Carbon, Climate, Cancun and Commonsense

Carbon, Climate, Cancun and Commonsense
*Madhav Mehra

“How can you buy or sell the sky, the warmth of the land? the idea is strange to us….The air is precious to the Red man, for all things share the same breath—the beasts, the trees, the man. The white man does not seem to notice the air he breathes. Like a man dying for many years, he is numbed to the smell...”Chief Health of Red Indian Suwanish tribe living in what is now called the State of Washington to President Pierce of US in 1855.

Why nobody does anything about it?
Mark Twain might as well have been talking about global warming when he famously remarked, "Everybody talks about the weather, but nobody ever does anything about it." For years we have heard so much about climate change and its catastrophic consequences but none is doing anything. In fact the cacophony and complexity created by climate, carbon, Copenhagen, Cancun has suppressed common sense so much that we’ve missed out the simplistic solutions that have potential for not only ridding us of the problem but unfold unimagined opportunities for regeneration of the economy, boosting the market and creating jobs while protecting the planet. Technologies exist today that can not only cut emissions of heat-trapping gases and make a real difference in the health of our planet but also eradicate poverty, bridge regional imbalances and transform economies.

The climate summit in Copenhagen while fielding an impressive array of national and international leaders ended up in a fiasco because these leaders, scared of their diverse constituencies could not agree to any thing practical like targets for emission reduction. The final agreement called Copenhagen Accord was reached in a surreal manner after the US President flying in with his red carpet burst into the room where the four BASIC leaders – Brazil, South Africa, India and China - were huddled together to draft a face saving document. The Accord restates the same aspirations that brought them in Copenhagen i.e. to keep the global temperature increase within two degree centigrade but without any binding commitment from any side on this was to be achieved.

Climate Cassandras

There is little disagreement that climate change is humanity’s greatest challenge. The problem is the participating actors are scared of the short term consequences of the outcomes. Almost all governments and industry leaders agree that carbon emissions must be cut down but share the fear of Sir Nicholas Stern and many other distinguished economists and forecasters that this would lead to reduction in economic growth, damaging businesses and endangering employment and lifestyles we have been used to. Reduction in emissions is treated synonymous with closing down factories and laying off people.

Why is there no tax on usage of environment?
What we need is belief in ourselves. It is the human activity that has caused global warming, humans have the capacity to change. For instance, coming generations will scarcely believe that their fore-fathers penalised hard work by levying a tax on income derived from hard work and let everyone pollute the environment with impunity - indeed reward those who were engaged in the wanton destruction of natural wealth. Governments can change all that in our stroke by levying an eco- tax or carbon tax on those who cause emissions.

Prosopagnosia of our society

In “The Man Who Mistook His Wife for a Hat” psychologist Dr Olivier Sacks describes a case of Dr P, a distinguished musician, who suffers from prosopognosia, an illness where a patient loses the ability to connect things. Dr Sacks handed his patient a freshly cut red rose. Dr P took it in his hand like a botanist and commented ‘about 6 inches long in red in convoluted red form with a linear green attachment’. He simply could not think of it as a rose. Dr Sacks might as well have been describing our society as a whole. It is perhaps in the way that we are brought up that while we perform miracles with parts, we are absolutely novice when it comes to integration of the parts. Like Dr P we compartmentalize the world around us to such an extent that we only seem to understand a small portion of the picture.

Year on year we spend huge amounts on research on treating life threatening diseases such as cancer, cardiac and pulmonary diseases but do little in investigating the causes that lead to these pernicious diseases. Common sense tells us it is better to combat the cause of the disease and prevent it or nip it in the bud rather than let it develop and then wait for a cure. More importantly we do not realise that solutions can be so simple as physical exercise that can cut down most of the diseases. Similarly in our quest to deal with the conundrums of this world - poverty, pollution and climate change, we attack these problems in the same way as Dr P a victim of prosopagnosia , dealing with each problem in abstraction and isolation rather than as part of an integrated whole. We look at climate change in isolation without realising how a fight against climate change without factoring its impact on poverty, pollution and biodiversity can be meaningless or on the other hand the transformational powers of climate change if it is tackled in its holistic form to regenerate the economy, create employment, remove imbalances while cutting down green house gases.

