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Quest Means Business

Fed Rolls Back Pandemic-Era Stimulus To Fight Inflation; Global Financial Coalition Backs Net Zero By 2050; Qantas CEO Predicts Massive Year As Borders Reopen; Iran Nuclear Deal Talks To Resume November 29th; Climate Aid, Paris Rulebook Details On The Table At COP26; Ben & Jerry's CEO: We Haven't Done Enough On Climate. Aired 3-4p ET

Aired November 03, 2021 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:06]

RICHARD QUEST, CNN BUSINESS ANCHOR: An hour before the closing bell, and it's a busy day in the markets. Look at the Dow. You'll see the way the

story went. Down throughout the course of the day. The Fed was meeting and then you look at two o'clock, and I'll tell you why.

At two o'clock, the market turned, at 2:30, it went more positive. And now as you can see, we are over into -- we gained. We're in the greens. The

reason why is the main event of the day. Let the tapering began.

The Fed announces it is rolling back stimulus $10 billion to $15 billion a month, month by month.

Climate finance is the big breakthrough at COP 26. The leaders have left, the talking -- the real negotiations begin.

And the CEO of Qantas, Alan Joyce, tonight on this program. He says a massive year ahead after Qantas International finally takes back to the

skies.

We are live in New York. It is Wednesday, 3rd of November. I'm Richard Quest, and yes, I mean business.

Good evening. The tapering has begun at the Fed. For the second time in a decade, the U.S. Federal Reserve announced it is hitting the brakes on

crisis-era stimulus, referring of course to the massive bond buying program that helped support the economy through the pandemic, and now, is to be

slowly -- very slowly reduced. About $15 billion every month will be cut from tapering. You can see the way it is $120 billion, $105 billion down to

$90 billion.

Interest rates stay at near zero for the time being.

At the moment, as we're talking, the Fed Chair, Jerome Powell is taking questions and he remains adamant inflation is transitory and will decline.

(BEGIN VIDEO CLIP)

JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: ... our baseline expectation is that supply bottlenecks and shortages will persist well into next year

and elevated inflation as well. And that as the pandemics subsides, supply chain bottlenecks will abate and job growth will move back up. And as that

happens, inflation will decline from today's elevated levels.

Of course the timing of that is highly uncertain, but certainly we should see inflation moving down by the second or third quarter.

The time for lifting rates and beginning to remove accommodation will depend on the path of the economy.

(END VIDEO CLIP)

QUEST: Now, as the U.S. starts its pandemic taper as opposed to the great financial crisis taper, the Chair is opening a new chapter in the Fed's

monetary policy history. In the years between the great financial crisis and pandemic, the Fed met its objective of full employment and interest

rates stood at a hearty 2.4 percent. Turn the page and COVID brought global economy to a standstill.

Unemployment temporarily soared to 15 percent. The Fed did its action and slashed rates to near zero and restarted a massive bond buying program that

it had stopped after the great financial crisis.

The vaccine has helped lower unemployment rate today to around 4.8 percent and the Fed's aggressive stimulus is being cut because a new foe has

emerged, our old bogeyman of inflation.

The Fed's future and the fate of the Chairman continue into the future chapters.

Matt Egan is in New York. Matt, so we sort of -- they telegraphed they were going to do it, and arguably, one can overstate its monetary tightening

aspect, because, frankly, they are still buying billions and rates are still just about at zero. Significant, nonetheless, do you believe?

MATT EGAN, CNN REPORTER: Yes, absolutely. This is a major moment, Richard, for the Federal Reserve, because it is really the first time that we've

seen the Fed address something that is causing anxiety for millions -- tens of millions of people around the country, if not around the world, and

that's inflation.

Now, when COVID erupted, the Fed came in, you know, guns blazing. They lowered interest rates to zero, unprecedented stimulus, all of this bond

buying because they wanted to prevent a depression and they were successful.

If anything, the economy has bounced back so quickly that, you know, supply can't keep up with demand. That's why we've seen all these price spikes in

everything from groceries to cars to energy. And so what the Fed is saying now is they're going to ease their foot off the accelerator finally, after

19 months of keeping pedal to the metal, they're going to ease off just a bit.

QUEST: What I'm hearing is that they're surprised that this is basically $10 billion of treasuries and $5 billion in mortgage backs. It's only $15

billion. People had thought that a taper might start higher than this.

