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Sound-Up Governance (ep.27) - The role of mining in reaching net-zero (feat. Chih-Ting Lo)
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Sound-Up Governance (ep.27) - The role of mining in reaching net-zero (feat. Chih-Ting Lo)

A corporate director and decarbonization expert on bringing the mining industry toward net-zero

TRANSCRIPT

Matt VO

Welcome back to Sound-Up Governance. This week's episode is part one of a super fun conversation with Chih-Ting Lo, President of EELO Solutions, who -  and I know I say this a lot -  is an absolute superstar. It's barely worth me describing her journey or credentials, because she's a great storyteller and it's way better to hear it in her words. Before we get to that Chih-Ting is on a bunch of boards, including Sherritt, International, a publicly traded nickel and cobalt mining and refining company. And let me just put it out there that Chih-Ting is, among directors on big listed companies, at the far left of the curve in terms of age. She also doesn't fit the typical professional profile of people who end up in those seats. You'll quickly learn that she's got so much other amazing stuff going on. But her journey and accomplishments are really pretty awesome. We'll get deeper into her governance journey in part two, for now, here's Chih-Ting's origin story.

Chih-Ting Lo 

I was born and raised in Taiwan, and I came as a family, so our immigrant family moved to Canada when I was in my teens. So I went through high school and university and graduate school in Canada. I chose to study engineering, because that was something that you take if you didn't have very good English. So I came, I came to Canada without knowing very, very much English. So I thought that was good for me, I like maths and physics. And in my undergraduate degree, I did chemical engineering. And then I continue on that, in my graduate work also in chemical engineering in the space of energy storage, specifically on hydrogen. So I graduated from my graduate work, we had such a good idea in my thesis, we decided to make a company out of it. It was a failed entrepreneur story where we couldn't really raise money to do what we wanted to. But it was really good experience, I learned many things along the way. And one of the things I learned was that there are so many solutions to help us resolve the problems we have in the world towards net-zero, at the time we called energy management or environmental impact reduction. And I thought, "well, what's a good place for me to practice that?" And I thought being in consulting would be a good idea, because then I can actually offer all kinds of solutions to different applications and different kinds of companies. So I did that, I joined a consulting company started in the commercial space. But quickly, I grew more and more interested in complex systems. So I was, you know, naturally moving towards the industrial space, where A. the impact is much higher in terms of environmental impact. And the opportunity is also large, because oftentimes the traditional industries that don't do as much to manage some of these environmental impact. So I did that with a consulting company. But then one thing I learned from typical consulting company is that they're expert, report writers, but I don't want to be an expert report writer for the rest of my life. I actually want to have real impact. So I started my own consulting company with the thesis that I want, I don't just want to develop a plan. But I also want to help with the implementation of that plan. And specifically in the industrial space. So over the last 15 years or so I've been working in my own company, it's a consulting company. And we've been working with large and small industrial organizations of which the last 12 years or so are all in the mining space. And so through that experience, I really enjoyed it having big impact and really fun projects travel around the world and all that good stuff, all continents.

Matt 

I just wanted to jump in here for a sec to say that Chih-Ting is 42 years old. Exact same age as me, coincidentally. Maybe not so young in terms of the overall age distribution of humans in the world, but like, really, really young for someone who's spent 15 years advising mining companies around the world on environmental impact and decarbonisation. Seriously. Whoa. Sorry, there's a lot more to the story.

Chih-Ting Lo 

But then one day, I started thinking about as an individual owning a small business, how could I have even more impact with the time I have to me? So I started exploring different things that I could do. And the board of directors came up as a experience I have in my consulting business, which I support my clients reporting to the board. And I started thinking more as I had a little bit more time to really consider how can I have more impact? And I identified that as a potential area which I could have more impact. If I could help form the direction of where the company is going, perhaps I could have more impact with my time. So I went down that path. That is how I started my board journey. And nowadays, I'm happy to report that I spend my time in between these different activities. So I spent about 40 to 50% of my time on my consulting business, so continue working with large organizations to develop and implement strategies or innovation in decarbonisation. I spend about 40% of my time on board of directors. And I spend, you know, 10, 20% of my time on passion projects, which maybe we'll get to that at some point.

Matt 

I hope so!

Chih-Ting Lo 

Yeah, so on my board activities, which I guess is where maybe it's the most interesting prep for the listeners. I'm currently on four boards. One of them is a publicly traded mining company, it's called Sherritt International, and we mined nickel and cobalt as well as refine those metals in Alberta. So the mining operation is in Cuba, but the refinery is in Canada. I am the vice chair of a regional impact investment fund. It's called the Metro Vancouver Zero Emissions Innovation Center. It's a federally seeded and endowed fund, which we look for opportunities to get the region to net zero. I am on the board of Minviro. It's a startup that provides environmental insights to raw minerals through lifecycle assessment. And finally, I'm on the board of Mine Shift Foundation. This is an organization that we're trying to transform workplace culture, in mining through allyship and bystander intervention training.