Climate change an unparalleled opportunity

Einstein said long ago that significant problems that we face today cannot be solved at the same level of thinking as we created them. Solving climate change conundrum needs a paradigm shift. We need to recognise that like all risk this is also an unparalleled business opportunity. Climate change is what brought life in this planet and led to the formation of galaxies as we see today. Climate change is an opportunity that has come after a million years. With the global spurt on innovation and development of information and communication technologies (ICT), climate change could not have timed its arrival better.

ICT turns impossible into possible

Instead of discussing which country should take on commitments that may lead to closing down production, we should start discussing how to finance digitalization and dematerialization of production processes in a way that we do away with transportation of physical goods altogether. Think of the amount of reduction in CO2 if we are able to successfully digitalise and dematerialize industrial processes.

Digitalisation can dematerialise the world

With the onset of the digitalised economy, production processes that today involve transportation of physical goods can be eliminated without any adverse consequences on growth or employment thereby reducing emissions. Instead of discussing which countries should take on the heavy toll of closing down production, we should start discussing how to attract investments to digitalise and renew that production. The fight against climate change is not a zero-sum game. It is fraught with infinite opportunities.

By intelligent use of ICT and communication solutions, industries and governments might bring about as much as 15% of the emission cuts that the world needs. This places digitalisation and dematerialisation on an equal footing with global reforestation, and delivers the potential of combining carbon cuts with economic growth.

Governments that choose to stimulate further investment in mobile and broadband communications services will see real contributions to a new economy, where growth and sustainability merge. Rather than discuss close-downs and layoffs in yesterday’s production, the ICT industry emerges everywhere as an enabler and cornerstone of tomorrow’s sustainable production processes. For the first time, world leaders will not have to choose between ‘sustainability’ and ‘growth’ - there will be room for both.

For this to happen, world business will need to put the climate threat to be perceived as climate opportunity and discussed as strategic agenda. Available data show that ICT’s CO 2 footprint currently stands at 2% of global emissions. This number is expected to double by 2020. As a response, the GSM Association, which represents the worldwide mobile communications industry, aims at reducing the carbon intensity of mobile communication by 40% by 2020.

Mobile technologies lead to huge reduction in CO2 emissions

Mobile and ICT also have significant potential in enabling other sectors to reduce their CO 2 emissions. ICT’s unique ability to monitor and maximise energy efficiency both within and outside its own sector could cut worldwide CO 2 emissions by 7.8 Giga-tonnes of carbon dioxide equivalent by 2020. That would equal 15% of business-as-usual emissions - or more than the current annual emissions of either the US or China.

Mobile technologies are already being used to reduce greenhouse gas emissions and costs across a wide range of sectors of the economy, using SIM cards and radio modules embedded in machines and devices to deliver intelligent solutions. Indeed, one of the most exciting emerging areas of mobile application is machine-to-machine (M2M) technology. It is at the heart of green ICT: enabling eco-efficiency in energy grids, traffic management, buildings and logistics. Estimates indicate that transmission and distribution losses in India’s power sector could be reduced by 30% through better monitoring and management of electricity grids, first with smart meters and then by integrating more advanced technology into the so-called energy Internet.

Smart systems lower carbon footprint

Smart systems will support smart green growth. Mobile networks provide the appropriate connectivity, transmission capabilities and security to help consumers and businesses more efficiently manage their operations and energy consumption and, thus, reduce their carbon footprint. Not surprisingly, M2M is a key focus area for future growth in the business strategy.

Governments need to explore the huge potential of emission savings in mobile industry. That means introducing mobile communications solutions into government policies and programmes with respect to smart grids, smart buildings and smart transport; facilitate a common framework to measure the mobile industry’s energy and environmental performance, and that of other sectors, and support broadband infrastructure deployment.

Governments should also encourage cross-sector collaboration between the mobile and other ICT sectors. Mobile devices can help promote increased awareness of climate change, enabling users to calculate their personal emission levels, including their home energy usage, and information campaigns that give suggestions for reducing personal carbon footprints.

Green Banking

India’s leading banks are also seizing opportunities in an emerging low-carbon economy. Last December, IndusInd Bank inaugurated Mumbai’s first solar-powered ATM as part of its “Green Office Project” campaign titled “Hum aur Hariyali”. With the solar-powered ATM, the bank expects to save around 1,980 Kw of energy annually besides reducing carbon emissions by 1,942 kg. It also expects to save power bills of around Rs 20,000 per year in urban areas, where it replaces diesel generators with solar panels.

