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3 posts from July 2011

21 July 2011

Stern thinks more needs to be done and faster than envisaged in Stern Review

Nicholas Stern, author of the Stern Review, says his views on climate change have intensified over the five years since the publication of his impactful study. In an interview with Technology Review, Stern lays out some key thoughts that every person concerned about the impact of climate change on business needs to take account of: Nick stern

  • It is unreasonable to overlay climate change models on growth scenarios. Climate change so changes the growth story it could radically reverse growth over the next 50-100 years. That would reverse development and potentially force the displacement of hundredsd of millions or even billions of people.
  • Businesses are now all looking at a carbon-constrained world - this lowers their risk.
  • Though carbon pricing has failed to get going in the US, it will get there in the end because there is no choice
  • Although lo-carbon technology has moved faster than Stern anticipated, entrepreneurship will not be enough to deliver the result needed - we need smart policies too.
  • The Stern Review has failed to convince people that there is a sense of urgency about acting now. IF we wait 5-10 years to act, it will be even more diffficult then.
  • China has been remarkably proactive in its decision-making. China's leaders expect to invest about half a trilliondollars a year into each of three industries: renewables, energy efficiency and clean tech. This is because they see China as extremely vulnerable in climate change, but also because they see the growth stories in the future.
  • The science of climate change looks more worrying than it did five years ago. There were some nasty feedback loops that got left out of the initial publication because they were difficult to model. However, some of these drivers seem to bigger and faster, and therefore more worrisome.

Plenty here for every risk manager, business strategist and policy-maker to devour. For more on the interview, check out http://www.technologyreview.com/energy/37774/


20 July 2011

Independent directors: really, what can we expect?

The News Corp disaster has many victims already (and the body count is only mounting) but so far none of them are non-executive directors. Lucy Marcus raises a really important issue about non-execs in a blog on Harvard Business Review's website:

 "News Corporation and the actions — or as some would note, the inactions — of its board highlight several important directions in the way that boardrooms need to be, and indeed are, moving. No longer will boards be able to conduct themselves behind closed doors without consequences. Investors have been loath to make waves when all was going well, but with the banking crises, HP, and now News Corp, investors are waking up to the fact that it is better to make changes in the good times than to be caught without trunks when the tide goes out."

 Amen, Lucy.

 And what does the non-exec director bring to the change process? Independence, transparency, asking the right questions. Really, it should be light in a dark world. If the non-execs fail to do this, then they are failing the company and its stakeholders (just ask the employees of the defunct News of the World if you think only investors are interested in good performance from the non-execs!). 

 Recommended reading.

13 July 2011

Six reasons why sustainability matters to business

If a CEO’s pronouncements were all the evidence we needed that a business was doing something, then sustainability would be top of the strategy charts. The business case for sustainability

Over half of the McKinsey Global Survey 2010 participants consider sustainability – the management of environmental, social and governance issues  “important” or “extremely important” to their businesses. An even more optimistic Accenture study of 766 CEOs found 81% claiming that sustainability is part of the strategy and operations of their businesses.

In practice, for most companies, word and deed diverge.

The same McKinsey study reports that most companies are not actively managing sustainability, or seeking opportunities for investment or making it part of their business practice. Yet, the best sustainability performers comfortably beat their competitors on sheer economic grounds.

So how do companies get their deeds to match their words? And why should they bother?  Here are six reasons why companies have to get their sustainability actions to speak at least as loudly as their words:

  • The best sustainability performers are the best performers. Period.
  • Operating efficiency is a sustainability virtue
  •  Keeping out of regulatory trouble is a sustainability driver
  • Reputation? What reputation? The drive to corporate respectability
  • Employees care about sustainability too
  • Business opportunities are rife in the New World

Still not convinced?

Well, Fronesys has written a paper that is exactly right for you - six reasons why the business case for sustainability is no longer a debate but a fact.

Check out the new paper authored by Fronesys partners Jyoti Banerjee and Chris Tuppen: Six reasons why sustainability matters to business.