“Business is ready”
As co-director of the Prince of Wales's Corporate Leaders Group on Climate Change, Craig Bennett is a man who is confident that businesses are capable of stepping up to challenges of sustainability. Now he just needs government to understand that, he tells Tom Idle
There are four main reasons why companies are taking sustainability seriously.
First, there are the big emitters – the Shells, EONs, and Centricas of this world – firms operating in fairly difficult sectors.
They don’t like the implications that climate change could have for their business. They recognise it is one of the biggest strategic challenges they face and that the world is soon likely to be a very different place. And so, they want that change to be as planned and carefully thought-through as possible, delivered in a phased manner. The nightmare scenario for this group of companies would be for government to do nothing for twenty years, then there to be a series of climate-related disasters (like London and New York being wiped out by floods), and then for governments to move in and be harder than ever with policy measures.
Then there is a second group of firms – mainly the retailers – for whom reputation is everything. They want to be seen to be on the right side of the debate. They recognise it’s not just about improving their operations and greening products and services; its about taking a progressive role in the public policy arena too.
Then there are those firms who see big opportunities to make lots of cash from the agenda – like Johnson Matthey, a company with an expanding fuel-cell division and a growing impatience to see government policy come through that will encourage the take-up of low-carbon technologies.
The fourth set – the banks and insurance companies – see the bigger picture. They’ve seen Stern’s conclusions that doing nothing to address sustainability in business could result in a downturn of global GDP of around 20% by the end of the century. For them it reall is a no-brainer.
For any company, all four reasons might be valid, but they might put them in a different order.
This is the logic of Craig Bennett, a man that ought to know a thing or two about these things having spent the past year interviewing the bosses of some of the world’s biggest businesses. He is deputy director of the University of Cambridge’s Programme for Industry, and also co-director of The Prince of Wales’s Corporate Leaders Group on Climate Change, an initiative that provides a platform for pioneering individuals from the corporate world. This is just one of the schemes, or “dialogues” as Craig calls them, that the Programme – now in its 20th year – delivers to help senior professionals get their head around sustainability issues.
“We’ve been doing this a long time,” he tells me, “before sustainability was fashionable.” Today, the Programme is world-renowned and very successful, drawing on its extraordinary alumni of thousands of people in the most senior positions right across the business community.
And its Craig’s history (he used to head up Friends of the Earth’s corporate accountability division) and experience of engaging with this community that puts him in a unique position to offer a good assessment of the current level of understanding among the UK’s leading companies. “Sustainability has shifted from the margins to the mainstream,” he says. “So much has changed.” I ask him to give some examples and although cagey about what companies he has been talking to recently (“some of the world’s biggest accountancy firms”), he does disclose that the Programme is increasingly organising customised sessions. “Once upon a time a company might have wanted to send a couple of people on a course about sustainability. Now they want their top 60 people to understand the challenges and opportunities.”
This shift in corporate attitude means that CSR is being considered, not just as a separate division, but as being relevant across the entire business; a part of boardroom discussion. “We’ve seen a much greater recognition of the economic relevance and business case for acting on sustainability,” he says. “And we’ve also seen a better mix of different sections of society coming together.” Here, he excitedly references the Corporate Leaders Group on Climate Change (CLGCC), a “crucially important” offering that allows cross sector discussion to “really move the agenda forward”. Participating business leaders are encouraged to follow a seven-point plan: addressing the impact of their operations (“one of the least important of the things to look at”); greening their products and services (“far more important”); communicating the message (“making sure staff are aware of the issues and buy into it”); knowledge management and reporting (“sounds dull and boring but crucial if the others are going to work”); and, motivating staff (“making sure sustainability is relevant across the board”).
The sixth point, the “most important”, asks businesses to consider their long-term model. “It’s about asking some very big questions. Does a company see itself as a mining company, or a raw materials company, for instance?” He offers the example of Nokia – a company that started off as a small rubber and electrics business and transformed itself into the world’s leading mobile communications outfit. Apparently, this evolution came about because its engineers out in the Finnish forests needed a better way of communicating. The technology was slowly developed in-house and the rest is history. “Making that strategic decision wasn’t driven by sustainability concerns but it does present to my mind the kind of opportunities that exist right now for companies that are prepared to think outside the box.
“Think about what the world will be like in 2050 and what people might be after. It will be very different from what it is today.”
But it’s in Craig’s seventh prong of action that he sees the biggest wins – for both the environment and society. If a company is seriously going to contribute to sustainable development, it can’t do it alone, he argues. “It needs to help society form its opinion about where it needs to go.” Again, Craig notes a significant shift in corporate behaviour. Where once the business community actively lobbied against governmental action on sustainability, companies are now arguing with society for a progressive approach from governments.
When the CLGCC was set up, one of its first actions was to write to the then Prime Minister Tony Blair who was then chairing the 2005 G8 Summit. At that time, the 12 members, including some oil companies, called for a long-term regulatory framework to enable the change to happen.
A similar thing happened last year when with the CLGCC’s Bali Communique. Prior to the UN Climate Change Conference in Bali, a 170-strong coalition of businesses (not only from the UK and Europe, but also firms from China, the US and Australia) called for a strong, post-Kyoto international agreement on cutting greenhouse gas emissions. “It was a very different message from what we had in the early 1990s which suggested that all we needed to do was leave business alone and allow the voluntary marketplace to drive change.”
The business community – or certainly the business community Craig has got to know over the years – has been fantastic in its progressive realisation that economic growth can be achieved alongside sustainability being addressed. It’s the governments that need to catch up, he argues. “There are very few people in government who see the big, joined-up picture.” He references the latest Budget with “one or two announcements made that are in the green box”, rather than the whole policy agenda being “genuinely looked at through the sustainability lens”.
“A big part of the solution could be in procurement,” he says. “It’s something government can just do – it doesn’t need legislation.
“Imagine if tomorrow, the UK government said that in five years time it would only buy vehicles that emit 100g per kilometre or less.
“Imagine if Germany and France did the same. Imagine if all 27 EU member states agreed as well. Imagine then if the top 100 companies in the EU did the same.
“You’ve then changed the whole European demand for cars and we haven’t seen a bit of legislation introduced.”
Real leadership is what is needed, and we’re not seeing it, argues Craig. “There is a lot more agreement on this agenda than we might think. Business is more ready for it than government thinks, but government is scared of business backlash.
“But there is a real concern in UK plc at the moment that we are losing the opportunity for first-mover advantage. Renewables is a classic example.”
Craig’s frustration of the government is understandable. Business leaders are up for the challenges and opportunities sustainability presents but are in need of a solid foundation of policy in order to be able to confidently make the investment necessary to transform their business to a low-carbon model. “We are in uncertain economic times. But if all the rhetoric we’ve heard over the years about how bold action on climate change is good for competitiveness is true, then now is the very best time for us to be stepping up our efforts.”
And this is the message Craig will be drumming into government over the coming years. Let’s hope his job isn’t too hard.
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