World Bank president: "what did you do when you knew about the impact of climate change?"
World Bank president, Jim Yong Kim today called for everyone to put their “necks on the line” by creating bold solutions to climate change ahead of the UN summit in September. Kim said that UN secretary general Ban Ki-moon had taken a big risk by calling the summit and it was the duty of politicians, businesses and NGOs to work together to ensure it did not end with empty promises.
Kim said that countries were starting to respond to climate risks, highlighting initiatives in Thailand, Chile, South Africa, Morocco and Nigeria.
In the wake of the recent devastation in the Philippines, Kim said the country now wanted to develop an innovative climate resilience insurance fund.
He also called for a scaling up of green investment funds, saying that the World Bank hoped to create green bonds worth $50 billion by the time of the global climate talks in Paris.
“All these initiatives have to be brought together,” he said. “We cannot fall into the trap of waiting for a political agreement before moving. By working on very practical initiatives and getting something moving on a stable price of carbon, we can create a platform that makes it easier for politicians to reach an agreement.
We can all act now. There are so many win win win situations.”
While Kim appealed to peoples’ business sense, he also gave a very personal appeal for action. Pointing out that his youngest son may still be alive in the year 2100, he said: “Oh my god, we try to give people a sense of urgency by 2030 but even that is not working yet. All our children and future generations will ask of their ancestors; what did you do when you knew about the impact of climate change.”
Greenpeace's Kumi Naidoo and Oxfam's Winnie Byanyima: corporate power and climate change
On climate day at Davos, Greenpeace's Kumi Naidoo and Oxfam's Winnie Byanyima call for a concerted effort from progressive companies to push governments to set tougher climate change targets. They highlight big food and beverage companies as among those that have the most to be gained from standing up and being counted on climate change:
Their bottom line is under threat as extreme weather and shifting seasons threaten to disrupt their supply chains and drive higher and more volatile commodity prices.
They should be doing much more to tackle their own emissions, including switching to 100% renewable energy in their operations and by taking the lead in ditching suppliers who recklessly cause deforestation. They should use their substantial power and influence to demand action from governments and not allow big polluters to dominate business groups such as the International Chamber of Commerce. With exceptions, their modest role in national and global debates on climate action to date has been striking given how much they have to lose.
If you read Achim Steiner & Rachel Kyte on green bonds earlier, and wondered how they work, the World Bank have a handy guide.
Climate change at Davos
Jo Confino has managed to grab a few minutes with UN climate chief Christiana Figueres. She says she is encouraged by the diversity of opinion on climate change at Davos and impressed by the extent to which it has been included on the WEF agenda. (Apologies for a slightly noisy recording)
From limits to growth...
Bill McDonough, designer and author of Cradle to Cradle, laid down a challenge to business to stop trying to do less bad and do more good. He was called 'the mastermind of sustainable design' by Al Gore in the session he just hosted and had a few words to say to Caroline Holtum:
Nike's Hannah Jones - we need to collaborate to tackle systemic challenges
Hannah Jones, vice-president of sustainable business and innovation at Nike, is at Davos and has been writing about the immense complexity of mainstreaming the principles of the circular economy into the company’s core operations.
While Nike-led technologies have greatly advanced the integration of sustainability and performance, materials innovation is not a problem we can solve alone.
Creating a sustainable palette of materials would be disruptive to the world of production, but it’s also incredibly complicated. The production of Nike footwear and apparel is contracted to around 765 factories globally. Materials for those products are supplied by hundreds more vendors. And those products use a palette of more than 16,000 materials.
And that’s just Nike’s supply chain. It is clear that no single company, organisation or government has the ability to tackle this innovation challenge on their own. Instead, it will require new models of collaboration.
We need to catalyse capital, capabilities, science and technology and resources far beyond the boundaries of our own supply chain. To tackle massive systemic challenges like those in the materials and manufacturing industries, Nike is harnessing the collective power of unconventional collaborations. Our ability to positively influence the systems in which we operate is critical to our future success.
Paul Simpson - regulators must make action on stranded assets mandatory
I've been speaking to Paul Simpson, the CEO of global NGO CDP, who has just come out of a debate on the risk of stranded carbon assets to capital markets.
This is what he had to say:
The IPCC, which has shown we have already emitted more than half of the one trillion tonnes of our total carbon budget, has alerted the world to the limits of emissions.
This means that a significant percentage of fossil fuel reserves needs to be kept in the ground to keep us within a maximum two degree warming. The discussion concluded that stranded carbon assets present a potential material risk to the global economy and compared this to the risk of inflated real estate assets that precipitated the 2008 financial crisis.
The meeting focused on the need for better disclosure from fossil fuel companies on the potential of their reserves to be stranded and their plans of how they intend to respond to this.
Given that current accounting rules do not require them to do this , the discussion concluded that institutional investors and financial market regulators must take action to make this mandatory.
Interestingly, the governor of the central bank of Korea, Kim Choong-Soo, who was present, said he could not initially understand why he had been invited, but after hearing the speakers, said he now recognised it as a significant issue for his country.
Michael Porter v Paul Polman – who is more radical?
