After a career in manufacturing businesses, Mark initiated the RSA Tomorrow’s Company inquiry into ‘the role of business in a changing world’. The resulting report, published in 1995 led to the creation of Tomorrow’s Company as an independent, business-led think tank. It also laid the foundations the redefinition of the directors’ duties in the 2006 Companies Act. In recent years he has concentrated on the issue of board and investor responsibilities for stewardship, co-authoring a report with the Institute for Family Business on Family Business Stewardship. Today he speaks to Blue & Green.
In 140 characters or less – what is Tomorrow’s Company?
A London-based, internationally influential think tank working with leaders and policymakers in business and investment to inspire and enable companies to be a force for good.
What was the driver for creating Tomorrow’s Company- what gap did it fill?
I worked in UK manufacturing for 15 years and sensed a dissatisfaction inside and outside companies about the role of business. The business philosopher Charles Handy then persuaded me to work at the RSA, where, inspired by a lecture he gave asking ‘What is a Company For?’ we started to bring CEOs and chairmen together to answer his question.
There was so much interest that we then created a business-led inquiry into Tomorrow’s company – the role of business in a changing world. The conclusions of the inquiry were that companies needed to focus on a clear purpose and strong relationships if they wanted to generate value. This directly influenced the change in directors duties in the UK’s new 2006 Companies Act. It was the CEOs involved in that inquiry who then urged me to create an organisation that would carry forward the agenda.
We have always put purpose, values and relationships at the heart of our vision of successful business. Tomorrow’s Company stays close enough to business to make its conclusions practical but aspirational enough to challenge and stretch businesses and investment institutions to adapt and change. It bridges the visionary and the practical.
Who is it primarily for?
Four key audiences: 1) Business leaders – Chairmen, CEOS, Directors, 2) Institutional investors – pension funds, fund managers Asset managers, 3) Policymakers and regulators and 4) Business educators.
What difference does Tomorrow’s Company want it to make?
Tomorrow’s Company aims to inspire and enable companies to be a force for good, both by working with individual companies on their journey and by working with investors, advisors, policymakers regulators and educators to influence the way companies are led, governed and stewarded.
What are the barriers to making that difference?
Economic orthodoxy and mistaken assumptions that tell us that people are only motivated by money and that the price of a share tells you what you need to know about a business.
Ironically the critics of capitalism and many commentators too often mirror and reinforce this dogma. Instead of working with all the human beings in business and investment who want to find better ways forward they stand outside the system and condemn it. They are wrong. There are millions of people working in business and thousands of good businesses which do have a purpose beyond profit and a focus on relationships. Every one of us is a saver who has a stake in the investment system and the challenge is to give our human concerns more voice.
(I talk about all this in my book Living Tomorrow’s Company – rediscovering the Human Purposes of Business which was first published in India in 2013.)
Who’s helping you overcome those barriers?
For 20 years we have worked with generation after generation of business leaders who share our belief in the human purposes of business. They have helped us develop an integrated and systemic approach to business success in which clear purpose and strong values lay the foundations for robust culture, productive relationships and a focus on long term success. We work with them in very practically focused forums where like-minded people from very different companies learn from each other and develop an agenda for action which others can follow.
We are also helped by the growing body of research that demonstrates that this approach is the best way to create long term profitability and value for investors. Again I cover this in my book and we will also cover it in the forthcoming report of our Futures Project early in 2016.
And there is a growing Tomorrow’s Company community of individual supporters, business advisors and alumni who are ambassadors for our work.
You’ve been with Tomorrow’s Company since inception in 1995, what’s the biggest shift you’ve seen in company behaviour over that period?
To start with the negative, and to focus on the UK, my answer would be to point to the preoccupation within the system with delivering cash returns to shareholders at the expense of investment in the business. Our current research (to be published early next year) is concluding that the UK has one of the lowest levels of investment in fixed assets amongst the OECD, and this is falling.
This is partly because the UK has made the greatest transition away from manufacturing towards the lower capital intensive service sector. Therefore more worrying is that the UK also has the lowest level of expenditure on R&D amongst major economies and this is falling. In the UK politicians talk of moving from manufacturing to a knowledge economy, however the evidence shows we are under-investing in both.
Furthermore, companies are now net savers in our economy. Companies came into existence to act as conduits for investment, to take money from individuals and the government to carry out investment. This has now reversed; companies in aggregate are net savers in our economy, lending money to consumers and the government to buy the goods and services the company’s provide.
There is a strong connection between this company behaviour, and the irrational economic dogmas I was talking about earlier. Individual clients and beneficiaries are told that they are best served by this ‘asset sweating’ approach to shareholder value. The evidence of the last two decades is that quite apart from its inhuman impacts, quarterly capitalism has actually served investors badly.
Is company action today commensurate with the massive economic, social and environmental challenges we face?
The best examples of company action are those where companies have collaborated and worked with civil society organisations and governments to tackle problems together. Marine Stewardship Council, EITI, action on Palm Oil. Or in a different way the Carbon Disclosure Project.
And the best businesses do have extraordinary capacity to innovate – look at something like M- Pesa in Africa.
But these admirable innovations are dwarfed by the scale of challenge we face within what we call the triple context of environmental, socio-political and economic systems.
How can people – individuals and organisations – find out more about Tomorrow’s Company?
Visit our website www.tomorrowscompany.com or follow us or me on Twitter.
How international is your influence?
I am finding that these ideas have spread strongly round the world. In particular We have strong relationships with a number of companies in India, and a strong partnership with Stewardship Asia, based in Singapore. In 2007 we published Tomorrow’s Global Company – challenges and choices. That’s a vision of the role of the global company in a changing world. It preceded michael porter’s work on Shared Value and actually offers a much deeper and more business-led analysis of the opportunities and threats faced by global companies.
Will Self-Driving Cars Be Better for the Environment?
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.
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 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.
New Zealand to Switch to Fully Renewable Energy by 2035
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.
Economy2 weeks ago
Report: Green, Ethical and Socially Responsible Finance
Energy4 days ago
5 Easy Things You Can Do to Make Your Home More Sustainable
Sustainability3 weeks ago
Worldwide Cities Leading the Way in Sustainability
Environment4 weeks ago
Consumers Investing in Eco-Friendly Cars with the UK Green Revolution