Rapid Response: How to decarbonize your business, w/John Doerr, partner at Kleiner Perkins

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Hi, everybody. It's Bob. The surge in energy prices this year has been hard to ignore. Some argue that we need to ramp up fossil fuel production to meet near term needs and reduce inflation. Others say this moment proves the danger of relying on fossil fuels that we need to redouble efforts on renewable sources. Climate emergency discussions are now underway at the White House, while record setting temperatures are claiming lives across Europe. I spoke earlier this year with legendary investor John Door of Venture Capital Firm Kleiner Perkins about his new book Speed and Scale, which provides a framework for considering these issues.

John's voice and message are compelling about the risks of climate change, as well as the opportunities for businesses that embrace a new reality. We're re releasing the episode now as a reminder and a roadmap for understanding and addressing these challenges. Here's the episode. What we are doing is not enough. And it's not happening fast enough.

There's a revolution underway, and in real revolutions there are winners. There are losers. One. Monster objective. It's the mother of all OKRs. And that's to take

Fifty nine gigatons. of greenhouse gas emissions. That's The carbon pollution that we pour into our precious atmosphere every year. As if it's some kind of free and open sewer.

Down to net zero. By twenty fifty. This is a tall order. In the early days of the internet. I kicked up something of a firestorm by declaring that the internet had been underhyped, and

I'm of the same view about the climate transition. The transition from The dirty fossil fuel economy to the new clean energy economy. Is I think the greatest economic opportunity in the next century. Yeah.

That's legendary investor John Doare, partner at Silicon Valley venture firm Kleiner Perkins. As author of the new book Speed and Scale, John is aggressively goading business leaders and all of us to address the climate crisis with existential urgency. I'm Bob Safian, former editor of Fast Company, founder of the Flux Group, and host of Masters of Scale Rapid Response. I wanted to talk to John because rather than simply rail about the need for change, his new book quantifies what specifically is needed in six discrete areas to achieve a carbon neutral world. John isn't arguing that we all need to be vegan ascetics. He talks about the need to go for the megatons and the critical role that business plays in advancing that movement.

He also talks about the huge economic opportunity that decarbonizing is unlocking across All industries and enterprises. To win the battle to preserve the planet, he says, we need to apply lessons of speed and scale more broadly and more aggressively than ever before. I'm Bob Safian. I'm here with John Doer, partner at Kleiner Perkins and author of the new book Speed and Scale about the climate crisis.

John is coming to us from California as I ask my questions from My home in New York. John, thanks for joining us. It's a pleasure to be here. I love your program and it's an honor to be on it. Well, thank you. As as an investor, you've backed some of the world's Most successful entrepreneurs from Amazon to Google, many, many more. You authored the influential book.

Measure what matters, spreading the gospel of OKRs, objectives and key results. And you've also been involved with addressing the climate crisis through investment and now through speed and scale. But I wanted to start by asking you about the Cop Twenty Six Conference in Glasgow in November. There were many high hopes going into it. But it didn't quite go as it might have. You were in Glasgow for the conference. I'm curious what your experience was like, what you were expecting and

What happened? Well, more than two hundred nations send representatives, ministers to the COP, the Conference of the Parties conference. First cop I've attended. But it was an imperfect mix of both progress and disappointment.

The bold commitments that were made were to Curb methane emissions. And to halt and reverse. The loss of forests. There were also steps taken to align the finance sector.

with net zero emissions by twenty fifty. And to retire the internal combustion engine. There was agreement too. phase out fossil fuel subsidies. All the parties agreed to return.

In twenty twenty two. That's in one year. with stronger twenty thirty emissions targets to align them with net zero by twenty fifty. And try to get to the Still possible goal.

of limiting global warming to one and a half degrees Celsius. And that's what the science tells us we must do, Bob, to Avoid a runaway climate disaster. Okay, so everything I've said so far is the good news. The bad news? What came out of Glasgow is too little and it's too late.

If the countries fulfill their full plans. This is based on UN data. The earth will be two and a half degrees Celsius warmer by the end of the century. Which is

Terrible. There's also quite a credibility gap. A number of countries S twenty thirty targets that are so weak. that they don't credibly support.