I caught up with Michael Porter and asked him about Unilever CEO Paul Polman’s recent comment to me that Porter's "shared value" concept is no longer radical enough.
This is what he had to say:
We think shared value is tremendously radical. It redefines how business operates at the core – how they think about their products and value chains, how they think about the boundaries of their responsibilities.
A lot of companies are still on the journey between CSR and shared value and have not made the truly radical transformation of seeing society and social issues as being a core part of running the business.
Paul uses the label of sustainability for much of their work. We believe that sustainability is not necessarily shared valued; it is a broad catch-all phrase. We have been accustomed for too long to believing there is a trade off between profitability and doing good which has fostered a culture that makes it profitable to pollute and make factories an unsafe place to work.
But this idea is Alice in Wonderland; actually societal problems are the greatest business opportunity to restructure how you operate, to become more productive. Selling products to Africa is not doing good but a giant new market.
But this takes a long time – CEOs often see the opportunity but it’s difficult driving it down into the organisation, where staff are used to thinking narrowly.
Porter gave the example of Dow Chemical which had created new billion dollar businesses after deciding to look at how the company could contribute to the Millennium Development Goals.
The agony and the ecstasy of the circular economy
The circular economy is a great concept but heck, it is difficult to bring into reality.
These are the conclusions of a World Economic Forum (WEF) report launched today in Davos.
The study points to mouth watering savings of $1 trillion a year by 2025 and the creation of 100 000 new jobs within five years.
But like may other radical new business models it requires a systemic change, which no single business or organisation can bring about on their own.
That’s because the circular economy relies on the eradication of toxins from products so they can be up-cycled.
But even the most simple products can contain hundreds of different substances, which each need to be tested.
Not only is that an uphill task of its own, but many suppliers plead confidentiality and refuse to even tell their customers what materials they use.
This is why WEF, in collaboration with the Ellen MacArthur Foundation is launching Project Mainstream; a collaboration of businesses that will focus their attention on a few key products that will have a global impact.
A bit of light hearted relief from the Coca Cola party last night. London Mayor Boris Johnson is always a tease and thought it was a great idea for the Guardian to publish this photo of him being “bought” by Coke.
Here he is with his own personalised Coke can, along with Muhtar Kent, the CEO of the drinks giant.
Johnson joked that while he should not announce it, Coke was going to become the next corporate to sponsor his Boris bikes scheme in the capital.
This, of course, may not be a bad idea given that Coke is focussing on wellbeing and encouraging people to exercise.
Was Johnson being more serious than he was letting on? Only time will tell.
Circular economy launch
Our colleagues over on the business desk are bringing you all the latest news from the congress centre, where Larry Summers, former US treasury secretary is currently on stage. You can follow their live bloghere.
Positive noises on finance for the green economy
Rachel Kyte, group vice president and special envoy for climate change at the World Bank, echoes Achim Steiner's reflection on the positive outcome of yesterday's session on finance and the green economy.
She sent us this update:
Following on from the Investor Summit on Climate Change in New York earlier this month there has been lots of discussion about the future of green bonds. Zurich Re, some weeks ago, indicated that it would buy $1bn in green bonds. Discussions in this session sought to encourage others to follow suit. Can infrastructure, energy and other companies follow EDF and issue corporate green bonds, was the other question up for discussion. And Jim Yong Kim, president of the World Bank asked why not aim to double the size of the green bond market to $20bn by time of the UN Leaders Summit in September and double it again (or more) to $50bn by the Paris climate summit in December 2015. Doable seemed the response. An impactful result if the growth expands the universe of investors going into green assets.
Achim Steiner, the executive director of UNEP gives us a whistle stop tour of his day yesterday:
Davos! Big debates, big brains, big names. My day consisted of 16 hours of non-stop meetings with people full of ideas, sometimes full of themselves but all important in some way.
The water session this morning : it must be progress when CEOs, ministers of finance and presidents focus on the global water crisis even if the answers only semi-reassuring.
Next session: getting sustainability into the DNA of business. I listened to some real pioneers in the business world. I see some real shifts here, but why still so few leaders? The debate centred on what to do about the average CEO.
Then agriculture and climate change, two big topics in Davos this year. From big agribusiness to consumer groups and ministers sitting in a big circle in real debate on solutions; most are still locked in to a 'more of the same but better' mode. A new UNEP report tomorrow will show dramatic loss of arable land across globe.
Next, a session with Ban Ki-moon, Jim Yong Kim and leaders of the finance world. Will they commit to scaling up their funding for a low carbon green economy? Surprisingly, the answer was a yes. Watch the finance space!
I also had many 'bilaterals' in the course of the day. One stood out: a young woman from India who has set up an inspiring social enterprise on the environment. WEF finds and invites these young global change makers to the table: another ingredient that goes into making Davos interesting.
Good morning from a snowy Davos. We'll be bringing you all the news and views on sustainability and business as day three progresses. And a busy day it promises to be, we'll be hearing from Al Gore, William McDonough, Michael Porter and a host of others.
To catch-up on what happened yesterday, read the day two blog here.