Paul Hohnen Sustainability Strategies



 
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Notable Quotables

“On the economic front, the importance of the (chemicals) sector is hard to deny. The sector is worth over $4.5tn worldwide, with most recent growth in east Asia. For new growth, however, the OECD countries (and China) need now to explore new products, services and management systems. On the social and environmental fronts, the picture is less rosy and has "needs to change" written large all over it. ... Since start-ups represent a major source of new business ideas, it would serve business interests well if all companies with an interest in better performing, lower cost and less toxic materials and products took a more active interest in driving the sustainable chemistry agenda, working with universities, regulators and start-ups.”

'A Winning Formula for Sustainable Chemistry Start-ups', Innovation Forum, Paul Hohnen, 18 October 2017


“The hard realities of climate change are showing again across Europe, with the historic drought in Italy ... being only the latest example. What seems increasingly clear is that Europe ... needs to invest massively in climate abatement and adaptation infrastructure. ... a grand European project to become collectively more resilient to energy and water stress could be just what is needed now to give Europe the new and positive shared narrative so urgently needed. Not to mention the jobs, economic growth and technological innovation involved.”

Letter, Financial Times, 2 August 2017


“Chemicals will be essential to the achievement of the 2030 Agenda and the majority of its sustainable development goals. The SDGs, however, will not be reached unless we have both a new and improved framework for the sound management of chemicals and waste and parallel work to mainstream sustainable chemistry. In this latter respect, the German initiative for an International Sustainable Chemistry Collaborative Centre (ISC3) is a promising development.”

Extract from 'The pressing need for global chemicals governance', Innovation Forum, 7 February 2017


“Business, and markets in particular, need to understand that the Paris agreement is not just another aspirational, but essentially meaningless, global road map. The agreement, between nearly 200 countries (almost all of whom underlined in their speeches the very real dangers of continued warming to the future of their societies, landscapes and economies) amounts — in security terms — to a global ‘code red’. It needs to be understood and acted on as such. No other threat on the radar stands to affect so many, so much, and for so long.”

Letter, Financial Times, 16 December 2015


“As the Paris COP 21 UN climate summit approaches, expect to hear more and more CEOs coming out in favour of a price on carbon. The trend has been long in coming and is — with some caveats — to be welcomed. It was given additional impetus in June 2014 when a thousand firms signed a "putting a price on carbon" statement developed under a World Bank initiative. Several months later, at the UN secretary-general's climate summit, leading companies (including Acciona, Braskem, EDF, Nestle, Novozymes and Philips) supported a "carbon pricing champions" initiative. This included a commitment to set an internal carbon price and publicly advocate the importance of carbon pricing. ..

If the call for a carbon price is not to be seen as a new wave of sophisticated PR posturing — and sometimes covering behind the scenes support for efforts to undermine either a global agreement or national legislation to increase the cost of fossil fuels — CEOs need to be more specific on how and where they would like to see such a price introduced. They also need to start putting out some figures on what the right price might be, and how that should be assessed. What are the appropriate criteria? Carbon intensity per barrel of oil equivalent, where coal would fare badly? Or relative radiative forcing potential — and hence impact on the greenhouse effect — where natural gas might not look so attractive? Crucially, if they are serious, CEOs will also need to enter — and lead — domestic political debates on carbon pricing.

There are no easy answers to these questions, but CEOs are smart and practical people. They are to be encouraged to lead this conversation and to help co-design a working system of carbon pricing. And the (too many) CEOs still silent on the issue should be encouraged to be part of the solution.”


'Companies warm to carbon pricing', Innovation Forum, 30 April 2015


“Your editorial "Warm feelings are no help to the climate" ... leaves one with the sense that the FT is trying to have its cake and eat it too. Either climate change carries the risk (as you note) of "catastrophe" or it does not. Your weighing up of the "enormous benefits" and "great risks" of the continued use of fossil fuels would be more persuasive if at least two of your policy prescriptions were not deeply flawed. Yes, carbon capture is technologically possible but no one is seriously investing in it (as, by contrast, they are in renewable energy) precisely because it is uneconomic and uncompetitive for most applications. Yes, a "price on greenhouse gas emissions" is an excellent idea, but how, where and when do you see the being agreed? (When CEOs)... defend similar calls for a global price on carbon at national elections (and not just around climate conferences), perhaps this one day may become a political possibility. Until then, climate campaigners have little option but to turn up the heat in their own way.”

