1. Climate change
& the killer app
Jakarta, 5 October 2011
New strategic risks
• Globalisation provides opportunity for companies to find efficiencies and opportunities
• Complex and fragile web of materials, production, and markets
• Global transformation that's lifted millions out of poverty
• Based on assumption of global stability – policy, security, access to markets
• Based on assumption of infinite growth utilising finite resources
• A changed climate challenges these assumptions.
• Business recognising limits to this model
• Disruption, scarcity, uncertainty à risk exposure
• Appetite for new services, technologies, networks à opportunity
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2. Companies need to transform; anything less is failure
Resource
70% efficiency to
improve by over
90%
50%
Life Expectancy 80yrs
30%
10%
2050
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
-10%
80% reduction in CO2 emissions
-30%
Source: NEF
Peter Drucker: “the best way
The ‘new’ Dynamic to predict the future is to
create it”
Changing Rules & Societal
Expectations
• Policy
• Regulations
• Market Standards
Changing Supply & Changing Awareness,
Costs Values & Demands
• Customers
• Natural Resources
• Stakeholders
• Employees
• Business Partners
• Access to Capital
Changing Competition & Technology
• Product & Service Differentiation
• Reputation & Brand
• Business/Service Model Innovation
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3. Examples of business value
Resource Efficiency Product Innovation
Investment: <$50k
Annual savings:
$153k
Compressed Air
ys
ela
c td
oje
pr
w
Ne
Employee & Stakeholder Brand Differentiation
Engagement
Business is taking opportunities to harness...
Citigroup – $100m a year from energy
In 2005 Marks & Spencer launched a savings by turning off escalators,
Strengthen marketing campaign
ground-breaking Corporate Reputation switching of recruiting and retaining
Ease off unnecessary lights,
called ‘Look behind the label’ which redesign to include more natural lights
informed customers of M&S’s long etc
Provide new access to opinion
commitment on social and environmental Enhance brand integrity
issues.
formers
A Citigroup report said that the
campaign contributed to the ongoing sales Enhance customer loyalty
Deliver operational M&S brand
recovery and would underpin efficiencies
performance going forward
GE’s Ecomagination has doubled its Whole Foods Group – the US company
revenue targets from green products, from Generate innovative products
based on providing natural and organic and
Lower$20 billion between 2006 and 2010
$10 to risk profile foods is services fastest growing US
one of the
retailers and entered the Fortune 500 in
Philips wants its Green Flagship products 2007 with sales of over $5.5 billons
to be delivering 30% of its sales turnover
Maintain/ Create four years to operate
within the next licence Access to project financing
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4. LRQA Business Assurance
Sustainability
Business wanting to be part of the solution; fearful
of being left behind.
Understanding and managing their footprint.
value Validation/verification of projects, products,
services, suppliers, operations
Accountability
Do good things if you can,
but at least be transparent.
CSR assurance
Regulation
Stop doing bad things.
Compliance
Management systems
time
Demand for new ‘killer apps’
• New networks, access to customers and capital, is lowering traditional market entry barriers
• Sustainability dynamic is increasing the value of an ahead-of-the-curve insight and innovation
• Enthusiasm for innovation and technologies that
• Do more with less
• Enable conservation
• Enhance energy/water efficiency
• Support moves to a carbon economy
• Build in or enable recovery and re-use
• Reduce costs and does not affect convenience of use
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5. For more information, please contact:
Robert Hansor
Head of Climate Change & CSR - Asia
T +86 (0) 10 5825 6801
E robert.hansor@lrqa.com
w www.lrqa.co.uk
Services are provided by LRQA and other members of the Lloyd’s
Register Group. For further information visit www.lr.org/entities
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