The growing pivot towards sustainability, volatile geopolitics, and AI are transforming the world around us. During BNP Paribas Exane’s TIME Conference, leaders from politics, business, security and academia shared their unique insights on the impact this is having.
The transition to a more sustainable future continues
The transition to net zero may have suffered recent setbacks, sustainability remains a priority for governments and businesses alike.
During TIME, C-suite leaders spanning a number of different sectors talked about how they are all embracing renewables – including solar, green and blue hydrogen, wind, biogas and small modular reactors – as part of their ongoing efforts to transition to net zero.
There is also a lot of political determination to deliver on sustainability. In Europe, energy diversification – with a special focus on renewables – has been a strategic priority for policymakers ever since Russia invaded Ukraine. Meanwhile, in the UK, speakers pointed out the Government’s sizeable majority puts it in an incredibly strong position to push ahead with ambitious green infrastructure programmes, a development which Juergen Maier, Former CEO of Siemens UK and Chair of Great British Energy, said could usher in a new era of reindustrialisation for the UK after several decades of deindustrialisation.
Digitalisation is also spurring people’s interest in renewables. According to Martin Brough, Head of Climate and Sustainability Research, BNP Paribas Exane, AI and data centres’ insatiable appetite for computational power is adding to demand for electricity alongside electrification of heat, transport and industry. This is fuelling demand for energy, including solar and wind.
In addition, technology breakthroughs are driving down the costs of renewable energy. “Technology developments are allowing us to decarbonise faster and at a much lower cost than originally anticipated. Since 1975, the cost of Solar Photovoltaic (PV) panels has fallen by 99.9%, and this trend is expected to continue, with costs projected to halve again in the next 10 years. We have also seen big reductions in the cost of wind turbines. Similarly, Lithium Ion Battery costs fell by 90% between 2010 and 2021,” said Lord Turner, Chair of the Energy Transitions Commission, speaking at TIME.
This will lead to tangible benefits for consumers. As solar PV and battery prices continue to slide downwards, Lord Turner said people living in the so-called Global Sunbelt group of countries will enjoy cheaper round-the-clock electricity supplies. Due to the contracting Lithium Ion Battery prices, Lord Turner added it is now less expensive to buy and run an electric vehicle (EV) in China than it is a traditional internal combustion engine model.
However, the energy transition is not without its challenges. Margrethe Vestager, Former EVP, European Commission, said countries should avoid becoming too dependent on single supply sources for clean technologies, such as Solar PVs. Having been overly reliant on Russian oil and gas in the lead up to the war in Ukraine, Vestager said the EU is looking to learn from past mistakes, as it transitions to net zero.
Geopolitics: Bracing for a new world order
The geopolitical landscape is undergoing a once in a generation change, and clients need to be prepared.
It is barely four months into the Trump 2.0 Presidency, and the impact on markets has been profound. Experts at TIME said President Trump is redefining US foreign policy, and redrawing the world order in a way not seen since the end of the Cold War. “When you translate ‘America First’ into foreign policy, it means isolationism, aggressive nationalism, and ambiguity about US defence commitments, particularly to allies, withdrawing from international bodies, and launching potential trade wars,” said Professor David Gioe, Global Professor of Intelligence and International Security, Department of War Studies, King’s College London, and a Former CIA Officer.
European powers are now actively talking about ramping up their own defence capabilities, with the German government for example, releasing its historic debt brake. The repercussions will be felt across energy, materials and industrial sectors, and to maximise efficiencies and ensure a coordinated approach during any rearmament, several speakers at TIME urged European powers to streamline their defence procurement processes. Participants agreed the response to this new world order will be distinctly European, but should not be underestimated.
AI is an enabler, but it could also be your biggest risk
AI, as a disruptive technology, is transformational, but its risks cannot be ignored.
Several industry leaders, speaking at TIME, said their companies are harnessing AI, mostly to streamline mundane operational processes, but also to expedite research and development, adding that the productivity gains have so far been impressive.
AI’s strategic benefits aside, policymakers in Europe have repeatedly said the technology, given its potential risks, should be subject to regulatory guardrails. A delicate balancing act, however, needs to be struck between fostering AI innovation and safeguarding consumers.
Vestager, Former EVP, European Commission, said that EU legislation on AI is not looking to regulate prosaic AI use cases or stymie research, but is more interested in protecting people against potential AI bias, when say, applying for a mortgage or a new job.
AI’s long-term impact on society is still a big unknown.
“AI is going to take one of three paths. The first is that it does not live up to our expectations. The second possibility is that AI is a game-changer, and an augmenter of productivity for individual workers, but not a substitute for them. The third – rather dystopian possibility – is that AI is a game changer for productivity, and also replaces workers altogether, leading to higher productivity but also higher unemployment and a more unequal economy,” explained Tom Orlik, Chief Economist, Bloomberg Economics.
Others go further, arguing that AI’s cognitive abilities might one day surpass those of humans. Also known as Artificial Superintelligence (ASI), this technological milestone, should it ever be reached, could have major geostrategic and military implications.
“There will be enormous, indescribable benefits from ASI, but it will also come with some huge risks. If we look at what the Industrial Revolution did to modern warfare, the nations which were impossible to beat for long periods of time were the ones with the advantage in the industrial race. The same thing is going to be true for this revolution in AI,” noted General Sir Patrick Sanders, Chief of General Staff, British Army, 2022-2024.
Attended by around 400 of the bank’s institutional and corporate clients in person, BNP Paribas Exane’s TIME Conference was an excellent opportunity for participants across a range of sectors to both re-connect and gain invaluable insights into the key dynamics influencing geopolitics and markets today.