This week’s blog is by the remarkable Marga Hoek, who recently joined our speaker roster.
Marga is an award-winning author, a successful businesswoman and a global thought leader on sustainable business and capital. This year her influence and impact were recognised when she was chosen to be one of the Thinkers50 – people in business who come up with the leading management ideas of our age.
In this blog, her message here is that addressing climate change and succeeding in business are not mutually exclusive. Sustainable business is possible.
Now that’s a message I think people want – and need – to hear more.
Last year, more than 24 million people were displaced by weather-related disasters, affecting the economy, business and society at large. The number of such events has nearly quadrupled since 1970. It’s a trend, sadly, that’s likely to continue.
But if approached correctly, climate change represents a remarkable opportunity for business to succeed economically and become a powerful force for good – one that works for the benefit of business, humanity and the planet.
Climate change affects every aspect of life
Climate change has detrimental consequences – many more than meet the eye. Globally it’s creating energy inequality and resource scarcity, for example, which are intertwined: a negative impact on one has a negative impact on the other. Poverty is also closely related to these negative climate impacts, with many millions having no access to basic energy services, fresh water or sanitary provisions.
Despite being faced with this, we are not slowing down the use of energy and resources; instead, use is growing — rapidly. Growing material and resource use is driven by expanding populations, consumption trends in mainly developed economies and the transformation of developing economies. Demand for resources has shifted from traditionally agriculture-based economies to modern urban and industrial economies.
Make business a force for good
Climate change adversely affects important aspects of everyday life. If we want to meet the targets of the Paris Agreement of 2015 as they are incorporated in the Sustainable Development Goals (SDGs), there is a turning point right here, right now. And business is poised to be a real force for good – if it chooses to be.
As John Pearley Huffman says in a recent satirical piece in which he jokingly compares Earth to a car, “No one owns Earth, but 7.7 billion humans are supposed to do regular maintenance”. But the truth is, sadly, that many of us don’t.
The power of business
For business, and capital, there is a major role to play — a role more impactful, crucial and meaningful than ever before.
Just imagine, for one second, the power that business has. Fifty of the largest economies are in fact corporations, operating throughout the entire planet.
And consider the investment potential of private capital, which today is a much larger percentage than public investment potential; for instance, the percentage of total capital flows of donor countries’ ODAs into emerging markets has decreased from over 50% to less than 10%, while private capital flows have increased in scale and volume.
Be part of the solution
“Climate change is not only a societal disaster but also an economic catastrophe”. Business leaders like Feike Sijbesma, Gerard Mestrallet and Paul Polman point this out regularly. And rightly so, since we cannot have business without a planet.
When it comes to climate change, business has a choice about what to do and it needs be aware that it makes that choice: be part of the solution or continue to be part of the ever-growing problem. Business and capital can be a huge power for good. And economically, there is no reason not to be.
Without a planet there is no business
We need the planet so much more than the planet needs us. This means that we have no option — even and also from a business perspective — other than to help solve the global climate and resource crisis that is now staring us in the face.
Business and private capital can thus be a huge power for good. It’s important to be aware that business solutions are as much needed as they are profitable. And that certainly applies to business solutions addressing climate change. Solutions for reducing food waste dramatically, for instance, prevent huge economic loss, gets more people fed — which is imperative since there are still nearly 800 million people going to bed hungry — and has an enormous impact on climate change since food and land-use systems account for over 25% of greenhouse emissions.
Real-life examples of innovation
Examples of such business innovations exist right now, around the globe. One case in point is the private equity fund InterEnergy, which has invested in the development and construction of the Laudato Si wind park in Penonome, Panama. As Central America’s biggest wind farm, the 215-megawatt Penonome plant will eliminate 400,000 tons of CO2 emissions a year — roughly the equivalent of taking 84,000 cars off the road.
Adopt a model that works for business and humanity
Creating business models that respond to both energy efficiencies and people’s everyday needs can deliver solutions with major societal impact. As the largest environmental cause of disease and death, air pollution has become one of the major health risks on the planet. Business can be part of the solution here as well.
In Mexico City, one of the biggest and most polluted cities in the world, the hospital Torre de la Especialidades was designed to transform air pollutants into harmless chemicals such as water. The building’s outer layer is made up of a new type of tile called ‘ProSolve370e’, which has the ability to neutralise the pollution of 8,750 cars a day. A building that gives back to the environment and society, rather than draining either, is really quite something.
Another inspiring example is that of the flooring company Interface, which has made CO2 their friend instead of their enemy. They discovered that the CO2 could be used as an ingredient for their carpet tiles. They now call that project ‘Climate Take Back’ and are scaling it up throughout the world.
Scale up radical solutions
The list goes on, but even more is needed. We need more solutions, at a larger scale to succeed. So let’s get down to business. Which in the end is in its own best interest. And will save our planet.