GlobeScan and the ERM Sustainability Institute held an insightful webinar on navigating the future of sustainability leadership. This event will took place on September 19th at 11 AM New York / 4 PM London.

What are the latest breakthroughs in sustainability? How is the anti-ESG movement affecting sustainability? What are the implications for sustainability leadership going forward?

Mark Lee, Global Director of Thought Leadership at the ERM Sustainability Institute, led a panel of experts in a discussion on these questions and the forces shaping sustainability today and implications for future leadership.

Our panelists included: 

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Mark Lee: Hi, everyone! Welcome, happy Thursday to you wherever you are in the world. I'm Mark Lee. I'm coming to you from California this morning. I am the Global Director of Thought leadership at Erm, and and part of the Thought Leadership program at Erm is the Erm Sustainability Institute, which was just on that initial slide with globescan as the host of this webinar.
 
Mark Lee: Really delighted to have the chance to facilitate a conversation about the sustainability leaders survey from 2,024. This is a survey that we had in the field in the spring. Chris Coulter from Globescan will run through this in just a minute. But just to tell you how we'll conduct today's call. We're going to introduce our speakers properly in just a moment. I'll then turn over to Chris to do a brief run through of the survey findings, assuming that everybody on the call won't necessarily have had a chance to read the report
 
Mark Lee: and digest that themselves. We'll then engage Alex. Housman from Google and Stacey Mahler from Siemens. In a conversation about the findings this year, Chris, and I'll continue to participate in that as well.
 
Mark Lee: And all the way through. We're interested in your comments. And your questions. The chat should be open, and you know, please drop thoughts in there anytime. We're gonna keep an eye on the chat, but if you want to pose a question to me or panelists. Please use the QA.
 
Mark Lee: And and we'll keep our our eyes closest there. We'll we'll run the panel discussion after Chris's presentation for about 20 min or so with some questions we've prepared, I'll work in what I see online as we go. But then we'll pause and and focus exclusively on what's in the QA. For a portion of this time as well.
 
Mark Lee: With that, maybe. 1st word from my co-host, Chris Coulter. Chris. It's great to see you. How are you today.
 
Chris Coulter: I'm good, Mark. Nice to see you, too.
 
Mark Lee: Yeah. And Chris, I know there's survey background coming. But how many years has the Gss leaders been running at this point?
 
Chris Coulter: 1997. So what's the quick math? 20
 
Chris Coulter: 7 years! Is that right?
 
Mark Lee: Yeah, you're you're in the right range. We're closing in on 3 decades, which is remarkable, and I know you'll give some survey method.
 
Chris Coulter: Almost as old as Alex's robust mustache.
 
Mark Lee: There, there we go, and I guess that points me, Alex at you. Next Alex. Housman is the Director of Sustainability Reporting at Google an old friend of both globescan and sustainability through a few of his career stops Alex. It's great to have you here today. Other than other than than mustache jokes from Chris. Tell us one thing about your sustainability reporting job right now that
 
Mark Lee: is shifting, changing. You know, there's a lot happening in the disclosure space.
 
Alex Hausman: Yeah, I will thank you so much for having me here today, and thank you for commenting on the mustache. You got out the jokes before I did biggest change for us. So I work for Google. I've been here about 2 years. It's a tech company.
 
Alex Hausman: the the influence of AI. I apologize, but we're this far into Webinar, and I just mentioned AI. So I probably won that Bingo.
 
Mark Lee: Yeah. Good.
 
Alex Hausman: Obviously, we have to drink now from it. But having huge impact really on, like the function of sustainability reporting.
 
Alex Hausman: And that's like my day-to-day life. I'm finding it as a huge tool on the development of of reporting, but also how we share it with the world and can share a little bit more in the webinar. Later on.
 
Mark Lee: Great. We'll definitely come back to that topic, Alex, and thank you so much for joining. And Stacey. Stacey Mahler, the the Us. Head of sustainability for Siemens, smart infrastructure. And, siemen, I'd be willing to place a bet that that folks might be more familiar with Siemens in broad terms than Siemens smart infrastructure. Specifically. So can you just parse that a tiny bit for us. Tell us what your role is like there and what the smart infrastructure focus means.
 
Stacy Mahler: Sure. So Siemens, if you think about the 3 core businesses for Siemens, we're in smart infrastructure digital industries and mobility. When we talk about mobility. It's the the trains. Not necessarily the Ev, so within smart infrastructure, we're focused on everything from buildings, building automation efficiency, smart buildings, to grid to power distribution.
 
Stacy Mahler: you know, management, infrastructure, ev charging equipment, and and again, that power, management and distribution infrastructure to support grid software so really comprehensive, but thinking again that that smart infrastructure that takes you from the building to the grid.
 
Mark Lee: Yeah. And every time I see an estimate Stacy of of how much
 
Mark Lee: more infrastructure we need to build and how much existing infrastructure we need to refurbish. I can only imagine the stretch that you feel at, but probably the excitement, too, in the role that you're playing. So we'll look forward to learning some more about that as we get into the conversation today as well. With those kind of brief intros, Chris, want to turn over to you to let you run through a few slides, give people context on this year's survey, and then we'll plunge into a conversation about it.
 
Chris Coulter: Great thanks, Mark, and thanks Alex and Stacey for being here.
 
Chris Coulter: So yes, this. This is the the latest round of the leader survey. It took place in May this year, and you can see the the depth of experience of the almost 500 respondents who took part in the survey. It's quite deep. People have been doing this for a long time. It's
 
Chris Coulter: multi stakeholder and multi geographic in orientation. Our biggest challenge is still trying to engage and find more African and Middle Eastern sustainability experts to participate. So
 
Chris Coulter: any ideas people have of networks to engage. That's an important piece. We want to have a much more balanced assessment of what's happening. But you can see from the sectors and the stakeholders. We have a multi stakeholder approach and and the people who have responded to the research are quite deep into sustainability. And they understand the agenda from these multiple facets. So that's exciting. And and what we're trying to do is is harness this collective
 
Chris Coulter: set of expertise and experience across the world, and help us all orient towards a stronger, faster approach to sustainability.
 
