much necessarily on these international organizations, but actually ensure that there's the same safeguards and guardrails up in the local area as well?

Rachel Kyte
Well, so I think that is a very good question. For many years, the IFC and the World Bank would produce the environmental health and safety guidelines. It's a volume that was so thick that you could hold a church door open with it. And then there was every guideline and every standard that you needed to meet in your environmental impact assessment, etc. I think what then was very smart about the IFC was that as it iterated the performance standards, and in the conversation with the leading banks at the time, that became the first equator principles banks, was that these standards, well-written and well understood and with sort of training behind them and products and services that support them, would become a norm and a standard that everybody else could use. And actually, the way to have development impact was not to have these used by the IFC, but was to have these used by all multilateral development finance, and then used by private finance, as well. That went very, very quickly and then in 2008, 2009, the bottom fell out of project finance in the great financial crisis, and then coming back from that, the question is about making these standards comprehensive. If you're an investment bank, obviously, you should use these standards for your project finance, but what standards are you adhering to when you provide investment advisory services? What standards are you adhering to when you are engaged in an equity fund or other forms of finance, or if you're providing equity, not project finance? So, what you're seeing now, I think, is a blossoming of what is the standard for environment and social best in class or best practice, best across all financial instruments. I think that's where it is now. Now, when I look at the IFC, I think that the shareholders put a lot of pressure on the multilateral development banks in the last few years and, in some respects, you've seen the IFC retreat a little bit from its advisory role and concentrate on the lending. I think that global public goods role is essential. It has to be financed by somewhere, somebody because it has to be available to the countries that need it most. And they're not going to buy those services off the shelf from an ERM or McKinsey or anybody else. I think that there is a role, always, for the Bretton Woods Institutions in that upstream advisory capability, so that the government knows how to regulate the private sector and the private sector knows how to behave in countries where you've got a weak regulatory environment. But now when I think about it, and I think about where the future is, then you would want to see the IFC playing an extremely robust role in helping companies operating in post-conflict countries and weak governance environments in the developing world, in terms of what is best practice in zero net emissions? What is best practice in all forms of air pollution that would apply both to climate outcomes, but also to air quality outcomes? What is the best in class advice now around the free prime informed consent of indigenous peoples and human rights, etc.? I mean, it is the responsibility of the IFC as a publicly held institution to keep on pushing back the boundary of understanding and then making that understanding available to everybody.

Michelle Brechtelsbauer
I would love to move a little bit forward in your career and talk about the World Bank and your work there where you were in the Special Envoy on Climate Change. A lot of the topics you're just mentioning are so broad in terms of the range of areas that we're focusing on in terms of infrastructure and project development, from women empowerment to environmentalism. How did climate change start to become that - I mean, climate change touches all of those things, right, and we'll get to that when we speak, obviously, about the SDGs as well - but how did climate change start to become a special focus area for you when you did go to the World Bank?

Rachel Kyte
We were looking at climate change when I was at the IFC. I was Vice President of Business Advisory Services. The environment and social work continued under my vice presidency, so I was seeing what we were doing. We started to think about a world where we would need to mitigate climate change, a world where carbon was going to become a problem. This is before stranded assets have been defined, but we started doing some very early regressions on the portfolio, really looking to see, if we put prices on carbon, what would that do? If we started to work on internal costs, internal prices and internal cost of carbon? What would that do to performance of the portfolio, of individual deals? We started to look at - this sort of internal work - we started to look at, within the environment, health and safety guidelines, what kind of emissions we would want to see and the performance of different technologies from an emissions point of view. This was really starting, and this is before Copenhagen. Copenhagen was the 2009 failed, quote, unquote, climate talks. I think the mindset there was really about driving efficiency and use of energy. If companies could be more efficient in the use of energy, then that was - and water - that was going to stand them in good stead. There was fairly clear evidence from our look at the portfolio that, if a company was really performing to a high environment and social standard, they were normally performing well financially. Then we were trying to look at, well, if they're not performing well financially, do they poorly perform environmentally and socially? And often it was yes, because if you're not doing well financially, you're not investing in your environment and social performance. There was fairly clear evidence that environment and socially weak performers, just weren't on top of their game, and therefore, that was reflected in their financial performance. But it was in 2008-

Michelle Brechtelsbauer
Was that true across the globe? Or were there specific areas where those trends didn't play out?

