From green savings to green profit: Moving towards a 21st century green business model (Article in Economy China)

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Comment
As I saw how the old CSR perspective from the west undermined interesting work in China I spent some time trying to explain that the reactive/ 0-approach tended to take the company into a dead-end where they did not focus on what society needed, but how they could communicate a zero-impact (often though offsetting). if they wanted to use sustinability as a driver for innovation they needed to take another path. 

Summary
The last years leading companies around the world have begun to shift focus. From only working on their internal environmental problems, they now focus on how they can help provide the solutions the world needs and how their business models can change from a focus on products to the services needed in society.

The reason behind this change is that incremental improvements are not enough, new markets are growing, smart solutions are ready at the same time as we understand the need for transformative solutions. The 21st century company must focus on new green business models that deliver sustainable services and have CEO’s that take the lead.

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迈向二十一世纪的绿色商业模式 从专注节能环保到寻求绿色利润 (Article in Economy China)

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Summary: 

过去的几年，世界各地领先企业的关注 点都在悄然地发生着变化。不同于过去只关 注内部的环境问题，当今的企业正在专注于 如何提供符合世界市场需求的解决方案，以 及企业自身的商业模式如何从关注产品转变 为关注于社会所需要的服务。

产生如此变化是基于以下几点原因:其 一、原有改善速度过慢;其二、新市场的不 断增长;其三、智能解决方案已准备就绪; 以及我们理解了对变革性解决方案的需求。 21世纪的企业必须着眼于可提供可持续服务 的新型绿色商业模式，而且其领导者必须起 到引领作用。

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The revolution from pre-Kyoto to post-Copenhagen (Article)

Role: author

Summary
To understand the current situation and the opportunities ahead, it is important to understand the different approaches companies have to take for a low carbon development and what kind of behaviour that different organisations and incentive structures promote.

Four different levels of innovation can be identified, see Figure 4. The first level of low carbon innovation is when focus is on incremental improvements that reduce the company’s own problems. This is where most of the attention has been focused by policy makers, NGOs and businesses themselves. The reason for the focus is twofold: it is easily noticeable and understandable. When emissions are

discussed, people usually think about a coal power plant or just a chimney with smoke coming out. This focus makes sense for big polluters and only if incremental changes are needed.

The second level, which has got a lot of attention today, is incremental reductions through out the value chain, including all suppliers, starting from the extraction of material from nature and then also looking at the use-phase & end-use of the products. For most companies which are not the major emitters, it is in these parts where the majority of the emissions exist. Among IT companies, retailers, biotech companies and the manufacturing companies, up to 98% of the emissions cannot necessarily be associated with their own direct impact.

Still it is common for companies to aim for “climate neutral” and offset the emissions as they focus on level 1. This is a reason why offsetting might be one of the worst innovation killers today, keeping the companies on innovation level 1.

The third level is when the company acknowledge that the way they produce

things is not sustainable and instead of trying to improve unsustainable production methods, it develops solutions that become part of the solution. This can be a manufacturer of furniture that becomes a net producer of sustainable bio-energy, or a car manufacturer who builds so many wind power mills as it constructs its manufacturing plant & becomes a net producer to ensure that it puts more renewable energy on the grid than used.

The fourth level, and the most important level for the 21st century, is when the company starts to focus on what it is providing to society through its products and services. The question on this level is if the services the company provides are helping people getting a better life while helping to reduce emissions society2 then obviously the other levels are needed as well. But unless we get more companies to focus on how their core business is contributing to a low carbon economy, it will be impossible to reach the reductions needed.

Some people are afraid that focus on the core business, and solutions that company provides that can help reduce emissions in society, will distract them from the need to reduce their internal emissions. Looking at the companies that have begun to explore this area are almost leading in level 1-3 as well. Probably, because the companies that link low carbon development to their core business, requires a commitment from the CEO and the board. And if one wants to be the company that helps the customers towards a low carbon economy, it is not credible if the company has its own emissions. If anything is true, it is probably that many of the current initiatives that focus on internal emissions are distracting from effort on the higher innovation levels and not the other way around.

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Indian Companies with Solutions that the World Needs (Report)

Role: Co-author with Sachin Joshi, Seema Arora and  Shirish Sinha

Summary
This report, ‘Indian Companies with the solutions that the World Needs’, builds on the previous report “Indian Companies in the 21st Century” by WWF and explores in a more detailed manner how some companies in India are understanding and responding to changing sustainability trends through innovation and business strategy.1

The five in-depth case studies and two examples in this report include companies from diverse economic sectors that have varied economic, social and environmental concerns and impacts. Nevertheless, they contain some common threads and lessons that can be applied in different contexts. The case studies capture key initiatives and identify important ways in which sustainability has affected the drivers of business competitiveness and success: access to markets, operational efficiency, access to capital or superior reputation, and most importantly innovation.

