Latest / Bloomberg Intelligence / Airbnb Rentals for Paris Olympic Games, Climate Goals at Risk

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Airbnb Rentals for Paris Olympic Games, Climate Goals at Risk · Bloomberg Intelligence

0:02
Speaker 1: This is Bloomberg Intelligence with Alex Steel and Paul'sweenye.
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Speaker 3: significant uptick in demand for metals.
0:54
Speaker 2: But first, we got the Olympics coming up this summer
0:57
Speaker 2: in Paris. How cool was that going to be? But
0:59
Speaker 2: good luck try to get a hotel room there or
1:01
Speaker 2: trying to get accommodation to anywhere. You know, who would
1:03
Speaker 2: know about this stuff. Airbnb. Dave Stevenson joins us. He's
1:06
Speaker 2: the chief business officer for Airbnb. Dave talked to us
1:10
Speaker 2: about your business in Paris for this summer. What are
1:13
Speaker 2: you guys seeing.
1:14
Speaker 4: You know, one of the great things about having airbnbs
1:17
Speaker 4: in Paris is that the actual the volume of airbnbs
1:19
Speaker 4: have gone up pretty dramatically. We have forty percent more
1:22
Speaker 4: active listings than we had a year ago. And by
1:26
Speaker 4: having those extra listings, we're actually able to keep prices
1:29
Speaker 4: reasonable because we're able to add so much capacity to
1:33
Speaker 4: the stays there. So there are still places available. You know,
1:36
Speaker 4: we're only twenty four days out, but you know you
1:39
Speaker 4: can keep booking. There are airbnbs ready for guests to
1:43
Speaker 4: come from around the world.
1:44
Speaker 3: Yeah, because you know why everyone's leaving Paris. Yeah, all
1:46
Speaker 3: the preachers to like, get me out of here, and
1:48
Speaker 3: they're going this outh of France anyway, sorry, go ahead.
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Speaker 4: So David, well, it's how bad they're actually able to earn,
1:53
Speaker 4: you know, two thousand euros on average for a host
1:56
Speaker 4: in Paris, and so yeah, many people do leave and
1:58
Speaker 4: share their homes and welcome people from other countries to
2:01
Speaker 4: come to the vilops.
2:02
Speaker 2: Talk to us about where the where you're seeing travelers
2:05
Speaker 2: come from to Paris.
2:06
Speaker 4: Yeah, it's interesting. Some of our top countries are the US,
2:10
Speaker 4: UK and actually people from other areas of France coming
2:13
Speaker 4: into Paris for the Olympics. We're also seeing some interesting
2:16
Speaker 4: trends where people are staying. You know, the Olympics are
2:19
Speaker 4: actually not only in Paris, They're kind of spread around
2:21
Speaker 4: the country and so you know, we're seeing people staying
2:23
Speaker 4: in airbnbs in Lelle where some of the basketball is
2:26
Speaker 4: being played. You know, We're seeing them in Leone where
2:30
Speaker 4: some of the football, you know, soccer matches are being played.
2:32
Speaker 4: You're seeing Spaniards and Brazilians stan Bordeaux because their national
2:37
Speaker 4: teams will be playing soccer out there. So we're not
2:40
Speaker 4: just seeing people come in Paris, They're staying in airbnbs
2:43
Speaker 4: all around the country.
2:44
Speaker 3: That's interesting. I did not know that you also transition
2:47
Speaker 3: recently from CFO to CBO. Is that so chief financial
2:51
Speaker 3: officer to Chief business Officer?
2:53
Speaker 5: How is that?
2:54
Speaker 2: Like?
2:54
Speaker 3: What how does your job change with that title?
2:57
Speaker 4: Yeah, no, I'm the Chief Business Officer I'm also the
2:59
Speaker 4: head of Employee Experience, so the head of HR, which
3:02
Speaker 4: I've been doing now for three years, but the chief
3:04
Speaker 4: business officer, you know, I'm focused on growth of a
3:06
Speaker 4: company and expanding into new and new business areas. So
3:11
Speaker 4: we're expanding beyond the kind of core stays business here
3:14
Speaker 4: at Airbnb into things like services and experiences over time,
3:17
Speaker 4: and so me and my team, that's what we're focused on,
3:19
Speaker 4: growing the existing business and expanding into new ones.
3:23
Speaker 2: So for just the business in general, how is travel
3:26
Speaker 2: this business as we crank up here in the US
3:29
Speaker 2: for fourth of July, and then of course in Europe
3:31
Speaker 2: they have their big travel during the summer, particularly August.
3:34
Speaker 2: Give us a sense of kind of where you're seeing
3:36
Speaker 2: the business these days.
3:38
Speaker 4: Yeah, you know, we're seeing more people travel this summer
3:40
Speaker 4: than they ever have before on Airbnb. Continency, great growth, yes,
3:45
Speaker 4: strong growth, especially from your Americans travel to Europe. You know,
3:49
Speaker 4: we continue to have a strong dollar, which enables strength there,
3:53
Speaker 4: and we're actually seeing you nice strength and people even
3:55
Speaker 4: traveling from US into Asia.
3:58
Speaker 3: US into Asia, okay, which is not rippin' dollar. Yeah,
4:02
Speaker 3: you just won't even go anywhere pretty much. What about
4:05
Speaker 3: the opposite, is anyone coming to the US. We're making
4:07
Speaker 3: any money on Airbnb here in the US anymore.
4:09
Speaker 1: Absolutely.
4:10
Speaker 4: I mean, the people are still traveling from overseas in
4:13
Speaker 4: the US. You know, actually the majority of our travel
4:15
Speaker 4: still is actually domestic travel in any given country. So
4:18
Speaker 4: we're kind of talking a lot about people moving around
4:20
Speaker 4: the world, but a lot of the travel is just
4:22
Speaker 4: people going. You know, in the US, it's a lot
4:24
Speaker 4: of beach destinations. You're seeing great traveled down to Florida,
4:28
Speaker 4: up onto the East Coast, you know, onto the Jersey
4:32
Speaker 4: Shore and other places. So you know, people are still
4:34
Speaker 4: traveling out to the beaches to visit with family and
4:37
Speaker 4: enjoy the fourth of July.
4:39
Speaker 2: Dave, what's a typical or prototypical Airbnb customer look like?