[15:05:01]

EGAN: Well, to your point, this is a significant move by the Fed because it is a shift in direction, it is a shift in strategy, but make no mistake,

they're still buying a lot of bonds. They are still pumping in money every month. The Fed's balance sheet is around $8.5 trillion right now.

If it took them until the middle of next year or so to get their tapering down to zero, the balance sheet would still go up to $9 trillion, and we're

talking about a lot of money. And also, the Fed still has interest rates at zero. And so that's why the big question is, you know, have they moved fast

enough to address inflation -- Richard.

QUEST: So to get into the weeds now, the Fed will continue to taper, then you have the question of reinvestment of existing securities, the so-called

runoff, and then you start to get to lift off. So, you've got tapering, runoff and lift off. Now, at this rate, is it feasible that lift off of

rates come sooner than all the others?

EGAN: You know, it's possible, I guess. I think that they do want to finish tapering before they lift off. But listen, they need to react to the

situation on the ground and there was an interesting line during the press conference from Jerome Powell, where he said, listen, you know, we are

committed to keeping inflation around our two percent goal, keeping importantly, inflation expectations around our two percent goal.

And if there are signs that it is moving well beyond that goal, well, we're going to use our tools. And we know that there are tools, in this case,

after they're done tapering it is really about interest rate hikes. And so that's the big question is, you know, when are they going to have to lift

off? And what's so important here is that Powell in that clip that you just played, you know, he's not saying we expect inflation to really cool off in

the next few months, even next year.

He is not saying that all at all. He is saying the bottlenecks are going to continue, and that inflation is going to remain elevated. At the same time,

the economy continues to add jobs. So, they have already met that inflation goal, they're moving pretty close towards the jobs -- full employment goal.

So, the Fed is certainly signaling that interest rates could be going higher as soon as next year some point.

QUEST: Matt Egan, thank you.

U.S. Treasury Secretary Janet Yellen says worries about inflation -- that Matt was talking about there -- won't become a self-fulfilling prophecy.

She spoke to Bianna Golodryga for today's Fed decision, and said, the country, the United States is a long way from 1970s era stagflation.

(BEGIN VIDEO CLIP)

JANET YELLEN, U.S. TREASURY SECRETARY: We did see in the 1970s a series of supply shocks became a longer run problem as self-fulfilling prophecy, as

you say. And that partly occurred because policymakers weren't trusted by the public to deal effectively with inflation. Inflation expectations rose

and a wage price spiral developed.

But I certainly see no evidence that that's the case now. Inflation expectations remain well-anchored, and I think the Federal Reserve has the

ability and has learned from history that if there were to be evidence, which there's not now, but if there were to be evidence that it's

developing into a self-fulfilling prophecy that they would learn the lessons of history and act appropriately.

BIANNA GOLODGRYGA, CNN SENIOR GLOBAL AFFAIRS ANALYST: And we are expected to hear from Fed Chairman Powell, your former job, later on today. I know

that you don't step on those policies. But there is a big question as to whether or not we will hear some terminology coming from him that that we

could perhaps see a sooner than expected rate increase to address some of these inflation concerns.

YELLEN: Well, I'm not going to weigh in on Fed policy. I think that the Federal Reserve has a framework that they have adopted to pursue the dual

mandate of price stability and maximum employment and what the right tactical decisions are to achieve that is a matter for my former colleagues

to decide.

(END VIDEO CLIP)

QUEST: There are a thousand and one ways in which they can say that statement and we've heard most of all of them. Basically, it's not up to

us, it is up to the Fed and I'm not talking about that.

On the issue of climate change, the financial sector says it is committing up to $100 trillion to help the world get to net zero. The Glasgow

Financial Alliance Fund for Net Zero which has more than 450 banks, insurers, and asset managers. We've got JPMorgan, HSBC, Mitsubishi, MUFG.

They're all there.

Mark Carney, the former Governor of the Bank of England is leading this effort and climate activists are skeptical saying the group members are

still invested in fossil fuel companies. Incidentally, Mark Carney will be on this program tomorrow.

[15:10:07]

Bain & Co., the management consultant firm went net zero in 2012. Manny Maceda is its Worldwide Managing Partner and joins me now. Manny, okay, so

you went net zero, and that's good for a company, a large company like your own, but the reality is the big stuff is with your clients, isn't it? And

to that extent, it is with those clients who still either invest in or deal with, or have as part of that business, traditional fossil fuel as part of

their business. What can you do about that?