Matt VO

Obviously, there are so many rocks to turn over here. It may disappoint you at first to learn that the first one I turned over had nothing to do with governance or boards or even mining. Instead, I asked about hydrogen. I'm no expert in hydrogen as a fuel source, but I know just enough to have noticed that hydrogen fuel went from a super exciting big deal to nothing at all, and now seems to be making a bit of a comeback. I just hoped that Chih-Ting could help a total noob like me to understand what's going on there. I'm so glad I asked.

Chih-Ting Lo 

Ya know, I'd love to talk to you about this for a long time. But I'll try to limit limit what I what I shared just because you know, there's so many things we can talk about. So when I first got into the hydrogen in space, that's the last time when hydrogen and fuel cells were very fashionable. And that's that's when Ballard, which is a Canadian company, that's that's sort of front and center in that in that story, had all these promises around how all the transportation all the passenger vehicles will be powered by fuel cell by I don't know, 2010, or something along those lines. And that didn't happen. It didn't happen for several reasons. But if I want to focus on the kind of the environmental impact on some of these activities around hydrogen, one of the main challenges back then was where does hydrogen come from? And how do you store hydrogen? And why that is important is because 95% of the hydrogen around the world that's available now it's from fossil fuels. So it is it is not a clean energy storage material to begin with. So when you want to transition that to some other means to make green hydrogen, which is the fashionable thing right now. And we can talk a little bit more about that, which is just in theory, it's produced from the non fossil fuel source, then that story breaks down in the economic sense back in the days. The second problem is how do we store hydrogen? And that's important because hydrogen comes naturally as a gas. And it doesn't have very high density of energy compared to diesel or gasoline. What that really means is in that same physical space and physical weight ratio, you have much less energy in hydrogen compared to diesel. Even if you compress hydrogen to very high pressure, even if you liquefy hydrogen, in the same volume, you cannot pack in enough energy as diesel does. And that's really a fundamental problem. So how do you address that? So those are the kind of the two big problems back then. And I work on the hydrogen storage side of things. And I would say coming back to in that why is there so much interest now, again? I can see and I can tell you that that problem was important. And it still is very important. So my paper, this is a proud moment of my life. I've only written two papers in my life. And they both in the same area around hydrogen storage and innovation, we came up in my master's degree. And and one of them has been cited more than 110 times

Matt 

Whoa!

Chih-Ting Lo 

And that's like less than 0.1% of the paper ever published or something along those lines. I don't actually know the stats.

Matt VO

Yes, this is true. In fact, a vast majority of academic papers get cited between zero and 10 times. Mostly zero. Sure, citations isn't an objective metric of the quality of research, blah, blah, but to be cited over 100 times is an irrefutable sign of the novelty of your topic and findings, which, well... yeah, is an amazing accomplishment. Seriously.

Chih-Ting Lo 

I really like the hydrogen story now. And the reason why I like it is is because, A. on the hydrogen production side of things, there are more opportunities, as we increase our renewable energy production around the world, to make green hydrogen. There are also other colors of hydrogen you might have heard of, which is just essentially, they've tried to find ways to sequester carbon in the process of hydrogen production or make use of the byproducts in the process of hydrogen production. So in other words, there is a more focused effort on hydrogen production that is greener, which I really like. And at some point, the economics will probably make a lot more sense this time around the bend last time. The other thing I really liked about the hydrogen story is now we're really seeing hydrogen as an energy storage medium as supposed to the energy source. So solar is an energy source. And you can use solar power to split water to make hydrogen. And the reason why you want to do that is then the energy is stored in hydrogen. And then it can be utilized in a fuel cell, let's say, for whatever application you might have. And the story on storage is changing. So if we imagine a world where countries like Indonesia, or countries like Ghana, can be making hydrogen from, renewable sources, and because they're on the coast, they can desalinate sea water, use renewable energy to make hydrogen, and this hydrogen can actually travel around the world, to Canada, to the US and other places to be utilized. It's a way to liberate, you know, energy, clean energy production around the world. And I really liked that story. And I think that story would have more legs this time around than last time. Have, we figured out the economics? Have we figured out some of these other geopolitical challenges and other things? Probably not. But I really like the story where now there's a different lens to look at hydrogen, not just as a fossil fuel replacement in the transportation application. It's really seen as a way to "Hey, this is how we can move renewable energy around the world!" Where, you know, sun may not be shining, or wind is not blowing in places like Northern Canada. But we can still access renewable hydrogen and make a case out of it to move towards net zero. So sorry, that's a very long answer to that question.

