Hassan Habib - Exploring the Future of Sustainability, EV Adoption, ESG Investing, and More #007

James Taylor 0:00
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James Taylor 1:46
Just go to MENA-speakers.com That’s MENA-speakers.com Alternatively, you can drop them an email at [email protected] to book the perfect speaker for your next event. Hassan Habib is a trailblazer in the world of industries of tomorrow, driven by a boundless passion for the future. His expertise in artificial intelligence has been pivotal in a myriad of groundbreaking digitization projects in both banking and non banking sectors propelling organizations into the next frontier of innovation. Beyond his technical acumen, Hassan is a values driven leader, who champions the principles of ESG and Sustainable Development Goals. Hassan has served as a trusted advisor helping clients develop investment strategies that align with their values, and sustainability goals, Hassan Welcome to The Ethical Futurists for having me what’s going on in your world just now Well, currently has your focus.

Hassan Habib 2:43
Her Hello lot going on, isn’t it. So we are recently just out of Ramadan. That’s one thing. But another thing is also that we recently also came out of the pandemic not too long ago, and the world is in a very different place now. So when it comes to innovation, when it comes to newness, how to do things in a different way and where to head over the next 10 years, I think priorities have shifted and refocused on a lot of different themes, among them, happens to also be key theme of ESG and sustainability. We saw the COP28, successfully being done here and raising billions of dollars for in funding in order to enable the transition. And I think that’s a great achievement, and very much to the leadership here. And the leadership of COP28, as well. Great. And in your current role as a futurist and investment advisor, what would you say are your top accomplishments? I think

the beauty of, of being associated perhaps with, with this theme is to do with that you can bring about change and law into lasting change. And when it comes to investments, for example, and when it comes to anything to do with capital market, this is what sustains a lot of change. Right? This is how the money is perhaps trickled. I think that’s where the actual beef and the fun is that you’re part of the process of lasting change rather than something that could be a more short lived cycle. This tends to continue and then you you my, my dream has always been that the moment when I retire or when I’m, God forbid, sick in bed or anything such you know, I look back. And when I’m pondering upon myself, what did I do with my life? I would like to think that I brought a change that still exists to that day.

James Taylor 4:42
Now you and I, we met up the other day and Alserkal Avenue, a beautiful area here in Dubai. And we were talking about electrification of mobility. And I said to you, Hassan, I don’t see many Tesla’s here. Well, can you explain that to me and you explain to me how I think it’s about 3000 5000 EB points at the moment but then you explain why what’s gonna be happening next? So, can you tell us a little bit about what the kind of vision is and what the future is? Right. So,

Hassan Habib 5:05
according to some, some data and statistics Currently there are somewhere around three to 4000 charging stations in the nation and I think that is infrastructure related to to EVs in order to to enable EVs and to make it as rather norm right today when you and I want to go buy a car, we think very little about what kind of fuel car do we want? Is it hydrogen fuel cell? Is it evey Is it a petrol a hybrid, we just happen to choose the brand. So, we want an X car and when if that x car happens to be running on gasoline, then that is it right we tend to accept it, I think that is changing. And and people are more realizing the value in either going much more efficient use of transportation or motorized transportation here. And it is important for this infrastructure to grow with it, because only that can enable it otherwise, it will be like for example, you have one petrol station in the population of let’s say, 10,000 people you will have always, you know, Lions lined up so that that’s kind of bottleneck it creates. So currently, I think I believe according to some statistics, we have about three to 4000 charging station and this is set to grow exponentially over the next seven to eight years. And with the strategy that is in place to harmonize and normalize the use of EVs perhaps even for the for the roads here in the UAE, we will be seeing this number go up to as much as perhaps 60,000 Plus, which means the gas stations that you see today perhaps Perhaps will become an enabler for charging stations as well they may have in the future not so deep in the future but near future they may have charging stations in the petrol stations where you could be parking your car and charging quick charges over the span of 20 minutes or half an hour at

