Ukraine Crisis: BP to exit Rosneft; EU bans flights; Germany to cut Russian gas

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Updated 28 February 2022
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Ukraine Crisis: BP to exit Rosneft; EU bans flights; Germany to cut Russian gas

  • The Group of Seven leaders said on Sunday that western allies had decided to cut off "certain Russian banks" from SWIFT

RIYADH: The EU decided to ban its aerospace to Russian flights and aircrafts in a fresh round of actions in response to Russia's invasion of the Ukraine.

Highlights:

  • The German government had asked utility firm Uniper UN01.DE to resume its plans to build a liquefied natural gas, or LNG, terminal in Wilhelmshaven, Handelsblatt newspaper reported on Sunday, as Germany steps up its plans to cut dependence on Russian gas.
  • UK considers using strategic oil reserves to stabilize prices, Bloomberg reported
  • British energy giant BP said on Sunday it had decided to exit its 19.75 percent stake in Russian state-controlled oil firm Rosneft after Russia's invasion of Ukraine.
  • BP Chief Executive Bernard Looney, who will step down from the Rosneft board, said in a statement that the invasion "caused us to fundamentally rethink BP's position with Rosneft."
  • Britain's business secretary Kwasi Kwarteng said on Sunday he welcomed BP's decision. "Russia's unprovoked invasion of Ukraine must be a wake up call for British businesses with commercial interests in [Russian President Vladimir] Putin's Russia," he said on Twitter.
  • US banks are preparing for retaliatory cyberattacks after Western nations slapped a raft of stringent sanctions on Russia for invading Ukraine, cyber experts and executives said.

 

From Earlier Today:

 

Fire in Ukraine oil and gas facilities

Huge explosions from Russian attacks on oil and gas installations lit up the night sky in Ukraine early on Sunday, while Western allies tightened sanctions to banish major Russian banks from the main global payments system.

Ukrainian forces were holding off Russian troops advancing on the capital Kyiv, President Volodymyr Zelensky said as the biggest assault on a European state since World War Two entered a fourth day.

But the night was brutal, with shelling of civilian infrastructure and targets including ambulances, Zelensky said.

Germany switch to LNG

Germany will make good on plans to build two liquefied natural gas (LNG) terminals and up its natural gas reserves to cut its dependence on Russian gas after Russia's invasion of Ukraine, Chancellor Olaf Scholz said on Sunday.

"We will do more to ensure secure energy supply for our country," he told lawmakers in a special Bundestag session called to address the Ukraine crisis.

"We must change course to overcome our dependence on imports from individual energy suppliers."

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Germany has been under pressure from other Western nations to become less dependent on Russian gas, but its plans to phase out coal-fired power plants by 2030 and to shut its nuclear power plants have left it with few options.

Earlier this week Germany halted the $11 billion Nord Stream 2 Baltic Sea gas pipeline project, Europe's most divisive energy project, in response to Russia's actions toward Ukraine.

Russian flights ban

A European Union-wide ban for Russian flights is now part of a fresh package of sanctions on Moscow discussed on Sunday by the bloc's foreign ministers.

A vast majority of EU member states have already closed their airspace to these flights.

EU officials meet for emergency refugee talks

European Union interior ministers are gathering Sunday for emergency talks on how to cope with an influx of refugees from conflict-hit Ukraine as tens of thousands of people flee across the border into Poland, Hungary, Romania and elsewhere.

The U.N. refugee agency, the UNHCR, estimates that more than 200,000 people displaced by the fighting in Ukraine have fled the country, and that up to four million could flee if the fighting spreads.

Poland said Saturday that over 100,000 people had entered from Ukraine in the previous 48 hours alone.

At a meeting in Brussels, the ministers will look at ways to shelter people, how to manage the security challenges that the conflict poses to the EU’s external borders, and what kind of humanitarian support can be provided to Ukraine.
Those arriving at the borders are mostly women, children and the elderly.

Ukrainian President Volodymyr Zelensky has banned the departure of men aged between 18 to 60 so they can take up arms against Russian forces.

Separately, Reuters reported that Ukraine is seeking to take Russia to the international court in The Hague, citing President Zelensky.

UK to seek further sanctions as Russian banks face SWIFT ban

British foreign minister Liz Truss said she would press for further sanctions against Russia, especially cutting off their oil and gas supplies. 

