simon zadek

Dear Mr Wolf…Reflections for the Magic Mountain

simon — Mon, 23 Jan 2012 14:16:26 +0000

The Davos countdown has begun, as some of the world’s most powerful embark on the ritual trek up the Magic Mountain. What should be expected from this glitzy dialogue in this Year of Unreasonableness. Davos this year is titled The Great Transformation. But can Davos offer real alternatives or will it serve up a smiling, gritted-teeth espousal that ‘business as usual’ can and should be sustained…read my response to Mr Wolf’s proposed ‘seven ways to fix the system’ on OpenDemocracy @ http://bit.ly/wP96tP

Sustainability’s Cinderella – Us!

simon — Mon, 16 Jan 2012 11:41:06 +0000

The World Economic Forum has launched its latest report on sustainable consumption in advance of its presentation and debate in Davos later this month. Entitled More with Less: Scaling Sustainable Consumption and Resource Efficiency, the report sets out the case for companies, governments and in particular plain old citizens to embrace sustainable consumption as a means of advancing the transition to a sustainable economy. So why is the Forum, and its members and friends, so interested in sustainable consumption, this being its fourth report on the topic in as many years?

“Sustainable consumption has gained centre-stage”, wrote S.D. Shibulal, Infosys’s Chief Executive, in celebrating the 10th birthday of the ‘BRICS’, highlighting the sad fact despite a decade of extraordinary advances in emerging economies, hundreds of millions of Indians still living in dire poverty. And he is certainly right that consumption lies at the core of our challenge and its solutions. Indeed, the very term ‘sustainable consumption’ reflects the paradoxes that it seeks to resolve.

Consumption for many is pure and simply the means to drive economic success. Consume more from us, plead the Europeans of the abstemious Germans, as China commits to boosting its domestic consumption to provide a more balanced growth pathway in years to come. Wayne Swan, Australia’s treasurer, in describing the country’s economic bounce back, concluded, “We have an economy with strong investment, rising incomes, sustainable consumption and low unemployment and these are the building blocks of a strong economy”. Mr Swan’s call for sustainable consumption has little to do, one suspects, with Mr Shibulal’s call to address endemic poverty.

For others, it’s all about the role of the consumer in driving change. Mark Bolland, Chief Executive of Marks & Spencer, champions the view that technology-enabled consumers will increasingly use social networking to ‘choice edit’ their consumer decisions. This is an opportunity, he argues, for those companies that get it, and a profound threat for those who do not, and for us all a chance to get sustainability on track. This view of the empowered consumer is not, it must be said, universally shared. Peter Brabeck-Letmathe, Nestlé’s Chair, speaking at the Global Green Growth Forum in Copenhagen last October, pointed out that consumers did not ask for the internet, but have embraced it now that it is available to them. Similarly, he argued, they will not be the driving force of green growth, but will respond positively once business gives them affordable and desirable, green products.

Sustainable consumption figures as a cross-cutting theme in the draft text for the UN’s Rio+20, The Future We Want, which sets out the need to, “establish a 10-Year Framework of Programmes on sustainable consumption and production”. Whilst being typically UN-unspecific as to what this might include, the UN surely intends the focus to cover both Mr Shibulal’s anti-poverty agenda and the need to secure ‘more for less’ in reducing the use of natural resources and levels of pollution. Economic growth per se, let alone business success, is not really the UN’s thing despite the focus on green growth at the forthcoming Rio+20 event in June.

Paul Polman, Unilever’s Chief Executive, speaking at the launch of the company’s Sustainable Living Plan at its headquarters in London in late 2010, provided perhaps the most integrated vision of sustainable consumption. In asserting that there is “no conflict between sustainable consumption and business growth”, he reaffirmed the three-fold essentials of sustainable consumption: as a growth driver, a means of bringing improved material well-being to the poor, and as a means for reducing the material impact of that consumption.

Mr Polman is right, but it is easier to describe sustainable consumption’s three-cornered hat than deliver it in practice. We can all list our noble consumer items, the low energy bulbs, organic t-shirts, low-pollutant freezers and carbon-offset (very low cost) holiday flights. Equally, we can with some prompting mention a few of the benchmarks for our changing consumer standards, the forest and marine stewardship councils’ signature stamps, fair trade marks, and for some the more exotic and time consuming benchmarks for de-selecting products made by companies with a bad record in anything from climate to internet privacy.

But for the world’s two billion or so middle class consumers (and I applaud the exceptions) this represents a small niche in our overall consumption patterns. Green growth may well mean ‘more-with-less’, as the Forum’s title seductively promises, but it still means way too much of the ‘more’. There remains a daunting gap between action and what needs to be done. Consumer-facing sustainability initiatives, whilst making laudable progress in everything from coffee to buildings to vehicles, are not making serious inroads into their respective markets to safeguard their targeted resource, species or indeed community.

