Speaker 1 [00:00:01] Hi, it’s John here. If you are like me or probably like anyone you know, you probably have done a fair bit of flying this year. Some are calling it the year of revenge flying after the pandemic and flying continues to be at the center of our culture. It connects us with the rest of the world and promotes tourism, creates employment opportunities, helps generate trade and acts as an enabler for economic growth and development. It also poses a number of challenges when it comes to climate. I got to thinking more about this in September at New York Climate Week, when I was sitting on an airplane at LaGuardia Airport looking at all the airplanes lined up to take off and those waiting to land and wondered, is this the most hypocritical thing I’ve ever done to actually fly to a climate conference? Or is there actually a way to use all the ingenuity that has made the airline industry so great for so many decades to create sustainable flying? There are currently more than 100,000 commercial flights a day, and that number will keep on growing as the global population grows and as people pretty much everywhere take up more flying. And with that growth, of course, there’s going to be more emissions. The airline industry is trying to do something about that. Air transportation currently accounts for about two and a half percent of global CO2 emissions. And that may be a bit of an understatement because all those airplanes not only emit CO2, they affect the climate in several more complex ways through the concentration of other gases and pollutants. Some of us may buy carbon offsets to help reduce the net impact of our flying, but there’s also some incredible innovations going on in the industry, particularly around sustainable aviation fuel. European airlines have been pioneers with SAF, and now the Americans are racing to catch up. Under the Biden Administration’s Inflation Reduction Act, the U.S. now has a goal to produce 3 billion gallons of SAF by the year 2030. Can Canada catch up, too? We’re a nation of travelers. We have to be given our geography, but we also have to recognize how fast the game is moving. What’s our plan? What are the risks if we don’t get it right? And how long is the transformation going to take on the ground and up there in the sky? This is Disruptors. An RBC podcast. I’m John Stackhouse. Sustainable aviation fuel is at the center of the airline industry’s race to get to net zero, according to the World Economic Forum. SAF as its known could cut emissions by up to 80% when compared to traditional jet fuels. Can it also play a bigger role in Canada’s own plans to get to net zero? And how will it change travel for all of us? Today, we’ll explore the incredible world of aviation and the strides Canada is making towards a more sustainable sky. We’ll be joined by two experts. Our first guest is Angela Avery, executive vice president at WestJet. Angela is an experienced airline and energy executive. In addition to her work at WestJet. she’s been appointed to the United Nations Compensation Commission and has served on several not for profit boards, including the Canadian Energy Law Foundation, the Calgary YMCA, Arts Commons and the Calgary Zoo. Angela, welcome to Disruptors. Speaker 2 [00:03:25] Well, thanks, John, for having me. Speaker 1 [00:03:27] I’m so excited to talk about sustainable aviation fuel. I can be a bit of a geek that way. You’ve had a fascinating career. I’m wondering when you first got interested in what people call SAF. Speaker 2 [00:03:38] Well, I was interested in SAF when I joined WestJet, so I joined WestJet in February 2020 and I came actually from the energy sector. So was an area where I was already keenly interested when I arrived at WestJet because I knew there were limited ways that we can really decarbonize in the aviation sector. And so for me, I was really excited to bring some of the knowledge I had from the energy sector to the airline when I joined. Speaker 1 [00:04:02] That’s a great crossover. I wonder if you can define and explain for our listeners what exactly is sustainable aviation fuel. Speaker 2 [00:04:10] Yeah, sure. It’s really a plug and play fuel that we can put directly into our aircraft fuel tanks today, but it’s developed from different sources than Jet A-1 fuel, which is the traditional fuel used in aircraft. And so, sustainable aviation fuel just means that it’s developed in a more sustainable way using more sustainable feedstock. I can geek out with you, John, in relation to what that means in terms of feedstock, but essentially what we’re using for sustainable aviation fuel is right now a lot of waste products. So whether that’s waste cooking oil or waste animal fat, or we can use waste forestry products and other things to essentially create what is almost the equivalent of regular jet A-1 fuel that would normally be produced through oil and gas activities. Speaker 1 [00:04:55] What’s the environmental benefit? Speaker 2 [00:04:57] The environmental benefits, interesting one, because at the end of the day the emissions are pretty similar in relation to the emissions that are the result of the flying. The real environmental benefit is frankly the feedstocks itself. And so by using biomass, we are essentially recycling. And so instead of introducing a new carbon product into the planet, we’re recycling a carbon product that already exists. What we’re finding right now is 70% less emissions through the use of sustainable aviation fuel than traditional Jet A-1. Speaker 1 [00:05:25] And right now, and presumably for the foreseeable future, this is a blended fuel like I may have in my car. Is that correct? Speaker 2 [00:05:32] That’s right. Boeing and some of the other technology leaders right now are testing flights that would have 100% sustainable aviation fuel on board. But right now, most regulators are suggesting that one ought not to go above a 50% blend. And so oftentimes what you’re seeing is one and 2% blends because there just is not a lot of sustainable aviation fuel available. But even blending one or 2% makes a difference. And so that’s the kind of blends that you’re seeing. But the regulators cap us at 50%. But with the view that we know that some of our technology leaders in this space are going to get us to 100% at some point. Speaker 1 [00:06:10] And unlike electric vehicles, the plane doesn’t change. The fuel tank doesn’t have to change either. Speaker 2 [00:06:16] No. And that’s the real benefit and game changer with sustainable aviation fuel, it truly is plug and play technology. We don’t have to change any of the kit on the aircraft. The engine stays the same, the fuel tank stays the same. And importantly, all of the kit leading up to the actual aircraft does not have to change either. Neither do the pipelines that service those tanks need to change. And so from an environmental perspective, it’s extremely benign in relationship to a fuel switch. Speaker 1 [00:06:44] I’m guessing the fuel supply, though, and all the technology that goes into that is more complicated. Can you walk us through what has to change in the supply chain to make this work, especially at scale for the whole global fleet? Speaker 2 [00:06:58] There’s two real challenges right now with sustainable aviation fuel. Otherwise, frankly, we’d be all filling up our tanks right now with it. But it’s the ability to produce SAF at scale is one issue and then one that is interrelated is frankly the cost of producing staff. So right now, producing staff is about 3 to 5 times more expensive than putting jet A-1 fuel in our tank. And so it’s difficult for the airlines to sign up for increasing their costs that way. The cost of our fuel would, in our case at WestJet, more than double the cost of an airline ticket in Canada. And so when you look at where SAF is being produced right now, globally, it’s being produced in jurisdictions that have extraordinary policy supports for the production of SAF where the producers of SAF had the capital confidence to be able to invest in what they often call in the refining complex the pots and pans necessary to create this new bio fuel. Oftentimes, you’ll see across North America biodiesel is being produced from these refining complexes. Biogen could also be produced as long as additional kit were added to these refiners, but they need that capital to do so. Speaker 1 [00:08:09] Who’s leading the way? Speaker 2 [00:08:10] Right now, it’s some smaller producers in Europe are leading the way. We’re seeing the U.S. now catch up, though, in so far as they’ve got now, those new policy supports that they had even prior to the Inflation Reduction Act. But what we’re seeing is a mix. We’re seeing some startups and we’re also seeing some of the traditional energy companies stepping in a meaningful way. We know both are required for us to get to our very large aspirations of billions of liters of sustainable aviation fuel being produced on an annual basis. Speaker 1 [00:08:42] And right now, WestJet has a dedicated route, San Francisco, to Calgary. What have you learned from that and what will be required to take that to other routes? Speaker 2 [00:08:51] It was a great trial, so we did that earlier this year, and so we trialed this for a three month period. What we learned was a couple of things. Firstly, there isn’t still a huge demand by our guests onboard the aircraft to pay more for sustainable aviation fuel. So I think that we’re really going to have to make the case with the policymakers and with our guests in relation to the importance of us continuing to decarbonize the industry. The other thing we learned, frankly, was that there were very few routes that we could actually do this trial on there, very few places that WestJet flies where you can actually acquire sustainable aviation fuel. And so we very deliberately picked San Francisco-Calgary as our route because you can acquire sustainable aviation fuel in San Francisco. You can do that because California has been providing policy support for the development of SAF for now many years and nothing is commercially available in Canada. So any of our domestic flying, if we were to use SAF, would require us to actually transport staff to Canada, which also causes its own obviously cost and emissions’ impacts. Speaker 1 [00:10:00] What are the risks to Canadian airports and Canadian travelers of us not keeping pace with the U.S. Right now? It’s limited supply. You mentioned San Francisco, but a number of the big airports like LaGuardia are moving in this direction. And presumably in a few years, there will be a network of hubs that have SAF across the U.S. Speaker 2 [00:10:22] Well, I think you’ll see it’s just increasingly difficult for Canadian airports to compete for business. And so to be left behind in relation to SAF as well, I think you could see that demand over time could erode in Canada. And so I think that’s the real risk here. And one of the big risks, I would argue too, John, is just that Canada has this incredible amount of feedstock in relation to SAF. We’ve got all the ingredients here in terms of also having a really great capacity when it comes to technological know how. I mean, a lot of the green tech investments that are being made right now globally in decarbonizing the energy sector are happening here in Alberta and also across Canada. And so I would hate for us to leave that intellectual horsepower on the sidelines. Airports will be the beneficiaries of SAF and they could be left behind. But I think that there’s a whole Canada question here as well. Speaker 1 [00:11:14] You’ve mentioned the subsidies now available in the U.S., is that all Canada needs to do is keep pace with what the U.S. is offering or are there other challenges for Canada? Speaker 2 [00:11:24] I think keeping pace policy wise would make the difference, John. And I think that’s what the IADA, which is sort of the governing agency for all airlines, is called the International Air Transportation Association. That’s what they’re looking for. They’re looking for convergence of policies around the world because you don’t want to create winners and losers. Air travel is not a luxury. This is something that’s absolutely required in Canada. We have a gigantic country with limited infrastructure relative to our size. And so unlike Europe, I can’t hop on a train to go up to Edmonton, but I can certainly fly to Edmonton. And in my estimation, Canada has to keep up when it comes to airline infrastructure. Speaker 1 [00:12:04] I’m interested in your experience with customers and our unwillingness, if I can put it that way, to pay a green premium, as some call it, when you think about marketing, sustainable aviation fuel or sustainable flying generally, what do you think will be the right triggers for consumers, for travelers? Speaker 2 [00:12:23] I think it’s going to be a really tough nut to crack, John. I don’t think we can market our way into gas paying a premium necessarily for the use of sustainable aviation fuel. We’d like to provide that option because we will have some guests that wish to do that. We also already provide the opportunity for our guests to use carbon offsets, but we don’t find a tremendous uptake. I don’t think that’s a Canada problem per se. When I talk to fuel providers globally, there are very few jurisdictions where the consumer will pay extra for the biofuel option. And so I think we have to find a solution to the problem of the commons that’s a bit different than relying on the guests to uptake it themselves directly. Speaker 1 [00:13:05] And that comes back to the public policy point you’re making. This is going to take a lot more, frankly, government involvement if we’re going to see the switch move faster perhaps than it has been. Assuming governments do move in that direction or help the industry and all of us travelers move in that direction. How quickly do you think this will change? Speaker 2 [00:13:27] Well, I think it will change really quickly. In 2016, there were only 500 flights that actually used sustainable aviation fuel. And this year they’re expecting almost 500,000 flights. So we go to half a million flights from 500 flights in the course of just a few short years. And there is hyperbolic growth right now in the SAF side. Obviously, we’re going to have to grow faster and we’re going to have to decarbonize more swiftly. But from my perspective, we can be fast, followers in this space now. We are not the ones necessarily in the lab having to invent SAF. We can be fast followers. Speaker 1 [00:14:04] I mentioned the transformation earlier, and that’s going to take probably 20 plus years to play out, just given the vehicle life for most cars on the road. Do you think the airline industry will transform faster than that? Is this something that will will change completely in the next decade, or will it also take several decades? Speaker 2 [00:14:24] I think that we have a better opportunity to decarbonize faster in aviation because of SAF. So if we were relying on EV technology like we are in the auto side, I would be less bullish because there’s obvious challenges when you’re adding weight to the to the aircraft and there’s very limited sort of flying that can be, we think in the short term, replaced with electric flying. Right, we’re very fortunate, I would argue in the aviation front that we’ve got a technology that’s right here available to us that can quickly decarbonize by up to 70% on average, now, the flying that we’re undertaking. Speaker 1 [00:15:05] Meeting my carbon footprint as a traveler would be 70% less. Speaker 2 [00:15:10] Yes. Speaker 1 [00:15:11] What a fascinating conversation. Angela, I wonder as we move towards close, if you could look into your crystal ball and tell us where you think aviation will be a decade out in terms of sustainability? Speaker 2 [00:15:22] I’m really excited about where we’re going to be in a decade, John, because you’re seeing new technology, even when it comes to aircraft themselves, aircraft are oftentimes 40% more aerodynamic now than they were 30 years ago. And so when you think about your own car, the how fuel efficient it was ten years ago versus what it is today, we’re driving those technology improvements when it comes to our fleet. We’re driving those technology improvements, even on board the aircraft. You’ll see we don’t have TVs onboard aircraft anymore and most airlines don’t because that saves thousands of liters of fuel. The other thing on the sustainability front, John, that I’m most excited about is that we’re going to see more people get the benefit of air travel. Only 20% of the world has actually been onboard an aircraft. I’d like to see that number change. I would really like for us to democratize, travel for the whole world. And so it’s going to be an imperative for us to decarbonize at the same time we democratize, but to advance everybody’s opportunities globally. I think you’re going to see a lot more aircraft and you’re going to see a lot more sustainable flying by that aircraft in the next ten years. And I’m excited about that. Speaker 1 [00:16:30] What a great and exciting vision that is to decarbonize while also democratizing travel. Angela, thank you for being on disruptors. Speaker 2 [00:16:37] Thank you. I’m so glad you would have me. Speaker 1 [00:16:41] Angela Avery is executive vice president of the WestJet Group. In a moment, we’ll hear from one of Canada’s other leading voices when it comes to sustainability in the skies. So stay right there. Speaker 1 [00:16:58] Welcome back. Today, we’re talking about sustainable aviation fuels and how they’re disrupting the aviation industry with aims of decarbonization. Our next guest is Geoff Tauvette. He’s one of the leading voices when it comes to SAF adoption and implementation in Canada. Jeff is the executive director at the Canadian Council for Sustainable Aviation Fuels, otherwise known as C-SAF. He’s a commercial aviation and engineering professional who’s at the forefront of airline sustainability. With more than 25 years of experience integrating aviation, fuel procurement, environmental and climate risk management. He’s also worked to develop Canada’s first SAF roadmap. Geoff, welcome to Disruptors. Speaker 3 [00:17:38] Thank you, John. Glad to be here. Speaker 1 [00:17:40] You’ve had a long journey, if you don’t mind the expression, in the aviation world. Tell me when you first got excited about sustainable aviation fuels. Speaker 3 [00:17:48] Sure. I think over my aviation career, I was one of the first to meld the Fuel and Environment departments together several years back and was able to live through all the various climate policy discussions that were occurring at the time. And in my previous role, I spent a lot of time figuring out how to manage that carbon portfolio and how to manage emission reductions, progress for airlines and sustainable aviation fuels. Really our only solution at the end of the day for aviation to achieve emission reduction. So using my background at the time in the fuel world, I integrated myself into the clean tech business or network anyways, in western Canada and really started to look at ensuring that