4:44
Speaker 4: You know, there we have customers of all kinds. You know,
4:48
Speaker 4: it's everything from young gen Z, millennials to families. You know,
4:53
Speaker 4: a large number of our people in travel in airbnbur
4:56
Speaker 4: group travel. Multiple people travel together because you get more
5:01
Speaker 4: you might get multiple bedrooms, you have multiple amenities, often
5:03
Speaker 4: with a kitchen, you know, maybe a washer and dryer.
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Speaker 4: It's one of the things reasons why we've recently launched
5:08
Speaker 4: some of these group travel features to enable more people
5:11
Speaker 4: to stay together more easily. We have things like shared Wishless,
5:16
Speaker 4: shared messaging capability, and that's helping in Paris where over
5:19
Speaker 4: fifty percent of the people traveling to the Paris Olympics
5:22
Speaker 4: have three or more people, and so the group travel
5:26
Speaker 4: is a key benefit of staying on Airbnb.
5:29
Speaker 3: That's a good point. What are there trends that you're
5:32
Speaker 3: you think you're going to be dealing with in twenty
5:33
Speaker 3: twenty five, kind of after we get through the Olympics.
5:36
Speaker 4: You know, I think we're going to continue to see
5:38
Speaker 4: strength and travel. I think one of the things we've
5:40
Speaker 4: seen since the pandemic is that people realize how much
5:44
Speaker 4: they miss being able to kind of travel, be with
5:46
Speaker 4: family and friends, that experiences are maybe more important than things.
5:50
Speaker 4: I think that trend will continue, and we're going to
5:53
Speaker 4: see people wanting to spend time with family and friends
5:57
Speaker 4: doing things together.
5:59
Speaker 1: So that's the big.
6:00
Speaker 4: Trend that we'll see in twenty twenty five, continued experiences.
6:03
Speaker 3: Our Thanks to Airbnb Chief business Officer Dave Stevensim.
6:07
Speaker 2: We now moved to the cloud space. ZECH, a cloud
6:09
Speaker 2: based software company, is now trying to fix any potential
6:11
Speaker 2: dread that you may have for an upcoming board meeting.
6:14
Speaker 3: The company distills hundreds of pages of corporate documents and
6:17
Speaker 3: to interactive websites for boards to expedite meetings, and even
6:19
Speaker 3: has an AI product. And recently ZECH announced it close
6:22
Speaker 3: a seven and a half million dollar investment led by
6:24
Speaker 3: Salesforce Ventures.
6:26
Speaker 2: For more and all this, we were joined by ZECH
6:28
Speaker 2: co founder Edward Norton. We first asked him more about
6:31
Speaker 2: what ZECH is trying to do.
6:33
Speaker 6: We're trying to make the experience between management of organizations,
6:40
Speaker 6: and I say that meaning corporations or nonprofits because obviously
6:44
Speaker 6: we've got a couple million nonprofit organizations in this country
6:48
Speaker 6: that have governance and boards and stuff like that. We're
6:51
Speaker 6: trying to take what we feel is an increasingly toxic
6:55
Speaker 6: dynamic and reform it into being what it's supposed to be,
7:00
Speaker 6: which is a relationship that that propels in organizations, supports,
7:05
Speaker 6: you know, brings additional leverage positivity to an organization. And
7:10
Speaker 6: we you know, I've definitely had some people say to me, like,
7:14
Speaker 6: you have an interesting day job, why would you get
7:16
Speaker 6: involved in.
7:17
Speaker 2: And your day job Just for folks that on the radio,
7:19
Speaker 2: Edward Norton Actor has been in a bunch of movies
7:21
Speaker 2: and all that kind of stuff.
7:22
Speaker 6: Yeah, the and I and I will I will admit that,
7:26
Speaker 6: you know, on the surface, like a software platform for
7:31
Speaker 6: for board governance features seems pretty esoteric. But it grew
7:37
Speaker 6: out of it grew out of my own experiences over
7:40
Speaker 6: the last thirty years, not dissimilar to years from serving
7:43
Speaker 6: on the board of arts organizations, serving on you know,
7:47
Speaker 6: conservation organization boards. And then as I built my own companies,
7:52
Speaker 6: and I've built a few software companies that that we
7:55
Speaker 6: had our own boards, people like Fred Wilson from Union
7:58
Speaker 6: Square or you know, Excel or gray Lock or these firms.
8:03
Speaker 6: We were on the management side and we were experiencing
8:05
Speaker 6: what it meant to have a board. And then when
8:07
Speaker 6: I sold one of my companies and I joined the
8:09
Speaker 6: board of GoFundMe, the company that acquired us, you know,
8:13
Speaker 6: I started sitting on corporate boards and my partners and
8:17
Speaker 6: I really started feeling that there was this elephant in
8:20
Speaker 6: the room, which is that is that companies go through
8:24
Speaker 6: four to eight times a year. They go pencils down
8:26
Speaker 6: to get ready for this thing that essentially to them
8:29
Speaker 6: feels like a hall monitoring moment and board members. On
8:32
Speaker 6: the other hand, when I was a board member, the
8:34
Speaker 6: thirty six hours before the meeting, you get a ninety
8:36
Speaker 6: page PDF and you're supposed to read it in the
8:38
Speaker 6: airport terminal, and then you go to the meeting and
8:41
Speaker 6: get it read back to you. You know what I mean,
8:42
Speaker 6: Like there was just and so.
8:44
Speaker 3: You're looking to make it a more what interactive visual
8:48
Speaker 3: engaging experience.
8:49
Speaker 6: I think we say two things. One is quantitatively, board
8:53
Speaker 6: meetings are an enormous waste of time for everybody, and
8:55
Speaker 6: that has to do with the amount of redundant time
8:57
Speaker 6: waste on setting these meetings up and the presentation materials.
9:01
Speaker 6: And that can be crushed down by having cloud based
9:04
Speaker 6: AI powered tools that make it like a tenth the
9:08
Speaker 6: time for a company. On zech a company can set
9:11
Speaker 6: up for a board meeting in one tenth the time
9:13
Speaker 6: that they were using to prep before it. Board members
9:18
Speaker 6: should get to read something that's you know, you wouldn't
9:21
Speaker 6: read in the New York Times or Bloomberg on a PDF.
9:24
Speaker 6: You read it in a mobile friendly scroll right that
9:28
Speaker 6: we expect that now, and so everything about the user
9:31
Speaker 6: interface should be easier for both sides of the table.