Scale is therefore at the heart of the challenge, and so rightly this is the focus of the Forum’s new report, and I am pleased to have had the opportunity to contribute to its creation. By 2030, three billion middle class consumers will be out there demanding products and services. In a resource constrained world, those companies and economies that can deliver against these demands without unsustainable natural resource use and pollution will secure powerful competitive advantage. Accenture, the Forum’s research partner, calculates that the economic output at risk in 2030 if the response to a “peak metals” scenario on iron and steel is business as usual. Similarly for nations – sustainable competitiveness for nations is the new buzzword in the Forum’s corridors as it launches its first country-level rating alongside its traditional global competitiveness index, building in vision and substance on some of the early work on the ‘responsible competitiveness’ of nations.

So if there is money to be made, economies to be grown, as well as a world to save, what’s the hold up? It’s a puzzle that we have so far failed to get to scale in addressing the challenge and hopefully reaping the economic and business benefits. After all, we live in an era of scale. Our US$ 70 trillion global economy is powered by US$ 210 trillion of financial assets; over five billion mobile phones are in circulation with penetration rates rising by 35% each year; and over a period of just two weeks in August 2008, 4.7 billion people (70% of the world’s population) tuned in to watch the Beijing Olympics on television. Modern societies are addicted to ‘speed-to-scale’, so why can’t we make it happen when it comes to sustainable consumption, or can we?

The Forum’s report usefully distinguishes three, complementary ways to deliver ‘more-with-less’: by rebuilding the value chain and products themselves, essentially supply-side responses; through consumer responses, the demand side; and finally by changing the rules of the game, whether this means norms, voluntary standards or the rule of law. Noticeably, the report’s emphasis is on the supply side and to some extent the rules of the game, perhaps confirming broader support for Peter Brabeck-Letmathe take that consumers are market-takers rather than makers. And supply side responses are of course what are needed if we are to re-engineer global value chains to be environmental smarter and share the wealth they generate more fairly.

Yet we write off consumer action far too easily. Many cite the problem of price premiums to buying ethically when we do not blink at design and status of premiums of hundreds of percent for everything from underpants to airlines. Technology, as Mr Bolland points out, is a game changer in catalyzing collective action. Indeed, we are witnessing an up-swelling of new forms of collective action, from the unfinished business of the Arab Spring to the on-going actions of the Occupy movement, which spread to over 900 cities in less than 3 weeks. Tens of millions of microblogs were generated in China within 24 hours of the train crash last year, and even Burma appears to be succumbing to the tripartite pressure of people, politics and profit. Citizens are making themselves heard from the protests on the streets of Moscow to those of Athens.

These citizens’ movements are rarely thought of as the vanguard of sustainable consumption, but we should not be so hasty in our judgment. Many commentators of Egypt’s early uprising have pointed out the coincidence of food price spiking, in significant part triggered by the financial market’s speculative trading in commodities. The Occupy movement has not focused on consumption per se, but has called for corporate reforms and greater equality in outcomes of today’s global markets. Many of the estimated 180,000 ‘mass protests’ in China last year called for less corruption, greater accountability and a fairer deal for poorer communities. These scaled uprisings may not be about the peaks of sustainable consumption, but are without doubt the heartland of its foothills.

Collective citizen action on sustainable consumption will ultimately be rooted in their imaginations about themselves and the societies that they want to live in, more than it is about price or even ‘point-of-sale-ethics’. Beyond the basics, consumption follows social identity, a point well-understood by sociologists and marketers, but still painfully absent from the strategies of sustainable consumption crusaders. Governments can help, not just through establishing new rules, but by providing leadership in setting and pushing foward visions of what is possible. President Lula of Brazil did just that in insisting that malnutrition could be overcome, and in his tenure went a long way to doing just that. Governments of Denmark, Germany and Korea, and perhaps most of all China, are redefining the international political landscape by moving unilaterally and ambitiously forward on the green growth agenda.

Businesses, similarly, can catalyze dramatic change by advancing what I have elsewhere called ‘unreasonable ambition’ for their own companies. Partly this is about the aspirations and strategies of individual companies led by unusual, amazing folks, and we need to celebrate such leadership. But scaling ultimately demands collective action, sometimes through competitive forces but often grounded in collaboration. Acting together, some of the world’s largest companies could commit to targets that would put many national targets, including those of major economies, to shame. Imagine this happening in the run up to Rio+20, a set of post-Millennium, Sutainabable Development Goals that businesses, working with others, commit to over the period to 2020. Could such goals shame, goad or create the imperative for governments, at Rio+20, in the climate negotiations, or at the World Trade Organisation or any one of a dozen stalled, inter-governmental, to act with courage and collective intelligence.

