The Corporate Sector can Save the World

The Business community may offer the best hope of saving the world from the ravages of environmental decay. In the context of the difficult economic times we are experiencing corporate initiatives may be our best hope for slowing the progression towards worsening environmental calamity. As reported in The Guardian, Peter Bakker corporate, the president of the World Business Council for Sustainable Business (WBCSD), "believes that the corporate sector currently offers the best opportunity for saving the world."In the wake of the disappointing outcome at Rio+20, Bakker is on a "mission to encourage business to implement change at scale." He believes that the short term fate of the world hinges on "the coalitions of the willing," comprised of local efforts, and responsible cities and countries.


Bakker flatly rejects criticism that the 1,000 businesses that descended on Rio are not serious about creating change. As Bakker points the corporate world has made significant progress towards developing their approaches to sustainability. Bakker wants to move the WBCSD beyond merely educating business towards real efforts that have meaningful impacts.

As Bakker points out there are good businesses that work to be more sustainable and there are bad businesses that work to undermine progress.  "The 20% of really bad guys we need to regulate out of existence."

Bakker has developed a four point plan to extend the WBCSD's sector led coalitions to the tire and chemicals industries the same way progress has been made in the cement and forest sectors. This involves sharing best practice and creating common measurement and reporting standards. He also wants to create cross-sector working groups that auger change at city level including public transport, construction and utilities."

Bakker is working on innovative approaches to standardized reporting and he is developing a common methodology for companies to integrate impacts on ecosystems and biodiversity into their accounting systems. More than 50 companies have already signed up to take part and companies like Puma are leading in this area.

New accounting frameworks require financial system to put a value on companies' sustainability performance which is why Bakker also plans to involve financial companies. "The valuation of a business has to change and that's why I need the banking sector to value these commitments," he says. "If the capital markets measured the sustainability of companies then people like Paul Polman at Unilever would be seen as a god."

© 2012, Richard Matthews. All rights reserved.

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Republican Governors See Value in Green

Unlike members of the GOP vying for public office Republican governors see value in supporting the green economy. The GOP presidential candidates and Republican members of Congress are largely united in their resistance to climate change, but an increasing number of Republicans are bucking this trend. Climate denial is a defining feature of the GOP and de rigueur for any Republican seeking the presidential nomination. However, some Republican governors are adopting policies that promote the green economy. Clean energy policies have been implemented in all 50 states and 30 of those states have Republican governors.

A February 2012 report by the National Governors Association (NGA) showed that 28 states enacted more than 60 new "clean" economic development policies between June 2010 and Aug. 2011. Among those states, more than half, or 16, have Republican governors. In five of the states, the policies were started under Democratic governors and were continued by Republicans who replaced them.

State efforts include support for renewable energy and green economic development policies. These policies include tax breaks for renewable energy manufacturers, grants for cleantech startups and training programs for green jobs.

According to NGA, every state except Georgia, Montana, Rhode Island and Wyoming have passed at least one clean development policy. In total there are nearly 250 such state programs across the country.

The NGA findings are very prescient for the debate taking place in the GOP primary process and in Washington. Republican presidential hopefuls are tripping over each other to de-legitimize climate change. In Congress the GOP has been more obstructionist on the environment than any other issue.

Although Republican governors could hardly be considered environmentally responsible, they are being attracted by the gravitational pull of the plethora of data supporting the economic opportunities offered by the green economy.

The electorate holds governors accountable for jobs and economic development, perhaps people should hold Congress and the GOP presidential nominee to the same standards.

© 2012, Richard Matthews. All rights reserved.

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The Credit Downgrade and the Green Economy

In the wake of the US credit downgrade entitlement reform may be the only hope for the green economy. Many believe that the battle against climate change cannot be fought with a weakened economy. The credit downgrade will increase pressure to resist any new government investments particularly those related to combating climate change.

America's downgrade from AAA to AA+ will cost the US an additional 100 billion per year in increased interest charges to service their debt. There is also the psychological impact, the full effects of which are unknown.

The credit downgrade in the US is also exacerbating economic fears around the world. Concerns about the global economy caused Asian stock markets to fall on Monday, extending one of the worst sells offs in recent years. Japan's main Nikkei 225 index and South Korea's Kospi both dropped significantly when markets opened on Monday morning. Predictably, gold, the heaven of nervous investors, gained in Asian trading.

Conventional conservative dogma would have us believe that governments should not invest in the economy. Even before the downgrade, Republicans opposed any new government investments, particularly those that involve the green economy. Republicans even resisted the government's Recovery and Reinvestment Act that prevented a total economic collapse.

