2009 is an interesting and “critically important year” according to Nicolas Stern of the Intergovernmental Panel on Climate Change, following last week’s emergency gathering last week in Copenhagen. I agree. We are in are one of the worst economic crises the world has ever seen AND in a climate crisis (environmental crisis) – both of these things reaching a tipping point at roughly the same sort of time. But it’s also a momentous year, if you’re able to look on the bright side.
2006 was the year Al Gore’s Inconvenient Truth tipped climate change awareness; 2008 was the year that markets collapsed; 2009 is year of a fundamental economic shift coupled with an environmental shift.
Environment is looking like the likely hero of stimulating economies and the burning issue and opportunity for business. Here are some stimulating type opportunities in the form of the latest rather dramatic climate news and new types of trends we need to feed into business planning. Earlier this month, 2,500 climate experts from 80 countries gathered for an emergency climate summit in Copenhagen. The conclusions of the event will be handed to officials and heads of state attending the UN Climate Change Conference in December.
The Guardian published six key messages directly targeted at business, gathered from scientists’ discussion at the summit. I’ve responded to their messages by trying to translate them into actions and opportunities for business.
To date, clean tech, investment, policy and consumer consciousness have been the leading drivers for sustainable development, but I’ve yet to see environmental insights and consequential social disruption widely discussed as a driver for business innovation and value creation. We’ve been working in the now with this subject, largely focusing on mitigation, but not the future, which WILL look very different. I’m pleased to hear scientists sending direct messages like these to business, albeit a little hard to absorb and do anything with.
With these messages in mind, I ponder: is there a role for a new type of planning function in business, “The Environmental Planner”, who absorbs and understands the evolving state of our planet, ecosystem and climate change scenarios and feeds insights to inform business transformation, innovation and communications? Something is needed to transform real time environmental data into business decision-making…
Message 1) Climatic trends
Recent observations confirm that, given high rates of observed emissions, the worst-case IPCC scenario projections (or even worse) are being realised. For many key parameters, the climate is already moving beyond the patterns of natural variability within which our society and economy have developed and thrived. These parameters include global mean surface temperature, sea-level rise, ocean and ice sheet dynamics, ocean acidification, and extreme climatic events.
Climate trends, like tech trends, will continue to evolve and accelerate. This level of specific climate/environmental data is now key to business planning and innovation. Consider for instance the impact of migration to cities when sea levels rise and areas of land become inhabitable, and seawater changes and stocks deplete. What exactly will happen? What sort of products and services will over populated cities or rural areas need going forward? What will a city need to provide to communities that can less depend on shipped goods from countries that were once rich sources of natural capital and in the future may be deserts? What role can brands take in translating this type of data to consumers, educating the public? How will this change what we consume and what we think necessary in our lives?
Take away: Feed climate trends (the hard environmental data) into business planning, the innovation roadmap today and into the longer term. Take on the role of educating your audience about a changing future as you develop new products/services.
Message 2) Social disruption
The research community is providing much more information to support discussions on “dangerous climate change”. Recent observations show that societies are highly vulnerable to even modest levels of climate change, with poor nations and communities particularly at risk. Temperature rises above 2C will be very difficult for countries to cope with.
Government will have a significant role to play in managing displaced communities, but there’s also a role for business to play and to create value. Planning for social disruption is key and will involve, for instance, the restructuring of cities and rural communities and our lifestyles within them, in poor nations and richer countries, as the world shapes up in different ways. The vulnerable communities will also impact the richer less vulnerable communities, so the focus should be on the development of products/services to address both markets.
Take away: (As above:) Feed climate social disruption insights and scenarios into business planning and the innovation road map. Auto companies, food and beverage brands, housing, health etc. will need to adapt to supply the changing society, displaced communities and communities living under new climate extremes.
Message 3) Long-term strategy
Rapid, sustained, and effective mitigation based on coordinated global and regional action is required to avoid “dangerous climate change” regardless of how it is defined. Weaker targets for 2020 increase the risk of crossing tipping points and make the task of meeting 2050 targets more difficult. Delay in initiating effective mitigation actions increases significantly the long-term social and economic costs of both adaptation and mitigation.