In a bid to reduce the carbon footprint, Romesh Sobti, MD & CEO of IndusInd Bank, who describes “green banking” as his mission, has also introduced thin computing (which reduces the need for many personal computers), e-archiving, e-learning, e-waste management, paperless fax, energy conservation, CNG cars and supporting finance programmes with incentives to go green.

IndusInd Bank is just one of the several leading Indian banks with similar plans. “There is already a group of leading banks in India that recognise the importance of their role and the commercial advantage this will give them,” says Emily Farnworth, senior advisor on the finance sector to The Climate Group, which acts as secretariat to signatories of the Climate Principles.

For instance, the State Bank of India (SBI), as part of its green banking policy, plans to set up captive windmills to generate 15 Mw of power in Tamil Nadu, Maharashtra and Gujarat.
A new study by PricewaterhouseCoopers (PwC) commissioned by the Indian Banks’ Association (IBA) and The Climate Group confirms that India’s leading banks are recognising and seizing opportunities in an emerging low-carbon economy.

Says Farnworth, “Seven out of the eight banks in the survey believe commercial lending banks in India can play a leadership role in the business community in addressing the challenges of climate change.” “They are starting to invest in low-carbon technologies and develop new products and services that will address the risks and opportunities of climate change,” she added.
For instance, in coal technologies, ICICI Bank introduced innovative concepts like deep beneficiation of coal (coal washeries) and coal bed methane. It also assisted a company develop a product that provides an eco-friendly air-conditioning alternative to conventional air conditioners (ACs).

ICICI Bank also initiated a programme to sensitise corporate bodies, institutions, banks and government agencies involved in project planning on issues like biodiversity, wildlife habitats and environmental laws.

Energy efficiency is another key focus of banks, with an estimated market worth more than $15 billion by 2015 in India. IDBI Bank, for instance, has an exclusive team working on clean development mechanism (CDM) advisory services. It also implemented a refinance scheme for energy saving projects for micro, small and medium enterprises sector.

Yes Bank, too, is incorporating community development initiatives such as clean and green drives, energy efficiency practices, workplace health and safety and the development of local disaster management plans through its “Yes Community” initiatives.

ABN AMRO (Royal Bank of Scotland) launched the Indian Sustainable Development Fund, opening up a new emerging market for socially-responsible investors, while the “Equator Principles” serve as a backbone for Citi’s broader Environmental and Social Risk Management (ESRM) policy, which extends beyond project finance.

As with any new drive the climate change agenda is driven largely by top management. Both public and private sector banks are equally pushing the agenda. Of course it needs to be checked how much of it is PR driven greenwash. India needs external verification of the claims made by the industry of their commitment to climate change.

The new Green Home Loan Scheme from SBI, for instance, will support environmentally-friendly residential projects and offer various concessions. These loans will be sanctioned for projects rated by the Indian Green Building Council (IGBC) and offer several financial benefits — a 5 per cent concession in margin, 0.25 per cent concession in interest rate and processing fee waiver.

K Unnikrishnan, deputy chief executive of Indian Banking Association says “...Correct policy incentives are essential to help banks take the next steps but banks need to proactively engage with the government”.

Transformative power of renewable technologies

Role of Wind Power

We are still to recognize the transformative powers of renewable technologies and how soon they will be able to compete with fossil fuel energy. After a rough spell that saw company debt rise to a high of Rs 12,000 crore and stock valuation drop, the world’s third-largest wind turbine company, Suzlon, is looking forward to renewed and rapid growth. According to Tulsi Tanti, its chairman, wind power will be cheaper than coal within 10 years. Mr Tanti is worried about the lack of clarity in Copenhagen. He says:

“We strongly believe a global framework for climate change is necessary. We need more clarity, so that long-term investments can be planned and, accordingly, we can reset our power sector to bring in more and more renewables. I think Copenhagen was a partial success. There was no legally-binding consensus, which is a pity. But, there were two successful outcomes. One, all 192 countries agreed to keep the temperature of the earth below 2 degrees, which shows a good mutual understanding. Two, the Reducing Emissions from Deforestation and Degradation (REDD) agreement on preventing deforestation was brought out. But, without a common legally-binding agreement, renewables will not get the global push they need.”

Harvesting the Sun

Solar energy is another area with huge untapped potential. Despite formulation of the National Action Plan on Climate Change there is little clarity on the development and distribution of solar power or incentivisation of the stakeholders of solar power – the harvesters of sun - on whom India’s future lies. What is required is a highly proactive approach by the government declaring harvesting of the sun its foremost priority and exhorting the nations to adopt it as a prime sport.

