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Quest Means Business
Western Allies In Stalemate On Tanks For Ukraine; Davos Attendees Pick Their Biggest Worry; Tech Layoffs Pile Up Amid Market Correction; Bezos Earth Fund CEO On Investment Needed To Protect Planet; SAP CEO: World Is Entering New Phase Of Globalization; U.S. Partners With Billionaire Foundations To Tackle Clean Energy. Aired 3-4p ET
Aired January 20, 2023 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:25]
RICHARD QUEST, CNN INTERNATIONAL HOST: An hour before trading comes to an end, back from Davos and tonight, here in London and look at this, we start
down, a bit of a wobble over here, but whoosh, best of the day so far. We will analyze the reasons why.
And you've even got the NASDAQ that is up two and a quarter percent. So all the markets indices are showing good gains.
The markets and the news of the day: Germany blocks EU efforts to send tanks to Ukraine.
And Netflix's Reed Hastings stepped down as Chief Executive, the end of an era.
And the Bank of America CEO tells me something has shifted when it comes to climate agenda.
(BEGIN VIDEO CLIP)
BRIAN MOYNIHAN, CEO, BANK OF AMERICA: The private sector finally said we'll solve this capitalism, we will solve it, and sort of, we don't need
money, but we have the innovation, we have the ideas.
(END VIDEO CLIP)
QUEST: Live from London, it is Friday, it is January the 20th. I'm Richard Quest and in London as in Davos, I mean business.
Good evening.
We begin tonight with Germany, saying it is not yet ready to send tanks to Ukraine. In doing so, it is rebuffing calls from allies to give Kyiv the
extra firepower it is wanting.
Defense leaders were sitting down in Germany to thrash this out. They didn't get very far. The new German Defense Minister says there is no
consensus on sending Ukraine heavier weapons.
(BEGIN VIDEO CLIP)
BORIS PISTORIUS, GERMAN DEFENSE MINISTER (through translator): There are good reasons for the delivery, and there are good reasons against it. And
given the overall situation of the war that has been going on for almost one year now, all the pros and cons have to be weighed very carefully, and
that assessment is explicitly shared by many allies.
We cannot all say today when a decision will be made, nor what that decision on the Leopard tanks will be.
(END VIDEO CLIP)
QUEST: The Germans are most concerned about provoking Moscow and not without reason. Today, for instance, Russia warned of escalation in
Ukraine, if the West decides to up the ante on weapons.
Washington is going after President Putin's private military fighters, the Wagner Group. The White House official John Kirby says it is now considered
a transnational criminal organization.
(BEGIN VIDEO CLIP)
ADM. JOHN KIRBY (RET), COORDINATOR FOR STRATEGIC COMMUNICATIONS AT THE NATIONAL SECURITY COUNCIL: It will open up additional avenues for us to
continue to not only sanction Wagner and put more squeeze on their ability to do business around the world, but will assist others in doing the same.
(END VIDEO CLIP)
QUEST: Nic Robertson is in London with me.
Nic, the Germans saying what they did today, why are they being so intransigent? Are there others supporting them?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Well, there were indications certainly from behind the scenes, according to the White House
administration that the Germans have tied -- America giving tanks to Ukraine for their cost, if you will, of giving the Leopard 2 to Ukraine.
The US has these Abrams tanks. They have jet engines, they use jet fuel, they're not particularly suitable for the environment. There isn't the
resources to support them. That seems to be part of it.
There is a historic reason as well. German tanks, obviously rolling through Ukraine in the Second World War. Germany, also, as we know, has only really
sort of faced this challenge and the realization that Russia is not a good business partner, and cannot be relied upon and trusted upon as they have
done for so many decades and they are reform in the military.
It's all part of this bundle, but I think we've seen extreme frustration today. And after the meeting closed in Germany, we've just seen a tweet
from the Polish Foreign Minister who has got those Leopard 2 tanks he'd like to send to Ukraine, they are waiting for Germany to give the nod to
that, saying, look, while we hesitate, Ukrainian blood is being spilled.
QUEST: Right.
ROBERTSON: There is real frustration here.