The point is that business and government need to accelerate the massive reductions in carbon emissions, regardless of perceived impact on the bottom line today. Sir Nicolas Stern made it quite clear, in 2006, that global warming will shrink the economy 20% (at a minimum), but if we invest 1% of global GDP now we can dramatically reduce this over time. Mitigating climate change through business innovation needs to be a core business objective: the long term view. And it’s starting to happen, with companies like Gap, E-bay Symantec, Nike, Timberland, Sun Microsystems, Starbucks Coffee Company and Levis Strauss founding or joining The Business Coalition for Innovative Climate and Energy Policy. The goal is to bring business and congress together to pass ‘meaningful’ energy and climate change legislation.
Take away: Lead the debate and legislation development with business allies. And build ‘climate mitigation’ into the long term business plan.
Message 4) Equity dimensions
Climate change is having, and will have, strongly differential effects on people within and between countries and regions, on this generation and future generations, and on human societies and the natural world. An effective, well-funded adaptation safety net is required for those people least capable of coping with climate change impacts, and a common but differentiated mitigation strategy is needed to protect the poor and most vulnerable.
Why? Businesses must understand that poor nations and communities at risk, the other side of the world, are a global economic and environmental issue, or ‘net cost’. Take for instance illegal logging of Indonesian rainforests. Desperate for fast cash returns loggers strip the rainforest of un-managed trees, sell the wood cheaply to China who turn the wood into furniture that’s then shipped to another country, like America, for a brand to distribute and sell. Forests are also being stripped to create mass supply of biofuels. All the way along the value chain the logger loses, as does the rainforest and the climate. The brand also eventually loses because the source of its value disappears (the trees), and will be hit by the cost of climate change. The only winner is net CO2 atmospheric level (a win-lose situation). It is these communities who will suffer most under climate change yet are most dependent on the natural capital they destroy – for us to buy. In the end, we all lose.
Take away: Investment and innovation are needed to support poor communities with social innovation and climate mitigation strategies today (eg, supporting rural loggers), as their adaptation needs of the future change, because we (the rich nations) rely on these communities for rich sources of natural and human capital to fuel the global economy. Environmental issues are a truly global economic driver. For a brand, that might mean investing in parts of the supply chain and markets, which they once otherwise externalized.
Message 5) Inaction is inexcusable
There is no excuse for inaction. We already have many tools and approaches — economic, technological, behavioural, management — to deal effectively with the climate change challenge. A wide range of benefits will flow from a concerted effort to alter our energy economy now, including sustainable energy job growth, reductions in the health and economic costs of climate change, and the restoration of ecosystems and revitalisation of ecosystem services.
Take away: Um, yes! Building the new energy economy and an economy of restoration (restoring natural capital) will create value for business and stimulate the job market. Stern suggests earmarking 20% of global GDP or $400 billion over the next year for green investment. Contrary to short-term business planning, the investment freeze and dealing with ‘crises’, now is the time to be focusing investment on sustainable innovation opportunities and energy efficiencies. Which is really the essence of all these messages.
6) Meeting the challenge
To achieve the societal transformation required to meet the climate change challenge, we must overcome a number of significant constraints and seize critical opportunities. These include reducing inertia in social and economic systems; building on a growing public desire for governments to act on climate change; removing implicit and explicit subsidies; reducing the influence of vested interests that increase emissions and reduce resilience; enabling the shifts from ineffective governance and weak institutions to innovative leadership in government, the private sector and civil society; and engaging society in the transition to norms and practices that foster sustainability.
Take away: the public is aware of climate change, to a degree, but needs to be more aware of emerging data on climate AND many other related issues (such as water), to shift belief systems, lifestyles and ultimately drive new types of demand. (The public being global citizens who also happen to be business leaders or policy makers).
These urgent 6 messages need to be heard by the public and translated into digestible communications, belief systems (an ideology) and new ways of consuming that support a low carbon, restoration and sustainable economy. That is a massively critical role of educating the public/business, a role that brands can take on. We’ve seen M&S enter this realm, educating their audience on packaging and supply chain issues with their “Look Behind The Label” work. That’s what I am talking about. There is space to educate in every capacity of the ever-emerging climate/environmental science and economic agenda. John Grant, author of The Green Marketing Manifesto, describes this as a “Knowledge role” for brands. Now we know plastic bottles are bad, who’s going to tell the world about the poor management of water and the looming shortage of supply?
- Contributed by Tamara Giltsoff, Sustainability Strategist
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