Letter, Financial Times, 25 March 2015


“There is a need for some tough talk in this week's climate talks in Lima on the subject of climate finance ... The first point ...is the unlikelihood of persuading the OECD group to make the magnitude of pledges sought by the emerging economies (let alone needed, as Oxfam points out) to adapt to climate change. Current levels of public debt, unemployment and domestic authority policies will put paid to that. The second is that the "invest in climate adaptation" narrative is itself deeply flawed. Odds are that as climate events become more extreme and regular, governments will be forced to increase invest in local climate-resilent infrastructure. Moreover, depending on the speed and scale of change economies everywhere could be scrambling to adapt to the rising costs of climate-related change. This means the very real prospect of less funding - and political support - for international action on the part of all countries as time goers by. ... the only alternative to going down an increasingly nationalistic and ineffective climate finance route is to ... put climate change back at the top of the international agenda as an existential strategic priority ... (and) ... massively expand investment-attractive policies that will generate the green power, green growth and green jobs desparately needed in all countries. Together, these steps stand a greater chance of mobilising more capital, and more action, than any climate fund.”

'Climate finance must top the international agenda', Letter, Financial Times 3 December 2014


“(According to the 2014 World Investment Forum) ... there is an estimated gap of around $2.5tn annually between what developing countries receive now and what they would need to make the transition to sustainable development. To achieve increased global investment of this magnitude, a step change is necessary in the levels of both public and private finance. In discussions, governmental and private sector participants seemed to agree on a number of points. First, that to unlock the capital needed, a major policy and regulatory re-set is required on all sides. Second, public finance alone is insufficient; massively expanded private financial flows (at least double the current growth rate) would be vital. Third, the private sector was already active in experimenting with sustainable investments. These had potential to be taken to scale. ... Judging from the conversations at the WIF, the bad news is that we're still heading, rapidly, in the wrong direction. The good news is that there are more finance and investment experts than ever willing to help in crafting a turn-around.”

'$2.5tn shortfall for sustainable development in developing countries', Guardian Sustainable Business, 27 October 2014


“Along with the internet, conferences and business events are one of the best, or worst, ways invented by humankind of spending time and money. ... employers need to build internal capacity to organise and moderate meetings. (This should include young women. There is a need for greater gender balance and for younger professionals in moderator/events management positions.) This encourages understanding of what is important for their employer to know, who the key stakeholders are and how best to communicate with them.”

'Employers -promote gender balance along with meeting skills', Financial Times letter, 8 October 2014


“There's a sense of "right diagnosis, wrong prescription" in Donald Tusk's call on Europe to move towards greater energy independence ... The Polish Prime Ministers to be applauded for reminding us that Europe is at its best when it faces challenges collectively and that a closer energy union is long overdue. However, in the face of all the evidence on climate change his counsel of making "full use of the fossil fuels available" is at odds with his desire for "a cleaner planet". Even more strangely, European leadership on energy efficiency and renewable energy technologies bare rates a mention ... If a true and sustainable energy union is to be forged, surely it should be built on ...locally available, low or no carbon energy sources, especially those whose future operating costs look low.”

'Deep flaws in your climate policy prescriptions', Financial Times letter, 28 April 2014


“So what should CEOs at the (2013) Global Compact Leaders Summit make of this complex landscape of conflicting pressures and expectations? Three steps are now essential. The first is to finally accept that sustainable development is indeed the new operating framework for business. It's not going to go away and will only become more urgent. In many ways, global change is already with us. Secondly, CEOs need now to be explicit about this. They should demand that all governments, all political parties — as much as all companies — must have the sustainability policies needed to win over consumers, investors and voters, or explain why they don't.Thirdly, they must actively engage in the design of the needed global institutional and policy architecture. This also means advocating smart regulation (e.g. on mandatory sustainability reporting) and economic policies (e.g. that tax pollution and not labour).”