QUEST: Nick, this is exactly what Putin wants, in a sense, because this is a disagreement amongst the allies on a core issue that Zelenskyy himself
says I need those tanks.
ROBERTSON: Yes, absolutely. Putin is looking at this. He had hoped to see this kind of disunity early on. He has had to wait this long to see a
difference of this magnitude, however this is part of the trajectory that we've seen.
[15:05:07]
You know, the Patriot Missile Systems in which the Netherlands in the last couple of hours has just said that it will commit to, those complex air
defense systems to Ukraine was also a nonstarter for all these contributing nations, but they hammered it out, and we noted in the margins of the
meeting in Ramstein, nations like Poland, who have these Leopard 2 tanks, and there are a lot of them, you know, Canada, Denmark, Sweden, Norway, to
name just a couple have these tanks, so they are trying to push the issue on the margins.
QUEST: So when I asked the Prime Minister of Poland about this, he basically said, look, we could send ours. We need German permission, but
even if we just decided to do it, we haven't got enough to make it worthwhile.
We need -- but if all these other countries, so you do start getting to critical numbers, literally stick two fingers up at Germany and say, we are
sending them anyway.
ROBERTSON: So there is a big thing going on here, and that was one of the issues at the Ramstein meeting, that was -- that there is so much military
equipment being sent to Ukraine right now, battalions worth of fighting vehicles, of equipment that will allow Ukraine to push its military
forward, not the tanks that it wants.
And there needs to be organization, this is what we heard from General Mark Milley, the US Joint Chiefs of Staff. They are saying we need to get the
training sorted, we need to get the support sorted. So you need to package this all up together to make it effective.
There is potentially, they're not using the word, a bottleneck here. But in terms of what Lloyd Austin was saying, it's very much sort of like
listening to Otto von Bismarck, you know, almost two centuries ago, the famous Prussian German Foreign Minister papering over the cracks, papering
over the differences saying, we are united, we are more united than we've ever been.
We know that there is an urgency to all of this. But yes, Russia will look at what is happening right now and try to read it that this is good for
them.
QUEST: Nic Robertson, thank you.
The US has hit its debt limit. The Treasury is now taking extraordinary measures to keep the government paying its bills. Those measures will hold
until around the summer.
If Capitol Hill cannot agree on a new limit by then, well, the Treasury Secretary Janet Yellen has told Christiane Amanpour, the effects will be
felt around the world.
(BEGIN VIDEO CLIP)
JANET YELLEN, US TREASURY SECRETARY: A failure to make payments that are due, whether it's to bondholders or to Social Security recipients, or to
our military would undoubtedly cause a recession in the US economy and could cause a global financial crisis.
(END VIDEO CLIP)
QUEST: And if that's not grim enough, there is another reason. Global interest rates have yet to bite according to the head of the IMF.
Kristalina Georgieva made the comment in Davos, and she was backed by the ECB president Christine Lagarde.
(BEGIN VIDEO CLIP)
KRISTALINA GEORGIEVA, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND: Interest rates are yet to bite, and if they bite more severely, then we can
see unemployment going up.
CHRISTINE LAGARDE, PRESIDENT, EUROPEAN CENTRAL BANK: We have to also stay that course of resilience that we observed in '22. So stay the course is my
mantra for monetary policy purposes. No question about that.
(END VIDEO CLIP)
QUEST: Stay the course, is the phrase de jour.
While I was in Davos, I asked the Allianz Chief Executive, Oliver Bate, about another pressing matter, the energy crisis. It's all related, of
course, it's higher energy that's pushed up inflation.
Mr. Bate says Europe and Germany in particular have been more resilient than many had expected.
(BEGIN VIDEOTAPE)
OLIVER BATE, CEO, ALLIANZ: First, is the gloom that people had short term about our home country basically going under and having blackouts and
nothing would work. Fortunately, it hasn't materialized.
In all, the Germans are sometimes better and faster than people estimate, but we still have the long-term issue around how do we reinvent our
business model.
So being based in Germany, I allow myself to start with Germany as a first, so that we see a lot and the message is really and that is very important,
is there is enormous resilience in the population, but also in the economy.
