Business Upheaval Inevitable As Fossil Fuel Era Ends

From: Centre For Sustainable Practice
May 2, 2013
 
Business Upheaval Inevitable As Fossil Fuel Era Comes to an End

The latest report warning that fossil fuel companies are running towards a financial cliff edge has prompted a call to New Zealand businesses to focus on the future and shock proof their business.
 
The 2013 Carbon Tracker report, co-authored with London School of Economics’ Grantham Research Institute, concludes that capital spent on finding and developing new fossil fuel reserves is largely a wasted investment that will produce stranded assets in the near future.  It says the consequences for capital markets, and flow on effects for national economies, will be significant.
 
New Zealand business futures strategy expert Simon Harvey says there is much New Zealand businesses can do to prepare for the flow on effects of this and other future market jolts.  He urges businesses to take the opportunity to future proof through a heavily subsidised business improvement programme that is available in many parts of the country.
 
“Its new territory out there for business owners and executives, and good planning decisions now are key to future success,” says Harvey who runs Adding Sustainable Value, a business improvement programme.  “The shocks that this and other reports are predicting could make the 2008 crash feel like a vicar’s tea party – yet there’s much that can be done now to ensure a business can navigate the volatility.”
 
There’s plenty of evidence that things are already changing.  Referring to KPMG’s recent report Expect the Unexpected, global sustainable business guru Bob Willard recently wrote about how capital markets will undergo sweeping change in the next three years.  Investors increasingly recognise that sustainability performance reflects management strength and lower risk profiles.  And, new reporting requirements, together with a drive for more transparency, are creating a business environment where disclosure is expected.
 
Harvey knows that a lot of businesses are struggling to make sense of the future.  “It’s hard to plan well, and be strategic when change just keeps coming.  We see a lot of confusion, which often results in denial, deck-chair re-arranging and decision paralysis.  Our work is in helping them build a new compass that constantly will steer them towards the light, and away from the walls of the tunnel. Much of what is going on and what is coming is quite predictable and there are good templates for working through the issues.”
 
Adding Sustainable Value is a business improvement strategy course backed with qualifications from Otago Polytechnic.  The course is leading the way in providing an internationally recognised framework that provides clarity and a handful of simple decision-making tools and is hailed as transformational by many who have already participated. 
 
Top New Zealand companies including Annabel Langbein Media, Fulton Hogan, Livestock Improvement Corp and NZ Pharmaceuticals have all recommended the programme, and its stature is building. Campbell Sturrock of Fulton Hogan’s Auckland branch credits the Adding Sustainable Value programme for a breakthrough with senior management.
“ASV has forced us to undertake an honest review of where our core business activities are currently unsustainable and helped us to work on some challenging goals based on what ‘doing good’ would look like.  Ultimately, we hope to show others what’s possible in our industry,” he said.
 
Harvey is also seeing a pattern in the sorts of business that are eager to learn. 
 
“We’re attracting a lot of industry leaders.  There’s a clear recognition that the opportunity for the early movers is going to be huge, but also a fear that the laggards will be wiped out by the scale of change.  Carbon and climate change are hot right now, but debt, consumer inequality, food prices and water are all following,” explains Harvey. “A robust decision-making framework gives you the confidence to make strategy and investment calls now that will pay big dividends later,” he says.
 
The next ASV course gets underway in Bay of Plenty on 14th May and eligible businesses may qualify for NZTE funding.  Programmes in Auckland, Wellington and Hamilton start in June.
 
ENDS

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