we get a production of SAF in western Canada. Was my focus at the time. Speaker 1 [00:18:37] And what along the way, Jeff, have been some of the bigger challenges and barriers to getting to more widespread adoption of SAF? Speaker 3 [00:18:44] Yeah, well certainly cost is still a big issue and we do want to focus all our discussions on that. But it is, it is a very costly product today and that’s a factor, of course, of we don’t have a lot of it in the world. And so the hope is when we get to scale, we can reduce those costs. The other angle as well is really we’re missing a policy environment in Canada, a national strategy that will help us put in place the regulatory certainty in order to make those investments. It’s really bringing people together and figuring out which stakeholders have that magic value chain that that can bring cost efficiencies and bring production online. And that’s really why C-SAF or Canadian Council for Sustainable Aviation Fuels, is formed and has really sort of filled that gap. Speaker 1 [00:19:36] I’m curious, Geoff, that we haven’t been more assertive on the policy front. Canada has an ambitious national climate plan that we have a well-regulated airline industry and a number of well-run airlines. One might have thought this is something we’d be at the forefront of. Speaker 3 [00:19:53] Our C-SAF strategy, and we really highlighted this in the road map that we released in June. We’ve developed a plan to produce a billion liters, of SAF by 2030. The road map shows the pathway and the actions that we need to take in order to set in place those building blocks to ensure that we are able to secure those investments and move forward on investing. But again, it is costly. I mean, unfortunately, today the cost of SAF is 3 to 5 times more regular jet fuel. So the trick is how did the airlines work that in to their cost profile and how do we ensure that Canadians can still travel affordably? And I think you have to context how aviation works, who they’re competing against. And the U.S., unfortunately, today has a lot of policies in place that are impacting SAF production, SAF cost, and it really is causing sort of a competitive issue for for Canadian aviation. Speaker 1 [00:20:57] What’s the risk to Canada and to Canadian travelers as well as the airline industry if we don’t get to that 1 billion litre goal that you’ve set? Speaker 3 [00:21:06] Well, with what the U.S. has in place today, we’re worried that a lot of the innovation and production of sustainable fuels will occur in the States. And so Canada just becomes essentially we’ll send sustainable feedstock down south. Have the U.S. make the product and we buy back at a higher premium because the system that we’re in. And then, of course, you see the opportunities in the U.S. and Europe, where the aviation industry is decarbonizing as well. And does Canada get left behind? And then we’re not as competitive, if you will, in the future because we haven’t had the opportunity to decarbonize in a cost affordable way. Speaker 1 [00:21:42] What do you think government can and should do in the near term to up our game? Speaker 3 [00:21:47] Well, certainly we need some form of incentives to ensure that sustainable aviation fuel is produced affordably. The investment climate is not competitive because of the industrial policy that the U.S. has put in place. We need all the different types of feedstocks. We need all the different types of technologies to convert those feedstocks into fuels. Some technologies are more ready than others in terms of commercialization. So when you look into the future of the renewable fuel that is actually growing in volume is SAF. And so that that should provide a great business or future fit business opportunity for suppliers of SAF. Because we know it’s growing and this is what are tentatives in the roadmap is in fact is that this is a future economic opportunity for Canada. We can use our feedstock, we can essentially make it here and then because it’s growing in volume, we should be able to have in place a policy that sort of puts those building blocks in place to be able to scale, to create that opportunity here in Canada in the future. Speaker 1 [00:22:52] You mentioned the need for incentives. I also wonder if there are technology developments on the horizon that maybe could reduce the cost of SAF? Speaker 3 [00:23:01] So we are seeing those come forward for sure. There’s catalysts and all the chemistry that goes behind that is getting better. And so it is getting cheaper on that end of things. Our problem, of course, is that we’re competing against renewable diesel and some of the other fuels. And then the ultimate goal for aviation is to get to these fuels called power to liquid fuels. That’s where we’re using really a renewable source of hydrogen and a renewable source of carbon. And really the process is going backwards from regular fuel. How you have your fuel, you burn it, it releases a whole bunch of energy and it turns into molecules in the air. We want to take those molecules from the air and go backwards and turn it into a fuel. And the cool thing about that is, yeah, we need to figure out hydrogen. Yeah, we need to figure out how to get the carbon from atmosphere. But if we spend some time figuring out how to advance some of those medium term technologies a little bit more quickly, it puts us in a good position to get more quickly on to power to liquids as well. Speaker 1 [00:23:58] You mentioned hydrogen. How far off are we from hydrogen being a significant component of this? Speaker 3 [00:24:06] So hydrogen is is an interesting component of of all fuels, but certainly SAF. So, we need it today because we are going to need more of it to help us process some of this fuels into liquid fuels. There’s just a missing component in some of these biomass type of feedstocks. So definitely we need a good source of renewable hydrogen in the mix to help us convert these fuels and into SAF from a power plant perspective. When you see some of the technology reports, I think they’re figuring near the 2050s and beyond is where you’re going to see maybe some opportunities for aviation over the long haul to use hydrogen as an actual fuel. So lots of time will need to be dedicated, lots of risk involved. So we need to figure out how to sort of put that into market as well, which is why, again, SAF is that sort of go-to solution for aviation in the long term. It fulfills the emission reduction requirement, it’s safe to use across the variety of age of aircraft that are flying today. There’s a few missing elements, if you will. So we still need to blend it with regular jet fuel to make sure that it can function in the engines. And lots of work going on to ensure that we can use 100% SAF. So so no more blending. So that’s going to take a while and we just need to produce more of it. Speaker 1 [00:25:24] Geoff, you’ve laid out a pretty rational road map. What do you think is the barrier to executing on that? Speaker 3 [00:25:32] I think the biggest missing piece is just how do we set up a regime that supports the production? How do we ensure that suppliers get the right signal to be able to make the investment that airlines and their consumers can still be competitive at the end of the day and have an affordable product? How do we pull private investment into the fold to help develop some of this technology? And that’s all going to have to come down to some form of federal strategy that the provinces can then build on top of with their industrial strategies or some of the manufacturing afterwards. But without that clear signal on how we’re going to do that, we’re just always in a discussion mode in terms of how we invest, right? There’s just not enough certainty going forward in order to pull that required investment to make the production of SAF happen. Speaker 1 [00:26:25] What a great call to action that Canadians have long been innovators and leaders in the aviation space. And Geoff, you’ve laid out an opportunity here for the country to take that into a new era of sustainable flying. Thank you for being on disruptors. Speaker 3 [00:26:40] I appreciate it. Thank you, John. Speaker 1 [00:26:45] That was Geoff Tauvette, Executive Director of the Canadian Council for Sustainable Aviation Fuels. We all know the climate is changing and of course, the world is changing. Today, we heard how the aviation industry is also changing. The big question I take away is can Canada move fast enough to keep up? I liked Angela Avery’s description of sustainable aviation fuel as a plug and play option. It’s something airlines are already doing. It’s something that the fuels’ industry is quite good at. It’s also something Canada can be a global leader in. We’re already a producer, as both Geoff and Angela explained. A biomass, the stuff that goes into fuel blends. And we’re a world leader and innovator in the fuel space. So how do we put together the right mix of technology, of commercial ambition, of consumer awareness, and a public policy that will help transform in a positive way the climate impact of flying? There’s a role for all of us to play because on the climate journey, none of us can afford to be just passengers. Until next time. I’m John Stackhouse and this is Disruptors, an RBC podcast. Talk to you soon. Speaker 2 [00:27:58] Disruptors and RBC Podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. For more Disruptors content, visit our RBC.com/disruptors and leave us a five star rating if you like our show.

Speaker 1 [00:00:01] Hi, it’s John here. Welcome back. This is our seventh season on Disruptors, and we have some exciting insights and big ideas that we think are going to disrupt the market this year. So let’s jump right in. When you think about prediction. What comes to mind? Or what about disruption or innovation or maybe automation? If you answered eye to any of these questions, you’re not alone. This truly was the summer of AI, and there’s a tech wave out there that’s surging. And a lot of us are both excited and worried about what it will mean for our jobs, for the economy, for our communities and, yes, the planet. And while these tech advances have immense potential, we all need to think harder about how they’ll be applied and where the advantages will be. There’s a new think tank at Toronto Metropolitan University called Dais, and they put out a really important study this summer that found only 3.7% of Canadian firms had deployed AI in their business in any capacity — 3.7%. When compared to other advanced economies, Canadian business may be at the back of the pack, but this adoption rate is pretty uneven. It’s been more rapid among big firms, those with more than 100 employees, where 20% said they’re already using AI compared to only 3% of the smallest firms. Adoption has also been leaving some equity seeking groups behind, businesses owned by women, for instance, or indigenous peoples, and people living with disabilities are far less likely than other businesses to currently use AI. So what can Canada do to better innovate and fill these gaps? We know that Canada is a leader in AI science. We have many of the world’s best AI scientists and several of the top universities when it comes to research, we’re a podium nation. But when it comes to application, we’re going to have to step it up and do a lot more to take advantage of this tech revolution. How can we put A.I. to use, whether it’s in business or in health care or education? How can we ensure that those uses are advancing Canada’s prosperity? And in true Canadian fashion, how can we do all this in a way that is fair and ethical? This is Disruptors. An RBC podcast. I’m John Stackhouse. We’re in the early stages of what seems to be a generative AI revolution, and it’s been remarkable to watch its rise and how quickly its evolving. At scale, AI can be integrated into pretty much any organization, and as it’s value to our daily lives and the economy grows. It’s also the topic du jour among regulators as they race to realize its impact, both good and bad. To help us make sense of it all, I’m joined today by two pioneers in Canada’s AI sector. Our first guest, Nick Frost, is the co-founder of Cohere, a Canadian startup that provides natural language processing models to help companies improve human machine interaction. As you’re about to hear, Nick is an optimist. He envisions a world where humans can rely on AI largely like personal assistants, to make life easier. Interacting with it as much as we do with our cell phones. Hey, Nick. Welcome to Disruptors. Speaker 2 [00:03:30] Hey, thanks so much for having me, John. Speaker 1 [00:03:31] It’s great to have you on the podcast. I’m so excited to learn more about Cohere because it’s such a fascinating and impressive Canadian company that’s now being noticed around the world. But before we get into the Cohere story, let’s start with some basic definitions of AI. I find it’s a term that everyone loves to say. It’s getting buzz everywhere, but not a lot of people can define it. Can you just give us a quick and dirty definition of AI and also generative AI? Speaker 2 [00:04:00] Yeah, for sure. So in general, when people talk about AI in a historical context, what they really mean is just computers doing things they didn’t expect computers could do. So in today’s moment, when someone talks about AI, what they’re almost certainly referencing is neural networks, which are a form of machine learning. And specifically, if they’re talking about generative AI, they’re talking about the ability for neural networks to create various forms of media that they thought only people could make. That’s writing sensible text, answering text questions, doing any kind of text based intellectual task. There’s image generative AI increasing, there’s video and audio, but all of those are powered by advances in neural networks and various forms of machine learning. Speaker 1 [00:04:44] That’s a great, succinct definition. Tell us a bit about Cohere. Maybe start with the origin story. What was the launch of the company? Speaker 2 [00:04:53] So the launch of the company came out of a realization that Aiden, our CEO, Ivan, and I had several years ago. So Aidan was a coauthor of a paper called Attention is All You Need, which was a machine learning paper which introduced a new type of neural network specifically for language. The realization was that, hey, this tech is really powerful. It can do really great things, but it’s very difficult to create a large language model. It’s even more difficult to make sure that it’s deployed in the right environments, that it actually solves problems for people. And we were at Google at the time and realized that, you know, this incredible technology was not going to be available to the broad public and to every company unless there was a company like ours that set out to make this stuff ready for enterprise and ready to solve business problems. Speaker 1 [00:05:46] Of course, a lot of people hear AI and they immediately think of the machines taking over that this is going to eliminate jobs, whereas you’re integrating it in things that are already going on and just making them more efficient, more productive, and presumably helping people do more. How do you think through that challenge of technology, both as a disruptor and enabler? Speaker 2 [00:06:06] I think whenever you have a technology as impactful as this, it will do both those things. I think it’s really important to think about the consequences of your creations as a technologist. These days there’s a lot of talk around existential risks posed by artificial intelligence. I think a lot of that is is kind of misaligned with where the technology is today. And I think our time is better spent thinking on the more immediate things that will be impacted. So that is things like job retraining programs to make sure people know how to be augmented by this technology as opposed to replaced by it means coming up with good policy to make sure that these things are deployed in a way that benefits the entire Canadian populace. Speaker 1 [00:06:49] Can you give us a couple of examples of how limbs are transforming in a positive way, jobs, companies, activities out there? Speaker 2 [00:06:58] Yeah, absolutely. One of the things that at Cohere we’ve worked on a lot is something called retrieval augmented generation. So this is where instead of just having an LLM write you a paragraph, you have it look through a whole bunch of documents, write a paragraph based on the information in those documents and cite its sources. This is a real breakthrough because it allows you to like, you know, actually trust the things that are coming out of this LLM because it’s telling you where it got this information. That I think will massively impact people’s ability to do research and synthesize large documents. So, for example, like writing a summary of an article, that’s a really great use case of LLMs. Or answering a question based on like a whole bunch of documents, other things like, you know, predicting how the stock market is going to go tomorrow. The input is not text, the output is not text. And the information that you’d need couldn’t possibly be given to the LLM anyways because there’s things that influence that that are not written down anywhere. Speaker 1 [00:07:56] That’s a great description. I often think of those moments that we all encounter every day when someone says, let me get back to you. I don’t know. And whether it’s a call centre rep or could be a lawyer or it could be a doctor who says, like, I’ve got to go look something up. Well, yes, saves the time. And then all the energy that goes into that. Speaker 2 [00:08:15] Absolutely. Speaker 1 [00:08:16] You talk about Cohere’s global reach. Tell us a bit about how Canada looks to you in terms of applications compared to other markets that you’re in. Speaker 2 [00:08:27] I would say that Canada is always Canadian. We’re always a little more hesitant to deploy new technology, and that is often to our fate. Like that’s often a good thing for Canada. That often means that things get rolled out and they go slightly better having watched the mistakes of others. But I do find that when talking to people in other parts of the world, they are more willing to like jump on a new technology and deploy it and make slight make mistakes and course correct as they’re going. Speaker 1 [00:08:55] What sectors do you think need to lean more into this than others? Speaker 2 [00:08:59] I would love to see all knowledge, work and white collar work lean into this heavier. I think there’s a real opportunity for this to empower people and free up time for us to do the things that we’re really good at and allow LLMs to do the things that they’re really good at. Any work whose input is text and output as text, I would love for them to be working with this. Speaker 1 [00:09:18] Great way of framing a text in, text out. In technology, there’s often this saying that the second mouse gets the cheese. We know what happens to the first mouse going into the mouse trap. And that’s true of some technologies. But this may be different. There’s also