“It doesn't end here. I've got a meeting today with my G7 counterparts. I am going to be pressing for further tightening against Russia, particularly including the access to Russian oil and gas,” said Truss. 

She also warned that Russian leaders will be prosecuted for war crimes. 

The Group of Seven leaders said on Sunday that western allies had decided to cut off "certain Russian banks" from the worldwide interbanking communication system called SWIFT.


The statement, in a joint declaration published by the French presidency, did not specify which Russian banks would be affected.

It added a transatlantic task force will soon be put in place to coordinate sanctions against Russia, Reuters reported.

Google, YouTube take action

Google has blocked the download of Russian state-owned media outlet RT's mobile app in Ukrainian territory. 

Alphabet Inc. which owns Google made this decision upon request from the Ukrainian government. 


Earlier, Google had barred RT and several other Russian channels from receiving money for ads on their websites and apps. 

YouTube has also suspended multiple Russian channels, including RT from revenue generation on the site. 

 

“In light of extraordinary circumstances in Ukraine...we're pausing a number of channels' ability to monetize on YouTube, including several Russian channels affiliated with recent sanctions,” said YouTube in a statement.

Russian Central Bank insists it can ride the storm

Russia's banking system is stable even after facing a raft of new sanctions from the US and the European Union, according to Russia's Central Bank. 

"The Bank of Russia has the necessary resources and tools to maintain financial stability and ensure the operational continuity of the financial sector," said the bank in a statement. 

On Saturday, the US, Europe, and Canada had announced the freezing of Russia's Central Bank's assets.

Reuters reported the bank as also saying it would be temporarily easing restrictions on banks' open foreign currency positions. 

Putin puts Russia’s nuclear forces on alert

In a dramatic escalation of East-West tensions, President Vladimir Putin ordered Russian nuclear forces put on high alert Sunday in response to what he called “aggressive statements” by leading NATO powers, AP reported.

The order means Russia’s nuclear weapons are prepared for increased readiness to launch, raising the threat that the tensions could boil over into nuclear warfare.

In giving it, the Russian leader also cited hard-hitting financial sanctions imposed by the West against Russia, including Putin himself.

Speaking at a meeting with his top officials, Putin directed the Russian defense minister and the chief of the military’s General Staff to put the nuclear deterrent forces in a “special regime of combat duty.”

 


Tripartite deal signed to strengthen Saudi Arabia’s real estate sector

Updated 01 December 2024
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Tripartite deal signed to strengthen Saudi Arabia’s real estate sector

JEDDAH: Saudi Arabia’s real estate sector is poised for significant growth following a new tripartite partnership designed to enhance housing finance and establish a secondary mortgage market.

Under the patronage of Minister of Municipal and Rural Affairs Majid Al-Hogail a memorandum of understanding was signed on Sunday by the Real Estate Development Fund, Saudi Real Estate Refinance Co., and Al-Ahli Bank. The agreement aims to support the Kingdom’s housing sector and accelerate the development of a secondary mortgage market.

The MoU, which involves the Public Investment Fund’s fully owned SRC and Al-Ahli Bank, marks an important step in fostering closer collaboration between financial institutions. As part of the agreement, Al-Ahli Bank will continue to create mortgage portfolios, which will be refinanced through the SRC, according to the Saudi Press Agency.

This partnership is expected to fast-track the creation of mortgage-backed securities (MBS), both domestically and internationally. By doing so, it will help realize the goals of the Kingdom's housing program, promoting the development of a sustainable and integrated real estate financing system. The initiative will also contribute to expanding housing options for Saudi citizens.

Recent data from the Saudi Central Bank shows that banks in Saudi Arabia disbursed SR60.92 billion ($16.24 billion) in residential mortgages during the first nine months of 2024, marking a 4.88 percent increase compared to the same period in 2023. Of this amount, SR38.85 billion was allocated for home purchases, accounting for 64 percent of the total mortgage loans. However, the share of loans for house purchases declined slightly by 3.38 percent year on year, dropping from 69 percent in 2023.

Demand for apartments has surged in response to urbanization and demographic shifts. Apartments now account for 31 percent of all mortgages, up from 25 percent last year, with lending for apartment purchases reaching SR18.6 billion — an increase of 26.8 percent. Loans for land purchases also grew by 8.26 percent to reach SR3.5 billion, underscoring continued interest in land investment across the Kingdom.