James Taylor 7:07
a hearing in Dubai I noticed that it’s a very much lot of apartment living and I go into our apartment building we stay in and and I go to the garage area and we actually don’t have a car yet because it’s just so easy that it’s actually really good Metro here as well and easy to get around but I noticed this no EB points in that as one of the well known companies that’s got this apartment and so can you see that starting to change as well cuz that’s always a difficult no in the UK we fit retrofitting some of these apartment buildings

Hassan Habib 7:35
correct. So, as we are today, I mean most of the buildings were constructed of course, pre pandemic and the focus on the sustainability has been not too long, I mean, from 2015 2016 onwards, especially when it comes to capital markets or so. But while ESG focus and environmental as a consideration has always been in place, I think the trickle down to a society level so social level has been very recent, right? And you will see that change as well we expect I mean today, most of the buildings do not have charging stations and they don’t facilitate for it. If you are living in an apartment chances are you do not have a charging station in your apartment. Now if you’re living in an A villa or a townhouse, you have the luxury of installing it by yourself and having that as a

James Taylor 8:30
that’s where all the Tesla’s are then in other words to

Hassan Habib 8:33
see where I’m going yeah. If you have a test site, chances are you’re living in a villa okay. And so, that that becomes one of the bottlenecks as well that even if a person is living in an apartment and chooses to own Tesla for example or any other Evie car it becomes a challenge for them to charge that Evie car in the building unless the building is providing which I believe is very, very low in terms of penetration. So a lot of then such people tend to charge their vehicles in commercial areas like perhaps the malls or other commercial areas, which is not so convenient. Right? And I think as As consumers we are always chasing convenience right? You will today you will order on application your food rather than going there and taking a takeaway or having it there and a lot of times so yeah, so just come to I think comes down to convenience and having that infrastructure of multiple charging stations across the nation and having legislations and perhaps also framework around real estate where perhaps charging stations become a a required serve service to have been in the building. I think that could change it could be a game changer as well. Yeah,

Alison Burns 9:54
yeah, that’s that’s driving sustainability. There was an evolution to energy and power Have you advise organizations on why and how best to assign capital to ESG investments? And we hear lots of terms about responsible investment, sustainable investment and impact investment? Can you explain to us what the difference in those terms are?

Hassan Habib 10:18
So I’ve been associated with the industry for quite a while, right? My experience has always been, I’m more finance person since the very beginning. And pre pandemic post pandemic tends to be, the pandemic tends to be the line where things changed. We see a lot of focus on ESG investments. And as you mentioned, that a lot of people, when they understand ESG investments, they just club it into one area that this is ESG investment, or this is sustainable investment. But there are multiple types of ESG investments and different intensities. If you would like to put it that way. You have something called responsible investing, and you have sustainable investing, and then you have impact investing. And depending on what your how you classify there could be multiple more as well. But more or less, these are major buckets. So in responsible investing, it’s more about how do you invest into areas that mitigate SDGs? Or climate related impact? Right? So it’s more if you put if you want to put it in English terms, it’s more like, How can I harm less? How can I reduce my greenhouse emissions, for example, and reduce the impact on the environment, or any particular SDG goal, or as a whole, then you, you’re talking about sustainable investing or sustainable in the sustainable buckets. So the word sustainable as it is, is self explanatory. But it’s more about how can I from abroad term? How can I not just reduce, but even contribute to negative emissions? Right? So one is reduction of emissions, you’re still not going down to negatives or zeros, right? So let’s say if you’re on a scale of negative five and positive five, you want to in a responsible, if your approach is responsible, you’re looking at to be somewhere between one and five. If your approach is sustainable, right, you’re looking at going towards the negative, right, you’re like, No, I want to be net contributors or have an effect on the ESG index as a whole, perhaps, on an organization level, then you have something called Impact Investing impact is you identify your particular goal and say, This is what I want to do. This is where I want to create the most an impact. So you have sustainable development goals, you could select any political goal. So in this case, climate action or climate change, you actually make it your goal to not only reduce, but not only go to Nigeria, but stay there. And that’s that’s your approach. So you’re more determined to a specific goal, sustainable is a broader term, and then responsible is much broader term. So as you go narrow down your focus and your approach on investments or how you run your organization, it then it comes to be are you in impact driven leader? Are you a sustainable leader? Are you a responsible leader?

