My 10-minute summary of Accenture’s Sustainability 24 online conference that discusses the global agenda, by advancing debate and discussion with clients, local government leaders and stakeholders around the world.
14th May 2013
8:10am – Business Strategy & Stakeholders: Building Trust & Planning for Uncertainty
“In hindsight, it is usually much easier to see what business leaders could have done better to avoid severe events which affect their reputation and long-term sustainability. Join our expert panel who examine resource intensive industries to understand how driving societal and business benefits ensures positive impacts on local communities and continued business growth.”
8:14am Question raised by AngloGold – How to embed sustainability into the heart of the business?
Test this against the Bruntland definition of sustainability… does it offset the
ability of future generations to live their own lives…? It’s tough and organizations still struggle to address this.
8:17am For Standard Bank, it’s about “who do we invest in, and are they building the future?”
8:19am The World Wildlife Fund reminds us that our recent human life style is but a blip. We are overshooting planetary ability to support this lifestyle by 50% (and is therefore unsustainable).
8:22am South Africa has a particular problem (but pertinent to a developing world) is poverty, joblessness and may embody the essence of sustainable development.
For macro economists, this is a crucial question: No one wants to turn back the clock to a pre-industrial age, yet, unless we do, based on the current lack of effective global political response, massive climate change, resource depletion and food poverty is inevitable.
8:28am Interesting point, sustainability is a complex system-based problem requiring a different response. A shared and common understanding is required beyond a simple transaction approach.
If you like systems-thinking, go read Peter Senge or Peter Checkland…
8:31am Standard Bank offers a way of looking at an investment proposal from different perspectives before agreeing to it, including the profit, planet, people. On a positive footing, banks are good at the risk-based view…
8:37am That South Africa, with intractable poverty in many areas, offers an insight that in order to deal fully and effectively with what sustainable development means, a new economic-political approach is essential; the current model doesn’t cut it.
8:41am Point made that very energy intensive industries are a reality; that reducing carbon intensity is a key challenge to product and process innovators…
Too fixated on GDP growth, to the detriment of environmental concerns (again the driver to the economic system creates, through incentives, “wrong” behaviours when it comes to the environment).
8:45am How to get real traction within an organization of sustainability approaches. In essence a sustainability is a change programme… Also, what (new, additional) measures will leaders be held accountable to?
Overall, a wide-ranging discussion that draws out many dilemmas in realising sustainable development. I’ve been following and thinking about how do become more sustainable in the context of the industrial perspective. My conclusion is that trying to do good within a commercial organization is necessary, but most definitely insufficient. Effective solutions are needed at a global-system level operating at the political, economic, industrial, social (human-values, education, urban planning), technological levels.
9:10am Total Energy Management: Transformation for Enterprise Energy Efficiency
“Energy efficiency has become a national business imperative in Singapore. Join senior executives from business and government as they examine where energy management ‘gaps’ exist, and how leading organizations are tackling this challenge.”
9:10am Message – embedding energy efficiency and management into the business is obviously a good thing to do, but is falling short in many organizations.
9:21am In Singapore, 21% of economy is manufacturing. As a net importer, Energy efficiency is essential for a continued thriving economy. Propose this hindrance, as a source of (anti) comparative advantage with a view to exporting this know-how. When I visited Singapore last year I saw that the entire river/Bay area was to be converted into a fresh water reservoir.
9:26am DuPont has saved significantly by undertaking 1000s of small improvement projects to save 5%pa energy savings – energy efficiency is a good business case. Done this by 1) Make it strategically important, 2) Install a cross-company system to identify and select projects, 3) Operate on the culture (norms, beliefs and values) before technology.
9:30am Energy management leads to better financial performance. Do you think it is normal to spend 20% operating costs on energy, and have no one with responsibility for improving it? Install an officer with responsible for energy and set up ways of learning good energy-saving practices from others.
In effect, good energy management is a facet of an operational excellence approach. Message – Replicate the OE school of thought for energy.
10:10am Circular Business: Value Generation in a Resource Constrained World
“A number of global trends are driving us away from the traditional ‘cradle-to-grave’ economic model. This is prompting the need for a paradigm shift in both consumption and production, towards what has been termed a ‘circular economy’.”
10:14 90% of consumer products are thrown away at the end of their life. This needs to change; there are trillions to be saved. Considering, a circular (systems-thinking) approach is a “new” way of looking at things.
10:20 Wow! 70% of what is seeded on a farm never makes it off the farm. Also, 70% of what does make it off the farm, is never consumed. Aerofarms seek to bring new thinking to dramatically intensify farming.
10:27 H&M fashion retailer looking to install old garment reclamation (no matter what there condition) to close the loop.
Closing the Loop is the key. Fundamentally, the economics and incentives need to be right for a business. This needs a good analysis and business case.
10:31am Gunter Pauli (author) calls for businesses to shift the business model to a systems-based one – I like it. The circular economy is not (only) closing the loop – it’s also doing the right activities in the supply network. For example, in fashion retail, move away from growing cotton which is land, water and chemical intensive – China is to stop cotton farming within 10 years.