QUEST: Right, but that resilience is being tested.
BATE: Yes.
QUEST: On numerous fronts.
BATE: Exactly right.
QUEST: And that creates stresses in the economies, which we are only now seeing.
BATE: Yes, absolutely.
So if you want to simplify a little bit, we had sort of three things going for us that we are betting on the last sort of 20 years. The first one,
America would pay for our security. We dropped investment in our military already in '91 when the wall came down by like 70 percent. America will pay
for it, they pay for everybody.
[15:10:02]
The second thing is China will pay for our profits and we have been the most important trading partner for us, next to the US has been China, it is
hugely beneficial for both sides. And the third one, and that's very important, Russia will provide us with low or cheap energy, right? And we
know that all three are not holding up anymore. So we really need to reinvent our business model.
QUEST: So for you as a CEO, how do you do that? What are you doing?
BATE: Well, we do the same we have to do for our company. We have to say, you know what, who is the consumer? What does she really want in the long
run? What does she want to pay for? And how do we retool value chain for this to be successful?
QUEST: The Edelman trust barometer shows that companies are highly trustworthy, and that CEOs are more trusted than government, which I'm not
sure is a particularly, something you want to take to the bank. But it means you are in a better position, that is even more so with an insurance
company.
BATE: Yes. And again, we're not just an insurance company. We are probably one of the world's largest wealth managers by now. The key thing and it
sounds very strange, because a lot of people say that, we start with our customers, right? One in every fourth German is our client. We have 210
million clients worldwide.
And for a long time, we were a product producer that would sell through intermediaries. So what we started actually, under my predecessor, is to
really understand why people buy from us and actually beyond perform, it's the trust in the institution, again, to protect assets, and to grow them.
QUEST: Choose your color.
BATE: I love blue, because that's the Allianz color.
QUEST: Oh, for goodness sake. It's all blue this year, right?
The worry board, you can't have climate crisis, because we've already taken that off, because everybody would have taken that. Global recession,
inflation, Ukraine, energy crisis, you can have two. Well, start off with one to pick.
BATE: I like this one, inequality, and I would call polarization because the issue is that it's not just an inequality issue. And the other
thing that I really, really, really worry about is this one.
(END VIDEOTAPE)
QUEST: So he was circling Ukraine, and this is the worry board that we saw Oliver Bate write in polarization, one of the many I spoke to from the
worlds of finance, business and politics and the winner -- the winner. Well, I think the winner is Ukraine, because Ukraine and energy crisis,
because you there has about 13 ticks, although you've got a few circles as well, global recession has about 11, and the rest follow. And
interestingly, no one went for COVID and China reopening But democracy was a late runner.
And what was fascinating about the wide variety of guests was the wide variety of answers.
(BEGIN VIDEO CLIP)
QUEST: Join me at the worry wall. So we've got global recession, inflation, Ukraine, energy crisis, we've taken the climate crisis off, just
in case anybody ever was going there, COVID, China, democracies, you can write something else in if you also mind to.
UNIDENTIFIED MALE: I do continue to worry about inflation.
UNIDENTIFIED MALE: Inflation.
UNIDENTIFIED MALE: Inflation,
VISWAS RAGHAVAN, CEO, JPMORGAN EMEA: I would go for A, and I will just add stagflation.
MATHIAS CORMAN, SECRETARY-GENERAL, OECD: I think democracies are under pressure all around the world, and the need to strengthen democracies is
acute everywhere.
JOSE MARIA ALVAREZ-PALLETE, CEO, TELEFONICA: I'm going to add one.
QUEST: Please. Inequality.
BOB MORITZ, GLOBAL CHAIRMAN, PWC: So the biggest issue in the short term is global recession right here, and the biggest issue for me personally, is
this one --
HOWARD LUTNICK, CEO, CANTOR FITZGERALD: And inequality as a fundamental worry. I mean, I don't think it's going to change the global economy.
QUEST: What most people wanted to do was put two or three.
ISA SOARES, CNN ANCHOR AND CORRESPONDENT: Yes, I bet. I mean, in many ways, I would tick probably Ukraine energy crisis, but like you said, they are so
interlinked, aren't they, Richard?