a bit of a frenzy out there, as you as you know, around AI. Some may see it as a bubble. Others may just see it as the growth curve that’s playing out. But I was struck visiting a number of companies in Silicon Valley in the late spring, how many were repositioning themselves as AI firms, but they were effectively just enterprise software firms. How does that affect your thinking as you build out the company? When you see all these large companies well capitalized and have repositioning themselves as AI companies and here you’re a scrappy startup going up against them. Is that a challenge for you as you think about your growth? Speaker 2 [00:10:14] Yeah, I think undeniably there’s a lot of hype. People are really, really excited about generative AI. A lot of that excitement is warranted based on the impact of this technology. It does really cool stuff. It does stuff we didn’t think computers could do. It continues to surprise me, a person who’s been working on this for many, many years now. But some of the hype is hype. And some of the companies out there who are just selling a traditional SaaS offering that is useful and adding value, recently feel the need to shoehorn generative AI in so that they can, you know, capture a new cycle or capture some investment. We could go back and create a history of the past several decades and name which technology that was happening to in any given year. This year it’s it’s generative AI. I think from our perspective, it’s cool to see people excited, but we’re focused on how this technology delivers value. We’re focused on trying to build something that is useful to people and not just capitalizing on the hype. Speaker 1 [00:11:14] You mentioned that even you get surprised by some of the progress, what in the last year has surprised you most in terms of what generative AI has been able to do? Speaker 2 [00:11:24] One of the things that surprised me recently was that our model’s ability to make citations. So it was a few, a year and a half ago or something, and we were first playing around with this retrieval augmented generation. So you give it a document, ask a question, get the answer from the information in that document. And that worked quite well, but it works way better than I thought it did. And now not only can I tell you, hey, this is the answer, it can tell you, and I got it from this paragraph or I got it from this document. And that’s a very complicated problem. Speaker 1 [00:11:53] Nick, we’ve only scratched the surface of AI’s potential in this conversation. I wonder, as you look to the future and say, think out, five years, where do you think we’ll be? Speaker 2 [00:12:05] Yeah, I think we will be in a world in which your primary interaction with a computer will be based on language. I also think you won’t think about it very much in the same way that you don’t think about the touch screen and you don’t think about the graphic user interface. I think we’re going to move to that. So I think you will open up a computer, there’ll be a chat box or a microphone for you to speak into. You’ll ask your computer to do things. It will do it for you, and that will be your daily interaction. Speaker 1 [00:12:37] That sounds very positive. Nick, this has been such a great conversation. We could go on and on, but mindful of your time and we want to thank you for being on Disruptors. Speaker 2 [00:12:47] Thank you for having me. Really enjoyed it. Speaker 1 [00:12:50] When we come back, we’ll meet someone who took a career pivot from entertainment law to artificial intelligence and is now at the global forefront. Speaker 1 [00:13:07] Welcome back. Today, we’re talking about AI and Canada’s standing as a podium nation in AI research and advancement. Our next guest, Jordan Jacobs, is at the forefront of applying AI to pretty much every sector. Jordan is co-founder and managing partner at Radical Ventures in Toronto. It’s now considered the world’s largest AI venture capital firm. He also co-founded the Vector Institute, a world leading AI centre that empowers researchers, businesses and governments to develop and adopt AI responsibly. Jordan also helped author Canada’s first national AI strategy. Jordan, welcome to Disruptors. Speaker 3 [00:13:46] Thanks for having me. Speaker 1 [00:13:47] Oh, it’s great to have you in the conversation. I want to start with a bit of your own background because you’ve had a fascinating career. Tell us what lured you into AI? Speaker 3 [00:13:55] Yeah, I started my career, actually, securities learning financings for tech and media and moved into a group that we built at the firm. I was at doing tech in the entertainment and sports. After a number of years, I left and set up my own firm. But really to do more entrepreneurial stuff that led to building a media company. I made a TV series with Elton John and Elvis Costello called Spectacle that ran around the world. And in the course of that, we partnered with a charity, Bono’s charity, Product Red. And the guy who was running that charity, and I, became very good friends. And we had this idea for basically a new type of social network that would be focused on cultural content. And I’d been reading about deep learning, and I was, you know, thankfully naive enough to not understand it hadn’t really worked in the wild, but it was largely being led out of Toronto by Geoffrey Hinton. One thing leads to another, decide to sell the law practice I had in the media company and go focus on this. My partner quit Product Red where he was the president, and we meet our third partner, Tomi Poutanen. And Tomi had studied with Geoff in the 90s before going and running search in the Valley at into me and Yahoo! And then became the ranking engine of Bing. The big breakthrough in AI wasn’t until 2012 when Geoff and two of his students won a Stanford competition that proved that deep learning was better than other approaches to image understanding. That was basically the moment that caused this boom that’s happened over the last decade. So we started off in our and our first hire was out of Geoff Hinton’s lab, and when we hired him, a lot of friends in tech said, Oh, you do not know what you’re doing. You have no product, you have no data. You do not hire the machine learning Ph.D. first. And our answer was, well, we’re going to architect a system that’s going to produce the signal for him to use. So that was really the genesis of my departure from law and going and doing an AI start up before modern AI worked. Speaker 1 [00:15:47] Jordan, tell us a bit more about the Radical story. What inspired you to launch what you’ve now described as the world’s biggest AI VC firm? Speaker 3 [00:15:55] Well, we had built and the AI Company, we had been spun out into a second company called Layer 6. We were ramping up in our sales and during the fundraise, a few things happened. One is we kept having successively higher offers for acquisition from a big tech company. And on the fifth offer, you know we had just again said to them go away without thinking about it. And they came back with a sixth offer. And I turned to my partner Tomi and said, you know Tomi we should talk about why we’re saying no instead of just saying no. So let’s think this through. And we came to a few conclusions. One is we really did believe then that AI would change everything. Second, the pan-Canadian strategy and the Vector Institute had been launched and we’d seen that it was winning talent and it was changing the conditions on the ground in Canada. Third, we realized there was no other VC in the Western world that was focused on AI. And then lastly, something really important happened which ties back to Cohere, which is we read a pre read of the Transformer paper. It Was written in 2017 by a group at Google Brain that included Aidan Gomez who’s now the CEO of Cohere. That paper was basically designing a new architecture for neural nets and we thought, this technology is going to get adopted quickly inside Google. It will probably take another five years to get adopted beyond Google. And then from that moment, it will be a ten year replacement cycle of all the software in the world. So we sold the company at the beginning of 2018, told the buyer, We’re going to go do this. When I left about six months later to launch Radical, we’ve been investing as angels for 70 years. At that point we had a little version of Radical, we were running on the side with our own money and some other individuals, but the first institutional fund was May of 2019, the US $325 million fund. We deployed into 27 companies in the first fund. Raised the new fund. It’s a $550 million fund. We’re now at about a billion US AUM. Our performance has been great, teams amazing. So, it’s been a fun ride. And then of course ChatGPT happens. ChatGPT came out exactly five years and two weeks after we had that prediction that it would take five years to get beyond Google. And what we’re seeing now is this adoption curve being straight up and into that ten year cycle of replacing all the software is happening probably at a faster cadence than we expected. Speaker 1 [00:18:21] Some people look at that acceleration as a bit of a hype cycle. AI has been through cycles going back to the 70s and 80s. What makes this time different? Speaker 3 [00:18:31] If you measure it in very short term, there’s too much hype. Medium and long term, I think it’s actually under hyped. People don’t understand how impactful this will be on our lives, on our health, on climate, on basically everything that you can think of that we do out there as humans and all these things we could never do before. So the reason it’s different is it works. What’s really interesting about the technology is all the things that people are not yet paying attention to. Designing molecules for material science to cure diseases. It can be creating new materials that we couldn’t create before or would take years to create that you can create now in a couple of hours. For energy, for aviation, all kinds of other applications. If you are an industrial company, you’re going to have AI that is in your factory assembly line monitoring the equipment and predicting where there’s going to be a breakdown before it happens. It’s going to supplement all of your back office functions for every business, whether it’s accounting software, HR software. So I would say every business is going to be touched by this because even if they’re not deploying it into the core of what their business is, their first thing, be using it in the back office functions because it’s just going to be part of the software suite. Anyone who’s got data, I think can deploy immediately, AI, or certainly over the next few years as the solutions get developed for their business. Speaker 1 [00:19:49] Where there’s data, there should be AI. That’s a great, great message. Jordan, I want to take you back to 2018, because you said at the time that Canada was uniquely positioned to become a world leader in AI. Do you still believe that? Speaker 3 [00:20:03] Yes. First of all, a lot of the stuff was invented here or by Canadians. So the research pedigree is elite in the world. And I think that first strategy that was called the pan-Canadian AI strategy, the government adopted in 2017 that we helped author, I think it has worked incredibly well in retaining talent and bringing in new talent. It’s not well recognized in Canada, but when you travel outside Canada, everyone says that strategy worked and that there’s now, I think, 40 plus countries that have emulated it, U.K., France, U.S., China. And I think that is the foundation for the ecosystem. The opportunity to then commercialize and build big companies around it is something that we have to do, it’s happening, but we have to continue to double down and do a better job of. Speaker 1 [00:20:51] How do we do that at a high level? How do we have that mindset shift in business or in public sector organizations, hospitals, schools and other groups that could benefit from AI? Speaker 3 [00:21:02] The first thing was we needed to have the practitioners, the researchers, the students you know, the profs, in proximity to businesses so that when businesses realize they need this stuff, they can go hire from down the street instead of having to recruit Google Brain or DeepMind across a continent or an ocean, because that’s really hard. So getting people who are local was important. So that, I would say, is largely solved as long as we continue to support those institutes and the development of that talent. Beyond that, Canadians are historically conservatives in adopting new technology. We’re laggards in spending on research and innovation inside corporations. The problem withAI is it’s very different. A.I. is basically learning software. And so when you deploy it, it starts to learn from your data as a company or your customer experiences, whatever way you’re deploying it. And it’s getting better and better and better. So if you are a company and your competitor is deployed AI and you haven’t, they’re not just pulling away, you know, in the number of months that they are ahead of you. It’s actually a curve and they’re pulling away faster and faster and faster. So how do we get people to adopt faster? You have to show them the return on investment for them doing it and what the benefits are to them in terms of their competition or avoiding disruption. But ideally, you want to show them how it makes them more money or saves them money. What we tend to find is that Canadian companies don’t like to buy until there’s a stamp of approval from the US. We have to change that mindset. We have to get Canadian companies willing to step out a little bit sooner. One party that could do that as a reference customer is the government. In truth, in technology, the US government is very involved and very often is the first buyer, whether it’s through DARPA or just becoming a customer and deploying things at scale. In Canada, we’re terrible at it. So I think the Canadian government being better at buying from Canadian companies. I’m not suggesting they buy stuff that is worse quality. I’m just saying they give it equal shake. Second, I think the government should develop incentives for Canadian companies to buy Canadian technology. So those are just two very quick things that I think can be done. There are others, too. Building capacity in compute. In order to build AI companies now you need access to massive compute. There’s much more demand then supply. The government could step in, for example, and be a bulk buyer on behalf of Canadian businesses. Government doesn’t have to spend in incremental dollars. It’s just fronting and being a guarantor of payments. So having the government as a guarantor of that in a bulk buyer I think gets better pricing and also guaranteed access for a country of Canada’s size. I think there’s there’s an advantage in having a bulk buying power for business and research. Speaker 1 [00:23:58] Jordan, before we move to close, I want to talk about one more application, which is climate, and that’s going to be a special focus of disruptors this season, including the intersections of AI and climate. I wonder if you can share some insights on where you think AI can play a more constructive role in helping us take on the climate crisis with more urgency. Speaker 3 [00:24:20] Yeah, I think it has to be a very important part of both addressing existing issues and also help improving things going forward. So we’ve invested in a couple of different satellite companies, one called Nuance Space. The first platform they’re building is for fire prediction and detection, early detection. Basically, they’ll put up a constellation of satellites around the world that’ll be able to detect forest fires before they get out of control. We invested in another company called Climate AI that predicts the weather and climate up to ten years in advance. So their first customers were in the food space, seed growers right through end users of the supply chain who can redistribute their food because they understand it’s going to be drier or wetter in a particular place. We are right in the middle of closing a deal right now with a company that is using AI to determine what existing materials can better do carbon capture at scale. And so that’s an interesting one because it has the chance to actually reverse the effects of climate change instead of just addressing the implications of climate change. So I think we’re going to see more and more of those kinds of companies, the ones that are trying to fix the problem, not just address the problems that already exist. Speaker 1 [00:25:39] And what a great opportunity for Canada, given the strengths here in both AI and clean tech. So lots more to come on that. Jordan, last questio if we’re lucky enough to have you back on the podcast a year from now, what do you hope will have changed? Speaker 3 [00:25:55] In Canada itself, I’d love to see faster adoption by companies and by governments of our local world leading AI solutions. There are some companies here that can become absolutely huge global champions. I’d really love to come back and be able to tell you we’re well on our way to a much faster adoption curve by Canadian businesses and government of this technology. I think it would be good all around for the economy. We should be one of the key pillars on earth when people think about where is AI built, based and growing. Canada should be among a couple of places in the world that are thought of that way. And we’re there, but we have to really double down on it. Speaker 1 [00:26:33] What a great call to action. Passionate but focused. Jordan, thank you so much for being on Disruptors. Speaker 3 [00:26:39] My pleasure. Thanks for having me. Speaker 1 [00:26:43] There’s no doubt that this is the age of AI, and when Canada looks into the AI mirror, it’s critical that we do so through a human lens that is responsible and sustainable. The technology has incredible potential, as we’ve heard, to revolutionize health care delivery and diagnosis, transform supply chains and strengthen the pace of learning in schools and of course, improve the productivity in pretty much everything we do. AI can also help us tackle the bigger systemic challenges that we face as a country and as a world. Climate change, lagging economic growth, health care inequality, and so much more. The question isn’t can we do it? It’s, can we do it responsibly? And can we apply it fast enough to bring meaningful change when the world needs it? This season promises to be our best yet. We’ll be speaking with incredible innovators and disruptors with big and bold ideas who are already making waves across Canada and around the world. So be sure to follow us wherever you get your podcasts. And while you’re at it, why not leave us a review? We’d love to hear your thoughts. Until next time. I’m John Stackhouse and this is Disruptors, an RBC podcast. Talk to you soon. Speaker 3 [00:28:01] Disruptors and RBC Podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. For more Disruptors content, visit RBC.com/disruptors and leave us a five star rating, if you like our show.