Rachel Kyte
No, I think it was true across the globe, but it had less impact in many emerging markets where there's no civil society chasing you, transparency is not embedded and you don't have investors asking the same kinds of questions. As an investor in emerging markets that those push and pull factors that were sitting as very much the environment for a Western oil and gas company or whatever, you didn't have that in the same way. So, in 2011, the World Bank was struggling to agree on a new energy policy. At that time, there was still a vibrant debate about, Are we are we about poverty eradication or are we about climate change? They were seen as two entirely separate things. There was a real discussion about, We are a development bank and our job is development, and therefore, climate has no part of all of this. At the level of the board, you had large, middle income countries and developing countries sort of saying, We don't want any rules that are going to impinge upon the bank's ability to lend to the things that we want to have the lending for. So, this was this was becoming very problematic. Bob Zoellick, who was then the President of the Bank asked me if I would move over from IFC to the bank and take over the portfolio of sustainable development, where energy was one of the sectors that would be under my management. This was unusual at the time, because very few people moved from the Bank to IFC, or from the IFC to the Bank. That's a little less so now, but then it was very, very rare. So, I moved across. The way in which we were able to square this- and you can imagine that, at that point, we had Europe and the United States, then under President Obama, really sort of pushing hard on more climate action. We did not yet have this sort of dance between China and the US, the partnership that they formed before Paris. So, you have China, India, Saudi Arabia, they are all lined up saying, We want lending, we want lending for everything. The way in which we squared that was, the UN had just brought together, under the auspices of Ban Ki-moon, a lot of different actors around a concept of what is the energy agenda from a development perspective. Ban Ki-moon, when he came in as a Secretary-General of the UN, was quite intrigued as to why energy was not considered as a development issue in the UN, because he'd grown up in Korea as a young man with only a candle to do his homework by. It was a very personal thing for him. So, he brought together leading international organization heads and private sector heads, including Chad Holliday, who went on to become the Chairman of Shell, and others around something called Sustainable Energy for All and the Bank became a partner in that. Sustainable Energy for All said, Look, you need to conceive of this as three things - they went on to become the Sustainable Development Goals, but this is predating that - and those three things were that everybody should have access to energy, that energy should be, in the end it was described as modern, sustainable, etc. - I mean, today, we understand that to be clean - so, everybody has access to energy, we should have much more energy efficiency, and we should have much more renewable energy in the mix. What I was able to do is say, Look, all of you countries have agreed to this framework at the United Nations. Saudi Arabia, you agreed to this at the UN. China, you agreed to this at the UN. So, why don't we use that as the framework for the energy forward directions or strategic directions, paper?

Michelle Brechtelsbauer
This is predating the SDGs?

Rachel Kyte
Yes, this is 2011, early 2012, before the SDGs were even conceived of at that time. The idea that there would be SDGs had not really come forward. That came forward out of the Rio Summit in 2012. Then the big issue was coal, even then. The framing, at that point, that we managed to get an agreement on is that we would only invest in coal in very rare circumstances. And honestly, even at that point, the very rare circumstances were going to be a large discussion around Kosovo where there was this ancient lignite burning power station that was really filthy and the most dangerous and sort of disgusting power plant on the continent. And the replacement for that was going to be what? At that point in time, most people did not believe you could jump from that to fully renewable energy. You would have to jump from that to a cleaner lignite burning power station. So, is that an emergency circumstance, because there is no other viable alternative? These were the kinds of deals where nobody wanted to say never, so that was the language that was agreed. There had been some recent investments in coal-fired power in South Africa. Again, at that point, they had been first invested in like 2009, 2010. They were considered to be really, significantly important for South Africa's political future. Now, just 12 years on, they now look increasingly like white elephants, but coal is still an incredibly difficult part of the just transition in South Africa,

Michelle Brechtelsbauer
Because when you're trying to balance energy access and clean energy, you have to make some tough choices. Not everywhere has sun shining, and the wind blowing. Not everywhere has nuclear energy capabilities. Some places just need to build power so they can feed their people make and grow their economies. It's something that we at EIC look at all the time. It's very much a rational decision, whether - it seems unintuitive, but it's a rational decision - to build dirty energy, if that's all you have access to. Right? So, I think this notion of bringing together the need for increasing energy access and stating that energy needs to be clean is really important to start thinking about so early on, as those two going hand in hand, because you can't just have one or the other in all cases. I think that's really great to hear.