QUEST: Hang on. Hang on.
SOARES: I'm not sure I'm the caliber of any of your guests to get a tick.
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR, "FIRST MOVE": What's the difference between ticks and --
QUEST: Nothing.
CHATTERLEY: And circles?
QUEST: These are just sort of emphasizing. The ticks are the ones that count.
CHATTERLEY: I want to circle. Also, why is climate crisis up there? Is that not one of my choices?
QUEST: She's clearly not been watching the program because she doesn't know the answer to that question.
What's the biggest worry for you at the moment?
ALEXANDER DE CROO, BELGIAN PRIME MINISTER: So short term, Ukraine.
NGOZI OKONJU-IWEALA, DIRECTOR-GENERAL, WORLD TRADE ORGANIZATION: It's Ukraine.
UNIDENTIFIED MALE: Ukraine.
UNIDENTIFIED MALE: Ukraine energy crisis, because that's where everything comes from.
QUEST: What color would you like?
DE CROO: I'll take blue.
QUEST: Blue is the color of --
DE CROO: It is the color my political party.
QUEST: Oh, it is as good enough reason as any. All right. Tell me what you're going to go for and why?
DE CROO: Well, definitely Ukraine and the energy crisis.
QUEST: You're a Prime Minister, so we allow Prime Ministers to have two, if you want, too.
MARK RUTTE, DUTCH PRIME MINISTER: Yes, because obviously it's, of course my big worry is inflation and the other of course is functioning of the
democratic system.
[15:15:10]
CHATTERLEY: I'm going to circle.
QUEST: Oh too clever by half.
(END VIDEO CLIP)
QUEST: Yes, the people at Davos, they actually look forward to see what we're going to do with the wall, and each year, we've tried to come up with
something new and different, and I think our worry wall really set the tone this year.
Now, you might remember one of these from movie nights, chill, Netflix and chill.
Netflix it's the iconic red Netflix envelope which was the brainchild of the company's founder. Now after 25 years, Reed Hastings is stepping down.
So what next for Netflix?
(COMMERCIAL BREAK)
QUEST: Google's parent company is adding to the list of tech layoffs. It's Alphabet and it is going to let 12,000 employees go. It is about six
percent of the workforce.
The Chief Executive, Sundar Pichai says Alphabet over had when the economy was hot, which has been of course the trend we've seen elsewhere. More than
200,000 tech jobs have been lost since the start of last year.
Not surprisingly, Alphabet shares are up on the news. It makes the company more competitive.
Paul La Monica is in New York. And yes, I guess, these are very large numbers, but these are very large companies with even larger workforces.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, it's obviously the problem, if you will right now, Richard, for all of the tech giants. That's why we've
seen layoff announcements at Amazon, at Facebook parent Meta, at Microsoft.
Now you have Alphabet joining this unhappy parade of companies that realize that when times were good, they ramped up. Times aren't necessarily as good
as they were a few years ago and everyone is bracing for the most telegraphed recession, probably in modern history. So we have job cuts.
It's not surprising. It's very unfortunate though, and it wouldn't surprise me though, if we see further job announcements -- layoff announcements from
other Big Tech companies.
QUEST: And yet at the same time, the speed with which they ramped up. I mean, you've got to take the good with the bad or the bad with the good, I
guess, if you celebrate a high ramp up because you expect fast demand, then I guess, the price for that is what's being announced.
[15:20:10]
LA MONICA: Yes, when there is a slowdown or an expectation that conditions will deteriorate and that revenue growth will not be as robust as it was,
and same thing for profit growth, companies have to make hard decisions and look at areas where maybe they went a little overboard with hiring and now
don't need as many people.
So this is a conversation that is happening in boardrooms, I think throughout Silicon Valley, and obviously, across corporate America. We are
seeing a large number of layoffs being announced in the financial services sector, consumer companies.
So tech is probably the most high profile area where we are seeing these pink slip announcements, but there are layoffs all over the place.
QUEST: Paul La Monica, before you go, I just want to -- how many streaming services do you subscribe to?