The new partnership aims to provide liquidity in the market, ensuring a continuous flow of mortgage financing and supporting the development of the secondary mortgage market in Saudi Arabia.

At the signing ceremony, Al-Hogail also launched a new financing offer from Al-Ahli Bank, with rates starting as low as 2.59% for those interested in purchasing units under construction.

Mansour bin Madi, CEO of the Real Estate Development Fund, emphasized that the strategic partnership with SRC and financial institutions aims to improve the residential mortgage market and reduce financing costs for Saudi families. He highlighted that the initiative aligns with the objectives of the “Sakani” program and the broader real estate goals of Saudi Vision 2030.

Majeed Al-Abduljabbar, CEO of SRC, noted: “This partnership with Al-Ahli Bank is a crucial step in advancing the mortgage financing market in the Kingdom. Through this collaboration, we aim to offer innovative solutions that enhance liquidity, allowing financial institutions to provide mortgage financing tailored to market needs, while expanding property options for citizens.”

Tareq Al-Sadhan, CEO of Al-Ahli Bank, affirmed that the partnership with SRC demonstrates the bank’s commitment to fostering growth in the housing sector and contributing to the development of a dynamic secondary mortgage market. This, he added, will support Saudi Arabia’s broader economic diversification efforts.


Closing Bell: Saudi main index rises to close at 11,741

Updated 01 December 2024
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Closing Bell: Saudi main index rises to close at 11,741

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 100.43 points, or 0.86 percent, to close at 11,741.74.  

The total trading turnover of the benchmark index was SR4.63 billion ($1.23 billion), as 159 of the stocks advanced and 64 retreated.   

On the other hand, the Kingdom’s parallel market Nomu lost 221.58 points, or 0.73 percent, to close at 30,173.12. This comes as 34 of the listed stocks advanced while 48 retreated.   

The MSCI Tadawul Index gained 11.24 points, or 0.77 percent, to close at 1,471.59.   

The best-performing stock of the day was Gulf Insurance Group, whose share price surged 8.35 percent to SR31.80.  

Other top performers included Saudi Arabian Cooperative Insurance Co., whose share price rose 4.61 percent to SR15.44, and Lazurde Co. for Jewelry, whose share price increased 4.26 percent to SR13.70.

Tamkeen Human Resource Co. recorded the biggest drop, falling 11.34 percent to SR68.

Etihad Etisalat Co. also saw its stock prices fall 3.08 percent to SR53.50.

Meanwhile, Northern Region Cement Co. also saw its stock prices dropping 1.86 percent to SR8.98.

On the announcements front, Nice One Beauty Digital Marketing Co. has announced plans to raise up to SR1.2 billion by offering 30 percent of its shares on the Saudi Stock Exchange.

SNB Capital Co. will act as the offering’s lead manager, financial advisor, book-runner, and underwriter.

EFG Hermes Saudi Arabia will join as joint financial advisors, book-runners, and underwriters. The institutional book-building period will run from Dec. 1 to 8.

According to a Tadawul statement, the price range for the offering has been set between SR32 and SR35 per share. The offering is comprised of 34.650 million ordinary shares, representing 30 percent of the company’s capital after the issuance of new shares and capital increase.

The minimum number of offer shares to be applied for participating parties is 100,000, while the maximum is 5.7 million. The participation in the book-building process is confined to the participating parties in accordance with the Instructions for Book Building Process and Allocation Method in the initial public offering issued by the Capital Market Authority. 

The final price per offer share will be determined after the completion of the book-building process, to be followed by the individual subscriber’s subscription process. The final allocation of the offer shares will be made after the end of the subscription period for individual investors.


Saudi Arabia’s Economic Council reviews outlook, approves key growth strategies

Updated 01 December 2024
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Saudi Arabia’s Economic Council reviews outlook, approves key growth strategies

RIYADH: Saudi Arabia’s Council of Economic and Development Affairs reviewed the Kingdom’s economic outlook and strategies to address global challenges, offering recommendations to support growth and resilience.  

