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21/02/08: HAS THE “CARBON FOOTPRINT” COME OF AGE?

Has the “carbon footprint” come of age, as a mainstream criterion for business competitiveness? The drive by some leading fast moving consumer goods (FMCG) retailers to make their businesses “carbon neutral” (by progressively reducing the carbon emissions arising from their products and operations and off-setting the diminishing remainder) is now stimulating leading FMCG manufacturers the measure and to manage the “carbon footprints” of their products.

(The “carbon footprint” of a product is the sum of the carbon emissions generated from; raw materials and packaging supply, plus product production and distribution. Some companies also include emissions generated during product use, end-of-life disposal or materials and energy recovery and even consumer store-to-home transport. Carbon footprint is usually expressed as grams of carbon per product unit.)

Why do these moves bring carbon into the mainstream of business competitiveness? Because, by buying off-sets for the residual carbon emissions which they cannot yet eliminate. The retailers concerned have linked the carbon footprints of the products which they sell, directly to their operating costs. As a consequence, products with a persistently high carbon footprint will raise direct operating costs for retailers.

Richard believes that this will generate retailer pressure on suppliers to reduce the carbon footprints of their products, thereby adding the carbon footprint to the mix of criteria by which products compete for retailer shelf-space. This, along with the pricing of carbon emissions in cap and trade schemes, will almost certainly bring carbon management performance into the mainstream of business operation for manufacturers, as well as for their investors and other shareholders.

Richard comments: “Carbon footprint management has to become a desirable, mainstream part of day-to-day business management, if we are to reduce carbon emissions progressively, on the scale now needed to contain the risks of further exacerbating climate change.”

“These changes in FMCG supply are interesting in another way. Carbon footprints as a competitiveness criterion may herald the beginning of an important change in the focus of business development, away from bigger, more consumptive product supply, towards “smarter” products and supply systems which both satisfy customers profitably and reduce the human pressures on our planet of so doing.”
 

28/11/07: STEPS TOWARDS SUSTAINABLE PRODUCTION and CONSUMPTION

Richard Poynton recently attended a cluster of conferences broadly connected by the theme of steps towards sustainable production and consumption.

A two day event on consumer and food processor attitudes to food waste, highlighted real progress towards grasping the opportunities to reduce waste. A very positive campaign (see www.lovefoodhatewaste.com)* is underway to encourage consumers to make better use of the food which they buy. Typically, about one third of this is thrown away, of which only about a quarter is actually unfit for consumption.

As a complement to the work with consumers, the food processing industry is beginning to look at its waste generation and particularly to make better use of the materials which never make it into the marketplace. Waste-to-energy plants are being considered, both to recover the residual value within the waste and to assist the larger food plants to be more self-sufficient in their heat and power supplies.

Richard comments, “This is all well and good, but these developments assume the continuing large scale generation of waste. Ironically, the more we invest ideas and money into dealing per se with waste. The more we lock ourselves into the need to produce waste for the foreseeable future. Surely to step towards sustainable production and consumption requires us to shift the focus of innovation away from waste per se, to the input end of our supply systems? Only then can we begin to optimise value extraction from the materials flowing through these systems and thereby dramatically reduce ‘by design’, our production of waste.”

Innovation is a key part of sustainable production and consumption. Taken together, two events on innovation, highlighted the following significant features of business innovation today:

First, more and more of the fresh ideas which drive business innovation are to be found outside of the businesses which need them, rather than in-house.

Second, as a consequence, innovation is demanding far more extensive networking and communications skills.

Third, “green” innovation, e.g. to progress towards sustainable production and consumption, is now being taken up by established innovators who made their names through innovation in entirely different fields, e.g. information technology.

Richard comments: “Although UK plc has a good track record on old-style innovation. To maintain this track record in today’s world, UK businesses will need to look beyond the “box” of their in-house resources, with its traditional communications inhibiting “silos” which prevent ideas transfer, to engage in well planned networking.”

“It is encouraging that those who know the demands of innovation, are beginning to recognise “green” innovations as being worth the risk, cost and effort. The involvement of these seasoned innovators brings “green” innovation into the mainstream. A vital precursor for the investment which these innovations need, to become the substance of real progress towards sustainable production and consumption.”

* Richard Poynton has no commercial interest in this campaign.

22/10/07: MEASURES of DESIRABILITY

As Richard Poynton has commented – “what a difference twelve months’ desirability can make!” Since Sir Nicholas Stern’s Review report (The Economics of Climate Change) was published on 28.10.06. The attitude of a growing number of UK Plc sector leaders to climate change, at both the strategic and practical levels, has changed substantially.

The headline messages of Sir Nicholas’ report to UK Plc, were first that if UK Plc wants to be part of the solution to climate change, “business as usual” is no longer an option. Second, that for most businesses, the costs of acting now will be attractively less than those of “wait and see”, the posture twelve months ago, of most UK businesses. Third, taking well founded action to mitigate and to adapt to climate change, brings desirable short-term business benefits, as well as long-term ones.

