Angel Hsu: Cities generate something between 60 and 80% of global economic output, measured by gross domestic product. Cities are responsible for around 60% of global waste output. They consume two-thirds to three-fourths of global energy. They also generate between 75 and 85% of global greenhouse gas emissions.
Hazem Galal: If we really want all of these national-level commitments that we’ve made for climate change, sustainability, and all of that to really get implemented, we have to take that down to the city level. That’s where the rubber hits the road.
Angel: Every second that we wait to take action on climate change and sustainability issues is time lost. And so, we have to think about how we can actually develop solutions that can achieve both goals of economic growth and productivity, and also environmental sustainability.
Lizzie O’Leary: From PwC’s management publication, strategy and business, this is Take on Tomorrow, the podcast that brings together experts from around the globe to figure out what business could and should be doing to tackle some of the biggest issues facing the world. I’m Lizzie O’Leary, a podcaster and journalist in New York.
Ayesha Hazarika: And I’m Ayesha Hazarika, a broadcaster and writer in London. Today, we’re talking about the place where more than half the world’s population lives: cities.
Lizzie: By the year 2050, the United Nations predict that the figure will have risen to 70%. A change like that brings social, economic, and environmental challenges.
Ayesha: How can cities provide the housing, transit, economic opportunities, and all the other amenities we need in a way which is equitable and sustainable?
Lizzie: To find out more, we’ll be talking to climatologist Angel Hsu. She’s founder of the Data-Driven EnviroLab, which uses satellites to measure how environmentally sustainable and how socially inclusive our cities really are. But first, let’s bring in Hazem Galal, Global Leader for Cities and Local Government and a partner with PwC Middle East. Hazem, welcome to the show.
Hazem: Thank you, Lizzie. Thank you, Ayesha.
Ayesha: Now, Hazem, you work on smart mobility and smart cities. Can you explain to our listeners what those two concepts mean?
Hazem: So, let’s start with smart cities. A smart city is a community that is connected. It’s a community where technology enables the delivery of smart services that can benefit the citizens, the residents, and the businesses operating in that city. On the other hand, it is not only about technology. Technology is an enabler. Now, when we think about smart mobility, smart mobility is how we actually move people, goods in a city—also enabled by technology and data.
Lizzie: What conversations are you having with clients about smart cities and smart mobility?
Hazem: We can be talking to the transport department within a city, how to introduce an integrated transportation system within a city that enables us to combine different modes of transport and to offer choices in that city based on using data in an intelligent way that provides the end user with all the different options for mobility in that city. We could be also having conversations with solution providers. For example, those providers that want to establish an EV-charging business in a city. So they would be, you know, asking us for support of how to make the business case to show what would be the benefits that a city would get if they were to adopt their solution of EV charging.
Ayesha: And can you tell us about any particular innovations or trends which you see as being successful and working really well?
Hazem: In the smart city space, we are seeing a shift leveraging technology and analytics into even a further level, which is what we call cognitive cities. A cognitive city would be offering you a lot of these decision-making opportunities in a more proactive way. So you would use predictive analytics to analyze data from the city. And again, the service receiver, you sort of, like, anticipating their needs and offering the service using AI, using cognitive thinking in a proactive way.
Lizzie: Hazem, thank you for those thoughts, and we’re going to come back to you in just a few minutes. But first, Ayesha, you spoke to Angel Hsu about some of the key issues.
Ayesha: That’s right, Lizzie. We had an absolutely fascinating discussion, and I began by asking her what makes a city sustainable.
Angel: Well, this is a really tricky question, because there’s not really a one-size-fits-all answer to what makes a city sustainable. I think there are three dimensions that you can think about sustainability. One is economic sustainability. So, cities generate between 60 and 80% of global economic output, measured by gross domestic product. I think another dimension is environmental sustainability. Cities are responsible for something around 60% of global waste output. They consume two-thirds to three-fourths of global energy. They also generate between 75 and 85% of global greenhouse gas emissions. And they also contribute to higher temperatures compared to rural areas. Also, equally important is the social-equity dimension. You have some of the wealthiest individuals that live within cities as well as some of the poorest. And this is one of the reasons why the United Nations in 2015 started to articulate a global vision for what cities should be in the future, to be both sustainable and inclusive.
Ayesha: Now, you’ve done some really pioneering work using satellite data to help measure sustainability. Tell us about that. How can a satellite look at this kind of measurement and work it out?