On the debt ceiling, Republican obstructionism made compromise impossible. Republicans refused to allow the President to levy taxes on the wealthiest 2 percent of the American population and corporations. In the absence of new taxes, another way to manage the burgeoning debt is to increase revenues through growth. Sadly, Republicans appear blind to the fact that there is no more significant growth opportunity then the one afforded by the green economy.

Republicans fault Obama and Democratic lawmakers for not doing more to create jobs. The truth is the GOP is to blame for thwarting all efforts to invest in a green economy which could create jobs and make America more competitive. The logic is overwhelming as the costs of preventing climate change are a fraction of the crippling costs we will incur if we continue with business as usual.

According to an analysis by Google, failure to move aggressively to implement a clean energy economy will cost the US GDP “trillions” over just the next five years. In 2009, the International Institute for Environment and Development (IIED) published a report authored by the co-chair of the IPCC and other climate science experts, revealing that the net present value of climate change impacts, i.e. the costs to civilization, are US$1,240 trillion under our current emission path and $410 trillion if we manage to stabilize atmospheric carbon at 450ppm. Most climate scientists would like to see that number at 350ppm or less.

Despite the overarching concern of climate change, Republicans and some Democrats, put self-interest ahead of national-interest. In 2012 we will see what happens to those who put their political ambitions ahead of the interests of the nation.

Although Republicans position themselves as the party of business, there are many in the business community who are opposed to Republican anti-environmentalism. Even though the nation’s leading business lobbying group consistently disagreed with the White House on the issue of climate change, there are a growing number of businesses with a different point of view. Some businesses see the wisdom of seizing the opportunity to grow the green economy and prevent full blown climate change while we still can. Several high-profile members, including Apple and Nike, left the Chamber of Commerce because of the organization's resistance to Obama’s pursuit of climate change legislation.

A congressional committee must make even deeper cuts to avoid further downgrades. While most believe further budget cuts are necessary, no one wants to see cuts in programs that impact them. How different is that from the Greeks or the Spaniards who vociferously resist much needed austerity measures? Austerity is what it will take to tackle climate change, and short term pain, although difficult, will lead to long term gain. The alternative is a nation in decline.

The Republican strategy can be best summarized as my way or the highway. President Obama and Democratic lawmakers listened to Republicans and upheld former President George W. Bush’s tax cuts. Rather than make concessions of their own, Republicans launched an all out assault on the environment. On the debt ceiling, President Obama and the Democrats conceded to cuts to the EPA and other important environmental programs. For their part, Republicans refused to compromise on the issue of new taxes and forced major cuts to environmental initiatives. The debt ceiling agreement should be the last time the White House offers something for nothing, going forward Obama must demand quid pro quo.

Although it is unpopular with Democrats and their supporters, entitlement reform may have to be on the table. In return for entitlement reform, Congress must be encouraged to support the green economy and the jobs that come with it. If, as expected, Republicans continue to be obstructionist, voters will decide the issue in 2012.

© 2011, Richard Matthews. All rights reserved.

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Let Boehner Know that US Competitiveness Should not be Compromised

Under the cuts imposed by the Republicans, US competitiveness is being compromised. The American people expect Congress to come together to ensure that America can be competitive with the rest of the world. To be competitive forward looking nations are investing in the green economy because they understand that competitiveness is increasingly about sustainable economic growth and green jobs.

Republicans said no to the President Obama's balanced approach that pairs an increase in the debt ceiling with responsible steps to reduce America's long-term deficit. However, despite support from most Americans, Republicans will not accept any form of compromise that might force the very rich and oil companies to pay their fair share.

There is another way to increase revenues and this involves growing the green economy, but again Republicans refuse investments that will contribute to economic growth.

Republicans are opposing efforts to increase revenues, not only by refusing tax increases for the wealthiest 2 percent, but by cutting agencies and programs responsible for environmental programs. These are the types of programs that could help make America competitive in the new green economy.

Each of us must get involved to resist the Republican's petty partisanship and tell House Speaker John Boehner, that US competitiveness in the green economy must not be compromised.

Call Boehner now at 202-225-0600.

© 2011, Richard Matthews. All rights reserved.

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Economic Development is the Only Way Forward

Some of the most passionate supporters of the environment argue that we cannot make the necessary changes within the current consumer oriented capitalist system. They point to the fact that growth in the 20th century was all about resource depletion.

Economic growth is not an end, but rather a means to an end. Because economic growth is premised on the concept of increasing quantity, it may be more productive to frame the issue in terms of economic development. Economic development looks at growth as a means of achieving a higher level of individual and societal well-being. While economic growth is about quantity, economic development is about quality. A well developed economy is one that meets people's needs and provides well-being for everyone.

Economic development is based on the collective good which is ultimately about creating more value per person.