The World Economic Forum’s ‘More with Less’ report is a call to action that blends pragmatism with radicalism into a cocktail fit for this era. It spells out what needs to be done, the cost of inaction, and the potential benefits from turning big words into big actions.

At the G8 (remember them) in Birmingham back in 1998, the New Economics Foundation, organiser of the counter, Peoples’ Conference, published the report ‘Purchasing Power’. That report set out many examples of sustainable consumption, mainly emerging from the politics of change from South Africa to Chile and even the US. It was a voice for change, from the outside, barely heard on the inside. The Forum’s report on the other hand comes not from the street, but from the boardrooms of global businesses and their international and local partners. We cannot afford to choose. Both despite and because of the power of business, scale will only happen when it finds either common purpose or mutual interest to act in concert with the street. The opportunity does exist, and must be taken, to join the dots.

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Sad Berlin Travelopsy

simon — Thu, 05 Jan 2012 20:36:42 +0000

Berlin for a new-year break was fun despite the warm rain and dangerously tossed fireworks that set fire to my child’s shoe and stocking. Positively, exploring Berlin revealed many reasons for its reputation as Europe’s most fashionable city. But watchful experiences revealed an endemic, almost casual, street-level racism that left unchecked will ultimately condemn the city to its troubling German roots rather than its aspiring cosmopolitan future.

Arriving in Berlin’s Tegel Airport, the women checking passports looked into the faces of the only two non-Europeans disembarking from our plane that morning, two young Chinese men. Having clearly verified in their passports that they were allowed into the country, she demanded roughly, “how much money do you have”. One of the Chinese men, struggling to understand I suspect the point rather than the language, pulled out his wallet and offered up a small bundle of euros, displaying them to both the official and the 50 or so other people in the queue who were looking on. The officious woman was clearly dissatisfied, and barked back, “is that all!”, without offering any sense of the what she meant, what might be enough, and what real right she had to make such demands. The Chinese man, puzzled and trying to be helpful, responded in broken English, “we have credit cards, visa”. The official had clearly either done her duty, satisfied her undefined anger, or achieved some measure of both. She tossed the passports across the counter, and waved the two men out of the way.

Both sides of my family come from Germany. The few but sufficient numbers escaping in the early 1930s, including my dad from Berlin, made me a biological possibility. Hanging out in Berlin for the first time with my own family included a visit to the now, world-famous, Jewish Museum. The experience was, frankly, disturbing. The museum perfectly replicates the worst of all Jewish images: an outright arrogance that allows for no flaws whatsoever to be displayed in how Jews go about their affairs, and zero acknowledgement of any learning from the German culture within which so many had prospered for so long and now did once again. And what appeared to offer a cute, computer game about Jewish history that I played for a while with my seven year old, Solongo, turned out to award points to those players who earned more money and ingratiated themselves successfully with incumbent (non-Jewish) kings and business magnates. Astonishing.

Racism comes in many shapes and forms. The numerous prizes that have been awarded to the museum are, sadly, displays of racism’s many, mutant variants, more than they are an acknowledgement of real merit.

Departing Berlin provided us with the second opportunity, again at Tegel Airport, to witness another obnoxious blend of officious behavior and casual racism. Standing waiting to board was a rather old, over-weight woman, struggling to walk, perhaps Ethiopian. Although accompanied by a younger woman, she was not coping well with the situation, was moaning quietly, and clearly distressed. She was standing by the help desk where also boarding tickets were being checked as people began to board. The official, neatly dressed behind the counter, first simply ignored the distressed person completely although they were directly facing each other. When this was no longer tenable, in a fit of all-too-apparent exasperation suited better to someone who has been hassled continuously by the same person hour on end (which she clearly hadn’t in this case), she waved her hand dismissively to one side, shouting out, “get out of the way, go over there”.

Now I am a forgiving kind of a guy, and spend an unlikely amount of my energy justifying in my own mind why people do bad things – it sort of comes with the territory of the business, economy and sustainability area. And yes, exhaustion after Xmas and too much drink and food, and too little sleep, over new-year can make one a bit touchy. And sure, I accept that cultural norms about shouting vary. But there was actually no doubt at all that what I witnessed on arrival and departure were straightforward displays of racism, performed in front of dozens and dozens of people, clearly with the perpetrators having no qualms or fears of any consequences. These were professionals, indeed folks representing Germany at it’s borders, who almost certainly abused non-white foreigners (and probably Germans) quite causally on a daily basis.

Normalization is of course the elixir of our time. Folks will tell me what I am describing this happens everywhere and always. Others will remind me of the racism of the Chinese towards ethnic minorities and Ethiopians towards Eritreans, and so on, and so on. But of course that is not the point, never was, and should never be. Europeans, Germans, and perhaps most of all Berliners must decide and demonstrate who they want to be in the 21st century. The good news about the Jewish Museum is that only a few million folks will ever see it, with hopefully far fewer being angered and made less tolerant by its subliminal messaging of Jews as victimized superiors. But as long as the casual racism played out by my two uniformed examples represent the face of Berlin, this city will remain rooted in its intolerant past.