Angel: We can look at trees and also where the location of water bodies are—freshwater, oceans—and then also environmental conditions. So environmental pollution can also be measured and viewed from space. So you can actually see algal blooms in water bodies, for instance. Satellites, because they have sensors, can actually detect the degree to which pollutants in the troposphere—which is a layer of the earth’s atmosphere—actually prevent light from penetrating. And then combining those data with global circulation models and other types of chemical transport models that model how pollutants move throughout the atmosphere, you can actually estimate ground level concentrations to air pollutants. And then also, carbon dioxide emissions and other greenhouse gases are increasingly being monitored also by satellites. Because satellites have a regular overpass time—so, they pass over the same position on earth, the same time every single day—you can actually start to get a consistent and regular time-series record of these phenomenon of air pollution or land cover, forest cover, carbon dioxide emissions, over that same spot.
Ayesha: And what about the equity aspect of sustainability that we discussed earlier, and inclusion? Can satellites give us a picture about inequality?
Angel: That’s where satellites become increasingly attractive, and the promise of earth observation, because then you can get this regular and consistent record of these different types of indicators. So, when we combine that with the sociodemographic data, we can start to answer questions like, well, do all populations, and all demographic groups, and all age groups, do they have the same access to green amenities like green space and tree cover, and also sustainable transit? And are they protected? Are they afforded the same protections from air pollution and urban heat exposure?
Ayesha: Let’s now dig in to what you’re discovering through your data. What kind of cities are performing well? What kind of regions of the world are really leading the way? And which sort of areas, which cities are not doing so well?
Angel: We find that there are generally four types of cities. So one type would be those Stockholms, Vancouver, London, Copenhagens that are performing above average on environmental quality, but then they’re not providing those benefits equally. And, in particular, they’re burdening poorer populations within their cities with these higher levels of pollution and not the same access to the amenities or benefits. Then there’s another type where we’re seeing, there are some incredibly dense cities. So, these are Asian cities, like Tokyo and Kyoto City in Japan, where they’re performing better than average on environmental indicators, but they’re burdening, actually, wealthier populations. Because of the product of density, you get more cars, you get more buildings. And there’s maybe not as much room for green space in dense urban areas. And then we’ve got another type of city where, if you think about large Chinese and Indian cities, like Beijing and Chengdu, Delhi, they are cities that are not performing as well on environmental quality. So they have high levels of air pollution and greenhouse gas emissions. They’re performing lower than average and also burdening poorer populations and wealthier populations, actually, alike. And then the last type of city would be those in primarily developing countries—Monterey, Mexico; Johannesburg, South Africa—where they’re performing below average on environmental conditions. But then also, they have huge amounts of income inequality as well. Half of the cities in our index are actually not providing the same benefits equally amongst all residents and are disproportionately burdening poorer populations with a greater burden of air pollution exposure, urban heat island exposure, and not the same benefit and access to green space and sustainable transit—so, some of the amenities that cities should be providing for all residents equally.
Ayesha: What is it about a city that allows it to be sustainable? Is it the way it’s governed? Is it specific policy decisions, whether it’s on housing or things like limiting cars? Is it geography?
Angel: It has to be a little bit of everything that you mentioned. So, I think some cities are just initially dealt a shorter hand than others. I think about Los Angeles, California, which is located in a valley. And so, unfortunately, there’s poor air quality, and smog has been a perennial issue. And other cities, yeah, they are wealthier, and so they have more economic resources, and they can invest in more sustainability solutions. So, I think there’s a lot of different varieties and reasons. And I do think that governance and policies, urban planning is certainly part of the solution. I’m here in Singapore. And, of course, you know, they have the benefit of being a relatively new nation. They just celebrated their 58th birthday. And so they kind of, in a way, got to think about how to design the city in a garden and garden in a city from the ground up. You know, the founders of modern Singapore, they were thinking about that, recognizing that they had very limited land area, and all these different competing pressures of wanting to grow GDP, but then also managing resources really well. It’s been really interesting being here and seeing the benefits of having centralized planning and very thoughtful urban design to combat urban heat and to minimize pollution, and try to balance all of these things together.
Ayesha: There are two very different schools of thought on the impact of sustainability. Some people think taking climate or inclusion into account can hold back your chances of economic success. But there are others who take a very different view, and they think that sustainability enables economic success and growth. What does your data tell you?
Angel: I think this is a really tricky question to answer. At least in our index, what we’re finding is that there are some cities that have higher than average GDP and environmental performance. So I think that that’s evidence that you can be wealthy and you can also be environmentally sustainable. And then, we’re also seeing that there are some cities that are actually less wealthy, but they punch above their weight in terms of environmental sustainability. I think probably trying to say which theory or which camp is right is probably not productive. I think every second that we wait to take action on climate change and sustainability issues is time lost. And so we have to think about how we can actually develop solutions that can achieve both goals of economic growth and productivity and also environmental sustainability.