Chris Coulter: So let's begin 1st with just the rank order, and perceptions of urgency, of various sustainability challenges. And and so here you can see the percentage of of stakeholder responses on how urgent they view each of these issues. And
 
Chris Coulter: not surprisingly, we have climate change at the very top and then a whole bunch of other elements that relate to the nature, agenda, biodiversity, loss, deforestation, water, scarcity, water, pollution, and then food security also in the top end
 
Chris Coulter: with poverty on the developmental side not too far below. So there's this hierarchy quite enviro, quite climate nature oriented, and then more economic social issues come in the middle and and some lower challenging issues as we get down to the bottom, but still significant proportion, saying, these are urgent
 
Chris Coulter: on the trend data and the tracking we can see there's volatility naturally in the trends over time. But if we look especially post recession, great recession of 2,011.
 
Chris Coulter: You can see this very steady increase. Across these stakeholders who've already been involved in sustainability. Back then, and now that projection of the urgency of these issues is all moved up over time with some volatility. And and this is important to note, I think, and sometimes we forget, because this urgency that we all feel and stakeholders feel.
 
Chris Coulter: Leads us both to drive in a technocratic, you know, wonkish way of how do we solve it? But there's also an emotional component that all of us are also feeling, too, as this urgency rises, and and how do we navigate that emotive response with the actual professionalism. To try and drive change is an important balance to. To keep in mind.
 
Chris Coulter: We've also started asking every year, this interesting thing, what do we collectively see as the most important events or or newsworthy developments in the sustainability agenda. And so people offer their answers, and we aggregate them into
 
Chris Coulter: into buckets, and we can see year on year. There's a consistency of what's happening at the governmental level is the game in town. So legislation, like the Inflation reduction act, and what's coming out of Europe and some other countries disclosure standards. This makes your life more complicated, Alex, of course, but this is a growing piece of the puzzle that people are are recognizing as relatively important breakthroughs on the sustainability agenda.
 
Chris Coulter: And then some things related to some solutions around energy. Stacey, given your work. This is obviously the the core of what you're focusing on, and and then some other pieces of the puzzle below that are are kind of governance and orientation, or one offs. But the notion of what's happening at the regulatory level is quite pronounced and
 
Chris Coulter: well, quite distinct than 5 years ago. So we're in a in a mode where there's more signals taking place from governments and regulators across different worlds, not in a fully harmonized way. But it is something that we're collectively recognizing as as noteworthy.
 
Chris Coulter: We also wanted to tap into this challenge. We've had culturally, I think, and politically, around this, this, so called, Esg backlash. And and so we asked the question here to folks, how significant do you think this backlash around sustainability? And Esg is in your country
 
Chris Coulter: and overall at a global level, we have a majority, 57% of all of the experts saying, Yeah, there's a significant backlash to Esg and sustainability, 43%, not not worrying about it too much.
 
Chris Coulter: But then you can see the dramatic difference regionally, where it is a very North American centered of gravity on this backlash where 83% of North American experts are saying, it's a significant backlash happening in this region. Europe are still a majority. But importantly, in the global South across Africa, Asia, Latin America.
 
Chris Coulter: Majorities aren't feeling that backlash. And this is corroborated by some other work we've been doing with with Oxford and the and the corporate affairs profession. Exactly the same thing has been transpiring.
 
Chris Coulter: So there's something unique here that we in North America, where I guess all 4 of us are right now is the center of the storm.
 
Chris Coulter: And then, importantly, we wanted to get below the surface and ask, what about you know? How much does this add up to? Is this going to be some impact on the agenda or not? And there's a worrying sign that from the collective wisdom of this crowd.
 
Chris Coulter: 52% of us think that there's going to be some impact on this transition to sustainability and and maybe accounts for at least the quietude that's happening in among certain companies, if not some pullback on targets and goals that are also there. So this is not an immaterial
 
Chris Coulter: conversation around this backlash and anti Esg stuff.
 
Chris Coulter: Okay, let's let's quickly look at the leaders. And we've been tracking this since 1997 as as as as Mark was referencing. And this year we have this leaderboard of spontaneous mentions of leading companies on sustainability. People are able to add up to 3 companies. Some do, some don't, some don't add any companies, and here we have the high end of the
 
Chris Coulter: over 260 companies that are referenced by the 500 stakeholders across the world. So there's a quite a long tail and diversity of perceived leadership. But at the high end it is captured by this list, which includes 34% of stakeholders. Reference Patagonia as a leading company, 24% for unilever, 12% for natsur and Co. Etcetera.
 
Chris Coulter: And we have
 
Chris Coulter: Google and Siemens on this list, which is also important to recognize as relatively newcomers to this leaderboard. And and while in at at 1st blush, it feels sort of static at the top end, and there have been a little bit of stasis with those top, 4 or 5 companies being referenced over time, there is below the surface a churning that's important to recognize over time with new leadership.
 
Chris Coulter: Briefly, you can see at the high end of the top of the leaderboard. You do have some shifts in Unilever's rise and and slight decline over time. The the pronouncing leadership and mind share of Patagonia.
 
Chris Coulter: This is challenging, because you know as much as we love Patagonia. It's not a real company in a fortune. 500 sense. It's a foundation owned. Now it's a relatively small company. Its footprint is pretty located in one geography in North America, and bleeds a little bit, but it doesn't have the same challenges or issues, for example, that Google and Siemens are are sharing. Ikea is in a similar boat. It's a foundation.
 
Chris Coulter: Owned companies was protected from some of the the sharper elbows of the marketplace, and yet we also have Denone Nestle, and Unilever at the top end as well as Netsura.
 
Chris Coulter: One last point. Here is where we ask stakeholders, why are you referencing certain companies from Patagonia all the way to Google and Siemens? And here's the collective assessment. One is that the stakeholders are seeing
 
Chris Coulter: the that actually sustainability is being integrated into the company more deeply, and that integration is an important sign of maturation and commitment, I think, from stakeholders. There's evidence of concrete outcomes and impacts. Important supply chain has grown as a reference point of leadership. And what do we do on supply chain
 
Chris Coulter: from scope 3 to all the other elements of shifting performance across the board, socially and environmentally, and then things like goals and targets, and even something like vision and purpose, and commitments are important elements as well. But the top end is integration, impact and supply chain.
 
Chris Coulter: All right. So let me pause and put it. Put it back to you, Mark. Now.
 
Mark Lee: Chris so well done. I know it's hard to get through that in summary form that quickly, and really appreciate how you did it. I I struck by 2 things that will layer on quickly, and and folks listening may have picked this up, but we were in the field in May.
 