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2012: The Year of Unreasonableness

simon — Sat, 31 Dec 2011 08:15:20 +0000

The Guardian invited me along with a few other folks to scribble some predictions for 2012. It must been a bad day when I finally hit the keys, but here is what I wrote.

2012 is going to be an unreasonably difficult year. We must be equally unreasonable in our ambitions for advancing sustainability.

The ‘sustainable biz’ circle’s golden rule is to keep one’s chin up, point out the good news, and duck the hard questions by appealing to an unknowable future. Being a party-pooper is considered impolite behavior, except perhaps through the majesty of John Elkington’s very-English metaphors. My personal prospects might be well served by joining Messrs Porter and Kramer in speaking of ‘shared values’. Better to be like Emma Howard Boyd, stretching optimism to breaking point in being positive about a financial sector whose bankers have personally pocketed US$2 trillion in the last five years and whose shenanigans cost the OECD an astonishing 26% of its collective GDP.

Frankly, penning positive ‘sustainability’ predications for 2012 on the same day that IMF chief, Lagarde, warns of a 1930’s style meltdown in the global economy is a challenge. The implications of China’s imploding property boom does not improve my state of mind. That The City instructed Cameron to either secure their interests in Europe or turn out the lights provides an expected, but ugly, backdrop. And all that in the context of the inexorable fall in the share of US working citizens in their own GDP, down to an historic 58%, which bodes badly for our cherished, North Atlantic ways.

Unfounded optimism, offered up to calm our rattled nerves with soothing lullabies, is a luxury we cannot afford. Time will tell whether 2012 will be a disaster of Largardian proportions, lets hope not. But as predictions go, one can’t go far wrong in saying that 2012 is going to be ghastly for, quite literally, hundreds of millions of people. Allowing oneself the discomfort of being troubled by current affairs might not be a bad thing. As Ed Mayo, my one-time boss at the New Economics Foundation, often gently reminded me that it is helpful to be at least a little angry when one gets up in the morning.

Noah’s biblical story spells out the fate of unreasonable folks, as I wrote in a recent China Entrepreneurs Club article, “Noah attempted repeatedly to warn his neighbors of the coming deluge, but was ignored or mocked”. Ray Andersson championed environmental sustainability despite being ridiculed for many years by his peers, employees and partners. Similarly for Anita Roddick of The Body Shop, John Browne of BP and many others who have stuck their necks out to say and do the right thing.

Being ridiculed for doing the right thing is an art that I have been working on over the last year in contributing to unreasonable initiatives. The South African Renewables Initiative was launched in Durban as an international financing partnership to accelerate the roll out of renewables in South Africa. The China Council for International Co-operation on Environment and Development has recommended to the State Council that China greens its expected trillion-dollar flow of outward investment over the next five years. The Korean-based, Global Green Growth Institute is working with governments around the world in advancing national and regional green growth plans, and the Canadian-based Centre for International Governance Innovation has provided an incubation hub for debating policy innovations that if implemented would better align financial market reform to sustainability outcomes. And we all hope that the UN High Level Panel on Global Sustainability, due to report out early in the new year, will raise our spirits and ambitions in the run up to Rio+20.

These initiatives are reasonably unreasonable, but we can and must do better. The Occupy movement has set the disruptive pace in calling for change, and it is our task to help deliver it. For 2012, I hereby open the Unreasonable List with three unreasonable ambitions. Firstly, Rio+20 could be a moment for some of the world’s largest businesses, working with others, to initiate their own ‘sustainability marshal plan’ by establishing collective stretch targets, their own post-Millennium Development Goals to deliver the benefits many nations are failing to achieve. Secondly, although we do seem to be able to land a decent, international carbon price, we could commit at Davos and then at the G20 in Mexico to ridding the world of the US$1 trillion worth of tax-financed, fossil fuel subsidies that in effect places a negative price on carbon today. And, thirdly, it is time to confront the financial sector, if not now when. We can during 2012 agree to establish, at least in Europe, a financial transactions tax as the vanguard of a root-and-branch realignment of the financial markets to delivering sustainability outcomes.

Predictions for next year, left to their own devices, look pretty bleak. So my wish list of one is that we declare 2012 the Year of the Unreasonable, establish an Unreasonable List and set ourselves some ridiculously ambitious goals.