Ayesha: Angel, cities are really diverse around the world. Now there are some, super-modern, and innovations can be built in. But there are other cities which are a real kind of jumble of the ancient and the modern. How feasible and how expensive is it to retrofit some of these older, ancient cities?
Angel: Retrofitting buildings is a key indicator for the building sector for urban areas if we want to have any hope of staying on track. So, I think it’s definitely feasible, but it’s also incredibly costly. But I think there’s a lot that can be done, just in simple terms of improving insulation and just sealing and making sure that these buildings are actually not allowing a lot of airflow from leaking in or out. And improving lighting, just upgrading to LEDs and more efficient lighting sources. That’s a huge focus. And then improving, obviously, the air-conditioning and ventilation systems. I think that’s also an area where you can really improve energy efficiency of buildings.
Ayesha: And why should business leaders care about this agenda, particularly when they are facing very difficult economic circumstances at the moment?
Angel: They should care because it’s kind of a do-or-die moment, where we now see that businesses are being impacted by climate change. Last year, when China experienced a record-setting heatwave—so, they had something like 70 days of temperatures over 100 degrees—it hugely disrupted supply chains, because China lost a lot of hydropower. A lot of their waterways dried up, and they weren’t able to transport goods as easily. And that affected supply chains. That certainly drove up inflation and affected businesses’ bottom line.
Ayesha: And if you’re a business leader who is concerned about the sustainability of the city where you operate, give us some examples of some practical things that they could do.
Angel: I always say, number one, know your impact, because I think that’s so incredibly critical. You can’t manage what you don’t measure, and you can’t manage well what you don’t measure well. And then, I think, once you know what your baseline emissions are, it’s important to set a goal. Also, as a mother and as a professor, I know how important it is to make the goalpost and the milestones very clearly defined if you want to actually motivate action. And then, the other piece is actually developing a plan. And then, I would say the fourth step is then to actually take steps to implement. Number five, you have to also monitor and report your progress, and that’s where we’re seeing a lot of gaps.
Ayesha: So, all of this sounds really important, but it also sounds like it’s quite a lot. Being really honest, is this going to be harder if you’re an SME, a small or a medium enterprise?
Angel: When we talk about the companies that are responsible for climate change, two-thirds of the companies that have contributed the most to the climate change problem are the very large companies that you would guess. So, large fossil fuel companies, cement companies, oil and gas. Really, we’re not talking about the SMEs here, you know. We’re really talking about major, major companies. And a lot of these are publicly owned, state-owned enterprises. These are the ones that are historically the most responsible for the climate change problem. And they absolutely have no excuse. I mean, they have the capacity. They have the resources to do all the things that I mentioned. But absolutely, for small and medium-sized enterprises, it’s going to be really challenging. Everyone should be aware at least and try to get educated about what climate change is, how it affects their businesses. You can collect activity data on how much electricity you consume, how much fuel do you purchase. And there are databases of emissions factors that tell us how much emissions are emitted through per unit of these different activities. And so, you can start to develop these estimates that don’t require necessarily a huge amount of technological resources.
Ayesha: So, Angel, what is your ideal vision of the sustainable, equitable city of the future?
Angel: I’m drawn to an example just from a few weeks ago. So, my family, they really like cruises. My parents are aging, and they really wanted to get everybody together. And my husband made a remark. He said, “To me, this is what every American really wants. They don’t necessarily want to be on a boat per se. And it doesn’t have to be on this monstrosity of a ship. What they really want is this connection with other people.” Because you have this self-contained entertainment center. You have walkability to restaurants, to cafes, to bars. You have these chance encounters with people. And it really struck me that this is what a city should be. I think that could actually help us achieve a sustainable city that’s equitable, because you would have people who could have access to better jobs and more economic opportunity that cities provide. You could have density and people not needing to actually purchase their own car, because they would have public transit that they could access. And then you could have these green spaces that could actually bring people together. And if everyone had the same access to these parks and shaded areas, then they could have protection from air pollution and urban heat. My hope is that emerging cities in other parts of the world learn from our mistakes, and they think about how to rebuild urban centers to be vibrant communities that connect people together and have a common, shared vision of sustainability. Because I think that’s the only way we’re going to be able to actually tackle climate change.
Ayesha: Well, Angel, thank you so much for your time.
Angel: Thank you so much. It was really a pleasure being here.
Lizzie: We’re back with Hazem Galal. Hazem, Angel laid out some reasons why she thought businesses ought to care about whether cities are sustainable: climate change disrupting operations and supply chains, driving up inflation, as well as reputational damage. To what extent do your clients share that perspective?