A net zero by twenty fifty. And I'm gonna call him out. Australia, Brazil, China, Russia, and Saudi Arabia. There was quite a contentious debate around the notion of

Climate injustice. Should the nations of the world that have emitted this carbon Pay for that. As you would if You owned a home and your neighbor engaged in actions that ruined your home.

There's no agreement on that. And I think it leads to a larger conversation around climate justice and redressing longstanding inequities in the world. One of the Most important developments out of Cop. Was a bilateral agreement.

Between China In the US. And despite all of the tensions in trade and human rights issues that exists between the world's two great superpowers. Their leaders came together and said

They're going to Meet regularly and work in many areas. Methane. Cool. Carbon capture.

to try to do better than China's commitment, which is net zero by twenty sixty. That's Ten years at least too late. It sounds like

The people who are there like they are taking it seriously. Which may be a difference from, you know, years ago. But they're not moving. Aggressively enough or fast enough. What we are doing is not enough.

And it's not happening fast enough. To the credit of the hard working ministers of environment and government leaders who were there. It's hard for them to get very far ahead of their populace, ahead of their people. And So There's no point making a pledge that you cannot

and act into policy when you return to your nation. And the participation in all of this is voluntary. There's no UN authority that will Force a nation state. to do whatever we believe is the right thing.

This is not some kind of green party that we're having and everyone comes together kumbaya. There's a revolution underway. And in real revolutions there are winners. And there are losers. I wanna ask you the solution that you write about in the book is to sort of apply the measure what matters formula

to climate efforts, right? That the way to get to a net zero future is to embrace An OKR based approach. That's exactly right. Ten big objectives. One monster objective. It's the mother of all OKRs.

And that's to take a Fifty nine gigatons. of greenhouse gas emissions. That's the carbon pollution that we pour into our precious atmosphere.

Every year. As if it's some kind of Free and open sewer. The science tells us we've got to take that fifty nine gigatons. Down to net zero.

By twenty fifty. And importantly, we've got to cut it in half. By twenty thirty, which is just eight years from now. While the planet grows. From seven billion to ten or eleven billion people.

While economic activity increases. So this is a tall order. This is an audacious Objective. The first half of the book, you're breaking down what's required, like transportation has to break, food, energy grid, and so on. Like for food, we're gonna. Cut consumption of beef and dairy and lower food waste and that sort of thing. You're doing the math.

Park by parked. So that we can figure out how to get there without necessarily having Unsavory or impractical impacts. Yes, exactly. Every one of these objectives is like a good OKR.

It's bold, it's visionary. It's clear it's long lived. And the six sectors, the six objectives where we can Cut our emissions. Are each supported by a handful of key results. And you'll remember from OKRs that

The objectives is what I want to have accomplished. The key results are how I'm going to get it done. And good key results are measurable, time bound, specific, clear. And for example, I'll pick one. Let's just go to objective number one, which is to electrify transportation. Which simply means Pow our vehicles with electricity.

Instead of with gas and diesel. If we achieve that objective We'll take eight of our fifty nine gigatons per year down to two gigatons per year. We won't entirely eliminate it, but we're very quantitative about that. And then to get there.

There are six key results. The first one, key result one die one, says We gotta get to price performance parity. between electric and internal combustion engine vehicles. in the United States by twenty twenty four at a price point of thirty five thousand dollars. And since this is a global plan, Bob

We also specify that in India in China. We've got to get to eleven thousand dollars for an electric vehicle. by twenty thirty to be competitive. So these are Carefully curated, thoughtfully chosen, vetted by scientists and policy makers.

I wanna invite your readers To go to the website. Speed and scale dot com. Because if they can get this plan. Download it for free. Each of the ten objectives.

The fifty five key results. And so you're doing the math sort of piece by piece and part by part to get that fifty-nine down to zero. And I I can imagine at some point as you're working on this project on this book, you're like, okay, can we really get to zero? Or like, you know, at what point do you realize like, oh, actually It all will add up. We can get there. Oh, but that's such a great question. The first five are electrified transportation, decarbonize the grid.

Fix the food system, protect nature. Clean up how we make cement and steel. Those are Five great areas. But the sixth and hardest one

is called remove Carbon. And there's ten gigatons. of carbon emissions that are gonna remain after those first five objectives are achieved. And honestly, we don't know how to do that economically today.