John Stackhouse [00:00:01] Hi, it’s John here. I hope you had a great summer. And what an epic, even historic summer it was. SFX [00:00:07] More than 6,000 separate wildfires have burned all over the country. John Stackhouse [00:00:13] Heat waves, wildfires, storms. SFX [00:00:15] Canada has been overwhelmed. John Stackhouse [00:00:18] It was like Mother Nature and Planet Earth were reminding us that, no matter where we are or what we do, the climate is changing profoundly. And the costs are growing. There was something else going on this summer that was also anything but natural. It was the explosion of ChatGPT. Now, Generative AI has been a thing for a while, but it was this summer that it really began to take hold. It feels like we’re on multiple collision courses as a society and this possible collision of climate and computing is what we’re going to explore on the upcoming season of Disruptors, an RBC podcast. We’ll ask “how can advanced technologies like ChatGPT help humanity but also help the planet?” I actually got thinking more about this during a double billing of Barbenheimer, that other great summer phenomenon. A lot’s been said about Barbie and Oppenheimer. But what I found kind of interesting was the existential tension between humans and technology in both films. As a species, we’ve long wrestled with the God complex and our ability to both create and destroy. We’re seeing that in climate, of course, and we may be seeing it in AI. But there’s also that constant human urge for progress. To not just build, but to share and nurture and grow. And we’re going to need a lot more of that for climate and for A.I. and for so much more. In AI, the race is on for supremacy in both adoption and regulation. Generative AI is a part of every business and sector. Large language models like GPT are already enabling the application of Einstein-level IQ at scale. And with investment increasing, regulators are confronting the challenge of how to slow AI’s rise. In climate, there are equal challenges and opportunities. We’re now a year into the age of the Inflation Reduction Act, when governments are spending record amounts and driving up regulation as well to accelerate climate action. Clean tech is taking center stage pretty much everywhere in the world. Countries are competing to dominate in batteries and EVs, leading critical minerals and safeguard domestic energy supplies. The future really is now. Here in Canada, the economy is thundering on as we confront the challenge of managing record population growth amid a historic housing shortage. SFX [00:02:51] Canada hit a new milestone officially surpassing 40 million in population. SFX [00:02:57] Chat about interest rate hikes, being able to afford housing has been on the top of everyone’s mind. John Stackhouse [00:03:02] Our race to net zero is accelerating with Clean Electricity Regulations, record funding for decarbonization and incredible innovation in every sector. Companies and consumers, investors and innovators are all recognizing that we’ll need technology to ensure those investments advance progress in the way that policy won’t. As workers return to the office and students return to campuses and classrooms, Generative A.I. is arriving in full force to turn traditional ways of working and learning on their heads. SFX [00:03:32] GPT, a search bot that responds with full text and analysis on a wide range of different topics. SFX [00:03:40] Chat bots came out. Kids are wondering, “can I use this for homework?’ Teachers are wondering ‘how do I need to adjust my classroom now that this technology is out there?’ SFX [00:03:48] Because it’s really going to impact every industry from customer care, to transforming data centers on logistics, to medicine, to manufacturing, to energy, to the automotive industry, to aerospace communication. John Stackhouse [00:04:01] So where does Canada fit in this age of disruption? We’re a podium nation in AI research, but can we use that to be a leader in AI applications? We’re a podium nation in energy systems. Can we use that to be a leader in energy transitions? We’re a podium nation in food production. Can we use that to be a leader in climate smart agriculture? Right now across Canada incredible innovators and disruptors are chasing these questions and we will spend the coming season chasing them for answers. So please join us for season seven of Disruptors, Canada’s leading business podcast coming this fall. Wherever you get your podcasts.

Speaker 1 [00:00:01] Hi. It’s John here. If you had to do a word cloud for 2022, I suspect talent and labor would somehow pop large. Everyone knows there are labor shortages out there, and every organization across Canada seems to be hunting for talent. And there are few avenues as promising for that as Canada’s international education system. I recently had the chance to sit down with Martin Basiri to talk about these things and more as part of the Business Higher Education Roundtable. That’s a group of business and post-secondary education leaders who are trying to build greater connections between employers and educators right across the country. Martin is co-founder and CEO of Kitchener, Ontario’s ApplyBoard. If you haven’t heard of a play board, it’s a great Canadian success story. It has an AI enabled software platform that lets students from around the world quickly identify and apply for university or college programs across North America, the UK and Australia. In seven years, Martin, who moved to Canada as a student from Iran, has grown apply board to more than 1500 employees and attracted more than $600 million in venture capital. In this special live edition of Disruptors. We tackle how Canada compares to other countries in building a pathway to citizenship for immigrants and especially those who come here as students, and how companies can do a better job of attracting and retaining this global talent. Martin is part of that story, so please have a listen. Martin, it’s great to be with you, as always. You helped us at RBC produce a report that was published a few weeks ago called Course Correction, that looked at the state of international students in Canada, not only from the perspective of the education system, but from the economy. I don’t think it’s widely known that about 20% of permanent residents now come through our school system, and that’s about double what it was a decade ago. This is 170,000 new Canadians a year are coming out of our post-secondary system. That’s extraordinary. It indexes even higher for STEM courses. So when we hear there’s demand for all sorts of STEM skills, it immediately points to the need for international students. You’re part of that story. Maybe you can just quickly kick us off with a sense of how you came to Canada as an international student. Speaker 2 [00:02:24] Yeah. Thank you very much for having me here, everyone. This is my pleasure. I came to this beautiful country about 12 years ago. I grew up in a I don’t call it poor, but lower middle class family in Iran, where my parents were educator. And I wanted to just code and build software and hardware, and it wasn’t that much opportunity there. And I was building as much and University of Waterloo, like Vivek is here today. It gave me my life. It gave me a scholarship to come to Canada. And I only paid for my ticket. And, you know, I sold my car and I had $6,000 in my pocket. I came to this beautiful country and my aunt came to pick me up. And when we came out of Pearson and we were going north to Richmond Hill, I fell in love with Canada. I love everything and I have two younger brothers that I help by raising them was, Oh, I have to bring them here too. So right there I started like looking for ways how I bring them. Now, the problem is I don’t have money. They don’t have a scholarship. They didn’t think I had a lot of inventions or stuff in my high school and my bachelor, but they were in high school and so I found this way of bringing them to Canada. It was very creative, very cheap, and I convinced my parents to sell all of the retirement homes, whatever they saved in the life, with the hope that, oh yeah, don’t worry, they’re going to find jobs here and I’ll, I’ll support them anyway. When they came to Canada, it took about a year and now everyone wanted to know, how did we do that? And they became customers. And coming from not having money, it was the best thing. We were like, okay, sure, I’ll charge you and I help you as well to pay for their tuition fee. And so I’ve done it a little bit. Then I graduated, went to us just for paperwork because I wanted to start a company. But as international students, when you graduate, you can’t start a company that you’re you have to work for someone else. And I was like, if I have to work for someone else instead of I stay in Canada, let’s go to us. It’s a, you know, so I went there. Then naturally I went back to entrepreneurship. Now I’m in U.S. is stuck. I can’t come to Canada. My brothers in Canada, no, they graduated from college. They can’t come to us. So we’re like, okay, what do we do? Events back to helping other students get started, apply work. And this time we were like, whatever we were doing, manually coded, recoded, and we put all of the admission information of universities and colleges in one algorithm, and it does something like a, like a book income. So it just comes out. For example, I’m from Nigeria, this is my credential and it is how much money I have. I want to study business, maybe Saskatchewan, maybe for example, Windsor. It shows exactly what the university or college, what program they offer. But the deadline was a payment, everything. And they can apply to all of them with one application right now is also does it for US universities, Australian universities and UK universities. And it started working. Then the University of Waterloo again came to our rescue, helped us out. We gave us free office at Velocity. We’re very thankful for that and we stayed there 2015 for about a year. Then we became 20 people. They kick us off. So go graduates, go find your own office and then then apply. We’re like, we went and we it took four years to get to the point that we can raise institutional money. It was so hard. And then after that, life got a little easier for our money point of view, but harder from a responsibility point of view. So right now we help, I think, 425,000 students. So far, of course, not all of them are getting Visa for Canada, US, UK and Australia. We vote for about 90% of universities and colleges. So I think almost everyone except one university here we work with and is a very hard problem. Very challenging. Which is good because it’s always like some problem to solve. Speaker 1 [00:06:41] Is amazing story and congratulations on on your success although I think you’re just getting going. Remarkable. You’ve built in seven years. We wanted to have this conversation not only just to hear your story, but you’ve got a great window on what’s going on in the world and where international students are coming from, where they’re going, and what some of the challenges are in between as we come into a new school year in the fall. Now, what are you seeing out there in the world? Speaker 2 [00:07:09] So let’s look at Canada as a as a company. So we are only as good as our people. Our fertility rate is 1.47 means we are not replacing our population. We are in huge deficit for about 50 years and it’s just getting worse is not coming back up. So if you rely on immigration, normally we bring people in their thirties as a skilled immigrant, a better ways to bring people for international students when they come. And they they’re normally in their twenties. They adopted a country of ours. And by the way, they’re more likely to have children because they come at that earlier stage, which is good, because we want as a country to be sustainable. We don’t want to always rely on one generation immigrants. We want bring them earlier to be sustainable. So it’s an amazing fact. And also international students and work people who we bring with work, they’re double more productive to economy than a normal immigrant. So perfect. International student is what we have to like work. But what we need to do, we need to make our government, our job market and our universities all align. So we have to see what do we need in terms of different areas in labor market in, for example, 2030 and after then work backward universities teach those ones and government incentivized do the right incentivize. So what we see government done, beautiful government of Canada done beautiful. They came with this idea of what if we give every single international students postgraduate work permit three years. You started two year of college or two year of university. They give it to you, boom. And that’s why Canada became almost the first thing it was at the same time that in UK conservatives came. So Theresa may thank the UK numbers Australia. It was Indian government to start having tension with Australian governments. So the students start coming and then of a boom. It started from when Donald Trump got elected because everyone now we are the only country that everyone come. And Canada, we went to that beautiful growth. And then what happened is gentlemen from UK, which by the way is working with apply for right now George Johnson is a younger brother of Boris Johnson said oh let’s copy Canada so they have now for year for graduate or fair mate and UK start booming but what a what a very big difference. And then so UK it started going up from 2019. They achieved their 11 year target of 600,000 international students from 237,000 in less than three years during pandemic years. So to give you like she was talking about the time of visa right now an average visa has taken four months in Canada. The diversity of markets, six months. Think about if you want to show up in fall semester, you need to have your visa already for 1st of March university. Sometimes don’t even open their acceptance till then. How can you already applied? So what does it mean? Means uncertainty of visa, uncertainty of time. So what is happening right now? UK and Australia is cooking all of the best talents. So the top talents are not coming to Canada. So we should expect to see more suffering happening in U15. Speaker 1 [00:10:37] So we’re still getting the numbers in aggregate, but the quality is is changing. Speaker 2 [00:10:41] Quality changing and you will see more of a more shift. So right now, colleges are about 50% body of the all international students, universities are only 25%. You will see more of that going to the colleges. So more and more, we see universities come down, colleges go up, and the total, the quality also go down. Even though Canada is the cheapest among just four countries, we are the cheapest. We have the safest. But it is funny because we have this metric in Norway, all the universities, the colleges want diversity. And in India we have this pin drop area that they’re historically very tied with Canada and they always want to come together. And it’s unbelievable. Even from Punjab area, the top of the funnel is weakening. Even Panjab students who are, of course, in friends, family, everyone here in Canada, they don’t want to come here anymore. Why not? Because first four months wait for a visa, which means you already have loan or where your money is taught for months and months. Second, even the minister himself or the most expert Irctc members sit down here and you give them the best students they can say if these are students, get visa or not complete is objective. There is no rule. We sent to exact same students. Sisters. One girl. Grade 11, one grade 12. Going to the exact same high school, same. That same high school from Iran. One of them in four days got the visa. One of them is seven months, got rejection. Speaker 1 [00:12:17] Photos and to Canada. Speaker 2 [00:12:18] Yeah. So what does it mean? Is like one of them went to one office or the other one went to another officer. So when is unpredictable then? The visa rates are either 48% or if you are a top talent visa rate of your case, 99%. Visa rate of Canada is 48%. Why would you put your life and everything one year, one and half year of your life to maybe you come over there? And this is a stat that shocked everybody. 80% of the visas in UK are done under five days. 80%. We are average four months right now and the other 20%, you may say, okay, so the other 20%, how long does it take is an average 16 days. So they’re the this to this is 16 days. Speaker 1 [00:13:08] Or is this four months? Speaker 2 [00:13:09] So Australia now came they gave the visa fee their first. Even Western Australia government is incentivize recruiters in other countries they pay them commission to send them as students and they have the cheapest. UK is about 50% on average more expensive. Australia is about 70% more expensive. So people are going to more expensive destinations. And unfortunately what was our mode which took us. It got copied and they just made it better. You committed for years. Now Australia can with six years postgraduate work permit and said oh if you study a stem that I need or health care I give you six years. So now you are a student. You are comfortable as you can go anywhere in the world, no longer bored. You can go to UAE, you can go to a Singapore visa. The UAE right now is under 30 days there, like zero income tax. Come here. Why should you come to Canada, if you may, after a year and a half, you may at 48% get a visa. Speaker 1 [00:14:18] One of the challenges we may not appreciate in this country is that the past decade of international student flows is not going to be what the next decade looks like. We in Canada relied heavily on Chinese students and that worked very well. There was a system and culture that worked exceedingly well for a lot of Canadian schools, as well as the students gone, as you say now we’re heavily reliant on India as a primary source of students. That’s starting to face challenges. Do you want to share some insights into what you’re seeing from the Indian market? Speaker 2 [00:14:48] Yeah. And 23rd of September, the foreign minister, the foreign affairs minister of India issued an official notice that Canada is now no longer safe and they see hate and crime is exactly what happened 11 years ago. 50% of our total international students coming from India, we are too reliant on one country. And on top of that, 66% of colleges and universities and if you look at trends, is not like diversity to get better, diversity get worse. Two out of three students that go into our colleges can vanish and it it vanished in Australia. So here’s a difference between international students and something like banks or a SAS product. SAS product, you get someone, you have them for years to keep using your software. International students, you can be the top today every year you need to find newest do this next year all can go so our entire sector not only we didn’t build diversity right now UK if you relax there are international students and three years of pandemic when we went down and we still don’t know if we should give them online or offline, they went from 37,000 217,000 international students from India. As you guys know, China since 2017. Then Canada and China, they have tension is just on decline. You 15 going to hurt to the most because they’re especially non undergrad they rely on the Chinese students they priced it up so much that only Chinese and Korean, Japanese, all three of them vanished. The only other students that they were going was Saudi Arabia. That what happens with Saudi Arabia, that sector 90% vanished. 