9:34
Speaker 6: But also think about this, think about how much time,
9:37
Speaker 6: how many professional, talented people with time is valuable sit
9:42
Speaker 6: there in board meetings, approving minutes, approvals, approving stock option packages,
9:46
Speaker 6: things that they ought to be able to do from
9:48
Speaker 6: the airport lounge in advance. So we built governance function
9:52
Speaker 6: that can be interactive and mobile.
9:53
Speaker 2: And also so your customer is the board.
9:57
Speaker 6: The customer is the company and the board. You know, yeah,
10:00
Speaker 6: both sides, management and board members suffer in different ways,
10:05
Speaker 6: and we've tried to reform it. But when you crush
10:08
Speaker 6: the redundant inefficiency of time waste, you improve the quality
10:12
Speaker 6: of the meeting too, because a board meeting should be
10:14
Speaker 6: a forward looking experience, not a You don't want to
10:18
Speaker 6: spend hours looking backward. Everybody can ingest the looking backward
10:23
Speaker 6: part before the meeting. You want the meeting to be
10:25
Speaker 6: propulsive and additive to where the company or the organization
10:29
Speaker 6: is trying to go. And the best thing about what
10:31
Speaker 6: people are saying to us is not just oh, we
10:33
Speaker 6: really love the user interface. It's much easier, it's easier
10:35
Speaker 6: to read. We love that they're saying to us. This
10:38
Speaker 6: has radically improved the quality and the value of the
10:43
Speaker 6: meeting itself and what we're getting out of our board.
10:46
Speaker 3: So you guys just raised about seven and a half
10:48
Speaker 3: million Series A led by Salesforce Ventures, including some other
10:52
Speaker 3: guys as well.
10:53
Speaker 5: What are you gonna do with it?
10:54
Speaker 3: And what's sort of your angle here?
10:56
Speaker 5: Well?
10:57
Speaker 6: You know, I think if you look at I mean,
10:59
Speaker 6: first of all, Salesforce to this day is still I mean,
11:03
Speaker 6: they still are the greatest innovator in cloud based corporate tools.
11:09
Speaker 6: And I've known Mark Benyoff a long time, even though
11:13
Speaker 6: I never told him that we were doing this with
11:15
Speaker 6: his own team until it was done because I didn't
11:17
Speaker 6: I didn't want to, you know, I didn't want it
11:19
Speaker 6: to come from the top down. The Salesforce team is
11:21
Speaker 6: really phenomenal. But you know, our fantasy was to work
11:25
Speaker 6: with Salesforce because really nobody, nobody understands the business of
11:32
Speaker 6: cloud based corporate tools better than they do. And I
11:35
Speaker 6: also like their ethos as a company. I think they
11:37
Speaker 6: have a great customer service ethos there. But you know,
11:41
Speaker 6: if you look at think about today, would you ever
11:44
Speaker 6: get a FedEx package with with signature tabs on your
11:48
Speaker 6: legal documents?
11:49
Speaker 7: No?
11:49
Speaker 6: You get it in DocuSign now.
11:50
Speaker 5: Right, You don't.
11:52
Speaker 6: You don't manage your cap table in Excel spreadsheets anymore.
11:55
Speaker 6: You use Karta, and we've we've made this evolution towards
11:59
Speaker 6: Lots of aspects of corporate function have gone into the cloud,
12:03
Speaker 6: but this really critical function hasn't. And we think that
12:07
Speaker 6: on a business level. To be honest, if you look
12:09
Speaker 6: at you know Karta, which is a seven billion dollar
12:12
Speaker 6: private company, and docu sign is a fifteen billion dollar
12:15
Speaker 6: public company, there's an enormous market in relatively low priced
12:21
Speaker 6: corporate software tools, and we really thought this was a
12:26
Speaker 6: good business. We think there's a very large marketplace of
12:30
Speaker 6: companies and nonprofit orgs that need to reform this critical piece.
12:35
Speaker 3: All right, thanks, is that co founder Edward Norton. Coming up,
12:37
Speaker 3: we're going to break down the Supreme Court decision to
12:39
Speaker 3: overturn the Chevron Rule and how that could put climate
12:42
Speaker 3: targets at risk.
12:43
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
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Speaker 2: depth research and data on two thousand companies and one
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Speaker 2: hundred and thirty industries. You can access Bloomberg Intelligence via
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12:53
Speaker 3: I'm Paul Sweeney, m Alex Steel, and this is Bloomberg.
13:02
Speaker 1: This is Bloomberg Intelligence with Alex Steelen Pohlsweened on Bloomberg Radio.
13:09
Speaker 3: Last week, the Supreme Court overturned a nineteen eighty four
13:12
Speaker 3: decision known as a Chevron rule that experts say, we'll
13:14
Speaker 3: make the EPA's job to regulate methane and carbon dioxide
13:17
Speaker 3: emissions more challenging, potentially putting US climate targets at risk
13:22
Speaker 3: for more. We spoke with Bloomberg Intelligence senior ESG Climate
13:25
Speaker 3: analyst Andrew John Stephenson.
13:27
Speaker 8: If you think about the Clean Air Act, that's the
13:29
Speaker 8: biggest thing the EUP has ever done. It started in
13:32
Speaker 8: nineteen seventy with one document that said basically, go to it.
13:35
Speaker 8: We need to reduce the amount of air pollution in
13:37
Speaker 8: the air. We need a lot of different levers to
13:39
Speaker 8: pull to make that happen. We're kind of deferring to
13:42
Speaker 8: experts to do that. And you know, they did it
13:44
Speaker 8: for about twenty years. And then they had another revision
13:47
Speaker 8: Clean Air Act too, and that's the one that we're
13:49
Speaker 8: enjoying today with when they basically said, you did a
13:52
Speaker 8: decent job, let's keep going, Let's keep driving down the
13:55
Speaker 8: air pollution. And you know, here we are today with
13:57
Speaker 8: the cleanest there we've seen in you know, since the
13:59
Speaker 8: nine early nineteen hundreds basically, so it's been very, very successful.