Rachel Kyte
It wasn't really until I think early 2015, the stranded assets report first came out from Carbon Tracker. That really shifted the debate in a very profound way because there is a limit, first of all, there's a planetary limit to how many emissions we can put on out there before we run out of a carbon budget. This, really, was sort of saying, Look at the financial cliff everybody's going to drive off if they're holding carbon when it loses its value is. That really started to sort of penetrate consciousness on the private sector side, the long term investors. And of course, as the World Bank Group, you are a long term investor, but you're also the investor of last resort in some cases. It should be understood that the World Bank Group would hold more carbon in its portfolio, because if anybody is going to do those emergency deals, it should be the World Bank Group. But increasingly the debate moved to, if we're in the business of development, then that development has to be clean and we have to find and mobilize the resources for countries to make the quicker transition to clean energy. Now, I have to say that the coal lobby ran a very aggressive campaign for a number of years. You started to see these ads, I'll never forget, in the FT, or in the FT online and elsewhere, basically, coal is the answer to energy poverty, it's the cheapest way to get energy to people. When I was at SEforAll, this was nonsensical once we started really building a picture of who are the people who don't have access to energy. Around about that time, this is 2015, 2016, there were about a billion people in the world who didn't have access to energy. They were mainly living underneath the power lines and beyond the power lines in Sub Saharan Africa and parts of Asia, small island states, etc. We calculated that 80% of people who didn't have any access to energy were living in 16 countries in Sub Saharan Africa. Well, building centralized coal-fired power, and then having somebody finance the transmission lines out all the way to far flung rural parts of the Sahel made no sense economically. It was never going to be done politically, because there are not enough votes in those sparsely populated parts. Of course, at that time, you'd already started to see this extraordinary revolution in the price collapse of renewable energy, the beginning of the price collapse of storage, and the fact that renewable energy could be provided in a distributed way, in a decentralized way. That kind of changed the debate, but now we see the same debate, again, with the gas industry. Those markets are shrinking in the developed world saying, Hey, Africa still has 600 million people without access to energy, gas is the answer. I think, again, people would argue that, if we can mobilize the financing, then the cheapest way to to close that energy access gap may be by going fully renewable, but the onus is on the developed world to provide the support and assistance to countries to be able to do that quickly.

Michelle Brechtelsbauer
Actually, speaking of the developed world and the role that the developed world is playing in the transition to clean energy addressing climate change, let's actually take a step back, if you don't mind and talk a little bit about the SDGs and how SEforAll fits within SDG 7, but kind of overall, how SDG 7, which is the one that's focused on clean energy, fits within the broader framework for sustainable development, and what all these countries have kind of signed up to in this framework that addresses climate, but also does it in a way that, again, going back to those broad topics you discussed earlier, empowers women, encourages education, etc., If you could just give us an overview of SDGs and how energy plays a role in achieving the entire suite of them.

