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Somebody asked me the other day whether there’s really enough to say about sustainability to fill a weekly podcast. The truth is that there’s so much going on that most of it has to be left out. For example, this week is Paris Climate Week, incorporating the 2-day Business and Climate Summit. Earlier this month there was a Responsible Business Summit in Singapore, Morgan Stanley have issued a new report on sustainable investment, in New Zealand consumers are calling for greater transparency from suppliers and Apple is preserving forests. But why did I call this episode “No more hot air”? Two reasons. First, “Sustainable Energy without the hot air” published by David Mackay in 2009, is now more relevant than ever. I've mentioned it a couple of times and suggested you read it. In case you haven't had time I’ve rounded off this episode with a summary of the main points. The second reason for calling this episode “No more hot air” is that it’s time for action on CO2 and climate change, not talk. No more hot air.
First, a few sustainability stories which caught my eye.
Sustainability strategies may be increasingly adopted by a growing number of companies worldwide, but communicating these efforts and engaging both internal and external stakeholders remain a challenge for many, especially if they want the stakeholders to come on board and be part of the efforts.
At the first Responsible Business Summit Asia held in Singapore this month, one of the issues discussed was the need to get a company’s sustainability efforts understood by its target audience – whether it is an internal or external stakeholder group. This is because a company’s ability to communicate its efforts and engage stakeholders could determine the success of its sustainability efforts.
“What we are trying to do now is to tell our story better,” said the head of corporate social responsibility at Chinese firm Huawei, the world’s largest telecommunications equipment maker.
“This way, we can grow our partnerships, work with more people and have an even bigger positive impact in the communities we operate in,” she said. “We can’t do it on our own.” A spokesman from Diageo, the world’s largest producer of spirits, confirmed that good community relations were essential to sustainable business.
Business and Climate Change
Meanwhile, in advance of the Paris Business and Climate Summit this week, Paul Polman, chief executive of Unilever, said governments must set clear CO2 targets to force low-carbon innovation. He said Unilever had faced business costs €300m-to-€400 million higher than normal due to extreme weather. He said "The reality is, if we don’t tackle climate change we won’t achieve economic growth.”. Polman called on other chief executives to join him to lobby governments on the issue. Clearly he has COP21 in view - that’s the United Nations Climate Summit taking place also in Paris, in December this year. One hundred and ninety-six countries will come together to agree an international policy on carbon emissions and climate change. Many believe that this could be the last opportunity to take action to prevent global temperatures rising by more than the critical 2℃. Unsurprisingly, companies relying on cheap energy from fossil fuels and the producers themselves of oil, gas and coal are firmly opposed to carbon controls and are lobbying strongly. On his side Paul Polman is supported by The B Team, a group which urges governments to bring greenhouse gas emissions to zero by the middle of the century. B Team members include Virgin’s Richard Branson and industrialist Ratan Tata.
What do investors think about sustainability? Bankers Morgan Stanley have established an Institute for Sustainable Investing. For the moment they find that sustainable investment is being held back by misperceptions of potential returns. In fact they make a strong business case for sustainable investment. Key resources such as water, clean air and soil are underpriced. Minerals and energy are increasingly scarce and at the same time demand for all these things is growing as population grows by a forecast 2 billion by 2050. More than that, the global middle class, with expectations of western consumption patterns - western diets, western travel, western consumer goods and so on - is expected to accelerate demand by growing by 2.5 billion by 2030. “Sustainable Business is business, not philanthropy,” states Morgan Stanley. Well they would say that, wouldn’t they? Even so, if they can persuade investors to make a business of decarbonising the global economy that can’t be bad for humanity.
Apple are in the news for preserving forests. Are these forests of apple trees? No, these are the trees this high-tech firm needs to assure sustainable supplies of paper and packaging for all its products. Apple have announced a plan to work with the World Wildlife Fund to improve the management of 1m acres of forests in China. This follows their announcement last month to donate money to Conservation Fund to buy and protect 36,000 acres of forests from commercial development other than forestry product production in Maine and North Carolina. Did you listen to the Sustainable Futures Show episode on the Green Supply Chain? (20th February 2015) Apple is making the point that we are all dependent on all parts of our supply chain. Some elements might be quite remote and not obviously connected to the core business, but they are important nonetheless. Apple is not only securing its supply chain here but it’s showing itself to be an environmentally responsible business. Given the almost cult following that Apple has among millions of consumers world-wide, that message is immensely strong.