In a video conference meeting, the council began by reviewing the quarterly economic report from the Ministry of Economy and Planning, which highlighted key developments in both global and national economies, the Saudi Press Agency reported. 

This follows Saudi Arabia’s 2.8 percent economic growth in the third quarter of 2024, driven by strong performance in non-oil sectors, official data showed.  

The country’s non-oil sector expanded by 4.2 percent year-on-year, in line with Vision 2030’s goal to reduce dependence on oil, according to a recent report from the General Authority for Statistics. 

During the meeting, the council reviewed the Ministry of Finance’s third-quarter report on the performance of the state’s general budget for fiscal year 2024. The report provided a breakdown of financial performance through the third quarter, including indicators for revenues, expenditures, and public debt. 

The findings confirm the Kingdom’s ongoing support for development projects, its strengthening of social care and protection systems, and its commitment to implementing major initiatives under Vision 2030. 

The Ministry of Commerce also presented a report from the Permanent Committee for Price Monitoring during the third quarter of 2024, outlining the roles and tasks of the committee's participants. 

The report highlighted key developments, including global price trends, consumption patterns, and inflation indicators in the Kingdom. It also detailed consumer goods prices for the third quarter and the measures taken to ensure the availability of goods and maintain price stability. 

The meeting also covered several other topics and reports, including the National Export Strategy Project, the National Savings Strategy, and initiatives related to financial inclusion and education. 

Additionally, the council reviewed the third-quarter 2024 Real Estate Price Index, the executive summary of foreign trade for August 2024, the September 2024 Consumer Price Index report, and the Wholesale Price Index report for the same period. 

The meeting concluded with the council making necessary decisions and recommendations on all discussed matters. The council’s recommendations and decisions are set to guide the country’s economic trajectory in the coming months. 


Oman inflation at 0.8% in October: official data

Updated 01 December 2024
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Oman inflation at 0.8% in October: official data

RIYADH: Oman’s inflation rate saw a modest 0.8 percent increase in October compared to the same month last year despite price increases across several categories, according to an official report.  

The National Center for Statistics and Information analysis revealed that consumer prices for miscellaneous goods and services increased by 4.8 percent year on year, followed by food and non-alcoholic beverages by 3.5 percent, healthcare by 3.2 percent, and culture and recreation by 0.8 percent.  

Restaurants and hotels also saw gains of 0.6 percent, clothing and footwear by 0.5 percent, household furniture and maintenance by 0.4 percent, and education by 0.1 percent.  

Conversely, transportation prices declined by 2.6 percent, while housing, utilities, fuel, communication, and tobacco categories remained stable.  

Breaking down the food and beverage category, vegetable prices recorded the largest increase at 8.9 percent. Fruits followed with an 8 percent rise. Dairy products, including milk, cheese, and eggs, increased by 5.4 percent. Oils and fats rose by 3.8 percent, while meat prices climbed by 2.8 percent. Sugar and confectionery saw a 2.4 percent increase. 

Processed foods increased by 1.8 percent, bread and cereals by 0.8 percent, and non-alcoholic beverages by 0.7 percent. Meanwhile, fish and seafood prices fell by 1.2 percent, partially offsetting the broader price hikes in food items.  

Broad money supply  

Data by the nation’s central bank pointed to a significant expansion in Oman’s broad money supply, which grew by 13.9 percent year on year, reaching 24.7 billion Omani rials ($64.1 billion) by the end of September.  

This growth was driven by an 18.2 percent increase in narrow money and a 12.3 percent rise in quasi-money, which includes savings deposits, term deposits in Omani rials, and certificates of deposit issued by banks, as well as margin accounts, and foreign currency holdings within the banking sector.  

Despite the overall monetary expansion, cash held by the public declined by 6.7 percent, while demand deposits surged by 25.1 percent, reflecting changing preferences in liquidity management.  

Commercial banks in Oman recorded rising interest rates during the period. The weighted average interest rate on Omani rial-denominated deposits increased from 2.453 percent in September 2023 to 2.679 percent in September this year.  

Similarly, the weighted average interest rate on loans denominated in Omani rials rose from 5.451 percent to 5.604 percent over the same period.  

Interbank lending rates for overnight transactions declined slightly, with the average falling to 4.896 percent in September compared to 5.388 percent in the same month last year.  