Let Solar be a prime sport in India

All over India more than 8000 investors have applied for such projects — totalling to a staggering 8,000 mega watt of solar power inviting an investment of Rs 1,20,000 crore. They have deposited a hefty non-refundable fee of Rs 25,000 per mega watt and given substantial bank guarantees. But little action is being taken because of the bureaucratic maze created by governments with various actors. All these applicants are serious about installing solar power projects and have invested heavily on selecting the technology supplier, arranging land and creating infrastructure at remote locations. Why has the government not got its act together? What are they going to do with so many applications if they do not have any strategy? asks Mr A S Kapur a retired Chief Engineer working on Asia’s first 10 MW solar project in Rajasthan.

Multiplicity of actors spoiling the broth

Government has created many actors for developing the solar energy field. These are ministry of new and renewable energy, the central and state regulators, national solar mission guidelines, NTPC Vidyut Vyapar Nigam, state renewable energy department and big and small investors. As the saying goes — ‘too many cooks spoil the broth'. As per Mr Kapur the whole plan of generation of solar energy has gone haywire. Till date not a single big solar plant has come up even after clearing all the hurdles. If the policy remains confusing, the dream to harness Sun for power will remain a distant dream.

Here is what Mr Kapur recommends: “What is required is to let the solar energy field be declared open to all the investors (small or big); let them generate electricity from sun for their state or for any other state under open access system; permit various trading companies to purchase the power from these investors directly; fix the tariff for each type of project — photovoltaic, thermal, thermal storage — fix it for 20 years as has been done for wind power; fix the tariff such that no other incentive from the government is desired by the solar power producers ; government should keep itself away from land dealings of these producers ; solar power producers should be encouraged, to make land owners profitsharing partners for life, in lieu of land they have sold to the power producers; India should emulate the Japanese model for use of renewable energy as a cottage industry to empower rural hamlet's instead of grid interactive power points; and keep the corruption away from this noble field of solar power. “

The cost factor of installing a solar power project is another important aspect for deciding the tariff. The investors have indicated a cost of Rs15-17 crore per mega watt for a solar power project. Today it seems high because of the expensive imports. Efforts are afoot to indigenise the technology and this has already started bringing results. Think of the fillip to the industry and the region by creation of millions of jobs while the sun shines in plenty on Indian soil.

The revolution in automotives

Biggest revolution in renewable energy will take place in automotives. There are currently 668 million cars in the world. By 2050 the figure is going to exceed 3 billion cars i.e over four times the existing number. There is just not enough fossil fuel to power these cars. This is why smart companies are going for renewable technologies. Mahindra & Mahindra has bought a majority stake in electric car company Reva, making a big foray on the alternative fuel technology that is increasingly becoming the darling of auto makers worldwide.
M & M’s acquisition of Reva

M&M that has acquired 55.2% of Reva is India’s largest utility vehicle company. It is adding passenger cars to its electric vehicle portfolio that includes Bijlee, a three-wheel vehicle, and Maxximo, an electric-powered mini-truck due for launch later this year. Pawan Goenka, president (automotive & farm equipment sectors), Mahindra & Mahindra, who will take over as chairman says:
“We expect that there will be 1.5 million electric cars sold globally. I see no reason why Reva cars will not be 50,000 of that 1.5 million in the next 7 to 10 years; this deal is a part of the larger strategy within the Mahindra group of focusing on sustained mobility,”

Eco-tourism

Climate change may have the greatest impact on tourism. Even ecotourism is just as environmentally damaging as traditional travel due to the greenhouse gases vacationers are burning to reach remote and pristine areas, industry experts warned. That dilemma has been the focus of the Global Ecotourism Conference in Oslo, a three-day gathering of ecotourism officials struggling to chart the future of an industry whose success threatens to become its own undoing.

"There is no other industry that has more to gain or to lose from climate change," said Alexi Huntley, whose tiny Costa Rican airline ‘Nature Air’ claims to be the first with zero net carbon dioxide emissions.

Ecotourism — a form of travel to pristine areas like natural parks or exotic islands meant to avoid the damaging impact of traditional tourism — is growing at around three times the rate of the tourism industry as a whole, according to The International Ecotourism Society, one of the sponsors of the conference.

Yet the extensive travel often required to reach untouched natural wonders produces climate-damaging greenhouses gases and other environmental damage. That, in turn, could potentially dry out the lush national parks and flood the small, exotic islands that are drawing the environmentally minded.