So If your uh glass half empty, do you say Door. Your plan doesn't add up. You're ten gigatons short. If you're an optimist.

You respond Well, I believe in the power of innovation and investment and entrepreneurs. And somehow I don't know how. We're gonna lower the cost of taking carbon out of the atmosphere. From six hundred dollars a ton today. To a hundred and fifty or a hundred dollars a ton.

By the time we need to get it done. So We're in a race. For the survival of our planet. We're all in this race together and we've gotta win it.

the second part of the book, you get into this issue of speed about sort of four ways to accelerate things so that all this actually happens. And you talk about policy and about government and about investments. What popped out to me was, and it's a word you mentioned earlier about movements. Which Evokes you know people marching in the streets. But if I'm reading you right, you're also applying that to how businesses operate, that business leaders

can themselves make decisions to advance these goals and that business itself Is part of a movement. Business is one of the most exciting things about this movement. Seventy percent of the emissions in the world. I profiled.

Doug McMillan, the CEO of Walmart. As the leader of a movement. Because Walmart, Fortune One company. has immense power.

And so when they gather together their supply chain, when they make a a personal commitment or a corporate commitment to get to net zero. They also are bringing their suppliers along and aim to do that. By twenty forty. I profile Jeff Bezos as a movement leader. He established the Amazon Climate Pledge.

Yeah. Has A couple hundred companies in the Amazon supply chain who have signed up to get to net zero by twenty forty. Ten full years ahead. of the Paris Accord.

No. We have to be hardcore about this. We can't Just accept. pledges. We need to track people's progress against these pledges. I kicked up something of a firestorm by declaring that the internet had been underhyped.

And I'm of the same view about To climate. Transition. The transition from

The dirty fossil fuel economy. to the new clean energy economy. Yeah. I think the greatest economic opportunity of the next century. Yeah.

And the people who look at commitments by the likes of Walmart and Amazon, as you mentioned, to decarbonize themselves to get to net zero. This isn't just greenwashing. That word gets thrown around a lot that it's just greenwashing. It's not greenwashing. Though we want to be on guard for that.

I've done the research spoken to members of the supply chain. And These Business leaders know what's at stake, and I think they know what needs to be done.

I make an analogy in the book with the mobilization that occurred for World War Two. In nineteen forty two General Hap Arnold had a meeting with FDR. And things weren't looking very good in the battle against the Nazis. F D R pulled out a napkin and he sketched on it.

A handful of objectives that needed to be achieved. We stopped manufacturing. Automobiles. For four years. And we turn that manufacturing capability over to making

Battleships. Airplanes, ammunition, and tanks. We need a similar Mobilization. Of all of the

the activity, all of the manufacturing, all of the consumption. On the planet. A total system change to realize this new clean economy. In one case, democracy was at stake. In this case.

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Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show. Because every Friday we release a second rapid response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely from Ford CEO to NAS administrator to the lessons from The Devil Wears Prada. It takes about 10 seconds to find, just search rapid response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there. Humans will never be more intelligent than AI. There's gonna be two types of companies.

Those are great at AI and those that went out of business because they weren't. How do we build a future? That is human centered. I'm Rana El Khayubi. And on my podcast Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone. Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives.

Find pioneers of AI wherever you tune in. Before the break, we heard John Dore, author of the book Speed and Scale, and partner at Kleiner Perkins, talk about what's required to combat the climate crisis, the importance of measuring our progress, and how business is a critical part of that movement. Now John talks about the massive economic opportunity in decarbonizing as we go for the gigatons, as he puts it. He says labeling the emissions created by every product and service will shift behavior, as will closing the green premium. Most of all, he talks about the lessons of leadership, how impact can come from any and all industries, including big oil.

And how each of us has a role we can play. I think back to when, you know, Lyft and Uber first emerged and at the outset the theory was that, you know, ride sharing would reduce the number of cars on the road. But that actually hasn't really materialized that way. And sometimes I I find myself confused, like Is eating a plant based burger actually better for the environment, practically versus theoretically? Like

In terms of emission impact is a shirt from A plastic bottle really better than cotton? Like do we even know? Am I just making myself feel good? How do I know if something's really helping or what really is going to have the most impact? We can know from the science.