Alison Burns 13:25
Do you see a shift in how investments are moving, especially after the pandemic,

Hassan Habib 13:30
I think the shift has already begun quite a few years ago, I mean, some of the data suggests that even from 2015 onwards is right the shift started having an effect in the market. But post 2020 is much more evident is something that has surfaced and has become a stick in the mainstream. So between 2020 FCC and till 2023 2024 Even in the capital markets, in terms of how ESG related investments have performed as opposed to non ESG related investments, volatility or is are less from mathematical terms, standard deviation has been higher in non ESG investments. And how and in ESG investments has been either half or just above a little bit of half in terms of volatility in terms of returns pretty much within a similar bracket. Now, if I put it if I put it in English, right, would you take higher risk for an X return? Are you would you take lower risk for the same x return? Right? It becomes a little bit a choice, right?

James Taylor 14:42
It’s almost like when companies think or individuals think about, should I put some money into stocks or an index or show put it into bonds? For example, there are different risk profiles, correct? Well,

Hassan Habib 14:52
so what if, given that the returns are, let’s say, identical? Would you choose the harder way or the Is your way, right? Usually, I mean, I, the common sense says I’ll take the easier route, I’m getting the same reason why take higher risk, right? If I tell you a capital is in trouble here, but you’re gonna get 5%, and until your capital is protected here, and you’re gonna get 5%, it’s a no brainer. So I think that is a point to note that between 2019 2020 Onward, we have seen, some data suggest that ESG related investments have performed better, or in par with lower risk, right? Volatility in the sector tends to be so far, even lower, comparatively to non ESG investments. However, ESG investments are more longer term. Right? So investors looking for short term returns. And by short term, I mean, like, between one to three years or so, then you’re, it’s unlikely that ESG will perform in a similar way as a non ESG. So this is a point that must be noted as well, I mean, it’s not an identical, let’s say play field over here. But at the same time, if you have a long term approach, someone who’s trying to build a portfolio over the longer term than ESG, is a better alternative, or having an ESG allocation. But if not, if you’re looking for short term so far, the data that I’ve come across is suggest that there’s more than on non non ESG side. So it’s a short term or it’s also horizon. What are you looking towards? And how long are you looking towards into it?

James Taylor 16:35
You mentioned that word data. And as I spoke at an event recently, we were talking about to some different CFOs, and chief investment officers, and they were talking about all these different reporting standards that you have when thinking about ESG investments. And so explain, let’s say, if I’m a, I’m an investor, or I’m someone who is advising people who are looking to invest in ESG funds, where do I go with? What is the number the numbers who is the trusted source when it comes to data?

Hassan Habib 17:08
That’s a very good question. So currently, when it comes to measuring ESG, there are multiple, let’s say, reference points that could be used, even when it comes to ESG. Reporting, for example, you have, for example, OECD norms, then you have the ILO. And then you also have UN Global Impact, and you have more, but these tend to be more commonly, perhaps used or references. And hence, I think that this is a challenge, right? Where if you don’t seem to have currently a standardized approach, but I think that’s changing now with, especially in this region, given there’s heavy focus on sustainability, going forward with net zero emissions by 2045. I think things are now consolidating, too, and more standardizing as we go forward. But so far, I mean, that had been always a challenge in terms of what kind of reporting Do you do you follow? What is your reference point? What’s your benchmark, right? And if that is always changing, then you cannot deduce from that, that you’re on the journey of sustainability. Because you can only determine your milestones, if you have a framework to to match it against. And if your framework and the reference point is not static, and it’s not constant, then you always have the challenge. Okay, how do you measure yourself against those? Are you measuring yourself against the ILO report? Are you measuring yourself against the OECD or the UN Global Impact? So I think standardization is necessary today, we have multiple standards. But coming to common grounds, it’s very similar to any framework right? Today, for example, you when you talk about financial industries, you have the risk metrics and risk framework, the basil three and so forth. Why is it standardized? Right? I mean, it’s, there’s a reason for that, I think, for sustainability and sustainable. And the reporting on ESG. Also, this is going to be crucial. Going forward that there’s a standard set out there’s a proper framework in place. And it is treated as a theme rather than as a good to have CSR initiative, for example, right. So by theme, what do I mean is that I shouldn’t be in a position as an individual where I go like, Okay, I’ve got 100 bucks in my pocket. Here’s 20 bucks for XC. So for example, if if I commute 10 days in a month, two days, I’ll commute sustainably eight days. I don’t care. I think, by theme, I mean, it becomes a going concern that I do my I go about my daily life, while making ethical decisions in the process. I think that’s what we’re trying to get to. And standardization. That’s what it will help us.