It's the Catch-22 of nature-based tourism. "Long distance travel — especially air travel — is a challenge to all of us. We know that it has serious impacts on the climate," said Norwegian Environment Minister Helen Bjoernoey, opening the meeting. "The tourist industry should give priority to developing ecotourism in markets closer to home and to promoting environmentally friendly forms of transport."

According to The International Ecotourism Society, nature-based tourism has been growing at a rate of more than 20 percent a year since the early 1990s, and is probably growing at three times the rate of the tourism industry as a whole. "Ecotourism will be especially affected by climate change and all these gloomy predictions," said Wolfgang Strasdas, a professor of ecotourism at the German University of Applied Sciences in Eberswalde.

Tourism to exotic destinations requires extensive travel, such as long flights and long drives that scientists say emit climate-warming gases. "Nature-based tourism requires a lot of travel. There may be six moves in 14 days," said Huntley, of Nature Air, which seeks to neutralize the climate impact of its flights by investing in such projects as reforestation to rinse carbon dioxide out of the air.

Strasdas said it might seem simplest to just cut out those trips, but that would be disastrous for poor regions and countries that are economically dependent on such tourism. Instead, a draft statement the meeting was expected to adopt said the ecotourism industry needs to focus on sustainable tourism "that entails responsible travel to natural areas and which conserves the environment and sustains the well-being of local people."

Sustainable Tourism

Global economists forecast continuing international tourism growth, ranging between three and six percent annually, depending on the location. As one of the world's largest and fastest growing industries, this continuous growth will place great stress on remaining biologically diverse habitats and indigenous cultures, which are often used to support mass tourism. Tourists who promote sustainable tourism are sensitive to these dangers and seek to protect tourist destinations, and to protect tourism as an industry. Sustainable tourists can reduce the impact of tourism in many ways, including:
• informing themselves of the culture, politics, and economy of the communities visited
• anticipating and respecting local cultures, expectations and assumptions
• contributing to intercultural understanding and tolerance
• supporting the integrity of local cultures by favoring businesses which conserve cultural heritage and traditional values
• supporting local economies by purchasing local goods and participating with small, local businesses
• conserving resources by seeking out businesses that are environmentally conscious, and by using the least possible amount of non-renewable resources

Increasingly, destinations and tourism operations are endorsing and following "responsible tourism" as a pathway towards sustainable tourism. Responsible tourism and sustainable tourism have an identical goal, that of sustainable development. The pillars of responsible tourism are therefore the same as those of sustainable tourism – environmental integrity, social justice and economic development. The major difference between the two is that, in responsible tourism, individuals, organisations and businesses are asked to take responsibility for their actions and the impacts of their actions. This shift in emphasis has taken place because some stakeholders feel that insufficient progress towards realising sustainable tourism has been made since the Earth Summit in Rio. This is partly because everyone has been expecting others to behave in a sustainable manner. The emphasis on responsibility in responsible tourism means that everyone involved in tourism – government, product owners and operators, transport operators, community services, NGO’s and CBO’s, tourists, local communities, industry associations – are responsible for achieving the goals of responsible tourism.

Responsible Tourism

Responsible Tourism can be regarded as a behaviour. It is more than a form of tourism as it represents an approach to engaging with tourism, be that as a tourist, a business, locals at a destination or any other tourism stakeholder. It emphasises that all stakeholders are responsible for the kind of tourism they develop or engage in. Whilst different groups will see responsibility in different ways, the shared understanding is that responsible tourism should entail an improvement in tourism. Tourism should become ‘better’ as a result of the responsible tourism approach.

Within the notion of betterment resides the acknowledgement that conflicting interests need to be balanced. However, the objective is to create better places for people to live in and to visit. Importantly, there is no blueprint for responsible tourism: what is deemed responsible may differ depending on places and cultures. Responsible Tourism is an aspiration that can be realised in different ways in different originating markets and in the diverse destinations of the world.

Focusing in particular on businesses, according to the Cape Town Declaration on Responsible Tourism, it will have the following characteristics.
• minimises negative economic, environmental, and social impacts
• generates greater economic benefits for local people and enhances the well-being of host communities, improves working conditions and access to the industry
• involves local people in decisions that affect their lives and life chances
• makes positive contributions to the conservation of natural and cultural heritage, to the maintenance of the world’s diversity
• provides more enjoyable experiences for tourists through more meaningful connections with local people, and a greater understanding of local cultural, social and environmental issues
• provides access for physically challenged people and
• is culturally sensitive, engenders respect between tourists and hosts, and builds local pride and confidence.