MANNY MACEDA, WORLDWIDE MANAGING PARTNER, BAIN & CO.: Yes, I had to clarify, Richard, that we were carbon neutral a while back. We committed,

like many companies have, to be net zero, in our case by 2030. And we're part of a large group of alliances with climate leaders who have committed

to be net zero by 2050.

And as you said, for any of the large companies in the world, including our clients, you have to focus on your own footprint, and do the range of

investments and technologies to achieve goals specific to your structure.

You know, we, as a firm, our biggest footprint, as an example is aviation. It is air travel. For other companies, it might be steel or shipping or

production. And so yes, it's quite different company to company.

QUEST: So what do you -- just stay on your own company then -- what do you believe post pandemic will be the reduction for your internal travel

budget, including visiting clients?

MACEDA: In order for us to get to net zero carbon as a firm, we will need to reduce our footprint from air travel by about a third and that's our

commitment. So the question is, how much do you do that via volume? Doing meetings like this, Richard, versus in-person, and how much you do this by

actually having aviation itself becomes sustainable. You know, tomorrow at COP 26, I'm actually flying to Glasgow tonight, myself. A group of

companies are announcing a first movers' coalition will be part of the group in aviation as a major user, together with airlines, major producers,

to pre-commit ways to get sustainable aviation fuel lower priced, to help us achieve our goals.

So it will make them -- it will make a difference in volume for sure. But also, it has to be more sustainable flying.

QUEST: On the wider issue of what you -- of the way forward, the economic argument or the economic solution is probably the way. Which way do you

think works best? And I know it's going to be all of them to some extent, but for instance, are we talking about carbon taxation, emission trading

schemes, a higher price of carbon, which is what -- 60 euros per ton at the moment -- some suggest that has to double or triple before it becomes

meaningful within ETS to actually bring down carbon levels.

MACEDA: I do think we have to have a real carbon pricing, carbon accounting, and as companies make commitment to do this and build this into

our strategies and budgets. In the end, Richard, I think this will end up being just good thoughtful business decisions. Obviously, we need help from

regulation.

But as you said, the bankers want to do this, the investors. Our customers want to do this, this mean higher costs, maybe overtime, we have to lower

it. Clearly, the employees all want to work for more sustainable companies. In the end, I think we will -- we are all pretty committed to do the right

things here and I do think these will end up being solvable in the end, but it'll take time.

QUEST: You see, I just wonder, it will take time and I understand that. But what I'm not hearing from anybody is pain and if we are going to meet

the 1.5 degree target, and Greta points out, we're all under -- as the IPCC points out, we're already well off track for that. I don't hear anybody

saying, you know something, it's going to cost profits, it's going to cost investment. It's going to cost -- maybe cost jobs. Instead, I'm hearing

everybody saying in the fullness of time.

MACEDA: Well, I think the clock is ticking, as you said, and I don't expect that we can just wait. And so, the commitments we're making now, the

investments we make today, the behavioral change we make today for you and me on everything we can do, including, you know, a trip like this, I might

have thought a few years ago, fly there, fly back. You leverage it over time, you're going to pay higher cost, but that's just what needs to be

done, and so I remain optimistic we can get through this.

[15:15:01]

QUEST: Well, since you mentioned the flight, I mean, how are you getting to Scotland?

MACEDA: You know, I'm flying and just like you, I've seen you in airports around the world, my friend, so it is sort of a mindset now, right, where

compared to a few years ago, if I'm going to make this trip, I wouldn't have made this trip if I wasn't going to leverage it with other visits to

Europe that I can bundle over now, a week and a half. So that it's -- because business will need to continue. We will need to have some physical

human to human interactions.

QUEST: Right.

MACEDA: But that's just a kind of behavioral change that has to be happening at a more -- and even more massive scale. For us, it is air

travel, for other companies it is how you ship, how you buy, how you produce. And yes, I think this is being taken seriously now by everybody.

It's not lip service. It's full commitment strategy from the top.

And, so I remain hopeful that we can -- it's not too late.

QUEST: Good to see you, sir. I appreciate it. Thank you very much indeed.

MACEDA: Thank you very much.