Mark Lee: Essentially kind of April, May and it trailing into June. And and so unilever. It'll be interesting to watch how people react to their new plan, which, if you've been following the story around the launch of Unilever's new refocus sustainability plan.
 
Mark Lee: there's been lots of reaction to it, very powerful in both directions, and I'm curious how that'll play next year, and on the backlash front. You know, I think Chris is talking about how the the findings here are supported by some of the other survey work they do, and just anecdotally, I feel like there. There is more conversation about the backlash spreading beyond North America. Personal opinion. We'll see how that plays out
 
Mark Lee: in today's conversation. But let's get into the conversation. Let's get Alex and and Stacey's voices in here. One of the questions that Chris talked about. Alex and Stacey was a relatively new one. So there's a bunch of tracking questions in the survey. We've been asking people about urgency of issues, and which companies for a long time.
 
Mark Lee: But it's only over the last couple of years that we've started to ask this question about greatest positive impact. And and so that's the one that throws up right now the the answer that it's the amount of government proactive movement on regulation and legislation that is shaping the field, and people in responding to that. If they give examples, tend to refer to the Csrd, they talk about the inflation reduction act in the Us.
 
Mark Lee: So it's both disclosure standards. And then some of the things that are driving investment
 
Mark Lee: around the world in different markets, in sustainability, too. And Alex Chris already hinted, you know, that this was maybe coming your way. So reporting and disclosure at Google, so many new disclosure standards, both regulatory and actually voluntary evolution as well. How's that shaping or reshaping your approach to reporting and disclosure in your job?
 
Alex Hausman: Yeah, in in a ton of ways as as you alluded to, kind of listed a few out, or at least, as I was thinking about this.
 
Alex Hausman: One. Our finance partners have become our best friends, we very close function. We work with them on a daily, at least weekly basis.
 
Alex Hausman: really to up level processing controls around data and claims and and any kind of environmental disclosure.
 
Alex Hausman: So that relationship has become very tight.
 
Alex Hausman: a renewed or increased focus on materiality. I don't think it ever went anywhere, but as Csrd is coming in the definition, the redefinition of materiality and double materiality.
 
Alex Hausman: How it applies to disclosure is is becoming much more prominent. It's going to help us prioritize reporting and disclosure efforts. So that's huge. And it's really a partnership effort.
 
Alex Hausman: not just from a like a sustainability function, as maybe it was done in the past, but as a whole company thinking about this and debating it internally, which I think is really interesting will lead to really great conversations.
 
Alex Hausman: enhanced data management. I think that's kind of an obvious one. The data Google has obviously, or been for a long time investing in the systems and the processing controls around it. But we need to continue to up level to match kind of the expectations that these regulations require.
 
Alex Hausman: then 2 more, one, the idea of continuous improvement. And so it's not that we haven't approached this work with continuous improvement, but we are going through such a fundamental dynamic shift.
 
Alex Hausman: In reporting, it is forcing us every year to rethink our approach, to realign our approach, to kind of deliver on a lot of different things in this transitionary moment, and
 
Alex Hausman: I find that very invigorating for someone that has done this for 20 years. You're constantly kind of reevalued. Why are we doing this? And do we need to do this again? And what new do we need to start in the New Year? And all of that obviously requires a lot of work in the back end to make happen.
 
Alex Hausman: and then
 
Alex Hausman: probably the biggest one that we have not solved yet here, and if anyone has any answers, please share them. But we are really trying to develop a unified vision for disclosure for 2026, and beyond. So what does the disclosure landscape look like in 26 and 27, when Csrd
 
Alex Hausman: is kind of happening? And what does that mean for regulated disclosure. What does that mean for voluntary disclosure? What does that mean for how Google tells its story around environmental impact and as well as other social and governance topics as well.
 
Alex Hausman: So those are kind of the key changes. They affect every part of every day of every day. In this job.
 
Mark Lee: Can only imagine. And Alex couple follow ups one just clarification. You mentioned. That that your relationship with your finance partners I assumed the internal corporate finance function, right, not external.
 
Alex Hausman: Correct. And and even more specifically, we have an Esg controllership team.
 
Mark Lee: Yeah, yeah.
 
Alex Hausman: So that is our, that's the group that we work with there. Yeah, on a daily basis.
 
Mark Lee: Yeah. And then you mentioned materiality. Refocus never went away, but greater. And and is materiality getting better? Because part of the curse of materiality and sustainability over the years we've been working on it is, it has been its enormous bread. It seems to sometimes run exactly the opposite direction of what the word means.
 
Alex Hausman: Yeah, I mean, I think time will tell. I mean, so as we think about it, it's now in that context of Csrd.
 
Alex Hausman: and I think we are all learning and looking around and and talking with peers on how best to take that definition which is not different than the definition that was shared in the gri and 20 years ago. It's not fundamentally different, but it's much more specific, more prescriptive.
 
Alex Hausman: And so I think I I it's hard for me to give you an assessment, yet I would like to on the back end of this talk about it, and then I think it will again. Get everybody to be thinking about it, and then we won't be done. The next year we'll refine it, and we'll refine it after that to make it more useful and more efficient, and really focus on what matters most. But I do think it. It is forcing conversations across companies in a good way. Ultimately, even though it's going to be challenging in the interim.
 
Mark Lee: Yeah, terrific terrific Stacey, if I turn to you, and you know, not being quite as specific, but giving me a chance to opine a bit more broadly on, on how you read that list of of what our expert respondents threw forward, and maybe putting them in the context of Siemens, wh. Which positive actions or developments shaping the sustainability space have mattered most to your organization, and if you want to go there for for the wider landscape as well. But what's your interpretation of that? Over the last 12 months the big movers are.
 
Stacy Mahler: I I mean, I would agree with the survey results results. So the regulation piece but maybe taking that a step further to look at the breadth of regulation. So having that at the federal and local level as well as at the industry level.
 
Stacy Mahler: having that reinforcement and and
 
Stacy Mahler: it provides some level of certainty. So I think one of the things that we see out in the market is with regulation. It's
 
Stacy Mahler: how immune is that to changes in political party control or kind of who's in power. Right? And so there's where you can remove that uncertainty, or or at least try to lessen it as much as possible. So, having again this breadth and diversity of of regulation and incentives being a big part of that in the Us.
 
Stacy Mahler: At both the local level, the Federal level. But again, some of these industry coalitions that are coming together to there's a regulatory component or a disclosure component to it. There's also a collaboration. And how do we figure this out together? But those 3 pieces together? I think
 
Stacy Mahler: the evolution and the shaping of those in concert with each other, has been really positive.
 