Alison Burns 19:55
I often call that my ethical filter. I tried to put everything through an ethical filter on a deal The basis. And so what would you say given all these challenges? What’s the hardest part of your job? In a nutshell,

Hassan Habib 20:07
I think there are a lot of stereotypes when it comes to, or less than misconceptions. I mean, I wouldn’t use the word stereotype, but a lot of misconceptions when it comes to ESG, or ESG related initiatives, or investments, or sustainability as a word. And this ended, and the misconception is that when it comes to, for example, investments, the misconception is they don’t ESG investments do not give you returns, in part with non ESG investments, I think data suggests otherwise, our test started to suggest otherwise in recent times. Also, when it comes to, for example, choices you make, right, you’re having a coffee, your paper cup, or non paper cup, plastic cup, what to choose. I mean, this is a very basic choice. And you and I go through, we make 1000s of decisions every day as humans, if we just have the right filter in our minds, I think just by having that we can do a lot in terms of, we can ship the industry within, you know, a span of few years, less than even, and we can achieve the net zero, much, much more earlier. And that’s I think that’s what that’s important at the moment is to view it as a filter as a theme. And to even, let’s say, demystify or debunk the myths around sustainability that exists when it comes to putting your money in, because it’s important investments, banking are more or less the core of an economy. And the change must begin in what is at the nucleus of of things, right. And I think that’s where we can bring a great difference. If if people are aware that I just I just gave you some information around standard deviation and risk metrics when it comes to investments. If I do know, as an investor, for example, or even as a consumer, that if I do X thing, by doing this, I can if I can do it in a more risk mitigated manner. And I can do it in a more efficient manner, while having no impact on the outcome that I desired fit. It’s a no brainer that I would choose that. But the misconception out there stops me to do that, right. Because I have already assumed if I’m sitting on like, I’m sitting on the side of table, wrong example. But but if I’m sitting on the consumer side, and someone comes to me, tries to sell me telling me a coffee, and he’s giving me an A in a plastic cup. And for me, coffee matters, right? But I have no understanding of, of perhaps I can change this cup to a more efficient recyclable paper cup or otherwise, right. But if I have that choice, and I’m aware of that choice, that this is going to give me a better product for the same price. It doesn’t matter to me, then I would, I will make a smarter choice. But I need to be aware of that choice. So if I walk into a coffee shop, because we have plastic, I automatically, for example, assume that all they have is plastic cups. So I don’t ask, right. But imagine that only from a cultural perspective, there was a placate out there for the coffee shop, or a brochure in front of you on front of the cashier, please ask for paper cups or reusable cups. Right? It will click that awareness me and I’m like, Okay, I would like that. And a lot of places, you’d be surprised. That is for no additional cost. A lot of places have already implemented the change and eliminated the use of plastics. And we’re going towards that even in the UAE ease of use of plastics is going to be you know, something of the past. But it’s important to understand that as consumers, whether we are consuming money in investments, whether we are consuming entertainment and leisure, or whatsoever, we must be aware of the choices we make. And we must if and if you’re not we must be made aware, right? I think awareness in a lot of people changes choices. I’ve come across people, for example from my past life and so forth is when I talk to them about certain opportunities. And I told him Look, what is your criteria and they say my criteria is ABC, I’m like, I can get you ABC by doing in a much more better and sustainable manner. So okay, they have no reservations, when is it that

