Overview

In business, climate changes everything

Why global warming demands accelerated change from business

Climate change is hitting the corporate consciousness as hard as it is the public's.  It could be a vision of new product opportunities, or concern about what new regulations such as emissions targets will mean for your business.  It might be recognition that a lot of human carbon emissions (anthropogenic interference to use the climate change vernacular) come from costly inefficiencies that can be put right while simultaneously adding to the bottom line.  Or it could be appreciating that climate change is linked to fiduciary obligations just as the reinsurance industry has done in its redefinition of risk and opportunity.

Climae change messageA 2008 report from McKinsey & Co. argued the reductions in greenhouse gas emissions scientists say are needed will drastically affect future value as factors such as consumer behaviour, regulation, and technical innovation bring value-creating opportunities to some while posing threats to others.  Yet, for all of the urgency implied by the scientific consensus on climate change, corporate change so far has been painfully slow - and you don't have to buy into some of the more alarmist forecasts such as NASA scientist James Hansen's claim that we need to reduce carbon emissions by 80% in 20 years to realise major transformations need to happen quickly.

Why is business falling short of the transformation climate change demands? There is plenty of blame to go round.  Initially, there was denial and obfuscation - sometimes with industry, scientists, and politicians in cahoots.  Now, there is little doubt that unprecedented anthropogenic interference is affecting the climate (although there are still differences of opinion about what this means), and recent shifts in the political landscape mean ideological resistance may be melting.  But the regulatory environment for driving transformation to a low carbon economy is still very uncertain, some industries with significant climate change impacts continue to enjoy government concessions, and managers often think climate change is a long-term issue that they can react to in due course.

There's truth in all of the above, but it doesn't explain why we are so far from realising the kind of accelerated transformational change climate change demands.  In my experience of working with companies on the challenge of climate change over the last two years, this is not just a lack of will or ambition: it's because our potential solutions only go part of the way to delivering the change required.  Peter Senge calls it 'the necessary revolution' where we shed industrial age beliefs.  Regulation, markets, technical innovation, organisational change, process innovation, and behavioural change are all part of that transformation. 

But as examples on the In the Shift website show, none of them on their own brings about the transformation required in an acceptable timeframe.  That leaves us searching for a new model for changing business, one that builds on what we know but wrestles with what we don't know: that allocates responsibilities for change wisely, and fosters endeavour and velocity rather than verbosity and inertia.

The materials, links and discussions on the In the Shift website are dedicated to building that new model.
Mick Blowfield


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