Mark Lee: Yeah. And the survey tends to throw up mostly global and sometimes national examples of of kind of regulation agreement standards. I'm intrigued that you went to the more local. And can you give us an example of some of the activity that's happening
 
Mark Lee: below the national level that you think is particularly important, at least the type of it. If you can't point at it completely, specifically.
 
Stacy Mahler: Yeah. I mean, I think things like local law 97 in New York are positive. The climate disclosure out of California, where it's not necessarily that it's different, but it is being adopted again at that local level that provides some level of
 
Stacy Mahler: immunity to to again some of those fluctuations that can provide uncertainty and prevent action. From organizations that aren't quite sure which way things are going. And again, I think in the us. One of the things that we see as a as a counter to EU is more of the incentives being more prominent than
 
Stacy Mahler: than the the regulation or the you know more, the care, less of the stick. So I I think, having those at the utility level.
 
Stacy Mahler: Again at the state level local level is is really helpful for moving projects forward.
 
Mark Lee: Got it, got it. And I think we need to remember to keep our eyes at all those levels all the time, and I feel. 10 years ago? The answer to this question from the experts might have been, Wow! What mayors are doing. We're seeing cities surge forward as the demonstrators, and that seems to have faded somewhere at the California EU level. It'll probably come back around.
 
Mark Lee: Chris. Maybe that's a good pivot to you. This is a new question. But we've kind of watched patterns around government influence in the space over time. We've only asked this for 2 years. In both years. Kind of government activity, legislation, regulation came back on top of the list. What do you think that means? And based on that experience of the years of of polling around these questions. Should we expect this will last.
 
Chris Coulter: It's a good question, because, as as you know, when we've been asking stakeholders for many years, how are different institutions performing on sustainability. You know, Ngos do really well on a consistent basis. Business sort of, you know, lower middling, a little improvement, and then governments at the very bottom in a very, very sad positioning. And that continued even
 
Chris Coulter: later last year, when we did that, that when we asked that question in a different survey. Despite this acknowledgment, that legislation disclosure is happening.
 
Chris Coulter: So there's there's still a gap. But I think there's been a long, steady time even. I think you know, I think, Mark, when you and I were at Rio plus
 
Chris Coulter: 20.
 
Chris Coulter: There was almost this feeling then, like, Oh, governments are irrelevant. It's like it's a business and civil society. That's the combination that's gonna drive us forward. And I think that's been quite an ensconced view in in all of us, despite the evidence now we have of. There's been pretty monumental things that are transpiring.
 
Chris Coulter: I think the underlying public opinion tracking we've been doing across the world has a very populous bent to it. So people do want governments, despite low trust in government sometimes to regulate good corporate behavior. However, that's defined, you know, as as vaguely as we as we as we ask the question. But the trend is very dramatic. Over 20, I think 25 years of tracking now it's like a 30 point increase in that 25 years.
 
Chris Coulter: It's uniquely true across of all all regions. So the the background noise of all of this, you know citizens pushing their governments is quite potent and powerful, and we can see how it's manipulated into negative populist approaches or positive Populist approaches. But I think the undercurrent of like things have to change. Structurally, we're not getting to where we want to get to. So governments are going to pick up those signals. We started mostly with disclosure, I think from an investor conversation
 
Chris Coulter: we'll see how that has really panned out in a couple of years, but the other harder parts, I think, are are the the formulas there to be enacted by governments, especially in the context of a very dramatic climactic
 
Chris Coulter: event or series of events. We've had them. But we have not had the ones that are coming that science tells us. When that happens and we're we're fundamentally rocked as societies. Governments will be under enormous pressure to force much more
 
Chris Coulter: stringent legislative changes, I think. And that's something that most companies are aren't thinking of aren't prepared. And we're, I think in in many cases we are feeling quite overburdened already in this context. But my happy thought is that this is the good times. The bad times are really coming, so we should be prepared for it.
 
Mark Lee: Oh, no, I think, is my response to that ending. I'm gonna come back on a speed round to all 3 of you, and then we're gonna move on to different topics. But, Stacey, it'll come to you first.st So, warning, based on what you see so far this year, if we ask this question again.
 
Mark Lee: is is government regulation, etc? Going to stay at the top of the list? Or do you have another contender to to take over the top positive impact kind of slot in the survey. What what looks like it might be a riser. Stacey.
 
Stacy Mahler: I I think November is gonna be really interesting to show what that's gonna look like. You know, I didn't mention it as a close number 2. But I think you know, companies organizations that more of that free market component has a possibility to also be that number one driver. And so and that would be more of my hope quite honestly. Is that
 
Stacy Mahler: you know the leaders that have embedded sustainability into really their corporate strategy and their mission are paving the way and helping to make
 
Stacy Mahler: technology scalable in such a way that
 
Stacy Mahler: it's easy affordable and understood how to make that transition for those that are that are just starting that journey.
 
Mark Lee: Okay, and what's happening in November? No, I know. Yeah. Well.
 
Mark Lee: big. Wait and see. Alex, what do you think? What's what's what's maybe a riser or a change in next year's list.
 
Alex Hausman: No change. Maybe it would be number 1, 2 and 3.
 
Mark Lee: Oh, okay, more, more, more. And, Chris, do you agree? Disagree.
 
Chris Coulter: I I agree, I think I think there's a there's some some momentum behind all this. So yeah. And and I love Alex that this 2026 unified vision harmonization that feels like a very important thing, but a very difficult thing. So I don't know any anything wanted to add on, how do you do that? How do you advocate for this kind of thing?
 
Alex Hausman: Yeah, I mean, yeah, I mean, just on to respond. I would love any any advice. But like scenario, it seems like it's a. It's a kind of a scenario planning game at this point, because there is not a ton of external examples to point to. There is not a playbook.
 
Alex Hausman: There is a playbook on what regulations require. But then there's everything else.
 
Alex Hausman: the everything else in context, with what is required, that I think you're going to have a lot of companies
 
Alex Hausman: go from just regulated disclosure to regulated disclosure plus everything they were already doing. And so it's like you have to find what is the right path for me? It's like, what is the right path for Google in that kind of wide spectrum. So it's a lot of it's really a lot of scenario planning and having conversations and getting leadership alignment on that.
 
