Sustainable Savings

SUSBIZ Sustainable Business Strategies.

A few notes on how climate change and sustainability affect business. I’m going to talk about the Archbishop of Canterbury, Lord Stern and the Institute of Directors. I’m running a teleclass with a few places left on Tuesday, and next week I shall be going up to the Low Carbon Best Practice Exchange in Newcastle. The RPI has come down, the CPI has gone up but the COBRA Matrix will help you deal with it, and at the beginning of May the Prince of Wales has his Mayday Summit on Climate Change.

Although the economy is in a state that nobody has seen for many, many years, it hasn’t pushed climate change and sustainability off the agenda. Pressure is coming from all quarters. The latest is the Archbishop of Canterbury who said that the case for action on climate change was a moral as well as a practical one. On Tuesday’s Radio 4 Today Programme he warned that billions could die if governments and individuals did not take moral responsibility for climate change now. Didn’t James Lovelock say much the same a few weeks ago? This comes after Lord Stern’s presentation to the Copenhagen Climate Conference when he said that the situation was very much worse than he had thought when he prepared his report on the economic consequences of climate change back in 2006.

But let’s not be negative! At a recent Institute of Directors event addressed by IOD environment spokesman David Boomer and by Todd Holden from Enworks we were told how adopting environmental policies could lead to a direct improvement in the bottom line. On the basis of studying more than 2000 companies it’s been shown that they saved 8% on energy, 2% on materials, 13% on water and up to 50% on waste. You can do a lot of this without spending any money. Apparently 70% of savings come from behaviour change. If you do need to invest to save, there’s a range of low carbon grants and soft loans. I’ve recently been looking at the work of Bob Willard who is a specialist in sustainable business based in Canada who also talks about the savings on staff costs which can be made from environmental policies; from improved morale and productivity to lowered recruitment costs and less turnover. It all depends on the structure of your business, of course, but anything that can make a quantifiable improvement to your bottom line, particularly in the present economic climate, must be valuable regardless of where it comes from.

Next Tuesday 31st March I’m running a teleclass which will cover these points and expand on them. This event is by invitation only but there are one of two places still available so if you want to take part please log on now to this link and you’ll find full details. The session will take place at 18:00 BST but if you can’t make it there will be a recording which will be available the following day.

Next week on 2nd April I shall be running a roundtable discussion session at the Low Carbon Best Practice Forum in Newcastle. If you haven’t already registered for the event go to www.Carbon–innovation.com

The big news this week is that inflation is going up, or at least it is as far as the Consumer Price Index is concerned. It’s risen from 3% to 3.2% while the Retail Price Index has declined to zero; no change. The difference is that the RPI includes housing costs which have been falling as house prices fall and mortgage rates are cut. Both these inflation indices are very crude instruments; it all depends on your lifestyle as to whether your costs are rising or falling. The other issue is the oil price. It peaked at $147 last July and crashed to $36 in January. Now it’s on the rise again - and after adjusting for the exchange rate in the UK it’s halfway back to last year’s peak.

In business, each organisation has its own set of risk factors and I’ve derived the COBRA Matrix to help managers balance impact against possibility. I’ll be covering this in Tuesday’s teleclass and there will be examples of the COBRA approach in the accompanying working papers. Download them here.

As I said to start with, pressure and the realization of the impact of climate change are coming from all quarters. On 1st May the Prince of Wales’s Mayday Summit on Climate Change takes place for the third year running. It brings together businesses at regional centres all over the country to report on progress and to commit to Carbon Reduction and environmental improvements for the year ahead. You can sign up here.

Government regulations demand that business become environmentally responsible and despite the economic environment, consumers are continuing to demand that organisations are green as well. You can find details of a survey published by the Carbon Trust here.

You don’t have to look far to find people who say how dreadful, how terrible, how earth-shattering the risks from climate change are. I prefer to concentrate on the opportunities for staying in business and staying in profit. In the coming weeks I shall be interviewing people from the Carbon Trust and Virgin Media among others to reinforce the positive message.

