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The post carbon revolution: why?

climate change reports: IPPC; Stern; Garnaut

recent reporting from the frontiers of science: feedback cycles the unprecedented environmental challenge new demands for corporate responsibility

The crisis
planetary overheating growing weather volatility dwindling oil reserves increasing world population damaged terrestrial & marine eco systems we are the future eaters (Flannery) the tipping point when?

Climate change is the main game in town the essence of corporate responsibility is to recognise and ACT on this -urgently.

The post-carbon
sustainable world
elimination of coal/oil as energy move to alternate sources sources;

reduced material intensity of the entire production, transformation, distribution, consumption cycle

zero waste; remanufacturing and recycling reduced demand for and use of material resources less stuff, more services, more emphasis on quality of life
stabilised population; social justice.

The central problem for leaders working to create a sustainable world:

The major obstacle to moving to a post carbon economy is not the availability of technology but rather human factors: political, social and cultural.

Can we rely on governments alone to achieve a sustainable world?

Like it or not, the responsibility for ensuring a sustainable world falls largely on the shoulders of the worlds enterprises, the economic engines of the future.
Professor Stewart Hart Kenan-Flager Business School, USA

The coming corporate revolution

The foremost issue in shifting to the postcarbon sustainable economy is to create cultural change in the multitude of organisations that make up the core of the economy.
So how do we make the cultural change? Can we identify the path to sustainability?

Making the journey: identifying the knowledge needed and the gaps
mapping the journey identifying the characteristics of future-fit organisations building capacity for ongoing corporate transformation generating high performance change-oriented cultures creating a cadre of leaders monitoring, evaluating and re-targetting change

Mapping the journey: achieving corporate sustainability

sustainability is a process organisations advance by stages each stage presents new business opportunities

The Phase Model

Rejection Non-responsiveness

Efficiency Strategic proactivity

The sustaining corporation

Less formally, the organisations at these stages can be labelled:

Phase 1: the freeloaders and stealthy saboteurs (Rejection) Phase 2: the bunker wombats (Non-responsiveness) Phase 3: the reactive minimalists (Compliance) Phase 4: the industrious stewards (Efficiency) Phase 5: the proactive strategists (Strategic proactivity) Phase 6: the transformative futurists (The Sustaining Orgn.)

So where are the opportunities?

Leave the Freeloaders, Stealthy Saboteurs and Bunker Wombats to experience increasing isolation The real opportunities begin with the Compliance Phase. Lets look more closely at the last four phases: compliance, efficiency, strategic proactivity and the sustaining corporation.

3. COMPLIANCE PHASE: The Reactive Minimalists

Objective: Seek to be compliant to the law and all environmental, health and safety requirements and relevant community expectations. Business opportunities: Avoid the potentially huge costs of noncompliance and create an effective risk management system. Typical actions: determine what is relevant legislation, regulations and community expectations build an effective risk management system with an informed workforce committed to compliance establish an organised measurement and monitoring system. Positive outcomes: risk minimisation easier finance basis for positive reputation improved relationships with regulators.

4. EFFICIENCY PHASE: The Industrious Stewards

Objective: Progressively eliminate waste and increase process and materials efficiencies. Key business opportunity: Increase efficiencies by waste reduction and reorganisation. Typical actions: reduce resource use (energy, water, materials) design/redesign buildings/plant to dramatically reduce footprint, create adaptable spaces move to front-of-pipe solutions to eliminate waste or return it to the production cycle as a resource (biomimicry). recycle/remanufacture (life cycle stewardship; cleaner production) dematerialise service provision rather than material production redesign products: sustainably produced and environmentally friendly meet international Global Reporting Initiative (GRI) guidelines. Potential business benefits: cost reduction; savings increased employee productivity increased employee involvement/engagement better teamwork and lateral communication.

