Yahoo Finance’s Alexis Christoforous and Carmine Di Sibio, EY CEO, discuss the company’s latest sustainability goals.
ALEXIS CHRISTOFOUROS: EY has some lofty goals when it comes to sustainability, including being carbon-negative this year and reaching net zero emissions by 2025. Joining me now to talk about that and more is CEO Carmine Di Sibio. Carmine, good to see you again. Thanks for being on the show. So look, these are ambitious goals you've got there. How do you plan to reach them?
CARMINE DI SIBIO: Thanks, Alexis. It's great to be with you, so much fun. And so yeah we're, very excited about our announcement. It's a very ambitious announcement. But it's one that we have very much a plan on how to get there.
First of all, it's two goals. One is to be net zero in 2025. As many of you know, net zero actually means that you're going to reduce your carbon emissions and really follow the Paris Accord and reduce climate by 1.5 degrees. And you have to actually reduce your emissions. To be carbon-negative each year, we'll reduce our emissions, but we'll also have to buy some offsets each year.
But the way we're going to get there is, the majority of our carbon emissions is around air travel. And in a new way of working, we are going to be doing some things differently. So we will be reducing our air travel by 35%, our overall emissions by 40% by 2025.
You might say, well, how are you going to do that. Is that going to impact your culture? Or are you going to work virtually the whole time? And the answer to that is absolutely not. We are going to travel but not to the levels that we were in 2019.
And the way I describe it publicly and the way I describe it to our people, we've modeled all this out. And we will obviously travel for clients. That won't change much. The change in the model isn't much. But on our internal travel, if you run a global group at EY, and let's say you had four meetings quarterly, each meeting quarterly, four meetings a year, and you had everyone there physically, we're going to ask you that you have two physical meetings and two virtual meetings because we've learned a lot from the pandemic on how to work virtually.
So we want to make sure we have a balance there, a hybrid model. And that'll get us to the 35% reduction. And it'll get us to net zero in 2025, which is the most ambitious target of any of our competitors or frankly, many companies in general.
ALEXIS CHRISTOFOUROS: For sure. Do you think that we'll ever see a day when business travel returns to pre-pandemic levels, or has that just changed forever?
CARMINE DI SIBIO: Yeah, I think it's changed forever. I've had a lot of conversations with our airline clients. And they obviously have a bit of a different view. But I do think people will travel.
And we actually, Alexis, in our model, we've actually built up almost a year of pent-up demand on travel. I, for instance, expect to do a lot of traveling-- I traveled a lot before-- but even more traveling, let's say, at the start of July of this year for a year because there will be pent-up situations where you need to visit clients and so forth.
We have learned a lot. And people can work virtually. They've made it work. So I do see business travel in general reducing not just for us but for many companies.
ALEXIS CHRISTOFOUROS: I mean, at EY, you have some of the largest companies in the world as clients. You've got Coca-Cola, General Motors, Walmart, the list goes on and on. Are you advising your clients to do the same? And are you hearing that they're on board with trying to achieve these goals?
CARMINE DI SIBIO: Alexis, what we're advising our clients is really to look at their strategy. We at EY have a long-term value strategy around our clients, our people, and society. And many of our clients are getting there in terms of their strategy or already have that in place.
With your strategy then, you have to figure out how you're going to take care of all your stakeholders. And you know, part of that is society. Part of that is the environment. We could talk more about ESG. But part of it is the environment.
And just so you know, we've had this plan before Larry Fink's letter today. And many clients have had this plan. So we are talking to them. They are figuring out ways to do better in terms of the environment. And I think many companies are going to roll out plans to be net zero, probably not by 2025, but 2030, 2040, 2050.
ALEXIS CHRISTOFOUROS: Carmine, I want to switch gears here and talk about new leadership in the White House. Do you believe that President Biden's policies are pro-business?
CARMINE DI SIBIO: Alexis, I do believe they're pro-business. I think President Biden is taking a very balanced approach towards everything, frankly, and including business. So he obviously wants a very good economy going forward.
And I do think that we're poised, for the next couple of years, once we get through the pandemic, which has been his number one priority is the pandemic-- and I think that's very smart. Once we get through it, we have low interest rates, globally really. We have a lot of pent-up demand.
And so this analogy of the roaring '20s might be a good analogy. When we talk to our clients, they're all very bullish over the next year or two in terms of their businesses.
ALEXIS CHRISTOFOUROS: You know, Trump had a lot of CEOs coming through the door of the White House. Do you think that President Biden could learn something from the way Trump dealt with corporate America, for better or for worse?
CARMINE DI SIBIO: Yes, I do. I think it's important for President Biden to have business as a stakeholder. I think business is large. And obviously, private business employs a lot of people. So I do think getting advice and talking to CEOs and talking to business is going to be important. Whether that's done by President himself or his staff, I think that's going to be important.
I mean, if you think about even what we're talking about here on sustainability and climate, President Biden has put John Kerry in charge of that. He's made him his climate czar. And I think that's important. I think companies will be able to interact with John Kerry in terms of how are companies going to help the overall goal.
ALEXIS CHRISTOFOUROS: What about Biden's plans for taxes? So we know that he wants to roll back a lot of the Trump tax cuts we saw in 2017. A lot of those tax cuts did benefit big business. And he's also talking about raising the corporate tax rate from 21% to at least 28%. Is that a threat for US businesses?
CARMINE DI SIBIO: Yeah, so Alexis, I do think any raise in the corporate tax would be a threat to US businesses because I do think it would make the US less competitive. I think the tax rate elsewhere would be more beneficial. So I do think President Biden would have to be careful in terms of the corporate tax rate to make sure that we don't drive business outside of the US.
I think he's been very careful in terms of made in the US, an initiative he announced, I think, yesterday or today. So President Biden cares about jobs in the US. He cares, obviously, about business in the US.
So I do think taxes is something that he's going to have to think of and the administration has got to think of very carefully because a raise in taxes would be problematic.
ALEXIS CHRISTOFOUROS: You know, yesterday he signed an executive order to buy American. And on its face, that sounds like a great idea. And frankly, it sounds a lot like what President Trump was saying when he was talking about America first. Is what he did yesterday with that executive order much different from what Trump was doing? And is this really going to be a job creator, do you think?
CARMINE DI SIBIO: Well, I don't know the details of his executive order. But I do think, when you encourage people to buy American, you're going to create jobs in America. That's what President Trump was trying to do, maybe in a different way. But I think if you deal with the demand side and people are proud about buying in America, buying American-made products, that can only help the US, obviously, and US businesses.
ALEXIS CHRISTOFOUROS: All right, we're going to leave it there. We could go on and on. We'll have to save it for another time. Carmine Di Sibio, EY CEO, always good to see you.
CARMINE DI SIBIO: Great to see you, Alexis. And thanks for having me on. Next year we might be in Davos again.
ALEXIS CHRISTOFOUROS: Oh, I hope so. Yes, something to look forward to. All right, be well, thank you.
CARMINE DI SIBIO: Bye.