The Business of Green

Climate change is well and truly on the agenda and we all have a part to play in curbing its impact – big business is no exception. SAM MORGAN introduces some companies leading the charge and shows how there’s money to be made from going green

IN THE PAST FEW YEARS, THE ISSUE OF GLOBAL warming has really gone global. Once the exclusive concern of environmentalists and scientists, climate change has quickly become the word on the street. Everywhere. From former US vice president Al Gore’s documentary An Inconvenient Truth to the monumental Live Earth concerts last July in New York, London, Sydney, Tokyo, Shanghai, Rio de Janeiro, Johannesburg and Hamburg, the message is out there in the public domain like never before: climate change is happening and we all need to do something about it.

So what’s causing this change? Carbon dioxide and other gases are responsible for warming the earth by trapping solar heat in the atmosphere. This isn’t usually a problem and is actually what helps make the earth habitable to humans. However, it is now accepted by many that an increase in the level of these gases in the atmosphere, largely as a result of burning fossil fuels and deforestation, is increasing the Earth’s average temperature. According to the Intergovernmental Panel on Climate Change (IPCC), 11 of the past 12 years were the hottest on record and, while climate change as such is not a new phenomenon (think of the Ice Age), the difference is that “the balance of evidence suggests a discernible human influence of the global climate”.

Fortunately, 2007 saw a positive shift take place in the international political community. Australia’s new Prime Minister, Kevin Rudd, signed documents to ratify the Kyoto Protocol, a move that was met with a standing ovation at the United Nations Climate Change Conference held in Bali last December. Negotiations on a successor to the Kyoto Protocol dominated this important conference, and after a tense last-minute round of talks, the defiant United States agreed to negotiate emissions cuts of 25–40% by 2020. During his closing statement, United Nations Framework Convention on Climate Change Executive Secretary Yvo de Boer said, “This is a real breakthrough, a real opportunity for the international community to successfully fight climate change”.

Businesses are also taking action on an unprecedented level – particularly those in the travel and tourism industry. From Carlson Wagonlit Travel’s role in carbon offsetting travel (see box “CWT: CO2 calculator”) to Singapore Airline’s recycling program to Marriott Hotels encouraging the use of fewer towels, these changes are essential, no matter how big or small. And more are set to come. April’s PATA CEO Challenge 2008: Confronting Climate Change in Bangkok will bring together the Asia-Pacific’s travel industry leaders with the objective of highlighting the reasons for taking a proactive approach to this subject – from risk mitigation to reputation management – and what changes need to be made.

There are also positive signs that the broader business community is accepting its responsibility to review how business is conducted and to introduce environmental policies. Hewlett Packard (HP), voted one of the world’s “10 Green Giants” by Fortune magazine, is setting the benchmark for greening its operations. With more than 150,000 employees and revenue nearing US$95 billion, this huge, global high-tech company is making definite moves to mitigate its eco-impact. With a commitment to reduce energy use by 20% below 2005 levels by 2010, stringent recycling at their e-waste plants, whole-of-process energy efficiency programs (going as far as auditing their suppliers’ practices), HP is a recognised leader.

“We have a long history around our commitment to the environment,” says Rita Sully, HP Corporate and Social Responsibility Manager. “HP is absolutely a pioneer in its commitment to environmental responsibility, including addressing climate change.” As well as internal policies, HP also offers financial support to the WWF’s climate change campaigns and provides money, equipment and assistance to the Climate Witness program – a program highlighting the plight of climate change-affected people in China and India.

And these commitments are not just about good PR, but are sound business practice. Sully believes that for HP, and for all the private sector, achieving long-term profitability means addressing climate change and finding solutions. “There is most certainly a business case for creating technology solutions to address problems associated with climate change,” she says.

Another of the “10 Green Giants”, Swiss Re, appears to share a similar opinion. The world’s largest reinsurer, with more than 10,000 employees and revenue in excess of US$18 billion, was the first major financial services company to launch a voluntary programme to become greenhouse gas-neutral. Andreas Spiegel, Swiss Re’s Senior Climate Change Advisor, says the company is focused on a company-wide response to global warming.

“As a major global reinsurer and risk transfer expert, we feel we have a responsibility to take a leading role in the climate change debate,” he states. “We identified climate change as an emerging risk some 20 years ago, and the concern has since evolved into an important component of the company’s long-term risk management strategy.”

Swiss Re purchases renewable energy for its major business locations worldwide, has a strong energy efficiency program, offers incentives for employees to reduce their carbon footprint, and attempts to raise awareness with their clients, employees and the public at any given opportunity.

Spiegel believes that action on climate change is not only in the interests of shareholders, clients, employees and the community, but is also an area where the company can find opportunity. “Swiss Re is committed to seize climate change-related market opportunities and develop appropriate solutions for adapting to and mitigating climate change,” he adds.


Andreas Spiegel,
Swiss Re’s Senior
Climate Change
AdvisorWhile big business is looking at ways to curb their output, others are looking at ways to educate, innovate and actually profit from the situation.