14:03
Speaker 2: Yeah I'm not that old, but I remember first going
14:06
Speaker 2: the Los Angeles earlier in my career and you could
14:08
Speaker 2: see the smog. Literally it was brown, it was orange,
14:11
Speaker 2: kind of funky. Now you rarely have ever have any
14:14
Speaker 2: problems out there, so I kind of have been a
14:16
Speaker 2: fan at EPA. It's given the Chevron ruling. What does
14:19
Speaker 2: it mean for climate in your part of the world.
14:23
Speaker 2: What's it mean for the energy industry?
14:25
Speaker 8: I mean, it's troubling on a couple fronts. The first
14:27
Speaker 8: is with respect to the oil and gas industry. The
14:31
Speaker 8: big oil companies have done a basically a fantastic job
14:33
Speaker 8: of driving down a big chunk of their pollution from methane.
14:37
Speaker 8: So methane is really the thing that you really want
14:40
Speaker 8: to address when it comes to the oil and gas industry,
14:42
Speaker 8: which is just sort of leaking natural gas into the atmosphere.
14:46
Speaker 8: And the bigger companies have done a fantastic job, but
14:48
Speaker 8: the smaller companies, basically are the private companies, haven't moved
14:51
Speaker 8: on it. And so the leadership we've seen from Exon
14:53
Speaker 8: Mobile and others. Has been really transformative in terms of
14:56
Speaker 8: what's happening for the bigger companies. But unless the APA
15:00
Speaker 8: does work to kind of push along the rest, and
15:03
Speaker 8: we're talking about still half of the production comes from
15:06
Speaker 8: small companies that are private, we're not going to get
15:09
Speaker 8: anywhere near where we need to go on from an
15:11
Speaker 8: emission standpoint from the oil and gas industry. So that's
15:13
Speaker 8: sort of one. The second is really with respect to
15:16
Speaker 8: the power sector. So the power sector, we need more power.
15:20
Speaker 8: We've basically gone from having a coma power growth over
15:24
Speaker 8: the last decade and now because of AI and evs,
15:28
Speaker 8: we have power demand somewhere around two and a half
15:30
Speaker 8: percent a year and that has to be filled with something.
15:33
Speaker 8: And it looks like gas is going to be a
15:35
Speaker 8: candidate in the next several years because there's just so
15:38
Speaker 8: much demand that needs to come online. And there was
15:41
Speaker 8: a ruling at least from the APA that the gas
15:44
Speaker 8: companies that they were going to build a new power
15:46
Speaker 8: plant would have to capture that gas, and that doesn't
15:48
Speaker 8: look like it's going to happen.
15:49
Speaker 3: So because of the ruling, I mean the power coma
15:52
Speaker 3: that was actually a grit I'm going to steal that.
15:54
Speaker 3: I hope that's okay. So you were a ESG climate analyst,
15:58
Speaker 3: so that's environmental, social and governance. Does the social and
16:00
Speaker 3: governance part of your job get affected by the Supreme
16:04
Speaker 3: Court decision?
16:05
Speaker 8: Well, so people, some of the people think of the
16:08
Speaker 8: environmental it does conclude chemicals and things like that. Obviously
16:11
Speaker 8: that's going to be a bigger problem the social If
16:13
Speaker 8: you think about health, that's really what's going to happen
16:17
Speaker 8: with respect to this ruling. So we are going to
16:20
Speaker 8: have poorer health. I mean, the ability for judges to
16:24
Speaker 8: make decisions that are very complicated, I mean you're talking
16:27
Speaker 8: about I mean I just mentioned the Clean Air Act.
16:30
Speaker 8: That's a fifty year project with thousands of people working
16:33
Speaker 8: on it to have an opinion on how to get
16:35
Speaker 8: from A to B. And we are now expected to
16:38
Speaker 8: have judges have an opinion that is just wildly professional
16:43
Speaker 8: in a number of areas, and that includes things like
16:46
Speaker 8: PF the kind of forever chemicals. So that's going to
16:49
Speaker 8: affect health and food safety. So there's a lot of
16:52
Speaker 8: things on that side that are going to be affected
16:54
Speaker 8: as well.
16:55
Speaker 2: So do we have any experience on kind of how
16:59
Speaker 2: this works out side of the regulatory agencies? Are the judges?
17:02
Speaker 2: Are they making reasonable rulings when applicable?
17:06
Speaker 8: So yeah, I mean the pushback was that these are
17:09
Speaker 8: the judges and the agencies. There's no interaction and there's
17:14
Speaker 8: quite a bit that goes on and I think the
17:16
Speaker 8: agency you'll only win about seventy percent of the time.
17:18
Speaker 8: So the judges actually have had input into this, but
17:22
Speaker 8: you're really relying and it can swing both ways. Which
17:24
Speaker 8: is the really kind of conterintuitive part is that you
17:28
Speaker 8: could have a judge that the sides it needs to
17:29
Speaker 8: be more stringent, right, so it can go in different directions.
17:33
Speaker 8: And I mean it's ultimately been deferred to the Chevron
17:37
Speaker 8: defense and they say, okay, well let the agencies deal
17:39
Speaker 8: with it. And now we have that kind of open air,
17:42
Speaker 8: open terrain. So it's very difficult to see how things
17:46
Speaker 8: move as smoothly and in such an organized fashion as
17:49
Speaker 8: we've had previously.
17:50
Speaker 3: Yeah, cause the other side will say, well, judges do
17:52
Speaker 3: this all the time, like they're ruling on different cases
17:54
Speaker 3: that they don't have an expertise about all the time.
17:56
Speaker 3: What's the difference for the companies that you cover? Which
18:00
Speaker 3: companies will be the most impacted.
18:01
Speaker 8: So the companies that are really if you think about
18:03
Speaker 8: what's going on with the growth of you let's just
18:06
Speaker 8: talk about power for a second. The companies that are
18:08
Speaker 8: really taking up a challenge with respect to you know,
18:11
Speaker 8: power demand going up and dealing with it. Really on
18:14
Speaker 8: a kind of the clean energy front. There's two benefits.
18:17
Speaker 1: You get.
18:18
Speaker 8: You get paid for capex right when you're a utility company.