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Durban: Plan B Is The Real Deal

simon — Mon, 19 Dec 2011 08:25:06 +0000

The climate negotiations in Durban has delivered a deal. As we return exhausted to our Xmas preparations, can we celebrate a breakthrough securing the future of our children, or should we condemn the outcome as a sham. The truth is that our futures depend less on the effectiveness of the Durban deal, but on what nations, communities and businesses do over the next decade, largely in their own economic interests.

Plan A has always been seen as a top-down deal involving global institutions, massive cross-border, public resource transfers, and national commitments to which wealthier sovereign states could be held to account. Plan A was not agreed when tabled in Copenhagen in 2009. In Cancun last year, and again in Durban, all negotiation efforts have remained focused on landing Plan A. Yet with falling confidence in an approach to the global challenge requiring almost 200 nations to reach consensus, voices advocating a Plan B have become more vocal.

Plan B would be made up of the bottom up actions of nations, regions and cities acting in pursuit of the interests of their citizens, businesses and political leaders. International co-operation would be key to Plan B, but by coalitions of the willing, acting in mutual interest and dependency. This would prevent it being a free-for-all, a pure expression of strong-arm politics or corporate interests. Harnessing the power of business and markets cannot mean allowing profits to lead in governing our international affairs, as Greenpeace points out in its recent report, Who Is Holding Us Back. Plan B would in essence be one for shaping a new global economy for the 21st century that would deliver the reduced carbon emissions whilst establishing a secure basis for creating jobs, income and growth for at least 9 billion people.

The Durban deal has been hailed as a Plan A. Agreed has been to develop a global framework with legal force for emissions reductions that would apply to all nations, including China and India. In return, Europe would commit to extending their commitments now, under the existing, legally-binding, international deal, the Kyoto Protocol, that would otherwise expire. A Global Climate Fund, furthermore, would be established to channel up to US$100 billion a year from 2020 from wealthier to poorer nations to help pay for the transition to green, and to support communities vulnerable to climate change.

Plan A is, however, a Plan B in disguise. The Durban deal at best delivers global, legally binding emissions reductions after 2020, whereas the science dictates that maintaining temperature rises below the critical 2 degrees is all about what is done before 2020. Similarly for the money. By 2020 many clean technologies will be cheap enough to be taken up without public subsidies. Our challenge is to mobilize funds now to accelerate green energy, energy efficiency measures and low carbon transport, just to name a few areas, whilst they are still relatively expensive, so requiring public subsidies.

For the Durban deal to mean anything at all, we need a Plan B for the next, crucial decade. And the good news is that the essential elements of such a plan are in motion. Renewables in Africa is a case in point. Africa’s largest planned green power project, the Lesotho Highlands Power Project, has secured funding from China in pursuit of its economic interests, a sign of things to come. Morocco will sell its desert energy into Europe, attracting public investors such as the European Investment Bank. South Africa is progressing a game-changing ramp up of its renewables, supported by an international partnership, the South African Renewables Initiative, launched in Durban, that will help to shape innovative financing instruments to reduce the burden of the extra costs of renewables on South Africa’s citizens and economy, stated by President Zuma as amounting to at least US$660 million a year.

Beyond Africa, India is advancing a huge build up of renewables through its Solar Mission. China is planning to spend US$1 trillion dollars by 2015 on renewables and enabling developments in its power grid, and also plans to pilot 7 domestic carbon markets across the country over the next five years. In Europe, Denmark’s newly-elected government is aiming for 50% of Danish power to come from wind by 2020 and Germany has established aspirational targets for a power system run entirely by renewables.

Finance is of course an issue, especially in this era of austerity across Europe, and uncertainty across the global economy. Public finances can be unlocked, however, by removing fossil fuel subsidies that today cost global taxpayers upwards of a US$1 trillion a year. Also, governments around the world spend almost US$5 trillion a year on everything from paper and ink to aircraft and food, which if greened would make a major difference to reducing carbon emissions and incentivizing new technologies and businesses. The proposed tax on financial transactions, now widely supported, can raises tens of billions of dollars annually, and go some way to reducing the endemic short-termism in financial markets that caused our current economic crisis as well as reducing investors’ interest in longer-term investing that would count carbon more fully.

Plan B, was very much in evidence in Durban, not in the negotiating rooms, but in the sprawling bazaar for ideas, projects, money and partners taking place on the sidelines. Thousands of people in tents, clubs and hotels, and in side rooms to the main negotiations, described with great vitality and in extraordinary detail how this real deal was going to play out over the coming decade. And the best news of all is that Plan B is not only our only option for reducing our emissions right now, but our only hope to those committed to a Plan A into the future. Nations will only sign up and stick to legally binding commitments if enough progress has been made in advancing the greening of their economies. Such real experience on the ground, with the associated development of business and political interests, is what it takes for nations to move beyond the search for an absent logic of trust to that of less inspiring but more impactful actions driven by first mover advantage, co-benefits and mutual dependencies and interests.