Alison Burns 24:45
it’s kind of planting the seed that

Hassan Habib 24:47
makes them think as well and and a lot of times, even then you you lost and what happens is they do come back to you as well. And then they actually asked for that particular way of doing stainable way of doing Doing things. Great. And that has happened with me. So I know that there is inclination out there. I know there is a, there is willingness, I think it’s more about awareness and, and debunking the myths around sustainability. So

James Taylor 25:14
final quickfire questions I have a question for you start to finish off here as well. Oh, well, you go first,

Alison Burns 25:19
migration again? And is there a book that you can recommend on sustainability or ESG, or sustainable invest investing that you could recommend to our listeners or another,

James Taylor 25:29
even another topic, something that you’re just kind of? possessed? Yeah, it’s a book.

Hassan Habib 25:33
I think sustainability begins with mindset. And it’s important to not see sustainability as a, as a particular product that I can enter or exit from. It’s more about you being in it like culture. I mean, can you exit a culture? No, I’m sitting for a few I have a certain culture, and I will reflexively behave in that kind of culture. Imagine sustainability, becomes culture, right? And I think that all starts with your mindset. So taking a step back, instead of reading about sustainable investments, or sustainability, read more about the psychology of money. Good point, is, there’s a book called The Psychology of money as well. And I would perhaps, recommend that to, to the listeners as well. Now, that is how you need to think about money as a whole, like I have, what does money enable you to do? Right, money enables you to buy goods and services, it’s a medium of exchange, but it is also a medium of change. Right? If I, if I do have, let’s say, a wealth, I do have a businessman with with an influence, I can use that to bring the change. Right? Today, a lot of investments wire a lot of investments going in, for example, having EVC we see today here, even in the UAE, a lot of evey cars have made their way through to the UAE. Up until two three years ago, we just had one brand or so right or two, if you were lucky. But today, you’re getting Evie brands in cars everywhere. The reason that is also is because people are putting the money in the right place to bring that change. Now whether if if you remove that from the picture, I as a consumer today, if I if I don’t get a car, I can’t commute, I will go and buy petrol car. But now I have a choice hold me the choice who made that who enabled that choice for me, someone who invested into bringing the Eevee here in the market, right? So money can also be a medium of bringing change. So I think we should more understand how to approach money first, and then use that money responsibly. And that will lead you to be ethical in your choices.

James Taylor 27:57
The Psychology of money, has links to that here on the show as well. As we start to finish up here. I just want to just ask where’s the best place for people to go if they want to learn more about you? And you’ve got podcasts? You’ve got lots of things kind of going on? Where should they go if they want to check out more about you and they

Hassan Habib 28:12
can always catch me up and down the roads? Yeah. Absolutely, or one of the highest but you can always reach me on I have a YouTube channel as well. For me, it’s called the the real essence speaks. And you can always reach out to me on LinkedIn, I’d be very much happy to hear from people and respond and and meet and connect even if it’s just for socializing purposes. I would love to do that as well. Fantastic. I’m very social being

James Taylor 28:42
heavy. Thank you so much for being a guest on the ethical futurist.

Hassan Habib 28:45
Pleasure is my thank you for having me. Thank you so much.

James Taylor 28:49
If you’re considering making sustainability or ESG, one of the themes for your next conference, your event, or perhaps a company retreat, then why not invite Alison and myself to be your keynote speakers or event MCs. We’ve delivered really inspiring keynote programs for some of the world’s largest organizations from all different kinds of industries. Now, the Ethical Futurists keynote will take your audience on a journey to discover how the world’s most ethical and sustainable companies are really innovating in their industries. So if you’d like to learn more about booking Alison and I as the Ethical Futurists for your next event, then simply head to theethicalfuturists.com/speaking, that’s the ethicalfuturists.com/speaking To schedule a call to discuss with us your next event. We’re delighted that you listen to this podcast and we’d really thank you if you could just take a moment now to subscribe to this podcast on your favorite podcast platform. Also, while you’re there, why don’t give us a five star rating and leave us a review It would really mean a lot to Allison and I so for me James Taylor and me Alison Burns thanks for listening to the Ethical Futurists podcast