The business of climate change

Jun 14 2006 by John Blackwell Print This Article

Our climate is changing – this fact is beyond contention. Over the past century, average global temperatures have risen by 0.6° Celsius, and the 10 warmest years on record have all been since 1990.

There is now scientific consensus that this warming has been brought about by the increase in greenhouse gases in the atmosphere, which in turn has been caused by human activities – primarily the burning of fossil fuels and changes in land use.

The devastating floods, droughts, and storms we have witnessed in recent months and years show all too clearly how vulnerable we are to climate extremes and how high the economic, human and environmental costs can be.

According to the UN Intergovernmental Panel on Climate Change, global temperatures are predicted to rise by between 1.4 and 5.8° over the next century. UK Prime Minister, Tony Blair sees climate change as "probably, long-term the single most important issue we face as a global community".

For this reason, climate change was the joint top priority during the UK's G8 Presidency in 2006 – with the Prime Minister recognising that central to addressing climate change is the engagement of business and government in tandem.

The G8 and its businesses, account for over 65 per cent of global GDP and 47 per cent of global CO² emissions
The G8, and by implication, its businesses, account for over 65 per cent of global GDP and 47 per cent of global CO² emissions. These businesses also play a dominant role in the technological development and scientific effort globally – reflected in their contribution of 70 per cent of the world's scientific papers and 75 per cent of science citations. With such technological and scientific pre-eminence, business must surely be able to seize a leadership role on climate change and be able to deliver a real, demonstrable difference.

Climate Change and Business

Let's put a sharp context on climate change and business in the UK.

A recent UK government study of 286,000 businesses focused on their levels of environmental resource depletion. What emerged was a shocking excess consumption that, were it scaled globally, we would require 3½ planets to support this copious misappropriation of our environment.

There's no justification for this abuse of our collective resources, however it would, in some meagre part, be excusable if the productivity and effectiveness our businesses were higher than our counterparts and neighbours, but this is far from the case.

  • The UK GDP per capita is 22.7 per cent below the high-performing global mean.
  • UK labour productivity is a lamentable 25.6 per cent below the high-performing mean.
  • UK patent registrations are 39.2 per cent below the high-performing mean.
  • Average UK earnings are 14.3 per cent below the high-performing mean.

What this clearly shows is that conspicuous over-consumption of our environmental resources is not linked to working smarter – there's no connection to be made with doing more, faster, and better, with less. It is simply a misappropriation of resources – a squandering of our shared environment without any purpose other than 'waste for the sake of waste'.

And this waste is costing not only our precious planet, but also £billions and billions in cost for the organisations involved.

This cannot continue. Businesses must rethink the way they work – quite simply, businesses must work smarter. Key to working smarter and reducing the environmental impact of business is workplace effectiveness – understanding the holistic interaction of people, space, and infrastructure.

Expressing Climate Change in Net Present Value Business Terms

Can we translate climate change into terms of business gain – gains that will be recognised by businesses large and small, across all commercial sectors?

Put simply; "Can we express climate change in compelling terms that all businesses will passionately want to embrace, adopt, and sustain?"

The answer is an emphatic yes.

Let's start by examining the largest dynamic factors in business. In order of magnitude, they are; - people, space, and infrastructure. These three factors eclipse all other business cost factors by many orders of magnitude.

Top of this list is people, with approximately 70 per cent of all organisations' costs being employee related.

Second on this list are facilities, often costing up to 25 per cent of all organisations' costs.

And then there's infrastructure – IT and communications – that can cost organisations millions.

Whenever there is a massive organisational cost there is an equal, and commonly greater, environmental impact.

  • What's the cost to the climate of transporting millions of workers around each and every day?
  • What's the cost to the climate of constructing, operating, lighting, heating, and air-conditioning trillions of square metres of unnecessary office space each and every day?
  • What's the cost to the climate of operating millions of IT and communications systems each and every day?

Making even the smallest strides in addressing these factors can make a huge environmental difference. However, the factors cannot be addressed in isolation – simply because the reality is that, none of these factors exist in isolation. Each factor – people, space, and infrastructure – is entirely interdependent on the other and each drives the demand for the other.

  • The use of office space is incontrovertibly linked to employee requirements (or perceived employee requirements).
  • Employee requirements drive the need (or perceived need) for IT and communication investment.
  • And completing the circle, IT and communication investments are tightly coupled to the requisite office space demands.

How often do business leaders question who is using what office space, and for what purpose? How often do we find that our offices are poorly utilised, or that hackneyed old management and status issues drive the territorial use of office space?

How often do business leaders truly question what are the 'right' tools for a particular working style rather than merely deploying generic tools based on the role or hierarchical function?

Furthermore, how easy is it to define just "what's a normal job" today? The majority of companies are finding even this basic description close to impossible to answer. Our working patterns are changing dramatically, our work expectations are changing dramatically – according to the Office of National Statistics, five years ago less than 30 per cent of the UK's population worked outside a core 9-5 working day whereas today over 70 per cent of the UK's working population work beyond a 9-5 working day.

In just five years, this is a remarkable transformation. Our employees are increasingly demanding choice – choice in when, where, and how they work.

To make a difference – both economically and environmentally – organisations must start understanding the working styles of their employees – considering the 'way they work' as opposed to outmoded job, role or functional descriptions. Let's face it, none of us could recognise an accountant, an outstanding marketer, or the most talented CEO if we walked past them in the shopping mall.

The bottom line is that in countless organisations, workplace effectiveness programmes that consider the working styles of their employees have demonstrated their contribution to increasing agility and the accompanying financial gains.

With the imperative to focus on climate change, maybe now is the time for all businesses and governmental organisations to enhance the effectiveness of their workplaces – for the sake of our planet.

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About The Author

John Blackwell
John Blackwell

John Blackwell is a sought after global thought-leader on effective business operation. His is author of over 30 management books and a visiting fellow at three leading universities.