Climate Change and BusinessesClimate Change and Businesses

Climate Change and BusinessesClimate Change and BusinessesClimate Change and BusinessesProf. Sushil Kumar

Indian Institute of Management, LucknowProf. Sushil Kumar

Indian Institute of Management, Lucknow

Why has the term, ‘Corporate Environmental and/or Social Responsibility’, attained so much

of prominence these days?

Responsibility: A detachable burden easily shifted to the shoulders of God, Fate, Fortune, Luck or one's neighbor. In the days of astrology it was customary to unload it upon a star

~Ambrose Bierce, The Devil's Dictionary, 1911

Did Something Go Wrong?Bhopal Gas Tragedy

Chernobyl Accident

Seveso: Italian dioxin crisis

The 1952 London smog disaster

Oil spills

The Love Canal chemical waste dump

The Baia Mare cyanide spill

The European BSE crisis

Spanish waste water spill

Global Warming&

Greenhouse Gases

Global Warming&

Greenhouse Gases

Except for nuclear war or a collision with an asteroid, no force has more

potential to damage our planet’s web of life than global warming

Except for nuclear war or a collision Except for nuclear war or a collision with an asteroid, no force has more with an asteroid, no force has more

potential to damage our planetpotential to damage our planet’’s s web of life than global warmingweb of life than global warming

Corporate Environmental ManagementWMP

Class-1

Is Earth Really Melting???

Global Warming: Hoax or a Reality

Global Warming: Effects11 of the past 12 years are among the dozen warmest since 1850 (hottest being 2005)

Average temperatures have climbed 0.8 degree Celsius around the world since 1880

Extreme weathers

Earlier timing of spring

Increase in number of hurricanes, tornadoes

Increased evaporation, higher rainfall

Relocation of precipitation

Agriculture productivity

Recurrence of diseases

IPCC: 4th Report and other studies

Global Warming: Effects

Glacier retreat and disappearance

Global Warming: Effects

Sea level could rise between 7 and 23 inches (18 to 59 centimeters) by century's end, (IPCC 4th report )

Rises of just 4 inches (10 centimeters) could flood many South Seas islands and swamp large parts of Southeast Asia

Some hundred million people live within 3 feet (1 meter) of mean sea level, and much of the world's population is concentrated in vulnerable coastal cities.

IPCC WarnsAt some point in the future, warming could become uncontrollable by creating a so-called positive feedback effect

Emissions must start declining by the year 2015 to prevent the world’s temperature from rising more than 2 degrees Celsius over pre-industrialized temperatures

Only .12 percent of world GDP would be needed to stave off the harmful effects of climate changeONLY THING WE SHOULD BE AFRAID OF IS DOING NOTHING

Ecological Footprints

Ecological Footprint

The global Ecological Footprint - 14.1 billion global hectares in 2003, or 2.2 global hectares per person

The productive area of the biosphere translates into 11.2 billion hectares oe an average of 1.8 global hectares per person in 2003

USA – about 9.6 global hectares per person; UK – about 5.6; India – 0.8; Afghanistan <0.05

Source: Living Planet Report 2006

Humanity’s Ecological Footprint, 1961- 2003

Source: Living Planet Report 2006

Three Ecological Footprint Scenario, 1961-2100

Source: Living Planet Report 2006

Ecological Footprint by Component, 1961-2003

Source: Living Planet Report 2006

Ecological Footprint And Biocapacity By Region, 2003

What is the solution?

Source: Living Planet Report 2006

Sustainable Business: Triple Bottom Line

Sustainable Development

Social goals

Environmental goalsEconomic goals

Socio-efficiency

Eco-efficiency

Eco-justice

Profits are like breathing. You have to have them. But who would stay alive just to breathe?

- Maurice Mascaranhas

The task of holding global emissions constant would be out of reach,

were it not for the fact that:

• all the driving and flying in 2056 will be in vehicles not yet designed,

• most of the buildings that will be around then are not yet built,

• the locations of many of the communities that will contain these buildings and determine their inhabitants’ commuting patterns have not yet been chosen, and

• utility owners are only now beginning to plan for the power plants that will be needed to light up those communities.

Scientific American, 2006

WHY DON’T NATIONS SIT TOGETHER AND FIND SOLUTION?

The torrid economic growth of China and

India will elicit calls from industrial nations for

restraints on emissions, which will again be met by even more adamant retorts that citizens of

Shenzhen and Hyderabad should have the same opportunities to build their economies that those of Detroit and

Frankfurt once did

Scientific American, 2006

Climate Change and the Business Scenario

Six Green House Gases

carbon dioxide (CO2)methane (CH4)nitrous oxide (N2O)hydroflurocarbons (HFCs)perfluorocarbons (PFCs), andsulphur hexafluoride (SF6)

GHG Control: Two OptionsSinks

any process, activity or mechanism which removes a greenhouse gas, an aerosol or a precursor of a greenhouse gas from the atmosphere. Oceans, soils, & forests all offer some potential to be managed as a sink

SourcesBurning of coal, oil and natural gasDestruction of forestsRaising cattle andPlanting riceDisposal and treatment of garbage and human waste

Source: Innovest

Exposure to Carbon Risk

Carbon Neutrality

Global Business Environment

Cross-countries cost of environmental regulations compliance

Over 4000 laws & regulations in Germany and over 1000 in Australia

Voluntary Norms and Standards

Reporting Standards

Market Forces: Consumer Awareness

Global Supply Chain

Peter DarbeeCEO at PG&E

Speaking on climate change

“Leadership isn't about waiting for everybody to agree. Leadership is about doing the right thing and

doing it early”

We are made wise not by the recollection of our past, but by the responsibility for our future. ~George Bernard Shaw

Proactive Changes

Eco-efficiency Analysis

costscosts ((normalizednormalized))

EnvironmentalEnvironmental Impact Impact ((normalizednormalized))

1,01,0

1,01,0highhigh lowlowhighhigh

lowlow

Depending onthe position ofthe analysed product, different strategic recommen-dations are given.

bring to bring to marketmarket!!

reduce reduce environmental environmental impactimpact!!

developdevelopalternatives!alternatives!

reduce reduce costscosts!!

Source: http://corporate.basf.com/en/?id=V00-1AgGG8pXRbcp3*O

Learning from Nature

Biomimicry

Carbon Markets: Show Me The Money!

With KP, environmental concerns have become further

important to industry…

… because by being ‘green’

they can make money

Profits are like breathing. You have to have them. But who would stay alive just to breathe? ~ Maurice Mascaranhas

Most of us can read the writing on the wall; we just assume it's addressed to someone else.

-Ivern Ball

and Finally………

We have not passed that subtle line between childhood and adulthood until... we have stopped

saying "It got lost," and say "I lost it."- Sidney J. Harris

It is ethical and moral responsibility of each and everyone of us to avoid ‘mutually assured

destruction’

Thank You!