Sustainable tourism is where tourists can enjoy their holiday and at the same time respect the culture of people and also respect the environment. It also means that local people (such as the Masaai) get a fair say about tourism and also receive some money from the profit which the game reserve make. The environment is being damaged quite a lot by tourists and part of Sustainable tourism is to make sure that the damaging does not carry on.

There are many private companies who are working into embracing the principles and aspects of Responsible Tourism, some for the purpose of Corporate Social Responsibility activities, and others such as World Hotel-Link, which was originally a project of the International Finance Corporation, have built their entire business model around responsible tourism, local capacity building and increasing market access for small and medium tourism enterprises.

Factoring the environmental costs

We are approaching an environmental meltdown because businesses are not factoring the environmental costs of procurement, production, packaging, transportation, usage and disposal. Gross Domestic Product gives a grossly distorted picture of growth. Our wealth is growing at the expense of our natural treasure. None of what we are creating can be transferred to our children. The best way is to adopt the model PROACTIVATE which advocates pricing of natural capital in balance sheets, radically increasing efficiency of energy and natural resources, opting for minimalist life styles, adopting zero waste systems, carbon sequestration, turning to renewable technologies, innovating business models that dematerialise world, vigorously pursuing market mechanisms to punish the polluters and reward who conserve environment, activate women and children to drive the change, training people to eco-innovate and lead execution by example.
Generation Xers will punish unethical companies

For companies who show irresponsibility to environment there are huge punishments in store. Thankfully our economy is not fuelled by the geriatrics who sit on the boards but teenagers who shop at high streets. Thankfully their value systems are vastly different from their parents. Dan is one of the Millennial generation - by far the most analysed of the three generations – the Baby Boomers born between 1946-1965, Gen Xers born between 1966-1978 and Millennials born between 1979-2001. It is a generation that has been shaped by the tragic world events such as 9/11 and natural disasters such as hurricane Katrina. The result is a group that has developed a strong social consciousness, amplified by internet and communication technology. Cone Inc. is a strategic communications agency that develops and executes cause related initiatives for companies and non-profits. AMP insights, is the strategic planning and consumer insight division of AMP Agency. Together they conducted a survey in 2006 involving the Millennial Generation in the age group of 13-25 years-old. The survey came to following conclusions:

• 79% want to work for a company that cares about how it impacts or contributes to society.
• 69% feel that their company social or environmental activities make them feel proud or work there;
• 64% report that their company’s social or environmental activities make them feel loyal to their group;
• 87% have purchased a product that supports a cause in the past year;
• 68% would actually refuse to work for an employer that is not socially responsible.

With tremendous resources at their command, the Millennial generation is skeptical of advertising they encounter on daily basis. This savvy generation will not respond to products/services of companies that are not genuine. They believe that the products/services need to be priced fairly, be of good quality and most importantly, have emotional relevance to their generation.

Turn your business into a cause and gain trust of the teenage shoppers

A significant way to gain the trust of Millennial generation is by “walking the talk” through substantial cause alignment. There is no room for green wash. 70% of Millennials believe that the companies are not doing enough to support the causes that they care about. Hence there is great opportunity for companies to effectively embed the causes that are dear to Millennial generation into their brand and engage that generation in a larger social purpose. To be truly effective cause related campaigns need to foster relationship between the cause and the consumer. By making an effort to engage the Millennial generation companies have the opportunity to create a new generation of fiercely loyal customers who are passionate about working with corporations to change the world.

Millennials are ready to reward and punish companies when it comes to their commitments to cause. They expect companies to raise the bar and meet their generations expectations by providing them with hands on cause related experiences as well as sufficient communication, transparent enough for them to feel engaged.

These Millenials are prepared to stand up and hence provide opportunities to companies to create generations of brand ambassadors who would remain loyal to the brands, companies and employers that they trust most. Tragic world events such as 9/11, coupled with natural disasters have motivated the Millennial Generation to develop a strong social conscience. Technology has given them a loud and powerful voice. As a result, Cause Branding has emerged as a valuable tool for reaching Millennials. Cause Branding is a business strategy that integrates a social issue or cause into an organization’s brand equity and identity. If authentically embraced and sustained, it allows businesses to gain signifi¬cant bottom line and community impacts.