Mark Lee: Yeah, alright, I'm gonna pivot us to a new topic. And and I'm gonna use one of the questions that's appeared in the QA. As a. As a way to pivot to that. So we're gonna go towards backlash and the impact of that. But I'm looking at the question from Dan Baina. And and he says, in my experience, companies of all sizes are shifting the balance to much lower risk, appetite or bare minimum, a compliance focus
 
Mark Lee: at the peril of innovation, and I'll try and take a shot at this myself, and I'll throw you all a backlash question you can layer in if you want. And and, Dan, I'm I'm seeing over and over inside companies. the the folks who have been and often still are, the the kind of sustainability, strategy and innovation team being asked to pick up the broader compliance regulatory
 
Mark Lee: disclosure remit, and and that so they're not always getting additional resources or additional resources commensurate to the size of the task. And I just hear companies saying, we have to figure the compliance piece out. You know our Cfo will not sign this without certainty, and it's it's not so much a a bare minimum desire as a this has to take precedence. And I hear that in the context of Csrd versus the nature agenda, that while the nature agenda kind of remains voluntary.
 
Mark Lee: Csrd gets more focused because it's coming quick, more quickly as mandatory. And then I think there is a backlash element in there, too, where companies to a degree have their horns in.
 
Mark Lee: because they're anxious about the ways their actions will be perceived. So with that as a pivot pivot with the numbers, with all of us sitting in North America. I wanted to ask each of you how significant you do perceive the Esg and sustainability backslash to be, and it's now endured over several years. Right.
 
Mark Lee: Stacy. I'll ask if you'll open up on this.
 
Stacy Mahler: Yeah, sure. And and maybe just to continue on the question, because I think that was a great question. I saw that in the QAI think inherently. What we see in in my role is is unique, because, of course, I work or part of the team that is supporting what Siemens is doing towards our own
 
Stacy Mahler: sustainability, commitments and ambition. But we also work with a lot of organizations that are trying to move the needle themselves, and and what we see back to the question on, do you see more compliance? Do you see? More? You know investment? And I would say it's people are just drawing closer to their core.
 
Stacy Mahler: If their core has sustainability embedded in the strategy in the fabric of that organization, then that's enduring where the the.
 
Stacy Mahler: the sustainability prioritization for that organization is more in compliance. It's it's getting consolidated back towards that core of compliance. So where they might have been kind of peeking their head around the corner to see could we be more ambitious? Forward looking innovative?
 
Stacy Mahler: I think you know the the uncertainty does drive closer to the core but the core. I don't see the core changing and when we work with organizations, we, we try to identify that core because that really does. Look at the the appetite for risk, the appetite for innovation specifically around sustainability.
 
Mark Lee: Yeah. Great Alex, can you just build on this with your perspectives on the backlash and its impact.
 
Alex Hausman: Yeah, no. I like what Stacy just said, you know. I was thinking about this, too, from a personal level working in the space for 20 years, so not as long as Mark and Chris, but for a long time. And
 
Alex Hausman: it's not really too surprising that there, I feel like this work is cyclical, and there is momentum, and then there's lack. There's like ups and downs. And so I think that's what we're in a moment of certainly in North America.
 
Alex Hausman: I do think it's. Yes, yes, I think there is. It's important to kind of acknowledge the reality of the backlash, and there is potential impact on business for sure.
 
Alex Hausman: The way that I look at it kind of putting politics aside would be that stakeholders are asking for like the stronger link between environmental Esg issues and long-term business value.
 
Alex Hausman: And I love, I mean, that's what that's how I see it. And I think it's a totally fair question, and one that I've heard for the 20 years that I've been in this job.
 
Alex Hausman: and it's for me one way to look at this backlash. It just reinforces the need to emphasize the link between Esg and long term value creation, you know, focus on what matters that drives business performance. So it's kind of to what Stacy said. It's like you drive back to what is core business and make sure that that's how this is all working. And
 
Alex Hausman: I think in. When there is a cycle like this, it's really really important to continue to engage. Internal and external stakeholders understand concerns continue to build, and the need
 
Alex Hausman: to always be selling right like to always build support for the company's sustainability. Initiatives don't assume. Well, you know not. You know we are doing that we you said last year that we should be doing this. You've got to continue to sell in, continue to show the value.
 
Alex Hausman: So I like my view of this. And I'm a bit, Pollyanna. But I really believe it's it's super necessary to stay the course, keep focused on sustainability.
 
Alex Hausman: I believe over time implications of environmental impact increase. They don't decrease much to Chris's very
 
Alex Hausman: harsh statement about the these are the good times and the bad times are coming soon.
 
Alex Hausman: Yeah, the long term benefits of of this type of integration, this type of focus on environmental or social governance far outweigh the short term risks. I've you know I believe this strongly. I've bet my entire career on it, and I just think that this will. It will keep it. It trends in one directions. But it is. It is cyclical.
 
Mark Lee: Yeah. And I think you both kind of neatly answered at least the spirit of Bogdan's question, which was in the QA. And he was asking, Can you show investors how you'll make money with sustainability and link that to company valuation? And I think both of you said, you know where sustainability strategies align with what the company does best, and is truly in its competence, and or addresses the environmental and social risk that sustainability poses.
 
Mark Lee: Then this stuff survives the backlash. Right?
 
Mark Lee: Chris, you and I recently had a conversation with John Elkington figure in our field. Of course, founder of the organization I was part of before coming into Erm. Sustainability. John talks about waves over time a little bit like we found in our survey work.
 
Mark Lee: and and he talks about up waves where sustainability surges forward and down waves where it pauses, and he's calling where we are now almost a sustainability recession, that there's there's not only recessionary threats in the economy, but they come in our field.
 
Mark Lee: but he argues that that's just fine, that that we kind of need time to regroup, and this separates weak from chaff, and we get focused. So you know, thought this would be a tee up for you, and a comment on the backlash, and and the way it has some in some ways forced a pause. Right like we're rethinking and a resetting. What do you think.
 
Chris Coulter: I think it's true. And I think this is. This is very, very complicated, and this is a monumental thing we're trying to do. We're trying to rejig the economy, you know, at at the scale of 100 trillion dollars a year to be aligned with social environmental outcomes. It's not. It's not a small project, and we're 36, 37 years into it. If we look at 1,987, when
 
Chris Coulter: sustainable development as a term was coined like it's not a long time to do that sort of level of transition, and and maybe we're halfway there may maybe but
 
Chris Coulter: it. It sometimes feels very slow. But I think there's our our like troughs and peaks and and plateaus, and and I like the term sustainable recession. It's a little negative. I was in a cab a while ago and you know the the context matters and the and the taxi driver says, you know, we're we're in a social depression.
 