This shift aligns with the reduction in the weighted average repurchase rate, which decreased from 6.000 percent to 5.790 percent during the same timeframe. These movements are attributed to adjustments in monetary policy in line with the US Federal Reserve’s actions. 


COP16: A turning point for global land restoration and drought resilience  

Updated 01 December 2024
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COP16: A turning point for global land restoration and drought resilience  

RIYADH: The 16th session of the Conference of the Parties to the UN Convention to Combat Desertification is set to be a pivotal moment in the global fight against desertification and land degradation. 

Scheduled for Dec. 2-13, 2024, in Riyadh, COP16 carries the theme “Our Land. Our Future.”  

This event aligns with the 30th anniversary of the UNCCD and marks the first time its COP will convene in the Middle East and North Africa — a region acutely affected by the devastating impacts of desertification and drought. 

Why COP16 matters 

As one of the three Rio Conventions, alongside climate change and biodiversity, UNCCD plays a critical role in global environmental governance. COP16 aims to catalyze unprecedented ambition and investment to restore degraded lands and enhance drought resilience. 

The conference will focus on several key objectives:  

Scaling up land restoration: Accelerating efforts to restore 1.5 billion hectares of degraded land by 2030. 

Strengthening drought resilience: Enhancing global and national policy frameworks to better withstand and manage droughts. 

Promoting people-centered solutions: Ensuring the participation of local communities, women, and youth in land management and restoration efforts.  

“The COP16 plans to combat land degradation present exciting opportunities,” said Vijay Valecha, chief investment officer of Century Financial, in an interview with Arab News. 

“Land restoration will promote job growth, encourage sustainable development, and support local economies. According to the UNCCD, every dollar invested in restoring degraded lands yields between $7 and $30 in economic returns,” he added.  

Valecha underscored the importance of collaboration in achieving these ambitious goals, stating: “The target to reforest 1.5 billion hectares will require close collaboration among experts, universities, NGOs, government organizations, and the private sector. This collaboration will strengthen knowledge transfer to local communities and grassroots organizations, making development more sustainable in the long term.”  

HIGHLIGHTS

As the hosts, Saudi Arabia is also introducing the first-ever Green Zone at a UNCCD COP, aimed at mobilizing the scientific community, businesses, financial institutions, NGOs, and the public to deliver lasting change.   

COP16 in Riyadh will host the first dual-track dialogue at a UNCCD COP, combining a negotiation track with an action agenda to address pressing environmental issues.  

The high-level segment of COP16, scheduled for Dec. 2-3, will feature ministerial dialogues on drought resilience, finance, and the impact of land degradation and drought on forced migration, security, and prosperity.  

Saudi Arabia’s hosting of COP16 highlights the region’s critical role in addressing desertification and water scarcity. 

The MENA region is one of the areas most impacted by desertification, with some areas experiencing nearly 100 percent land degradation.

‘Missed calls from the land’  

As COP16 in Riyadh approaches, the presidency announced the launch of the global campaign, “Missed calls from the land.”  

This initiative, supported by a campaign film, highlighted Saudi Arabia’s commitment as the UNCCD COP16 Presidency to raise global awareness about the urgent issues of land degradation, drought, and desertification.  

Currently, 40 percent of the world’s land is degraded, affecting 3.2 billion people. The UNCCD’s target aims to restore 1.5 billion hectares of degraded land by 2030.  

Valecha elaborated on how land restoration will have far-reaching impacts: “Restoration also improves water retention in the soil, enhances agricultural output, stimulates the livestock economy, and increases water availability for human consumption.”  

He added: “These efforts will create more green jobs, making economies more resilient in the face of climate challenges.”  

Ministerial dialogues  

COP16 in Riyadh will host the first dual-track dialogue at a UNCCD COP, combining a negotiation track with an action agenda to address pressing environmental issues.  

The high-level segment of COP16, scheduled for Dec. 2-3, will feature ministerial dialogues on drought resilience, finance, and the impact of land degradation and drought on forced migration, security, and prosperity.  

“COP16 in Riyadh is a critical moment for the international community to address land degradation, drought and desertification,” said Osama Faqeeha, deputy minister for environment and adviser to the UNCCD COP16 Presidency.  

In a press release, he added: “From food and water insecurity to climate change, conflict, instability, and forced migration, how we treat our land has a profound impact on lives and livelihoods around the world.” 