The Paris Business and Climate Summit ended yesterday. 200 days before COP21, the UN Paris Climate Conference, French president Francois Hollande called for a miracle in December. A miracle to achieve consensus among all 196 participating nations to agree on measures to control carbon emissions and keep the increase in global temperatures below 2℃. He called upon the business community for support, with carbon capture and storage, new clean technologies and enhanced energy efficiency. If it’s difficult to achieve consensus within one country it’s certainly a challenge to achieve consensus among 196 countries. Nevertheless he believes it can be done. However, Tony Hayward, chairman of Glencore, the world’s largest supplier of power station coal clashed with representatives of the solar and wind turbine industries, indicating the sort of debates which are likely to rage between now and December and indeed will be crucial in reaching an agreement. Hayward’s point was that renewables could never provide alternatives to coal for the process industries of countries such as India. Kerry Adler of Skypower and José Manuel Entrecanales Domecq, chief executive of Spain’s Acciona group, a large wind power developer, disputed this. With advances in electricity storage there is no reason why renewables should not provide base load power. The debate continues.
Sustainable Energy - the book
And so to Sustainable Energy without the Hot Air. This book was written by David MacKay, Fellow of the Royal Society and Regius Professor of Engineering at the University of Cambridge. Shortly after publication he was appointed Chief Scientific Advisor to the Department of Energy and Climate Change. In the book he has analysed the energy consumption of the average UK citizen. This covers not just the energy we use for heating, lighting and transport, but the energy we use to provide the food we eat, to run our public services and defence forces, to manufacture and deliver all the goods we buy and to run all the equipment and gadgets that we own. Against this he looks at the potential output from the various renewables, ranging from solar panels and wind turbines to tides, waves and geothermal energy. Even though each section is meticulously researched and presented in detail, it’s written with the general reader in mind. The author uses clear examples, simple illustrations and approximations to make things easy to understand. At the same time his assumptions and data sources are listed in notes to each chapter. The conclusion is that the average Brit needs 125kWh each day to maintain our current standard of living. That’s not electricity, it’s power from oil to drive our cars, from gas to heat our homes, from coal to run our power stations and so on. Although the theoretical maximum output from renewables could come close to matching this, the practical reality comes nowhere near. We cannot cover every roof with solar panels, we cannot instal wind turbines on every spare piece of land, we cannot put barriers across every tidal estuary. What we can do will yield about 14% of what we need.
And the rest? We eliminate fossil fuels from our transport fleet by converting all vehicles to electricity. We convert our central heating to electricity, not with electric radiators or storage heaters but with heat pumps. For every unit of electricity used by a heat pump it’s possible to extract around three units of heat from the air or the ground, depending on the type of pump. We exploit the renewables we have, to provide renewable electricity. In the short term at least, we use clean coal with carbon capture and storage and we use nuclear energy to provide additional electricity with no additional carbon emissions. The final piece of the jigsaw is imported electricity from distant solar farms in foreign deserts. Technically this is feasible; politically it could be problematic. Theoretically enough solar energy falls on only a small part of the Sahara Desert to power the whole of Europe and provide 125kWh of energy to everyone in North Africa as well. If the countries meeting in Paris this December are serious about cutting carbon emissions then they will have to consider ambitious solutions. No shortage of investment opportunities there!
That’s all for this week, but what do you think? How likely are we to get a sensible agreement in December? What do think of David Mackay’s suggestions? As I mentioned before, his book can be downloaded free of charge at withouthotair.com.
I’m always keen to hear from you about this or any other sustainability issues. email@example.com Let me know what you think, let me know what you’d like to hear more of, let me know if you’re an expert and you’d like to be interviewed for the Sustainable Futures Show.