Hazem: Absolutely. I mean, climate change is real. It’s here. The cost of not dealing with climate change is borne by the entire society, including the companies, public sector entities, private sector entities that operate in a city. So, a lot of our clients, especially the startups, are starting right now to really think about how can they provide solutions that would help us to deal with climate change, be it mitigation or adaptation?
Lizzie: Well, whose responsibility is it to make our cities more sustainable? I mean, is it the private sector? Is it government? What’s the balance?
Hazem: So, it has to be driven by the government, essentially. I mean, city mayors and city regulators are the ultimately responsible people for that. But it’s not only their responsibilities. The private sector has to be part of this. And the government has a very solid set of regulations, you know, in terms of making sure that when they give the permits to a master developer, they need to make sure that the type of units that they are developing are catering for all different strata within that society, right? So it is the government’s responsibility, but it has to be done in collaboration with the private sector, with academia, and with nongovernmental organizations.
Ayesha: What would effective and valuable public–private partnerships look like when it comes to sustainable cities? And what benefits do they provide?
Hazem: We did a study, actually, with the World Economic Forum a few years ago. And we looked at one of the most important factors in making those public–private partnerships a success is to engage the private sector early enough in the process, and to make sure that they are an equal partner along the way. Of course, you have to be designing these partnerships so that they are a win-win situation. And you’re taking the best of the private sector but also making sure that the regulations, the laws, the procurement laws are catered to incentivizing the private sector to participate, while keeping checks and balances to make sure that the recipients of the service are still getting the best quality.
Lizzie: I’m wondering what uses you see for policymakers and businesses in the kind of data that Angel’s work is producing.
Hazem: It’s great when you actually have data that would allow you to better plan and operate a city. If they can understand through sharing, car-, ride-sharing data in a better way, the use of different times of the day, different modes of transportation, you will be able to plan better roads. You will be able to better plan public transportation and your bus lines to address those areas that need them the most. So, having this dynamic data and being able to process it, analyze it, intelligently make decisions based on that is what really a smart city is all about.
Lizzie: Looking specifically at the region where you work, the Middle East, it’s got the second-fastest rate of urbanization on the planet, after Africa. What particular challenges or opportunities do you see in the Middle East?
Hazem: Oh, this is an amazing time to be in the Middle East, and, I think, especially when it comes to smart cities. Now, we are seeing a big transition. In Saudi Arabia, for example, Riyadh has really started to transition into a cognitive city. As a brownfield city, that is a city that is already existing, that becomes very challenging, because in a way you have to sail the boat as you are rebuilding it. On the other hand, we also have the likes of Neom, we have the likes of Masdar. These are greenfield new cities that are being designed from scratch, like The Line, like Oxagon, where from the beginning, you are inserting and investing in smart infrastructure that would allow you to offer these smart services. And there is a renewed emphasis, as well, on sustainability, because at the end of the day, you want to be able also to leverage these technologies towards sustainability and enhanced quality of life. I would say, if we really want all of these national-level commitments that we’ve made for climate change, sustainability, and all of that to really get implemented, we have to take that down to the city level. That’s where the rubber hits the road.
Lizzie: Hazem Galal, thank you so much for talking with us and for sharing your reflections today.
Hazem: It was a pleasure. Thank you very much.
Ayesha: So, Lizzie, I mean, my big takeaway is that justice and inclusion is a really, really big part of the story of smart cities and smart mobility. And particularly as that collides with global warming and climate change. We’ve got these very, very dense cities. But that also means real challenges, particularly as our cities get warmer, in terms of even things like green spaces, planting trees for shade, making sure that buildings as well as being warm in winter are sort of cool and ventilated when it gets really hot.
Lizzie: I was expecting to hear, Oh, some of these cities, Copenhagen, Stockholm have done so well on sustainability. But then, when she talked about, actually, they’re not necessarily including poor people in those benefits and in fact burdening them, I thought that was incredibly interesting to think about this intersection of being inclusive and diverse with being sustainable, that these are not values that are in opposition with one another, that they are, in fact, inextricably linked. And that we can do that using data to drive this kind of decision-making.
Ayesha: That’s all for this episode. Join us next time on Take on Tomorrow, when we’ll be asking if business is ready for how generative AI will transform cybersecurity.
Guest: If cybercrime was a country, it would be the third-biggest country in the world in terms of gross domestic product. It would also be the fastest-growing economy in the world. And when you think about some of the money that is being made by ransomware operators or some of these organized crime gangs, they’ve got a lot more money to invest in new tools, new technology, which we’ve spoken about, the potential for generative AI. Microsoft believes that our ability to collaborate and our ability to collaborate at scale and utilizing some of this technology is going to tip that advantage into the realm of defenders.