LA MONICA: Let's see. I believe, only three, I think if you don't -- I mean, I don't count Amazon. I have Amazon because I am a Prime member, but
it is mainly Hulu, Netflix and Disney. The kids are trying to get me to do Peacock, and for the time being I have, you know, our Warner Brothers
Discovery streaming services as a corporate benefit, but that will answer it.
QUEST: Well, not before we've had a chance to talk a great deal more. Thank you, sir. I'm grateful.
Why do I ask Paul La Monica these questions, because Netflix is seeing a blockbuster end to the week. The shares, look at that seven percent, I
think that's worth a Friday Bell.
Bearing in mind, those shares were down in the hundred and something at the low point of June last year, 160 or so.
Well, the fourth quarter subscriber numbers blew past expectations, added 7.6 million, 70 percent above expectations. Q4 is a season of change for
Netflix, it would appear. It's the first time they are seeing ad revenue from their new ad supported subscriptions, and it marks a change of the
guard.
The CEO and founder, Reed Hastings is stepping down. He'll be the Executive Chairman. He spoke to CNN in the early days of the company and shared his
philosophy.
(BEGIN VIDEO CLIP)
REED HASTINGS, CEO AND FOUNDER, NETFLIX: You know, it's like the hare and the tortoise and we were the tortoise and the hare got ahead, and then
they're all bankrupt and we are now cashflow positive and successful.
We've always been obsessed by an economic model that works. That is so we charged a reasonable price $20.00 a month. We didn't try to undercut
everybody because then you can't sustain that. Employees say I'm cheap, but I think of it as prudent.
(END VIDEO CLIP)
QUEST: So when Netflix started 25 years ago, these were everywhere. They were the DVDs sent out in a signature red envelopes. And in sending these
out, they disrupted en masse.
Because then Netflix ushered in a new era of tech, which was all about streaming. But before that, you had these. Remember? They saw off
Blockbuster, Hollywood Video, Movie Gallery. Netflix managed to get rid of that lot.
And then of course, you would have thought well, did they have it to themselves? Not a bit of it. Success came with new competitors. So you've
got Hulu, Disney, HBO and all the others.
And so you have Netflix, the humble red envelope now competing with all this lot.
Anna Stewart is with me.
Anna, I have to say I just asked Paul La Monica how many he had? How many do you have? Let's go through these.
ANNA STEWART, CNN REPORTER: I mean, I'm embarrassed, Richard to answer this one. Yes, I have a lot of the ones on that envelope. I have Prime. I have
Apple TV. I have Disney+, I have Netflix. I'm also not a cold cutter, because I also have Skype, so I can watch CNN.
And if I could get HBO Max in the UK, I would, Richard. I can't stop.
I need to see some consolidation in this industry and I don't think I'm alone looking at some of the analyst comments. Can all of these companies
ever turn a profit?
QUEST: Not if they continue to spend at the rate upon which they're doing and that includes our own HBO Max. That's the problem. They are all
spending to gain market share, but Disney plus shareholders an activist shareholders are now rebelling against that.
STEWART: This was the strategy, make the best content, grab the most subscribers. That was strategy number one. That isn't going to work much
longer because the market is mature. There are too many competitors. And this is why it's something like Netflix is looking at other ways to build
growth, which is fascinating.
So for instance, they have rolled out that ad supported subscription offering. Now, they haven't broken that dam. They haven't told us how many
subscribers they actually have on that, but they say engagement is better than they thought.
[15:25:10]
They are looking at pay sharing plans to try and stop people sharing their passwords. They're looking at a way of monetizing that.
QUEST: You have no idea how many of my producers, years after they flew the nest, have still been on their parents' account.
STEWART: Quite, so there are these different ideas that Netflix is rolling, but Netflix is profitable, unlike many of the companies on that envelope
here.
QUEST: Right. But if you take, for example, Prime Video that is a leader for Prime itself and all the other things that it does. If you take Apple
TV, I mean, it's all about these. HBO Max has got Warner Brothers and the entire panoply of our company behind it, the same with Prime on the list,
they have all got some other things. Disney's got its parks.