QUEST: On tomorrow night's QUEST MEANS BUSINESS, I'll speak to the former Bank of England governor Mark Carney, now, U.N. Special Envoy for Climate

Change. We'll discuss COP 26, and I'm sure we'll find time for discussions on Bank of England rates and indeed, Fed policy.

Australia is reconnecting with the world. Alan Joyce, the CEO of Qantas, after the break.

(COMMERCIAL BREAK)

QUEST: The Chief Executive of Qantas told me he is expecting a massive year for the airline in 2022. When you look at the moments like this, you

can understand why.

[VIDEO CLIP PLAYS]

QUEST: After 20 months, Australia's borders finally reopened to international flights. People traveling from destinations like Singapore

and Los Angeles were reunited with loved ones at Sydney Airport.

Alan Joyce said moments such as that were pure relief for Qantas. He spoke to me from Sydney when he said it was time for Australians once again to

connect with the rest of the world.

(BEGIN VIDEOTAPE)

ALAN JOYCE, CEO, QANTAS AIRWAYS: It was amazing, Richard, a bit of a relief -- relief for our people because it now means in early December, we

get 11,000 people that were stood down back to work because we now have certainty on the borders. That was half our employees, but also fantastic

for Australia and for its people.

[15:20:04]

I was talking to people traveling to London and we saw the pictures, amazing pictures of people coming in from LA and London, and it was people

that haven't seen family in two years, nearly; grandkids, they had never seen people ill, relatives that they were going to visit, people that were

going for funerals. It was all part of life reestablished again, and allowing Australians to get around the rest of the world.

So very uplifting to see that we are open to the world again, and very uplifting for our people to see that they're back at work again.

QUEST: So what do you do now? You've got Los Angeles open, you've got London. I'm imagining your other principal markets, you'll quickly reopen.

How quickly and how big do you think it will be?

JOYCE: Well, let's take domestic first. We got as low as 30 percent of our domestic pre-COVID schedule in August. By Christmas, we're back to 90

percent of that. In fact, in the last two weeks, we had 500,000 bookings for domestic travel compared to 20,000 a fortnight in August. So a 25-fold

increase on that. And we think by the time we get to Easter, we'll be back to 120 percent of pre-COVID. We will be bigger, a lot bigger than we were

pre-COVID in the domestic market.

Then on international, it gradually open so up. As you mentioned, we have London and LA at the moment. By Christmas, we have Fiji, we have Singapore,

we have Japan opening up again from Melbourne and Sydney. And then in the early New Year, we have markets like Johannesburg. We have markets -- more

markets into Asia open up. We hope we can get Bali opened up.

Australia have the largest visitors to Bali. It's a massive market. Jetstar is the largest carrier in Bali. And in fact, to show you the demand in 72

hours, Jetstar here sold 75,000 international seats. The demand domestically and internationally has been pent up for two years. It is

massive, quite significant and we think '22 will be a massive year for us both domestically and internationally.

QUEST: How would you describe your international as the strategy for Qantas International? Since it's had a root and branch, we think over

COVID?

JOYCE: It has, Richard. But one of the big benefits that we've taken during COVID is to rationalize our fleet. So, the 747s have retired, the

old fleet that we've had. We've taken half a billion dollars of costs out of Qantas International and we have a network that we can operate with the

787s and the 380s. That's designed for the corporate market mainly in Australia. But to the big leisure volumes, also, we're seeing us having the

ability to fly direct to more points.

You know, before COVID, we were going to start services to Chicago and we have a massive network at every continent around the globe internationally.

We'll continue that and build that. And we still have Project Sunrise in the pipeline, which is our ability to fly from Sydney and Melbourne to the

last horizon, the last turn of distance that we say we direct into London, direct into the East Coast of the United States that will be a unique value

proposition that no other airline in the world will be offering.

QUEST: Final thought. Extraordinary event, I mean, the U.S. opens up to Europe and to others next week, next Monday. There's more than light at the

end of the tunnel. But when those flights arrived from Los Angeles and London, and when you saw those passengers, it must have justified all the

decisions you've had to take.

JOYCE: Yes. It was amazing. And you do realize, Richard, the business that you're in, it is connecting people. You have a massive impact in the

aviation industries, on people's lives. You get people to meet family and friends, to meet relatives.

The aviation industry does something special and you realize how great and how amazing your people are.