Rachel Kyte
The Sustainable Development Goals were the successor to the Millennium Development Goals. The Millennium Development Goals, which had sort of run from the Millennium to 2015, had really been - not to put too fine a point on it - sort of written on the back of an envelope by a bunch of guys in a small room in Paris. That's how everything used to work. So, the SDGs became this extraordinary crowdsourcing. There was an expert panel with David Cameron and the President of Indonesia and President of Liberia and other dignitaries, but then the process was thrown back to sort of the General Assembly at the UN and led by extraordinary diplomats from Kenya and from Ireland. The whole world had a view. Business was consulted, civil society was engaged in all these countries. There were sort of 17 goals, but what was really important was that, from the get go, there was no argument that energy would be a goal. Energy was not one of the Millennium Development Goals and that's what really puzzled Ban Ki-moon. So, these 17 goals emerge and really SDG was considered one of the golden threads. It is difficult to imagine how you can have access to high quality education for all if you're sitting in a classroom which is dark and which can't be connected to the internet, because there's no electricity. It's difficult to imagine how you can achieve your health outcomes if a nurse can't practice her vocation, because she can't get access to a clinic with the lights on where the electricity goes out 26, 27 times a day, and a doctor can't practice or you can't keep medicines and vaccines cool and safe. It's difficult to imagine how you can achieve SDG 2, which talks about zero hunger, if you can't have a cold chain for food, which you need energy for. And I could go on, right? So, every single one of those goals is intimately connected to the ability to have energy systems that work for everybody. Energy systems which are clean and don't cause us a planetary problem for climate change. And energy systems which are hyper efficient and allow us to do more things with less energy. The good news was that, in the period of 2011 to 2015, the program called Sustainable Energy for All had sort of grown up out of this expert group that banking had put together, this concept of these three pillars of sustainable energy -access, efficiency, and renewables - that have kind of been cemented in the imagination and the private sector have gotten very involved early on. When the SDGs were agreed, with Shakira on stage, and everybody agreeing very quickly in September 2015, sustainable energy for all as an idea that was already cemented in the public consciousness and it was off to the races. Then Ban Ki-moon said, Look, this needs to be set up outside of the UN, we need to have this as a platform for the public and the private sector together. That's how SEforAll, the organization, was born in 2016. We got a lot of running room as a result and, of course, now SEforAll continues to push forward on the boundaries of understanding what this means. SEforAll continues to work on getting energy to healthcare systems, even more important at a time of pandemic. How to make sure that refugees and displaced have access to energy, and actually in providing the last mile with energy that you can serve other people more effectively, issues around cooling, sustainable cooling and sustainable heating, things that often get forgotten. Everybody gets very excited about electricity generation, but there are many things that you need energy for which aren't about generating electricity. Then, of course, one of the most intractable problems is the fact that we still have about two and a half to more than two and a half billion people in the world, mainly women, who can't get access to clean fuels for cooking, and there are lots of reasons for that. The agenda keeps moving forward and the energy access agenda becomes a fundamentally important element of the "leave no one behind" part of the climate puzzle. Yeah, it remains a golden thread.

Michelle Brechtelsbauer
SEforAll kind of sits on its own, but kind of in between the UN World Bank and ensuring that the three targets underneath SDG 7 that's focused on energy are being met, are on track, or not, I wonder if you could kind of explain what the relationship between SEforAll and all the work that you just mentioned, and then tying back to the UN and World Bank really is. And then, kind of the role of it being almost more of like a watchkeeper, making sure that we're holding ourselves accountable to meeting these targets, these goals - I believe the deadline, or not deadline, but the target is to meet some of these goals - by 2030, how SEforAll tries to ensure that these goals are at top of mind across these organizations, across different nations and sustainable development organizations as well. I wish you could kind of speak to where SEforAll creates that impact in keeping the focus on this goal.

Rachel Kyte
SEforAll is a unique partnership between the UN and the World Bank, and then that partnership extends out to the private sector. One of the really strong aspects of Sustainable Energy for All is that you're as likely to be working with a big global company like Danfoss, for example, as you are with a small off-grid provider in Sierra Leone run by women. It's everybody in between. There have been three heads of SEforAll. The first head of SEforAll was Kandeh Yumkella who had been the head of Unito, and took on SEforAll in those early stages. He was the world's greatest salesman. He got the entire world enthusiastic about the concept of sustainable energy for all. I took over after him and what I had to do at that point was keep that enthusiasm going, but then really define a critical path. These were not three completely independent ideas - access, efficiency, and renewables - they actually achieve together. You need to be hyper efficient, you need to really drive renewable energy in order to achieve access for all. We can't have access achieved by coal and then have renewable energy for the 1%, etc. That critical path really led us to doing much more work on how much is this going to cost? Who are the people who need the access? What kind of access do they need? How much energy do they need? What's it going to cost? And where's the funding gonna come from? Why is the funding not flowing, given everybody's agreed to this agenda? We did a lot of that building blocks and brought in the conversation around the last mile around refugees and sort of these critical inflection points in that critical path. Now, Damilola Ogunbiyi is taking over for me as a phenomenal leader, previously with the Rural Energy Agency in Nigeria. Her task, then, is to make sure the implementation is moving at scale, because we're now into this final nine years of the SDGs and we need to have much more progress in order to then be able to achieve all the other things. Of course, I think there's a renewed focus on the energy transition, because of the urgency and the immediacy of climate crisis. I think SEforAll, and also because the head of SEforAll is a special representative for the Sec-General, if he so chooses, you are able to use the UN's convening power. But you're also agile enough to be able to convene on the private sector side. So, you're toggling between the public and private sector, bringing people together with convening capability, but then really good analytical work and then really strong advocacy. And then trying to make sure that those who have the opportunity to implement and to build things are connected in and at the people who are supposed to be providing the finance can see where that finance is needed and what the opportunities are. It's a marketplace, it's a convener, it's a platform for extraordinary advocacy, and diplomacy, really. It's a new hybrid form of sort of governance around an idea. We see similar entities around, for example, vaccines, you see similar sort of public-private platforms created around forest use and land transformation, etc. Increasingly, we see these public private models emerging.

