Ad­dress­ing climate risk is an op­por­tu­nity to drive value

The Star Early Edition - - OPINION & ANALYSIS - Frank Ap­pel Frank Ap­pel is the chief ex­ec­u­tive of Deutsche Post DHL Group, Bonn, Germany.

FOR ANY ma­jor global com­pany – in our case as the world’s lead­ing lo­gis­tics provider – the com­mit­ment to go emis­sions-free by 2050 tends to trig­ger one of two re­ac­tions. Some re­gard it as a pub­lic re­la­tions ploy, oth­ers think set­ting such a goal is overly op­ti­mistic.

I think both re­ac­tions are wrong. Mak­ing such a com­mit­ment is sim­ply in­evitable. Climate change is a clear risk to the value of all com­pa­nies any­where.

At the same time, the true po­ten­tial to com­bat climate change will only be achieved once hu­man in­ge­nu­ity and the re­source ef­fi­ciency of the mar­ket are fully tapped.

For that rea­son, busi­ness lead­ers in­creas­ingly un­der­stand that ad­dress­ing the climate risk is not just a cost im­posed on them. It is also an op­por­tu­nity to drive value through new busi­ness mod­els and in­vest­ment in new tech­nolo­gies.

The goal of COP 23, this year’s UN climate change con­fer­ence – cur­rently held in Bonn, Germany, the city where our com­pany’s global head­quar­ters are lo­cated – is to be­come very spe­cific on how to achieve a pos­i­tive out­come for the en­vi­ron­ment.

That chal­lenge is also very much ad­dressed to large cor­po­ra­tions. Based on what I have learnt since 2008, when we first es­tab­lished spe­cific com­mit­ments to re­duce our global emis­sions, I would point to four key lessons:

First, the com­mit­ment to go emis­sions-free re­quires a fun­da­men­tal re­think of many busi­ness ac­tiv­i­ties. For us, re-eval­u­at­ing ev­ery­thing through the prism of sus­tain­abil­ity has given a new qual­ity to our re­la­tion­ship with sup­pli­ers and cus­tomers.

For ex­am­ple, our aero­dy­nam­i­cally de­signed Teardrop trail­ers, used for long­haul road trans­port, re­duce fuel con­sump­tion as well as car­bon emis­sions. Be­yond our own com­pany’s needs, we work with our cus­tomers to cre­ate tai­lor-made ver­sions for them.

Sec­ond, pre­cisely be­cause there is no sil­ver bul­let, one must launch many con­crete steps rapidly and sys­tem­at­i­cally. Th­ese ef­forts start with such lit­tle steps as switch­ing to LED light­ing in our fa­cil­i­ties world­wide and re­dis­cov­er­ing the ben­e­fits of re­ly­ing on bi­cy­cles for ur­ban de­liv­ery to the max­i­mum ex­tent pos­si­ble.

Third, suc­cess de­pends at least as much on so­lu­tions flow­ing bot­tom-up in­side each com­pany as top-down. Start-up labs, which cap­ture promis­ing ideas from rank-and-file em­ploy­ees, play an im­por­tant role in that re­gard.

Fourth, a com­pany pre­pared to un­der­take a fun­da­men­tal re­think of its es­tab­lished way of do­ing busi­ness may well dis­cover trans­for­ma­tive so­lu­tions that yield new busi­nesses with true long-term po­ten­tial.

As for us, we have be­come e-en­trepreneurs. Op­er­at­ing a to­tal fleet of 92 000 de­liv­ery ve­hi­cles, a cen­tral task on our 2050 agenda is to move be­yond our re­liance on diesel-pow­ered de­liv­ery ve­hi­cles and shift to elec­tric ve­hi­cles.

Such e-ve­hi­cles have to be as ro­bust as diesel ve­hi­cles in han­dling heavy loads, able to sus­tain the stresses of con­stant stopand-go traf­fic on ur­ban de­liv­ery routes, and re­li­able enough to be used up to 300 days a year.

When we could not find a suit­able provider in the mar­ket place, we linked up with a univer­sity-based start-up, StreetS­cooter, which we sub­se­quently ac­quired. We are now build­ing out its ini­tial prod­uct to a full range of elec­tric ve­hi­cles and ex­pand­ing its pro­duc­tion ca­pac­ity from 10 000 ve­hi­cles this year to 20 000 in 2018.

An im­por­tant mo­ti­va­tion for us is to demon­strate that e-mo­bil­ity can be­come stan­dard prac­tice in the global lo­gis­tics in­dus­try and be­yond. That is why, af­ter scal­ing up in Germany, we are now be­gin­ning to roll out this so­lu­tion glob­ally. In ad­di­tion, since StreetS­coot­ers can be adapted to the sec­tor-spe­cific de­liv­ery needs of other in­dus­tries, they can pro­vide ur­ban mo­bil­ity so­lu­tions on a much broader ba­sis.

To re­duce our com­pany’s emis­sions and noise pro­file fur­ther, we also put great em­pha­sis on e-bikes and e-tri­cy­cles. We cur­rently use them in 58 cities in 12 dif­fer­ent Euro­pean coun­tries, in­clud­ing France, Italy, the UK and the Nether­lands.

For us, the full-scale im­ple­men­ta­tion of th­ese var­i­ous mea­sures is key to reach­ing an im­por­tant mile­stone for 2025 – that 70 per­cent of our first-mile pick-up and fi­nal-mile de­liv­ery ser­vices will be emis­sions-free.

There is no doubt that meet­ing our own 2050 net-zero emis­sions com­mit­ment will be­come in­cre­men­tally harder. For the road ahead, I am greatly en­cour­aged by one un­ex­pected fact: Re­spond­ing to the climate chal­lenge goes far be­yond ad­dress­ing “just” en­vi­ron­men­tal is­sues.

As I have learnt first hand, green ini­tia­tives lead to new forms of pro­duc­tiv­ity and over time the cre­ation of en­tirely new mar­kets with in­creas­ing de­mand for sus­tain­able so­lu­tions.

Bold as­pi­ra­tions are nec­es­sary, how­ever, to catal­yse this process. This is the way in which busi­ness can – and must – lead the trans­for­ma­tion that’s re­quired glob­ally.

Green ini­tia­tives lead to new forms of pro­duc­tiv­ity and over time the cre­ation of en­tirely new mar­kets with in­creas­ing de­mand for sus­tain­able so­lu­tions.

PHOTO: EPA-EFE

Pro­test­ers roll a globe as they take part in the “Climate March” demon­stra­tion dur­ing the UN Climate Change Con­fer­ence COP23 in Bonn, Germany, over the week­end. The con­fer­ence runs from Novem­ber 6-17 in Bonn.

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