If you want to add your comments I look forward hearing from you. Add them to this blog or give me a call.
My name’s Anthony Day and my number is 01904654986. I hope we’ll talk soon.

Too late to save the planet

The BBC can be criticised for the way it justified abandoning Planet Relief, but the truth is that a television spectacular would have achieved nothing. Yes, many people would have made pledges and yes, some may have sent money, but most of us have excellent reasons for making long-haul flights, driving large cars and constantly consuming. In any case we cannot stop climate change. Even if all nations fulfilled their Kyoto targets the best we could hope for would be slowing it down, but with the US refusing to sign and the UK and the rest falling short even this will not be achieved.

British government action on climate is largely lip-service and superficial. They continue to build roads, support airport expansion and subsidise wind farms – the most ineffective form of renewable energy. The implication of their policies is that fossil fuels are limitless; they ignore the carbon consequences of burning all these fuels. They dare not tax energy, cut petrol use though road pricing or restrict air travel. There lies electoral suicide. That leaves action up to us.

Concern for climate change must not blind us to the threats of pollution, resource depletion and particularly energy shortages. It makes sense to address all of these by reducing, re-using and recycling as environmentalists recommend. This won’t save the planet but it may help us cope with the dire conditions we can expect as the oil and everything else starts to run out.

Let’s face up to the consequences of climate change rather than pretending that a TV show or anything else we do will stop it happening.

Festina lente G8!

Festina lente – hurry slowly.

After a lot of pre-conference posturing and sabre-rattling, Angela Merkel the German Chancellor and G8 president announced that the agreements on climate change were "the most important decision for the coming two years."

It really all depends where you’re coming from. Arguably the situation is better than it was before the conference. The United States will “strongly consider” ways of cutting greenhouse gas emissions by 50% by 2050. George Bush has said that the US will take a lead on meeting the climate change challenge and appears to agree with the Europeans that the United Nations and the IPCC (Intergovernmental Panel on Climate Change) are central to the process.

Hurry? Well they hope to have something in place by 2009 to replace the Kyoto Protocol which expires in 2012. Some people would argue that targets for 2050 are all very well, but if we don’t make real changes within five or ten years, then climate change will be out of control. (The same lack of urgency is written into Britain’s Climate Change Bill, by the way. Progress will be reviewed once every five years. Do you know of any project, business, public authority which can get away with reporting less than once a year? And the climate is an immediate and crucial issue!)

Going back to G8. Few commentators are happy with the outcome because it is so full of caveats and maybes. Fifty percent of what? Fifty percent of 1990 levels is more than 50% of current levels. The UK and Europe were aiming at 60% of 1990 levels; the US is proposing 50% of current levels. The climate is uncompromising. We need what the climate needs. George Bush is largely uncompromising: China and India as the two largest developing nations must come to the table and commit to cuts. No matter that emissions in the US are six times per head what they are in China. George Bush will not accept actions which put the US economy at a disadvantage. And "strongly consider" achieves nothing. Somebody has to act. Plenty of room for negotiation – some would say for delay.

Of course everyone admits that it’s urgent, but no-one in power seems ready to take urgent action.

Lente is just not in it. Festina, festina, before it’s too late!

Are you local?

I see that an on-line petition about Peak Oil has been lodged with No 10 Downing Street. Sign it if like me you believe that energy is running short and government should be doing far more about it.

Oil is our principal transport fuel and it is also a valuable chemical feedstock. As shortages begin to bite the will be pressures on transport – it will get just too expensive to drive. We may be talking about 30 years hence, but it won’t be a case of going on as usual and suddenly adapting at the end of year 29. Lifestyles will have to change. Principally that means making things local – local schools, local hospitals, local places of work, local sources of food. We could see the renaissance of the community, if that’s not too elaborate a phrase.

Without doubt there will be change – when wasn’t there? This change will be different. In some ways we will be going backwards – losing our freedom to just up and go, to spend today here, tomorrow on the other side of the Atlantic and the next day almost anywhere else in the world. We’ll lose our freedom to just get in and drive, unless it’s really necessary and justifies the cost. On the other hand, we may see an end to not knowing our neighbours, and become part of a mutually supportive community. Of course this is in the future, and someone, I forget who, said “I never make predictions – especially about the future!” Still it makes sense to examine the possibilities. Have a look at this blog. See what Steve “Habib” Rose has to say on the subject of neighbourhoods.