Join in Financial Transactions Tax On-line Debate

simon — Sun, 18 Dec 2011 06:08:52 +0000

This upcoming Monday (December 19th) at 11am EST, I will be participating in a webinar hosted by the United Nations Principles for Responsible Investment Inititative on the implementation of a Financial Transactions Tax. The debate will feature four very practical thinkers from different sides of the issue including Tjerk Kroes (APG Asset Management), John Fullerton (Capital Institute), and Roger Exwood (BlackRock). Raj Thamotheram of the Network for Sustainable Financial Markets will moderate. John and I will speak in favour of the tax, and the other two folks against.

If you are interested in the issue, you can join us, and join in !

To register, go to https://www2.gotomeeting.com/register/113001242

Business Versus Business: Applying Kandinsky’s Test Of Madness?

simon — Thu, 15 Dec 2011 03:54:03 +0000

Optimism in the face of repetitive failure is a sure sign of madness, I wrote in the article, Time for Progressive Companies to Deal with the Climate Bad Guys, published two weeks ago in The Guardian. Progressive CEOs need to apply their corporate muscle effectively, and that means challenging those businesses preventing a timely transition to the sustainable economy.

Heated responses to my argument were, shall we say, ‘racy’, in fact in the main dismissive and ridiculing. Such emotive comments are typically elicited in response to either idiotic ideas or insights whose time has not yet come. Like peoples’ views on the first cars, telephones and computers, the mainstream response to the world’s first, externally audited corporate sustainability report, from The Body Shop in early 1996, was almost universally patronizing and dismissive. Today, the company’s iconic leadership is widely recognized. Similar responses reverberated across the media and business community when Rio Tinto, BP and Shell launched their human rights policies in 1997.

But some ideas are of course just plain silly, not unrewarded strokes of genius. The trick, as Kandinsky reminded us in his insightful pamphlet in 1910, the Spiritual in Art, is to distinguish the rantings of the insane with those of the artist.

Guardian executive editor, Jo Confino, was curious enough to use my piece as a talking point in interviews with a number of leading folks working in the business and sustainability space. Their responses, at their core, mirrored the ad hoc comments to the blog, with departing WBCSD president, Bjorn Stigson and others persuasively arguing the need for progressive businesses to focus on advocacy based on demonstrated business value in doing the right thing. Bjorn in fact condemned my proposed approach as actively counter-productive.

Well yes, many people, including myself, have spent much of the last two decades pursuing exactly this line, emphasizing the benefits for business. My publications back in the early days included ‘Conversations with Disbelievers’, with the underlying tone and approach being replicated in ‘The Civil Corporation‘. For the national level, whilst at AccountAbility, the potential for the ‘responsible competitiveness of nations’ was promoted in theory, cases and through the biannual Responsible Competitiveness Index.

But at issue is not whether one should argue this line, but whether it is working in driving change in the right direction, to the right scale, and at the right pace. The answer to this, in a nutshell, is yes, no and emphatically no.

As Sir Nick Stern in Durban has declared repeatedly, ‘we have lost our sense of urgency, but have no reason at all to be complacent’. Jo apparently agrees, concluding, “…the time is past for quiet diplomacy. The risks are too great. The time is too short. What progressive businesses need to do is be far more assertive and public in their demands on politicians”. But Jo also reflects, “…direct attacks on other companies, I am not so sure”.

Exemplary practice has always had its place in leading change, but has rarely if ever been sufficient alone to drive historic, quantum changes. This assertion is all the more true where incumbents benefit from the status quo, as is the case for the carbonized, industrial economy. The current history-in-the-making of the financial sector is a case in point. The IMF estimates that leading US financial institutions spent no less than US$5 billion on political lobbying in DC over the period 2007 to 2010, at exactly the same time they were being bailed out with taxpayers money, principally to prevent regulations coming into force that would reduce their risk appetite and endanger their profitability. Lobbying against the financial transactions tax, similarly, has involved a spectacular mobilization across Europe and the US. And of course similarly with climate, as Greenpeace summarizes in its provocative report, Who Is Holding Us Back.

So applying the Kandisky test, if my argument is madness, then it is not because of misplaced urgency or mistaken concerns over the power of incumbents. Furthermore, I am in good company, literally. When John Browne, then BP’s chief executive, called out climate change in his infamous Stanford Business School speech, he was speaking out powerfully against his peers. When Jeff Immelt co-led the launch of the US Climate Action Partnership, similarly, he was widely condemned by his corporate peers. Major utilities and other companies, including Exelon, Pacific Gas and Electric Co. and New Mexico-based PNM Resources Inc., made high-profile exits from the US Chamber of Commerce in 2009 over differences in views over climate related policy advocacy.