Now talking to our people that have been stood down, they have found secondary employment. A lot of them have worked for New South Wales,

they've worked to help the state and the country get through the pandemic. They've done an amazing secondary employment jobs to get themselves through

it, but contributing to the community. And all of that makes you feel like you're running a very special business that has huge impact for its

customers and its employees and it is great for them that there's light at the end of the tunnel.

[VIDEO CLIP PLAYS]

(END VIDEOTAPE)

[15:25:01]

QUEST: You'll forgive us on a day like that, it's an old advert, but there you go. We call Australia home. There you are. Qantas does, but you get

what I mean.

People are getting back to work on the road and the question becomes how to stop over tourism? Jamaica's Tourism Minister says protecting the

environment is key to protecting the industry itself.

Minister Bartlett says for a country like his -- and you can see its positioning there in the Caribbean Sea -- environmental protection of the

product is essential and tourism must become more sustainable in the light of COVID-19.

(BEGIN VIDEOTAPE)

EDMUND BARTLETT, JAMAICAN TOURISM MINISTER: Tourism knows that it is the most vulnerable, although it is the most resilient of all industries, but

its vulnerability relates to what makes tourism happen, the environment. The environment is the product. And unless you manage that product, and you

sustain that product, you will not have a tourism.

QUEST: So how do you manage that? Over tourism in some places, poor neglect of the environment in other places, stripping of resources.

BARTLETT: So first of all, I think we have to re-invent this great industry on the basis of what are those two key factors that drive you.

One, sustainability. How do you ensure that you are in sync with nature? You are protecting and securing the future of your product. And secondly,

resilience. How do you build capacity to respond to global disruptions that are going to continue to happen because it's a feature of Anthropocene

Earth?

QUEST: But I'm not being unfair when I say your country has been one of the worst offenders of overbuilding in some cases, poor land management,

and certainly over tourism in some cases.

BARTLETT: Well, in some cases, but the good news is that this gives us an opportunity and COVID has not all been negative. It has given us a chance

to stop, look, and listen; to review what we've been doing and to find better ways of doing what we must.

QUEST: Is that possible? Isn't there an inevitability that mass tourism will take a toll on the environment?

BARTLETT: Well, mass tourism will take a toll on the environment, but what is important is innovation. And how do you be nimble and adapt? And how do

you make the changes using technology and your ability to convert knowledge into practical responses? And that is the essence of what human beings are

made of. That's why we survive on Planet Earth, because we're able to innovate, to adapt, and to reinvent ourselves.

QUEST: Finally, when the operators in Jamaica said, look, this is going to cost us money. No. We can't do this. Or we can't have this new regulation.

What do you say?

BARTLETT: When I say look, what is the cost of not being able to do it?

QUEST: They don't care because they're only interested in next year's return?

BARTLETT: Yes, but I'm saying that there is no next year return if this year's investment is dim. So, we have a compromise, and every time it has

to be, how do I ensure that I balance the livelihood that I must have with the lives that time was preserve?

(END VIDEOTAPE)

QUEST: Minister Bartlett of Jamaica.

World leaders have left COP 26. The real work begins. The negotiators get down to business. We're going to be looking at what's on the negotiating

table. We've given you a glimpse of it already. We were talking to the Bain managing partner, but we'll be talking about it in Glasgow, next.

QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

[15:30:00]

(MUSIC PLAYING)

QUEST: Iran said that talks on the country's nuclear deal will resume on November 29th. U.S. State Department has said that the United States will

take part.

The special envoy for Iran, Rob Malley, will join the JCPOA talks in Vienna. The E.U. will go along, with China and Russia and the United

Kingdom.

The world leaders made grand entrances and promises at COP26 and then they all left. Now the high profile figures have gone, the real negotiations

begin. Two weeks to hash out the nitty-gritty of what all of those climate commitments mean and how they could credibly be met.

Of course, the top dogs have to approve it but the delegates have the hard numbers to deal with. There's $100 billion a year for climate finance,

supposed to be secured last year. There is the technical details of the Paris commitment from 1.5 percent to 2 percent and no one's ever really got

to grips with those.

And then tax carbon emissions, carbon pricing; the IMF said it takes $75 a ton to meet reduction targets and it is currently around $60. Phil Black is

going to watch every nook, cranny and follow every twist and turn. He's in Glasgow tonight.

Who is doing the talking?