As the hosts, Saudi Arabia is also introducing the first-ever Green Zone at a UNCCD COP, aimed at mobilizing the scientific community, businesses, financial institutions, NGOs, and the public to deliver lasting change.   

“At the same time, we are engaging policymakers from around the world in a range of high-profile discussions to deliver decisive multilateral action. This dual-pronged approach is vital to accelerating the land restoration and drought resilience initiatives our planet and its people so desperately need,” said Faqeeha.

FAO’s central role  

The Food and Agriculture Organization will play a key role at COP16, reflecting its commitment to sustainable land management and food security. Abdul Hakim Elwaer, FAO’s assistant director-general, emphasized in remarks to Asharq Al-Awsat the organization’s active participation, including leading discussions on transforming food systems and coordinating thematic days like Food Day and Governance Day.  

Valecha tied land restoration directly to food security, emphasizing: “Land restoration is crucial for ensuring we have enough food for the future. Sustainable methods like agroecology and regenerative agriculture can improve soil health, reduce carbon emissions, and boost productivity, creating robust food supply chains that adapt to climate change.”  

Strengthening drought resilience  

Building resilience to drought will be a key focus of COP16, emphasizing the role of policies and technologies, with Valecha advocating for proactive measures. 

“To improve drought resilience, a comprehensive framework is needed. This includes identifying vulnerable areas, implementing early warning systems, and enacting policies to prevent water overuse,” he said.  

“Measures such as promoting drought-resistant crops and establishing drought management funds will provide essential protection for affected communities,” Valecha added. 

The integration of local and indigenous knowledge into these efforts is equally vital.   

Valecha said: “Indigenous communities, as key stakeholders in land restoration, possess deep understanding of their ecosystems. Their involvement can significantly reduce deforestation rates, as seen in countries like Nepal and regions in the Americas.”  

A regional and global impact  

Saudi Arabia’s hosting of COP16 highlights the region’s critical role in addressing desertification and water scarcity. 

The MENA region is one of the areas most impacted by desertification, with some areas experiencing nearly 100 percent land degradation. COP16 will provide an opportunity for regional countries to showcase their resilience strategies and contribute to shaping global policies.  

“The Gulf and MENA region, owing to its demographics, have been at the center of environmental challenges,” said Valecha. “However, initiatives such as drought and disease-resistant crop varieties by GCC nations demonstrate the region’s commitment to combating these challenges.”  

Moreover, COP16 will offer a platform to showcase innovative solutions, from advanced land management practices to cutting-edge technologies in water conservation.  

Youth and community engagement  

For the first time, COP16 will see Saudi Arabia host a Green Zone alongside the formal Blue Zone program. This inclusive public space will promote environmental awareness through family-friendly and cultural activities. 

The emphasis on inclusivity is central to COP16, with forums and training sessions for youth, women, and indigenous communities. The Green Zone will host discussions on sustainable land stewardship while featuring workshops, exhibitions, and interactive art installations.  

Valecha highlighted the potential of youth engagement at COP16: “Selected youth negotiators will participate in the Youth Negotiators Academy, equipping them with skills to advocate for actionable policies. These efforts promote intergenerational dialogue and foster solutions for sustainable livelihoods.”  

“Globally, women account for nearly 50 percent of agricultural labor in small-scale farming. Gender-inclusive policies across the value chain are critical to the success of restoration initiatives,” said Valecha. 

Innovative solutions and partnerships  

COP16 is expected to unveil groundbreaking initiatives, with Valecha anticipating significant developments. He added: “The conference could lead to the establishment of financing mechanisms and restoration funds. Cross-border partnerships can help maintain the Land Degradation Neutrality target and prevent further degradation of land resources.” 

Valecha emphasized the critical role of the private sector in achieving COP16’s goals, highlighting the potential contributions of international financial institutions and private companies. He pointed to favorable loans, green bonds, and funding for sustainable practices such as no-till farming and rotational grazing as key areas of support.  

He also stressed that public-private partnerships are vital for scaling up land restoration efforts. 

A call to action  

As COP16 commences, the world stands at a crossroads. This conference is not just a meeting but a call to action — a chance to turn ambition into tangible solutions for land, livelihoods, and the planet’s future.