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The job of the CEO is to scan the horizon and think about the long term. Clearly you must constantly balance this with attention to the short term – but if you don’t pay attention to the future, you will find that all too soon it becomes the present and you are unprepared for it.
When I look forward I clearly see resource scarcity, energy price increases and extreme weather as real and growing threats to the long-term viability of business. These major trends pose a significant challenge to the business-as-usual model we operate, and perhaps the most significant of all is climate change. It is not necessary to be versed in the technical detail of climate science to realise that, when a body of experts are giving a clear warning, it is poor risk management not to listen.
This is why I am a signatory to the Trillion Tonne Communiqué and am actively encouraging other businesses to sign as well.
The Trillion Tonne Communiqué has been drawn up by the members of The Prince of Wales’s Corporate Leaders Group, to send a signal from the business community to policy-makers gathering in Paris next year. It is asking the negotiators in Paris, and the governments they represent, to join business in thinking both about the short term and the long term by committing to decarbonise the global economy. Their decision is something that will impact business the world over.
A successful business requires a little luck combined with three skills: a focus on risk mitigation, seizing the right opportunities, and meticulous execution of your priorities. When it comes to making decisions, I have rarely had the luxury of all the facts. Indeed, it’s far more frequent that I’m offered opinions based on the available evidence. To succeed you have to weigh up what you have and make a decision anyway. The way I see it, when you cut through the complexities, climate change is no different. We know global carbon emissions are rising.
We know the world’s population is increasing. We know emissions from countries like China and India will explode as they develop in our footsteps. We know if our planet warms beyond two degrees the consequences are likely to be pretty bad. There’s a strong science-based case to support the view that our activities, rather than natural causes, are causing our planet to warm. There’s a strong science-based case that the best chance of keeping our planet from warming a further two degrees is to ensure we don’t emit more than a trillion tonnes of carbon as carbon dioxide. We know we’ve already spent around half of that trillion tonnes, which means that, if we want to succeed, we must urgently do things differently.
When presented with a case like that – knowing that failure to act means risking the long-term viability of my business – then I know we need to collectively and boldly make the right choices and investment decisions. I’ve seen the devastating consequences for those that fail to respond to emerging threats: Woolworths, HMV and Focus to name but a few.
Recent devastating floods cost billions to UK businesses, home-owners and the Government. More climate change means more extreme events like those floods. Businesses are already feeling the financial impacts of being forced to close and refit premises due to flood or storm damage. We’re already having to displace workers and invest in the clean-up operations of the affected communities we serve. For my business alone we are talking about costs to the tune of tens of millions of pounds. Businesses are the backbone to successfully growing economies: we can’t afford to be awash with floods because we aren’t only piling up sandbags, we are piling up costs – and neither are good.
What we need is to hedge. We need to give ourselves the best shot at success and stability. We need the decision-makers in Paris next year to agree and come up with a plan for all the world’s global economies to urgently decarbonise.
Business won’t be at the table in Paris next year when decisions are being made that will impact our planet, its people and those of us responsible for growing our economies. That’s why I’m urging businesses – regardless of their size or country – to sign the Trillion Tonne Communiqué. The greater our number and the more united we are, the more our voice will be heard around the table.
Sir Ian Cheshire is Group Chief Executive to the world’s third largest home improvement retail Group, Kingfisher. He also chairs the British Retail Consortium and the Prince of Wales’s UK Corporate Leaders Group.
Kingfisher is a Forum for the Future Partner.
Photo credit: Kingfisher