Businesses compete with businesses in the market places for ideas and public policies as well as goods and services, talent and finance. Competition, as well as collaboration, takes many forms. Clearly first past the post in selling stuff, hiring great people and getting cheap finance is business in full fling. But more complex warfare is also part of the puzzle for any but the luckiest or smartest. Coalitions of the good and willing are great, but just don’t get us far enough, quickly enough.

To get to where we need to be means disempowering incumbents blocking change. Greenpeace and other civil society actors do a reasonable job, but not an adequate one. Businesses need to step up and more visibly join the fray, so helping their customers and employees mark out the difference between the good and the bad guys.

Kandisky’s litmus test was that the difference between artists and crazies is that the former create images that help those who gaze on them make sense of themselves and the world around them. Time will tell whether good business will increasingly call out the bad guys in the months and years to come. My guess is that my proposal, and my prediction will pass Kandisky’s test as the real deal.

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Hey, I’ve Been Cartoon Animated !!

simon — Thu, 08 Dec 2011 21:33:25 +0000

You’ve got to laugh, an animated cartoon of myself and The Guardian’s George Monbiot debating the motion at the Royal Society in London that ‘London’s Climate Policy Should Start in Beijing’. Its unclear whether the cartoonist saw me as a priest or a used-car salesman, perhaps some blend of the two. But here it is.

In summarizing the debate, I argued that China has a long-term economic and industrial policy, not a climate policy per se, whereas the UK has a well-defined climate policy, but not a serious economic policy, even for the short term. What the UK needs, I concluded, was exactly such a policy, perhaps drawing lessons from China. For those who prefer the real thing, a video of the actual debate is available, as below.

For those who like good-old text, the Huffington Post published an article days before the event setting out some my arguments.

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President Zuma Endorses South African Renewables Initiative

simon — Sat, 03 Dec 2011 13:02:56 +0000

President Zuma today endorsed the South African Renewables Initiative as a South African-led, international, lighthouse initiative designed to enable the scaling up of renewables in South Africa by reducing the incremental cost burden to South Africa’s citizens, economy and jobs…the relevant part of his speech is below:

“Ladies and gentlemen,

As we noted, the biggest barriers to developing renewable energy in Africa to date are not technological, but financial.

In that regard, South Africa has been hard at work in the development and design of financial instruments aligned to our national plans for green growth. During the course of COP 17 we will be launching a key initiative that could kick-start major development for renewable energy generation and industrial development.

The South African Renewable Initiative (SARi) funding mechanism will help us unlock South Africa’s green growth potential through the funding of large-scale renewable developments. This will be achieved with the assistance of global partners – donors and Governments, who will provide innovative funding solutions to facilitate it.

Renewable energy still costs more than non-renewable energy, which in South Africa is largely supplied by cheap, abundant coal supplies. It is estimated that the renewables’ targets indicated in our Integrated Resource Plan 2010 would add an average incremental cost of around 660 million US dollars to South Africa’s annual electricity bill up to the year 2044. The SARi model will enable us to deal with the high cost through low cost loans and other financial instruments combined with time limited pay-for-performance grants.”

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Consumers without Boundaries

simon — Tue, 22 Nov 2011 18:36:08 +0000

Unilever, working with The Guardian, today launches its on-line debate on sustainable living. As a part of this initiative, Unilever invited a number of folks to write short essays on the topic that have been compiled into a bound collection, Inspiring Sustainable Living, also published today on line. My contributed essay is set out below.

Exiting the Valley of Death

Start-up companies have named the most dangerous moment in their development as the ‘Valley of Death’ – the moment between proof of concept and the beginning of mass production and significant sales. It is the place where most dreams perish in the face of conservative capital markets that doubt an entrepreneur’s abilities to beat the competition.

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Sustainability has reached its own valley of death. After two decades of intense activities, we have excellent data on the nature and scale of the problem, an abundance of cases of successful experiments, and the growing attention of political and business leaders. Yet we cannot leverage our insights, resources and passion to contain our production of carbon, manage the scarcity of water, or dampen the speculative fluctuations in the price and availability of basic foodstuffs. De-materialised products, rentalised markets, renewable power and sustainability standards are amongst the social innovations that have provided inspiration and advances in offering consumers greener choices. Yet whilst our call to arms has been for transformation, we are, in practice, celebrating incremental changes in the spirit of increasingly desperate optimism.