STEWART: But does that matter if Netflix is king of streaming and has worked how to do it well, and if they keep innovating, look at how they
became -- they went from being a DVD by mail service to the instant broadband started getting a little bit better, they became a streaming
platform.
QUEST: What about that snobbish view that Netflix is Macy's whilst HBO is Tiffany's.
STEWART: Well, you're going for a very US metaphor for a Brit like me. So I'm not sure I can entirely follow it.
QUEST: You get the idea.
STEWART: I get the idea. Netflix is the old bastion of streaming, and they make a profit, and not many of them do and I think it's got some road to
run. They do need to make good content, they also need to make it cheaper, and they also need to work on all of those other growth areas.
QUEST: Thank you very much. Needless to say, a health warning to you all, HBO Max is a part of the same company as CNN, we are all owned by
Warner Brothers Discovery -- WBD.
Climate talks took center stage at Davos. The chief execs of Bank of America and SAP shared their thoughts about it. You'll hear that.
And the man in charge of Jeff Bezos' $10 billion, that's right billion dollar climate fund. He is on the program tonight.
QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
[15:30:17]
QUEST: At Davos this year, snow fell just as the global leaders arrived. And that gave us all a wonderful, familiar wintry backdrop. A week earlier,
though, and unusual heatwave meant there was little snow in sight. So, when I met the chief executive of Bank of America, we had to address the big
white elephant in the room.
(BEGIN VIDEOTAPE)
BRIAN MOYNIHAN, CHIEF EXECUTIVE OFFICER, BANK OF AMERICA: I look at there. Is that beautiful?
QUEST: It's easy. It's very beautiful. But that of course, there's not enough snow.
MOYNIHAN: Yes.
QUEST: And there's not enough snow because it's all too warm.
MOYNIHAN: Yes.
QUEST: Which of itself is a problem?
MOYNIHAN: Well, all the parties here are working on this oil companies, renewable companies. I just met one of the biggest oil companies in the
world. We're all after this. We have to make sure that we are causing this. And that -- and so we're going to keep working this, but we're going to
work in a consistent way with energy security, good economic growth, and what's fair at all. And that's a tightrope to walk but we're going to do
this.
QUEST: Do you feel as a difference in the climate agenda that -- something seems to have shifted.
MOYNIHAN: It's exactly that the private sector finance said, we'll solve this, capitalism will solve it. And sort of we don't need money. We have
the innovation. We have that is -- we may need some help permits and things to make it move faster. But you have to trust that we need the energy at
the right price. And Jeremy just learned that pretty quickly, that they've got to recover that energy.
So good news. U.S. is shipping it to him and other people are shipping to him. And they've made it through and that the winter, that looks good. But
we've -- the big change is the private sector now says we'll drive this. And we'll tell you we're driving. We'll give you some goals that sort of
get out of the way and let us do. Capitalism will solve this.
QUEST: Do you feel your customers demanding that not only you, but that which you invest in in that business? Can you feel an upward pressure?
MOYNIHAN: You do because we have 60 million --
(CROSSTALK)
QUEST: Exactly.
MOYNIHAN: And we have 200-plus thousand employees. We have the family members. And believe me, they are -- they are on all sides of every issue.
It's not. But what is common is that they believe that we've got to make progress on certain issues facing society. And this is one of the them and
that's a -- that's a 90 percent level. That's not a, you know, that's not a 40 percent level and -- but they believe we got to do it and make money for
our shareholders and deliver for society.
Profits and purpose, deliver the new economy and make sure the old runs well.
(END VIDEOTAPE)
QUEST: Bank of America's chief executive. The U.S. government is teaming up with Jeff Bezos' Climate Fund and the Rockefeller Foundation to accelerate
a global clean energy transition. The joint initiative is targeting developing countries aiming to help them switch from dirty to clean.
Bezos's Earth Fund is Amazon founder's $10 billion commitment to drive climate solutions. The largest philanthropic commitment ever made when it
comes to climate change.
Andrew Steer is the CEO of the Bezos' Earth Fund. Always delighted to have you with us on the program. You know, you're talking about -- we've been
talking about the -- I see you've got this new plan of super leverage, where you're hoping that various mandates on certain things will create
tipping points. I'm a bit weary of hearing that we're at a moment of super leverage and this is going to solve the problem.