Michelle Brechtelsbauer
Yeah, I think that's just so great to have an organization that's focused on what are the drivers that we need to be pushing on to ensure that there is an ambition around achieving these goals. There's investment to achieve these goals. And also, we're holding ourselves to actually making real progress on this. I wanted to bring up an article that you recently wrote, in your current role, where you're discussing entities that are launching these net zero PR campaigns and the need to take concrete actions to actually reduce emissions. I'm curious what you see both private and public entities doing in this space to achieve these goals, outside of the SEforAll framework, and where we can continue to drive progress and encourage ambition in both the private and the public sector.

Rachel Kyte
We're at a very, very interesting point in the journey towards a more sustainable future in that what started off as- what was considered completely outlandish in 2013 and 2014, the idea of net zero was the sort of goal, right? And even the arguing for 1.5 degrees is before the Paris agreement asked the IPCC to come back with a report about whether 1.5 was feasible or not. I remember sitting in meetings with colleagues from different walks of life and we were talking about campaigning around net zero, whether that was outlandish or not. Here we are, 2020, 2021, and net zero is the gold standard now, not just for the leading green companies in the world, but it's now for central bank governors, for finance ministers, for investors, for energy companies.

Michelle Brechtelsbauer
And foreign governments.

Rachel Kyte
And governments. So, everybody is committing to net zero by 2050. The question is, how do they think they're getting to net zero? Those need to be science-based commitments. We're seeing some science-based commitments which are that, some science-based commitments which don't, and some where science is really just a free floating concept. So, we've got the good, the bad and the ugly. Now, what we need to do is put guard rails on this race to zero, because it's very important from an investor perspective. It's very important from the public's perspective, but it's critically important from the planet's perspective, that this is actually real. We do actually need to be zeroing out emissions. There is a limit to how much I can continue to emit over here, and you're gonna offset it over there. Whether you're a forest in Malawi, or whether you're a direct air capture company in Iceland, or actually, it's false accounting, right? One of the things that I'll be doing together with others, many others is looking at what are those roles? How do we start to put guard rails around what is, at the moment, a voluntary market and a voluntary initiative. Now, the race to zero is embedded in the Marrakesh Declaration, and therefore has UN ownership. The UN has a vested interest in making sure that if you're making a net zero commitment, that it's real, that it actually can be scientifically backed up, and if you're going to use offsets, that there is a permanent, that those are identifiable, measurable, verifiable, etc. So, we really are at a new era of international governance, and we don't have the institutions to do this, we don't have the rules for it. We are basically inventing this as we run, and that's both exciting - it's a little scary - but there is a responsibility, then, on everybody to hold each other to account. We've only got one planet, and if we get this wrong, the only people we will hurt are ourselves. There's a lot at stake in the next few years.

Michelle Brechtelsbauer
I think you said that beautifully. You mentioned we don't have the international framework, we don't have the international guidebook, but we are seeing certain entities take action. Last week, we saw - I guess two weeks now ago - we saw some landmark actions being taken in the Netherlands against Shell, which is potentially going to set precedent for a lot of other actions of this consequence. I'm curious what your thoughts are on government holding a large, polluting company to account and how this might impact other industries, how it might influence other governments or even be a potential lesson learned for how the international community might look at this type of action going forward.