Lizzie: Take on Tomorrow is brought to you by PwC’s strategy and business. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity.
Hazem Galal: If we really want all of these national-level commitments that we’ve made for climate change, sustainability, and all of that to really get implemented, we have to take that down to the city level. That’s where the rubber hits the road.
Angel: Every second that we wait to take action on climate change and sustainability issues is time lost. And so, we have to think about how we can actually develop solutions that can achieve both goals of economic growth and productivity, and also environmental sustainability.
Lizzie O’Leary: From PwC’s management publication, strategy and business, this is Take on Tomorrow, the podcast that brings together experts from around the globe to figure out what business could and should be doing to tackle some of the biggest issues facing the world. I’m Lizzie O’Leary, a podcaster and journalist in New York.
Ayesha Hazarika: And I’m Ayesha Hazarika, a broadcaster and writer in London. Today, we’re talking about the place where more than half the world’s population lives: cities.
Lizzie: By the year 2050, the United Nations predict that the figure will have risen to 70%. A change like that brings social, economic, and environmental challenges.
Ayesha: How can cities provide the housing, transit, economic opportunities, and all the other amenities we need in a way which is equitable and sustainable?
Lizzie: To find out more, we’ll be talking to climatologist Angel Hsu. She’s founder of the Data-Driven EnviroLab, which uses satellites to measure how environmentally sustainable and how socially inclusive our cities really are. But first, let’s bring in Hazem Galal, Global Leader for Cities and Local Government and a partner with PwC Middle East. Hazem, welcome to the show.
Hazem: Thank you, Lizzie. Thank you, Ayesha.
Ayesha: Now, Hazem, you work on smart mobility and smart cities. Can you explain to our listeners what those two concepts mean?
Hazem: So, let’s start with smart cities. A smart city is a community that is connected. It’s a community where technology enables the delivery of smart services that can benefit the citizens, the residents, and the businesses operating in that city. On the other hand, it is not only about technology. Technology is an enabler. Now, when we think about smart mobility, smart mobility is how we actually move people, goods in a city—also enabled by technology and data.
Lizzie: What conversations are you having with clients about smart cities and smart mobility?
Hazem: We can be talking to the transport department within a city, how to introduce an integrated transportation system within a city that enables us to combine different modes of transport and to offer choices in that city based on using data in an intelligent way that provides the end user with all the different options for mobility in that city. We could be also having conversations with solution providers. For example, those providers that want to establish an EV-charging business in a city. So they would be, you know, asking us for support of how to make the business case to show what would be the benefits that a city would get if they were to adopt their solution of EV charging.
Ayesha: And can you tell us about any particular innovations or trends which you see as being successful and working really well?
Hazem: In the smart city space, we are seeing a shift leveraging technology and analytics into even a further level, which is what we call cognitive cities. A cognitive city would be offering you a lot of these decision-making opportunities in a more proactive way. So you would use predictive analytics to analyze data from the city. And again, the service receiver, you sort of, like, anticipating their needs and offering the service using AI, using cognitive thinking in a proactive way.
Lizzie: Hazem, thank you for those thoughts, and we’re going to come back to you in just a few minutes. But first, Ayesha, you spoke to Angel Hsu about some of the key issues.
Ayesha: That’s right, Lizzie. We had an absolutely fascinating discussion, and I began by asking her what makes a city sustainable.
Angel: Well, this is a really tricky question, because there’s not really a one-size-fits-all answer to what makes a city sustainable. I think there are three dimensions that you can think about sustainability. One is economic sustainability. So, cities generate between 60 and 80% of global economic output, measured by gross domestic product. I think another dimension is environmental sustainability. Cities are responsible for something around 60% of global waste output. They consume two-thirds to three-fourths of global energy. They also generate between 75 and 85% of global greenhouse gas emissions. And they also contribute to higher temperatures compared to rural areas. Also, equally important is the social-equity dimension. You have some of the wealthiest individuals that live within cities as well as some of the poorest. And this is one of the reasons why the United Nations in 2015 started to articulate a global vision for what cities should be in the future, to be both sustainable and inclusive.
Ayesha: Now, you’ve done some really pioneering work using satellite data to help measure sustainability. Tell us about that. How can a satellite look at this kind of measurement and work it out?