Maximise profits by harnessing the Millennial generation

The more that Millennials are engaged or involved in a cause, the more they internalize or relate to the message and the more likely they are to act upon that message. As a result, cause-related organizations as well as cause-related marketing efforts need to change how they approach Millennials. The bottom line is that the best way for companies to reach Millennials with causerelated messages is to redefine the brand marketing experience.

Traditionally, the brand marketing experience or relationship is between the brand and the consumer. However, cause marketing alters that brand marketing experience by adding a relationship between the company and the cause.

Taking that idea further, this study found that, given Millennials’ activities and mindset, there needs to be a third dimension added to the brand marketing experience. Figure 1 illustrates that in order for a company’s cause-related campaign to be truly effective, it not only needs to establish a relationship with the consumer and with the cause, but it must also foster a relationship between the cause and the consumer. This idea is referred to as the Millennial Cause Engagement paradigm.

Because choosing to support a cause is personal and directly appeals to an individual’s conscience, there must be a degree of engagement for a campaign to effectively resonate with its target. The cause-related campaign needs to foster a relationship between the cause and the consumer.

Pioneering companies are meeting Millennials’ high expectations by aligning with social and environmental issues that are relevant to Millennials. In order to further appeal to these unique consumers, companies need to provide hands-on cause-related experiences and then clearly and consistently share the related societal impacts.

Remember that while 74% of respondents are more likely to pay attention to a company’s message if that company has a deep commitment to a cause, in order for that message to resonate with Millennials, the commitment needs to be authentic and relevant to both the brand and the consumer.

Launch of Plan A by Marks and Spencer

A 2007 Marks & Spencer customer survey said that 75% of British consumers are interested in green issues. Last November, in a survey which scored M&S with the best reputation in British business, the Confederation of British Industry concluded that customers will pay a premium for a great reputation, and that, as far as M&S is concerned, Plan A is already contributing positively to our wider standing.
On 15 January 2007, M&S launched an initiative, known as "Plan A", to dramatically increase the environmental sustainability of the business within 5 years and expected to cost £200 million.
The plan covered "100 commitments over 5 years to address the key social and environmental challenges facing M&S today and in the future" with the tag-line "Because there is no Plan B". The commitments span five themes: climate change, waste, sustainable raw materials, 'fair partnership' and health, with the aim that, by 2012, it will:
• Become carbon neutral
• Send no waste to landfill
• Extend sustainable sourcing
• Help improve the lives of people in their supply chain
• Help customers and employees live a healthier life-style

Despite an 18% fall in the share price in January 2008, following publication of their latest trading statement, the company confirmed that they would be continuing with the plan, saying that there were 'compelling commercial — as well as moral — reasons to do so'.

The new iconic brown, reusable, hession bag was first introduced in 2007 as an early part of this plan. It was hoped that this will reduce the use of plastic carrier bags over the next few years.
May 2008 saw the introduction of the 5p carrier bag scheme at M&S stores, with customers now paying 5p per standard sized vest carrier bag for food purchases. This implementation was brought about through the Plan a scheme, to try to discourage use of the traditional plastic bag. All profits from the sale of food bags go to Groundwork UK.

In becoming carbon neutral the company has committed to only use carbon offsetting as a last resort, restricted to cases "where it is required by government or where the technology for green air or road transport will not be available for the foreseeable future".

As of August 2008 M&S had three wind turbines in operation, one at Methlick and two near Strichen, generating enough power to supply three stores via the National Grid. In April 2009 the company began purchasing 2.6 TWh of renewable energy (wind and hydroelectric) from Npower, enough to power all Marks & Spencer stores and offices in England and Wales.
Company chairman Sir Stuart Rose is personally committed to further promoting green issues and the recycling of plastic bottles. He has also pledged to reduce non-glass wastage by 25% and plastic carrier bag usage by 33% in the near future.

The result of Plan A was that Marks and Spencer profits for the 12 months endng 29 March 2008 topped the one billion pound mark. The profits registered an increase of 20% over previous year despite tougher market environment in second half of 2007/2008.

Sustainability drive by Walmart

Five days before he took over as CEO of the world’s largest retailer Mike Duke, WallMart Executive, spoke to his employees of the troubling time ahead with new ideas and a global economic crisis. For the most part his talk was the usual exhortation of a CEO faced with recession. But he suddenly turned direction and asked all his employees “sustainability is even more critical now, isn’t it?”