Action to measure, in order to manage operational carbon emissions, has been instigated by several UK Plc sector leaders, setting a new tone for their sectors:

In food and drink manufacture and retail, the biggest sector of UK Plc, major projects are starting to measure the carbon emission outputs of today’s supply chains, e.g. as the contributions of individual products, or of particular supply lines.

In construction, sector leaders are working to eliminate solid waste and particularly the “unnecessary” waste of unused, new materials, which contribute unproductively to this sector’s carbon emissions.

In electronics and consumer durables, leaders are collaborating to design out unnecessary energy usage and to explore the remanufacturing of used goods and materials into top quality products, as part of the drive towards sustainable production and consumption in the UK.

In transport intensive sectors, leaders are setting carbon reduction targets and radically re-working the logistics of their operations to meet these targets.

Given that the calls on UK Plc to respond urgently to the necessity of action on climate change, have been ringing out for well over twelve years. Richard asks, “why the sudden rush into action by its sector leaders, over the past twelve months?” The answer is that such action is now seen as being desirable, in business terms.

In its headline messages to UK Plc, Sir Nicholas’s report gave a clear measure of the desirabilities of acting now, in terms which business could understand. Those who are now running a carbon yard-stick over their operations are beginning measure this desirability for themselves, in terms of reduced business risk and desirable savings in £ sterling. Their findings motivate others in their sectors to take similar measures, thereby enhancing the desirability of sector change towards low carbon operations.

Richard is working to progress this tide of desirable change within UK Plc., towards a low carbon operation and away from “business as usual”. The business case for so doing, is first to maintain the UK’s competitive advantage in a low carbon world. Second, it is to avoid the malign by-products of “business as usual”, i.e. the board room discomforts of sharply rising costs and risk, coupled with declining choice. To business, these are just as disruptive as are the physical effects of climate change, which, as we have seen, again over recent months, have no measure of desirability.

06/02/07: IPPC CLIMATE CHANGE REPORT

Richard Argues for a Positive, Proactive Drive to Design Out Greenhouse Gas Emissions.

Commenting on the publication of the report by the Intergovernmental Panel on Climate Change (IPPC), Richard Poynton said:

“This report is a welcome clarification of the dimensions and time-scale of the climate change challenge. The fact that it has softened some of the earlier estimates of climate change effects, suggests a more confident, sharper understanding of the processes of climate change and makes this statement of the challenge, more real, not less.”

However, as regards the debate following publication of this IPPC report. The big disappointment is that so far, this debate has largely been restricted to curtailing carbon emissions from “business as usual” practices, e.g. by cap and trade and by taxation. These responses have a part to play, but the long-term resolution of climate change resides in a positive, if also radical, redesign of the systems and tools – our buildings, infrastructure, industrial processes and vehicles – with which we operate our economy, to eliminate their greenhouse gas emissions.

Planning now, to proactively devise systems and tools which, in a net sense, emit no greenhouse gases, or better still, as they operate, actively reduce the presence of these gases in the local atmosphere, opens a new development “space”, which should be very attractive, particularly to the UK. This “space” offers opportunities for new design, enterprise, ideas and solutions, all of which are UK strengths.

Taking this positive approach, has the advantage of turning climate change into a creator of jobs and prosperity. The positive approach is also endorsed by Einstein’s wisdom, that the solutions to man-made problems reside in the application of fresh thinking and practice, rather than in the thinking and practice which created them.

15/01/07 : GOOD NEWS FOR FORWARD LOOKING BUSINESSES!

New website for organisations wanting practical advice on business focussed solutions to climate change issues etc.
 
Launched today, Richard Poynton's website (www.richardpoynton.com) takes a refreshingly positive view of the capability of a business to deliver a sizeable part of the solution to the major environmental challenges facing our economy and society, whilst maintaining their profitability.
 
Richard, a professional consultant, speaker and writer, works with forward looking businesses which are seeking to be a central part of the solution to climate change and to the other key environmental challenges, by adopting radical changes to their methods of delivering customer and consumer value and of enhancing value for their shareholders.
 
Central to the new website is "the profit and planet question":

How, profitably, to satisfy the needs and aspirations of customers, consumers and shareholders today - in ways which maintain our planet's resources and stability systems - to secure a continuing basis for business opportunity and general prosperity tomorrow?

The website offers some practical answers.
 
Richard commented: "There are huge opportunities for those businesses with the vision to see, devise and embrace new designs for the provision systems and products and services by which they provide their customer and consumer value - fast moving consumer goods being a particularly fruitful area.
 
In essence, this is all about rebuilding the natural element of the capital base upon which business depends."

Contact Richard Poynton.