10:48am The consumer is king! Softly-softly does it; through encouragement and engagement retailers need to move carefully so as not to move away from their core value proposition e.g. Quality. Fashion. Right Price.
10:54am Wow! Shoes from Rocks – blend waste gold ore blended to polyethylene as leather substitute.
10:57am What does Value mean? Economic and social angles. Rewards for behaving well.
10:59am What do you wish for – Technological breakthrough of scaling up closed loop recycling. Think about using waste to generate new revenues (coffee waste as mushroom mulch) – Analysts, why aren’t you holding CEOs of the firms you follow to task? Reorganise the value chain; create incentives to be more sustainable.
12:30pm The “Energiewende” or “Energy Transformation”: A Blueprint for Sustainable Growth?
“The “Energiewende” in Germany – or to abandon nuclear energy in just 10 years while in parallel reducing carbon emissions, expanding renewable usage and improving energy efficiency – is being touted as the biggest technological, political and regulatory experiment taking place in an industrial country. If it succeeds, it is a blueprint for sustainable growth. If it fails, it could harm the competitiveness of the most important economy of Europe. Join our panel of experts to hear what “Energiewende” is, what other countries can learn, and how likely it is to succeed.”
12:35pm 25% of the energy would be switched to renewables by 2022. High risk with the reward of a much lower climate change impact; but renewable energy systems have a lower resilience because of weather, the storage and distribution.
Technology roadmaps need to be developed to describe the technologies, projects, resources and programmes. Success more likely through be honest about the opportunities and risks and by taking a market orientation.
12:41pm Many in Germany are deeply worried about the “nightmare” of the lights going out.
12:43pm According to Siemens, who offer a positive image, the gap 22000 new wind turbines and 32 CHP plants; in other words, the technology is available. In addition, the energy efficiency angle could solve half the gap. Success is driven by political will power, by a regulatory framework and an integrated roadmap.
It may be true that the generation technology is available, but the storage technology is not yet. This seems to be the crucial link that will deal with the fluctuations in weather and demand – no more always on generation…
12:52pm The cost of power has not been mentioned… societal acceptance is very important.
13:02pm The greater target of reduction GHG emissions by 80% just mentioned. This is a far greater throw, and I wonder to what extent these two steps are in conflict with each other; one might well make different technological choices and take different pathways with these two very different end points in mind. For example, if the goal were to eliminate 80% GHG, you would not start by shutting down the nuclear fleet…
13:10 My question has just been asked to one of the speakers! (What do consumers think about much higher energy prices?)
13:11 Again, the idea of thinking about energy transformation from a system’s perspective.
14:30 Innovative Business Growth: How Sustainability is Reshaping Businesses for the Future
“Environmental concerns, coupled with advances in technology, maturing markets, relentless demand for innovation and the uncertain economy are combining to drive the emergence of new growth scenarios. These trends have spurred leading companies to fundamentally rethink their business models and growth strategies, and they now view sustainability as a strategic and differentiating lever.” Wouter Koetzier, Global MD Product Innovation Development Practice, Accenture
14:35 Sustainability may be considered as a disruptive driver to new business models. For example, the leasing model rather than the ownership model – did you know it is likely your drill-driver is used for on average 6 minutes per year; why not lease the unit when you need it? (B&Q).
14:45 Car leasing firm, Athlon, are taking a fundamental look at the mobility needs (rather than car ownership) of customers. Consider the degree of utilisation the average car has – my guess is that it is ~5%.
Really, sustainability can be considered as a optic to look at your business with… ask, if I had much more expensive of rare materials, what would my business look like – and then do that…
14:59 Michelin Solutions looks to create innovative services rather than just make tyres e.g. Leasing guaranteed cost/mile through efficient fleet management.
It’s the, “what are you (really) in business to do?” question… in this example, making and selling tyres to cost certainty.
18:30 Sustainability 24 Round Up: Implications for Business
“themes that have emerged during Sustainability 24, highlights of the day, and explore the implications for business in the year ahead.”
MY PERSONAL KEY INSIGHTS
– Evaluate the business you are in; what are you really satisfying? And can a sustainability point of view be used as the lens with which to do that? (Yes)
– That realising a globally sustainable planet, will require operating at the global system level. Unfortunately, the pan-global structures (political, social) aren’t fit for purpose.
– Technological innovation is critical to achieving more with less; more intensive and lower impact processes and developing and using alternative materials and delivering products, processes and services differently. The scale of the change required is no less than a wholesale reconfiguration of the energy, transport and social systems.
– Systems-thinking is necessary whether that be in your business, country or at the planetary level.
– Endpoints drive the measures you take. In Germany, shutting down 25% of the nuclear-based electricity supply in 10 years is not a coherent policy choice, if the real end goal is 80% GHG reduction.
– It seems we are about to hit an existential crisis; society is not changing anywhere near fast enough. The human condition is to be taken to a point of crisis before the energy of change can be generated. The use of language-of-influence that all people understand might offer progress?
– Good Sustainability is Good Business is Good Sustainability. Success requires an integrated perspective into everything you do.