18:20
Speaker 8: So the more of that capex that goes into renewables
18:23
Speaker 8: and grid and things like like that, you get basically
18:26
Speaker 8: one hundred percent of that money is you can earn
18:30
Speaker 8: a return on it, whereas if you build a gas
18:32
Speaker 8: plant you only get about half that because half of
18:34
Speaker 8: the cost of the plant is in fuel and you
18:36
Speaker 8: don't get paid for that is a utility. So the
18:38
Speaker 8: companies like Constellation Energy are still expected to do very
18:41
Speaker 8: well next Era Energy because of the IRA, are getting
18:45
Speaker 8: very strong incentives to continue to produce as much clean
18:48
Speaker 8: energy as they can, and they're going to there if
18:50
Speaker 8: you look at their stock prices, they've reflected that in
18:53
Speaker 8: the last little bit. But from the other side of
18:56
Speaker 8: the equation, which is the oil and gas industry, the
18:58
Speaker 8: leaders are already the leader, you know, and they've performed
19:01
Speaker 8: exceptionally well. If you look at the group that is
19:04
Speaker 8: the lowest methane producers have done very very well against
19:06
Speaker 8: the other.
19:07
Speaker 3: Guys, all right, thanks to Bloomberg Intelligence Senior ESG climate
19:10
Speaker 3: analyst Andrew John Stephenson.
19:12
Speaker 2: We next take a look at the Swedish Swiss company ABB.
19:15
Speaker 3: ABB is a technology leader in electrification and automation, enabling
19:19
Speaker 3: a more sustainable and resource efficient future.
19:22
Speaker 2: Guests hos Chessman and I were joined by ABB chairman
19:25
Speaker 2: Peter Vassar. We first asked Peter where the focus this
19:28
Speaker 2: company is these days.
19:30
Speaker 9: It's clearly it's the energy transition, which is not only
19:33
Speaker 9: the hard to abate sectors, it's in general the move
19:37
Speaker 9: from a more fossile driven energy system into an electric
19:42
Speaker 9: energy system. And there we obviously contribute with our products
19:46
Speaker 9: and systems, which gives us energy savings between twenty and
19:50
Speaker 9: forty or even fifty percent. So that's one angle. The
19:53
Speaker 9: other one is all linked to new technologies around automation
19:57
Speaker 9: and robotics, because we are we're leading company in both areas,
20:01
Speaker 9: and that has to do with the reshuring bringing things
20:05
Speaker 9: closer home again where the markets are but also in
20:09
Speaker 9: some countries dealing with the demographics because we have less
20:12
Speaker 9: and less people working in the working age, and therefore
20:17
Speaker 9: robotics and the automation becomes very important. And the last
20:20
Speaker 9: one is AI, which will revolutionize obviously all what's related
20:24
Speaker 9: to automation. In the future.
20:27
Speaker 5: We'll talk to us more about what you think is
20:30
Speaker 5: the best way to try to scale manufacturing. When it
20:33
Speaker 5: comes to the EVE charging space.
20:37
Speaker 9: I think what we really need on the emobility side,
20:41
Speaker 9: let me put it this way, is really work on
20:45
Speaker 9: two fronts. One is a technical side on the charging side,
20:48
Speaker 9: but the other one is also on the user friendliness side,
20:52
Speaker 9: so that they become actually more reliable, they are much
20:56
Speaker 9: more modern. On the manufacturing side, I think we have
20:59
Speaker 9: had clearly in some countries and regions there was some
21:04
Speaker 9: scarcity of manufacturing capacity, which I think have been sold.
21:08
Speaker 9: Was not an issue for ABB in that sense, but
21:10
Speaker 9: it's the product evolution which is very key.
21:13
Speaker 5: Now.
21:13
Speaker 9: On the other side, I think one that should not
21:15
Speaker 9: forget that the whole network of electrification needs to be
21:20
Speaker 9: up to speed. You cannot just actually consume much more energy.
21:24
Speaker 9: You also need to build the transmission lines that the
21:28
Speaker 9: power actually comes in where we have got let's say
21:31
Speaker 9: the charge is installed either for private passenger cars or
21:35
Speaker 9: for buses, ships, trains, whatever you want to call it.
21:39
Speaker 9: So I think we need much more infrastructure investments on
21:41
Speaker 9: the one side, and really really to actually get the
21:44
Speaker 9: EV charging and the passenger cars based on electrification much
21:50
Speaker 9: more developed in the future.
21:52
Speaker 2: Peter, who are some of your bigger customers that you're
21:55
Speaker 2: working with these days?
21:57
Speaker 9: We are here in the United States, so we have
21:59
Speaker 9: all kind of factoring companies in that sense. But on
22:02
Speaker 9: the industrial side, any any company you can think of,
22:08
Speaker 9: which are they are in manufacturing space, for example, they
22:12
Speaker 9: use our actification products, they use our automation products. So
22:16
Speaker 9: you have all the industrial companies and that's where we
22:19
Speaker 9: make the difference. The other side, utilities are very key.
22:22
Speaker 9: As I just said, they need to make sure we
22:25
Speaker 9: have an off supply.
22:26
Speaker 2: And I know, I'm just looking at our PGeo function
22:28
Speaker 2: where I can see where your revenue comes by geography,
22:31
Speaker 2: you're everywhere. You see certain parts of the world that
22:34
Speaker 2: are more in front of you know, kind of making
22:38
Speaker 2: the transition then some others.
22:39
Speaker 9: Yeah, I think I would say that Europe has started
22:42
Speaker 9: this rather early with the new green deal in Europe,
22:46
Speaker 9: but also moving into a very different energy systems paid
22:50
Speaker 9: some price with the wars in Russia. So energy prices
22:54
Speaker 9: have gone up and that some rethinking has taken place.
22:57
Speaker 9: I think here in the US you quite clearly see
23:01
Speaker 9: the demand is there in all industries now supported by
23:06
Speaker 9: the various acts you have here, either the Inflation Act
23:10
Speaker 9: or then also the Industrial Act, and that is driving investments.
23:14
Speaker 4: Now.
23:15
Speaker 9: It's much earlier days than in Europe. For example, Hia
23:18
Speaker 9: is a little bit of mixed back, I have to say.
23:21
Speaker 9: So you see some countries at the leading edge, like
23:24
Speaker 9: smaller countries like Singapore. In China, which is our second
23:28
Speaker 9: biggest market after the US, you see actually a lot
23:32
Speaker 9: of efforts now being put in place to change the
23:36
Speaker 9: electric system in China. A lot of TV cards are
23:40
Speaker 9: coming in and you can see that those really are
23:44
Speaker 9: now generating the growth in China by city subdued compared
23:48
Speaker 9: to the US at this stage. So indeed, we are
23:51
Speaker 9: operating across the world in more than one hundred countries.