ANDREW STEER, CHIEF EXECUTIVE OFFICERE, EARTH FUND: Oh, Richard, you shouldn't be wary of anything. Look, we should be worried about the state
of the world, economy is difficult. We should be worried about the war in Ukraine. But we shouldn't be worried about big ideas that are going on
right now. You think about it this decade, every single year, we need to close down 925 coal plants, if we are going to get to the target of
limiting global warming by 1.5 degrees.
QUEST: Right.
STEER: We can't do that unless we were able to mobilize some money. So, we got to be thinking big. And the kind of initiative that we've been
discussing here in Davos is precisely designed to do that.
QUEST: Except you end up -- not you personally, but you want end up going in circles. Giving you an example, on the climate finance debate that I
did. Everybody agreed that something needed to be done. Everybody agreed what needed to be done. Everybody agreed that there was the money in some,
shape or form to act as leverage. And I kept coming back to this problem. So, why isn't it being done fast enough?
STEER: Well, it absolutely isn't being done fast enough. I agree with that wholeheartedly, but consider sort of nature protection. Two years ago,
there might have been 20 countries that were willing to support something called 30 by 30. 30 percent of the world's land and ocean to be protected
by 2030. A huge ambition. What we did with other philanthropists, we put $5 billion on the table of grant money.
And we said look, we work with governments in Africa, in Asia, in Latin America. And in Europe and the United States to see if we could do
something.
[15:35:03]
It turns out now that last December all the countries of the world, 195 agreed to protect 30 by 30. Why is that related to climate change? Because
if we don't protect the forests of the world, we will fail. And now what's happening? We met this week with governments in Indonesia or in, in Brazil,
in various other countries to say, what would a deal look like? Now we're going to go in and try and do it. It is not easy. But we've got to keep
doing very best.
QUEST: I -- but why do I get the feeling, God forbid, it's going to take a real crisis, climate crisis calamity, before people actually make the
commitment? If you just think of every cop, every cop invariably ends up as Alex Stubb would say, a suboptimal result. Every negotiation is tortured to
the nth degree?
STEER: Well, it is. There's no question about that. The problem with the moment actually is not commitments. You know, 110 countries are committed
to net zero $130 trillion of assets under management are committed to move to net zero through their entire portfolio. The difficulty now is delivery.
We now need to deliver on those commitments. But you know, it's really interesting here in Davos.
You know, obviously, a lot of discussion on the world economy, a little bit of more optimism there. A lot of discussion on security around the world.
But probably the biggest subject being discussed in Davos is the green transition, issues of trade, issues of investment, issues of policy, and
issues of fairness and justice. And it's quite interesting. You know, all of these guys want to discuss this, we now need just to deliver.
QUEST: And I think you're still in Davos. Hopefully you might even get a chance to ski before you go home. Happy to see you, sir.
STEER: No.
QUEST: No? That's exactly the answer most people have about it.
STEER: Well, the trouble -- the trouble, Richard, there's not enough snow at the moment. And there you go, there's a problem why we need to address
climate change.
QUEST: Thank you, sir. Glad to have you with us.
STEER: Great to be with you, Richard. Thank you.
QUEST: The chief executive of the tech giant SAP says a new phase of globalization is here.
Christian Klein thinks companies will refocus on building more resilient supply chains and investing sustainability. I spoke to him in Davos, and we
discussed public and private and climate efforts.
(BEGIN VIDEOTAPE)
CHRISTIAN KLEIN, CHIEF EXECUTIVE OFFICER, SAP: I have to give some credit, also to the public sector, I'll look at the Inflation Reduction Act. From
my perspective, the right thing to do. The actions also in Europe to cut energy prices. And last but not least being in the technology sector.
Technology also provides some solutions to some of the most pressing issues of our customers.
QUEST: You see, I've heard that again, and again, particularly on climate change.
KLEIN: Yes.
QUEST: And all these issues, everybody's talking about technology, technology, and technology. And at the same time, the market has absolutely
beaten up technology.
