“You won’t like what you are going to hear” was the opening line of the CEO of Beko and Arcelik, Hakan Bulgurlu, during his keynote speech at IFA Berlin 2022 titled Richer People – Poorer Planet?
“Turn off your air conditioners in this blistering heat. Like the French would say – wash only parts of your body when you shower – or shower with cold water. Unplug your appliances when you are not using them. Don’t drive – ride a bicycle. All of these things you are hearing European politicians everywhere speaking today, but not for the right reasons.
“Welcome to modern day Europe. We are in a world significantly different than when I last gave the keynote speech in 2019 when we were on the back of the longest period of growth human history has seen. We created wealth. We brought people out of poverty. Yes, the environment was in a difficult situation and now we’re still talking about the climate. I mean, I went and climbed Everest to make a point.
“But today, we’re in a vastly different world. In my country Turkey we have lived with inflation for many generations. But now Europe is actually for the first time tasting the bitter medicine – 9.1% headline inflation is something Europe has not seen since the Second World War. These newspaper headlines are real – they’re depressing. Interest rates are rising, capital is becoming scarce and jobs will become difficult.
“People’s disposable income is going to go down. China’s zero COVID policy has put pressure on supply chains. We all run businesses – there’s scarcity of supply components, massive increases in logistics costs, and a massive increase in material costs. And yet Europe’s energy crisis deepens every single day. The global meltdown is disrupting economies everywhere. And yet the hottest topic in the planet is actually the heating planet.
“And at the same time, what’s happening with this global warming? Demand for appliances is increasing every single day. Today there are about 3.6 billion cooling devices in the world what I mean by cooling devices, air conditioners, refrigerators, freezers. 3.6 billion sounds like a huge number, right? If you think of the number of people on this planet, 3.6 billion is a huge number. Well guess what? By 2050 it’s predicted that there will be 14 billion appliances. We cannot cope with the energy demand of 3.6 billion cooling appliances today. How are we going to cope with 14 billion in the future unless we change completely our energy mix and the energy efficiency of these appliances?
“This demand is going to come from very densely populated places like my beloved India, where we have a partnership where growth is going to be exponential in cooling appliances, or Bangladesh or Sub Saharan Africa or Indonesia. These are countries which will experience such growth in energy demand that there is no way today’s energy mix can actually fuel this.
“I’m not trying to be too dark. I’m going to share quite a few facts with you. But I do have hope and please listen to me. With that in mind. I will share some facts with you though, which I think everybody needs to keep at the forefront of their minds and run their everyday lives by. Fact number one – we have to get to a net zero future. We have to limit global warming to 1.5 degrees by the end of the century. These are a must. Nothing else matters unless we get these targets right. And do not expect your governments and politicians to do this either. You have to do it. We have to do it. This is our responsibility.
“And believe me when I say this, in the future, they will look at our generation because all of this destruction has happened in our generation, one generation. They will look at us and say ‘you did this’ and I don’t I certainly don’t want that. So I am doing everything I can but I think each and every one of you have to do this too. Fact number two, this is an urgent issue. It is not tomorrow’s issue. 2030 which is when cop 26 said most government and company targets to actually decarbonise economies, businesses consumption. 2030 is only 380 weeks away 380 weeks, that is nothing.
“The home appliances industry has developed well over the past couple of decades, we’ve made more eco friendly appliances consuming less water, but the number of appliances in use are continually going up. If you take my earlier example of 3.6 billion to 14 billion. You understand the enormity of this problem. So as of course the number of appliances grow, so does the consumption of energy. Now why is this a problem? Well, the chair you’re sitting on the shoes, you’re wearing the glasses you’re wearing this screen, everything is made from materials on Earth. We haven’t learned yet to mine meteorites, other planets. Everything comes from here. But somehow I blame the economist again – our forefathers who actually wrote economic theory, they gave no value to nature.
“The market system we operate under today, the capitalist system demands basically demand and supply determine the price of something. If there’s scarcity in supply like chips, the price goes up we know this. How can we can consume nature endlessly. And there’s still no value attributed to it. We need to make sure that whatever we take from nature is priced into the price of that commodity or product so that we can preserve the future of nature. This is a problem which is actually going to become bigger and bigger. Let’s assume for a second that we find nuclear fusion or green hydrogen. That means free energy for everyone. Not just free energy for everyone. That would mean if you have free energy for everyone, you can desalinate water it means you have free water for everyone and you can pump it everywhere.
“Let’s assume for a moment that we achieve this as humanity we may end up destroying the world if we don’t also look out for forest trees, fisheries, agriculture, ecosystems, biodiversity, we need to learn to look at nature and the world as a whole. And to do that we need to assign a value to nature. I worry that in a world where you have free energy, you will have unlimited travel, you will have unlimited consumption. And that’s already the end of the world.
“Another problem we don’t talk about of course, which is a little bit of a taboo subject then you have unlimited amount of people also if everything is free, and easy. So we need to make sure. I think personally as societies we get used to elevated energy costs, but the money is not going to oil and gas companies is a carbon tax that actually goes in to the products price. I don’t believe in a world where people can get richer and the planet poorer. This is not a quality of life equation. We need to make sure we are looking at it much more holistically now. Of course. What do we need to do? Can we actually get richer can we live better without destroying the planet without earth being poor? We can. We need to decarbonize, we need to electrify everything. It makes no sense. We need to preserve water. Water is a huge issue.
“It turns out that the role of appliances is far bigger than any of you can imagine – and I’d love for you to remember this after you leave: Air Conditioners, refrigeration, electric motors and lighting – these four product categories consume 40% of all power in the world, all power. Now, think about the technologies available in terms of the efficiencies of these appliances and think about how they are today implemented. They are not used today. If there is a cleaner technology available, it should be mandatory that all of us use it. So there’s a massive amount of responsibility on our industry.”
This is an excerpt from the keynote speech by the CEO of Beko and Arcelik, Hakan Bulgurlu. View the entire speech here.