90% of US students vanished overnight. Speaker 1 [00:16:40] Many of these challenges are solvable. Let’s start with the the visa challenge, because in some ways this is what apply board solved for a similar challenge. It’s technology and and matching systems. What can we do quickly to reduce the visa stress? Speaker 2 [00:16:57] Put the responsibility on universities, colleges and the sector same way that works in UK and say that work in Australia. So what they do they say. University so right now so let’s say I’m a university I can give anyone a letter of acceptance. I don’t bear any responsibility. If they get my acceptance, they come and they don’t show up. In fact, majority of universities don’t even report to government if their student showed up or not. I don’t bear any responsibility for their students. Have money or not. Nothing because the government don’t ask them. Of course, no one take responsibility for something that they are not asked for. But let’s look at the UK and Australia. Universities are responsible to check so many things like financial interview with students, integrity of students, everything and government become like a randomly check a student and they say University, be careful, you should not have more than 10% rejection. You need to tell me every single semester if the students attending your school or not. Can you believe we have 330,000 students we bring to the country? No. University? No. How many students got their visa? How many students got visa with their acceptance? Nor the government know how many of this the students are actually studying. So the solution is what Minister Champagne said on the when we met said Don’t come to government with your problem, come, come to government. The solution is us. You and universities go to government said this is the solution. Please use it and let us take some of that burden from you because government right now they’re saying the reason that you have delay is there are so much of checks they have to do their fraud and we don’t have enough labor in place to do that. So that’s phase one just to solve to the problem. Speaker 1 [00:18:44] So let’s let the schools take responsibility for the students. Speaker 2 [00:18:47] Not only as schools, as schools, banks and private companies and all the middlemen, whoever is doing the test companies, the test of language like a tougher party. And it’s those companies that they administer this test. They have to take responsibility. Everyone makes them responsible. And it very simple, like, for example and by the way, we have all the technology for it in Canada. It’s funny like apply, but we are a Canadian company and we are like a product of this. We have the technology universities have the manpower universities already checking the transcript of the students why someone else should exactly do the same job, you know. Speaker 1 [00:19:25] So it sounds simple. Why? Why isn’t it happening? Speaker 2 [00:19:29] Maybe one is like, first, that shift of mindset of come to government, the solution of the problem. I think we as a sector, we are always like raising the problems we never got together of say, hey, let’s ten of us solve something and go. And it has worked before like we have done is here see I can they provided pilots that now is permanent. Right. So we know it’s possible. I think one of them is on us that we have to get united together and go. The other thing is on government, I think our government is our government is and they do have to like be more accessible to the sector to listen to them and provide things like during the pandemic, we see how much their delays cost. Our data shows that on average, around 30% of us students who are supposed to start fall semester, they didn’t get their visa. And I’m pretty sure all of you guys are have that problem 30%. And the funny is majority of universities and colleges try to say mandated I only going to do in-class not going to do it online and by September 1st 30% of us do the law show of what should we do okay online again and they have problem with the academy teachers and everything else. Speaker 1 [00:20:49] We’ve got just a couple of minutes left to if we can resolve these challenges and pain points. What are the bigger issues that Canada needs to think about in the decade ahead in terms of maintaining our leading position when it comes to international students? Speaker 2 [00:21:03] Yes, we need to align what business at the end of this story. As in Canada, we want top talent and as universities we want our alumni to be fine. Very successful drives right now. Great that we bring a lot of STEM students, but that’s not enough. Like we bring 52% of our students are studying business. They’re only 20% of the jobs are business. That sounds right. We need to create way more software developers and way less project management. I can’t call head of nursing of Ontario, but you guys can’t. We need to push them so you can have. Nursing student hundred 10,000 health care need right now in Canada 12% of job can you if we don’t have nurses, we’re going to die. If you go to a hospital, I go to a hospital. We’re going to solve this. And not only that. Also, we need to like push on blue collar workers. Now, you remember they’re talking about we don’t have truck drivers. We don’t have people like do piping hatchback has a huge shortage in things and colleges are perfectly established to to create trades. But trades, we are very behind. And I think Canada can be the leader on that. That’s second. Third. We should do what worked. We should be takes like for example if you go right now computer science you 15. We should give them six years postgraduate work permit. Why should we give them same advantage if they got a two year college of study, for example, business or their studies four or five years for computer science that we know the society need or nursing so we can incentivize them for Canada need. The good news is the three database that we’ve done that the study we know exactly with a very good accuracy what Canada needs in 2030 every year. So we know what is the need of Manitoba in 2030. These are the jobs so we can work backward. The schools in Manitoba teach this and then alumni become more successful. Speaker 1 [00:23:14] All of these challenges come down to information flows between students, educators, governments, employers. What’s just as we wrap up. What are the one or a couple of things that Canada can do to elevate our game in terms of sharing information and using technologies like you’re developing? Speaker 2 [00:23:33] I think our brand is everything we’ve seen on us. How brand is matter. So does it matter? You are the you could be the biggest economy in the world. If you feel if people feel unsafe or unwelcome, they don’t come. And we took advantage of during these years, all these talented people came to Canada. It was because us was unsafe or unwelcomed. The biggest asset of Canada is our brand for safety. So right now, when India last week said, oh, Canada is not safe for Indian students, very valid response. There was a couple of videos. They’re sending visuals right away. React to the students. The market can shift overnight. We should react. Is that. No, they’re welcome. And in fact, we want them here. They’re going to be CEOs of companies. They’re going to be the head of ITC of the companies. They’re going to be the nurses. They’re going to be successful people. We need to as a sector and this is not on government. I think it’s on us. Every of us have to take responsibility. And one other thing, if I add at the end of the story. What applied to exist for and what the universities and colleges exist for. We are all here to serve as students, to educate the board, and I think we have to understand international students is extremely lucrative business. But at the end of the story, it’s a business for educating the world. So if you have a greater responsibility to making sure every single of those students are successful in their lives. Speaker 1 [00:24:57] It’s a competitive in an increasingly competitive world, especially in in education. And Canada needs to be more ambitious. That’s one of the messages you’re saying and you. Martin, reflect that ambition. You’re a great Canadian story. But when Martin saw the ads, just to give you a sense of his ambition, when he saw the RBC boardroom, he said, I’m going to have a board table bigger than that, apply board. Speaker 2 [00:25:21] So you. Speaker 1 [00:25:24] May have a buyer. Speaker 2 [00:25:25] Hundred thousand to get through the fair. Speaker 1 [00:25:28] But that kind of ambition is great to see so alive and well in the country. Martin, thanks for being part of the conversation. Speaker 2 [00:25:36] Thank you for having me. Thank you. Thank you so much. Speaker 1 [00:25:43] That was Martin Basiri, co-founder and CEO of ApplyBoard. Thanks to Martin for sharing his inspiring story with our listeners. Stay tuned for our upcoming special three part series called The Growing Challenge. In it, we explore how Canada can lead the world in food production using cutting edge technologies, data systems and smart thinking to help feed a growing and divided world and do so sustainably. You won’t want to miss it. Until then, I’m John Stackhouse, and this is Disruptors, an RBC podcast. Talk to you soon. Speaker 3 [00:26:17] Disruptors, an RBC podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by JAR Audio. For more disruptors content, like or subscribe wherever you get your podcasts and visit rbc dot com, slash disruptors.

Speaker 1 [00:00:00] Hi. It’s John here. Speaker 2 [00:00:02] And it’s Theresa. Speaker 1 [00:00:03] Theresa? When I think back, way back to my childhood, there’s a saying I seem to remember hearing a lot, which was waste not want not. In fact, it seemed to be a daily message at the dinner table that scraps of food could be much better used elsewhere in the world if we kids didn’t appreciate them. Speaker 2 [00:00:22] Yeah. And I mean, the numbers are shocking, John. According to the Boston Consulting Group, about one third of the world’s food is lost or wasted every year. And the UN’s Food and Agriculture Organization estimates everything that’s lost or wasted is enough to feed one and a quarter billion hungry people each year. But before we go any further, it’s worth clarifying some terms. Food loss is something that happens at harvest or soon. After all, food waste happens after the food reaches retailers or consumers. And so if we eliminated both food loss and waste, so many hungry people would be fed, which is especially important given how many people are facing food insecurity. Speaker 1 [00:01:00] Plus, there’s a huge opportunity to reduce greenhouse gas emissions if we can reduce these totals because food loss and waste create 12 megatons of emissions every year across Canada, landfills are literally filling up with food. Metro Vancouver, to take just one example, estimates that up to 30% of the garbage sent to landfills is organic waste. Speaker 2 [00:01:21] Canada is among the worst countries on the planet when it comes to food waste. Not so fun. Fact Did you know that the average Canadian household throws out a staggering 79 kilograms per year? That’s compared to 59 kilos in the U.S., according to the UN’s Food Waste Index Report. But businesses have a part to play to. More than a quarter of all food waste comes from restaurants, while 13% comes from retailers. Speaker 1 [00:01:46] It’s a massive issue throughout the food system, but there are some elegant solutions emerging from the farmer’s field to the grocery store to our plates. And each of these solutions has the potential to reduce loss and waste and reduce harmful greenhouse gas emissions throughout the system. And that’s what’s on our table today. This is Disruptors, an RBC podcast. I’m John Stackhouse. Speaker 2 [00:02:17] And I am friend Theresa Do. Welcome to the final installment in a special three part series that we’re calling The Growing Challenge. And it we’re exploring how Canada can lead the world in clean, green agriculture using cutting edge technology, data systems and smart thinking to increase yields while reducing our environmental impact. Last week we talked about some of the technological solutions aimed at reducing emissions on Canada’s beef and dairy farms. But the issue of food waste and food loss is arguably an even bigger challenge to be solved. After all, the less we waste, the more resources we save, the fewer emissions we put into our atmosphere and the better able we are to feed a growing planet. In the first episode of this series, we introduced you to Sonja, who she’s a managing partner at Boston Consulting Group, who is investigating this vital question How can Canada produce more food while slashing GHG emissions in the process? As Sonja explains, the twin issues of food waste and food loss have to be central to that discussion. Food waste is something that actually happens all across the value chain, from everywhere, from production, all the way to the food that we waste at home. And that makes up about 10% or so of the agricultural emissions. Speaker 1 [00:03:36] That’s a significant number. But I also wanted to know how much food, waste and loss happens at each stage of the value chain, from producer to retailer to consumer. Speaker 2 [00:03:45] A good chunk of that comes from the on farm production. So what happens is farmers will actually grow food that is just not for whatever reason harvested or if it’s harvested, it may just not be brought to market. Then that happens for many reasons, including labor challenges. There may be fluctuations and variability in prices in the market, or there just may not be a market for the farmers to sell into. So it’s actually more cost effective for them to just leave the food there and there aren’t any penalties for doing so in terms of processing and manufacturing. Now mostly we’re pretty efficient at food processing, but there are byproducts of processing. So as we make food, things that come off that could potentially be leveraged because there’s still sort of food stock, but they may not be today. So that’s another source of waste. And then really the big chunk of waste. So, you know, close to 40% or so will be from sort of what we think of as restaurants, grocery stores, and then ultimately consumers at home. And that’s everything ranging from, you know, if you just think about the food that you’re leaving on your plate when you go out or when you’re at an event and there’s the buffet that set up, you know, not all of that food gets eaten. It gets thrown out to the food that just goes bad in our refrigerators because we bought too much or we didn’t get around to eating it. John This gets back to that saying you mentioned off the top waste not want not all that food we buy at the grocery store or in a restaurant that never gets eaten. And that 40% number that Sonia mentioned, it’s seared into the minds of many of those who work with food day in and day out. Like our next guest. Hi, Meeru Dalwala. I’m the co-owner and chef of Veggies Restaurant here in Vancouver as well. I am the founder of my Banbury Organic Baby Foods Meeru, along with her ex-husband Vikram, which runs one of Canada’s most acclaimed Indian restaurants. Mira is a child of immigrants, and her upbringing has shaped her entire attitude towards food waste. So Mom and Dad grew up in refugee camps in Old Delhi because of the war of partition, and so it was a little bit more direct for me growing up. We weren’t allowed to waste food. We could we could do a lot of other things. I remember I shoplifted once at the age of ten and I got in trouble for shoplifting. It was candy bars because we weren’t allowed to eat candy bars, but I got in less trouble for shoplifting. Then I would get in trouble for not finishing my dinner. This is super relatable as a child of refugees myself, not wanting to waste food is related to living with a scarcity mindset. You don’t waste food because you can’t afford to, and if you do, it means you’re depriving your family or your future self of nutrition, which risks your ability to survive another day. So I can very much understand why Mira takes the issue of food waste so seriously, as do many of the people she works with. We had a restaurant in Seattle called Shana Restaurant from December 2012, all the way through to 2015. And half of my kitchen staff I hired, they were refugees from Ethiopia and Eritrea, and the other half were new immigrants from India, all women on opening night. From my point of view, it was a fantastic evening. And then at around 12:30 a.m. I found my Ethiopian and Eritrean staff by the Compost and they were pulling out all this meat, all this meat going to the trash. And I said, It’s the compost. And they said, No, compost is trash. I don’t see any goats eating this right. We don’t see any cows eating this. They were tearfully indignant. Then I looked in it to. Well, there’s a lot of lamb popsicles in there. It was uneaten. I can’t even just jump in here. LAMB Popsicles are one of Mira and breadcrumbs, signature dishes, fresh cut racks of lamb with vinaigrette, cream sauce. That sounds so good. Honestly, finding those in a compost bean would seem like some kind of environmental food crime. And that’s when I looked at that and I thought, how must this look to people coming from? And we all know about the history of famine in Ethiopia and Eritrea. And I that’s when I thought, oh, this is just I’m so embarrassed at all levels. But at that point, I was more morally embarrassed for is now it’s not just about pointing your finger now. It’s just a logical climate change issue as well. Speaker 1 [00:08:09] That’s a profound story, Teresa. And being confronted with our own waste by people who have seen famine up close. It’s a real wake up call. Speaker 2 [00:08:17] Very true. So Muro says that she is very committed to reducing food waste and also to solving foods, climate challenges in terms of emissions. She thinks that part of the problem lies in the fact that consumers have trouble connecting the dots between food waste and climate change. It’s an out of sight, out of mind situation. Maybe it’s because we don’t see the visual of it getting wasted. Maybe because right now we’re not feeling the impact of food waste in terms of climate change. Maybe we just need it, for lack of a better phrase, thrown in our face. The obviousness of we’re thinking about how do we cut down our carbon footprint? But maybe food is so cheap that we’re not thinking about the fact that when you buy that steak or you’re buying that chicken in the store, a lot of fossil fuels have already gone into putting it there in the supermarket. The plastic wrap on the chicken is there, the raising of the chicken, the fertilizer, the feed, the pollution going into the river, transporting it. Then we’re purchasing that chicken. It sits in our full fridge and then we realize, Oh, the best before date was two days ago. Then we’re worried about getting food sick and then we actually toss the chicken. Speaker 1 [00:09:31] So maybe there are some ways to address that in the grocery store. Things like labeling the detail, the carbon footprint of that package of chicken breasts to use mirrors. Example, if you gave an indication of how far that chicken has traveled from farmer to grocer, it might help build awareness right at the point of sale. But how does that awareness then translate into the restaurant environment? How do you reduce waste there when the order of the day is giving customers what they want? Here’s Meru again. Speaker 2 [00:09:59] We restauranteurs. The smaller we are, the more efficient we tend to be with our money is tighter, right? The smaller you are, the less staff you have, the tighter you have to be. We’re pretty consistent at veggies, so that really helps the restaurant. When you are consistent, when you know, okay, we’re going to do approximately within $500 or within $1,000. We’re going to do this much business on a particular night. It’s a lot easier for us at the restaurant. We can choose what we want to purchase and get deliveries and things done. So on the back side of the kitchen, we have minimal, minimal food waste at the restaurants. Our food waste comes from the customer point of view. Now, that’s a hard one because in the past 15 years, maybe even 20 years, the U.S. and Canada, we’re competing with these big corporations, with all you can eat for 699. And people are expecting this bang for their buck when they go to the restaurant. And especially for us during tourist season in the summertime, there is this preconceived notion that Indian food is like an all you can eat buffet. That really resonates with me, John. Every time I travel, especially to the U.S., but really all across North America, I can’t help but notice how big portions have become. Speaker 1 [00:11:14] For some reason, many consumers have come to value quantity over quality. When it comes to dining out, it’s something Miro thinks about a lot. Speaker 2 [00:11:22] I have been working a lot in the past couple of years of trying to figure out how do I do it? That the customer is paying what the customer should pay for the food. But the food isn’t cheap enough subliminally to that customer that they have no problem leaving an entire lamb popsicle on their plate or asking for more naan and more rice and then just leaving that rice and not on the plate. We actually look at our compost every single night to determine, just to have a look at it and just say, okay, this is what customers today wasted. Speaker 1 [00:11:54] Have you tried scolding your customers the way your parents did? Speaker 2 [00:11:57] Well, Vikram is pretty good at that. Finish your plate. But customers don’t mind being teased about, you know, what they’re wearing. But morally, it’s hard to tease the customer. Speaker 1 [00:12:07] So instead of teasing or scolding customers, Mira and Vikram try to educate them about food waste for some of their charity fundraising dinners, for example. Mira uses ingredients from a nonprofit in Vancouver, the Food Starch Foundation. It collects so-called rescue food from local grocery stores and. Speaker 2 [00:12:23] At the very end when I announced that you just ate a meal prepared from rescued food and even rescued food. I don’t like that word because it has like some charitable component to it. You get very high quality food that grocery stores deemed not worthy to sell anymore because of this best before date or because it didn’t look the way a consumer wants it to look. And thankfully, I got it. I was able to host a fundraiser. You were able to experience what this food is. I mean, it’s great to see the look on their faces. Speaker 1 [00:12:59] I’ll bet they’re a little surprised, but also impressed. Emmy RU hopes it causes people to really think about their habits. Speaker 2 [00:13:05] We need