Angel: We can look at trees and also where the location of water bodies are—freshwater, oceans—and then also environmental conditions. So environmental pollution can also be measured and viewed from space. So you can actually see algal blooms in water bodies, for instance. Satellites, because they have sensors, can actually detect the degree to which pollutants in the troposphere—which is a layer of the earth’s atmosphere—actually prevent light from penetrating. And then combining those data with global circulation models and other types of chemical transport models that model how pollutants move throughout the atmosphere, you can actually estimate ground level concentrations to air pollutants. And then also, carbon dioxide emissions and other greenhouse gases are increasingly being monitored also by satellites. Because satellites have a regular overpass time—so, they pass over the same position on earth, the same time every single day—you can actually start to get a consistent and regular time-series record of these phenomenon of air pollution or land cover, forest cover, carbon dioxide emissions, over that same spot.
Ayesha: And what about the equity aspect of sustainability that we discussed earlier, and inclusion? Can satellites give us a picture about inequality?
Angel: That’s where satellites become increasingly attractive, and the promise of earth observation, because then you can get this regular and consistent record of these different types of indicators. So, when we combine that with the sociodemographic data, we can start to answer questions like, well, do all populations, and all demographic groups, and all age groups, do they have the same access to green amenities like green space and tree cover, and also sustainable transit? And are they protected? Are they afforded the same protections from air pollution and urban heat exposure?
Ayesha: Let’s now dig in to what you’re discovering through your data. What kind of cities are performing well? What kind of regions of the world are really leading the way? And which sort of areas, which cities are not doing so well?
Angel: We find that there are generally four types of cities. So one type would be those Stockholms, Vancouver, London, Copenhagens that are performing above average on environmental quality, but then they’re not providing those benefits equally. And, in particular, they’re burdening poorer populations within their cities with these higher levels of pollution and not the same access to the amenities or benefits. Then there’s another type where we’re seeing, there are some incredibly dense cities. So, these are Asian cities, like Tokyo and Kyoto City in Japan, where they’re performing better than average on environmental indicators, but they’re burdening, actually, wealthier populations. Because of the product of density, you get more cars, you get more buildings. And there’s maybe not as much room for green space in dense urban areas. And then we’ve got another type of city where, if you think about large Chinese and Indian cities, like Beijing and Chengdu, Delhi, they are cities that are not performing as well on environmental quality. So they have high levels of air pollution and greenhouse gas emissions. They’re performing lower than average and also burdening poorer populations and wealthier populations, actually, alike. And then the last type of city would be those in primarily developing countries—Monterey, Mexico; Johannesburg, South Africa—where they’re performing below average on environmental conditions. But then also, they have huge amounts of income inequality as well. Half of the cities in our index are actually not providing the same benefits equally amongst all residents and are disproportionately burdening poorer populations with a greater burden of air pollution exposure, urban heat island exposure, and not the same benefit and access to green space and sustainable transit—so, some of the amenities that cities should be providing for all residents equally.
Ayesha: What is it about a city that allows it to be sustainable? Is it the way it’s governed? Is it specific policy decisions, whether it’s on housing or things like limiting cars? Is it geography?
Angel: It has to be a little bit of everything that you mentioned. So, I think some cities are just initially dealt a shorter hand than others. I think about Los Angeles, California, which is located in a valley. And so, unfortunately, there’s poor air quality, and smog has been a perennial issue. And other cities, yeah, they are wealthier, and so they have more economic resources, and they can invest in more sustainability solutions. So, I think there’s a lot of different varieties and reasons. And I do think that governance and policies, urban planning is certainly part of the solution. I’m here in Singapore. And, of course, you know, they have the benefit of being a relatively new nation. They just celebrated their 58th birthday. And so they kind of, in a way, got to think about how to design the city in a garden and garden in a city from the ground up. You know, the founders of modern Singapore, they were thinking about that, recognizing that they had very limited land area, and all these different competing pressures of wanting to grow GDP, but then also managing resources really well. It’s been really interesting being here and seeing the benefits of having centralized planning and very thoughtful urban design to combat urban heat and to minimize pollution, and try to balance all of these things together.
Ayesha: There are two very different schools of thought on the impact of sustainability. Some people think taking climate or inclusion into account can hold back your chances of economic success. But there are others who take a very different view, and they think that sustainability enables economic success and growth. What does your data tell you?
Angel: I think this is a really tricky question to answer. At least in our index, what we’re finding is that there are some cities that have higher than average GDP and environmental performance. So I think that that’s evidence that you can be wealthy and you can also be environmentally sustainable. And then, we’re also seeing that there are some cities that are actually less wealthy, but they punch above their weight in terms of environmental sustainability. I think probably trying to say which theory or which camp is right is probably not productive. I think every second that we wait to take action on climate change and sustainability issues is time lost. And so we have to think about how we can actually develop solutions that can achieve both goals of economic growth and productivity and also environmental sustainability.
