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Corporate Sustainability Part 2: Managing the Future Today

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Corporate sustainability is about smart business consumption, a stratEQic, pragmatic and astute management approach. It blends economic profit, ecological balance and social compatibility in a management formula that goes beyond tick box compliance and glossy reports. Businesses that develop the mastery of growing profits in balance with their environments and enhancing social wellbeing will be the brand giants of tomorrow. Steve Burt, CEO EQi Group, writes in a recent LinkedIn post. You can read part 1 here.

 

Economic Profitability

Sustainability is about how one conducts business operations in a profitable manner within the resource and impact limits of the planet. Economic profitability is fundamental to creating a sustainable world and society. The existing for-profit system is key to building a future, maintaining a stable society and building long term returns that provide the bedrock of future economic growth and a well maintained ecological system.   Today’s business models are built with the primary focus of producing profit and thus providing all stakeholders the ability to grow their wealth for future needs. There is an intricate relationship between the performance of companies and people’s financial and personal wellbeing.

As 21st century challenges become more obvious, business leaders are realising that their business models need to be changed to models that are less resource hungry, do not damage the planet’s fundamental ecological infrastructure and are compatible and complementary to the societies in which they operate. This change brings a new dynamic which requires careful consideration, planning and implementation: classic change management.

Accurate information is critical so that businesses can understand the financial gains that resource efficiency will deliver – in savings and value. Knowing the value to be gained from implementing these forward-looking changes will not only preserve, but progress commercial success – and this is critical to embedding sustainable cultures and change.

To date, sustainability has not been embraced as a change management mechanism but more as an estimation of a business’s position to attain some recognition that it is doing the “right thing.” Awards are given for efforts and glossy reports are used to sell the message.  What happened to addressing the real issue of reducing resource use and increasing bottom line returns?

Ecological Balance

Ecological balance plays a critical role in the stability and success of all businesses and organisations.  A clear strategy on how using ecology as part of profitable growth will bring increased returns on investment and secures long term customer loyalty. Ecological consciousness and planning as part of a business strategy is not only responsible but intelligent business management because it protects the fundamental resources that every business needs to thrive.

Since every resource businesses use to produce their goods or services can have an ecological impact, it is in a business’s interest to proactively manage their ecological impact to protect their on-going profits. It is an executive’s fiduciary duty to protect the company’s assets, minimise risk and protect profit, understanding how to reduce such impacts while maintaining shareholder value should be a key executive responsibility.  Furthermore, understanding these risks and impacts is critical to migrating to a sustainable business model. Being able to accurately determine and reduce the negative ecological effects in an operation and its supply chain protects future profits and value. Ecological balance will drive innovation, create business disruption opportunities and open new levels of shareholder returns.

Social Compatibility

Social impact management affects all aspects of running and conducting business[1] and is a great profit generator, building compelling brand positions that protect future returns. It feeds into future research, development and design and can provide competitive advantages that translate into greater stock performance and lower capital cost. It cannot be ignored.

With the advent of brand reputation being a critical aspect in winning and maintaining customer loyalty, businesses can no longer be cavalier about the social impacts their operations and supply chains may have. Social compatibility therefore is a powerful mechanism for building a sustainable business. Enlightened and astute executives are bEQinning to view sustainability as a business driver, not a marketing tool or legal cost. Engaging employees and their communities means opening up minds, multiplying your intellectual resource and adding new perspectives to create new and competitive products and services.

Sustainable Organisations

Sustainability is a journey not a prize. It is an outcome to be achieved. It is fundamentally about first class management and resource efficiency. For business teams to plan and act on a meaningful change management strategy that migrates a business and its supply chain to an acceptable level of economic, ecological and social sustainability, executives need accurate, comprehensive and trustworthy information.

Unlike the one-dimensional compliance, carbon management, and sustainability reporting systems out there today, Corporate Sustainability needs a comprehensive global system akin to financial systems with accuracy and detail – one focused on numbers and targets, and providing relevant resource consumption information to everyone who needs it, thereby allowing business teams to work together.

Each business sector and industry will need to create their own resource efficiency operating model and change strategy. There are many options business teams could look at as examples and there are going to be many more created.

One fine example of how companies can create strong market and competitive positions while protecting the environment and enhancing social wellbeing is demonstrated by the Zeitz Foundation, a group of global businesses that have embedded sustainability through their tourism operations to build profitable, long term, and resilient destinations. They have harnessed economic profit, ecological balance and social compatibility through the principles of the four C’s: Conservation, Community, Culture and Commerce.

Resource Efficiency Economics

The financial opportunity and compound savings achieved by migrating to a resource-efficient, sustainable model has not yet been realised by the vast majority of companies. To make an operation sustainable, quantification, not qualification, is required.

Resource efficiency needs to be the main focus and driver in moving the business model forward – using hard numbers that give accurate positions of resource use at a granular level in order to understand how making small efficiency changes can add up to a significant savings. When resource efficiency is the business focus operating resiliency and sustainable profits will follow.

EQi is a data and technology company that connects business to sustainability by providing resource efficiency management solutions. EQi has announced successful certification as a founding UK B Corporation.

[1] http://www.aspeninstitute.org/policy-work/business-society/publications-speeches/publications-archives/social-impact-management-de

Economy

Will Self-Driving Cars Be Better for the Environment?

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self-driving cars for green environment
Shutterstock Licensed Photo - By Zapp2Photo | https://www.shutterstock.com/g/zapp2photo

Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?

But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?

The Big Picture

The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.

That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.

Driver Reduction?

One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.

There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.

As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.

Deadheading

Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.

Make and Model of Car

Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.

On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.

The Bottom Line

Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?

Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.

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Economy

New Zealand to Switch to Fully Renewable Energy by 2035

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renewable energy policy
Shutterstock Licensed Photo - By Eviart / https://www.shutterstock.com/g/adrian825

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.

Sources: https://www.bloomberg.com/news/articles/2017-11-06/green-dream-risks-energy-security-as-kiwis-aim-for-zero-carbon

https://www.reuters.com/article/us-france-hydrocarbons/france-plans-to-end-oil-and-gas-production-by-2040-idUSKCN1BH1AQ

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