23:56
Speaker 9: We get good insights at the moment. The driving forces
23:59
Speaker 9: are really the US and Europe, with let's say Asia
24:04
Speaker 9: apart from India, are lacking somewhat.
24:07
Speaker 5: So where else do you go to expand from here
24:10
Speaker 5: when you already are in so many places.
24:12
Speaker 9: It's quite clearly US is our key number one market
24:16
Speaker 9: and that's where we have a developing We have over
24:18
Speaker 9: the last ten years, we have put more than fourteen
24:21
Speaker 9: billion dollars into the US in terms of investments. We
24:26
Speaker 9: have got forty manufacturing sites in twenty states. We're operating
24:29
Speaker 9: in all states with our services, et cetera. So that's
24:33
Speaker 9: a key market. We see the electrification market in the
24:36
Speaker 9: US as key, but also the industrial one, which has
24:39
Speaker 9: a lot to do with bringing home let's say, manufacturing
24:42
Speaker 9: capabilities and capacity. And then the second one is clearly India,
24:48
Speaker 9: which at the moment is in terms of growth outstripping
24:52
Speaker 9: all other countries in a big way. They are very
24:55
Speaker 9: low in manufacturing capacity and that's where a lot of
24:59
Speaker 9: investments now for the high end manufacturing goes in. And
25:03
Speaker 9: then the third one will be Europe quite clearly as
25:06
Speaker 9: the European Change INDI energy system, but also the demographic
25:11
Speaker 9: issues which we have in Europe which will take out
25:15
Speaker 9: about fifty million kind of working people over the next
25:19
Speaker 9: ten years and that needs to be replaced by automation
25:22
Speaker 9: and robotics, so there's a lot of Freema spins on
25:24
Speaker 9: going there.
25:25
Speaker 2: Thanks to Peter Vasser, chairman of ABB.
25:27
Speaker 3: Coming up on the program a conversation with Next Era
25:30
Speaker 3: Energy CEO John Ketchum and how the demand for power
25:33
Speaker 3: is dramatically increasing.
25:35
Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
25:38
Speaker 2: depth research and data on two thousand companies and one
25:40
Speaker 2: hundred and thirty industries. You can access Bloomberg Intelligence via
25:44
Speaker 2: b I go on the terminal on Paul Sweeney.
25:46
Speaker 3: And am Alex Steel and this is Bloomberg.
25:54
Speaker 1: This is Bloomberg Intelligence with Alex Steele and Paul Sweeney
25:59
Speaker 1: on Bloomberg Radio.
26:00
Speaker 3: We begin with a look at the company Next Era Energy.
26:03
Speaker 3: It's ticker is NEE. Next Era Energy is a leading
26:06
Speaker 3: clean energy company headquartered in Juno Beach, Florida, and it
26:09
Speaker 3: provides clean, affordable, reliable electricity to approximately five point eight
26:13
Speaker 3: million customer accounts or more than twelve million people across Florida.
26:17
Speaker 2: For more on how the demand for power is dramatically increasing,
26:20
Speaker 2: we were joined by Next Era Energy President and CEO
26:23
Speaker 2: John Ketchum. We began by asking him more about what
26:26
Speaker 2: his company does.
26:27
Speaker 10: We're made up of two businesses. One we own the
26:30
Speaker 10: nation's largest rate regulated utility, Florida Power and Light, and
26:36
Speaker 10: two we are the world's leader in renewables when solar
26:42
Speaker 10: battery storage. A unique combination bringing those two companies together.
26:46
Speaker 3: But you still have like nuclear and gas too, right
26:48
Speaker 3: like it we do for the utility.
26:50
Speaker 10: Side, we do so we covered all. We're in every
26:53
Speaker 10: part of the energy value chain, not only renewables. We
26:57
Speaker 10: have six gigawatts of nuclear and one the best operators
27:01
Speaker 10: in the country on the nuclear side. And we also
27:03
Speaker 10: own gas fire generation. Seventy two percent of our generation
27:08
Speaker 10: fleet in Florida's actually natural gas fired. So we view
27:11
Speaker 10: ourselves really as a very credible source in being able
27:15
Speaker 10: to advise our customers on what the lowest cost option
27:19
Speaker 10: is for generation.
27:20
Speaker 2: Owning a utility electric utility in Florida would seem to
27:24
Speaker 2: be a tough business with all the weather down there.
27:27
Speaker 2: What happens when these storms come through? How do you guys?
27:31
Speaker 2: You have to almost be in a constant state of
27:33
Speaker 2: emergency almost to be able to react.
27:35
Speaker 10: We are battle tested. That's one of the great things
27:37
Speaker 10: about our company is that nothing catches us up by
27:41
Speaker 10: surprise and it comes from a culture of continuous improvement
27:45
Speaker 10: and innovation, and we practice and we drill, and we've
27:48
Speaker 10: had what forty nine hurricanes in the last twenty or
27:52
Speaker 10: thirty years. We're never caught by surprise. We're a company
27:55
Speaker 10: that is used to managing through diversity and that's one of.
27:58
Speaker 5: The strengths catch by surprise.
28:02
Speaker 3: So there was an investor presentation that you made and
28:05
Speaker 3: you did you where you outline your forecast this year
28:07
Speaker 3: through twenty twenty six. You're also twenty twenty seven midpoint
28:11
Speaker 3: profit forecast. That's the one that analysts said that falls
28:14
Speaker 3: short of our estimates. Yeah, and I guess the question
28:17
Speaker 3: is if data demand and data power is going to
28:20
Speaker 3: drive so much demand for your stuff, why isn't that
28:23
Speaker 3: midpoint higher.
28:25
Speaker 10: Well, here's what we see, and we talked a lot
28:27
Speaker 10: about this at the analyst day. There are three things
28:30
Speaker 10: that I think really differentiate next Era as part of
28:33
Speaker 10: our value story. One, we're seeing an inflection point and
28:36
Speaker 10: power demand. Two it's going to be met by renewables
28:39
Speaker 10: because it's low costs, fast to deploy, and it's clean.
28:43
Speaker 10: And no companies better positioned to meet it than we are.