Ayesha: Angel, cities are really diverse around the world. Now there are some, super-modern, and innovations can be built in. But there are other cities which are a real kind of jumble of the ancient and the modern. How feasible and how expensive is it to retrofit some of these older, ancient cities?
Angel: Retrofitting buildings is a key indicator for the building sector for urban areas if we want to have any hope of staying on track. So, I think it’s definitely feasible, but it’s also incredibly costly. But I think there’s a lot that can be done, just in simple terms of improving insulation and just sealing and making sure that these buildings are actually not allowing a lot of airflow from leaking in or out. And improving lighting, just upgrading to LEDs and more efficient lighting sources. That’s a huge focus. And then improving, obviously, the air-conditioning and ventilation systems. I think that’s also an area where you can really improve energy efficiency of buildings.
Ayesha: And why should business leaders care about this agenda, particularly when they are facing very difficult economic circumstances at the moment?
Angel: They should care because it’s kind of a do-or-die moment, where we now see that businesses are being impacted by climate change. Last year, when China experienced a record-setting heatwave—so, they had something like 70 days of temperatures over 100 degrees—it hugely disrupted supply chains, because China lost a lot of hydropower. A lot of their waterways dried up, and they weren’t able to transport goods as easily. And that affected supply chains. That certainly drove up inflation and affected businesses’ bottom line.
Ayesha: And if you’re a business leader who is concerned about the sustainability of the city where you operate, give us some examples of some practical things that they could do.
Angel: I always say, number one, know your impact, because I think that’s so incredibly critical. You can’t manage what you don’t measure, and you can’t manage well what you don’t measure well. And then, I think, once you know what your baseline emissions are, it’s important to set a goal. Also, as a mother and as a professor, I know how important it is to make the goalpost and the milestones very clearly defined if you want to actually motivate action. And then, the other piece is actually developing a plan. And then, I would say the fourth step is then to actually take steps to implement. Number five, you have to also monitor and report your progress, and that’s where we’re seeing a lot of gaps.
Ayesha: So, all of this sounds really important, but it also sounds like it’s quite a lot. Being really honest, is this going to be harder if you’re an SME, a small or a medium enterprise?
Angel: When we talk about the companies that are responsible for climate change, two-thirds of the companies that have contributed the most to the climate change problem are the very large companies that you would guess. So, large fossil fuel companies, cement companies, oil and gas. Really, we’re not talking about the SMEs here, you know. We’re really talking about major, major companies. And a lot of these are publicly owned, state-owned enterprises. These are the ones that are historically the most responsible for the climate change problem. And they absolutely have no excuse. I mean, they have the capacity. They have the resources to do all the things that I mentioned. But absolutely, for small and medium-sized enterprises, it’s going to be really challenging. Everyone should be aware at least and try to get educated about what climate change is, how it affects their businesses. You can collect activity data on how much electricity you consume, how much fuel do you purchase. And there are databases of emissions factors that tell us how much emissions are emitted through per unit of these different activities. And so, you can start to develop these estimates that don’t require necessarily a huge amount of technological resources.
Ayesha: So, Angel, what is your ideal vision of the sustainable, equitable city of the future?
Angel: I’m drawn to an example just from a few weeks ago. So, my family, they really like cruises. My parents are aging, and they really wanted to get everybody together. And my husband made a remark. He said, “To me, this is what every American really wants. They don’t necessarily want to be on a boat per se. And it doesn’t have to be on this monstrosity of a ship. What they really want is this connection with other people.” Because you have this self-contained entertainment center. You have walkability to restaurants, to cafes, to bars. You have these chance encounters with people. And it really struck me that this is what a city should be. I think that could actually help us achieve a sustainable city that’s equitable, because you would have people who could have access to better jobs and more economic opportunity that cities provide. You could have density and people not needing to actually purchase their own car, because they would have public transit that they could access. And then you could have these green spaces that could actually bring people together. And if everyone had the same access to these parks and shaded areas, then they could have protection from air pollution and urban heat. My hope is that emerging cities in other parts of the world learn from our mistakes, and they think about how to rebuild urban centers to be vibrant communities that connect people together and have a common, shared vision of sustainability. Because I think that’s the only way we’re going to be able to actually tackle climate change.
Ayesha: Well, Angel, thank you so much for your time.
Angel: Thank you so much. It was really a pleasure being here.
Lizzie: We’re back with Hazem Galal. Hazem, Angel laid out some reasons why she thought businesses ought to care about whether cities are sustainable: climate change disrupting operations and supply chains, driving up inflation, as well as reputational damage. To what extent do your clients share that perspective?
