CDP Global Forum's Comprehensive Look at Sustainable Business

On Wednesday the Global Forum had an international gathering of business and political leaders in a unique virtual workshop-style discussion which focused on ways to create sustainable, profitable business growth around the world. The 2-hour meeting organized by the Carbon Disclosure Project (CDP). The meeting took a realistic tone, bridging long-term vision with existing challenges.

First, the forum walked the talk by using Cisco TelePresence technology to create an online discussion between 18 participants in 9 locations on 4 continents. Paul Dickinson, CDP Chairman, who moderated the forum, started by saying he loves this technology because of all the greenhouse emissions it saves. This technology is definitely a great example of the win-win solutions discussed afterwards in the forum, since it saved money and emissions.

The forum focused on three themes: resources scarcity, barriers businesses need to overcome on their way to create systematic changes, and business opportunities in low-carbon economy.

Resource scarcity
This challenge, as Ian Cheshire, CEO of Europe’s leading home improvement retailer Kingfisher Group pointed out, is shared by all companies, as every business has one or two scarcity issues to deal with. He added that businesses need to address it and those that do so first are going to gain.

Participants agreed that resource scarcity is both opportunity and risk and shared some of their experiences approaching the issue. José Lopez, Executive VP of Nestlé talked about engaging with the supply chain, while José Luciano Penido, CEO of the Brazilian paper and pulp company Fibria explained how they promote innovative solutions, such as genetically modified trees. I’m not sure biotech trees are the best example of a sustainable solution, but it’s clear that companies need to promote innovation and develop new materials and products to meet this challenge.

One of the main conclusions in this part of the discussion was the need to create value. The challenge for companies is how to generate increased value while using fewer resources. While Mark Makepeace, CEO of FTSE said we see growing interest of investors in these themes and it could certainly help if companies would know that it is part of the factors shaping investors’ decisions, Ian Cheshire of Kingfisher noted that investors still don’t know how to change their valuations of businesses when they become more sustainable. In his view, companies can’t rely yet on investors to help them move forward as investors are still part of the market failure. The question is, how do we calculate and show the value of sustainability?

Barriers to change
Paul Simpson, CEO of CDP, shared findings from the 2011 edition of the annual CDP Global 500 report. For the first time, the majority of companies answering the survey (68%) have integrated climate change initiatives into their business strategy (last year it was 48%). Sixty-five percent of respondents provide monetary incentives to staff for managing climate change issues, versus 49% in 2010.

Lauralee Martin, CFO of the real estate company, Jones Lang LaSalle, described the need for metrics, explaining that companies need to translate climate into business language to get their business clients excited. Ian Cheshire mentioned that one fundamental barrier is that companies feel comfortable with the existing business model, which brings them a lot of money. To ask companies to step away from this model is very difficult. "What we need," he said, "is a structured reimagining of what would a different business model look like."

Business Opportunities
Somak Ghosh, President of the Indian Yes Bank mentioned the challenge of providing products and goods to the bottom of the pyramid. These services must be integrated into the low carbon economy, as otherwise developing countries will be left behind. He gave an example of the 450 million people in India that are not connected to the grid. There's an opportunity to give increased electricity access with renewable technologies.

Christiana Figueres, Executive Secretary of UNFCCC, discussed the challenges the business sector is facing, such as the need to decouple carbon emissions and growth. According to Figueres, each ton of carbon has to grow five times in economic output in less than 20 years to enable a sustainable future for the globe. How should companies do this quantum leap? Figueres believes it is based on vision, capital availability, executive capability and policy support. While governments still don’t do as much as they can, businesses should check if they do the maximum they can in the meantime, she said, adding that those companies that wait for 100% certainty are going to lose the return early birds can expect.

Paul Dickinson ended the discussion emphasizing that we are at critical junction now and reminding us that the business sector is responsible for 70% of the emissions. Is it doable? It’s hard to tell but this forum certainly showed that businesses are making growing efforts that can eventually make it happen, and although the challenges are enormous, so are the opportunities for those who will choose to act.

You can watch the webcast on the Carbon Disclosure Project’s website.

Image credit: Carbon Disclosure Project

Raz Godelnik is the co-founder and CEO of Eco-Libris, a green company working to green up the book industry in the digital age. He is also an adjunct professor in the University of Delaware’s Alfred Lerner College of Business and Economics.