Rachel Kyte
There are so many less - that's a fantastic question - so many less that, I mean, first of all, I think that for some of the leading oil and gas companies that are listed in the West, there's a little feeling that they are clearly leading in the way in which they think about how they will manage the transition and how they manage themselves out of their oil and gas business effectively over the next few decades. And that they're getting clobbered by public opinion and investors and now by the courts, even though they're the leaders. When you compare them with the performance of maybe some of the other companies in their class, and then the national oil companies have many countries where there is just no pressure on them yet, because they're publicly owned, to come forward with the same kinds of science-based net zero commitments that Shell or BP or Equinor or Total is doing. There's that piece of it. Second, some of these companies have come out with different ways to get to net zero and I think they all, however, rely extraordinarily on offsets, whether that's nature-based solutions or nature-positive activities, or then direct air capture and elsewhere. I think that there is this catch up that we have to do. We only have a certain amount of nature that can be used to offset in this way. And then that nature has to be there permanently, you can't go and cut it down for other purposes and things like that. So, that voluntary market and those rules need to be further cemented. And so, for Shell to say that it can get to net zero, objectively by offsetting, that works fine. But if Malawi's forests have already been used to offset all these other activities, then how do we make sense of that? Those are issues around the sort of way in which we achieve net zero. Then I think the courts, this is going to become an increasing feature. Of course, there'd been a prior case in the Netherlands where a vendor and other civil society organizations working with members of the Dutch public had sued the Dutch government for a climate plan that wasn't protective of its people. They argued that the government wasn't protecting its people by coming up with a not ambitious enough climate plan. That was one and it was appealed, and then appealed again, and the people won that case, so the Dutch were forced to come back with a much more ambitious climate plan. You’ve got a bit of a precedent of using the courts. This case was very important. It's the first time that the courts have actually said, No, your plan is not in line with the science, your plan is not in line with the objective of 1.5, or with the government's objectives, and therefore you've got to go away and correct it. Now, you could expect to see other cases like that, then, across Europe, I think the US is in a different place. But in the same week that that happens, you had this extraordinary shareholder action on Exxon's board, where you've now got three independent directors on the Exxon board all put there by a very small private equity firm, Engine No. 1, and other activism. Then you also saw shareholder action really forcing Chevron to up its game as well, in terms of its ambition. This is all made possible by the fact that these companies are performing very badly from a financial point of view. You've got this coming together of the fact that we are now in an era of rapid decarbonisation and therefore, if you're in the business of digging stuff up that is full of carbon, you've got to explain how you are going to stop it from emitting anything. These are not oil and gas companies anymore, and they're not energy companies, as Total has now rebranded itself, they're actually carbon molecule companies. You can be in the business of digging these molecules up, but you cannot let them escape. Their emissions may not be allowed to escape.

Rachel Kyte
Yeah, that's so well said. And while that is their business, they also have greater resources, in many cases, than some governments do to change their business. I think that's a really fascinating thing to think about and we're looking at who's going to be- not just who needs to take action and really help to accelerate this transition, but who can take impactful and bold action, given infrastructure, given financing, and given pressure or momentum as well. As we wrap up the episode, Rachel, I'd love to let you just opine upon your thoughts going forward as to what you see as the most critical things in this space going forward, as we look to keeping up the ambition, trying to reach these SDGs, reach these energy and broader goals in the next nine years, and what you're going to be keeping your eye on as we look forward to, hopefully, a much more sustainable and clean future.

Rachel Kyte
That's a really great question. I think the SDG is really important, because we tend to get distracted by incremental improvement over where we are now. That's not going to be enough. So, we must always remember that the question in front of us is how do we ensure that everybody has access to the energy they need to be productive in the economy to be productive in life, right? And that that energy be clean, and it be affordable, and it be reliable. That's what we're trying to achieve. Now, to get there, then we need to deploy the technologies that help you do that that are available, but which aren't deployed at scale now. We need new technologies and new business models in which there needs to be much more investment than there is now. We've had this big spat over the last few weeks about how much of the technology we need is actually available or we've got to invest in that. Truth of the matter is that we need much more R&D than we are spending at the moment across the whole financing things related to sustainable food, water and energy. Governments need to do more. And then we need to align the finance so that we're not doing stupid things with the public money that we have and that that public money is leveraging private money into places it won't go on its own. That means that every multilateral development bank, every development finance institution needs to be absolutely in line with the 1.5 and with climate with the SDGs. That has to happen. And then the private sector finance can be mobilized, but this is not a development project. It's not about development. This is about allowing countries in Africa and Asia and Latin America to have access to the capital markets at reasonable rates. This is about bond issues, which aren't neutral, and that we understand that we do want green bonds and brown bonds are not something that we want. This is about sort of Marshall Plan sized ambition around revolutionising energy markets, electricity markets. This is about electrifying everything with clean electricity. The thing to take home is this is entirely possible. Is it an enormous task? Yes. Is it daunting? Yes. Is it beyond us? No. But our politics need to support our science.

Michelle Brechtelsbauer
Well said. Thank you so much, Rachel, this has been so wonderful to talk to you. I really appreciate you coming on the show.

Rachel Kyte
Well, thank you. It's been great to talk to you, too.