PHIL BLACK, CNN CORRESPONDENT: The big names have gone. They made some big splashy headlines with some important deals that have been warmly received

but these were largely negotiated in advance.

Now as you say, the continuing work, the incremental grind of the negotiating teams, I want to bring in with me now Iskander Erzini Vernoit.

You know how the sausage is made -- or more often isn't at these gatherings. You are with a climate think tank and a former COP negotiator

for the Moroccan government. Take us behind the door of these negotiations and, in a word or two, describe what is the atmosphere like at its most

intense.

ISKANDER ERZINI VERNOIT, FORMER COP NEGOTIATOR FOR MOROCCO: Well, if I had to pick one word, it would be exhausting. These are highly strenuous events

that take place, not just over two weeks, that most people are here for, but over three weeks if you're a country delegate.

Country delegates will stay night after night to pull these things across, often all nighters. These are highly fatiguing events and, of course --

(CROSSTALK)

BLACK: Emotional?

VERNOIT: -- emotional, highly emotional. People have their countries' lives on the line.

BLACK: And often hugely detailed and technical as well.

VERNOIT: Hugely so, requiring a great deal of technical expertise.

BLACK: Particularly in the context of the Paris agreement, the details, which are still working out, which is the rulebook for all of this.

VERNOIT: Indeed, the rulebook. I know we discussed the issue of common timeframes for revising the NBCs, that is particularly important,

especially with the aspiration that this is a COP that will keep 1.5 degrees alive.

BLACK: That's the headline issue, we know what each country is prepared to do. It falls woefully short.

VERNOIT: It does.

BLACK: Keeping global temperature rise to 1.5, how much progress can be made at this delegate level over the next two weeks?

VERNOIT: I think that is a really good question, because what happens at the delegate level is a reflection of what is happening at a much larger

level. At a high political level and, to be honest, at an even higher level of commercial realities and technological developments over the past

decade.

[15:35:00]

BLACK: The other key issue and it is an emotional one is finance and money. We know that developing countries are upset because the rich

countries have not kept their word to deliver $100 billion a year by 2020.

But there's another emotional aspect and this is the push for some countries to receive money for loss and damages, reparations essentially,

for damage they say that's been inflicted by global warming caused by rich countries.

VERNOIT: Yes.

BLACK: It is a nonstarter, isn't it?

VERNOIT: Well, I think COP26 is seeing a bit of a breakthrough on loss and damage from what I can see. I think that there is increasing recognition

that all countries around the world, developed and developing, are experiencing serious costly losses and damages as a result of climate

change.

If you look at the floods and the droughts that afflicted countries around the world across continents this summer, I think you hard-pressed not to

see that.

And I think what we've seen now, yes, there continue to be divisions around whether there is a legal liability for compensation. But the story at end

of the day, that there are losses and damages that need to be dealt with, I think that is increasingly universal recognition.

BLACK: Iskander, thank you for that insight on what goes on behind the doors here.

The general mood is one of, well, some optimism, some sense of progress and momentum here I think after the big deals announced.

But crucially, Richard, there is a sense that those key targets that countries have set, they are insufficient and we can't wait another five

years for countries to come back and try again, as is currently instructed by the Paris agreement.

There will be a push and in some ways it will be a measure of the success here if countries are willing to come back in another year or two and push

harder.

QUEST: Phil, as this goes on, please come to us with every nook and cranny and bit of detail. The more technical, the better, here on QUEST MEANS

BUSINESS we appreciate it. Phil Black is in Glasgow.

Unilever is one of the countries voluntarily disclosing its climate related financial details. CNN's Max Foster spoke to the chief executive at COP26

and asked how the company could tackle climate.

(BEGIN VIDEO CLIP)

ALAN JOPE, CEO, UNILEVER: Capitalism has done many good things for the world but, unfortunately, capitalism treats nature as a free good and

destroying nature in order to grow products and commodities is not a sustainable solution.

We need regenerative agriculture. And I think more and more of the emerging markets around the world are aware of that and are asking for support, not

just from Western governments but from the private sector as well.

MAX FOSTER, CNN LONDON CORRESPONDENT: So you're having to really, I mean you are always checking back where products come from but that can be a

challenge for you because they hide often where the supplies have come from.