Chris Coulter: That's such an interesting corollary to that, like the the malaise and the anxiety that the world and people have. And insecurity. So all of this is connected like where the background music really does matter in how we're operating.
 
Chris Coulter: I do think we we can only digest so much at once. And I think we've digested a lot in the last 5 years. And this operationalization of all this is really complicated. I mean decarbonization on its own is, you know, wow! Really, really tough. But I but and I do think to Alex and Stacey's point of like once we're aligned there, and this continuous improvement, it will show results over time. We're just waiting. We're waiting for it.
 
Chris Coulter: But we do need, I think, collectively, to maintain the rest of society stakeholders, consumers, public Ngos government officials, etc. We do need to show some wins soon. We need some dramatic shifts, and the incremental is fine, but I think that's why I was framing the the external context of people being more and more freaked out.
 
Chris Coulter: And more people concerned about more things means that there's an emotional response which is very populism. So it could be like anti. Sg, one day. There could be like way too much. Esg, so we need, we do need to be cognizant of. We've got to demonstrate and showcase this in a time of
 
Chris Coulter: anti Esg, which is real in a time of anti, you know, tentative around communications because of greenwashing. We're a little bit stuck. And and so people
 
Chris Coulter: are not seeing the the what the advances that are being made. They're behind the scenes. And so we need to find clever ways to visualize. And so this is what's possible. This is what we're doing. This is why the the missing targets is such a controversial, challenging thing, because that's all people have been been able to hold on to. And once we're saying, Wow! This was, we're a bit inflated
 
Chris Coulter: a little bit over, you know, over enthusiastic, and this is harder than we thought, and therefore we're not going to hit these things. You do that enough, and people will. Will will flip for other solutions out there. Possibly.
 
Stacy Mahler: And maybe to build on that a bit, mark. And I think.
 
Mark Lee: Yeah.
 
Stacy Mahler: To Dan's question is.
 
Stacy Mahler: you know, showing value. And you know, getting the word out that can be along, things that are happening that are considered more mainstream improving efficiency of resources, of energy, of water.
 
Stacy Mahler: That's that's easy to do. It's being done. It's not scary. But I think a lot of times. The what tends to get the most promotion or press are kind of newer technologies or things that are gonna rock the boat a bit, and and it's good to talk about those as well. But when we're trying to get buy in and show results, it's improving the efficiency of our systems. It's improving the resilience of our systems.
 
Stacy Mahler: Those are tied to financial impact, positive financial impact. By the way, we've been doing them for a really long time, and they are part of
 
Stacy Mahler: the Esg umbrella. It's just they often, maybe don't get as much credit as they should, because it's
 
Stacy Mahler: it. It's old news. I'm not, I'm not sure but IA lot of times. It's just going back to basics and talk
 
Stacy Mahler: about the good work and the advancement within those spaces. So Alex is, you know, quick, quick to pull in AI as well he should, because that's when you think about the power of
 
Stacy Mahler: improved usage, of data and processing and analytics of data. That's really where those kind of those core old news efficiency, resilience type topics can be taken to the next level.
 
Mark Lee: Well, and our work on those old news topics is so far from done. Right? So yeah, Chris, this will create a bit of a scramble as I ask Stacy the next question. But I wonder if you can pull the slide back up? That has the
 
Mark Lee: the the what experts say, leadership is, you know that list, please. And and Stacey, that's kind of where I want to go. And I think it builds actually on you saying these areas of focus. But you know, our our experts tell us that that integration into kind of the core of the business evidence of impact. This, this is their list.
 
Mark Lee: Do you agree? Is this what Siemens would call sustainability leadership? And and if not, what would you say should be at the higher on the list.
 
Stacy Mahler: I I agree with it. But I I think it's
 
Stacy Mahler: kind of tough, because a lot of these are intertwined right? So you can integrate it into the business strategy.
 
Stacy Mahler: But to be committed and resilient to that
 
Stacy Mahler: throughout business cycles, throughout technology changes throughout geopolitical dynamics. I think that that staying power, that continued commitment
 
Stacy Mahler: to that strategy and to those that ambition it makes its way through everything else. It impacts your values, it impacts. I mean supply chain is on here. It's
 
Stacy Mahler: it's a tactic to me. Of how you would employ or execute that business strategy. It's a component to your business strategy, so I think the list is
 
Stacy Mahler: is absolutely accurate. But I would say all. I I don't know that I could rank them if I were filling this out.
 
Mark Lee: Yeah. And and Alex, if I can get you to continue on this in some degree with integration at the top, you were talking about relationship with finance. Now, there's an Esg Controller. But how does Google work at the deeper integration question? And what lessons you know a lesson can you share with us about that.
 
Alex Hausman: Yeah, I mean, I mean, I 1st of all, I do this. This list makes a ton of sense to me. The only change I would put, I'd put communication transparency at the top. Obviously.
 
Mark Lee: Yeah, talking. To you.
 
Alex Hausman: no, I mean, for us, integration is very, very important. You want the attention you want, the resources. It needs to be core to business strategy. So I mean, we talked about AI at the beginning it was just mentioned again by Stacy.
 
Alex Hausman: We have to as a company. We have to think about how AI it's, you know, it's it's an AI 1st company for for almost a decade.
 
Alex Hausman: How does AI get
 
Alex Hausman: deployed into our products? You know Google Maps and eco-friendly routing. How do we find more efficient routes for folks like around prediction? If it's around contrails and working with pilots and airlines to, you know, avoid climate warming contrails.
 
Alex Hausman: Those type of work streams get the attention, get the meetings of leadership which then gets resources and more momentum.
 
Alex Hausman: But there's also another very important piece, too. And so if we, if Google was out there only talking about how AI is helping people make more environmentally friendly choices, but not talking about how we're using AI to make sure that we're more efficient as a company. I think that's a really important like an important lesson that we have.
 
Alex Hausman: How are we leveraging AI and the use of AI and making it more efficient is a key part. And so talking about model AI model optimization. How do we.
 