More about the bill

The government’s Climate Bill has been published. It has already led to much debate and it is, after all, a discussion document. Nothing is expected to be approved and implemented much before the end of 2008. There are many grounds for criticism, but first of all let us welcome the fact that something is being done, even if we don’t think it’s enough. Hopefully we can get it changed before it’s put in place.

The overall target of the bill is to reduce the country’s carbon emissions by 60% by 2050. There will be a series of five-year objectives and there will be legal sanctions if these are not met. If carbon emissions are as serious as we are led to believe, you could almost expect that progress towards targets should be monitored on a weekly basis rather than every five years. The government’s reaction is that if they were to set annual targets it would be easy to fail to reach them in any one year which suffered a very harsh winter. These things should average out over five years. Nonetheless, there should certainly be annual targets and annual reports on how close we are to meeting those targets because otherwise there will be no chance of meeting the five year target.

This bill introduces legal sanctions for failure to meet the emissions targets, but the way they are presented seems quite odd. It is not the polluters who will be penalized, but rather the government minister responsible, who will be hauled before the courts for a judicial review and if found guilty will have to make amends. These amends are the purchase of carbon offsets. This implies that if we don’t actually meet our targets, we can buy our way out of the problems by buying carbon credits. Secondly, these carbon credits will of course be bought with taxpayers’ money although the taxpayers themselves will have little control over the emission levels. Thirdly, ministers rarely stay in a particular office for more than two or three years, so by the time it becomes clear that five year targets have been missed the minister responsible will be far away.

Another aspect of all this is that the government talks exclusively about the control of carbon. The unspoken assumption is that if we restrict our carbon emissions then everything will carry on as normal. In fact, the best scientific estimates are that if we reduce our carbon dioxide emissions we will prevent things from getting worse than they otherwise would. The public does not seem to be aware that global warming, or rather global overheating, is a fact; that climate change is highly probable; that the sea-levels are measurably rising; that glaciers are receding and ice caps are melting and that there is probably nothing we can do to stop this happening within our lifetimes or within those of our children or grandchildren.

If we do cut back on our carbon emissions we may prevent from things being as bad as they might otherwise be. We still need to protect ourselves against the floods, the famines, the forest fires and the violent and more frequent storms that may well be caused by climate change as a result of global overheating. Nobody seems to mention this.

And as for the disruptions that will be caused as fossil fuels run out - well that’s another story that you’ve heard me comment on in previous posts!

It's the law

...or at least it soon will be. Today the British government publishes its Climate Change Bill which is expected to set 5-year targets for carbon dioxide emissions. This comes after a weekend when the Conservative opposition were making it clear how green they were. Bit of a balancing act - they want to restrict air travel, but they don't want to upset families who might vote for them so maybe they will target the frequent fliers. Gordon Brown has also set out his stall in a speech, making it clear that he's green and voter-friendly at the same time.

The bill has already attracted criticism. Why have 5-year targets and not annual targets? If things are as desperate as the press and politicians tell us surely we should be watching the situation week by week. It's easy to be cynical and assume that climate change is just another bandwagon and a convenient excuse for raising more tax.

My own view is that the whole thing is far too simplistic. The unspoken message is that if we cut carbon dioxide we will stop global warming, avoid climate change and everything will go on as normal. In fact, the only effect we may have is to make future climate change less bad than it might otherwise have been. If we cut carbon dioxide by cutting our fossil fuel consumption we will also cut production of the other nitrous and sulphurous pollutants than no-one ever mentions, so that might be a hidden bonus.

The real threat of course is Peak Oil. As production volumes decline we will be forced to use less, travel less and consume less, but we could never tell that to the voters. As conventional oil declines it's likely that we will start exploiting oil from coal, shale or tar sands. And when we do that you can forget carbon dioxide limits or pollution controls!