Paul Hohnen Sustainability Strategies
“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.”
“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.”
“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.”
“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.”
“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. ..
“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.”
“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.”
“(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.”
“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.”
“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.”
“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).”
“(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."”
“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.
“... 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.”
“ 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:
“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.”
“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".”
“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.
“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.”