Hazem: Absolutely. I mean, climate change is real. It’s here. The cost of not dealing with climate change is borne by the entire society, including the companies, public sector entities, private sector entities that operate in a city. So, a lot of our clients, especially the startups, are starting right now to really think about how can they provide solutions that would help us to deal with climate change, be it mitigation or adaptation?
Lizzie: Well, whose responsibility is it to make our cities more sustainable? I mean, is it the private sector? Is it government? What’s the balance?
Hazem: So, it has to be driven by the government, essentially. I mean, city mayors and city regulators are the ultimately responsible people for that. But it’s not only their responsibilities. The private sector has to be part of this. And the government has a very solid set of regulations, you know, in terms of making sure that when they give the permits to a master developer, they need to make sure that the type of units that they are developing are catering for all different strata within that society, right? So it is the government’s responsibility, but it has to be done in collaboration with the private sector, with academia, and with nongovernmental organizations.
Ayesha: What would effective and valuable public–private partnerships look like when it comes to sustainable cities? And what benefits do they provide?
Hazem: We did a study, actually, with the World Economic Forum a few years ago. And we looked at one of the most important factors in making those public–private partnerships a success is to engage the private sector early enough in the process, and to make sure that they are an equal partner along the way. Of course, you have to be designing these partnerships so that they are a win-win situation. And you’re taking the best of the private sector but also making sure that the regulations, the laws, the procurement laws are catered to incentivizing the private sector to participate, while keeping checks and balances to make sure that the recipients of the service are still getting the best quality.
Lizzie: I’m wondering what uses you see for policymakers and businesses in the kind of data that Angel’s work is producing.
Hazem: It’s great when you actually have data that would allow you to better plan and operate a city. If they can understand through sharing, car-, ride-sharing data in a better way, the use of different times of the day, different modes of transportation, you will be able to plan better roads. You will be able to better plan public transportation and your bus lines to address those areas that need them the most. So, having this dynamic data and being able to process it, analyze it, intelligently make decisions based on that is what really a smart city is all about.
Lizzie: Looking specifically at the region where you work, the Middle East, it’s got the second-fastest rate of urbanization on the planet, after Africa. What particular challenges or opportunities do you see in the Middle East?
Hazem: Oh, this is an amazing time to be in the Middle East, and, I think, especially when it comes to smart cities. Now, we are seeing a big transition. In Saudi Arabia, for example, Riyadh has really started to transition into a cognitive city. As a brownfield city, that is a city that is already existing, that becomes very challenging, because in a way you have to sail the boat as you are rebuilding it. On the other hand, we also have the likes of Neom, we have the likes of Masdar. These are greenfield new cities that are being designed from scratch, like The Line, like Oxagon, where from the beginning, you are inserting and investing in smart infrastructure that would allow you to offer these smart services. And there is a renewed emphasis, as well, on sustainability, because at the end of the day, you want to be able also to leverage these technologies towards sustainability and enhanced quality of life. I would say, if we really want all of these national-level commitments that we’ve made for climate change, sustainability, and all of that to really get implemented, we have to take that down to the city level. That’s where the rubber hits the road.
Lizzie: Hazem Galal, thank you so much for talking with us and for sharing your reflections today.
Hazem: It was a pleasure. Thank you very much.
Ayesha: So, Lizzie, I mean, my big takeaway is that justice and inclusion is a really, really big part of the story of smart cities and smart mobility. And particularly as that collides with global warming and climate change. We’ve got these very, very dense cities. But that also means real challenges, particularly as our cities get warmer, in terms of even things like green spaces, planting trees for shade, making sure that buildings as well as being warm in winter are sort of cool and ventilated when it gets really hot.
Lizzie: I was expecting to hear, Oh, some of these cities, Copenhagen, Stockholm have done so well on sustainability. But then, when she talked about, actually, they’re not necessarily including poor people in those benefits and in fact burdening them, I thought that was incredibly interesting to think about this intersection of being inclusive and diverse with being sustainable, that these are not values that are in opposition with one another, that they are, in fact, inextricably linked. And that we can do that using data to drive this kind of decision-making.
Ayesha: That’s all for this episode. Join us next time on Take on Tomorrow, when we’ll be asking if business is ready for how generative AI will transform cybersecurity.
Guest: If cybercrime was a country, it would be the third-biggest country in the world in terms of gross domestic product. It would also be the fastest-growing economy in the world. And when you think about some of the money that is being made by ransomware operators or some of these organized crime gangs, they’ve got a lot more money to invest in new tools, new technology, which we’ve spoken about, the potential for generative AI. Microsoft believes that our ability to collaborate and our ability to collaborate at scale and utilizing some of this technology is going to tip that advantage into the realm of defenders.
Lizzie: Take on Tomorrow is brought to you by PwC’s strategy and business. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity.