28:46
Speaker 10: And our business model has always been what I would
28:49
Speaker 10: call a replacement cycle. We were building new renewables to
28:53
Speaker 10: replace higher cost coal plants, higher costs, less efficient gas
28:59
Speaker 10: fired units, oil fired units. We now have this new
29:03
Speaker 10: opportunity that's really emerged in the last six to nine months,
29:07
Speaker 10: which is what I call our growth cycle opportunity. It's
29:11
Speaker 10: a new demand that has come and it's across industries.
29:15
Speaker 10: It's not just data centers get a lot of discussion,
29:19
Speaker 10: but it's industrial electrification, reshoring, and manufacturing as well. But
29:23
Speaker 10: when you think about it, we're having all these discussions
29:27
Speaker 10: with these customers now. Take data centers, for example, it
29:30
Speaker 10: takes two to three years to build a data center,
29:32
Speaker 10: so they won't need the power until twenty twenty seven.
29:35
Speaker 10: We might sign a contract today, but the power comes
29:39
Speaker 10: in twenty seven, which means it contributes in twenty eight.
29:41
Speaker 10: And so we're trying to explain to investors, Look, we
29:44
Speaker 10: have a tremendous long term growth outlook, but a lot
29:48
Speaker 10: of this growth cycle demand is really going to start
29:52
Speaker 10: materializing and producing revenues and earnings in twenty seven, which
29:56
Speaker 10: means it really starts to contribute in twenty eight.
29:59
Speaker 2: As you walk through me Manhattan. You probably see some
30:01
Speaker 2: empty office space here. I think they all move down
30:04
Speaker 2: to your state. Talk to us about how that's impacted
30:07
Speaker 2: your business in terms of demand and maybe what you
30:10
Speaker 2: have to invest back into your grid.
30:12
Speaker 10: Yeah, and that's what's great about our business right is
30:14
Speaker 10: the Barbell approach. We've got the nation's leading great regularly
30:17
Speaker 10: utility in Florida and the world's leader in renewables in Florida.
30:21
Speaker 10: We're seeing tremendous growth over the next twenty years. We're
30:25
Speaker 10: projecting a forty four percent increase in GDP. We have
30:28
Speaker 10: one thousand people a day moving to the state of Florida.
30:33
Speaker 10: Four of the five fastest growing metropolitan areas in the
30:37
Speaker 10: United States are in Florida. Florida, we're a country, it
30:41
Speaker 10: would have the fourteenth largest economy in the world, and
30:45
Speaker 10: we're there to power all that growth. So our growth
30:49
Speaker 10: story is not only about what I just discussed about
30:52
Speaker 10: all this renewable demand that we see power in AI
30:55
Speaker 10: and industry and manufacturing across the United States, but it's
30:59
Speaker 10: also all the growth that we see right in our
31:02
Speaker 10: own backyard in Florida.
31:04
Speaker 3: Talk to me about rates. So you're going to need
31:07
Speaker 3: to invest a lot, right, Like there's maybe an enormous
31:09
Speaker 3: investment cycle, as you mentioned, like the growth cycle for utilities, Right,
31:13
Speaker 3: what is it like on the regulated side of going
31:16
Speaker 3: back to the government and saying, Okay, guys, I got
31:17
Speaker 3: to invest it, you've got to raise the rates.
31:20
Speaker 1: Yeah.
31:20
Speaker 10: And so what we do is we have done a
31:23
Speaker 10: terrific job of taking cost out of our business. So
31:25
Speaker 10: when you look at what we've been able to do
31:28
Speaker 10: over the last twenty years, our O and M on
31:31
Speaker 10: a dollar per megawate hour basis is seventy percent seventy
31:36
Speaker 10: percent lower than the national average. That's three billion dollars
31:40
Speaker 10: we put in our customer's pocketbook every single year compared
31:45
Speaker 10: to an average utility. And we've always been able to
31:49
Speaker 10: make really smart capital investment decisions around bringing low cost
31:53
Speaker 10: generation into the fold. And the lowest cost generation option
31:57
Speaker 10: that we have in Florida is sole in storage. So
32:01
Speaker 10: although we're investing more capital, it's actually lowering the bill
32:05
Speaker 10: because it's a lot cheaper than other generation alternatives, combined
32:09
Speaker 10: with our ability to take cost out with the way
32:12
Speaker 10: we operate.
32:13
Speaker 2: But for you, from your investor's perspective, is a unit
32:16
Speaker 2: of power from a renewable source. What's a profit margin
32:19
Speaker 2: on that versus maybe an existing source.
32:22
Speaker 10: Well, when you think about renewables, I mean, renewables, you know,
32:26
Speaker 10: have really strong returns and they're low cost, and you
32:30
Speaker 10: talked about you know, interest rates, you being one of
32:33
Speaker 10: the factors. We pass those costs through to our customers.
32:36
Speaker 10: And so the cost of wind and solar has gone
32:41
Speaker 10: up a little bit as we've seen some pressure you
32:44
Speaker 10: know here from the macro environment, So have cost increase
32:47
Speaker 10: for every other type of generation. Actually, gas fired generation
32:52
Speaker 10: has really gone up in price. And so you know,
32:55
Speaker 10: what we have seen with gas fire technology is a
32:59
Speaker 10: fifty percent increase in the last twelve months. That has
33:03
Speaker 10: not happened to renewables, making renewables even lower costs than
33:06
Speaker 10: they've ever been on a relative basis to gas turbine options.
33:11
Speaker 3: So what I hear is that everything is just more
33:13
Speaker 3: expensive because that's the environment that we're in. But because
33:17
Speaker 3: you're able to take costs out, the rate payer may
33:20
Speaker 3: not get hit as hard. Is that a fair statement?
33:23
Speaker 10: That's exactly right. And so what we've been able to
33:24
Speaker 10: do in Florida, our bill is thirty seven percent lower
33:28
Speaker 10: than the national average, thirty seven percent. It's because of
33:32
Speaker 10: our ability to take all those costs out of the
33:34
Speaker 10: company and also offer them low cost renewable solutions as
33:40
Speaker 10: part of the generation mix. And when you put those
33:42
Speaker 10: two together, that's how we're able to achieve that thirty
33:45
Speaker 10: seven percent lower bill than the rest of the nation.
33:49
Speaker 10: That's a really compelling customer value proposition and investor value proposition.
33:55
Speaker 2: All right, thanks to John Ketchum, President and CEO of
33:57
Speaker 2: Next Era Energy.