to change our eating when we go to restaurants and we need to change our purchasing. When we go to the grocery stores, we need to become a little bit smarter and wiser about how we purchase food and our fears of getting sick. As Mira says, we need to change how we eat and go to restaurants, and we need to change how we shop when we go to grocery stores. But of course, there’s another critical player in this revolution, and that’s the producer who supplies those restaurants and stocks, those store shelves. Speaker 3 [00:13:35] I’m Randy Huffman and the chief food safety and sustainability officer at Maple Leaf Foods. Speaker 1 [00:13:40] Maple Leaf Foods is one of Canada’s largest and oldest food producers. Dating way back to 1927 and as a food producer. Maple Leaf knows full well that its activities have a significant carbon footprint. But Randy Huffman told us that Maple Leaf is also aiming to become, quote, the most sustainable protein company on earth. And a key ingredient in that plan is cutting its own food waste in half. Speaker 3 [00:14:03] Back in about 20 1415, we began to set long term environmental footprint goals focused on how our operations impact our utility usage, such as natural gas, electricity and water. But we also recognized the importance of food loss back in 2014, and we set a goal to reduce our impact, to reduce the amount of food loss and waste from our manufacturing system by 50% by 2025. That was a goal, we said, based on a baseline in 2016. Since 2016, we’ve accomplished a 36% reduction in food loss and waste in our system. So we’re on track to meet our target of a 50% reduction by 2025. We’ve got work to do, but we feel confident we’ll hit that. Speaker 1 [00:14:49] Of course, targets are great, but implementing those changes on a tight timeline is another matter. I asked Randy how he’s planning to achieve this audacious net zero goal, and specifically what role food waste plays in the effort. Speaker 3 [00:15:03] The products that we produce have a very defined shelf life, and depending on the category, it can be from, you know, a week or two of salable shelf life to several months. But in all cases there’s an end to the life of that product. So probably the most meaningful approaches that we can take to ensure that the product maintains its quality and maintains its quality characteristics and consumer acceptability throughout the shelf life have to do with improving our hygienic conditions in our facilities. So improving the microbiological status of foods that we produce. And we’ve made dramatic strides in that. Second, we packaging the technologies and the ways that we packaged foods today compared to five, ten, 20 years ago, is is dramatically improved. And so packaging can play a role in improving the quality of the product through the consumer’s use of that product. Speaker 2 [00:15:59] Essentially, he’s saying that quality foods, cleaner facilities and better packaging make food last longer. That all checks out because the longer food lasts, the less likely it is to get thrown out. But there must be some waste that occurs in other areas of Maple Leafs production process, right? Speaker 1 [00:16:15] There is. That’s why it’s often called shrinkage in the retail world. When something falls off a conveyor belt and onto the floor, for instance, it gets deemed unfit for human consumption. It has to be thrown out. But as Randy says, through regular food and waste audits at its plants, Maple Leaf has been able to tighten its production processes and reduce some of that shrinkage. Speaker 3 [00:16:35] Those audits continue every year, and they identify best practices or engineering changes that we can make to our equipment that reduce the amount of loss that occurs in the system that Maple Leaf Foods were big believers in. You manage what you measure. That that concept and principle helps us strive for improvements. One example that comes to mind is very simple mechanical approaches to preventing product from falling off of a conveyor. Let’s say once we started measuring this, it became more important to our teams. And then we began to address, well, how can we create that guarding on that conveyor to be more effective and not have that inch gap where food can fall through? Speaker 2 [00:17:21] One thing I thought was interesting in our conversation with Randy was how he highlighted generational changes in the reasons why food gets wasted. He says, For one thing, we’re much more conscientious these days about spoilage. Speaker 3 [00:17:33] In the past, food spoilage was a much larger contributor to waste, and my parents grew up in the Depression era. My dad on a dairy farm. And now when it comes to assessing whether or not deli meat is safe to consume, my mom, she would say, never eat slippery me how we think about freshness and shelf life and quality of food products today. I know many consumers are driven by what’s on the label, the use by date. In fact, our food systems have become so efficient at producing food that it has a long shelf life and it has technology over the course of history. Recent history has led to dramatic improvements in the life of the foods that we consume. Yet we still have a major problem. Speaker 1 [00:18:17] It’s an interesting observation, Teresa. In the past, food got wasted due to things like poor refrigeration or production processes. But back then, consumers valued food, especially during economic crises like the Great Depression, when there was so much scarcity. Canadians waste more than 50 million tons of food. Every year. This suggests that the source of the problem lies at least partly in the attitudes of consumers. Speaker 3 [00:18:40] I think prior generations, our parents generations were much more cognizant of the value of food and were less tolerant of approach we have today where, you know, there’s just not as much appreciation for the value of food and what goes into getting it to a consumer’s home. I think back in those days, people were much more aware of that and reducing food loss in the home. Speaker 2 [00:19:03] It’s true, although I do have to wonder about the impact inflation is having. Food may be relatively cheap compared to historical highs, but it’s getting more expensive by the day. Data released by Statistics Canada this fall suggests the price of food purchased from stores is now rising at its fastest pace since 1981, up more than 11% year over year. You have to think that maybe those increases will force consumers to be smarter about what they buy and don’t buy. And to that point, John, who better to ask than somebody from Canada’s top grocery chain? Stick around for that conversation and more right after this short break. You’re listening to Disruptors an RBC podcast. I’m Theresa Do. I’d like to share with you our latest Proof Point report from RBC Economics and thought leadership that dives into Canada’s provincial finances. All provinces from coast to coast have recently recorded surprisingly high revenues, thanks in part to elevated commodity prices and soaring inflation. But how long will this revenue windfall last? We predict that the looming economic downturn and higher interest rates will soon tip the scale for provincial governments. To learn more, visit RBC E-commerce Thought Leadership. Welcome back to the third and final episode in our special series on the future of Canadian Agriculture, The Growing Challenge. Today, we’re looking at the issue of food waste from several different perspectives, from the role played by consumers to producers to restaurateurs and retailers. We just heard from Randy Huffman of Maple Leaf Foods, who told us about how Canada’s leading food producer is reducing waste and loss throughout its production system, thanks to data driven decision making and cutting edge technology. But remember that stat Sonja, who from BCG shared with us that 40% of waste comes from a further down the food chain from restaurants, grocery stores and ultimately consumers at home. While this means that grocery stores in particular have a vital role to play in helping to move the needle. Speaker 3 [00:21:12] My name is Kevin Groh. I head up an area called Corporate Affairs for Loblaw Companies Ltd.. And Corporate Affairs is really the company’s relationship and communication with stakeholders right across the spectrum. So from the people we work with, to the folks in our stores, to suppliers, governments, communities, and that’s an increasingly tightly connected activity to the things we’re doing around the environment, fighting climate change and also priorities around advancing social equity. Speaker 1 [00:21:43] Kevin says grocery stores are in a unique position to gauge changing consumer choices about climate change and sustainability. Everything from how we shop, whether it’s in-store or online to what we buy organic vegan, gluten free meat or dairy to how those items are sourced are all part of the food shopping equation. As the Loblaw Group of companies moves to become a net zero operation. Kevin says they’re looking at the many ways they can reduce waste in stores and throughout the supply chain. Speaker 3 [00:22:12] As we look at our company purpose. We talk about helping Canadians live life well. And it’s really evident how you might do that if you’re Loblaw and you operate the largest chain of both corporately owned and independent grocery stores across Canada and also the Shoppers Drug Mart chain. So we came up with five crisp commitments. One is to fight climate change and the other is to advance social equity. And beneath those are really specific goals and activities around. On the climate side, bringing our carbon footprint to zero, getting to net zero greenhouse gas emissions position and then food waste are. Our goal is really simple, which is we want to send zero food waste to landfill by 2030 and all of those things we believe link back to helping Canadians live life well. The interesting thing is many of them intersect. So if you look at carbon, for instance, we want to have a net zero carbon footprint within. That is certainly going to be consideration of food waste and the negative impact that food waste going to landfill has on the environment. Similarly, on some of the commitments we’ve made around social interests, namely the health and wellness of families, there is a very direct connection between food waste and that category of social equity, which is think it’s morally offensive that businesses or people are throwing out food that can be otherwise consumed, particularly when we have levels of food insecurity like we do in Canada. Speaker 2 [00:23:41] That last point. Food insecurity is a really important one, John. When we talked with Sonja from BCG, she told us a shocking fact. Nearly 16% of households in Canada were food insecure in 2021. That means that nearly one in six Canadians doesn’t have access to enough safe and nutritious food to meet their daily needs. And the soaring cost of food isn’t helping. But Kevin says a food waste for grocers is also a sign of a business that’s not running particularly well. Speaker 3 [00:24:12] I guess if you look at food waste, fundamentally, you could almost say that that the existence of food waste is a business failure for a grocer. So if you talk to ten grocers about the idea of food waste, most of them will start with the statement, something like, you know, we’re in the business of selling food, not throwing it out. Many years ago, we met internally and actually met with others in the industry to wrestle the challenge of food waste and the fact that, you know, it’s not only morally objectionable, but from a business perspective, the less food waste we create, the better our business is running. And in those conversations, we took a baseline of our food waste from 2016 and said that we would cut it in half by 2025. And we came out of the gates really, really strong. And within a matter of a couple of years, I think we had cut our food waste by about 75% in our corporate stores. Those are the ones we effectively own and operate that aren’t independently run. And it was a really great achievement. And it it sort of gave us the ambition of saying, you know what, we’re going to up the goal and we’re going to say by 2030, we will be sending no food waste to landfill. Speaker 1 [00:25:19] And that’s where innovation comes into play. Loblaw has partnered with a wide variety of startups delivering tech solutions. To the food waste challenge and to research. There are innovations that provide benefits to the environment and substantial savings to consumers. Speaker 3 [00:25:33] One of the innovations we’ve been looking at and have actually tested with great success is Flash Foods, and that’s an app based program that actually gives people access to food in our store at discounts as great as 50%. And the selection of those items really has to do with an algorithm that assesses whether we have ordered too much of something and the likelihood that that product will sell by its best before date. And as items sort of approach their best before date, but are still very safe and healthy to eat, they’re made available at deep discounts. And we found that it’s an interesting microcosm of the bigger challenge, which is we don’t want to create food waste. Ideally, the things on our shelves we’d like to sell and not throw away. And people are very inspired by discounts. Speaker 2 [00:26:22] I get that. I mean, who doesn’t appreciate a good deal? Right. Speaker 3 [00:26:26] And I think when you look at the issues behind food waste, whether it’s the negative business implication of throwing out food or the negative social implication of throwing out food, flush foods has been a bit of a sweet spot solution that checks a lot of those boxes. Speaker 1 [00:26:42] Flashfood was introduced in more than 500 Loblaw stores, resulting in the elimination of more than 5 million kilos of potential food waste in 2020. So some pretty significant savings there, but the benefits are also being seen up and down Loblaws supply chain. Speaker 2 [00:26:58] Kevin told us the company is working with growers to help market imperfect produce to consumers. You’ll remember hearing about that concept of rescued food from Marion’s Alala so it’s a similar idea at Loblaw. The company is taking fruits and veggies that might not fetch a full price and giving them a new lease on life. Speaker 3 [00:27:16] We’ve actually packaged it up to say, Yeah, this potato looks a little strange, but it’s perfectly edible and healthy and we’ve packaged that under the no name naturally imperfect line. So there’s a there’s an effort there to just think slightly differently, both at the at the brand level, but also at the consumer level to capture what otherwise might become waste or in another part of the country. We’ve been partnering with a group called Loop Resources to literally collect our food waste and take it and turn it into animal feed for local farms. So there are there are ways to address the challenge and where food waste is inevitable, we’re working to make sure that it’s not inevitably the landfill. The other areas that we’ve worked on include Zoo Share, which is a partnership with the Toronto Zoo to take our food waste and their anim on manure, combine it into a biogas that is renewable energy fed directly into the grid. Speaker 1 [00:28:11] Theresa We’re hearing this again and again about biogas and the opportunities throughout the food system to turn waste into energy. Speaker 2 [00:28:19] It really gets back to that idea of a circular economy, John, where surplus food or waste from farms, grocers and wholesalers is finding new purpose while helping to reduce harmful emissions. And that commitment to a circular economy is something that consumers can also tackle in their own homes. You don’t have to wait for your favorite retailer or restaurant to take that action, as our next guest proves. Speaker 3 [00:28:41] Hi, I’m Jeremy Lang. I’m the founder of Pila and we are working on creating a waste free future. So we do it by creating everyday products or everyday waste, and our goal is to eliminate £10 billion of waste. And we started with plastic waste and now we’re working on food waste to help keep food waste out of the landfill and get it back to the soil where it belongs. Speaker 2 [00:29:00] Sheila produces a smart countertop, composter called Lomi. It holds about four liters of waste and takes between three and 15 hours to break it down, depending on the type of material that’s compared to the weeks or months it takes. Conventional composter. Jeremy says the need for his product was obvious because our landfills just aren’t meant to handle the millions of tons of organic waste they get every year. Speaker 3 [00:29:23] When plants and animals die, they’re supposed to go back to the earth. When we send them to a landfill, they biodegrade anaerobic with no air and they create methane, which is way worse than CO2. Food waste rotting in landfill creates roughly seven or 8% of all greenhouse gas emissions. So it’s a big problem to solve. So anything that we can do to help nature get that food waste, keep it out of the landfill and put it back into the soil so it helps to create healthy topsoil, which helps to grow healthy plants. And it’s like nature’s fertilizer, the end product. You can sprinkle in your garden and you can sprinkle on your lawn. You can avoid the compost facility altogether and go directly into the soil. We’re saving emissions by preventing that greenhouse gas emission, by preventing and are avoiding the landfill, avoiding that food waste from rotting landfill, and by creating healthy topsoil, which helps to sequester carbon from the atmosphere. Speaker 1 [00:30:14] It sounds like a great consumer oriented innovation. Theresa And according to Jeremy, more than 100,000 households are now using Lumi to reduce their food waste. Speaker 2 [00:30:23] That’s quite impressive. John, I can’t believe we’ve reached the end of this series. We’ve covered so much ground, and yet there’s still so much more to say. When I think about that big number that more than a third of the world’s food is lost or wasted every year, it really strikes a chord with me. Reducing waste seems like low hanging fruit, to use another food pun in our battle to get more food into the hands of those who need it and to keep our greenhouse gas emissions in check. Speaker 1 [00:30:54] But before we wrap up, Teresa, I’d love to hear your thoughts on everything we’ve learned in the series. Speaker 2 [00:30:58] There’s a lot to digest here, John, but what stands out to me the most is how incredibly high tech agriculture is, which of course, is evidence everybody working in the space and not that much to those outside of it, like I was until I started doing research on it. And we were only able to touch a little bit on this in a previous episode. But the future of food is unreal. Lab grown meats, cheeses, even chocolate one day could be available at a restaurant or bodega near you. Not to mention the vertical farms that are already offering fresher local microgreens at the grocery store. It makes me feel like we can really transform how we produce and consume food to be way more climate conscious and meaningfully reduce our emissions. What about you? Speaker 1 [00:31:43] I keep thinking about change, and if we’re going to tackle climate change, we all have to think about how to change the way we produce food, the way we transport food, the way we consume food, and how we can better preserve food. Fortunately, there are technologies emerging in all sorts of fascinating ways. I think about how the past decade of innovation or a couple of decades really has been rooted in software and how much innovation in the decade ahead is going to be based on hardware, especially in the ag and food sector, where we’re going to need new machines, tools, devices to transform and change all that we do with food. And that’s what Canadians for generations have been great at. So for Canada, it’s game on. Speaker 2 [00:32:28] And just to cap off with the focus of today’s episode, I think about food waste or rather not wasting food a lot in my daily life. It’s fascinating to me that food waste is both one of the easiest aspects of emissions to address because it’s directly under our control and also one of the hardest, because it’s about changing our behavior and our attitudes, which are very sticky. Speaker 1 [00:32:49] Absolutely. We love on this podcast to talk about technology, but technology doesn’t matter if we don’t think a lot harder about all of our own behaviors. Speaker 2 [00:32:58] So we’d like to offer a huge thanks to all our guests for sharing their insights with us. We hope you’ve enjoyed listening to the series as much as we’ve enjoyed putting it together. And if you’d like to revisit some of our past episodes or you just want to keep the conversation going, visit RBC dot com slash thought leadership. Until next time. I’m Theresa Do. Speaker 1 [00:33:18] And I’m John Stackhouse. This is Disruptors, an RBC podcast. Talk to you soon. Speaker 2 [00:33:27] Disruptors, an RBC podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by Jar Audio. For more disruptors content, like or subscribe wherever you get your podcasts and visit rbc dot com, slash disruptors.