UNEP's Executive Director Achim Steiner said in the statement: "With 2.5 billion people living on less than two dollars a day and with more than two billion people being added to the global population by 2050, it is clear that we must continue to develop and grow our economies. But this development cannot come at the expense of the very life support systems on land, in the oceans or in our atmosphere."

Growth and resource depletion are not inexorably linked and given the urgency, the green economy is the only solution we have of capable of addressing the environmental and social threats we face.

We simply do not have time to rebuild society anew, nor is it reasonable to wipe the slate clean. In the form of economic development, growth can serve the earth and its inhabitants. However future growth will not be based on wanton resource depletion, it will be about increased efficiency and productivity.

© 2011, Richard Matthews. All rights reserved.

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Sustainable Growth Excludes Fossil Fuels

Sustainable economic growth is utterly impossible as long as oil, coal and natural gas provide nearly 88 percent of the world's energy needs. According to EIA (the US Energy Information Administration), total world consumption of marketed energy will increase by 49 percent between 2007 to 2035. The International Energy Agency predicted that Chinese energy demand would soar 75 percent by 2035, accounting for more than a third of the growth in global consumption.

The most egregious source of energy is coal, in India, more than 50% of commercial energy demand is met with coal and according to 2008 statistics, coal accounts for 71 percent of China's energy mix. The US is not much better with 23 percent of its total energy demand being met with coal.

We simply cannot afford economic growth that is so reliant on dirty energy like coal. Although growth is a serious environmental threat, it could also be a valuable opportunity to radically expand the clean energy economy. New innovative applications of sustainable technologies can significantly reduce emissions and old inefficient technologies can be replaced with cleaner greener technologies.

Renewable energy is the great hope for the planet because it is sustainable energy, but renewable energy is not cost competitive cheap and abundant coal. Therefore, cost considerations alone will not drive the move away from coal.

The increasing price of oil and the uncertainty of the fossil fuel markets is something that business are increasingly considering and it is only a matter of time before we remove oil subsidies. However, until we see climate change energy legislation and regulation, business have an opportunity to show leadership by voluntarily replacing coal with renewable energy.

Economic growth that includes fossil fuels precludes the possibility of a living planet.

© 2011, Richard Matthews. All rights reserved.

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Sustainable Business Is Growing But It Still Has A Long Way To Go

Despite the growth of sustainable business, this extrordinary transformation has only just begun. The combination of regulation and demand will color the future a much darker shade of green than what we see today. Whether you are a passionate supporter of efforts to combat climate change or a science-hating denier, everyone will have to contend with a business environment that will be unmistakably greener.

The core features of the new green economy are here to stay and will keep growing. This includes things like efficiency, conservation, waste reduction, pollution prevention, supply-chain management, environmental reporting, biomimicry and cradle-to-cradle products.

Although the green economy is a permanent fixture, companies will continue to rise and fall as new technologies emerge and old technologies are rendered obsolete. But the core features of green business will be with us for generations to come.

More and more companies are adopting greener practices and environmentally oriented consulting services are very much in demand. However, the green market is still very young.

The vast majority of businesses have yet to adopt sustainable practices. According to the Sustainability & Innovation Survey by MIT’s Sloan Management Review and Boston Consulting Group, small business has been especially slow to adopt sustainability. Their survey revealed that 82 percent of small companies have yet to go green, and 66 percent of large companies have yet to embrace sustainability. That leaves a lot of room for growth.

The green market is now estimated to be worth $5.27 trillion (£3.2 trillion) worldwide. In the next couple of decades the clean energy market alone is expected to be worth more than$13 trillion.

Today the green market may seem big, but the business world of tomorrow will be much greener.

© 2011, Richard Matthews. All rights reserved.

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Greener Japanese Companies

There is a long list of Japanese companies that are investing in sustainable innovation. Many of the world's best known Japanese brands are seeing the wisdom of green.

Sharp has built a solar-cell factory that raised its output to 1.3GW last year, from 790MW the year before. According to Ernst & Young, we could see a fourfold growth in Japan’s solar panel market by 2020.

Sanyo has re-emerged as the world’s largest maker of rechargeable batteries as well as a producer of solar panels. On April 1, 2011, Sanyo Electric became a wholly owned susbsidury of Panasonic.

Panasonic is expanding its energy businesses, from electric-vehicle batteries to hydrogen fuel-cell generators, and hopes to more than triple revenues from the segment to Y3,000bn ($36.4bn) by 2018. Like many other companies in Japan, Panasonic is also making its manufacturing operations greener, doubling the ratio of recycled materials used in its products and raising the recycling rate for its own industrial waste to virtually 100 per cent.

Nissan and Mitsubishi Motors have begun selling battery-driven electric vehicles, building on a green-car market pioneered by Toyota's top-selling Prius hybrid.

© 2011, Richard Matthews. All rights reserved.

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