Anna Triponel, 23 March 2022
The following captures the closing remarks delivered at the conference ‘Turning aspirations into reality – Go Green, Be Ethical and Protect your Company’ co-hosted by Clyde & Co LLP and Queen Mary, University of London in London on 23 March 2022.
There’s a line at the beginning of Kim Stanley Robinson’s book, the Ministry for the Future, that goes like this: “Yes, you know. Everyone knows, but no one acts. So we are taking matters into our own hands.”
These are words from the Indian delegate to the convenors of the Paris Agreement, after millions of Indians have died in an unprecedented heat wave. The Indian government is now deciding to take action by replicating a volcanic eruption. In short, if they can trigger a volcanic eruption, the ash cloud would help protect India from warming – only for a year or two – but that is much needed respite in a world with no other options.
At this point in Robinson’s book, we have reached unimaginable numbers of parts per million (ppm). This is the number of carbon dioxide molecules for every million air particles.
If we come to back where we are now, today, we are at 415 parts per million – which is right in the middle of the danger zone in the climate boundary. This amount of carbon dioxide in the atmosphere is the equivalent of 1.1 degree warming of the planet – as compared to when the Industrial Revolution of 1850 began.
If we reach the 450 parts per million mark, we will exit the danger zone and enter a high risk zone. This 450 parts per million is equal to – you guessed it – this 1.5 degrees warming everyone is talking about.
We can act, but we need to act now.
· If we go past the 1.5 degrees of warming, we will start to trigger irreversible tipping points, where our planet will start to work against us by warming itself up even further. Ice sheets will start to tip from becoming self cooling to the planet, to self warming – absorbing heat, rather than reflecting it back. Forests can be carbon sinks, and absorb our carbon emissions. Last year it happened: scientists found that the Amazon rainforest had tipped into emitting more carbon dioxide than it is able to absorb.
· The latest IPCC report makes crystal clear that every fraction of a degree of warming makes a difference. With every fraction of a degree in warming comes an increase in heat stress, an increase in homes being lost due to rising oceans, an increase in water shortages, hunger, extinction of species, and the list goes on.
So what does acting now look like for a company?
In my world of the UN Guiding Principles on Business and Human Rights, we speak about an obligation of means. In other words, we cannot guarantee as companies that there will be no adverse impacts on people connected to our operations. However, what we can guarantee is that we are taking meaningful steps toward not having these impacts, or reducing their severity, and remediating them, as the case may be. We are conducting quality and effective human rights due diligence, it’s about the journey to get to respect for human rights, that in turn is intended to translate into the desired outcome: respect for people in the company’s business and value chain.
However, in the climate space, we cannot be speaking about an obligation of means. This is an obligation of result – this is about guaranteeing that we stay within 1.5 degrees of warming – and doing what it takes to get there.
So the business of today is one that knows what the business model of tomorrow looks like, and is creating that business model now.
The good news is that we know what transformation is needed. We know what the business model of tomorrow looks like. For all sectors in fact.
We know that for energy, we are looking at a world of net-zero carbon energy. We will have a decarbonised global energy system – from the generation, conversion and transmission, all the way through to distribution, storage and use of energy. We will have carbon removal, sequestration and other solutions where emissions remain unavoidable. The energy system will be largely electric. When it comes to the transition out, workers will be upskilled, reskilled and empowered. When it comes to the transition in, people’s human rights will be respected throughout the energy value chain.
We know that for goods being made, we are looking at a circular world. Companies will no longer be using virgin, non-renewable materials. They will be relying on traceable, renewable and recycled materials, and will have designed out waste. People and planet will be front and centre of this circular world.
We know that for agricultural companies, we are looking at a world based on regenerative and equitable food systems. The global food system will be resilient, carbon neutral and regenerative; it will be supportive of biodiversity; and will meet consumers needs of choosing diets that fit within planetary boundaries. Value will be distributed along the full food value chain – farmers, fisherpeople and workers will be well treated, empowered and resilient.
So forward-looking companies are now working backwards from these business models that are part of the transformation: this is my future business model. What steps do I have to take now to get there?
The pieces of the jigsaw puzzle are varied. They include:
· Strategy: how does my company’s strategy move us toward the transformation needed? How will my company bring its business partners along? What is the company’s role in shaping the broader eco-systems – regulatory frameworks; consumer behaviour and demand; pressures from investors, etc.?
· Senior-level understanding and commitment: How does my company bring in relevant expertise? Within governing bodies, as well as advising them? Do we need to consider behavioural science and organisational change techniques to bring people along with us?
· Structure: What is the business structure that we will need to meet this new strategy? Do we have the expertise – can we train ourselves up, do we bring new people in? How can we create inter-connections between the pockets of the business and a cross-functional approach?
· Metrics: How can the KPIs we design enable and support this transformation? Which KPIs could undermine it?
· Engagement: Who can we bring in to the company? How can we gather feedback and views on an ongoing basis? How can we engage with stakeholders to accelerate our progress?
Sci-fi author Kim Stanley Robinson said in Glasgow that he never thought he’d reach a point where the reality was more surreal than what he would have imagined in science fiction. And yet this is where we are.
So we can indeed take matters into our own hands, but today we don’t need to resort to dangerous and short-term geo-engineering. We have the pathways for business transformation. We know why, and we know how. Now we need to act, and fast.
As the IPCC points out, “