Speaker 1 [00:00:01] Hi, it’s John here. Happy New Year and welcome back. We’ve been warned for years that the point of no return is coming. Sea levels are rising. The Earth is warming. We’ve seen thawing permafrost and large scale die offs in coral reefs. And even parts of the Amazon are experiencing increased episodes of drought. Okay. That’s a lot of despair. But guess what? There’s also hope. We know the problem. And more than ever, we know a lot of the solutions. Critical policies are actually in place and a very key element. Money is on the table to fund innovative technologies that can change our world. The US is making its largest investment ever. The European Commission has pledged to mobilize at least €1,000,000,000,000 in sustainable investments over the next ten years, and Canada is ponying up, signaling the next federal budget, along with commitments from key provinces, could set the course of public spending on climate for years to come. But it’s not enough. Now it’s time for the private sector to put those billions of dollars to work and add many billions more. The future is here. The question is how can we disrupt it before it disrupts us? This is Disruptors. An RBC podcast. I’m John Stackhouse. Today, I’ll be speaking with two people who decide how billions of dollars are invested in green tech. I’ll be joined by Elliot haTO, a managing director at Beyond Net Zero, a global growth equity firm with $73 billion under management. But first, I’d like to introduce Dr. Andrew Steer. Andrew is the president and CEO of the Bezos Earth Fund, created by Jeff Bezos in 2020. It has $10 billion that has to be disbursed as grants to address climate and nature within the current decade. Andrew, welcome to Disruptors. Speaker 2 [00:02:07] Thank you very much, John. Speaker 1 [00:02:08] I want to start with the Bezos Earth Fund. What is it? And maybe give us a sense of the vision behind it? Speaker 2 [00:02:14] Well, Jeff Bezos allocated $10 billion to be spent down this decisive decade on the challenges of climate change and nature. And so it’s an exciting venture. It sounds like a lot of money and it is a lot of money. But actually, compared to the need, of course, it needs to be leveraged so that we can get real change because this is the decade that will determine whether or not we succeed or fail. Speaker 1 [00:02:43] So is it that critical that those sorts of investments, that scale of investment be made this decade? Because if it’s made a decade hence, it’s too late? Speaker 2 [00:02:53] Well, next decade will also be critical. The problem is, if we don’t do it right this decade, it will be impossible to do next decade. So that’s why this decade is is really absolutely critical. We we simply have to get down to net zero. When we talk about climate change and we simply must reduce the incredible loss of nature which is going on at the moment because these two problems multiply themselves and we’re heading to a bad place. We live in this highly paradoxical world, don’t we? We have never had the progress. You know, the average person today lives 20 years longer than when I was born. Poverty has fallen from 80% of the world’s population to less than 10% of the world’s population. Amazing achievements. But the price we’ve paid has simply been too high in terms of losing species, losing natural habitats, polluting the atmosphere. And we can do better. Speaker 1 [00:03:56] And Jeff Bezos, I mean, he’s celebrated widely for a level of thinking and ambition that is all too rare in this world. Can you give us a bit more sense of how that ambition applies to climate work? Speaker 2 [00:04:08] Well, I mean, it is wonderful, isn’t it, that wealthy people decide to give back. And it’s wonderful how a growing number of high net worth individuals are seeing these big problems that are needing to be addressed. And Jeff Bezos himself obviously has a way of thinking. I mean, he is somebody who has taken on problems that at times seem impossible and systematically gone about addressing them so that we now have the ability to do things that we couldn’t do before, having really transformed entire industries. And so bringing that mindset to these incredibly, you could say, wicked problems, solving climate change is the greatest collective action problem, as many have said sort of in the history of the world. It’s got everything that makes it difficult. It’s got into temporal inequities, it’s got current inequities, it’s got deep moral issues, it’s got massive technological issues, it’s got complex financial issues, and it’s got huge political questions that need to be resolved and all of that kind of free rider problems that we know about. And so, my goodness me, we need the best brains as well as the best money to address these issues. Speaker 1 [00:05:27] But I guess in some ways you’re not solving that problem. Jeff isn’t solving that problem. You’re trying to find support, invest in the many folks out there who are developing the ideas and solutions. And I’m curious what kind of mindset you strive to bring to that. You know, I’ve heard the fund described as one that supports ideas and not just projects. That’s got an appeal. Not always easy to invest in ideas on, unfortunately, but it probably takes a different approach than building a company or running a project. Can you give us a bit of insight into what kind of thinking you and your team tries to bring to the challenge? Speaker 2 [00:06:03] Well, we try to identify and monitor the roughly 50 to 70 major transitions that are required this decade and next. You know, the big blocks of we’ve got to totally transform energy. We’ve got to rethink our food system. We’ve got to think about forests. We’ve got to think about our cities. Within each of those, there are five or six transitions, which in and of themselves are pretty major. We’ve got to get. Rid of the internal combustion engine. We’ve got to shift diets towards more plant based. We’ve got to do about 50 things of that level. And what we do is we co-manage with the World Resources Institute and some others something we call the System Change Lab. And what we do with those, we monitor those 50 to 70. And we ask the question, how close are they to tipping points beyond which change becomes irresistible and unstoppable? And what are the barriers to get there? Our job is to be pretty forensic about where we go in using both money and convening power and influence Power. It could be to finance primary research. It could be to finance political advocacy. It depends on the issue, and it depends upon precisely where they are in that trajectory towards a positive tipping point. So when you mentioned we like to address ideas, this is again, is something that Jeff Bezos, you know, will say let’s not allocate funds in our efforts to issues or even to targets. Let’s allocate them to ideas that will get to those targets, that will address those issues. Speaker 1 [00:07:46] And the ethos of the fund, primarily one of technology. That technology can and will solve this. Or do you believe that we also need culture change, behavior change, even social change, and not rely on those magic bullets of technology? Speaker 2 [00:08:02] We absolutely and utterly require cutting edge technology and behavioral change. And indeed, as we move forward towards the end of the 2020s into the 2030s, behavioral change is going to become more important is probable that people in Canada and certainly in the United Kingdom, where I come from originally, we have reduced our greenhouse gases quite a lot. The average citizen has no idea it’s happened because they haven’t had to change their behavior. As we move forward, we are actually going to have to change our behavior. Now, technology is still incredibly important and we couldn’t have a chance of addressing climate change. You know, if you look at the cost of, say, solar energy, I mean, since Jimmy Carter put solar panels on the roof of the White House in 1979, the price of solar has fallen by 99.6%. So there’s actually been a wonderful revolution that’s intellectual and economic. I mean, even ten years ago, the entire economics profession felt that, my goodness me, it would be nice to do something about climate change, but we’re going to have to pay a cost in terms of lost competitiveness, lost economic growth. And now because of cost changes, because of technology changes, because we’ve learned about what policies work. It now turns out that actually smart, strong climate action leads to more economic efficiency. It drives new technologies, it opens new opportunities, it shifts expectations. So there is a much better future. So you get more competitiveness and you can get more growth. Now, we don’t want to be Panglossian about this. It’s not all win win. There are losers. And that’s where politics comes in. Speaker 1 [00:10:00] Well, exactly. This is political and I mean that in a positive way because it’s about collective decision making, which is reflected in in our politics when we do it well. But we don’t do politics very well in many countries. How are you thinking about systems change in the political arena or the collective decision making arena that can perhaps accelerate some of the other investments that you’re making? Speaker 2 [00:10:25] Well, I mean, this is a very difficult issue. We’ve certainly put quite a bit of resources already into communications. Last year, we invested quite a bit here in the United States trying to clarify the narrative about good climate action leads to a good, better economy. And we we invested in targeted messaging through various media, television, social media, basically bringing data, bringing the data and evidence and bringing human stories as to what works. I think generally the environmental movement has been trumped by more sophisticated communications and political skills from the opposition. Speaker 1 [00:11:16] I want to shift to the idea of of of leverage. People will hear that you are investing $1,000,000,000 a year and think that’s a large amount of money. And of course it’s a huge amount of money. But the need out there for the transition is going to be kind of in the 5 to $10 trillion a year range globally. That’s how much capital needs to be invested. So we all need to be thinking more about leverage. And I’m curious what you’re seeing and learning about leverage in your own climate work. Speaker 2 [00:11:45] Well, most philanthropy has been unleveraged, so a dollar into good health gives a dollar of good output. In good health. You know, you build a hospital, you build a school, you build whatever. Unfortunately, because the problems are so great, we need to do better than that. Now, you can leverage in several ways. You can leverage through de-risking private investment. And obviously the Royal Bank of Canada has done incredible work on that. Many investments in sustainable development need some de-risking. One could do that very directly, but one also can, if you like, do the policy side, which is also leverage. I mean, in many ways that’s the most effective leverage of all if one invests in reshaping policy. So what we try and do for every single investment we ask, well, if you like the direct impact and then what’s the second order impact that would encourage others to do it? And another I mean, another form of leverage is simply doing something that is so successful that then through the right kind of communication, it can then become irresistible. So we’re experimenting with all kinds of ways of doing it. So as an example, last year we really wanted to take on the most difficult issue of protection or conservation that exists, which is the Congo Basin, which is, you know, unbelievably precious. It absorbs more carbon than the Amazon Basin and the Southeast Asia tropical forests combined, and yet it’s under massive threat. And obviously there are all kinds of governance issues. So we gave funding to about ten different world class organizations and we said, look, the deal is each of you are very, very good at certain things. Your job is to work on those and be accountable to to us for what you do. But in addition to that, for the first time ever, let’s work as a team together. So if you’ve got the CEOs of ten internationally recognized organizations together with ourselves, then suddenly you get some European governments that say, actually, we’d be like to be part of this. And then you can go and see any head of state in the Congo basin that you want and you start sort of thinking differently about, my goodness me, if we only we could get the the head of the office, the head of the country all the way down and have something joined up, my word, that could be real leverage. Speaker 1 [00:14:20] But that spirit of collaboration is really at the heart of leverage. Leverage isn’t just a financial equation. It’s about bringing together different forces and empowering them, but also using them together to do things that none could do on their own. And it makes me think of the Electric School Bus initiative, which I wanted to ask you about, because that’s a it’s a really neat and ambitious project aimed at decarbonizing the entire U.S. school bus fleet. Curious how you see it as a template for more collaboration, especially between public and philanthropic forces? Speaker 2 [00:14:51] You’re absolutely right what you just said, John. I think I mean, if you look at almost any of the problems that we’re trying to deal with, there’s no one organization. There’s not even one group of organizations. It’s basically a sort of multi-stakeholder solution. And you need governments and you need, you know, NGOs, you need citizen group, corporate sector and so on. And actually the school bus situation in the United States, a very good example of that. There are 480,000 school busses in the United States. If you are a poor child from a poor county going to school in a bus in this country, because remember, schooling is a county level responsibility, you breathe air from diesel fumes. That is basically like being on the street in New Delhi. I mean, it’s really bad for health. So this has a social justice element to it, a health element. And this is one of the very first conversations that I have had with Jeff Bezos and Lauren Sanchez about when I was in my old job. And it was like, wouldn’t it be exciting if we could do something that would have a health benefit? But not only that, it would have a climate benefit, it would have an intergenerational benefit. It would it would actually also help create an industry in this country, because 96% of all the electric busses in the world were built in China. And then on top of that, by the way, during those long, hot summer months while school busses just sit there, they actually don’t sit there if they’re electric because they become a giant battery. And because 480,000 batteries, when you take electricity off the grid, when it’s cheap and plentiful, you put it back on the grid when it’s not, my goodness me, that saves dozens of power plants being built. But you can only then do it if the state level gets engaged, the school districts get engaged, the industrial and financial sector gets engaged. And so what we did, we worked on legislation and now there are, what, $12 billion that’s been put into this, something like that through the new Biden administration. And little by little, you start seeing, my goodness me, we could put this jigsaw puzzle together. Not us. I mean, you said earlier we don’t take any particular credit for this, although I think we’ve played a very good role. We’re part of, if you like, making sure that the pieces of the jigsaw puzzle sort of come together at the right time in the right kind of way. Speaker 1 [00:17:24] This point about multiple benefits from multiple our allies is really critical and often lost on climate policy, where many people, for understandable reasons, see the objective as critical enough on its own to be the only ROI, if you will. That’s important, but that’s not necessarily the case for all sorts of people in society who have multiple needs. And the more that policies and investments can help address those multiple needs rather than be a kind of a single solution oriented one, probably the better we all are. And I’ve been seeing more of this in the biodiversity space, and I raise that because our last episode of 2022 was on biodiversity, and you and I met for the first time at the Montreal Biodiversity Conference