Either we change or the climate does
Business leaders need to tackle global warming with courage
THE headlines we see in newspapers are arresting: ongoing economic challenges in Europe, oil price volatility, violent instability in the Middle East with spillovers to other regions, and growing concerns about inequality, poverty and global unemployment.
This is even before you consider the sort of pressures we face as a bank. New technologies, changing customer demographics and a slew of new regulations are just part of the things we’re coming to grips with.
But perhaps the biggest challenge looming in our future relates to the climate.
On November 30, business leaders, politicians and environmentalists will converge on a wintry Paris for COP21, the UN conference on climate change.
As business, we need to deliver a firm mandate to our negotiators in Paris to enhance the likelihood of a successful deal that will create new opportunities as we move to a lowcarbon economy.
Simply put, the level of greenhouse gas emissions needs to be drastically slashed now. Quite how this will play out remains to be seen: we cannot be sure that the negotiators will succeed where 20 previous attempts have fallen short, but we really need them to. Time is not on our side.
This presents something of a challenge for executives and CEOs. Business has often struggled to deal with climate change, partly because this requires courageous leadership and our ability to consider the whole rather than our narrow self-interest.
It’s a unique challenge: the impact has no respect for borders, the consequences span generations, and it is distinctively irreversible because once a threshold is breached, there’s no going back.
What makes it particularly difficult for people — and business — to grasp is that climate change isn’t actually caused by evil intentions or deliberate selfishness. Rather, it has its roots in our well-meaning efforts to provide affordable energy, food, and higher living standards.
Even understanding the causes and impact of climate change has required an unparalleled scientific endeavour. The basic principles of climate science were firmly established a century ago, and underscored by a US National Academy of Science study in 1979. But it’s only in the past two-and-a-half decades that the topic has really been scrutinised and peer-reviewed, unlike almost anything else.
True, no process is perfect, but the work overseen by the Intergovernmental Panel on Climate Change is surely the best effort the world could have mounted to understand the complexity of the challenge.
And the message from the panel is emphatic: the world needs to take rapid and decisive action to avoid dangerous interference with the climate system.
This is why we as South African business must lend our support now, to secure some form of globally binding agreement.
For sure, any deal will inevitably imply sacrifices from all of us and changes in the way we pursue certain objectives. But longer-term gains nearly always require shorterterm pain, and the bottom line is, we don’t really have any alternative.
A point that many in the business community overlook is that responding to climate change is the most economically rational thing to do.
Fortunately, continued advances in renewable energy, energy efficiency and energy storage technology are also making it increasingly achievable and cost-effective.
South Africa, like the rest of the world, can now see a credible pathway ahead for the continued ex- BEDROCK: Fishing boats sail past icebergs in Disko Bay near Ilulissat, in western Greenland. Icebergs are melting at an unprecedented rate as global warming plays havoc with the climate HEAVY METAL: A steel plant spews pollution into the air, adding to the greenhouse gas emissions pansion of energy services.
At our bank, we’re taking these steps as part of an economically rational approach, too: we want to be around for a long time, to create long- term value for our stakeholders, and help shape our society.
In our own planning, we have found it useful to apply the lens of a “carbon budget”.
Budgets are something that we are all very familiar with, and we firmly believe in the discipline that budgeting instils.
Applying a carbon budget can unlock a great deal of innovation and far-sighted decision-making, as we are compelled to consider the use of every resource prudently with the future direction in mind.
This means our lending portfolio, as well as our branch footprint, need to correspond with a greenhouse emission trajectory that is compatible with an equitable carbon budget for South Africa, informed by the globally accepted 2°C threshold.
National legislative frameworks, international political commitments and the latest scientific knowledge provide useful guidance as to what such a budget should be.
We need to take a unified message to Paris, all on board with the notion that there simply is no Planet B.
Brown is CEO of Nedbank Group