Yet although we bemoan the lack of much-needed speed-to-scale in advancing the sustainability agenda, scale is something we know a lot about – in selling mobile phones, going to war, watching the World Cup, or in catalyzing fundamentalism in its many forms. Markets, governments, and communities in action have been societies’ three historic instruments for achieving scale. Business, the world’s most fashionable vehicle of change over recent decades across richer nations, can in quick time sell billions of packets of crisps, tens of millions of cars and millions of handguns. If the price is right, businesses can innovate, produce and deliver, and citizens will turn out en masse and do the right thing, namely buy. But the logic of the business community has, to date, limited its ability to deliver sustainability-aligned products and services at scale. Today’s backward-facing markets, in the main, only reward companies for doing the right thing on the margin. Despite exemplary businesses, innovative products, technological advances and the fact that most people do care about other people and the planet, most profits are still made by selling lots of stuff that is produced, and then used, in environmentally unsustainable and often socially-destructive ways.

Government and the power of public policy
Government, after religion, is arguably our most venerable institution for scaled action for the broader interest – in principle, at least. Most obviously, it does much to define what should not be done, set out through the rule of law. Fiscal policy also plays a critical role in driving consumer behaviour, with feed-in tariffs (or their equivalent) crucial for advancing renewables, whilst perverse fossil fuel subsidies encourage unsustainable lifestyles. Governments have soft as well as statutory and fiscal instruments. The decline in smoking throughout wealthier nations resulted from a combination of public education and a gradual restriction in social space for exercising the habit. Public education, from classrooms to billboards, has played a major role in socialising a deeper, inter-generational appreciation of sustainability, from climate to waste to health management. And governments are big spenders, with contestable public procurement globally amounting to US$4-5 trillion annually, and some have indeed moved, albeit slowly, in greening this voluminous purchase of goods and services.

Public policy counts in achieving scale, and so enabling business to do what it does best in ways that are sustainability aligned. The nexus between business and government is critical in shaping options facing citizens as consumers, voters, employees and investors. Both together have the power to make or prevent change, complementing each others’ strengths and offsetting each others’ weaknesses. The US’s environmental shortfalls can be directly attributed to the power of businesses that benefit from the status quo, whatever the cost. Meanwhile, Denmark’s new government has come to office with a mandate to double the country’s carbon emission reduction targets to 40% by 2020 and to deliver an energy system powered largely by wind by the same date, providing a strong domestic basis for building its next generation of global exporters. The Korean government, similarly, is driving forward with the nation’s business community an integrated, green economy with every intention of taking global markets by storm. Brazil and China, also, are leading in shaping domestic policies to incentivise green business, whilst simultaneously advancing their immediate development agendas.

Social norms and collective action
Citizens’ norms of concerns and behaviour in large part define the difference between nations like Denmark and Korea, and those failing to progress, such as the US. These are in no small part shaped by governments alongside business. After all, citizens did not stand up and demand the internet, they merely responded to the increasingly persuasive offer. Yet this closed loop is not the entire story. Germany’s decision to green its power system was built on a deep sensibility of its citizens towards the environment, just as others have tapped national sensibilities, including problematic ones like nationalism and other aspects of identity. At a far smaller scale, after all, support for ‘fair trade’ products from coffee to cotton was borne in Europe’s churches, community centres and political movements. Major events can also be important turning points, such as Japan’s recent nuclear disaster.

People, that is, citizens acting together, are our third way of fracturing and seeking to replace incumbent social norms and outcomes that are no longer acceptable. The Arab Spring in Tunisia, Egypt and elsewhere demonstrate vividly that people can and do rise together and say ‘enough’, even to those with the destructive power and the willingness to exercise it. OccupyWallStreet – and its thousand or so companion protests – show us that people from every walk of life will join together, despite their huge differences, to challenge what is just plain wrong. But these dramatic cases also illustrate the potential poverty of social movements that can declare ‘enough’, but do not identify, cohere and secure the next steps. Although these unfolding histories are far from complete, the concern from Cairo to the City of London is that these cathartic societal experiments might fail to deliver the much-needed new economics. There is no sign that the Muslim Brotherhood is concerned with Egypt’s dirty and weakened economy. Equally, there is no obvious sign that the US and UK governments are inclined to respond to OccupyWallStreet’s call for reform of the financial sector, the lifeblood or life-taker of the real economy, with anything but platitudes or worse.

Exiting sustainability’s valley of death is not about public policy, business initiative, or citizen action – it is about all three and their dynamic alignment with each other. Citizen actions that create scaled change will be collective, not necessarily on the streets, but as social norms confirmed in bars, taxis, workplaces and schools, and only in the end at the point of purchase. Shaping new social norms that underpin citizens’ collective action is a task where businesses and governments have an important catalyzing role to play. Government policies are a product of artful politics, occasionally inspired by crisis and leadership, shaped by business interests, and underpinned by the ultimate need to satisfy the public in all but the most despotic cases. And, finally, to achieve scale, progressive businesses will have to help to create the political space to shape the right enabling policies, edging to one side their resistant competitors, and mobilising citizens’ support in encouraging governments to do the right thing. Only with such alignment will public policy play a fulsome role, opening the opportunity for us to exit sustainability’s valley of death.

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