But I believe it is an essential step for any business that is serious about making Corporate Responsibility more than just a sound bite or an optional extra.
I am particularly sorry not to be able to be with you today because I cannot imagine a more urgent topic to address and because I would have greatly enjoyed joining in your discussions. Therefore I do hope you will forgive this somewhat disembodied means of communicating with you!
I have believed for many years, with absolute conviction, that sensible, thoughtful businesses, led by men and women of vision, have an essential part to play in achieving environmental and social objectives in our society.
This approach has underpinned the work of my International Business Leaders Forum, my Business and the Environment Programme and that of Business in the Community, of which I have been President for the last twenty one years.
All three organizations have played their part in many interesting and important initiatives around the world over the last decade or so. But nothing they have achieved has given me more satisfaction than the work of a small group of business leaders, recruited by my Business and Environment Programme, to address the issues of climate change from a business perspective. Known as the Corporate Leaders Group on Climate Change, and convened by the University of Cambridge‘s Programme for Industry, this group of thirteen major United Kingdom and international companies has offered to work in partnership with the Government to develop a world-leading policy framework on climate change for this country.
At a time when businesses are invariably, but erroneously, assumed to be at best dragging their heels on tackling climate change and at worst positively obstructive, this seems to me to be leadership of the highest order. So I was delighted to learn that the Secretary of State has welcomed the Group‘s offer and is taking forward the initiative. The Corporate Leaders Group made three key points in their letter to the Prime Minister. First, that investments in low carbon technologies need to be scaled up now if we are to meet long-term targets for emission reductions. Second, that while many businesses have made significant investments in reducing emissions, this has not been nearly sufficient: the required degree of scaling-up can only be achieved once the right long-term policy frameworks are in place. Third, that investing in a low carbon future should be a strategic investment for their companies and for United Kingdom plc as a whole.
They also note that with the right policy framework in place, the costs of this investment can be minimized, the UK‘s competitiveness need not be undermined and we will be in a position to compete for the $16 trillion of global energy infrastructure investment that is expected to be required over the next 25 years. There is also an important caveat in the letter which the Group wrote to the Prime Minister.
They point out the importance of eliminating the policy inconsistencies and perverse incentives that undermine the effectiveness of climate policy.
As someone who has often pointed out - as politely as I have been able to! - that policies made with the best of environmental intentions in one Government department can all too easily be rendered worthless by policies made, with equal conviction, elsewhere, I can only underline this message with emphasis! The suggestion that all new legislation and regulation should be assessed for its impact on carbon emissions seems eminently sensible. If and when this happens, I think it will be surprising to see how much otherwise well-intentioned environmental regulation fails this essential test.
As a final point on the work of this eminent group, I just want to stress how encouraging it is to note their conclusion that ‘taking serious action to prevent dangerous climate change makes good business sense‘. In other words, they are stressing the vital importance of taking the precautionary approach. This conclusion has also been reached by an increasing number of companies worldwide and I know many of these are in the audience today. That progressive companies are realizing that action on climate change makes good business sense is both important in its own right and a direct challenge to all the business organizations who have been saying more or less the opposite!
I now want to move on from the important work of the Corporate Leaders Group on Climate Change and make some personal observations. In doing so I speak as a layman, so if you were thinking of going to sleep while I analyze the small print of the European Union Emissions Trading Scheme or National Allocation Plans, I can promise you that that won‘t be necessary….
If I may, I would just like to start by looking at the debate about sources of renewable energy and ask whether enough is yet being done to encourage the development of those technologies that are less able to compete in the current commercial market? I don‘t think I am alone in thinking that wind energy, and onshore wind in particular, seems to have a distinct advantage in the current marketplace. If we are serious about developing a range of viable technologies then the suggestion, made by WWF, of a ‘marine performance fund‘ to support projects such as offshore wind farms, wave and tidal projects seems eminently sensible.
The aim would be to bridge the funding gap that currently exists between the demonstration and pre-commercial stage of United Kingdom renewable development and offer the taxpayer best value for money. Having mentioned WWF, I should just say how pleased I am that they have identified the work of the Corporate Leaders Group on Climate Change as a good example of something I have been trying to encourage myself over the years. That is the important, but difficult, issue of persuading businesses to lobby positively for stronger social and environmental policy frameworks.
To many business leaders this goes just too far against the grain.
But I believe it is an essential step for any business that is serious about making Corporate Responsibility more than just a sound bite or an optional extra. I also think it is an issue about which we are going to hear a lot more in the next few years, as businesses are increasingly called upon to justify their role in society. But to return to my subject - and even though it may sound almost too mundane to mention - in all the talk about innovation and newer and greater sources of renewable energy, we do seem to have rather lost sight of the potential for far greater energy efficiency. It may be that rapidly rising energy prices will do all that is needed in this area, but as Amory Lovins and others have shown, huge gains are possible simply through sensible design and greater awareness.
Part of the problem may be that this is not the sort of area, unlike wind, wave or solar power, to attract bold entrepreneurs or venture capital funds, but perhaps that just makes it all the more important for an even stronger lead to be given, dare I say it, by Government? Are there really no additional cost-effective steps that could be taken to encourage everyone to do more to save energy? Even the seemingly little things can make a significant contribution - such as switching off lights and the "stand-by" buttons on televisions and computers.
The other issue I want to touch on is the whole question of building awareness. Major companies, such as those who make up the Corporate Leaders Group, can dedicate teams of people to look clearly and in detail at these issues and identify the business case for action. Small and medium-sized businesses do not have this luxury and are more likely to take a negative view of the possibilities, frequently encouraged by their Trade Associations who - so often - find it difficult to get ahead of the bulk of their members.
Organizations like Business in the Community have recognized this problem and are trying to encourage major companies to share their thinking and expertize with their smaller counterparts, whether these are their suppliers, operating in the same sector, or simply based locally.
So I do encourage all those of you who have the capacity to assist smaller companies to get their heads round these issues, to do so.
One of the simplest things that small companies can do is to set out to become ‘carbon neutral‘. The whole process is very revealing in identifying the scale of the emissions caused by various activities and from there it is a small step to doing something about the problem, either by reducing the emissions or by taking a positive step to counterbalance them. I have deliberately ended with a mention of personal responsibility and the importance of small steps, because that is what I believe is needed if we are to make any real impact on climate change. For what it is worth, I am commissioning a study to examine the whole question of carbon neutrality in my own organization. But Government, of course, must set the framework and I know that the Secretary of State is determined to do so, but then it will require every part of every business to take, and continue to take, all the small, incremental steps that will reduce emissions and minimize climate change.
The alternative doesn‘t bear thinking about, either for the future of the business or indeed for our descendants - the seventh unborn generation as the old Sioux Indian chiefs used to acknowledge - who will have to live with the consequences.