Recent years have seen a growing range of economic, social, environmental and governance issues push into the mainstream of politics and business. The priorities for action emerging from a range of summit meetings - such as the G8 and the World Economic Forum - tend to share one common characteristic: they all relate to current market failures or dysfunctions.

While most sustainability challenges – such as income disparity, loss of biodiversity and assosiated impacts - are not new; globalisation has directly or indirectly exacerbated many problems to a degree where many of these questions are now dealt with as matters of global and national security, e.g. climate change and food prices. Information technology is propelling increased awareness about the scope of societal needs and the lack of progress to date by governments and traditional non-governmental organisations. Businesses, civil society and governments, once considered strange bed-fellows, are now working together to resolve some of the most chronic problems.

This trend was implicit in the 2008 agenda of the World Economic Forum annual meeting at Davos, which closed with a call by business, government and civil society leaders for a new brand of collaborative and innovative leaders to address the challenges of globalisation, particularly the pressing problems of conflict, terrorism, climate change and water conservation.2

Business, political and civil society leaders at the World Economic Forum’s India Economic Summit 2007, called on India to focus on skills development, improving governance, upgrading of education, forging public- private partnerships in infrastructure and addressing environmental degradation and water scarcity to sustain the high growth the country requires.

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Arab Companies in the 21st Century (Report)

Role: Co-author with Tareq Emtairah and Suzanne Påhlman

Summary
The study, undertaken in the United Arab Emirates (UAE), is inspired by a series of initiatives undertaken by WWF with an intention to identify and to work with various proactive key players in emerging economies of the world like India,

China, Russia, Brazil and South Africa. This study focuses on the scope and potential for companies in the UAE and the rest of the Arab world to emerge as leaders in investment and export of sustainable goods and services, as well as becoming a key international actor in promoting and supporting sustainable development.

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Indian Companies in the 21st Century (Report)

Role: Co-author with Mohmmed Saqib and Rajesh Sehgal

Summary
In a situation where the world requires innovative companies to address
the serious global challenges faced by humanity, including high resource consumption, pollution, population growth, demographic and geopolitical changes, India, with its rapidly changing business environment, may indeed prove to be one of the most important countries on the planet over the next several decades.5

This report shows that there exists significant interest within the Indian business sector in sustainable development and innovative solutions that can be applied to achieve this goal. The approaches utilised in this regard by lead- ers in the Indian corporate sector are well ahead of many of their western counterparts, which are often, and often erroneously, viewed as leaders in the eld of corporate social responsibility (CSR). A number of common denominators exist within the progressive approach of these Indian companies, and these have been collectively referred to by one Indian company as “third generation CSR”.

This third generation CSR is an approach where companies look to ensure that their core businesses deliver sustainable development results. This dif- fers from the rst generation of CSR, that looked at philanthropy as one way of using pro ts, and the second generation that was searching for ways of minimizing the negative impacts of the companies’ operations.

The most important element of the third generation CSR is that it examines the core activities of a company and determines means by which the company can evolve in order to ensure that it contributes to welfare, even if this does not translate into immediate returns. This approach means that environmental and social concerns are the starting point for the business activity, as opposed to being factored in at the end. Rather than compromising on pro t, companies provide information that allows government to proactively change business regulations in order to reward companies which deliver on social and environ- mental objectives, such as reducing the use of natural resources.

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Chinese Companies in the 21st Century (Report)

Role: Co-author with Peng Lei and Baijin Long

Summary
This report is based on a survey of 182 of the largest and most important Chinese companies. WWF would like to highlight the following summarized results and outline possible steps forward.

1. A significant minority (22%) of Chinese companies say they are going beyond current regulation and some (13%) are even suggesting tougher rules. Many of these companies also have concrete suggestions that could help China become a leader in the provision of sustainable goods and serv- ices, not only in China but also for the rest of the world, and thereby move beyond the existing CSR discussion.

2. While one group of companies takes environmental issues seriously and is proactive, a large group could be described as almost hostile to environ- mental issues and do not even want to engage in discussions. 39% of respondents said “many” or “very many” Chinese companies were breaking the law, and 57% said companies were trying to lower standards.

3. There is a need to develop domestic solutions that support export of prod- ucts and services that help the environment, according to 78% of the com- panies surveyed.

4. 85% think traditional Chinese philosophical concepts like “union of nature and man” could help both Chinese and foreign companies become more environmentally friendly. 96% thought that the “circular economy”, a modern concept used widely in China today, also could be of help.

5. 85% of the companies said there is a need for stronger rules for environ- mental reporting, transparency and monitoring for large companies. Only 2% said there wasn’t and 13% said they didn’t know.

6. 53% said they would be willing to engage with NGOs like WWF in discus- sion about how sustainable development can be promoted, even though NGOs are not yet key actors in China and for many Chinese companies the idea of policy work with NGOs is new.

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