5. STRATEGIC PROACTIVITY PHASE: The Proactive Strategists

Objective: Pursue the strategic opportunities in sustainability. Key business opportunity: Become market leader through pursuing the strategic potential of sustainability. Typical actions: commit strongly to sustainability re-brand and build wider stakeholder support be early in on new product/service demand curves creatively destroy existing product designs, manufacturing models and re-invent the firm, leapfrog competition by early breakthroughs increase employee and stakeholder engagement to source innovative ideas shift the prevailing business paradigm in environmental and social ideas innovate with new models of stakeholder governance concentrate on adding value and innovating. Potential business benefits: increased revenue and market share stronger stakeholder support (reputation and commitment) higher customer retention rates; faster attraction of new customers established lead in developing new markets employer of choice attract and retain skilled managers and professionals operate at high value-added end of market. LEAD IN VALUE-ADDING AND INNOVATION


Objective: Redefine the business environment in the interests of a more sustainable world and to support the core strategies of the firm. Key business opportunity: Create a constructive culture that continually renews the long-term viability of the organisation. Typical actions: participating in changing the rules of the game to achieve sustainability participate in public policy formation reorganise the companys supply chain to ensure that the whole production process is sustainable build human and relational capital support dematerialisation and the growth of the knowledge-based economy model best practice; support/publicise best practice elsewhere participate in international agreements seek external auditing of sustainability influence capital markets to support long-term value-adding build a constructive culture that encourages openness, debate, innovation and participation. Potential business benefits: global leadership of the sustainability movement enhanced reputation and stakeholder support and involvement increased share value attraction/retention of talented, highly motivated employees. TRANSFORM OURSELVES: LEAD IN CREATING A SUSTAINABLE WORLD


The Enterprise of the Future based on conversations with more than 1000 CEOs Some key characteristics of the enterprise of the future: hungry for change innovative beyond customer imagination disruptive by nature

Future-fit companies actively disrupt the status quo

Creating the cadre of leaders

Hewitt Associates global study: Top Companies for Leaders 2007
Some findings from a study of those organisations rated as outstanding in producing future leaders: leadership development is made a strategic priority by the Board and senior managers who are personally involved with the potential leaders there is an integrated set of human resource strategies from selection, through development, coaching etc to project assignments

Monitoring the Change etc

active involvement of academics with executives a new level of knowledge exchange and development emphasis on action research: monitoring ongoing change processes, devising appropriate interventions (theory in action) new emphasis in business schools on skills for change monitoring and intervention rather than knowledge alone

the environment is the forgotten basis of the economy a healthy biosphere is the only guarentee of a healthy economy and society

organisations are social institutions designed to provide sustenance to us throughout our lives and to leave the legacy of a healthy biosphere and world community for those who follow us this is their licence to operate

Summary continued we are involved in an unprecedented revolution that demands concerted action at all levels of society and by all institutions particularly visionary corporate leadership we have much of the knowledge we need to make the change: technological knowledge & social process knowledge we need to apply what we already know

then add to it through action research - carried out in collaboration between corporations and universities

Summary - continued

sustainability is a better way of doing business; constructive, innovative corporate cultures create high performance those organisations that dont adapt will end up in the dustbin of history those organisations that pick up the sustainability challenge increase their probability of surviving and thriving So pursuing sustainability and social responsibility make good business sense

Resource books: how to do it

D. Stace and D. Dunphy, Beyond the Boundaries: Leading and Recreating the Successful Enterprise, 2nd ed., McGraw Hill, Sydney, 2001 D. Dunphy, A Griffiths and S. Benn, Organisational Change for Corporate Sustainability, 2nd ed., Routledge, London, 2007 Q. Jones, D. Dunphy et al, In Great Company: Unlocking the Secrets of Corporate Transformation, Human Synergistics, Sydney, 2007 D. Grayson and A. Hodges, Corporate Social Opportunity - 7 Steps to Make Corporate Social Responsibility Work for Your Business, Greenleaf, Sheffield UK, 2004 B. Willard, The Next Sustainability Wave: Building Boardroom Buy-In, New Society Publishers, Canada, 2005 B. Doppelt Leading Change Toward Sustainability: A Change Management Guide for Business, Government and Civil Society, Greenleaf, Sheffield UK, 2003. M. Hogarth, The Third Degree: Frontline in Australias Climate War, Pluto Press, Melbourne Australia, 2007. D. Spratt and P. Sutton, Climate Code Red: The Case for Emergency Action, Abbey, Sydney, 2008.