Alex Hausman: you know, develop techniques that make training faster and more efficient? Or how do we think about our data center infrastructure? And how are we more efficient? There, I think that's just a really important kind of again for us, huge scale with products. People know Google for
 
Alex Hausman: all the different products that they use every day. But they also want to know that we're making sure we're taking care of our own house. And I think the
 
Alex Hausman: consumer facing is much more interesting kind of relevant to the business, and we need to make sure that also we
 
Alex Hausman: that our credibility and that story with consumers can be eroded. And we've seen it in research if they don't believe that Google is kind of using those same techniques to reduce our environmental impact internally so kind of cool
 
Alex Hausman: a core lesson that has existed in this space forever. I think the difference now is that
 
Alex Hausman: difference than 20 years ago is that consumers are more educated. The younger generations have grown up on the notion of sustainability. They they understand they can handle more nuanced conversations about it.
 
Alex Hausman: And so we need to make sure that we're sharing that information with with them right along with the great product features that help them live more sustainably.
 
Stacy Mahler: And I was just gonna.
 
Mark Lee: Yeah.
 
Stacy Mahler: Back off, Alex, because a hundred percent agree. And I think one of the by products is not. It's the credibility. But it's also the learnings that you get by by employing it in house first, st and so being able to remove some of the the hurdles. And you know fleet electrification is a huge one that we see
 
Stacy Mahler: where
 
Stacy Mahler: us going through it and realizing, okay, these are where the pain points are going to lie. This is how we're solving it.
 
Stacy Mahler: So not only do you have the credibility of of employing it within your own house, and keeping your own house in order, but, by the way by by putting the house in order. We figured out what works, what doesn't work, and we're able to accelerate
 
Stacy Mahler: other everyone else's journey. So I think when you talk about leadership, it's willing to make that investment financial time resources to to make those learnings happen, to, to
 
Stacy Mahler: open yourself up, embrace those learnings, and to to then share them.
 
Mark Lee: good, good, good across the board. And I'm just gonna move forward only because of time. And I want to try and pick up a few more of the questions. We've grabbed a couple along the way we've we've got several more about the impact of legislation, and and 1. 1 comes from Sophie Chappelier, another from Michael Sadowski. They're a bit in the direction of Dan's question from earlier.
 
Mark Lee: but but if we try to bundle them a bit. And, Alex, I think I'll come to you first, st because of the weight of the disclosure legislation that we've seen.
 
Mark Lee: What's the balance between
 
Mark Lee: dealing with accommodating the legislation we have now, and anticipating and preparing for even more ambitious legislation that might be just over the horizon. And I think there's a tone in these questions of
 
Mark Lee: is this limiting progress or not like, are we the dog that caught the car? Is it? Is it? We wanted this to be mandatory. It is, is it? Is it now
 
Mark Lee: painful and harder than we thought?
 
Alex Hausman: Yeah, I mean, it's a really, it's hard to answer that question when you're right. In the moment, too, right? Like we, the the signal that has been kind of put out by legislation, both domestically, but also in Europe and other places
 
Alex Hausman: leadership in companies at Google. I was at Nike before they've heard it. They recognize it. They are feeling nervous about it, and they are asking questions to their teams. Are we prepared? What are we doing
 
Alex Hausman: around again in my myopic view of, like the disclosure part of this. And so this the there have been more resources that I've seen both in the companies I've worked for. But the peers I've talked to
 
Alex Hausman: allocated for the disclosure. That is what has to be done.
 
Alex Hausman: And so, you know, I think that there is a crowd there can be. I've seen it in other companies of a crowding out of like focusing on what we have to do in the next couple of years. But I will say what what I have just experienced. You know, again using again a disclosure. But that is the tool that I have. So everything, you know I'm the hammer. Everything looks like a nail, but disclosure does force a company to talk about least good disclosure talk in a clear and transparent way about progress
 
Alex Hausman: and that progress story. If it's good, then perhaps you have the right amount of resources, and you are making progress. But if that story is bad, that is a story that you are telling to the world, and there is feedback that not only you get as a sustainability team. But your CEO gets and the leaders of your your company get.
 
Alex Hausman: and that is a feedback loop that then drives a feeling of we need to not only disclose and comply, but we need to be making real progress, that we can show year over year and communicate that. So the kind of theoretical use of disclosure. Right? Is that you are transparent. You get that feedback. You incorporate that feedback and continue to make progress.
 
Alex Hausman: So I think it's not. Yeah, it's like the front end. Yes, there is a requirement, and we are. We are resourcing up for the compliant disclosure. But that's the the knock on effect will be that we are sharing progress, which will then create the feedback loop to make sure that companies are held accountable to their commitments.
 
Mark Lee: Thank you. And I'm gonna just keep trying to get a couple more questions in. And Claude, and I'm not sure Claude or Claude a hundred percent. But I'm guessing guessing, Claude, in this case. Voila has asked a question about the geopolitics. And almost just why aren't geopolitics referenced in the experts, answers, you know, and certainly in the conversations I'm having with companies right now. The the geopolitical uncertainty
 
Mark Lee: comes up more and more often. So, Stacy, I wonder? Given infrastructure literally means crossing borders and boundaries at times, and negotiation, and it also needs security. Can can you weigh in on this one like is is Geopolit, our our geopolitical threats a greater part of the sustainability conversation inside Siemens today than they used to be.
 
Stacy Mahler: I don't know if they're more or less with respect to sustainability, because at the end of the day it's it's relative to infrastructure growth overall. Right? I think, when we what we want is for infrastructure, growth to be sustainable. And so thinking about integration of renewable energy sources things like that. So the conversation hasn't, or the consideration hasn't changed. Necessarily, I think there's
 
Stacy Mahler: you know, it's a there's an ecosystem in play, and it requires.
 
Stacy Mahler: That regulatory component, that geopolitical component to it. But that's only one component
 
Stacy Mahler: so maybe tying in the the previous question around.
 
Stacy Mahler: what do you do in the face of uncertainty.
 
Stacy Mahler: Think about the market forces that are also in play that are driving action. So I can't tell you how many sustainability surveys. I get as a supplier to other customers.
 
Mark Lee: Yeah.
 
Stacy Mahler: That are asking for disclosure, and it's not going to be the same type of disclosure. But it's a Cdp report. It's ecovotis. And so getting that baseline. I don't. I would tell any organization, big, small, no matter where you're at in in prioritizing sustainability, that you need a baseline, you need to understand, have some level of transparency into what impact, environmental and social impact your business has. Because even if
 
Stacy Mahler: there, you're not going to get hear it from a regulatory standpoint. You're going to hear it from other stakeholders in the system.
 