KLEIN: Yes. But take for example this car on there and all material of this car is produced by a company who with a high likelihood wants SAP. And the
car manufacturer is for sure an SAP customer as well. Guess what we are doing, we are connecting these companies to build resilient supply chains,
to have the material flow working. And then we add sustainability data before -- then for the first time, you also understand your scope three
emissions.
QUEST: You talk about the changes will take place next year when the new regulations come in the. Reporting requirements on sustainability, the
scope regulations.
KLEIN: Yes.
QUEST: Do you think many businesses already, are your customers ready?
KLEIN: Not yet, but we are working with them. And look, there is also sometimes criticism about over regulations. But I guess then that -- then
that help. Because when you don't understand what your carbon emissions are, how can you act? There is a lot of criticism also, sometimes about the
World Economic Forum. But there's also a lot of goodness in that. Lead us coming together. Politicians from the economy and we are working on
standards.
The big auditors, the big four are coming and standards are focusing. So, we know what to put into our standard software to really also have a
unified view on sustainability.
QUEST: And you talk about the Inflation Reduction Act. In Europe, there is concerned that it's a subsidy act and an unfair subsidy act which Europe is
going to have to follow through with.
KLEIN: Yes. Look, I don't see it as unfair when, you know, looking at it from the United States perspective. I mean, you put a lot of money into the
energy transition into moving to renewables, into moving to green energy, what's wrong about that? And then also there is money going into the
digital transformation which is also very important for the country. And I would just say looking at Europe, let's just also follow and do it together
with the United States and, you know, also working on free trade then both will win.
QUEST: Choose your color.
KLEIN: I will take green. Yes.
QUEST: And tell me what -- which one you're going for and why?
KLEIN: Democracies.
QUEST: Really?
KLEIN: Yes.
QUEST: Interesting.
[15:40:06]
KLEIN: You know I also talked to, you know, to the Ukraine government this week and, you know, the voice continuing.
QUEST: Yes.
KLEIN: And I guess it's more important than ever to protect our democracy and to stand up for our values. And that's why I picked democracy.
(END VIDEOTAPE)
QUEST: And that's QUEST MEANS BUSINESS for the moment. I'll be back at the top of the hour as we make it dash to the closing bell. The market is up
very sharply actually. And coming up next, Marketplace Asia.
(COMMERCIAL BREAK)
[15:58:08]
QUEST: Hello. I'm Richard Quest. Together let's have a dash to the closing bell. We are just two minutes away. And markets are finishing a rough week
on a very positive note. We are at the best of the day. Session highs overall. And consider we started way down as well. As we come to the close,
the Dow is up one percent. A gain of 317 points over 33,000. And it will be snapping a three-day losing streak.
Over to the triple stack and the S&P is up almost two percent. But it's the NASDAQ that's roaring up by some 2-1/2 percent. And the reason of course is
getting help from the likes of Netflix and Alphabet. The head of Bezos Earth fund was one of the leaders attending talks at Davos. Andrew Steer
told me it's time for green initiatives to finally deliver.
(BEGIN VIDEO CLIP)
STEER: Probably the moment actually is not commitments. You know, 110 countries are committed to net zero, $130 trillion of assets under
management are committed to move to net zero through their entire portfolio. The difficulty now is delivery. We now need to deliver on those
commitments. But, you know, it's really interesting here in Davos, you know, obviously a lot of discussion on the world economy, a little bit of
more optimism there.
A lot of discussion on security around the world but probably the biggest subject being discussed in Davos is the green transition.
(END VIDEO CLIP)
QUEST: And the market as it's looking, Netflix is causing Disney also to rise. We're expecting better results on Disney Plus. And indeed, all of
tech is getting a boost. Down at the other end Goldman Sachs. It's got problems of its own with some rumors of investigations and that's why
Goldman is at the bottom. Otherwise, majority of market as you can see, including Apple which is having a strong day. Microsoft up 3-1/2 percent.
That's the way the market's looking. I'm Richard Quest. Whatever you're up to in the hours ahead I hope it's profitable. The closing bell is ringing
downtown Wall Street. Boom.
END