This group includes: Australian scientist, Tim Flannery, who ranks alongside Al Gore for his efforts in communicating the climate change issue worldwide; Barnabas Suebu, Governor of Papua and a campaigner negotiating carbon-credit payments for Papua’s immense forests; Von Hernandez, a tireless campaigner who made the Philippines the first nation to ban waste incineration; and Indian wind-turbine mogul, Tulsi Tanti. However, no list would be complete without the “Sun King”, Dr Zhengrong Shi.

Dr Shi is a little-known Chinese-born Australian citizen who not so long ago enjoyed an ordinary existence in Sydney, a solid job and a mortgage. However, this all changed in 2001 when Dr Shi decided to return to China to form Suntech, a company making silicon photovoltaic solar cells. Today, Suntech is China’s leading solar company and is listed on the New York Stock Exchange with a value of close to US$9 billion. This unassuming man with a boyish face and smiling eyes once said in an Associated Press interview: “I never thought I’d be a rich guy.” But rich he is – his personal wealth is estimated at more than US$3 billion, ranking him alongside the richest people in Australia and China.

Known as the “Sun King”, Dr Shi is a shining example of how a bright idea with untold benefits for the environment can bring huge returns. Dr Shi believes solar energy, as a clean and renewable energy source, is ideal for combating global warming and should play a big role in global energy generation. “At Suntech, we envision solar energy systems becoming a standard element of community and building infrastructure, providing a clean, green and secure source of sustainable energy to global communities,” he says. “We are extremely optimistic about solar power’s potential to play a major role in total power generation worldwide.”

However, he understands that rapidly reducing the cost of the systems is crucial to broader adoption of solar energy. “Suntech aims to reduce the cost of solar systems by up to 50% over the next three to five years,” he says. A claim that, if true, will bring great things for China, the world and Dr. Shi’s already healthy bank balance.


“Sun King” Dr
Zhengrong Shi

The answer to many of the world’s energy problems, however, might actually be right under our feet, rather than in the sky. According to Gerry Grove-White, Managing Director of Geodynamics, an Australian company leading the way in drilling down and extracting energy from hot rock deep inside the earth, there is untold energy potential waiting to be unlocked and his company is poised to unleash it. Hot Fractured Rock (HFR) geothermal energy is extracted using heat taken from hot granites and passing water through an underground heat exchanger. On what is arguably the best site in the world for large-scale development, Geodynamics aims to supply a huge load of renewable energy to Australia. “Australia is blessed with an energy source that, once commercialised, would provide the country with base-load, zero-emission energy at a competitive price,” says Grove-White.

Geodynamics’ operations are still in the experimental phase; the drilling is proving to be the most difficult aspect of the operation and Grove-White needs more support: “The resources are known, but require market confidence and government finance to commercialise”.

For this eco-entrepreneur, climate change is clearly not something to be feared, but embraced: “Climate change provides an opportunity for humans to extend our imaginations, take risks and make real differences to our world on a global scale,” he argues.

A similar positive attitude to humankind rising to the challenge is echoed by Jeroen van der Veer, CEO of Shell – currently one of the world’s largest generators of energy seeking to meet ever-increasing demand, while keeping its impact in check. “We should explore this route with the same ingenuity and persistence that put humans on the moon and created the digital age,” he says. Now is the time to accept that climate change is happening and proactively work towards being part of the solution.

CWT: CO2 calculator

Carlson Wagonlit Travel (CWT) is helping clients to address environmental issues by enabling travel management professionals and travellers to make well-informed decisions that may reduce their company’s carbon footprint. A “CO2 calculator” used at the time of booking allows business travellers to calculate and compare the carbon cost of transportation options (rail versus air). Post-trip reporting enables travel managers to track carbon dioxide emissions and ultimately neutralise their impact through carbon offsetting.

David Tibbles, Global Product Director Online Booking and Environment at CWT: “The CO2 calculator shows at a glance how the individual can contribute to making travel more eco-friendly.” He explains that CWT is seeking to further improve the detail of the feature: “We are currently working on refining our data and will in the future be able to show, for example, how the emission values for the various airlines look, depending on which aircraft is flown. We are also looking at the possibility of collecting more exact data for hotel emissions both for room nights and Meeting and Events.”

The Facts

• The number of category four and five hurricanes has almost doubled in the past 30 years
• The Arctic Ocean could be ice-free in summer by 2050
• More than one million species worldwide could be driven to extinction by 2050
• Deaths from global warming will double in just 25 years – to 300,000 people a year For sources and more information, visit www.climatecrisis.net

Making a Difference

At home: Use energy more efficiently. Reduce your electricity consumption by not leaving your TV on stand-by and replacing regular incandescent light bulbs with a compact fluorescent light (CFL) bulb. Turn down your heating or air-conditioning by two degrees and ensure all filters are clear.

At work: The three Rs is a good rule to follow at work – reduce, reuse, recycle. Turn off your computer at night and think twice before printing.

On holiday: Calculate the carbon emissions from your entire trip and offset them with a reputable offsetting agency. Two companies that are worth considering are Climate Care (www.climatecare.org) or The CarbonNeutral Company (www.carbonneutral.com).