There’s nothing that makes more sense in the business world than getting serious about climate change.
Climate change will be a massive hit to the bottom line, none more so than for those businesses involved directly in the built environment, which, let’s face it, is most of them one way or another.
It’s why the world of commerce and finance is such an intriguing player in the challenge that stands before us.
It has at its fingertips the most powerful force in history, one that with a simple tweak of willpower can launch a Wagnerian scale assault on the problem – money.
Self-interest is the other moniker for this weapon of mass destruction. Or creation.
Former PM Paul Keating had it right when he said that’s the horse that always wins – it’s motivation is simply bigger!
Money is just the tool to get you there.
So what will motivate business as we enter the era of global boiling?
As we stand, climate change threatens to wipe out all known forms of capital creation – stable economies, happy clappy workers (ex Tim Gurner’s staff), passive income from sources such as property (one of the biggest wealth creators of all time, given it builds wealth on little more than enjoyment of the national infrastructure – built on public money by the way, often without so much as lifting a finger ) and a willing insurance industry that underpins the lot.
You’d think with climate change threatening this nice capitalist scaffolding the biggest winners and biggest potential losers would be in there with their with their ears pinned back, finding solutions.
And if not mitigation then resilience, to protect as much as possible from when the fires break out and the seawalls crumble.
But the strange thing is that while the scientists have known what’s coming for aeons, the business community has been busy on…busyness. It hasn’t been paying much attention.
In 2023, suddenly, it’s like they’ve been caught with their pants down.
There’s scope 1 and 2 emissions to report – by law. Soon. That’s hard enough.
Then scope 3 emissions. What does that mean? What gets captured? How do you measure them – what tools are you using?
There’s taxonomy to work out, embodied carbon, upfront carbon and life cycle analysis.
Investors want assurances their money is safe. So, there are ratings, but what are they based on – neatly wrapped science or some block chain mumbo jumbo?
And even with the ratings and safeguards, the insurers are disappearing. What do the insurers know that the ratings agencies don’t?
Banks are struggling. Their mortgage portfolios aren’t protected by any more than the householder. Always were. In Australia it’s the householder that insures the bank’s investment, thanks to iron clad laws that will see you pursued to your grave if you default. So what happens if a cyclone takes the roof off your house and you along with it?
We had carbon offsets. A kind of pacifier that you give to a squawking infant. Until this week.
Shell said, “oh you think the $100 million of carbon offsets we buy each year aren’t bright green enough? You think we’re greenwashing? OK, you’re right, we’ll stop. We’ll pocket the $100m and we don’t get accused of greenwashing.”
Problem solved. For them. Meanwhile their shareholders are probably building greenhouse bunkers to make sure they’re alright, Jack.
Check the boom in greenhouses that took us by surprise…just a few months ago.
There are a few big consultancies that are able to attract the best talent to start to grapple with possible solutions but it’s very tough to remain both effective and viable when your shareholders expect the kind of returns enjoyed by Louis XVI’s pals at Versailles – before the revolution. And not get caught with your hand in the government till – PwC style.
So here at The Fifth Estate we hear that to map and accurately measure embodied carbon in materials is extraordinarily difficult and open to greenwash charges. It will need block chain to fix. Then we speak to someone who’s been doing this gig for 20 years and says all you need are the data sets and the postcode where the stuff was made.
What’s going on?
Most of this uncertainty, insecurity and ignorance is because this is so new for the corporate world.
But business can blame its age old corporate insouciance regarding ESG (environment, social and governance) principles for the mess were in. (Refer Versailles).
But business is so, so smart. The most intelligent wily people on the planet are in business. (Refer self interest)
These days the folks that used to go into law and medicine now work in AI and ways to manipulate consumers or voters to do what their paymasters want.
What if those collective brains turned their minds to getting us out of this mess?
As business starts to “get” climate change, imagine the Wagnerian assault it could unleash on its cancerous parts – so they don’t destroy the motherlode.
Imagine those AI dudes working overtime to stop the spin machines of denial and mistruths.
It can be done. We need to be Ukrainian about it; but it can be done.
Now there’s a climate culture wars now spawning a right wing backlash against protesters in Europe calling them terrorists so that some are ripped by their hair from the roads they’re glued to, others are kicked and it’s reported as a protection of ordinary people’s rights to go about their daily lives.
Even timber is coming into question. One of its strongest proponents architect James Fitzpatrick announced this week that his team are revisiting timber ratings because some of his clients want to avoid outcomes like the ones reported in The Guardian on the logging of old growth timber in Tasmania. His post on LinkedIn said:
What is clearly missing from our industry is a moral compass that simply says “this is wrong”.
As industry leaders in the use of engineered timber in our projects, we see building in timber as a tool to help address our climate emergency. But society will no longer accept the status quo or any certification stamp whilst we see outcomes like this. We are already seeing clients say “no timber please” because we can’t be sure of it’s source. This outcome attached feeds this fire.
To suggest the controversial from a position of some small knowledge, our timber industry needs to smarten up to define its future beyond the next couple of years or face extinction. I don’t think it is a hard problem to solve.
This disquiet might also related to the devastating article (there is still some brilliant journalism in the SMH), Minds were blown’: These scientists were stunned at what’s happening on the NSW North Coast, that related to the fast tracking of timber logging ahead of protections for koala habitat.
Can we ever know the source of the timber – is it conflict timber from Russia shipped secretly via China and then masquerading as something chopped down in Victoria – no wait, that’s not allowed now, so maybe Sumatra…no wait, will they pull down that Orangutang habitat for a palm oil plantation instead, while I enjoy my nice new timber furniture and fully timber house?
Fitzpatrick is right to question timber. And it’s time to question everything.
And now we know that the IPCC scientists have (effectively) kept the truth from us thanks to the fierce politicking of the dark days in which they started getting traction.
We’re burning up and drowning now – not in 100 years.
It’s with this background – this mess of uncertainty, claims and counter claims – while Rome burns – that there’s arisen an urgent need for a source of verifiable evidence of something tangible.
Sad to say it’s like we’re starting over again. But not quite from the back of the tap.
There are amazingly committed wonderful people everywhere. They’re hampered from the full flowering of their potential by the systems failure that gave us the mess.
Wherever we see them we need to encourage them, give them a leg up, promote them, give them access to the decision makers in business and government.
The new Centre for Centre for Climate Risk and Resilience at UTS Business School
And it’s with this in mind that it was exciting to attend the launch of the environmentally focused business study and research centre at UTS on Wednesday night, Centre for Centre for Climate Risk and Resilience, which is housed at the UTS Business School.
Full disclosure: we’re located on the UTS campus at the faculty of Design, Architecture and Building, so it’s an easy thing to pop across to the fabulous “paper bag” building (but not so easy to schlep across town to other fabulous events).
Part of our partnership with UTS is that we wanted an opportunity to get to know better the research and learnings of universities because we think they are capable of offering the deep institutional knowledge and impartial science based evidence that works for the common good.
Blending that capability with the agile engaged and motivated business world and the governments that support this, is the best of all worlds. The one we want to inhabit.
So we congratulate the businesses and governments that will support the new work at UTS and encourage more of the same – everywhere.
Our interviews on Thursday – with the business school Dean Carl Rhodes and with director for the Centre Martina Linnenluecke – were inspiring.