and it was there that I got to more deeply appreciate the intersection of climate change and biodiversity and how they both lead to benefits in each realm and are interconnected in all sorts of ways. And I’m curious, Andrew, how you see those two challenges intersecting and how we can do more. Speaker 2 [00:18:28] Well, you’re absolutely right. And by the way, your podcast edition on that was wonderful. I think that conference in Montreal was extremely important and I think combining that with COP26 in Glasgow, which for the first time sort of recognized we can’t solve climate change unless you also protect nature because it’s there’s more than one third of the solution. And the same goes the other way round. You can’t protect nature unless we address climate change, because with the way that climate change is going, we are losing nature at an even more rapid rate. And it’s really been wonderful to see just in the last 18 months culminating in in Montreal, we’ve seen this sort of willingness to think of these two as integrated. And your points about, you know, multiple benefits are incredibly important. You know, they call them co-benefits. And in many parts of the world, you know, if we want to deal with climate change, you know, don’t enter the policy door through the climate change door, enter it through health or entry through nature. Speaker 1 [00:19:32] We’re sort of time, unfortunately. But I also was just reflecting we’re still in the early days of January, and therefore I want to seize on the New Year spirit to ask you, as you look through 2023, what your maybe greatest hope is for the year and also what your greatest fear is. Speaker 2 [00:19:50] Well, look, this is a year where things are going to need to start improving. We got data just today on greenhouse gas emissions in the United States. Greenhouse gas emissions went up last year and things need to change. I am deeply hopeful that actions that may take a year or two to have bite, they are going to start having impact this year. I think some of the decisions made in Glasgow and in Sharm el Sheikh will start to bear fruit in the United States. Obviously with the additional funds that are being put forward. I mean, historically important. We are going to start seeing some progress. But look, we are in a hugely uphill battle. We’re in this paradoxical world where, if you ask two experts say on climate change, you say, how are we doing? And one will say, it’s amazing. You know, costs have come down 99%. We’re doing this. It’s really great. Others who say, you know, we’re a bunch of lemmings going off a cliff the end times and which how could they both be, right? Well, they actually are both right. They are both right. We are doing better and better than we are dog chasing a bus and the dog is going faster and faster. And we are saying we are running so fast is great, but the bus is accelerating away and so the dog can’t keep running faster. The dog has to get its own electric bike. You know, we need a new instrument. And I’ve got a feeling that we’re getting towards the stage where. Will accept that fact. Speaker 1 [00:21:17] What do you think those dogs need to do in 2023, above all else? Speaker 2 [00:21:21] We need once and for all to recognize that no individual government or even government can solve the problem. We need to sit down around the table and we need to get the real decision makers to say, okay, if the issue is electrification of transportation, what do we need to do? How do we how do we have a rational conversation? It can’t simply be preaching. It’s got to be a multi-stakeholder approach. And I hope and pray that we’re heading towards that kind of new it’s really a new governance system. And I think there are signs of hope. But, you know, there’s still a far, far more risks than most people are aware of. Speaker 1 [00:22:08] In a site governance system going to have to come from government or from collectives of government like the U.N., or is it going to come from philanthropists, private actors, business and other coalitions? Speaker 2 [00:22:20] I think it’s already starting to change. I mean, it is quite interesting that if you go to the United Nations General Assembly now, you’ll see a much, much richer approach. You’ll see young people. You see businesspeople. Governments have to accept it. But often governments, you know, don’t always lead. They are responsive. And so the business community, I mean, it’s albeit difficult, it is stunning when you think about it that now $130 trillion of assets under management are now committed to net zero. That would have been unthinkable. Now it’s very, very difficult to implement it. And there’s some rocky things going through right now, but we now need to come through that and say, look, you know, we know it’s difficult, but now let’s really redouble our efforts. And I’ve got a feeling that that’s happening. And, you know, I don’t want to flatter your country, but I do think actually some pretty exciting things going on in Canada right now. Speaker 1 [00:23:20] What excites you most in terms of what’s happening in Canada? Speaker 2 [00:23:22] Well, I think, for example, on the nature side, the announcement that Canada made on massive new protected areas, I think anywhere in history on the first day of the COP and led by First nations, very, very exciting. I mean, talk about multi-stakeholder. I mean, so interesting seeing First Nations seizing and being given authority to manage natural resources, which they are very good at, at managing. That would be just one example. Speaker 1 [00:23:58] It’s those coalitions likely and unlikely that are keeping us moving forward as bumpy as rocky as that road can be. And I’m grateful that the Bezos Earth Fund is leading a lot of those coalitions. Andrew, And that you’re you’re a champion of so many. Thank you so much for being on disruptors. Speaker 2 [00:24:15] Thank you, John. We love listening to your podcasts. Speaker 1 [00:24:19] That was Dr. Andrew Steer, president and CEO of the $10 Billion Bezos Earth Fund. Up next, Ellia haTO will join us to talk about how massive investments in technology are changing the fight against climate change. Speaker 3 [00:24:37] RBC Tech for Nature. Is there a $100 million by 2025 multi-year commitment to accelerate tech based solutions that help preserve the world’s greatest wealth, our natural ecosystem? We work with partners to leverage technology and innovation capabilities to help solve pressing environmental challenges. This program is a key element of how we are delivering on our climate strategy. The RBC Climate Blueprint RBC Tech for Nature is now accepting funding applications until February six. Apply now to partner with us and create a more sustainable future. Visit RBC dot com slash tech furniture for more information. Speaker 1 [00:25:12] Welcome back. Today, we’re talking about how Canada can emulate the most comprehensive climate law in American history, the Inflation Reduction Act, or IRA. Our next guest is Eli Aheto. He’s the managing director of Beyond Net Zero, a global growth equity firm that invests in companies to develop innovative climate solutions. Eli, welcome to Disruptors. Speaker 4 [00:25:34] John Thank you so much for having me. It’s a pleasure to be with you. Speaker 1 [00:25:37] I want to start with Beyond Net Zero, and if you could give our listeners some background on what it is and what it’s all about. Speaker 4 [00:25:44] Sure. Beyond Net Zero is the climate investing team at General Atlantic. I think folks may recognize General Atlantic as a 40 year old global growth equity firm. We’ve been investing in leading businesses in digital sectors for most of our history. And the climate initiative is one that’s fairly new in the last two years. But we recognize it as one of the most consequential opportunities in business today and also one of the most consequential opportunities in society. And so we think that there is a significant need for capital to help drive the growth of businesses that are putting out products and services that help people decarbonize either their operations, their livelihoods. You know, all sorts of activities that need to have reduced greenhouse gas emissions. And so we’re pretty excited about the opportunity ahead of us both, because there’s a real social dimension to what we need to accomplish. But we think it’s a fantastic business opportunity where there are entrepreneurs creating products and services that are saving customers money, which is really exciting, at the same time helping them reduce their greenhouse gas emissions. Speaker 1 [00:26:48] I want to get into some of those examples and opportunities, but wonder first if we can talk a bit about the macro environment. Of course, the Inflation Reduction Act or IRA, is clearly injecting a lot of capital into American opportunities. But at the same time, we’ve got a lot of challenges and headwinds in in markets generally. How are you looking at the macro environment for investing in 2023? Speaker 4 [00:27:14] You know, it continues to be a challenging market as an investor. Obviously, we’ve had markets falling over the last year. In some sectors we still have high valuations, which those two things don’t seem to go together. In the climate sector particularly, we’ve still seen high valuations that haven’t yet reflected where the public markets are. But at the same time, we’re seeing markets that are growing quite dramatically. So if you think about, for example, EV charging infrastructure, that’s a market that Bloomberg thinks will grow 80% year over year, and that’s despite the macro environment. More broadly. If you think about solar, the IEA has just increased its estimate of solar buildout for the next several years by 20% globally. That’s a pretty big step up in one year. Part of that is an adjustment that is a consequence of the IRA. Part of that is an adjustment that’s a consequence of energy security in Europe. And part of that’s a consequence of the decreased cost of renewable power. And so there are a lot of tailwinds that are driving forward the climate opportunity, despite what is still a volatile and in some ways rough macroeconomic environment. Speaker 1 [00:28:22] Well, it has been a pretty rough year that maybe now in the rearview mirror a bit longer than that than a year. And for some that brings back memories of earlier clean tech wrote Wonder in your mind what makes this time different? Speaker 4 [00:28:36] I think there are numerous differences between clean tech 1.0 and where we are today. We have now ecosystems of entrepreneurs, financiers, scientists, academics, policymakers who have experience in climate. We didn’t have that last time around. We have now technologies that very importantly are mature and are cost effective. We have now entrepreneurs focused on business models where they are delivering a cost savings to consumers. We have now financial markets that are ready, willing and able to finance businesses that have demonstrated they can be profitable at scale. And we have obviously a desire for consumers to decarbonize and mandate from corporates to decarbonize their supply chains. We have a political support that we didn’t have in the first clean tech investing boom. And so it’s a it’s a radically different environment. Speaker 1 [00:29:34] Did IRA change your fundamental outlook? Did you wake up in August, September, whenever it hit the headlines and think, Wow, I’ve got to rethink my portfolio and my allocations? Or is it more kind of a marginal benefit than that? Speaker 4 [00:29:47] There’s no describing the IRA as being marginal. It clearly was an overdue substantial statement around what the U.S. was going to commit to relative to climate change, and it created the incentives in several different sectors, some of which were already active. And so I mentioned distributed generation. You know, we’ve been very keenly looking at transportation, electrification. So it will create great tailwinds for those sectors. But those sectors were already moving forward. I think in things like hydrogen and carbon capture, it has changed the game. So anywhere from a 60 to 70% reduction in the levelized cost or the, you know, the cost for those technologies. And so you’re seeing right away companies announcing large scale manufacturing facilities, new hydrogen facilities. You’re seeing people announce new battery facilities, you’re seeing folks announce new lithium mining operations. And so I think the IRA has very successfully catalyzed those harder to abate longer duration and somewhat less mature technologies to make them economic and help them scale. The IRA was a game changer in a lot of ways. Now for our portfolio, I don’t think it changed what we’re doing. Mostly we are focused on mature technologies, businesses that are scaling, and so these were businesses that were successful pre IRA, but there definitively is a wind at their back with the IRA. Speaker 1 [00:31:16] But as you look at options, as all investors are doing and will continue to do, what do you see as the needs for Canada to become a greater pull for investors like you? Speaker 4 [00:31:28] The key for us is is business models with scale. And so obviously relative to the US, Canada has a smaller population and a smaller economy by the numbers, but it’s still a very large country and the very clear regulatory frameworks and there are a fairly sizable and very attractive sort of income levels in Canada. So we would expect that those things will yield. Businesses that are serving customers decarbonize in attractive way. You could see easily businesses that are focused on electrification of automobiles being relevant in Canada. You could see easily businesses that are financing consumers to decarbonize, being relevant in Canada. And so I don’t I don’t think that there is any business that exists in the US that couldn’t exist in Canada. It’s just a question for us to go out and find those entrepreneurs and figure out how to convince them to partner with us. Speaker 1 [00:32:20] And that’s a great message for entrepreneurs who may be listening that the world of capital is watching and ready to move and move very quickly in in this environment. Ali, as we move towards close, I wonder if you can give us a perspective on General Atlantic for our listeners who may not be familiar with it. It is one of the great names in investing and has been for decades. What excites you most About 2023? Speaker 4 [00:32:46] I wouldn’t have guessed that we would have the tailwinds we have today. It’s the IRA is a big tailwind. Unfortunately, energy security as a as a concept is a big tailwind. The cost of these technologies keeps coming down. And every day I meet an entrepreneur who is, I think, cracking the code around how to bring decarbonization to markets in a way that’s attractive for the customer and for the investor. It is a sea change from what climate 1.0 was. But when you see that it’s possible to both bring your customer value, your investor value and society value, that that I think is a really attractive proposition. Speaker 1 [00:33:29] That’s a great message to wrap up with Ali and a great message to begin the year with that there’s a lot of people out there cracking the code. Thank you for being on disruptors. Speaker 4 [00:33:39] It was my great pleasure. Thank you so much for having us. Speaker 1 [00:33:42] That was Eli Aheto, managing director at Beyond Net Zero. And before that, Dr. Andrew Steer, president and CEO of the Bezos Earth Fund. We’re at a critical juncture as a country with so much money being put into the advancement of renewable energy and electric vehicles, Canada is bound to feel the effects. It’s up to all of us not to sit back and watch from the sidelines, but rather take bold action, show courage and in the global race to net zero, even take the lead, it’s Canada’s opportunity. Join us next time for a special live on location episode from Davos, Switzerland. I’ll be there along with business and political leaders from across the globe for the World Economic Forum. And you can bet the climate crisis will be one of the hot topics. Until then. I’m John Stackhouse and this is Disruptors, an RBC podcast. Talk to you soon. Speaker 3 [00:34:39] Disruptors, an RBC podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by JAR Audio. For more disruptors content, like or subscribe wherever you get your podcasts and visit our RBC.com slash disruptors.