All of the questions that you're asking. It's largely known. But it's not well communicated. So the book calls out the need for greater transparency. We need to have labels on emissions. Just the way there's

nutrients labeling for Foods, all products, all services. Ought to be scored. So that consumers don't need to figure these questions out for themselves. The carbon accounting is as important as the financial accounting.

in a year we'll be able to pinpoint. Down to every emission. the sources of emissions on the planet. And then there's a consortia Called

Climate trace. that is using AI to standardized and normalized and make freely available to the world. A Google Earth like globe, a map.

But shows what the emissions are from Smarter agricultural practices in fields. And the losses due to deforestation in the Amazon. We've got to go for the gigatons.

So your individual, my individual actions to not use plastic bags. It's probably not. going to have a gigaton. level impact on the climate crisis. Yeah.

And effort. To identify The big gigatons, the big actions that we can take. We cannot afford to be distracted. By bright shiny objects.

And so having Transparency in What the actual emissions are created by each product that we buy will have this cascading impact. to turn what might be individual purchases into sort of industry wide

Practices and adjustments That are holding everyone accountable for the emissions. On a much larger scale. Yes. I've written this book.

Not to convince anyone to go vagin. I've written this book for the leader. Inside of everyone. We're fast running out of time. We truly need collective action. Not individual action.

Hm. I'm curious what the environmental impact of the tech industry is. Sometimes people talk about NFTs or crypto mining and cloud storage and so on. Is that issue one of the distractions you're talking about? Well, first of all, Bitcoin powered as it is today.

Largely by fossil fuels. emits as much carbon as several nations combined. And that's equivalent to all the energy used by Malaysia. Or Sweden.

So we've got to power our crypto currencies. with clean and renewable energy. But I don't think it's Bitcoin as the tech industry. Honestly, I believe Every business is a tech business and it relies now on technology. And the great big emissions come from

How we generate electricity. And how we move Good around the world. And then how we make things. So

Decarbonizing the grid. Shutting down coal plants. Eliminating methane leaks and emissions from methane. This is a a wicked greenhouse gas. Because it's about eighty times more potent.

Then CO two. Those are Going for the gigatons. Mm. So when I was editor of Fast Company, I had the team go through this exercise, like, are there companies that we shouldn't take ads from because we didn't want to support them, right? And tobacco companies came up and gunmakers. And then of course

Big oil companies. And the challenge in our conversation was, Well, are we telling our readers like don't fly on planes, you know, don't use any gas powered vehicles or eat your home or whatever. I'm curious what your perspective is about big oil. Well, my view of big oil begins with the belief that they engaged in near criminal activity in the Misinformation campaigns that they staged when they knew Well in advance that carbon pollution was a threat to civilization.

Even the international energy agency has called out that we must stop using fossil fuels in our lifetime. The dirtiest of industries though can seize an opportunity here and The leadership of those companies can choose to adapt and evolve. One of the best stories in the book is of the Danish oil giant Orsted. who use their expertise in offshore drilling.

To become the world's leading provider. of offshore winds. You know they're emitting industries. Producing cleaner materials will help them move into a hydrogen economy or make steel and cement that drastically reduce the carbon emissions.

So my advice to the Oil and gas industries. Or Find ways to decarbonize your business. To be part of this new

Clean energy economy. I think they know. They've seen in their market valuations. That They've been counting on stranded assets. buried under the ground that are never gonna see the light of day.

Hm. You talked at the outset about sort of winners and losers in this revolution to the future, like there's a lot of opportunity for growth for winners and organizations that embrace This way the world will work in the future. To

generate a lot of opportunity for themselves. Totally. You know this move to electrify transportation. That's a massive change in over a hundred million vehicles. The estimated size of the market for batteries for electric vehicles.

is four hundred billion dollars. Per year. For the next twenty years. All of online advertising, everything that Google and Facebook fight over in the US is eighty billion dollars.

So that market is five times bigger. That's how enormous this transformation is that We need to Successfully made.

