I'm at least a month late in this, but finally read a copy of HBR's special report on climate and business. A variety of experts are represented, and each seems to hammer on the same theme (and rightly so) - necessity and opportunity. While it is imperative that business act immediately, there are a plethora of economic and competitive opportunities if those strategies are effective, transparent, measurable, thoughtful and long-term. Among the other highlights from these articles:
- Porter develops a revised SWOT analysis for this new era of climate change, focusing on an "Inside Out" approach (all direct and indirect aspects of a firm's value chain, i.e. strengths and weaknesses) and an "Outside In" approach (various effects of climate change on a firm's business, i.e. opportunities and threats).
- Esty gives his perspective on the importance of environmental transparency, especially carbon reporting and emissions management, for a company:
That capability is seen by many observers, including Wall Street analysts, as a proxy for good environmental management, which studies show correlates with good general management and superior stock market performance over time. Reporting is similarly seen as a measure of corporate trustworthiness and good governance.- Roosevelt and Llewellyn explain why "green investment" demand is so much greater than supply:
Many of the investors who are most intensely interested in climate change don’t want to dilute their investments by putting money into diversified companies—they want their investments to go directly to green technologies or strategies. On the other hand, the diversified companies that have good green businesses...often do not want to spin them off because they want to experience all the potential gains they see in those businesses.- Finally, I especially liked this analogy from Forest Reinhardt:
For centuries, the North Atlantic cod fishery fed millions of people, but there were no property rights controlling access to fish in the sea, so fishermen didn’t treat the resource as scarce. In the early 1990s, the fishery collapsed. Governments have since established sensible systems of tradable catch permits that seem likely to prevent the collapse of other species, but it was apparently too late to resurrect the cod fishery.There are a myriad number of examples of unsustainable natural resource exploitation and eventual collapse. I wonder if early government regulation was successful in staving off the inevitable collapse. I'm sure I'd find the answers here. Yes, yes, it's on the list...