JOPE: We've committed by 2023 we'll have a deforestation free supply chain. Take something like palm oil, not a very popular ingredient. We're

at 99 percent sustainable palm oil. But the last 1 percent will require enormous technology to track and make sure people are not burning down

virgin forest to grow more palm oil.

(END VIDEO CLIP)

QUEST: With me now, Matthew McCarthy, the CEO of Ben and Jerry's Ice Cream, owned by Unilever. He joins me from Burlington, Vermont.

It is good to see you. Ben and Jerry's is one of the most environmentally, sound, secure, whatever; you're well-known for this. You're on the stage

now of really focusing down on things like plastic packaging and the various minor ingredients that go into it.

How much more have you got to do until you're happy that you're (INAUDIBLE) with your environmental credentials?

MATTHEW MCCARTHY, CEO, BEN AND JERRY'S ICE CREAM: Richard, thanks for having me. It's good to see you again and it is an honor to be included

here.

The fact of the matter is we haven't done enough and we need to do a lot more faster here at Ben and Jerry's. So I'm proud of the things that we

have done over the past few decades. But we still have a long way to go to reduce our direct carbon impact as a business.

And part of that is in scope one and scope two, the things that we directly control, like our imagery and power consumption. We've made good progress

there. But the biggest part of our carbon impact as a company is actually on the farms, through the cows, through enteric emissions.

And there is a lot more work that we need to do to reach our own science- based goals at Ben and Jerry's.

QUEST: If you are going to make ice cream, unless it is non-dairy, you need milk and you need cows. And we've seen the numbers from agriculture,

from methane and the like. I don't know, Matthew, how you get around that problem.

MCCARTHY: It is something that has been with us a long time for us. And what I would tell you is that it is not easy. And that is why don't want to

sugar-coat it.

I think speaking to it directly. What I would say is that we've put pretty strong science-based targets for ourselves to reduce our carbon intensity

across our business. We want to have a 40 percent reduction in the next few years and, by 2050, almost 100 percent reduction. The way that we do that

is we've been taxing ourselves at Ben and Jerry's.

[15:40:00]

We've had our own carbon tax and we use those funds to specifically invest in new technologies to actually reduce carbon intensity and total emissions

on the farm.

So getting to zero very difficult. But there is a lot of stuff that we could do and there's also a lot of new technologies that we're investing in

to actually work with our farmers to do that.

QUEST: I'll get back to climate in a minute. I do need to ask you about the current Middle East and the policy now with the Palestinian Territories

and with Israel.

Are you planning to change your policy there, bearing in mind the Israeli reaction to the decision not to sell in the territories?

MCCARTHY: Richard, I appreciate you asking about that. That is not something I'm here to talk about today. I really want to talk about climate

and stay focused on this and I think it is a pivotal moment for us and for business leaders to be talking about climate, especially with what is

happening at the COP right now.

QUEST: I'll allow you the dignity of that and with your assurance that you'll come back and talk about other matters afterwards.

Finally on ice cream, the way in which you're going to move forward -- I guess with the message I hear from you is some improvement is better than

none; we get there when we can.

MCCARTHY: No. No, Richard, that is not the message at all. I'm excited to see some of the things happening at COP with companies, with countries

taking action. But I'm going to build on what Alan Jope said, companies have to be stepping forward.

If we as business leaders that have the privilege of leading businesses that do not take aggressive action, we'll frankly never get there. So

policy is absolutely essential to level of the playing field and, frankly, businesses that are not committing and those that are actually fighting

against Build Back Better plan, they're fighting against some of these policies, they're in the way of climate change.

The way of fighting climate change on the business. And frankly I think this is an area where I think the data is quite clear, our consumers,

consumers don't really trust CEOs on climate. They trust the science.

And so I think adopting science-based targets -- and something really cool happened last Friday. The science based target organization basically said

they put a definition around what net zero means.

And so it is really important that all companies reduce their carbon intensity and have a plan to reduce it. The science based target

organization said you have to reduce carbon by 90 percent. And you can use offsets as a way to get that last small amount.

So I think this is an exciting moment but it is not get there when you can. It is putting aggressive policies in place and we're really actually

pushing for legislation.

QUEST: We need to come to present QUEST MEANS BUSINESS from your factory which we will do the moment --

MCCARTHY: I would love that.

QUEST: Thank you, sir.

And that is QUEST MEANS BUSINESS. I'll have the dash for the bell at the top of the hour.

END