Mm. Talk to me about The green premium, right? This is the extra that we pay for an electric car versus a gas car or whatever, for oat milk versus cow milk. Can the scale of impact happen? If that

Premium persists. And how do we break it down? The green premium is the difference that we pay for a clean Zero carbon. Product or service.

compared to it's Fossil fuel. standard alternative. And I first heard of this term from our friend Bill Gates. So in the case of electricity.

Today the green or no carbon price is around fifteen cents a kilowatt hour. Dirty electricity is about thirteen cents per kilowatt hour. But that green premium of two cents is rapidly declining.

For some industries, like in aviation fuel. The green premium is four hundred percent. It costs seven dollars a gallon. As opposed to a dollar eighty. Yeah.

fly with fuels that are made without emitting carbon. The most important innovation we can do. is to lower the cost. A fuel, of food.

A product. An ingredient. So that we drive the green premium. And will that require subsidies? I mean you mentioned that the traditional oil and gas industries have been receiving subsidies from governments for a while. Does this require government subsidies to be able to

generate that or eliminate that premium. Government subsidies are an important part of it. But there's not enough subsidies in the world to transform The whole economy. So I tell the story of Germany.

And the feed in tariff subsidy that a German legislator Enacted. Which Guaranteed that The German utilities would buy clean electricity.

At a declining price. For two decades. And that was the catalyst that kickstarted the phenomenal reduction in the cost of solar photovoltaic energy so that today Solar energy is Together with when.

Cheaper than coal or gas or natural gas. fossil based fuel systems. I'm very pragmatic about this. I want to see the renewable energy subsidized. And I'd like to see the fossil fuel subsidies.

And it Mm. I often ask guests on the show what's at stake. But given this dialogue, it's kinda obvious that the stakes are pretty enormous. So let me ask this a slightly different way. If I'm gonna do one thing to change my life to advance Addressing the climate crisis.

What should it be? Is it Buying an electric car or is it more about leadership and the movement, or can it not be just one thing if we're gonna overcome this burden, this crisis? Well, the one thing you should do, Bob is move others to action.

And I wanna appeal not to your personal virtue. Which is necessary, expected. And not sufficient. The time is so short. This is the decisive decade.

That we need you. And your audience. To take this plan. Understand it. Pick the one or two areas where you can have the most impact.

And then declare. That's what I'm going to do. Tell your friends, your family, your loved ones, enlist your co-workers. Enlist them in this agenda. If your employer has not made a commitment to net zero.

Get them to make that commitment. And then get them. To meet it. If in your school district They're still using dirty diesel buses.

join forces together with other parents and taxpayers. And get your school district. To go to clean buses. Immediately.

We're past the point of time where we can talk. Or even debate. We need collective action. And we need it now. I just want to do some basic Rice University math.

If we have to cut emissions in half. By twenty thirty. And we're doing this In a world with growing demand and activity. That means we've gotta cut emissions in twenty twenty two.

By eight percent. And another eight percent in twenty three. And eight percent in twenty four and twenty five. Every year between now and twenty thirty. We have to reduce emissions by eight percent. Bob, do you know we've never reduced emissions by eight percent in the history of the planet?

During the pandemic they briefly reduced by six percent. But Emissions came roaring back. So We've got to make

The right outcome. The profitable outcome. So it becomes the probable outcome. This is a wicked problem. Mm.

You know, you said at the outset that you're hopeful about all this or you were coming out of cop It's a little terrifying listening to you and I guess you kind of have to walk this line between scaring people into action, but not Paralyzing them and having them throw up their hands and say Oh, this is too big. This is too hard. This is impossible. I think fear is a healthy emotion.

But I want it to galvanize and catalyze action, not to paralyze people. Only concerted and global action is gonna get us over the finish line here. In time. We need the Greta Thunbergs to be angry and to engage in

Civil disobedience. To make this a top Two voting issue. In every major emitting nation.

I'm not a world leader and I'm an engineer from Saint Louis, Missouri. I need to establish credibility. The numbers need to add up. They do We can achieve this plan. And I have actually Great hope that we will.

Well, John, this has been great. Thank you so much for galvanizing all of us, pushing me and pushing all of us to keep this Top of mind and constant. Masters of Scale Rapid Response is a wait what original. The show is recorded remotely using sanitized audio gear. I'm your rapid response host, Bob Safien. Host for Masters of Scale is Reed Hoffman.

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