Mark Lee: Okay. And, Chris, if I bend this one towards you, I wonder if even in the the corporate affairs
 
Mark Lee: research you do with Oxford is. Is the geopolitics thread more prevalent there? How do you see it connecting to the sustainability, conversation.
 
Chris Coulter: Yeah, yeah. Super prevalent, prevalent and grown dramatically as as both as a a big risk to business, according to corporate affairs, directors across the world, and it aligns with the the regulatory legislative.
 
Chris Coulter: but also as as that Cadremen. They're communications, people fundamentally right. And and they they find the geopolitics and the politics overall, making
 
Chris Coulter: the bread and butter of what they do around stakeholder engagement. That much harder to do. So, you know, having dialogue, open conversations is more difficult, just the tactical part of that. So it's sort of weakened. I think their ability to understand what's happening in this.
 
Chris Coulter: you know. Multi stakeholder ecosystem. And how do they plan for that? So it's not. It's made. It made it more difficult, which I I wonder the implications in the sustainability world of. We know we have to collaborate more. And there's all kinds of kind of crummy collaboration, and very few really good catalytic collaborations. So how do we do that in this context, and then advocacy as a driver of systemic change, too, also, probably a bit more challenging than it was a couple of years ago.
 
Mark Lee: Yeah, yeah, okay. And with the top of the hour looming, I'm gonna throw a final question at all of you. Chris and I were talking at the start. We've been doing this survey for 27 years. Globe scan the whole way. Erm
 
Mark Lee: and the Sustainability Institute. The partner for for much of it. We keep doing it because we're interested in how leadership's evolving, you know. Where does sustainability leadership go next? So want to give you all a chance to grab your crystal ball and 30 60 seconds, so we can close this out. What way do you need? Corporate sustainability must evolve
 
Mark Lee: to be more effective and and higher impact in the kind of one to 3 year timeframe. How do we close on the ambitions we have which are so significant to address the planetary challenges. What do we need to do better?
 
Mark Lee: Chris, I'm gonna ask you to go first.st So our guest panel.
 
Chris Coulter: Great.
 
Mark Lee: Think a bit longer. Yeah.
 
Chris Coulter: Thank thank you.
 
Chris Coulter: I mean, it is the big question.
 
Chris Coulter: I I think more innovation is required. And I and I I wrote in the chat, too. I think. I think, Alex, the way you framed it, and took us out of that binary, the more disclosure and compliance to do, the less we're innovative. And that kind of is the I guess the simplistic thinking that I've had sometimes, too. But you've, I think, charted a pathway to showcase the that this can be a driver of innovation. So that's exciting. So I think ratcheting that up is really important.
 
Chris Coulter: I do think the response to what's next is also fundamental. And and you know, Stacey, I think the work that Siemens is doing, especially on infrastructure and adaptive and resilient infrastructure in the face of a of a climate crisis. How do we take this this moment and showcase these multiple benefits that we need to
 
Chris Coulter: society? We need to do more of that, and be aware of people feeling out of the conversation and needing just I need a job. I need some security. And all this other stuff is, you know, grandiose, but give me that, and we can do that with adaptation. I think, in many ways.
 
Mark Lee: Good good thanks for kicking us off, Stacey. Maybe get you to pick up. Given. Chris pointed a little bit about you.
 
Stacy Mahler: I'm gonna take it a bit of a different direction. I think the biggest thing that we need to see to to make up for lost time, if you will, is just to scale quicker. So I I think
 
Stacy Mahler: integration into supply chains, not as getting back to our earlier conversation around. Is it just regulatory and mandated and disclosures? Or is there more facilitated support? And I think in the case of scaling and supply chain in general
 
Stacy Mahler: there needs to be more facilitated support by those leaders in the industry to help these companies along.
 
Stacy Mahler: So I think the more that we can do that through, I'll I'll echo what what's been said around collaboration and more effective collaboration. I would say, Mark, I forget how how it was, how you mentioned it, but essentially that collaboration to help the scaling. But the scaling is overdue.
 
Mark Lee: Yup love it! We've got to move at at much greater pace and scale, I agree. And, Alex, you get the the kind of final word on this.
 
Alex Hausman: I was, gonna take it a slightly different direction. Maybe a contrarian ish view. I think leadership. And what companies need to do in the next one to 3 years
 
Alex Hausman: would be almost a re articulation of the very bold ambitions that we all shared in the world. At the beginning of 2020. Some of these net 0 targets are the bigger ones which were good, aspirational, ambitious ideas. And I think what leadership needs to do now is, be more specific.
 
Alex Hausman: And and even if it's restricting in some ways, if you can be much more clear in your articulation of how you're planning to get there. I think that sets us up, and it sets us up for collaboration for governments to take action. It sets up a clear path for ad advocacy to get much more clear on the path, even if that requires a slightly tightening of ambition. And I think you're going to hear arguments on both sides as companies are doing that. But I believe, like true leadership and true vision is the specificity of the plan.
 
Alex Hausman: And so that's what I'm I'm looking forward to in the next couple of years.
 
Stacy Mahler: I don't think that is contrarian. I think it's pragmatic.
 
Chris Coulter: I guess it's the mustache that throws you off. Stacy.
 
Mark Lee: It's where.
 
Stacy Mahler: Very cool.
 
Mark Lee: That's true.
 
Stacy Mahler: November. When November comes, Alex is going to be ahead of.
 
Mark Lee: Oh, she's already winning. Yeah, yeah, I yeah, I I'm gonna close with thanks and and the thanks, or especially to Alex and to Stacey for joining us as guests to bring their insights and thoughts. Personal and from their work experience to us, we so so appreciate your time. And you're doing this with us.
 
Mark Lee: Chris. Always a pleasure to work on this with you, thanks to all of our teams who do all the work to make the survey happen, and to the audience. I wish we could get to all your questions. Hope it felt reasonable. The ones we managed to work in loved reading the chat and your insights as well, and hope everybody has a great morning afternoon, evening, whatever time zone you're in.
 
Mark Lee: and we'll look forward to hosting you on another webinar in the future. Bye, for now.
 
Chris Coulter: Thank you, Mark. Thanks, Alex. Thanks. Stacey.
 
Stacy Mahler: Thank you. Guys.
 
Alex Hausman: Thanks, all.