During his discourse Duke described a myriad of environmental projects that WallMark had undertaken. These included reduction of transportation costs and energy usage across the company. He summed up: “My message to you today I hope will be real clear: we want to accelerate our efforts in sustainability, we want to broaden our effort.”

Like Stuart Rose, Mike Duke did not slow down his green effort in $400bn company because of recession. It is because the smartest companies are recommitting to sustainability and using environmental thinking not only to stay profitable but to drive innovation to cut costs while going green. Greening offers the best opportunities to smart companies to emerge stronger from the downturn. In my paper I talked about how green thinking can help spur an economic recovery both for companies and for countries. The recessions, depressions and downturns have propelled many a companies to achieve greatness because of the advantages that it affords to radicals, those who are agile enough to respond to business turbulence.

Clean, green and lean is the smartest course

Contrary to common belief doing green is not expensive. Green is essentially about doing more with less. Pricing natural capitalism or committing to zero waste are not just altruistic slogans that designed to cut down costs and free up capital to invest in building a stronger and more resilient company, the one ready to outperform slow moving competitors. For those companies that are navigating the tricky and turbulent waters today but have dreams of world dominance, a focus on clean green and lean agenda could be the smartest course.

Sustainable Investment Revolution

The world is on the cusp of a sustainable investment revolution of unprecedented proportions. Opportunities are galore both for mature businesses and start ups for making money through clean and green agenda. Green has become the new color of money on the Wall Street. There is increasing evidence that pension plans and mutual funds which are not focusing on environmental and social issues are not performing as well as they could thus shortchanging the investors and savers.

The environmental and social issues are becoming increasingly critical in improving competitiveness and sustainable performance. In the coming years it is the ESG considerations that will redefine the contours of70 trillion dollar plus global investment universe. The new world thus offers infinite opportunities to companies that are agile and small.

The DNA of capital markets is being reengineered to encompass environmental and social issues Smart companies are increasingly turning their businesses into causes such as combating climate change, minimizing pollution, protecting human rights, access to affordable medicines and food for 4 billion people at the base of economic pyramid.
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Sustainable development is defined as development that meets the needs of a present without compromising the ability of future generations to meet their own needs.

The conceptual underpinning of sustainable investing is different from socially responsible investing. The later remains a relatively peripheral and statistically insignificant segment of the market. Sustainable investing on the contrary is about environmental and social issues that actually matter for determining profits. While sustainable investing is far from being a magic bullet or a panacea for business competitiveness. For a growing number of top performers it is helping them to regain the market share, create new products and services, enhance customer loyalty, recruit, retain and motivate top talent, reduce energy costs and minimize risk of customer backlash and litigation. The causes driving the sustainable investment revolution include other than degradation of natural resources:

• The dramatically increased levels of public and consumer concern about company’s ESG performance.

• The nakedness of corporation due to melting away of veil of secrecy by strobe like glare of internet.

• Tightening regulatory requirements for disclosure norms and transparency.

• Recognition of economic interdependence and that any economic, social and political shock in any single region will have global reverberations.

• Growing economic, social, political and competitive impact of major public health issues such HIV/malaria etc.

• The exponential increase of social networking through YouTube, Facebook, Twitter. A growing body of both academic and empirical evidence of a tightening nexus between company’s performance and its approach to ESG’s issues.

We hope that by the time they get to Cancun, policy makers will realize that the earth’s climate can be stabilized at no cost. Indeed our proactive action to change our model of growth from consumeristic to experience based would unleash a new trajectory of businesses that would lead to boosting employment and regenerating the economy. This will release an explosion of innovations and multiply business models of the likes Interface Corporation of US and Bridgestone of Japan that minimize use of material. As Daniel Kahneman, the celebrated Nobel economist says people cherish experiences far more than commodities. They love “doing” more than “having”. Business will discover new potential in moving economy from this acquisitional to experiential mode.
The policymakers in Copenhagen were unable to agree even on moderate goals. Changing their paradigm to treat climate change as an opportunity, to change our growth model, leveraging the human capacity to innovate and using the transformation power of the markets to punish polluters and reward those who minimize use of the carbon would unfold new pathways that world reduce carbon emissions beyond our imagination. As Einstein said the significant problems that we face today cannot be solved at the same level of thinking as we created them. We need responses that are innovative, holistic & synergetic.


*Dr Madhav Mehra, President, World Environment Foundation
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