Matt 

No, and I love the way that you're telling this story. And it's emblematic of one of the things that I think makes you really special in my view. It's not just the way that you are able to tell stories in language that I can understand. But also the fact that it's really clear that you've got a very strong sense of purpose and vision around decarbonisation. And and I presume that this is in service of climate change oriented thing. And that's a pretty unusual perspective to, to hear in that way, in the world where you work. And I'm curious, how do you take that passion and that expertise, and it's clearly very technical expertise that you have, and take it into the organizations you work with in mining, and make it real, instead of just sort of greenwashing or box ticking exercise?

Chih-Ting Lo 

Yeah, so a little bit trial and error over the over the last couple of decades. But number one, I think you have to be able to align what you're trying to do with what the organization is trying to do. So the business objective has to be aligned with whatever you might be offering. And there's a clear business case around reducing your emissions and reducing your energy use. And that was the language that we would probably speak 10/15 years ago, when I when I started working with mining companies to say, "hey, you know, by focusing on this areas, you actually will help with your bottom line, not only that you're having some positive impact in environment, but also it's a good business case for you." Fast forward to the last five years where ESG has now really become this... I was going to use the word "monster," but this giant issue that is taking everything into this three letter acronym, which you know, you can agree or disagree on whether that's the right thing to do. But there is just a lot of pressure from organizations to react to. Whether that is regulations, whether that is the shareholder requests, but specifically for the mining sector, there are also two other things that are going for them to to push them into the right direction. And number one is this optimism around the net zero future will require more minerals. And the reason why that is is for you to build a electric vehicle or to have wind and solar power. They actually all need more raw material compared to the equivalent sort of services that you have in the world. And that is given lots of optimism to the mining sector around "hey, we need to grow because we are the critical minerals producer, and we need to power that energy transition into the future." On the flip side of that, it's now getting a lot of attention. So whether you like it or not, people are now starting noticing that mining as a sector is something that they may want to follow. And therefore, surfacing all the risks around, you know, not being a good corporate citizen is now not a good idea, because you can't just sort of fly under the radar anymore. And you really do need to be a good corporate citizen. And we operate in a very challenging jurisdiction. So I'll use Sherritt as an example. We operate in Cuba, and just thinking about operation in Cuba, you think about the US embargo against the country. So when you really thinking about operating some of these geopolitically challenging environments, yes, we're producing what we call critical minerals for that net-zero future. But there are lots of other things at play. So to really tell the equitable transition story is not easy. And you have an excellent point around greenwashing. So how do we kind of move around that? So companies not just like Sherritt, but all the other companies I work with, are seen as a as an emerging risk. So that now it's, instead of pushing, "hey, you should really do something about getting the environment better. And there's a good business case." Now is quite a bit more pull on "hey, we're hearing all this from the outside world, asking us to do stuff, what is it that we need to do?" So I really love that because now it's the companies are thinking about we need to do something, let's find the right people to help us do that, to help us navigate through that knowing all our challenges. And we don't want to be greenwashing. Are some companies that are doing this just to check boxes? Yes, probably. But are there many companies that are really trying to do the right things? I believe so. And I work with a lot of those people. So that's number one. And the second thing that I observed is really, the world is changing in general. We like to talk about millennials and Gen Z's want to do things with a purpose and want to have impact. And the millennials are now starting to run the world in terms of being the senior executives of organizations, including mining companies. So I see that also with the with people changing and having new leaders in the industry, we're seeing more commitment and real commitment in that area. So both of those are, are really positive things. And, therefore nowadays it's a lot easier for me to talk to people on thinking about strategy and implementation of these types of issues in the mining sector than let's say 5-10 years ago,

Matt VO

So I suspect that the moment you heard the theme song creep in you were probably thinking "What the F, Matt? Not only is this super interesting, but we're just getting warmed up." And it's true. There's so much more to come. This was just the most logical point for an episode break because next week, we dive right into Chih-Ting's governance perspectives and her experience as a young woman of color in spaces dominated by, well, rich white dudes. And some of her perspectives on where things are and could be going in terms of governance and board effectiveness. Thanks so much for listening. As usual. if you want to send me any thoughts or complaints or ideas, shoot them to soundup@groundupgovernance.com. Unless it's a complaint about ending this episode too early, in which case the solution is to tune in next week. See you then.

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