'Sustainable development: business has a long way to go', Guardian Sustainable Business, 13 Sept 2013


“(Regarding the use of the terms 'green' and environmentalist') 'This narrative is consistent with the prevailing use ... by many in government and the private sector as a pejorative term, usually synonymous with "anti-development" and "anti-business". ... however, climate change is now central to the viability of nation states and the economic and political systems that support them. Rather than being fringe, the issues of climate stability and health of global ecosystems are increasingly defining the contours of national policy and geo-strategic relationships. They are, and will continue to be, domestic and foreign policy issues of the first order. ... Indeed (many see) ... the issues of resource scarcity and increasing climate variability as drivers of a new resource efficient business model, and the ultimate test of the ability of capitalism to keep delivering the goods."”

'Kerry is up to the climate challenge', Financial Times letter, 12 May 2013


“Let us be clear. All the scientific evidence points to the fact we are crossing — or might have already crossed — planetary system boundaries. These include changes to atmospheric chemistry (with resulting changes in climate and ozone depletion), to the nitrogen and phosphorus cycles (affecting river and marine ecosystems), to biodiversity loss and profound changes in land use. We need to understand that these are not irrelevant or remote developments that might only affect, say, one kind of insect in a rainforest somewhere. These are changes that will sooner or later affect every species on Earth. It is essential to keep in mind that our current political, social and economic systems — and any hope of sustainability — are built on a healthy and self-replenishing ecosystem. The sooner our political and business models incorporate this reality, the sooner we can put ourselves on a sustainable path.

Here's the great irony of our current situation. If we fail to choose to make orderly and strategic changes to prevent the profound system changes that are in the pipeline, these changes will take place. We will then be forced to respond in a probably disorderly and non-strategic manner, where the social, political and economic costs will be significantly higher.”


'Reasons to be both hugely disappointed and very excited', UNIDO 'Making It' magazine, 27 August 2012


“... as I argue in a new Chatham House paper on the future of sustainability reporting, ... (t) he first generation of sustainability reporting — SR 1.0 as the paper calls it — has proven both the feasibility and value of reporting on a company's economic, environmental and social (or sustainability) performance. (however) SR 1.0 cannot continue in its present form. A next generation model - SR 2.0 - needs to be developed that will address the weaknesses that have been identified with the current approaches. These problems include: (o)nly a small percentage of the world's multinational companies are reporting on their sustainability policies, practices and impacts. If governments really want to harness the power of the private sector, and track progress, then universal reporting — at least by all large companies — is required.”

'Sustainability reporting: immediate choices for the future', Guardian Sustainable Business, 20 January 2012


“ While it is impossible for a single conference to do everything, next year's Rio+20 conference will make a historic contribution to sustainable development if it calls for policies, practices and frameworks that encourage:

  • Long-term investment in low-carbon and resource-efficient products and services and the growth of crucial sectors such as education and health care.
  • Measurement and reporting of every organisation's contribution to sustainable development and reform of national accounts systems to reflect key sustainability indicators.
  • Education and research about sustainability risks and opportunities.
  • Implementation of existing commitments (ie phasing out of harmful subsidies) and the creation of public dialogues on how to create greener and more just local economies.
  • Integrated public decision-making which ensures that national economic, trade and environmental policies are consistent, and promotes a stronger business voice in how faster progress can be made towards a greener economy.
The worst thing that could happen now is that we let short-term financial challenges and interests tempt us into repeating the mistakes of a dying economic model. ”

'Why the private sector is holding back on sustainability', Guardian Sustainable Business, 26 Sept 2011


“If climate change is going to be anywhere near as globally destabilising and disruptive as scientists think it will be, isn't this the next big security issue? And if it is, why aren't we treating climate change as the war it is, and mobilising all our resources to minimise the impacts? ... (We must reject) the nonsense of the dominant policy approach which maintains that climate change should only be tackled only by the use of market forces. While I understand the importance that economics played in the defeat of Hitler's Germany and Tojo's Japan, the Allies did not win those ones by a mix of light-handed regulatory and voluntary market mechanisms. Should our forebears have let the markets handle Hitler? No of course they shouldn't have.”