33:59
Speaker 3: Staying with energy, we have something here at Bloomberg called
34:01
Speaker 3: Bloomberg New Energy Finance. The idea behind it is to
34:04
Speaker 3: provide data on commodities, power, transport, industries, buildings and agriculture
34:09
Speaker 3: plus new technology.
34:10
Speaker 2: This week we looked at how the energy transition will
34:13
Speaker 2: drive a significant uptick in demand for metals.
34:15
Speaker 3: Bloomberg and EF estimates six trillion dollars worth of key
34:18
Speaker 3: metals will be needed between twenty twenty two and twenty fifty,
34:21
Speaker 3: and to reach net zero emissions by mid century that
34:23
Speaker 3: number leaps to ten trillion.
34:25
Speaker 1: For more.
34:26
Speaker 2: We were joined by sung at Choie Bloomberg, BNEF Metals
34:29
Speaker 2: and mining analysts. We first to ask some to comment
34:32
Speaker 2: about the amount of metal that would be needed in
34:35
Speaker 2: the energy transition.
34:36
Speaker 7: As we progress through the technologies where we shift from
34:40
Speaker 7: fossil fuel to clean energy, and with the innovation and technologies,
34:44
Speaker 7: especially in the transportation sector and data sector as well
34:48
Speaker 7: and power grids more, obviously more metals will be needed.
34:51
Speaker 7: In order to get the electrons flow. You need metals.
34:54
Speaker 7: That's pretty obvious right now. The particular categories of metals
34:58
Speaker 7: that are of interesting is lithium and copper. Those two
35:02
Speaker 7: metals are very interesting at this moment.
35:05
Speaker 2: Where do we get these metals and is that a
35:08
Speaker 2: concern where we.
35:09
Speaker 7: Do get them? Yes, that is a concern. So for me,
35:14
Speaker 7: demand is is of a concern, but it isn't too
35:17
Speaker 7: much of concern. Supply is more of the concern. The
35:20
Speaker 7: reason for that is the reason that I say that
35:22
Speaker 7: is because many of the places that have had this
35:26
Speaker 7: particular resource, such as copper and lithium in areas where
35:31
Speaker 7: it has very sensitive political and social landscape. And in
35:35
Speaker 7: order to get those you know, supply out of the ground, right,
35:38
Speaker 7: miners have to navigate through those complicated situations. Right For example,
35:43
Speaker 7: many people forecast that the copper will be in surplus
35:47
Speaker 7: for twenty twenty four, but will be a surplus. It
35:49
Speaker 7: will be a slight surplus. For twenty twenty four, there was,
35:52
Speaker 7: there was the expectation. But then at the start of
35:56
Speaker 7: this year right in Panama, Cobrat Panama was you know
36:00
Speaker 7: done for many reasons. Right as a result of that,
36:03
Speaker 7: we're experiencing this, you know, run open copper prices right
36:07
Speaker 7: because there's a displocation between a copper minds plot and
36:10
Speaker 7: the smell the capacity.
36:12
Speaker 3: So here is where I think raises the problem because
36:15
Speaker 3: you're looking at a structural shift among metals that are cyclical.
36:18
Speaker 3: So that's one area where we were surprised to the upside,
36:21
Speaker 3: and now we're going to see a deficit. But then
36:22
Speaker 3: I look at lithium, and we knew the ev revolution
36:25
Speaker 3: and the batteries, we were going to need lithium. So
36:27
Speaker 3: all of a sudden the lithium guys, and a lot
36:29
Speaker 3: of them are in South America. When Game Busters, they're like,
36:32
Speaker 3: we need all this lithium. It's going to be awesome.
36:34
Speaker 3: The demand's going to be there, and then the price
36:35
Speaker 3: is crashed and then they had to shut down some
36:37
Speaker 3: of their operations because it wasn't economic anymore. We do
36:39
Speaker 3: need the lithium, but we didn't needed that day.
36:42
Speaker 2: How do we manage that with everything?
36:45
Speaker 7: You know, timing is everything, but it's really impossible to
36:48
Speaker 7: predict any type of timing with any type of investments. Right,
36:52
Speaker 7: So copper is in this moment right now. For lithium,
36:56
Speaker 7: that was two years ago, right, all this hype around
36:58
Speaker 7: you know, electric vehicles use of lithium, difficulties in getting lidium,
37:03
Speaker 7: so all the investments poured in into lidium space and
37:05
Speaker 7: as a result of that, there's currently there is an
37:07
Speaker 7: oversupply issue with lithium.
37:09
Speaker 1: Right.
37:10
Speaker 7: But despite the oversply issue, the lithium industry is really
37:16
Speaker 7: at the cusp of a paradigm shift in technology innovation. Right.
37:21
Speaker 7: There's this thing called direct lithium extraction technology where you take.
37:25
Speaker 2: The direct lithium extraction, yes.
37:27
Speaker 7: Direk lithium distraction technology. So there's two routes where you
37:32
Speaker 7: could extract lithium. There's mainly a hard rock with them
37:36
Speaker 7: where you take the spodium, you mind it at the
37:39
Speaker 7: rock and you process it.
37:40
Speaker 5: All.
37:40
Speaker 7: The process is brian. You take you take the brian
37:45
Speaker 7: and you extract the lithium out of it but water,
37:49
Speaker 7: but using evaporating method, so you basically you're using some
37:54
Speaker 7: like to evaporate the water out of it and extract
37:55
Speaker 7: lithium and that takes two years. Now DL or diark
37:58
Speaker 7: lithium extractions. That's gonna bring that lead time down to
38:03
Speaker 7: two weeks instead of two years. Oh so main competition
38:07
Speaker 7: versus you know, heart rock that is right now, that's
38:10
Speaker 7: going to be a you know, game changer for the
38:12
Speaker 7: industry where it's gonna actually lower the cost card. It
38:15
Speaker 7: may load the cost card. It's a bit too early
38:17
Speaker 7: to tell right now, but at the you know, at
38:19
Speaker 7: the cost of commercialization of this technology, it may loader
38:22
Speaker 7: the cost card and it may you know, change the
38:24
Speaker 7: industry forever.
38:25
Speaker 3: Our thanks to Sung Choi, Bloomberg and e F Metals
38:28
Speaker 3: and Mining Analysts.
38:29
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38:32
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38:34
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38:36
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38:38
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38:40
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38:41
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