'Should our forebears have left it to the market to handle Hitler?', Guardian Sustainable Business, 28 June 2011


“By going green, a company achieves several things at the same time. First, it reduces the time wasted on brand management "fire fighting". Think of all the time and money lost when some accident or incident attracts negative media coverage. In a world increasingly worried about the impacts of climate change, air pollution and environmental damage, companies with poor performance can expect to spend more time defending themselves to regulators, investors and the media. Consider Exxon, which is still dealing with the consequences of the Exxon Valdez oil spill. Second, smarter use of raw materials and energy, and producing less waste, can lead to quick improvements at the bottom line. The motto "make more by using less" has been adopted successfully by big chemical companies like BASF, Bayer and Dow.Third is the market share. For many specialists, "green industry" is seen as the next IT revolution in terms of market growth and opportunities. Some assessments show that the global market for green products and services is more than 500 billion euros a year and growing. Many of the world's biggest companies, like Siemens, Philips and GE, are busy positioning themselves for the "green industrial revolution".”

'Why Green is being smart', The Star newspaper, 2010


“Corporations and globalisation sometimes seem to get blamed for all the ills in the world. It is easy to forget that there have been at least three great waves of Globalisation in human history, and corporations have only played a relatively recent — if decisive - role. Whether CEOs and shareholders like it or not, how they act in the coming years will largely determine the fate of humankind. In turn, they are set to receive the attention that this role implies from government and the rest of civil society. And, whether NGOs and governments like it or not, corporations must be seen as decisive when it comes to generating the finance, technologies and entrepreneurship necessary to put us on the road to sustainability.

( At the next G8 meeting, world leaders could put the world on track to sustainability by)

  • Admitting that the current market framework will not provide the motive, mechanisms and technologies to redress the 'externalities' of unlimited growth. The argument that˜more growth helps everyone' has been proven bogus by the USA, where economic growth has driven historically high — and unsustainable - per capita rates of raw material consumption and pollution. Policies are urgently needed that make markets work to support sustainability, not continually undermine it.
  • Acknowledging that corporations are essentially social agents, created by states to deliver ˜social goods'. While business can't be expected to take sole responsibility for getting us out of the mess we're in, it cannot continue to pass off its social and environmental costs to others. The currently available mix of voluntary CSR tools is insufficient. Legislation and incentives will be essential to encourage the industries of the future that will provide the jobs and progressively cleaner and better distributed energy, food, water, housing and communication that is required.
  • Recognising that the time for denial and defensiveness about the dimensions of the problems (e.g. on climate change) has ended. The Second Wave ˜Pollyanna' mentality has delayed the taking of vital policy reforms and has undermined the business sector's potential to show the same leadership, innovation and flexibility it did during the Second Wave. Deteriorating environmental and social conditions are creating a 'clear and present danger' for socio-political and economic systems, and need to be treated as a threat to global security.
  • Welcoming the fact that the 'Second Wave' international institutions, including the UN and World Bank, provide a good foundation for future coordination and convergence of effort. With the necessary rapid reforms, these bodies must be given responsibility to drive the agenda ahead. This means giving them the mandate and independence to challenge governments on the dimensions of the problems; to create forums where government, business and civil society can collectively address policy constraints; and to profile, disseminate and build on success stories.
The 'Third Wave' of Globalisation offers humankind two dramatically different roads ahead. One road will see us accept that it is in our collective interests to set, refine and implement standards of behaviour and performance that bring out the best of human nature and control the worst. The other will see us, still following the First and Second Wave model, working as separate self-interested groups, competing for more than a fair share of an ever- diminishing global pie, with scant regard for others or how long the pie will last.

And that may just be the great virtue of the sustainable development challenge: that it leads humankind to know itself fully — and work together — for the first time. Now isn't that a globalisation worth working for?”


'The G8 Globalisation and the Last Wave', Ethical Corporation, June 30 2005


“Sir, Readers over the past few days will be rightly perplexed about the significance of non-financial data to assessments of a company's performance. On the one hand, it is contended by one US academic that "non-financial measures just don't add up" (March 29). On the other, the FT reports growing market interest in non-financial data, on the part of both fund managers ("Fortis plans CSR action in Europe", March 29) and rating agencies ("Companies face an avalanche of questionnaires", March 26).... As non-financial reporting develops further, including through software applications that will make reporting easier and of higher value to all users, many see non-financial reporting as significant in this century as financial reporting was in the last.”

'Non-financial reporting is set to grow in importance', Financial Times, April 2004